MARKET EURO ZONE RETAIL PMI®

Euro zone retail sales continue to decline in December

Key points:
 German sales growth slows to marginal pace
 Italy Retail PMI hits 33-month high
Summary of findings:
Markings final batch of euro zone retail PMI®
 data for
2013 signaled an overall decline in sales for the fourth month running. The rate of decline remained
modest but accelerated slightly, reflecting a sharper contraction in France and slower growth in Germany.
The overall decline would have been stronger were it not for a marked easing the rate of contraction in
Italy, where the retail PMI hit a 33-month high.The Market Euro zone Retail PMI, which tracks
month-on-month changes in the value of retail sales,fell back to 47.7 in December, from 48.0 in
November. That matched October’s five-month low and indicated a moderate decline in sales. The
average reading for the final quarter (47.8) was lower than in Q3 (49.5) but still the second-highest in over
two years.
Commenting on the data, Trevor Balanchine, senior economist at Market and author of the Euro zone
Retail PMI, said:  “The retail downturn in the euro zone continued in December. While the rate of decline in sales remains weaker than in the first half of the year, the trend over the final quarter suggests consumer
spending may fall back. “German retail sales slowed in December, but this may prove temporary given the strength shown by the flash PMI data for manufacturing and services. Meanwhile a much slower drop in Italy was countered by a sharper decline in France.” Euro zone Retail PMI

Retail PMI summary (December)
Euro zone 47.7 2-month low
Germany 50.7 8-month low
France 46.1 7-month low
Italy 45.3 33-month high
Euro zone retail sales vs. one year ago

Data summary:
Index Nov-13 Dec-13 Description Rate
PMI (Month-on-month sales) 48.0 47.7 Contracting faster
Year-on-Year Sales ▲ ▼ Contracting faster
Sales vs Plans ▲ ▲ Low er slow er
Expected Sales vs Targets ▲ ▼ Higher slow er
Gross Margins ▼ ▲ Contracting slow er
Purchase Prices ▼ ▲ Rising faster
Quantity of Purchases ▼ ▲ Contracting slow er
Stocks of Goods ▼ ▲ Expanding change of direction
Employment ► ▼ Contracting faster
▲ Above 50, rising ▲ Below 50, rising
▼ Above 50, falling ▼ Below 50, falling
► Below 50, unchanged

Euro zone retail PMI data are based on national data for the three largest euro zone economies.
Retail sales in Germany rose for the eighth month running in December, but at the weakest rate over
this sequence. Meanwhile, the retail downturn in France intensified, as sales fell for the fourth
successive month and at the fastest pace since May. Retail sales in France have risen only twice in
the past 21 months. Italy continued to post the sharpest decline in sales of the three economies, however, despite seeing a much slower fall in December. The Italian retail PMI remained well below 50.0 but rose to a 33-month high of 45.3, and the gap between it and the German retail PMI was the lowest in nearly three years.

Retail employment in the euro zone declined further in December, reflecting ongoing job shedding in
France and Italy. The overall decline across the currency area was the steepest since April. German
retailers expanded their work forces for the forty-third consecutive month.

The value of goods purchased for resale by euro zone retailers decreased further in December,
extending the current survey-record sequence of decline to 29 months. That said, the rate of
contraction slowed sharply to the weakest over this period. Stocks of goods for resale increased for the
second time in three months, and to the greatest extent since May 2012.
Wholesale prices rose in December, and the rate of inflation picked up slightly to the second-highest in
11 months. Moreover, purchase price inflation remained higher than the survey’s long-run
average. Pharmaceuticals registered the strongest increase in purchase prices, followed by food &
drink.

