Forex - EUR/USD remains lower as ECB meeting in focus

The euro remained lower against the U.S. dollar on Tuesday, as sentiment on the single currency remained vulnerable ahead of the European Central Bank's policy meeting on Thursday. 

EUR/USD hit 1.3476 during European afternoon trade, the session low; the pair subsequently consolidated at 1.3473, shedding 0.31%. 

The pair was likely to find support at 1.3338, the low of September 18 and resistance at 1.3581, the high of November 1. 

The euro remained under broad selling pressure after data last week showing that euro zone annual inflation fell to a four year low in October raised concerns that the ECB might cut rates in order to safeguard the economic recovery in the region.

While no policy change was expected from the ECB on Thursday many investors expected the bank to signal the possibility of further monetary policy easing at its meeting in December.

Separately, the European Commission cut its forecast for euro zone growth on Tuesday and said that unemployment in the region remains at unacceptably high levels.

The EC said it now expects economic growth of 1.1% in 2014 down from 1.2% and said the growth rate is expected to rise to 1.7% in 2015.

Meanwhile, data showed that euro zone producer price inflation was down 0.9% from a year earlier in September, compared to expectations for a 0.7% decline. 

In the U.S., comments by Federal Reserve officials on Monday indicated that the bank is likely to keep its stimulus program in place for some time to come.

Federal Reserve Bank of Boston President Eric Rosengren said bank should keep its asset purchase program in place until there is "compelling evidence of a sustainable recovery making satisfactory progress toward full employment." 

The euro was also lower against the pound with EUR/GBP declining 0.77%, to hit 0.8397. 

Also Tuesday, data showed that activity in the U.K. services sector expanded at the fastest rate in 16 years in October, bolstering the outlook for the economic recovery.

Markit said the U.K. services purchasing managers index rose to 62.8 in October up from 60.3 in September, the sharpest rise in activity since May 1997. Economists had been expecting the index to tick down to 59.8. 

Later in the day, the Institute of Supply Management is to release a report on service sector activity.

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European stocks push lower on E.C. forecast; Dax down 0.52%

European stocks pushed broadly lower on Tuesday, after the European Commission cut its forecast for euro zone growth, amid ongoing speculation over a possible rate cut by the European Central Bank.

During European afternoon trade, the EURO STOXX 50 dropped 0.87%, France’s CAC 40 retreated 0.80%, while Germany’s DAX 30 declined 0.52%. 

The European Commission cut its forecast for euro zone growth on Tuesday and said that unemployment in the region remains at unacceptably high levels.

The EC said it now expects economic growth of 1.1% in 2014 down from 1.2% and said the growth rate is expected to rise to 1.7% in 2015. 

European equities had strengthened on Monday after data showed that manufacturing activity in the euro zone edged higher in October from the previous month.

But investors remained cautious ahead of Thursday’s meeting after weak euro zone inflation data last week fuelled speculation that the ECB will cut rates in order to safeguard the economic recovery in the region. 

Financial stocks remained broadly lower, as French lenders BNP Paribas and Societe Generale tumbled 1.24% and 2.06%, while Germany's Deutsche Bank plummeted 1.97%. 

Among peripheral lenders, Spanish banks BBVA and Banco Santander declined 1.40% and 1.52% respectively, while Italy's Unicredit and Intesa Sanpaolo lost 0.94% and 1.12%. 

Elsewhere, BMW plunged 3.71% after the automaker said third-quarter earnings fell to EUR1.93 billion from EUR2 billion a year earlier, still exceeding analysts estimates. 

In company news, Swiss drugmaker Novartis climbed 0.50% as the company reportedly identified its animal-health business as a top candidate for a sale. 

In London, commodity-heavy FTSE 100 slid 0.59%, as U.K. lenders tracked their European counterparts lower, although data showed that activity in U.K. services sector expanded at the fastest rate in 16 years in October, bolstering the outlook for the economic recovery. 

HSBC Holdings tumbled 1.41% and Barclays plunged 2.95%, while Lloyds Banking and the Royal Bank of Scotland retreated 2.04% and 2.55%. 

Shares in mining giants BHP Billiton and Rio Tinto jumped 1.72% and 2.33% respectively, while Glencore Xstrata and Antofagasta surged 1.95% and 2.32%. 

In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.24% fall, S&P 500 futures signaled a 0.22% loss, while the Nasdaq 100 futures indicated a 0.26% decline. 

Also Tuesday, Spain’s Employment Ministry said the number of unemployed people increased by a seasonally adjusted 87,000 in October, compared to expectations for a rise of 31,300. 

The number of unemployed people increased 25,600 in September. 
Later in the day, the Institute of Supply Management is to release a report on service sector activity.

