Mid-Day Report: Yen Weakens Further Against Dollar and Sterling
Action Insight | Written by ActionForex.com | Jan 22 07 15:13 GMT |
Forex Mid-Day Technical Report Yen Weakens Further Against Dollar and Sterling
The Japanese yen weakens further in quiet market today, in particular, falling to fresh lows against dollar and sterling. USD/JPY reaches as high as 121.77 while GBP/JPY reaches 240.60. Elsewhere, dollar remains bounded in tight range against European majors. Without important economic indicator to be released today, market could turn focus too SF Fed President Yellen’s speech on economy later today. Last week, Yellen, which is known dove, has noted that she is comfortable with the current level of Fed fund rate but labor market remains a “serious risk” for the outlook. It will be watched if she will elaborate further on her views. EUR/USD
Daily Pivots: (S1) 1.2919; (P) 1.2959; (R1) 1.3006; http://www.actionforex.com/forex_analysis_and_forecasts/pivot_points/pivot_points_summary_200603205734/
Outlook remains unchanged as EUR/USD continues to trade inside established range of 1.2896 and 1.2998. Further consolidation is still in favor as long as EUR/USD stays above 1.2896 support and risk for another rise remains. But still, we’d expect upside to be limited by 1.3052 cluster resistance (38.2% retracement of 1.3364 to 1.2867 at 1.3057) and decline resumption. On the downside, below 1.2896 support will bring retest of 1.2867 low. Break will confirm that the fall from 1.3296 has resumed for 1.2760 support.
In the bigger picture, an important medium term top could be in place at 1.3364 already, in particular, with bearish divergence condition in weekly MACD and RSI. Sustained break of 1.2760, which will probably have medium term rising channel line (now at 1.2730) taken out too, will add much weight to the case that whole medium term up trend from 1.1639 has completed. Focus will then be on 1.2483 cluster support (50% retracement of 1.1639 to 1.3364 at 1.2502). Decisive break of 1.2483 cluster support will confirm this case and have medium term outlook turned bearish.
On the upside, a break of 1.3052 cluster resistance will indicate the fall from 1.3364 has possibly completed after drawing support from resistance line (1.2978 to 1.2937, now at 1.2853). This will also save the case that medium term up trend from 1.1639 is still in progress with EUR/USD kept inside the rising channel. Break of 1.3296 resistance will suggest the rise from 1.2483 has possibly resumed and EUR/USD could make a new high above 1.3364 before finally making a top on above mentioned bearish divergence condition in weekly chart.
GBP/USD
Daily Pivots: (S1) 1.9700; (P) 1.9735; (R1) 1.9779; http://www.actionforex.com/forex_analysis_and_forecasts/pivot_points/pivot_points_summary_200603205734/
Cable continues to trade in tight range below 1.9777 high. Bearish divergence remains in 4 hours MACD and RSI, suggesting a short term top is in place at 1.8777. A drop below 1.9692 will complete an intraday triple top which will confirm this and bring further pullback towards 1.9587 cluster resistance (38.2% retracement of 1.9261 to 1.9777 at 1.9580. However, we’d expect downside to be contained above 1.9452 cluster support (61.8% retracement of 1.9261 to 1.9777 at 1.9458) and bring rally resumption. Above 1.9777 will indicate rise from 1.9261 has resumed.
In the bigger picture, correction from 1.9846 has completed after three waves down to 1.9261. Hence, further rally is expected to follow to 1.9846 high and then 138.2% projection of 1.8090 to 1.9142 from 1.8517 at 1.9917. But, close attention will be paid to sign of loss of upside momentum and reversal pattern formation as cable approaches 2.0106 cluster resistance (1992 high, 100% projection of 17047 to 1.9024 from 1.8090 at 2.0067).
On the downside, below 1.9452 cluster support will argue that price actions from 1.9846 is developing into extended consolidation and will shift focus back to 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).
USD/CHF
Daily Pivots: (S1) 1.2441; (P) 1.2485; (R1) 1.2522; http://www.actionforex.com/forex_analysis_and_forecasts/pivot_points/pivot_points_summary_200603205734/.
Outlook remains unchanged as USD/CHF is still bounded in choppy sideway trading between 1.2415 and 1.2546. As discussed before, even though price actions from 1.2528 could be developing in to extended sideway consolidation, further rise is still mildly in favor as long as USD/CHF stays above 1.2415 support.
