Posts tagged ‘short covering’

February 15, 2012

Euro certainly volatile for long

Discussion about a Greek default is rising: “Given that the market has had plenty of time to prepare (or be prepared) then the question is whether it would be that much of a shock”, writes Gavin Grier-Rees, analyst at FXMR, pointing to a natural Euro sell-off in reaction, but that could be rapidly retraced by short covering, as “the market is too short”.

Adding to that is far eastern investors thinking “that a euro without Greece is likely more stable and hence stronger”, but in another hand, a Greek departure opens a precedent, which might increase volatility/uncertainty about the other peripherals future: “The problem is that Europe’s structural problems are not confined to Greece. They might well be the extreme example but the other peripherals each have similarities that place them at risk too”, adds Grier-Rees.

February 2, 2012

USD/CAD: 1.0006 threatened pre-Wen, 0.9950 expiry today

USD/CAD scaled an intra-day peak a couple of pips shy of 1.0006 (yesterday’s North American session high) ahead of Reuters-reported comments from Chinese Premier Wen Jiabao re: the EFSF/ESM, with 0.9980 marking the subsequent knee-jerk pullback low (0.9983 was today’s Asian session high). Bids are tipped ahead of 0.9950, inclusive of interest at 0.9965 (yesterday’s three-month low). There is a 0.9950 option expiry for today’s 10am ET NY cut (15:00GMT). 0.9961 is the 200-day moving average. A break through 1.0012 (Monday’s low) could spur some short-covering, with 1.0050 among resistance levels beyond (1.0049 was yesterday’s high). WTI oil is currently trading circa $96.95 per barrel, 0.7% lower on the day.

US weekly jobless claims will be revealed at 8.30am ET, alongside US Q4 productivity and unit labor costs US Economic Calendar . Canada’s Jan labour force survey will be released at 7am ET tomorrow (Friday), with Jan’s US employment report ensuing 90 minutes later.