Daily Market Analysis

July 15, 2014

Gold Falls Off A Cliff As Risk On Sentiment Resumes

Markets have started the week on relatively thin trade, but this does not mean there has not been considerable volatility across all of the major financial assets so far. Volatility, driven primarily by risk on sentiment, looks set to continue today as a host of major fundamental releases hit the press. Here is what to look out for, and how to set up against it.

Stocks

The majority of the US stock markets opened and closed higher on Monday, as the aforementioned risk on sentiment fuelled bullish behavior throughout. The S&P 500 closed up nearly 1%, while the Dow exceeded 1% and the NASDAQ hit the level. Highs in the S&P another level to watch around 1987. If this level holds, but for one towards the 2000 handle as today’s markets mature. US retail sales data is scheduled for release later this afternoon, and a better-than-expected figure would make this target an almost certainty. Consensus forecasts the month over month figure at 0.6%, a doubling of the previous figure of 0.3%, so look for an on target release to strengthen towards aforementioned in term resistance. A better-than-expected release would likely offer up a four hour daily close above 2000, and suggest further bullish momentum as we head into the middle of the week.

Currencies

The two major pairs to keep an eye on today at the cable (GBP USD) and the EURUSD. Bank of England Gov Mark Carney is set to take the stage at market open today; any speech will offer insight into the likely future actions and the Bank of England as far as near-term interest rates are concerned. The property market is heating up in the UK, and many analysts are calling for an interest rate hike so as to mitigate the effects of any long-term property bubble bursting. Look for a hawkish tone (one that suggests a near-term hike is on the cards) in Carney’s speech to strengthen the cable after yesterday’s decline, with an initial upside target around 1.71250. Conversely, a dovish tone may compound yesterday’s current bearish momentum, and drive the pair towards in term support at 1.7050.

Looking to the Euro, both the aforementioned US retail sales figure and the release of the German ZEW economic sentiment have the potential to influence the EURUSD. Look for a concurrent bias (i.e. a better-than-expected European release and a lower than expected US release or the reverse) to determine the short to medium term direction in the pair, with the former example likely to boost the EURUSD towards in term resistance at 1.3660 and the latter likely to weaken the power through in term support at 1.3588.

Commodities

Gold was yesterday’s big loser, as fears over the situation in Iraq, Syria and Israel seem to have slipped from the market’s attention, along with the suggestion that one of the biggest banks in Portugal may be setting up to default on a large portion of its debt. The market ignoring these situations has led to a rapid decline on the price of gold, which was driven above last two weeks as a result of the aforementioned geopolitical and military tension. Expect the bearish momentum to continue today, with an initial correction towards the 1315 region likely to be rejected, offering up to 1300 handle as an initial downside target.

Oil gained slightly during yesterday’s session, but was far from regaining the value lost throughout the majority of last week. With 8 out of 11 of the previous sessions concluding in a decline for the fuel, it’s highly unlikely that oil will gain today. A better-than-expected US retail sales release major temporarily strengthen the fuel, but as the day draws to a close and the week matures look for further decline towards support at 99 flat.

Daily Market analysis

July 16, 2014

Dollar, Pound Surge Dominates Trader Sentiment

There has been a lot of speculation in the currency markets as of late. The yen was the strongest currency last week, but we saw it get hit hard yesterday. Meanwhile, the Asian stock market rally yesterday morning had a very important impact on the movement of key assets. Volatility has driven a lot of the market. Whereas the other part has been driven by hard facts on the ground. Much of the same variables will be driving stocks, currencies and commodities today.

Stocks

US stocks fluctuated on Tuesday amid the bank earnings and valuation concern. It was good to see that the leading American banks posted better-than-forecast figures. The thing is that there is a lot of concern that top social media and biotech companies are overvalued at the moment.

The Dow Jones and Nasdaq Composite Index were down for much of yesterday’s trading session. However, they were able to recover a lot of ground in the latter part of the trading session.

