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 Pivots: (S1) 86.46; (P) 87.84; (R1) 88.59
USD/JPY’s recovery from 87.13 breaches 89.24 minor resistance briefly, suggesting that an intraday low in in place. Intraday outlook is turned neutral for the moment and some recovery could be seen. Nevertheless, upside is expected to be limited below 91.57 resistance and bring fall resumption. Below 87.13 will target 100% projection of 124.13 to 95.77 from 110.66 at 82.30. Read the rest of this entry »
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 »
Daily Report: Euro Leads Rebound against Dollar, SNB to Cut Again
Dollar’s decline continues today even though the $14b automaker rescue bill is passed in House and is set to vote in Senate on Thursday. One important thing to note is that dollar’s fall is lead by strengthen in European majors, in particular the Euro which is topping this week’s top movers chart. Swissy follows Euro’s strength despite expectation of another 50bps cut by SNB later today. Sterling is catching up in early US session as EUR/GBP retreats mildly. However, strength in Australian dollar and Canadian dollar is not apparent so far as both are still kept below this week’s high against the greenback. Yen crosses remains pretty steady so far except the apparent strength in EUR/JPY. Read the rest of this entry »
Daily Report: Asian Stocks Firm as Auto Bailout Deal Agreed, Dollar and Yen Soft
by ActionForex
Dollar and yen trade with a soft tone in Asia today as Asian stocks rally for the fourth day, supported by news that Democrats and White House agreed on a $15b bailout deal for the big three automakers in US. Congress could vote on the plan as early as Wednesday, which includes appointed of a “car czar” who could force the automakers into Chapter 11 bankruptcy if they don’t come up with a business plan by Mar 31. MSCI Asia Pacific index climbs mildly to 83.65. Dollar index is mildly down to 85.67 level. Crude oil and Gold recover mildly to 43.49 and 779.5 respectively.
Technically speaking, main focus remains on where Dollar index is completing a head and shoulder top (ls: 87.87, h: 88.46, rs: 87.68) reversal pattern, or it’s just unfolding as triangle consolidation. Dollar index continues to press neckline support (now at 85.67) but there isn’t follow through selling for a breakthrough yet. As mentioned before, sustained trading will add much credence to the case that a medium term rise from 71.31 has concluded at 88.46 already. Further break of 83.11 will confirm this case and bring deep medium term correction to 75.89/80.38 support zone. However, note that it’s usually hard to predict whether the pattern is a head and shoulder or a triangle before it’s completed. Even after a break of the neck line support, any strong rebound above 83.11, followed by break of 87.68 will indicate that medium term up trend in the dollar index is still in force. In short term, though, favor is on the downside as long as 86.47 minor resistance holds.
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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 »
Not change in Gold’s outlook as consolidation continues between 717.1 and 778.3. The development so far argues that it’s in form of a triangle pattern which could be completing. As discussed before, below 717.10 will indicate that such consolidation from 684.6 has completed. In such case, retest of 684.60 low should be seen first and then 100% projection of 1033.9 to 739.8 from 936.3 at 642.2. On the upside, while another rise cannot be ruled out for the moment, we’d still expect upside to be limited below 824.5 resistance and bring down trend resumption. Read the rest of this entry »
Daily Pivots: (S1) 95.19; (P) 96.17; (R1) 96.68
USD/JPY’s break of the intraday trend line support with 4 hours MACD dragged down signal line argues that fall from 100.54 might be resuming. Intraday bias is now mildly on the downside and near term focus is turned to 94.47 minor support. Break will confirm this scenario and bring deeper fall to retest 90.92 low first. On the other hand, above 97.13 minor resistance will revive the case that rebound from 90.92 is still in progress for 100.54 or above before completion.
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