Thursday, 13 November 2014

Daily Market Analysis — Intraday Comment 11/13/2014

Daily Market Review 11/13/2014

In the absence of any major economic events, things have been fairly calm for currencies during the European session on Thursday. The main gainers against the dollar were NZD and AUD.

Germany’s CPI rose 0.7% yoy in October, unchanged from the preliminary estimates released earlier this month. This confirms that the German economy is facing weak demand. On the other hand, the French inflation report was slightly more encouraging than expected: its CPI rose 0.5% yoy in October, up from 0.4% yoy previously and above expectations of an unchanged pace. Nevertheless, the Eurozone’s largest economies remain worryingly just above deflation. The recent disappointing industrial production figures point to weak growth in Q3 and increase the possibility for below-expectations growth when Q3 GDP is released tomorrow. I expect German GDP to fall on a qoq basis, dragging the bloc’s currency lower with it.

DAX futures advanced on Thursday after finding support marginally above the 9160 (S1) support line and the 50- and 200-period moving averages. The short-term bias is to the upside as the index is trading within the blue uptrend channel. A break above the black downtrend line is necessary for the index to head towards the 9500 (R1) resistance zone. A breach above that hurdle could trigger further extensions towards the next resistance of 9700 (R2). Our short-term momentum indicators do not give any clear indication of direction: the RSI is just below the 50 line and pointing up, while the MACD is already below its trigger line and seems willing to enter its negative territory. A break above the downslope black line is needed for further upward movements. On the daily chart, DAX is trading below the long-term uptrend line (the light blue line taken from June 2012), thus keeping the overall outlook cautiously to the downside. A move below 8350 would be needed to confirm a forthcoming lower low on the daily chart

•             Support: 9160 (S1), 8900 (S2), 8730 (S3)

•             Resistance: 9500 (R1), 9700 (R2), 9880 (R3)

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