MARKET BRIEFING – LONDON OPEN 01.12.2015
As expected, the Chinese Yuan has been accepted by the International Fund into the basket of Special Drawing Rights currencies.
This means barring any disasters, the Yuan will join an exclusive club of currencies in October of 2016.
The head of the IMF, Christine Lagarde on a momentous day for China said of the Yuan’s acceptance as an SDR currency that this was “an important milestone in the integration of the Chinese economy into the global financial system”
The Chinese Yuan new found status as a key component of the IMF’s basket of reserve currencies not only brings with it a great deal of prestige but is also a vote of confidence in the manner that the Chinese Government and the Peoples Bank of China have managed the recent crisis that has hit the domestic economy.
The move by the IMF also signals and acceptance that the Peoples Bank of China is gaining increasing prestige and authority. The significance of the Yuan’s SDR acceptance, therefore, highlights that the Chinese Government has allowed a certain degree of power and control to be transferred from the ruling party to an independent, state organization.
Furthermore, from a geopolitical aspect, the Yuan’s acceptance into the IMF’s SDR basket is a clear and strong message that the Chinese economy matters. The Chinese Yuan in a very short space of time has now become one or the major global currencies.
Although we are some way from the USDCNY currency pair gaining the status of EURUSD for sure the time will come in the near future when CNY will become an important financial instrument.
EURUSD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1.0641
Target 2: 1.0485
Projected range in ATR’s: 0.0078
Daily control level: 1.0636
GBPUSD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.5137
Target 2: 1.4975
Projected range in ATR’s: 0.0081
Daily control level: 1.4993
USDJPY
The intraday technical outlook
Trend 1 hour: Up
Target 1: 123.70
Target 2: 122.50
Projected range in ATR’s: 0.59
Daily control level: 122.67
USDCHF
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.0363
Target 2: 1.0211
Projected range in ATR’s: 0.0076
Daily control level: 1.0225
USDCAD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.3435
Target 2: 1.3283
Projected range in ATR’s: 0.0076
Daily control level: 1.3280
AUDUSD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 0.7295
Target 2: 0.7160
Projected range in ATR’s: 0.0068
Daily control level: 0.7169
GOLD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1079.00
Target 2: 1051.00
Projected range in ATR’s: 13.84
Daily control level: 1075.00
OIL
The intraday technical outlook
Trend 1 hour: Down
Target 1: 43.00
Target 2: 41.00
Projected range in ATR’s: 1.42
Daily control level: 43.66
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