By Mercaforex
USD:
The USD lost additional ground to both the EUR and GBP on Thursday as the equity markets climbed. The U.S. did release its weekly Unemployment Claims figures and the numbers were negative with a 531K outcome compared to the estimate of 516K. However investors apparently remained unconcerned about a lack of fundamental support and continued to propel Wall Street higher. Today the Existing Home Sales figures will be published and they are forecasted to turn in a result of 5.37 million. Perhaps the housing statistic will have an impact on the marketplace, but the greatest likelihood is that it will be given a passing glance. The housing and mortgage sector remain on a slippery slope, while the numbers have stabilized somewhat, there is no denying that foreclosures remain a problem. The reality of high unemployment has a direct impact on the housing sector. However, it appears that investors are still willing to cast their eggs into a basket laden with the potential for gains from bourses.
The crowd among asset classes such as stocks and commodities seems to be growing in courage even as questions continue to be asked. The better results from Wall Street have been noteworthy and have certainly created a flourish of disagreement between traders. There is an old adage that ‘the market is never wrong’ and if that is the case it would be wise not to try and attempt to stand in front of the trend unless you have very deep pockets. The USD has been hit from all sides and continues to show no ability to escape its decline in the short term. One dark cloud that does hover over the optimists is a lack of solid economic data. U.S. officials have done a good job of creating the perspective that the stability attained is going to lead to growth eventually. However this is a ‘sales job’ that needs constant attention and maintenance while the U.S. economy still struggles. Corporate earnings, particularly Microsoft’s, will continue to be reported today and going into the weekend the USD appears that it will be under the direct influence of bears and bulls.
EUR:
The EUR had another good day against the USD on Thursday as it moved ahead. There was little in the way of economic data from the continent with only the broad Current Account numbers released and it showed a negative number of -1.3 billion compared to the estimated gain of 1.9 billion. Italian Retail Sales figures were released too and showed a decline. However little of this mattered as the EUR continued its stellar run against the greenback. Today there is a large amount of PMI data and both Germany and France will be reporting. Both countries are expected to show gains among the Services and Manufacturing sectors from the Flash PMI publications. Also the German Ifo Business Climate reading is on schedule and is expected to turn in an outcome of 92.1, which would be an improvement. The EUR has had a good week of trading and kept not only its previous gains, but has marched higher versus the USD under the umbrella of investor optimism.
GBP:
The Sterling continued to increase in value against the USD on Thursday. The U.K. did release Retail Sales and it turned in a lackluster ‘unchanged’ statistic, which was below the expected rise of 0.6%. The poor consumer spending numbers did little to interfere with the gains being made by the GBP. Today the Preliminary GDP statistic will be published and it carries a forecast of 0.2%. The outcome from the GDP report will be closely watched by all investors and weighed carefully into market sentiment. A positive number would back the official line that stability has been achieved, while a negative number could send a shiver into the hearts of traders. The BBA Mortgage Approval numbers will be released also, but the crux of the market action will be centered on the Gross Domestic Product outcome. Having attained good results for two weeks, the GBP could see yet another day of volatility.
JPY:
The JPY continued to be a laggard against the USD on Thursday as it underperformed in comparison to the other major currencies versus the greenback. Having produced a strong trend for a few months, the JPY has shown signs the past few weeks that it may have run out of momentum. Part of this circumstance may be that risk appetite is increasing once again within the Chinese stock markets which do get plenty of attention and participation from Asian investors. Gold turned in another tight range and taking into consideration that the USD has shown more weakness, traders should keep their eyes tuned into the precious metal carefully.
