Daily FX Commentary: (Morning Report)
EUR/USD
The single currency trades in a consolidative mode, after posting fresh high at 1.3074 yesterday. With previous high at 1.3046, protecting the downside along with ascending 20 day EMA and yesterday’s close above the latter, scope exists for attempt at initial 1.3100 target, clearance of which to open way towards key barriers at 1.3138 and 1.3170. However, further consolidative / corrective action cannot be ruled out, as 4h indicators are near overbought zone and moving sideways. Psychological 1.3000 support, also Fib 38.2% of 1.2879/1.3074 upleg and daily Ichimoku cloud top, is expected to contain any stronger pullback.
Res: 1.3074, 1.3082, 1.3100, 1.3138
Sup: 1.3045, 1.3028, 1.3000, 1.2977
GBP/USD
The pair maintains positive sentiment that emerged on yesterday’s break above 1.6050 congestion top and cracked initial target at 1.6100, spiking to 1.6114 so far. Shallow correction that was contained by 20 day EMA at 1.6085, keeps bulls in play for final push towards 1.6174/78 Oct / Now double-top, with interim barriers at 1.6124, Fib 61.8% of 1.6308/1.5826 and 1.6140, 26 Oct high. Overnight’s lows at 1.6085, offer immediate support, ahead of more significant 1.6050, previous resistance, reinforced by ascending 55 day EMA.
Res: 1.6114, 1.6140, 1.6174, 1.6178
Sup: 1.6085, 1.6060, 1.6050, 1.6026
USD/JPY
The pair comes under increased pressure, following upside rejection at 82.36, with fresh weakness attempting below 82.00 handle. Hourly studies remain negative, with 4h ones breaking into the negative territory. This increases risk of further weakness and test key near-term support and range floor at 81.68, 28 Nov low. Break here is seen as a trigger for stronger corrective action towards 81.40/00, Fibonacci support, also as confirmation of near-term double-top formation that would put near-term bulls on hold. Only bounce through yesterday’s intraday high at 82.36, would avert immediate downside risk.
Res: 82.00, 82.15, 82.36, 82.50
Sup: 81.68, 81.58, 81.39, 81.00
USD/CHF
The pair enters near-term consolidative phase, just above fresh low at 0.9239 and key support and near-term target at 0.9213. With hourly studies gaining traction, further sideways movements are likely, however, weak 4h structure and upside being limited by descending 20 day EMA at 0.9260 zone, does not leave much room for any significant corrective action.
Res: 0.9269, 0.9279, 0.9290, 0.9300
Sup: 0.9250, 0.9239, 0.9213, 0.9200
Daily Market Commentary: (Evening Report)
London close: US and Eurozone uncertainty keeps stocks flat
Market Movers
- techMARK 2,108.13 -0.09%
- FTSE 100 5,869.04 -0.04%
- FTSE 250 12,053.26 +0.21%
- Democrats, Republicans wrangle over 'fiscal cliff'
- Europe talks about bank supervisor
- Defensives gain, resources fall
The FTSE 100 swung between gains and losses for most of Tuesday's session to finish the day broadly flat as ongoing concerns about the US budget and developments in the Eurozone weighed on investors' minds.
"It's been a rather slow day on equity markets today as markets tread water as uncertainty prevails over what's going on in the US with respect to arguments between Democrats and Republicans over spending cuts relative to tax rises, before year end," said market analyst Michael Hewson from CMC Markets.
In a letter to President Barack Obama, House Speaker John Boehner presented a deficit-reduction proposal that included $1.4tn in spending cuts and $800bn in new revenue. However, the plan was rejected by the Obama administration as it didn't include higher tax rates for top earners.
Market analyst Craig Erlam from Alpari said this afternoon: "At this stage there are very few people who are underestimating the potentially devastating effects that the fiscal cliff could have, apart from maybe the people in charge of avoiding it who appear to be very relaxed on the subject. Market volatility is likely to remain low until we start to see some progress here."
Markets were also still digesting weak manufacturing figures Stateside which dampened equities on Monday. The US Institute for Supply Management (ISM) purchasing managers' index fell from 51.7 to 49.5 in November, well below the 51.4 forecast. Any figure below 50 represents a contraction.
Closer to home, the Ecofin met in Brussels today to discuss proposals on bank supervision and take stock of negotiations with the European Parliament on bank capital requirements.
- Europe talks about bank supervisor
- Defensives gain, resources fall
The FTSE 100 swung between gains and losses for most of Tuesday's session to finish the day broadly flat as ongoing concerns about the US budget and developments in the Eurozone weighed on investors' minds.
