Midday Market Outlook 21 Jan
World’s largest LNG(Liquefied Natural Gas) venture Chevron Corp.’s Gorgon project started this year with a great challenge because of the weakest energy prices in more than a decade. The Oil price which determine the value of LNG shipment is plunging near 13 years low right now while Chevron prepares to start exporting from the development of northwest Australia. This project will add more supply in current weakening demand condition. Expense of Chevron in this project has increased by 46% to $54 billion as oil price has decreased by half since 2009 when Chevron started the development project.
Hang Seng Index traded below its net asset today first time since 1999 as money flowing out from Hong Kong market. The sluggishness of China growth and speculators bet on an end to the city’s currency peg to the dollar increased concern over investing in Hong Kong , one of the world’s most open economies . Hang Seng index has already languished by 35% from its last April high.
EURUSD still remains in a long consolidation as it failed to break 1.0990 as was rejected by a diagonal resistance yesterday. The indecisiveness of EURUSD market may break today as European policymakers will sit in a meeting today to discuss about the monetary policy of ECB and also to decide the interest rate. If ECB decides to go for further quantitative easing or takes rate cut decision then EURUSD would face strong selloff .Conversely if ECB decides to remain interest rate on hold with a hawkish tone of describing recoveries then Euro may initiate a strong rally by breaching the 1.10 level.
Sell below 1.0800 with a Stop loss @1.0870 and Take Profit @1.0720. Buy above 1.10 with a Stop Loss @1.0910 and Take Profit @1.1160.
GBPUSD has been in a sideway market since yesterday after having a strong selloff on the 19th January. Intraday bias is strongly bearish as price has coincided with SMA 50 consecutive four times and created lower high and lower low each time within a small range.
Sell below 1.4124 with Stop Loss @1.41600 and Take Profit @1.4070.
USDJPY is rebounding by drifting back and forth with volatility after yesterday’s erratic fall. The intraday bias is neutral in USDJPY. It is suggested to stay away from this turmoil market.
XAUUSD has established an upward channel on the hourly chart. Yesterday it surged higher and breached the psychological 1100.00 level but could not carry on as rejected @1109.54 strongly by the confluence of the top of current upward channel and resistance zone. Right now, market has got support by the previous resistance zone (1095.00-1097.00) and has been accumulating strength to stage another rally. Intraday bias in XAUUSD remains bullish today.
Buy above 1104.00 with a Stop Loss @1094.00 and Take Profit @1120.00.
Crude Oil slumped to a 12-year low yesterday. Currently it is ahead of breaching the 13 years low at 25.04 level . It seems being a bottomless market as creating lower lows again and again without any significant correction. it has established a downward channel on the hourly chart and dropped 1.34% so far today. ‘Crude Oil Inventories’ data will release later today which may create erratic movement in the market.
Sell below 28.00 with Stop Loss @29.50 and Take Profit @26.50.