How is 2014 ending? The American dollar rises while the oil falls
EURUSD broke the 1.2150 support level, a signal that forecasts the next support to be at 1.2100. As on 22nd of January the ECB will hold a meeting which could bring together the approval of the officials to start buying sovereign bonds, the 1.2000 threshold will become vulnerable. The situation in Greece started to be alarming as the Prime Minister didn’t succeed in gathering the 180 votes benchmark, which could have made his candidate the Greek President. The presidential elections will take place on the 25th of January and the major risk for the EUR is that the party opposing the European bailout could win the presidency. However, as we said earlier, the risk for the Eurozone is much lower now than a few years ago.
China’s yuan continues its decending trend. Since November, when the central bank decided to cut the interest rate for the first time in two years, bad news didn’t stop to come. Tomorrow, the publishing of the HSBC final manufacturing PMI may fail to meet expectations as well as the manufacturing PMI (compiled by CFLP) which will be reported on the 1st of January. On January the 3rd, the non-manufacturing PMI result will be the final report of the week, which is expected to maintain the descending path for the Chinese economy. It is important to bear in mind that this situation will sustain the depreciation of the Australian and New Zeeland dollar. Moreover, this will have a negative impact on the economic recovery of the Asian area.
Today the American economy will fill the day with macroeconomic data as the S&P/CS Composite is expected down to 4.4% and the CB consumer confidence index awaited up to 94.6 points from 88.7. Tomorrow, the unemployment claims index is expected up to 287k, the Chicago PMI may disappoint with 60.2 points and the monthly pending home sales may rise to 0.6%. Even if the mentioned data seems to be mixed, we may expect them to support the decreasing trend for the EURUSD as well as the increasing trend for USDJPY.
The WTI oil broke again the support level at 54 dollars while Brent went down to 57.30 dollars per barrel based on the American production which is expected to increase the inventories again. The chances for the price of oil to end the year close to record low levels are seriously increasing. The traders will certainly keep an eye on the price tomorrow when the last report of the American oil inventories may continue to add negative pressure on the price