Disappointed Nikkei On Japan’s GDP
Nikkei fell after Japanese GDP data is lower than the estimated dim hope investors will be tough momentum of economic recovery in the world’s 3 largest. Japan’s quarterly GDP contracted -0.4% in the third quarter of 2014; worse than the predictions of analysts expect growth of 0.5%.
This was a period of both Japan’s GDP recorded a negative economic growth after GDP contracted -1.9% in the second quarter. It also means that Japan falls back into recession. Nikkei futures down 0.6% and is now trading at 17 365.
With economic activity in Japan is still bad then this may encourage Prime Minister Shinzo Abe to delay the next tax increase. Tax increases earlier in the month in April has increased the cost of living in the current Japanese society should consumers struggling with rising inflation as the BoJ is working to achieve the inflation target of 2%.
Abe is also likely to accelerate the implementation of the election to ensure that the government is still getting support from the people of Japan. Abe’s popularity began to fall, although he still could win the next election.
Technically, the index on the trading session today, Monday (17/11) 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 17100 and 17050. If it fails at 17 155, then the next index is expected to tend to retest the resistance level that is 17 180 and continued until the possibility of being in the 17230 area.
Japan’s GDP contraction, Yen Weakens
Trading foreign exchange on Monday (17/11), the yen weakened against the US dollar observed when Japan’s gross domestic product growth contracted in the third quarter.
Ongoing trade in the Asian session, the pair USDJPY strengthened 0:47% at 116.84 level, where the pair hit a daily low of 116.36 for the session and the highest level of 117.06 for the session daily.
Yen seen strong pressure to weaken against the greenback after Japan’s GDP growth contracted. According to a report released by the Cabinet Office showed that Japan’s gross domestic product growth declined by 0.4% in the third quarter.
Technically, the trading session today, Monday (17/11), the dollar yen pair a chance to move in the negative trend.
The weakening of the yen mainly expected soon reexamine the minimum support at 113.50 and 110.00 maximum. Meanwhile, if the Yen was able to break and hold above 115.97, then the other alternative scenario that Yen chance to test resistance in 116.50 and 118.90 area.
Trigger Action Short-Covering Rally Gold
Gold rallied after the outbreak of the action of short-covering ahead of the weekend. Gold was down to touch $ 1147 but rose $ 30 in the New York session after the easing of the strengthening US dollar managed to trigger a short-covering action. XAUUSD is now traded at $ 1,187; daily high near $ 1191.60 level.
The US dollar reduces the gains after US Treasury yields rise despite failing to maintain data shows increase in retail sales and consumer confidence. US government bond yields on 10-year fell from 2,377% to 2,347%. Government bond yields 2-year US Treasury was also reduced from the level of 0548% to 0536%. The decrease of the yield can be intimated reduced Fed rate hike expectations.
Rebound in oil prices also reduce fears of low inflationary pressure world that also adds to the appeal of gold as a hedging instrument for inflation. Oil had gained after briefly touching a 4-year low as widespread expectations that low oil prices could force OPEC to cut production in the upcoming November 27 meeting.
Technically, gold trading session today, Monday (17/11) the potential reversal, tested positive trend, but prone to taking profit. RSI indicator tends to re-test resistance and aiming the bullish channel, but Bollinger Bands that began to shrink, thus giving impetus to the gold to the downside.
It is estimated that the gold price immediately prior to test resistance in the area of at least 1174.00 and re-test the maximum level of 1180.10. However, if the price of gold was unable to break and stays below 1189.10 then estimated the price of gold could potentially test the 1185.50 and 1180.00 Support.
