Forex Morning Comments: l’euro regge l’urto del giudizio di S&P
La moneta unica continua a rimanere impermeabile (tra $1,4550 e 1, 4570) sia ai risvolti negativi inerenti la situazione greca, ignorando di fatto l’avvertimento di S&P che qualsiasi rollover volontario verrebbe classificato comunque come default, sia ai dati macroeconomici deludenti in uscita ieri. La Grecia, in pratica, si troverebbe nella necessità di ottenere una ciambella di salvataggio perpetua per evitare la bancarotta. Come anticipato, in Australia la banca centrale ha mantenuto i tassi invariati diminuendo però le stime di crescita per il 2011 e aprendo il dibattito sui tempi e i modi delle prossime mosse di politica monetaria. In questo quadro l’Aussie ha saputo mantenere le sue posizioni mostrando una certa resistenza al flusso di dati non positivi rilasciati nelle ultime 24 ore (non ultimo le indiscrezioni relative alla Cina, che potrebbe alzare nuovamente il costo del denaro questa settimana). Sul fronte Atlantico, il Dollaro Usa sembra aver guadagnato un supporto, anche se di breve durata considerando la mole di istanze aperte sia sul lato macroeconomico che su quello del debito pubblico: i livelli di volatilità sui mercati azionari americani al momento sono molto bassi e questo potrebbe comportare reazioni violente ad eventuali ulteriori notizie negative.
FOREX MORNING COMMENTS
London – 5th July 2011
(Comments below have been provided by CMC Markets Analyst Michael Hewson)
The single currency continues to remain unaffected by continued negative headlines with respect to Greece, shrugging off the warning by ratings agency S&P yesterday that the rollover agreement mooted by French banks would be tantamount to a “selective default”.
Yesterday’s comments by an ECB official that the central bank would ignore a default rating recommendation unless there was a consensus across the board from all ratings agencies could be seen as trying to drive a wedge, or delay the inevitable with Moody’s declining to comment, while both S&P and Fitch have made their positions clear.
There is a concern that such an action by the ECB would stretch their credibility to breaking point. For now however that is a decision they won’t yet have to make. The single currency also appears to be immune to disappointing economic data having shrugged off last weeks below par PMI data and German retail sales data. It therefore wouldn’t be too much of a surprise if today’s German and euro zone services PMI also fell short, and was also shrugged off.
Expectations are for the June figures to remain unchanged from May’s figures of 58.3 and 54.2 respectively.
In any case it will probably be the euro zone retail sales numbers for May which could well create some fireworks with expectations for a sharp decline of 1% from April’s 0.9% rise. Given that German retail sales last week posted a surprise 2.8% fall in May, against expectations of a 0.5% rise the scope for a miss remains quite high, though some analysts have argued that the e-coli scare may have contributed to the slump.
Whatever the reasons, ongoing uncertainty resonating throughout Europe with respect to the current debt crisis could well prompt consumers to keep their wallets shut. Whether the numbers disappoint or otherwise they are unlikely to prevent an ECB rate hike later this week.
Continuing with the PMI theme the pound will be hoping for a more positive June services number than has been the case so far for manufacturing and construction data so far for June. Expectations aren’t particularly high with predictions for a number of 53.5, down from May’s 53.8.
In Australia the Reserve Bank of Australia kept interest rates unchanged at 4.75%, which wasn’t really too much of a surprise given the weakness of recent economic data in not only the jobs market, but also yesterday’s disappointing retail sales data. The decision to downgrade its 2011 growth did unsettle the market, however as did the slightly more dovish tone regarding interest rates, altering the perception that interest rates could rise in the near future.
EURUSD – the euro is still trading below the broader resistance area between 1.4550 and 1.4570, which continues to act as a cap with respect to further gains for the time being. A break above the 1.4570 area which is 61.8% of the 1.4940/1.3970 down move could well see a return to the 1.4700 area, and the highs this year at 1.4940. The 55 day MA at 1.4415 remains a key support area and for the downside view to remain intact we need to see the single currency break back below here to target the 1.4320/30 area and retest the key trend line support at 1.4150/60 from the May lows at 1.3970.
