17 August 2016 Daily Analysis
Divided Fed leaves next rate hike in limbo.
Market bears took the course of greenback on Thursday following the release of Fed minutes which exhibit debates over the timing of next interest rate hike this year. The dollar index sheds 0.05% while last quoted at 93.36. The minutes released were from FOMC’s July meeting after policymakers voted to hold their benchmark rate unchanged in the range of 1% – 1.25%. Fissures were unfolded from the minutes whereby some participants expressed their concern over the recent decline in inflationary pressure while another highlighted the risk in delaying the process of tightening their policies. Recent sluggishness in inflation rate has spurred market concern over Fed’s ability to follow through their plan to hike interest rates gradually even though the economy is growing moderately while unemployment rate fell to 16-years low of 4.3% in July. Conversely, traders in the Fed Funds Futures priced in at least 50% chance for a rate hike in December, up from previous reading of only 37%.
In the commodities section, crude oil price rose 0.21% to $46.88 following a larger-than-expected draw in crude inventories. However, current gains remained capped as a separate report highlighted an increase in US crude production which attains 9.502 million barrels a day, its highest since July 2015. On the other hand, gold price rose 0.64% to $1,285.08 following a weaker greenback.
Today’s Holiday Market Close
Time Market Event
N/A
Today’s Highlight Events
Time Market Event
19:30 EUR ECB Publishes Account of Monetary Policy Meeting
01:00 USD FOMC Member Kaplan Speaks
01:45 USD FOMC Member Kashkari Speaks
Today’s Highlight Economy Data
| Time | Nation & Data | Previous | Forecast | Actual |
| 09:30 | AUD – Employment Change (Jull) | 14.0K | 20.0K | 27.9K |
| 16:30 | GBP – Retail Sales (MoM) (Jul) | 0.6% | 0.2% | – |
| 17:00 | EUR – CPI (YoY) (Jul) | 1.3% | 1.3% | – |
| 20:30 | USD – Initial Jobless Claims | 244K | 240K | – |
| 20:30 | USD – Philadelphia Fed Manufacturing Index (Aug) | 19.5 | 18.5 | – |
GBPUSD
GBPUSD, H4: GBPUSD was traded higher following prior rebound from currently testing at the resistance level of 1.2900. A successful closure above this level would suggest further upside bias for GBPUSD to extend its gains towards the subsequent target at 1.2950.
Resistance level: 1.2900, 1.2950
Support level: 1.2850, 1.2790
EURUSD
EURUSD, H4: EURUSD remains traded within a downward channel while currently testing at the top level. A breakout from the top level would signal a change in trend direction to move further upwards towards subsequent target at 1.1840.
Resistance level: 1.1780, 1.1840
Support level: 1.1720, 1.1650
USDJPY
USDJPY, H4: USDJPY pared its prior gains following a retrace from the strong resistance level of 110.90. MACD histogram which begins to form negative divergence signal suggest USDJPY to extend its losses towards the support level of 109.40.
Resistance level: 110.10, 110.90
Support level: 109.40, 108.70
CrudeOIL
CrudeOIL, H1: Crude oil price was traded higher following a rebound near the support level of 46.65. Such price movement while coupled with diminishing downward momentum in MACD histogram suggests its price to be traded higher in short-term as technical correction. Otherwise, long-term trend direction skew towards downside bias.
Resistance level: 47.10, 47.50
Support level: 46.65, 46.30
GOLD
GOLD_, H4: Gold price was traded higher following a successful rebound from the 23.6 Fibonacci level at 1271.90. Recent closure above the 20-MA line (red) suggests further upside bias towards the previous high at 1292.05.
Resistance level: 1292.05, 1300.00
Support level: 1282.00, 1271.90