Daily Market Outlook by AceTrader - page 4

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Market Review - 07/06/2010 21:46 GMT

Euro hovers near a fresh 4-year low on weakness in U.S. stocks

Euro extended Friday's decline and fell to a fresh 4-year low at 1.1876 in Asian morning after breaching Friday's low made in New York at 1.1955 on lingering European debt worries. Although the single currency staged a modest rebound on active short-covering and hit 1.1992 in European mid-day after release of stronger-than-expected German industrial production data, the single currency later retreated as U.S. stocks extended intra-day losses. The single currency finally ended the day at 1.1924 while DJI fell by 1.16% and closed at 9816.49. Eur/jpy also fell to a fresh 8-1/2 year low at 108.06 while eur/chf slumped to a fresh record low at 1.3850.

On economic front, German industrial production rose by 2.8% m/m and 29.6% y/y in April versus economists' forecast of 0.2% m/m and 25.4% y/y, however, renewed selling interest emerged below 1.2000 and pressured price again.

In other news, European finance ministers concluded their two-day meeting in Luxembourg on Monday and indicated that they were in no rush to halt the euro's slump against the dollar, instead, they said that euro's current level would be a tonic for the economic recovery. ECB's Noyer said Europe had to make sure surveillance would be better organized to avoid problems in the future. The ministers also agreed details of a E440 billion special purpose vehicle fund (SPV) to aid eurozone countries if they needed help. Eurogroup's Juncker said the SPV had just been set up on Monday in the form of a limited-liability company under Luxembourg law. In addition, Juncker said the SPV could be operational in July and eurozone would pursue fiscal consolidation beyond 2011.

Juncker added that the austerity plans of Spain and Portugal were significant and courageous but further consolidation beyond 2011 would be needed. Eurozone Finance Ministers would look at the measures of the two nations again in July. EU's president also said that the finance ministers agreed budget deficit cuts could be launched earlier for countries with large debt and each spring national budget plans would be viewed by the EU commission.

Versus the Japanese yen, the greenback once fell to 90.97 in Asian morning on active yen buying due to risk aversion, however, the pair rebounded strongly from there and hit an intra-day high of 92.10. However, the pair retreated sharply as weakness in U.S. stocks sparked off another wave of risk aversion .

The British pound briefly dipped to 1.4388 at London opening but the pair subsequently rallied on active cross buying in sterling. The pair managed to hit 1.4563 briefly before retreating from there. The pound drew support as Prime Minister Cameron prepared voters for deep spending cuts and said the overall reductions needed to tackle the U.K.’s budget shortfall would be set out, increasing investor confidence his government could tackle a record budget deficit.

Economic data to be released on Tuesday include: U.K. BRC retail sales, Japan Current account, Trade balance, Leading indicators, Swiss Jobless rate, Germany Trade balance ,Current account, Industrial production, Swiss CPI and Canada Housing starts.

 

INTRADAY TRADING SIGNAL BY ACETRADER.COM: EUR/USD EUR/USD: 1.1965

Late Update At 08 Jun 2010 05:38 GMT

Euro's intra-day rebound fm 1.1912 (AUS) to 1.19

82 in Asia suggests price wud continue to trade abv

y'day's temp. low of 1.1876 n mild upside bias is

seen for re-test y'day's 1.1992 high, break wud

bring stronger recovery to 1.2016/20 later.

For st trade, raise long entry for this move n

only below 1.1912 wud risk re-test of 1.1876.

Range Forecast

1.1950 / 1.1980


Resistance/Support

R: 1.1992/1.2016/1.2079

S: 1.1912/1.1876/1.1822

 

INTRA-DAY GBP/USD: 1.4388

Last Update At 08 Jun 2010 09:19 GMT

Current selloff suggests correction fm 1.4388

has possibly ended at 1.4563 n consolidation with

downside bias wud be seen for weakness twds said

sup, however, o/sold condition shud limit fall to

1.4360 today n yield rebound later.

Sell on recovery with stop as indicated, break

wud risk stronger gain to 1.4500.

Range Forecast

1.4430 / 1.4480

Resistance/Support

R: 1.4458/1.4530/1.4563

S: 1.4401/1.4388/1.4360

 

Market Review - 08/06/2010 21:37 GMT

Euro edges up against the greenback on rebound in U.S. stocks

Despite falling in NY session on Monday due to renewed cross-selling in euro versus yen, good buying interest at 1.1900/10 area contained euro's weakness in Europe on Tuesday. Despite climbing to 1.2010 in NY mid-day on speculation of SNB's intervention, renewed selling pushed euro lower to 1.1921 before edging higher in late NY session. Earlier in May, SNB's President spelled out the policy: 'We will not allow that the euro zone problems and an excessive rise in the franc linked to them will lead to deflation in Switzerland.'

In addition, the news of Switzerland's lower house of parliament had rejected a bill which aimed at handing over the names of thousands of alleged U.S. tax dodgers to U.S. authorities possibly triggered a sudden massive sales of eur/chf, sending the cross pair to 1.3785. The pair fell to a fresh lifetime low of 1.3746 in U.S. session and then rebounded briefly but strongly to 1.3899 on short-covering due to talk of SNB's intervention.

