Forex. Euro/dollar forecast (EUR/USD)
On Wednesday, the euro/dollar pair fell slightly from 1.1395 to 1.1380.
In the morning, the European currency rose against the Us against the positive news on the Italian budget crisis. The European Commission has concluded an agreement with Italy on the country's budget for 2019, which will allow Rome to avoid disciplinary measures. Italy's budget deficit target will be 2.04% of the country's GDP. The budget structure will remain unchanged.
The dollar recovered on the back of a rise in the base interest rate by the Federal Reserve. Fed Chairman Jerome Powell said on Wednesday that further gradual interest rate hikes would be necessary, including to maintain the proper level of investment in U.S. companies, which is lower than previously seen in 2018 Year. Thus, in the long term, the policy of the Federal Reserve will support the dollar, limiting the growth of the European currency against the U.S.
Sales in the secondary housing market in the U.S. in November yesterday also came on the side of the dollar, growth in annual terms was much more than forecast. Nevertheless, housing affordability remains a factor limiting the positive dynamics of secondary sales, and with it the American currency.
In our forecast for today we expect an upward correction of the euro/dollar pair to resistance levels of 1.1400, 1.1415 and 1.1440.
Forex. Pound/dollar currency pair forecast (GBP/USD)
The quotations of the pound/dollar pair continued to decline on Wednesday and reached the support level of 1.2610 at the end of the day.
Yesterday, MPs and senators in France agreed on a single version of the bill preparing the country for any form of Britain's exit from the European Union. It should be adopted by early 2019. In the absence of an agreement between London and Brussels, the document must provide guarantees to British citizens in France. This news was positive for the pound and caused a short-term upward correction of the pair's quotations.
Published yesterday a block of data on inflation in the UK in November was the main factor of pressure on the pound paired with the dollar, as the decline in the consumer price index to the level of 2.3% although it appeared within the consensus forecast, but in general is negative indicator of declining purchasing activity.
On Wednesday, it was reported that U.S. President Donald Trump ordered the full withdrawal of U.S. troops from Syria, declaring victory over the terrorist group Islamic State, the fight against which he said was the sole purpose of staying there U.S. military contingent. Against this background, the potential of the dollar as a reserve currency is somewhat reduced.
Today, the Bank of England will announce a decision on the interest rate, which is likely to remain unchanged. UK retail sales in November could limit the pound's decline against the dollar, as consumer spending could rise 0.3 per cent after falling the previous month.
In our forecast for Thursday we expect the pound/dollar pair to continue downward momentum against support levels of 1.2580, 1.2560 and 1.2535.
Forex. Gold price forecast
In morning trading on Wednesday, a troy ounce of gold was traded for 1254 dollars, and by the evening its value fell to 1245 dollars. At the same time, the price rose to a local high of 1261 dollars.
The decline in gold prices was triggered by the decision of the US Federal Reserve to raise the key refinancing rate by 0.25 percentage points. This decision was unanimously supported by all members of the Fed. The regulator also announced an increase in the base interest rate twice in 2019 and another in 2020.
The head of the Federal Reserve Jerome Powell yesterday at a press conference after the meeting of the regulator noted that the U.S. economy and labor market remain strong, but growth is expected to slow to 2.3% in 2019 and weaken inflation to 1.9%. Such a macroeconomic situation will be conducive to the growth of the precious metal in the medium term.
The US market reacted to Jerome Powell's press conference yesterday with a decrease in risk appetite. The stock market fell against the background of the Fed's statement about an interest rate hike and plans for increases for 2019. All major indices lost gains gained during the trading day. Investors considered the promised increase in 2019 insufficient easing to support the stock market. U.S. Treasury bond yields, which fell significantly during the conference, were no better. The yield on 10-year treasuries, the benchmark for U.S. debt, fell to 2.769%. The unstable situation on the stock market and the decline in bond yields continue to support gold.
In our forecast for today we expect the continuation of a moderate downward correction of gold quotations, support levels may reach 1242, 1240 and 1237 dollars per troy ounce.
Forex. North American Oil Forecast (WTI)
On Wednesday, the oil market recovered from a sharp fall the day before. The price of a barrel of WTI crude oil at the beginning of the day was $46.77, by the end of the session the price was 47.98 dollars.
The rise in commodity prices was mainly corrective, caused by the announcement of the results of the meeting of the Federal Reserve and expectations of tightening of its monetary policy.
Meanwhile, the quotations continue to be pressed by the active increase in shale oil production in the United States, increasing the risks of market glut. Most active production is in the most oil-rich Permian basin. An important indicator of the potential for increased shale production is the change in the number of oil wells drilled but unfinished. They can be quickly put into operation without requiring a large investment in drilling. In November, the number of such wells in the United States increased by 287 units, of which 248 are located in the Permian field. Thus, next year the oil market is likely to see the continuation of the growth of shale oil production, and the United States will strengthen its position as the world leader in the production of this type of raw materials.
U.S. Department of Energy data released yesterday showed a 497,000-barrel decline in U.S. oil reserves last week. This figure is lower than the consensus forecast of a decrease in raw materials reserves, which will continue to put pressure on oil prices.
In our forecast for Thursday, we expect a reversal and the continuation of the decline in WTI crude oil prices to support levels of 47.60, 47.30 and 47.00 dollars per barrel.
Forex. Cryptocurrency forecast
Yesterday, the cryptocurrency market was moving again on the upward. The value of Bitcoin rose to a key level of $3,900 by the end of the day. Ethereum started and finished trading at $106. XPR rose to $0.3670 and Wednesday's peak was $0.3880.
Analysts of the banking holding JPMorgan Chase believe that the protracted crisis in the digital currency market deters institutional investors from cryptocurrency assets, which confirms the decline in the share of financial institutions in trading Bitcoin. Their report is supported by the evidence, key indicators of the flow, in particular, the index of open positions in the Bitcoin futures market, has significantly decreased. According to the Chicago Options Exchange, this figure reached the lowest level since the opening of contracts a year ago. At the moment, it is large traders who are able to stimulate the upward trend in the cryptocurrency market, and their passivity limits the potential for its recovery. However, the situation can be corrected by the launch of cryptocurrency trading products on bakkt and Fidelity sites next year.
The second important factor in the market recovery is the interaction between cryptocurrencies and traditional financial services. On Wednesday, the western Union payment system announced its readiness to work with Bitcoin and other cryptocurrencies after the blockchain becomes ubiquitous. Given the scepticism previously expressed by the company's officials about virtual currencies, it can be concluded that even financial giants are aware of the benefits of digital assets, which will be accompanied by an increase in the value of the latter integration into the traditional sector.
In our forecast for Thursday we expect the continuation of the upward dynamics of the virtual currency market. Bitcoin can grow to resistance levels of 4000, 4060 and $4,120. Resistance levels for Ethereum can be $109, $112 and $114. XPR is capable of encountering resistance at 0.3800, 0.3860 and $0.3950.