Daily Market Review January 07



A pile on unused amounts of petroleum has led to more worries in the U.S and aggravates the outlook for U.S. crude prices. Huge amount of petrol stays idle in many storage tanks across the U.S., since demand and supply do not seem to tally at all. The biggest consumer of oil, China shows no economic recovery which is impeding on U.S. exports of crude. U.S. West Texas Intermediate (WTI) futures traded at $34.23 a barrel. Despite a huge drop in U.S. crude inventories of around 5.1 million barrels last week, crude prices are said to remain low.

Inflation debate continues aftermath the rise in interest rates in the U.S. Though interest rates were hiked up, there was no apparent boost to the dollar, while the Fed and the FOMC still look for methods to bring inflation to the target of 2 percent. The reading will be achieved when all the economic data tallies with the on-going economic recovery and global equity. Inflation is awaited to reach its set target around mid of this year. Concerns about inflation as depicted in the FOMC meeting yesterday, slightly helped the EURUSD to bounce a little higher.

For the first time since August 2015, Apple prices shares have dropped below the $100 level. The signs are not good for the technology giant, as slow shipment of iPhone 6s and 6s plus, dragged Apple down on the share market yesterday. Most of the stocks are quite down following the Santa Claus Rally in December, causing the sentiment to edge down on the global market. Amazon’s shares are also dropping as the stock saw a rough start for the year 2016. The stock lost around 5.8 percent since Monday this week. Plunging shares in China could also be the reason behind the drop for most stocks.

Technical Analysis:
A much better recovery is awaited for the Euro today, as the retail sales data could be the key factor to revive Eurozone’s common currency today. Following the retail sales, the unemployment rate could also help the Euro soar higher against the dollar later today. The pair EURUSD commenced the session around the 1.074 level on a slightly bearish note and navigated until the1.072 level within the first few hours. Later, the pair tried to gather forces and bounced to the 1.078 level, where it also closed the session. Currently the pair is trying to gap higher, while the chart candles are moving above the Ichimoku cloud. If the Ichimoku cloud moves below the candles, the session could become bullish. Notice a probable change indicated by an intersection of the red and green lines at 1.077 for tomorrow, thus trade safely.
The Yen is gaining all the way since the start of this week, overpowering the dollar, but ahead of the NFP the pair is likely to consolidate. Everything will depend on the NFP numbers to be released on Friday. However, it is panic time here on the USDJPY charts, since the dollar has shed quite some gains compared to its strength over the Yen last year. The pair USDJPY initiated the session around the 119.0 level on a bearish level and was dragged down to the 118.4 level within the first few hours. After consolidating for some while, the pair navigated within a specific range, reaching to the 118.3 level. However, the pair closed the session up around the 118.6 level, but a bearish session is already being seen for the pair today, therefore, verify market trends before trading here.

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As the dollar is a little down, the British Pound fails to take advantage of the situation. A lot of consolidation is what the pair has to offer for the moment. Reminding traders that, consolidation refers to a situation on the charts, where candles move within a certain range, neither breaks above nor below and maintain a particular position. The resistance line above around the 1.480, shall not offer any break above so soon. The pair seems a little timid to gather strength and soar higher and weak economic releases also weighs on the pair. The pair maintained a consolidated mode from the 1.467 level and closed around the 1.462 level. Having fallen from highs of 1.700 level, the pair shall offer weak sessions for a while, therefore keep an eye on changing fundamentals to trade safely here.

 

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