Above The Key Breached

After the deep selloff markets recover some of earlier losses triggered by fears of “Grexit”, after politicians failed to find a common ground and name a new coalition government. Meanwhile Angela Merkel in an interview with CNBC reiterated following many European politicians “I want Greece to stay in the Euro” giving markets a minor relief, and a reason to rebound in a normal pullback after being oversold. The EUR/USD decently off lows, the pair has traded the lowest since January today at 1.2680, and currently trading around 1.2750. Meanwhile, U.S. housing sector continues to show recovery, as building permits fell to 715,000 last month, however March permits were revised upward to 769,000. Housing starts rose to 717,000 units, while March reading of 654,000 was revised to 699,000. On ...

Fundamental Analysis EUR "The overall manufacturing trend remains weak." - Pierre-Olivier Beffy, chief economist at Exane BNP Paribas French industrial production fell in March, said the national statistics office Insee on Thursday. Output contracted 0.9 per cent from February, when it gained 0.2 per cent. USD "It’s hard to get nervous that imports are rising." - Dean Maki, chief U.S. economist at Barclays Capital Inc. The number of Americans claiming for unemployment benefits fell to 367,000 in the week ended May 5 from 368,000 the week before, said the Department of Labor on Thursday. GBP "Our forecast is that they are done with QE, but you can’t rule out more later this year." - Ross Walker, an economist at Royal Bank of Scotland Group Plc The Bank of England kept rates on hold ...

Fundamental Analysis EUR "The real concern isn’t about Greece, it’s about the euro and whether it breaks up -- that is key." - Mark Tinker, a fund manager at AXA Framlington Investment EUR Management European stocks declined on Wednesday as investors awaited resolution of Greek coalition talks and yields on Spanish 10-year bonds rose above 6 per cent. USD "Certainly as a result of the elections in Greece, the odds of a default and an exit from the euro have increased." - James Dunigan, chief investment officer for PNC Wealth Management U.S. wholesale inventories rose in March at a slowest pace since November, Commerce Department data showed on Wednesday. GBP "Consumers, struggling to balance their household budgets, remain reluctant to spend..." - Stephen Robertson, BRC director ...

Markets woke up on a strong bearish tone as political jitters from France and Greece dominate the scenes, sparking a flight to safety across the global markets. The anti-austerity French presidential candid Mr. Hollande was officially elected the new president, which is considered another political issue that may add further complications to the already uncertain outlook of the euro area. The new president has clearly disclosed his tendency towards less austerity and further growth, which may be a setback to the current fiscal pact and reforms that Sarkozy and Merkel pledged to tackle the debt crisis. On the other hand, the two main pro-bailout political parties in Greece fell short in the parliamentary elections, as Greeks gave their votes to parties that have always stood against the ...

Fundamental Analysis EUR "Technically, easier monetary policy conditions should be currency negative." - Jane Foley, analyst at Rabobank The European Central Bank held key rate at 1 per cent on Thursday and told it expects a gradual economic recovery this year. USD "Labor market conditions have improved in recent months." - Federal Open Market Committee The number of Americans claiming for unemployment benefits tumbled to 365,000 in the week ended April 28 from 392,000 the week before, said the Department of Labor on Thursday. GBP "The service sector started the second quarter on a weaker note than in the first quarter, but continued to grow at a reasonable pace." - Chris Williamson, chief economist at Markit U.K. service sector growth slowed in April, Markit Economics data showed on ...

The Reserve Bank of Australia shocked markets with a 50bps rate cut this morning, the bank cut interet rate from 4.25% to 3.75% while markets were expecting an imminent cut of 25bps. Australia’s slowing economy and headache coming overseas from Europe in addition to the slowdown in its major trade partner China were the main reasons behind the aggressive move. Thus, we have seen the Australian and Newzealand dollar under pressure today. While most European markets were off for Labor day, the euro was well bid as the common currency bottomed at the support area and the 50-days SMA around 1.3220, to resume the bullish bias retesting areas near 1.3300 again, however 1.3300 seen the next important pivot for the pair over the short term. Above 1.3300 the door could be open towards March high ...

Euro remained under pressure during the Asian and European sessions heading into the U.S. session down more than 55 pips. The pair has reversed from the descending resistance of the possible falling wedge pattern we mentioned yesterday. For now, we advise being cautious trading the pair as we are approaching the key technical support at 1.3000 psychological barrier, while traders anticipate the awaited bond auction from Spain tomorrow morning. Thus, the risk-on trade could be under threat within the upcoming hours. Technical wise, a breach above the descending resistance of the wedge could signal a short term recovery for the pair, for a possible retest of the latest high at 1.3215 and 1.3250. While taking 1.3000 shall be a major catalyst for further bearishness towards 2011 lows at 1. ...

(Reuters) - Spanish borrowing costs jumped at a debt auction on Tuesday but the sale went smoothly and German data gave an upbeat reading of the euro zone's largest economy, providing some relief to investors worried about the debt crisis. The euro and European shares rose and Spanish 10-year bond yields fell further below six percent, a key level breached on Monday. Investors fear Spain's economic problems will reignite Europe's troubles; a break in a country's debt yields above 6 percent has in the past accelerated the rise in borrowing costs to unsustainable territory. But Spain sold 3.2 billion euros of 12- and 18-month Treasury bills, slightly above its target, although yields were higher than at the last sale and analysts said the success was largely due to the participation of ...

The cheery sentiment we have seen within the past two days was dampened by the lower than expected pace of growth in China; the Chinese economy grew at 8.1% rate in the first quarter below market consensus of around 8.4% expansion rate; and down from 8.9% in the fourth quarter of 2011. While retail sales and industrial production showed slight expansion however just around market expectations, and fixed assets investment dropped from 21.8% to 20.9%. The numbers from China has drawn a downbeat start for the session and could continue to dampen investors’ appetite; markets continue to be data sensitive specifically from major global economies, where fears could infiltrate into the trade that China would not escape a hard landing; thus we have not seen the trough of the economic cycle yet. ...