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2012-05.31 06:00 GMT
Spain becoming a major financial problem
News out of Europe was highly confusing. One day after unnamed European officials were quoted in the financial press officially denying the possibility that collective European funds would be used to bail out Spanish banks, the European Commission publicly “envisaged” the possibility of a European banking union and direct capital injections into troubled European lenders. Rather than giving markets cause to believe that rescue is imminent, the entire episode points to the reality, seriousness, and immediacy of the problems confronting the European economy – something which markets shrugged off during Q1 2012. Markets may have spent most of the first part of this year weighing whether US jobs were growing at a pace of 200k or 250k per month and whether the S&P 500 should trade above or below the 1400 level, but the focus is now on more ominous issues: the financial crisis in Spain and the cooling of the economy in China, with a healthy dose of concern that a left-wing Greek government might hit the ‘euro exit’ panic button.
Unsurprisingly, on a day during which cash was king, the USD outperformed. EURUSD closed at 1.237 after convincingly breaking through the 1.25 level yesterday. The commodity currencies followed suit, with CAD losing ground and USDCAD closing the day at 1.03.
Read More
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2012-05-31 09:00
European Monetary Union - Consumer Price Index
2012-05-31 12:15
US - ADP Employment Change
2012-05-31 12:30
CAD - Current Account
2012-05-31 12:30
US - Gross Domestic Product Annualized
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2012-05-31 06:20 GMT
EUR/USD retreats from highs, failed to breach 1.2400
2012-05-31 06:19 GMT
Germany: Retail Sales rise 0.6% in April
2012-05-31 06:13 GMT
Asian markets followed western fall
2012-05-31 06:03 GMT
Germany Apr Retail Sales (YoY) falls 3.8%
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SUMMARY
Oversold
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TREND
Down
trend
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MA10
Bearish
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MA20
Bearish
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STOCHASTIC
Overbought
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MARKET ANALYSIS - Intraday Analysis
The next major EUR support level is 1.2152, followed by the 2010 low of 1.1877. The market is notably one sided and shorts are at extreme levels, opening up the risk of short covering on any hint of an official response; however the bias remains to the downside, and accordingly we expect a temporary test of 1.2152. Technical indicators remain bearish, with major signals still in sell territory even as RSI enters oversold.
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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
Overbought
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MARKET ANALYSIS - Intraday Analysis
Technicals are bearish, with major signals still in sell territory; next level is 1.5235. The near‐term risk for GBP is a test down through the psychological 1.55, followed by a move to the ytd low of 1.5235. However, once risk aversion passes, the outlook for GBPUSD is relatively positive, partially on the flows generated from its Triple‐A rating. Supports are seen at 1.5531/17 and then at 1.5415. On the other hand, resistance levels are seen at the 10-DMA line at 1.5713/35 and then at 1.5850.
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SUMMARY
Neutral
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TREND
Neutral
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MA10
Bearish
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MA20
Bearish
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STOCHASTIC
Neutral
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MARKET ANALYSIS - Intraday Analysis
As risk aversion rises on the back of an escalation in the European crisis, USDJPY continues to trend lower, testing the psychologically important 79.00 level. Technicals are bearish but are beginning to become mixed, but trend is lower. Supports eyed at 78.56, which is the 200-DMA line. On the other hand, resistance levels are seen at 79.16/36 and then at the 21-DMA line at 79.72.
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MARKET INFORMATION AND OPINIONS: Any information provided by FXCC
on this newsletter, including but not limited to news, research, opinions, analyses
and prices, is provided as commentary on the Forex market generally -- in other
words, it is not, and should not be considered as, investment advice. Consequently,
FXCC shall not be liable for any loss or damage, including but not limited to loss
of profits, which arises directly or indirectly from reliance upon or use of information
contained on this newsletter.
RISK WARNING: Trading in Forex and Contracts for Difference (CFDs) is highly speculative
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Forex and CFDs may not be suitable for all investors. Only invest with money you
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investing. Seek independent advice if necessary.
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