PBOC Warning Undermines the Hang Seng
Hang Seng fell after China’s central bank PBOC warns of China’s economic slowdown risks may increase. However, the PBOC express the central bank will continue to promote sustainable economic growth, but also will prevent excess liquidity that could increase inflation and debt.
Comments PBOC reiterated concerns the market for a continuing economic slowdown in the world’s biggest 2. Data this week that show the reduced activity of China’s manufacturing and services sectors for the month of October also provide additional evidence on the threat. Hang Seng futures down 0.72% and is now trading at 23 490.
Investors are also seen cautious ahead of the publication of US employment data at 20:30 GMT. Data on non-farm payrolls and the unemployment rate will get the attention because it can also determine how quickly the Federal Reserve will raise interest rates in 2015. The Fed’s Yellen has previously been pointed out that the central bank may raise interest rates sooner if the US employment conditions improved faster than anticipation.
Technically, the index in the trading session today, Friday (11/07) 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 the level of support in advance ie 23 430 and 23 480 23380. If you fail, then the next index is expected to tend to retest the resistance level of 23500 and continued to be in the area of 23 550 possibilities.
Draghi Dovish Comments Hurting Euro
The euro fell to its lowest in more than 2 years versus the US Dollar on Thursday after European Central Bank President reiterated his commitment to use unconventional measures to stimulate economic growth in the Euro zone are slow.
Draghi also added that if the impact of the asset purchase program of the ECB’s balance sheet will be quite large. The statement, which was brought after the ECB held interest rates at a record low of 0.5%, investors regarded as a green light to sell the Euro.
“Short position in the market really is not too much before Draghi’s speech,” said Vassili Serebriakov, currency strategist at BNP Paribas in New York. “But fairly dovish comments have prompted investors to re-take a short position.”
Technically, the trading session today, Friday (11/07), the pair euro dollar likely to move in a negative trend.
The weakening of the euro is mainly expected to immediately reexamine the minimum support at 1.2320 and 1.2270 maximum. Meanwhile, if the euro is able to break and hold above 1.2378, then another alternative scenario ie the Euro likely to test resistance in 1.2400 and 1.2450 area.
The Strengthening of the US Dollar Weaken Gold
Gold price fell to its lowest price since May 2013 by the strengthening of the US dollar so that erode the allure of gold as an investment option.
Gold is a victim of the strengthening US dollar, amid expectations the US economy will continue to grow. A day earlier, gold prices dropped to the lowest price touched her on April 23, 2010. The strengthening of the US dollar to its strongest position in the last five years against 10 other major world currencies, Suggests US domestic economy continues to improve.
Meanwhile, from a price comparison against other commodities, indicating that the gold price is still quite expensive compared to oil and commodity price ratio of silver though. Based on this comparison, investors are expected to pay more attention to the amount of the ETP ownership – (exchange-traded products) are based on gold, see which direction the gold price will move. Currently, the global ETP assets ownership decreased sharply to its lowest since September 2009 to positions.
Gold for December delivery contract ended down 0.3 percent to $ 1,142.60 an ounce on the Comex – New York, continuing seventh consecutive decline today. Gold prices had touched $ 1,137.10 to which is the lowest price in 54 months.
Economic divergence occurs, both in the US, Europe and Japan. This encourages the strengthening of the US dollar as well. Very few US people are fired, and industrial productivity has increased as well. Recent data from the US government showed that US employment conditions improved. Meanwhile, in Europe alone, Mario Draghi, President of the European Central Bank remains committed to continuing its stimulus policy.
This year, gold prices are expected to decline will end, for the first time since 1998 there will be an annual decline in a row back. Last year, the price of gold was minus 28 per cent after being hit hard by the rise in the stock market and subdued inflation low. ETP’s ownership in 2013, removed 869 tons worth more than $ 73 billion. This year, gold prices have dropped by 5 percent, which the US dollar gained 7.7 percent against other major currencies.
Technically, gold at today’s trading session on Friday (7/11) 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 1136.10 and re-test the maximum level of 1130.73. However, if the price of gold is able to break and hold above 1141.30 then estimated the price of gold has the potential to test the 1145.00 and 1149.72 Resistance.
