Forex Market: EUR/HKD daily trading forecast

Yesterday’s trade saw EUR/HKD within the range of 9.5886-9.6854. The pair closed at 9.6213, losing 0.26% on a daily basis.

At 7:27 GMT today EUR/HKD was down 0.13% for the day to trade at 9.6066. The pair touched a daily low at 9.6013.

Fundamentals

Euro zone

French Current account

The deficit on Frances current account probably widened to EUR 3.2 billion in October, according to the median forecast by experts. In September the nations current account produced a deficit of EUR 1.2 billion, or the least since December 2013, when a gap of 1.2 billion was registered as well.

The current account reflects the difference between a nation’s savings and its investments. It is the sum of the balance of trade, net current transfers (cash transfers) and net income from abroad (earnings from investments made abroad plus money sent by individuals working abroad to their families back home, minus payments made to foreign investors).

A current account surplus indicates that a country’s net foreign assets have increased by the respective amount, while a deficit suggests the opposite. A country with a surplus on its current account is considered as a net lender to the rest of the world, while a current account deficit puts it in the position of a net borrower. A net lender is consuming less than it is producing, which means it is saving and those savings are being invested abroad, or foreign assets are created. A net borrower is consuming more than it is producing, which means that other countries are lending it their savings, or foreign liabilities are created. Therefore, a contracting surplus or a widening deficit on the French current account may have a limited bearish effect on the single currency. Banque de France is to release the official figure at 7:45 GMT.

Spanish Consumer Price Index – final estimate

Spain’s final annualized consumer inflation probably accelerated to -0.3% in November, according to the median forecast by experts, from a preliminary rate of -0.4%, reported on November 27th. If so, this would be the fifth consecutive month, during which annual consumer inflation stood in negative territory. In October the final annualized Consumer Price Index fell 0.1%. According to provisional estimates, lower electricity and fuel costs contributed the most to the drop in consumer prices last month.

Key categories, included in Spans CPI, are food and non-alcoholic beverages (accounting for 20% of the total weight) and transport (15%). Other categories are real estate (12%), hotels, coffee and restaurants (11.5%), clothing and footwear (9%) and entertainment and culture (7.5%). Health, communication, education and other goods and services comprise the remaining 25% of the index.

The CPI measures the change in price levels of the abovementioned basket of goods and services from consumer’s perspective and also provides clues over purchasing trends. In case the CPI improved more than projected, this would have a bullish effect on the euro. The National Statistics Institute (INE) will release its official report at 8:00 GMT.

Spanish final annualized CPI, evaluated in accordance with Eurostat’s harmonized methodology, probably matched the preliminary CPI estimate of -0.5% in November, which was released on November 27th. In October the final HICP was reported to have fallen 0.2%, in line with the preliminary estimate.

Italian Consumer Price Index – final estimate

Italys final annualized consumer inflation was probably at 0.2% in November, matching the preliminary inflation estimate, reported on November 28th. If so, this would be the second consecutive month of CPI growth. In October the final annualized index of consumer prices rose 0.1%. According to provisional data, in November upward pressures came from prices of services (a 0.9% increase year-on-year), grocery and unprocessed food (a 0.8% gain) and food and non-alcoholic beverages (up 0.5%). At the same time, cost of non-regulated energy products dropped the most during the same month, or by 3.2% year-on-year.

Key categories, included in Italys Consumer Price Index, are food and non-alcoholic beverages (accounting for 16% of total weight), transport (15%), restaurants and hotels (11%) and housing, water, electricity and other fuels (10%). Other categories are clothing and footwear (9%), furnishing and household equipment (8%), recreation and culture (8%) and health (also 8%). Communication, education, alcoholic beverages, tobacco and other goods and services comprise the remaining 15% of the index.

The nations final annualized CPI, evaluated in accordance with the harmonized methodology, probably accelerated 0.2% in November, according to market expectations. If so, this would match the preliminary HICP estimate, reported on November 28th. In October the final annualized HICP rose at a pace of 0.2%, marking the highest annual rate of inflation since June. The National Institute of Statistics (Istat) is to release the official CPI report at 9:00 GMT.

Euro zone Industrial output

The seasonally adjusted index of industrial production in the Euro zone probably expanded 0.2% in October compared to a month ago, following a 0.6% gain in September. Annualized output probably increased at a pace of 0.6% in October. If so, this would match the annual rate in September and would also be the fastest rate of growth since July, when output expanded at an annualized pace of 1.6%. The index, reflecting business cycle, measures the change in overall inflation-adjusted value of output in sectors such as manufacturing, mining and utilities. In case industrial output expanded more than anticipated, this would support demand for the euro, as this implies higher inflationary pressure. Eurostat is to publish the official data at 10:00 GMT.

Hong Kong

Industrial output

Hong Kongs annualized industrial production report for Q3 is to be released at 8:30 GMT by the Census and Statistics Department. Output expanded at an annual rate of 2.2% during the second quarter of the year, following another 2.1% growth in Q1. The index reflects the change in overall inflation-adjusted value of output in sectors such as manufacturing, mining and utilities. In case industrial output continued to expand, this would have a bullish effect on the local currency.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 9.6318. In case EUR/HKD manages to breach the first resistance level at 9.6749, it will probably continue up to test 9.7286. In case the second key resistance is broken, the pair will probably attempt to advance to 9.7717.

If EUR/HKD manages to breach the first key support at 9.5781, it will probably continue to slide and test 9.5350. With this second key support broken, the movement to the downside will probably continue to 9.4813.

The mid-Pivot levels for today are as follows: M1 – 9.5082, M2 – 9.5566, M3 – 9.6050, M4 – 9.6534, M5 – 9.7018, M6 – 9.7502.

In weekly terms, the central pivot point is at 9.5777. The three key resistance levels are as follows: R1 – 9.6449, R2 – 9.7675, R3 – 9.8347. The three key support levels are: S1 – 9.4551, S2 – 9.3879, S3 – 9.2653.