THE TIPSTER
THE vacillations of euro-US dollar are never far from the headlines. And this week is no exception – the Eurozone stress test results are scheduled for tomorrow and Federal Reserve chairman Ben Bernanke is continuing his testimony today. Euro-dollar has recovered an impressive 9.5 per cent since its low of $1.1875 on 7 June.
But the rally seems to have been overdone and the pair should encounter some fresh selling interest. A break of the key trendline support at $1.2760 could add to the downside momentum. A target would be $1.2670 and there is minor support at $1.2550. Some stiff resistance is expected around $1.2870 and $1.2915 area. A close above $1.2915 would trigger intra-day stops. Spread Co quotes $1.2813-$1.2815 on the pair.
The cocoa market has also been attracting plenty of interest this week after hedge fund trader Anthony Ward bought up 7 per cent of the world’s annual cocoa production last week. There have also been reports of supply shortfalls on the Ivory Coast as a result of bad weather. Buying cocoa on dips towards the two-year trend line support at $2,890 could be a low risk way of playing this trade. But place a close stop loss unless you want to see your profits melt away. CMC Markets quotes $2,946-$2,954.
The second-quarter earnings season is still in full swing and tomorrow sees mobile giant Vodafone update the market. It has been a steady, if unspectacular, 2010 so far for the FTSE heavyweight. But with uncertain markets over recent months, the company has retained its appeal to investors because of a healthy dividend yield.
However, some are starting to ask questions about the performance of its Italian and Spanish operations and whether, after a 25 per cent rise in the last 12 months, the current share price is stretching the definition of fair value. The current IG Index spread bet price is 145p-145.35p.