Yesterday’s Trading:
On Monday the euro/dollar spent the day below 1.0900 due to Martin Luther King day in the US. The stock market situation stabilized. Market participants weren’t active as the release of Chinese stats approached.
Main news of the day (EET):
- 09:00, German December CPI;
- 11:00, Eurozone November balance of payments changes;
- 11:30, UK retail sales, PMI and CPI for December;
- 12:00, Eurozone business sentiment for January from ZEW and November CPI. German ZEW business sentiment;
- 14:00, BoE governor Carney to speak;
- 17:00, US housing market index from NAHB for January.
Market Expectations:
China published some data on GDP, industrial manufacturing volume and retail sales. Chinese GDP in 2015 slowed to 6.9% YoY against 7.3% in 2014. The data was as forecasted.
Industrial manufacturing volumes and retail sales were 5.9% and 11.1% against a forecasted 6.0% and 11.3%. The market hardly flinched on news of the data. This just confirms that market participants are having doubts about the dependability and credibility of the statistical data. The stock markets in this case are a better indicator for China. By 06:47 EET they were all up by 1.5% on average.
Trader attention on Tuesday will be on German and UK economic data. A V-shaped pattern with a 1.0854 minimum at 112 degrees is what I have for my forecast.
Technical Analysis:
- Intraday target maximum: 1.0904 (current Asian), minimum: 1.0852, close: 1.0887;
- Intraday volatility for last 10 weeks: 100 points (4 figures).
The euro/dollar is trading at around 1.0885. The price is near the trend line. Since the Asian stock indices are in the green zone and oil is in the red, in my forecast I’ve gone for a fall of the euro to 1.0854 with a subsequent rebound to 1.0887. I’ve gone for a fall due to the euro/pound cross.
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