Daily Report: Dollar Recovers Mildly in Quiet Trading Ahead of Philly Fed
Action Insight | Written by ActionForex.com | Dec 21 06 08:37 GMT |
Forex Daily Technical Report Dollar Recovers Mildly in Quiet Trading Ahead of Philly Fed
Dollar recovers mildly in quiet trading today, ahead of GDP revision, leading indicator, jobless claims and Philly Fed index. Consensus expects no revision to Q3 GDP growth of 2.2%. Price index and PCE core are expected to stay as previous estimate, though, Personal consumption is expected to revise slightly lower to 2.8%. Philly Fed index for December is expected to retreat slightly from 5.1 to 4.8. Leading indicator is expected to stay flat in Nov.
Canadian growth data will also be featured in the US session today. Oct GDP is expected bounce back from 0.3% drop to 0.1% increase. Meanwhile retails sales, though still dropping, is expected to improve slightly to 0.5% fall with ex-auto sales dropping 0.2%. Tuesday’s higher than expected core CPI inflation data relieved some concerns that BoC will cut rate early next year. The CAD rebounded strongly against dollar this week but sentiments are still fragile. Surprises today could still swing USDCAD to either side.
Released earlier, Japan’s trade surplus widened to 915.9b in Nov, beating expectation of 601.8B. The bigger than expected rise was mainly due to slowing import growth, which increased 7.5% only comparing to consensus of 10%, while exports remain growth remains firm, increasing 12.1% versus expectation of 9.1%. EUR/USD
Daily Pivots: (S1) 1.3139; (P) 3192; (R1) 1.3225; http://www.actionforex.com/forex_analysis_and_forecasts/pivot_points/pivot_points_summary_200603205734/
EUR/USD’s rally from 1.3051 has made a top at 1.3244 and retreats mildly since then. Further consolidation might follow but short term bias remains on the upside as long as the current retreat is contained above 1.3105 resistance turned support. ABove 1.3244 again will encourage rise to 1.3291 resistance and then a retest of 1.3364 high.
As discussed before, prices action from 1.3362 is treated as correction to rally from 1.2760. Such correction should have completed at 1.3051, after meeting 1.3056/61 target (100% projection of 1.3364 to 1.3129 from 1.3291 at 1.3056, 50% retracement of 1.2760 to 1.3362 at 1.3061). Subsequent rebound from there could represent resumption of the whole rise form 1.2483 but a decisive break above 1.3364 resistance is needed to confirm and bring further rise towards next upside target of 1.3668 (04 high). Otherwise consolidation may still continue to extend.
On the downside, below 1.3105 resistance turned support is needed to turn short term bias back to the downside and indicate correction from 1.3362/64 is still in progress. But even in such case, downside is still expected to be contained above 1.2911/38 support (50% retracement of 1.2483 to 1.3362 at 1.2923, 161.8% projection of 1.3364 to 1.3129 from 1.3291 at 1.2911) and bring another rally.
In the long term picture, the medium term rise from 1.1639 could either be resumption of this multi-year up trend or just part of a larger scale consolidation that started at 1.3668. But neither case is confirmed yet. Nevertheless, medium term outlook remains bullish with EUR/USD saying above 1.2760 support. Decisive break of 100% projection of 1.1639 to 1.2978 from 1.2483 at 1.3822 will confirm long term up trend has resumed for 1.4 psychological resistance first. On the downside, break of 1.2760 support will turn medium term outlook neutral and argue that whole medium term rally from 1.1639 has possibly completed. Focus will be shifted by to 1.2483 key support and break will confirm this case and bring much deeper decline.
GBP/USD
Daily Pivots: (S1) 1.9592; (P) 1.9670; (R1) 1.9721; http://www.actionforex.com/forex_analysis_and_forecasts/pivot_points/pivot_points_summary_200603205734/
Cable’s rally from 1.9433 has made a top at 1.9747 and retreats mildly since then. Further consolidation might follow but still, short term bias remains on the upside as long as such consolidation is contained above 1.9497 resistance turned support. Break of 1.9747 will encourage a retest of 1.9846 high.
As discussed before, price actions from 1.9846 were treated as consolidation to rally from 1.8834 only. Such consolidation should have completed at 1.9433, after being supported by 38.2% retracement of 1.8834 to 1.9846 at 1.9459 again. Rise from there could represent resumption of whole rally from 1.8517. But decisive break of 1.9846 is needed to confirm and bring further rise to next upside target of 138.2% projection of 1.8090 to 1.9142 from 1.8517 at 1.9971. Otherwise, consolidation might extend further.
On the downside, below 1.9497 resistance turned support is needed to shift short term bias back to the downside and indicate corrective fall from 1.9846 is still in progress. But even in such case, downside should be contained by 1.9338/44 cluster support (50% retracement of 1.8834 to 1.9846 at 1.9340, 38.2% retracement of 1.8517 to 1.9846 at 1.9338) and bring rally resumption.
In the long term picture, break of 1.9554 high added much credence to the case that this multi-year up trend from 1.3680 has resumed. However, this is not confirmed yet. Nevertheless, medium term outlook remains bullish with cable stays above 1.9177 cluster support (50% retracement of 1.8517 to 1.9846 at 1.9182, 23.6% retracement of 1.7047 to 1.9846 at 1.9185). On the upside, decisive break of 2.0106 cluster resistance (1992 high, 100% projection of 17047 to 1.9024 from 1.8090 at 2.0067) will confirm that long term up trend from 1.3680 has resumed. On the downside, sustained break of 1.9177 cluster support will turn medium term outlook neutral and argue that the whole rise from 1.7047 has possibly completed. Focus will be turned to 1.8517 support..
