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Currency Updates:
The euro (EUR) edged higher against the US dollar (USD) after dropping on news of the Cyprus bailout in which small depositors would be hit by a 6.75% tax on their deposits. The pair is currently trading above 1.2945 as it looks like the markets have absorbed the news and fears of contagion to Spain and Italy have to an extent subsided. Of course the Cypriot parliament will vote on the measure this afternoon and a negative vote will bring a Eurozone member closer to bankruptcy.
- The Australian dollar (AUD) was pulled lower against the US dollar (USD) as the pair fell from a previous high of 1.0405 to 1.0380.
- Gold (XAU) moved higher against the backdrop of the Cyprus bailout and a hit on depositors in a member of the Eurozone. The precious metal continues its bullish ride trading above 1604.
- The GER 30 (DAX), which tracks Germany’s 30 largest corporations, edged above 8010. The move comes after correcting for opening lower yesterday amid news of the Cyprus bailout.
- Weekly option volatilities for the EURUSD eased from 11.50 to 10.40 as investors’ fears subside and push options’ premiums slightly lower.
Stay in tune throughout the day with foreign exchange bullets !
Movers & Shakers
EURCHF
The euro (EUR) continued to rise against the Swiss franc (CHF), moving the pair above 1.2256. The euro had opened lower on Monday’s open but recovered as fears of a bank run on Spanish and Italian banks eased.
Outlook
EURUSD Pivot Point 1.2980 with a preference to go SHORT at 1.2980
Sentiment is 50% of deals to buy EUR
USDJPY Pivot Point 95.00 with a preference to go LONG at 95.00.
Sentiment is 43% of deals to buy EUR
GBPUSD Pivot Point 1.5065 with a preference to go LONG at 1.5065.
Sentiment is 68% of deals to buy GBP
AUDUSD Pivot Point 1.0340 with a preference to go LONG at 1.0340.
Sentiment is 52% of deals to buy AUD
GOLD Pivot Point 1590 with a preference to go LONG at 1590.
Sentiment is 71% of deals to buy GOLD
OIL Pivot Point 91.90 with a preference to go LONG at 91.90.
Sentiment is 72% of deals to buy OIL
US 500 Pivot Point 1597 with a preference to go LONG at 1597.
Sentiment is 21% to buy US 500
Option volatilities stable, premiums low UK 100 Pivot Point 6405 with a preference to go SHORT at 6405.
Sentiment is 23% to buy UK 100
Calendar
GBP – Consumer Price Index y/y at 09:30(GMT) Forecast 2.8%
EUR – German ZEW Economic Sentiment at 10:00 (GMT) Forecast 47.9
CAD – Manufacturing Sales m/m at 12:30(GMT) Forecast 0.7%