Daily Market Review - 10/01/2014

EUR/USD

EURUSD_Oct 1

The Euro pattern doesn’t bring any surprises. Next goal on the downside will be 1.2500. The bigger picture of the chart suggests slowdown of the trend. Before1.2135 there is no serious support seen.

USD/JPY

USDJPY_Oct 1

Resistance at 110 still prevails. Nevertheless there is no strong retracement seen. Most likely the currency will attempt to break above once more, so that is the challenge for today.

GBP/USD

GBPUSD_Oct 1

The Pound has dropped down. At current level there is an important support capable of reversing the trend. The inability to do so will push the rate further down.


Market Overview

The Euro continues to go down. In spite of inflation revision from 0.3% to 0.4% last month, in September the figure came out again at the level of 0.3%. More over: base inflation dropped from last month 0.9% to 0.7% (the figure doesn’t take to account price dynamics for food and energy).

Since inflation continues to be at 5 years minimum, it puts a bigger pressure on the ECB. During the week the regulator has to determine parameters of future program of assets purchasing. But if agreements on securities guarantee with biggest EU capitals are not reached, there will be only the most reliable ones included in the program. In such case it will reflect negatively on its effectiveness.

Correspondingly it will become an additional driver for the downgrade of the Euro. Overall unemployment has remained at 11.5% in the EU, but in Italy the figure among youth has set a new negative record of 44.2%. Since the state is in recession, continuing escalation at the labor market suggests that the beginning of recovery is still far away, especially if authorities continue do nothing.

But as British and American experiment show, without additional liquidity the situation won’t be changed easily. Last statistical data suggests increase of British GDP by 0.9%. In Europe such dynamics remains a dream.

Recent survey of companies shows continuing weakening of business activity in the third quarter, what might also reflect negatively on inflation. The only available positive thing is retail increase by 2.5% in Germany and 0.7% in France. But it is worth mentioning, that a month earlier 2 figures were in the red zone, and stable inflation bears risks that consumers will support significant spending in hope for even bigger prices downgrading.


Economic Calendar

All Day

Holiday

Hong Kong – National Day

All Day

Holiday

China – National Day

01:00

CNY

Manufacturing PMI (Sep)

01:30

AUD

Retail Sales (MoM) (Aug)

03:00

IDR

Core Inflation (YoY) (Sep)

07:15

EUR

Spanish Manufacturing PMI (Sep)

07:30

CHF

SVME PMI (Sep)

07:45

EUR

Italian Manufacturing PMI (Sep)

07:50

EUR

French Manufacturing PMI (Sep)

07:55

EUR

German Manufacturing PMI (Sep)

08:00

EUR

Manufacturing PMI (Sep)

08:30

GBP

Manufacturing PMI (Sep)

12:15

USD

ADP Nonfarm Employment Change (Sep)

14:00

USD

ISM Manufacturing Employment (Sep)

14:00

USD

ISM Manufacturing PMI (Sep)

The post Daily Market Review – 10/1/2014 appeared first on Citrades.

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