Euro rallies on reduced ECB cut hopes and strong German data, Aussie strong

November 7, 2013

The Euro is one of the main games at the moment and last night bounced perfectly off support in EURGBP as stronger than expected German Factory orders (+3.3% v +0.5% expected) and reduced expectations of an ECB cut tonight  after an MNI report, citing “unnamed officials” saying they want more time to wait and see , helped Euro regain some of its recent weakness and it sits at 1.3522 this morning.

As always we respect trendlines unless and until they break.

On other FX markets  GBP rose 0.24% to 1.6082. USDJPY is up 0.19% to 98.68 while the Aussie dollar is 0.23% higher and breaking up through the resistance zone sitting at 0.9528 after a high or 0.9542. traders will be watching the employment data today.

The question of course is where to after employment? The charts suggest while above 0.9440 the Aussie is looking ok.

Turning to stock markets at the close the Dow is up 126 points or 0.82% to 15,747, the S&P is up 7 or 0.40% to 1,770 but the Nasdaq is a little miffed and down 0.20%. Across the Atlantic the DAX reacted to the strong German data by rallying 0.35%, the CAC was 0.79%, in Milan stocks rose 0.90% and in Madrid the IBEX was 0.42% higher. In the UK the FTSE was largely unchanged.

Closer to home on the Sydney Futures Exchange the SPI 200 contract rose 7 points to 5425 bid which is a solid result and support has been strong on every dip so far this week.

On Commodity markets Bitcoin made a new all time high overnight and sits at 265 this morning. Nymex Crude bounced a little up 1.6% on lower than expected rise in stocks and the technicians reckon that the low is in for this run. Gold rallied just under $10 oz to $1316 but copper fell again to $3.23 lb. On the Ags the relative quiet largely continued though corn fell 0.94% but wheat fell 0.38% and soybeans rose 0.3%.

Crude is closing in on support as you can see in the chart below of the weekly price action. There is a bit of timeframe divergence here with Crude on the weeklies still pointing lower at the moment but the dailies very very oversold.

$91.25/50 remains very solid support with resistance at our fast moving average which comes in today at $97.03 in MT4 terms as you can see in the Vantage FX chart.

On the data front there is no bigger number for the Aussie dollar each month in Australia than the employment data and today is the day. The market is expecting a rise of 10,000 and an unemployment rate of 5.7%. Before that however we get the AiG performance of construction index. In Europe tonight German industrial production is due to be released before the BoE and ECB interest rate decisions. Then in the US we get preliminary GDP nd jobless claims.

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