Dollar Boosted Rate Hike
The dollar rose 1.6% against the euro on Tuesday’s trading session, its biggest one-day gains since May 19, after the home sales report improved and hawkish comments from Federal Reserve Chairman shifting the investors’ expectations for the rise in interest rates at the central bank meeting in September next.
The dollar index settled at its original position, which is in the position of 95.4070. Jerome Powell, a high-level committee voting members of the Fed said that he believes economic conditions can provide door to two interest rate hikes before the end of the year – one in September, and another in December. But, he added, the increase was not a problem if done; it means not just decisions without consideration.
Strength of dollar on Tuesday is boosted by new home sales report; which grew at the fastest pace in seven years. Strong sales figures pushed economists to claim that the housing market has been “turned” into a good condition. Marc Chandler, global head of currency strategy at Brown Brothers Harriman, the strength of the dollar on Tuesday to bring back the issue of monetary policy divergence trading.
Federal Reserve policy makers signalled last week that a rate hike will unfold gradually from the expected market developments, giving cooling in the growing divergence of trade policy.
Technically, the pair Euro-dollar likely to move in a negative trend on the trading session today, Wednesday (24/06).
The weakening of the Euro mainly expected soon retests the support at 1.1110 minimum and maximum 1.1050. Meanwhile, if the Euro is able to break and hold above 1.1170, then the other alternative scenario that Euro likely to test resistance in 1.1190 and 1.1250 area.
Gold Slumping Respond to Fed Powell Comments
Gold fell three days in a row with investors refocused on expectations of rising US interest rates. Gold ended the trade at the level of $ 1178.48 per troy ounce, with daily highs $ 1,188.04 and $ 1,176.14 daily lows.
Federal Reserve Board Member, Jerome Powell, assess rate hike likely to apply as soon as possible in the month of September, the second interest rate hike in December. Powell, who also became one of the members of the Federal Open Market Committee (FOMC) this year, adding the economy, will strengthen in the second half of this year. Sign of improvement in the US economy not only increase the chances of a rate hike, but also adds strength strengthening US dollar, two things that puts pressure on the gold trade. Gold will become more expensive for investors holding other currencies when the greenback strengthens. Gold charm will also be reduced in the middle of a potential rise in interest rates because gold is one of the non-interest assets.
Not only that, the appeal of gold as a safe haven asset was also reduced on prospects of a Greek deal if achieved could keep Greece from bankruptcy. The Greek international lenders are now giving more positive response to the proposal of Greece. Market participants are now assessing the risks in the Greek negotiations reverse on the ability of Prime Minister Alexis Tsipras to get parliamentary support before a key meeting this week.
Technically, gold in today’s trading session on Wednesday (24/06) 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 Band begins to widen, thus giving impetus for gold to the upside.
It is estimated that the gold price immediately prior to test support in the area of at least 1170.80 and re-test the maximum level of 1165.25. However, if the price of gold is able to break and hold above 1176.70, the estimated price of gold could potentially test the Resistance 1178.60 and 1183.25.
Positive Kospi Wednesday
Stock market trading ginseng South Korea Wednesday morning (24/6), the Kospi successfully re-opened in positive territory by the sentiments of the Government and the Bank of Korea (BOK) on public savings ratio in the country.
Reports the ratio of the total savings in the first quarter increased significantly by 1.5% to be 36.5%, when compared with the results of the quarter at 1.8%. The results reached record highs in the seventeen years since the first quarter of 1998 which had reached the highest position at 40.1%.
This sentiment sustain gains in LG at 12:20%, 00:40% shares of Hyundai Motor, KIA Motor 0.15% The shares, but shares of Samsung Electronics should be opened great distress at 1:21%. So that the Kospi index rose limited by 5:49 or 0:26% points to become 2086.69 points from the previous closing position at 2081.20 points and reached the highest position previously traded at 2086.09 and the lowest point at 2066.21 points previously.
But unlike the movement of Kospi index futures this morning, which opened in the same condition on the position of the previous closing at 254.50 points by achieving the highest position previously traded at 255.42 points and the previous low at 252.42 points.
Based on the closing traded before, then Analyst estimates that today’s Kospi index movement will try to penetrate the first resistance at 255.60 points with MA5 on BB10 daily, if the movement of the index broke through the first resistance is expected to try to penetrate the resistance at 256.75 points with MA5 top BB10 daily.
If the movement of the index managed to turn around the direction of weakening, it is expected to try to penetrate the first support at 253.80 points by the middle MA5 BB10 daily, if the movement is able to penetrate the first support is expected to try to penetrate the second support at 252.65 points with MA5 under BB10 daily.
Technically, the index likely to weaken on the trading session today, Wednesday (24/06), 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 of which is likely to increase, early indications bullish index. In addition, RSI, on the M15 charts, is oversold, signaling upside.
It is estimated, the index test the first support level 254.00 and 252.25. If it fails at 254.60, then the next index is expected to tend to retest the 254.90 resistance level and continued up to the possibility of being in the 255.60 area.
