Stock Japan Back Continue Bullish Trend for 4 Consecutive Session
Japanese stock market on Wednesday morning trading experience significant improvement. Japanese stocks held up for four consecutive sessions after the trade exchange closed Tuesday to celebrate the anniversary of the Emperor. A weaker yen back into the main driver of the increase in the stock market.
Today the Topix in the Japanese stock market observed an increase of 1.1 percent recorded in early trade and was at 1428.07 points position. While the Nikkei spot observed an increase of 1.1 percent as well and was at 17836.31. The yen fell back and were in the range of 120 per dollar.
US stock exchanges at the end of the trade early this morning also experienced a significant increase so as to provide support positive sentiment in Asia. The Dow Jones rose by 0.4 percent after the US economy in the third quarter and reported an annual growth of 5 percent, the biggest expansion since the third quarter of 2003 ago.
Today the Japanese parliament will also be re-confirm the posi- Shinzo Abe as Prime Minister after the party won an absolute coalition supporters in the snap election last week. Currently Abe are in the right position to push reflation policies aimed to perform a reboot of the Japanese economy that already had fallen into recession.
The Nikkei 225 futures this morning seems to have an opening at the position 17850. Nikkei index opened with a record significant decline of 55 points compared to the previous closing.
Analyst estimates that the movement in the stock market index futures trade today will experience the movement of the rebound. The Nikkei gained support amid weakening Japanese yen.
Today the Nikkei will test the support level at 17750-17700 points. Meanwhile if you have further strengthened the movement, the Nikkei will meet resistance level at 18000 points which would be the most high-level new in 7.5 years.
Technically, the index on the trading session today, Wednesday (24/12) likely to weaken, test negative trends, the impact of Wall Street. At the M15 chart bearish engulfing formation provides opportunities for the index to move downside. However, the volume tends to rise, early indications bullish index. In addition, RSI, the M15 chart, are oversold, signaling upside.
It is estimated, the index test the first support level that is 17800 and 17750. If it fails in 17840, we then estimated the index tends to retest the resistance level of 17870 and continued until the possibility of being in the 17920 area.
Cross Rate Sterling, Retreat Limited
British Pound exchange rate on US session Tuesday night was lower against the Japanese Yen. Opened at 187.14 in early trading (0000 GMT), the currency has weakened about -28 pips or about -0.15% and the value of rolling seemed to be in the range of 186.85.
Negative sentiment towards the currency Sterling seems to increase in the cross rate, after the Office for National Statistics said that the performance of international trade in the UK weakened.
The development is indicated by the decline in economic indicators worsening Current Account to -27.0B figures of previous period of -24.3B. Developments are not encouraging showed lower performance than the estimated number of economists, who expects to be able to rise to -21.1B numbers. British Pound exchange rate was observed to move retreat respond to these developments.
Analyst suggests daily forex fundamental analysis Pound exchange rate normal range pair GBPUSD on Tuesday support level at 186.57 and resistance level at 187.61.
Technically, the trading session today, Wednesday (24/12), pound sterling-dollar pair a chance to move in the negative trend.
The weakening of the pound sterling primarily expected soon reexamine the minimum support at 1.5400 and 1.5350 maximum. Meanwhile, if the pound sterling was able to break and hold above 1.5506, then the other alternative scenario that Pound chance to test resistance in 1.5535 and 1.5575 area.
Gold No Longer Important To Protect Inflation
Gold may be is not important anymore to as protection during inflation. US inflation is going up, but will not cause concern.
Gold history associated with inflation has been going on since 2000 years ago, where the first coins used in 550 BC, as in the notes to the World Gold Council. Britain and the United States began to use gold in the nineteenth century to limit inflas, consequently none of the currency of any country that is not connected with this precious metal. Forty years ago, the Federal Reserve decided to end the relationship with this Golden Dollar.
The increase in the price of gold itself is expected to graduate, after gold rose by 70 percent from December 2008 to June 2011 were driven by the policy of the Federal Reserve to repurchase their bonds and decide lending rates at very low levels. Last year, the price of gold fell by 28%, this is the largest decline over the past 30 years. The fall of the price of gold as investors lose confidence in the future value of gold.
The attitude of the Fed will raise interest rates of 1.25 percent at the end of next year, as presented in the quarterly report on December 17 yesterday. Federal Reserve Governor Janet Yellen has said that US inflation targets have been in line with expectations, so that the Central Bank will begin to raise interest rates on loans. The US dollar responded by moving slowly but surely towards the reinforcement. This result was followed by the rise in the floor of the stock exchange, the US stock index has increased as well. The combination of this sentiment makes depressed gold prices, exacerbated by the collapse of commodity prices following a sharp decline in commodity prices of crude oil.
Since June, crude oil prices began to decline, began a long decline in the waves of this generation. This bankruptcy instead of pushing up consumer prices, gold investors are expected in a few decades, the US actually experienced deflation. So the concern is currently not in inflation but leads to deflation. Typically, the fall in oil prices will encourage deflationary pressures. We will probably see a rise in US interest rates in 2015 and we will see more and more mighty dollar, putting pressure on gold prices furiously.
Although not occur inflation over the past six years, the investors expect the acceleration after the Fed cut interest rates to near zero in order to stimulate economic growth. Finally, this step push the price of gold reached its peak at $ 1,923.70 an ounce in June 2011. Currently, the inflation outlook increasingly disintegrating, so the reasons for owning gold is also faded.
It should be noted that crude oil prices continue to decline, even reaching into lower price in five years. In this year, oil prices plunged 42 percent to below the price of $ 54 a barrel in New York. One of the causes of the fall in oil prices is an abundant supply of oil. Other economic data showed that the cost of living in the US fell 0.3 percent, this was the biggest since December 2008. It is estimated that the consumer price index in 2015 still will decline to 1.5 percent from 1.7 percent in this year. The cheapening of energy prices make the inflation target could be missed in order to achieve the target of 2 percent, as expected the Fed.
The speculators themselves do not give up so easily and still expect the price of gold will rise. At least some parties are still trying to hold a position in gold. This step was taken on the assumption that the central banks in China, Europe and Japan will conduct stimulus policies that raise US inflation global. Despite of stable inflation, the US dollar strengthened and struck gold, but gold prices rose by 12 percent against the yen and 10 percent against the Euro. Thus, the rate of gold price movements will not only depend further on the issue of inflation, but also liquidity pumped into the global financial system as well. Currently it is not visible, but when this starts to happen then we will find the chances of inflation back and this will certainly push up the price of gold again.
Technically, gold in today’s trading session on Wednesday (24/12) potentially bearish, tested negative trend back, but prone to reversal. RSI indicator tends to re-test support channel and towards the oversold area, but Bollinger Bands that began to widen, thus giving impetus to the gold to the upside.
It is estimated that the gold price immediately prior to test support in the area of at least 1175.33 and re-test the maximum level of 1170.73. However, if the price of gold is able to break and hold above 1177.40, the estimated price of gold could potentially test the 1179.40 and 1183.72 resistance.