DAILY FOREX POST – EUR/USD, GBP/USD, GOLD DECEMBER 30, 2013

EUR/USD Technical view

SPOT EUR/USD Previous day OHLC

Open	High	Low	Close	Change
1.3691	1.3892	1.3685	1.3741	0.0050

Today's Support and Resistance

Resistance
Support
R3	1.4000
R2	1.3840
R1	1.3810
S1	1.3720
S2	1.3680
S3	1.3550

EURO ended the session on Friday with gains of 0.36%, versus the greenback, inching higher to close the second successive session with gains. The pair briefly spiked close to 1.3900, before pulling back to close near crucial resistances at 1.3800- 1.3850, close above which the gains should extend to 1.4000. Near term supports placed at 1.3680- 1.3720. The medium to long term trend however, remains bullish for targets of 1.4200; targets for the symmetrical triangle in an uptrend. For the next few sessions, the pair could remain in the 1.3700- 1.3850 range

TREND DIRECTION

• Short term: Bearish
• Medium term: Bullish
• Long term: Bullish

TRADING RECOMMENDATIONS

• Short:

  • N/A

• Long:

• At.1.3660 with a stop at 1.3630 for a profit target of 1.3800
• At.1.3550 with a stop at 1.3480 for a profit target of 1.3800

GBP/USD Technical view

SPOT GBP/USD Previous day OHLC

Open	High	Low	Close	Change
1.6410	1.6577	1.6403	1.6478	0.0069

Today's Support and Resistance

Resistance
Support
R3	1.6750
R2	1.6700
R1	1.6600
S1	1.6470
S2	1.6400
S3	1.6350

Sterling ended the session on Friday with gains of 0.42%, versus the greenback, inching higher to end the second successive week with gains. The pair spiked to graze near term resistances at 1.6600, before pulling back sharply. Close above and the gains could have extended to 1.6700- 1.6750; top end of the near term bullish channel and targets for the symmetrical triangle in an uptrend. For the next few sessions, the pair could remain in the 1.6400- 1.6600 range

TREND DIRECTION

• Short term: Bearish
• Medium term: Bullish
• Long term: Bullish

TRADING RECOMMENDATIONS

• Short:

  • N/A

• Long:

• At 1.6400 with a stop at 1.6330 for a profit target of 1.6575

GOLD Technical view

SPOT GOLD Previous day OHLC

Open	High	Low	Close	Change
1210.20	1218.65	1208.64	1212.81	2.51

Today's Support and Resistance

Resistance
Support
R3	1262.00
R2	1220.00
R1	1218.00
S1	1209.00
S2	1203.00
S3	1172.00

Spot gold ended the session on Friday with gains of 0.20%, inching higher to end the week with small gains. Near term, the precious metal could face stiff resistance at 1218.00- 1220.00; top end of the near term bearish channel. ONLY a close above, the near term trend would turn bullish and spot gold could rally to hit targets of 1260.00- 1265.00. Crucial near term supports placed at 1170.00- 1175.00. The medium to long term targets remain intact at 1000.00- 1050.00 per troy ounce; targets for the symmetrical triangle in a downtrend

TREND DIRECTION

• Short term: Bearish
• Medium term: Bearish
• Long term: Bearish

TRADING RECOMMENDATIONS

• Short:

  • At 1220.00 with a stop at 1228.00 for a target of 1200.00

• Long:

  • At 1230.00 with a stop at 1215.00 for a target of 1260.00

Bailout Of World's Oldest Bank In Jeopardy, Rests On Hope That "Ship Does Not Sink"

The ongoing debacle of Italy's Banca Monte dei Paschi (BMPS) took a turn for the worst today. The bank's largest shareholders (MPS Foundation) approved (read - forced through) a delay in a EUR 3 billion capital raise, which the bank needs to avoid nationalization, until May. The delay (which will cost the bank EUR 120 million in interest) allows MPS more time to liquidate their 33.5% holding before their stake is massively diluted. Management is 'considering' resignation and is "very annoyed," but the city Mayor is going Nationalist with his delay-supporting comments that "we cannot let the third biggest bank in this country fall prey to foreign interests." So Europe is recovering but they can't even raise a day's worth of POMO to save the oldest bank in the world?

Italy's third-biggest bank Monte dei Paschi di Siena was forced to delay a vital 3 billion euro ($4.1 billion) share sale to raise capital until mid-2014 because of shareholder opposition, plunging its turnaround plan into uncertainty.

The bank's chairman and its chief executive may now resign after their plan to launch the cash call in January was defeated at an extraordinary shareholder meeting on Saturday due to the vote of Monte Paschi's top shareholder.

The world's oldest bank needs to tap investors for cash to pay back 4.1 billion euros in state aid it received earlier this year and avert nationalization

Simple game theory really - why would the largest shareholder "guarantee" losses now when it can try and liquidate more of its exposure over time?

