Sunday 7 November 2010

Forex: EUR/USD recovery constrained below 1.4120 (Barcelona) - Euro rally topped yesterday at 1.4280, and the pair has given away more than 200 pips on Friday to hit session low at 1.4030 after upbeat US employment data, and recovery attempts remain capped below 1.4120 intraday resistance so far.

On the upside, immediate resistance lies at the mentioned 1.4120, and above here, 1.4180 (previous lows), and above here and 1.4245 (session high). On the downside, support levels lie at 1.4030 (session low), and bellow here, 1.3990/00 (Nov 3 lows) and 1.39510 (Oct 29 high).

Technical indicators show the pair exhausted to the downside, according to Valeria Bednarik, technical analyst at, suggesting further recovery: "Technically, hourly indicators look exhausted to the downside, suggesting some further recovery yet to be confirmed once the pair overcomes 1.4120 immediate resistance zone."

Gold bullion threatening $1400 milestone (Barcelona) - Gold futures are setting new historic records for a second-consecutive day, as investors rush to the safety of the metal in the wake of the Fed´s QE2 announcement. In early trading over NY, the most active gold contract for December delivery trades at $1396.80 a troy ounce as it leans toward the $1400 milestone.

The safe-haven appeal of gold has been markedly amplified since Wednesday´s Fed announcement, due to the fact of a weakening US dollar. Today, the yellow metal dipped over Asia and Europe on profit-taking as well as a better-than-expected US NFP report which gave the greenback some breath. Nonetheless, the upside momentum is overshadowing the upbeat employment report as demand remains high.

Forex: USD/CHF, capped at 0.9640, back to previous range (Barcelona) - Dollar rally witnessed after Non Farm payrolls has been short lived, as the pair, capped at 0.9640 session high has pulled back returning to previous trading range, between 0.9550 and 0.9600.

The pair is trading at the moment at 0.9570, with next support levels at 0.9550/55 (session lows), and below here, 0.9510 (Daily pivot point S1) and 0.9460 (Oct 14 low). On the upside resistance levels lie at 0.9640 (session high), and above here, 0.9690/00 (Nov 2/3 lows) and then 0.9735 (Nov 4 high).

The pair seems likely to resume its bearish trend, according to Valeria Bednark, technical analyst at "With hourly indicators however still bullish; below 20 SMA now around 0.9590, pair will likely resume its bearish trend, while daily close below 0.9600 should signal fresh historical lows for the upcoming week."

Forex: Majors wait for US housing data (Buenos Aires) – Following better than expected US employment data and mixed spikes across the board, majors had settle down in tight ranges, waiting for the last fundamental number of the week, the US Pending Home Sales. Expected around 3.2% compared to previous month 4.3%, dollar remains under pressure with gold nearing $ 1400/oz, setting a fresh record high around $ 1398. Market anyway, is mixed today, as commodity currencies found strength to soar against greenback, while yen and euro had come under pressure since early Europe.

EUR/USD quotes around 1.4080, unable to overcome 1.4120 static resistance area, that has been capping the upside since post data dip to 1.4030 daily low. USD/JPY has regained the 81.00 level, trading over the past few hours in between 81.00 and 81.30, far from yesterday’s high of 81.65 and immediate resistance level. Finally, USD/CHF holds barely below 0.9600, favored to the downside on SNB comments about needed rate hike in the short term, while GBP/USD remains range bound lacking strength either side of the board, although supported above 1.6200.



Forex: USD/JPY surges near daily high

Fri, Nov 5 2010, 16:06 GMT (Buenos Aires) – Dollar has accelerated higher across the board on London fix, favored by gold that’s falling below $ 1390/oz after setting a fresh record high at $ 1398/oz. Some profit taking at the end of the week plus position adjustment ahead of US data, are the main reason of current movements, after an eventful couple of hours that saw majors trading in tight ranges.

USD/JPY surged above 81.30, approaching to daily high at 81.46 set after better than expected US employment readings earlier today. Still limited to the upside by yesterday’s high around 81.65, pair has managed to slowly gain over this week, as the 80.30 15-year low posted past Monday, seems to have draw a bottom line, at least temporal. Still, market rumors suggest Japanese exports are ready to sell around the 82.00 level, while suspected stop losses lie above this one.

US stocks flat as 2-day rally begins to subside (Barcelona) - A widely upbeat US NFP report helped to bring Wall Street back into positive territory, however equities still struggle near even as wave of optimism originating from the Fed´s QE2 announcement begins to fade. So far the DOW and NASDAQ trade slightly under by 0.02% and 0.05%, while the S&P holds onto modest gains of 0.27%.

A day after the DOW closed at its highest level since September 2008, investors are striking a cautious tone as markets appear to be overextended. Still, the recently released US jobs report showed the economy added jobs over October for the first time in 5 months, helping to slightly lift confidence even though the unemployment rate remains at 9.6%.

Among stocks in focus, Kraft Foods is showing a loss of nearly 3.0% after announcing disappointing 3rd quarter results on higher costs. On the flipside, Starbucks and Coventry Health Care are up around 4.0% and 5.0% respectively as both firms post strong quarterly financials.

LME LATEST - Metals pare gains in PM sessions, but sentiment boost seen from US jobs data

Fri, Nov 5 2010, 16:37 GMT

- Base metals turned back from session highs during the PM sessions, with prices mixed but generally ending the week on a robust note. The bullish sentiment that has developed this week was underscored by today's US October non-farm payrolls report. This - the last of this week's key macro-events - came in much better than expected, with US employers adding 151,000 jobs last month compared with a forecast increase of some 60,000.

