Pivot 1.0745
Our Preference Long positions above 1.0745 with targets @ 1.083 & 1.086 in extension.
Alternate Scenario Below 1.0745 look for further downside with 1.0705 & 1.067 as targets.
Comments Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
S1 1.0745
S2 1.0705
S3 1.067
R1 1.083
R2 1.086
R3 1.089
Snapshot:
-EUR/USD at 1.0753-56; 10-year Treasury yield at 2.304%; stock futures mostly flat; Nymex at $41.73; gold at $1082.30
-Watch for: U.S. retail sales; producer prices; University of Michigan Survey of Consumers; Bank of Canada’s Wilkins speech; earnings from J.C. Penney, Aimia, Power Financial
-News: Eurozone Economy Slows as Exports Weaken; Fischer: Strong Dollar Delayed Rate Rise, but Fed Could Move in December; Global Oil Demand Growth to Slow in 2016, IEA Says
Markets Outlook:
Forex:
The dollar was stronger by midmorning in Europe, with the WSJ Dollar Index recently up 0.2% at 90.16.
The euro fell 0.5% against the dollar to trade at 1.0768, after data showed the German economy slowed in the third quarter, even though its French counterpart returned to growth.
The dollar was flat against the yen in quiet Asia trade as investors mostly sat on the sidelines ahead of U.S. October retail-sales data.
Ahead, Friday’s report on October retail sales will give clues about the mood of consumers heading into the crucial holiday shopping season. Car sales have been on a tear, but purchases outside of the auto sector have been sluggish. The economy’s fourth-quarter growth will hinge largely on consumer spending, especially given the beating manufacturers are taking from the weak global economy.
Meanwhile, a producer price index will hint at the direction of overall inflation. Federal Reserve officials have signalled they want to be confident that inflation is heading toward their 2% annual target before raising interest rates.
Bonds:
The yield on the benchmark 10-year U.S. Treasury note was last at 2.304%. Short-term Treasury yields inched traded near their highest level in five years Thursday, as investors continued to sell U.S. government debt in anticipation of an interest-rate increase by the Fed in December.
New York Fed President William Dudley on Thursday declined to comment on the timing of a rate increase, though he said it was getting closer and that future rate increases would likely come at a slow pace.
Fed Vice Chairman Stanley Fischer said a strong dollar had already delayed the Fed’s interest-rate increase, but said it “may be appropriate” for the central bank to begin raising rates next month.
Japanese 10-year government bonds were unchanged.
Equities:
U.S. stock futures struggled for direction early Friday after heavy losses in the previous session.
Stocks in Europe were slightly lower. The Stoxx Europe 600 dropped 0.2% to 371.60 by midmorning. It faces a 2.2% decline for the week, which was dogged by investor worries about slowing global growth and the possibility of an U.S. interest-rate increase next month.
In London, the FTSE 100 was headed for its biggest weekly loss since Sept. 4, down 0.3% as health care, technology and consumer-oriented shares moved lower.
Asian bourses fell sharply amid a drop in commodities prices. Australia’s S&P/ASX 200, which heavily depends on commodity exports, was down 1.5%, Hong Kong’s Hang Seng was down 2.1% and the Shanghai Composite Index was down 1.4%.
Commodities:
Oil prices rebounded in Europe as investors were bargain hunting after oil’s steep losses this week, but a bearish outlook for next year by a top energy watchdog kept prices under pressure.
Brent crude rose 1.3% to $45.80 a barrel. On the NYME, West Texas Intermediate futures were trading up 0.5% at $41.96. Both benchmarks fell to their lowest level since end of August on Thursday.
Spot gold prices were hovering near five-and-a-half year lows in Europe, trading down 0.1% at $1,083.88 on concerns the Fed will raise U.S. interest rates in December. “Given weakness across the commodities, further weakness in gold prices now seems likely,” says William Adams at Fastmarkets.
Eur/usd intraday: The downside prevails.
Pivot 1.077
Our Preference Short positions below 1.077 with targets @ 1.067 & 1.0625 in extension.
Alternate Scenario Above 1.077 look for further upside with 1.083 & 1.086 as targets. Comments As long as 1.077 is resistance, look for choppy price action with a bearish bias.
S1 1.067
S2 1.0625
S3 1.06
R1 1.077
R2 1.083
R3 1.086
EURUSD chart may encourage bearish movement
After having just notched a new seven-month low of 1.0660, further downside likely awaits the EUR/USD pair, the daily chart suggests. A bearish technical bias re-established Monday is likely to keep the euro under pressure and aimed toward the 1.0500 round-figure trading barrier.
The daily Bollinger downtrend channel came back into effect with Monday’s fall, which was partially triggered by the knee-jerk reaction to the terror attacks in Paris. If EUR/USD stays under the 1.0737 ceiling of the channel by Tuesday’s close, it would encourage bearish bets. The fundamental outlook for the EUR/USD pair is still fundamentally negative, due to the divergence in monetary policy stance adopted by the European Central Bank and the U.S. Federal Reserve; the release of the FOMC meeting minutes Wednesday may affirm that the latter is likely to raise interest rates next month. EUR/USD is now trading at 1.0666 from its Monday close of 1.0684.
Eur/usd intraday: The downside prevails.
Pivot 1.0725
Our Preference Short positions below 1.0725 with targets @ 1.0625 & 1.06 in extension.
Alternate Scenario Above 1.0725 look for further upside with 1.077 & 1.083 as targets.
Comments The RSI has broken down its 30 level.
S1 1.0625
S2 1.06
S3 1.056
R1 1.0725
R2 1.077
R3 1.083