Daily FX Commentary: (Morning Report)
EUR/USD
The single currency sustains break above 1.3000 barrier, as clearance of Fib 61.8% at 1.3030, tested 1.3050 so far. Strong bullish posture of 4h studies, sees bulls in play for test of 1.3085/1.3100 barriers, above which the way will be opened for test of key barriers at 1.3125/38, 05 Dec / 17 Oct peaks. Gains would be delayed by corrective action on overbought hourly studies, with strong support and higher platform at 1.3000, reinforced by ascending 55 day EMA at 1.2990, expected to contain. Daily close above 1.3030 to confirm bullish structure off 1.2900 base and confirm daily three white soldiers reversal pattern.
Res: 1.3013, 1.3030, 1.3041, 1.3066
Sup: 1.2995, 1.2970, 1.2950, 1.2927
GBP/USD
The pair resumes rally from 1.6000 base, clearing 1.6127/29 double-top and Fib 61.8%, extending gains to 1.6150 zone so far. Subsequent pullback on overbought hourlies, sees good support at 1.6100, near Fib 38.2% of 1.6000/1.6150 / 55 day EMA, however, caution is required, as 4h indicators are reversing that would trigger stronger correction. Below 1.6100, supports lie at 1.6070/50, loss of which would delay bulls. Larger picture outlook remains firmly bullish and favors near-term extension towards 1.6175/1.6200 barriers.
Res: 1.6129, 1.6150, 1.6175, 1.6200
Sup: 1.6100, 1.6090, 1.6060, 1.6050
USD/JPY
The pair cracked three-week barrier and range top at 82.83, to approach psychological 83.00 barrier. Gains were limited by overextended hourly studies, however, strong bullish tone on 4h chart, suggests that extension through 83.00 is likely. Immediate upside target lies at 83.26, 02 Apr high, ahead of yearly highs at 84.08/17, posted in March. Any dips should be contained at 82.50 zone.
Res: 83.00, 83.29, 84.08, 84.17
Sup: 82.79, 82.63, 82.52, 82.32
USD/CHF
The pair has lost ground, as strong support at 0.9320/00 zone gave way and dips reached levels close to Fib 76.4% retracement of corrective 0.9239/0.9381 rally. Failure to regain important 0.9400 resistance zone, stalling at 50% of 0.9511/0.9239 descend and subsequent reversal that accelerated on a loss of 0.9320/00, revived bears for possible re-visit of 0.9239, 03 Dec low. With hourly studies deep in negative zone and 4h indicators breaking below the midlines, downside remains in near-term focus. Previous strong supports now act as resistance and only clear break and close above 0.9320/30 zone, would avert immediate downside risk.
Res: 0.9300, 0.9320, 0.9335, 0.9367
Sup: 0.9275, 0.9254, 0.9239, 0.9213
Daily Market Commentary: (Evening Report)
Stocks rise as investors await the FOMC
Market Movers
techMARK 2,132.04 +0.18%
FTSE 100 5,945.85 +0.35%
FTSE 250 12,224.31 +0.28%
Market Movers
techMARK 2,132.04 +0.18%
FTSE 100 5,945.85 +0.35%
FTSE 250 12,224.31 +0.28%
UK stocks finished Wednesday's session
with decent gains, extending its recent winning streak into its sixth
day, with investors widely expecting the US Federal Reserve to reveal
more stimulus measures in the coming hours.
The Footsie closed at its highest level since March 19th when it finished the session at 5,961.
It is predicted that the Federal Open Market Committee (FOMC) meeting will culminate with the announcement of a new long-term bond purchase programme valued at $45bn per month as 'Operation Twist' comes to an end.
Some 48 out of 49 analysts surveyed by Bloomberg are expecting new stimulus on top of the $40bn monthly mortgage-bond buying programme announced in September, commonly referred to as QE3 (third round of quantitative easing).
While optimism over the 'fiscal cliff' has increased slightly over the last few days, House Speaker John Boehner, who has talked this week with President Barack Obama, said that their two parties still have “serious differences" on resolving the issue.
“His remarks, although not enough to send markets spiral downward, do reinforce the discord between Republicans and the White House. The focus is now on the US Fed’s policy to see if it could provide some joy – due out after the European closing bell,” said market strategist Ishaq Siddiqi from ETX Capital.
