Daily Commentary

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Daily FX Commentary: (Morning Report)

AUD/USD

The pair has fully retraced five-week corrective phase from 1.0612, 09 Aug high to 1.0165, 06 Sep low, as fresh strength briefly broke above 1.0612. Failure to sustain gains and overbought conditions on 1 and 4 hour chart studies, were the trigger for current corrective pullback. Dips have so far found footstep just above 1.0500 handle, however, weak hourly structure and 4h chart indicators moving out of overbought territory, see risk of stronger correction. Loss of 1.0500 to expose important supports at 1.0450, Fib 38.2% of 1.0165/1.0623 ; 1.0440, daily Ichimoku cloud top and 1.0428, 13 Sep higher low / 55 day EMA, below which, bulls would be put on hold.

Res : 1.0542, 1.0564, 1.0612, 1.0623
Sup : 1.0514, 1.0500, 1.0450, 1.0440

USD/CAD

Near-term price action moves in a corrective mode, as bounce from 0.9631, last Friday’s fresh 13-month low, retraces 61.8% of the latest 0.9772/0.9631 fall. Positive hourly structure keeps the upside favored in the near-term, with break above 0.9720/25, Fibonacci / trendline resistance, to expose the next resistance band at 0.9750/70 and 0.9800, key near-term barriers, 50% of 0.9912/0.9361 downleg and previous longer term congestion low. Break here is required to spark stronger corrective action, otherwise, rejection would risk a lower top and fresh weakness, as part of 3 ½ month downtrend off 1.0444, 06 June high

Res: 0.9750, 0.9772, 0.9800, 0.9833
Sup: 0.9692, 0.9663, 0.9654, 0.9631

EUR/JPY The pair breaks above 103.00 barrier, after last Friday’s rally was capped here and brief, narrow range consolidation preceded fresh strength. Acceleration above 103.00, with regain of 103.50 zone so far, looks for test of 104.00, round figure resistance, with 104.60, 16 Apr low and 104.80, Fib 61.8% of 111.42/94.10, seen on a break, as overall picture remains bullish. Extremely stretched studies on 4h chart, however, warn of corrective action, yet no firm signal being generated on the lower timeframes. Previous high at 103.00, offers initial support, ahead of daily low and consolidation floor at 102.50 and 102.00, Fib 38.2% / 55 day EMA that is expected to contain any stronger dips. Res: 104.00, 104.42, 104.60, 104.80 Sup: 103.00, 102.50, 102.00, 101.50 EUR/GBP The near-term corrective action followed the latest rally that peaked at 0.8114, just ahead of strong barrier at 0.8145/55 zone, where 200 day MA and 11/16 June double-top lie. As dips found footstep at 0.8066, exactly 38.2% of 0.7988/0.8114 upleg, fresh strength aims towards initial 0.8114 barrier, break of which to open our near-term targets. With hourly studies regaining momentum and 4h chart indicators pointing higher, despite being in overbought territory, upside remains in focus in the near-term trading. Higher platform at 0.8066, now offers good support, ahead of Fib 61.8% and consolidation floor at 0.8036, loss of which would weaken the near-term structure. Res: 0.8114, 0.8145, 0.8155, 0.8200 Sup: 0.8066, 0.8051, 0.8036, 0.8000 GBP/JPY The pair resumes its recent strong gains off 124.42, following brief 127.24/126.82 consolidation. Strong gains through Fib 61.8% at 127.87 and 128.00, round figure resistance, open way towards 128.50 and 129.00, initially, as psychological 130.00, also Fib 76.4%, would come in focus on a break above the latter. Near-term outlook remains positive, despite overextended short-term studies. Res: 128.50, 129.00, 129.37, 129.50 Sup: 128.00, 127.55, 127.24, 127.00 GBP/CHF The downside remains pressured, as the price dips below psychological 1.5000 support and Fib 61.8% of larger 1.4718/1.5478 rally, with 1.4988 seen so far. Corrective bounce remains congested under 50% of 1.6167/1.4988 downleg, with still negative 1 and 4h charts studies, seeing no bigger prospect for stronger recovery, as long as important barriers at 1.5100 and 1.5130/70 stay intact. Only regain of the latter would improve the picture, otherwise, fresh weakness, as a part of broader downtrend, would look for extension towards 1.4930 and 1.4900. Res: 1.7350, 1.5100, 1.5132, 1.5166 Sup: 1.5028, 1.5000, 1.4988, 1.4930

