Intraday Market Thoughts

US Housing and Euro Continue Higher

by Adam Button
Nov 19, 2012 23:18

The euro climbed above 1.28 as risk trades rallied on Monday in US trading. The commodity currencies were the top performers while the US dollar lagged. The minutes of the November RBA meeting are the highlight of the upcoming session. 5 longs from last week's Premium Insights hit all targets, including both EURUSD trades.

Positive risk sentiment broadly weighed on the US dollar, boosting the euro through the 200-day moving average, albeit marginally. It’s the first time above the 200dma since the pair broke down on Nov 1.

Hopes for a solution to the fiscal cliff and a further bailout for Greece were the main drivers but upbeat housing numbers added to the momentum.

The NAHB housing market index climbed to 46 compared to 41 expected. It was the best reading since May 2006. Existing home sales were also slightly ahead of forecast at 4.79m, although the National Association of Realtors warned that Nov and Dec sales could be skewed by the hurricane.

European leaders are meeting in Brussels on Tuesday on Greece. Dow Jones reports that Greece has rejected a Troika request for 20,000 additional public sector job cuts. At the moment, optimism about a Greek deal is high but that could change in an instant. Even if the funds are dispersed, any troubles in Spain could trigger risk aversion.

In Asian trading, the focus will be on the RBA as the minutes of the Nov meeting are released at 0030 GMT. The market is undecided about a Dec rate cut because the Nov statement was non-committal. A clearer indication in the minutes would swing the market (and the AUD) strongly in one way or the other.

The BOJ also starts its two day meeting as policies continue to stoke the fires of more activist policies to defeat deflation and the strong yen.

5 longs from last week's Premium Insights hit all targets, including both EURUSD trades. 3 trades were stopped out as final targets were missed by 10-15 pips. Find out the rationale of these trading ideas and understand the breakdown of multi-time frame stochastic analysis. Direct access to the latest PremIum Insights is found here: Non- subscribers can have a free trial here:



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