"It's been a rather slow day on equity markets today as markets tread water as uncertainty prevails over what's going on in the US with respect to arguments between Democrats and Republicans over spending cuts relative to tax rises, before year end," said market analyst Michael Hewson from CMC Markets.
In a letter to President Barack Obama, House Speaker John Boehner presented a deficit-reduction proposal that included $1.4tn in spending cuts and $800bn in new revenue. However, the plan was rejected by the Obama administration as it didn't include higher tax rates for top earners.
Market analyst Craig Erlam from Alpari said this afternoon: "At this stage there are very few people who are underestimating the potentially devastating effects that the fiscal cliff could have, apart from maybe the people in charge of avoiding it who appear to be very relaxed on the subject. Market volatility is likely to remain low until we start to see some progress here."
Markets were also still digesting weak manufacturing figures Stateside which dampened equities on Monday. The US Institute for Supply Management (ISM) purchasing managers' index fell from 51.7 to 49.5 in November, well below the 51.4 forecast. Any figure below 50 represents a contraction.
Closer to home, the Ecofin met in Brussels today to discuss proposals on bank supervision and take stock of negotiations with the European Parliament on bank capital requirements.
Europe Market Report
Europe midday: Authorities bicker over bank regulator
-Merkel: Nobody can tell when crisis will be overcome
-Schaeuble: If all banks supervised Parliament may not approve
-Markets waiting on results of ECOFIN meeting
-Baxter acquires Gambro for 4bn dollars
FTSE-100: 0.05%
Dax-30: 0.33%
Cac-40: 0.76%
FTSE Mibtel 30: 1.13%
Ibex 35: 0.50%
Stoxx 600: 0.24%
Markets have turned around to trade higher and are now registering slight gains. That as investors look to the result of tonight's meeting of European Union finance ministers, also known by its acronym ECOFIN.
Ahead of that Germany's Finance Minister, Wolfgang Schaeuble, has been cited as saying that if the new proposed bank supervisor then it will be harder to pass the needed legislation through the German parliament.
Tonight's meeting is supposed to reach a final agreement on the roadmap for the single supervisory mechanism, ahead of next week's European summit, which should endorse this agreement.
Nevertheless, economists at Barclays wrote this morning that, "we think this is probably too ambitious given the disagreements between member states."
-Schaeuble: If all banks supervised Parliament may not approve
-Markets waiting on results of ECOFIN meeting
-Baxter acquires Gambro for 4bn dollars
FTSE-100: 0.05%
Dax-30: 0.33%
Cac-40: 0.76%
FTSE Mibtel 30: 1.13%
Ibex 35: 0.50%
Stoxx 600: 0.24%
Markets have turned around to trade higher and are now registering slight gains. That as investors look to the result of tonight's meeting of European Union finance ministers, also known by its acronym ECOFIN.
Ahead of that Germany's Finance Minister, Wolfgang Schaeuble, has been cited as saying that if the new proposed bank supervisor then it will be harder to pass the needed legislation through the German parliament.
Tonight's meeting is supposed to reach a final agreement on the roadmap for the single supervisory mechanism, ahead of next week's European summit, which should endorse this agreement.
Nevertheless, economists at Barclays wrote this morning that, "we think this is probably too ambitious given the disagreements between member states."
Spain's unemployment worsened by 76,000 in November (Consensus: 90,000).
Eurozone producer prices increased at a 0.1% month-on-month pace in October (Consensus: 0.0%).
Small moves in other asset classes
The euro/dollar is now rising by 0.15% to the 1.3079 dollar mark. As a curiosity, or not, Bloomberg points out how year-to-date the single currency is up by just 0.1%.
Front month Brent crude futures were down by 0.553 dollars to the 110.32 dollar mark on the ICE.
US Market Report
US open: Stocks slightly mixed
-Stocks mixed in absence of data
-White House rejects Republican offer
Dow Jones Industrials: 0.01%
Nasdaq Comp.: -0.67%
S&P 500: -0.25%
The major New York equity benchmarks were still trading in a mixed fashion an hour after the opening bell. This in a light day in terms of economic data.
Despite appearances, investors were somewhat anxious ahead of Friday's monthly employment report and next week's Federal Open Market Committee (FOMC) meeting.
In more immediate matters, the White House has rejected Republican's most recent offer, $2.2trn of spending cuts and new revenue, as the measures do not include higher tax rates for top-earning Americans.
10 year US Treasury yields were down by 2 basis point to the 1.61% level.
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Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
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