Market Movers of the Day
Europe
*Swiss Adjusted Retail Sales better than expected at 3.1%
*EU Sentix Investor Confidence worse than expected at -5.5
*German Factory Orders surprised for the worst at -2.1%
Americas
*Canadian Building Permits beat market forecasts at 18.0%
*Fed’s Chairman Bernanke speech
The Overall Sentiment
Equities
US stock markets advanced as Federal Reserve Chairman Ben Bernanke stated in his speech that US economy confronts “formidable headwinds” to sustain expansion at a moderate pace. Bernanke added that inflation is likely to remain subdued suggesting that the Fed will not raise interest rates in the near future. The S&P was up 0.3% and the Dow 0.5% after Bernanke’s declarations. In Europe, the British FTSE 100 slid 0.2% driven by losses from natural resources companies as metal prices continued to decline. The German DAX Index dropped 0.6% as Factory Orders unexpectedly fell in Europe’s largest national economy. The Japanese Nikkei 225 added 1.5% led by electronic companies as the strength of the Dollar against the Yen improves conditions for Japanese exporters.
Forex
The Dollar continued to advance after the surprisingly strong Nonfarm payrolls on Friday but gave up some gains after Fed’s Chairman Bernanke’s views on the US economy. EUR/USD fell to the 1.4750 area but corrected above 1.4850 as Bernanke’s declarations suggested no rate hikes for the time being. GBP/USD extended its decline as well, briefly falling below 1.6320, but recuperated to trade above 1.6450. The Canadian dollar rose as Canada’s Building Permits came much stronger than expected with an 18% gain in October. The Yen strengthened across the board with USD/JPY failing to hold above 90 after last week’s rally.
Commodities
Gold continued to weaken as the Dollar advanced touching $1135 an ounce intraday but managed to climb above $1155 as the Greenback gave up gains. Silver traded below $17.85 before Bernanke’s speech and corrected to settle in the $18.15 area. Crude Oil extended losses for a fourth straight day falling below $74 a barrel.
Technical Analysis
GBP/JPY DAILY
GBP/JPY has been trading in a volatile manner with swift changes in direction. After a steep fall that took the cross to a brief visit below 140 came an equally sharp bullish movement to the critic area around 148.50. This price level acted in the past as a resistance as well as a support, and the current failed attempt to break above it suggests that GBP/JPY’s next move could be a bearish one.
Daily Forex Market Analysis provided by eToro
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