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Mixed performances for the majors as Dollar gains back some ground supported by strong economic data
MORNING BRIEF
Yesterday was a day of mixed performance for the major currency pairs we track each day. Euro and Cable extended their gains over the US Dollar over the morning session only to give back some of the ground gained during the US hours. Euro rose to print a new high at 1.3600 before pulling back down to retest the 1.3550 support area while the Pound blasted through stops all over Europe to climb above 1.6300. The UK currency was lifted by the strong printing of the Q3 GDP that came in line with expectations at 0.8% showing that the economy is still in a path of strong recovery. Data coming in for the US were good for the Dollar with the Jobless Claims falling and Durable Goods Orders rising offering some much-needed support to the Dollar that clawed back some pips mostly against the Euro. For the day ahead, we have a couple of significant events to tackle with the German Unemployment and CPI reports being the most important while the Euro-zone CPI is also scheduled for release. If figures print as expected then the rise in the Euro will continue and as US markets are closed today for Thanksgiving we don’t expect any changes in the current trends. However, we’d also like to be prepared for the event that figures miss expectations because a steep sell-off could be triggered and the lack of liquidity that will appear after noon could accelerate losses for the high-beta currencies.
German Unemployment and CPI along with EZ Confidence
This morning holds a number of important news releases with the German Unemployment Change and Rate being the first to come in. Analysts expect no change in Germany’s workforce data and it’s important to see how this number prints. Germany is Europe’s steam engine and it’s critical to perform well as to support the recovery effort. Also this morning the Euro-zone’s Consumer Confidence is expected and a rise is eyed here and should this come to happen it could lift Euro even more. Finally, the German Consumer Price Index will close the day for economic reports and this could be the most important report for the day. All three reports could influence Euro’s outlook for the short-term as a strong printing of these figures will send the European currency a lot higher while a miss in expectations could turn the tide for the Single currency.
Economic Calendar
|
Time |
Currency |
Event |
Importance |
Forecast |
Previous |
|
8.55 |
EUR |
German Unemployment Change |
High |
0K |
2K |
|
8.55 |
EUR |
German Unemployment Rate |
High |
6.9% |
6.9% |
|
10.00 |
EUR |
Euro-zone Consumer Confidence |
Medium |
-15.4 |
-15.4 |
|
13.00 |
EUR |
Euro-zone Consumer Price Index |
High |
1.2% |
1.2% |
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TECHNICAL ANALYSIS & LEVELS
EUR/USD
Euro hit 1.3600 again yesterday but failed to overcome this level and settled around the 1.3550 area for the rest of the day. Today we have a number or reports coming in from the European region and we’d like to take advantage of any further gains in the pair. We favor a long entry above the 1.3615 area with targets at the 1.3645 and 1.3700 marks with a stop placed just below the 1.3555 support. However, we need to be prepared for the event that figures print lower than expected and Euro falls below 1.3550. Should this happen we will enter short just below the 1.3550 area, target the 1.3525 and 1.3470 price tags and place our stops just above the recent high of 1.3615.
GBP/USD
The Pound blasted through our targets yesterday to complete our trade at the 1.6240 mark as the Q3 GDP came in line with expectations. The UK currency reached as high as 1.6330 before retesting the 1.6260 support. For the day ahead, we expect little movement for the Cable as there are no events scheduled for the Pound or the Dollar. However, we’d like to offer our scenarios should a breakout occur. We need to enter long if the pair prints a new high above the 1.6330 mark and target the 1.6370 and 1.6440 price tags with a stop below the 1.6250 area. On the other hand, should the 1.6250 support fail to hold the currency then a short trade is advised with targets coming in at 1.6215 and 1.6145 with a stop placed above the 1.6330 area.
FTSE 100
Little have changed for the FTSE 100 since yesterday as the index hovered around the 6,640 area for the entire day. We remain committed to our short trade, we’re targeting lower towards the 6,600 and 6,530 points areas with a stop placed above the 6,710 mark and we need to remain patient until the instrument starts to move again.
Gold
Gold pulled up higher yesterday to close the remaining 50% of our trade before falling again lower. Volatile behavior for the instrument as it tries to find its footing during recent sessions. At this point we’d like to offer our scenarios for the coming sessions. We favor a long entry for Gold just above the $1,258 mark with targets at the $1,272 and $1,296 areas and a stop placed below the $1,234 low. However, if Gold prints a new low below the $1,223 mark we will enter short, target the $1,203 and $1,169 areas and place a stop above the $1,258 peak. These trades could take a while to complete so please be prepared. Moreover, as we mention repeatedly, please don’t engage in any large positions in Gold since it’s a volatile instrument that could bring large wins but losses as well to your account.
The above charts have been created using FXCM’s Trading Station platform.
STOCK MARKET FOCUS
[Restricted Content] Plc.
The Alpesh Patel Value/Growth filter has indicated [Restricted Content] Plc as our stock of the day.
Company Information: [Restricted Content]
Created using Sharescope Pro
[Restricted Content] Plc has been rated a 8 out 10 in our Value/Growth rating and gets an A Grade rating on our Bullish Momentum meter. The P/E ratio is relatively low suggesting that the stock might be undervalued. Turnover is up year on year suggesting good growth and Earnings are also up supporting the growth potential. Finally, from a technical standpoint, the MACD indicator is still rising on the weekly chart above and a price breakout above recent highs could accelerate its rise. The recommended holding period for a stock of this type is 6-12 months.
Important Information
The filters and settings in the Special Edition of the Sharescope software use Alpesh Patel’s proprietary criteria to generate suggestions of securities worthy of further investigation. They DO NOT CONSTITUTE INVESTMENT ADVICE.
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