Alpari UK
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US Opening Call from Alpari UK on 4 March 2013
FOMC members speak following failed sequester deal
Today’s US opening call provides an update on:
* Sequester and poor data hit investor sentiment;
* UK construction industry contracts faster than expected;
* Eurozone investor confidence falls on inconclusive Italian elections;
* FOMC members speak for the first time since Congress failed to avoid the sequester.
European stock indices are trading lower this morning, and US futures are pointing to a similar open, as a combination of the sequester in the US and poor data in Europe hits investor sentiment.
It’s been another miserable morning for the UK, after the February PMI figure showed the construction industry contracted faster than expected. A contraction figure was expected, however it was forecast to contract at a slower rate than the month before, instead it’s contracted much faster. This just adds to concerns that the UK is going to struggle to avoid a triple dip recession in the first quarter, let alone grow in 2013.
Investor confidence in the eurozone was dealt a blow this month, as inconclusive Italian elections and lower growth forecasts for the region quickly turned investors bearish, following a couple of months of optimistic figures. Surveys so far this year have been much better which prompted talk of a recovery later this year, however a drop in confidence from -3.9 to -10.6 shows just how fragile the region is in the eyes of investors.
Looking ahead to this afternoon and the economic calendar is looking very light, which is probably negative for sentiment, with the sequester and poor data this morning now weighing on sentiment. One point of interest in the US will be speeches from two voting FOMC members, Jerome Powell and Janet Yellen.
Fed Chairman Ben Bernanke went some way last week to easing concerns about the scaling back of QE in the coming months, but he isn’t the only voting member. On top of that, we could get some insight into how the sequester now changes things at the Fed, with the general consensus up until this point surely being that it would be avoided.
The euro is trading lower against the Australian dollar in early trading today, with the pair looking to continue the downtrend in existence since the triple top seen throughout early February. We have seen a devaluation of the euro across a number of major pairs and this is likely to continue over the coming period.
The triple top seen in February was broken around three weeks ago and the break below this 1.287 level can be seen as pretty bearish for the pair. The Fibonacci retracement levels (January low – February high) are being well respected recently and the most notable element of this is the turn from support found at the 38.2 retracement into resistance.
We have seen a third push back up towards this level throughout Monday morning trading and this has coincided with a touch of the 50 period simple moving average derived from the central bollinger band. The previous touch of this indicator resulted in a push back towards the downside and subsequently I expect to see a move towards the lower band, which coincides with the 61.8 Fibonacci retracement and previous resistance in January.
The CCi indicator has spiked above the 100 level which indicates a price action away from ‘normal’ and subsequently points to further confirmation that we may be in a downtrend today. The stochastic also points to a potential move south and subsequently the two targets for the day lie at 1.277 and 1.267.
Ahead of the open we expect to see...
FOMC members speak following failed sequester deal
Today’s US opening call provides an update on:
* Sequester and poor data hit investor sentiment;
* UK construction industry contracts faster than expected;
* Eurozone investor confidence falls on inconclusive Italian elections;
* FOMC members speak for the first time since Congress failed to avoid the sequester.
European stock indices are trading lower this morning, and US futures are pointing to a similar open, as a combination of the sequester in the US and poor data in Europe hits investor sentiment.
It’s been another miserable morning for the UK, after the February PMI figure showed the construction industry contracted faster than expected. A contraction figure was expected, however it was forecast to contract at a slower rate than the month before, instead it’s contracted much faster. This just adds to concerns that the UK is going to struggle to avoid a triple dip recession in the first quarter, let alone grow in 2013.
Investor confidence in the eurozone was dealt a blow this month, as inconclusive Italian elections and lower growth forecasts for the region quickly turned investors bearish, following a couple of months of optimistic figures. Surveys so far this year have been much better which prompted talk of a recovery later this year, however a drop in confidence from -3.9 to -10.6 shows just how fragile the region is in the eyes of investors.
Looking ahead to this afternoon and the economic calendar is looking very light, which is probably negative for sentiment, with the sequester and poor data this morning now weighing on sentiment. One point of interest in the US will be speeches from two voting FOMC members, Jerome Powell and Janet Yellen.
Fed Chairman Ben Bernanke went some way last week to easing concerns about the scaling back of QE in the coming months, but he isn’t the only voting member. On top of that, we could get some insight into how the sequester now changes things at the Fed, with the general consensus up until this point surely being that it would be avoided.
The euro is trading lower against the Australian dollar in early trading today, with the pair looking to continue the downtrend in existence since the triple top seen throughout early February. We have seen a devaluation of the euro across a number of major pairs and this is likely to continue over the coming period.
The triple top seen in February was broken around three weeks ago and the break below this 1.287 level can be seen as pretty bearish for the pair. The Fibonacci retracement levels (January low – February high) are being well respected recently and the most notable element of this is the turn from support found at the 38.2 retracement into resistance.
We have seen a third push back up towards this level throughout Monday morning trading and this has coincided with a touch of the 50 period simple moving average derived from the central bollinger band. The previous touch of this indicator resulted in a push back towards the downside and subsequently I expect to see a move towards the lower band, which coincides with the 61.8 Fibonacci retracement and previous resistance in January.
The CCi indicator has spiked above the 100 level which indicates a price action away from ‘normal’ and subsequently points to further confirmation that we may be in a downtrend today. The stochastic also points to a potential move south and subsequently the two targets for the day lie at 1.277 and 1.267.
Ahead of the open we expect to see...
Read the full report at Alpari News Room