MARKET BRIEFING – LONDON OPEN 26.08.2015
The People’s Bank of China cut interest rate and also has lowered the reserve requirements for the banking sector yesterday, hoping to support the struggling economy. The one-year benchmark interest rate was cut by 25 basis points, with the current rate now of 4.6 percent. At the same time the reserves were allowed to be reduced by 50 basis points to 18 percent.
The action followed one more day stock plunging on Tuesday, seeing the investors desperate in expectations of new supportive measures by the Chinese government. The major Chinese indices declined to more than 8 percent on Monday, with the following day’s decline accounted to approximate 7 percentage points.
The attempt to support plunging market was the next step after the investments of hundreds of billions dollars by the Chinese government to support the equities, failed to bring any sustainable result.
The China’s turmoil, the world’s second-largest economy and one of the main global engines, has sent a shockwave around the world, causing all the major indexes to decline sharply on Monday, which consequently was called “Black Monday”, as the amount of losses counted in billions of dollars.
Despite all the efforts to prop-up the Chinese stock market, the decline continues, with Shanghai Composite declining by another 1.3 percent by yesterday’s close. The index is now trading at 2927 level, its lowest since December 2014.
FTSE100, the main British benchmark index continued the decline, despite the brief retracement last afternoon. It is currently trading below 6000 mark, losing 1.8 percent of the value. The German DAX is following the trend with 1.9 percent loss up to now, trading at 9.955 this morning. French CAC 40 faced similar faith, declining 2.05 percent up to now.
The US Dollar Index has retraced to trade above 94.00 mark, after it reached 92.52 low on Monday. In the meantime, EURUSD has reconfirmed the reversal to the upward trend, currently trading around 1.1500 level. High volatility seems very likely to hold in the coming days.
EURUSD
The intraday technical outlook
Trend 1 hour: Range
Target 1: 1.1748
Target 2: 1.1486
Projected range in ATR’s: 0.0131
Daily control level: 0.0980
GBPUSD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.5880
Target 2: 1.5670
Projected range in ATR’s: 0.0105
Daily control level: 1.5615
USDJPY
The intraday technical outlook
Trend 1 hour: Range
Target 1: 119.62
Target 2: 117.18
Projected range in ATR’s: 1.2151
Daily control level: 124.60
USDCHF
The intraday technical outlook
Trend 1 hour: Range
Target 1: 0.9407
Target 2: 0.9193
Projected range in ATR’s: 0.0107
Daily control level: 0.9670
USDCAD
The intraday technical outlook
Trend 1 hour: Range
Target 1: 1.3416
Target 2: 1.3156
Projected range in ATR’s: 0.0130
Daily control level: 1.2960
AUDUSD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 0.7256
Target 2: 0.7056
Projected range in ATR’s: 0.0100
Daily control level: 0.7360
GOLD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1172.02
Target 2: 1138.68
Projected range in ATR’s: 16.67
Daily control level: 1112.00
OIL
The intraday technical outlook
Trend 1 hour: Down
Target 1: 44.73
Target 2: 41.55
Projected range in ATR’s: 1.5940
Daily control level: 49.30
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