Kospi Confident With World Economy
Kospi rose as widespread optimism about the world economy maintained its growth momentum. The ECB has launched the QE policy is expected to avoid the euro zone from the brink of deflation and help the region’s economic recovery. On the other hand, the reduction in US jobless claims will provide additional evidence of the continued recovery of the world economy. Kospi futures gained 0.9% and is now trading at 251.90.
However, investors appear reluctant to push up the index is too high after South Korean GDP data released this morning confirms the economic slowdown in Asia’s biggest 4. South Korea’s annual GDP is only recorded an increase of 2.7% in the last quarter of 2014; slower than the publication of the third quarter grew 3.2%.
Energy sector and other related industries will come back to get attention as world oil prices rebounded in early Asian session. The sharp drop in oil prices in the last 6 months quite hit shares of energy sector and related industries as investors worried about the impact of the fall of oil prices on the outlook for corporate earnings.
Technically, the index on the trading session today, Friday (23/01) 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 249.50 and 247.25. If it fails at 251.80, then the next index is expected to tend to retest the resistance level of 252.60 and continued until the possibilities are in the 254.10 area.
Euro Decline to Lowest Level 11 Years After ECB Decision
The euro slumped to its lowest level in 11 years after the Eurpean Central Bank launched its asset purchase program, a policy which tends to weaken the currency exchange rate.
In today’s policy meeting, the ECB kept its benchmark interest rate by 0.05% and the release of its asset purchase program by € 60 billion per month, and began to be implemented in March 2015 to September 2016. The amount is greater than the previous speculation that blows of € 50 billion per month.
President of the ECB, Mario Draghi, in a press conference said the ECB decided to increase its asset purchase program includes a program that has been running for achieving the inflation target of close to 2.0%.
EURUSD traded the range of 1.1439 at 22:30 pm, away from daily highs 1.1649
Technically, the trading session today, Friday (23/01), the pair Euro-dollar likely to move in the negative trend.
The weakening of the Euro mainly expected soon reexamine the minimum support at 1.1315 and 1.1250 maximum. Meanwhile, if the Euro is able to break and hold above 1.1366, then the other alternative scenario that Euro chance to test resistance in 1.1390 and 1.1450 area.
Gold Closed Above $ 1,300 Following the Announcement of the ECB Stimulus
Gold futures ended above $ 1.300 / onz for the first time since August, after the European Central Bank extend stimulus measures, increasing the demand for the precious metal as a haven asset.
ECB President Mario Draghi said the bank will buy government bonds amounting to 60 billion euros per month until September 2016. Previous Executive Board proposes bond purchases by 50 billion euros ($ 58 billion) per month until December 2016, according to two officials of the central banks of the euro area.
Gold rose nearly 10% this year amid stagnant economy has challenged policy makers to produce new way to sustain growth. The euro fell to a 11-year high against the dollar as the European Central Bank to expand the program which includes the purchase of government bonds, increasing the demand for gold as an alternative asset to the currency value of money in return.
“The size of the package was a positive surprise for the gold market, and we are seeing an increase in the purchase of safe haven assets after the fall of the euro,” said David Meger, director of precious metals trading at Highridge Futures LLC in Chicago. “Gold will continue in the hunt at a low interest rate environment.”
Gold futures for February rose 0.5% to settle at $ 1,300.70 / onz on the Comex Nymex. The price of gold which the value of the euro jumped to its highest level since April 2013, extending its gains to 17%.
After avoiding the gold for the past two years, investors currently seems to be back to the precious metal on fears that US growth will not be enough to Balance economic slowdown in other countries.
John Stephenson, CEO at Stephenson & Co. Capital Management in Toronto said that today there are many uncertainties and decisions and the ECB has stressed on the circumstances. ”
Technically, gold in today’s trading session on Friday (23/01) 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 1295.33 and re-test the maximum level of 1290.73. However, if the price of gold is able to break and hold above 1298.40, the estimated price of gold could potentially test the 1300.40 and 1305.72 resistance.
