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| Action Insight | Candlesticks Trades | Markets Summary | Action Bias | Top Movers | Daily Technicals |
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| Action Insight Weekly Report | Markets Snapshot |
Daily Report: Risk Aversion Continues as Moody's Downgraded Spanish Banks, Fitch Downgraded Greece, Yen JumpsMarket sentiments were further hurt by worries on Spain, Greece and European banking sector as a whole. Moody's downgrade of 16 Spanish banks and the surging yield in bond auctions sent Spanish CDS to record high of 552 bps while benchmark 10 year yield continues to march towards 7% unsustainable level. Fitch downgraded Greece on risk of Euro exit. Asian equities are broadly lower following the -1.24% fall in DOW overnight while dollar index is heading closer to 2012 high of 81.78. Note that, this round, yen is the biggest winner and overshadowed dollar as markets are starting to expect additional easing from Fed due to global financial market risks and recent weak US economic data. |
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| Featured Technical Report | |
GBP/JPY Daily OutlookDaily Pivots: (S1) 124.26; (P) 126.12; (R1) 127.09; More... GBP/JPY's decline extends further to as low as 124.64 so far today and intraday bias remains on the downside for 61.8% retracement of 116.83 to 133.48 at 123.19 next. Break of the lower channel line suggests that acceleration and sustained break of 123.47 will target a test on 116.83/117.29 support zone. On the upside, above 125.72 minor resistance will turn bias neutral and bring consolidations. But recovery should be limited by 127.10 support turned resistance and bring fall resumption. |
| Special Report |
Moody's Downgrade Unveils Insufficiency Of Latest Spanish Banking ReformDespite further banking reform, Moody's announced to downgrade 16 Spanish banks with ratings of Banco Santander (SAN) SA and Banco Bilbao Vizcaya Argentaria SA (BBVA), Spain's biggest lenders, cut 3 notches to A3. The rating agency stated that the downgrades were mainly due to reassessment of each bank's standalone credit quality which is expected to deteriorate further in the coming year. Moreover, downgrades of 5 banks were also due to anticipation of reduced support from the Spanish government. Both the EU and the IMF welcomed the latest round of reform announced in Spain earlier in the month. However, in our opinion, the 4 key measures, including additional provision requirements for banks, availability of government capital injections, creation of a framework for 'bad banks' and employment of independent audits, while indicating some progress for the restructuring, are rather modest and are not expected to have significant impacts on transforming the banking sector. |
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Orders and Options Watch | |||||||||||||||||||||||||||||||||||||||||||||||||
European Session: Orders and Options WatchJPY: The pair tumbled yesterday on broad-based strength in Japanese yen due to risk aversion and stops at 79.60 and 79.40 were tripped and option barrier at 79.25 was also triggered. At the moment, some defensive bids are still noted above next barrier at 79.00 and buying interests from Japanese investors should emerge around 78.70-80 and further out at 78.50-55. On the upside, first layer of offers is located at 79.45-50 and more selling interests are tipped at 79.75-80 as well as 80.00-10. | |||||||||||||||||||||||||||||||||||||||||||||||||
| Forex Trade Ideas | |||||||||||||||||||||||||||||||||||||||||||||||||
Trade Idea: EUR/USD – Sell at 1.2760Although euro has resumed recent decline after meeting renewed selling interests just below the Ichimoku cloud bottom and weakness to 1.2640 is likely, loss of near term downward momentum should prevent sharp fall below previous chart support at 1.2624 and risk from there has increased for a corrective rebound later. Above intra-day resistance at 1.2708 would bring test of the lower Kumo (now at 1.2725) but renewed selling interests should emerge around previous resistance at 1.2759) and bring another decline. Trade Idea: USD/CHF – Buy at 0.9380Despite intra-day resumption of recent upmove, loss of near term upward momentum should prevent sharp move beyond 0.9500-05 (1.236 times projection of 0.8931-0.9335 measuring from 0.9002) and upside should be limited to 0.9540-50, price should falter well below previous resistance at 0.9595 and risk from there is seen for a retreat later. Candlesticks Intraday Trade Ideas Update Schedule (GMT): Elliott Wave Daily Trade Ideas Update Schedule (GMT): | |||||||||||||||||||||||||||||||||||||||||||||||||
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