EU Morning Report – Market sentiment improves
Friday, October 12th, 2012The euro (EUR) has been strengthening against most of its major counterparts, one day after the S&P downgraded Spain. The worsening economic conditions, rising unemployment and the uncertainty regarding the government’s intentions for an official bailout request were the key reasons behind this move. German Finance Minister Schaeuble characterized the downgrade as a “misunderstanding”. He also said that the attitude of his G7 counterparts towards Europe has improved significantly. Negotiations between Greece and the Troika are progressing and there are hopes that an arrangement can be reached before the next eurozone summit on the 18th of October.
§ The Australian dollar (AUD) is still rising versus most of its counterparts, as a softening labor market and the recent rhetoric by the Reserve Bank of Australia (RBA) heightened speculation that the central bank will proceed with another rate cut in November.
§ Silver (XAG) is rebounding over the past two days versus the US dollar (USD) after losing nearly 2 dollars at the begging of the week. The area around 33.55 is expected to act as a support level.
Stay in tune throughout the day with foreign exchange bullets!
| Outlook | . | Pivot | Preference1 | Sentiment2 |
| . | EURUSD | 1.2895 | LONG @ 1.2905 | 48% of deals buy EUR |
| . | USDJPY | 78.25 | LONG @ 78.25 | 91% of deals buy USD |
| . | GBPUSD | 1.6010 | LONG @ 1.6010 | 45% of deals buy GBP |
| . | AUDUSD | 1.0240 | LONG @ 1.0240 | 58% of deals buy AUD |
| . | GOLD | 1757 | LONG @ 1757 | 57% of deals buy GOLD |
| . | OIL | 92.90 | SHORT @ 92.90 | 63% of deals buy OIL |
| Calendar | Currency | Time (GMT) | Event | Forecast |
| . | EUR | 09:00 | Industrial Production in August | -0.4% |
| . | USD | 12:30 | Producer Price Index (PPI) m/m in September | 0.7% |
| . | USD | 13:55 | University of Michigan Consumer Sentiment for October | 78 |
| Movers Shakers | |
| USDZAR |
The US dollar (USD) has been weakening versus the South African rand (ZAR) after it broke through the 8.6000 resistance level on Friday, and recorded a 3-year high at 8.9958 on Monday. The trend is still bullish and this retracement is an excellent opportunity for long positions as the pair approaches the 8.6000 level – which is now expected to act as support.
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Written by Easy-Forex
