MARKET BRIEFING – LONDON OPEN 12.08.2015
Chinese Yuan continued to depreciate, extending yesterday’s losses after the People’ Bank of China weakened the currency for the second day in the row. The Yuan price declined against the 6.1162 on Monday to a four-year low of 6.4392 in Shanghai.
The PBOC presented this change as an attempt for a free market reform, where the market forces will have more influence on determining the currency value.
The Chinese currency devaluation was a made after the set of disappointing economic data was published and as some analysts believe, could serve as a beginning to the longer-term slide in the exchange rate.
The rapid drop to around 4 percent in Chinese currency affected the markets worldwide, as investors fearing the further economic slump and are looking to switch their funds to safe-haven government debt. Meanwhile, the demand for the riskier assets is diminishing, with the equities, currencies and commodities experiencing a downward pressure.
It is feared that the Chinese government action will lead to the currency wars deepening when other countries’ Central Banks could potentially follow suit and weaken their currencies.
Asian stocks and emerging market currencies have tumbled this morning while MSCI’s Asia-pacific index fell to two-year low.
The currencies of the economies associated especially close to the Chinese economy suffered hardest blow. The Australian Dollar has reached a new low against the US Dollar of 0.7214 this morning, being the pair’s six-year low.
Brent Oil continued to tumble as it was trading below 49.50 support at the European session opening.
S&P 500 index, based on the market capitalization of 500 large US companies has been declining for the second day in the row, bouncing off the 2100.00 level yesterday and now trading around 2063.00 mark.
US Dollar index continued on the way down as well, after forming a double top pattern on the daily chart last week. It has now slid below 96.80 level.
The Common European currency, however, has strengthened for the third consecutive day, after the final deal between Greece and its International creditors was arranged yesterday in the morning.
EURUSD
The intraday technical outlook
Trend 1 hour: Range
Target 1: 1.1148
Target 2: 1.0934
Projected range in ATR’s: 0.0107
Daily control level: 1.1125
GBPUSD
The intraday technical outlook
Trend 1 hour: Range
Target 1: 1.5671
Target 2: 1.5469
Projected range in ATR’s: 0.0101
Daily control level: 1.5670
USDJPY
The intraday technical outlook
Trend 1 hour: Up
Target 1: 125.83
Target 2: 124.39
Projected range in ATR’s: 0.7188
Daily control level: 123.70
USDCHF
The intraday technical outlook
Trend 1 hour: Up
Target 1: 0.9966
Target 2: 0.9792
Projected range in ATR’s: 0.0087
Daily control level: 0.9710
USDCAD
The intraday technical outlook
Trend 1 hour: Range
Target 1: 1.3230
Target 2: 1.2996
Projected range in ATR’s: 0.0117
Daily control level: 1.2910
AUDUSD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 0.7393
Target 2: 0.7207
Projected range in ATR’s: 0.0093
Daily control level: 0.7425
GOLD
The intraday technical outlook
Trend 1 hour: UP
Target 1: 1124.58
Target 2: 1092.46
Projected range in ATR’s: 16.064
Daily control level: 1077.00
OIL
The intraday technical outlook
Trend 1 hour: Down
Target 1: 51.57
Target 2: 48.21
Projected range in ATR’s: 1.678
Daily control level: 55.50
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