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High-beta currencies extend their gains over the Dollar as investors are waiting for more hints on the tapering decision
MORNING BRIEF
High-beta currency pairs extended their gains yesterday as investors didn’t seem to be moved by the better than expected NFP report on Friday. The Euro was lifted higher to reach 1.3750 and the Cable also formed a new peak at 1.6460. Even though the fundamentals don’t support these losses for the US Dollar it seems that market participants are not yet ready to add to their Dollar positions and prefer to diversify by investing on Euro and Pound’s remarkable resilience. On a day with no important news releases this fact has led the current uptrends higher. Several policymakers offered their remarks during various events last night and as expected the tapering debate was at the forefront of the discussion. Given the fact that recent job data printed strong and only the consumer spending figures are bound to be released until the FOMC meeting chances for a December tapering appear significant.
British Production and GDP figures scheduled for today
Today the Economic Calendar is flooded with UK-related events. The Industrial and Manufacturing Production figures are set for release early in the morning and a few hours later the NIESR GDP Estimate is also scheduled to be released. Analysts expect an uptick on the Production data this month and this could be a significant boost for the Pound that has hit a new high during overnight trading hours. The day holds no other significant events and this makes for a possibly quiet trading environment.
Economic Calendar
|
Time |
Currency |
Event |
Importance |
Forecast |
Previous |
|
9.30 |
GBP |
Industrial Production (YoY) |
Medium |
3.2% |
2.2% |
|
9.30 |
GBP |
Manufacturing Production (YoY) |
Medium |
2.9% |
0.8% |
|
15.00 |
GBP |
NIESR GDP Estimate |
Medium |
0.7% |
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TECHNICAL ANALYSIS & LEVELS
EUR/USD
The Euro continues to climb higher and actually reached our second target from the previous trade suggestion we had issued, even though we were unlucky to be closed out at the breakeven price. For the time being a new suggestion is not possible as the pair needs to retrace a bit before we consider trading it, either towards new highs or towards lower levels. We believe that with no news to influence its course the Euro could drift either way today and a possible retracement lower should be contained above the 1.3700 mark. Patience is advised as we’re on the lookout for the new trade idea.
GBP/USD
The Pound has closed out our short trade at the 1.6400 mark after pulling higher yesterday to form a new high above the 1.6450 area. The recent flows after the NFP release and positive comments from BoE Governor Carney have turned the trend upwards again and we’re now expecting a small pullback in order to try and join the uptrend. The 1.6400 mark is an important level and we’ll be looking for a possible retracement near that mark to enter long. For the time being, we’ll need to stand aside and wait this out.
FTSE 100
The FTSE 100 seems to have halted its retracement higher is now on the search for direction. This fact offers us a dual trade opportunity which is as follows: we like a long trade just above the 6,571 points mark with targets coming in at the 6,595 and 6,635 price tags and a stop just below the 6,530 area (green levels on the above chart) but should the UK index fall below the 6,530 points then a short trade is advised there with targets at the 6,510 and 6,475 marks and a stop placed above the 6,565 price tag (red levels on the chart above).
Gold
Gold continued to remain range-bound between the $1,211 and $1,253 price levels and is now trading near the upper level of this range. We’re very interested to see how the yellow metal will react upon approaching this level and whether this sideways movement will eventually breakout or continue. It seems that Gold has left behind its volatile swings and is now moving in a more gentle fashion allowing us to consider trading it. For the moment we have no trade to suggest as it is vital to see how Gold will behave as it nears the $1,253 resistance.
The above charts have been created using FXCM’s Trading Station platform.
STOCK MARKET FOCUS
[Restricted Content] Plc.
The Alpesh Patel Value/Growth filter has indicated [Restricted Content] Plc as our stock of the day.
Company Information: [Restricted Content]
Created using Sharescope Pro
[Restricted Content] Plc has been rated an 8 out 10 in our Value/Growth rating and gets an A Grade rating on our Bullish Momentum meter. The P/E ratio is relatively low suggesting that the stock might be underpriced, Turnover is up year on year suggesting good growth but the ratio of the price earnings is medium challenging the growth potential. From a technical standpoint, the MACD indicator has been pointing upwards on the weekly chart above pointing towards higher levels. The recommended holding period for a stock of this type is 6-12 months.
Important Information
The filters and settings in the Special Edition of the Sharescope software use Alpesh Patel’s proprietary criteria to generate suggestions of securities worthy of further investigation. They DO NOT CONSTITUTE INVESTMENT ADVICE.
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