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Mid−Day Forex Technical Report − Dollar Firm Despite Mixed Data, Euro Pressured Broadly

Thu, Apr 24 2008, 14:12 GMT
by ActionForex.com Team

ActionForex.com

Action Insight Mid-Day Report

Dollar Firm Despite Mixed Data, Euro Pressured Broadly

After rebounding further, dollar remains generally firm in early US session despite mixed data. On the positive side, jobless claims unexpected fell to a two month low of 342k. Even though headline durable goods orders dropped for the third consecutive by -0.3% in March, the details were indeed solid. Ex-transport orders rose strongly by 1.5% while ex-defense orders also climbed 0.3%. However, deterioration in the housing market is still clearly seen in another month of disappointing new home sales which dropped sharply by -8.5% to 526k annualized rate in March.

On the other hand, Euro has been pressured across the board since the release of disappointing Germany Ifo index. The business climate index disappointed the markets by dropping to 102.4 in Apr, which is even lower than Dec's low of 103.0. Indeed, that was the lowest reading since Jan 2006. UK retail sales dropped -0.4% mom in Mar with yoy rate at 4.6%. Feb's growth was revised higher, in particular with the yoy rate revised up from 5.5% to 6.3%. While pound is up in EUR/GBP cross, cable heads further south on broad based dollar strength.

Technically speaking, EUR/USD's break of 1.5710 support today is another confirmation that diagonal triangle that started at 1.5342 has already completed at 1.6019, so is the rally from 1.4309. More downside is now expected to be seen to 1.5342 support. GBP/USD is still tricky as the fall from 2.0029 is now much more deeper than originally expected and outlook is turned mixed at this moment.

More Technical Analysis Reports Here

USD/CHF Mid-Day Outlook

Daily Pivots: (S1) 1.0059; (P) 1.0114; (R1) 1.0207; More

USD/CHF climbs further to as high as 1.0328 today and at this point, intraday bias remains on the upside as long as 1.0235 minor support holds. The corrective rebound from 0.9634 is expected to extend further to test 1.0352 resistance zone before completion. On the downside, below 1.0235 will turn intraday bias neutral first. But still, break of 0.9995 support is needed to indicate rise from 0.9634 has completed. Otherwise, another rise is still mildly in favor even after deep pull back.

In the bigger picture, with 1.0352 resistance zone, with 50% retracement of 1.1105 to 0.9634 at 1.0370 and 38.2% retracement of 1.1596 to 0.9634 at 1.0383, remains intact, fall from 1.1596 should still be in progress. Break of 0.9634 low will confirm that such decline has resumed. Also, medium term decline from 1.3283 (05 high) is tentatively treated as resumption of the long term down trend from 1.8305 (00 high) which could extend further to 61.8% projection of 1.8305 to 1.1128 from 1.3283 at 0.8946, which is close to 0.9000 psychological support.

On the upside, however, firm break of 1.0352 resistance zone will indicate that that fall from 1.1596 has completed and a medium bottom is probably in place. Stronger rebound should than be seen to resistance zone of 1.0890 to 1.1596.

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Published on  Thu, Apr 24 2008, 14:34 GMT