Or to Hold recent range despite USD Dump on the EU summit agreement

Fundamental forecasts for gold: neutral
Gold is higher at the end of the trade this week with the metal precious progress of 1.79% at the end of the month to the mark $ 1600. A massive rally in broader risk Friday fueled a rally of 3.06% gold after the EU leaders agreed to the band of emergency loans granted to Spanish banks of their seniority status which guarantees up to 100 billion € creditors default, a clear disadvantage to private bondholders. The move was able to put pressure on the Spanish yields that have reached their highest level since the month of November 2011 this month with the fall of 6.8% to 6.3%, 10 years Friday. While the announcement made few adr3ess the structural problems of the region, it mitigates the Spanish financing concerns in the short term with a substantial rebound in appetite for risk weighing on the greenback in favour of
The future of next week, traders will be be closely considering the RBA, BoE interest rate decisions and the ECB with data from key non-agricultural employment of Friday to steal the spotlight. While the Australia and the United Kingdom will leave rates unchanged at 3.5% and 0.50% respectively, focuses on the ECB with the differences in the expectations of the market and Economist considers likely to fuel added volatility in the markets. Night credit Switzerland swaps suggest that market participants are factoring in 37% chance of a rate cut on Thursday, then that 45 of the 57 Economist surveyed by Bloomberg called for lowering the cost of borrowing from the Central Bank. As such, blow of golden eye respond accordingly with more likely facilitate to maintain prices well supported investors look to hedge against the depreciation of the currency and inflation. Data on employment Friday may have the greatest impact on the price of gold next week with a consensus of estimates of the appellant for the addition of any K 90 jobs for the month of June, a slight improvement of the 69 K jobs created in May. In light of the recent decision by the Fed of scope operation key rather than to start a new series of large-scale asset purchases, a lower than expected printing is likely to feed speculation for plu Fed ease, there still no doubt to support the price of gold in the short term.
From a technical point of view, but is still within a descendant of canal dating from the formation to the heights of February with the closing price just below the confluence of the moving average 50 days and the tracing of 61.8% taken form June 15 drops to $1601. Over this breach exposes targets resistance subsequent superstructure depressions April $1612 and the confluence of the 100-day moving average and the top of June approximately $1641. Note that daily that RSI continued to hold above the mark of 40 with a violation over 60 changing of our Centre for higher interest. At first view, it is important to keep in mind that gold has been largely linked to the price holding between extension 38.2% Fibonacci from February to June to $1540 ridges and the highs from June to $1640. Although our prospects long term on the precious metals remains weighted to the downside, fundamental factors and the weakness of the greenback could see well supported in the short term with our prejudices on gold remaining neutral pending out of this price range. -MO

€ Euro Outloo Still Constructive Despite Contrasting Fundamentals

June 14, 2012 05: 30 GMT markets probably tighten ahead of weekend key risk Technicals still show room for the additional force of currency in the short term for the opportunity to purchase to the breakdown of the USD/JPY as we inch more about event risk great weekend in the form of the election of Greek, it is quite possible that the markets will begin to harden and strengthen until after the election. The market participants also expect on the details of the last Spanish rescue and at this time, there are not many current that would justify engaging actively in both directions. Technically however, maps paint a different picture (in my opinion) and will continue to promote the room for the additional force of money before considering the possibility of bearish resumption.
This would mean that in spite of any fundamental concern now, active correlated risk always have room to run backwards. While we retain a broader bearish perspective on the Euro, at this stage, refer us to charts and look for further upside in the sessions coming in the region of 1 2800 - 1 3000 before considering a fresh short position. In addition, we keep a close eye on the USD/JPY and will seek to aggressively buy a break on resistance short term 79.80 key.
ECONOMIC CALENDAR

TECHNICAL OUTLOOK

EUR/USD: the market is in train to correct certain levels severely oversold after breakdown of yearly lows little less 1.2300. While our global perspective is clearly downward, by we see still place upside in the short term before a high low is wanted. Look for the positive in the last week has close to open the door for an acceleration in the region of 1 2800 - 1 3000, where new offers are likely to re-emerge. Setbacks must be well supported ahead of 1.2400.

USD/JPY: the recent setbacks have been quite intense, the market collapse by the ADM, 200 days before finally finding support by 77.65. We have since seen attempts at recovery and we support that the market should continue to break higher, with views finally fixed on a retest and rupture of 2012 senior by UST up more. However, at this stage, we need to see a break and close above 80.00 back to alleviate the pressures weighing officially and to reaffirm the optimistic prospects.


GBP/USD: Daily studies are now correct oversold and risk CIHI appear inclined upside down to allow a corrective bounce short term necessary after the setback down just shy of the 2012 bottom of January. Locate the last close back daily over 1.5440 to strengthen the prospects for growth in the short term, provided in the 1.5800 region where a low high costs will be sought for that underpin the acceleration of bear trend to resume. Only a close back under delays 1.5400.

USD/CHF: while we retain a broader upward perspective for this pair, with the market seen to establish above parity in the weeks to come, short-term risks are a corrective withdrawal to allow the market to establish a fresh plu bass. Thus, we see risks of weakness in the next sessions to the 9200 0 - 0 9300 area before the market seeks to reaffirm its upward momentum and broader uptrend.

-: Perspectives euro short-term always constructive despite the last Pullback

June 12, 2012 05: 55 GMT markets retirement wave of Sunday, but must find technical support image clarity that the fundamental principles now offers constructive Euro short of time over 1.2385 USD/JPY is fresh to the rear more than $80.00 despite the last withdrawal in the perception of the risks, markets do not seek as bad that some might think. After all, the action of the price is somewhat misleading because of the huge gap open risk of active correlation Sunday evening. While we not take this as a sign too optimistic, we would not recommend also to head for research and the more important position of liquidation of risk at this stage. For the moment, our technical Outlook seems to offer more clarity, and while that the Euro takes over 1.2385, we see additional risks to the market following a bullish weekly reversal ending a sequence of four consecutive lower weekly low and low plateaus.
The Euro is the market which must be monitored for directional overview of larger markets, and if this market should be taken in from 1.2400, we could still see yet another push beyond senior 1.2670 from Monday, to the area 1 2800 - 1 3000 further up. Ultimately, this should result in more currencies, higher equities and a low Dollar and Yen. The buck and the Yen were already sold their earlier respective daily limits, with the Yen find a relative weakness on the comments of the IMF that the currency is overvalued. This market level key look more high is 80.00 and a break and back close this psychological barrier could accelerate once more gains.
ECONOMIC CALENDAR

TECHNICAL OUTLOOK

EUR/USD: the market is in train to correct certain levels severely oversold after breakdown of yearly lows little less 1.2300. While our global perspective is clearly downward, by we see still place upside in the short term before a high low is wanted. Look for the positive in the last week has close to open the door for an acceleration in the region of 1 2800 - 1 3000, where new offers are likely to re-emerge. Setbacks must be well supported ahead of 1.2400.

USD/JPY: the recent setbacks have been quite intense, the market collapse by the ADM, 200 days before finally finding support by 77.65. We have since seen attempts at recovery and we support that the market should continue to break higher, with views finally fixed on a retest and rupture of 2012 senior by UST up more. However, at this stage, we need to see a break and close above 80.00 back to alleviate the pressures weighing officially and to reaffirm the optimistic prospects.

GBP/USD: Daily studies are now correct oversold and risk CIHI appear inclined upside down to allow a corrective bounce short term necessary after the setback down just shy of the 2012 bottom of January. Locate the last close back daily over 1.5440 to strengthen the prospects for growth in the short term, provided in the 1.5800 region where a low high costs will be sought for that underpin the acceleration of bear trend to resume. Only a close back under delays 1.5400.

