Technical and Market Analysis by Vistabrokers - page 7
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Vista Brokers: MarketsWait for FOMC decision
On Thursday US stock indexes moved down under a pressure from disappointing U.S. durable goods orders data. In December durable goods orders decreased by 3.4% against the expected growth of 0.6%. The core index fell by 0.8% against the expected growth of 0.6%.
Against this backdrop, US stock indexes were down around 2%. DJI fell by 2.05% to 17,316.42. SPX - by 1.61% to 2,023.91. IXIC – by 2.09% to 4,672.06.
Vista Brokers analysts note that expectations for this year's first Fed meeting was also the factor of pressure for the US stock market. Investors look forward FOMC to express its commitment to the course of monetary tightening marked earlier. Doubts about the Fed raising rates occurred after the ECB had announced the launch of an ambitious quantitative easing program.
According to experts, any statements of the Fed about the strong US labor market will support expectations of rates growth in the middle of this year. The references about the problems of the world economy or low inflation will enhance the excitement in markets.
Using the doubts of market participants about the US dollar, the euro recovered the second consecutive day against the US currency. On Tuesday, the euro has moved up from 11-month high reached on Monday morning on the news about the Greek elections results.
On commodity markets oil and gold are rising. Brent futures on Tuesday were trading at $ 48.37 per barrel, WTI - at $ 45.47 per barrel. Spot gold rose by 0.5% to $ 1,287.30 per ounce.
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Market Pulse 28.01
Certainly, the most important event of Wednesday and even of the whole week for financial markets will be the announcement of the US Federal Reserve meeting results. Today FOMC will announce its decision on the basic interest rate, and then the FOMC statement will be published. Also the Reserve Bank of New Zealand will announce its decision about the interest rate.
7:00 ** GfK Consumer Climate - February (Germany)
Moderate impact on the market (EUR). The GfK leading index characterizes the attitude of consumers to the economy by the beginning of the reporting month. As a rule, the growth of the index is favorable for the currency.
15:30 ** Crude Oil Inventories - January(USA)
Moderate impact on the market (USD). Changes in the level of crude oil reserves in the United States is one of the benchmarks for the oil market.
18:50 *** BOE Governor Mark Carney Speaks - January (UK)
Strong impact on the market (GPB). Comments of Carney about inflation or the labor market can quite strongly influence the pound because on their basis investors can draw conclusions about the future monetary policy of the central bank.
19:00 *** FOMC Rate Decision - January (USA)
19:00 *** FOMC Statement - January (USA)
Strong impact on the market (USD). Financial market participants expect some hints on the Fed's furtherer actions in the light of recent decisions of the ECB and the Swiss National Bank. The Fed will either confirm or not confirm its policy of raising interest rates this year. In any case, it can greatly affect the dollar.
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USD / JPY. WillHawksbeСaged?
In a previous review we have mentioned the presence of a fairly large-scale graphic figure "triangle", formed by the correction of the next ascension wave observed during last October-December. Thus, this correctional figure has occupied the whole space and time from the beginning of December, and its borders are a good benchmark in terms of further pair hesitation anticipating.
At the same time, now the other interesting chart pattern that resembles a triple top had formed. In fact it is just a trading corridor where there are quotes in the last few days. It should be noted that price changes occur clearly within this corridor, which means that its range of about one and a half figures can still be used to work on a rebound from its borders.
This tactic is justified until tonight the Federal Open Market Committee (FOMC) of the US Fed will announce its decision on the future of monetary policy. Recall that at the end of their meeting in December the regulator has made it clear that the main reference point for the beginning of the temporary tightening cycle will be apparently the April meeting. At the same time, the recent actions of some major central banks, such as Bank of Switzerland, Bank of Canada, European Central Bank, which took up thoroughly to easy their policies, can influence the mood of the Federal Reserve leaders. Given that the current inflation rate is far from target, these leaders may decide that they do not need to hurry up and go on about hawks.
So, it is recommended to work on a rebound from boundaries of the channel 117.30 - 118.70 using oscillators. In the case of the upper range limit overcoming (after the announcement of the Fed's decision), it is necessary to open long positions in order to reach the top graphic border of "triangle" and then - with the aim of 120.69, which is Fibonacci extension level of the pulse of 16-20 January.
AUD / USD. Isthe Wait over?
Today aussie quotes shot up by 80 points in a minute after the very important (in the context of the Australian currency weakness against the US dollar) inflation data. So, despite the fact that the consumer price index in the 4th quarter of 2014 grew by only 0.2% while the forecast was 0.3%, other index, which excludes the cost of the most volatile commodity groups, exceeded expectations (0.5%), showing an increase by 0.7%. Apparently, market players in the context of recent statistics publications from other countries, which often have recorded deflation, were expecting much weaker performance, and were pleasantly surprised. So, now quotes have reached 38.2% correction from the last wave of decrease, but this climbing may turn into a directional trend, given the achievement key support levels - 61.8% Fibonacci correction of the upward trend of 2008-2011, as well as medium-term channel line and long-term downtrend.
