Wakeup Call: Stocks Were Rejected Yesterday At New Highs. Will We Have A Retest Today?

Daily Forex Fundamentals | Written by Saxo Bank | Aug 26 09 06:49 GMT |

Despite the generally positively surprising data, stocks were rejected at new highs. The O/N market development suggests that risk-willingness is still intact with the JPY and US-T and CDS/Itraxx down Calendar Economic Data Releases Country Name Time (GMT) Expectation Prior Comment GE 08:00 IFO – Business Climate (AUG) 89.0 87.3 US 12:30 Durable Goods Orders (JUL) 3.0% -2.5% We expect 1.5% US 14:00 New Home Sales MoM (JUL) 1.6% 11.0% Earnings Data Releases Country Name Time (GMT) Expectation Prior Comment BE 13:40 Dexia SA 0.230 UK - Tullow Oil PLC 0.030 UK - Antofagasta PLC 0.252 What's going on? Yesterday's US figures were somewhat better than expected. The home price data showed some signs of stabilization with the S&P/Case-Shiller Quarterly HPI showing the first QoQ INCREASE since H1-2006. This increase, however, was not corroborated by the FHA and NAR price data. The Conference Board Consumer Confidence was at 54.1 – higher than expected (47.9). Despite the generally positively surprising data, stocks were rejected at new highs. The O/N market development suggests that risk-willingness is still intact with the JPY, Treasuries and CDS/Itraxx down and AUD holding up relatively well. FX FX Daily stance Comment EURUSD 0 Ranging 1.4250-1.4330. German IFO may see breakout either way but 1.45 still caps EURJPY 0 Likely to trade a tight 134.20-135.20 range USDJPY 0/- 94.30-50 seen capping for a slow retracement back to 93.50 suppt. GBPUSD 0 1.6275 looks key suppt for rebound to 1.64. Sell break below, else 1.63-64 range AUDUSD 0 Likely ranging between 0.8330-0.8400. await breakout Equities Equities Daily stance Comment DAX 0/+ Buy around 5540 targeting 5575. S/L below 5525. FTSE 0/+ Buy around 4900 targeting 4935. S/L below 4882. S&P500 0/+ Buy around 1022 targeting 1033. S/L below 1018. Nasdaq100 0/+ Buy around 1630 targeting 1644. S/L below 1620. Dow Jones 0/+ Futures Commodities Daily Stance Comment Gold 0/+ Buy around 945 and target 956. Stop below 940. Silver 0/+ Buy at the break of 14.50 and target 14.80. Stop above 14.30. Oil 0/+ Buy on dips towards 70.50 and target 73. Stop below 69.30 FX Options FX- Options Comment EURUSD Buyers still looking for short dated EUR calls and market seems to be looking for a clear break through 1.44 shortly. A bounce back towards 1.42 should see vols ease again. USDJPY Mainly quiet session with vols coming in heavy. Unlikely to see risk reversals or vols spike unless we break under 9200. Back end remains well supported. AUDUSD Vols are softer as spot continues to trade inside established ranges. Few bid seen over the 9 day (nonfarm) but mostly sellers out the middle of the curve. Saxo Bank 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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