But the cash-strapped Monte dei Paschi foundation - whose stake in the bank is big enough to veto any unwanted decision - forced a postponement until at least mid-May to win more time to sell down its 33.5 percent holding and repay its own debts.

...

Antonella Mansi, a feisty 39-year-old businesswoman recently appointed head of the Monte dei Paschi foundation, said her insistence on a cash call delay did not amount to a no-confidence vote in the bank's management.

But she said that carrying out the capital increase in January would massively dilute the foundation's holding, leaving it with virtually nothing to sell to reimburse debts of 340 million euros.

"We have a precise duty to ensure (the foundation's) survival. You can't ask us to let it collapse," she said.

Management is "very annoyed"...

Chairman Alessandro Profumo, a strong-willed and internationally respected banker who was formerly the chief of UniCredit, said he and CEO Fabrizio Viola would decide in January whether to step down.

"These are decisions one takes in cold blood and in the right place," Profumo said at the meeting.

"What I have on my mind is a 3 billion euro cash call because we need to pay back 4 billion euros to taxpayers. Today this is uncertain and at risk," he told a press conference.

Viola, sitting at his side, told reporters he would do everything "so that the ship does not sink", but that he could not take responsibility for mistakes made by others.

Of course, there is risk either way...

"It's important to carry out the capital increase as early as possible," said Roberto Lottici, fund manager at Ifigest. "The risk is that the bank finds itself rushing into a cash call later at a lower price than what it could achieve now."

...

"It's hard to think that the third largest Italian bank can't find a pool of banks able to support the cash call after May 2014," said Antonella Mansi, the president of the MPS foundation, at the shareholders' meeting.

and given the number of jobs involved... local officials are now reacting in favor of the delay (hoping for domestic savior)...

But in Siena, where the bank is known as "Daddy Monte" and is the biggest employer, fears that the cash call might sever the umbilical cord between the lender and the city run high.

Siena mayor Bruno Valentini, whose city council is the top stakeholder in the Monte dei Paschi foundation, said on Friday a postponement might help keep the bank in Italian hands.

"We cannot let the third biggest bank in this country fall prey to foreign interests," he said. "Monte dei Paschi is not just an issue in Siena, it is a big national issue."

So, even after all the lqiuidty provision; yields and spreads on European debt back near record lows; calls from US asset managers that Europe is recovering and will be the growth engine; and hopes that Europe's AQR stress test (and resolution mechanism) will be the gold standard for confidence in their banking system... they still can't find a group of greater fools to pony up EUR3 billion in real (not rehypothecated) money to save the world's oldest bank - that's a day's worth of Fed POMO!!!!

On an odd side note, we did note a major surge in ECB margin calls this week...

How to Trade the Aussie Dollar Head and Shoulders Pattern

Talking Points:

• The Head and Shoulders is bearish reversal pattern consisting of a higher swing high with lower swing highs on either side.

• A rising trend line drawn along the bottom of the pattern can be used as a sell zone
• Measuring the distance in pips from the top of the pattern to the neckline give a conservative profit projection.

According to Thomas Bulkowski, author of The Encyclopedia of Chart Patterns, the Forex head and shoulders price pattern is tied for the number 1 spot for best performing chart patterns alongside the Forex bull flag pattern. As with all most patterns, they give Forex traders valuable clues in determining future price direction and act as road signs along the trend highway. There are rules that must be observed when this pattern is recognized. Knowing where to enter, where to exit for profit and knowing where to exit if this pattern fails are the three things that traders need to get from this pattern.

First of all the bearish head and shoulders pattern can occur in an uptrend as well as a downtrend. It consists of an initial price surge upward followed by a sharp pullback forming the first shoulder. Bargain hunters usually pile in push price higher to form a new high peak establishing the head. Prices pull back completing the head and forming a second trough or “armpit”. A rising trend line called a “neckline” can be drawn connecting the two “armpits” or troughs. Traders are now looking for a higher high to confirm an uptrend, however price fails to make a new high and makes a lower high instead and returns back to the neckline. This lower high forms the right shoulder and signals traders that the trend is about to change. Price needs to close below the neckline for this pattern to be valid. Once price close below the neckline, a protective stop can be placed a few pips above the right shoulder. By measuring the distance from the top of the “head” to the “neckline”, Forex traders can determine, with some precision, a profit objective. Whipsaws are possible so if price were to close below the neckline and then move back above the right shoulder, this would be regarded as pattern failure.

