Daily Market Review January 14



The final quarter of 2015 was not up to the mark for the Eurozone, since industrial production was seen slowing across 19 countries in the area. Data reading for Eurozone’s industrial production yesterday, confirmed a decrease in output, by around 0.7 percent, despite market expectations were higher. Energy demand declined and the cause evoked for the same reason, was said to an unusually warm weather in many parts of the Eurozone. Investors keep their hopes high as the European economy has been quite buoyant despite Greece’s bailout trouble and falling investment.

Crude oil prices continue to wrestle against the support line of $30 a barrel, while a growth in U.S. stocks of oil added to the woes. Demand may stagnate further as an increase in crude, gasoline and diesel, pushes supply higher, overshadowing overall demand. Energy shares also caused strong indices such as the S&P 500 to curb gains, dipping below 1900 points for the first time since October 2015. Brent Crude, LCOc1 was dragged lower than $30, around $29.96 a barrel and later closed around $30.31 a barrel. U.S. crude barely settled around $29.93 a barrel yesterday, a level seen in December 2003.

Gold prices rebounded from previous losses, as investors turned to trade safer assets, with the on-going turmoil on the global market. On the Comex division of the New York Mercantile Exchange, gold for February delivery rose by 0.52 percent, settling around $1,092.40 a troy ounce. With China’s fourth-quarter and full year GDP awaited next week, investors await for more clarification for the world’s second largest economy. Gold prices may see further hikes if Chinese data turn out to be positive.

Technical Analysis:
A lot of risks revolve around currency pairs this week, as a volatile market persist on creating more apprehensions. Investors look forward to an uptrend for the Euro today as a tentative Eurogroup meeting may likely create the boost for Eurozone’s single currency. Also, publication of the account of monetary policy will add to Eurozone’s economic releases today. Besides, after a short-term downtrend near to the support line of 1.080 level, the pair did try to gap higher. Yesterday, the EURUSD pair commenced the session around the 1.084 level and fell to the 1.081 level, following some pullbacks and momentary jumps. The session was closed around the 1.088 level and still trends around the same level. Traders are advised to verify fundamentals before trading here.
Though machinery orders in Japan, were not up to the expectations, the Yen held on to gains, causing the dollar to step down on the USDJPY chart. The dollar initiated the year on a sour note, by being quite weak against most currencies on the trading market, but remains strong enough, provoking a slow progress. The USDJPY pair was 0.19 percent down yesterday, however, the greenback was slightly up by 0.02 percent against a basket of currencies. The pair USDJPY initiated the session around the 117.8 level and slowly climbed upwards to the 118.3 level. The pair is expected to touch the line of 120.0 level in the next few weeks, but a consolidation mode is likely to occur for now, thus the 120.0 level, remains the resistance level. The pair closed the session down at the 117.4 level and shows little momentum to bounce back.

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“Brexit”, the probable exit of Britain from the European Union caused an uproar on the global market, putting at stake future of banks if so does happen. The hot topic of global markets is indeed the “Brexit” issue. Britain will soon take a decision pertaining to this matter which will definitely cause more effects on the GBP. Yesterday, the pair GBPUSD started the session around the 1.443 level and climbed to the 1.446 level, before consolidating for a while. The pair was later dragged lower to the 1.439 level and tried to bounce back to the 1.446 level. The session came to a halt around the 1.440 level. The Ichimoku could hovers above the candles, indicating a bearish session for today, but the cloud can also be seen moving down, which could reverse the situation and turn the session bullish if an intersection of the Ichimoku cloud occurs. With the Interest rate decision of BOE meeting minutes awaited today for Britain, keep an eye on changing trends before trading.

 

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