• The US dollar appears weaker today after failing to break through last week’s highs weighed by a pause in US Treasury yields rally. On Thursday, data showed US Jobless Claims decreased by 3K last week and December US Manufacturing climbed more than the market anticipated further justifying a US economic recovery.
• The euro edged higher on Friday’s currency markets a day after the EU policymakers meeting to discuss euro zone debt crisis. EU leaders agreed that a permanent mechanism is needed to prevent a euro zone debt contagion and in addition they voted to double ECB’s capital. The single currency rose as high as 1.3326 against the dollar from 1.3181 hit on Thursday.
• Gold rose today helped by a weaker dollar and continuing fiscal uncertainty in the euro zone that caused a rising demand for the safe haven metal. The precious metal climbed to 1377.73 an ounce.
• The Aussie edged higher on Friday versus the greenback helped by upbeat data confirming that the US economy is healing and a rise in commodity prices. AUD/USD hit a high at 0.9926 dollars

Currency to watch out for: EURUSD & USDJPY

• § The EURUSD pivot point is at 1.3225 with a preference to enter into Long positions at 1.3235
• § The USDJPY pivot point is at 83.70 with a preference to enter Long positions at 83.75

Today’s calendar and market movers:

• § Germany’s IFO Business Climate is forecasted at 109
• § Europe’s Trade Balance is forecasted at 2.9B
• § US November Leading Indicators is expected at 1.1%

Equity Markets:

US equities closed positive on Thursday with the S&P500 up at 0.62% and the DJIA up at 0.36%. The European bourses traded down with the FTSE traded at -0.02% the DAX and the CAC traded down 0.11% and 0.21% respectively. The NIKKEI and the HSI at the time of writing is trading at -0.07% and -0.03% respectively.

Written by Easy-Forex

EU Morning Report – Dollar falls on higher US Treasury prices is an article from:

• The Dollar Traded with a risk off sentiment, trading in Asia witnessed North Korean tensions intensify and that fear sent the Euro and Aussie to day lows heading into Europe. Also supporting the Dollar is increasing yields on longer term US government bonds being attributed to the recent tax cut extensions. In US stocks, DJIA +13 points closing at 11372, S&P +4 points closing at 1227 and NASDAQ +10 points closing at 2609. Looking ahead, Weekly Jobless Claims are forecast 425k vs. 436k previously.The Euro tested support under 1.3200 before recovering and stabilizing in the lower 1.3200 region. EUR/JPY was able to edge higher as the Yen silently remains under pressure due to increasing US yields and ongoing Korean concerns. October German Industrial Production gains 2.9% vs. -1.0% previously. EUR/USD traded with a low of 1.3179 and a high of 1.3282 before closing at 1.3270. Looking ahead, November German CPI forecast at 0.1% m/m.

Currency to watch out for: EURUSD & USDJPY

• § The EURUSD pivot point is at 1.3240 with a preference to enter into Long positions at 1.3250
• § The USDJPY pivot point is at 83.50 with a preference to enter Long positions at 83.50

Today’s calendar and market movers:

• § United Kingdom Halifax House Price for December is forecasted at 0.3%
• § United Kingdom Trade Balance for October is forecasted at $-8.05 bln
• § United Kingdom BoE Rate Announcement for December is forecasted at 0.5%

Equity Markets:

• US equities closed positive yesterday with the S&P500 up 0.37% and the DJIA up 0.12%. The European bourses were mixed with the FTSE down -0.24% the DAX and the CAC closing down at -0.37% and up 0.56% respectively. The NIKKEI and the HSI at the time of writing is 0.52% and 0.25% respectively.

Written by Easy-Forex

EU Morning Report – EURUSD finds support below the 1.3200 level! is an article from:

The Euro initially held a firm tone in Europe on Tuesday, but there was a sharp reversal in trends during the US session.

There was optimism that President Obama’s proposals to broker a deal over an extension of tax cuts could bolster growth within the US economy and this was important in pushing US Treasury yields sharply higher which also helped support the dollar, although market positioning is also likely to have been important.

There was also an increase in consumer credit for the second successive month which will create some optimism over near-term consumer spending trends and a potential easing in the credit restrictiveness seen over the past 2 years. Greater confidence in US growth prospects will increase the potential for increased investment inflows, although it will also pose very important longer-term structural risks.

The US developments illustrated the sharp divisions between US and Euro-zone policies with many Euro members tightening fiscal policy in an attempt to narrow budget deficits. The Irish government presented its austerity budget in parliament, presenting a EUR6bn package to cut the deficit over four years. There will be a series of votes on budget proposals with the government securing initial approval in Tuesday’s votes.

