Daily Market Review September 08



Highlight of the day will be the Eurozone, as the deposit facility rate data along with the interest rate decision for September will be both announced today at 11:45 GMT. Following these economic events, Mario Draghi, the president of the European Central Bank is set to speak at 12:30 GMT. Recent economic data point out to weakness in the Eurozone’s economy which may affect the sort of the data expected for release today. On the other hand, Japan’s economy looks likely to stabilize as GDP numbers eased.

GDP in Japan grew to 0.2 percent, which is a good indication for the economy and the same has been reflected on the USDJPY chart this morning. The Japanese yen takes an uptrend which explains the bearish trend the pair adopted. The pair was seen hovering around 101.6 yen earlier today and may be expected to consolidate until boosted by market momentum. The U.S. dollar may sink further as apprehensions grip the market as Fed’s interest rate decision day nears.

Moving on, oil prices were seen easing by more than 1.5 percent as the weekly crude stock fell by most in three decades. The slump in weekly crude stocks certainly took the market by surprise, but has given oil prices the boost needed. Though prices seem to be taking a rise, note that prices still hover below the $50 a barrel handle. Brent crude for November surged by only 76 cents, jumping to $48.74 a barrel, while NYMEX crude for October delivery upped by 85 cents.

Technical Analysis:
The EURUSD pair will attract most attention today given the trading setups for today. Mario Draghi, the president of the European Central Bank is expected to speak and before his speech, the ECB will release the interest rate decision. Both the data releases hold potential of boosting the pair as expected. Earlier today, the pair EURUSD was seen trading around the 1.124 level and yesterday the pair mostly consolidated. The pair EURUSD was pushed by a nice hammer to the top at the 1.1256 level yesterday while the Ichimoku cloud signals that the pair may continue to remain bullish. As the USD adopts a downtrend today, the pair stays in an uptrend, therefore keep an eye on this pair today.

Final revision of the GDP data yesterday helped the Yen stabilize yesterday while today the pair trends lower. Uptrend for the Japanese Yen, drove the US dollar down on the USDJPY chart and this trend may last for more hours today. Yesterday, the session for the pair USDJPY commenced at the 101.5 level and fell to continue a consolidation till the 101.8 level. It is quite obvious that this pair is not going to resume any uptrend soon as the market wait for more cues on the upcoming policy rates decision by the Federal Reserve. This pair is deemed to incur further losses having edged lower to the support line of 101.2 level. Traders are advised to keep a close eye on the evolution of this pair today.
The British Pound was pulled lower against the US dollar, despite losses incurred by the greenback. The pair GBPUSD neared to the resistance line yesterday after almost touching the 1.345 level. Manufacturing production readings came in bearish and the Bank of England governor suggested that there might a cut in rates so as to stabilize the UK economy. Yesterday, the GBPUSD session initiated at the 1.341 and the pair was gradually pulled lower to the 1.336 level. After rising up for only some hours, the pair was again brought down to the 1.331 level and eventually closed the session around the same level. With the USD being down, this pair is still not rising higher than expected, therefore, keep an eye on it.

 

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