FOREXYARD: Forex News Blog | |
| Posted: 16 Nov 2011 04:40 AM PST
An early morning rebound in both the EUR and Italian bonds were short lived while the BoE preps for additional quantitative easing with its latest inflation report. The ECB through its SMP program was out in full force buying Spanish and Italian bonds. There were reports circling of the ECB buying up to EUR 1 bn in Italian bonds alone. Despite the ECBs best efforts the Italian 10-year bond yield was up above the 7% level. The Greek 2-year sank to a new low with yields climbing to 115.50%. The spread between the 10-year French German yield was also at an EMU high of 195 bp. European equities are also lower with the German DAX down close to 1%. Early in the European trading session the EUR/USD looked to put in a low of 1.3425 at a technical support level, climbing to a high of 1.3555 before quickly being pushed lower to 1.3470. There is lots of market chatter of traders targeting the 1.3145 October low. Yesterday the EUR/JPY made a decisive close below the 104.70 support line. There is a lack of support on the daily chart until the 100.75 low from early October. The BoE is prepping for additional quantitative easing as the UK central bank said it sees the risk for price pressures to the downside and growth will be slower than expected. This may be the first step the BoE is taking on a path to additional bond buying above the GBP 275 bn which it has already bought. Additional bond buying is likely a negative for Sterling. The GBP/USD has support at the October 18th low of 1.5630. Read more forex trading news on our forex blog. |
| Look Out for Greek Confidence Vote Posted: 16 Nov 2011 01:05 AM PST
This morning the EUR/USD slipped below the key 1.35 level versus the USD before finding some buying interest at technical levels. Today has a large amount of data releases on the economic calendar but the political issues should not be ignored, especially in Greece as Prime Minister Lucas Papademos will have one of his first political tests. The Bank of England will release its Quarterly Inflation Report as well as jobs data. Markets will be looking for hints of additional quantitative easing to come from the BoE. Sterling has been supported despite the additional GBP 75 bn of QE. Only now is the pressure being felt in the GBP/USD. The pair has support at the October 16th low of 1.5630. Resistance comes in at 1.5850 from the bottom of the late October-November consolidation pattern. Today at 13:00 GMT new Greek PM Lucas Papademos will face a confidence vote in Parliament. Papademos is expected to get the necessary number of votes but a failure would likely signal difficulties in passing the necessary austerity measures to receive the next EU bailout funds. The EUR/USD has risen from 1.3425 to 1.3525 upon the opening of the London trading session. There is a falling wedge pattern forming on the daily chart from the October high and the November 1st low. The chart pattern typically is considered bullish. Resistance on the chart pattern is at 1.3710 and falling. Support is located at today's low followed by the October low of 1.3145. Read more forex trading news on our forex blog. |
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