Daily Analyses

22.01.2021

Fundamentals

Europe

The monetary policy meeting held by the European Central Bank (ECB) in the Eurozone was significant for the markets. It was noteworthy that the Bank, which kept interest rates stable in line with market expectations, removed the statement from the that "We will also continue to monitor developments in the exchange rate with regard to their possible implications for the medium-term inflation outlook." In a statement after the decision, ECB President Christine Lagarde said that while there was a prolonged weakening in inflation, they continued to monitor developments in the exchange rate and that the rise in the exchange rate halted the inflation.

Lagarde also said upward pressure was expected on the medium-term inflation outlook with the vaccination and the Brexit deal, adding that asset purchases would continue on a flexible basis. After the meeting to discuss the coronavirus vaccine and pandemic measures, EU Commission President Ursula Von der Leyen and EU Council President Charles Michel warned that citizens do not travel unless it is necessary and that new restrictions may be put into effect in the coming days. On the other hand, EU High Representative for Foreign Affairs and Security Policy Borrell, after the meeting with Foreign Minister Mevlut Cavusoglu, announced that the situation between Greece and Turkey is in a good step to begin the negotiations again, adding that they would like to see a decrease in the tension in the eastern Mediterranean.

On the German side, Chancellor Angela Merkel said that they are in a difficult phase of the pandemic, that the quarantine will start to give results and that they should take the new strain of the virus seriously, while they will be able to offer the vaccine to everyone by the end of the summer. In addition, a spokesman for the German Prime Minister's office said that the country's borders could be closed if Germany's neighboring countries failed to reduce coronavirus cases.

US

US markets closed with heavy news flow. U.S. House Speaker Nancy Pelosi said she plans to put the $ 1.9 trillion package announced by U.S. President Joe Biden to a vote in early February. According to the news, Biden will sign 10 separate presidential orders as part of the fight against coronavirus, which will make it mandatory to wear masks on certain public transport such as trains, buses, especially airports, and the rate of emergency resources transferred to US states will increase to 100 percent, which is currently 75 percent. On the other hand, the director of the US National Institute of Allergy and Infectious Diseases, Dr. Anthony Fauci reported that the United States intends to fulfill its responsibilities to the World Health Organization (WHO) and that President Biden will sign on to enter the Covax structure, which will provide drug and vaccine assistance to poor countries.

In addition to these developments, the White House statement called the sanctions imposed by China on 28 people involved in the Trump administration useless, while the decisions taken on the day of the new administration's inauguration ceremony were an attempt to play on the United States. In addition, White House spokeswoman Jen Psaki said they want an extension of the nuclear agreement between the United States and Iran and a strengthening of nuclear restrictions. Looking at the macroeconomic calendar, jobless claims announced by the US Department of Labor on a weekly basis amounted to 900 thousand, which was below market expectation of 910 thousand. According to US Department of Commerce, construction permits in December were 1.709M , above market expectations of 1.604M.

Britain

In British markets, the importance of statements from the Cabinet of British Prime Minister Boris Johnson was high. Boris Johnson said they were at an early stage to comment on when they might lift the restrictions and saw the contagion of the new strain of the virus in the data. A spokesman for the British Prime Minister's office said that the relationship between the US and the UK would be close and that they would give EU delegations the necessary concessions to work in the UK. On the other hand, UK Health Minister Matt Hancock said Pfizer&Biontech had achieved 89 percent effectiveness in the vaccine between 14 and 21 days, and supported the decision to switch to a 12-week dosing schedule.

UK Education Secretary Gavin Williamson, meanwhile, said the quarantine had eased pressure on the health system and there was evidence schools were safe and education could begin before Easter. In addition, British media reported that under Germany's proposal, European countries would impose a ban on people coming to Europe from the UK because of the new strain. Irish Prime Minister Michael Martin said Ireland would also implement the virus measures in February because of the increased impact of the new strain virus, while Northern Ireland's Foreign Minister Simon Coveney said there was a crisis in the country's food supply and these problems were caused by Brexit.

Asia

In the Asian session, news from Japan was on the markets' radar. Japanese Prime Minister Yoshihide Suga said the case numbers were too high, although a state of emergency was declared in some areas. Also, Bank of Japan (BoJ) President Haruhiko Kuroda said it was early time to consider an exit from monetary stimulus and could loosen monetary policy if needed, adding that policies would be reviewed in March and that the yield curve control was working properly. In December, the National Consumer Price Index (CPI) was minus 1.2 percent compared to the same month a year ago, while the national core CPI was minus 1.0 percent, slightly above market expectations of minus 1.1 percent year-over-year, according to the Statistics Bureau of Japan.

The Manufacturing Purchasing Managers' Index (PMI) was 49.7 points and the Services PMI was 45.7, according to preliminary data from London-based global information provider IHS Markit. On the Chinese side, the State Department said they welcomed Joe Biden's administration's decision to re-join the Paris Climate Agreement and the World Health Organization. In Turkey, the monetary policy meeting held by the Central Bank of the Republic of Turkey (CBRT) was on the radar of markets. At the meeting, the CBRT kept the one-week repo tender interest rate fixed at 17.00 percent, while the press release stated: "The MPC, taking into account the end-2021 forecast target, has decided to maintain decisively the tight monetary policy stance for an extended period until strong indicators point to a permanent fall in inflation and price stability."

On the other hand, Foreign Minister Mevlut Cavusoglu, after the summit with Borrell, said that the Turkey-EU friendship group can play an important role in creating a positive agenda with the EU and that they expect a constructive position from the European Parliament. Looking at the data agenda, according to data published by TurkStat, consumer confidence in January increased 3.2 percentage points compared to the previous month and reached 83.3 points.