Versus the Japanese yen, the greenback initially rose to 91.92 in European morning but the pair retreated from there on renewed risk aversion as European equities pared early gains and turned into negative territories. Although the greenback rebounded briefly to 91.69 after new Japanese leader Naoto Kan said that weak yen would be positive for Japan's exports and economy, the usd/jpy pair fell sharply to 90.84 in N.Y. mid-day before staging a strong rebound on firmness in U.S. stocks. Despite early choppy trading, DJI staged a strong rebound and closed the day up by 123.49 points at 9939.98.

Earlier, Federal Reserve Chairman Ben S. Bernanke said ' The U.S. recovery is moving at a 'moderate' pace and the Fed will raise its benchmark interest rate from a record low before the economy returns to full employment or inflation surges'. Bernanke also said the U.S. economy recovery of U.S. would be strong enough to avoid a double dip recession. In addition, Naoto Kan said that public finances had worsened because the government could not raise taxes. Kan indicated that keeping up current size of spending would push Japan's public debt above 200% of GDP and restoring Japan's fiscal health would be crucial for economic growth.

The British pound ratcheted higher in Asia on Tuesday as short term speculators bought cable after the release of stronger-than-expected BRC UK May retail sales (+0.8% vs previous reading of -2.3%). The pair hit 1.4530 in European morning but cable tumbled from there after rating agency Fitch called Britain's fiscal finances as 'formidable challenges'. Sterling then remained under pressure and tumbled to 1.4346 in N.Y. mid-day before rebounding strongly.

Commodity currencies also rose as firmness in U.S. stocks boosted risk appetite. Aud/usd rose to 0.8286 from 0.8082, nzd/usd climbed to 0.6685 from 0.6572 and usd/cad fell to 1.0470 from 1.0611. In addition, gold rose again and hit a fresh record high of 1251.60 an ounce on Tuesday.

Economic data to be released on Wednesday include: Japan Machine orders, Australia W'pac consumer confi., U.K. Trade balance,U.S. Beige Book report and Wholesale inventories.

 

Market Review - 09/06/2010 21:25 GMT

Euro pares early gains after U.S. stocks retreat

Although the single currency moved narrowly in Asia, euro rose sharply in Europe on short-covering after triggering stops above previous day's high of 1.2010 and surged to as high as 1.2074 in NY morning as early rally in U.S. stocks boosted risk appetite. Euro was also supported as Reuters reported that China's export data for May surged and Asian stock markets jumped after the news with China's Shanghai Composite rising sharply by 2.8%. The single currency, however, retreated sharply from said 1.2074 high and ended the day at 1.1980 as DJI erased all of its early gains (more than 100 points) and closed the day down by 40.73 points at 9899.25.

Versus the Japanese yen, the greenback moved sideways in Asian and early European sessions inside the range of 91.25-91.62. Although the dollar rose to an intra-day of 91.67 in NY morning, the pair retreated swiftly from there and fell to 91.06 as DJI turned into the negative territory and prompted investors to buy yen.

In other news, the Fed said in its Beige Book that U.S. economic activity improved nationwide last month but worries over Europe's debt crisis dented confidence. Many districts described pace of growth as modest and the labour market conditions improved slightly as permanent employment levels edged up in most districts. However, Fed said commercial and industrial lending remained weak in most districts.

In addition, Federal Reserve Chairman Ben Bernanke said U.S. has 'a little more breathing space' on fiscal front because of its size and importance. He also said Fed will 'absolutely' respond if banks fail to adjust compensation practices. Bernanke indicated U.S. economy would grow by 3.5%-4% next year and U.S. dollar would still be the dominant reserve currency and U.S. treasuries remain very attractive.

Despite the British pound's initial sideways movement in Asia, cable rose sharply and reached 1.4608 in NY morning on dollar's broad-based weakness. Cable then retreated from there in tandem with euro and ended the day at 1.4528.

The nzd/usd pair rose from 0.6670 to 0.6715 after the Reserve Bank of New Zealand lifted official cash rate to 2.75% from 2.50% as expected. The central bank also said that further rate hikes would depend on economic and market developments. The pair then traded with a firm undertone as the central bank hinted that rate-hike cycle would be restarted.

Economic data to be released on Thursday include: Japan Domestic CGPI, GDP, Germany CPI, U.K. BOE rate decision, EU ECB rate decision, U.S. Jobless claims, Canada Trade balance, U.S. Fed budget.

 

INTRADAY TRADING SIGNAL BY ACETRADER.COM: EUR/USD EUR/USD: 1.2048

Late Update At 10 Jun 2010 06:06 GMT

Euro's intra-day strg rebound fm 1.1957 to 1.20

64 suggests the pullback fm y'day's high of 1.2054

has possibly ended there n erratic upmove fm 4-year

low of 1.1876 shud resume for re-test of said res,

abv wud extend gain twds 1.2110 (prev. sup).