USD/CHF
Daily Pivots: (S1) 1.2128; (P) 1.2159; (R1) 1.2209; http://www.actionforex.com/forex_analysis_and_forecasts/pivot_points/pivot_points_summary_200603205734/.
USD/CHF’s fall from 1.2268 has made a low at 1.2110 after touching mentioned 1.2115 cluster support (38.2% retracement of 1.1878 to 1.2268 at 1.2119). Further consolidation could follow but as long as such consolidation is limited below 1.2229 resistance, short term bias remains on the downside. Break of 1.2110 support will encourage further decline towards 1.2026 cluster support (61.8% retracement of 1.1878 to 1.2268 at 1.2027).
Also, the rebound from 1.1878 which is treated as correction to the fall from 1.2768, should have completed at 1.2268 after breaking of the short term rising trend line with 4 hours MACD dragged below signal line. Break of 1.2026 cluster support will confirm such case and bring retest of 1.1878 low. On the upside, break of above 1.2229 resistance is needed to turn short term bias back to the upside and indicate rebound from 1.1878 is still in progress.
In the long term picture, the current medium term fall from 1.3283 could either be resumption of multi-year down trend from 1.8305 or part of a large scale consolidation that started from 1.1288. But, neither case is confirmed yet. Nevertheless, medium term outlook remains bearish with USD/CHF staying below 1.2343 cluster resistance (50% retracement of 1.2768 to 1.1878 at 1.2323, 161.8% projection of 1.1878 to 1.2097 from 1.1983 at 1.2337). Sustained trading below 1.1288 support (04 low) will confirm that the long term down trend has resumed. Meanwhile, decisive break of 1.2343 cluster resistance will turn medium term outlook neutral and open up some other possibilities. But in any case, a firm break of 1.2343 resistance will likely bring stronger rebound towards 1.2536 resistance and probably further to retest 1.2768 resistance too.
USD/JPY
Daily Pivots: (S1) 118.10; (P) 118.29; (R1) 118.64; http://www.actionforex.com/forex_analysis_and_forecasts/pivot_points/pivot_points_summary_200603205734/
USD/JPY edged higher to 118.50 and is getting very close to mentioned 118.58 resistance Despite diminishing upside momentum is seen as displayed in mildly bearish divergence in 4 hour MACD, further rise could still follow as long as USD/JPY stays above 117.93 support. Below 117.93 will suggest a short term top is formed and should bring retreat to 4 hours 55 EMA (Now at 117.50 or lower). But downside should be contained above 115.87/90 resistance turned support (61.8% retracement of 114.41 to 118.31 at 115.90) and bring rally resumption.
In the bigger picture, firm break of 117.11 cluster resistance (50% retracement of 119.86 to 114.41 at 117.14) confirmed fall from 119.86 has completed with three waves down to 114.41, contained well above 113.14/39 cluster support (61.8% retracement of 108.99 to 119.86 at 113.14), suggesting that it’s merely a correction to the rally from 108.99. Therefore, favor is shifted to the case that medium term rally from 108.99 is indeed, still in progress. Above 118.58 will encourage a retest of 119.86 high. Break should bring further rally to 121.38 resistance (05 high). On the downside, sustained break below 115.87 cluster support will argue that the fall from 119.86 has resumed for 114.41 low first.
Forex News Digest
http://c.moreover.com/click/here.pl?r743546198
Thu, 21 Dec 2006 04:23:00 GMT from Reuters
http://c.moreover.com/click/here.pl?r743488631
Thu, 21 Dec 2006 02:58:00 GMT from Reuters
http://c.moreover.com/click/here.pl?r743424453
Thu, 21 Dec 2006 01:41:00 GMT from Bloomberg
http://c.moreover.com/click/here.pl?r743414565
Thu, 21 Dec 2006 01:29:00 GMT from Bloomberg
http://c.moreover.com/click/here.pl?r743404553
Thu, 21 Dec 2006 01:17:00 GMT from Reuters
http://www.actionforex.com/latest_news/latest_news/forex_news_20060323537/ Economic Indicators Update
GMT Ccy Events Actual Consensus Previous Revised
23:50 JPY Japan Trade balance (jpy) Nov 915.9B 601.8 B 614.7 B
23:50 JPY Japan Exports Y/Y Nov 12.10% 9.10% 11.60%
23:50 JPY Japan Imports Y/Y Nov 7.50% 10.00% 17.40%
23:50 JPY Japan All industry index Oct 1.70% 1.60% -0.90%
7:15 CHF Swiss Trade balance (chf) Nov 1.30B 1.40 B 1.58 B
9:30 GBP U.K. GDP Q/Q Q3 0.70% 0.70%
9:30 GBP U.K. GDP Y/Y Q3 2.70% 2.80%
9:30 GBP U.K. Current account (gbp) Q3 -7.7 B -7.0 B
13:30 USD U.S. Initial jobless claims 315 K 304 K
13:30 USD U.S. GDP annualised Q3 2.20% 2.20%
13:30 USD U.S. GDP price index Q3 1.80% 1.80%
13:30 USD U.S. Personal consumption Q3 2.80% 2.90%
13:30 USD U.S. PCE core Q/Q Q3 2.20% 2.20%
13:30 CAD Canada GDP M/M Oct 0.10% -0.30%
13:30 CAD Canada Retail sales M/M Oct -0.50% -1.20%
13:30 CAD Canada Retail sls ex. auto M/M Oct -0.20% -0.90%
15:00 USD U.S. Leading indicator Nov 0.00% 0.20%
17:00 USD U.S. Philadelphia Fed index Dec 4.8 5.1
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