GroundStone Holdings Morning Newsletter

GroundStone Holdings

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Morning Technical Newsletter - Pound Momentum Ebbs

Pound Momentum Ebbs
While it has now lost some momentum, the Pound Sterling had earlier struck an 11-week peak during overnight trading on renewed optimism that a no-deal Brexit can be avoided. The latest attempt by Parliamentary lawmakers to find an acceptable alternative seems to have garnered the backing of lawmakers, which improved sentiment favorably and had traders looking to add the Pound back into their portfolios. Given the hopeful sentiment, the Pound has gained nearly 2.3% in the month of January, and signals from derivative markets are suggesting that there is likely to be more backing for the Pound in the days ahead.

As reported at 11:35 am (GMT) in London, the GBP/USD was trading at $1.3028, down 0.38% and well away from the session peak of $1.3094, while the low was recorded at $1.3020. The EUR/GBP was trading at 0.8705 Pence, a gain of 0.06% and moving away from the session low of 0.86889 Pence while the high was recorded at 0.87253 Pence.

Mario Draghi Presser Eyed
In the Eurozone, markets are awaiting the European Central Bank monetary policy decision. While analysts have predicted that the ECB will leave lending and deposit rates at the current levels, there will be much more interest in the press conference that will follow the announcement. Market players want to know whether Mario Draghi, the current head of the ECB, will finally acknowledge the mounting risks to Eurozone growth. In December's meeting, Draghi had said that while risks were present, they were essentially balanced; his take on those threats to the Eurozone's economic outlook and the impact on the Euro is of the utmost concern to FX traders.

DXY:

Intraday target: $97.00
Long-term target: $100



EUR/USD:

Intraday target: 1.12760
Long-term target: 1.0800



APPLE:

Intraday target: $150
Long-term target: $100



SPX:

Intraday target: $2610
Long-term target: $2000



GOLD:

Intraday target: $1270
Long-term target: $1183



WTICOUSD:

Intraday target: $54.50
Long-term target: $27.00



BITCOIN:

Intraday target: $3597
Long-term target: $2000



ETHEREUM:

Intraday target: $121
Long-term target: $60

 

GroundStone Holdings

Active member
144 2
Daily Macro View - Japan’s manufacturing activity stopped expanding

Daily Insights

Japan’s manufacturing activity stopped expanding in December. Activity in Japan’s manufacturing sector fell to the neutral mark in December, according to flash Purchasing Managers’ Index data out this morning, after two-and-a-half years of expansion. This follows trade data yesterday that showed Japanese exports fell 3.8% year over year in December, the slowest pace in two years amid slower growth in China and global trade tensions. Just one year ago exports were growing at a double-digit annual pace. However, in an encouraging sign, the IMF raised its gross domestic product growth forecast for Japan earlier this week from 0.9% to 1.1%, and the Bank of Japan voted to maintain its ultra-loose monetary policy when it met earlier this week.

ECB stands pat on rate plans, downgrades growth expectations. At the conclusion of its monetary policy meeting earlier today, the European Central Bank (ECB) left its key deposit rate at -0.4%, as expected. It also reiterated that it expects the key “interest rates to remain at their present levels at least through the summer of 2019” and intends to continue reinvesting principal payments from maturing securities for an extended period of time past the date when it begins raising rates. However, in his post-meeting press conference, ECB President Mario Draghi acknowledged that risks remain to the downside as economic data has deteriorated recently, and inflation has failed to sustain any upward momentum.

Europe’s woes go beyond Brexit. Brexit is not the only risk in Europe for global investors to consider. Throughout the continent, a tighter regulatory environment and strict labor laws have restricted business growth, while the rise of populism has added obstacles.

Bring on the stimulus. China’s economy grew 6.4% year over year in the fourth quarter of 2018 and 6.6% for the full year, its slowest pace since 1991. Other data including retail sales, industrial production, and capital investment corroborate the slowdown. Economic weakness puts additional pressure on the Chinese to resolve U.S. trade issues and increases the odds of meaningful fresh stimulus. A potential U.S.-China trade agreement over the next several months would also have a stimulative effect and we think could help buoy performance of EM stocks.
 
 
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