Daily FX & Market Commentary

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Daily FX Commentary: (Morning Report)

EUR/USD

The pair maintains bearish tone that was confirmed on a break blow 200 day MA and important 1.2800 support that confirmed daily double-top formation. Temporary base at 1.2700 zone comes under pressure, as fresh weakness erase overnight’s recovery to 1.2738. As 1.2700 has already been cracked and hourly 55 day EMA caps the upside, with hourly studies losing momentum, immediate focus comes on 1.2700/1.2689, last Friday’s low and bear-channel support. Break here to signal resumption of broader downmove from 1.3138, through 90 day MA at 1.2650, towards 50% retracement of 1.2042/1.3170 July/Sep rally at 1.2606. Alternative scenario sees further consolidation above 1.2700, with strong barrier at 1.2780/1.2800, expected to cap rallies.

Res: 1.2738, 1.2761, 1.2787, 1.2800
Sup: 1.2700, 1.2689, 1.2650, 1.2606


GBP/USD

Near-term bears resume on last Friday’s slide through 1.5950/30, last week’s consolidation range floor, with violation of important 1.5900 support, Fib 38.2% of 1.5267/1.6308 ascend / 90 day MA, keeping the downside in focus. Fresh weakness from overnight’s correction top at 1.5914, pressures last Friday’s fresh low at 1.5886, loss of which to look for test of 200 day MA at 1.5848 initially. Previous strong support at 1.5950, reinforced by 20 day EMA, offers initial resistance, however, only bounce through 1.6000, round figure / 55 day EMA, would provide relief.

Res: 1.5914, 1.5928, 1.5950, 1.5970
Sup: 1.5900, 1.5886, 1.5850, 1.5800


USD/JPY

The pair remains maintains near-term bearish tone, as pullback from 80.67, 02 Nov high dips close to psychological 79.00 support, also Fib 61.8% of 77.94/80.67 rally, where temporary base was found. Corrective bounce was so far limited by 55 day EMA that turns in the sideways mode on hourly chart, with last Friday Doji, showing indecision. Any further retracement needs to clear 80.00 barrier, Fib 61.8% of 80.67/79.06 downleg, to shift focus higher, while violation of 79.00 would signal stronger correction of 77.12/80.67 upleg.

Res: 79.55, 79.75, 80.00, 80.43
Sup: 79.30, 79.06, 79.00, 78.75


USD/CHF

Near-term bulls remain in play, as the pair approaches initial target at 0.9500 on a second attempt. Brief corrective action off last Friday’s high at 0.9497 was contained at 0.9466, by ascending 55 day EMA, with fresh bullish momentum looking for resumption of rally from 0.9213 through 0.9500, to focus 0.9528, 90 day MA and psychological 0.9600 barrier, also 50% of 0.9970/0.9213 descend. Initial support lies at 0.9466, ahead of previous strong barrier at 0.9430 zone, while only loss of 0.9400, also 200 day MA.

Res: 0.9500, 0.9528, 0.9550, 0.9591
Sup: 0.9466, 0.9450, 0.9427, 0.9400

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Daily Market Commentary: (Evening Report)

London Market Report

London close: Stocks finish flat as Eurogroup meets
Market Movers

• techMARK 2,062.12 -0.83%
• FTSE 100 5,767.27 -0.04%
• FTSE 250 11,803.30 -0.33%

- Eyes turn to Eurogroup meeting
- Greece approves 2013 budget
- Japanese GDP decline worse than feared

Concerns about Greece and a worse-than-expected contraction in Japan meant that it was a rather subdued day on the UK stock market on Monday, with the FTSE 100 broadly unchanged by the close.

"European markets have struggled for direction today, not surprising given the backdrop of denial and delay in dealing with the problems of Greece's financial situation, ahead of today's latest EU finance ministers meeting, where expectations are receding that there will be any clarity on what the next steps will be in this latest stage of the crisis," said market analyst Michael Hewson from CMC Markets.

Greece's parliament put the rubber stamp on its budget for 2013 late Sunday night with a wide margin as 167 deputies approved the bill, 128 voted against, four voted 'present' and one member was absent. Passage of the budget was a requirement for Athens to get the green light on the next tranche of aid. However, the Troika is not expected to be able to give the final seal of approval necessary in time for today's meeting of Eurozone finance ministers.

