Monday, November 23, 2009

Cross yen sales during the Asian session dictated moves, with sales of Aussie-yen and Kiwi-yen leading. The dollar withstood the major part of yen strengthening, with trade in dollar-yen once again contained within a relatively tight range just above Y89.00 (Y89.03/43). This in turn allowed the dollar to track yen gains vs majors, euro-dollar slipping from $1.4966 to $1.4903, cable extending Wednesday afternoon losses to $1.6686 (NY low $1.6715), with Aussie and Kiwi feeling the main brunt of cross yen sales, but with Aussie-dollar meeting support ahead of $0.9220 left Kiwi as the main underperformer, Kiwi-dollar dropping 100 points to $0.7357, in turn taking Aussie-Kiwi above NZ$1.25.

Risk positions continue to be pared with some already talking of end month covering, prompted by next week's US Thanksgiving holiday. Some concern has been voiced over the MUFG capital raising measures in Japan, with talk that more shares than previously announced could be on offer. Soc Gen has issued customers a warning of possible 'global economic collapse' offering advice for best investments.

Euro-dollar opened Asia around $1.4962, off late NY rally highs of $1.4992. Rate initially edged up to post session highs at $1.4966 before coming under pressure as yen crosses were sold out of Tokyo. Additional talk of Asian sovereign sales added to the weight to take rate down to early lows of $1.4919 with a second wave of selling triggering stops through $1.4910 before rate based at $1.4903. Reported demand placed ahead of $1.4900 proved strong enough to cushion the move with rate recovering back to $1.4925.

Euro-dollar currently trades around $1.4915, finding interim support above $1.4910. Stops noted on a break of $1.4900, a break of which to open a deeper move toward $1.4880 ahead of $1.4860/50. Through here and option linked demand again expected to emerge ahead of $1.4800 ($1.48/1.51 DNT option structure in play, rolls off Friday), though traders have noted that recent defence, when rate stretched down to $1.4807, was not seen as strong as previously seen. Offers seen placed at $1.4965/70, stronger between $1.4990/1.5000. Stops noted above $1.5010, though more offers $1.5015/20, $1.5050/65.

RES 4: $1.5230 2% moving average envelope
RES 3: $1.5163/89 76.4% of decline from July 2008 high, Res line 3 June
RES 2: $1.5090 Current Bollinger band top
RES 1: $1.5047/64 High 11 Nov, Double-day high 23, 26 October

SUP 1: $1.4885 21-day moving average
SUP 2: $1.4788 61.8% retracement of $1.4628 rally, 1% MAE
SUP 3: $1.4742 Support line 17 Aug
SUP 4: $1.4628/80 Low 3 Nov, Base of Bollinger band

Dollar-yen closed in NY mid-range around Y89.30, with euro-yen ending in the Y133.60 area. Traders said a US investment bank was the noted seller prior to the Tokyo open Thursday, with Japanese banks then selling through Y89.25 as the rate dropped down to initial lows around Y89.10. Talk also that a large Y89.50 digital option rolled off at the Tokyo cut, keeping the range relatively tight. Cross yen sales were noted in Asia as investors took profit on risk positions and the Nikkei slipped to four-month lows, euro-yen dropping from early highs at Y133.70 down to initial lows around the Y133.00 area.

Lows were extended into the Asian afternoon as dollar-yen dropped to Y89.03 and euro-yen slipped to Y132.80, with early European dealing seeing another leg to the downside as dollar-yen drops below Y89.00 and the cross slips beneath Y132.70. Bids seen into Y132.40, while key support is still the 200-day moving average at Y132.06 and the Cloud base at Y131.85. Dollar-yen bids are placed into Y88.75/70 with stops below. Techs also note trendline support from the October lows coming in at Y88.80.

