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Flash: EUR/USD faces bearish outlook below 1.3020 – UBS

fxopen — Fri, 24 May 2013 03:52:00 GMT

(Barcelona) - UBS Strategists, Gareth Berry and Geoffrey Yu take a technical perspective at today's EUR crosses and note that there is a generally neutral-trending bias ahead.

According to the analysts, “As long as the EUR/USD resistance at 1.3020 holds, there is scope for resumption of downside as bearish trend conditions persist. Support is at 1.2797 ahead of 1.2746, indicating a bearish outlook”. In terms of the EUR/CHF, resistance prompted the latest setback at 1.2661. While support at 1.2370 holds, the risk is for extension of the bull trend.

Moving to the EUR/GBP, the recent recovery is approaching resistance at 0.8607. A break above which would extend the strength to 0.8656. Support is at 0.8516 ahead of 0.8441, suggesting a neutral intraday view. Finally, concerning the EUR/JPY, the latest setback was staged from just under critical resistance at 134.38. There is scope for a break above this, extending strength to major resistance at 138.49 – support is at 129.97.

UBS Strategists, Gareth Berry and Geoffrey Yu take a technical perspective at today's EUR crosses and note that there is a generally neutral-trending bias ahead.

(Market News Provided by FXstreet)

Buba head see no conflict between consolidation and growth

fxopen — Fri, 24 May 2013 03:45:00 GMT

(Barcelona) - President of the Deutsche Bundesbank Jens Weidmann said on Friday in a speech prepared for the BdF-BBk Macroeconomics and Finance Conference in Paris that there was no conflict between consolidation and growth in the long term and that delaying consolidation in the EU could increase uncertainty on financial markets.

“As a consequence, sovereign bond spreads would remain high or go up even further,” he warned.

The Buba chief stressed that high levels of public debt adversely affect economic growth and that they might also divert banks from price stability. He suggested that growth could be boosted by attaining budget consolidation through spending cuts. Monetary policy alone cannot assure a stable currency, Weidmann stressed, adding that it also depends on sustainable public finances.

Finally, he argued that in the long term the EU should allow for state bankruptcies, as the possibility of default is and important element of market discipline.

President of the Deutsche Bundesbank Jens Weidmann said on Friday in a speech prepared for the BdF-BBk Macroeconomics and Finance Conference in Paris that there was no conflict between consolidation and growth in the long term and that delaying consolidation in the EU could increase uncertainty on financial markets.

(Market News Provided by FXstreet)

European equities continue the downside Friday

fxopen — Fri, 24 May 2013 03:43:00 GMT

(Barcelona) - The European markets tracked lower Friday to close out the week, with a further weakness permeating major indices across the continent – in addition, the EUR/USD rallied higher during European trading.

Beginning with the indices and composites, the EURO STOXX 50 fell -0.24% as it settles in region of 2770.17, down -6.61 points in these moments. In addition, the FTSE 100 collapsed into negative territory, operating at 6657.61, descending -39.58 points or -0.19% at the time of writing. Finally, the DAX has weakened recently as well, trading in the zone of 8293.54 presently -0.70% after a movement of -58.44 points.

Moving to commodities the prices of gold and silver are trading near session highs, and more specifically at USD $1387.30 and $22.41 per oz. respectively. In addition, the price of crude is operating at USD $93.90/bbl Friday.

The European markets tracked lower Friday to close out the week, with a further weakness permeating major indices across the continent – in addition, the EUR/USD rallied higher during European trading.

(Market News Provided by FXstreet)

EUR/USD attempts to regain 1.3000

fxopen — Fri, 24 May 2013 03:40:00 GMT

(Barcelona) - The shared currency attempted to clinch the psychological mark at 1.3000 on Friday, although the intent died off soon after.

“We think that a stab at the 1.3030-1.3040 range in EUR/USD is a distinct possibility in the run-up to next week’s second pass at US Q1 GDP if today’s data seriously disappoint”, commented Strategist Stephen Gallo at BMO, ahead of the US Durable Goods Orders due later. Recall that prior estimates points to a monthly expansion of 1.5% of the headline and 0.5% excluding the Transportation sector.

The pair is now advancing 0.34% at 1.2978 and a surpass of 1.2998 (high may 22) would expose 1.2999 (MA21d) and finally 1.3030 (high May 14). On the downside, a breach of 1.2900 (MA10d) would then target 1.2821 (low May 23) en route to 1.2809 (low May 20).

The shared currency attempted to clinch the psychological mark at 1.3000 on Friday, although the intent died off soon after...

(Market News Provided by FXstreet)

GBP/USD oscillates around 1.5100

fxopen — Fri, 24 May 2013 03:17:00 GMT

(London) - GBP/USD is trading in a range of 40 pips around the 1.5100 level. There are Durable Goods orders on the calendar coming up at 13.30 BST with consensus for a high reading.

Alvin Pontoh, FX & Rates Strategy at TD Securities said, ‘The pace of durable goods orders should rebound smartly in April as higher Boeing aircraft orders and an increase in defense orders combine to push the headline number higher.’’ During the month, he expects the pace of orders to post a fairly robust 2.5% m/m rise, better than the 1.5% expected by consensus.