Minutes from the Fed meeting last week revealed that policymakers are concerned that investors are becoming too complacent about market momentum. Therefore, the Fed will need to be on the lookout for additional risk-taking. The Federal Reserve will have to go ahead with some very aggressive stimulus measures in the near future in order to continue supporting Wall Street.

Currencies

The GBP/USD, EUR/USD and EUR/GBP will be the key players in the hours ahead. The cable and the greenback were among the best performers both yesterday and in previous several trading sessions. With there being a number of risks in the financial markets, this has really turned out to lend the dollar a helping hand. In addition, previously, the USD was undervalued to some extent, so traders are of the view that now is really the time for them to go long on the American currency.

When speaking of the cable, it has surged on the improved British economy. It seems that all aspects of the nation’s economy are performing pretty strong at the moment. This includes the services and manufacturing sectors. In addition, more private jobs are being created, which could result in the economy booming in the medium term. This has ended up backing the pound against a basket of other currencies.

With interest rates in the US expected to be raised sooner rather than later, this may end up boosting the EUR/USD currency pair this Wednesday afternoon. With the BOE expected to also raise rates soon, going short on the EUR/GBP currency cross this morning may turn out to bring high returns for ambitious currency traders.

Commodities

Gold futures fell to their lowest level in 3 weeks yesterday, despite being several dollars higher at the start of Tuesday’s trading session. This shows just how quickly the situation in the commodities market can change from day to day. With the dollar surging during the New York session, this led to a massive selloff of the commodity. In other words, there was simply a lack of demand for the haven metal. In fact, the commodity fell the most since December on yesterday’s surge in a variety of other assets, and easing concerns in connection to the Portuguese banking crisis produced very little demand for gold.

Oil dipped below the $100 mark during yesterday’s trading session amid supply disruption concerns easing with both Libya and Iraq shipments unaffected by ISIS and the spread of chaos in the region. A bullish comeback is quite likely considering its technical position and expected fundamental news.

Source Daily Market analysis Yesoption.com

July 17, 2014

US Fundamentals Likely To Set The Tone On Thursday

With a large number of unexpected releases reported across the major developed economies on Tuesday, the leading asset markets experienced considerable volatility yesterday. With a host of key fundamentals also scheduled for release at today’s market open, and as the day matures, this volatility is likely to continue throughout Thursday’s session. What’s on the cards, and what’s expected across the major assets? Let’s take a look.

Stocks

The majority of global equities markets closed up on Wednesday, as a combination of better-than-expected fundamental releases and impressive earnings reported across a number of US corporate sectors fuelled bullish momentum. Core PPI out of the US came out at 1.8% versus a forecast of 1.7%, and its raw counterpart came out at 1.9% versus a forecast of 1.8%. Combined with a better-than-expected earnings report from Bank of America (BAC) – the second largest bank in the US – the fundamental release boosted the Dow to yet further highs. Jobless claims, building permits and housing starts figure is all set for release as the US markets open, so look for better-than-expected releases across the street headliners to boost the Dow further, with an initial upside target of 17200.

In the UK, the claimant count change release of -36.3 K versus the consensus forecast of -27.0 K boosted the FTSE 100 from support around the 6730 mark to close just below what will likely serve as key resistance around 6800 flat. With no real market movers expected out of the UK today, look for a small correction to proceed a continuation of the bullish momentum. In this situation look for a close above the aforementioned resistance to offer up an initial upside target of 6830.

Currencies

The two major is to keep an eye on today are the EURUSD and the USDCAD. Looking at the first of these two, Key inflation data set for release out of the Eurozone a few hours before the US markets open. A better-than-expected release could temporarily boost the strength of the Euro versus its US counterpart, and markets will be looking for a concurrent bias in the US jobless claims and Philadelphia Fed manufacturing index release to determine the direction. Look for better-than-expected data out of the Eurozone and weak data out of the US to reinforce in term support in the EURUSD around 1.3510, and strengthen the pair with an initial upside target of 1.3600. In the opposite scenario, one in which Eurozone reports weak data US reports strong data (this is the more likely two scenarios) look for a break below aforementioned support to offer up a medium-term downside bias in the pair.