The Trade Setup

The Aussie US dollar pair has been in a down trend has rallied form the 12/18 lows of 0.9923 to a high just above the 0.8959 area. AUDUSD’s inability to hold onto the 0.8900 handle only reinforces the bearish sentiment surrounding this pair. On 12/19 the left should was put in with a high of 0.8885, and the head’s peak was put in at 0.8957 on 12/23 and the peak of the right shoulder was made at 0.8927. By connecting the troughs 0.8854 on 12/20 and 0.8874 on 12/26 a neckline trend line can be created.

US Week Ahead: ISM, Cons Conf, Vehicle Sales

Consumer Confidence likely rebounded in December to 79.0 after an unexpected decline in November left the index at 70.4. The Conference Board’s confidence measure surprised last month with a decline to an eight month low. At the time, we suspected this was due to the fact that the Conference Board’s survey period closed around November 15th and households were still suffering from lagged effects on confidence after the government shutdown. With a budget deal in place alongside declining unemployment, rising home prices, and strong equity markets, confidence should be set for a solid rebound in December. As usual we will look closely at the employment related details in the report for early indications on the labor market for the month.

„The December ISM Manufacturing survey will likely remain strong, gaining 0.1 point to 57.4. Regional manufacturing surveys for December so far have shown modest improvement. The Empire Manufacturing survey rebounded to positive territory, albeit just barely, at 0.98 while the Philadelphia Fed Business Outlook Survey gained 0.5 points at 7.5. On balance, information for manufacturing activity in December suggests sustained strength.

Total Vehicle Sales likely ran at a 16.0 million unit rate in December, after a strong 16.3 million unit rate in November. Industry analysts suggest that December sales are following a similar pattern to November where sales will be skewed to the end of the month when dealers ramp up incentive pricing to meet year-end sales targets and clear 2013 inventories. The remaining 2013 model-year stock represents 26% of current inventory, according to reports from Kelley Blue Book. If our forecast is accurate, December sales would bring the 2013 total up 8% over 2012.

GBPUSD & AUDUSD Daily Analysis

This thread will be focused on GBPUSD & AUSDUSD Pairs Only - Any Analysis Post regarding this 2 Pairs Is Warmly Welcome

The Market act like a Human Life

We need to realize is that life isn’t meant to be a straight line that goes from point A to point B. Life is meant to be a series of zigs and zags. 

It should look like a mess, but a beautiful mess. 

It shows that you have changed throughout the course of your life. You’ve had your ups and downs. You went down one path, but decided to change course… perhaps on many occasions.

That’s how life should be. 

Life is a continuous experience of independent present moments and choices. 

So whatever situation you are in right now, just know that it can change if you want it to

Personal Method

1. 100% Technical
2. Zero Fundamental
3. Daily Timeframe
4. Swing & Hold
5. Cut Loss Short & Ride The Profits
6. Support Resistance Lines

DAILY FOREX POST – EUR/USD, GBP/USD, GOLD. DECEMBER 27, 2013

EUR/USD:
Our preference: Bullish setups on a pull-back move to within 1.3680 - 1.3720 with targets @ 1.3747 & 1.3769 in extension.

Alternative scenario: Below 1.3680, watch for bearish setups with 1.3654 as target and 1.3630 in extension.

Comment: EUR/USD currently is in an upward trajectory. Note that hourly stochastic and RSI are overbought.


GBP/USD:
Our preference: Bullish setups within 1.6365 - 1.6405 with targets @ 1.6447 & 1.6478 in extension.

Alternative scenario: Below 1.6365, watch for bearish setups with 1.6346 as target and 1.6315 in extension.

Comment: GBP/USD currently is in an upward trajectory. Note that hourly stochastic and RSI are overbought.


GOLD: 
Our preference: Bullish setups on a pull-back move to within 1201.25 - 1208.85 with targets @ 125.79 & 1221.28 in extension.