Indicators

MSCI iShared ETF’s

Msciisharedetfs
MSCI iShared ETF’sDownload Image

MSCI ETF indices are used for measuring the performance of a stock market located within a certain region. Prior to take any actions regarding the relevant region, stock market investment funds follow up the ETF yields and risk measurement.

Volatility Indices

Volatilityindices
Volatility IndicesDownload Image

The VIX, also known as the fear index, is calculated based on the difference between the buy and sell prices of the options contracts where the stocks in the S&P500 index are the underlying assets. If the index value is below 10 points, it means that there is optimism in the markets and the investors are eager to take risks, the pessimism starts to increase slightly even if it is considered as the normal range when it is in the range of 10 – 20. When VIX is in the range of 20 – 30, it means that the stress in the markets has started. A score of over 30 means that the investors’ desire for risk-taking is under pressure and asset prices will fluctuate.


US Index

USIndex

The recovery in developed country currencies is dragging down the index after uncertainty about the election process in the United States was taken off the table after the inauguration ceremony. Technically, if the index does not exceed Fibonacci 50.0 percent fan line, negative oriented index will follow 89.80, 89.50 and 89.20 supports. In possible upward attempts of the index, 90.65 above 90.30 is in a strong resistance position

Support89.8089.5089.20
Resistance90.3090.6590.90

Parities

EURUSD

The European Central Bank's removal of its practice of monitoring exchange rate developments from its text for the January meeting paved the way for euro purchases. However, after completing the retracement movement, the pair, which rebounded and broke the minor descending trend, can test 1.2230 and 1.2265 resistances, in case, it can move its prices above 1.2200. 1.2140 and 1.2110 supports can be followed in possible decreases in the pair.

Support1.21401.21101.2080
Resistance1.22001.22301.2265

GBPUSD

In global markets, the dollar headed for a weak outlook, while positive comments on the UK vaccination campaign supported Sterling purchases. In this context, as long as the pair becomes permanent above the critical 1.3700 level, it can raise to 1.3760 and 1.3800 resistances. Also, 1.3680 and 1.3640 supports can be monitored for possible falls from this level.

Support1.36801.36401.3600
Resistance1.37601.38001.3840

USDJPY

The pair, which ended the recovery movement along with the weakening of the dollar, retreated and broke the minor ascending trend. If the pair gets below 103.25 support, it will possibly land at 102.70 support below 103.00. It seems unlikely that the pair's attempts to recover will strengthen unless 104.00 level above 103.80 is exceeded.

Support103.25103.00102.70
Resistance103.80104.00104.30

Commodities

XAUUSD

In the face of moderate easing in US 10-year bond interest rates, Gold is trying to claw back its losses as investor risk appetite in the markets gives different signals. At the same time, the commodity, which shows upward movements after holding onto the ascending trendline in its decreases, can continue its recovery towards 1900 resistance over 1886, in case, it can overcome exceed 1874 strongly. In possible retreats, on the other side, it may increase again after reaching 1824, located below 1850 and 1836 levels.

Support185018361824
Resistance187418861900

USOIL

As part of the worldwide vaccination campaign against coronavirus, number of doses given reached 50 million, while expectations that global energy demand will continue to recover as election uncertainty in the United States disappears are significantly supporting the price of crude oil. If the commodity, which technically relatively retains its strength in the rising trend, exceeds 53.00 with positive pricing, it will follow 53.50 and 54.00 resistance levels. On the other hand, 52.00 and 51.60 supports will be on our radar in possible decreases to the area below the rising trendline.

Support52.0051.6051.00
Resistance53.0053.5054.00

XAGUSD

The commodity, which limited its retreats at 24.00 support and started to move up, faced with strong resistance in intermediate descending trend. After that, it maintained its buyers despite some downward movements. In case, the black gold can exceed 26.00 level and put an end to the trend it is in, we will follow 26.40 resistance. For a possible retracement movement in the commodity, the minor trend needs to be broken. But in a possible transition to the area below minor trend,25.20 and 24.80 supports will be on our radar.

Support25.2024.8024.40
Resistance26.0026.4026.80

Indices

DAX30

We watched DAX30, which relatively follows the rally in global stock markets, used Fibonacci 78.6 percent expansion line as a strong barrier. Although it showed moderate decreases from here, it can test 14 140 level after 14 060, in case, the index exceeds 13 980 with high volatility, indicating that it can perform new tests, maintaining its permanence above the 100-period simple moving average. 13 820 and 13 740 levels will be our supports in any decline below the moving average.

Support13 82013 74013 660
Resistance13 98014 06014 140

S&P500

U.S. President Joe Biden's first remarks try to preserve the gains of SP500 index. Technically, the index can target 3 885, which indicates Fibonacci 78.6 percent expansion line above 3 866, with the current upward potential, as long as it is in the minor price channel. And against any retreats, 3 824 and 3 800 supports will be our support levels.

Support3 8243 8003 775
Resistance3 8663 8853 910

Cryptos

BTCUSD

Leading cryptocurrency hit its peak level by maintaining its upward movements with high volatility and then, it faced with take profit sales. Afterwards, Bitcoin broke the minor trend with the sales experienced and turned to return its earnings. If it breaks 29 700 support, we will possibly see it falling to 28 500 and then, 27 200, which is Fibonacci retracement of 61.8 percent. For possible upward movements in Bitcoin, 32 200 and 33 600 resistance levels will be on our radar.

Support29 70028 50027 200
Resistance32 20033 60035 000

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