Crown Forecast

Action Insight Daily Report
While dollar is strong broadly with dollar index now staying above 80 level, it’s Euro’s particular weakness that’s catching most attention for the moment. EUR/USD took out 1.4 level overnight for the first time in a year and extends weakness to as low as 1.3933. EUR/JPY also took out 150 level to 149.24 so far. Markets are concerned with the dim growth outlook in the Eurozone, in particular after EU downgraded the growth forecasts yesterday. Traders are ignoring hawkish comments from ECB officials and instead, are starting to speculate that ECB may cut rates sooner than expected.

Technically speaking, recent development suggests that Euro’s long term up trends against dollar and yen have topped out in Jul already and it’s probably now in just the beginning of a large scale down trend. Focus is now on 1.3581 and 149.27 level for further evidence.

While the yen extends rally against Euro and Aussie, remains steady bounded in range against dollar, Sterling and even Aussie even though Asian stock markets tumbles sharply. Risk aversion seems not to be the main driving force behind the markets for the moment. Nevertheless, there is still no change in the short term bearish outlook in yen crosses and the recent fall should resume sooner or later. Data

The 50 bps cut from RBNZ to bring OCR down to 7.5% was a surprise to the markets which expected a 25bps cut only. In the accompanying statement, RBNZ Governor Bollard said that “medium-term inflation pressures” is expected to “ease” and it’s now appropriate to move to a less “restrictive stance”. The cut is “warranted in light of tightness of credit conditions” and the time to take to “affect actual interest rates faced by households”.

Aussie was dragged down by Kiwi despite a strong employment report which saw 14.6k growth. More surprisingly, unemployment rate dropped from 4.3% to 4.1% in Aug.

By : ActionForex

Daily Pivots: (S1) 149.91; (P) 151.71; (R1) 152.76

EUR/JPY dips to as low as 150.15 in early US session, taking out 150.59 low briefly. Downside momentum is not convincing yet. Nevertheless, intraday outlook is cautiously bearish as long as 153.62 minor resistance holds and further fall is in favor to key medium term support at 149.27. On the upside, above 153.62 will indicate that EUR/JPY is still bounded in sideway consolidation and flip intraday bias back to the upside for another test of 157.83 cluster resistance (38.2% retracement of 169.96 to 150.59 at 157.99) holds. As long as 157.83 holds, consolidation should be relatively brief. But break will indicate that a short term bottom is already in place and stronger rebound should be seen towards 163.07 resistance.

In the bigger picture, last week’s sharp fall and sustained trading below the long term rising channel added strong evidence that whole up trend from 88.97 (00 low) has completed, with bearish divergence conditions in weekly MACD and RSI and with monthly MACD remains below signal line. Focus now turns to 149.27 support and break will confirm this case and bring deeper medium term fall to 38.2% retracement of 88.97 to 169.96 at 139.02 first. On the upside, above 163.07 is needed to indicate fall from 169.96 has completed and invalidate the above view. Otherwise, medium term outlook now remains bearish.

Read the rest of this entry »

Daily Pivots: (S1) 151.57; (P) 152.62; (R1) 154.71
EUR/JPY gaps up today and rebounds strongly to as high as 156.99 so far. Break of 154.37 minor resistance indicates that an intraday bottom is in place. Further recovery could now be seen but consolidation should still be relatively brief as long as 157.83 cluster resistance (38.2% retracement of 169.96 to 150.59 at 157.99) holds and retest of 149.27 key medium term support should be seen. However, break of 157.83 will indicate that a short term bottom is already in place and stronger rebound should be seen towards 163.07 resistance.

In the bigger picture, last week’s sharp fall and sustained trading below the long term rising channel added strong evidence that whole up trend from 88.97 (00 low) has completed, with bearish divergence conditions in weekly MACD and RSI and with monthly MACD remains below signal line. Focus now turns to 149.27 support and break will confirm this case and bring deeper medium term fall to 38.2% retracement of 88.97 to 169.96 at 139.02 first. On the upside, above 163.07 is needed to indicate fall from 169.96 has completed and invalidate the above view. Otherwise, medium term outlook now remains bearish.

