The US Federal Reserve (Fed) yet again postponed a hike in interest rates from near zero levels even after weeks of enthusiastic speculation about whether it was about time for the central bank to announce a rate hike.
This time around the developments in China, the world’s second largest economy, appeared to have influenced the decision in favour of maintaining a status-quo on low interest rates. The central bank has two more scheduled policy meetings this year, in late October and mid-December. Most analysts now expect a rate rise to come in December at the earliest.
The updated FOMC forecasts revealed that the Fed expects Gross Domestic Product (GDP) growth for 2015 to be 2.1%, up from the 1.9% it estimated in June. However, it lowered its 2016 forecasts to 2.3% from 2.5%. The unemployment rate forecasts for 2015 and 2016 were lowered by 0.3% each to 5% and 4.8%, respectively.
The S&P500 fell more than 0.5% since the start of the month and plunged more than 4.5% year to date settling in a bearish phase. The Index went back and forward without any clear direction with a wide range during the course of last week and closed in the red near the open of the week. The stochastic is showing bearish momentum and is below the 50 mid line.
Expecting downward move to a weekly support at 1,891.50 on a break below previous week low at 1,891.50 (scenario 1) or a bounce off the weekly resistance at 1,973.0 (scenario 2).
Usa500 is a CFD written over S&P 500 futures.
Another month of strong hiring in June, adding 221K jobs and a sinking unemployment rate hitting 5.3%, but many part-timers cannot find full-time work. However in the face of global and demographic shifts, this may be what a nearly healthy US job market now looks like.
Switzerland is unquestionably bracing for a deeper negative economic impact due to the strength of the franc. In its June forecast, the Swiss government statistics office (SECO) anticipates further economic deceleration to 0.8% in 2015, from the 0.9% expected in March. The gross domestic product (GDP) growth in 2016 was revised downwards to 1.6% from 1.8% previously.
Greece stares into the abyss and the Swiss franc or the US dollar may offer traders a safe haven for those who want it.
The USDCHF fell 6.25% since the start of the Year and is in bearish phase since the end of June. The currency tried to rally last week but found enough selling pressure at the 10-week moving average giving all its gains back and closing near the low of the week, moving towards the 200-week moving average. The Stochastic is showing a strong bearish momentum and ….
Expecting an upward move to a weekly resistance at 0.9838 on a break above previous week high at 0.95034 (scenario 1) or a break below previous week low at 0.9243 could throw the currency to a weekly support at 0.9021 (scenario 2).
This past week data showed that unemployment rate in Australia surprisingly fell to 6.0%, its lowest level in a year in May, from a downwardly revised 6.1% in April. Markets were expecting the nation’s jobless rate to rise to 6.2%. Additionally, number of employed people jumped by 42K in May, compared with an expected increase of 15K. However the consumer inflation expectations in the country eased to 3.0% in June, from prior month’s level of 3.6%.
The US May retail spending data and April inventory levels data both support the setting that the US economy is on a steady path of recovery. As consumers are willing to spend more, businesses would have to take on additional workers to produce more and this would increase the production and income of the entire economy.
The AUDUSD fell 4.25% since the start of the Year and is in bearish phase. The currency rallied last week on a narrow range week, creating an inside week and closed near the high of the week, below the 10-week moving average. The stochastic is showing lack of momentum and is below the 50 mid line.
Expecting an upward move to a weekly resistance at 0.8032 on a break above previous week high at 0.7793 (scenario 1).
The US dollar strengthened against the British pound after a positive jobless claims report reduced worries that the world’s largest economy is experiencing a broad slowdown.
The data released from the UK was cheerful on Wednesday Markit Services (PMI) displayed a reading of 59.5 it was the highest level since August and up from 58.9 in March. However, the UK Parliamentary Election is showing, by most polls, that another coalition government is a highly probable outcome of the election.
Today on the economic agenda we have from the UK the total trade balance in March that is expected to fall from £-2.859 to £-2.400. On the US side we will have the nonfarm payrolls in April that is estimated to rise from 126K to 230K and the unemployment rate is expected also to fall from 5.5% to 5.4% showing a strong US Labour market.
On yesterday session the GBPUSD initially fell but found enough buying pressure at Wednesday open to turn around and closed near the high of the day, shy of the 200-day moving average. The pair is in a potential phase change from recovery to accumulation, trading above the 10 and the 50-day moving average.
Expecting upward move to a daily resistance at 1.5853 on a break above the daily resistance at 1.5583 (scenario 1) or a bounce from the daily resistance at 1.5485 could pull the pair back down to a daily support at 1.5237 (scenario 2).
The data released from the UK was rather mixed on Friday as unemployment rate reached its lowest level in more than six years at 5.6%. However, while wage growth figure including bonuses rose at a slower pace than the previous three months.
Today on the economic agenda from the UK the Bank of England (BoE) should announce that it would hold its key interest rate at a historic low of 0.5%, and keep the size of its quantitative easing asset-purchasing program at £375 billion in spite of investors concerns’ regarding the likely outcome of next month’s UK General Election.
On yesterday session the GBPUSD initially fell but found enough buying pressure to turn around and closed in the middle of the daily range. The pair is in a potential phase change from bearish to recovery, trading above the 10-day moving average although below the 50 day moving average.
Expecting upward move to a key level at 1.5162 on a break above the daily resistance at 1.5008 (scenario 1) or a break below previous day low at 1.4856 could pull the pair back down to year low 1.4670 (scenario 2).
Yesterday European markets closed higher, after China’s central bank on Sunday lowered the reserve requirement ratio (RRR) for all banks by 100 basis points. The wider-than-expected cut was the second reduction in two months, as the world’s second-largest economy attempts to combat slowing growth.
Data released on Friday by the Office for National Statistics (ONS), revealed that the unemployment dropped to a seven-year low and the number of people out of work fell by 76,000 to 1.84 million in the three-month period (December 2014 to February 2015). Statistics also showed a drop of 5.6% in unemployment rate, the lowest level since July 2008.
Since the beginning of the year the FTSE 100 surged more than 6.5% and is in a bullish phase.
On yesterday session the Index found support on the 10-day moving average rising and closed in the middle of the daily range within the previous day range creating an inside day. The stochastic is showing a overbought and displaying bearish momentum.
Expecting a downward move to a key level at 6,840 on a break below previous day low at 6,976 (scenario 1) or a break above the previous day high at 7,022 could push the Index up to year high at 7,076 (scenario 2).
UK100 is a CFD written over FTSE 100 futures.
The USD strengthen after better-than-expected US initial jobless claims and an increase in Services PMI, discarding at the same time disappointing continuing jobless claims.
Yesterday, Japan released its National Consumer Price Index in February that fell from 2.4% to 2.2% and unemployment rate also fell from 3.6% to 3.5% showing improvement in the labour market.
Today on the economic calendar we have from the US we will have the Gross Domestic Product Annualized (GDP) in 4th quarter that is expected to rise from 2.2% to 2.4%.
On yesterday session the USDJPY initially fell during the start of the day but bounce from 118.32 support zone closing near the open of the day. The pair shows a possible phase change from bullish to a warning phase and closed below the 50 day moving average. The Stochastic is showing an oversold market and is signaling a slight bullish momentum.
Expecting upward move to a daily resistance at 120.55 on a break above previous day high at 119.57 (scenario 1).