MARKETS CONSOLIDATE AHEAD OF THE WEEKEND

The EUR/USD is consolidating after a sharp decline in the morning that was caused by news on the Catalan elections where supporters of the region’s independence from Spain won the majority vote. Some support for the single currency came from the German Gfk consumer climate index which grew in January to 10.8, that’s 0.1 better than expected. Investors are in no hurry to accumulate positions ahead of the long Christmas weekend. The durable goods orders in the US rose by 1.3% in November compared to 2.1% forecasted. Another positive statistic from the US today was the increase of personal spending in November by 0.6% against the 0.2% increase in October and 0.5% forecasted.

Volatility is expected to increase after the Christmas holidays when portfolio managers start to revise investment portfolios and in case of a correction on the stock market we may see the rise in demand for the defensive assets.

The British pound keeps consolidating today and the amplitude of price fluctuations is falling which points to a possible sharp movement soon. Gross Domestic Product in the UK grew by 0.4% in the third quarter which was in line with the forecast, but this positive was partly offset by negative data on the current account balance for the third quarter which showed a deficit of 22.8 billion compared to the expected 21.5 billion.

The benchmark for the American light sweet crude oil WTI is falling today in anticipation of news on drilling activity in the US that will be published by Baker Hughes tonight. Investors are expecting the growth of output in the US which will have a negative influence on USD/WTI quotes.

EUR/USD

The EUR/USD price is consolidating above the important support line at 1.1825 and its overcoming may be the stimulus for continued falls to 1.1730 and 1.1620. In case of switching the local descending trend to positive, the closest target will be 1.1925. Powerful movements are not anticipated today ahead of the long weekend.

GBP/USD

The GBP/USD is consolidating between the inclined support line and descending resistance. In case of the price fixing above 1.3400, the immediate targets will be at 1.3550 and 1.3600. On the other hand, the basis for the price decline may come from the price fixing under the local support at 1.3300. The closest targets in this scenario will be 1.3250 and 1.3150.

USD/WTI

The USD/WTI price has corrected to the inclined support line and in case of a rebound we may see growth resume to the target level at 59.00. The sell signal, with potential objectives at 57.00 and 55.00, may come if the price fixes under the local low at 57.50.