 - To some extent the complex was restrained by the firm dollar, which was ushered higher by the employment figures and was a firmer 1.4040 against the euro this afternoon. Some profit-taking in the metals after three days of hefty advances was also evident.

 - Copper was the exception, trading at $8,685 per tonne, still up $85 from Thursday, with volume around 14,500 lots. Earlier in Asia the market hit $8,769.50, its highest since July 2008, against a background of a large position being closed out. Prices are nevertheless getting ever nearer to the all-time high of $8,940 set that same month. Falling inventories - stocks are just 275 tonnes above their lowest for 12 months - and the start of a strike at the Collahuasi mine in Chile today mean that the impetus is upwards.

 - Aluminium business at $2,446 was $14 lower, with the market faltering after initially touching levels near the six-month high of $2,492 set yesterday. Resistance is anticipated around there - prices will be at levels last seen in September 2008.

(Editing by Mark Shaw)

US Pending Home Sales (MoM) declines 1.8% in September 

Fri, Nov 5 2010, 16:30 GMT (Barcelona) For more information, read our latest forex news.


Forex: EUR/USD could rise to 1.45 in the coming months – Danske Bank

Fri, Nov 5 2010, 18:28 GMT (Córdoba) – The Euro could extend its rally against the Dollar in the coming months according to analysts at the Danske Bank. The second round of quantitative easing by the FED and the exit strategy of the European Central combined will pushed the EUR/USD higher the bank affirm.

“The ECB remains committed to its exit strategy. Short money market rates in the eurozone remain elevated but can actually rise more if liquidity is being drained further. Hence, we maintain our call for a gradual dollar depreciation over the coming months and maintain our forecast of EUR/USD to reach 1.45 in three months and continue towards 1.50 on the 12- month horizon unless the monetary policy divergence between the Fed and the ECB abates”, analyst at the Danske Bank said.

Forex: AUD/USD weekly gains above 300 pips (Córdoba) – AUD/USD posted the biggest weekly gain since July and finished above parity for the first time since it’s freely traded. The pair rose more than 300 pips during the week supported by a rate hike in Australia, soaring gold prices and FED’s announcement of more quantitative easing.

“On a longer-term perspective, AUD/USD potentially carries enough of a bullish bias to target upside around the 1.0500 price region, which is a key 261.8% Fibonacci extension level. To the downside, parity now serves as significant support where it previously served as strong resistance before breakout”, said James Chen, chief technical analyst at FX Solutions.

AUD/JPY extended its rally on Friday and reached at 82.60, the highest price in 5 months. The pair accumulates an increase of 330 since Monday’s Asian session.

The Aussie and the New Zealand Dollar were the biggest gainers during the week among the most traded currencies. 

US GOLD - Comex gold pushes aside dollar rally to strike new record just below $1,400

Fri, Nov 5 2010, 20:11 GMT

New York 05/11/2010 - Gold on the Comex division of the New York Mercantile Exchange touched a fresh all-time high Friday and closed just shy of $1,400 an ounce as overall bullish sentiment outweighed a unexpectedly strong US jobs report, which led the dollar to rebound.
Gold futures for December delivery settled up $14.60 to $1,397.70 an ounce. Earlier in the session, the yellow metal hit a lifetime high of $1,398 for the most actively traded contract.
Comex silver also posted strong gains as the December contract touched a new 30-year high of $26.915 an ounce before closing up 71 cents at $26.748.
Precious metal prices are still being swayed by positive post-qunatitive easing (QE2) euphoria. On Wednesday, the Federal Reserve announced its intentions to buy an additional $600 billion in Treasury bonds in an attempt to pump some added life in the economy.
"Today was a continuation of what's been going on. It's all investment demand as people are trying to move out of paper assets because they're afraid that the central banks are going to crank up the printing presses," a US-based gold trader said.
The market even shrugged off a positive jobs report, which typically would have dented bullion prices.
The US Labor Department reported that the economy added 151,000 jobs in October, an improvement over September, when 41,000 jobs were lost, and much better than expectations of a 63,000 gain.
Based on that news, the dollar climbed about 1 percent against the euro to 1.4039 from 1.4215 on Thursday.
"New buying in gold and silver and their record highs led open interest figures to near records. Buyers were anxious enough to ignore the improving dollar and were intent on not missing the market," George Gero, senior vice president and financial consultant with RBC Wealth Management, said.
Gero added that QE2 appears to be working as the weak dollar is allowing foreign buyers to bargain hunt in the metals and agricultural markets.
MKS Finance SA said that the good numbers regarding the US labour market weren't enough to substantially alter the rally in gold, which started since the release of QE2.
"We're just a few steps away from the important $1,400 level which we expect to see very soon in the actual environment of concern over inflation and with the dollar under pressure boosting gold's appeal as a currency hedge," MKS said.
The first trader said that the gold will likely see some physiological resistance around $1,400, which is also a popular option strike price where people could be defending positions.
"It's always dangerous when you go into new high ground as this is a market tends to have some pretty large corrections; however, the last correction we had from $1,388 to $1,315 didn't really change the dynamics of the market or make it bearish," he said.
He added that if the sentiment does changes all at once there would be a big washout, but until that happens money will continue to pour in to metals.
"There are still folks out there who feel they missed the boat and are looking to get in. That's why we're seeing those dips get pretty good support," the trader said.

US Consumer Credit increases $2.15B in September (Barcelona) For more information, read our latest forex news.

Consumer Credit