Market Movers of the Day
Asia-Pacific
*Australian Consumer Inflation expectation higher than expected at 3.6%
*Australian Unemployment Rate lower than expected at 5.7%
Europe
*Swiss National Bank left interest rates at 0.25%
*Bank of England kept interest rates at 0.50%
Americas
*Canada’s International Trade Balance surprised for the better at 0.4B
*US Trade Balance better than expected at -$32.90B
*US Initial Jobless Claims slightly below expectations at 474K
*US Continuing Jobless Claims better than estimated at 5157K
The Overall Sentiment
Equities
US stock markets advanced in response to positive economic reports that showed the US Trade Deficit narrowing 7.6% in October as the Dollar’s weakness spurred exports to its highest level in a year. Initial Jobless Claims slightly rose but Continuing Claims dropped more than forecasted driving stocks to the positive side. The S&P added 0.6% and the Dow gained 0.7%. European main indices advanced after three losing sessions as major banks and financial institutions bounced back since EU finance official Jean-Claude Juncker ruled out a bankruptcy of the Greek state adding that no EU assistance to Greece would be required. The British FTSE 100 gained 0.8% and the German DAX Index added 1.1%.
Forex
The Dollar declined against commodity-linked currencies but ended virtually unchanged versus its European counterparts as these showed little reaction to the economic events of the day. EUR/USD traded sideways consolidating around 1.4725. The Swiss National Bank kept interest rates unchanged at 0.25% and stated it will stop bond purchases as a first measure to an exit strategy but will continue to intervene to prevent excessive appreciation of the Swiss Franc. This policy has kept EUR/CHF on a short leash for several months. Sterling was little changed against the Euro as the Bank of England left interest rates at 0.50% and also kept its Quantitative Easing plan unchanged at 200 billion pound. EUR/GBP remains slightly above 0.90. The New Zealand dollar continued to rise after RBNZ’s hawkish tone yesterday. The Aussie dollar strengthened as the Australian unemployment rate dropped to 5.7%. The Canadian dollar advanced as Canada’s Trade Balance showed a surplus as a result of increased exports of energy and metals. The Yen was the worst performer weakening against the majors at early hours and trading sideways for the rest of the day as investors try to assess the direction of Japan’s economy amid troubling recent data and continuous rumors about potential intervention of the BoJ in the Forex market.
Commodities
Precious metals were little changed as the Dollar remained in a tight range. Gold hovered around $1128 and Silver ended slightly above $17.30. Crude Oil visited briefly below $70 but recuperated to close around $70.50.
The Day Ahead
The day will start early in Japan with the Consumer Confidence figures for November and the UK PPI numbers will follow to shed some light on inflationary prospects for the British economy. In the US, Retail Sales will be closely watched by traders to perceive if the strong Nonfarm report from last week reflected on consumer spending headed for the holiday season. The New Housing Price Index is due for release in Canada and the Michigan Consumer Sentiment in the US will close the week in which a rise to 68.6 is expected from 67.4 the previous month.
Technical Analysis
EUR/JPY DAILY
EUR/JPY has found support in the 127-129 strip for several months. Notice how the 129 level is the first line of defense and, in case it is breached, the cross immediately bounces off the 127 support to trade back above 129. EUR/JPY has recently touched the 129 line, rebounding right up. It could be an opportunity to open a Long position, counting on the supports to hold once again and taking into consideration the possibility of a dip below 129, with the chance for the more daring traders to reinforce the position.
Daily Forex Market Analysis provided by eToro
Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.
