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Daily FX Commentary: (Morning Report)
EUR/USD
The pair regains the strength, following last Friday’s initial test of strong 1.2800 barrier and subsequent sell-off that drove the price below 1.2700 mark. Fresh gains into 1.2770 zone, keep the near-term structure positive. However, reclaim of very important 1.2800 barrier that marks 200 day MA and double-top neckline, is seen required to resume near-term recovery off 1.2660, 13 Nov low and open another significant barriers at 1.2880/1.2900 zone, 26/29 Oct lows / daily Ichimoku cloud top / 50% of 1.3138/1.2060 descend. Immediate support lies at 1.2750 zone, while violation of 1.2700 and last Friday’s low at 1.2689, would revive bears. Overall bearish tone still dominates on a larger picture.
Res: 1.2772, 1.2783, 1.2800, 1.2808
Sup: 1.2755, 1.2740, 1.2720, 1.2700
GBP/USD
Bounce above 1.5900, averts immediate risk of testing 1.5800 support and extension of larger downtrend from 1.6308. With overnight gains being capped at 38.2% of 1.6018/1.5826 and daily Ichimoku cloud base, pullback on overbought hourlies is, for now, seen as corrective, with 1.5900 being tested so far. Next good supports lie at 1.5880/70 zone, where dips should ideally reverse. With fresh bullish momentum emerging, focus is at 1.5960, previous lows and 1.5978, Fib 38.2% of 1.6174/1.5826. Conversely, downside risk would be increased in case of penetration of 1.5840, 200 day MA and 1.5826, 15 Nov low.
Res: 1.5922, 1.5955, 1.5978, 1.6000
Sup: 1.5892, 1.5880, 1.5870, 1.5840
USD/JPY
Near-term bulls remain in play, as the pair posts fresh high at 81.58 overnight, surpassing previous high and Fib 61.8% of 84.17/77.12 descend at 81.45. Stronger corrective action cannot be ruled out, as RSI/MACD bearish divergence appears on hourly chart and 4h indicators are in overbought territory. Initial support at 81.00, round figure is reinforced by 55 day EMA, ahead of 80.67, previous peak and Fib 38.2%, where any deeper dips should be contained. Break above 81.58 to focus 82.00, figure resistance and 82.20, mi May highs.
Res: 81.45, 81.58, 82.00, 82.20
Sup: 81.11, 81.00, 80.89, 80.67
USD/CHF
Overall bullish tone remains intact, as upside rejection at 0.9500 and subsequent pullback found ground at important 0.9400 support, where 200 day MA contained dips. However, as fresh gains failed to regain 0.9500 handle, softer near-term studies still see risk of possible retest of 0.9400, loss of which would trigger stronger correction of 0.9213/0.9511 upleg. Conversely, lift above last Friday’s high at 0.9489, would re-focus 0.9500/11 and improve near-term tone.
Res: 0.9462, 0.9489, 0.9500, 0.9511
Sup: 0.9435, 0.9400, 0.9380, 0.9365
Daily Market Commentary: (Evening Report)
London close: Footsie rallies on US budget hopes
Market Movers
- techMARK 2,050.22 +1.43%
- FTSE 100 5,737.66 +2.36%
- FTSE 250 11,744.79 +1.45%
- Obama confident that 'fiscal cliff' will be dealt with
- Markets await Eurogroup meeting on Greece
- Banks and miners surge on increased risk
Stocks rallied on Monday after hitting a four-month low the previous session on the back of increased hopes that the US can tackle the 'fiscal cliff' and sustain economic growth early next year.
The benchmark FTSE 100 finished at 5,606 on Friday, its lowest closing price since July 26th when it closed at 5,573. Today, the index rose 2.36%, or 132 points, to 5,738.
Banks and mining stocks were leading the risers in London today as risk appetite increased. Just four stocks on the Footsie finished the day in the red.
Speaking to reporters in Bangkok yesterday, President Barack Obama said: "I am confident we can get our fiscal situation dealt with." This follows discussions between key members of Congress on Friday which were labelled by all sides as "constructive".
"Europe's markets have rebounded strongly today in the wake of the positive and constructive noises coming out of the US with respect to a resolution on the fiscal cliff question," said analyst Michael Hewson from CMC Markets.
Nevertheless, he said: "Despite the rally seen today, as with Friday's sharp sell-off, this rally also needs to be taken with a pinch of salt, given that a lot of obstacles still remain with respect to a final solution, not only in the US, but also in Europe, and a solution to Greece's debt sustainability."
Investors were riding on hopes for a deal to be reached at Tuesday's extraordinary Eurogroup meeting so that Greece would receive the next tranche of its bailout programme.
However, Marianne Kothe, spokesperson for Germany's Finance Ministry, told the German press that a decision on Greece's aid is not expected to be made by Tuesday.
- Markets await Eurogroup meeting on Greece
- Banks and miners surge on increased risk
Stocks rallied on Monday after hitting a four-month low the previous session on the back of increased hopes that the US can tackle the 'fiscal cliff' and sustain economic growth early next year.
The benchmark FTSE 100 finished at 5,606 on Friday, its lowest closing price since July 26th when it closed at 5,573. Today, the index rose 2.36%, or 132 points, to 5,738.
Banks and mining stocks were leading the risers in London today as risk appetite increased. Just four stocks on the Footsie finished the day in the red.
