Thursday, 9 May 2013

European stocks are expected to open higher

       European stocks are expected to open higher Thursday, with other markets in Europe barely changed. The focus will be on a meeting of the Bank of England's monetary policy committee, which is likely to leave both its benchmark interest rate and the size of its asset-purchase program as they are.
"The Bank of England is expected to leave monetary policy unchanged following Sir Mervyn King's penultimate meeting as governor. Mark Carney will take over this role in July, and you get the feeling that most members are not interested in committing to anything until the transition is complete," said Craig Erlam, market analyst at Alpari (UK), in a note to clients.     

EUR/USD Open 1.3158 High 1.3194 Low 1.3070 Close 1.3149

On Wednesday Euro/Dollar increased with 120 pips. The European currency appreciated from 1.3070 to 1.3194 yesterday, matching the positive money flow sentiment at above +21%, closing the day at 1.3149. This morning the Euro is trading quietly, with movements at the upper end of yesterday's range for now.

On the 1 hour chart quotes are back into the range trading, while on the 3 hour chart the downward channel has turned into wide trading scope. Break above the nearest resistance and yesterday's top at 1.3194 may trigger further strengthening of the Euro. Going bellow yesterday's bottom and first support at 1.3070, however, would confirm continuation of the bearish trend, towards next objective downwards 1.2956.

Today's focus is on ECB Monthly Report, and U.S. Jobless claims and Wholesale inventories, at 8, 12:30 and 14 GMT respectively.

Quotes are moving just above the 20 and 50 EMA on the 1 hour chart, indicating slim bullish pressure. The value of the RSI indicator is positive and calm, MACD is positive and inclining upwards, while CCI is in line with the 100 line on the 1 hour chart, giving over all light long signals.

Technical resistance levels: 1.3194 1.3310 1.3433
Technical support levels: 1.3070 1.2956 1.2832

Euro Briefing

Better than March German Industrial Production data, rosy comments from Germany's Eco Min on output for future months & a German Finance Ministry statement wanting to complete talks on a European resolution mechanism by the summer break had EUR/USD lift off right out of the gate. NY spiked the pair from the 1.3125 open to a high of 1.3194. ECB's Mersch aided to fuel the rally. Mersch stated the ECB is discussing an ABS buying program (MNI) while also stating the chance of deflation is not bigger than 10%-15%. The rally was halted ahead of 1.3200 as mkt chatter touted nothing but offering interest from 1.3200 to 1.3250. Talk of large 1.3200 expiries for the NY cut tomorrow also likely aided to keep bulls in check. Intra-day players began taking profit & the pair steadily slid for most of NY's afternoon to settle near 1.3155. Bulls are encouraged that the pair again fails to hold below the 10 & 21 DMAs. Solid bidding interest 1.3030/50 aids to keep
EUR/USD above the averages. The broad 1.2950-1.3250 range prevails though and until it's broken choppy mkts & short term range traders will prevail.

Power crisis: Pakistan government bans airconditioners

Grappling with power outages across the country, the Pakistan government on Wednesday banned the use of airconditioners in its offices from May 15 and introduced a "summer dress code" for employees.

Caretaker Prime Minister Mir Hazar Khan Khoso decided to impose the ban in all government departments and offices, an official statement said.

Khoso directed authorities to introduce a new dress code for government employees to help them cope with the lack of airconditioning.

The dress code includes white or light coloured shirts and trousers or shalwar-kameez with waist coat.

As a special concession, government employees will be allowed to come to work in "shoes without laces" or "sandals without socks", the statement said.

The ban on airconditioners will come into force on May 15 and continue till "there is substantial improvement in the energy situation".

The Prime Minister's House has already stopped using airconditioners as part of an austerity and conservation drive.

"The measure reflects the resolve of the government to manage the power crisis by management of demand," the statement said.

Authorities were given seven days to implement the ban.

Khoso expressed hope that provincial governments, private institutions and the people would cooperate with his government for energy conservation.

He appealed to people to adopt energy conservation in their homes and workplaces to minimise power cuts.

