EUR Rebound Stalls, Fitch Lowers US Outlook

EUR Rebound Stalls, Fitch Lowers US Outlook, Japanese jobs up next

The early euro optimism ebbed in US trading even as the broad risk rally continued. NZD and AUD were the top performers with USD and JPY lagging. Japan retail sales rose in Oct but so did the unemployment rate. See status on Mondays Premium trades below and how EURUSD fails to close NY above the key level,

The euro rose high into US trading, as it flirted with 1.34 but was beaten back on two occasions, forming a double-top on the intraday chart. The sellers piled in, driving the pair to a close at 1.3313. Although EUR/USG gained 75 pips on the day, its performance badly lagged other risk trades.

Late in the session, Fitch lowered its outlook on US debt, saying a failure of meaningful deficit reduction by 2013 will result in a downgrade. The lone US economic data point was new home sales, which rose 307K compared to the 312K expected.

Most of Mondays Premium Intermarket Insights remain in progress, EURUSD & oil longs were stopped out, 1 of EURJPY longs hit all targets, while the other 2 remain in progress. ES, gold, silver and GBPCAD remain in progress. Direct access to the trades is found here: http://ashraflaidi.com/products/sub01/access/?a=557 Non subscribers can go here http://ashraflaidi.com/products/sub01/

The weekly CFTC positioning data showed EUR traders holding a net -85K short position compared to -76K the week before. It is somewhat surprising that Mondays euro rally didnt spark a short squeeze but it also demonstrates that the bears have a high conviction level.

The S&P 500 surged 2.9% to 1193

Asia-Pacific Preview

Japan Oct unemployment rate rose to 4.5% from 4.1% vx exp 4.2%. Retail trade rose 1.9% y/y in Oct from -1.1%. The market is increasingly concerned about Japanese economic malaise and a round of soft data points here will put pressure on the government and BOJ to stimulate growth.