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Daily FX Commentary: (Morning Report)
EUR/USD
Euro’s break below 1.2900 handle, Fib 38.2% of 1.2735/1.3007, tested 4h 55 day EMA and previous high of 07 Nov at 1.2880 so far. As indicators on 4h chart are in steep descend and price slides below 20 day EMA, further weakness is seen as likely near-term scenario. Overextended hourlies, however, could signal consolidation, yet no signal being generated on hourly chart. Break below 1.2880 and 50% retracement at 1.2870 to trigger fresh extension towards 1.2840/30, Fib 61.8% / previous high, next. Former supports at 1.2900/15, now act as initial resistance, while only bounce through 1.2950 would provide relief.
Res: 1.2900, 1.2915, 1.2944, 1.2967
Sup: 1.2881, 1.2870, 1.2858, 1.2839
GBP/USD
Bears took control on near-term outlook, as the price dips below psychological / Fibonacci support at 1.6000, to retrace near76.4% of 1.5926/1.6050 upleg at 1.5960, session’s fresh low and daily Ichimoku cloud base. With price sliding below 20/55 day EMA’s on 4h chart and hourly indicators holding below midlines, risk of further weakness is increasing, as hourly double-top pattern has been completed on a break below 1.6000. Near-term focus now shifts towards next supports at 1.5920/00. Initial resistance lies at 1.6000, while regain of 1.6020/30 zone, would avert immediate downside risk.
Res: 1.5975, 1.6000, 1.6015, 1.6032
Sup: 1.5960, 1.5926, 1.5917, 1.2900
USD/JPY
Near-term downleg from 82.83, 22 Nov peak, found temporary footstep at 81.70, 55 day EMA, with sideways, narrow-range trading sees during the European and early US session. This could be described as consolidative, as initial barrier at 82.00, reinforced by descending 20 day EMA, stays intact and near-term studies maintain negative tone. Further easing sees Fib 38.2% of 79.06/82.83 at 81.40, as the next target, with more significant 81.00, expected to come in near-term focus. The notion is supported by daily indicators reversing from overbought zone. On the upside, above 82.00 barrier, trendline resistance and yesterday’s high at 82.30, are seen as pivotal point for possible reversal.
Res: 82.00, 82.20, 82.31, 82.45
Sup: 81.70, 81.58, 81.39, 81.00
USD/CHF
The pair regains important barrier at 0.9330, previous low / Fib 38.2% of 0.9456/0.9253, on a break above initial 0.9300 resistance. This brings more positive tone into near-term outlook and averts immediate risk of slide towards key support at 0.9213. However, as 4h chart studies are still in the negative territory, extension through 0.9350, double Fibonacci barrier and 55 day EMA, is required to confirm recovery and possibly open way towards key 0.9400 barrier and breakpoint.
Res: 0.9339, 0.9350, 0.9378, 0.9400
Sup: 0.9300, 0.9282, 0.9268, 0.9253
Daily Market Commentary: (Evening Report)
Losses erased after 'optimistic' fiscal cliff comments
Comments from US Republican Speaker of the
House John Boehner about the 'fiscal cliff' saw the FTSE 100 rally in
afternoon trading to finish broadly flat.
Markets got off to a poor start this morning after Nevada Democrat Harry Reid said that “little progress” has been made so far on avoiding the fiscal cliff by year-end.
However, stocks pared losses after Boehner said that he was “optimistic that we can continue to work together to avert this crisis sooner rather than later.” He said that Republicans were willing to put “revenue on the table” as long as it is accompanied by spending cuts.
Market analyst Craig Erlam from Alpari said: “In the grand scheme of things this comment makes very little difference to people’s perceptions, but on a day when so little has happened in the markets, it has helped trim earlier losses.”
Erskine Bowles, co-Chairman of Obama’s 2010 fiscal commission, had said earlier in the day that it would be unlikely that the government will reach an agreement on the ‘cliff’ by the end of the year.
Markets got off to a poor start this morning after Nevada Democrat Harry Reid said that “little progress” has been made so far on avoiding the fiscal cliff by year-end.
However, stocks pared losses after Boehner said that he was “optimistic that we can continue to work together to avert this crisis sooner rather than later.” He said that Republicans were willing to put “revenue on the table” as long as it is accompanied by spending cuts.
Market analyst Craig Erlam from Alpari said: “In the grand scheme of things this comment makes very little difference to people’s perceptions, but on a day when so little has happened in the markets, it has helped trim earlier losses.”
Erskine Bowles, co-Chairman of Obama’s 2010 fiscal commission, had said earlier in the day that it would be unlikely that the government will reach an agreement on the ‘cliff’ by the end of the year.
Europe Market Report
European Markets Finished Mixed On Fiscal Cliff Concerns
The European markets have ended Wednesday's trading session with mixed results. The looming fiscal cliff debate in the United States was a source of weakness in early trade. Statements made yesterday by Harry Reid led many to worry that the U.S. could potentially go over the fiscal cliff, which could push the U.S. economy back into recession. However, the markets came off their early lows after statements made today by John Boehner, which helped to reassure investors that a deal can be reached.
