When we look at the latest developments in the global forex market, we can say the traders will focus on three major issues during 2017. These three subjects are Trump’s fiscal policies, elections in EU countries and Fed’s interest increase decisions during this year. Firstly, we will talk about the Fed’s meeting in February.
As expected, the Fed did not take any interest rate action at the FOMC meeting from January 31 to February 1. In the policy statement, no uncomfortable changes are seen in the over-the-top markets. The line-heading we are paying attention to in the explanation is of course what the Fed will say about the economic outlook and whether there will be a signal of possible interest rate hikes. We can say it very clearly, there is no signal that the interest rate will rise in March, and the Fed options continue to tend to price slightly more likely to increase interest rates. The Fed has found itself in the policy statement that inflation is increasing in the last quarter. However, the fact that inflation expectations continue to fall below targets and that inflation expectation changes very little, balancing makes the statement very soft. The committee's progressive interest rate increase expectation continues. Regarding the labor market, the increase in employment is strong and unemployment remains low. Expected to grow moderately, an argument that we do not know has not been put forward.
On the other hand, Trump’s fiscal policies and decisions are playing an important role in global economies which have strong relationships with the American market. After Trump officially started his new role, the ranks behind the start of the referendum, and is already at odds with the trading partners that they could create a risk for the future period. The rhetoric has been hardened by the fact that the wall that will be built in Mexico is also stepped back. After being selected, the interpretations of what Trump's promises can do now left him anxious. In a short period of time Trump's moves show us that he is very determined to fulfill his promises. When we dismiss the political side and examine the economic dimension of business; We can see the commitment to implement expansionary fiscal policies. It is very likely that we will be able to see the scenario again, which is troubling the market in this respect. On this view, the stronger US economy may come up with pricing in the context of a stronger interest rate hike scenario.
It is said that the USA is planning to withdraw the corporate tax from 35 % to 15 % while Trump is aiming to pass 20 % of Mexico and 45 % of customs duty to pass the imports from China. Trump wants to encourage US companies to make their productions in the country.
Finally, the European elections and EU economies will play an important role in the world economy. The steps taken by the ECB to stimulate the regional economy can be seen with a few data that most of Germany have made. For example, the EU gave a surplus of about 36 billion Euros in November, giving Germany a current surplus of about 24 billion Euros. In addition, Germany's 1.9 % growth with the region's 1.8 % growth over the performance showed. The ECB's most focused inflation was 1.8 %, while inflation in Germany climbed to 1.9 %.
When we look at the general perspective of the Gold market during the month of February, we can observe a positive outlook. The starting point was at 1.205 USD level at the beginning of the month. When we come to the second week of the month, the price level exceeded 1.230 USD level on the global forex market.
The announcement of Fed Chairman Janet Yellen showed that too much wait for the interest rate hikes would not be right, causing the Dollar to strengthen. When we look at today, we see that the upward trend has continued with the data set released from the US in general terms exceeding expectations. With this upward movement in the Dollar, the sales pressure for gold prices has also increased. On the other hand, the statements of Fed Chairman Janet Yellen to speak this evening may lead to a rise in activity in gold prices.
Finally, when we look at the technical analysis briefly, it is important to maintain permanence above 1224 USD to be able to continue to recover underneath, and 1234 and 1240 USD levels can be targeted in the upsurge. If sales pressure is seen below, support levels of 1215 and 1208 USD can be followed respectively.
The global silver market has experienced a positive trend until the last week of February. After the beginning of new year, the silver market is pricing some positive expectations from many economies. The starting point was at 17.45 USD level at the beginning of the year and reached the 18.00 USD level at 16th day of the month. We can say that the positive trend may continue for a while because the expectations are a bit positive about the silver market.
Like many precious commodities, the stronger Dollar is affecting the prices of the silver market. When we look at the general outlook of the silver market, the parity may try the 18.50 USD level as a resistance level in a short time, and the support level will be 17.75 USD.
Brent oil Market
Brent oil market has been experiencing a positive trend after the end of 2016. When we look at the current trend of the market, we can observe a fluctuating trend on the brent oil market. The 56.80 USD level was the beginning point at the first day of February, and the parity reached to 55.05 USD level on February 7th. But, with some positive developments in the global market and OPEC side, the parity reached 56.70 USD level on February 10th. Nowadays, the current trend is pricing over the 55.50 USD level.
We continue to spend days when oil prices are dominated by the horizontal trend. Oil inventories were announced by the US in the middle of the month. We can observe the oil stocks are increasing regularly. Oil inventories, which are expected to increase by 3.5 million barrels, have increased by 9.5 million barrels over expectations. The number of drilling wells in operation and the rise in inventories following the increase in production continues to push up oil prices. Although OPEC and OPEC are loyal to the commitments made by other countries, we can say that supply and stock in the market are the biggest obstacles in stabilizing oil prices.
