Daily FX Commentary

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Daily FX Commentary: (Morning Report)

EUR/USD The single currency has jumped higher in an attempt to break 1.2410/25 medium term resistance and 29th June Low, have managed to reach as high as 1.2443, but a fast reversal below 1.2400 within 2 hours was made. Currently we are looking for the pair to maintain 1.2365 and Fibo 38.2% (1.2130/1.2442) at 1.2325 to maintain bulls for another break through today’s high. A break below 1.2325 would open the downside for a drop to Fibo 50% (1.2130/1.2442) at 1.2290 and 1.2215Suport. Res: 1.2440, 1.2505, 1.2555, 1.2625 Sup: 1.2365, 1.2325, 1.2290, 1.2215

GBP/USD Cable was capped at today’s peak 1.5663 zone and dropped lower so far to 1.5610. Side way trend remain in play while it holds above Fibo 38.2% (1.5490/1.5663) at 1.5595, were a break below would open further to the downside for a test of 1.5535 support. A break below 1.5535 and 1.5490 would accelerate the drop to 1.5400 support zone, while a break of 1.5665 would open 1.5690 and 1.5730 next, only a break above 1.5770 would open Medium term bulls. Res: 1.5665, 1.5690, 1.5730, 1.5770 Sup: 1.5595, 1.5535, 1.5490, 1.5455 USD/JPY Today’s price action indicates a drop after last Friday’s jump to 78.80 zone Fibo 38.2% (80/77.90), correction could be maintained at 78.2 and if broken down to the bottom side of the border at 77.90 zone, a break there would open 77.65 1st of Jun Low. Any rise above 78.70/80 zone would trigger bulls for a target of 79.10 and 80 next Res: 1.2220, 1.2255, 1.2310, 1.2350 Sup: 1.2165, 1.2133, 1.2115, 1.2050

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Daily Market Commentary: (Evening Report)

London Market Report

London close: RBS leads Footsie higher
Market Movers

• techMARK 2,115.30 +0.50%
• FTSE 100 5,808.77 +0.37%
• FTSE 250 11,426.40 +1.11%

- Greece making progress
- RBS up on US sale rumours
- StanChart in the spotlight over Iranian transactions

UK stocks started the week strongly on the back of improvements in Greece and hopes of imminent action from the European Central Bank (ECB) to stem the crisis.

After a meeting between the Troika (European Commission, European Central Bank and International Monetary Fund) and Greek Finance Minister Yannis Stournaras in Athens at the weekend, the institutions issued a joint statement, saying: "The discussions on the implementation of the programme were productive and there was an overall agreement on the need to strengthen policy efforts to achieve its objectives."

Analyst Craig Erlam from Alpari said this afternoon: "Stocks are continuing to trade higher today following an improved non-farm payrolls figure in the US and fresh hopes that the Eurozone is making strides in fighting the debt crisis. There is still a lot of caution around but many are expecting Spain, and potentially Italy, to request assistance soon in bringing their bond yields lower."

According to Italy's Prime Minister Mario Monti in an interview with German publication Der Spiegel, the Eurozone tensions "bear the traits of a psychological dissolution of Europe." Talking about the growing resentment between southern and northern European nations, he said that "it is very alarming, and we have to fight against it".

In other news, the People's Bank of China (PBoC) has issued a statement saying that "in the second half, we must continue to reinforce fine-tuning and pre-emptive adjustment in monetary policy and improve credit policy to support the development of the real economy."

Europe Market Report 

Europe close: Europe up as debt fears ease
- European stocks up on Greek hopes
- Toyota figures give carmakers a boost

FTSE 100: +0.37%
Dax 30: ++0.77%
Stoxx 600: +0.46%
Cac 40: +0.81%
Ibex 35: +4.41%
FTSE MIB: +1.54%

European stocks continued their nine week rally on Monday following better news from Greece and a growing sense that the European Central Bank will step into the secondary bond market.

In Athens the "troika" - the International Monetary Fund, the European Commission and the European Central Bank - have agreed with the Greek government that it must improve its
efforts to privatise parts of the state run economy in order to meet the terms of its bailout. Greece needed an agreement from the troika in order to receive the next tranche of emergency funding.

In Berlin, the German government appeared to give its backing to the President of the European Central Bank, Mario Draghi who has hinted the ECB could buy the bonds of struggling Eurozone countries in the secondary market. A spokesman for Angela Merkel said the administration is "not worried" by Draghi's plans.

US Market Report

US open: Apple moves to block HTC exports The main New York equity benchmarks are moving forward by 0.3% on average at the start of trading. That against the backdrop of an empty economic data calendar and alongside renewed gains in short-term Eurozone periphery debt markets. As such, at present the main discussion point is whether August will indeed turn out to be a quiet and positive month, as usually happens in election years. This as analysts give off conflicting opinions on whether the recent "risk-rally" can be trusted or not. Berkshire Hathaway has raised its cash holdings by more than 7% to over $40bn. No less important, Apple has moved to block exports of rival HTC. Much commented as well, shares of electronics retailer Best Buy are rocketing by 22% after its founder offered to take the company private. Cognizant Technology is climbing 9.5% higher after reporting better than forecast sales. The latest quarterly figures out of Tyson Foods and HCA however have disappointed. The former has lowered its full-year revenue forecast by $1bn due to the rise in grain prices. Knight Capital has obtained access to a $400m rescue plan. Front month West Texas crude futures are up by 0.62% to the $84.97/barrel mark on the NYMEX.