Daily Forex Analysis from FXCC

Daily Forex Analysis Dec 10 2012

Italian PM Monti announces intention to resign; early elections likely in February

The political news coming from Italy, in which current primer minister Mario Monti plans to resign once the 2013 budget goes through parliament and is approved, are not sitting well with the Euro, as investors anticipate it may lead to a new chapter in the EU crisis. The prospects of higher Italian bond yields when Europe opens weighs on the Euro. The Italian general elections, upon final confirmation, will likely be celebrated in February. Former primer minister Silvio Berlusconi is to run as centre-right candidate, and with the threat of an 'Il Cavaliere'-led anti-euro campaign looming, traders have logically turned cautious. The leading centre-left PD party is still in control, with Berlusconi's centre-right PDL behind by over 16 points.

According to NAB: "Prospects of Italian bond yields spiking higher when Europe opens is driving the euro lower. EUR bears would though do well to note that the People of Liberty party currently trails the centre-left Democratic party by 20% points. Plus, the re-appearance of Mr Berlusconi to the centre of the Italian political stage may well prompt Mr Monti to make him himself available for re-selection as PM after elections now seen likely to occur next February, three months earlier than originally intended."


UPCOMING EVENTS :
2012-12-10 13:15 GMT | Canada.Housing Starts s.a (YoY) (Nov)
2012-12-10 17:15 GMT | UK.BoE's Governor King Speech
2012-12-10 21:00 GMT | Australia.REINZ House Price Index (MoM) (Nov)
2012-12-10 21:45 GMT | Australia.Electronic Card Retail Sales (MoM)/(YoY) (Nov)

FOREX NEWS :
2012-12-10 05:33 GMT | GBP/USD outlook bearish below 1.6065 – V.Bednarik
2012-12-10 04:41 GMT | EUR/JPY offered toward 106.00; yen more bid
2012-12-10 03:49 GMT | EUR/USD bears beware ahead of Spanish bailout - UBS
2012-12-10 02:26 GMT | AUD/USD slips to 1.0465 on downbeat China trade numbers

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EURUSD :
HIGH 1.29157 LOW 1.28871 BID 1.29066 ASK 1.29074 CHANGE -0.13% TIME 08:12:00



OUTLOOK SUMMARY : Down
TREND CONDITION : Downward penetration
TRADERS SENTIMENT : Bullish
IMPLIED VOLATILITY : Low

MARKET ANALYSIS - Intraday Analysis

Pair is losing its neutral structure, as the price has tested new lows today. Next immediate support locates at 1.2888 (S1). Break here is required to enable bearish pressure towards our targets at 1.2867 (S2) and 1.2846 (S3).

Resistance Levels: 1.2929, 1.2952, 1.2971
Support Levels: 1.2888, 1.2867, 1.2846

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GBPUSD :
HIGH 1.60426 LOW 1.60172 BID 1.60240 ASK 1.60247 CHANGE -0.07% TIME 08:12:01



OUTLOOK SUMMARY : Down
TREND CONDITION : Downward penetration
TRADERS SENTIMENT : Bearish
IMPLIED VOLATILITY : Low

Bearish penetration below the support at 1.6007 (S1) might determine negative sentiment for the remaining of the day with possible targets in focus at 1.5994 (S2) and 1.5982 (S3) intraday.

Resistance Levels: 1.6041, 1.6057, 1.6070
Support Levels: 1.6007, 1.5994, 1.5982

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USDJPY :
HIGH 82.639 LOW 82.374 BID 82.410 ASK 82.415 CHANGE -0.07% TIME 08:12:04



OUTLOOK SUMMARY : Sideway
TREND CONDITION : Sideway
TRADERS SENTIMENT : Bullish
IMPLIED VOLATILITY : Low

We are not expecting significant price deviation later on today, though risk of positive tone establishment is seen above the next resistance level at 82.57 (R1). Any penetration above this level would put in focus higher targets at 82.68 (R2) and 82.77 (R3).

Resistance Levels: 82.57, 82.68, 82.77
Support Levels: 82.30, 82.20, 82.11

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