Daily FX Commentary

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Daily FX Commentary: (Morning Report)

EUR/USD Still trading in narrow range, the pair formed a double top pattern at 1.2440 high of 6th and 7th of Aug and 55 days EMA at 1.2445 however, it didn’t manage to drop lower than 1.2338 during the past couple of days. Awaiting a break of any of those points to decide the direction, the downside is favored as Momentum started to drop to 100, a break of 1.2370 would confirm it for a drop to 1.2340 and 1.2290 next. If a momentum is established and a break of 1.2440 was made, the pair is expected to jump towards 1.2505, 1.2555 and 1.2625 next. Res: 1.2440, 1.2505, 1.2555, 1.2625 Sup: 1.2370, 1.2340, 1.2290, 1.2215

GBP/USD Yesterday price action was maintained at 1.5680 at 2nd of Aug peak, however still inside way trend as long as it is trading above 1.5560. First support is spotted at 1.5590 ahead of 1.5560, when a break there would open 1.5590 and 1.5400 next. The upside is capped by 1.5680/90 zone, a break there would open a test to 1.5730 and 1.5770 our medium term resistance. A break of 1.5590/60 would confirm the drop in momentum for a downtrend. Res: 1.5680, 1.5690, 1.5730, 1.5770 Sup: 1.5590, 1.5560, 1.5490, 1.5455

		USD/JPY The pair has tested the higher levels of the side way trend at 78.70 were it was maintained, today’s current account higher than expected data did nothing to the pair were its still trading 20 pips lower than upside barrier, a break higher would open 79.15 and 80.00 next. On the downside, support of 77.90/95 would hold side way trend, a break there would open 1st of Jun low at 77.60, and if broken, a drop lower to 76.00 and 75.60 zone. Res: 78.70, 79.10, 80.00, 80.60 Sup: 77.90, 77.65, 77.30, 76.70

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Daily Market Commentary: (Evening Report)

London Market Report

London close: Footsie at four-month high despite StanChart slump
Market Movers

• techMARK 2,124.63 +0.44%
• FTSE 100 5,841.24 +0.56%
• FTSE 250 11,460.94 +0.30%

- StanChart makes headlines on Iran dealings, shares tank
- Evraz jumps on positive read-across from steel peers
- Juncker says Greek exit manageable

The Footsie rallied in afternoon trade on Tuesday to close at a four-month high in spite of some weakness in the banking sector on the back of a massive slump from Standard Chartered.

The blue-chip index hasn't closed above the 5,841 level since April 2nd, when it finished at 5,875.

"Were it not for Standard Chartered shares suffering significant losses today, the FTSE 100 would have seen much higher prices today. Despite the drag from UK banks in the midst of the Standard Chartered scandal, another close above the 5,800 level for the FTSE breeds confidence that the 5,900 level remains in target," said Joshua Raymond, the chief market strategist at City Index.

"Tomorrow marks the start of two days of intense economic data including the release of the Bank of England quarterly inflation report tomorrow and a raft of Chinese data including industrial production and inflation due out on Thursday morning. It is here where investors will likely gauge the next phase of the FTSE's bullish turn in momentum," he said.

The Footsie rose strongly yesterday after Germany backed the European Central Bank's (ECB's) plan to buy Spanish and Italian bonds, and Greece agreed with the Troika to strengthen policy efforts.

However, according to Jean-Claude Juncker, Luxembourg's Prime Minister, Greece exiting the Eurozone would be "manageable": "From today's perspective, it would be a manageable process. But that doesn't make it a desirable process. It would carry enormous risks, especially for the Greek people."

UK manufacturing data from June today showed that the sharpest decline since 2008 as companies took a hit from the two days of public holiday set aside for the Queen's Diamond Jubilee celebrations. Industrial production figures showed a drop of 4.3% compared to June 2011. However, this wasn't as bad as the 5% analysts had been predicting.

Europe Market Report 

Europe close: Stocks continue rally
- Italian recession continues
- German manufacturing worse than expected

FTSE 100: +0.56%
Dax 30: +0.71%
Stoxx 600: +0.64%
Cac 40: +1.52%
Ibex 35: +2.02%
FTSE MIB: +2.19%

European stocks continued their nine week rally on Tuesday even as the Italian economy entered its fourth quarter of contraction.

Italian gross domestic product shrank 0.7% between April and June, slightly better than the 0.8% drop the market had been expecting.

In Germany factory orders declined by 1.7% between May and June, the market consensus was for a 0.8% decline.

COMPANIES

The strongest sector on the Stoxx 600 was oil & gas, which gained 2.3%, food and beverage stocks were the weakest, posting a 0.33% decline by the close.

Credit Agricole led the risers in Paris, up 6%. In Italy, Telecom Italia saw a 3.8% rise after first half profits came in ahead of forecast.

German steel giant Thyssen Krupp led the way in Frankfurt, gaining 2.8% by the close. In Madrid, oil major Repsol added 9.3%.

US Market Report

US open: Boston Fed President calls for further QE The main US equity benchmarks have opened higher, by 0.3% on average. That on a barren day as far as the economic calendar is concerned. US Federal Reserve President Eric Rosengren, however, is making up for this. In remarks before the "opening bell" he is arguing for further monetary stimulus. More specifically, he says that the next such round of stimulus must be "open-ended." Helping equities higher today perhaps, 72% of the S&P 500 companies which have reported second-quarter results to date have beat analysts' earnings estimates, according to data compiled by Bloomberg.