Helping provide a lift to sentiment this morning was positive employment data in the UK (jobless claims fell 3,000 in November, better than the 6,000 increase expected), while a bond auction in Italy went relatively ‘smoothly’ in spite of the current political uncertainty.
The Footsie closed at its highest level since March 19th when it finished the session at 5,961.
It is predicted that the Federal Open Market Committee (FOMC) meeting will culminate with the announcement of a new long-term bond purchase programme valued at $45bn per month as 'Operation Twist' comes to an end.
Some 48 out of 49 analysts surveyed by Bloomberg are expecting new stimulus on top of the $40bn monthly mortgage-bond buying programme announced in September, commonly referred to as QE3 (third round of quantitative easing).
While optimism over the 'fiscal cliff' has increased slightly over the last few days, House Speaker John Boehner, who has talked this week with President Barack Obama, said that their two parties still have “serious differences" on resolving the issue.
“His remarks, although not enough to send markets spiral downward, do reinforce the discord between Republicans and the White House. The focus is now on the US Fed’s policy to see if it could provide some joy – due out after the European closing bell,” said market strategist Ishaq Siddiqi from ETX Capital.
Helping provide a lift to sentiment this morning was positive employment data in the UK (jobless claims fell 3,000 in November, better than the 6,000 increase expected), while a bond auction in Italy went relatively ‘smoothly’ in spite of the current political uncertainty.
Europe Market Report
European Markets Exercised Caution Ahead Of Fed Announcement
The European markets largely ended Wednesday's session with modest gains, as investors played it cautious ahead of the impending announcement from the Federal Reserve in the U.S. European finance ministers are also meeting today to discuss bank supervision and financial reform.
The Federal Open Market Committee will conclude its 2-day meeting after the European close. The Fed is expected to announce further stimulus, as Operation Twist is set to expire after 2012. Investors will be watching what the Fed will say regarding its forecast for economic growth, unemployment, inflation and interest rates.
North Korea successfully launched a satellite carrying rocket early Wednesday, which the West and several other countries believe was aimed at testing a long-range missile. The U.S., Japan and South Korea have called for a meeting of the U.N. Security Council to discuss North Korea's defiance in launching the rocket despite the international community's request to desist from the move.
The stickiness in U.K. inflation may persist for a while, Bank of England Chief Economist Spencer Dale said Wednesday. In a speech in London, he said the stickiness of inflation is a by-product of the real adjustment that economy has been forced to make and there is no easy fixes to such real adjustments.
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.23 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.16 percent.
The DAX of Germany climbed by 0.31 percent and the FTSE 100 of the U.K. rose by 0.33 percent. The CAC 40 of France gained 0.01 percent, but the SMI of Switzerland lost 0.21 percent.
Industrial production in Eurozone declined for a second consecutive month in October, but at a slower pace compared to the previous month, data released by Eurostat showed Wednesday. Production dropped 1.4 percent month-on-month in October after a 2.3 percent fall in September. Economists expected no change in production volume.
Germany's harmonized index of consumer prices rose less than estimated in the preliminary report in November, final figures published by the Federal Statistical Office showed Wednesday. The HICP inflation was 1.9 percent in November, a tad below 2 percent reported initially. On a monthly basis, HICP fell 0.2 percent compared with 0.1 percent fall reported earlier.
France's harmonized inflation eased more than expected in November on a renewed drop in petroleum product prices, the statistical office Insee said Wednesday. Inflation fell to 1.6 percent from 2.1 percent in October. The inflation rate was forecast to ease to 1.8 percent.
France's current account deficit narrowed in October, mainly due to increase in surplus on trade in services, data from Bank of France showed Wednesday.
The deficit fell to EUR 2.8 billion in October from EUR 3.4 billion in September. According to the central bank, the improvement is mainly due to an increase in surplus on services trade to EUR 2.8 billion from EUR 2.1 billion.
U.K. claimant count declined unexpectedly in November and employment reached a record through the three months to October, confounding the weakness in economic activity.
Claimant count dropped by 3,000 month-on-month to 1.58 million in November, the Office for National Statistics said Wednesday. Economists had forecast the figure to rise by 7,000. Claims rose by 6,000 in October, instead of the initially reported 10,100.
The European markets largely ended Wednesday's session with modest gains, as investors played it cautious ahead of the impending announcement from the Federal Reserve in the U.S. European finance ministers are also meeting today to discuss bank supervision and financial reform.
