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Daily FX Commentary:
EUR/USD
The Euro briefly broke above important 1.3000 resistance
zone, previous high and daily Ichimoku cloud top, following steady
recovery off yesterday’s low at 1.2880, but lost traction, failing to
sustain gains. Positive hourly studies have been dented by recent fall
to 1.2960 zone, where temporary support was found, while bearish
divergence, appearing on 4h chart, warns of possible failure at 1.3000
and fresh slide that would be confirmed on today’s close below the
latter and break below day’s low at 1.2938. Otherwise, retest of 1.3000
would stay in play, as break here is seen as a trigger for resumption of
near-term recovery from 1.2660, 13 Nov low and open 1.3020/25, then
1.3070, next upside targets.
Res: 1.3012, 1.3020, 1.3025, 1.3070
Sup: 1.2964, 1.2950, 1.2938, 1.2900
GBP/USD
Cable’s near-term bulls are back in play, as dip from
1.6050 double-top to 1.5960, has been fully retraced. However, lack of
momentum on near-term studies warn of possible further hesitation at
1.6050, as 20 day upper Bollinger caps the upside for now. Immediate
supports lie at 1.6010/00, 20 day EMA / round figure, while more
downside risk would be seen on loss of today’s low at 1.5960, also Fib
38.2% of 1.5826/1.6055 rally that also marks near-term range floor.
Break above 1.6050 barrier to open 1.6067, 50% of 1.6308/1.5826 descend,
ahead of 1.6100, psychological barrier.
Res: 1.6047, 1.6055, 1.6067, 1.6090
Sup: 1.6010, 1.6000, 1.5960, 1.5926
USD/JPY
The pair eased below 82.00, following failure to break
above 82.20 congestion and trendline resistance. As hourly studies lost
momentum and prevailing negative tone on 4h chart, the downside remains
vulnerable. Sustained break below 82.00 to confirm bearish continuation
of larger descend from 82.83 and re-focus yesterday’s correction low at
81.68. On the upside, clearance of 82.20/30 is required to signal
near-term basing attempt and open way for further retracement of
82.83/81.68 downleg.
Res: 82.20, 82.31, 82.56, 82.83
Sup: 82.00, 81.90, 81.84, 81.68
USD/CHF
Near-term bears are interrupted by jump higher, after
the pair posted fresh marginally lower low at 0.9251. However, overall
negative tone would not be affected, as long as significant barriers at
0.9300, 50% of 0.9339/0.9251 / daily Ichimoku cloud and 0.9339,
yesterday’s high, 4h 55 day EMA and near 38.2% of 0.9511/0.9251, stay
intact. Current bounce, signaled by MACD / RSI bullish divergence, needs
to clear those barriers to avert immediate risk of testing key support
at 0.9213.
Res: 0.9285, 0.9300, 0.9318, 0.9339
Sup: 0.9251, 0.9213, 0.9200, 0.9193
====================================================================
Daily Market Commentary: (Evening Report)
London Market Report
Miners surge on US hopes
Market Movers
techMARK 2,106.84 +1.21%
FTSE 100 5,870.30 +1.15%
FTSE 250 12,026.57 +1.14%
Hopes about the US economy were
driving gains on Thursday as investors reacted positively to comments
from politicians about the 'fiscal cliff' and decent economic data
Stateside.
US Republican Speaker of the House John Boehner said
that he was “optimistic that we can continue to work together to avert
this crisis sooner rather than later.” He said that Republicans were
willing to put “revenue on the table” as long as it is accompanied by
spending cuts.
Meanwhile, President Barack Obama told
the public in a press conference today to pressure Congress to act to
avert the automatic tax increases, saying: “When the American people
speak loudly enough, lo and behold, Congress listens." He said he
expects a deal by Christmas.
Nevertheless, market strategist Ishaq Siddiqi from ETX Capital said that "markets remain extremely sensitive
over the fiscal cliff issue – it could take just one negative headline
suggesting the talks are stalling to send the bulls running back to the
exit so today’s move to the upside is unlikely to sustainable in the
sessions ahead.
"For now however, Eurozone debt worries are in
the back seat and improved US macro data is driving the afternoon
cheer," he said.
US gross domestic product (GDP) growth
in the third quarter was revised higher from the initial flash
estimate of 2% to 2.7%. Meanwhile, jobless claims declined last week
and pending home sales surged in October.
Market analyst
Craig Erlam from Alpari said: "The housing market is naturally a good
barometer of economic conditions as it highlights not only the
consumer’s confidence in the economy but also the banks’ willingness to
lend. The improvement we’ve seen in recent months suggests that the US
economy could be performing better than the Federal Reserve are
suggesting and is likely to be reflected in the fourth-quarter data."
Economic news
German unemployment rose for the
eighth consecutive month in November, up a seasonally adjusted 5,000 to
2.94m, according to the Federal Labor Agency. However, this was much
less than the 16,000 increase predicted.
The Confederation of British Industry's (CBI) distributive trades survey index for the month of November rose to 33 points, after 30 in the previous month (Consensus: 18).
The latest Bloomberg poll has the world economy in its ‘best shape’
for 18 months, as the US is expected to avoid the fiscal cliff, albeit
with political manoeuvres expected before hand, and as China’s
prospects improve.
Europe Market Report
European Markets Rallied On Fiscal Cliff Optimism
The
European markets
finished solidly to the upside Thursday on investor optimism that a
deal can be reached on the looming fiscal cliff in the United States.
