Daily Report: Cable Still Pressing Channel Support, Looking to MPC Minutes for Trigger
May 15th, 2008
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Action Insight | Written by ActionForex.com | Dec 19 07 06:04 GMT |
Forex Daily Technical Report Cable Still Pressing Channel Support, Looking to MPC Minutes for Trigger
Cable continues to press the important medium term channel support after yesterday’s CPI report failed to trigger neither a break through nor a rebound. Focus will turn to MPC meeting minutes to be released later today. Markets generally expect the minutes to show the decision to cut rates by 25bps to 5.50% earlier this month was done by a 6-3 vote. Opinions on the near term path of BoE is divided and any deviation from the the expected vote split could significantly shift markets’ expectations. Also, another point to note is on whether the possibility of a 50bps cut was raised during the meeting. Technically speaking, with cable pressing an important support, today could be defining for them medium term trend.
Another focus of today will be Germany Ifo index. The business climate index unexpectedly rose from 103.9 to 104.2 in Nov but is expected to head lower to new two year low of 103.8 in Dec. Germany PPI is expected to rose 0.4% mom, 2.1% yoy in Nov. Nevertheless, EUR/USD’s fall from 1.4966 remains intact and is still expected to extend further before completion.
In Asia, the Japanese government revised the forecasts of economic growth for the year ending Mar 08 down from 2.1% to 1.3%. Continuous troubles in the housing market are believed to be the main reason for the downward revision. Though, economic growth is expected to rebound to 2.0% next year, with “the corporate sector will remain firm and households will show improvement gradually. EUR/USD
Daily Pivots: (S1) 1.4374; (P) 1.4405; (R1) 1.4443; «www.actionforex.com»
Outlook remains changed in EUR/USD as consolidation from 1.4331 continues. An intraday low could be in place, but still, fall from 1.4750 is still expected to resume sooner rather than later to support zone between 1.4014 and 1.4281 before completing the correction to rise from 1.3360 that started from 1.4966 and stage another rally. On the upside, above 1.4454 minor resistance will bring recover, probably to 4 hours 55 EMA (now at 1.4554). But still, break of 1.4750 resistance is needed to indicate fall from 1.4966 has completed. Otherwise, short term outlook will remain bearish.
In the bigger picture, medium term up trend from 1.1639 has made a top at 1.4966 after failing 61.8% projection of 0.8223 to 1.3668 from 1.1639 at 1.5004 which overlaps with 1.5 psychological resistance. However, as long as the correction from 1.4966 is contained above 1.3851 resistance turned support, medium term outlook will remain bullish and rally from 1.1639 is still expected to resume after completing the correction. Though, sustained break of 1.3851 will argue that whole rise from 1.1639 has completed and will bring deeper decline.
GBP/USD
Daily Pivots: (S1) 2.0094; (P) 2.0159; (R1) 2.0208; «www.actionforex.com»
Outlook remains unchanged as cable continues to stay in tight range and pressing medium term rising channel support (now at 2.0121). Cable is still at a juncture. Nevertheless, intraday bias remains on the downside as long as 2.0244 minor resistance holds. Further decline is still in favor. Meanwhile, above 2.0244 will indicate an intraday low is in place. Also, short term outlook will be turned neutral in that case and bring rebound. But still. a break of 2.0577 resistance is needed to confirm that fall from 2.1161 has completed. Otherwise, further decline cannot be ruled out.
In the bigger picture, cable has been trading well within the medium term rising channel since making a low at 1.8090. The current fall from 2.1161 is still treated as a correction to such rally only after rise from 1.1.9652 hit this channel resistance. Strong support should be seen between the channel support and 2.0 psychological level. Strong rebound from there, followed by break of 2.0577 resistance, will indicate that fall from 2.1161 has completed and medium term up trend could have then resumed. However, sustained break of 2.0 psychological support will indicate that whole medium term rally from 1.7047 has possibly completed. Deeper decline should then be seen to next medium term support at 1.9652 first.
USD/CHF
Daily Pivots: (S1) 1.1489; (P) 1.1512; (R1) 1.1539; «www.actionforex.com».
