Eur/usd - page 198
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EURUSD continues in a bearish phase on the longer timeframe charts despite the recent bullish rally back above 1.23. The pair is due for a bullish correction after months of tumbling, so remain technically bearish below 1.2450 and continue to look to sell beneath that level.
EUR/USD rises after upbeat German trade data
The euro rose against the U.S. dollar on Tuesday, after data showed that Germany's trade surplus widened more than expected in October, although last week's U.S. employment report continued to support demand for the greenback.
EUR/USD hit 1.2367 during European late morning trade, the pair's highest since December 5; the pair subsequently consolidated at 1.2361, gaining 0.38%.
The pair was likely to find support at 1.2271, the low of December 5 and a two-year low and resistance at 1.2458, the high of December 4.
Official data earlier showed that Germany's trade surplus widened to €20.6 billion in October from €18.6 billion in September, whose figure was revised up from a previously estimated trade surplus of €18.5 billion.
Analysts had expected the trade surplus to widen to €19.2 billion in October.
The report came a day after data showed that German industrial production rose just 0.2% in October, while September’s figure was revised down to 1.1% from 1.4% previously. The data had fuelled concerns over the outlook for fourth quarter growth.
Meanwhile, the dollar remained broadly supported after the Labor Department reported last Friday that the U.S. economy added 321,000 jobs in November, far more than the 225,000 forecast by economists and the largest monthly increase in almost three years.
The strong data fuelled to expectations for the Federal Reserve to raise interest rates mid-2015, compared to expectations for September 2015 before the report.
Earlier Tuesday, the Wall Street Journal reported that Fed officials are looking at dropping an assurance that interest rates will stay low for a "considerable time", in its statement, following its upcoming policy meeting next week.
read more
Greece crashes
Stocks in Greece crashed on Tuesday. At the close, the Athens Stock Exchange Index was down a mindboggling 12.78%.
That's the worst fall since 1987.
The steep decline comes after the announcement that Greece's presidential elections are being brought forward to Dec. 17.
The presidential election is conducted by Greece's legislators, not its population. But the government needs a super-majority to install a president, which it doesn't have. If it can't elect a president, that might precipitate a general election, and the radical Coalition of the Left (Syriza) is leading the polls.
The uncertainty also means sovereign bond yields are breaking out of the region they've been in for the past few days, up from 7.2% to beyond 7.75%. The yield on a 10-year bond is a common measure used to show how expensive it is for governments to finance their debt. Yields saw a recent peak just below 9% in October, when the far-left anti-austerity party Syriza took a polling lead, and the government was planning to exit its bailout early.
Deutsche Bank's Jim Reid explains the situation here:
The failure to elect a President by the existing parliament would lead to a national general election within 3-4 weeks, with the current SYRIZA opposition party leading in the polls (according to various opinion polls). So very large electoral uncertainty and the lack of an official financing backstop ensures a meaningful period of uncertainty ahead for Greece. In rounds 1 and 2 (Dec 17th and 22nd) the Government requires 200 out of 300 MPs which is extremely unlikely. In the final round (Dec 29th) they require 180 votes.
Deutsche's George Saravelos also says there's a 60/40 chance of a Greek parliamentary election. With Syriza in the lead, that's a big risk for bondholders. The insurgent party wants Greece's creditors to take a major haircut (dramatically cutting the value of their investment), and for existing bailout programs to be canceled.
Here's a longer term look at Greece's ASE index. As you can see, the Greek stock market has a history of massive swings.
read more
Yesterday the EUR / USD recovered after finding the level of 1.2250, ie the determined support area for a minimum of 10 August 2012.
The RSI was up after finding support near the 30 line, while the MACD, although negative, remains above its signal line and is pointing up. In addition, I see positive divergence between the two oscillators and the price action.
On the daily chart, the price shows minimum and maximum decreasing and below the moving averages 50 and 200 days.
R3 - 1.26051
R2 - 1.25263
R1 - 1.24493
Daily Std. Pivot - 1.23705
S1 - 1.22935
S2 - 1.22147
S3 - 1.21377
http://bewayopa.wordpress.com/
for now we should just wait and see how the EURUSD keeps reacting for the rest of the week, but it seems like there isn't anything really important to make it take a clear direction.
EURUSD rallied on yesterday session but struggle to keep up the bullish momentum just below 1.2450 keeping the resistance intact, so near term outlook stays bearish. The pair might make another run to the 1.2450 level giving us another opportunity to go short.
Leaked EU summit conclusions: Draghi left hanging?
The dance had become so routine that we at the Brussels Blog were thinking of giving it a name, the Eurozone Two-Step.
Ever since the eurozone crisis first rocked international markets nearly five years ago, European Central Bank chiefs – first Jean-Claude Trichet, then Mario Draghi – sent a very clear message to the currency union’s political leaders: we can only act if you act first.
The deal was never explicit, but both sides knew what was required. The ECB’s first sovereign bond purchase programme in May 2010 came only after eurozone leaders created a new €440bn bailout fund; its €1tn in cheap loans to eurozone banks in early 2012 only came after political leaders agreed to a new “fiscal compact” of tough budget rules.
But with the markets watching Frankfurt closely for signs Draghi is about to launch another bold move – US-style quantitative easing, purchasing sovereign bonds to halt fears the bloc is headed into a deflationary spiral – there are new indications one of the partners is no longer dancing.
Back in October at a eurozone summit, Draghi was able to get a little-noticed statement out of the assembled leaders committing them to another “Four Presidents Report”, a reference to the blueprint delivered in 2012 that set a path towards further centralisation of eurozone economic policy. The report helped kick-start the EU’s just-completed “banking union.”
Progress on that 2012 blueprint has since stalled, however, and at his last summit press conference, then-European Council president Herman Van Rompuy said the new “Four Presidents Report” would be delivered at the December EU summit, which starts next Thursday. Many in Brussels saw this as the quid for Draghi’s quo – once the leaders agreed to another blueprint for eurozone integration, Draghi would have a free hand to launch QE.
But according to a leaked draft of the communiqué for next week’s summit, Draghi may have to deliver his quo without a eurozone quid. The text (which we’ve posted here) makes clear that leaders have no intention of delivering a new blueprint any time soon.
According to the draft, a debate on how to proceed will be pushed off until February, and the report itself will come no sooner than June. Here’s the relevant paragraph from the current draft, sent around to national capitals on Monday:
This means Draghi won’t have the normal political cover he needs to make a bold decision early next year – a problem only compounded by the European Commission’s decision last month to put off the day of reckoning for France and Italy over whether they will face sanctions for failing to live up to the EU’s crisis-era budget rules.
Does that mean Draghi can’t act? Hardly. But with opposition to QE rising both within Germany and the ECB governing council, it certainly makes it politically more difficult for the normally persuasive Italian.
source
EUR / USD continued high on Tuesday to hit resistance.
The 1.2250 is now a key reference area.
There is a positive divergence between both our short-term oscillators and the price-action.
On the daily chart, can be identified possible formation of candle "morning star", which favors the continuation of recovery.
The daily momentum indicates climb.
R3 - 1.26051
R2 - 1.25263
R1 - 1.24493
Daily Std. Pivot - 1.23705
S1 - 1.22935
S2 - 1.22147
S3 - 1.21377
http://bewayopa.wordpress.com/
thanks for the information
EURUSD continues to find buyers on low news volume, but so far have failed to break any significant resistance, the most significant of those, in the short-term, being 1.2450.
A sustained break there is needed to signal short-term bears are standing aside. Even without that break bulls have the upper hand in the short-term, and will continue to have it above 1.2390 support. Long-term trend remains bearish.