Thursday, August 11, 2011

Market Afternoon Overview - August 11, 2011

Previous session overview
The dollar firmed Thursday, helped by encouraging U.S. initial claims data and safe-haven buying as high-yielding assets turned lower. 

Concerns about Europe's debt problems, and increasing worry that those issues may be spreading to France, continued to undermine market sentiment. The euro extended Wednesday's sharp losses against the dollar, falling to early U.S. session lows near USD1.41. The dollar bought JPY76.64, staying off its record low at JPY76.25. 

The number of Americans filing first-time jobless claims fell to 395,000 in the latest week, less than the 400,000 most analysts had expected. While the data would normally be positive for risk sentiment, the euro zone debt crisis is the dominant theme for investors. 

The Swiss National Bank is evaluating a range of measures to stall the Swiss franc's rise, and doesn't exclude moves that affect the currency directly, including the temporary pegging of the franc to the euro, a central bank official said in a newspaper interview Thursday. EURCHF stabilizes up around 4.6%, around CHF1.0790, after earlier shooting quickly higher by 5% on session.

The Canadian dollar trimmed losses, then slumped, then trimmed again, in choppy market action after disappointing trade data from the U.S. and at home. 

The U.S. dollar was at CAD0.9744 Thursday morning, from CAD0.9949 late Wednesday. In both the U.S. and Canada, the trade data showed an outright drop in exports. 

In Canada, the trade deficit swelled to CAD1.56 billion in June, nearly double the CAD0.8 billion deficit the market was predicting. It marked Canada's largest trade deficit since September 2010, as declines in shipments of energy and auto product dragged down exports, eclipsing a smaller drop in imports.
Market expectation
For USDCHF on the upside, the pair might find resistance at CHF0.7590 (Aug 9 high), and above here, CHF0.7650 (Aug 8 high) and CHF0.7740 (Aug 5 high). On the downside, immediate support lies at CHF0.7310/35 (previous resistance), below here, the pair might find support at CHF0.7235 (day low) and CHF0.7175 (Aug 10 low).

For EURCHF on the upside, immediate resistance lies at 1.0840 (Aug 9 high), and above here, CHF1.0990 (Aug 5/8 high) and CHF1.1135 (Aug 3/4 highs). 

On the downside, support levels are CHF1.0030/50 (previous highs), and below here, CHF1.0425 (intra-day support) and CHF1.0255 (day low).

Support levels for the USDJPY lie at JPY76.25 and below at JPY75.34 while resistance at JPY77.31 and above at JPY77.86, report technical analysts.