U.S. ‘Fiscal Cliff’ likely to rock USD – Goldman Sachs
Looking ahead to December 31, 2012 and January 1, 2013, Goldman Sachs’ Global FX Monthy Analyst, says the upcoming U.S. ‘fiscal cliff’ episode has noteworthy potential to boost USD initially, followed by a sharp USD sell-off. Goldman Sachs explains: “The logic of this price action closely follows the pattern of markets temporarily losing confidence in the ability of polarised policymakers to compromise. During this period it may look as if the ‘fiscal cliff’ is becoming reality and that the economy could face a negative fiscal shock of up to 5% of GDP. The temporary negative response in cyclical assets would likely also trigger a broader USD rally.” Goldman Sachs continues: “After that, when policymakers do find a compromise, possibly helped by the market concerns reflected in cyclical asset weakness, risk sentiment could improve rapidly and the USD would weaken again.”
Busy day ahead for the London session A bunch of data releases will keep traders glued to the wires today. The show starts with French jobs data and current account at 07:45 GMT, followed 15 minutes later by Spanish CPI, Italian CPI at 09:00 GMT, and the highly followed German ZEW at 10:00 GMT, while the ECOFIN meeting, held in Brussels, will take place all day long. Bank of Portugal will also release its Autumn economic bulletin, with CPI figures for Portugal at 10:00 GMT. At 14:30 GMT Greek FinMin Stournaras will speak to EU lawmakers, while EU managing director of the Institute of International Finance Dallara will hold talks with senior government officials and private sector leaders regarding Greece and the Euro Area. In the sovereign debt auctions front, Italy will deliver 12 month bills, with 10 year bond yields standing barely above 5.03%, steady around the 5% figure for last 2 months, while Greece will try to sell 13-weeks T-Bill, as mentioned above.
2012-11-13 **:** GMT : United Kingdom. BOE Inflation Letter
2012-11-13 09:30 GMT : United Kingdom. Consumer Price Index
2012-11-13 10:00 GMT : Germany. ZEW Survey - Economic Sentiment
2012-11-13 19:00 GMT : United States. Monthly Budget Statement
2012-11-13 05:52 GMT : GBP/USD weakens ahead of UK CPI
2012-11-13 05:02 GMT : GBP/JPY cracks 126.00 to multi-week lows
2012-11-13 04:05 GMT : AUD/NZD prints inside day pin at 200 EMA
2012-11-13 03:08 GMT : USD/JPY pressured as risk wanes
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EURUSD :
HIGH 1.27098 LOW 1.26731 BID 1.26854 ASK 1.26859 CHANGE -0.18% TIME 08 : 31: 38
OUTLOOK SUMMARY : Down
TREND CONDITION : Down trend
TRADERS SENTIMENT : Bullish
IMPLIED VOLATILITY : High
MARKET ANALYSIS - Intraday Analysis
Upwards scenario: We expect busy session ahead. Yesterday low is acting now as key resistance level at 1.2698 (R1). Appreciation above it might enable next targets at 1.2722 (R2) and 1.2746 (R3) in potential. Downwards scenario: Medium term bias remains negative as both moving averages are pointing down. We expect retest of our support at 1.2672 (S1). Easing below it would suggest next targets at 1.2648 (S2) and 1.2624 (S3) in potential.
Resistance Levels: 1.2698, 1.2722, 1.2746
Support Levels: 1.2672, 1.2648, 1.2624
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GBPUSD :
HIGH 1.58776 LOW 1.58577 BID 1.58683 ASK 1.58691 CHANGE -0.05% TIME 08 : 31: 39
OUTLOOK SUMMARY : Down
TREND CONDITION : Down trend
TRADERS SENTIMENT : Bullish
IMPLIED VOLATILITY : High
Upwards scenario: Instrument gained momentum on the negative side, though we expect formation of retracement ahead. Progress above the resistance level at 1.5888 (R1) would suggest next targets at 1.5911 (R2) and 1.5933 (R3) in potential. Downwards scenario: Immediate focus comes on our next support level at 1.5856 (S1). Price penetration below it might open way towards to next targets at 1.5834 (S2) and 1.5811(S3).
Resistance Levels: 1.5888, 1.5911, 1.5933
Support Levels: 1.5856, 1.5834, 1.5811
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USDJPY :
HIGH 79.641 LOW 79.226 BID 79.292 ASK 79.293 CHANGE -0.25% TIME 08:31:40
OUTLOOK SUMMARY : Neutral
TREND CONDITION : Sideway
TRADERS SENTIMENT : Bullish
IMPLIED VOLATILITY : High
Upwards scenario: Neutral hourly studies point towards further consolidation, with a break required to spark stronger upside action. Our next resistance level is placed at 79.36 (R1). Break above it might open initial targets at 79.44 (R2) and 79.54 (R3) in potential. Downwards scenario: Fresh low offers initial support level at 79.22 (S1), possible pushdown of the price below it would suggest next targets at 79.13 (S2) and 79.05 (S3).
Resistance Levels: 79.36, 79.44, 79.54
Support Levels: 79.22, 79.13, 79.05
Source: FX Central Clearing Ltd,( forex trading brokers | automated forex trading system | forex trading for dummies | FXCC )