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Forex - Euro broadly lower with ECB meeting in focus

The euro fell to almost four week lows against the yen on Tuesday and was also lower against the dollar and the pound as speculation that the European Central Bank may cut rates intensified ahead of Thursday’s upcoming policy meeting.

EUR/JPY hit 132.38 during European morning trade, the lowest since October 10; the pair subsequently consolidated at 132.54, shedding 0.55%.

The pair was likely to find support at 131.59, the low of October 10 and resistance at 133.31, the session high.

The euro came under broad selling pressure after data last week showing that euro zone annual inflation fell to a four year low in October raised concerns that the bank might cut rates in order to safeguard the economic recovery in the region.

While no policy change was expected from the ECB on Thursday many investors expected the bank to signal the possibility of further monetary policy easing at its meeting in December.

The European Commission cut its forecast for euro zone growth on Tuesday and said that unemployment in the region remains at unacceptably high levels.

The EC said it now expects economic growth of 1.1% in 2014 down from 1.2% and said the growth rate is expected to rise to 1.7% in 2015.

Meanwhile, data showed that euro zone producer price inflation was down 0.9% from a year earlier in September, compared to expectations for a 0.7% decline.

The euro was lower against the dollar, with EUR/USD down 0.19% to 1.3489.

Sentiment on the dollar was hit after comments by Federal Reserve officials on Monday indicated that the bank is likely to keep its stimulus program in place for some time to come.

Federal Reserve Bank of Boston President Eric Rosengren said bank should keep its asset purchase program in place until there is "compelling evidence of a sustainable recovery making satisfactory progress toward full employment."

Elsewhere, the euro dropped to five-week lows against the pound, with EUR/GBP falling 0.66% to 0.8407.

Sterling strengthened across the board after data on Tuesday showed that activity in the dominant U.K. services sector expanded at the fastest rate in 16 years in October, bolstering the outlook for the economic recovery.

Markit said the U.K. services purchasing managers index rose to 62.8 in October up from 60.3 in September, the sharpest rise in activity since May 1997. Economists had been expecting the index to tick down to 59.8.

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U.S. futures edge lower amid Fed taper uncertainty; Dow Jones down 0.31%

U.S. stock futures pointed to a lower open on Tuesday, as comments by Federal Reserve official dampened expectations for the central bank to begin tapering its bond buying program before the year end. 

Ahead of the open, the Dow Jones Industrial Average futures pointed to a 0.31% fall, S&P 500 futures signaled a 0.28% gain, while the Nasdaq 100 futures indicated a 0.30% decline. 

Comments by Fed officials on Monday indicated that the bank is likely to keep its stimulus program in place for some time to come.

Federal Reserve Bank of Boston President Eric Rosengren said bank should keep its asset purchase program in place until there is "compelling evidence of a sustainable recovery making satisfactory progress toward full employment." 

The tech sector was expected to be active, as BlackBerry said it will raise USD1 billion in convertible bonds and seek a new chief executive officer after the recent collapse of a USD4.7 billion buyout by Fairfax Financial Holdings. 

The news sent the company's shares up 2.23% in pre-market trade 
Separately, Apple said it will be opening a new plant in Mesa, Arizona, that will create 2,000 jobs to make components for its products, in a move to boost manufacturing in the U.S. 

The iPhone maker declined 0.43% in early trading. 

Google, down 0.19% in extended trading, said it plans to spend USD608 million to expand its Finnish data center as mobile video demand increases. 

Financial stocks were also slated to be active, after Morgan Stanley said it lost money from trading on seven days in the third quarter, down from eight a year earlier, sending shares down 0.14% pre-market. 


Other stocks likely to be in focus included 21st Century Fox, Tesla Motors, LiveNation and OpenTable, all scheduled to report quarterly earnings later in the day. 

Across the Atlantic, European stock markets were lower. The EURO STOXX 50 retreated 0.54%, France’s CAC 40 slid 0.41%, Germany's DAX shed 0.34%, while Britain's FTSE 100 dropped 0.54%. 

During the Asian trading session, Hong Kong's Hang Seng Index declined 0.65%, while Japan’s Nikkei 225 Index added 0.17%. 

Later in the day, the Institute of Supply Management is to release a report on service sector activity. 

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Forex Trading Signal for 5th November 2013

                                                                                


Japan (Tokyo)                               United Kingdon (London)                        USA (New York)

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EUR/USD

 Up Trend :

 (1) BUY

E/P: 1.34964

T/P: 1.35200

S/L: 1.34500

 

GBP/USD

Up Trend:

(1) BUY

E/P: 1.59520

T/P: 1.59900

S/L: 1.59000

NOTE: The above posted Signals are delayed 2 - 4 hours after it has been  generated.
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