Power outages have increased across Pakistan with the steady rise in summer temperatures.

There are eight hours of power cuts in Islamabad while many rural areas go without electricity for upto 18 hours a day.

Wednesday, 8 May 2013

EUR/USD In 90 Pip Range This Week So Far

See more HOT pictures

 EUR/USD Open 1.3075 High 1.3132 Low 1.3067 Close 1.3077

On Tuesday Euro/Dollar traded within 65 pip range. The European currency appreciated from 1.3067 to 1.3132 yesterday, matching the positive money flow sentiment at around +16%, closing the day at 1.3077. This morning the Euro is trading quietly, with movements at the lower half of yesterday's range for now.

On the 1 hour chart quotes are back into the range trading, while on the 3 hour chart the downward channel has turned into wide trading scope. Break above the nearest resistance and yesterday's top at 1.3132 may trigger further strengthening of the Euro. Going bellow yesterday's bottom and first support at 1.3067, however, would confirm continuation of the bearish trend, towards next objective downwards 1.2955.

Today's focus is on Germany Industrial production at 10 GMT.

Quotes are moving just above the 20 and in line with the 50 EMA on the 1 hour chart, indicating short term slim bullish and medium term neutral pressure. The value of the RSI indicator is neutral and calm, MACD is negative and quiet, while CCI has crossed up the 100 line on the 1 hour chart, giving over all neutral signals.

Euro Briefing

Early NY bears were spooked as Portugal's 10 year bond issue looked set for solid demand & German Industrial orders for March came in at +2.2% (-0.5% exp). The news awoke a slumbering EUR/USD mkt & the pair spiked up from 1.3078 to a session high of 1.3132. Asian offers in the 1.3140/50 region held bulls in check. The gains were given away a short while later though as the ECB's Weidmann & Noyer stated EZ competitiveness should be improved as a whole, Germany shouldn't be weakened and it is up to other EZ nations to catch up to Germany. The pair slipped to 1.3105. Another leg lower took hold after Japan revised up its nominal GDP for the Oct-Dec quarter. EUR/JPY cleared 129.80 support, hit stop & hit a low of 129.30. EUR/USD broke below 1.3100 support & hit 1.3073. Bounces were limited to 1.3090 & the pair settled near the NY lows. The chop in EUR/USD persists but bears may win out. The pair is below the 10 & 21 DMAs & a doji on the daily candle
suggest sellers lurk. Solid bids still sit near 1.3050 & ahead of 1.3000. If those are cleared, the Apr 24 low comes into play. A break there suggests a test of the April low is due.

Tuesday, 7 May 2013

Trading Signals: EUR/USD intraday: under pressure

EUR/USD intraday: under pressure.

Pivot: 1.3115.

Our preference: SHORT positions below 1.3115 with 1.3035 & 1.299 as next targets.

Alternative scenario: The upside breakout of 1.3115 will open the way to 1.315 & 1.318.

Comment: the RSI is capped by a declining trend line, the pair stands below its resistance and remains under pressure.

Monday, 6 May 2013

Mersch to EUR: Live long and prosper

It's somewhat less dramatic than when Draghi first pledged to save the euro, but ECB's Mersch is also promising to do what it takes for "the euro to have a long and prosperous life". But he sounds less enthusiastic than Draghi about doing much in terms of policy to ease monetary conditions. A hawk close to the Bundesbank, Mersch warns of the limits of policy, or "pushing on a string." Though the hawks appear to be in the minority now, the level of resistance to further moves indicate Draghi may face an unappealing debate over further action, no matter how ready to act he may be. Here's how the ECB hawks and doves stacked up last year amid the OMT

Trading Signals: EUR/USD intraday: under pressure

EUR/USD intraday: under pressure.

Pivot: 1.3150.

Our preference: SHORT positions below 1.315 with 1.3075 & 1.3035 as next targets.

Alternative scenario: The upside breakout of 1.315 will open the way to 1.318 & 1.322.

Comment: the pair stands below its new resistance and remains on the downside as the RSI is badly directed.