RES 4: Y92.32/53 Failure highs 27 Oct, 21 Sep, 100-day moving average
RES 3: Y91.31 High 4 Nov
RES 2: Y90.35/55 21, 55-day moving average
RES 1: Y89.90 Base of the Ichimoku cloud

SUP 1: Y88.50/73 Base of Bollinger band, Low 17 Nov
SUP 2: Y88.02/24 Major low 7 Oct, Low 25 Sep
SUP 3: Y87.81 100% projection of the 21 Sep pullback from 27 Oct high
SUP 4: Y87.12 Major lows Dec/Jan

Opened Asia around $1.6745, posted session highs at $1.6746 before turning lower with sales of cross yen leading the move, easing in tandem with euro-dollar as euro-sterling consolidated Wednesday's late recovery gains to stg0.8950 between stg0.8930/45. Cable traded to a low of $1.6686 before meeting decent demand, with main bids reported in place to $1.6680, more toward $1.6650 ($1.6654 61.8% $1.6515/1.6879). A break here to open a deeper move toward $1.6600 (76.4%). Rate recovered off lows, with trade then contained for a while between $1.6690/10 before extending correction to $1.6725 ahead of the European open. Rate dipped back to $1.6695 before settling between $1.6705/20. Offers seen placed between $1.6720/25, a break to open a move toward $1.6750/55, with stops placed on a break of $1.6760.

Gradual pull back over night from highs of 1.6745 ish Stops sitting in the sub-1.6710-15 region were triggered in the process, taking cable down to 1.6686, as I write we break the 1.6680 level, of reasonable note, this is the level at which HSBC had moved their stop up to based on a med term long recommendation, no follow through as yet

RES 4: $1.7240 100% projection of first October upwave
RES 3: $1.7044/52 High 5 August, November 2005 low
RES 2: $1.6930 Current top of the daily Bollinger band
RES 1: $1.6879 High 26 Nov

SUP 1: $1.6750 5-day moving average
SUP 2: $1.6663 Support line 13 October
SUP 3: $1.6570 21-day moving average
SUP 4: $1.6515 Low 12 Nov

FX Option expiries for today's 1500GMT cut

* Euro-dollar; $1.4875, $1.4900, $1.4920, $1.4935, $1.4950, $1.4960, $1.5000
* Dollar-yen; Y89.00, Y88.00
* Cable; $1.6700, $1.6900
* Euro-Swiss; Chf1.5150
* Aussie; $0.9200, $0.9400/10
* Aussie-Kiwi; NZ$1.2500

EUROPEAN STOCKS: European equity bourses are seen open mixed Thursday, with spreadbetters calling the FTSE-100 flat, CAC-40 down 3pts and the Xetra-DAX down 8pts. Earnings results from National Grid (NG.) and Infineon (IFX) are watched for movement in Europe this morning, with Dell (DELL) and Gap (GPS) both releasing results in the US later. On the macro front, UK Retail, Mortgage Lending and Money Supply data all at 0930GMT and the OECD Economic Outlook at 1000GMT will be eyed for direction initially today, with the US Phila Fed and US Leading Indicator at 1500GMT, taking focus later in the session.

UK data starts the European calendar Thursday, with a string of releases at 0930GMT. The data includes the October retail sales data, the October public finance data, M4 money supply, the Bank of England trends in lending survey and the October CML mortgage lending data.

European events starts at 1000GMT, with the release of the OECD Economic Outlook for the major world economies. At 1100GMT, the Bundesbsank Nov monthly report is out.

The US calendar starts at 1330GMT, with US 14-Nov Jobless Claims. Jobless claims are expected to rise only 2,000 to 504,000 in the November 14 employment survey week, compared with the 531,000 level in the October 17 employment survey week. Both initial and continuing claims have trended downward over the last few months.

There is also a raft of Canadian data at 1330GMT, with the release of the Sep09 Intl sec transaction, Oct-09 Leading indicator and the Sep09 Wholesale sales data.

Back in the US, at 1500GMT, Treasury Secretary Timothy Geithner testifies before the Joint Economic Committee on financial reform in Washington.

More US data is released at 1500GMT, with Philly Fed and Leading Indicators. The Philadelphia Fed index is forecast to rise slight to a reading of 12.0 in November after falling to 11.5 in October.

The leading indicators index is expected to rise 0.4% in October, the seventh straight increase. Positive contributions from a steep yield curve, falling jobless claims and rising stock prices are expected to be offset by falling consumer expectations.

At 1530GMT, the US 13-Nov EIA Natural Gas Stocks data is released.

At 1600GMT, ECB President Jean-Claude Trichet gives a speech on "Is there still a paradigm for monetary policy today?", in Paris.

Later, at 2145GMT, the Dallas Federal Reserve Bank President Richard Fisher delivers closing address to the Cato Institute's annual monetary policy conference in Washington.

The day ends at 2130GMT, when the US Nov M2 Money Supply data is released


Trading Spreads said...

Gold prices have today hit a record high

Trading Spreads

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