Earlier this week, the Forex Blog speculated that the tide was turning on the Euro, which had retreated from the $1.60 threshold. Sure enough, the month of April saw the best monthly performance by the Dollar in over two years. The sudden about-face by the Dollar stems from changes in interest rate expectations. Only a couple weeks ago, the consensus among investors was that the Fed would cut rates further at its next meeting; the only point of uncertainty was whether rates would be cut by 25 or 50 basis points.

As of today, however, there is only a 25% chance that the Fed will cut rates at all, if you go by futures prices. Regarding the Euro, investors are no longer so sure that the ECB will hike rates in response to surging inflation. In short, the new consensus is that the US/EU interest rate differential has stabilized. Then there is the economic picture; investors have “chosen” to be pleasantly surprised by the most recent economic data. While the economic downturn still seems inevitable, it may not be as severe as investors had previously feared. Reuters reports:

In contrast to slightly stronger U.S. data, the Ifo German business sentiment index this week showed the biggest monthly fall since September 2001.

Read More: «www.reuters.com»

Action Insight | Written by ActionForex.com | Nov 14 07 13:59 GMT |
Forex Mid-Day Technical Report Euro Firm, Sterling Pressured, Dollar Mixed

Euro remains firm across the board after solid GDP data. On the other hand, Sterling is hammered on increased expectation of rate cut from BoE in early 08. Dollar remains mixed in general after weaker than expected PPI report which showed 0.1% mom, 6.1% yoy growth in Oct comparing to expectation of 0.3% mom, 6.3% yoy. Retail sales rose 0.2% in Oct, inline with expectation while ex-auto sales rose missed expectation by rising 0.2% only.

Sterling was firm in early European, supported by solid job report that showed claimant count dropped another -9k in Oct while average earnings growth accelerated to 4.1% yoy in Sep. However, Sterling reversed sharply after the released of «www.bankofengland.co.uk». The report forecasts inflation in UK will settle at its target of 2.0%, after being pushed to above 2.0% by energy prices, assuming at least on rate cut in 2008. This prompted increased expectation that BoE will act as soon as Q1.

On the other hand, Euro is lifted by stronger than expected Q3 GDP data which showed 0.7% qoq, 2.6% yoy growth comparing to expectation of 0.6% qoq, 2.5% qoq. The comparative strength between Euro and Sterling is also seen in the sharp rally in EUR/GBP cross. EUR/USD

Daily Pivots: (S1) 1.4538; (P) 1.4585; (R1) 1.4650; «www.actionforex.com»

EUR/USD’s rise from 1.4518 extends further to as high as 1.4713 today. At this point, intraday bias remains on the upside as long as 1.4633 minor support holds. Retest of 1.4751 high should be seen. correction from 1.4751 has likely completed after drawing support from 4 hours 55 EMA and short term rising channel. Break of 1.4751 will confirm rise from 1.4014 has resumed for next upside target of 1.5 psychological resistance.

On the downside, below 1.4633 will flip intraday bias back to the downside and suggest that consolidation from 1.4751 is possibly still in progress and will bring another fall to 1.4519 before completion. Though, rise from 1.4014 should still be in force as long as 1.4414 clusters support (50% retracement of 1.4124 to 1.4751 at 1.4438) remains intact.

The long term view remains unchanged. Regardless of internal structure, medium term up trend from 1.1639 remains in force and is treated as resumption of long term up trend from 0.8223 (00 low) to 1.3668 (04 high), with subsequent correction ended at 1.1639. Such rally is expected to extend further to 61.8% projection of 0.8223 to 1.3668 from 1.1639 at 1.5004 which will overlap with 1.5 psychological resistance. A break below 1.3851 is resistance turned support is needed to be the first signal that such rally has completed. Otherwise, medium term outlook remains bullish.

GBP/USD

Daily Pivots: (S1) 2.0566; (P) 2.0663; (R1) 2.0804; «www.actionforex.com»

Cable retreats sharply after rebound from 2.0523 was limited at 2.0845 earlier today. Break of 2.0670 minor support turns intraday bias is flipped to the downside for the moment and retest of 2.0520/38 cluster support (50% retracement of 1.9879 to 2.1161 at 2.0520) could be seen. However, as long as this cluster support holds, rise from 1.9879 should still be in progress. Above 2.0845 will encourage a retest of 2.1161 high.

