12, October 2017

US dollar is gaining amid technical factors

Since the beginning of this week, the US dollar has been trading under pressure, although there are signs of some stabilization amid some technical factors today. After the release of US employment data at the end of last week, the market sharply lowered expectations for a rate hike in December. US bond yield that reached a local six months maximum, also moved to a decline with the beginning of a new week. This might be due to some concern about the status of tax reform in the US.

At FOREX, European currency suspended its advance, after four gaining sessions. EUR/USD pair moved in a strong resistance zone 1.1880, and expectedly rolled back to the area of ​​1.1830. The next goal of recovery is about $1.1930. We expected the development of an upward momentum and the current pullback, especially given that the strengthening of the euro is vulnerable to tomorrow's US consumer price index and retail sales. USD / JPY pair found support in the area of ​​JPY112.05-JPY112.10. Today the market is consolidating around JPY112.30.

American stock markets opened today in negative territory - the main indexes retreated from record levels, as investors expect the first data from a series of third quarter corporate results. The data of the banking sector will start the corporate season as J.P. Morgan Chase & Co. and Citigroup Inc. will provide their earnings.

Statistics data showed that the initial claims for unemployment benefits in early October fell by 15,000 to 243,000, and marked the lowest level in six weeks. Economists expected the data to be around 250,000. The producer price index rose by 0.4%, which is in line with consensus forecasts.

Brent crude oil market failed to move above $57 per barrel, despite the positive report of OPEC. Data on oil reserves from the API showed an increase in inventories. The data came out contrary to market expectations. Today, the market expects official statistics from the US Department of Energy as well as IEA report.