Speaking to reporters in Bangkok yesterday, President Barack Obama said: "I am confident we can get our fiscal situation dealt with." This follows discussions between key members of Congress on Friday which were labelled by all sides as "constructive".
"Europe's markets have rebounded strongly today in the wake of the positive and constructive noises coming out of the US with respect to a resolution on the fiscal cliff question," said analyst Michael Hewson from CMC Markets.
Nevertheless, he said: "Despite the rally seen today, as with Friday's sharp sell-off, this rally also needs to be taken with a pinch of salt, given that a lot of obstacles still remain with respect to a final solution, not only in the US, but also in Europe, and a solution to Greece's debt sustainability."
Investors were riding on hopes for a deal to be reached at Tuesday's extraordinary Eurogroup meeting so that Greece would receive the next tranche of its bailout programme.
However, Marianne Kothe, spokesperson for Germany's Finance Ministry, told the German press that a decision on Greece's aid is not expected to be made by Tuesday.
Europe Market Report
Europe midday: Stocks bounce back sharply
-Diplomacy to avoid escalation in Gaza increases
-German economic outlook to worsen as year ends -Buba
-Germany says extra time to negotiate EU budget a possibility Bbg
-Holland says not to expect final decisions on Greece tomorrow -Bbg
-Spanish banks' bad loan ratio rose to 10.7 per cent in August from 10.52 per cent
FTSE-100: 0.99%
Dax-30: 1.61%
Cac-40: 1.68%
FTSE-Mibtel 30: 1.45%
Ibex 35: 0.82%
Stoxx 600: 1.31%
European equities are now bouncing back further, at the start of what is to be a holiday shortened week Stateside, due to the Thanksgiving Day celebrations.
Helping markets move higher today is a bevy of positive news. Chief amongst these, over the weekend leading US lawmakers waxed optimistic that a deal on avoiding the fiscal cliff will be reached.
Furthermore, speaking to German broadcaster ARD the country's Finance Minister, Wolfgang Schaeuble, indicated that an agreement on giving Greece access to the next tranche of aid will be reached tomorrow. As well, and contrary to earlier remarks, "he now appears to be open to adding about EUR 14 billion over the next two years to the funds already committed to Greece, to close the financing gap up to 2014," added economists at Barclays Research.
For her part, nevertheless, International Monetary Fund (IMF) managing director Christine Lagarde said she will push for a permanent solution to Greece's debts so as to avoid prolonged uncertainty.
Acting as a backdrop, the latest news reports point to increased diplomatic activity aimed at avoiding an escalation in the recent clashes between Israel and Palestinians in Gaza.
-German economic outlook to worsen as year ends -Buba
-Germany says extra time to negotiate EU budget a possibility Bbg
-Holland says not to expect final decisions on Greece tomorrow -Bbg
-Spanish banks' bad loan ratio rose to 10.7 per cent in August from 10.52 per cent
FTSE-100: 0.99%
Dax-30: 1.61%
Cac-40: 1.68%
FTSE-Mibtel 30: 1.45%
Ibex 35: 0.82%
Stoxx 600: 1.31%
European equities are now bouncing back further, at the start of what is to be a holiday shortened week Stateside, due to the Thanksgiving Day celebrations.
Helping markets move higher today is a bevy of positive news. Chief amongst these, over the weekend leading US lawmakers waxed optimistic that a deal on avoiding the fiscal cliff will be reached.
Furthermore, speaking to German broadcaster ARD the country's Finance Minister, Wolfgang Schaeuble, indicated that an agreement on giving Greece access to the next tranche of aid will be reached tomorrow. As well, and contrary to earlier remarks, "he now appears to be open to adding about EUR 14 billion over the next two years to the funds already committed to Greece, to close the financing gap up to 2014," added economists at Barclays Research.
For her part, nevertheless, International Monetary Fund (IMF) managing director Christine Lagarde said she will push for a permanent solution to Greece's debts so as to avoid prolonged uncertainty.
Acting as a backdrop, the latest news reports point to increased diplomatic activity aimed at avoiding an escalation in the recent clashes between Israel and Palestinians in Gaza.
Italian industrial orders fell by 4% in September (Consensus: -1%), after a decrease of 0.7% in the previous month, led by a 7.4% fall in foreign orders.
Eurozone construction output fell by 1.4% month-on-month in September, after an 0.6% fall in the previous month.
Crude rises on tensions in Gaza
The euro/dollar is now rising by 0.20% to the 1.2770 dollar mark.
Front month Brent crude futures are up by 0.928 to the 109.97 dollar mark on the ICE.
US Market Report
US pre-open: Stocks bounce back on supposed optimism
The main US equity market averages are now being called to open higher by 1% on average, on the back of remarks by President Obama, last night, regarding his optimism over on-going debt talks with Republicans in both the House and the Senate.
Similarly, the news-flow coming out of the Eurozone today seems to have taken a turn for the better.
Of interest, the combination of falling stocks and rising profits as the economy recovers has left the S&P 500's price-earnings ratio below the ending level of eight of the nine bull markets since 1962 and beneath the average of any since Ronald Reagan was in power, Bloomberg is reporting.
Front month West Texas crude futures are now rising by 1.7% to the $88.40 per barrel mark on the NYMEX.
10 year US Treasury yields are now 3 basis points higher, at 2.77%.
10 year US Treasury yields are now 3 basis points higher, at 2.77%.
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