The Pound Suffers As The UK’s Long Term Outlook Becomes Less Promising
SPX/USD:
We started trading off weak on the open yesterday. However, as we have discussed over the last few weeks, there is some serious strength in this market. Multiple attempts to trade lower are met by continuous buying. It is important to note that we finally closed the gap formed on the 14th of October. The dollar has not done nothing spectacular, and even with weaker data we keep holding this higher range. Support 1081.16, 1074.2 1060.9, 1020.3 Resistance 1101.4, 1132.2, 1153.8
XAU/USD:
Yesterday’s recommendation still holds true: “I would like you to recall how a few weeks ago, we discussed how important it was for a product to consolidate. Well that’s exactly what it looks like gold is doing at the moment. In the previous example I had used a one hour chart to show what an effective trade this could be. Today we are looking at the daily chart and it is obvious how after a large push up the market has to take time to breath, and accept the new price range it has reached. At the moment we expect a higher push higher based on these technical’s, but as always, make sure you don’t throw everything you own into this trade, and play it with the appropriate amount of caution. Manage your risk!” Support 1059.5, 1050.5, 1047, 1042.5, 1024, 1019.65, 1009.65 Resistance 1061.35, 1064.25 1070.6.
GBP/USD:
Yesterday I wrote: “Taking a look at the weekly GBP/USD chart we see how this currency pair continues to trade the range. While it tested both the upper and lower ends of this range we are pushing back up towards the upper band. This channel has been holding strong since early June. As we near the 1.6741 level, Depending on the price action I will be looking to get in on the short side with a relatively tight stop. Any break above that level could be the beginning of a solid move past 1.7042.”
Well after bad news (that might be an understatement) hit the wires the pound has fallen against the euro the most in one month. This was a good trade, and it goes to show the power of this trading channel. Support 1.6467, 1.6444, 1.6399, 1.6324, 1.6239, 1.6119 Resistance 1.6591, 1.6637, 1.6662, 1.6743, 1.7042
EUR/USD:
This currency pair continues to be the prettiest “girl at the dance”. A strong uptrend that began in early October is still holding strong. As other currencies, including the dollar, battle it out, fighting various types of negative data, the Euro keeps flying straight and true. I am looking for a long trade entry on any weakness towards the 1.4943 level. Support 1.4991. 1.4943, 1.4844, 1.4761, 1.4673 Resistance 1.5060, 1.5083, 1.5144, 1.5284
USD:
The USD lost additional ground to both the EUR and GBP on Thursday as the equity markets climbed. The U.S. did release its weekly Unemployment Claims figures and the numbers were negative with a 531K outcome compared to the estimate of 516K. However investors apparently remained unconcerned about a lack of fundamental support and continued to propel Wall Street higher. Today the Existing Home Sales figures will be published and they are forecasted to turn in a result of 5.37 million. Perhaps the housing statistic will have an impact on the marketplace, but the greatest likelihood is that it will be given a passing glance. The housing and mortgage sector remain on a slippery slope, while the numbers have stabilized somewhat, there is no denying that foreclosures remain a problem. The reality of high unemployment has a direct impact on the housing sector. However, it appears that investors are still willing to cast their eggs into a basket laden with the potential for gains from bourses.
The crowd among asset classes such as stocks and commodities seems to be growing in courage even as questions continue to be asked. The better results from Wall Street have been noteworthy and have certainly created a flourish of disagreement between traders. There is an old adage that ‘the market is never wrong’ and if that is the case it would be wise not to try and attempt to stand in front of the trend unless you have very deep pockets. The USD has been hit from all sides and continues to show no ability to escape its decline in the short term. One dark cloud that does hover over the optimists is a lack of solid economic data. U.S. officials have done a good job of creating the perspective that the stability attained is going to lead to growth eventually. However this is a ‘sales job’ that needs constant attention and maintenance while the U.S. economy still struggles. Corporate earnings, particularly Microsoft’s, will continue to be reported today and going into the weekend the USD appears that it will be under the direct influence of bears and bulls.
EUR:
The EUR had another good day against the USD on Thursday as it moved ahead. There was little in the way of economic data from the continent with only the broad Current Account numbers released and it showed a negative number of -1.3 billion compared to the estimated gain of 1.9 billion. Italian Retail Sales figures were released too and showed a decline. However little of this mattered as the EUR continued its stellar run against the greenback. Today there is a large amount of PMI data and both Germany and France will be reporting. Both countries are expected to show gains among the Services and Manufacturing sectors from the Flash PMI publications. Also the German Ifo Business Climate reading is on schedule and is expected to turn in an outcome of 92.1, which would be an improvement. The EUR has had a good week of trading and kept not only its previous gains, but has marched higher versus the USD under the umbrella of investor optimism.