The Federal Open Market Committee will conclude its 2-day meeting after the European close. The Fed is expected to announce further stimulus, as Operation Twist is set to expire after 2012. Investors will be watching what the Fed will say regarding its forecast for economic growth, unemployment, inflation and interest rates.
North Korea successfully launched a satellite carrying rocket early Wednesday, which the West and several other countries believe was aimed at testing a long-range missile. The U.S., Japan and South Korea have called for a meeting of the U.N. Security Council to discuss North Korea's defiance in launching the rocket despite the international community's request to desist from the move.
The stickiness in U.K. inflation may persist for a while, Bank of England Chief Economist Spencer Dale said Wednesday. In a speech in London, he said the stickiness of inflation is a by-product of the real adjustment that economy has been forced to make and there is no easy fixes to such real adjustments.
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.23 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.16 percent.
The DAX of Germany climbed by 0.31 percent and the FTSE 100 of the U.K. rose by 0.33 percent. The CAC 40 of France gained 0.01 percent, but the SMI of Switzerland lost 0.21 percent.
Industrial production in Eurozone declined for a second consecutive month in October, but at a slower pace compared to the previous month, data released by Eurostat showed Wednesday. Production dropped 1.4 percent month-on-month in October after a 2.3 percent fall in September. Economists expected no change in production volume.
Germany's harmonized index of consumer prices rose less than estimated in the preliminary report in November, final figures published by the Federal Statistical Office showed Wednesday. The HICP inflation was 1.9 percent in November, a tad below 2 percent reported initially. On a monthly basis, HICP fell 0.2 percent compared with 0.1 percent fall reported earlier.
France's harmonized inflation eased more than expected in November on a renewed drop in petroleum product prices, the statistical office Insee said Wednesday. Inflation fell to 1.6 percent from 2.1 percent in October. The inflation rate was forecast to ease to 1.8 percent.
France's current account deficit narrowed in October, mainly due to increase in surplus on trade in services, data from Bank of France showed Wednesday.
The deficit fell to EUR 2.8 billion in October from EUR 3.4 billion in September. According to the central bank, the improvement is mainly due to an increase in surplus on services trade to EUR 2.8 billion from EUR 2.1 billion.
U.K. claimant count declined unexpectedly in November and employment reached a record through the three months to October, confounding the weakness in economic activity.
Claimant count dropped by 3,000 month-on-month to 1.58 million in November, the Office for National Statistics said Wednesday. Economists had forecast the figure to rise by 7,000. Claims rose by 6,000 in October, instead of the initially reported 10,100.
US Market Report
Stocks Turning In Lackluster Performance Ahead Of Fed
With traders reluctant to make any significant moves ahead of the Federal Reserve's monetary policy announcement, stocks are turning in a lackluster performance in mid-day trading on Wednesday after failing to sustain an initial upward move.
The major averages currently continue to linger near the unchanged line, turning in a mixed performance. While the Nasdaq is down 3.21 points or 0.1 percent at 3,019.09, the Dow is up 4.23 points or less than a tenth of a percent at 13,252.67 and the S&P 500 is up 1.98 points or 0.1 percent at 1,429.82.
The choppy trading on Wall Street comes ahead of the Federal Reserve's latest decision on monetary policy, which is due to be announced at about 12:30 pm ET.
Many analysts expect the Fed to announce a new round of Treasury securities purchases to replace its "Operation Twist" program, which expires at the end of the year.
Following the announcement, traders are likely to keep an eye on Fed Chairman Ben Bernanke's accompanying press conference.
Peter Boockvar, managing director at Miller Tabak, said, "We'll hear again from the 4th branch of government today, the Federal Reserve, to tell us their plan to replace the upcoming expiration of Smother the Yield Curve."
"Between Fed speeches and WSJ articles, it seems likely that we'll get $45 billion per month of unsterilized Treasury purchases, thus bringing the monthly dose of electronically printed money to $85 billion including the ongoing MBS program."
Traders are also keeping an eye on developments in Washington, as lawmakers continue to struggle to reach an agreement to avoid the looming fiscal cliff.
House Speaker John Boehner, R-Ohio, accused President Barack Obama of failing to put forth a "balanced" plan, while Senate Majority Leader Harry Reid, D-Nev., warned that the U.S. will go over the cliff unless Republicans agree to raise tax rates on wealthy Americans.
On the economic front, the Labor Department released a report showing that U.S. import prices fell by much more than anticipated in the month of November, with the decrease largely due to a drop by fuel import prices.
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