Any agreement on Greece will have to pass through the Bundestag, Germany's Finance Minister Wolfgang Schaeuble is reported to have said this afternoon.

Japan's economy contracted at an annualised rate of 3.5% in the third quarter, only slightly worse than the 3.4% decline expected by analysts. Nevertheless, the decline in capital expenditures was considerably larger than what was forecast. However, over the weekend investors learned that Chinese exports grew at an 11.6% month-on-month pace in October, well ahead of the 10% that had been foreseen.

In other news, the International Energy Agency (IEA) said that the US will surpass Saudi Arabia's and Russia's level of oil production by around 2020, something which was thought unthinkable by many even just a year ago. Based on current forecasts, the US will pump 11.1m barrels of oil a day (b/d) in 2020 and 10.9m b/d in 2025, the IEA said. America's oil production is currently running at 6.7m b/d. 

Europe Market Report 

Europe midday: OECD sees weakening growth in the Eurozone

-OECD sees weakening growth in Eurozone and Asian Big 5
-OECD sees stabilisation in China and US
-Banks deposited €248.5bn overnight at ECB

FTSE-100: 0.33%
Dax-30: 0.33%
Cac-40: -0.16%
FTSE Mibtel 30: 0.32%
Ibex 35: -0.83%
Stoxx 600: 0.00%

The main European equity benchmarks have turned slightly higher. While the Greek parliament last night approved the 2013 budget by an ample majority, there are some doubts as to just when, exactly, the country will be able to access the next tranche of international financial aid. That uncertainty is weighing on markets.

However, there seem to be relatively solid indications that European authorities are looking to approve the above by the end of the month, with the country expected to be able to hold out until then. If not, then it is considered very likely that European authorities will act.

Even so, and as regards the US fiscal cliff, some market commentary out over the weekend seems a tad more downbeat than what could be seen and heard in previous days. Thus, for example, economists at Barclays Research wrote on Friday that: "The retention of the status quo within the US Congress provides the most treacherous path to navigating the fiscal cliff."

Meantime, and in Asia, Chinese macroeconomic data out over the weekend was generally stronger than expected, particularly as regards export growth.

Nevertheless, the latest Japanese GDP data seems to have taken some of the luster off of the same.

The Organisation for Economic Co-operation and Development´s (OECD) leading composite index points to weak growth prospects in many major economies, but signs of stabilization have emerged in Canada, China and the United States. 

US Market Report

While selling pressure has remained relatively subdued, stocks have moved mostly lower over the course of the trading day on Monday. Lingering concerns about the looming fiscal cliff continue to weigh on the markets following last week's sell-off. The major averages have moved roughly sideways in recent trading, stuck in negative territory. The Dow is down 21.00 points or 0.2 percent at 12,794.39, the Nasdaq is down 5.69 points or 0.2 percent at 2,899.18 and the S&P500 is down 1.61 points or 0.1 percent at 1,378.24. Stocks moved mostly higher in early trading on the heels of the release of a report showing that the Chinese trade surplus widened to $31.99 billion in October compared to expectations for a surplus of $27.15 billion. Chinese exports surged up by 11.6 percent year-over-year, surpassing expectations for a 10 percent increase. Imports rose by 2.4 percent, below estimates for a 3.4 percent increase. However, a separate report showing that Japanese GDP shrank by 0.9 percent in the third quarter helped to limit the upside for the markets. On a year-over-year basis, Japanese GDP fell 3.5 percent in the third quarter compared to expectations for a 3.4 percent drop. The subsequent pullback by the markets came as traders expressed continued concerns about whether President Barack Obama and members of congress will be able to come to an agreement to avert the fiscal cliff looming at the end of the year. While members of both parties have called for compromise on the issue, recent statements suggest that a continued disagreement over taxes on the wealthy could lead to continued gridlock on Capitol Hill. Without action by Congress, the end of the year will see the expiration of the Bush-era tax cuts as well as the automatic spending cuts that were part of last summer's debt ceiling deal. Other Markets In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index fell by 0.9 percent, while Australia's All Ordinaries Index ended the day down by 0.3 percent. Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Indexedged up by 0.1 percent, the U.K.'s FTSE 100 Index closed just below the unchanged and the French CAC 40 Indexdipped by 0.4 percent. The U.S. bond market is closed on the day due to the Veteran's Day holiday.