EU Morning Report – ESM ruled out for old cases
Wednesday, September 26th, 2012The euro (EUR) has been weakening against most of its major counterparts, as there were overnight reports stating that the European Stability Mechanism (ESM) will only be used as a last resort, for new recapitalization cases. As Spain is due to stress test each banks by the end of the week and subsequently release its recapitalization requirements, any detail concerning the mechanics of the nation’s bailout deal should be expected to affect the single currency.
§ The euro (EUR) broke through the 1.29 level versus the US dollar (USD) and lower lows should be expected given the increasingly negative market sentiment.
§ The US Tech (NDQ) did not find the catalyst needed to challenge its multi-year high at 2868.25, recorded last Wednesday and dropped from 2840.5 to 2805.
§ The British pound (GBP) dropped against the US dollar (USD), after it had been whipsawing for days just below the 1.6250 area, a major resistance level.
§ OIL has found support above the 90.00 area after plummeting over the past week against the US dollar. The commodity dropped from 100 dollars a barrel to 92, a staggering 8% depreciation.
Stay in tune throughout the day with foreign exchange bullets!
| Outlook | . | Pivot | Preference1 | Sentiment2 |
| . | EURUSD | 1.2950 | SHORT @ 1.2940 | 37% of deals buy EUR |
| . | USDJPY | 77.95 | SHORT @ 77.95 | 97% of deals buy USD |
| . | GBPUSD | 1.6210 | SHORT @ 1.6210 | 33% of deals buy GBP |
| . | AUDUSD | 1.0410 | SHORT @ 1.0410 | 38% of deals buy AUD |
| . | GOLD | 1770 | SHORT @ 1770 | 66% of deals buy GOLD |
| . | OIL | 91.80 | SHORT @ 91.80 | 51% of deals buy OIL |
| Calendar | Currency | Time (GMT) | Event | Forecast |
| . | EUR | 12:00 | Consumer Price Index (CPI) | 0.0% |
| . | USD | 14:00 | New Home Sales | 380 k |
| . | USD | 14:30 | Crude Oil Inventories | 1.7 mil |
| Movers Shakers | |
| USDPLN |
The US dollar (USD) has produced a remarkable surge versus the Polish zloty (PLN) over the past week. The pair found support around the 3.1000 area after descending for days, and rose by more than 1250 pips since – a 4% appreciation. The greenback now needs to break-and-hold above 3.2300, a previous support level – now a resistance, to pave the way for higher highs.
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Written by Easy-Forex