Senate Majority Leader Harry Reid, D-Nev., said Tuesday that lawmakers have made "little progress" on addressing the fiscal cliff, while his Republican counterpart Mitch McConnell, R-Ken., accused Democrats of remaining in campaign mode. However, U.S. House Speaker John Boehner stated today that he is optimistic that a deal on the fiscal cliff can be reached. Boehner reiterated that Republicans are willing to put revenues on the table, as long as Democrats agree to spending cuts.
The European Commission on Wednesday approved restructuring plans of four nationalized Spanish banks namely Bankia, NCG Banco, Catalunya Banc and Banco de Valencia and paved the way for more aid from Eurozone.
The approval of the restructuring plans is a milestone in the implementation of the Memorandum of Understanding between euro area countries and Spain, EU Competition Commissioner Joaquin Almunia said.
Today's EU approval allows Spanish banks to receive aid from the European Stability Mechanism (ESM) in the context of the financial assistance programme to recapitalize the banking sector. The nation was earlier given consent to access up to EUR 100 billion from euro area's permanent bailout fund.
The European Central Bank is ready to buy government bonds of Eurozone countries that agree to fiscal adjustment, Executive Board member Benoit Coeure said Wednesday.
The debt deal struck by Eurozone finance ministers and the International Monetary Fund earlier this week to stabilize the situation in Greece was the best of all other alternatives, European Central Bank Governing Council Member Ewald Nowotny reportedly said Wednesday.
"I believe in such a difficult situation as we see in Greece, there are no ideal solutions, but it is probably a solution that is better than all alternatives," reports said citing his interview with Austrian radio station OE1.
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.22 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.21 percent.
The DAX of Germany rose by 0.15 percent and the FTSE 100 of the U.K. advanced by 0.06 percent. The CAC 40 of France climbed by 0.37 percent and the SMI of Switzerland gained 0.67 percent.
Eurozone broad monetary aggregate M3 grew at a faster pace of 3.9 percent in October from a year ago, the European Central Bank said Wednesday. The increase follows a 2.6 percent rise in September. The annual rate was forecast to accelerate to 2.8 percent.
Germany's EU measure of inflation slowed in November, in line with economists' expectations, preliminary data from Destatis showed Wednesday.
The harmonized index of consumer prices rose 2 percent annually, following October's 2.1 percent increase. The index, however, declined 0.1 percent from the previous month, which also matched expectations.
New home sales in the U.S. unexpectedly showed a modest decrease in the month of October, according to a report released by the Commerce Department on Wednesday, with the report also showing a substantial downward revision to the data for September.
The report said new home sales edged down 0.3 percent to a seasonally adjusted annual rate of 368,000 in October from the revised September rate of 369,000. The annual rate of new home sales in September was downwardly revised from the previously reported 389,000, which had represented a two-year high.
Economists had been expecting new home sales to inch up to 390,000 from the 389,000 originally reported for the previous month.
US Market Report
Stocks Nearly Flat Amid Focus On Washington
Reflecting the focus on developments in Washington due to the looming fiscal cliff, stocks bounced well off their early lows following optimistic comments by House Speaker House John Boehner. Buying interest has waned since then, however, and the markets are nearly flat.
The major averages have moved roughly sideways in recent trading, lingering near the unchanged line. While the Dow is up 13.63 points or 0.1 percent at 12,891.76, the Nasdaq is down 2.09 points or 0.1 percent at 2,965.70 and the S&P 500 is down 0.92 points or 0.1 percent at 1,398.02.
The early weakness on Wall Street reflected lingering concerns about the fiscal cliff amid indications that lawmakers are encountering familiar disagreements over taxes on the wealthy and entitlement reform.
Senate Majority Leader Harry Reid, D-Nev., said Tuesday that lawmakers have made "little progress" on addressing the fiscal cliff, while his Republican counterpart Mitch McConnell, R-Ken., accused Democrats of remaining in campaign mode.
However, stocks staged a notable recovery following remarks by Speaker Boehner, who said he was "optimistic" that a deal could be reached to avert the crisis.
Boehner continued to express opposition to higher U.S. income tax rates but once again expressed a willingness to consider increasing revenues if accompanied by spending cuts.
"You're not going to grow the economy if you raise tax rates on the top two rates," Boehner said. "We're willing to put revenue on the table, as long as we're not raising rates."
As a result of the focus on the negotiations in Washington, traders have largely shrugged off a report from the Commerce Department that unexpectedly showed a modest drop by new home sales in the month of October.
The report said new home sales edged down 0.3 percent to a seasonally adjusted annual rate of 368,000 in October from the revised September rate of 369,000. The annual rate of new home sales in September was downwardly revised from the previously reported 389,000, which had represented a two-year high.
Economists had been expecting new home sales to inch up to 390,000 from the 389,000 originally reported for the previous month.
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