Kospi Confident With World Economy
Kospi rose as investors remain confident subdued outlook for the world economy. Data weekend shows US annual inflation grew only 0.8% in December; away from the Federal Reserve’s inflation target of 2%. With the slowing inflation is expected to encourage the Fed for not hastily raised interest rates this year. On the other hand, US consumer sentiment index rose to a high of 11 years, and this provides additional evidence will be solid economic recovery Uncle Sam.
The rising tide of expectations that the ECB will do QE policy this week also gave investors hope will be of better economic conditions in the euro zone. The ECB will have a meeting on Thursday, January 22 next where some investors began to anticipate the bond purchase program by widespread threat of deflation and recession in the euro zone.
Of domestic, Seoul today released data on producer price index (PPI) South Korea sinyalkan low inflationary pressure. The annual PPI recorded a 2.0% decline in December after falling 0.9% in November. With low inflation pressure then this can provide a space for the Bank of Korea to cut interest rates again for South Korea sustain economic activity. Kospi futures gained 1.3% and is now trading at 1.32%.
Technically, the index on the trading session today, Monday (19/01) 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 243.50 and 241.10. If it fails at 245.85, then the next index is expected to tend to retest the resistance level of 246.25 and continued until the possibilities are in the 248.10 area.
Euro Keep Weakened, Sink Into Worst Level in 11 Years
Euro in trading last week (January 12 to 17) are generally observed to show a trend weakened against the US dollar. Trading the currency pair EUR / USD is once opened in the range of 1.1868 in early trading week has dropped about -301 pips or about -2.53% and closed at around 1.1566.
Analysts suggested that the weakening of the Euro currency in this week related to reports from the German statistical office – Destatis, to the public that the performance of a large trade in the domestic market of this country weakened.
The development is indicated by a decline in German economic fundamental indicators WPI m / m which weakened to figure -0.01% of the previous period of – 0.7%. The negative reports showed worse performance than the expectations of economists, who expects to be able to rise to 0.2% figure.
In trading this week (January 19 to 24), the normal range trading EUR / USD weekly forecast to have the support level at 1.1393 and then at 1.1221. While the resistance level at 1.1804 and then at 1.2042.
The movement of the currency pair is expected to be influenced by several economic data releases are: German ZEW Economic Sentiment and the Minimum Bid Rate.
Technically, the trading session today, Monday (19/01), the pair Euro-dollar likely to move in the negative trend.
The weakening of the Euro mainly expected soon reexamine the minimum support at 1.1510 and 1.1450 maximum. Meanwhile, if the Euro is able to break and hold above 1.1556, then the other alternative scenario that Euro chance to test resistance in 1.1580 and 1.1630 area.
Gold Up To Higher Level 4 Months
The price of gold scored its biggest weekly gain in 18 months as the turmoil in European currency markets that has fueled the demand for the precious metal as a haven asset.
Aggregate number of open contracts (contract opening) in gold futures on January 15 jumped by 5.6%, was the largest since October 2009, after the Swiss central bank gave a surprise move to remove restrictions franc exchange rate against the euro. Total assets in the largest exchange traded gold rose to its highest level since August 2011.
Gold rose to a four-month high on Friday, while the call options to the right to have a futures contract in February at the level of $ 1.300 / onz, jumped seven-fold in the last two days. Signs of easing expansion in Europe has been increasing speculation that policy makers will add stimulus, it will increase the demand for hedging assets. The easing of inflation and the global economic staganannya might prompt the Federal Reserve to postpone interest rate hikes.
“There are many uncertainties in Europe and the US, and it was quite aroused the interest of investors towards gold,” said Fain Shaffer, president of Infinity Trading Corp. in Indianapolis. “Increased open contract is bullish for gold and it means that traders feel gold will move higher in the short term.”
Gold futures contract in February rose by 1% to settle at $ 1,276.90 / onz on the Comex in New York. Earlier, the price touched $ 1,282.40 level / onz, it is the highest level for the active contract since 2nd of September. In this week, the precious metal has jumped by 5%, it is the largest since July 12, 2013.
Based on data compiled by Bloomberg, the aggregate amount of futures trading at 45% above the 100-day moving average at this time on Friday. The dollar rose to its highest level in 11 years against the euro on the impact of the movement of the Swiss central bank.
Technically, gold in today’s trading session on Monday (19/01) 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 1252.90 and re-test the maximum level of 1250.73. However, if the price of gold is able to break and hold above 1277.10, the estimated price of gold could potentially test the 1280.40 and 1282.72 resistance.