USD/CHF: while we retain a broader upward perspective for this pair, with the market seen to establish above parity in the weeks to come, short-term risks are a corrective withdrawal to allow the market to establish a fresh plu bass. Thus, we see risks of weakness in the next sessions to the 9200 0 - 0 9300 area before the market seeks to reaffirm its upward momentum and broader uptrend.

$$$$$Euro on the decline despite softer results of PMI

The Takeaway: eurozone Composite PMI hits 3-year low-> Markit Economics predicts-0.5% contraction in the second quarter-> Euro set aside earlier gains
Out of manufacturing and services in the euro area has reached the level the lowest since June 2009, according to the economic managers of Markit purchasing index survey of the. The PMI composite index at 46.0 may, slightly above the previously estimated 45.9. The euro-zone composite PMI has fallen for four straight months, since the January index reported the increase in production. A survey less than 50 points of exit of contracting PMI.
The lower PMI indicates a slowdown of the economy in Europe, even the usually strong Germany shows contracting output. Composite German PMI fell to a low 49.3 of 34 months in may, the result of 50.5 positive in April. French and Spanish composite PMI also decreased in May.
Services PMI in each country of the euro have been developed this morning; Germany services PMI were reported as expansion depending on the outcome of 51.8 for may, even lower than the previously estimated 52.2. France and the Italy both had contracting production services, although the Italy of 42.8 PMI was better than the estimated 42.0 and 42.3 index reported in April.
Markit Economics reported this weak demand has led to losses of jobs between services and manufacturing industries. However, a slight increase of German jobs in may softened the unemployment rate for the euro area in a whole. Chief Economist Chris Williamson of the markit predicts a contraction of 0.5% of the Q2 GDP of the euro area, according to the report.
It is said that G7 leaders are meeting today to discuss ways to improve the European economy and to help the Greece to avoid output of the single currency. German Prime Minister Angela Merkel said so far that it does support joint Government in euro bonds.

EUR/USD reversed earlier gains of day in the hours leading up to the release of the PMI, probably fall because of feelings on the G7 meeting possible and the negative comments recently by the Minister of the Spanish budget.
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$$$ USD Looks Higher Despite Being Overbought, AUD Outlook Hinges On RBA

04 June 2012 16:05 GMT

Index	Last	High	Low	Daily Change (%)	Daily Range (% of ATR)
DJ-FXCM Dollar Index	10225.88	10271.92	10211.64	-0.11	110.02%

he Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is 0.11 percent lower from the open after moving 110 percent of its average true range, and it looks as though the greenback has carved a short-term top coming in June as it threatens the upward trending channel carried over from the previous month. Although currency traders are look for a short-term correction in the greenback, the recent selloff in the USD may turn out to be a false break, and we will keep a close eye on the 30-minute relative strength index as it bounces back from oversold territory. As the oscillator continues to find support around 27, we may see the dollar consolidate ahead of the Fed’s Beige Book on tap for later this week, but the central bank may continue to strike a cautious tone for the world’s largest economy amid the ongoing slack in private sector activity.

As the USDOLLAR continues to bounce off of the 10-Day SMA (10,210), the RSI on the daily chart may hold in overbought territory, and we may see the greenback work its way back towards the 10,300 figure as the ongoing threat for contagion drags on market sentiment. Although European policy makers are looking to recapitalize the banking system through the European Stability Mechanism, it seems as though the recent movement is merely another attempt to buy more time as Germany continues to oppose broadening the scope of the permanent bailout fund. As there appears to be a growing rift within the EU, there’s speculation that the European Central Bank may offer some relief at the rate decision scheduled for Wednesday, but we may see the Governing Council move away from its nonstandard measures as they have a limited impact in addressing the risks surrounding the real economy. In turn, ECB President Mario Draghi may look to target the benchmark interest rate, and the dollar may continue to benefit from the ongoing turmoil in the euro-area as investor confidence remains frail.

 Three of the four components advanced against the greenback, led by a 0.47 percent rally in the Euro, while the Australian dollar added 0.15 percent ahead of the Reserve Bank of Australia interest rate decision on tap for Tuesday. According to a Bloomberg News survey, 16 of the 27 economists polled are looking for a rate cut, while market participants are pricing a 63 percent chance for a 50bp rate cut according to Credit Suisse overnight index swaps. In light of the dovish rhetoric from the RBA, we may see the central bank continue to take an aggressive approach in addressing the risks surrounding the $1T economy, and the board may carry its easing cycle into the second-half of the year as the slowdown in China – Australia’s largest trading partner – threatens to derail the recovery. In turn, the AUDUSD may face another selloff going into the middle of the week, and the high-yielding currency may continue to give back the rebound from October as the flight to safety gathers pace.

$- US Dollar Extends Advance Despite S&P 500 Resistance Break

25 May 2012 01: 48 GMT THE TAKEAWAY: US Dollar continued to press higher despite an upside break from the S & P 500 but highly technical studies warn that a pullback may be nearing overbought.
S & P 500 - Prices broke through resistance at 1322.10, the 23.6% Fibonacci tracing, after completing a Bullish Engulfing candlestick pattern above support at 1292.90. The bulls now aim to challenge the 38.2% Fib at 1341.70. The 1322.10 level has been recast as near-term support.
Daily Chart - Created Using FXCM Marketscope 2.0
CRUDE OIL - Prices put in a Harami candlestick pattern above resistance-turned-support at 90.49, hinting a corrective bounce may be ahead. Positive RSI divergence reinforces the case for an upside scenario. Initial resistance lines up at 92.51, form support marked by the December 16 low, with a push above that targeting the February 2 low at 95.41.

Daily Chart - Created Using FXCM Marketscope 2.0
GOLD - Prices narrowly slipped below support at 1560.98, the 23.6% Fibonacci tracing, exposing the next key downside barrier in the 50 1522-1532 45 region. The lack of meaningful belief on the break lower puts follow-through into question however, suggesting the 38.2% Fib at 1582.10 may still be the most significant near-term resistance threshold.

Daily Chart - Created Using FXCM Marketscope 2.0
US DOLLAR - Prices continued to edge higher after taking out resistance in the 10134-41 area marked by the 76.4% Fibonacci expansion and the October 2011 swing high. The bulls the 100% target level at 10241 as the major next upside objective from here. RSI studies are at their most overbought since prices set the last major top however, warning that the threat of a pullback is significant. The 10134-41 region has been recast as near-term support.
Daily Chart - Created Using FXCM Marketscope 2.0

Commodities Rise Despite Dismal Chinese, Eurozone PMIs - Why?

24 May 2012 11:00 GMT Talking Points
Crude Oil, Copper Follow Shares Higher as Risk Appetite Corrects Gold and Silver Find Support on Waning Haven Demand for US Dollar Risk appetite trends appear to be shrugging off softer Chinese and Eurozone PMI figures, with European shares on the upswing and growth-geared crude oil and copper prices following suit. Meanwhile, waning haven demand is pressuring the US Dollar, allowing an upside correction for anti-fiat gold and silver prices. S&P 500 stock index futures have erased earlier losses and now trade firmly in positive territory ahead of the opening bell on Wall Street, reinforcing the likelihood of a recovery across the sentiment landscape as North America comes online.
While the chipper mood is undoubtedly running counter to economic data, recent price action offers context to explain what may be happening. Risky assets have faced unrelenting selling pressure over the past three weeks with very little corrective recovery in the interim. With the EU leaders’ summit in the rearview mirror and growth indicators reinforcing the seriousness of already well-known headwinds facing global output from the Eurozone and China, the supply of near-term negativity that can conceivably strike the markets may be running dry. Broadly speaking, this opens the door for a corrective recovery until the bears find fresh fodder to fuel downward momentum as the second Greek election approaches in mid-June.
The US economic calendar appears broadly supportive of an improving risk appetite profile. Durable Goods Orders are expected to rise in April after a sharp dip in March, the Kansas City Fed manufacturing activity index is forecast to rise in May after two consecutive months of losses, and weekly Jobless Claims numbers are set to yield a modest but broadly positive result. While Initial Claims are expected to hold at 370K for a second week, Continuing Claims are due to edge lower to 3250K.
WTI Crude Oil (NY Close): $89.90 // -1.95 // -2.12%
Prices continue to test resistance-turned-support at 90.49, with a break lower initially exposing the 61.8% Fibonacci retracement level at 88.54. Near-term resistance lines up at 92.51, a former support marked by the December 16 low, with a push above that targeting the February 2 low at 95.41.
Daily Chart - Created Using FXCM Marketscope 2.0
Spot Gold (NY Close): $1561.45 // -7.05 // -0.45%
Prices recoiled from resistance marked by the 1600/oz figure as well as the 50% Fibonacci retracement level at 1599.17, taking out support at 1582.10 marked by the 38.2% level and exposing the next downside objective at 1560.98. A break below this boundary exposes the 1522.50-1532.45 area. The 1582.10 level is acting as resistance.