However, upside momentum remains unconvincing at this moment with 4 hours MACD trending down. Below 1.2415 support will suggest a short term top is formed and encourage further pull back to 38.2% retracement of 1.2111 to 1.2546 at 1.2380. But downside should be contained by 1.2270 cluster support (61.8% retracement of 1.2111 to 1.2546 at 1.2276) and bring further rally.
In the bigger picture, decisive break of 1.2501/72 resistance zone (100% projection of 1.1878 to 1.2268 from 1.2111 at 1.2501 and medium term falling trend line resistance from 1.3238 to 1.2768, now at 1.2572) will indicate whole medium term down trend from 1.3283 has already completed at 1.1878. Further rally should be seen towards 1.2768 cluster resistance (61.8% retracement of 1.3283 to 1.1878 at 1.2746). On the downside, sustained break of 1.2270 cluster support will suggest that the whole rise from 1.1878 has possibly completed and put focus back to 1.2110 support. Break will shift focus back to the downside for 1.1878 low.
USD/JPY
Daily Pivots: (S1) 121.06; (P) 121.26; (R1) 121.43; http://www.actionforex.com/forex_analysis_and_forecasts/pivot_points/pivot_points_summary_200603205734/
USD/JPY’s rise from 117.96 resumes today and edges higher to 121.77 so far. At this point, intraday bias remains on the upside as long as USD/JPY stays above 121.17 minor support and further rally is still expected to follow. However, below 121.17 will suggest an intraday top is formed and risk pullback towards 4 hours 55 EMA (now at 120.53).
Also, as long as USD/JPY is kept inside short term rising channel (now at 119.93), the rise from 114.41 is still in progress. Any interim consolidation still be brief and rally is expected to resume sooner rather than later. However, sustained break of the channel, with bearish divergence condition in 4 hours MACD and RSI as background, will indicate the rise from 114.41 has completed and deeper correction should be seen towards 117.96 support.
In the bigger picture, as medium term rally from 108.99 is still in force, such rally is treated as resumption of whole up trend from 101.65 for the moment. Sustained break will confirm such case and bring further rally to next upside target at 123.23/29 cluster projection level (100% projection of 114.41 to 119.68 from 117.96 at 123.23. 100% projection of 108.99 to 117.87 from 114.41 at 123.29). However, sustained break of 117.96 support will rise some doubt about this case.
Forex News Digest
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http://c.moreover.com/click/here.pl?r778346018
Mon, 22 Jan 2007 12:47:00 GMT from Reuters
http://c.moreover.com/click/here.pl?r778334856
Mon, 22 Jan 2007 12:37:00 GMT from Bloomberg
http://c.moreover.com/click/here.pl?r778294364
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Mon, 22 Jan 2007 11:47:00 GMT from Financial Times
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Mon, 22 Jan 2007 11:29:00 GMT from AP via MSN Money
http://www.actionforex.com/latest_news/latest_news/forex_news_20060323537/ Economic Indicators Update
GMT Ccy Events Actual Consensus Previous Revised
00:01 GBP U.K. Rightmove hse prices M/M Jan 0.50% N/A -0.30%
00:01 GBP U.K. Rightmove hse prices Y/Y Jan 13.50% N/A 13.00%
00:30 AUD Australia PPI Q/Q Q4 0.20% 0.20% 1.00%
00:30 AUD Australia PPI Y/Y Q4 3.50% N/A 4.00%
07:00 EUR Germany PPI M/M Dec 0.00% 0.10% 0.00%
07:00 EUR Germany PPI Y/Y Dec 4.40% 4.60% 4.70%
08:15 CHF Swiss Combined PPI M/M Dec 0.0% 0.10% 0.00%
08:15 CHF Swiss Combined PPI Y/Y Dec 2.6% 2.70% 2.80%
13:30 USD U.S. Chicago Fed survey Dec 0.04 N/A -0.26 -0.3
15:00 USD U.S. Leading indicator Dec * 0.20% 0.10%
*Release of Leading Indicator rescheduled to tomorrow
http://www.actionforex.com/general_information/forex_newsletters/forex_newsletter_200507301487/