Hello
EUROPE: There is a full calendar Thursday, although the morning session will be
dominated by the policy decisions from the ECB, the BOE and the Norges Bank,
along with the the Autumn Statement from UK Chancellor George Osborne. The
European calendar gets underway at 0745GMT, with the release of the French Q3
ILO employment data. At 0800GMT, Spanish October industrial output numbers will
be released. The Norges Bank's latest policy decision will be released at
0900GMT.
Rates are seen unchanged at 1.5% The ECB policy decision is due at
1245GMT, to be followed by President Mario Draghi's press conference at 1330GMT.
Following last month's semi-surprise of a rate cut - if only on timing than
actual movement - analysts are not expecting any move from the ECB this month.
The release of the updated staff projections will likely be the main focus.
UK: The busy UK session gets underway at 0900GMT, with the release of the
November SMMT Car Registration data. At 1115GMT, the Chancellor George Osborne
will deliver the 2013 Autumn Statement, along with the latest OBR forecasts. The
OBR will raise its growth forecasts and slash its borrowing one. Since the
summer, the economic recovery has strengthened and intensified and the OBR's Mar
forecasts for 0.6% growth in 2013 and 1.8% in 2014 are outdated. Economists now
expect the economy will grow 1.4% this year, on a mean forecast, with even
pessimists predicting growth of 1.2%. The mean forecast is for the economy to
grow 2.4% next year. The OBR will also forecast reduced borrowing for 2013-14.
The additional tax receipts from increased activity, allied with a reduced
welfare bill, will help bring the still large deficits down and lead to a
sharply lower government cash requirement. The OBR's March forecast pointed to
borrowing of Stg120 billion in 2013/14, most analysts expect that to be scaled
back to Stg100 billion to Stg105 billion.
At 1200GMT, probably as the Chancellor
is on his feet speaking, the BOE will announce its latest policy decision.
Analysts forecast no change in rates, QE levels or forward guidance parameters.
EURO SUMMARY: Another quiet session today in Asia as the euro market waited for
tonight's ECB meeting.
The ECB is expected to keep a steady hand on policy as it
faces increasingly difficult choices and the latest inflation data eases
pressure for immediate action, according to MNI report out last night. The key
focus, however, will be on the ECB's staff forecasts for growth and inflation.
Ahead of that euro-dollar had a lackluster start, opening at $1.3586 and then
staying mostly on the sidelines through much of the morning. Reports of a
Moody's upgrade to Spain's BAA3 rating also failed to really inspire the market
with euro-dollar only briefly managing a high of $1.3603 before easing again.
Euro-dollar was last traded at $1.3598, after a narrow $1.3579 to $1.3603 range,
with bids near $1.3545 and stronger demand at $1.3525/15 providing the lift.
Topside, some dealers are eyeing a meaningful break of $1.3600 before taking aim
at urmored stops at $1.3620 and then at $1.3635/45.
05-Dec-2013
7:02
EURO-DOLLAR TECHS: 61.8% Key Resistance At $1.3627
RES 4: $1.3706/11 76.4% $1.3832-1.3296, Reversal high Jan 2013
RES 3: $1.3681/82 Reversal high Apr 2007, High Oct 17
RES 2: $1.3654 Daily Bollinger band top
RES 1: $1.3626/27 Channel base, 61.8% of $1.3832-1.3296
LATEST PRICE: $1.3603
SUP 1: $1.3554/64 38.2% of $1.3105-1.3832, 55-DMA
SUP 2: $1.3504/14 Nov 7 support line, 21-DMA
SUP 3: $1.3469 50.0% of $1.3105-1.3832 & Daily Ichimoku base
SUP 4: $1.3442 100-day moving average
COMMENTARY: Euro-dollar declined to test previous two session lows around
$1.3525 but failed to break below to retest Nov 7 support line at $1.3504. Bears
require break below to flip sentiment south, daily studies look a little
overbought and could reverse also. However, bulls aim to regain the rising
channel and eye the key 61.8% of $1.3832-1.3296 at $1.3627, now initial res just
above the channel base at $1.3626, break above targets 76.4% at $1.3706.