Daily Chart - Created Using FXCM Marketscope 2.0
Spot Silver (NY Close): $28.18 // -0.29 // -1.00%
Prices are reversing lower from resistance at 28.70, with sellers once again aiming to challenge support at support at 27.06. A break lower exposes the 26.05-15 area. Alternatively, a reversal back through resistance on a daily closing basis targets the next upside barrier at 28.70.
Daily Chart - Created Using FXCM Marketscope 2.0
COMEX E-Mini Copper (NY Close): $3.396 // -0.092 // -2.64%
Prices are testing through support at 3.438, the 100%Fibonacci expansion, with a break below that exposing the 123.6% level at 3.327. Near-term resistance lines up at 3.537, the 76.4% expansion level.
Daily Chart - Created Using FXCM Marketscope 2.0

€ Euro Still Has Sights Set on 2012 Low Despite Oversold Technical Readings

AppId is over the quotaOngoing turmoil in Greece pressures markets lower Fear of contagion to larger EX economies weighing Technical studies are however clay Investors looking to retest Euro 2012 lows Looking for technical bounce before trend continuation Emergency ECB meeting talk temporarily props intraday BOE King downbeat at press conference Euro Pound comes on some under pressure despite solid employment The latest end of intensified selling in the Euro has been attributed to the ongoing political turmoil in the Eurozone.Currencies in general have followed following, and are under pressure against the buck. With no clear resolution in sight for Greece, and new elections on the horizon, many now fear the worst and the possibility of a Greek exit is looking more realistic with every passing day. However, while the possibility is increasing and panic and uncertainty are running high on threat of contagion to larger Eurozone economies, we still do not see the markets at risk for a sell-off material from current levels before a technical correction.
Relative performance versus the USD Wednesday (as of 10: 40GMT)
EUR - 0.09 %
CHF - 0.11 %
AUD - 0.22 %
CAD - 0.27 %
JPY - 0.29 %
GBP - 0.44 %
NZD - 0.52 %
We contend risk-off the trade has been driven more by technical selling, resulting from a daily close below 1.3000 in the Euro several days back, which now has traders setting sights set on a retest of the lows from January at 1.2625 2012. However, given how severely overextended markets are at present, there should soon be some relief, at least for a little while, before ongoing liquidation risk. We often find that the middle of the week brings a reversal during periods of intense volatility, and we suspect that the US Dollar may find a top today before selling off into the remainder of this week and the next.
So far, the Euro has stalled shy of the 2012 lows from January, but once this level is tested, be on the lookout for a make bounce. Talk of an emergency ECB meeting has helped to inspire some bids in European trade, but the market still remains heavily offered and will need to break back above 1.2870 to relieve immediate downside pressures. Elsewhere, the Pound has come under some relative pressure intraday despite some earlier solid employment data, with the downbeat economic outlook from BOE King easily offsetting the positive flows. Meanwhile, USD/JPY has quietly been mounting a recovery, but will need to close above 80.60 to open fresh upside. Looking ahead, there is a good deal of economic data on tap, although we suspect attention will be focused to the FOMC Minutes due out later in the day.
ECONOMIC CALENDAR

TECHNICAL OUTLOOK

EUR/USD: The market remains under intense pressure and the focus for now is squarely on a retest of the lows from January at 1.2625 2012. While we would not rule out a possibility of a test of this level over the coming sessions, short-term technical studies are well oversold and are showing a need for some form of a corrective bounce from where a lower top is sought out fresh. Ultimately however, any rallies should now be very well capped by previous support turned resistance at 1.3000 in favor of additional weakness over the medium-term that projects deeper setbacks into the lower 1. 2000's.
USD/JPY: The market continues to consolidate around 80.00 and is in the process of looking for a medium-term higher low ahead of the next major upside extension back above the yearly highs at UST and towards 90.00 further up. However, for the time being it remains in question whether the market will still head lower towards the 200 - Day SMA by 78.50 before ultimately reversing higher. The key level to watch above comes in by 80.60, and a break and close above this level will officially alleviate downside pressures and suggest that a higher low has now been carved in the 79. 00's.
GBP/USD: The latest daily close below 1.6050 now opens the door for an acceleration of declines over the coming days back down towards next key support in the 1. 5800's. At this point, look for any intraday rallies to be very well capped ahead of 1.6200, while only back above 1.6300 would negate outlook and give reason for pause.
USD/CHF: Overall the structure remains highly constructive and we continue to project additional upside over the coming months back above parity. For now, the latest break and close above 0.9335 is expected to accelerate gains for a retest of the yearly highs by 0.9600, while any pullbacks should be very well supported ahead of 0.9200 intraday. Ultimately, only back under 0.9000 would negate outlook and give reason for pause.

! Loonie Falls Despite Surge in April Housing Starts To Fastest Pace Since 2007

THE TAKEAWAY: [Canadian housing starts accelerated in April for fifth straight month to fastest pace since September 2007] > [Continuing strength in housing market] > [CAD weakens vs. USD]
Housing starts in Canada unexpectedly accelerated in April for the fifth straight month to its fastest pace since September 2007. The Canada Mortgage and Housing Corporation reported a large jump to 244,900 housing starts at a seasonally adjusted annual pace in April, while March’s figure was revised slightly downwards to 215,200 from 215,600 originally reported. The median forecast of 21 economists surveyed by Bloomberg News had called for a slowdown to 204,000 housing starts in April. New starts soared by 28.8 percent in April from a year ago, compared with March’s year-on-year rate of 16.7 percent.
The pickup in housing starts in April was led by a surge in multi-family homes in urban areas, which recorded a 27.4 percent gain to 158,500 new starts. Meanwhile, housing starts in rural areas contracted by 19.0 percent from a month ago, reversing the 10 percent gain in March.
April's housing starts data follows yesterday’s news that the number of residential building permits approved had declined by 1.3 percent in March. This could indicate that we may see slight moderation in the coming months in the recent strength shown by the Canadian housing market, in what some analysts think is a housing bubble.
USDCAD 1-minute Chart: May 8, 2012

Chart created using Strategy Trader – Prepared by Tzu-Wen Chen
Despite the stronger-than-expected print, the Canadian dollar tumbled against the U.S. dollar in the minutes following the data release. The loonie fell as much as 20 pips in the first 15 minutes from pre-announcement levels, and despite a slight retracement, continued to trade weaker at C$0.9972 against the greenback at the time of this report.

€ Euro under pressure despite of strong German industrial data

THE TAKEAWAY: Strong German industrial data-> Euro and risky currencies Markets digest French, Greek election results
German industrial production was stronger than expected in March, removing some of the bite from a weak open weekly for the single currency. Production rose 2.8% on the month, more than the - 0.3% markets had expected. The yearly number was 1.6% versus the expected - 1.2%, the German stats Office said today. Both the monthly and yearly figures saw upward revisions.
Germany has struggled to maintain industrial growth as declining global demand continues to erode. Even so, Europe's largest economy remains its strongest, although yesterday's election results from France and Greece threaten to test Berlin's mettle in demanding tough reforms across the Eurozone. Both nations elected anti-austerity parties in a repudiation of the German-led drive to reduce sovereign debt in the Euro-area.
Germany's leader Merkel reportedly told French President-Elect Holland that the Eurozone fiscal compact approved last fall is not up for renegotiation. Berlin has taken a similar hard position regarding Greece, where last weekend's election results are likely to bring increased opposition to austerity.

The Euro remained pressured today as risk-correlated currencies took a beating in the wake of uncertainty over the Eurozone's future.

€ Euro Rallies After Draghi Presser Despite No New Policy Actions

Fundamental Headlines
- Canadians Dominate World’s 10 Strongest Banks – Bloomberg
- Jobless Claims in U.S. Decline More than Forecast – Bloomberg
- Mario Draghi’s Introductory Statement – ECB
- ECB Holds Rates, Resisting Calls for Crisis Actions – Reuters
- Solid Demand for Spain Bonds – WSJ
European Session Summary
Higher yielding currencies and risk-correlated assets traded mostly lower in the overnight, but volatility and price ranges were contained overall as market participants eagerly awaited the outcome of the European Central Bank’s policy meeting midway through the European trading session on Thursday. As Euro-zone stresses have risen in the past few weeks, not in the form of liquidity issues for banks but rather a crisis of confidence, there have been calls for the ECB to introduce more measures to bide time for governments struggling to implement austerity measures. After today’s meeting, it is clear that the Mario Draghi ECB is going to hold out for as long as possible when considering new policy measures, as President Draghi noted that the ECB “didn’t discuss” a rate cut at this month’s meeting.
In terms of President Draghi’s statement, the outlook provided by the ECB was certainly downbeat. According to President Draghi, the ECB sees “downside risks” to the Euro-zone economic outlook, saying that the outlook has become more “uncertain.” On the topic of inflation, the ECB sees price pressures in line with prices broadly balanced over the medium-term horizon. Similarly, the ECB notes that liquidity is abundant in the Euro-zone and that short-term real rates are negative in all Euro-zone nations, further supporting President Draghi’s outlook that inflation will be tethered to the medium-term target at 2 percent.
The big development, or lack thereof, was the ECB’s commentary on what their intentions are with their securities market program (SMP), the facility the central bank uses to intervene in the secondary bond markets to purchase sovereign debt (mainly PIIGS). President Draghi said that the SMP is neither “eternal nor infinite,” and while the program is “still there,” the ECB never “pre-commits.”
Overall, while the Euro rallied across the board following the statement, this could be in part due to the expectations that the ECB might cut rates at this meeting – I find that the “weak” hands were shaken out of the market during the press conference. Instead, with the ECB offering little more substantive support, the increasing tensions between politicians and policymakers is expected to continue, with more governments coming out to offer lip service to the notion that the Euro-zone just needs to grow – as if it were that simple given current market conditions. There’s little contained within the ECB’s statement and the President Draghi presser that would suggest the Euro’s intraday rally is sustainable.
EURUSD 5-min Chart: May 3, 2012

Charts Created using Marketscope – Prepared by Christopher Vecchio
Following the press conference, the Euro took back much of its losses, and even rallied up 0.09 percent against the US Dollar overall. The Canadian Dollar remains the strongest currency, with the USDCAD depreciating by 0.13 percent. The Australian and New Zealand Dollars were among the weakest majors, shedding 0.45 percent and 0.97 percent, respectively.
24-Hour Price Action
Key Levels: 13:05 GMT

Thus far, on Thursday, the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) is trading higher, at 9902.44 at the time this report was written, after opening at 9890.80. The index has traded mostly higher, with the high at 9923.23 and the low at 9887.13.

$$ US Dollar Remains Strong despite April ISM Non-Manufacturing Decelerates

THE TAKEAWAY:U.S. non-manufacturing activity grew less than expected in April but > Business activity, new orders, employment growth and prices all decelerated > USD remains strong versus major peers
U.S. economic activity in the non-manufacturing sector continued to expand at a slower pace in April as sale has slightly improved, business conditions has leveled off, and fuel and food continued to be a challenge.
The report released by Non-manufacturing Institute of Supply Management (ISM) report showed that its April non-manufacturing index disappointingly declined to 53.5 percent from 56.0 percent registered in March. The print is well below consensus forecast of 55.3 percent, according to seventy-four economists polled by Bloomberg News survey.
The Business Activity index, which is considered the most important in 10 sub-indexes reported, slipped to 54.6 percent, 4.3 percentage points lower than the 58.9 percent reported in March. This corresponds with survey responses that “business is slowing and projections for the rest of the year are being lowered”. Similarly, the New Orders index fell 5.3 percent to 53.5 percent as a result of contraction in four industries including mining, utilities, health care and public administration.
Employment index, which rose 1 percent to 56.7 percent in March, unexpectedly decline decreased by 2.5 percent to 54.2 percent, pointing to slower pace of job creation. Additionally, the Prices index tumbled 10.3 percent to 53.6 percent, suggesting price increase at a significantly slower rate in April compared to March. Nonetheless, respondents remain concerned about rising fuel costs and the impact on shipping, transportation and petroleum-based product costs.
EURUSD 1-minute Chart: May 3, 2012

Chart created using Strategy Trader – Prepared by Tzu-Wen Chen
The greenback remained strong versus most of its major currency counterparts after the lower-than-expected ISM non-manufacturing report. As seen on the 1-minute EURUSD chart above, the currency pair dropped approximately 30 pips from 1.3180 to 1.3150. At the time this report was written, the euro saw some correction, trades at $1.3160.

Dollar Little Moved Despite Aggressive Rebound in Risk Trends

Dollar Little Moved Despite Aggressive Rebound in Risk Trends Euro Stubborn in the Face of Poor Bond Auction Growth Concerns Canadian Dollar Surges after BoC Says Hawkish Move a….Possibility Australian Dollar Traders Cap Their Rate Expectations for Cuts, Turn to Risk British Pound Rallies In Spite of CPI, Jobs and BoE Minutes Due New Zealand Dollar: Does Inflation Data Carry as Much Sway Here as with the Aussie? Gold Once Again Delivers on Volatility, Fails for Trend Dollar Little Moved Despite Aggressive Rebound in Risk Trends
The fundamental flow was heavy and the S&P 500 was particularly strong this past session; yet through that fundamental drive, the benchmark US dollar found itself virtually unmoved through the close. In fact, the Dow Jones FXCM Dollar Index closed Tuesday’s active trading session with a 0.04 percent change at 9940. Alone, the benchmark’s lack of momentum would not be particularly surprising; but against the backdrop of otherwise active markets, the restraint is somewhat surprising. This could speak to two underlying truths: either the dollar is lagging capital markets, or the rally in risk trends lacks the kind of conviction we would need to generate follow through. Following Occam’s Razor (the principle whereby the simpler explanation or the one with the fewest assumptions is usually the correct one), we would expect the disconnect was the dollar’s responsibility. However, there is still no clear trend for our primary sentiment gauges and recent data does little to encourage bulls.
In the most easily made connection to broader risk trends this past session, macro traders could pick up on the IMF’s updated growth forecasts. From January, the group notched its 2012 global GDP outlook up from 3.3 to 3.5 percent. That pace draws a notable contrast to the more moderate 2.1 percent outlook for the US. Any optimism that may have accompanied these projections were offset by the market’s preexisting expectations of moderate growth for the year and the IMF’s own concern that downside risks were “extremely present.” The preoccupation with a global crisis borne from the Euro Zone found another mixed picture. Headlines from Spain were far from encouraging (more on that below), but the gauges of regional stress seemed unfazed – much less global measures.
Ultimately, it is the view on general risk trends where the greenback will defer its intentions. While the S&P 500 managed its biggest single day rally in a month (1.6 percent), the move didn’t shake the index free from weeks of general congestion. If the dollar is to take to a prevailing and durable trend (bullish or bearish), FX interests will likely need to be guided by the influence of a general sentiment shift.
Euro Stubborn in the Face of Poor Bond Auction Growth Concerns
Through Tuesday’s session, the euro dropped against all of its major counterparts with the exception of the Japanese yen. Weakness on the shared currency’s part is reasonable against the discouraging round of fundamentals the euro faced through the session. Continuing with the IMF’s optimism, the Euro Zone’s 2012 recession was upgraded from a 0.5 percent expected contraction to 0.3 percent. That said, Spain’s growth forecast was lowered further to a 1.8 percent projected contraction alongside expectations of a 6.0 percent debt-GDP ratio (missing the 5.3 percent target). Following along with the Spain theme, the 12 and 18 month bond auctions met higher demand but at the price of significantly higher yields (investors demanding greater return to take a risk on a loan to the country). Furthermore, Prime Minister Rajoy said the region is going through another round of credit crunch. Through all of this though, Spanish 10-year yields actually fell. Now on to Thursday’s 10yr auction.
Canadian Dollar Surges after BoC Says Hawkish Move a….Possibility
The Canadian dollar was far and away the best performer through the past trading session. Normally, we trace the currency’s strength back to general risk trends; but this time around, the bounce in a few risk gauges was merely an amplifier to inherent strength. The catalyst this time was the Bank of Canada rate decision. The actual policy decisions roused little interest as the policy authority kept the benchmark at the same place it has maintained the rate since September 2010. Nowadays, the market is trading off of the subtle shifts in rhetoric to gauge the eventual change. On that front, the BoC said removing stimulus in the future “may become appropriate”. The question is: how far will an option get us?
Australian Dollar Traders Cap Their Rate Expectations for Cuts, Turn to Risk
Whether it is a general slide in risk trends, economic or financial troubles in China or the RBA’s predisposition towards rate cuts, the Australian dollar seems to always have a negative catalyst it can turn to. That said, speculation may have overreached on its Aussie fundamentals. From risk trends, the outlook is certainly a cautious one; but benchmarks like the S&P 500 have yet to feed momentum behind a reversal. China is an abstract risk as its troubles don’t have clear milestones. Furthermore, stimulus is always an option available to them. Finally there are rate expectations. The market is virtually certain of a May 1 rate cut, so where to go from here. Until next week’s CPI, guidance will be lacking.
British Pound Rallies In Spite of CPI, Jobs and BoE Minutes Due
Sterling traders that were in the market around the release of the UK CPI data may have attributed the second stage of the cable’s rally to the inflation numbers. A modest uptick from a 28-month low for core inflation (to 2.5 percent) is hardly a strong bullish catalyst. There is little chance of a rate hike from the BoE through the foreseeable future (the 12mth outlook according to swaps is a 2bp increase), so bulls would really have to dig. Instead, the pound was likely borrowing from the euro. That said, the BoE minutes and jobs figures will likely carry more influence.
New Zealand Dollar: Does Inflation Data Carry as Much Sway Here as with the Aussie?
Over the past four weeks, the hawkish rate outlook for the RBNZ has backed off significantly. Where the 12 month forecast was for 36 bps of hikes back on March 22, the outlook is now for a mere 9 bps over the same period. We will find an unusually effective indicator for rate watchers to work with over the coming 24 hours. After Wednesday’s US close, the first quarter CPI data is expected to cross the wires, and the consensus is for a further deceleration in the annual figure to a 1.6 percent clip. That would set up an interesting RBNZ rate decision next week.
Gold Once Again Delivers on Volatility, Fails for Trend
Gold’s general bear trend from late February continues to exert pressure on the precious metal. Eventually we will come to a head on medium-term trend for the commodity, however, as this bearish drift confronts the long-term rising trendline that has carried the market higher since the end of 2008. For a general assessment of market health, the CBOE’s gold volatility index is moving back towards 9 month lows (one of the few volatility readings not inversely correlated to price) while the one-week average on futures volume is testing its lowest levels of the year.
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ECONOMIC DATA
Next 24 Hours
Westpac Leading Index (MoM) (FEB)
ANZ Consumer Confidence Index (APR)
Drifting confidence indices may hurt domestic spending, prices
ANZ Consumer Confidence Index (MoM) (APR)
Property Prices (New Residential YoY) (MAR)
Controls hitting new home prices
Euro-Zone Current Account n.s.a. (euros) (FEB)
Seasonally, non-seasonally adjusted data not expected to move markets
Euro-Zone Current Account s.a. (euros) (FEB)
British labor market seems to be stable, still weak. Bank of England easing still helping
Average Weekly Earnings (3M/YoY) (MAR)
Weekly Earnings exBonus (3M/YoY) (MAR)
ILO Unemployment Rate (3M) (FEB)
Euro-Zone Construction Output s.a. (MoM) (FEB)
Demand from investment spending seen to hit index
Euro-Zone Construction Output w.d.a. (YoY) (FEB)
ZEW Survey (Expectations) (APR)
MBA Mortgage Applications (APR 13)
DOE U.S. Crude Oil Inventories (APR 13)
Crude and gasoline levels returning to near term highs, may pressure price as supply swells
DOE Cushing OK Crude Inventory (APR 13)
DOE U.S. Distillate Inventory (APR 13)
DOE U.S. Gasoline Inventories (APR 13)
NZ labor still relatively strong
Consumer Prices Index (QoQ) (1Q)
New Zealand prices expected to fall even without rate cut reversal. Eventual hike looking less likely
Consumer Prices Index (YoY) (1Q)
Merchandise Trade Balance Total (MAR)
Japanese trade expected to weaken again on yen strength, exports continue to grow slowly
Adjusted Merchandise Trade Balance (MAR)
Merchandise Trade Exports (YoY) (MAR)
Merchandise Trade Imports (YoY) (MAR)
Bank of Canada Monetary Policy Report
SUPPORT AND RESISTANCE LEVELS
To see updated SUPPORT AND RESISTANCE LEVELS for the Majors, visit Technical Analysis Portal
To see updated PIVOT POINT LEVELS for the Majors and Crosses, visit our Pivot Point Table
CLASSIC SUPPORT AND RESISTANCE –EMERGING MARKETS 18:00 GMTSCANDIES CURRENCIES 18:00 GMT
INTRA-DAY PROBABILITY BANDS 18:00 GMT

$Dollar United States even at the risk of decline in the short term, despite the fierce Fed

Markets still locked in choppy directionless trade Fed Bullard out reinforcing case for Fed policy reversal Goldman Sachs comments open late rally in EUR/CHF cross Moody’s announces that it will come out with decision on banks in May Currencies could still see additional gains before US Dollar bull trend resumption Aussie well bid on solid employment data but gains not expected to last In what otherwise might have seemed to be another choppy directionless session for the currency markets, there were three key developments on Wednesday which could ultimately impact and influence the landscape and construct of the markets going forward. These developments include some hawkish comments from a Fed member, an article out of the WSJ which puts the EUR/CHF cross rate back in the spotlight, and news that Moody’s will be making their decisions for downgrades on major US banks in May.

The release of the Fed Beige Book on Wednesday showed no surprises and as was to be expected, the report painted a relatively upbeat picture for the US economy and economic recovery. The improved outlook for the US economy has recently prompted the Fed to reconsider its ultra accommodative monetary policy stance, and the latest comments from Fed Bullard only help to reaffirm this fact. Fed Bullard was out on Wednesday with some pretty strong language, saying that he saw an “extreme amount of uncertainty” over the 2014 date, and the implication was quite clear that he didn’t mean that ultra low policy would be extended beyond 2014. Bullard expressed concern over longer-term inflationary threats and went on to say that very low rates could do little at this point to speed up the drop in the unemployment rate. Overall the comments reflect a central bank that looks to be in the process of a more official shift in its outlook (last week’s Minutes also did a good job of highlighting this fact), and this could be a theme that provides some ammunition for US Dollar bulls on any form of a dip.

Moving on, an article out of the WSJ got a lot of buzz late Wednesday after the financial publication reported that the SNB could soon look to raise its EUR/CHF floor from 1.2000 up to 1.2500. The source for the article came from the head of Goldman Sachs asset management, with Jim O’Neill stressing that investors should not underestimate the SNB’s resolve. O’Neill went on to say that he felt the cross rate was extremely undervalued, while echoing the sentiments of various Swiss officials who would be more comfortable with a rate in the 1.3500-1.4000 area. Still, the Goldman comments only helped to rally the cross marginally, and it seems that until the SNB actually does step forward and take action, the markets will indeed continue to test their resolve. What is interesting in our opinion is that in this case, the SNB might be well positioned as technical studies show this cross rate still closer to the oversold side on the longer-term charts and there looks to be plenty of room for upside ahead. The trouble for the SNB is the ongoing crisis in Europe and the downside pressure that it might still place on the cross rate. Some have therefore argued that the SNB would be better off encouraging the ECB to buy Italian and Spanish bonds rather than trying to expand its own reserve portfolio.

Finally, news that Moody’s will come out with its decision on downgrades for some of the major US banks in May, has been getting attention and this could be something that influences investor sentiment and appetite for risk correlated assets. It seems as though Moody’s would like to see the investment banks in the mid-single A range, and the question is not whether there will be downgrades to these banks but rather just how aggressive the downgrades will be. One of the biggest question marks surrounds Morgan Stanley and whether the bank will be downgraded by two or three notches. Other major banks that will likely be downgraded include UBS, BofA, JP Morgan, Barclays and Goldman Sachs. With the financial and banking sector having played such a central role in the latest economic turmoil, the rating agency moves will likely impact the markets in one way or another, and we can expect a similar banking sector review by S&P later in the year.

As far as price action in the FX markets over the next 24 hours is concerned, the key market to watch will be EUR/USD. Although there was little follow through on Wednesday on the break of the previous daily high, the bullish move does still leave the door open for additional upside in this market into the 1.3200-1.3300 area. At this point, a break below 1.3000 would ultimately be required to end the latest bout of consolidation and accelerate declines to the downside. Elsewhere, the Yen remains in focus and the recent gains in the currency have been quite impressive. Still, we contend that any additional gains should be limited over the coming sessions in favor of a resumption of the newly established longer-term Yen downtrend after the currency showed signs of a major top back in February. Ultimately, any setbacks in USD/JPY should be limited to the 79.00-80.00 area and we suspect that this market will look to accelerate towards 85.00-90.00 into the second half of the year. For those of you trading the commodity bloc, we recommend keeping a close eye on the 1.0360 level in AUD/USD, with a daily close above on Thursday to potentially open a short-term corrective bounce into the end of the week. The latest much better than expected employment data (44k versus 6.5k expected) has already helped the market above 1.0360 intraday. But here as well we warn that the US Dollar should prevail and rallies will be very well capped ahead of 1.0600 in favor of an eventual drop back below parity.

ECONOMIC CALENDAR

TECHNICAL OUTLOOK

EUR/USD: The latest round of setbacks have stalled ahead of some key multi-week support by 1.3000 and from here, we still can not rule out risks for a shorter-term bounce back towards the 1.3200-1.3300 area, before considering bearish resumption. Ultimately, any rallies towards 1.3300 should be very well capped, while a break and close back under 1.3000, would accelerate declines.

USD/JPY: The market continues to correct from the recent 2012 highs established at 84.20 several days back, and risks still exist for additional setbacks into the 79.00-80.00 area before considering a bullish resumption. Overall, our outlook is highly constructive and we see the pair in the process of carving a longer-term base ahead of the next major upside extension into the 85.00-90.00 area. We would therefore expect to see the shaping of a fresh medium-term higher low over the coming days somewhere in the 79.00-80.00 area. Ultimately, only below 78.00 delays outlook and gives reason for concern.

GBP/USD: Failure to establish any fresh momentum on the recent break above 1.6000, followed by an aggressive bearish reversal, now suggests that the market could finally be looking to carve a top in favor of a more significant decline over the coming sessions. Look for a break and close below next support at 1.5800 to reaffirm outlook, while back above 1.6065 would be required to negate.

USD/CHF: Our core constructive outlook remains well intact, with the latest setbacks very well supported by psychological barriers at 0.9000. It now looks as though the market could be looking to carve a fresh higher low, and we will be watching for additional upside back towards the recent range highs at 0.9335 over the coming sessions. Above 0.9335 should accelerate gains towards the 2012 highs by 0.9600 further up. Ultimately, only back under 0.9000 delays and gives reason for pause.

Stocks Take a Breather Despite Strong Rally From Apple

US markets consolidated but continue to assist trend following Openbook traders who have a long US equity bias.  Guru trader Maximus24876 continued to fight the tape selling the Dow Industrials on Thursday ahead of the ECB and BoE meetings.  Returns for this portfolio manager have been rocky during the past few months, as picking a top in riskier assets has proven to be a difficult task.  Maximus24876 trades approximately 14% of his portfolio in US equity, and has had a hard time generating returns as US equities have been a one way train during 2012.Maximus24876 is not the only bear trading on Openbook. Guru traders are expressing their opinions through a new section called Guru Talk which can be found off a tab on the main page of the eToro blog. Trader Atelieruk reviewed a paper in which super stock strategist Tom Hougaard discusses the potential for the Dow to fall below 5000.
Petra09, among the most active of the US equity index traders on Openbook, continues to ride the wave higher, notching up gains during the week as equity bourses grind higher.  In addition to solid gains on US indexes, Petra09 made over 22% during the week on a long position in the DAX.
Europe regained the spotlight toward the end of the week, creating headwinds for the US equity markets.  After announcing an austerity agreement on Thursday, US traders woke to news that EU Finance Ministers in Brussels told the Greek Finance Minister that an additional 325 million Euros in cuts would be need to receive a second aid package.  The skepticism over the agreement was warranted Thursday, as the US indexes failed to rally on the news.
Apple stock price continue to drive the Nasdaq during the week as the stock pushed to new all time highs reaching for $500 dollar per share.  Technically, the Nasdaq continues to surge higher, and an increase in volume is confirming the uptrend.  The RSI on the Nasdaq is moving into a concerning overbought level above 80, which is the first time the RSI has moved above the 70 level during the past 6 months.  Support on the technology index is seen near the 10-day moving average at 2507.  Resistance is seen near weekly highs near 2800.

OpenBook Traders Remain Bullish on Wall Street Despite Greek Concerns

February 6th, 9:22 pm
 Wall Street was faced with a struggle today Greece cast a shadow of gloom over the U.S. session. Markets retreated today with the Dow down 41 points, the Nasdaq down 8 points and the S&P 500 down 3 points at the time of writing this report. Traders on OpenBook are primarily long on SPX500 with average limits at 1,350 and stops at 1,320.
Despite the bearish sentiment on Wall Street, OpenBook traders are primarily bullish on SPX500. OpenBook trader drangie was busy this morning scalping short profits on the SPX500 in the European session. The trader switched to becoming a SPX500 bull last week and closed several profitable long positions on the SPX500 with gains between 2% and 5%. The traders started buying SPX500 near 1,336 and closed near 1,342. The trader has 2 copiers and 35 followers so far on OpenBook.
With the U.S. economic calendar light on events, markets are taking their cue from developments in Europe. Talks between Greek Prime Minister Lucas Papdemos and leaders of the three opposition parties were delayed until Tuesday. Greece has to come to an agreement on new austerity measures before it gets the second bailout package. French President Sarkozy and German Chancellor Merkel said that time is running out for Greece to reach an agreement with the troika. The troika refers to European Union, IMF and ECB.
Federal Reserve policy maker James Bullard said that the U.S. housing market has already hit bottom. Bullard who is a hawk is against the current Fed policy of keeping interest rates low until late 2014. Bullard believes that low interest rates hurt savers and older Americans who rely on interest payments.
OpenBook trader aaronsw was also bullish on the SPX500 and used the dip in the markets to add to his SPX500 long exposure. Looking at this trader’s open positions, the trade is targeting SPX500 to reach 1,373. The trader has closed closed several long SPX500 positions in the past few days with gains as high as 48.33%. The trader allocates significant portion of their portfolio (about 34%) to trading SPX500. Besides SPX500, the trader also trades Oil and FRA40. The trader has been watching the $100 per barrel price level on Oil. The trader has been going long as oil prices fall below $100 and going short as oil prices trade above $100 a barrel.

Despite Delays, Traders Know Greece Can’t Dodge the Inevitable

Despite a deadline which the Greek government believes to be amorphous, no decision has yet been made which will ultimately determine whether or not Greece, as the world now knows it, will survive. Greek officials are as far away from a consensus as could be possible; one wry commentator noted that if they can’t even agree on whether or not there is or was a deadline (one unnamed Greek politician argued that there wasn’t one) how much hope was there that they could move forward on the bailout loan decision?

With the uncertainty, the Euro continued to be under significant downward pressure; currently, the Euro-Dollar is trading at 1.3110 after finding some relief overnight. On the OpenBook, sentiment is primarily bullish with investors hopeful that the Greek government will come to its collective senses. For the time being, Guru pyruss continues to be a Euro bull, and opened up a long earlier today that is already showing a profit. In the past several hours this trader closed several trades, primarily longs, all to smallish profits.

Belgian trader wkatsioulis closed a short position in the EUR/USD pair earlier which returned an 84% pr. This trader who has 20 followers and no copiers as of yet, is on the way to posting a 160% profit for the week, and 523% for the month. This trader, who employs a high-risk strategy, primarily trades indices but has earmarked more than 17% of the portfolio to this pair. The trader currently has several open longs which are showing a gain.

E.U. officials have said that indeed there was a deadline and that the Greek government missed it. So now what? More uncertainty and more volatility is a given. The Greeks are playing a high-stakes game of chicken but when March 20th arrives – when €14.5 billion in debt comes due – there will be no more dodging.

