I have recently been talking about the range-bound nature in the markets of late and how good trading opportunities are available to trade between those ranges. Most notably, I highlighted the British pound (GBP/USD) as one such opportunity.
Well there is also another opportunity that is available, and occurs when the range breaks out or breaks down. This occurred yesterday when the US dollar strengthened and just about all other currencies sold off as a result.
The bottom of the range was at 1.5575 off of the previous swing low and that level broke down easily As you can see from the chart, once that level was breached it was off to the races. Now that level has become resistance, and could provide further opportunities for short entries as that level gets tested.
Italy auctioned 7.02 billion euros of bonds, falling short of the target, as borrowing costs declined in its final debt sale of the year.
The Treasury in Rome sold 2.5 billion euros of securities due in 2014, less than the 3 billion euro maximum for the sale, to yield 5.62 percent, down from 7.89 percent at the previous sale on Nov. 29. The Treasury priced 2.5 billion euros of its 5 percent 2022 bond to yield 6.98 percent, compared with 7.56 percent on Nov. 29. Italy also sold about 2 billion euros of bonds due 2021 and a floating-rate security due 2018.
The sale, which aimed to raise 8.5 billion euros, came one day after Italy auctioned 9 billion euros in treasury bills for 3.251 percent. That was about half the rate from the previous auction on Nov. 25 after the European Central Bank last week offered euro-area banks unlimited funds for three years.
Bloomberg
The number of new applications for unemployment benefits for the week ending December 3rd fell by 38,000 from the previous week to 381,000. This represents a nine-month low and beat forecasts of 395,000 new claims.
“The labor market is improving,” said Brian Jones, a senior U.S. economist at Societe Generale in New York. “The numbers are moving in the right direction. You have to be careful because we’re around the Thanksgiving holiday and the Department of Labor has a hard time adjusting around floating holidays.”
Source: Bloomberg
The EUR/USD is coming into some significant long term support levels that are showing very clearly on the weekly charts. After failing at the previous highs just below 1.4250, prices have reversed sharply and are quickly approaching the yearly lows at 1.3130. There is very little to suggest that this level will hold, given the [...]
The EUR/USD is coming into some significant long term support levels that are showing very clearly on the weekly charts. After failing at the previous highs just below 1.4250, prices have reversed sharply and are quickly approaching the yearly lows at 1.3130. There is very little to suggest that this level will hold, given the [...]
The Swiss National Bank (SNB) followed through on rumors from the previous weeks that they would set a target rate for the Swiss franc (CHF) at 1.20 per Euro. The Central bank came out and said that they woudl use “unlimited resources” to defend that level so the Swissie fell by roughly 7% in one day!
Recent bouts of risk aversion had made the Swissie a desirable destination for those seeking asset protection over yield, though demand had pushed the franc to levels that were undesirable for Swiss exports and the economy in general. This form of currency intervention is the strongest we’ve seen from any Central bank in some time and it will be interesting to see if the markets attempt to test the SNB’s resolve.
The rate of inflation in the UK eased in June to an annualized rate of 4.2 percent. Analysts had predicted the rate to remain the same as the previous month at 4.5 percent.
The unexpected decline can be partly explained by an aggressive wave of price discounting as merchants desperately try to lure shoppers back into the shops. This was reflected in the Retail Prices Index which fell from 5.2 percent to 5.0 percent and while retail prices were down, food prices continue to climb jumping another 0.9 percent for the month.
Source: BBC News
Ireland’s economy shrank the most in a year in the fourth quarter of 2010 as consumer spending, investment and exports declined.
Gross domestic product fell 1.6 percent from the previous three months, when it increased 0.6 percent, the Central Statistics Office said in Dublin today. Consumer spending declined 0.4 percent on the quarter, exports fell 1.4 percent and investment dropped 2.3 percent. In 2010, the economy shrank 1 percent, a third straight annual contraction.
Bloomberg
Latest Gross Domestic Product (GDP) results for the Eurozone shows that growth increased by only 0.4 percent from the previous quarter. Growth for the previous quarter was one percent and experts say the slowing growth is due largely to cuts in government spending as several debt-ridden countries strive to bring deficits under control.
“The squeeze from fiscal consolidation programs on the periphery will build,” said Ken Wattret, chief euro-zone economist at BNP Paribas in London. “That contrast between Germany driven by strong demand for its exports and the periphery really struggling is going to become more rather than less pronounced.”
Source: Bloomberg
Canada recorded a bigger-than-expected gain in employment in August as a jump in educational jobs retraced the previous month’s losses, while the country’s jobless rate increased as more people entered the workforce.
Employment rose by 35,800 jobs, the seventh gain in the last eight months, following a drop of 9,300 in July, Statistics Canada said today in Ottawa. The unemployment rate rose to 8.1 percent from 8 percent as 53,500 more people joined the labor force. Economists predicted 30,000 jobs would be created and a jobless rate of 8 percent, according to the median estimates in Bloomberg surveys.
Bloomberg