Action Insight Daily Report

Massive carry trade unwinding occurred overnight following the 344 pts fall in DOW and extended into Asian session with Nikkei down over 300 pts. Markets are increasingly worried on global economic growth. Yen crosses are seen sharply lower, with EUR/JPY pressing 150 level, GBP/JPY taken out 190, and AUD/JPY breached 86. Dollar was boosted by such carry trade unwinding and inflow of funds despite pessimistic comments from Fed Fisher and Yellen. Fisher said that it is “very likely we will suffer anemic growth for the current and perhaps the next couple of quarters.” He also warned slowing growth might not moderate inflation into 2009. Yellen on the other hand expects expects growth in the second half of 2008 to be “decidedly subpar,” though she sees inflation risks as being “diminished.”

Focus now turns to Non Farm Payroll report today which is expected to show the eighth consecutive month of contraction by -75k in Aug. Unemployment rate is expected to be unchanged at 5.7%. Leading indicators for NFP are mostly negative with employment component of ISM Services dipping deeper into contraction region at 45.4 while that of ISM manufacturing also dropped below 50 to 49.7. ADP employment showed -33k contraction. Challenger report showed layoffs increased by 11.7%. It’s hard to expect any upside surprise in the NFP. Canadian job report will also catch much attention and is expected to recover mildly by growing 8k in Aug. But unemployment rates is expected to climb further from 6.1% to 6.2%.

After all, the reactions to data remains tricky and the dominate force in the fx markets is still carry trades and commodity prices. A poor NFP data today may not be dollar negative as yen buying could indeed help the greenback like it does recently. So, traders are advised to pay close attention to the stocks and commodities before placing their bets on FX.

FXCM 2008: Even Lower Spreads

FXCM’s (www.fxcm.com) No Dealing Desk trading platform recently added an additional bank as a price provider, bringing the total to seven global banks that compete to provide pricing for FXCM’s Trading Station. Over the last three months, typical spreads have already tightened.

Watch closely for lower spreads in the following currency pairs:

Currency Pair
Typical Spread
As Low As

EUR/USD
2.3
0.9

USD/JPY
2.9
0.5

GBP/USD
3.7
0.8

USD/CHF
3.8
1

EUR/CHF
2
0.1

AUD/USD
3.7
1

USD/CAD
4.8
1

NZD/USD
4
0.8

EUR/GBP
2.4
0.6

EUR/JPY
3.9
0.6

GBP/JPY
5.3
3

CHF/JPY
3.5
1

"FXCM’s No Dealing Desk trading platform aims to provide transparent and fair execution. Every trade is executed back to back with one of the world’s premier banks, or financial institutions, which compete to provide FXCM with bid and ask prices," said Drew Niv CEO of FXCM. "The best spreads available to FXCM are streamed to you with a small mark-up, which is generally one pip or less for major currency pairs."

For a complete list of currency pairs and their new tighter spreads, please go to www.fxcm.com

If you have any questions, please call one of our currency specialists, who are available 24 hours a day, at 888-503-6739, or email us at info@fxcm.comThis email address is being protected from spam bots, you need Javascript enabled to view it .

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FXCM Facts
Forex Capital Markets LLC is one the Largest Forex Dealer Members
More than 100,000 live accounts are traded on FXCM trading platforms
Over $200 billion in notional volume is traded each month on FXCM trading platforms
As of January 2008, there is in excess of $700 million in customer funds trading on platforms offered by FXCM.
FXCM provides customer support with native speakers in more than a dozen languages in 6 offices around the world
Registered with the CFTC as a Futures Commission Merchant, FXCM (Forex Capital Markets LLC) has received numerous awards from the investment community, including Best Currency Broker from Shares, Best Retail Foreign Exchange Platform from FX Week and Best Foreign Exchange Specialist from Technical Analysis of Stocks & Commodities. In addition to currency trading, FXCM offers educational courses on forex trading, and provides research through DailyFX.com.
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Leveraged foreign exchange trading carries a high level of risk, and may not be suitable for all investors. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose.

More Information:
Jaclyn Sales
Public Relations Coordinator
FXCM
Financial Square
32 Old Slip, 10th Floor
New York, NY 10005
Dir (646) 432-2463
Tel (212) 897-7660