Consumer Confidence The Trigger For Dip-Buying

Daily Forex Fundamentals | Written by Saxo Bank | May 27 09 06:59 GMT |

We maintain that the S&P500 will be a “buy-on-dips” until we see a test of the 200 DMA, currently around 931. Calendar Economic Data Releases Country Name Time (GMT) Expectation Prior Comment GE Consumer Price Index YoY 0.2% 0.7% US 14:00 FHFA House Price Index MoM (MAR) 0.2% 0.7% US 14:00 Existing Home Sales MoM (APR) 2.0% -3.0% What's going on? US Case/Shiller Home Prices show no signs of stabilization. National home prices declined at an 18.7% annualized pace, the fastest ever. Stocks rallied nonetheless on the much better than expected Consumer Confidence from the Conference Board, which showed the biggest gain since 2003. The Richmond Fed Index was also better than expected and corporate CDS prices and the VIX were continuing to slide lower. We maintain that the S&P500 will be a “buy-on-dips” until we see a test of the 200 DMA, currently around 931. Eastern European Sovereign CDS prices crept higher – beware of a break higher in the EUR vs. PLN, HUF and CZK. FX FX Daily stance Comment EURUSD 0/+ 1.4050 looks key to further gains. Buy break or buy dip to 1.3910-15 for 1.4160 EURJPY 0 Near-term res at 133.50. Seen ranging 132.50-133.50 USDJPY - Look to sell rallies up to 95.50-60 res with a stop abv 96.25, target 93.0 lvls GBPUSD 0/+ Look to buy dips to 1.5890-00 for a challenge on 1.5990 then 1.6050 AUDUSD 0/+ Buy dips to 0.7840 for a test of new 2009 highs at 0.7930. Stop below 0.7750 Equities Equities Daily stance Comment DAX 0/+ Buy on dips towards 4948 and target 5000. Stop below 4920. FTSE + Buy around 4410 and target 4500. Stop below 4380. S&P500 + Buy around 910 and target 923. Stop below 900. Nasdaq100 0/+ Buy on dips towards 1400 and target 1422. Stop below 1390. Nikkei 0/+ Buy at the break of 9500 and target 9600. Stop below 9450. Futures Commodities Daily Stance Comment Gold 0/+ Buy on dips towards 942 and target 953. Stop below 935.50. Silver 0/+ Buy on dips towards 14.40 and target 14.60. Stop below 14.30. Oil 0 Neutral. Risk-reward unconvincing. Beware of inventory figures today. FX Options FX-Options Comment EURUSD Vols corrected a bit lower after last week’s jump, but main interests still looking for EUR calls. Could see some range trading around 1.39/1.40 levels before breaking higher. USDJPY Risk reversals have eased as spot moved back above 9500. Gamma comes back offered as spot ticks higher. 9500 strikes for Tokyo cut would likely attract spot. AUDUSD Front end remains weak while 1m-6m area have found bids after spot moved to new highs above 7800. 2m-3m upside (8000-8200 area) seen some buying interests. Analysis Disclosure & Disclaimer Saxo Bank A/S shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. 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