08.01.2014- The markets are full of optimism

Yesterday’s trading session on European markets ended with steady growth of stock indixes. One of the drivers was the message that the number of unemployed in Germany decreased by 15 thousand to 2.965 million. In November this figure showed an increase by 9 thousand, experts predicted a decline by only 1 thousand. Unemployment at the same time remained unchanged, at around 6.9%. The consumer price index in the euro area, according to preliminary estimates in December have risen by 0.8%, the forecast was 0.9%.

At yesterday’s speech to business representatives in Boston, the Fed President E. Rosengren said that the U.S. economy remains under threat as long as the rate of inflation is below the target of 2%. U.S. trade balance came out better than expected. Thus, the deficit decreased to $ 34.3 billion, with forecasted growth to $ 40.2 billion.

On this background the price of euro continues to consolidate near the level of 1.3620. Support level is at 1.3530. Growth is limited by the resistance levels at 1.3660 and 1.3710. Further price movement will depend on the results of the ECB meeting, which will take place on January 9. On that day the ECB should announce plans on economy stimulation of the euro area in 2014. The course of trading today may be affected by the data on the trade balance of Germany (07:00 GMT), as well as unemployment and retail sales in the Eurozone (10:00 GMT).

The British pound is consolidating in a narrow channel 1,6370-1,6440. The dynamics of prices today will depend on the report of the Bank of England on the state of the credit market UK (09:30 GMT).
USD/JPY continues to move in the uptrend. The reason for another depreciation of the Japanese yen against the U.S. dollar were the news that the monetary base in Japan in December grew by nearly 47% comparing with the previous year to a record level 193.5 trillion. Yen. We recall that the target figure for the Bank of Japan is 270 trillion. Yen. Growth is limited by a local maximum at 105.40. Support lines are located at 104.60 and 103.90.

The Australian dollar continues to move within the corridor 0,8840-0,90. Yesterday was published the data on the trade balance of the country, which appeared better than the forecast. Thus, the deficit decreased to 0.12 billion dollars against the expected figure of 0.30 billion. We remain a negative outlook on the Australian dollar in the long term. Loose monetary policy of the Reserve Bank of Australia and a large supply of tools for the further weakening of the national currency gives the background for a further decrease of quotations.

After reaching the psychological level of $ 100 per barrel, the U.S. benchmark Light sweet crude oil collapsed to the level of 93.60 and now is consolidating at the level of 94.00 dollars per barrel. Now the price of oil starts to grow on fears of an escalation of the conflict in Iraq, which could lead to interruptions in oil supplies. Today the course of trading may be influenced by the report on oil and petroleum products inventories in the U.S. (15:30 GMT). The rise of prices is limited by the resistance at 95.50. Strong support is located at 92.00 dollars per barrel.

The price of gold have corrected after reaching the strong resistance level at 1240 dollars per troy ounce. The reason for decline was the strengthening of the U.S. dollar. Low demand for physical gold continues to put pressure the on prices of the yellow metal. We recall that in 2013 a net outflow from the “gold” exchange-traded funds totaled 38.1 billion U.S. Last year, the price fell by 28%. While the yield of risky assets remains high, it is early to talk about the change of trend. The closest targets in case of the further reduction are the 1220, and 1200 levels. Resistance is situated at 1240.

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