However, decisive break of 2.0520/38 cluster support will indicate that whole rise from 1.9652 has already completed, after touching medium term rising channel resistance. In such case, focus will be back to medium term rising channel support (now at 1.9986). But otherwise, rise from 1.9879 remains in force as long as 2.0520/38 cluster support holds.

In the bigger picture, medium term rally from 1.7047, regardless of internal structure, is treated as resumption of long term up trend from 1.3680 (01 low) to 1.9554 (04 high) with subsequent correction ended at 1.7047. Break of 61.8% projection level at 2.0677 now encourages further medium term rally to next projection target of 100% projection 1.3680 (01 low) to 1.9554 (05 high) from 1.7047 (05 low) at 2.2921. On the downside, decisive break of the medium term rising channel is needed to signal that such medium term rally has made a top. Otherwise, medium term outlook remains bullish.

USD/CHF

Daily Pivots: (S1) 1.1235; (P) 1.1267; (R1) 1.1306; «www.actionforex.com».

USD/CHF weakens today and is now pressing 1.1187 low. At this point, further decline is still expected as long as 1.1300 resistance holds. Sustained trading below 1.1187 will encourage further fall to test next important medium term support at 1.1100 (95 low). On the upside, above 1.1300 will indicate that a short term bottom is possibly formed and bring recovery to 4 hours 55 EMA (now at 1.1353) and above. But upside should be limited below 1.1597 support turned resistance and bring another fall.

In the bigger picture, medium term down trend from 1.3283 (05 high) has now breached medium term support of 1.1288. The current preferred interpretation is that fall from 1.3282 was initially contained at 1.1919 and turned into sideway triangle consolidation that completed at 1.2467, where the medium term down trend resumed. With this interpretation, next downside target is 1.1100 clusters support (95 low and 100% projection of 1.3283 to 1.1919 from 1.2467 at 1.1103). Hence, downside could be supported there initially on oversold condition and bring rebound.

On the upside, even though a stronger rebound would be seen in case of a break of 1.1597 resistance, break of 1.1891 resistance is needed to indicate fall from 1.2467 has completed. Otherwise, further decline is still in favor after correction.

USD/JPY

Daily Pivots: (S1) 109.75; (P) 110.37; (R1) 111.51; «www.actionforex.com».

USD/JPY’s rebound from 109.12 extends further to as high as 111.55 today. With a short term bottom in place at 109.12, further recovery could now be seen to 112.04/113.39 resistance zone. But still, upside should be limited there and bring another fall. On the downside, below 110.53 minor support will flip intraday bias back to the downside for 108.99 support first. Sustained break of 108.99 will encourage further decline to next short term target of 100% projection of 124.13 to 111.59 from 117.94 at 105.40.

In the bigger picture, the three wave structure of the up trend from 101.65 to 124.13 suggests that it’s corrective in nature. Such development flipped favor to the case that the rally from 101.65 could indeed be the final leg of a long term triangle formation (147.68, 101.22, 135.20, 101.65, 124.13). The break of falling trend line (147.68, 135.20) was merely a throwover in the last leg. Sustained trading below 108.99 low will add more credence to this case and put key long term support zone of 101.22/65 into focus. On the upside, break of 115.91 resistance is needed to be the first signal that fall from 124.13 has completed. Otherwise, medium term outlook remains bearish.

EUR/JPY

Daily Pivots: (S1) 159.71; (P) 160.91; (R1) 163.14; «www.actionforex.com»

EUR/JPY’s rebound from 158.67 continues today and is now pressing mentioned 164.00 resistance (61.8% retracement of 167.62 to 158.67 at 164.26). At this point, intraday bias remains on the upside as long as 161.81 minor support holds. But still, as long as 164.00 resistance (61.8% retracement of 167.62 to 158.67 at 164.26) holds, the current rebound will be treated as correction to the fall from 167.62 only and further decline is still in favor. Below 161.81 will turn intraday bias back to the downside bring retest of 158.67 low. However, above 164.00/26 cluster resistance will flip favors back to the case that price action from 167.72 is merely consolidation to rise from 149.27. and will bring retest of this high and then 168.93 key resistance.