The Irish developments failed to provide a boost to the Euro with markets still fearing a contagion effect and medium-term instability for the Euro area, especially with persistent friction between member countries. The Euro failed to move above the 1.34 level against the dollar and retreated to lows near 1.3220 as markets took an optimistic tone towards the US stance.

Source: VantagePoint Intermarket Analysis Software

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Yen

The dollar found support on dips towards 82.50 against the yen on Tuesday and accelerated higher in US trading as the yen weakened sharply. There was a spike higher in US yields which helped underpin the dollar and it rose to a high close to 83.75 in early Asian trading on Wednesday. The Japanese currency failed to gain any support from a decline in commodity-related currencies as the US dollar secured wide-ranging gains.

The Japanese data was generally weaker than expected with a 1.4% decline in core machinery orders while there was a contraction in bank lending for the 21^st consecutive month. The government was optimistic over the outlook, but underlying confidence is likely to remain generally weak and this will maintain pressure for yen gains to be resisted.

Sterling

Sterling hit resistance close to 1.5820 against the US dollar on Tuesday and had a weaker tone in New York with lows near 1.5725, although this was a function of dollar gains rather than any selling pressure on the UK currency and it advanced to near 0.84 against the Euro.

The UK economic data had a slightly positive tone with a higher than expected increase in manufacturing output for October, although there was a decline in industrial production as a whole.

The NIESR estimated that GDP growth was 0.6% in the three months to November which was slightly higher than the previous estimate and will reinforce hopes for a robust fourth-quarter performance.

The positive Sterling impact is still likely to be offset by unease over the first quarter of 2011 when there is liable to be a sharp slowdown.

Sterling will continue to gain some degree of protection from underlying fears surrounding the Euro-zone. The situation is still complex as there remains a risk that Sterling will get dragged into a wider loss of confidence surrounding European economies and currencies.

Swiss franc

The Euro was broadly resilient against the franc during Tuesday with a move to test resistance above the 1.31 level as defensive flows eased to some extent following the Irish budget presentation. The dollar was able to take advantage of the subdued franc tone on the crosses and pushed to a high near 0.99 in Asia on Wednesday.

If there is a greater focus on pro-growth currencies and improved risk conditions then defensive demand for the franc will tend to weaken. The currency should still gain firm support on an underlying lack of confidence surrounding the Euro-zone and selling pressure within Europe should be contained

Source: VantagePoint Intermarket Analysis Software

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Australian dollar

The Australian dollar hit a peak above 0.9960 against the US currency on Tuesday, but was unable to make a push towards parity and there was a rapid reversal in US trading. A squeeze on short US dollar positions helped trigger a sell-off in the Australian dollar which hit a low just above 0.98 in Asia on Wednesday

The currency should gain some protection if there is a sustained improvement in international risk appetite. In contrast, underlying confidence in the domestic economy is liable to be weaker, although the latest home loans data was slightly stronger than expected.

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Increase in Consumer Credit is an article from:

• The Dollar started weaker yesterday as the market was trading in a ‘risk on’ mood during Asia given news that the US Bush tax cuts would be extended to all Americans and that the Irish budget would pass an important vote. Dollar selling reversed however as a major move higher in the 10 year Treasury yield sent the USD soaring. In US stocks the DJIA traded -3 points lower closing at 11359 and the S&P traded +1 points up closing at 1223. Looking ahead, Weekly Oil Inventories are forecast at -1.3m vs. 1.1m previously.The Euro weakened yesterday despite the approved budget in Ireland as it was already largely priced in. The Euro also lost ground as the session unfolded as the lack of a broader solution for contagion worries gave no reason for new long positions. Technically speaking we saw the EURUSD failed to make a new high at 1.3416 indicating a technical reversal for now. Analysts are now calling for a retest of the 1.3000 level in coming days. German October Industrial Orders came in at 1.6% vs. -4% previously m/m. EUR/USD traded with a low of 1.3235 and a high of 1.3402 before closing at 1.3260. Looking ahead, October German Trade Balance is forecast at 15 vs. 15.6bn previously.

Currency to watch out for: EURUSD & USDJPY

• § The EURUSD pivot point is at 1.3305 with a preference to enter into Short positions at 1.3185
• § The USDJPY pivot point is at 83.50 with a preference to enter Long positions at 83.50

Today’s calendar and market movers:

• § Germany Trade Balance for October forecasted at 15 bio
• § Canada House Starts for November forecasted at 175K
• § United Kingdom CBI Industrial Orders forecasted at -12

Equity Markets:

• US equities closed mixed on yesterday with the S&P500 up 0.05% and the DJIA down -0.03%. The European bourses were positive with the FTSE up 0.66% the DAX and the CAC closing up at 0.68% and up 1.63% respectively. The NIKKEI and the HSI at the time of writing is 0.9% and -1.69% respectively.

