Daily Market Review – 11/06/2015
German 10-Year Bond Yield Climbs Above 1%
The EUR/USD pair dropped slightly during the Asian session. The market focus was divided between the good old Greek deadlock and the German 10-Year bond yield, which rose above 1%. Such a hike in yields will drive new traders to the pair, pushing the EUR/USD up.
On the other hand any negative information regarding negotiations between the Greek government and its creditors will lead to sell-off of the European single currency.
Thus, it appears the pair will be trading in a wide range between 1.1210 and 1.1450 until the FOMC meeting next week.
Resistance: 1.1380–1.1385; 1.1450–1.1470; 1.1500.
Support: 1.1280; 1.1215–1.1210; 1.1050; 1.0915–1.0900; 1.0885; 1.0815–1.0800.
The strengthening of the USD/RUB pair was technical, i.e. the pairing was acting out head and shoulders pattern, as well as driven by rising of the oil prices due to rumors that the US crude oil inventories have fallen.
It appears the market has two likely scenarios. If the pair breaks through 54.50–55.00, there will be upward movement. If the USD/RUB falls below its support line at 53.50 however, the Russian ruble will likely to continue its growth.
Resistance: 55.05; 57.05; 57.40–57.50; 60.00.
Support: 53.50; 52.00; 50.00.
S&P500 (Futures SP500 E-mini)
The S&P’s positive trading yesterday was primarily driven by technical patterns. The breakthrough of the resistance lines at 2086 and 2100 triggered a massive execution of stop-loss orders pushing the index to the new local peak around 2107.50.
The market is currently in a price consolidation mode. If it moves below 2100.00, it may lead to a new downward trend, while breaking the support line at 2120.00 will create an open road to a historic peak for the S&P at 2133.50.
Resistance: 2107.5–2108.00; 2116; 2120–2122; 2133–2133.5.
Support: 2095.00; 2068.50–2068; 2050; 2033; 2000.
Yesterday’s jump in oil prices was mostly speculative in nature. It was driven by rumors that US crude oil inventories have fallen. This is a perfect example of the “buy the rumor, sell the news” golden rule. US crude oil inventories fell by 6.8 million barrels, which was –1.7 million what the market expected. However, oil didn’t get a boost from this news, since the market has already put it in the price.
It appears that we can expect a continuation of the downward movement in a middle-term perspective.
Resistance: 66.00–66.35; 66.80–67.00; 70.00.
Support: 65.00; 62.45–62.40; 61.50–61.40; 61.00–60.90; 60.00.