In the bigger picture, break of trend line support (137.16, 150.75) confirmed that medium term rally rally from 130.60 has made an important medium term top at 168.93. However, subsequent sharp correction from there to 149.27 was supported by long term rising channel. Hence, long term up trend from 88.97 (00 low) remains intact. But break of 168.93 high is needed to confirm such up trend has resumed. Meanwhile, on the downside, break of 149.27 low will also have the long term rising channel taken out, which in turn add much weight to the case that rise from 88.97 has indeed completed at 168.83 and bring much deeper medium term decline.

Forex News Digest

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«c.moreover.com»
Wed, 14 Nov 2007 11:37:00 GMT from Excite Money & Investing

«c.moreover.com»
Wed, 14 Nov 2007 10:49:00 GMT from International Herald Tribune

«c.moreover.com»
Wed, 14 Nov 2007 10:43:00 GMT from CNBC

«www.actionforex.com» Economic Indicators Update
GMT Ccy Events Actual Consensus Previous Revised
23:30 AUD Australia W’pac consumer confidence -4.20% N/A -0.30%
07:00 EUR Germany GDP Q/Q Q3 0.70% 0.70% 0.30%
07:00 EUR Germany GDP Y/Y Q3 2.40% 2.50% 2.50%
09:30 GBP U.K. Claimant count Oct -9.9k -5.0K -12.8K -13.9k
09:30 GBP U.K. ILO unemployment rate Sep 5.40% 5.40% 5.40%
09:30 GBP U.K. Avg. earnings 3m Y/Y Sep 4.10% 3.90% 3.70%
10:00 EUR Eurozone GDP Q/Q Q3 0.70% 0.60% 0.30%
10:00 EUR Eurozone GDP Y/Y Q3 2.60% 2.50% 2.50%
10:30 GBP BoE Quarterly Inflation Report
13:30 USD U.S. PPI M/M Oct 0.10% 0.30% 1.10%
13:30 USD U.S. PPI Y/Y Oct 6.10% 6.30% 4.40%
13:30 USD U.S. PPI core M/M Oct 0.00% 0.20% 0.10%
13:30 USD U.S. PPI core Y/Y Oct 2.50% 2.60% 2.00%
13:30 USD U.S. Retail sales M/M Oct 0.20% 0.20% 0.60% 0.70%
13:30 USD U.S. Retail sales less auto M/MOct 0.20% 0.30% 0.40% 0.30%
13:30 CAD Canada Leading indicators Oct 0.10% 0.30% 0.40% 0.30%
14:10 USD Bernanke Speaks on FOMC Communications
15:00 USD U.S. Business inventories Sep 0.30% 0.10%

«www.actionforex.com»

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

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«c.moreover.com»
Wed, 19 Dec 2007 02:18:00 GMT from Philippine Daily Inquirer

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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

«www.actionforex.com»

Action Insight | Written by ActionForex.com | Nov 07 07 13:52 GMT |
Forex Mid-Day Technical Report Dollar’s Free Fall Continues, EUR/USD Hits 1.47, GBP/USD Hits 2.1

Dollar’s free fall continues today as talk of China’s reserve diversification dominates the market. Cheng Siwei, vice chairman of China’s National People’s Congress, said that China will “readjust” the $1.43 trillion of foreign-exchange reserves, favoring “stronger currencies over weaker ones”. This suggest that China may diversify further away from the dollar. Also, not that the largest holder of US treasures, China and Japan, has already reduced their treasury holdings this year, with China’s holding down 5% to $400b while Japan’s down 15% to $586b. The news triggered concern that dollar could continue to lose its status as the world currency and other central banks may follow to move away from it.

In addition, other dollar bearish theme continue to play, including concern on extended housing market downturn, further rate cut from Fed on credit market problems, record oil prices, new the century mark of $100 a barrel and commodity prices as well as expectation for either further rate hike or no move from other major central banks in the near term.

