Daily Market Review - 02/06/2014

EUR/USD

Apparently consolidation gradually transforms into an ascent. The up slanting line with a small angle could be projected. The resistance for the new emerging trend is at 1.3550

USD/JPY

The pair sticks to its prior trend. The outlook remains bearish. Support and resistance at the moment remain on the same levels. Analysts do not anticipate any dramatic changes here.

GBP/USD

The pair continues to fluctuate within the narrow range. Support is at 1.6265 and resistance is at 1.6347. Bias is quite uncertain. Nevertheless the trend is rather downward than otherwise.

Market Overview

Lengthy inflation in the Euro zone messed up things for politicians, monetary institutions, and businesses. At that the latter ones were not ready for such long period of low inflation, as the ECB is still indecisive. At that according to recent December data retail sales in Europe dropped by 1.6%, in spite of Christmas sales.

Dropping inflation also contributed to that statistics. Last month we heard a lot about talks on approaching inflation, which imply prices decline for consumer sector. A lot of Europeans against such background postpone big purchases in hope, that in coming months sales will start to tumble. Consequently revenue contraction will have a quite negative impact on investment plans of various companies.

Fresh portion of PMI indices demonstrates modest growth, but any conclusion about possibility of economic recovery has to be made cautiously. It is important to remember about France, where PMI is lower than 50, what means contraction. The only positive thing is that the pace of decline is diminishing. Besides unemployment is still on high levels.

In the US the situation around prolonging of governmental debt limit continues to become more complicated. It is the main obstacle for Dollar appreciation. The debt ceiling will be reached by February 7, but by the end of the month we are not likely to see a default. Republicans’ position is also softening. Last year they demanded full cease of health care reform and also reduction of spending part of the budget.

Economic Calendar

The post Daily Market Review – 2/6/2014 appeared first on Citrades.