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.
Daily FX Commentary: (Morning Report)
EUR/USD
The Euro remains under pressure at the beginning of the
week, following last Friday’s acceleration lower that tested the upper
boundary of strong 1.2830/00 support zone, denting 200 day MA at 1.2829.
Overall bearish tone keeps further weakness favored, with test of
1.2800 platform seen likely. Break below 1.2800, 5-week congestion
floor, to signal major correction and open 1.2740 zone, mid-June highs /
Fib 38.2% of 1.2042/1.3170 rally. Corrective rallies see good barrier
at 1.2880/1.2900, previous supports, where gains would be likely capped.
Res: 1.2841, 1.2862, 1.2880, 1.2900
Sup: 1.2813, 1.2800, 1.2740, 1.2700
GBP/USD
Negative sentiment continues to dominate on the
near-term outlook, as last Friday’s bearish acceleration fully retraced
1.6005/1.6174 upleg, as the price posted fresh session low at 1.6006.
Brief corrective action on oversold hourlies did not give many results,
with near-term focus at 1.6000 support, also Fib 61.8% of larger
1.5911/1.6174 rally, seen as a trigger for fresh weakness and possible
retest of key near-term support at 1.5900. Any bounce is expected to be
limited at 20/55 EMA’s bearish crossover at 1.6075 and only break here
would provide temporary relief.
Res: 1.6038, 1.6066, 1.6075, 1.6100
Sup: 1.6005, 1.6000, 1.5974, 1.5935
USD/JPY
Corrective pullback off last Friday’s fresh high at
80.67, when the price reached our initial target, weakened hourly
structure, with bulls giving way after lower top was posted at 80.55.
Also, indicators on 4h chart are starting to descend off overbought
territory. However, bullish daily studies remain intact for now, with
the latest reversal seen as corrective, as long as 80.15, Fib 38.2% of
79.27/80.67 upleg, reinforced by 20 day EMA and psychological 80.00
level, stay intact. Otherwise, confirmation of failure swing would be a
trigger for stronger correction. On the upside, break above 80.67 to
open 81.00 next.
Res: 80.37, 80.55, 80.67, 81.00
Sup: 80.26, 80.15, 80.00, 79.90
USD/CHF
Near-term bulls continue to drive the price higher,
after the pair found ground at 0.9275 last week and acceleration through
0.9385/0.9400, previous peaks / 200 day MA, and weekly close above
here, now testing 0.9430/36 double bottom. Break here is seen as a
trigger for stronger correction of 0.9970/0.9213 descend and
confirmation of base at 0.9200 zone. With fresh momentum emerging on a
daily chart, upside remains favored, however, overextended conditions of
hourly studies, may signal pause in current rally. Previous barriers at
0.9400/0.9385, now offer good support.
Res: 0.9436, 0.9461, 0.9500, 0.9523
Sup: 0.9414, 0.9400, 0.9385, 0.9374
====================================================================
Daily Market Commentary: (Evening Report)
London Market Report
London close: Stocks taken down by global uncertainty
Market Movers
- techMARK 2,095.70 -0.42%
- FTSE 100 5,839.06 -0.50%
- FTSE 250 12,030.46 -0.75%
- All eyes turn to the US elections
- Greece attempts to agree on austerity
- UK and US services PMI disappoint
After a sharp fall early on, the FTSE 100 traded broadly sideways for
the remainder of Monday's session as investors refrained from building
positions ahead of a busy week for the global economy, with the US presidential elections firmly at the front of everyone's minds.
Nevertheless, market analyst Michael Hewson from CMC Markets highlighted
a number of reasons why markets were on the back foot today:
"increasing uncertainty against a backdrop of concerns about Greece
getting its budget through parliament later this week; another sharp
increase in Spanish unemployment; while the outcome of tomorrow's US
presidential poll promises to be as close as everyone expected it would
be."
What's more, economic data from home and away failed to lift sentiment today in London: the UK services
purchasing managers' index (PMI) fell from 52.2 to 50.6 in October,
well below the consensus esteem of 52.0 and the long-run average of
54.9. In the US, the ISM services PMI for the month of October came in at 54.2, compared with 55.1 for the month before and the consensus estimate of 54.5.
Meanwhile, monthly policy meetings scheduled for later this week
also kept investors on their toes today, with decisions due from the
Bank of England, European Central bank and Reserve Bank of Australia.