Statements made yesterday by both President Barack Obama and Speaker of
the House John Boehner suggested that a deal to avoid a budget crisis
could be reached before the end of the year. A strong upward revision to
U.S. GDP and a surge in pending home sales also provided a boost to
investor sentiment.
Bank of England Governor
Mervyn King on Thursday warned that British banks are understating their capital requirements.
Releasing the Financial Stability Report,
King said banks currently report substantial buffers over the minimum level allowed.
"But,
in judging whether banks are adequately capitalised, we need to ensure
that reported capital ratios do in fact provide an accurate picture of
banks' health," he said. "At present there are good reasons to think
that they do not."
The
U.S. Federal Reserve revealed in
its Beige Book release yesterday that factory activity in the U.S. has
tailed off in recent weeks. Seven of the twelve Districts reported
either slowing or outright contraction in manufacturing, and two others
gave mixed reports.
A number of respondents blamed uncertainty
about the 'fiscal cliff' for the slowdown. Analysts say the impact of
Hurricane Sandy also contributed to the dim view of conditions in the
New York and other parts of the Northeast.
The
Euro Stoxx 50
index of eurozone bluechip stocks increased by 1.30 percent, while the
Stoxx Europe 50 index, which includes some major U.K. companies, added
0.98 percent.
The DAX of Germany advanced by 0.78 percent and the
CAC 40 of France rose by 1.53 percent. The
FTSE 100 of the U.K. gained 1.15 percent and the
SMI of Switzerland climbed by 1.07 percent.
Despite the 17-nation economy moving into a deep recession, Eurozone
economic confidence strengthened in November, marking the first
improvement since February, survey results from the European Commission
showed Thursday.
The
corresponding index rose to 85.7
from 84.3 in October and was above the consensus forecast of 84.5.
Confidence strengthened in industry and retail trade, which was partly
offset by decreases among consumers and construction.
Eurozone
leading economic index dropped for the second consecutive month in
October, suggesting weak outlook for the currency bloc, the Conference
Board said Thursday. The leading index dropped 0.2 percent in October,
after decreasing 0.3 percent in September and rising 0.5 percent in
August.
Germany's unemployment rate for October declined from the
same month last year, data released by the Federal Statistical Office
showed Thursday. The adjusted jobless rate, which is based on the
calculation concept of the International Labour Organization (ILO), fell
to 5.4 percent from 5.7 percent last year. Meanwhile, the figure held
steady from September.
The number of people out of work in
Germany rose for an eighth month in November, as subdued economic growth
forced firms to shed jobs to contain costs, data from the Federal
Labor Agency revealed Thursday.
The
unemployment total
rose by 5,000 from a month earlier in November to 2.939 million. That
was weaker than the expected increase of 16,000. In October, the number
of unemployed increased by 19,000. The jobless rate for November was
6.9 percent, unchanged from October. The figure was in line with
economists' forecast.
The
Swiss economy expanded more
than expected in the third quarter fueled by strong consumption and
goods trade, the latest figures from the State Secretariat for Economic
Affairs (SECO) showed Thursday.
Gross domestic product
expanded 0.6 percent sequentially in the third quarter, strongly
recovering from a 0.1 percent contraction in the previous three months.
Economists had expected just 0.2 percent growth.
U.K. house
prices dropped for a ninth month in a row in November, according to
the results of a house price survey released on Thursday. Prices are
expected to remain subdued in the months ahead as downward pressure on
wage growth will weigh on prospects of house price growth.
House
prices were down 1.2 percent from a year ago following a 0.9 percent
drop in October, the Nationwide Building Society said. The rate of
decline exceeded the 1 percent drop forecast by economists.
US Market Report
Stocks Come Under Pressure On Disappointing Boehner Comments
Stocks have
shown a notable move to the downside in recent trading on the heels of
comments by House Speaker John Boehner. The pullback by the markets
reflects the recent focus on any headlines regarding the looming fiscal
cliff.
The major averages are currently turning in a mixed performance, as the Dow has turned negative. While the Dow is
down 4.69 points or less than a tenth of a percent at 12,980.42, the
Nasdaq is up 10.92 points or 0.4 percent at 3,002.70 and the S&P 500 is up 1.96 points or 0.1 percent at 1,411.89.
After
seeing early strength on the heels of a batch of largely upbeat U.S.
economic data, stocks came under pressure after Boehner told reporters
that "no substantive progress" has been made in fiscal cliff talks with
the White House.
Boehner went on to say that he was disappointed
with the lack of progress and argued that Democrats in Washington need
to get "serious about spending cuts."
The pullback by the
markets reflects a notable reversal from the performance seen in the
previous session, when stocks rallied after Boehner expressed optimism
about reaching an agreement.
Earlier in the session, traders
reacted positively to some key economic data, including a report from
the National Association of Realtors showing a much bigger than expected
jump in October pending home sales.
The Labor Department
also reported a drop in weekly jobless claims, while the Commerce
Department said GDP increased by more than previously estimated in the
third quarter.
Positive sentiment was also generated by a report
from the European Commission showing that Eurozone economic confidence
strengthened in November, marking the first improvement since February.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region saw notable strength during trading on Thursday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both ended the day up by 1 percent, while Australia's All Ordinaries Index advanced by 0.6 percent.
In the bond market, treasuries have
climbed back near the unchanged line following the comments from
Boehner. The yield on the benchmark ten-year note, which moves opposite
of its price, is up by less than a basis point at 1.62 percent after
reaching a high 1.644 percent. |
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