Daily Market Review August 16

The UK average earnings index and CPI data releases are awaited today, while the German Zew economic sentiment is expected to boost the EURUSD pair. Currently, the EURUSD advances at a rate of 0.10 percent and has successfully attained the $1.120 level. This pair picked up significant strength as a result of the USD weakness and risk-off markets. In the U.S., building permits data and core CPI data are both awaited at 12:30 GMT, but as data results are not being supportive enough, the USD may stay bearish.

Elsewhere, oil prices are slowly moving away from recent gains achieved over five weeks. As crude producers proposed to take further action so as to deliver crude markets from oversupply worries, traders cashed-in on the rally, resulting from the talks. On this note, crude prices fell with Brent futures trading down by 21 cents at $48.14 a barrel. Despite the slump, crude prices manage to remain 15 percent higher than the average prices of $42 a barrel seen during the month of August.

Most U.S. stocks rose on Monday pushing major indices to close at record highs. This occurred before crude prices fell, that is when crude prices were still higher yesterday. The S&P 500 closed by 0.3 percent higher, led by gains in material stocks, while the Dow Jones rose by 60 points fueled by Boeing and Goldman Sachs. The best performance was attributed to NASDAQ which outperformed advancing by nearly 0.6 percent. This market is expected to continue to go higher, thus keep track of U.S. indices.

Technical Analysis:
The EURUSD pair broke higher to reach at $1.121 earlier today and the German Zew economic sentiment data will be eyed today. A look at yesterday’s session shows that the pair commenced the session around the 1.116 level on a bearish note. After falling for the first few hours, the pair managed to climb higher to the 1.117 level with the help of some momentary jumps. After a few pullbacks and more momentary jumps, the pair upped higher to the 1.119 level. The session came to an end at around 1.118 level. Currently the pair looks bullish, trying to cross above the 1.20 level and moving towards the 1.121 level. It is advisable to keep an eye on this pair today.

The downtrend of the pair USDJPY continues with the pair now having reached to the 100.2 level, which is seen way too bearish. U.S. economic data are not supporting the USD as expected and with more policy measures being taken in Japan, the Yen relished from losses of the greenback. However, keep in mind that both the economies are in turmoil with Japan’s GDP seen slumping yesterday. Yesterday, the session for the pair USDJPY initiated at the 101.2 level and was quickly dragged down to the 100.9 level within the first few hours of trading. After trying to maintain some gains, the pair was eventually brought down to the 101.06 level. Earlier today, the pair was seen more bearish reaching to the 100.2 which was not seen since November 2013. Therefore, it is vital to keep an eye here.

The pair GBPUSD will be much in the limelight today with the UK average earnings index including bonus data expected at 08:30 GMT, together with the UK CPI data awaited at the same time. The pair GBPUSD is expected to bounce higher and cross above the normal range of 1.295 level. The Ichimoku cloud hovers above the pair which signals towards a bearish session for this pair. No intersection of the Ichimoku lines have been spotted, therefore no change is expected but with the data releases expectations are higher today. Yesterday, the session for this pair was initiated at the 1.290 level to close at 1.287 level. With the USD being bearish for the moment, markets expected the GBP to take advantage of the same. Traders are advised to constantly keep an eye on this pair.


Economic Calendar