Written by Easy-Forex

EU Morning Report – Ireland passes budget cuts, Euro still retreats! is an article from:

The Dollar was mixed in a very volatile trading week with fresh month highs seen on Tuesday after the EUR/USD broke below 1.3000 before reversing sharply on talk the ECB would aggressively intervene to support struggling countries sovereign debt. Strong data in the US helped equities with ADP Unemployment Change +93k vs. +70k forecast and suggests that Friday’s NonFarm Payrolls could also be strong, currently forecast at 140k vs. 151k previously. UPDATE NONFARM PAYROLLS +39k vs. +140k. The Euro was crushed on debt contagion fears early in the week as Portuguese and Spanish Bond Yields surged and speculators pushed the single currency below 1.3000. The market reversed sharply however on Wednesday as global stock markets rallied and a story that the US supported a IMF/EU bailout fund expansion circulated. The EUR/USD fell +1.29% closing  at 1.3412, after opening the week at 1.3239.

The Japanese Yen went into a range with USD strength and weakness sending USD/JPY in an orbit around Y84. Yen Crosses were much more volatile as the tracked there respective majors and stock markets. AUD/JPY rebounded nicely on Wednesday with the US Dow Jones Index rallying 250 Points. The USD/JPY fell -1.84% closing at 82.53, after opening at 84.05. The GBP tracked the EUR/USD but underperformed on the topside as the market found itself caught short on the EUR/GBP after two weeks of heavy selling. UK House Prices continue to be under pressure with Nationwide HPI falling -0.3% m/m in November. The GBP/USD gained +1.19% closing at 1.5775 after opening at 1.5588. The AUD came under pressure with disappointing economic  data, Q3 GDP missed at 0.2% vs. 0.5% Q/Q forecast and October Retail Sales fell -1.1% vs. +0.3% forecast. The major change in investor sentiment on Wednesday and Thursday allowed a sharp rebound back to the 0.9750 level. The AUD/USD gained +2.89% closing at 0.9930 after opening at 0.9643.

The Forex Trading Week Preview

In the States; On Thursday, Weekly Jobless Claims previously at 436k. On Friday, Trade Balance previously at -44bn m/m and UoM Consumer Sentiment Previously at 71.6. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone; On Tuesday German Factory Orders previously -4.0% m/m. On Wednesday, German Industrial Production previously at -0.8% m/m. In the UK, On Tuesday, Manufacturing Production previously at 0.1% m/m. On Thursday, MPC Rate Statement forecast to remain at 0.5% with the Asset purchase program remaining at 200m. On Friday, PPI previously  at 2.1% m/m. We will provide our previews and reviews of these data releases in the daily summary.

In Japan; On Thursday, Final GDP previously at 0.9%.  In Australia; On Tuesday, RBA Rate announcement is forecast unchanged at 4.75%. On Thursday, Employment Change previously at 29.7k and the Unemployment Rate previously at 5.4%. We will provide our previews and reviews of these data releases in the daily summary.

TECHNICAL COMMENTARY

Euro – 1.3390

Initial support at 1.2969 (Nov 30 low) followed by 1.2830 (Sep 14 low). Initial resistance is now located at 1.3419 (Dec 3 high) followed by 1.3634 (Nov 23 high)

Yen – 82.80

Initial support is located at 82.53 (Dec 3 low) followed by 81.83 (0.618 of 80.23-84.40). Initial resistance is now at 84.41 (Nov 29 high) followed by 85.40 (Sept 24 high).

Pound – 1.5760

Initial support at 1.54 (Nov 29 Low) followed by 1.5297 (Sep 7 low). Initial resistance is now at 1.5648 (Nov 29 high) followed by 1.5773 (Nov 26 high).

Australian Dollar – 0.9915

Initial support at 0.9537 (Dec 1 low) followed by the 0.9477 (50% retrace of 0.8771-1.0183). Initial resistance is now at 0.9939 (Dec 3 high) followed by 1.0000 (Psychological Resistance).

Gold – 1410

Initial support at 1362 (Nov 30 low) followed by 1351 (Nov 26 low). Initial resistance is now at 1415 (Dec 3 high) followed by 1424 (Nov 9 high).

Oil – 89.35

Initial support at 88.00 (Intraday Support) followed by 87.00 (Intraday Support). Initial resistance is now at 90.00 (Intraday Resistance) followed by 91.00 (Intraday Resistance).

Written by Anthony Darvall

Written by Easy-Forex

Weekly Outlook – European Debt Crisis Causing Volatility is an article from: