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Daily FX Commentary: (Morning Report)
EUR/USD
Near-term price action remains supported at 1.2885, lows
of yesterday / 29/26 Oct. Fresh strength 1.2900 and regain of 1.2936,
Fib 38.2% of 1.3021/1.2885 downleg / hourly 20 day EMA, signals basing
attempt, however, despite improving hourly studies, the picture on 4h
chart still holds bearish tone. Upside extension through 1.2969/78, Fib
61.8% / bear-channel resistance, is required to avert downside risk and
open way towards 1.3000/20 breakpoint zone. Otherwise, upside rejection
risks lower top and fresh attempt towards 1.2900/1.2885 supports, loss
of which to attract very strong support zone at 1.2830/00.
Res: 1.2935, 1.2955, 1.2980, 1.3000
Sup: 1.2881, 1.2843, 1.2833, 1.2825
GBP/USD
The pair extended pullback from 1.6142 high, to test
psychological and Fib 61.8% support at 1.6000, reinforced by ascending
daily 55 day MA that contained dips for now. Fresh momentum, developing
on hourly chart, requires break above 1.6060, 38.2% of 1.6142/1.6005
downleg and 1.6100, main bear-trendline off 1.6308 peak, to confirm
recovery and expose 1.6142, 25/26 Oct double top, break of which would
be an initial signal of higher low at 1.5911, with regain of
1.6178/1.6200, required to confirm. Conversely, failure under trendline
resistance, sees risk of lower top and fresh extension lower.
Res: 1.6090, 1.6100, 1.6142, 1.6178
Sup: 1.6020, 1.6000, 1.5989, 1.5974
USD/JPY
Near-term bears remain in play, as the pair failed to
sustain recovery above 80.00 barrier and subsequent weakness breaks
below 79.50 base. Increased risk of re-visiting important 79.00 support,
also near 61.8% of 77.94/80.37 upleg is seen, as near-term indicators
slide into negative territory. To avert immediate downside risk, clear
break above 80.00 is required.
Res: 79.50, 79.75, 80.00, 80.13
Sup: 79.27, 79.15, 79.00, 78.60
USD/CHF
Near-term tone softens, as the price slides to initial
support at 0.9330 zone, unable to clear 200 day MA and psychological
0.9400 barrier. With 4h studies losing traction, immediate risk is seen
on retest of 0.9320/00, 38.2% / 50% of 0.9213/0.9385 rally that would
weaken near-term structure. On the other side, break through 0.9400, to
confirm near-term bullish stance and re-open important 0.9430/36
barriers.
Res: 0.9379, 0.9385, 0.9400, 0.9430
Sup: 0.9340, 0.9320, 0.9300, 0.9289
====================================================================
Daily Market Commentary: (Evening Report)
London Market Report
London close: Markets rebound on low volumes
Market Movers
- techMARK 2,102.68 +0.54%
- FTSE 100 5,849.90 +0.95%
- FTSE 250 11,954.25 +0.28%
With US stock markets remaining closed for a
second straight day as Hurricane Sandy continues to batter the shores of
America's East Coast, equities across the Pond rebounded as investors
celebrated decent results from a number of heavy hitters across Europe.
"Trading remained thin today as the NYSE's decision to keep shut, the
first time weather has halted trading for two straight days since 1888,
put off many investors from engaging in risk-on assets and instead many
investors opted to await news regarding the impact of Hurricane Sandy," said financial trader Shavaz Dhalla from Spreadex.
"However, the few investors still willing to trade the markets were
clearly bullish as the remaining open markets traded positively. Thus,
it seems these scarce investors have preferred to build on positive news
from European stocks, including BP which has today announced a
big dividend increase, instead of focusing on the potential financial
consequences of Hurricane Sandy," Dhalla said. Heavyweights including ENI, Deutsche Bank, Bayer and Imperial Tobacco also lifted sentiment today.
