EU Morning Report – Focus on Spain’s stress test
Friday, September 28th, 2012The euro (EUR) has been volatile, weakening first and then rebounding higher against most of its major counterparts, ahead of the release of the Spanish banks stress test. The results come after reports on Tuesday stated that the European Stability Mechanism (ESM) will only be used as a last resort, for new recapitalization cases. This increased uncertainty concerning its use for the recapitalization needs of banks in eurozone’s indebted nations.
§ The euro (EUR) dropped as low as 1.2828 versus the US dollar (USD), where it found strong support and advanced up to 1.2927. Any commentary, reports or the actual results of the Spanish banks stress test should be expected to move the pair considerably.
§ The British pound (GBP) rose against the US dollar (USD) from 1.6174 to 1.6230, after the second quarter GDP came out slightly better than expected and the current account deficit widened by 5 billion GBP.
§ OIL is rising, after it had found support above the 90.00 area following a dive over the previous week against the US dollar. The commodity dropped from 100 dollars a barrel to 92, a staggering 8% depreciation – and now lies above 92.00.
Stay in tune throughout the day with foreign exchange bullets!
| Outlook | . | Pivot | Preference1 | Sentiment2 |
| . | EURUSD | 1.2880 | LONG @ 1.2880 | 37% of deals buy EUR |
| . | USDJPY | 77.80 | SHORT @ 77.80 | 97% of deals buy USD |
| . | GBPUSD | 1.6210 | LONG @ 1.6210 | 33% of deals buy GBP |
| . | AUDUSD | 1.0415 | LONG @ 1.0415 | 38% of deals buy AUD |
| . | GOLD | 1774 | LONG @ 1774 | 66% of deals buy GOLD |
| . | OIL | 91.30 | LONG @ 91.30 | 51% of deals buy OIL |
| Calendar | Currency | Time (GMT) | Event | Forecast |
| . | EUR | 09:00 | Inflation flash y/y in September | 2.5% |
| . | CAD | 12:30 | Groos Domestic Product (GDP) m/m in July | 0.1% |
| . | USD | 13:55 | Univesrity of Michigan Consumer Sentiment in September | 79 |
| Movers Shakers | |
| XAGUSD |
Silver (XAG) advanced against the US dollar (USD) yesterday and is still looking strong today, early in the EU session. The precious metal broke through the 34.10 resistance and appeared to be facing resistance around the 34.70 area. Nevertheless, it has risen above that level as well and 34.70 should now be expected to act as a support level in case of a retracement.
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Written by Easy-Forex
