Todays Trading Focus Updates Oct 11th 2012
Oil closed yesterday at $91.3 a barrel and has resumed its trading range between $90 and $92, hovering around its 38.2% Fibonacci line on the 1 hour chart. Oil traded yesterday at its highest since late September at $93.5 a barrel. However it then declined sharply back below $92 as it awaits news from Europe amid the continuing debt crisis. Gold closed yesterday at $1765 an ounce and is reaching closer to its resistance level of $1972. Good results following the jobless claims could strengthen this resistance level and push the price of gold to the lower end of its $1750 to $1780 range.
The duration for the Fed’s present QE is the main issue for determining the gold price, and recent economic results are certainly the best indicators for the program’s duration.
Jobless claims have just been published today and with the good news, it could appreciate the price of oil somewhat, although tensions from the Middle East are still the biggest price indicator for the present. Oil inventories will also be published later today with an expected rise of 1.3m barrels which could push the price of oil down.
Global growth concerns continued to weigh on the market sentiment yesterday, while investors eyed on quarterly earnings reports to be published this week.
The International Monetary Fund warned yesterday that the euro zone crisis remains the greatest threat to the global economy and warned that policymakers need to urgently strengthen fiscal and financial ties within the Euro-zone area.
Meanwhile, concerns over whether international creditors will extend their loans to Greece continue as the country struggles to meet deficit reduction targets.
At the close of the European session yesterday, France’s CAC 40 fell 0.50%, while Germany’s DAX 30 edged lower by 0.41%.
The U.S. markets were also hit by the negative sentiment, the Dow Jones Industrial Average fell 0.95%, the S&P 500 lowered by 0.62%, while the Nasdaq Composite index dropped 0.43%.
Late Wednesday, Standard & Poor’s cut Spain’s sovereign credit rating by two notches to BBB-minus, and maintained a negative outlook for country, citing mounting economic and political risks. This ratting is only one notch above Junk.
The ratings agency also warned that the capacity of Spanish political institutions to deal with the challenges presented by the current fiscal and economic crisis is declining.
European stocks open today session slightly higher despite yesterday Spain’s sovereign rate cut, although concerns over the handling of Spain’s financial woes continued to weigh on market sentiment after Standard & Poor’s downgraded the country’s credit rating.
The Economic Calendar for today is relatively thin;
09:00 Van Rompuy-Barroso-Monti meeting
12:30 Initial Jobless Claims (Oct 6)
14:00 G7 finance ministers meeting
18:00 Monthly Budget Statement (Sep)
23:50 Tertiary Industry Index (MoM) (Aug)
Gold futures edged higher during European morning hours on Thursday, bouncing off the previous session’s two-week low as fears over the handling of the euro zone’s financial crisis intensify after Standard & Poor’s downgraded Spain’s sovereign-debt rating. Follow this downgrade, market participant went looking for safety in the dollar and of course in gold’s.
USD/JPY intraday: under pressure.
Our Preference: SHORT positions below 78.35 with 77.85 & 77.75 as next targets.
Alternative scenario: The upside penetration of 78.35 will call for 78.45 & 78.65.
Comment: the RSI is mixed to bearishEUR/USD intraday: under pressure.
Our Preference: SHORT positions below 1.289 with 1.282 & 1.28 as next targets.
Alternative scenario: The upside penetration of 1.289 will call for 1.291 & 1.2935.
Comment: the pair is rebounding but stands below its new resistance
AUD/USD intraday: supported by a rising trend line.
Our preference: Long positions above 1.022 with targets @ 1.0325 & 1.035 in extension.
Alternative scenario: Below 1.022 look for further downside with 1.018 & 1.015 as targets.
Comment: the RSI calls for a new upleg
GBP/USD intraday: under pressure.
Our Preference: SHORT positions below 1.605 with 1.5975 & 1.5955 as next targets.
Alternative scenario: The upside breakout of 1.605 will open the way to 1.608 & 1.61.
Comment: the pair stands below its new resistance and remains under pressure.
EUR/JPY intraday: key ST resistance at 100.7.
Our preference: Short @ 100.63 with targets @ 100.15 & 99.85 in extension.
Alternative scenario: Above 100.7 look for further upside with 101 & 101.2 as targets.
Comment: the pair stands below its resistance and remains under pressure.
GBP/JPY intraday: target 124.35.
Our preference: Short @ 125.45 with targets @ 124.75 & 124.35 in extension.
Alternative scenario: Above 125.6 look for further upside with 125.85 & 126.4 as targets.
Comment: as long as 125.6 is resistance, look for choppy price action with a bearish bias.
Dax (Dec 12) intraday: rebound expected.
Our Preference: LONG positions above 7145 with 7245 & 7320 in sight.
Alternative scenario: The downside penetration of 7145 will call for 7100 & 7015.
Comment: the RSI is mixed to bullish.