Monday July 12, 2010 - 17:59:02 GMT
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Lack of Fresh News Holds Euro Rangebound at Mid-Session
equity markets are see-sawing this morning while investors await the
earnings season. The season kick-offs with a report from Alcoa after the
markets close. Stocks were trading lower shortly before the opening but
toyed with the plus side most of the mid-morning.
September E-mini S&P 500 futures found
support early in the session at a 50% price at 1066.00. Holding this
level is the
key to further upside action to perhaps 1081.00. A break through 1066.00
likely to trigger sell-stops and possible cause an acceleration to the
Early weakness in the stock market helped
boost September Treasury Bonds and Treasury Notes, but investor demand
higher yields and a firming equity market weighted on both markets going
Lower Asian and European equity markets
overnight triggered a break in the Euro early in the session, but stable
markets are helping to hold it in a range at the mid-session.
Without any major economic reports to push
the markets around, traders have decided to focus on two elements: the
earnings season and the European bank stress results.
earnings season begins after the equity market close this afternoon.
Euro has been taking its cue from equity markets lately, traders expect
first report from Alcoa to move the market.
European stress test results are not due
until July 23rd, but that hasnâ€™t stopped traders from
concerns about the event. Traders continue to question the toughness and
transparency of the report. There is also confusion as to how much
will be revealed and if the publication of the results will be limited
The question of ordering banks to
recapitalize came up late last week when European Central Bank President
Trichet mentioned in a speech that it may be necessary.
Technically, the EUR USD confirmed last
weekâ€™s daily closing price reversal top at 1.2722. This pattern usually
suggests a 2 to 3 day break coupled with a 50% to 61.8% correction. This
make 1.2436 to 1.2369 the next likely downside target.
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