South Korea Manufacturing Activity Weight the Kospi
Kospi recorded slightly after weakening South Korean manufacturing data confirms the threat of economic slowdown in Asia’s biggest 4. South Korea’s manufacturing index (version HSBC) fell from 48.8 to 48.7 for the month of October. The data is in line with the HSBC manufacturing data released last week Seoul where the manufacturing sector activity fell from 78 into 76. The Kospi futures were down 0.24% and is now trading at 249.60.
Meanwhile, auto stocks slumped enough after CEO Kia Motors has resigned on Friday last. President Sam-woong Lee stepped down as a form of responsibility for the demonstrations by workers demanding wage increases Kia. Vice President and CFO Park Han-woo will take over the helm of Kia Motos. Kia Motors and Hyundai Motors each dropped 3%.
On the other hand, South Korea reported a rise in the trade surplus of $ 3.4 billion to $ 7.5 billion for the month of October. However, export performance gains have slowed to only 2.5% after growing 6.8% in September. Import even declined 3% in October after rising 8% in the previous month.
Investors also looked wary after China’s manufacturing sector activity reduced to investors worried about the outlook back 2 largest economy in the world. China’s manufacturing sector index fell from 50.8 to 51.1 into October. Markets were also cautious with the geo-political risks in Ukraine after a pro-Russian separatists do elections were contested by the rival Kiev and the West. The election results show that Alexander Zakharchenko can be a leader in the separatist region of eastern Ukraine and this can assert separatist desire to be closer to Russia.
Technically, the index in the trading session today, Monday (03/11) likely to weaken, test negative trends, the impact of Wall Street. On the bearish engulfing formation M15 chart gives an opportunity for the index to move downside. However, the volume is likely to increase, an early indication of a bullish index. In addition, RSI, on the M15 chart, is in the oversold area, cue upside.
It is estimated, the index test in advance the level of Support 247.00 and 245.50. If it fails at 249.20, then the next index is expected to tend to retest the 250.50 resistance level and continue until the area is likely to be 252.00.
US Dollar Highest Against Yen In 7 Years
At the end of the weekly trading foreign currencies, the US Dollar against the Yen occupying the highest position in almost seven years after the BOJ announced the end of stimulus programs and fueled the growth of the Japanese economy.
USDJPY closed jumped 2.7% to 112.33 yen from 109.22 yen the previous session. With a weekly gain of 3.9% and increased 2.7% on a monthly basis. EURUSD ended up falling in the level of $ 1.2526 from an earlier session at the level of $ 1.2611 and GBPUSD declined slightly in the $ 1.5999 level.
BOJ on Friday abruptly announced additional stimulus measures, underscoring how economic revival plan of Prime Minister Shinzo Abe has strayed as a national sales tax increase in April this year dampened by consumer spending.
Steps taken by the BOJ and the Fed at the Federal Reserve has triggered a sharp decline in commodity exchanges precious metals, gold ended sharply down $ 26.30 or 2.2% to settle at $ 1,167.80 an ounce. Gold futures were likely to find support at $ 1,164.10 with the highest resistance at $ 1,172.10.
While the Nikkei 225 index jumped nearly 5% and pushed the yen to lows against the dollar.
Relatively strong economic data depress precious metal and push up stock prices. The US economy grew 3.5% in the third quarter, supported by a surge in exports and federal government spending.
The ICE Dollar Index, which measures the strength of the greenback against a basket of major currencies, rose 1.2% to 78.80.
Technically, the trading session today, Monday (03/11), the dollar yen pair likely to move in a negative trend.
A weaker yen is mainly expected to immediately reexamine the minimum support at 110.50 and 108.00 maximum. Meanwhile, if the Yen was able to break and hold above 112.72, then another alternative scenario that is likely to test resistance Yen in 103.50 and 105.00 area.
Strengthening Dollar and Gold Rally Sink
Gold dropped to its lowest level since 2010 on Friday due to a stronger dollar and soaring stock markets after the Bank of Japan to add monetary stimulus and trim US economic data. The dollar rose to its highest level in four weeks against major currencies, boosted by the addition of the BOJ’s monetary base by bringing the yen to its lowest level in seven years.
Strengthening dollar makes dollar-denominated commodities like gold more expensive for holders of other currencies. Gold trading on Friday closed at $ 1,171.40 per troy ounce, with daily highs $ 1202.61, $ 1161.56 and the lowest.
Meanwhile, additional monetary stimulus from the Bank of Japan and the addition of the allocation of shares in the portfolio Japan’s Government Pension Investment Fund increase investor risk appetite makes a global stock rally, otherwise the gold which is seen as safe haven assets become less attractive.
Gold on Thursday, breaking below the level of $ 1200 per troy ounce after data showed the US economy grew 3.5% in the third quarter from a year earlier, and better than economists’ estimate of 3.0%. The slick data following the decision of the Federal Reserve’s bond-buying program and end the surprisingly expressed optimism over the US economy.
Technically, gold at today’s trading session on Monday (03/11) potentially bearish, tested negative trend back, but prone to reversal. The RSI indicator is likely to re-test support channel and towards the oversold area, but the Bollinger Bands which began to widen, thus giving impetus to gold to the upside.
It is estimated that the price of gold immediately prior to test support at least in the area of 1161.50 and re-test the maximum level of 1155.00. However, if the price of gold is able to break and hold above 1166.80 then estimated the price of gold has the potential to test the 1170.50 and 1175.00 Resistance.