Canadian market open, Statistics Canada is scheduled to release latest foreign securities purchases figure. The higher than expected reading – forecast at 14.23 billion – would likely strengthen the Canadian dollar versus its US counterpart, which would be bearish for the USDCAD. In this scenario, look for a break below 1.0735 to offer up an initial downside target of 1.0664.

Commodities

Having collapsed during the first two days of the week, as a result of the shift to risk on sentiment with markets diverted attention from the troubles in Iraq, Syria and Israel, gold closed higher on a daily basis during Wednesday’s session. The gain came as a result of US PPI data showing higher-than-expected inflation during June. Look for today’s key fundamental releases out of the US (jobless claims, housing starts, and Philadelphia Fed manufacturing index) to offer up a medium-term bias in the yellow metal. If the releases come out better-than-expected, gold could reverse yesterday’s bullish momentum and compound the early week losses. Look for an initial downside target of Wednesday’s low just shy of 1294, and beyond that, look for a break towards in term support at 1285.

Source :- Daily Binary Trading Market Analysis

July 18, 2014

Daily Market Aanalysis – 18/07/2014

Canada and the US in the Spotlight As the Week Draws to a Close

Mixed data out of the US set the tone for the relatively indecisive Day during Thursday’s session, and as we head into the final session of the week markets will be looking to a couple of key fundamental releases in order to help them determine the most profitable directional bias heading into the weekend. Is a look at what happened yesterday, what’s coming up today, and how to set up against it.

Stocks

All of the US major indices were relatively steady moving into yesterday’s close as a reaction to a couple of key fundamentals out of the US. Building permits and housing starts revealed a lackluster construction industry during June, with former reported at -4.2% versus a forecast of 4.2% on the latter reported at -9.3% versus a forecast of 0.9%. In contrast, employment data beat expectations, with continuing jobless claims reported at 2507K versus a forecast of 2575K and initial jobless claims reported at 302K versus a forecast of 310K. The data translated into some volatile action, but the major indices evened out to close out the day relatively close to the open in each case.

Today, Michigan consumer sentiment and expectations releases will likely determine the short-term bias in the Dow and NASDAQ 100, with the hotly anticipated release scheduled approximately one hour after the US markets open. Both indices are trading at or near all-time highs at present, making it relatively difficult to pick an upside target based on key levels, but if the report comes out weaker than expected, look for a decline towards in term support at 17057 in the Dow and concurrent decline in the NASDAQ towards recent close swing low at 3865.

Currencies

The two major pairs to watch today are the EURUSD and the USDCAD. Shortly before the US markets open (just after lunch in Europe) latest inflation figures will come out of Canada. Core CPI (MOM) and its non-core counterpart over headliners, with the figures estimated at -0.1% and 0.1% respectively. Both consensus estimates represent a decline on the previous figures, and a downside miss in either could weigh heavily on the value of the Canadian dollar versus its US counterpart. In such a situation, the level to keep an eye on will be the recent swing high (reached during yesterday’s session) just shy of 1.0800. Better-than-expected data could temporarily weaken the US dollar, with in term support at 1.0715 a reasonable target as the week draws to a close.

As mentioned, the second releases the Michigan consumer expectations and sentiment data. The sentiment version is likely the headline, and consensus estimates put its release at 83.0 versus a previous figure of 82.5. A higher figure suggests a more positive outlook by consumers, so look for anything above 83.02 strengthen the US dollar versus the euro. The EURUSD is currently trading at key long-term support, so look for such a strengthening to break below 1.3525 and offer up a downside target somewhere around 1.3480.

Commodities

West Texas intermediate crude oil hit weekly highs during yesterday’s session, as the markets interpreted the mixed data as generally positive for the US economy. Crude oil also rallied to just over $103 per barrel before declining into the close. The rallies come on the back of expectations that the US economy is still maintaining a sustainable growth rate. Look to the aforementioned fundamental releases out of Canada and the US to determine the likely direction of crude during the rest of the day. If the data proves positive, a boost towards in term resistance around the $102 flat level would make a nice intraday trade.

Source :- Daily Market Analysis