News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Real Time News
  • (ASEAN Tech) US Dollar Bounces off Key Trendlines and Support: USD/SGD, USD/THB, USD/IDR, USD/PHP #USD $USDSGD $USDTHB $USDIDR $USDPHP
  • Further your forex knowledge and gain insights from our expert analysts @ddubrovskyFX and @FxWestwater on JPY with our free Q4 market analysis guide, available for free today.
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 89.75%, while traders in USD/JPY are at opposite extremes with 73.09%. See the summary chart below and full details and charts on DailyFX:
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.19% 🇳🇿NZD: 0.16% 🇪🇺EUR: 0.02% 🇨🇭CHF: -0.04% 🇦🇺AUD: -0.10% 🇨🇦CAD: -0.10% View the performance of all markets via
  • Indices Update: As of 04:00, these are your best and worst performers based on the London trading schedule: US 500: 0.18% Wall Street: 0.16% FTSE 100: 0.06% Germany 30: -0.01% France 40: -0.07% View the performance of all markets via
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn more about controlling greed here:
  • It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. Understand a pair's spread here:
  • Earnings will remain a key theme ahead with AMZN and AAPL due to follow GOOG's and MSFT's failure to push a Nasdaq 100 to record highs while the ECB will follow in the BOC's and Brazil hawkish policy mix. That said, I'm watching the Dollar most closely:
  • 🇯🇵 BoJ Interest Rate Decision Actual: -0.1% Expected: -0.1% Previous: -0.1%
  • Heads Up:🇯🇵 BoJ Quarterly Outlook Report due at 03:00 GMT (15min)
Forex: European Equities Optimistic but European Currencies Lag

Forex: European Equities Optimistic but European Currencies Lag

Christopher Vecchio, CFA, Senior Strategist


High beta currencies and risk-correlated assets are moving higher to start the week, with the Australian and New Zealand Dollars as the top two performers, while the third commodity currency, the Canadian Dollar, is up modestly as well. With European equity markets having a strong day and bond yields remaining relatively unchanged, the way has been paved for a continuation of the overnight rally in the US session today; Gold and Silver are both higher as well, as a sign of confirmation.

There are two main reasons why sentiment may have improved over the weekend: the Euro-zone meeting on Tuesday will likely yield more aid for Greece; and the US fiscal cliff/slope looks like it will be avoided.

With no new news outside of some outside chatter that Greece will ultimately get what it needs, we’ll concentrate on the US. Following a sound defeat at the hands of President Barack Obama and the Democrats, Republicans have been back-peddling the past two weeks on issues across the board, but have becomes increasingly more pliable on how to raise government revenues. Ultimately, given the election results, it is likely that any resolution agreed to will result in a slight tax hike, entitlement reform, and tax reform, giving both parties what they desire, perhaps tilted in the Democrats favor.

Accordingly, US are politicians taking a reprieve from negotiations this week for the Thanksgiving holiday, which has markets in the US half-open on Wednesday and Friday, and closed on Thursday. Generally speaking, holidays tend to drain liquidity and leave trading conditions susceptible to random volatility or otherwise uninspiring price action)

Taking a look at credit, peripheral bond yields are mixed, perhaps preventing the Euro from having a stronger day. The Italian 2-year note yield has increased to 2.234% (+1.5-bps) while the Spanish 2-year note yield has increased to 3.266 % (+7.3-bps). Likewise, the Italian 10-year note yield has increased to 4.868% +1.5-bps) while the Spanish 10-year note yield has increased to 5.848% (+0.6-bps); higher yields imply lower prices.


NZD: +0.57%




CHF: +0.19%


GBP: +0.11%

Dow Jones FXCM Dollar Index (Ticker: USDOLLAR): -0.18% (+0.37% past 5-days)


Forex_European_Equities_Optimistic_but_European_Currencies_Lag_body_Picture_7.png, Forex: European Equities Optimistic but European Currencies Lag

See the DailyFX Economic Calendar for a full list, timetable, and consensus forecasts for upcoming economic indicators.


Forex_European_Equities_Optimistic_but_European_Currencies_Lag_body_Picture_6.png, Forex: European Equities Optimistic but European Currencies Lag

EURUSD: The EURUSD rebound on Friday has given way to some decent continuation, but remains below the key 1.2800/10 level. Thus, our levels remain unchanged. Support comes in at 1.2645/50 (100-DMA), and 1.2400/35. Resistance is 1.2800/05 (200-DMA, last week’s high), 1.2820/30 (mid-October swing low), 1.2880/1.2900, and 1.3015/20 (late-October high).

Forex_European_Equities_Optimistic_but_European_Currencies_Lag_body_Picture_5.png, Forex: European Equities Optimistic but European Currencies Lag

USDJPY: No change from Thursday: “The USDJPY has moved to the top of trend resistance near 81.15 and has broken above our key 80.50/70 level, leaving the mid-April swing high at 81.75/80 as the next major resistance level. Support comes in at 80.50/70 (former November high) and 79.10/30.”

Forex_European_Equities_Optimistic_but_European_Currencies_Lag_body_Picture_4.png, Forex: European Equities Optimistic but European Currencies Lag

GBPUSD: The downtrend that’s been in place for the past two months remains, though the GBPUSD finds itself hold both its 100-DMA and 200-DMA on recent declines, suggesting the medium-term trend is to the upside. Resistance comes in at 1.5910/15 (October low), 1.5955/60 (20-EMA), 1.5980/85 (50-EMA) and 1.6170/80 (late-October highs). Support is 1.5870/75 (100-DMA), 1.5845/50 (200-DMA), and 1.5800/05.

Forex_European_Equities_Optimistic_but_European_Currencies_Lag_body_Picture_3.png, Forex: European Equities Optimistic but European Currencies Lag

AUDUSD: The AUDUSD failed in the 1.0405/50 zone again on Wednesday, and is now threatening to break below trendline support off of the June 1 and October 23 lows at 1.0315/25. Support is there and 1.0235/80. Resistance is at 1.0355/70 (20-EMA, 50-EMA), 1.0405/50 (former swing highs and lows, October high) and 1.0500/15.

Forex_European_Equities_Optimistic_but_European_Currencies_Lag_body_Picture_2.png, Forex: European Equities Optimistic but European Currencies Lag

S&P 500: The key support noted for the past several weeks at 1350/65 has held. Although this is a broad zone, with multiple points of inflection occurring in this area, we know it will be an area in which buyers and sellers are looking at the market. If this breakdown is legitimate, then a healthy corrective rebound back towards 1380/85, 1400, and even 1420 could be possible. Support comes in at 1350/65 (monthly S2, ascending channel support off of November 2011 and June 2012 lows). Resistance comes in at 1383 (200-DMA) and1400/10 (20-EMA, 50-EMA, 100-EMA).

Forex_European_Equities_Optimistic_but_European_Currencies_Lag_body_Picture_1.png, Forex: European Equities Optimistic but European Currencies Lag

GOLD: Nothing has changed over the past three weeks, so neither has my bias: “Gold has consolidated just below its November highs, though considering that the US Dollar is at its strongest level in over two months, Gold is holding up well. As such, I still expect the 1700 area to be defended vigorously, and look to get long as low as 1675. Resistance is 1735, 1755/58 and 1785/1805. Support is 1700, 1680/85 (100-DMA, November low), and 1660/65 (200-DMA).”

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.