Forex. Euro/dollar forecast (EUR/USD)
At the end of Wednesday's trading session, the quotes of the euro-dollar pair fell slightly to the level of 1.1336, reaching a new pre-current low at 1.1306 during the day. At the end of this month, the euro fell against the dollar by 2.4%.
The fall of the euro is due to a set of reasons. First, it is the monetary policy of the European Central Bank, which continues the policy of low rates. It is also an Italian crisis that will remain a factor of pressure on the euro in the long term. Angela Merkel's departure contributes to the general political instability, and it also has a negative impact on the euro. The weakening of the Chinese yuan contributes to the strengthening of the dollar, which affects the European currency. Finally, investors are generally unsure of the possibility of economic growth in the Eurozone after the publication of GDP data in the third quarter.
According to yesterday's reports, the consumer price index in the Eurozone in October increased by 2.2% in annual terms after an increase of 2.1% in the previous month. Core inflation strengthened by 1.1%, which slightly exceeded expectations. The unemployment rate in the Eurozone remained the same at 8.1%.
The statistics in the context of individual countries were less positive. Retail sales in Germany increased by 0.1% in September, with an expected 0.5%. The Italian consumer price index in October showed no growth, remaining zero. On Wednesday, European stock markets were characterized by positive dynamics, for example, The Stoxx Europe 600 rose by 1.71%. This was facilitated by the appreciation of oil prices and, as a result, an increase in the share price of oil companies. The growth of stock markets somewhat smoothed the downtrend in the euro, although it failed to change it.
In today's trading, the continuation of the downtrend of the euro-dollar pair is likely, and further reduction of quotations to annual lows. Support levels are at 1.1320, 1.1300 and 1.1275.
Forex. Pound/dollar currency pair forecast (GBP/USD)
As a result of Wednesday, the British currency managed to recover the positions lost on Tuesday, the pair of the pound dollar rose to the mark of 1.2848 by the end of the trading day.
Representatives of the EU member states agreed yesterday positions on the division of existing European tariff quotas between the EU and the UK after Brexit, which was a positive signal for the pound.
The indicator of consumer confidence in the UK at the end of October decreased to -10 points compared to -9 in the previous month. The British retail price index fell 0.2 percent in October, compared with a 0.2 percent rise in September.
ADP's non-agricultural employment figures were positive, with an increase of 227,000 against a projected 189,000. Employment growth precedes the growth of consumer spending, so strong labor market data have become a catalyst for the dollar. The value of the third-quarter Labor Value Index in the United States rose by 0.8%, although it was expected to increase by 0.7%.
On Thursday, the market's attention will be drawn to the meeting of the Bank of England and the speech of Mark Carney on its results. Given that the government, led by Theresa May, still can not achieve unity in the Brexit negotiations, the probability of a softer position of the Bank of England at today's meeting increases, which will result in a negative impact on the pound.
We expect that today the pound will show a moderate decline against the dollar against the levels supported by 1.2830, 1.2810 and 1.2790.
Forex. Gold price forecast
Gold prices on Wednesday reached a new weekly low at 1212 dollars per troy ounce, and then recovered to the level of 1217 dollars by the end of the day.
The decline in the price of gold is due to the next block of positive reporting of companies from the S'P 500. Gold also played back The U.S. macroeconomic statistics, which strengthens the dollar.
On Thursday, the dynamics of the U.S. stock market will be greatly influenced by Apple's report, which will be released after the end of the trading session. Other key reports will be published by Starbucks, Teva, Spotify and GoPro. Many analysts still assume that the growth of U.S. indices will not last long and will soon move to a deeper correction. At the end of October, the U.S. Treasury reduced the supply of money by 181.4 billion dollars compared to 57.2 billion dollars in the previous month.
In addition, gold is already under pressure for the upcoming meeting of the Federal Reserve in December, at which the interest rate is likely to be raised. At the moment, the Fed is helping to strengthen the dollar, increasing the divergence of monetary policy with other central banks, which contributes to the growth of demand for the U.S. currency.
Taking into account the continuation of the uptrend of Us stock indices, today we expect the trend for gold to continue. It is possible to test support levels at 1214, 1210 and 1206 dollars per troy ounce.
Forex. North American Oil Forecast (WTI)
In yesterday's trading, WTI crude oil again fell sharply in price and reached the mark of 65.05 dollars per barrel by the end of the trading session.
On Wednesday, data on crude oil reserves in the United States were published according to statistics of the Department of Energy and data on excess oil reserves in Cushing. According to the report, oil reserves increased by 3.22 million barrels in the past week. Taking into account that at the moment American refineries began to reduce purchases due to seasonal preventive work, these reserves began to enter the world market, and, accordingly, to influence world commodity prices.
Overall, the U.S. increased exports by 305,000 barrels per day last week. They also sold 1.5 million barrels of strategic reserves last week to lower gasoline prices in the run-up to the election.
The overall increase in oil production in the world will also be the cause of negative dynamics for oil. U.S. production is reaching new highs due to the introduction of shale projects frozen during the hurricane season. Production in Russia reached 11.4 million barrels per day, according to data released on Wednesday.
Also on Wednesday, a memorandum signed by U.S. President Donald Trump was published, in which Washington reaffirmed its intentions regarding the embargo against Iran, and promised to minimize the impact of the second package of sanctions on those U.S. allies, that cannot completely stop the purchase of Iranian oil. Such promises also somewhat reduce the degree of anxiety about the shortage of oil.
In our forecast for Thursday, we assume that oil prices will be characterized by a downward dynamic. Support levels can reach $65.00, $64.80 and $64.60 per barrel.
Forex. Cryptocurrency forecast
On Wednesday, cryptocurrencies recovered slightly, although they could not win back the positions lost at the beginning of the week. In the morning Bitcoin was trading at $6,332, but eventually recovered to $6,370. The trajectory of Ethereum repeated the Bitcoin chart, at the end of the day the cryptocurrency reached the mark of 199 dollars. The XRP price ended the trading day at $0.4550.
The South Korean financial regulator has announced that cryptocurrency exchanges have all the rights to open virtual accounts in commercial banks, provided that they meet the requirements of KYC/AML. These accounts are a unique tool designed specifically for crypto-traders, with the aim of exchanging cryptocurrencies for korean won. The market reacted to this news positively, because it is a marker of the authorities' loyalty to cryptocurrency transactions and opens up a number of opportunities for traders.
It was also reported that Binance, a leading cryptocurrency exchange, froze the trading account, which during August and September were transferred 93,000 cryptocurrencies Ethereum, probably stolen from the WEX exchange. This news contributed to a surge in market volatility, as did any news showing the vulnerabilities of the crypto industry.
In our forecast for Thursday, we assume that in today's trading cryptocurrencies will continue a moderate uptrend with minor corrective pullbacks during the session. Bitcoin may try to test resistance levels at $6400, $6,450 and $6,480. Ethereum will still be closely correlated with the Bitcoin movement, with likely resistance levels of 202, 204 and $210. XRP will also recover from resistance levels of .4580, 0.4620 and $.4650.