GBPUSD – the pound continues to find upward momentum beyond the 1.6120/30 area difficult to sustain despite yesterdays sharp move to 1.6142. Despite this while it is unable to break below the support area at 1.5980 then the risk of a break beyond the 1.6120/30 resistance zone increases.
A break of 1.6120/30 could well see further gains towards 1.6200; while below the 1.5980 area retargets the lows of earlier this week around 1.5910 as well as the 1.5880 area which is the 61.8% retracement of the 1.5340/1.6745 up move.
EURGBP – yesterday’s slide lower was unable to break below the 0.9000 area which seems to be acting as a fairly key psychological support level. Again the long candles on the daily charts give the impression of indecision. For now the market seems intent on testing the May 2010 highs around 0.9150 and it would need a break below yesterday’s lows to delay the possibility of this course of action. While the four hourly charts are working out their overbought characteristics the daily charts haven’t; however it would need a sustained break back below the 0.8940 area to shift the focus back towards 0.8850.
USDJPY – last weeks surge in US 10 year bond yields should continue to keep a floor under the dollar here with a close above the 200 day MA at 3.12% and a bullish weekly engulfing candle. As far as the recent range is concerned it’s as you were with the 55 day MA at 81.10 and last week’s highs at 81.30 continuing to cap. A break above is needed to signal the next leg higher towards the May highs at 82.00. For now the 80.00 level remains fairly solid support while a slide below 79.80 could well see a re-test of the May lows at 79.50.
AUD Resilient In Face Of Economic Data
(Comments below have been provided by CMC Markets Head of Analysis David Land)
The Australian currency has been quite resilient given some of the economic data that has been released in the last 24 hours. This points toward some of the positives that have underpinned the AUD for some time but also points to the inherently hawkish footing that market participants are on at the moment. Despite the RBA being clear that they will move rates higher if required this has been enough to add a real air of expectation in the market.
This means that the even though there is no real expectation of a rate bump today there will be furious dissection of the statement from the RBA to try and gain a clue as to future timing of movements. The answers will likely be held more in future data particularly that related to inflation and unemployment. The wider US dollar index has remained of the slide so there appears to be little materialisation of the post QE dollar buying.
There appears to be little support for the dollar which has been a theme for a long time now and it seems that without any concrete economic improvement there is little positive to be seen. Whilst European troubles are capturing headlines I think more focus should be placed on the state of play in the US and the need for resolution on their issues.
Volatility levels in US equity markets are very low at the moment which suggests that they may react strongly to negative news. I think we are likely to be in a similar currency situation as the market is offered attempts at resolution to problems with great uncertainty as to both their effectiveness and the potential for new problems to arise.
Rates Remain On Hold
(Comments below have been provided by CMC Markets Sales Trader Ben Taylor)
The Australian market has hit a soft patch in afternoon trade today despite rates remaining on hold and a positive lead from the European markets overnight. New York was closed last night for 4th of July celebrations and has resulted in light trading conditions today.
The optimism that surrounded lasts week’s Greek debt solutions has soured after Standard and Poor’s released a statement yesterday stating the proposed rollovers of sovereign debt into longer dated maturities would be deemed equivalent to default. I believe the Standard and Poor’s assessment is a crucial review of the Greek debt situation. It basically sees through the current schemes concocted by the French and German banks and says that Greece either needs almost perpetual bailouts or is moments away from deafault.
Rumours that China will receive a rate rise this weekend also dampened confidence here in Australia. The recent confidence flowing over from last weeks rally should end shortly as recent revelations start to sway this very fragile market. The Australian market is also coming under pressure as the weight of negative economic reads continues to drain the market of confidence. Yesterday’s retail sales and building approvals data provided further proof of our current condition and were a contribution to today’s “no change” from the RBA.