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22.02.2019 Daily Bulletin
ECB minutes showed a preparation of new longterm loans for banks. FOMC minutes were rather neutral as the market already traded the dovish sentiment ahead of report release. The parity price didn’t gain on Dollar’s mixed data as well. 1.1370 appeared to be a firm resistant to the price movement that is expected to edge down even more to 1.1300 followed by 1.1260 and 1.1230 ahead of most likely dovish comments from ECB President Draghi and next portion of Eurodata in the case that comes weak. Any positive surprises will pull the price once more to 1.1370 and then 1.1400 and 1.1450 levels. Multiply FOMC officials, among them Bostic, Williams, and Clarida, will be speaking at the end of the week.
Support: 1.1300 – 1.1260 – 1.1230
Resistance: 1.1370 – 1.1400 – 1.1450
The Pound could be battered as investors fear for the worst in Brexit. British MP Andrew Percy told BBC that PM May could face another rebellion as more than 30 lawmakers from her party prepare to block a no-deal. In the meantime, more MPs could break the ranks with their ruling Conservative Party and the opposition Labour over the Brexit process. With the price having fluctuated within the past 24 hour's range of 1.3025 and 1.3095. It currently is testing the 1.3050 resistance. Further rise means 1.3070 and 1.3100 will be the next targets. A decline means the parity will first face 1.3030 again and then see 1.3000 level as a firm support.
Support: 1.3030 – 1.3000 – 1.2950
Resistance: 1.3050 – 1.3070 – 1.3100
Japanese national core CPI reading came in line with expectations at 0.8 pct, but it still is far from BoJ’s 2 pct target. The monthly report showed inflation to rise by 0.3 percent, comparing to prior -0.2 percent. Japanese central bank will keep its ultra-loose policy until the target is reached. Last Tuesday Governor Kuroda signaled that bank is prepared to expand the stimulus program even more. The price is trading nearly flat on the upper band of the channel while the markets are looking forward to some decisive developments. Trade talks arena might provide them before the weekend as a meeting between the US President and China’s Vice Premier Liu He takes place today. 110.50, then 110.20 and 110.00 remain our support levels. In the case of reaching and breaking 111.00 level, the price will soar towards 111.50 and then 112.00.
Support: 110.50 – 110.20 – 110.00
Resistance: 111.00 – 111.50 – 112.00
The possibility of an accord between the US and China and the end of the months-long trade war is increasing although there is a lot of work and a few days left before the deadline on March 1. The market is optimistic as China offered additional imports of US agricultural products. The safe haven's price has slid down recently from 1346 level by 20 dollars. As long as the price remains above decisive 1325, 1330 and 1336 will be seen again. If the drop continues, substantial 1320 level will be reached. Then, 1295 and 1286 will be further downward targets. US President Trump will meet with Chinese Vice Premier Liu He on Friday.
Support: 1300 – 1295 – 1286
Resistance: 1330 – 1336
US crude oil inventories showed an increase, beating the lowered forecast and the previous week's reading. The reading was 3.672M, compared to 3.080M forecast and prior 3.633M. US cushing crude oil inventories showed a significant increase to 3.413M from prior -1.016M. However, the impact on the price was limited. While OPEC+ and allies, including Russia, are putting efforts to limit the crude oil output, the US became first country reaching output at 12 mln bpd. EIA reports the country reached that number for the first time last week. The price has edged down on the news, but the decline is not drastic. As long as the price stays above 70.50, there is prospect for breakout and reaching 71.00 and 71.50 levels. If the price deepens, 70.20 and 70.00 will be seen. Any movement below 70.00 will lead to 69.40. US Baker Hughes will release its weekly count of oil rigs.
Support: 70.20 – 70.00 – 69.40
Resistance: 71.00 – 71.50
In the light of chance for Sino-US accord and lower risk of chaotic Brexit global concerns are easing. German and Eurozone manufacturing PMI grew lower than it was expected but Services PMI didn’t disappoint. The Markit composite for the bloc came in green. German GDP matched the expectations and the previous reading with 0.0 percent quarterly and 0.9 percent annually. ECB minutes acknowledged that the bank is ready for a fresh stimulus program if necessary. The German index price reached 11 500, but the level turned out to be a strong technical resistance. The price flopped but it is holding on above 11 400. Therefore, 11 500 will be still on our radar while 11 600 will be the next upside target. If the price aggravates and breaks 11 400 downward, 11 300 and 11 260 will be considered. German Ifo business climate index will be published. Economic calendar presents Eurozone inflation.
Support: 11 400 – 11 300 – 11 260
Resistance: 11 500 – 11 600