The euro (EUR) saw its largest drop in weeks against the U.S. dollar (USD) moving from a high of 1.3047 to 1.2829. The single currency, currently moving just above 1.287 has come under pressure after yesterday’s deal on Cyprus. The “Cyprus Precedent”, as the press dubbed it, made many analysts suggest that the restructuring of troubled economies banks will be solved similarly if done under the EU, ECB, IMF framework. This has caused jitters in Spanish, Italian and other southern European lenders which are heavily exposed to their sovereigns.
- Gold (XAU) recovered after dropping to 1590 US dollars per ounce. The precious metal, currently moving above 1602 has been heavily influenced by recent European developments.
- The GER 30 (DAX) Germany’s leading stock market index dropped to 7880 from a previous 8034 following news of another euro bail-out executed in line with German directions.
- Weekly option volatilities for the EURUSD at 9.52 shows investors’ fears subside and push options’ premiums lower.
The U.S. dollar (USD) continued losses versus the Japanese yen (JPY). The pair moved to lower lows touching 93.57 before recovering somewhat to 94.24. Some analysts suggest that the pair is correcting on its upward course. Japan’s new central banker, Kuroda, has outlined the options for monetary easing which may help the yen edge lower.
Outlook
- EUR/USD Pivot Point 1.2920 with a preference to go SHORT at 1.2920.
Sentiment is 41% of deals to buy EUR
- USD/JPY Pivot Point 94.95 with a preference to go SHORT at 94.95.
Sentiment is 42% of deals to buy USD
- GBP/USD Pivot Point 1.5165 with a preference to go LONG at 1.5165.
Sentiment is 66% of deals to buy GBP
- AUD/USD Pivot Point 1.0415 with a preference to go LONG at 1.0415.
Sentiment is 59% of deals to buy AUD
GOLD Pivot Point 1617 with a preference to go SHORT at 1617.
Sentiment is 70% of deals to buy GOLD
OIL Pivot Point 95.65 with a preference to go SHORT at 95.65.
Sentiment is 77% of deals to buy OIL
US 500 Pivot Point 1535 with a preference to go Long at 1535.
Sentiment is 22% to buy US 500
UK 100 Pivot Point 6300 with a preference to go Long at 6300.
Sentiment is 18% to buy UK 100
Calendar
- GBP: CBI Realized Sales at 11:00(GMT) Forecast 12
- USD: Core Durable Goods Orders m/m at 12:30(GMT) Forecast 0.7%
- USD: New Home Sales at 14:00(GMT) Forecast 426K