Mid-Day Report: Dollar Steady after Retail Sales Report
Action Insight | Written by ActionForex.com | Sep 14 07 13:28 GMT |
Forex Mid-Day Technical Report Dollar Steady after Retail Sales Report
Market outlook remains unchanged in the early US session. Dollar is still steady after mixed retail sales report. Sterling continued to be pressured by earlier news of on of UK’s largest mortgage lender sought emergency financial support from BoE while yen is lifted mildly on risk aversion. Euro paid little reaction to hawkish comments from ECB officials.
Total retail sales rose 0.3% in Aug, missing expectation of 0.5%. Ex-auto sales was even worse, falling -0.4% comparing to consensus of 0.2% rise. However, the negative effect was offset up upward revision in Jul’s growth with headline sales revised from 0.3% to 0.5%, ex-auto sales revised from 0.4% to 0.7%. Import Price Index turned around dropped 0.3% in August. Export prices rose 0.2% decreasing by 0.1% in the previous month. Q2 current account deficit narrowed by 3.2% to $190.8b. Industrial production rose 0.2% vs exp 0.3%.
ECB Tichet said that baseline scenario remains growth at potential with risks to price stability are on the upside., ECB will monitor the market turmoil very carefully. Juncker sees little impact on growth from financial market turmoil. Alumnia echoed that but mention downside risks to growth have increased while oil price is still an upside risk to inflation. EUR/USD
Daily Pivots: (S1) 1.3855; (P) 1.3891; (R1) 1.3920; «www.actionforex.com»
Outlook remains unchanged EUR/USD continues to struggle in tight range below new record high of 1.3927, after failing to decisively take out mentioned fibo resistance of 100% projection of 1.3360 to 1.3719 from 1.3552 at 1.3911. A short term top is possibly formed with 4 hours MACD staying below signal line. Nevertheless, further rally is still in favor as long as 1.3824 minor support holds. Sustained break of 1.3911 will encourage further rise towards 1.4 psychological resistance.
On the downside, touching of 1.3824 will indicate confirm a short term top is formed and bring pull back towards 4 hours 55 EMA (now at 1.3776). But rise from 1.3360 should still be in force as long as shorter term rising trend line support (now at 1.3673) holds.
In the bigger picture, break of mentioned 1.3822/51 resistance zone indicates that up trend from 1.1639 has resumed. Also, this will add much weight to the case that long term up trend from 0.8223 (00 low) has resumed too. Further upside should then be seen targeting 1.4000 psychological resistance and probably further to 1.4523 (95 high).
Also, while there is no convincing interpretation of the structure of rally from 1.1639, it’s no doubt that EUR/USD is still in an up trend making successive higher highs and higher lows. It will at least take a break below 1.3360 low to break this pattern and indicate a medium term top is formed.
GBP/USD
Daily Pivots: (S1) 2.0208; (P) 2.0277; (R1) 2.0320; «www.actionforex.com»
Cable’s fall from 2.0365 continues today. With bearish divergence condition in 4 hours MACD and RSI, a short term top is likely in place at 2.0365. Short term outlook is turned neutral. Intraday bias will stay on the downside for 1.9959 support. support. However, as long as this support holds, rise from 1.9652 could still be in progress.
On the upside, above 2.0225 will flip intraday bias back to the upside for 2.0365 and break will encourage rise to 2.0462 resistance and break will bring retest of key resistance zone of 2.0652 high and 61.8% projection of 1.3680 (01 low) to 1.9554 (05 high) from 1.7047 (05 low) at 2.0677.
In the bigger picture, cable is still kept above 1.9621 support as well as 55 weeks EMA (now at 1.9522), thus giving no confirmation of a long term reversal yet. That is up trend from 1.7047 could still be in force. Focus remains on 61.8% projection of 1.3680 (01 low) to 1.9554 (05 high) from 1.7047 (05 low) at 2.0677. Decisive break of this resistance is needed to confirm rally from 1.7047 has resumed for 100% projection of 1.3680 to 1.9554 from 1.7047 at 2.2901
On the downside, failure to take out 2.0677 fibo resistance or a break below 1.9959 will suggest that fall from 2.0652 is probably developing into deeper correction and retest of mentioned support zone of 1.9621 support and 38.2% retracement of 1.8090 to 2.0652 at 1.9673 should be seen. Also, sustained trading below 1.9621 support will add more credence to the case that whole rally from 1.7047 has indeed completed and bring deeper decline to next support zone of 1.9183 and 38.2% retracement of 1.7047 to 2.0652 at 1.9275 first. But still, medium term outlook will remain neutral at worst as long as 1.9621 support holds.
USD/CHF
Daily Pivots: (S1) 1.1810; (P) 1.1850; (R1) 1.1898; «www.actionforex.com».
Outlook remains unchanged. USD/CHF failed to take out 1.1816 support decisively and turned into sideway consolidation. A short term bottom is possibly in place at 1.1801 with 4 hours MACD staying above signal line. But with 1.1897 resistance remains intact, consolidation should be brief and fall is expected to resume sooner rather than later. Break of 1.1801 will encourage further fall towards 100% projection of 1.2467 to 1.1816 from 1.2214 at 1.1563.
However, above 1.1897 will suggest that stronger recover is underway to 4 hours 55 EMA (now at 1.1925) or further to 1.1959 cluster resistance (38.2% retracement of 1.2214 to 1.1801 at 1.1959). But upside is expected to be limited there and bring another fall.
