20131126

Good morning,

Risk taking was decent yesterday with EU stocks finishing in green more or less across the board on back of the lowered geo-political risks associated with the Iran nuclear deal. US was not able to follow suit as the Pending Home Sales came out lower than expectations and a lower Dallas Fed Manufacturing Index kept market players from taking additional longs. Dow Jones (closing above 16,000 for the third day in a row) and Nasdaq took home less than 0.1%, while the S&P lost 0.1%.

Overnight, the Bank of Japan Minutes from the October 31st meeting was in focus, but it a more or less non-event. Market reaction was disappointing with the JPY appreciating and stocks in negative being a classic "buy the rumour, sell the fact" scenario.

Today, the European session could be relatively quiet with the Italian Consumer Confidence at 09:00GMT as the highlight (expected unchanged at 97.3 for November). For GBP-pairs, the Inflation Report Hearings at 10:00GMT will be very interesting in light of the improved labour data and the relation to inflation and hence interest rates. GBP/USD is trading in the mid-range of the 50-day SMA and the 1.6260 Double-Top, but these two levels will be key for further moves.

Later today, the US Housing Data will once again dominate the scene with Housing Starts, Building Permits and the Housing Price Index. Also the Consumer Confidence will be interesting and could be the trigger for additional volatility in the US Dollar. EUR/USD is still in between the 50-day and 100-day SMAs with a bias to the upside. The US figures could send the pair out of this range.

Have a nice day!