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Daily Market Commentary: (Evening Report)

London Market Report

London close: South African miners rally
Market Movers

• techMARK 2,139.61 -0.26%
• FTSE 100 5,893.52 -0.37%
• FTSE 250 12,080.88 -0.29%

Footsie finished the day below 5900, having traded in a narrow range spanning from 5,883 to 5,916, as worries about Chinese growth weighed on investors' minds.

Last week London enjoyed a good run on the back of apparent enthusiasm of central banks worldwide to give the global economy a leg-up, but speculation mounted over the week-end that the Chinese authorities might not quite as keen on sprightly intervention as previously assumed.

Adding weight to that view was the decision by economists at Citigroup to cut their forecast for Chinese gross domestic product growth this year to 7.6% from 8% before.

Europe Market Report 

Europe close: Spanish delays and China weakness hit markets

Market movers
FTSE 100: -0.37%
Dax 30: -0.11%
Stoxx 600: -0.34%
Cac 40: -0.78%
Ibex 35: 0.08%
FTSE MIB: 0.93%

A lack of agreement over the future of banking supervision within Europe, uncertainty over whether Spain will request assistance from the European Central Bank (ECB), reduced growth prospects in China and rising tensions between Japan and China all served to push European stocks lower on Friday.

EU finance ministers failed to agree to changes to the powers of the European Central Bank at a meeting in Cyprus at the end of last week. This was seen as an important step in helping to avoid catastrophic losses within the Spanish and Irish banking sectors, as it would clear the way for the direct recapitalisation of these countries´ banks.

In addition, Spain has yet to make a formal request for assistance from the European Central Bank. The move, which would see the ECB enter the secondary market to keep down the cost of borrowing for the Eurozone's fourth largest economy, would also entail strict budget conditions that the Spanish government is loathe to accept.

Investors have been expecting Spain to bite the bullet for several weeks but Madrid has so far resisted the political and economic pressure to press the emergency help button.

News out of China further darkened the mood with Citigroup cuttings its growth forecast for the world's second largest economy from 8% to 7.6%. The official Xinhua Chinese news agency also carried a warning that the recent announcement by the US that it would begin a third round of quantitative easing might have inflationary consequences.

US Market Report

US open: Apple announces record pre-orders for iPhone 5 The main US equity benchmarks have begun today´s trading session with slight falls. That as some observers ask themselves just how effective the Fed´s third round of quantitative easing will really be or not. Also weighing on sentiment may be the increasing tensions between China and Japan, and the effect which that could have on trade relations in the region. Apple is on the rise after the company reported that pre-orders for the iPhone 5 topped two million units in the first 24 hours, twice the demand seen for the iPhone 4S last year. Shares of Office Depot are surging 13% after activist investor Starboard unveiled a 13.3% stake in the office-supply giant, calling the company "undervalued." Lowe´s has pulled a $1.81bn offer for its Canadian rival Rona. Waste Connections will pay $1.3bn for various subsidiaries of R360 Environmental Solutions. Analysts at Stiefel Nicolaus have downgraded their recommendation on shares of Wells Fargo to hold from buy. Weaker than expected manufacturing data The New York Fed´s regional manufacturing gauge for the month of September has fallen to -10 points (Consensus: -2) from -5.85 in August. Treasuries rise after Empire State survey 10 year US Treasuries are now gaining 7/32 dollars, with yields at 1.85%. Front month West Texas crude futures are now rising by 0.25% to the 99.29 dollar per barrel mark on the NYMEX.