15.01.2014 - Retail sales supported the bulls

Trading day on the European stock markets has passed near the previous close levels. The industrial production in the euro area increased by 1.8% in December, the expected increase was just 1.6%. Positive market statistics came from America. Core retail sales excluding the transportation component in December grew by 0.7%, while the forecast was 0.2%. It is worth noting that retail sales are one of key macroeconomic indicators in the U.S. economy, which depends on consumption. Growth

in inventories has met analysts’ expectations and made 0.4%.

On this background, the U.S. stock market has shown a steady growth. In case of continuation of growth, S&P500 may reach a strong resistance level at 1844. Support is at 1810.

The course of trading today may be affected by publication of a report on the trade balance of the Eurozone (10:00 GMT), the data on requests for mortgage lending (12:00 GMT), the index of business activity in the manufacturing sector of New York and the producer price index (13: 30 GMT). Also at 19:00 GMT will be published the Beige Book.

Quotations of EUR/USD dropped sharply and reached 1.3630. In case of further decline, the nearest support level will be at 1.3530. Growth is limited by 1.3710 mark. Traders do not hasten with actions and wait the release of the ECB monthly report, which will be published tomorrow at 09:00 GMT and a large block of macro statistics on China which will be released on Saturday.

The price of the British pound continues to trade inside the rising channel. After reaching the 1.6440 level we saw a rollback. Now the support is at the lower limit of the rising channel. The course of trading yesterday was influenced by data on consumer inflation, which in December made 2.0%, while the forecast was 2.1%. Retail prices appeared 0.1% above expectations and reached 2.7%. The chart shows the formation of a triangle, after which a strong movement is possible.
Due to the dollar strengthening, the quotes of USD/JPY have shown a strong growth. The closest target is the level of 104.60. Correction is possible to 103.90. Growth of the monetary base in Japan in December was 4.2%, against waited figure 4.5%. Stock market was supported by the data on the volume of orders for machinery equipment, which in December increased by 28%, compared with growth of 15.4% in November. We maintain our positive outlook for the pair due to the monetary policy of the Bank of Japan aimed at currency devaluation and inflation growth to 2%.

Meanwhile, the Australian dollar continues to fall amid strengthening of the American currency. Correction is possible to 0,8940-0,8950. In case of further reduction the target will be at local minimum 0.8840. Due to the loose monetary policy of the Reserve Bank of Australia and a large number of tools for weakening national currency, we remain bearish on the Australian dollar.

The price of Light Sweet crude oil continues to consolidate near the level 92.00 dollars per barrel. Today at 15:30 GMT, will be published the report on oil and petroleum products inventories in the U.S. Until that time, traders will not rush to build up new positions. In case of growth, the price can reach the level of 93.60. When fixing below 92.00 the quotes of oil can decline to the next support level near 90.00 dollars per barrel.

Quotations on gold corrected down to the strong support at 1242 on strengthening of the U.S. dollar. In case of resumption of growth, there is a strong possibility that the price will reach resistance at 1265 moving within the local rising channel. When fixing below 1242, 1220 dollars per troy ounce will serve as a support level.

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