In the bigger picture, as discussed before, USD/CHF has had a series of lower highs since Nov 05, ie 1.3823, 1.3238, 1.2768, 1.2571 and then 1.2467 in June. Such pattern is still holding and the medium term outlook is still remaining mildly bearish and neutral at best. It will take a break above 1.2467 high to indicate USD/CHF has made an important low at 1.1816 and have the medium term down trend from 1.3283 reversed. Otherwise, with USD/CHF still staying below 55 weeks EMA (now at 1.2257), further medium term fall is still in favor.
Meanwhile, a break above 1.1959 cluster resistance will suggest that USD/CHF is probably still in sideway consolidation that started at 1.1816 and another rise to retest 1.2214 could be seen before another medium term fall.
USD/JPY
Daily Pivots: (S1) 114.28; (P) 114.88; (R1) 115.67; «www.actionforex.com»
USD/JPY’s retreats mildly after recovery from 112.58 was limited below 115.65 resistance. But still, intraday bias remains on the upside as long as 113.74 minor support holds. Break of 115.65 resistance will indicate that corrective fall from 117.11 has completed at 112.58. That is, corrective rise from 115.59 has likely resumed for the final rise to above 117.11 high. Meanwhile, below 113.74 will flip intraday bias to the downside for 112.58 and break will indicate recent decline has resumed for 111.59 support.
In the bigger picture, as discussed before, daily MACD’s stay above signal line suggests that the whole decline from 124.12 could have already completed at 111.59. Hence, firm break of this low is needed to confirm that sharp fall from 124.13 has resumed. Otherwise, USD/JPY could still develop into lengthier consolidation with another test of 117.15 resistance before completion.
Also, prior break of long term rising trend line (101.65, 108.99) indicates the the whole up trend from 101.65 could also have completed at 124.13 already, with bearish divergence condition in weekly MACD and RSI.. Break of 111.59 will indicate fall from 124.13 has resumed for support zone between 108.99 and 61.8% retracement of 101.65 to 124.13 at 110.23.
EUR/JPY
Daily Pivots: (S1) 158.75; (P) 159.60; (R1) 160.65; «www.actionforex.com»
EUR/JPY retreats mildly after reaching as high as 160.45. But still, intraday bias remains on the upside as long as 157.77 support holds and further rise should be seen to 161.42/57 cluster resistance first (61.8% projection of 149.27 to 159.67 from 155.15 at 161.57 and 61.8% retracement of 168.93 to 149.27 at 161.42). Break will encourage further rise towards 165.39 cluster resistance (100% projection at 165.55).
On the downside, below 157.77 will turn intraday outlook neutral first but below 155.15 support is needed to confirm rebound from 149.27 has completed. Otherwise, another rise is still expected after pull back.
In the bigger picture, the break of trend line support (137.16, 150.75) confirmed that rally from 130.60 has already completed at 168.93, with bearish divergence condition in weekly RSI. Hence, an important medium term top is in place at 168.93 already. However, since EUR/JPY is still supported within the rising channel shown in the monthly chart. the whole up trend from 88.9 could still be in force and price actions from 168.93 is probably just developing into consolidation to this long term up trend.
But in any case, firm break of 168.93 is needed to confirm long term up trend has resumed, otherwise, another fall could still be seen before completing the consolidation that started from 168.93. Meanwhile, a break of 149.27 low will add much favor to the case that up trend from 88.9 has completed and bring much deeper decline.
Forex News Digest
«c.moreover.com»
Fri, 14 Sep 2007 09:50:00 GMT from AP via MSN Money
«c.moreover.com»
Fri, 14 Sep 2007 09:48:00 GMT from Reuters UK
«c.moreover.com»
Fri, 14 Sep 2007 09:18:00 GMT from Yahoo! News Australia
«c.moreover.com»
Fri, 14 Sep 2007 08:54:00 GMT from Reuters
«www.actionforex.com» Economic Indicators Update
GMT Ccy Events Actual Consensus Previous Revised
04:30 JPY Japan Industrial prod’n M/M Jul -0.40% -0.40% -0.40%
04:30 JPY Japan Industrial prod’n Y/Y Jul 3.20% 3.20% 3.20%
04:30 JPY Japan Capacity utilisation Jul 104.4 N/A 105.8
06:00 EUR Germany CPI final M/M Aug -0.10% -0.10% -0.40%
06:00 EUR Germany CPI final Y/Y Aug 1.90% 1.90% 1.90%
06:00 EUR Germany HICP final M/M Aug -0.10% -0.10% 0.50%
06:00 EUR Germany HICP final Y/Y Aug 2.00% 2.00% 2.00%
09:00 EUR Eurozone HICP final M/M Aug 0.10% 0.10% -0.20%
09:00 EUR Eurozone HICP final Y/Y 1.70% 1.80% 1.80%
12:30 USD U.S. Retail sales M/M Aug 0.30% 0.50% 0.30% 0.50%
12:30 USD U.S. Retail sales ex auto M/M Aug -0.40% 0.20% 0.40% 0.70%
12:30 USD U.S. Current account (usd) Q2 -190.8B -190.0B -192.58B -197.1B
12:30 USD U.S. Exports price Aug 0.20% 0.20% 0.20% -0.10%
12:30 USD U.S. Imports prices Aug -0.30% 0.30% 1.50% 1.30%
13:15 USD U.S. Capacity utilisation Aug 82.20% 82.00% 81.90%
13:15 USD U.S. Industrial prod’n M/M Aug 0.20% 0.30% 0.30%
14:00 USD U.S. Business inventories Jul 0.30% 0.40%
14:00 USD U of Michigan survey Sep 83.4 83.4
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