Wednesday, 13 June 2012

European Forex Technicals: EUR Nearing Key Resistance Levels

Forex spot:       EUR/USD    USD/JPY    GBP/USD    USD/CHF 
Spot 0537 GMT     1.2583     79.42      1.5522     0.9549 
3 Day Trend       Range      Range      Bullish    Range 
Weekly Trend      Bearish    Range      Range      Bullish 
200 day ma        1.3200     79.64      1.5829     0.9190 
3rd Resistance    1.2672     79.92      1.5785     0.9657 
2nd Resistance    1.2626     79.74      1.5740     0.9595 
1st Resistance    1.2611     79.50      1.5599     0.9570 
Pivot*            1.2547     79.51      1.5537     0.9571 
1st Support       1.2552     79.30      1.5455     0.9522 
2nd Support       1.2515     79.17      1.5405     0.9514 
3rd Support       1.2435     78.99      1.5322     0.9475 
Intraday EUR/USD: Resistance at 1.2626 is the last line of defence protecting Monday's prominent peak at 1.2672. EUR bulls need to force a break through Wednesday's 1.2611 high and then 1.2626 in order to open the week's 1.2672 high once more. While 1.2626 caps, EUR weakness will look to put pressure on intra-day pivotal support at 1.2515, and only a move below 1.2515 would expose the 1.2435/44 lows.
Weekly chart EUR/USD trend: Bearish.
Intraday USD/JPY: Remains within the established range between Tuesday's low at 79.17 and Monday's peak at 79.92. However, Wednesday's peak at 79.74 has become a confirmed USD bull failure, suggesting a return to the 79.17 low is on the cards. A downwave equality target at 78.99 would be generated on a break below 79.17.
Weekly chart USD/JPY trend: Range.
Intraday GBP/USD: A move lower to Monday's low at 1.5455 is threatened, as resistance at the important June 7 reaction high at 1.5599 remains resolute. The setback off Wednesday's high at 1.5595 has scope to extend to 1.5405, although only a move below 1.5405 would put GBP bears in control. A push above 1.5595/99 would create additional upside scope to 1.5740 and 1.5785.
Weekly chart GBP/USD trend: Range.
Intraday USD/CHF: Support at 0.9514 is the last line of defence protecting Monday's prominent low at 0.9475. However, Wednesday's low at 0.9522 and support at 0.9514 remain within striking distance, and are likely to come under fresh pressure. A recovery above 0.9570 and 0.9595 is required to lift the tone, opening 0.9657.
Weekly chart USD/CHF trend: Bullish.
Forex spot:       EUR/GBP    EUR/JPY    EUR/CHF    AUD/USD 
Spot 0537 GMT     0.8106      99.93     1.2014     0.9959 
3 Day Trend       Range      Range      Bearish    Range 
Weekly Trend      Bearish    Bearish    Bearish    Range 
200 day ma        0.8337     105.12     1.2114     1.0252 
3rd Resistance    0.8230     100.90     1.2030     1.0200 
2nd Resistance    0.8157     100.33     1.2023     1.0146 
1st Resistance    0.8106     100.10     1.2018     1.0011 
Pivot*            0.8076      99.73     1.2010     0.9955 
1st Support       0.8050      99.29     1.2006     0.9928 
2nd Support       0.8012      98.71     1.2000     0.9889 
3rd Support       0.7972      98.55     1.1990     0.9850 
Intraday EUR/GBP: Remains within a bear flag continuation pattern, to come within touching distance of this week's 0.8157 peak. A push above Wednesday's high at 0.8106 is required to pave the way for further gains, but the 0.8157 peak is not expected to be broken at this stage. Support at 0.8050 protects Tuesday's important low at 0.8012.
Weekly chart EUR/GBP trend: Bearish.
Intraday EUR/JPY: There is scope for further corrective EUR gains towards 100.33, as the recovery from Tuesday's 98.86 low has room to extend. However, Monday's commanding peak at 100.90 is not expected to be broken at this stage. A setback below Wednesday's low at 99.29 is required to bring the focus back onto the week's low at 98.71, and then 98.55.
Weekly chart EUR/JPY trend: Bearish.
Intraday EUR/CHF: The corrective rally targets 1.2018, and potentially 1.2023, within a broader EUR bearish tone. A return to support at 1.2006 remains the main threat though, which defends 1.2000 and the April 5 spike low at 1.1990. Orderly corrective gains will be restricted by 1.2023, and only a move above 1.2023 would create risk of spikes to 1.2030 and 1.2076.
Weekly chart EUR/CHF trend: Bearish.
Intraday AUD/USD: A trading range has been established between 0.9821 and Monday's 1.0011 high. Consolidation of the short-term rally from the June 1 reaction low at 0.9581 is underway, and a break below 0.9928 would create additional downside risk to 0.9889 and 0.9850. Only a fresh wave of AUD bull pressure would manage to force an upside break through 1.0011, opening 1.0146 and then 1.0200.
Weekly chart AUD/USD trend: Range.
* The pivot is the sum of the high, low and close divided by 3.
For more technical analysis see: Dow Jones Newswires, N/DJTA; Bloomberg, NI DJTA; and Reuters key word search "INSI-DJN"
By Francis Bray; Dow Jones Newswires; +44 (0)207 842 9249;
Francis Bray is Dow Jones' chief technical analyst for Europe, and has worked as a technical analyst and trader for 20 years in London, Barcelona and Guernsey.
Data provided by CQG International Ltd.
This is a financial news and information service. It is provided in general terms and does not take account of or address any individual user's position. To the extent that this article includes suggestions as to various possible investment strategies which users might consider, it does so in only general terms without reference to the personal factors which should determine any user's investment decisions. Nothing contained in this service constitutes personalized investment advice. Dow Jones does not warrant the accuracy, completeness or timeliness of the information in this article, and any errors shall not be made the basis for any claim against Dow Jones. The author does not invest in the instruments or markets cited in this article. This article does not constitute or form part of any invitation or inducement to buy or sell any security.
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U.S. Stocks Turn Positive

