Which is the most volatile financial instrument?
What is EURUSD market development signaling these days? Well, it indicates that it is going to stay under the 1.1800 on the long term considering the technical and fundamental elements.What caused this dramatic fall in the last period? Here you have the reasons:
- The rising pressure on Greece, which could get the country out of the Euro zone;
- Positive macroeconomic data from the United States as: ADP Non-Farm Employment Change was reported up to 241K, Trade Balance increased to -39.0 billion, Unemployment Claims reported to 294K, the FOMC didn’t rule out the possibility of an interest rate increase and only postponed this decision, Non-Farm Employment Change and the Unemployment claims which are due to be reported today are expected to meet market expectations;
- Negative macroeconomic data from the Euro zone: monthly German Prelim CPI reported down to 0.0%, CPI Flash Estimate decreased to -0.2%, Unemployment rate stays up to 11.5%, German Factory Orders fell to -2.4%, the Producer Price Index decreased to -0.3%, the governor Mario Draghi is expected to start buying governmental bonds and macroeconomic data due to be published today is expected to disappoint the market;
This is a grim picture of the EURUSD future, which may add reasons for the descending trend to continue throughout the year.
An interesting evolution also refers to the oil market, which has developed corrections in the descending path during the last days. The appreciation of the price of oil is caused by the falling oil inventories in the United Stated and the presumptions that the Americans are going to slow down the production. As for the Arab attitude, it is unwavering. Now, both the WTI and Brent oil are retesting resistance zone but once the local lows are exceeded (47.30 for WTI and 50.20 for Brent) the chances for the downward trend to continue may increase.
Yesterday, the Central Bank in the United Kingdom decided to maintain the interest rate to 0.5% as well as other monetary policy parameters were kept unchanged. The GBPUSD currency pair went down to 1.5034 then quickly adjusted. It’s important to take into consideration that the market participants feel attracted by round levels only that the GBP currency tends to be more precautionary. It won’t be a surprise to soon see the 1.5000 level tested and afterwards a natural correction, in this quite aggressive descending trend, to develop.
After the oil market crash, we may watch the next victim of the demand and supply war: this is the natural gas market. The descending trend started at the beginning of 2014 and is seems to continue also in 2015. The reasons behind this drop are: the increasing global production capacity and the descending path that characterizes the demand on the natural gas market. On the short term, considering valid the descending trend premises, the natural gas quotation may retest the 2.800 points level whereupon it may go down to the 2.600 support zone from august 2012.