A further rise in prices is expected and the first target may be the current medium-term downtrend resistance line. In the case of its overcoming it will be possible to talk about the beginning of the global adjustment of all reduction in July 2014 - January 2015.
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Vista Brokers: StockMarket is Recovering after Decline
On Tuesday, some US shares have declined, mainly against the backdrop of disappointing data on orders for durable goods in the United States. The most significant drop has showed the IT-companiy Microsoft, which shares have declined by 9.3% to $ 42.66 due to slow sales of the software for business. Shares of the largest engineering company Caterpillar have fallen by 7.2% to $ 79.85 amid worries about the impact of cheap oil on the work of this manufacturer of equipment for energy companies. Among the "outsiders" of the market were also Procter & Gable and DuPont Co.
Vista Brokers analysts point out that frustration on Wednesday the US stock market was replaced by more positive mood, and major indexes began to restore positions. Firstly, the expectations of the Fed meeting no longer pressured so much on markets as the day before. And secondly, some US companies brought a pleasant surprise to investors. It is, first of all, Apple Inc., which after the close of markets on Tuesday announced a net profit growth in the first quarter of fiscal year 2015 by 38%, due to the huge demand for new smartphone iPhone with larger screens. After this news Apple's stock price jumped immediately by 5%.
Interestingly, the 18 billion dollars of net profit earned by Apple for the quarter, is a world record. The previous record belonged to the oil giant ExxonMobil, which had earned in 2012 $ 15.9 billion of quarterly profit.
Also shares of Yahoo Inc increased by 6% immediately after the news that the company will provide its share of the Chinese Alibaba Group to create an independent company SpinCo. Investors approved a plan of Yahoo, especially the fact that the separation of a stake in Alibaba do not require the tax payment. Yahoo Inc shares growed despite the fact that in the fourth quarter of 2014 its profit had reduced by half.
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Vista Brokers: GreeceMayContinue toWeigh onEuro
Some analysts believe that the euro against may fall the dollar to 1 in the near future, with the development of the situation in Greece. Several months in a row the market was taking a lead from the fears that radical political forces would come to power in the country. When it occurred, the EUR/USD had fallen to a 11-year low.
Now, market participants will closely monitor the situation to see how "Syriza" is fulfilling its campaign promises. Vista Brokers analysts reminde that the party leader Alexis Tsipras voiced about the following plan of action after the elections: Greece will remain in the euro zone, but will force international creditors to cancel debts and will leave the austerity program. Over the next few weeks Tsipras will try to negotiate with the EU, ECB and IMF to revise the terms of lending, and will possibly squeeze "troika" on Greece's exit from the euro zone in case of reducing dept failure.
Experts point out that the victory of "Syriza" in Greece may lead to much more serious consequences than even the country's exit from the euro zone. Thus, other countries where radical political forces already have the large support may follow Greece. These are Italy, Spain, France.
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GOLD.Is itHead andShoulders?
Our "head and shoulders" figure has gotten a missing second shoulder by performing another condition for formation and implementation of graphic patterns. Thus, the H&S formation was preceded by a clear upward trend, then all the necessary graphical borders were formed, in particular there are head and shoulders and even the neckline. Now it is a little thing to do - we need a breakdown of the neckline. From fundamental point of view, a recovery in global stock indices amid the steps that have been taken by some world central banks with a view to stimulating economic growth, as well as for anti-deflation, continue to put pressure on prices. During such periods, the cash flow is directed towards the priority of income from investments, as opposed to the need for preservation, which is provided by gold.
The first reduce goal in the case of the support break scenario on the classics should be the distance from the neckline to the top of the head. Another classic goal will be the correctional Fibo level 38.2% from the growth of the pair fixed in the current month. We can say that they tie together at 1254 dollars per troy ounce, where the close order should be placed.
EUR / USD. Is itTime toLiftHead?
Yesterday's FOMC meeting was not out of the ordinary event. The Fed did not scare people, announcing any drastic measures, keeping the overall market expectations within borders understood by most investors. We mean that the regulator, of course, has reacted to the recent easing measures from other world central banks, referring to the need of the economy support, focusing primarily on long-term targets for inflation and employment. Based on recent data, about half of the analysts think that the first rate hike will occur in June. In any case, the situation with the euro is now clearer, because the long-awaited asset repurchase program of ECB has finally been announced. It's time to gather stones ...
At the moment, the descending medium and long term trends remain valid, but the dynamics of the pair in the last days together with the fundamental background give reasons to expect a correction and a possible medium-term trend line break. For this, it is necessary to overcome the extremum at 1.1421, where it is possible to open long positions with the aim of 1.1620 - Fibonacci extension 161.8% of the above-mentioned pulse. Here lies an important resistance level, corresponding to this year maximum.
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Vista Brokers: FedMeetingResults are Positive forDollar
On Wednesday, the most anticipated event of this week for financial markets took place - this year's first meeting of the US Federal Reserve. Iahead of it the US dollar against the euro rose in price. By 13:00 GMT the single currency was at $ 1.1355 level compared with $ 1.1381 at the close of trading on Tuesday. USD/JPY has remained stable - at 117.88 yen.