Outlook remains unchanged as USD/CHF continues to consolidate below 1.1573 high today. An intraday top is likely in place at 1.1573. and further further pull back to 4 hours 55 EMA (now at 1.1383) could be seen. Nevertheless, break of 1.1233 cluster support (50% retracement of 1.0890 to 1.1573 at 1.1232) is needed to indicate rise from 1.0890 has completed. Otherwise, further rally is still in favor after pullback. Break of 1.1573 will indicate recent rise has resumed for key medium term resistance at 1.1891 (61.8% retracement of 1.2467 to 1.0890 at 1.1865).
In the bigger picture, while a short term bottom is in place at 1.0890, there is no confirmation of the completion of medium term down trend from 1.3283 yet. Focus will remain on 1.1891 key resistance. As long as this level remains intact, the current rebound from 1.0890 will still be treated as a correction in the medium term down trend only and further decline is still in favor after completing the correction. However, sustained break of 1.1891 will indicate that medium term down trend from 1.3282 has already finished and 1.0890 is an important medium term bottom. In such case, strong rally should then be seen with prospect of testing 1.2768 resistance.
USD/JPY
Daily Pivots: (S1) 112.90; (P) 113.21; (R1) 113.70; «www.actionforex.com».
Outlook remains unchanged as USD/JPY is still bounded inside tight range, with upside limited by mentioned 113.55/67 cluster resistance (38.2% retracement of 124.13 to 107.21 at 113.67 and 100% projection of 107.21 to 111.21 from 109.55 at 113.55). As discussed before, an intraday top is possibly in place at 113.60 and further pull back could be seen to 4 hours 55 EMA (now at 112.20). However, break of 110.48 cluster support (50% retracement of 107.21 to 113.60 at 110.40) is needed to signal the completion of rise from 107.21. Otherwise, further rally is still in favor after pullback.
In the bigger picture, sharp rebound from 107.21 raised some doubt that the whole fall from 124.13 has already completed with three waves down to 107.21 already. However, this is not confirmed yet. Focus will be on the mentioned falling trend line resistance (now at 114.31). Sustained trading above this trend line resistance, which will also have 38.2% retracement of 124.13 to 107.21 at 113.67 taken out decisively too, will add more credit to such case. In such case, next cluster resistance of 117.94 (61.8% retracement of 124.13 to 107.21 at 117.66) will be put into focus.
However, sharp reversal after failing the trend line resistance, followed by a break of 110.48 support, will indicate that rebound from 107.21 has completed and keep the down trend from 124.13 intact. In such case, further decline should be seen to retest 107.21 low first and then resume the down trend.
EUR/JPY
Daily Pivots: (S1) 162.68; (P) 163.15; (R1) 163.91; «www.actionforex.com»
EUR/JPY’s outlook remains mixed as price actions continue to be choppy. Though the fall from 165.29 was supported by mentioned inner rising channel and recovers, intraday bias will still remain mildly on the downside as long as 163.96 minor resistance holds. Further retreat could still be seen. But after all, break of 161.86 support is needed to indicate the rebound from 159.36 has completed. On the upside, above 163.96 will turn intraday bias back to the upside for a retest of 165.29 high.
In the bigger picture, outlook remains equally mixed as recent price actions did little to clarify the picture. The main question remains on whether price actions from 168.93 has already completed at 149.27 or is still in progress. Nevertheless, with the rise from 158.67 still in force, favors is still on the bullish scenario. However, break of 158.67 will flip favors back to the case that fall from 167.72 represents the last falling leg of the large scale consolidation and will bring deeper decline towards 149.27 low before completion.
Forex News Digest
«c.moreover.com»
Wed, 19 Dec 2007 02:18:00 GMT from Philippine Daily Inquirer
«c.moreover.com»
Wed, 19 Dec 2007 01:43:00 GMT from People’s Daily Online
«c.moreover.com»
Wed, 19 Dec 2007 01:34:00 GMT from Stockhouse Canada
«c.moreover.com»
Wed, 19 Dec 2007 01:30:00 GMT from Macro World Investor
«www.actionforex.com» Economic Indicators Update
MT Ccy Events Actual Consensus Previous Revised
23:30 AUD Australia Westpac leading economic indexOct 0.50% N/A 0.80% 0.60%
23:50 JPY Japan All industry index Oct 1.20% 1.10% -1.60% -1.70%
07:00 EUR Germany PPI M/M Nov 0.40% 0.40%
07:00 EUR Germany PPI Y/Y Nov 2.10% 1.70%
09:00 EUR Germany Ifo Business Climate Nov 103.8 104.2
09:30 GBP BOE MPC Minutes Dec 6–3–0 7–2–0
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