Market update

November 24, 2015 by Michael Oyebamiji

USD strength continues to put the market under an intense pressure as commodity prices continues to sell-off and every pair against USD are also on a downward slope. Emerging markets are not left out in this intense pressure despite every effort to stage a comeback against the dollar last week. We saw South African Rand gain the most against USD last week due to a rake hike in South Africa in other to combat inflation and Turkish Lira (TRY) was also a bit resilient but a strong support level at 2.810 held tightly to push price back on a rally. Eurusd made a fresh low yesterday to trade at 1.059 which is the lowest price in more than 4 months. This was due to a strong USD and market expectation of monetary stimulus expansion from the European central bank. Cable also followed the same pattern dropping to 1.510 support level and prices has bounced from this support. If this support holds, we might get a rally all the way to 1.51-1.52 area.

Market will be expecting some key fundamental news from the Eurozone and US economy. The German IFO business climate will be the first set of data to come from Europe, market is expecting figures to remain unchanged at 108.2%. US GDP come out later in the day, market is expecting 3 quarter GDP to have increased to 2.1% from 1.5%. A strong GDP expected will further strengthen the USD and it might trigger a December rate hike expectations to a bigger odd. Commodity prices will drop further; emerging market will also slide against the USD. However, a disappointing data might see a rally against USD across the board.