EURO-DOLLAR: MNI Fundamental levels (orders, options, technicals),
$1.3739 Thursday Oct31 high
$1.3690/710 Strong offers/$1.3706 76.4% $1.3833-1.3295/RM offers $1.3710-12
$1.3677 Cloud top
$1.3660/65 Medium offers
$1.3650 Strong offers
$1.3640 Medium offers on approach/Stops on break
$1.3639 Int.Day high Europe, Asia $1.3615 (NY $1.3606)
$1.3627 ***Current mkt rate 0645GMT Thursday
$1.3610/00 Medium demand
$1.3580 Int.Day low Asia
$1.3570 61.8% $1.3528-1.3639
$1.3550/40 Medium demand/$1.3543 mentioned bid level
$1.3528 Wed Dec4 low
$1.3525/15 Strong demand/$1.3524 Tues Dec3 low
$1.3490/80 Medium demand/$1.3490 Nov25 low/Stops
STERLING SUMMARY: Cable closed in NY Wednesday at $1.6385 after rate had
recovered off a NY session low of $1.6328 (seen on react to stronger than
forecast ADP data) to a high of $1.6405 as sterling got a late lift on S&P
comments suggesting that if recent growth data can be substantiated then it
would cause a ratings change (S&P have the UK at AAA, negative outlook). Cable
had seen lows earlier in the day on release of softer than forecast services PMI
data, with cable marking intraday lows at $1.6326, euro-sterling highs of
stg0.8323. Cable drifted lower into the close with early Asia extending the
pullback to $1.6370 on Gotobi Day dollar-yen demand. Rate edged back to
$1.6373/83 before getting a late session lift to $1.6389 ahead of Europe. Offers
placed between $1.6390/95, a break to open a move toward the NY high at $1.6405.
A break of $1.6405/10 to expose the area of recent highs at $1.6437/43, with
offers seen from here through to barrier interest at $1.6450. Support remains in
place at $1.6330/20. Euro-sterling stg0.82935-0.83075 in Asia. UK Autumn
Statement at 1115GMT and expected to underline positive growth outlook, with BOE
MPC rate/QE decision at 1200GMT (no change expected).
05-Dec-2013
7:10
CABLE TECHS: Key S/T Suppt Line At $1.6341; Bulls Eye Dec 2 High
RES 4: $1.6543 Weekly Bollinger band top
RES 3: $1.6470/96 Daily Bolli band top, High June 2011
RES 2: $1.6443 High Dec 2
RES 1: $1.6401/044 Highs Mar 2011, Dec 4
LATEST PRICE: $1.6379
SUP 1: $1.6341 Nov 13 support line
SUP 2: $1.6304 23.6% of $1.5855-1.6443
SUP 3: $1.6260 High Oct 1
SUP 4: $1.6218 38.2% of $1.5855-1.6443
COMMENTARY: Cable still holds above the short-term support line from Nov 13 -
now at $1.6341 and initial support. A break below could see a slide to July
support line at $1.6052, especially while daily/weekly studies look overbought.
We also note 10-week momentum's bear-divergence since September also adds to the
downside. However, yesterday's long lower-shadow cautions bears and we may see a
retest of the double-day high at $1.6437/43 - Dec 3 and 2 highs, respectively.
CABLE: MNI Fundamental levels (orders, options, technicals),
$1.6500 Strong offers on approach/Barrier
$1.6496 Jun 2011 highs
$1.6480 Medium offers
$1.6450 Strong offers on approach/Barrier/Stops
$1.6437-43 Dec3-Dec2 highs
$1.6411 76.4% $1.6437-1.6326/Stops
$1.6400/05 Medium offers/$1.6405 NY recovery high Dec4
$1.6397 Int.Day high Europe, Asia $1.6387
$1.6387 ***Current market rate 0657GMT Thursday
$1.6370 Int.Day low Asia
$1.6329-26 Area of react pullback lows Dec4 (UK svcs PMI-US ADP)
$1.6315 Nov 30 low
$1.6310/00 Medium demand
$1.6280/75 Medium demand
$1.6260/55 Strong demand
EURO-STERLING: MNI Fundamental levels (orders, options, technicals)
stg0.8391 Tues Nov26 high/stg0.8392 76.4% stg0.8415-0.8317
stg0.8387 Wednesday Nov27 high
stg0.8345/55 Medium offers/stg0.8352 Thu Nov28 high
stg0.8333 Corresponds to E1.20
stg0.8320/25 Medium offers/stg0.8322 76.4% stg0.8344-0.8252
stg0.8323 Dec4 react high after UK svcs PMI
stg0.8318 Int.Day high Europe, Asia stg0.83075
stg0.8311 ***Current market rate 0711GMT Thursday
stg0.82935 Int.Day low Asia
stg0.8274 Dec4 low
stg0.8258 Tuesday Dec3 low/Strong demand stg0.8260-50
stg0.8252 Monday Dec2 low
stg0.8250 Option barrier/Strong demand ahead
stg0.8220 Strong demand
stg0.8205/00 Strong demand
YEN SUMMARY: The Japanese currency ran into early demand after it started the
session around Y102.27 against the dollar and at Y138.95 vs the euro this
morning. Dollar-yen was carried up to a Y102.46 high while the cross edged up to
Y139.21 amid rumored demand from Japanese accounts early in the day. Dealers
attributed part of the buying to Japanese Gotobi day demand. But dollar-yen ran
into selling pressure soon after Japanese stocks opened lower, with offers
appearing from below Y102.50. Euro-yen also pulled back off the highs but was
generally supported above Y139.00 through the morning. In the early afternoon,
dollar-yen was trading at Y102.33 while the cross was at Y139.17. Immediate
dollar-yen support is seen at the region of last night's Y101.82 US session low,
minor demand spotted at Y101.80, with stops then seen on break below Y101.67. On
top, the Y102.83 level that previously supported on the hourly time frame has
again capped the move higher with stops remaining above this level and more
noted above the Y103.38 level. Very overbought daily tech studies combined with
CFTC data showing that Yen shorts are at extreme levels are hinting at a deeper
correction that is initially targeting a retest of the Y100.98-00 region.
