• Home ::
• Technical ::
• Analysis Reports ::
• Daily Forex Technical Report

• Send
• Print
• Add To
• Rss

Daily Forex Technical Report

8f0c81d5-e190-4ca0-a051-ef1e4d9ae6ab

0

0

Daily Forex Technical Report − Markets to Focus on Non−Farm Payroll Report

Fri, Feb 2 2007, 08:33 GMT
by ActionForex.com Team

ActionForex.com

Forex Daily Technical Report

Markets to Focus on Non-Farm Payroll Report

Markets trade quietly in tight range today as traders are holding their bets ahead of the employment report today. Non-farm payroll report is expected to show 149k job growth in Jan, slightly lower than Dec's 167k. Unemployment is expected to remain at 4.5%. Today's payroll report will also incorporate benchmark employment revisions for the period ending in March 2006. There will also be post-benchmark revisions, from April 2006 onward, that take into account changes in net birth/death adjustments and small business hiring.

Recent data are not giving clear indicators on whether today's NFP report will surprise on the upside or the downside. On the one hand, ADP employment report, which is usually viewed as a preview to NFP, surprised the market on the upside with 152k private sector job growth which suggest that the NFP should be above this number after including public sector jobs count. On the other hand, the employment sub-index of the ISM Manufacturing index has reported a contractionary reading for the consecutive third month yesterday which raise downside risk to today's NFP report.

From technical point of view, after a pretty eventful weak, there are clear signs of near term top formed in USD/JPY and USD/CHF. A short term bottom is also made in GBP/USD, but with a stronger rebound afterwards. However, EUR/USD is still kept below 1.3052 cluster resistance which still favors the case the it's merely in sideway consolidation pattern that started at 1.2865. After all we believe the risk is more on the downside for the dollar and in case of a sell off on today's NFP, GBP/USD could be a better choice to long for the strength of the current rebound. Meanwhile, EUR/USD is considered to be a better choice to short in case of dollar rally for the clearer consolidation pattern.

Read full report (EUR/USD, GBP/USD, USD/CHF, USD/JPY) here.

GBP/USD

Daily Pivots: (S1) 1.9613; (P) 1.9674; (R1) 1.9727; More

Cable's rebound from 1.9480 has reached as high as 1.9747, breaking marginally above 1.9695 cluster resistance (50% retracement of 1.9913 to 1.9480 at 1.9697) before retreating mildly. As discussed before, break of 1.9659 cluster resistance suggest that fall from 1.9913 has already completed at 1.9480 after failing to break through mentioned trend line support rising trend line support (1.8517 to 1.8834). Hence, at this point, as long as cable stays above 1.9618 support, short term outlook will remain bullish and further rally is expected to be seen towards 1.9913 high. Below 1.9618 will turn short term outlook mixed again.

In the bigger picture, with mentioned trend line support remains intact, further rally could still be seen that brings cable above 1.9913 high. However, close attention will be paid to sign of loss of upside momentum and reversal pattern formation as cable approaches key 2.0106 cluster resistance (1992 high, 100% projection of 17047 to 1.9024 from 1.8090 at 2.0067) as the whole medium term up trend from 1.7047 should complete at or below this level.

Meanwhile, we already have bearish divergence conditions in weekly RSI, daily MACD and RSI. Sustained break of the trend line support will confirm that whole rise from 1.8517 has completed and bring decline towards 1.9237/61 cluster support (23.6% retracement of 1.7047 to 1.9913 at 1.9237). Decisive break of 1.9237/61 cluster support will add much weight to the case that whole medium term up trend from 1.7047 has already completed earlier than we thought and much deeper decline should be seen towards next cluster support at 1.8834 (38.2% retracement of 1.7047 to 1.9913 at 1.8818).

Stay tuned with our Forex Newsletters

ActionForex is set up with the aim to empower individual forex traders by providing insightful contents. Analysis reports, live pivot points on majors and crosses, etc are provided with collection of carefully selected educational articles and free trading ebook downloads.

Published on  Fri, Feb 2 2007, 08:33 GMT