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Euro, light crude and Twitter in focus

Four markets in focus today.

EUR/USD

Low liquidity exacerbated the moves on Friday, but the failed break above the year’s high of 1.3832 should be taken as a negative. The pair is at an interesting juncture, with uptrend support drawn from the November low coming in at 1.3680, while an upside break of the October downtrend (at 1.3803) should see 1.40 in play. Comments from ECB members Oliver Weidman and Mario Draghi moved the EUR higher in US trade, with narrative that low inflation is not a licence for ‘arbitrary easing’.

US light crude (WTI)

US oil has rallied back above the $100 per barrel, after falling below this level in late October. Better signs of demand could help support the commodity above $100 and it will certainly be worth keeping an eye on both Brent and WTI oil, as the ECB look at inflation with energy costs. Therefore moves higher in oil will increase inflation expectation in Europe and could support the EUR.

Germany 30 (DAX)

The German market continues to print new highs and remains one of the key markets to be leveraged too in 2014. The index has rallied 26% year-to-date and for Australian investors (when adjusting into AUD) the gains have been huge, putting on 53.8% for the year.

Twitter

The social media giant fell 13% on Friday after Macquarie Capital downgraded the stock to underperform (or its equivalent to a sell rating) after the steep rise in its share price. On the other hand Prince Alwaleed Bin Taleb (the richest Arab businessman) has disclosed his holding of the stock has increased from $300 million to $1.2 billion

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