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Mid-Day Report: Sentiments Weighed Down by Economic Data, EUR/USD Dipped Below 1.3Euro retreats further against dollar and yen today with EUR/USD back below 1.3 level. Weak economic data send global equities lower and markets are in mild risk averse mode. Nonetheless, loss is the common currency is so far limited as supported by solid Spanish bond auctions. Spain easily sold EUR 4.8b in bonds today including EUR 0.86b in 10 year bonds and EUR 3.9b in a new three year bonds. The total sold was way above maximum target of EUR 4.5b. In particular, yield on the 10 year bonds dropped to 5.666%, sharply down from 6.647% in last auction in August. Bid-to-cover ratio for the 10 year bonds also rose to 2.8 times, up from 2.4 times back in August. In the secondary market, Spanish 10 year yield rose slightly to 5.755% but stays well below 6% level. Data from US saw initial jobless claims came in more than expected at 382k. |
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| Featured Technical Report | |
EUR/USD Mid-Day OutlookDaily Pivots: (S1) 1.2999; (P) 1.3041 (R1) 1.3090; More..... EUR/USD dips below 1.3 psychological level as retreat from 1.3171 short term top continues. Deeper decline could be seen but downside is expected to contained by 1.2816 support (38.2% retracement of 1.2255 to 1.3171 at 1.2821) and bring recovery. While some more sideway trading might be seen, an upside breakout is anticipated. Above 1.3171 should pave the way to 1.3486 key resistance, which is close to 50% retracement of 1.4939 to 1.2042. |
| Special Reports |
BOE Minutes Signaled Members Favored Further EasingThe September BOE minutes unveiled that the MPC members voted unanimously to leave the Bank rate unchanged at 0.5% and the asset purchase program at 375B pound. While policymakers noted that inflation had been coming down more slowly than anticipated, the central bank should not be refrained from expanding the size of asset purchases as the pace of economic recovery remained subdued. We retain the view that the BOE would increase the quantity of program by another 50B pound in as soon as next month. BOJ Speeds Up Easing, Expands Asset Purchases After ECB And FEDThe BOJ accelerated the pace of monetary easing by doubling the size of asset purchases, in addition to leaving the uncollateralized overnight call rate at around 0 to 0.1%. Slowdown in global economic growth and recent tensions between China and Japan over territorial dispute are expected to delay Japan’s recovery as exports growth would be affected. According to the central bank, the move is expected to 'help ensure that Japan's economy resumes a sustainable growth path with price stability'. The move came in earlier than market expectations, sending Japanese yen lower, and Nikkei stock index and cash bonds higher. |
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Orders and Options Watch | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
US Session: Orders and Options WatchEUR: The single currency continued to move lower today as economic data out of eurozone mostly came in lower than expected, bids from Asian names at 1.2940 were filled but more buying interests from them and Middle East names should emerge in the region of 1.2900-20, followed by mixture of bids and stops in good size further out at 1.2850-60. On the upside, offers are lowered to 1.2960-70 and also at 1.2990-00, more selling interests from European names and funds should emerge from 1.3030 up to 1.3050 with stops building up above 1.3060 and 1.3090-00. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Trade Idea Update: GBP/USD – Sell at 1.6235Despite yesterday’s rebound from 1.6185, price faltered well below the Ichimoku cloud and dropped again this morning (unfortunately we missed our short entry), current breach of said support adds credence to our view that a temporary top has been formed at 1.6273 and bearishness remains for retracement of recent upmove to previous resistance at 1.6132 and possibly to 1.6100, however, reckon previous support at 1.6071 would hold from here, bring rebound later. Trade Idea: EUR/JPY – Target met and sell again at 102.50Despite yesterday’s brief bounce to 103.63, as the single currency tumbled from there after faltering below indicated resistance at 103.85, adding credence to our bearish view of a top formation, our short position entered at 103.40 met target at 101.50 today (with a quick 190 points profit), this anticipated selloff confirms top has been formed at 103.85 and bearishness remains for correction of recent rise to 101.00, below would extend weakness towards 100.70-75 Candlesticks Intraday Trade Ideas Update Schedule (GMT): Elliott Wave Daily Trade Ideas Update Schedule (GMT): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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