Market wavered before statements of Central Banks

November 18, 2014

A big fluctuation occurred for the Dollar Yen yesterday. It initially refreshed new multi-year highs to 117 as the Yen depreciated after the release of disappointing Japanese economy data. The Q3 GDP shrank another 0.4% after its negative Q2 reading, showing the economy is still suffering from the consumption tax hike. The annualized data is -1.6%, telling people that the ‘Abenomics’ is far from successful. The Dollar Yen later dropped to 106.45 in the hours soon after the new high was touched – finally succeeding to close near 116.50. It closed as a doji on the daily chart, showing how some traders are closing their long orders at this level. The pair may continue its consolidation this week.

The Aussie Dollar fell back to 0.87 after it shortly touched 0.88 in the Asian morning session. Traders revealed concerns regarding whether the RBA statement and the Governor may disclose more signs to suppress the current exchange rate.

The Gold price consolidated around its month high at the $1190 level. The price also touched the upper boundary of the most recent two weeks’ upward channel. It may fall and test the lower boundary in the next couple trading days just like the pattern which had occurred last week.

The Asian stock markets fell on Monday. The Nikkei Stock Average slumped by almost 3% as the Japanese GDP shrank again. The Shanghai Composite retreated by 0.19% to 2474. The ASX 200 closed flat at 5412. In European stock markets, the UK FTSE was up 0.26%, the German DAX rose 0.58% and the French CAC Index gained 0.56%. The US market moved very little. The S&P 500 closed flat at 2041. The Dow rose 0.1% to 17647, while the Nasdaq Composite Index lost 0.37% to 4671.
On the data front, RBA Monetary Policy Meeting Minutes will be released at 11:30 AEDST and Governor Stevens’ speech will be at 19:25 AEDST. Market participants may hear some hawkish statements. The UK inflation data will be at 20:30 AEDST and Euro area ZEW Economic Sentiment will be at 21:00. US PPI will be at midnight.

Have a great trading day!

Anthony


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