Thursday, October 25, 2012

Daily Market Analysis – Is this a short term bounce?



Today’s schedule is once again heavy with market moving announcements. Pending the release of that data, we shall see if today’s market strength is nothing more than a short term recovery bounce after getting trashed over the last several trading days or if the markets will return to the highs of last week. So far released today were better than expected GDP numbers out of the UK. Later today from the US we will see employment numbers, manufacturing numbers and housing data. 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

The pair is currently trading at 1.3005, facing heavy overhead resistance at 1.3020. If it gets above this level the next upside target is at 1.3075. If the EURUSD falls from its present level, the first downside target is 1.2950 followed by 1.2895.  There are several key events to watch that could impact the pairs direction. First, Initial Jobless Claims are being released at 8:30am that if worse than expected might be bearish for the currency. Also being released at 8:30am are Durable Goods numbers which would be bullish for the EURUSD if the numbers are better than expected. At 10am are Pending Home Sales that if higher than expected would be bearish for the EURUSD.
 

Resistance
R1: 1.3015
R2: 1.303
R3: 1.3075
Support
S1: 1.2950
S2: 1.292                 
S3: 1.2895



GBPUSD
It remains to be seen if today’s pop higher is an opportunity to short the pair or if the currency is going to continue higher. 1.6133 has been the high so far for today’s trading day with the next target on the upside at 1.6170. If the market heads lower, the first target is 1.6070 followed by 1.6015.

Resistance
R1: 1.614
R2: 1.6175
R3: 1.6220
Support
S1: 1.6070
S2: 1.6015
S3: 1.5955
  
 

NZDUSD

The pair was able to break above the .8170 resistance level following yesterday’s favorable RBNZ rate statement and interest rate decision. It’s currently trading at .8236 and is facing its next resistance level at .8252, which if it breaks above could set the stage for the .8343 level. Targets on the downside are first at .8200, followed by .8140. Possibly influencing the pair’s direction are NZD Trade Balance numbers being reported at 17:45 that if better than expected would be bullish for the pair.

Resistance
R1: 0.8254
R2: 0.8343
R3: .8465
Support
S1: .8216
S2: .8138
S3: .8034

 

Gold

Shifting our analysis from the currencies, we can see that Gold’s correction to the downside is continuing. After bouncing off support around $1698.90, its trading at $1715.30 and getting above $1729.90 will set the stage for a rise to $1743. On the downside, it will need to hold above $1698.75. Its next downside target is $1688.33, followed by $1676.29.

Resistance
R1: 1722.30
R2: 1731.50
R3: 1739.44
Support
S1: 1698.75
S2: 1690.14
S3: 1681.80

 

Daily Calendar for Thursday, October 25
Time
Currency
Event
Actual
Forecast
Previous
4:30 EST
GBP
GDP(YoY)
0.0%
-0.5%
-0.5%
4:30 EST
GBP
GDP(QoQ)
1.0%
0.6%
-0.4%
8:30 EST
USD
Initial Jobless Claims

370K
388K
8:30 EST
USD
Core Durable Goods Order(MoM)

7.1%
-13.2%
10:00EST
USD
Pending Home Sales(MoM)

2.1%
-2.6%
17:45EST
NZD
Trade Balance

-825M
-789M

Successful Trading!

Jacob Fendrich
Senior Market Analyst

Risk Warning: Contracts for Difference (CFDs)  and foreign exchange products are leveraged products and may not be suitable for everyone. They are highly speculative and involve a significant risk of loss. Please ensure that you fully understand the risks involved. More information can be found from our "Risk Disclosure" statement. . The content offered in this email is for information purposes only and should not be interpreted as a solicitation to offer purchase or sale of any financial instrument. The information on which this communication is based has been obtained from sources we believe to be reliable, but we do not guarantee its accuracy or completeness. All expressions of opinion are subject to change.

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