January 29th, 2016.
On Friday morning, the Euro has surrendered part of its stab to recent highs in the 1.0970 area against the American dollar, prompting the EUR/USD to return to the 1.09 neighbourhood. One of the key events for the pair for today is the publication of Gross Domestic Product in the US. Experts predict that the US economy advanced by 0.8% in 4th quarter. The resistance levels for the euro are 1.1007 and 1.1035. The support levels for the EUR/USD are following 1.0875 and 1.0848.
Today, the USD/JPY breached up the key mark of 120 yen per dollar. The maximum of the da was recorded near to the level of 121.415. The yen tumbled over 2% after the Bank of Japan unexpectedly cut a benchmark interest rate below zero on Friday, stunning investors with another bold move to revive the economy as volatile markets and slowing global growth threaten its efforts to beat deflation. Reuters writes that “the Bank of Japan said it would charge for a portion of bank reserves parked with the institution, an aggressive policy pioneered by the European Central Bank.” "The BOJ will cut the interest rate further into negative territory if judged as necessary," the bank said in a statement announcing the decision. In adopting negative interest rates Japan is reaching for a new weapon in its long battle against deflation or widespread falling prices, which since the 1990s have discouraged consumers from buying big or frequently because prices tend to fall. Deflation is seen as the root of two decades of economic malaise. BOJ Governor Haruhiko Kuroda said the world's third-biggest economy is recovering moderately and the underlying price trend is rising steadily, "but there's a risk recent further falls in oil prices, uncertainty over emerging economies, including China, and global market instability could hurt business confidence and delay the eradication of people's deflationary mind-set." By adopting a negative interest rate, the central bank hopes banks will step up lending to support activity in the real economy, rather than pay a penalty to deposit excess cash at the BOJ. There is little sign of any pent-up demand from Japanese banks or cash-rich companies for fresh funds, and any money released into the system may merely be hoarded or steered into speculative activity such as betting on stocks. The resistance levels for the pair are 121.30 and 121.50. The support levels for the USD/JPY are following 120.00 and 119.67.
US Crude oil trades on a green area. Yesterday the oil jumped to the level of $34.70 by adding over 3%. Oil rose last days, spurred by hopes of a deal among oil-producing countries to tackle a growing supply glut. "Despite the unlikely scenario of supply cutbacks in the oil market, prices have found some support above $30 a barrel. We believe this basis is fragile, with fundamentals expected to weaken in the coming weeks," ANZ said on Friday. The resistance levels for oil are $35.20 and $36.20. The support levels for oil are $32.70 and $32.00.