GBP:
The Sterling continued to increase in value against the USD on Thursday. The U.K. did release Retail Sales and it turned in a lackluster ‘unchanged’ statistic, which was below the expected rise of 0.6%. The poor consumer spending numbers did little to interfere with the gains being made by the GBP. Today the Preliminary GDP statistic will be published and it carries a forecast of 0.2%. The outcome from the GDP report will be closely watched by all investors and weighed carefully into market sentiment. A positive number would back the official line that stability has been achieved, while a negative number could send a shiver into the hearts of traders. The BBA Mortgage Approval numbers will be released also, but the crux of the market action will be centered on the Gross Domestic Product outcome. Having attained good results for two weeks, the GBP could see yet another day of volatility.
JPY:
The JPY continued to be a laggard against the USD on Thursday as it underperformed in comparison to the other major currencies versus the greenback. Having produced a strong trend for a few months, the JPY has shown signs the past few weeks that it may have run out of momentum. Part of this circumstance may be that risk appetite is increasing once again within the Chinese stock markets which do get plenty of attention and participation from Asian investors. Gold turned in another tight range and taking into consideration that the USD has shown more weakness, traders should keep their eyes tuned into the precious metal carefully.
The Pound Suffers As The UK’s Long Term Outlook Becomes Less Promising
SPX/USD:
We started trading off weak on the open yesterday. However, as we have discussed over the last few weeks, there is some serious strength in this market. Multiple attempts to trade lower are met by continuous buying. It is important to note that we finally closed the gap formed on the 14th of October. The dollar has not done nothing spectacular, and even with weaker data we keep holding this higher range. Support 1081.16, 1074.2 1060.9, 1020.3 Resistance 1101.4, 1132.2, 1153.8
XAU/USD:
Yesterday’s recommendation still holds true: “I would like you to recall how a few weeks ago, we discussed how important it was for a product to consolidate. Well that’s exactly what it looks like gold is doing at the moment. In the previous example I had used a one hour chart to show what an effective trade this could be. Today we are looking at the daily chart and it is obvious how after a large push up the market has to take time to breath, and accept the new price range it has reached. At the moment we expect a higher push higher based on these technical’s, but as always, make sure you don’t throw everything you own into this trade, and play it with the appropriate amount of caution. Manage your risk!” Support 1059.5, 1050.5, 1047, 1042.5, 1024, 1019.65, 1009.65 Resistance 1061.35, 1064.25 1070.6.
GBP/USD:
Yesterday I wrote: “Taking a look at the weekly GBP/USD chart we see how this currency pair continues to trade the range. While it tested both the upper and lower ends of this range we are pushing back up towards the upper band. This channel has been holding strong since early June. As we near the 1.6741 level, Depending on the price action I will be looking to get in on the short side with a relatively tight stop. Any break above that level could be the beginning of a solid move past 1.7042.”
Well after bad news (that might be an understatement) hit the wires the pound has fallen against the euro the most in one month. This was a good trade, and it goes to show the power of this trading channel. Support 1.6467, 1.6444, 1.6399, 1.6324, 1.6239, 1.6119 Resistance 1.6591, 1.6637, 1.6662, 1.6743, 1.7042
EUR/USD:
This currency pair continues to be the prettiest “girl at the dance”. A strong uptrend that began in early October is still holding strong. As other currencies, including the dollar, battle it out, fighting various types of negative data, the Euro keeps flying straight and true. I am looking for a long trade entry on any weakness towards the 1.4943 level. Support 1.4991. 1.4943, 1.4844, 1.4761, 1.4673 Resistance 1.5060, 1.5083, 1.5144, 1.5284