Forex Morning Comments: riflettori puntati sul summit europeo
Per l’Europa si apre oggi una giornata decisiva: le indiscrezioni circa un pre-accordo concordato tra la Merkel e Sarkozy per una soluzione comune ai problemi dell’Eurizona ha comportato un rimbalzo del’Eurodollaro sui mercati asiatici con possibile target a $1,4345. Oltre alla moneta unica, le prospettive di un risultato positivo dal summit europeo sul debito hanno rimesso le ali anche alle cosiddette risk-currency come il Dollaro Australiano (alla prova di 1,079 contro il DollaroUsa) e quello Neozelandese che ha raggiunto i massimi storici sul biglietto verde.
Dopo questa apertura di fiducia, gli investitori si aspettano di vedere un accordo sulla Grecia che ponga le basi per una soluzione a lungo termine: ciò richiede essenzialmente la rimozione della possibilità di un contagio sul mercato internazionale del debito e il contemporaneo supporto del sistema bancario europeo, permettendo ai paesi più indebitati come Grecia e Italia di uscire dal vicolo cieco in cui sono entrate. Viceversa, una soluzione che fosse solo temporanea potrebbe sì vedere acquisti tattici sull’Eurodollaro nei prossimi giorni, ma farebbe comunque mancare un supporto prolungato alla moneta unica, in mancanza di un annuncio che si faccia carico del problema del debito nel lungo termine.
Lo stesso discorso (ovvero la necessità di trovare un accordo di massima non solo per l’immediato) vale per gli Stati Uniti: al fine di sbarazzarsi del tema del rischio sovrano, i traders vorranno assistere ad un accordo di lungo termine accompagnato da un piano credibile di riduzione della spesa pubblica secondo uno schema che tenga in considerazione il quadro economico complessivo. Qualora il Congresso non fosse in grado di raggiungere questo obiettivo, le monete considerate bene-rifugio come l’Aussie, il Dollaro Neozelandese e il Franco Svizzero sarebbero tutte pronte ad un rally.
FOREX MORNING COMMENTS
London – 21th July 2011
(Comments below have been provided by CMC Markets Analyst Michael Hewson)
The main event today is the EU summit in Brussels where the next stage in the sovereign debt crisis in Europe is being played out. Last night President Sarkozy flew to Berlin to persuade German Chancellor Angela Merkel to try and come to some accommodation with respect to some form of solution to the problem of not only Greece, and a new bailout, but also how to head off a possible contagion to Spain and Italy, with the stakes as high as they have ever been.
Reports that some form of agreement or common position had been struck has sent the euro higher in Asia. The President of the EU commission Jose Manuel Barroso even stuck his oar in yesterday, accusing the leaders of the ECB, Germany and France of “endangering a strong single market and a strong euro”. There has been talk that policymakers could well tap the remainder of the EFSF to buy themselves some time, as well as talk of a tax on banks to fund a new bailout of Greece.
Before that however we can expect to see further declines in both German and Eurozone manufacturing PMI’s for July as the fallout from the crisis over the past few weeks continues to weigh on activity. In the UK there is also quite a busy economic calendar in the wake of yesterdays Bank of England minutes, which didn’t tell us anything we didn’t already know before with respect to the banks outlook for the UK economy. Fears of a slightly more dovish tone in the face of recent weak data did not materialise, though that could change over the next week or so.
Today’s June retail sales figures are expected to reflect that weak outlook, though they are still expected to be a vast improvement on May’s 1.6% decline, with expectations of a rise of 0.5%.
Public finance data is also due for June and the chancellor will be hoping that borrowing will have come down after May’s £15bn number with expectations of £10.4bn. If the figures come in significantly higher than this figure then there will be increasing concerns that the Chancellor could be on course to miss his fiscal targets for 2011, and the crisis unfolding in Europe certainly won’t be doing him any favours in that regard.
All the while this is going on there is the small matter of US economic data in the wake of the debt ceiling discussions, with weekly jobless claims expected to rise slightly from last weeks slightly improved 405k to 410k.The US have a similar problem to Europe, namely lack of time in agreeing a resolution in time to raise the debt ceiling by August 2nd or face a damaging ratings downgrade.
