EU Morning Report - ESM downgraded but EUR still strong

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By NikolasX | December 3, 2012 7:56 PM EST

Easy Forex

 

The euro (EUR) is rising against most of its major counterparts, even as Moody’s cut the AAA rating of the European Stability Mechanism (ESM). Early in the Asian session, China released a slightly stronger manufacturing PMI confirming that the nation is continuing its recovery. There has been no breakthrough regarding the “fiscal cliff” situation in the US and every day spent without any development is going to hurt market sentiment more and more.

 

 

§ This has traditionally been a strong month for equities as shown by the S&P 500 (tracked by the US 500 (SPI) rising 16 times in the past 20 years during the month of December.

§ The euro (EUR) is again trading above 1.30 against the US dollar (USD). This is the 5th time the single currency is trying this move in the past 7 trading days, and this time it has recorded a higher high at 1.3046.

§ OIL rebounded off its 87.00 US dollars (USD) a barrel support level and now trades just below the 89.00 figure. A break above that level could pave the way for higher highs.

§ The US dollar (USD) is falling against the Japanese yen (JPY) and the pair now lies just above the 82.00 psychological level. It will be interesting to see whether the greenback will pull a rebound.

Stay in tune throughout the day with foreign exchange bullets!

 

 

. Pivot Preference1 Sentiment2
. EURUSD 1.2990 LONG @ 1.2990 31% of deals buy EUR
. USDJPY 81.90 LONG @ 81.90 32% of deals buy USD
. GBPUSD 1.6015 LONG @ 1.6025 34% of deals buy GBP
. AUDUSD 1.0425 SHORT @ 1.0425 47% of deals buy AUD
. GOLD 1703 LONG @ 1703 67% of deals buy GOLD
. OIL 87.65 LONG @ 87.65 41% of deals buy OIL
1 data generated by Trading Central, 2 data obtained from easy-forex Inside Viewer
.
Currency Time (GMT) Event Forecast
. EUR 08:53 German PMI Manufacturing in November 46.8
. GBP 09:28 PMI Manufacturing in November 48
. USD 15:00 ISM Manufacturing in November 51.2

 

Movers Shakers
EURAUD
The euro (EUR) has pierced above the 1.2500 resistance area against the Australian dollar (AUD) early in the Asian session as the markets open following the weekend break. This previous resistance is expected to now act as a support and an excellent risk/reward entry point for long positions.

 

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