Alternative scenario: Below 1201.25, watch for bearish setups with 1198.00 as target and 1192.51 in extension.

Comment: Gold price is pushing higher. 20 MA has crossed above 50 MA on hourly chart. Note that hourly stochastic and RSI are overbought.

GLOBAL NEWS

⇒ U.S. stock indexes closed at all-time highs, extending their record run as consumer-spending data reinforced perceptions that the U.S. economic recovery is poised to accelerate in 2014. The SandP 500 closed 9.30 points, or 0.5%, to 1,827.99, near its intra-day high and record close. The Dow Jones Industrial Average advanced 73.47 points, or 0.5%, to 16,294.61, marking its 48th record high this year. The Nasdaq Composite jumped 44.16 points, or 1.1%, to 4,148.90 – Source: Marketwatch

⇒ Asian markets took cheer on Tuesday after Wall Street rang up more records and upbeat U.S. spending data burnished the outlook for the global economy, with Japan’s Nikkei hitting a 2013 high after Tokyo markets opened after a holiday. Tokyo’s Nikkei sped to a six-year peak, adding about 0.8 percent and topping the 16,000-mark, driven by buying from long-only investors after Wall Street marched upwards. The Australian market added about 0.6 percent, while MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.2 percent – Source: Reuters

⇒ The Federal Reserve on Monday proposed long-awaited restrictions on its role as lender of last resort role during the next financial crisis. During the 2008 financial crisis, the Fed controversially provided low cost loans to domestic banks, foreign banks, and broker-dealers. A study by Bloomberg News estimated that the Fed lent as much as $1.2 trillion in public money to banks and other companies from August 2007 through April 2010 – Source: Marketwatch

⇒ The dollar rose toward a five-year high against the yen as traders bet on a divergence in monetary policy with the U.S. Federal Reserve paring stimulus while the Bank of Japan continues unprecedented easing. The dollar gained 0.3 percent to 104.37 yen as of 12:31 p.m. in Tokyo from yesterday. It reached 104.64 yen on Dec. 20, the most since October 2008 – Source: Bloomberg

⇒ The U.S. dollar steadied on Tuesday, having given back a bit of its recent hefty gains as upbeat U.S. consumption data fostered hopes of solid U.S. recovery and boosted U.S. bond yields. Although the market lacked conviction with many investors having already closed their books for the year, traders expect the prospects of eventual rate hike by the Federal Reserve to underpin the dollar. The euro bought $1.3683, down slightly from late U.S. levels but still holding off a two-week low of $1.3625 plumbed Friday. The dollar index gained slightly to stand at 80.530 , edging closer to a two-week high of 80.827 hit last week – Source: Reuters

⇒ Gold traded little changed below $1,200 an ounce as investor holdings retreated and U.S. equities climbed to a record amid signs of an improving economy. Bullion for immediate delivery was at $1,199.10 an ounce at 11:23 a.m. in Singapore from $1,198.83 yesterday when prices dropped 0.4 percent. The price closed at $1,188.68 on Dec. 19, the lowest since Aug. 3, 2010 – Source: Bloomberg

⇒ A gauge of consumer sentiment rose this month to the highest level since July, led by brighter views on current conditions, according to data released Monday. The final December reading of the University of Michigan/Thomson Reuters consumer-sentiment index hit 82.5, unchanged from a preliminary reading and up from a final November level of 75.1. Economists polled by MarketWatch had expected the final December gauge to hit 82.9, thanks to higher stock prices, as well as Washington’s progress on a budget deal, among other factors – Source: Marketwatch

⇒ Consumer spending outpaced income growth in November, the Commerce Department reported Monday. Consumer spending rose 0.5% in November. Personal income rose 0.2%. Wall Street economists had expected a 0.5% gain for spending and an 0.4% gain for income. The savings rate fell to 4.2% from 4.5% in October. Excluding inflation, real disposable incomes rose 0.1% in November after falling 0.2% in October

Daily Strategy December 24th / 2013

EUR/USD:
Our preference: Bearish setups within 1.3670 - 1.3710 with targets @ 1.3625 & 1.3581 in extension.

Alternative scenario: Above 1.3710, watch for bullish setups with 1.3767 as target and 1.3812 in extension.

