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

• Send
• Print
• Add To
• Rss

eae93d37-d795-4b33-9001-d427ac93b27b

0

0

Daily Forex Technical Report − Markets Cautiously in Familiar Range ahead of G7 Meeting

Thu, Oct 18 2007, 06:54 GMT
by ActionForex.com Team

ActionForex.com

Forex Daily Technical Report

Markets Cautiously in Familiar Range ahead of G7 Meeting

Dollar weakens mildly against European majors today but is still holding inside familiar ranges. Same in the Japanese yen as the rally losses steam with yen crosses stuck in range too. Markets are cautious ahead of this weekend's G7 meeting on concern that G7 may issue a more aggressive statement on euro's strength or Asian currencies. The Canadian is holding below 31 high against dollar even though oil price hit another record high.

On the data front, just released, Swiss trade surplus surged to 1.8B in Sep, highest in more than 18 years. UK retail sales will be the main focus in European session and is expected to show 0.1% mom, 5.5% yoy growth in Sep. However, the impact of this data could be short lived as the real deal will likely be on Friday's Q3 GDP estimates. Swiss ZEW will also be featured. From US, jobless claims is expected to remain in familiar range above 300k. Leading indicators is expected to show a rebound to 0.3% in Sep. Philly Fed survey is expected to drop slightly from 10.9 to 7.3 and may trigger some volatility in the markets.

Released overnight, the Fed's latest Beige Book showed economic conditions are consistent with recent data. Even though business momentum slowed, there aren't a lot of evidence that slowdown in the economy has intensified. Five of Fed's 12 districts reported slower growth while seven reported unchanged. The report gave no special case for a cut or a hold for the upcoming FOMC meeting. Contradicting to prior statement from Rato, IMF said yesterday that dollar was overvalued and forecasts slower growth in 2008. Johnson said that dollar's decline is part of the "natural, healthy process of global rebalancing".

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

USD/JPY

Daily Pivots: (S1) 116.17; (P) 116.67; (R1) 117.17; More.

USD/CHF continues to trade in choppy consolidation above 116.17 today. As discussed before, break of inner rising channel indicates the rise from 114.01 has completed at 117.93 on loss of momentum, after failing 100% projection of 111.59 to 117.11 from 112.58 at 118.10 . Further decline is in favor to follow towards outer channel support (now at 116.05). This is also a warning that rise from 112.58 and thus the corrective rebound from 111.59 has ended too. Break of the outer channel support will add much weight to this case and bring deeper decline to 114.01 support first. On the upside, firm break of 117.93 is now needed to confirm recent rebound from 112.58 has resumed. Otherwise, short term risk remains on the downside.

In the bigger picture, note that prior break of long term rising trend line (101.65, 108.99) indicates the the whole up trend from 101.65 has completed at 124.13 already, with bearish divergence condition in weekly MACD and RSI. Subsequent sharp fall from 124.13 has made a short term low at 111.59 and rebound from there is treated as correction to this fall only. Break of the outer channel support (115.82) will be the first alert that such corrective rebound has completed and will be confirmed by 114.01. In other words, sharp fall from 124.13 could have resumed in such case for a retest of 111.59 low first and then 108.99 medium term support.

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  Thu, Oct 18 2007, 06:51 GMT