Reported earlier: U.S. Stocks Mixed as Market Downplays Economic Data, EuropeBY ALEXANDRA SCAGGSNEW YORK--U.S. stocks erased early-morning losses in choppy trading, shrugging off weak data and worries about Europe.The Dow Jones Industrial Average fell 9 points, or 0.1%, to 12567. The Standard & Poor's 500-stock index was flat, at 1323, and the Nasdaq Composite was up 4 points, or 0.2%, to 2847.U.S. retail sales slipped for the second consecutive month in May, the first string of declines in nearly two years. While the measure fell by less than expected in May, April retail sales were revised downward into negative territory. Businesses held more inventory than expected in April because of sluggish sales.J.P. Morgan Chase & Co. rose 2.3%, and was the fourth-largest gainer in early trading. Chief Executive Jamie Dimon's testimony to the Senate gave the impression the bank wouldn't see crippling fallout from its unexpected $2 billion trading loss."He's appeasing the stock market here, so now we're calm to the fact that J.P. Morgan isn't going to get decimated" by its losses, said Ryan Detrick, chief technical strategist with Schaeffer's Investment Research. "That's led us back a bit."European markets erased early gains to turn mostly lower as worries about Spain's debt and banking crisis festered and investors responded to weak economic data. Euro-zone industrial output was at its weakest level since September 2010 in April.The Stoxx Europe 600 was down 0.3%, after being up 0.4% at its intraday high.Asian markets were mostly higher following Tuesday's U.S. gains, with Japan's Nikkei Stock Average rising 0.6% and China's Shanghai Composite climbing 1.3%.Crude-oil futures slipped 0.2% to $83.46 a barrel, while gold futures rose 0.6% to $1623 an ounce. The U.S. dollar lost ground against the euro and the yen.In corporate news, shares of Dell rose 4.5% after the computer maker said it plans to start paying a quarterly cash dividend of 8 cents a share.Johnson & Johnson gained 1.1%. The blue chip health-care company said it received regulatory clearance to close its $19.7 billion bid for medical-device maker Synthes. Analysts from J.P. Morgan Chase, Jefferies & Co. Inc., and Raymond James Financial subsequently upgraded the stock.Facebook edged up 0.8%, putting it on track to post back-to-back gains for just the second time since going public. The stock rose 1.5% Tuesday to close at a one-and-a-half-week high.Scotts Miracle-Gro dropped 8% after announcing it expects to fall short of estimates of full-year earnings and sales growth it had provided earlier as a result of slowing consumer demand and lower-than-expected margin rates.Printing company 3D Systems fell 5.6% after the company said it is offering shares of its common stock for sale to the public. 

MARKET TALK: Sell Bunds/Buy Tsys Good Hedge on Greece -Scotia

The best way to ride out of the Greek elections is not to short stocks, but to sell German bunds and buy Treasury bonds, says Charles Comiskey, head of Treasury trading at Bank of Nova Scotia. He argues that bunds would be losers as Germany might need to channel more money to safeguard the monetary union, and the rising fiscal burden is what has fueled worry that bunds could lose their safe-haven status. That concern was underlined after Pimco's Bill Gross indicated on Tuesday he dislikes bunds. A comfort, though: The 10-yr bund auction Wednesday didn't show investors fled in droves. The underperformance of bunds vs Treasurys has narrowed the yield gap sharply. Recently, the benchmark 10-yr Treasury note trades about 15bps above that of 10-yr bund, down from 37bps just a week ago and a recent peak of 50bps in April.
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