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18.12.2018 Daily Bulletin
The Euro advanced after the major US indices fell which pulled the Dollar down with themselves. A firm resistance trend line prevented the parity price from further expansion. Core monthly CPI for Eurozone showed a decline by 0.1 percent and the annualized data matched the expectations at 1.0 percent in November. The price is in correction movement, approaching to the tip of the weeks-long triangle formation. In the case of a breakdown, the price will erase all its yesterday gains, reaching 1.1300 and 1.1270 levels. If the upward movement continues after the correction, 1.1380 and 1.1420 and then 1.1440 will be seen. Today and tomorrow, the US will release several figures, starting today with building permits and housing starts. Soon, Germany will publish business indices.
The parity price edged up due to the Dollar’s depreciation. But the Pound struggles as well on a no-deal Brexit risk while PM May faces the possibility of a no-confidence vote from the opposition party. If the price rises above 1.2620, 1.2670 and 1.2700 will be targeted. The levels of 1.2540 and 1.2480 will remain downward targets. Today, the UK economic calendar has not much to offer. More sharp movements are expected tomorrow as the economic calendar on Wednesday will be dominated by UK data and FOMC monetary policy statement.
New economic forecasts for Japan have been issued. GDP, CPI and capital expenditure decreased as the result of natural disasters and weakened exports demand caused by trade tension. The parity price returned from 143.20 level as investors sought refuge in the Yen amid global concerns. Pound in the meantime is coping with a now full-blown Brexit crisis. The level 141.50 the first support ahead. In the case of a further drop, 141.00 will be considered. If the price retraces, 142.80 and 143.20 will be eyed. In the following Asian session, Japan will unveil its trade figures.
In its last meeting of the year today, the Bank of Japan is expected to make some “tweaks” before starting to normalize monetary policy. The Dollar index continues to rise due to value losses in Euro and Pound. Market picks the US dollar as a safe haven asset again. The parity still is above the important 113.00 level. 113.50 and 114.00 resistance lines will be followed if the upward price movement continues. The current triangle formation is getting smaller by day. It should break soon. If price movements decline sharply below the 113.00 level, 112.50 and 112.00 supports will be crucial.
Gold price took an advantage from the weakening Dollar, however, currently the price is dimmed. Global concerns causing the drop in US stocks as well as the two-days FOMC meeting that is widely expected to raise interest rates by 25 basis points might cause more gyration in Gold price. The level of 1241 will be a daily support, but once it is broken, we will see a decline to 1236. In the event of a further rise, the recent peak at 1251 and a fresh high at 1255 will be targeted.
After the OPEC meeting earlier this month, investors are still concerned over a lack of resolve and specific targets for production cuts. Global growth concerns rose in recent days. Japan’s government revised all GDP data for the next few years. Tomorrow Fed’s FOMC meeting will be important for all markets globally, affecting the market appetite. Brent oil broke the formation it was following before. If the price continues to decline, 61.50 will be on our radar. After that level 61.00 support should be watched. In the case of a retracement above the 63.00 level, 63.70 resistance will be followed.
European economic commissioner Moscovici said that France will be the only Eurozone country with a deficit of over %3 next year. He argued that French and Italian cases are not similar. The European Commission isn’t giving good signals for Italy. Because of Fed’s FOMC meeting, the market is fearful and indices around the world continue to feel the pressure of global growth concerns. Dax is still hovering around the 10 650 – 10 700 area. If the index stays above that level, 10 800 and 10 900 resistance levels should be followed. Otherwise, 10 550 will be targeted.