2012-07-26 05:13 GMT
Markets take a breather.
Stock markets were in a somewhat more encouraging mood yesterday during day. Currency markets were dumping the USD in favor of a broad basket of other currency crosses including the euro, A$ and CAD among others. Equity markets are feeling the love with all European benchmarks enjoying a positive lift albeit across a wide range from the FTSE100’s small gain to a 2% rise in Spain.
US markets ended fairly flat after housing data disappointed. The bond safe havens are getting marginally dumped with yields on US, Canadian and German 10s rising while yields on Spanish and Italian 10s are moving slightly away from the abyss. Commodity markets are also enjoying a lift with most major categories gently bid.
One possible rationale for a more positive risk-on market bias this morning can be traced to comments by ECB council member Ewald Nowotny. Nowotny remarked that there are “pro arguments” to be made for granting the European Stability Mechanism (ESM) a banking license which is significant because theoretically it would give it access to the ECB window and thus be a back door approach to further policy easing beyond the ESM’s current funding limitations.
I would think Germany and the Bundesbank roots to the ECB would remain steadfastly opposed to this policy option given long run inflation considerations but also given the danger that it could well hand the keys to monetary policy over to a much more politicized institution that could derail the ECB’s policy credibility over the long run.
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2012-07-26 08:00 GMT
EMU - M3 Money Supply) (Jun)
2012-07-26 09:30 GMT
EMU - ECB President Draghi's Speech
2012-07-26 12:30 GMT
US - Durable Goods Orders (Jun)
2012-07-26 14:00 GMT
US - Pending Home Sales (Jun)
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2012-07-26 04:39 GMT
EUR/USD below 1.2165, all eyes on Draghi
2012-07-26 04:24 GMT
GBP/USD limited below 1.55 ahead of Europe
2012-07-26 03:32 GMT
BoC first rate hike not expected till 2013Q3 - Rabobank
2012-07-26 03:20 GMT
UK GDP Q2 bad enough for BoE to consider 25bp cut - UBS
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SUMMARY
Down
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TREND
Down
trend
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MA10
Bearish
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MA20
Bearish
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STOCHASTIC
Oversold
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MARKET ANALYSIS - Intraday Analysis
Technicals are bearish, but risk reward is poor. A close above 1.2163 would be temporarily bullish. The dip didn’t quite make 12000 but today’s rally triggers an intraweek reversal and is enough for me turn bullish against the low 12040. There is no guarantee of course that a low is in place but there is enough evidence to act. RSI failed to break below 30 at the most recent low, which is often a sign that the trend has exhausted. 12110 is support. Supports are seen at the key 1.2110 level, followed by 1.2053 levels and resistance levels are seen at the 10-DMA line at 1.2204, 1.2230 and then at 1.2282.
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SUMMARY
Down
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TREND
Down
trend
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MA10
Bearish
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MA20
Bearish
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STOCHASTIC
Oversold
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MARKET ANALYSIS - Intraday Analysis
Technicals remain bearish - MACD has turned to a bearish signal, joining other indicators; congestion at 1.5500-1.5400. The pair breached the key support level of 1.54799 and continued through the next target level of 1.54503. Supports are seen at 1.5414 and then at 1.5375 andresistance levels are seen at 1.5552 and then at 1.5596. Short term technical continue to read bearish but are moving towards oversold, where as longer term technicals remain bearish support the overall bearish bias.
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SUMMARY
Down
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TREND
Down
trend
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MA10
Bearish
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MA20
Bearish
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STOCHASTIC
Oversold
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MARKET ANALYSIS - Intraday Analysis
Technicals remain bearish and further downward movement is expected as technicals have not yet moved to oversold ( note Stochastic keeps edging into oversold territory ).The pair are range trading and at present are in the middle of the range. The downside is favored below 78.05 The pair has broken out of a descending channel and is expected to fall to targets in the region of 77.65 and then 77.30. It has reached the 61.8% Fibonacci and so there is a possibility of a recovery with the next target at the trend-line again at 78.40. A move lower, however, would have to breach the 78.05 level. Supports are seen at 78.08 and then at 77.94 and resistance levels are seen at 78.39 and then at 78.67.
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