Daily Market Review August 18



Recent economic indicators in Britain show that the job sector is faring well, as the number of people claiming jobseeker’s allowance fell. Unexpectedly, the UK employment sector depicts recovery which is not really being attributed to Britons, but to the influx of non-UK EU migrant workers. However, considered as a positive sign for the economy, bullish UK economic indicators helped the GBP to turn bullish. Earlier today, the GBPUSD pair was seen trading around $1.306.

Elsewhere, the USDJPY fell to 99.89 yen which is way too bearish for this pair and this trend was not seen since November 2013. The weakness of the dollar is a boon to major currencies such as the Euro, which was seen hiking up earlier today to attain the 1.1320 level. In the stock market, Wal-Mart will report its earnings today before the market opens and this can turn into a redeeming opportunity if the giant retail company posts bullish earnings.

Crude prices fell again on the Asian trade earlier today as OPEC failed to reassure the market that oversupply issues would be tackled. Saudi Arabia may add more crude supplies to the market, not really complying to find ways to curb the current oversupply problem. On the New York Mercantile Exchange, the WTI crude for September fell by 0.40 percent to trade at $46.75 a barrel while on the Intercontinental Exchange, Brent crude for October delivery dipped by 0.36 percent to trade at $49.67 a barrel.

Technical Analysis:
The Euro climbs higher on the EURUSD trading chart getting hold of a nice momentum. The pair EURUSD commenced the session around the 1.127 level and consolidated in range before going slightly up to the 1.128 level. The trading session came to a halt at around the 1.129 level. Earlier today, the pair broke above the consolidation range and support of 1.129 to trade around 1.1320 level. Given that the Eurozone’s CPI data is expected for release at 09:00 GMT today, this pair already looks bullish. If the CPI data is positive, then the pair is expected to go much higher. The Ichimoku cloud also navigates below the candles, thus suggesting that the pair could be bullish. Keep an eye on this pair today.

Is there a calling for an increase in Federal fund rates? Despite the US dollar spiked higher in earlier sessions, the Federal Reserve still prefer to wait for more positive data in the United-States. However, one Fed official said that increase in interest rates could be a reality, but this is being done only to bolster the trading market and keep traders’ involved. With the current economic turmoil, most central banks prefer to regress rates instead of hiking them up. On this note, the USDJPY trades as low at 99.89 yen, which is way lower than seen in previous years. It is not advisable to undermine the strength of the dollar but currently the pair remain bearish and the resistance line for the pair is at 101.1 level. Should the pair cross above the said resistance, the USD could become bullish.

The GBPUSD pair rose to a considerable level as a result of constant data releases by the side of Britain lately. With number of people claiming jobseeker’s allowance unexpectedly falling, it may be a sign that the job sector of UK might be seeing some improvement. Yesterday, the pair USDJPY initiated the trading session around the 1.302 level and was quickly brought down by some pullbacks to the 1.300 level. Later, the pair upped to the 1.303 level and fell again to consolidate. The consolidation mode did not manage to give any correct indication on the pair movement and later the pair closed the session up above at the 1.304 level. Markets deem that UK economic indicators are bullish thus helping the GBP to get bullish over the USD. With UK retail sales data awaited for release at 08:30 GMT today, keep an eye on this pair.

 

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