Technically speaking, EUR/USD, making new record high, has now taken out 1.45 level decisively and is set to challenge next important psychological resistance of 1.5. GBP/USD has also made 26 years high and touched 2.1 level. Tentatively, USD/JPY’s sharp fall from 124.13 is treated as resumed and is set to test 111.59 low and then 110. USD/CHF took out 04 low of 1.1288 and is set to challenge 95 low of 1.1. USD/CAD remains extremely weak and is heading to 0.9, just 3 months after it breached parity. Aussie continues to make new 23 year high

Meanwhile, note that the overall outlook in the Japanese yen is less clear as carry trade is still a major factor in yen’s movements. Yen crosses surges initially today, boosted by strength in major currencies other then dollar and yen, even though USD/JPY dipped sharply. However, as yen crosses quickly reversed following decline in European stock markets.

Overnight, RBA hiked by 25bps as expected, raising the overnight cash rate to an 11 year high of 6.75%. The accompanying statement maintained a hawkish tone and expect inflation to climb above 3% in Q1 08. Recent credit crunch in the global economy is expected to have little impact in Australia. Markets’ attention is turning to employment report from Australia and New Zealand in the coming Asian session, before BoE and ECB rate decision later tomorrow. EUR/USD

Daily Pivots: (S1) 1.4492; (P) 1.4531; (R1) 1.4596; «www.actionforex.com»

EUR/USD remains very strong today and extends rally to as high as 1.4728 so far. At this point, intraday bias remains on the upside as long as 1.4540 minor support holds. Further rally is expected towards next medium term target of 1.5. Below 1.4613 will turn intraday outlook consolidative first and probably bring pull back to 4 hours 55 EMA (now at 1.4458) but downside should be contained above 1.4348 resistance turned support and bring another rise.

In the bigger picture, medium term rally from 1.1639 is still in force and is being treated as resumption of long term up trend from 0.8223 (00 low) to 1.3668 (04 high). Such rise is expected to extend further to 61.8% projection of 0.8223 to 1.3668 from 1.1639 at 1.5004 which will overlap with 1.5 psychological resistance.

One the downside, below 1.4348 will indicates that rise from 1.3360 has made a top will turn into lengthier consolidation with further correction into support zone between 1.4014 and 1.4281. But EUR/USD is expected to be supported there and bring rally resumption.

GBP/USD

Daily Pivots: (S1) 2.0817; (P) 2.0861; (R1) 2.0920; «www.actionforex.com»

Cable’s rally continues today and reaches as high as 2.1050 so far, meeting mentioned target of resistance zone of 2.1 psychological resistance and 161.8% projection of 1.9652 to 2.0365 from 1.9879 at 2.1033. At this point, intraday bias remains on the upside as long as 2.0928 minor support holds. Sustained trading above 2.1033 will encourage further rally to next short term target of 200% projection of 1.9652 to 2.0365 from 1.9879 at 2.1305. Below 2.0928 will turn intraday outlook consolidative first and probably bring pull back to 4 hours 55 EMA (now at 2.0743). But downside should be contained above 2.0538 resistance turned support and bring another rise.

In the bigger picture, rise from 1.7047 is treated as resumption of long term up trend from 1.3680. Sustained break of 2.0677 now encourage further medium term rally to next projection target of 100% projection 1.3680 (01 low) to 1.9554 (05 high) from 1.7047 (05 low) at 2.2921. On the downside, a break below 2.0538 support will indicate deeper correction is underway. But still, the rise from 1.7047 should still be in progress as long as 1.9652 medium term support holds.

USD/CHF

Daily Pivots: (S1) 1.1397; (P) 1.1469; (R1) 1.1517; «www.actionforex.com».

USD/CHF dives to as low as 1.1256 today, meeting mentioned target of 1.1288 (04 low) as expected. At this point, intraday bias remains on the downside as long as 1.1401 minor resistance holds. Sustained trading below 1.1288 will encourage further fall to 1.1000 (95 low). Above 1.1401 will turn intraday outlook consolidative first and bring recovery. But upside should be limited by 1.1597 support turned resistance and bring another fall.

In the bigger picture, medium term down trend from 1.3283 (05 high) has now breached medium term support of 1.1288. Such decline is now tentatively treated as resumption of the long term down trend from 1.8305 (00 high) and is set to retest 95 low of 1.1000 first. On the upside, even though a stronger rebound would be seen in case of a break of 1.1597 resistance, break of 1.1891 resistance is needed to indicate fall from 1.2467 has completed. Otherwise, further decline is still in favor after correction.

