The first month of 2015 is slowly coming to an end and the decisive events that moved the markets are almost over. January was very volatile in equity markets and currencies until the middle of the month, expectations were divided. One of the most important events this week was the ECB press conference. More on that later.
Economy and monetary policy
EU: Important economic data from the EU were rather scarce sown. Except for German producer prices and ZEW economic expectations, no data was on the agenda. Producer prices declined enormously on both a monthly and monthly basis in December. In contrast, the previous ZEW expectations for Germany and the EU were very positive.
USA: In terms of data technology, the United States also looked rather poor. Only the construction industry recorded declining data in the case of building permits in December, while the start of housing construction was positive in December.
China: " All eyes on China", it has been said for more than a year, because the global economy seems to have become very dependent on the land of dragons and tigers. GDP growth for the fourth quarter of 2014 was slightly below expectations and well below the growth of the previous quarter. There was no change in growth compared to the previous year. However, the country's industrial production rose slightly in December, indicating a positive development. The key HSBC Production Manager index for January was also positive.
UK: The UK economy gave insight into the job market this week. The unemployment rate fell by a whole 20 basis points compared to the previous month and fell below 6% for the first time since the crisis. The unemployment statistics were also positive. The good labor market data was expected by experts due to the upcoming elections in May.
Monetary policy: But as usual, the decisive impetus came this week from the direction of monetary policy. And to an extent that can be said to be unprecedented. The currency war seems to be entering the second round, and hard bandages are used here. Several central banks adjusted interest rates this week. These included the Bank of Canada, the Turkish central bank and the Czech central bank. The ECB launched its QE and the Bank of Japan adjusted its inflation and growth forecasts downwards. The British central bank is shifting its rate hike far and wide. The Fed does not meet until next week.
Technical valuation of the markets:
EUR / USD: That the euro is now towards parity with the US dollar there is no doubt about that. The majority did not expect anything else from the ECB, but the "Buy the Rumor, Sell the Fact" failed to materialize. This could be due to the fact that too many had this expectation and some information had leaked before the announcement. Technically, we pointed out last week that relevant support is now barely available. So here is another weekly chart, because sometimes you can see more from a distance. Accordingly, the next major support zone would be in a range between $ 1.06-1.08 per euro.
GBP / USD: The currency pair offers roughly the same picture GBP / USD. Support at $ 1.50 per pound has been broken, and the next support would be in the zone between $ 1.47-1.48 per pound.
USD / JPY: The Japanese yen is still fairly stable against the US dollar and is below the 20-day average line. A sustained breach of the 119.00 Japanese yen per US dollar should result in further upward pressure.
Screen 4: Weekly chart of the Dax
DAX: The DAX says "Sky is the limit ". After the ECB decision, the leading German index reached 10,500 pts. The future is currently trading at 10,580 pts. A slight correction could be a good start for the entry, which could be implemented with the broker OptionBit. In addition to various types of option types, the broker also offers the option of choosing a longer term.
S&P 500: The US equity markets are still weakening. Nevertheless, there is a high probability that these will also follow the European markets. At least from a technical point of view, if you are interested, a slight correction should be used to get you started.