Daily FX Commentary: (Morning Report)
EUR/USD
The Euro moves in a sideways consolidative mode, holding within 30-pips range, following yesterday’s failure on approach to 1.3200 barrier and Doji candle. As the latter proves to be tough barrier and the pair lacks momentum for push higher, stronger correction cannot be ruled out. The notion is supported by descending hourly and 4h studies emerging from overbought territory. Range lows at 1.3140 zone, reinforced by hourly Ichimoku cloud, offer initial support, ahead of more significant 1.3100, 13 Dec previous highs, loss of which to possibly expose psychological / Fibonacci 61.8% support at 1.3000.
Res: 1.3178, 1.3186, 1.3200, 1.3250
Sup: 1.3142, 1.3115, 1.3100, 1.3065
GBP/USD
The pair holds steady around 1.6200 handle, following yesterday’s break and close above the latter. Overall bulls remain intact for fresh extension higher that would focus key 1.6300 resistance zone. However, corrective easing may precede rally, as hourly indicators are reversing. Initial support lies at 1.6180/70 zone, previous tops and Fib 38.2% of 1.6084/1.6218 ascend, ahead of 1.6150, 50% retracement, where dips should be contained, otherwise, further delay and downside extension towards 1.6100/1.6085, would be likely.
Res: 1.6218, 1.6250, 1.6271, 1.6300
Sup: 1.6190, 1.6175, 1.6150, 1.6135
USD/JPY
Near-term bears are running out of steam, after yesterday’s surge to fresh 1/ ½ year high, as the price slides below psychological 84.00 support, following repeated attempt at 84.32, yesterday’s high. With 4h studies starting to point lower, initial signal for corrective action is given, however, confirmation requires filling yesterday’s gap that will be seen on a dip to 83.50 and possible test of strong support at 83.30/20 zone, 13/14 Dec lows , Fib 61.8% of 82.09/84.32 ascend. Conversely, lift above 84.32, to open 84.50 and 85.00, weekly 200 day MA.
Res: 84.07, 84.15, 84.32, 84.50
Sup: 83.82, 83.50, 83.30, 83.20
USD/CHF
The pair consolidates recent losses, moving within narrow range above yesterday’s fresh low at 0.9151, with upside being capped under initial 0.9200 barrier for now. Overall bearish tone keeps the downside favored, with corrective bounce signaled by oversold 4h conditions. However, upside action requires clearance of strong 0.9200/40 resistance zone, previous lows and 20/55 day EMA’s, to avert immediate downside risk and allow for stronger retracement. Otherwise, risk of lower top under 0.9240 and fresh leg lower, would be the likely near-term scenario.
Res: 0.9192, 0.9210, 0.9213, 0.9240
Sup: 0.9165, 0.9151, 0.9100, 0.9080
Daily Market Commentary: (Evening Report)
London close: FTSE 100 finishes strongly on 'fiscal cliff' optimism
Market Movers
- techMARK 2,120.84 +0.62%
- FTSE 100 5,935.90 +0.40%
- FTSE 250 12,293.25 +0.61%
- US budget negotiations lift hopes
- G4S up on renewed confidence
- FTSE 250 at all-time high
UK markets finished with strong gains on Tuesday afternoon as 'fiscal cliff' hopes spurred investors' appetites for riskier assets, such as mining stocks.
The second-tier FTSE 250 index was trading at a record high today, while Frankfurt's DAX was close to its best levels since 2008. However, as financial sales trader Toby Morris from CMC Markets pointed out this afternoon, "the FTSE 100 has once again underperformed finding progress above its recent highs somewhat problematic".
Eyes were kept firmly on budget negotiations Stateside today after President Barack Obama last night proposed raising taxes for those that earn over $400,000, a higher threshold than the $250,000 annual salary he had previously targeted.
Meanwhile, House Speaker John Boehner said that he is working on a "plan B" to "protect as many American taxpayers as we can". Under his new plan, tax increases will only be imposed on those earning over $1m a year.
"Markets feel that after days of slow progress, we are finally seeing a step-up in the pace of budget negotiations," said market strategist Ishaq Siddiqi from ETX Capital.
"Much work remains for US lawmakers however, who will have to endorse proposals but the last two days provides the market with a degree of confidence that we are seeing some constructive dialogue in Washington."
Economic news elsewhere was thin on the ground today, with Spanish and Greek bond auctions going smoothly and UK consumer price inflation staying unchanged at 2.7% in November.
- G4S up on renewed confidence
- FTSE 250 at all-time high
UK markets finished with strong gains on Tuesday afternoon as 'fiscal cliff' hopes spurred investors' appetites for riskier assets, such as mining stocks.