USD/JPY

Daily Pivots: (S1) 114.37; (P) 114.58; (R1) 114.92; «www.actionforex.com».

USD/JPY’s fall from 117.93 resumes today by taking out 113.23 low and reaches as low as 112.76 so far. At this point, intraday bias remains on the downside as long as 113.67 minor resistance holds. Further decline is expected to retest 111.59 low. Above 113.67 will turn intraday outlook consolidative first but recovery should be limited below 114.79 resistance and bring another fall.

In the bigger picture, current fall from 117.93 is tentatively treated as resumption of whole fall from 124.13. Firm break of 111.59 low will confirm this case and bring decline to next cluster support zone of 61.8% retracement of 101.65 to 124.13 at 110.23 and 61.8% projection of 124.13 to 111.59 from 117.33 at 109.58 first.

On the upside, break of 115.91 resistance is needed to turn short term bias back to the upside and indicate that USD/JPY is still bounded in consolidation that start from 111.59 low.

EUR/JPY

Daily Pivots: (S1) 165.94; (P) 166.49; (R1) 167.54; «www.actionforex.com»

EUR/JPY’s rise was limited at 167.63 earlier today, below 167.72 resistance and retreats from there. Nevertheless, further rally is still in favor as long as 164.95 cluster support (38.2% retracement of 160.46 to 167.63 at 164.89) holds. Break of 167.72 resistance will encourage retest of 168.93 key resistance. However, below 164.95 will turn short term bias back to the downside and retest of 160.46 low could be seen.

In the bigger picture, break of trend line support (137.16, 150.75) confirmed that medium term rally rally from 130.60 has made an important medium term top at 168.93. However, subsequent sharp correction from there to 149.27 was supported by long term rising channel. Hence, long term up trend fro 88.97 (00 low) remains intact. Weekly MACD’s stay above signal line suggests that such correction has likely completed. Rise from 149.27 is tentatively treated as resumption of the long term up trend and sustained break of 168.93 will confirm such case. However, sustained break of 160.46 support and 160.67 cluster support will flip favor back to the case that price actions from 168.93 is developing into a large scale consolidation and retest of 149.27 low could be seen in such case.

Forex News Digest

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«c.moreover.com»
Wed, 7 Nov 2007 09:37:00 GMT from Reuters UK

«c.moreover.com»
Wed, 7 Nov 2007 09:34:00 GMT from Reuters

«c.moreover.com»
Wed, 7 Nov 2007 09:11:00 GMT from Reuters South Africa

«c.moreover.com»
Wed, 7 Nov 2007 09:09:00 GMT from Reuters

«c.moreover.com»
Wed, 7 Nov 2007 09:08:00 GMT from Reuters

«c.moreover.com»
Wed, 7 Nov 2007 08:58:00 GMT from New Zealand Herald

«www.actionforex.com» Economic Indicators Update
GMT Ccy Events Actual Consensus Previous Revised
22:30 AUD RBA rate decision Nov 6.75% 6.75% 6.50%
23:01 GBP U.K. N’wide Consumer Confi. Oct 98 97 99
00:30 AUD Australia House price index Q/Q Q3 3.50% 3.00% 3.20%
00:30 AUD Australia House price index Y/Y Q3 10.60% 9.80% 9.20%
11:00 EUR Germany Industrial prod’n M/M Sep 0.30% -0.10% 1.70% 1.90%
11:00 EUR Germany Industrial prod’n Y/Y Sep 6.00% 5.10% 5.10% 5.20%
13:30 USD U.S. Labour cost Q3 -0.20% 1.00% 1.40% 2.20%
13:30 USD U.S. Productivity Q3 4.90% 3.00% 2.60% 2.20%
15:00 USD U.S. Wholesale inventories Sep 0.20% 0.10%

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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

«www.bloomberg.com»

«www.bloomberg.com»

«www.bloomberg.com»

«www.bloomberg.com»

«www.bloomberg.com»

«www.bloomberg.com»

«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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