On the charts, the pair are trading below the 61.8% correction and were resisted at 1.5130 and the possibility of extending the bearish move is valid today, with daily MA’s and momentum indicating a move to the downside.

On the otherhand, a break above 1.5130 , breaking the resistace line and a seriies of higher lows could keep the pair bid above 1.5100 for the time being. Next resistance is 1.5170. Near term support is at the pivot point 1.5080 before 1.5035 and key plays out at 1.4995. 1.4830 (March 2013 and 2009 Low).

GBP/USD is trading in a range of 40 pips around the 1.5100 level. There are Durable Goods orders on the calendar coming up at 13.30 BST with consensus for a high reading.

(Market News Provided by FXstreet)

EUR/CHF wanes towards 1.2500 barrier

fxopen — Fri, 24 May 2013 03:00:00 GMT

(Barcelona) - The EUR/CHF recently fell off the 1.2530 handle to move back towards the 1.2500 barrier during European trading Friday.

Briefing the technicals, the pair has settled at 1.2502/04 in these moments, incurring a loss of -0.20%. “In terms of the EUR/CHF, resistance prompted the latest setback at 1.2661. While support at 1.2370 holds, the risk is for extension of the bull trend.” notes Gareth Berry, a Research Analyst at UBS.

Earlier today in Germany, the IFO – Business Climate (May) has yielded a figure of 105.7, against expectations of 104.5. In addition, the IFO – Current Assessment revealed 110.0 in May, vs. a projection of 107.2. Finally, IFO – Expectations (May) was reported at 101.6, matching its consensus of 101.6.

The EUR/CHF recently fell off the 1.2530 handle to move back towards the 1.2500 barrier during European trading Friday.

(Market News Provided by FXstreet)

Flash: Stay long USD, avoid it when positioning in other currencies – Merrill Lynch Bank of America

fxopen — Fri, 24 May 2013 02:56:00 GMT

(London) - Tomos Rhys Edward, BofA Merrill Lynch Global Research said that the Fed message this week was to follow the data.

He added that although the Fed clarified that it was not about to change its policy, acknowledgment that such a change was on the table if data continued improving, in a market that is bullish on the US, has been USD positive.

Further he said, markets might have also gotten more concerned about an early Fed exit, taking some risk off. He expects the Fed to scale back its accommodation and, even more, exit from unconventional policies only when data have improved to such an extent that the policy change will not be a negative market shock. Hence, the Fed needs more data to confirm a sustainable recovery, in particular because of concerns that the sequester may affect the economy with a lag.

Fed message this week was to follow the data.

(Market News Provided by FXstreet)

Flash: The trade surplus fell - TD Securities

fxopen — Fri, 24 May 2013 02:41:00 GMT

(London) - Research teams noted that the trade surplus fell to $NZ157m in April, from $NZ732 in March, below consensus expectation of $NZ500m.

They explained that the weakness was driven both by lower exports and higher imports. Despite a 22% m/m jump in dairy prices, exports eased slightly, likely affected by the North Island drought.

Research teams noted that the trade surplus fell.

(Market News Provided by FXstreet)

USD/JPY finds support at 101.00

fxopen — Fri, 24 May 2013 02:39:00 GMT

(Barcelona) - Selling interest in the cross has found strong support around the 101.00 handle once again on Friday, allowing a rebound to the area of 101.65/70 afterwards.

In light of the ongong QE tapering talks, Currency Analyst Christopher Vecchio at DailyFX commented, “Chairman Bernanke reiterated nearly every talking point from the Fed over the past few weeks, including from those in his inner circle, such as NY Fed President William Dudley… I don’t expect any sort of news about a taper at the June meeting (barring a +300K NFP print); any such major shift in policy is likely to occur at the September meeting”.

At the moment, USD/JPY is losing 0.35% at 101.66 with the immediate support at 101.08 (hourly low May 24) followed by 100.83 (low May 23) and finally 100.54 (low May 10). On the upside, a breakout of 102.59 (high May 24) would open the door to 103.57 (high May 23) ahead of 103.74 (2013 high May 22).

Selling interest in the cross has found strong support around the 101.00 handle once again on Friday, allowing a rebound to the area of 101.65/70 afterwards...

(Market News Provided by FXstreet)

Draghi: ECB eliminated risk of euro collapse

fxopen — Fri, 24 May 2013 02:39:00 GMT

(Barcelona) - During a speech delivered on Thursday in London Mario Draghi said that the European Central Bank's actions were crucial for securing the permanence of the euro.

The ECB head told the audience gathered for an event organized by bankers and regulators in the City of London that the measures implemented by the central bank, such as the liquidity injection for banks through the LTRO program, helped to halt the panic in the financial markets, preventing a considerable increase in interest rates which most probably would bring about the collapse of various Eurozone economies.

“Today we are seeing some encouraging signs of tangible improvements in financial conditions” Draghi insisted. Spreads in sovereign and corporate debt markets have narrowed considerably.”

Draghi added that ECB's intervention eliminated the risk of a systemic collapse of the euro and announced that the fiscal consolidation planes and labor reforms implemented by Eurozone governments are starting to bear fruit.

During a speech delivered on Thursday in London Mario Draghi said that the European Central Bank's actions were crucial for securing the permanence of the euro.

(Market News Provided by FXstreet)