Tuesday, October 16, 2012

Daily Market Analysis - October 16, 2012

What’s worthy of note is that many of the major markets, after the minor selloff of the past couple weeks, have found support and could be ready to resume their uptrend. Let’s take a look for clues as to what direction currency traders and investors will push these markets. There are a whole cocktail of economic reports that could drive the markets in either direction. Data already released today are European economic reports that seem to be supportive of the markets.  Most notable was the German ZEW Economic Sentiment figures that reported numbers that were more bullish than expected. Coming out of the US later today are inflation, industrial production and Consumer Price Index(CPI) numbers.   For those interested in a more in depth analysis, we at CM trading are here to assist those who are interested in profiting from the financial markets.

EURUSD
Let’s start our analysis with the EURUSD, the most watched of all the currencies. After hitting a low of 1.2888 to start the trading week, it is currently trading at the week’s high of 1.3010. Market makers appear to have lost patience with the question mark of whether Spain would request a bailout and it seems to have broken out of its trading range. Pay attention to the US CPI numbers coming out at 8:30 EST that if negative could be bullish for the EURUSD.
Resistance
R1: 1.2995
R2: 1.303
R3: 1.3065
Support
S1: 1.292
S2: 1.289
S3: 1.2830


GBPUSD
There was a wide array of economic reports that came out of the UK today that appear to have been the cause for the GBPUSD’s rise above the weeks low of 1.6020 to its current high for the week of 1.6109. Holding above 1.6060 is an important level to watch for the near term. Employment numbers and MPC meeting minutes coming out tomorrow could determine if the break above resistance today is the start of a trend change for the currency pair.

Resistance
R1: 1.6095
R2: 1.614
R3: 1.6215
Support
S1: 1.606
S2: 1.6025
S3: 1.5975
  
 
USDCAD
After dropping down to .9770 to start the week, the pair is currently trading near the top of its range at .9820.  At 8:30 EST, numbers for Canadian Manufacturing and  Foreign Securities Purchases are being reported. This combined with the various US economic reports could provide swings for those wanting to trade both sides of the market.

Resistance
R1: 0.9825
R2: 0.985
R3: 0.988
Support
S1: 0.98
S2: 0.977
S3: 0.9745
 
 Crude Oil
Let’s shift our analysis from the fx market to the energy market. Crude oil prices are mainly driven by the simple economics of supply and demand.  It’s been trading between $87.66 and $93.84 since the end of September and is currently trading at $92.25.  Coming up later today is the API Weekly Crude Stock that indicates how much crude oil is available in storage. Higher than expected numbers could indicate weaker demand and this would be bearish for crude oil prices.

Resistance
R1: 92.60
R2: 92.95
R3: 93.30
Support
S1: 92.00
S2: 91.50
S3: 91.00




 


Daily Calendar for Tuesday, October 16
Time
Currency
Event
Actual
Forecast
Previous
4:30 EST
GBP
CPI(MoM)
.4%
.4%
.5%
4:30 EST
GBP
PPI Input(YoY)
-1.2%
-.8%
1.1%
4:30 EST
GBP
Core CPI(YoY)
2.1%
2.1%
2.1%
4:30 EST
GBP
PPI Input(MoM)
-0.2%
-.1%
1.9%
4:30 EST
GBP
CPI(YoY)
2.2%
2.2%
2.5%
5:00 EST
EUR
German ZEW Econ. Sentiment
-11.5
-15.0
-18.2
8:30 EST
USD
Core CPI(YoY)
 2.0%
2.0%
1.9%
8:30 EST
CAD
Manufacturing Sales(MoM)
1.50%
1.0%
-1.5%
8:30 EST
USD
CPI(YoY)
2.0%
1.9%
1.7%
8:30 EST
USD
CPI(MoM)
0.6%
0.5%
0.6%
8:30 EST
USD
Core CPI(MoM)
0.1%
0.2%
0.1%
8:30 EST
CAD
Foreign Securities Purchases
6.90B
8.72B
6.67B
9:15 EST
USD
Industrial Production(MoM)
0.4%
0.2%
-1.2%
16:30EST
USD
API Weekly Crude Stock

1.48M
1.65M

Jacob Fendrich
Senior Market Analyst

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