The second-tier FTSE 250 index was trading at a record high today, while Frankfurt's DAX was close to its best levels since 2008. However, as financial sales trader Toby Morris from CMC Markets pointed out this afternoon, "the FTSE 100 has once again underperformed finding progress above its recent highs somewhat problematic".
Eyes were kept firmly on budget negotiations Stateside today after President Barack Obama last night proposed raising taxes for those that earn over $400,000, a higher threshold than the $250,000 annual salary he had previously targeted.
Meanwhile, House Speaker John Boehner said that he is working on a "plan B" to "protect as many American taxpayers as we can". Under his new plan, tax increases will only be imposed on those earning over $1m a year.
"Markets feel that after days of slow progress, we are finally seeing a step-up in the pace of budget negotiations," said market strategist Ishaq Siddiqi from ETX Capital.
"Much work remains for US lawmakers however, who will have to endorse proposals but the last two days provides the market with a degree of confidence that we are seeing some constructive dialogue in Washington."
Economic news elsewhere was thin on the ground today, with Spanish and Greek bond auctions going smoothly and UK consumer price inflation staying unchanged at 2.7% in November.
Europe Market Report
Europe midday: Stocks steady ahead of US data
-Stock rose as US fiscal cliff fears diminished
-Core country bond yields increased slightly as haven demand receded
-Spanish banks´ bad loan ratio rose to 11.23 per cent for October
-Riksbank lowered benchmark policy rate
-Greek and Spanish bill auctions went off without a hitch
FTSE-100: 0.39%
Dax-30: 0.40%
Cac-40: -0.05%
FTSE Mibtel 30: 0.34%
Ibex 35: 0.82%
Stoxx 600: 0.3o%
The largest European equity benchmarks were still registering small gains by the midday mark following news overnight of concessions by US President Barack Obama on the fiscal front.
Worth noting – perhaps – there was some market chatter regarding pressure on core European bond yields, while on the periphery long-term interest rates were down a tad. The former seemed to be a result of diminished haven bids.
Acting as a backdrop, Sweden´s central bank opted on Tuesday to lower its benchmark policy rate by 25 basis points, to 1%, as expected.
Not to be missed, Spanish banks´ bad loan ratio rose to 11.23% in October, after a reading of 10.71% for the previous month.
Both the Greek and Spanish bill auctions went off without a hitch.
News that Chinese officials had again set a 7.5% target for their economy´s rate of expansion (in 2013), at their annual central economic work conference, buoyed mining and basic resource stocks.
Ireland´s economy grew more or less as was expected
Irish third quarter gross domestic product (GDP) expanded at a 0.2% quarter-on-quarter pace (Consensus: 0.7%). That disparity, however, was made up by an upwards revision to the prior month´s reading.
Italy´s current account deficit improved to €245m in October after a reading of €2.6bn for the previous month.
Moderate rise in crude futures
The euro/dollar was edging higher by 0.20% to the 1.3186 dollar mark.
Front month Brent crude futures were rising by 0.536 dollars, to the 108.26 dollar per barrel mark on the ICE.
US Market Report
US open: Homebuilder confidence back at levels from 2006
-Home builder confidence at 2006 levels
-Several M and A transactions in the news
-Single currency moving higher
Dow Jones Industrials: 0.42%
Nasdaq Comp.: 0.84%
S&P 500: 0.60%
The main US equity benchmarks are now registering moderate gains. That following yesterday´s late surge higher and as investors wait for Republicans´ reaction to Obama´s concessions yesterday.
Home builder confidence back at April 2006 levels
The NAHB home builders´ confidence index for the month of December increased to 47 points after a reading of 45 points in the month before (down from a preliminary reading of 46).
The US third quarter current account deficit decreased to 107.5bn dollars, after a reading of 118.1bn dollars for the previous quarter (Consensus: 103bn dollars).
Same store weekly retail chain sales grew by 4.3% according to the latest ICSC survey data.
Month to date same-store retail sales have fallen by 0.2% according to Redbook.
Moderate rise in crude futures
Front month West Texas crude futures rose by 0.60% to the 87.70 dollar per barrel on the NYMEX.
10 year US Treasury yields are now rising by 2 basis points, at 1.78%.
The NAHB home builders´ confidence index for the month of December increased to 47 points after a reading of 45 points in the month before (down from a preliminary reading of 46).
The US third quarter current account deficit decreased to 107.5bn dollars, after a reading of 118.1bn dollars for the previous quarter (Consensus: 103bn dollars).
Same store weekly retail chain sales grew by 4.3% according to the latest ICSC survey data.
Month to date same-store retail sales have fallen by 0.2% according to Redbook.
Moderate rise in crude futures
Front month West Texas crude futures rose by 0.60% to the 87.70 dollar per barrel on the NYMEX.
10 year US Treasury yields are now rising by 2 basis points, at 1.78%.
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