In the foreign exchange market unstable equilibrium
January 17, 2019 10:21 amVideo
Latest News
- Video market update for April 23, 2024 April 23, 2024
- Trading Signals for EUR/USD for April 23-25, 2024: buy above 1.0681 (21 SMA – 3/8 Murray) April 23, 2024
- Analysis for the EUR/USD pair on April 23rd. Euro currency prepares for another decline April 23, 2024
- Analysis for the GBP/USD pair on April 23rd. Sellers failed to take the mark of 1.2313 on the first attempt April 23, 2024
- Technical Analysis – AUDUSD gears up after disappointing US PMIs April 23, 2024
- Technical Analysis – Meta stock falls below 50-SMA ahead of earnings April 23, 2024
- USD/JPY: Simple trading tips for novice traders on April 23rd (US session) April 23, 2024
- GBP/USD: Simple trading tips for novice traders on April 23rd (US session) April 23, 2024
- Technical Analysis – USDJPY fights with new 34-year high April 23, 2024
- EUR/USD: Simple trading tips for novice traders on April 23rd (US session) April 23, 2024
- Alphabet Q1 Earnings: Strong ad business but AI initiatives lag – Stock Markets April 23, 2024
- GBP/USD: trading plan for the US session on April 23rd (analysis of morning deals). The pound continues to decline April 23, 2024
- EUR/USD: trading plan for the US session on April 23rd (analysis of morning deals). The euro has shown rapid growth April 23, 2024
- EUR/USD. April 23rd. Bulls and bears are in balance April 23, 2024
- GBP/USD. April 23rd. The bears continue to attack April 23, 2024
- Gold edges lower as Middle East tensions ease April 23, 2024
- Slightly lower volatility across the board ahead of key US data – Volatility Watch April 23, 2024
- Technical Analysis – UK 100 index hits new all-time highs but rally may be cooling April 23, 2024
- XM Teams up with ‘Charity Right’ for Change April 23, 2024
- Technical Analysis – US 500 index rebounds off 2-month low below 5,000 April 23, 2024
Eurozone
The euro partially lose ground before the publication of the report on inflation in December, while the forecasts are still neutral, but a number of factors, such as a decline in manufacturing activity in Germany, a general fall in PMI in the eurozone and Brexit uncertainty, put pressure on the euro.
Support for EUR/ USD 1.1330 / 35, growth is limited by the level of 1.1420, slightly more likely to move up during the day.
Great Britain
Against the backdrop of increasing political crisis, the pound received unexpected support. Despite the fact that inflation slowed to a two-year low in December, it was still slightly higher than expected, and the base index without taking into account volatile energy and food prices even rose from 1.8% to 1.9%, which gives hope that the slowdown in price growth will end as soon as oil prices stabilize.
As expected, some conservatives who voted against the Brexit agreement with the EU did not dare to repeat their trick on the question of confidence in the cabinet of ministers, as a result of which Theresa May managed to keep her post. This victory, however, may turn out to be Pyrrhic. The conservatives just don’t want to allow extraordinary elections, as they may lose some of the seats, but a positive outcome does not add any chance that by January 21, a Brexit solution will be found that suits everyone.
The head of the Bank of England Mark Carney, commenting on the voting results, noted that the market’s expectations are most clearly reflected in the foreign exchange market. The pound remained close to local maximum, which, in his opinion, indicates a good prospect of reaching an agreement with the EU. At the same time, the EU coordinator at the Brexit talks, Michel Barnier, believes that the likelihood of a tough Brexit has risen to an “unprecedented level” without any agreement.
No macroeconomic publications on the pound are expected until the end of the week, so all attention will be focused on possible insights regarding preparations for the January 21 parliamentary session, the last opportunity to reach an agreement. GBP / USD with a high probability will not go beyond the range of 1.2805 / 1.2930 until any significant news appears.
Oil
Oil prices adjusted downward after the publication of the weekly report by the US Department of Energy, which showed a record increase to 11.9 million barrels per day. We also need to note higher than expected reserves of gasoline and crude oil. US production is growing, largely offsetting a decline in OPEC +, which prevents market balancing.
At the same time, surprisingly, production growth in the USA occurs without the growth of three main indicators, the number of drilling rigs, investment in the mining sector and employment, which are at levels lower than during the time of the second oil bubble of 2011/14.
Such unexpected statistics can indicate either an unprecedented increase in the efficiency of production, that is, the triumph of modern technologies, or the fact that something is not in order with the methods of calculating own production. In any case, the factor of record production in the United States will prevent oil prices from continuing to grow, therefore stabilization in the range of 58.90 / 62.60 formed last week is more likely.
The material has been provided by InstaForex Company – www.instaforex.com
Related Posts: