Tuesday, November 27, 2012

EUR/USD is steady in early Monday trading

BOJ minutes; EZ finance ministers meeting continues; Catalan separatists parties won; German GfK fell; Italian consumer confidence at all time lows. Markets discounting favourable decision on Greece tonight. EUR/USD regained the important 200-DMA and 55-DMAs in matter of 3 days. 6 trades from the Premium Insights hit all targets, 2 were stopped out. See more details below.

USD attempted to push higher at the beginning of the London session but it gave up all gains and currently trades slightly lower against all majors. European equities are losing around 0.5%.

The BOJ meeting minutes did not provide any surprise as they contained only the usual notes of continued powerful easing in light of a weak outlook. Despite the governor Shirakawa comments that the currency market can be influenced by easing until the inflation target is in sight, USDJPY declined from 82.50s to 81.92 and currently trades around 82.10.

Eurozone finance ministers are meeting in Brussels for the third time this month on Greek debt clearance. The goal is to agree on debt reduction and debt sustainability before the next tranche of the aid is delivered. Markets discounting favourable decision on Greece tonight.

Catalan separatist parties won regional elections but voters gave no clear message for their leaders as the Catalan president Artur Mas who called the election actually lost a number of seats in the regional parliament. As a consequence he will have to form an alliance with parties that have a different socioeconomic agenda.

The European data calendar was light, Eurozone GfK German consumer climate fell for December to 5.9 from previous 6.3 and Italian consumer confidence fell to all time low 84.8 in November from 86.2 in October. EURUSD trades not far from session highs around 1.2965.

There are no data reports due during the US session today. The only risk event is a speech given by the vice president of the ECB Vitor Constancio that is scheduled to begin at 9:00 am ET.

 EUR/USD intraday: the upside prevails.

Pivot: 1.294
Our preference: Long positions above 1.294 with targets @ 1.2995 & 1.3015 in extension.
Alternative scenario: Below 1.294 look for further downside with 1.2895 & 1.2865 as targets.
Comment: the pair remains within a bullish channel.

EUR/USD is steady in early Monday trading, as the markets keep close tabs on today’s Eurogroup meeting in Brussels. The Euro-zone finance ministers will again huddle and attempt to reach some agreement on the vexing issue of Greece’s debt. Given the importance of today’s meeting, we could see EUR/USD react whether or not a breakthrough is achieved. There is only one scheduled economic release today, that of German Consumer Climate.

EUR/USD Technical
Asian session: Euro/dollar was quiet and consolidated around 1.2960. The pair is unchanged in the European session.
Current range: 1.2960 to 1.30.

Further levels in both directions:
Below: 1.2960, 1.2880, 1.28, 1.2750, 1.2690, 1.2624, 1.2590, 1.25, 1.2440, 1.2390 and 1.2250.
Above: 1.30, 1.3030, 1.3080, 1.3140, 1.3170, 1.3290 and 1.34.
1.2960 is providing weak support as the pair improves. 1.2880 is stronger.
1.30 is the next line on the upside.

Euro/dollar steady prior to Eurogroup meeting– click on the graph to enlarge.

EUR/USD Fundamentals
All Day: Eurogroup Meetings in Brussels.
12:00 GfK German Consumer Climate. Exp. 6.3 points.

For more events and lines, see the Euro to dollar forecast

EUR/USD Sentiment
  1. Eurogroup meets (yet) again over Greece: The Euro-zone’s finance ministers are again meeting in Brussels to try and reach an agreement over the Greek debt crisis. Previous attempts to hammer out a deal have failed, as the IMF and the EU have publicly bickered over what steps to take. Themain goal is to come up with an additional 10 billion euros to fill the finance gap that has resulted from the EU granting Greece two extra years to meet deficit reduction targets.Greek Finance Minister Yannis Stournaras stated that the EU and the IMF have narrowed the gap in their positions, and was confident that a compromise could be reached in today’s Eurogroup meeting. Is an agreement really close at hand, or is this just wishful thinking on Stouraras’ part? Greece continues to totter near bankruptcy and Greeks are frustrated that its lenders have not released more aid, even though the Greek government has pushed through harsh austerity measures that triggered mass demonstrations. If the deadlock continues, market sentiment could sour, and EUR/USD could lose some ground as a result.
  2. Euro enjoying rally: Following a sharp drop in early November, the euro has flexed some muscle in the past two weeks, gaining over 250 points against the greenback. The main catalyst for this rally has been positive Euro-zone data, including respectable PMIs and unexpectedly strong German business climate data. However, the euro continues to remain vulnerable, with the number one problem the Greek debt crisis. European finance ministers are meeting today in Brussels, as attempts continue to hammer at agreement. We could see more movement by EUR/USD following this crucial meeting.
  3. Ruling party in Catalonia suffers setback: Separatists in the Spanish region of Catalonia won regional elections on Sunday, but the ruling party, the CiU, lost 12 seats, complicating plans for a referendum on indepedence. The results are a victory for the central government in Madrid, which is struggling with an economy in recession and can ill afford further political turmoil. However, theseparatists now control two thirds of the local parliament, and Prime Minister Mariano Rajoy’s political headaches are far from over.
  4. EU Summit Fails to Adopt Budget: European leaders failed to reach any agreement over the EU budget for 2014-2020. The bloc’s wealthier countries, led by the UK wanted to reduce their contributions due to the tough economic climate. Unsurprisingly, struggling members such as Greece, Portugal and Spain opposed any cuts. In the end, the gap between the two sides were too wide to bridge. European Council President Herman Van Rompuy, who presided over the summit, tried to put a brave face on the impasse, saying that he was hopeful that the ”constructive discussions” at the summit could result in an agreement in early 2013.

Disclaimer The analysis we provide is based on the average estimate of price movements in one day. Does not guarantee what we deliver is actually a proper and correct. Everything that happens in the decisions you make on your trading transaction is to be Your responsibilities. Visit Us www.deryworldscorp.web.id


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