TRADERS AWAIT TOMORROW’S BLOCK OF MACRO DATA FROM THE US
Volatility on the market remains increased due to political tensions in the US and the speech of Janet Yellen in which the Fed’s governor didn’t give new hints about the timing of another rate hike in the US. There was mention that the Fed’s balance sheet may start to reduce by the end of the year from the current amount of 4.5 trillion dollars if economic expansion continues to meet the regulator’s forecast.
Traders are waiting for tomorrow’s report on consumer inflation in the US that can offset the weak data from the previous month, which showed a slowdown in CPI’s growth. Traders will also be paying attention to news on retail sales and industrial production in the US that are also released tomorrow.
The British pound slightly appreciated against the US dollar after the previous increase caused by the fall of the unemployment rate in the UK by 0.1% to 4.5%. Potential increase is likely to be limited by the strong resistance area of 1.3000-1.3050. The price of USD/JPY decreased amid the stronger interest in defensive assets, but th recent drop may be temporary and the strong dollar will push the price upwards.
An important report on crude oil inventories in the US yesterday demonstrated the unexpected decline in inventories by 7.6 million barrels, but this fact was unable to offset the bearish mood on the market caused by the growth of oil production in OPEC. The oil output in the US also increased to 9.4 million barrels per day and the next event that may influence the mood of traders will be Friday’s release on drilling activity from oil service company Baker Hughes.
The single currency price is gradually declining after an unsuccessful attempt to reach and break through the resistance at 1.1500. Such scenario could lead to continued growth up to 1.1620 and 1.1700, but now the quotes are closer to the support line at 1.1380, breaking through will likely become the stimulus for a continued fall to 1.1300 or even 1.1200. Growth in volatility is expected tomorrow after the report on the Consumer Price Index in the US.
The British pound is trying to overcome resistance at 1.2950 after which the price may reach multi-month highs near 1.3050. On the other hand, breaking through the support at 1.2890 may provoke another round of selling the result of which the price may decline to 1.2800 and 1.2635. Today we may see continued consolidation, but tomorrow the volatility may rise.
The USDJPY resumed to increase after a failed attempt to fix beyond the limits of the rising channel and the support line at 113.00. A continued increase within the channel will have first targets at 114.00 and 114.70, but the price needs to overcome the local maximum at 1.1350. In case of negative dynamics resuming, the quotes are likely to reach 111.70.
The American benchmark for light sweet crude oil continues to demonstrate fluctuations within the wide range due to a number of controversial news from the US and OPEC. Now the price has approached resistance at 46.00 and its overcoming will be the reason for further increases up to 47.00 and 47.75. In the opposite scenario, the RSI on the 15-minute chart is close to the overbought territory that signals a possible retreat with the first stop at 45.00.