Re: Forex Analysis by LiteForex
Morning Market Review
2019-10-28 08:51 (GMT+2)
EUR showed a moderate decline against USD last Friday, updating local lows of October 17. The development of negative dynamics in the instrument at the end of last week was contributed by uncertain macroeconomic statistics from Germany. GfK German Consumer Climate index in October showed a decrease from 9.8 to 9.6 points against a forecast of 9.8 points. Ifo Current Conditions in October fell from 98.6 to 97.8 points, while analysts expected a decrease to 98.0 points. At the same time Ifo Expectations index for the same period rose from 90.9 to 91.5 points with a forecast of 91.0 points. German Business Expectations index in October remained at the previous level of 94.6 points, contrary to expectations of a slight decrease to 94.5 points. Today, the pair is trading in both directions, waiting for the appearance of new drivers at the market. On Monday, investors expect one of the last speeches by the ECB President Mario Draghi who will soon be replaced by Christine Lagarde.
GBP is mainly falling, retreating from local highs, updated on October 22. The focus of investors remains on the situation with Brexit. At the end of last week, EU members agreed on a new postponement for the UK, which did not manage to ratify the new version of the agreement on the country's exit from the EU. The deadline for the new postponement has not yet been approved. European Council President Donald Tusk still insists on a postponement until January 31, 2020, but not all EU members agree. France takes the toughest stance on this issue. Meanwhile, Boris Johnson continues to insist on holding early elections to the British parliament, but is not expected to receive unanimous support in this matter.
AUD showed a slight correctional growth against USD at the end of last week, recovering after a steady decline of October 24. Technical factors contributed to the development of the "bullish" trend in the instrument, while the fundamental picture remained the same. The macroeconomic statistics from the US published on Friday was contradictory. Michigan Consumer Sentiment in October fell from 96.0 to 95.5 points with a forecast of 96.0 points. In turn, Monthly Budget Statement in September indicated a surplus of 83B dollars against the deficit of –200B dollars a month earlier.
USD ended last week with a slight increase against JPY, updating local highs of October 17. Macroeconomic statistics from Japan released on Friday showed little or no support to the yen. Foreign Investments in Japanese Stocks for the week as of October 18 slightly increased from 508.2B to 522.3B yen. At the same time, Foreign Bonds Buying for the same period fell sharply from 1,062.2B to 536.1B yen. Today, the pair retains a weak "bullish" advantage, waiting for new drivers to appear on the market. Today, not much interesting macroeconomic statistics are expected, so investors will focus on the data on consumer inflation in Japan which will be published on Tuesday.
Oil prices showed moderate growth last Friday, continuing the development of the "bullish" momentum formed earlier. Active support for the quotes was provided by a report from the US Department of Energy, which indicated an unexpected reduction in oil reserves by 1.7M barrels. Additional support for the instrument was provided by OPEC comments. Representatives of the organization said that they are considering more significant restrictions on oil production, which will compensate for the low demand, which is expected in 2020. Friday's Baker Hughes report on active oil rigs in the USA also provided moderate support for quotes. For the reporting week, the number of active oil rigs decreased sharply from 713 to 696 units.