Wednesday 26th November: European Open Briefing

Global Markets:

• Asian stock markets: Nikkei down 0.15 %, Shanghai Composite gained 1.10 %, Hang Seng rose 1 %, ASX up 1.20 %
• Commodities: Gold at $1200 (-0.20 %), Silver at $16.65 (+0.25 %), Crude Oil at $74.10 (unch)
• Rates: US 10 year yield at 2.252, UK 10 year yield at 2.014, German 10 year yield at 0.742

News & Data:

• Australia Construction Work Done q/q -2.2 %, Expected: -1.7 %, Previous: -1.2 %
• U.S. economy resilient in third quarter as global growth cools (RTRS)
• Oil Trades Near 4-Year Low as Pre-OPEC Talks Fail on Supply Cuts (BBG)

Markets Update:

USD/JPY was caught in a 20 pips range overnight amid lack of data releases/events. The pair got under pressure at yesterday’s NY open, despite the stronger than expected US GDP data, and dealers saw decent profit-taking from leveraged names ahead of the US holiday tomorrow. USD/JPY has been trading with an offered tone since then and a test of the big support level at 117.30 seems imminent. In Asia, Japanese funds were the usual buyers on the dip sub-117.70 and bids are said to be resting at 117.50 and in better size towards 117.30. A break sub-117.30 will see a good number of stops being cleared and likely lead to further position covering from longs. To the topside, key resistance at 118.30 and then 118.80.

EUR/USD has been consolidating between 1.2460 and 1.2485 since it broke above 1.2450 and the pair is facing heavy resistance ahead of the big figure. Intraday support noted at 1.2440 with some stops through 1.2425, and then at 1.24, 1.2350/60. Meanwhile, GBP/USD still hasn’t been able to break above 1.5730, though it is getting close. Much will depend on today’s UK GDP release at 09:30 GMT. A beat in the headline number would help the pair finally breach through the aforementioned resistance area. To the the downside, key intraday support at 1.5680 and 1.5650. A break sub-1.5650 is likely to attract some momentum selling as well as stops and might lead to another test of 1.5590 support.

The European session could be quiet with the UK GDP the only key data releases. However, we will have a busy US session. Since US markets will be closed the next two days for Thanksgiving, we will see all the data usually released on Thursday and Friday being published today. See the calendar below for further details.

Upcoming Events:

• 09:30 GMT – UK GDP (0.7 % q/q, 3.0 % y/y)
• 13:30 GMT – US Core Durable Goods Orders (0.5 % m/m)
• 13:30 GMT – US Durable Goods Orders (-0.4 % m/m)
• 13:30 GMT – US Initial Jobless Claims (287k)
• 13:30 GMT – US Personal Spending (0.4 % m/m)
• 14:45 GMT – US Chicago PMI (63.1)
• 14:55 GMT – US Michigan Consumer Sentiment (90.2)
• 15:00 GMT – US New Home Sales (471k)
• 15:00 GMT – US Pending Home Sales (0.9 % m/m)

Source:: Wednesday 26th November: European Open Briefing