Mid-Day Report: Euro Weakens, Dollar and Sterling Rebounds to Close the Year
First of all, wish our readers happy and prosperous 2009!
Just after we mentioned the possibility of reversal in Euro yesterday, selling of the common currency intensifies in thin holiday trading on New Year’s Eve. Most importantly, EUR/GBP dropped over 300 pts to to as low as 0.9473 in early US session. Bearish divergence condition in 4 hours MACD and RSI argues that a short term top is formed at 0.9799 and more weakness will likely be seen, probably to retest 0.9 psychological level. EUR/USD is back below 1.39 and is set to test key near term cluster support at 1.3629. EUR/CAD will probably test double top neckline support at 1.6750 too. Note that Euro’s rally in Dec is partly fueled by speculations that ECB will pause rate cut in early Jan but markets are getting doubtful on such expectations as outlook of the Eurozone economy is getting worse. Some more profit taking on Euro longs could be seen leading to to ECB meeting on Jan 15. Read the rest of this entry »
Mid-Day Report: Dollar Indifferent to Mixed US Data, Swissy Climbs Further
Markets remain steadily in range after a mixed bag of US data. On the positive side, durable goods orders dropped less than expected by -1.0% in Nov while ex-transport orders even managed 1.2% rise. However, Personal income dropped more than expected by -0.2% in Nov even though personal spending dropped less than expected by -0.6%. Headline PCE moderated further to 1.4% yoy while core PCE slowed to 1.9% yoy in Nov. Jobless claims climbed to 586k. From Canada Oct GDP contracted -0.1% mom versus expectation of -0.3%.
Technically speaking, not much is worth noting as markets are staying in range in general. Though, Swissy continues to be a stronger one in a quiet markets. EUR/CHF dives further to as low as 1.5012 after taking out mentioned 1.5163 support. As discussed before, break of this support level argues that whole rebound from 1.4315 has completed at 1.5880. Having said that, deeper decline is expected to be seen towards retesting this low. And as mentioned before, the Swissy might be taking over Euro’s leading strength against other majors.
Daily Forex Report: Swiss Franc to Take Over Euro’s Leading Strength?
By ActionForex
Dollar index extended the sharp decline to as low as 78.22 before recovering mildly. The broad based weakness in the greenback is still overwhelming in the markets but after all as the greenback is now sitting in side an important support zone of 75.89 to 80.38, some support should be seen in near term as the greenback approaches 61.8% retracement of 71.31 to 88.46 at 77.86. It’s unclear on whether dollar’s up trend has totally finished but some noticeable rebound should be seen on oversold condition in near term. The critical factor to determine dollar’s outlook will indeed be on whether another fall will be seen after the anticipated rebound to make the whole fall from 88.46 a five wave impulsive sequence, or will such fall complete in three wave corrective manner. This should be decided in the next few weeks and will set the tone for 2009. Read the rest of this entry »
GBP/JPY Mid-Day Outlook
Daily Pivots: (S1) 137.32; (P) 138.20; (R1) 139.59
GBP/JPY’s recovery from 133.09 was limited below 140.71 resistance and weakens again today. 4 hours MACD’s cross below signal line indicates that an intraday top is formed and dampens the immediate bullish case. Intraday outlook is turned neutral for the moment. On the upside, above 140.71 will indicate that rise from 133.09 has resumed. Also this will affirm the case that a short term bottom is in place at 133.09 and bring rally towards 148.57 resistance next. Break there will confirm this case. On the downside, though, below 133.09 will indicate recent down trend is still in progress for key long term support at 129.32 before completion. Read the rest of this entry »
EurUsd Market broke on the upside the November triangle consolidation pattern. It’s been trading as high as 1.3406 yesterday erasing the last 6-week trading range 1.2330 – 1.3298. This may open the way to 1.3500 target equal to 1.3302-1.2334 spread. On the further upside, only a return over 1.4000 (former trendline support) and 1.5000 will confirm release of the 3-month pressure and may put key resistance 1.6000 into focus. Resistance holds 1.4002 former trendline support. Initial resistance holds 1.3406 yesterday high. On the downside, renewed weakness below 1.2430 21st November low may open the way down to trendline support 1.2208. Next long-term support holds 1.1640 November 2005 low. Further support holds 1.0739 September 2003 low. Former resistance 1.3298 holds now initial support.
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USD/JPY Daily Outlook
Daily Pivots: (S1) 90.75; (P) 91.81; (R1) 92.47
USD/JPY falls sharply to as low as 88.54 today and the strong break of 90.92 low confirms that decline from 110.66 has resumed. At this point, short term outlook will remain bearish as long as 91.15 resistance holds. The current decline is expected to extend further to next target of 100% projection of 124.13 to 95.77 from 110.66 at 82.3. On the upside, while some recovery might be seen, break of 93.90 resistance is needed to indicate that a bottom is in place. Otherwise, short term risks remain on the downside. Read the rest of this entry »
Daily Pivots: (S1) 92.30; (P) 93.94; (R1) 94.82
USD/JPY recovers mildly after hitting 92.64 earlier today. Though, at this point, intraday bias remains on the downside as long as 94.25 minor resistance holds. Decline from 100.54 could extend further to retest 90.92 low. On the upside, above 94.25 will turn intraday outlook neutral first. Also, note that the lack of impulsive structure of the fall from 100.54 so far is still arguing that it might be part of the consolidation that started at 90.92. Above 95.74 will indicate that fall from 100.54 has possibly completed. The corrective structure in turn suggests that rebound from 90.92 is still in progress and stronger rally should be seen to 100.54 or above before completion. Read the rest of this entry »
Daily Pivots: (S1) 1.2695; (P) 1.2824; (R1) 1.3084
EUR/USD surges further to as high as 1.3080 in early US session and at this point, intraday bias remains on the upside as long as 1.2803 minor support holds. As discussed before, rise from 1.2423 should represent another rising leg of the consolidation that started at 1.2329 and further rally could be seen to 1.3290 or above. Though, upside is still expected to be limited below 1.3768 cluster resistance and bring down trend resumption. On the downside, below will turn intraday outlook neutral first. Further break of 1.2423 will indicate that such consolidation has likely completed and recent down trend is resuming for 50% retracement of 0.8223 to 1.6038 at 1.2131 next. Read the rest of this entry »
Daily Pivots: (S1) 1.2555; (P) 1.2628; (R1) 1.2689
EUR/USD’s strong rally in early US session suggests that rebound from 1.2389 is resuming. At this point, intraday bias is mildly on the upside as long as 1.2585 minor support holds. Further rise is in favor to 1.3290 high and 100% projection of 1.2329 to 1.3290 from 1.2389 at 1.3350 to complete the consolidation from 1.2329. Nevertheless, upside is expected be limited below 1.3768 cluster resistance and bring down trend resumption. On the downside, below 1.2585 will flip intraday bias back to the downside and break of 1.2389 will be an important indication that consolidation from 1.2329 has completed and recent down trend has resumed for next target of 50% retracement of 0.8223 to 1.6038 at 1.2131
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Daily Pivots: (S1) 1.4600; (P) 1.4796; (R1) 1.5033
GBP/USD recovers mildly after dipping to 1.4557 but upside is still limited below 1.5080 minor resistance. Intraday bias remains on the downside and further decline is still expected to mentioned target of 161.8% projection of 2.0158 to 1.7445 from 1.8668 at 1.4278. On the upside, above 1.5345 will turn intraday outlook neutral first and bring brief consolidation before staging another fall. Read the rest of this entry »