Markets were also focusing on some key macroeconomic indicators in the Eurozone today: Spanish gross domestic product
(GDP) figures showed that the country remained in recession in the
third quarter, contracting by 0.3% quarter-on-quarter but better than
the 0.4% decline expected; meanwhile German unemployment gained
for a seventh consecutive month in September despite the jobless rate
remaining stable at 6.9% - unemployment increased by 20,000, double the
10,000 gain expected.
In other news, Greek Prime Minister Antonis Samaras has announced
that a deal has been reached for a €13.5bn austerity package and
negotiations with the 'Troika' have concluded. The austerity deal was a
necessary step so that Greece can receive its next tranche from its
bailout programme with international creditors.
The Bank of Japan has expanded its asset-purchase programme for
the second consecutive month. Markus Huber, the head of German HNW
trading at ETX Capital, said this morning that the news was "less
well-received as many had hoped for much more aggressive easing to
counteract renewed weakness seen in the Japanese economy."
Europe Market Report
Europe midday: Germany and Greece working on Greek solution
-Moscovici: Greece to be discussed tomorrow
-Italian DMO head says current bond yield levels manageable
-PIMCO (Balls) says Spain will ask for aid relatively shortly -Bbg
-PIMCO (Balls) says no longer underweight Spanish debt
FTSE-100: 0.86%
Dax-30: 1.06%
Cac-40: 1.40%
FTSE Mibtel 30: 0.98%
Ibex 35: 1.31%
Stoxx 600: 0.81%
The main European equity benchmarks are now registering a strong
bounce-back, more than reversing yesterday´s price action. That as New
York equity futures resumed trading overnight, and actually turned
positive.
More important, of course, millions have been left without power in the
Mid-Atlantic and North-Eastern United States, but the floodwaters have
receded from the streets of New York City. Nevertheless, the New York
City Metropolitan Transit System may take weeks to return to normalcy
and remains flooded, according to some reports. Even so, insurers are
now amongst the best performers on the Continent, in apparent relief. As
an aside, but worth monitoring, some of the first estimates available
are putting the cost of the storm at approximately $20bn.
Acting as a back-drop, overnight the Bank of Japan approved a ninth
consecutive increase in the size of its asset repurchase program. That
following the release of very weak data on industrial production,
consumer spending and the labour market.
Markets, however, had apparently been expecting firmer actions analysts
say. Hence today´s fall in the benchmark Nikkei-225 and rise in the Yen.
According to the French Finance Minister, Pierre Moscovici, his country
and Germany are working towards a complete solution of the Greek
situation with November´s Eurogroup meeting in mind as the target date,
although Greece´s plight will also be discussed at tomorrow´s summit.
German unemployment rises for first time in 3 years
German unemployment increased by 20,000 in October, ahead of consensus
forecasts for a rise of 10,000. The unemployment rate came in at 6.9%,
as expected, but the previous month´s level was revised up by a tenth of
a percentage point. Last month´s increase was the first in three years.
Spanish gross domestic product contracted at a 0.3% quarter-on-quarter
rate in the third quarter, less than the 0.4% contraction that had been
foreseen.
The European Commission´s economic sentiment indicator for the Eurozone
in the month of October fell to a three year low, at 84.5 points, after
85.2 for September (Consensus: 84.4).
Single currency holding above 1.29
The euro/dollar is now is now rising by 0.40% to the 1.2960 dollar mark.
Front month Brent crude futures are down by 0.45 dollars to the 108.95 dollar level.
US Market Report
NYSE Euronext has announced that it will close all its
trading venues on Tuesday, in coordination with all US equities, bonds,
options and derivatives markets.
The above comes as
85 mile-per-hour winds from Hurricane Sandy hone in on New York city,
thus paralysing capital markets, with flooding expected in lower
Manhattan, precisely where the financial district is concentrated.
Nevertheless, NYSE has indicated that it intends to reopen on Wednesday, October 31st, conditions permitting.
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