Clicky

Published On: Thu, Dec 13th, 2012

Daily market review – 12th December 2012

A dramatic improvement in the German ZEW economic sentiment for this month so far bolstered equities on Tuesday to almost hit a two month high, as illustrated in the next table. In addition, they were boosted by negotiations suggesting that Washington lawmakers were finally achieving progress towards reaching a fiscal cliff compromise.

 

Investors opted to flee the safe-haven US dollar on Tuesday in preference for riskier currencies, such as the Euro and Australian dollar, with the two-day Federal Open Market Committee (FOMC) meeting concluding today. Analysts are forecasting that the Fed will most likely initiate a fresh bout of stimulus which will seriously undermine the greenback.

As the figure above illustrates, the NASDAQ outperformed other key US trading indices on Tuesday after it acquire substantial support from an inspiring comeback by Apple’s shares. The iPhone producer, which accounts for about 12% of the NASDAQ membership, has recently been stressed resulting from a significant potential increase in capital gains tax.

Six tips are now displayed, which are active until 4.00pm EST, Thursday 13th December 2012.

EURUSD: The euro rose against the US dollar by over 50 pips on Tuesday amid investor fears that the greenback could weaken further today if the US Federal Reserve instigates additional quantitative easing, as widely predicted.

The Fed is anticipated to introduce a fresh round of security purchases later today in order to replace its Operation Twist which finishes at the end of December. The prime intent of such a move would be to entice traders to transfer their investments from safe-havens, such as US treasuries and the dollar into riskier assets, i.e. stocks and the euro.

Preference: moderately bullish

PUT option: beneath 1.2958

CALL option: break above 1.3061

Expiry time: 1 day

 

AUDUSD: The Aussie appreciated in value against the US dollar on Tuesday by climbing almost 75 pips, as demonstrated on the chart below. In this process, the AUD recorded its highs last recorded in that middle of September as it gained support from a general greenback weakness.

Currency specialists are now forecasting further strengthening of the Australian dollar over the coming days as the US dollar is now prone to significant weakness especially if the Fed does instigate new stimulus measures later today. Consequently, execute a CALL binary option using the AUDUSD as its underlying asset if price surges above its important resistance level at 1.0575.

Preference: strong bullish

PUT option: beneath 1.0435

CALL option: break above 1.0575

Expiry time: 1 day

 

GOLD: Despite nudging lower yesterday, revered commodity analysts consider yesterday’s bearish gold movement as just a temporary respite. Instead, they are advising that the precious metal will gain significant support as a primary hedge against inflation if the Fed announces new stimulus measures today as widely anticipated.

As such, consider instigating a new CALL binary option if gold can break above $1,714.26 per oz.

Preference: strong bullish

PUT option: beneath $1,705.82

CALL option: break above $1,714.26

Expiry time: 1 day

 

 Oil prices increased by 0.42% on Tuesday following the publication of news informing that OPEC oil production had faltered during November. Increased stress within the Middle East and a falling US dollar also provide support for oil.

As the greenback is widely tipped to weaken further during the remainder of this week, consultants are forecasting fresh rises in oil prices. This will especially happen if the Fed introduces a new bout of stimulus later today. Consequently, purchase oil if price attains a sustained break above $86.64 per barrel.

Preference: slightly bullish

PUT option: beneath $84.91

CALL option: break above $86.64

Expiry time: 1 day

APPLE: After its shares were subjected to a serious sell-off recently, Apple bounced back on Tuesday by climbing 2.5%.

Officials advised that this impressive recovery was mainly caused by investors seeking bargains by buying shares in the iPhone manufacturer producer at cut-rate prices. Many investors adopted this attitude on the hopes that the start of 2013 will produce new bullish movements in stocks.

Apple shares are now forecasted to rise higher over the coming days as this trend is predicted to continue for an extended period.

Preference: moderately bullish

PUT option: beneath $537.25

CALL option: break above $549.63

Expiry time: 1 day

Whitbread witnessed its shares surged by over 2.5% after its Costa Coffee business reported much better-than-expected sales on Tuesday. Management advised that this inspiring performance resulted from the recent instigation of a pioneering promotional campaign and the introduction of new food ranges, especially those for Christmas.

With almost 3.8 million customers drinking Costa coffee every week, Whitbread is now forecasted to enjoy increasing growth in short-term.

Preference: moderately bullish

PUT option: beneath 2,407.21GBP

CALL option: break above 2,556.90GBP

Expiry time: 1 day

Share Button

About the Author

- Marcus Holland has been trading the financial markets since 2007 with a particular focus on soft commodities. He graduated in 2004 from the University of Plymouth with a BA (Hons) in Business and Finance.

Leave a comment