Mid-Day Report: Dollar Weakens as Consolidation Continues, FOMC Minutes Next
Dollar is sharply lower against European majors in early US session as consolidation continues. Technically speaking, as discussed in our technical outlook reports, more upside is still expected in EUR/USD and GBP/USD. Meanwhile, USD/CHF retreats sharply after edging higher to 1.2082 earlier today. Dollar index’s dip below 4 hours 55 EMA argues that some more pull back should be seen before resuming recent rally. Elsewhere, Crude oil, rides on dollar’s retreat and rebounds strongly from intraday low of 53.66 to above 55.6. Focus will now turn to FOMC minutes for inspirations on further volatility. Though, ,markets are pricing in 90% chance of another 50bps cut from Fed on Dec 16 and the minutes will likely have little impact to this view based on current economic and inflation outlook. Read the rest of this entry »

Mid-Day Report: Markets Stay in Tight Range after Poor US Data

Dollar continues to stay in tight range in early US session as poor economic data from US fails to trigger much price action in the financial markets. New residential construction data showed housing market is still in deep recession. Housing starts dropped by -6.3% to 26 years low of 0.82m annualized rate in Sep. Building permits dropped by -8.3% to 27 years low of 0.786m annualized rate. Preliminary reading of U of Michigan consumer sentiments tumbled sharply to 57.5 in Sep. But after all, dollar index remains in tight range above 82 level while most forex pairs are bounded in sideway consolidation. DOW opens lower of lack follow though selling. Crude continues to struggle around above 70 as consolidation continues too even though gold dropped below 800 level again and reached as low as 779.
By : ActionForex

Daily Report: Forex Markets Follow Stocks in Consolidation

The forex markets continue to stay in tight range today with dollar and yen mildly softer against other major currencies. Note that intermarket relationship with stock is the main driver in the forex markets currently and will likely remain so for a while. Weakness in the commodity markets is apparent with oil breached $80 level briefly while gold also breached 800 level briefly too. However, the lift on dollar by commodities will likely be temporary and as stock markets’ choppy consolidations are still in progress, the forex markets will likely follow. After all, note that levels in major pairs and crosses as well as the dollar index still hold and there is no change in the medium term bullish outlook in dollar and yen yet. Also, DOW’s 7,884 low will be the key level to watch for and as long as this level holds, there is no confirmation of downtrend resumption in DOW yet. Thus, any breakout in the forex markets will be treated with caution as that may only be part of short term consolidation only. Breakout in dollar and yen needs to be confirmed by breaking of 7,884 in DOW too.

On the data front, main focus will be on new residential construction data from US today. The NAHB home builder confidence index released yesterday dropped three points to an all time low of 14 last month, suggesting deep pessimism in the housing industry. Housing starts is expected to drop slightly from 0.89m to 0.88m annualized rate in Sep while building permits is expected to be unchanged at 0.85m. Preliminary U of Michigan consumer sentiment is expected to drop from 70.3 to 65 in Sep. Eurozone Trade deficit is expected to widen from -2.3b to -6b in Aug.
Market Overview by ActionForex

(CEP News) - The big news of the morning was the market response to the U.S. government’s bailout of Fannie and Freddie announced over the weekend. Equity indexes surged sharply higher in the opening hours of trading, before paring most of their gains. In data releases, Canadian building permits rose 1.8% in July, while U.S. manufacturing profits were down in the second quarter.
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(CEP News) - A surprise increase in Canadian building permits did little to prop up the loonie against the newly strengthened U.S. dollar on Monday and other foreign currencies.
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(CEP News) - A surprise increase in Canadian building permits did little to prop up the loonie against the newly strengthened U.S. dollar on Monday and other foreign currencies.
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(CEP News) Ottawa - The value of building permits issued by Canadian municipalities snapped back in July, increasing 1.8% from the previous month, Statistics Canada reported Monday.
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(CEP News) Ottawa - The value of building permits issued by Canadian municipalities snapped back in July, increasing 1.8% from the previous month, Statistics Canada reported Monday.
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(CEP News) Ottawa - July will likely have seen a significant decline in building intentions, economists say. Although economists differ on the degree of the decline, they agree residential permits will be the weak spot.
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(CEP News) Ottawa - July will likely have seen a significant decline in building intentions, economists say. Although economists differ on the degree of the decline, they agree residential permits will be the weak spot.
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