The Fed meeting results were published at 19:00 GMT without any press conference, thus investors tried to catch hints of further steps of the US central bank between the lines of the statement.
Vista Brokers analysts note several important theses that have been made. Firstly, the Fed has marked a steady development of the US economy and the labor market, as well as the fact that the drop in oil prices has increased the purchasing power of households. Secondly, the Fed expects the decline in inflation in the short term and its growth in medium-term to the target level of 2%. Also worth noting is that the interest rate has remained in the same range.
As analysts had expected, the FOMC statement did not give any surprise. Although some experts got to see in a slightly changed text some hints at "softening". In particular, the State Street Global Advisors economist Michael Aron believes that even if inflation will grow closer to the target level, the Fed's policy remains soft for a long time.
Immediately after the publication the US stock market began to decline and the yield of US 30-year Treasuries fell to the record - 2.291%. The dollar strengthened against a basket of currencies by 0.5%.
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Market Pulse 29.01
8:50 *** Unemployment Change- January (Germany)
8:55 *** Unemployment Rate - January (Germany)
Strong impact on the market (EUR). Analysts expect that unemployment in Germany will remain the same - 6.5%, while the number of unemployed will fall, but less than in the previous reporting period. Excess of forecasts can support a single currency.
10:00 ** Consumer Confidence - January (euro zone)
Moderate impact on the market (EUR). The leading index, published by the European Commission, which reflects consumer confidence in the economic situation. Analysts expect lowering of confidence level by 8.5.
11:00 ** CBI Distributive Trades Survey - January (UK)
Moderate impact on the market (GPB). A report published by the Confederation of British Industry, is an indicator of short-term trends in the retail and wholesale trade in Great Britain. As a rule, the high value of the index is positive for the pound.
13:00 ** Preliminary Consumer Price Index - January (Germany)
13:00 ** Harmonised Index of Consumer Prices - January (Germany)
Moderate impact on the market (EUR). After a small increase in the previous month, on January, analysts expect lowering of inflation in the euro zone's largest economy. This can put pressure on the euro.
13:30 *** Initial Jobless Claims - January (USA)
13:30 *** Continuing Jobless Claims - January (USA)
Strong impact on the market (USD). In the accompanying statement of FOMC which has been released yesterday was a comment that labor market conditions have improved and the employment growth is "strong." In recent months, the number of claims in the US has been steadily decreasing.
15:00 ** Pending Home Sales - December (US)
Moderate impact on the market (USD). One of the most important indicators for the US real estate market, which characterizes activity in this area. High result strengthens the dollar.
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Vista Brokers: Fed Meeting Influenced on all Financial Markets
On Thursday, stock markets in Europe and Asia were falling amid of the dollar growth after the Fed meeting on Wednesday. The regulator has confirmed the policy of raising interest rates this year giving the US currency a considerable support.
Vista Brokers analysts note that the dollar strengthening has led to a decline in oil prices down to 6-year low, and has put a pressure on gold.
As for the European markets, they are still under the influence of the radical party "Syriza" victory in Greece. Now Greece shares are rebounding slightly after falling by 9.2% on Wednesday. But the pan-European index FTEU3% has lost 0.7%, having dropped to 1.464 points.
In Asia, the stock market declines. The Japanese major index Nikkei fell on Wednesday by 1.1%, and it is the greatest day decline over the past two weeks. Asian MSCI index lost 1.2%.
In the USA, the S&P 500 index fell by 1.4% after the announcement of the Fed meeting results. Recall that many market participants have expected that the US regulator would adjust its plans for the monetary policy after the other major central banks around the world had chosen further easing. However, the Fed confirmed the previously taken course.
Against this backdrop, the dollar index, which tracks the price against a basket of currencies, was up by 0.2%. Against the yen, the dollar rose by 0.3% to 117.87 yen. The euro fell against the greenback to $ 1.1304.
As for commodity markets, the Brent crude oil rose by 0.25% to $ 48.60 per barrel, WTI fell by 0.1% to $ 44.40. Gold has fallen in price to $ 1,279.80 per ounce.
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Vista Brokers:FedStatementPutPressure onGold
On Wednesday, the price of the precious metal fell. At the end of trades on СОМЕХ gold for February delivery fell by 0.5% to $ 1.285.90 per ounce. Vista Brokers analysts note that the reason for the decline of gold was that the US Federal Reserve had confirmed its adherence to the policy of raising rates in the second half of this year. March silver futures closed unchanged at $ 18.09 per ounce.
In its accompanying statement, the Fed has noted a "solid growth" of the economy and the labor market. Thus the regulator has expressed an optimistic attitude to the current state of the economy. Also, the Fed has repeated that inflation is likely to reach a level of 2%, although not in the short term.
Analysts remind that the day before the market price of precious metals rose after weak data on orders for durable goods in the United States. Disappointing statistics put pressure on the stock market, which in turn led to an increase in demand for safe-haven assets.
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