Dukascopy Fundamental Analysis
EUR
On Monday trade German DAX 30 index advanced rapidly on growing investors’ confidence that German and French politicians have agreed on a new stability treaty to restrain crisis. DAX index surged 3.6% reaching 5,690.93. Major winners in the index were Commerzbank and Deutsche Bank AG, each added about 7%. Auto producers Daimler AG and BMW gained 7.5% and 4.92% respectively.
USD
Crude oil futures hit the six-week high being traded over USD 99 a barrel. Analysts claim that the increase in oil demand was caused by more positive outlook on the Eurozone economy. On the New York Mercantile Exchange crude oil futures for January delivery were traded at USD 99.72 at early European trade, surging by 3.05%.
GBP
UK has developed a multi-billion Pound programme in order to facilitate economic development of the country. The largest part of the money is going to be taken from British pension funds and China’s investments. More than 40 infrastructural projects are planned to be launched as a part of the National Infrastructure Plan that is expected to attract private investors who will also contribute to the development of social and eco nomic projects over the next 10 years.
CHF
Seeking safer haven foreign investors tend to buy Yen thus pushing up its value. Stronger Yen undermines the domestic industries that take advantage of relocating manufacturing processes to emerging markets, said Masaaki Shirakawa from the Bank of Japan. The jobs in the industries disappear faster than the new ones can be created and there is a risk that these jobs may never be back even in case the Yen is weaker in future, he added.
JPY
Moody’s Investors Service is considering downgrading Credit Suisse Group AG’s credit rating as t he bank reported loss and revenue at the wealth management dropped. Moody’s set Credit Suisse’s Aa1 and Aa2 ratings on assessment for a reduction. On November 1 Credit Suisse announced it will reduce nearly 1500 jobs and review its securities after reporting quarterly loss.
Dukascopy Technical Analysis
EUR/USD
Daily maximum: 1.3398
Daily minimum: 1.3273
The single European currency started this trading week with a bullish reversal as EU leaders send clear signals to the financial markets that they will proceed with implementing new measures to improve the Eurozone economic shape, enhance financial discipline and bring the EU towards a closer financial integratio n. The market mean at 1.3253 remained untapped today.
Daily Resistance: 1.3319; 1.3403; 1.3457. Daily Support: 1.3181; 1.3127; 1.3043. The daily trading stance is strongly bearish.
EUR/JPY
Daily maximum: 104.45
Daily minimum: 103.09
There are optimistic hopes the EU leader will sort out the financial disorder in the Eurozone after Germany, France agreed on controlling the budgets of the Eurozone members, leaving the market mean at 102.86 intact.
Daily Resistance: 103.24; 103.62; 104.00. Daily Support: 102.48; 102.10; 101.72. The market outlook for the rest of the day stays strongly bearish.
GBP/USD
Daily maximum: 1.5594
Daily minimum: 1.5459
The British pound eased the pressure today as investors hope the EU leaders will eventually address the EU debt crisis and propose a long-term solution. As a result, the market participants’ market mean at 1.5452 was not approached today.
Daily Resistance: 1.5495; 1.5554; 1.5591. Daily Support: 1.5399; 1.5362; 1.5303. The daily trading signals point at a strong con tinuation of bearish trend.
USD/JPY
Daily maximum: 77.99
Daily minimum: 77.58
The Japanese Yen depreciated against the American Dollar as at the moment investors admire USD as a safe-haven currency, causing the pair to touch the market mean at 77.14.
Daily Resistance: 77.96; 78.22; 78.65. Daily Support: 77.27; 76.84; 76.58. The daily trend stays bullish.
USD/CHF
Daily maximum: 0.9306
Daily minimum: 0.9176
The American dollar advanced higher today as the worries ease over the European debt problems and the US economy shows promising signs the national economy is gaining steam.
Daily Resistance: 0.9356; 0.414; 0.9498. Daily Support: 0.9214; 0.9130; 0.9072. The daily market trend remains bullish.
Expert commentary
“The debt sovereign crisis is a community problem which can only be solved by all members moving from preconceived conditions.”
Dukascopy has interviewed Brian Lucey, Professor of Finance at the prestigious School of Business in Trinity College Dublin, to discover how Ireland is doing in light of the debt crisis in Europe.
What To Read Today
Europe
OECD Warns of Europe Contagion
The global economic outlook has deteriorated significantly, the Organization for Economic Cooperation and Development said Monday, as it urged the European Central Bank to act more decisively to prevent the euro-zone sovereign debt crisis from deepening further.
USA
New Home Sales Rose 1.3% in October but Prices Fell
New U.S. single-family home sales rose in October and the supply of homes on the market fell to its lowest level since April of last year, showing some healing in the battered housing sector.
Asia & PacificEurope
Real-Estate Risks Overshadow China’s Economic Prospects, OECD Report Shows
Property risks are &ldq uo;overshadowing” China’s economic outlook as a slowdown in sales threatens to trigger developer collapses, the Organization for Economic Cooperation and Development said.