EURUSD – no change in view here as the single currency remains sandwiched between the 100 day MA at 1.4290 and the 200 day MA support at 1.3915. This week’s early test of the 1.4020 level and 200 week MA, has prompted a rebound back above 1.4200, bringing the 100 day MA back into sight.
Only a break above the 100 day average would then target the 55 day MA at 1.4345, but this is already starting to turn over. To open another test of the 200 day average on the downside at 1.3915, we need to break below yesterday’s lows around 1.4130 to then target the 1.4000 area. The primary trend line support at 1.3750 from the June 2010 lows at 1.1880 is the major uptrend line for the current rise in the single currency.
GBPUSD – still in the broad trading range identified earlier this week between 1.6000 and 1.6200. As suspected might happen yesterday we saw the previous support at 1.6080 act as a pivot to ratchet back to the 1.6180 level that had acted as resistance last week. The 1.6080 level should now act as support initially but as was the case earlier this week we could see a move back towards 1.6000 on a break below it. The expectation remains for a move towards 1.5980 to unfold and a retest of the 1.5880 area which is the 61.8% retracement of the 1.5340/1.6745 up move. Trend line resistance can now be found at 1.6220 trend line resistance from the April highs, at 1.6745. The 1.6250/60 area is also a 50% retracement of the down move from the highs at 1.6745 to the recent 1.5780 lows, so is also important.
EURGBP – until we get a rebound above the resistance and 55 day MA at 0.8835/50 the downside scenario remains intact, despite the recent bullish snapback that we saw at the beginning of this week.
The strength of this rebound suggests we could well have seen the lows in the short term, but we won’t know for sure until a break above the resistance at 0.8835/50 where we have the 55 day MA.
Nevertheless the bias still remains bearish given the weekly reversal signal two weeks ago and we still look for a move towards the 200 day MA at 0.8665. Above the highs at 0.8850 could well target a move towards the 0.8940 area.
USDJPY – sometimes watching the yen can be like watching paint dry and this is no different. The main resistance remains at the May lows of 79.50/60 which needs to be overcome for a move towards the 80.00 level. Nevertheless while below the May lows at 79.50 the emphasis remains to the downside. The next support lies around last weeks lows around 78.50, while a break below could well target the all-time lows at 76.50.
Currency markets position for favourable outcome at European debt summit
(Comments below have been provided by CMC Markets Chief Market Analyst Ric Spooner)
Currency markets in the Asian time zone have begun to position for a favourable outcome at the European debt summit taking place tonight. The Aussie and Kiwi dollars, which are both regarded as risk currencies, are well bid this morning. Aussie:USD at 1.0760 is set to test technical resistance at around 1.0790 cents. This area represents the top of a relatively tight trading range that has confined the currency throughout July. NZD:USD has also improved on Monday’s strong gains reaching a new record high this morning.
Markets have been encouraged by today’s news that Germany and France have agreed on a common position prior to the European summit on the sovereign debt situation. Any optimism is at best cautious, however. Investors need to be convinced that any agreement to bail out Greece will put in place the foundations for a long term solution to this problem. This would require substantially removing the chance of risk contagion in international debt markets and supporting the European banking system whilst at the same time allowing high debt nations such as Greece and Italy to grow their way out of difficulty.
A temporary solution to the immediate crisis may see some relief buying of the Eurodollar over the next few days but there is unlikely to be ongoing support for the currency in the absence of an announcement that paves the way for a long term solution.
The situation with the US government debt limit is much the same for currency markets. An increase in the debt ceiling could avert an immediate crisis but traders will be focussed on the quality of the agreement from a longer term perspective. To remove this issue as a source of risk, traders will want to see a long term solution accompanied by credible plans to reduce US government debt in a way that is well targeted for the economy as whole. If Congress is unable to achieve this, safe haven currencies such as the Aussie, Kiwi and Swiss franc are all likely to rally.