Wakeup Call: The Positive Sentiment From US Equities Will Spill-Over Into The European Session

Daily Forex Fundamentals | Written by Saxo Bank | Jan 22 09 08:29 GMT |

The positive sentiment from the US equity market yesterday will most likely spill-over into the European session today and lead equities higher. Calendar Economic Data Releases Country Name Time (GMT) Expectation Prior Comment EC Industrial New Orders SA YoY (NOV) 10:00 -20.0% -15.1% US Housing Starts (DEC) 13:30 605K 625K US Initial Jobless Claims (JAN) 13:30 543K 524K Earnings Releases Country Name Time (GMT) Expectation Prior Comment US Microsoft 0,495 Important for market sent. US Lockheed Martin 1,908 US Google 4,957 What's going on? Insiders in major US banks buying shares and the Obama rescue plan made US equities rally significantly yesterday. This will also lead European equities into positive territory at the opening. Singapore is planning to spend as much as 8% of GDP to alleviate the effects of the slump on households and businesses. Bank of Japan said it will consider buying corporate bonds to prevent a shortage of credit from worsening. This is in line with our expectations that Central Banks will at the final stage intervene directly in the market Portugal had its long-term sovereign credit rating cut to A+ following Spain which had its cut to AA+. This will put further pressure on the EUR as the differences between the strength of the economies are getting larger. FX FX Daily stance Comment EURUSD 0 Bullish reversal yesterday from new lows. 1.3175 next resistance. Support 1.2925 EURJPY 0/+ Huge bullish reversal yesterday on risk appetite. Support 115.00 Resistance 117.00 USDJPY 0/+ Bullish reversal yesterday. Buy dips toward 88.60 with stops below 88.00 for 90.00 attempt. GBPUSD 0 Reversal yesterday. 1.4025 first resistance followed by 1.4350. First big support at 1.3775. USDCAD - Uptrend looks tired for now. Sell rallies toward 1.2600, stop above 1.2660 for 1.2400 try Equities Equities Daily stance Comment DAX + Buy on dips. Initial target 4387, final target 4450. S/L at 4261. FTSE + Buy on dips. Initial target 4113, final target 4253. S/L at 4060. S&P500 + Nasdaq100 + Nikkei225 + Futures Commodities Daily Stance Comment Gold (XAUUSD) 0/+ A bit disppointed at lack of follow through. Longs should have stops below 840. Silver (XAGUSD) 0/+ Still in the range, but feels like something needs to give soon. 11.75 key resistance. Oil (CLH9) + Yesterday a key reversal? Will follow risk appetite. Be careful of US supply data later today. FX Options FX-Options Comment EURUSD Vols are easing off today after spot failed to break much lower. Talk of market being very long some low delta puts 1.26-1.25 area under 2 weeks. EURCHF Front end vols trading higher. Main interest in the broker market was buying of Front end upside options. USDJPY Yen vols are bid up in the front of the curve. With all the talk about the 90 strikes that came off yesterday, market has come all the way back to just under where it started. 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