Analytics

News, Trends, & Analytics 18.02.2020

Negative Economic Forecasts

Today, the focus is on positive comments on the coronavirus, the Bundesbank forecast, as well as a reduction in Japan’s GDP in the fourth quarter of 2019.

 

News

According to preliminary estimates, Japan’s GDP in the fourth quarter fell by a record 1.6%. Affects JPY


The Bundesbank has determined it will likely see weak data on German economic growth in the first quarter. Affects EUR


The World Trade Organization sees gloomy prospects for world trade in 2020. Affects S&P 500


Due to the virus COVID-19, Nintendo may reduce the supply of Switch consoles to the US and European markets. Affects Nintendo


Chinese Premier Li Keqiang announced the positive dynamics of countering the spread of coronavirus. Affects Brent

 

Calendar

12:30 GMT

A report will be published on the average wage level taking into account premiums in the UK. If results exceed 3.0%, the GBP will receive a boost.


13:00 GMT

The updated ZEW economic sentiment index in Germany will be released. Experts expect a drop to 21.5 points. However, if the indicator remains at the same level of 26.7 points, the EUR will get a chance to strengthen.

 

Technical Analysis

USD/JPY

On Monday, a preliminary report on GDP growth rates for the IV quarter of 2019 was published in Japan. The document sent a negative signal. On an annualized basis, GDP declined immediately by 6.3%, which is the worst indicator since 2014. Against this background, the Bank of Japan may begin to take more active measures to stimulate the economy.

Due to the prevailing fundamental background, the yen should be considered as a weak asset. USD JPY may continue the uptrend and approach 111,000.

Brent

If Brent fails to gain a foothold above 57.40, the asset will likely begin to correct to 56.00. This is indicated by the Fibonacci levels.

DAX 30

The German stock index has already visited the overbought zone, if you focus on the RSI indicator on a four-hour timeframe. In addition, the pressure on the quotes is an upward resistance level. With such initial data, we can get an asset correction down.

 

USD/JPY on this day in history

  • Since 2000, Feb. 18th has been a trading day 14 times.
  • On 71% of those days, the asset finished trading with growth.
  • The maximum strengthening range was 1.47%.
  • The downward trend was limited to 0.97%.
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