Pound Sterling Traders Bullish Resolve Holds Despite Mixed Data

Early this morning, the GfK Group released its key consumer confidence index for January, which is a gauge of confidence levels for the U.K.’s economic activity among the 2000 respondents. The reading improved to -29 from -33, beating analysts’ forecast of -32 yet far off the May “peak” of -21. The managing director of the group which conducts the survey on behalf of the E.U. Commission said that the improvement was somewhat surprising given the decline in U.K. GDP and the strong possibility that the economy is on the verge of another recession. However, he points to a decline in inflation and the recent lowering of energy prices as offering some hope to consumers.

OpenBook guru PPVijayakumar who is almost exclusively a EUR/GBP trader with 99.4% of his portfolio allocation, has consistently and successfully been able to scalp both sides of the pair and his statistics show that he is on track to post a 202% gain for the past six months. With 99.1% of all of his trades being positive, it’s understandable why this guru is regularly atop the leader board. Currently, the EUR/GBP pair is trading at .8373 and a bullish sentiment dominates on OpenBook.

Santosh is another guru who also primarily trades the Pound Sterling, though against the U.S. Dollar, with more than 64% of his portfolio allocated to the GBP/USD pair. He has several long positions opening the pair but would need a good bull rally to see them turn a profit. Nonetheless, nearly 99% of trades result in a profit for this trader who, in response to a question from a follower, admits that he avoids a fixed formula or strategy, but rather adapts his approach to the market’s behavior. Moreover, he doesn’t trade with more than 10% of his equity and uses a hedging strategy to maintain equity.

The GBP/USD pair is currently higher at 1.5751, but off the intra-day high of 1.5774; news from the Bank of England that net lending to individuals failed to meet expectations may put pressure on the pair. The report showed that lending rose from £0.6 Billion to £0.7 Billion while analysts surveyed had predicted an increase to £0.8 Billion. The Bank also reported that December’s mortgage approvals remained flat against expectations of an increase to 54,000.

 

Pound Sterling Traders Bullish Resolve Holds Despite Mixed Data

Early this morning, the GfK Group released its key consumer confidence index for January, which is a gauge of confidence levels for the U.K.’s economic activity among the 2000 respondents. The reading improved to -29 from -33, beating analysts’ forecast of -32 yet far off the May “peak” of -21. The managing director of the group which conducts the survey on behalf of the E.U. Commission said that the improvement was somewhat surprising given the decline in U.K. GDP and the strong possibility that the economy is on the verge of another recession. However, he points to a decline in inflation and the recent lowering of energy prices as offering some hope to consumers.
OpenBook guru PPVijayakumar who is almost exclusively a EUR/GBP trader with 99.4% of his portfolio allocation, has consistently and successfully been able to scalp both sides of the pair and his statistics show that he is on track to post a 202% gain for the past six months. With 99.1% of all of his trades being positive, it’s understandable why this guru is regularly atop the leader board. Currently, the EUR/GBP pair is trading at .8373 and a bullish sentiment dominates on OpenBook.
Santosh is another guru who also primarily trades the Pound Sterling, though against the U.S. Dollar, with more than 64% of his portfolio allocated to the GBP/USD pair. He has several long positions opening the pair but would need a good bull rally to see them turn a profit. Nonetheless, nearly 99% of trades result in a profit for this trader who, in response to a question from a follower, admits that he avoids a fixed formula or strategy, but rather adapts his approach to the market’s behavior. Moreover, he doesn’t trade with more than 10% of his equity and uses a hedging strategy to maintain equity.
The GBP/USD pair is currently higher at 1.5751, but off the intra-day high of 1.5774; news from the Bank of England that net lending to individuals failed to meet expectations may put pressure on the pair. The report showed that lending rose from £0.6 Billion to £0.7 Billion while analysts surveyed had predicted an increase to £0.8 Billion. The Bank also reported that December’s mortgage approvals remained flat against expectations of an increase to 54,000.

TradeTheNews.com European Market Update: Spanish and French debt auctions show no kinks despite recent SP sovereign downgrades

Thursday, January 19, 2012 5:44:32 AM
 TradeTheNews.com European Market Update: Spanish and French debt auctions show no kinks despite recent S&P sovereign downgrades
***Economic Data***
- (EU) ECB: €3.3B borrowed in overnight loan facility v €2.3B prior; €395.3B parked in deposit facility vs. €528.2B prior (Note: New Maintenance period began)
- (IN) India Primary Articles WPI w/e Jan 7th Y/Y: 2.5% v 0.5% prior; Food Articles WPI Y/Y: -0.4 v -2.9% prior
- (PH) Philippines Dec Balance of Payments: -$114M v $364M prior
- (RU) Russia Gold & Forex Reserve w/e Jan 13th: $497.1B v $498.0B prior
- (PH) Philippines Central Bank (BSP) cuts the Overnight Borrowing Rate by 25bps to 4.25%; as expected
- (AT) Austria Nov Producer Price Index M/M: +0.2% v -0.1% prior; Y/Y: 3.3% v 3.4% prior
- (NL) Netherlands Jan Consumer Confidence: -37 -34e
- (NL) Netherlands Dec Unemployment Rate: 5.8% v 5.9%e
- (HK) Hong Kong Dec Unemployment Rate: 3.3% v 3.4%e
- (EU) Euro Zone Nov Current Account nsa: €1.0B v +€2.6B prior; Current Account Seasonally Adj: - v -€1.8€7.5B prior
- (PL) Central/Eastern European Jan ZEW Indicator: -26.6 v -41.4 prior

