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Daily Market Report 19/01/2012

European Shares
Wednesday’s session saw traders celebrating more rumours of free money to Greece in the form of some kind of bailout by the IMF, with European shares rising for a fourth session. However caution seems to remain the order of the day so far, as the second day of bargaining on the crucial bond swap deal will be critical for reaching a compromise needed to avoid an unruly default. The German DAX tested its 200 day moving average on the daily chart today, which had not been seen since July, but failed to maintain traction and is drifted downwards at the time of writing. The FTSE 100 is hovering around 5.700 and is yet to be seen how long the bulls can hold it above this level.
FX
The last three trading sessions saw FX traders regain some appetite for risk and buy into the euro that rose straight up on Wednesday in line with the European equity markets, pushing the euro above 1.2800 against the greenback. Despite any corrective rallies the trend remains firmly in a negative stance and it is going to be interesting to see what happens when we reach the 1.20 area. The sterling had to give up some of its gains after the disappointing November employment figures with jobless claims rising for a tenth month. The selling pressure on the pound doesn’t seem to have abated with the cable trading down at 1.5420 this morning.
Commodities
The commodity sector had its fair share of excited buyers yesterday buoyed by hopes of increased funding from the IMF. The precious metal is creeping ever higher this morning giving the bulls hope that we might see a test of the all-time highs set back in August and September last year. Currently at 1663 key support and resistance levels to watch are 1.543 and 1.720 respectively. For Brent crude things have been choppy this year. After the bulls pushed it above $114 in the previous week the black liquid has been trading downwards. At $111.34 this morning key support level to watch is at $110.46.
Today’s Calendar
On the economic data front things will be a little quite during European hours. Economic data starts to pick up after the start of the US session with a swathe of data being released from across the Atlantic. The US consumer price index, housing starts and jobless claims put out at 13.30 (GMT) will be closely watched by investors. Consumer prices in the world’s largest economy are expected to increase by 3.0% in December, and the weakening outlook for inflation may drag on the greenback as it increases the scope for another round of quantitative easing.

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