Comment: EUR/USD remains moving within the confluence zone. Note that 20 MA has crossed above 50 MA on hourly chart. Hourly stochastic has crossed up.


GBP/USD:
Our preference: Bullish setups within 1.6320 - 1.6380 with targets @ 1.6420 & 1.6484 in extension.

Alternative scenario: Below 1.6320, watch for bearish setups with 1.6279 as target and 1.6215 in extension.

Comment: GBP/USD remains in consolidation mode. Note that hourly stochastic has crossed down.


GOLD:
Our preference: Bearish setups within 1192.95 - 1207.20 with targets @ 1187.04 & 1177.73 in extension.

Alternative scenario: Above 1207.20, watch for bullish setups with 1217.18 as target and 1226.49 in extension.

Comment: Gold price is in consolidation mode. Note that hourly stochastic has crossed up.

DAILY FOREX POST – EUR/USD, GBP/USD, GOLD DECEMBER 24, 2013

EUR/USD Technical view

SPOT EUR/USD Previous day OHLC

Open	High	Low	Close	Change
1.3669	1.3716	1.3665	1.3695	0.0024

Today's Support and Resistance

Resistance
Support
R3	1.3930
R2	1.3800
R1	1.3730
S1	1.3620
S2	1.3580
S3	1.3500

EURO ended the session on Monday with gains of 0.17%, versus the greenback, inching higher to close the second successive session with gains. The pair again slipped from crucial near term resistances at 1.3700- 1.3730; bottom end of the near term bullish channel. Near term, the declines could extend to 1.3500- 1.3600, with the upside likely to be capped at 1.3730- 1.3800. The medium to long term trend however, remains bullish for targets of 1.4200; targets for the symmetrical triangle in an uptrend. Buy the pair on declines up to 1.3500

TREND DIRECTION

• Short term: Bearish
• Medium term: Bullish
• Long term: Bullish

TRADING RECOMMENDATIONS

• Short:

  • N/A

• Long:

• At.1.3520 with a stop at 1.3470 for a profit target of 1.3700

GBP/USD Technical view

SPOT GBP/USD Previous day OHLC

Open	High	Low	Close	Change
1.6329	1.6374	1.6323	1.6353	0.0020

Today's Support and Resistance

Resistance
Support
R3	1.6660
R2	1.6560
R1	1.6450
S1	1.6350
S2	1.6300
S3	1.6260

Sterling ended the session on Monday with gains of 0.13%, versus the greenback, inching higher in a volatile session. Near term, the pair could be oscillating in the 1.6150- 1.6450 range; bottom end of the medium term bullish channel and bullish breakouts respectively. ONLY a close above 1.6450, the rally will extend to 1.6650 - 1.6750; targets for the symmetrical triangle in an uptrend and the top end of the near term bullish channel. Buy the pair on declines up to 1.6150

TREND DIRECTION

• Short term: Bearish
• Medium term: Bullish
• Long term: Bullish

TRADING RECOMMENDATIONS

• Short:

  • N/A

• Long:

• At 1.6250 with a stop at 1.6200 for a profit target of 1.6450
• At 1.6160 with a stop at 1.6120 for a profit target of 1.6450

GOLD Technical view

SPOT GOLD Previous day OHLC

Open	High	Low	Close	Change
1203.29	1206.15	1192.54	1198.61	-4.03

Today's Support and Resistance

Resistance
Support
R3	1230.00
R2	1218.00
R1	1214.00
S1	1180.00
S2	1176.00
S3	1162.00

Spot gold ended the session on Monday with losses of 0.33%, inching lower in a volatile session. The precious metal is inching lower towards crucial near term supports at 1175.00- 1180.00; bottom end of the medium term bullish channel. Near term, the losses could be capped around these levels and a bounce back to 1220-00- 1240.00 looks very likely. However, close below 1175.00, the losses could extend to 1150.00- 1160.00, the final barrier before spot gold could slide to 1000.00- 1050.00 per troy ounce; targets for the symmetrical triangle in a downtrend

TREND DIRECTION

• Short term: Bearish
• Medium term: Bearish
• Long term: Bearish

TRADING RECOMMENDATIONS

• Short:

  • N/A

• Long:

  • At 1178.00 with a stop at 1170.00 for a target of 1210.00