Fixed Income
- (ES) Spain Debt Agency (Tesoro) sold €6.61B vs. €3.5-4.5B indicated range in2016, 2019 and 2022 Bonds
- Sold €1.3B in 4.25% Oct 2016 Bono; Avg Yield % v 5.276% prior; Bid-to-cover: 3.2x v 2.83; Max Yield 4.050% v 5.280% prior
- Sold €2.3B in 4.60% July 2019 Bono; Avg Yield % v 5.110% prior; Bid-to-cover: 2.0x v 2.09x prior; Max Yield 4.643% v 5.147% prior
- Sold €3.0B in 5.85% Jan 2022 Bono; Avg Yield % v 6.975% prior; Bid-to-cover: 2.2x v 1.54x prior; Max Yield 5.466%
- (FR) France Debt Agency (AFT) sold total €7.97B vs. €6.5-8.0B indicated range in 2014, 2015 and 2016 BTANs
- Sold €2.961B in 3.0% 2014 BTAN; Avg Yield 1.05% v 1.58% prior; Bid-to-cover: 2.10x v 2.98x prior
- Sold €1.575B in 2.0% 2015 BTAN; Avg Yield 1.51% v 2.44% prior; Bid-to-cover: 3.40x v 2.40x prior
- Solds €3.429 in 2.5% 2016 BTAN; Avg Yield 1.89% v 2.82% prior; Bid-to-cover: 2.10x v 1.68x prior
- (UK) DMO sold £4.0B in 4% Jan 2016 Gilts; Avg Yield 0.893% v 1.789% prior; Bid-to-cover: 2.02x v 1.48x prior; Tail:0.2 bps v 0.5bps prior
- (HU) Hungary Debt Agency (AKK) sold HUF45B vs. HUF45B targeted in 12-Month Bills; Avg Yield 8.19% v 9.96% prior
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
- Australia Job data worse than expected
- Greek PSI discussions continue
- S&P registers its first close above 1300 since summer 2011
- First bond auctions in France and Spain since the ratings cuts go reasonable well
Equities:
FTSE 100 +0.10% at 5708, DAX +0.10% at 6358, CAC-40 +0.70% at 3288, IBEX-35 +0.50% at 8463, FTSE MIB +0.60% at 15,367, SMI +0.30% at 6133
- European shares climbed higher following recent news that Greece was working with its lenders and that IMF would increase its lending resources by $500B. The initial euphoria at the news has subsided given the reluctance of some countries, namely US and Canada, to the potential increase. On a positive note, Spanish auction were well received as Spain sold considerably higher than the planned range.
- In corporate news, Carrefour [CA.FR] dropped about 1.8% after missing estimates and expecting a lower operating profit. French manufacturer Alstom [ALO.FR] also declined after reporting a 9% drop in its Q3 revenues which missed estimates. Company blamed the weak economic conditions in developed countries. Commerzbank [CBK.DE] rose after announcing that it had fulfilled 57% of the EBA requirements and strengthened Tier 1 capital ratios from its own resources.
Speakers:
- ECB's Asmussen reiterated that the central bank's extraordinary measure were strictly temporary and that the govt bond purchase program could not last forever. He did note that the ECB had many unconventional tools such as liquidity measures. He supported strengthening and early introduction of ESM facility and that it had many advantages over the EFSF. The ESM required high, stable firewalls and that all members should contribute more capital to ESM.
- ECB published its Jan Monthly Report echoes Draghi's post rate decision commentary. The report reiterated that CPI to stay above 2% in the short term and move back towards target in medium term. The report also reiterated that downside risks to economic outlook were substantial and that ongoing financial market tensions to dampen economic activity. It did noted that it saw tentative signs of stabilization
- Bundesbank Official Dombret commented that global imbalances played an important role in financial stability. European members faced a moral hazard in buying stressed sovereign debt and that non-European investors should purchases peripheral bonds to diversify their portfolios. Global Investors should help to solve the debt crisis in Europe and purchase more sovereign debt on long-term sustainability. Monetary policy tools were not primarily financial stability tools
- Slovakia Fin Min Miklos commented that the combined EFSF and ESM capacity should not exceed €500M and that the EFSF lending capacity should be sufficient for ongoing programs despite the recent S&P downgrade
- Greece Finance Minister Venizelos confirmed that the final phase of Troika talks was related to new aid will begin and that new EU-led aid deal would come with new terms. He reiterated that the PSI debt swap talks were at a "critical" stage
- Germany BDI Federation commented in its economic outlook that it saw 2012 Germany exports rising 3% y/y and that overall 2012 GDP growth of 1.0% was possible (compares to official German Govt view of 0.75% growth)
- S&P commented that the Euro zone could see a mild recession in the first half of 2012 with roughly a 40% chance of deeper EU recession materializing
- Norway Central Bank (Norges) Q4 Survey of Bank Lending stated that household lending rose in quarter but saw broadly unchanged household credit demand. Banks tightened household credit standards in Q4 with tighter standards also seen in Q1
- Spain's government might halt transfers to regions which miss spending target
- Japan had not made any commitment regarding contribution to IMF new round of fund raising but would consider support for Europe's effort to stabilize markets including bilateral loans to IMF
- Fitch analyst reiterated its view that it expected that six euro zone members currently on review to end with downgrade of 1-2 notches in most states
- Fitch commented on Spain and noted that the Gov't liquidity plans for the autonomous regions was interesting
- Fitch commented that an disorderly Greek default was not likely
- Czech Central Bank Gov Singer commented that interest rates might remain unchanged during 2012
- Philippine Central Bank commented after its interest rate decision that its 2012 and 2013 inflation target seen falling within lower half of the 3-5% range. It did see upside risk to inflation from strong capital flows and geo-political issues with the main risk being oil prices. The local economy would likely to face external headwinds in 2012
- Iran foreign minister Salehi commented that no one needed to be concerned about the Hormuz Strait but the region was of importance to Iran and warned other Gulf nations not be to dragged into conflict. He noted that the US was double-dealing with Iran as it was flexing muscles but secretly asking for discussions. President Obama must follow up letter with goodwill
Currencies:
- The Euro continued to grind higher against the major pairs against a more supportive background. The recent disclosure that the IMF sought to raise its lending resources and not complications from the Spanish and French bond auctions helped the EUR/USD to probe above the 1.29 handle for fresh 2-week highs. The technical picture was also more constructive for the Euro. The EUR/USD was above the prior 3-month channel resistance line while EUR/JPY cross appeared to have some potential of a weekly reversal after testing 11-year lows earlier this month at 97.00. The cross probed the 99 handle during the session.
- The EUR/CHF cross seemed bent on testing the SNB's resolve on holding the 1.2000 floor that has been enacted since early September. The cross was at 1.2070 for the bulk of the session.
Political/ In the Papers:
- In an international study released by consultancy McKinsey, UK had the highest level of debt following Japan. UK debt increased over the past three years to more than 5x its economic output. At current trends, it would take until 2020 for households to return debt levels to the pre-bubble trend. The report compares major economies since 2008. The overall sentiment was positive for the US with household debt possibly reaching sustainable levels in roughly two years or slightly more compared to the UK where it will take many more years.
- The Telegraph's Evans-Pritchard looked at the warning signs related to China's economy. Unsold property inventories in China have hit multi-year highs with more than 800K cars sitting unsold in warehouses. According to former Chinese banking regulator Liu Mingbank, orders for new ships have declined sharply. China's property sector makes up about 13% of GDP, which is in line with levels seen in Spain at the peak of its property bubble. The extent of China's property bubble and the aggressive tightening measures by officials has raised concerns about whether policy makers can engineer a 'soft landing'.
- The FT reported that European banks, Commerzbank and Monte dei Paschi di Siena, are in danger as the Friday deadline approaches. Regulators in Europe were reported to be certain that both banks will not be able produce realistic plans to deal with capital deficits by deadline on Friday; this exposes both banks to the risk of full or partial nationalization. European official had said it is almost inevitable that further injection of funds by the state will be required. Plpease note that the recent EBA tests found that 31 out of the 70 banks tested needed to raise a total of €115B in new capital; European regulators gave banks until June, need to submit a plan by deadline of Friday.
***Looking Ahead***
- (ZA) South Africa Central Bank (SARB) Interest Rate Decision: Expected to maintain interest rates at 5.50%
- 6:00 (PL) Poland to sell up to PLN6.0B in Zero Coupon Bonds
- 6:00 (PT) Portugal Dec Producer Prices M/M: No est v 0.2% prior; Y/Y: No est v 5.2% prior
- 6:00 (IE) Ireland Dec CPI M/M: No est v 0.0% prior; Y/Y: 2.7%e v 2.9% prior
- 6:00 (IE) Ireland Dec CPI EU Harmonized M/M: -0.2%e v 0.0% prior; Y/Y: 1.3%e v 1.7% prior
- 7:00 (EU) ECB chief Draghi
- 8:00 (PL) Poland Dec Sold Industrial Output M/M: -6.3%e v +0.7% prior; Y/Y: 6.2%e v 8.7% prior
- 8:00 (PL) Poland Dec Producer Prices M/M: 0.6%e v 0.7% prior; Y/Y: 8.3%e v 8.9% pror
- 8:00 (RO) Romania to sell 5 Year Bond
- 8:30 (CA) Canada Nov Manufacturing Sales M/M: +0.8%e v -0.8% prior
- 8:30 (US) Dec Consumer Price Index M/M: 0.1%e v 0.0% prior; CPI Ex Food & Energy M/M: 0.1%e v 0.2%; CPI NSA: 225.782e v 226.23 prior
- 8:30 (US) Dec Housing Starts: 680Ke v 685K prior; Building Permits: 679Ke v 680K prior (revised from 681K)
- 8:30 (US) Initial Jobless Claims: 384Ke v 399K prior; Y/Y: 3.59Me v 3.628M prior
- 9:00 (BE) Belgium Jan Consumer Confidence: No est v -12 prior
- 9:00 (MX) Mexico Dec Unemployment Rate: 4.8%e v 5.0% prior
- 10:00 (US) Jan Philadelphia Fed: 10.3e v 10.3 prior
- 10:30 (US) Weekly EIA Natural Gas Inventories
- 11:00 (US) Weekly DOE Energy Inventories
- 11:00 (US) Treasury refunding announcement for 2-year, 5-year and 7-year notes
- 11:00 (US) Fed to buy Notes
- 13:00 (US) Treasury to sell $15.0B in10-Year TIPS
- 12:00 (DE) German Bundesbank President Weidmann
- 12:00 (EU) OECD
- 12:10 (CA) Canada former Dep Fin Min speaks in Ottawa
- 16:00 (CO) Colombia Nov Industrial Production Y/Y: 5.2e v 5.0% prior; Y/Y: 5.9%e v 6.1% prior
- (MX) G20 vice Finance Ministers meet in Mexico City (first of a 2-day meeting)
- (US) Republican Party holds Primary Debate in Charleston, South Carolina
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