05-Dec-2013
7:28
DOLLAR-YEN TECHS: Bears Attempting To Close Below Y102.00
RES 4: Y103.74/78 Reversal high May 22, Reversal low June 2012
RES 3: Y103.58/65 Daily Bolli top, Rising channel top
RES 2: Y103.38 High Dec 3
RES 1: Y102.89 High May 21
LATEST PRICE: Y102.07
SUP 1: Y101.82 Low Dec 4
SUP 2: Y101.53 Reversal high Jul 8
SUP 3: Y101.18 38.2% of Y97.62-103.38
SUP 4: Y100.85 21-day moving average
COMMENTARY: Dollar-yen slips below the channel base after bears tried to close
below yesterday - daily studies appear to be reversing lower and we look for a
close below the Y102.02 level to confirm, a close below yesterday's low at
Y101.82 would encourage bears further. However, bulls may look to close back
within the rising channel. The downside channel breakout, if confirmed, targets
a measured move to Y100.91 and a move to this level threatens the Y100.00 level.
DOLLAR-YEN: MNI Fundamental levels (orders, options, technicals),
$1.3739 Thursday Oct31 high
$1.3690/710 Strong offers/$1.3706 76.4% $1.3833-1.3295/RM offers $1.3710-12
$1.3677 Cloud top
$1.3660/65 Medium offers
$1.3650 Strong offers
$1.3640 Medium offers on approach/Stops on break
$1.3639 Int.Day high Europe, Asia $1.3615 (NY $1.3606)
$1.3627 ***Current mkt rate 0645GMT Thursday
$1.3610/00 Medium demand
$1.3580 Int.Day low Asia
$1.3570 61.8% $1.3528-1.3639
$1.3550/40 Medium demand/$1.3543 mentioned bid level
$1.3528 Wed Dec4 low
$1.3525/15 Strong demand/$1.3524 Tues Dec3 low
$1.3490/80 Medium demand/$1.3490 Nov25 low/Stops
05-Dec-2013
7:45
EURO-YEN TECHS: Lower High & Low Cautions Bulls, Daily Studies Slip
RES 4: Y141.28 Daily Bolli band top
RES 3: Y140.17/20 Channel top, Oct 2005 high
RES 2: Y140.03 High Dec 3
RES 1: Y139.43 Feb 2005 high
LATEST PRICE: Y139.10
SUP 1: Y138.72/79 Aug 2009 high, Hourly low
SUP 2: Y138.43/52 Low Dec 4, Daily Tenkan line
SUP 3: Y137.90/95 Channel base, 23.6% of Y131.22-140.03
SUP 4: Y137.35 High Nov 22
COMMENTARY: Euro-yen posts another lower high and lower low after failing to
retest the Y140.00 level - bulls still eye above here but daily studies are
beginning to slip and weekly/monthly studies are overbought. Bears eye the
channel base at Y137.90 just below the 23.6% of Y131.22-140.03 at Y137.95, a key
support level. A break below here would confirm a new bearish tone and likely
see a move to the 50.0% at Y135.63 which is also the daily Kijun line.
EURO-YEN: MNI Fundamental levels (orders, options, technicals)
Y140.20 Medium offers
Y140.03 2013 high - 3 Dec
Y140.00 Strong offers on approach
Y139.80/85 Medium offers
Y139.61 Dec4 high
Y139.35/40 Medium offers
Y139.30 Int.Day high Europe, Asia Y139.28
Y138.89 ***Current market price 0742GMT Thursday
Y138.79 Int.Day low Europe, Asia Y138.835
Y138.70 Medium demand on approach/Stops
Y138.55/50 Medium demand, stops
Y138.20 Strong demand
Y138.00 Strong demand, stops (Y138.02 - Daily Tenkan line)
Y137.95/90 23.6% of Y131.22-140.03/Channel base
Y137.80 Strong demand
OPTIONS: Option expiries for today's NY cut 1000ET. Large(L), Very Large(VL),
Includes DTCC
* Dollar-yen; Y101.00, Y101.25,
Y102.00(L), Y102.10,
Y102.50(VL), Y103.00,
Y103.25(L), Y104.00
* Euro-dollar; $1.3400, $1.3460, $1.3485,
$1.3490(L), $1.3500, $1.3520, $1.3565,
$1.3570, $1.3580, $1.3590
* Cable; $1.6200
* Aussie; $0.9000, $0.9075, $0.9150
* Aussie-yen; Y92.75, Y94.60
* Dollar-Canada; C$1.0550, C$1.0700