Trade fm long side with stop as indicated, break

wud prolong choppy trading n risk 1.1993...

Range Forecast

1.2040 / 1.2064


Resistance/Support

R: 1.2074/1.2110/1.2155

S: 1.1993/1.1957/1.1924

 

INTRADAY TRADING SIGNAL BY ACETRADER.COM :
AUD/USD: 0.8377

Last Update At 10 Jun 2010 08:24 GMT

Despite aud's pullback after resumption of up-

move fm 0.8082 to 0.8396, upside bias is seen after

choppy consolidation, abv 0.8396 wud extend rise to

0.8414, however, near term loss of upward momentum

shud cap price well below 0.8478 in Europe.

Stand aside n look to buy on dips later. Be-

low 0.8356 signal a top is made, 0.8328.

Range Forecast

0.8340 / 0.8380

Resistance/Support

R: 0.8396/0.8414/0.8478

S: 0.8356/0.8328/0.8258

 

INTRADAY TRADING SIGNAL BY ACETRADER.COM: USD/JPY

USD/JPY : 91.25

Last Update At 10 Jun 2010 08:48 GMT

Despite early brief drop to 90.85, current

strg rebound on renewed cross selling in jpy sug-

gests choppy consolidation abv 90.84 sup wud con-

tinue n abv 91.39 wud signal pullback fm 91.67 is

over n yield another rebound to 91.67.

Buy on dips with stop as indicated, break wud

abort n extend fall fm 92.89 to 90.54.

Range Forecast

91.10 / 91.39


Resistance/Support

R: 91.39 / 91.67 / 91.92

S: 90.84 / 90.54 / 90.00

 

Market Review - 10/06/2010 21:34 GMT

Euro rallies on optimism over global economic recovery

Euro surged as strong demand for Spanish bonds eased worries if the country could fund its debt in the market while a sharp rise in Chinese exports suggested that Europe's debt crisis would not derail global growth. The solid Australian jobs data also boosted risk appetite.

Although euro briefly dipped to 1.1957 in Asian morning, the single currency rebounded from there and rose sharply in Europe. Euro managed to climbed above resistance 1.2110 and reached 1.2143 in NY afternoon after triggering the stops at 1.2110/15. The single currency gained support as Spanish bonds were sold at the top of the expected range and Germany's high court rejected an attempt to block German guarantees for eurozone financial aid.

Euro was also supported after the release of a series of upbeat economic data as Australian employment change came in at +27K versus the forecast of +20K and China posted a massive exports growth of 48.5% y/y in May ( vs forecast of 32.0% ) while Japan's Q1 GDP rose by 1.2%, better than economists' forecast of 1.0% rise. The head of China's national pension fund said the single currency would weather Europe's debt crisis and his comments lifted up the euro further.

ECB kept its benchmark interest rate on hold at a record low of 1.0% for the thirteenth month. ECB's Trichet said latest information confirmed that recovery continued in H1 2010 and monetary would do what is needed to keep price stable and indicated that growth rates in coming quarters would be uneven. ECB's Nowotny said central banks were successful in crisis management.

The British pound traded with a firm undertone throughout the day and despite brief dip to 1.4509, cable then edged up and eventually reached 1.4509 on dollar's broad-based weakness in US session. Earlier, Bank of England kept interest rate unchanged at 0.5% as widely expected and made no change to its 200 billion pounds quantitative easing target after putting it on hold four months ago.

Investors returned to buy assets linked to growth as China's strong exports data boosted risk appetite. U.S. crude futures for July delivery settled to $1.1 higher at $75.48 per barrel. Aud/usd also rose to 0.8510 from 0.8269 while nzd/usd jumped to 0.6879 from 0.6696 and usd/cad dropped from 1.0452 to 1.0287. Riskier assets like stocks also rose as DJI surged by 2.76% or 273 points above the 10000 points level and ended the day at 10172 while FTSE 100 climbed by 0.92%, CAC 40 surged by 2.03% and DAX jumped by 1.20%.

Versus the Japanese yen, the greenback moved narrowly within the range of 90.85 and 91.48 as the market focus was on other currencies.

Economic data to be released on Friday include: Germany WPI, U.K. Industrial production, Manufacturing production, PPI, U.S. Retail sales, U. Michigan Survey, Business inventories, Canada Capacity utilisation.

 

INTRA-DAY GBP/USD: 1.4735

Last Update At 11 Jun 2010 06:07 GMT

Although cable has briefly penetrated Asian morn

ing high of 1.4730 after meeting renewed buying abv

initial sup at 1.4695 (AUS), suggesting this week's

erratic rise fm 1.4346 wud yield marginal gain, nr

term 'loss of momentum' wud cap price below 1.4771.

For st trade, sell on further rise n exit on dec

line as below 1.4695 needed to yield 1.4665/75.

Range Forecast

1.4715 / 1.4755

Resistance/Support

R: 1.4744/1.4771/1.4790

S: 1.4695/1.4655/1.4608

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