In Spain, unemployment rose by 2.7% month-on-month to 4,833,521
in October, as 128,242 more Spanish residents were without a job during
the month.
Nerves over Greece remain on edge as the coalition government
brings the austerity package before the Athenian Parliament today. The
smallest party in the coalition government - Democratic Left- has
already pledged to vote against the €13.5bn in cuts due to its
opposition to labour reforms. Even some members of the leading New
Democracy party have announced plans to vote against the package.
Europe Market Report
Europe midday: Equities hit new lows ahead of US open
-USD index hits 2 month high on haven flows
-Banks deposit 261.4bn euros overnight at ECB
FTSE-100: -0.58%
Dax-30: -0.66%
Cac-40: -0.99%
FTSE Mibtel 30: -1.50%
Ibex 35: -1.72%
Stoxx 600: -0.67%
Investors are watching events in Greece -the country faces two critical
votes this week- and the change of leadership in the United States and
China with both also expected for this week. Furthermore, the latest
Chinese service sector PMI data out over the weekend has led some to
expect fewer new easing measures in the Asian giant.
As regards events in Greece, eKathimerini says that the ruling
coalition will manage to muster sufficient support for the approval of
the necessary new austerity measures, although only just. Furthermore,
the Financial Times reports that the country´s creditors may have
already agreed on a new schedule of debt repayments to allow the
country to return to debt sustainability by 2022.
However, investors´ worries seem to persist.
Of interest in this regard, German daily Handelsblatt writes that
the European Central Bank´s (ECB) so-called Shadow Council does not
believe that Greece will be able to pay back its debts.
From a sector stand-point the wortt performance is now to be seen in
shares of the following industrial groups: Banks (-1.22%), Oil&Gas
(-1.13%) and Automobiles (-1.13%).
Spanish unemployment rises again
Spanish unemployment increased by 128,200 in October, versus a consensus expectation for 110,000.
The Eurozone Sentix survey of investor confidence fell to 18.8 points in
November, after -22.2 in the month before (Consensus: -18.8).
Irish service sector purchasing managers´ index for the month of October
has come in at 56.1, versus 53.9 for the previous month.
Haven flows weaken single currency
The euro/dollar is now falling by 0.37% to the 1.278 dollar level.
Front month Brent crude futures are currently off by -0.142 dollars to the 105.51 dollar mark on the ICE.
US Market Report
Stocks continue to turn in a lackluster
performance in mid-day trading on Monday, with traders reluctant to
make any significant moves ahead of tomorrow's elections. The choppy
trading comes after the markets ended last week's trading roughly flat.
The major averages are currently turning in a mixed performance, although they are all nearly unchanged. While the Nasdaq is up 5.34 points or 0.2 percent at 2,987.47, the Dow is down 13.98 points or 0.1 percent at 13,079.18 and the S&P 500 is down 1.66 points or 0.1 percent at 1,412.54.
Many traders seem to be staying on the
sidelines amid uncertainty about the outcome of Tuesday's presidential
race between President Barack Obama and Republican challenger Mitt
Romney.
In the short-term, investors will be
looking for a definitive outcome from the election, as a race that is
still too close to call or requires a recount will add to insecurity on
Wall Street.
Looking further ahead, a win for Obama is
expected to be good news for the alternative energy, telecom, and
housing sectors, while a win for Romney could benefit the defense,
resource, and financial sectors.
Along with the outcome of the presidential
race, traders are also likely to keep an eye on which party controls
the House and the Senate following the elections.
On the economic front, the Institute for Supply Management released a report showing a modest slowdown in the pace of growth by the U.S. service sector.
The ISM said its non-manufacturing
index dipped to 54.2 in October from 55.1 in September, although a
reading above 50 indicates continued growth in the service sector.
Economists had expected the index to edge down to a reading of 54.9.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both ended the day down by 0.5 percent, while China's Shanghai Composite Index edged down by 0.1 percent.
The major European markets also moved to the downside on the day. While the French CAC 40 Index tumbled by 1.3 percent, the German DAX Index and the U.K.'s FTSE 100 Index both fell by 0.5 percent.
In the bond market, treasuries have moved
higher amid the uncertainty about the election results. As a result,
the yield on the benchmark ten-year note, which moves opposite of its
price, is down by 4.5 basis points at 1.681 percent.
|
|