Crude oil Market
When we look at the crude oil market, the starting point was at 53.88 USD level at the beginning of February. The fluctuating process has continued during the month and the parity is trading over the 53.00 USD level with the second half of the month. Crude oil remains limited in its uptrend as crude and processed inventories continue to increase in the US. Despite OPEC's cuts in oil supplies, worries over oversupply in the US remain the main obstacle to a steady rise in oil prices. The market will continue to watch the US for a while.
If the above level of 53.50 is exceeded in crude oil, it can be seen to rise to 54.10 and then to 54.85 resistance. On the below side, there is a breakdown of support 52,75 can be seen down to 51,90 and then 50,80 when the support line passes 7 times before.
Natural Gas Market
The global natural gas market made the opening with the level of 3.168 USD at the beginning of February. We can observe a negative outlook on the natural gas market. When we start the second half of the month, the price level decreased under the 3.000 USD level and reached 2.900 USD level. Watching the temperatures above the seasonal norms in the winter season of 2016-2017 is the reason behind the recent retreat. In the latest estimates, it is expected that weather conditions will be higher than the seasonal norms in the US after February 27th. But remember that the market will get rid of the winter effect after a while and the summer season will be locked into the climatic conditions.
During 2016, the safe zone in the natural gas market was seen as 2.50-3.00 band and the market mainly spent time in this band. We're under 3.00 these days and there is a potential for slippage into the lower band of the safe zone of the market. Retreats towards the 2.50-2.60 level in the coming weeks may be an opportunity for buying direction.
The copper market is one of the leading markets of the world at the last years, and we can observe the trading volume is increasing day by day. When we look at the February analysis of the Copper market, the starting point was at the 2.704 level at the beginning of the month. In the first days of February, the copper market experienced a strong decline and reached 2.610 level on January 3rd. After this week, the parity gave a lot of recovery signals and reached 2.786 on February 13th. With the second half of February, the fluctuating trend is affecting the copper prices on the global forex market.
There is a view that investment in infrastructure will be given importance after American elections under the rise in copper prices in the last quarter of the year. At the same time, from 2017 onwards, the global economy is expected to perform better on the growth side. Perhaps America's infrastructure investments and the rhetoric of renewing the country may leap into other developed country policies.
We see that the copper market reached the price target of 2017 in the first month of the year. The increase in demand on the US side began to be priced after November. China's copper imports, which had risen during the period of 2016, were the most important catalyst for the upward movement of the market.
The EUR/USD parity is one of the leading currency pairs in the global forex market. The starting point was at the 1.0769 level at the beginning of January. Then, the negative atmosphere started to affect the prices of EUR/USD parity and the parity reached to 1.0577 at February 14th which was the lowest level of the first part of February. With the second half of February, there are a bit recovery signals on the parity. The parity is trading over the 1.06 level nowadays.
The Dollar index rose after yesterday's unveiled USA Consumer Price Index and Retail Sales figures outperformed expectations. Monthly Retail Sales data came in at 0.4%, exceeding expectations of 0,1%, while January monthly CPI in the US was above 0,3% expectation and realized as 0,6%. Following the release of CPI and Retail Sales figures from the US, the EUR/USD pair, which was exposed to harsh daily sales pressures, further accelerated the decline to 1.0521.
The USD/JPY parity is one of the most important and determinant major currency pairs in the global forex market. When we look at the February analysis of USD/JPY parity, the starting point was at the 113.25 level at the beginning of the month. During the month, the general outlook was on the positive side. When we come to February 15th, the parity tested over the 114 level. We can say the horizontal and positive trend will continue for a while on the USD/JPY parity.
When we look at the second half of the month, Haruhiko Kuroda, President of the Bank of Japan, stressed the aggressive monetary easing programs followed by major central banks, reporting that low productivity in financial institutions has spawned new fiscal crises. The yen, which was valued against the Dollar after Kuroda's aggressive monetary easing announcements, caused the USD/JPY parity, which followed a selling course throughout the Asian session, to withdraw to 113.8 support.
Technically speaking, in order to maintain the tendency to recover in the GBP/USD, we need to see persistent movements at 1.2530 level, and resistance levels of 1.2610 and 1.2690 can be targeted on the rise. For profit sales in the parity, 1.2420 and 1.2300 support levels can be followed.
GBP/USD is preferred by a lot of traders who are making buying and selling transactions in the global forex market under today’s economic market conditions. When we look at the February analysis of GBP/USD parity, the starting point was at the 1.2572 level at the beginning of the month. The general outlook was on the horizontal side during the month.
The Fed's increase in the possibility of interest rate hikes following the US-announced CPI inflation led to the strengthening of the Dollar and the volatility of negative currencies. In the UK, the unemployment rate for December was 4.8%, but it did not change compared to the previous turnover. However, after the January inflation announcement announced on expectations in the US yesterday, the GBPUSD parity fell to 1.2380 level, affected by the worldwide appreciation of the Dollar. However, after his period, there could be some profit sales on the Dollar front, the Sterling closed the day with a flat course against the Dollar.
- Date: 27 February 2017 Mon 18:04
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