Focus Shifts to Next Week’s EU Summit
City Index December 1, 2011 3:48 PM
<p>Attention has now turned to how the situation in Greece and Italy will turn out and whether Germany will contribute more money. EUR/USD Range: 1.3431 […]</p>
Attention has now turned to how the situation in Greece and Italy will turn out and whether Germany will contribute more money.
Euro-dollar closed in New York at 1.3440, as the rate settled back from recent highs of 1.3534, seen after the announced Fed cut in the cost of dollar swaps, coordinated through several major central banks. The rate was seen recovering off pullback lows of 1.3420 however. The rate marked lows in early Asian trade at 1.3430 before edging higher through the session, the move up aided by the better than rumoured China PMI data as well as reserve manager demand seen from around 1.3445. The rate pushed to an overnight high of 1.3473 in fairly dull trade, settling between 1.3445-1.3465 into the European open. Bids seen placed between 1.3430-1.3420, a break to open a deeper move toward 1.3400, with stops placed on as break of 1.3390. Further demand seen at 1.3370-1.3360, ahead of 1.3325-1.3320. Resistance remains at 1.3473, with a break to open a move toward 1.3500 and then 1.3534.
Cable closed in New York at 1.5700 after the rate pulled back from session highs of 1.5780 as risk appetite was given an added boost by the Fed action to cut the cost of dollar swap lines, coordinated with several major European central banks. Trade in Asia was contained within a range of 1.5674-1.5717 as the rate consolidated Wednesday’s gains, opening Europe around 1.5690. Local focus is seen on the CIPS manufacturing PMI, ahead of the release of the BoE’s Financial Stability Report. Developments in the eurozone remain the main drivers in the markets, with attention turning to focus on the December 9 meeting, with comments ahead to be watched. Cable support is seen at 1.5675-1.5670, ahead of 1.5660-1.5640, with stops below. Resistance at 1.5720, 1.5750-1.5755 ahead of 1.5780.
Gold saw another strong move higher yesterday after opening the day at 1,715.60. An early move up in Asia to 1,726.75 was initially reversed in Europe to a low of 1,700.90. As New York opened, the major central banks of the world announced a joint lowering of prices in US dollar swaps by 50 basis points, which led a massive risk-on rally in the euro and equity indices. New pricing adjustments will be in place until February 2013 and the Fed stated that further measures could and would be taken if required. Gold surged to 1,750.20 and remained firm into the close at 1,746.50. Asian markets have seen a retest of yesterday’s highs but stalling just above at 1,750.60 before easing back on some light profit taking to 1,743. Today’s support is at 1,700 and 1,682.40, with resistance at 1,767.10 and 1,779.50.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.