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

• Send
• Print
• Add To
• Rss

fadeff4d-fcf2-4cf6-b72e-b4fed1f1f491

0

0

Daily Forex Technical Report − Dollar Soft Post FOMC Minutes

Thu, May 22 2008, 06:51 GMT
by ActionForex.com Team

ActionForex.com

Action Insight Daily Report

Dollar Soft Post FOMC Minutes

Dollar remains pressured across the board even though FOMC minutes confirmed market's expectation that Fed will pause the policy easing cycle in Jun. Market's focus was in deed on the forecasts from Fed which saw growth significantly revised lower while inflation was significantly revised higher. Adding that factor that oil just made another record high above $135 a barrel, markets are generally quite pessimistic on the US economy as well as the greenback.

FOMC minutes released overnight basically confirmed market's expectation that Fed will pause in Jun and hold interests rates unchanged at 2.00% for a considerable amount of time. The committee members said that the decision to cut rates by 25bps in the Apr 29-30 meeting was a "close call". Interest rates is now at a relatively low level by historical standard and should be enough to promote moderate growth in the economy. The two dissenter Fisher and Plosser said that the committee should " put additional emphasis on its price stability goal at this point, and they believed that another reduction in the funds rate at this meeting could prove costly over the longer run."

Forecasts for real GDP in 2008 was lowered from 1.3% - 2.0% to 0.3% to 1.2%, reflecting deeper housing correction, slower consumer spending, weaker labor market, and more intense fallout from financial market turmoil. On the inflation front, core PCE forecasts was revised upward fro 2.0-2.2% to 2.2-2.4% yoy in 2008, with headline PCE up from 2.1-2.4% to 3.1-3.4%.

Kiwi extends recent rebound after Finance Minister Michael Cullen announced a tax cut plan that reduces the odds that RBNZ will need to cut rates to support growth in the economy. Japanese all industry index rose 0.5% in Mar, beating expectation of -0.2%. Trade surplus shrank to 485b on much stronger than expected import growth.

Looking ahead, focus in the European will be on UK retail sales which is expected have another monthly fall of -0.4% in Apr. Sterling has been the relatively weaker one among the majors as seen in the weakness in crosses. Focus in US session will be on Canadian retail sales, which is expected to grow 0.3% mom in Mar, with ex-auto sales growth 0.5%. Rebound in the retail sales will likely provide further boost to the Canadian dollar, which is already supported by yesterday's strong CPI release and strength in oil prices. From US, jobless claims is expected to stay above 370k level. Q1 house price index is expected to drop -1.3% qoq.

More Technical Analysis Reports Here

GBP/USD Daily Outlook

Daily Pivots: (S1) 1.9723; (P) 1.9727; (R1) 1.9729; More

After brief retreat, cable's rally from 1.9363 resumes and edges slightly above mentioned falling trend line resistance (now at 1.9699) to 1.9735 so far. At this point, intraday bias remains on the upside as long as 1.9612 minor support holds. As discussed before, sustained trading above the trend line resistance will add more credence to the case the whole corrective decline from 2.0391 has completed at 1.9363 already. Stronger rally should then be seen to 2.0029 resistance first. On the downside, below 1.9612 will turn intraday outlook neutral and bring pull back. But downside should be contained well above 1.9454 support and bring another rise.

In the bigger picture, down trend from 2.1161 have made a low at 1.9337. Rebound from there should have completed with three waves up to 2.0391, which is corrective in nature. Subsequent fall from there also displays a corrective structure too. In other words, wide range consolidation from 1.9337 is expected to extend further. The structure and length of this consolidation could either be in form of a three wave sideway consolidation or in form of five wave triangle pattern. In either case, the fall from 2.0391 is expected to be contained by 1.9337 support and be followed by another strong rally.

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, May 22 2008, 06:53 GMT

Archive

• Daily Forex Technical Report - Yen Retreats Following Surprised RBA 100bps Cut
  Published On Tue, Oct 7 2008, 06:36 GMT
• Mid-Day Forex Technical Report - Dollar and Yen Surge as Global Stocks Tumble
  Published On Mon, Oct 6 2008, 13:59 GMT
• Daily Forex Technical Report - Euro Gaps Lower on Deepening Credit Crisis, Dollar and Yen up on Risk Aversion
  Published On Mon, Oct 6 2008, 07:19 GMT
• Weekly Review and Outlook - Bailout Plan Approved but Investors Unconvinced, Risk Aversion Dominates
  Published On Sat, Oct 4 2008, 18:59 GMT
• Mid-Day Forex Technical Report - Dollar Extends Rally Despite Poor NFP
  Published On Fri, Oct 3 2008, 13:37 GMT

[ View All ]

• More Reports from this Author
• More Reports from this Contributor

Action Forex Company Limited  | Room 1707, 17/F Treasure Centre 42 Hung To Road Kwun Tong, Kowloon
http://www.actionforex.com | contact@actionforex.com