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Daily Forex Technical Report

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Daily Forex Technical Report − Dollar Mildly Lower but Still in Range

Tue, Jul 22 2008, 07:25 GMT
by ActionForex.com Team

ActionForex.com

Action Insight Daily Report

Dollar Mildly Lower but Still in Range

Dollar weakens mildly but is still staying in tight range today as consolidation continues. Yesterday's earnings announcements from Bank of America and American Express triggered some volatility but not much direction in the greenback. The yen and carry trades will likely remain the major focus and the could very much depends on earning results of Wachovia Corp and Countrywide Financial Corp to be released today. After all, at this moment, there is no confirmation of completion of dollar's recovery yet and we could still see another leg down in EUR/USD, GBP/USD and AUD/USD. But more upside are expected in yen crosses

The economic calendar is again pretty light today. Japan all industry index released overnight climbed 0.4% in May, inline with expectation. Jun Swiss trade balance to be released is expected to show surplus shrank from 1.87b to 1.60b. US house price index is expected to drop -0.5% mom in May. Treasury Paulson and Fed Plosser's speech will also be paid attention to. The main focus in the US session will be on Canadian retail sales which is expected to show 0.6% mom growth, with ex-auto sales rising 0.8%.

More Technical Analysis Reports Here

GBP/USD Daily Outlook

Daily Pivots: (S1) 1.9945; (P) 1.9992; (R1) 2.0077; More

Cable drew some support from 4 hours 55 EMA and recovers from there. With 4 hours MACD crossed above signal line, an intraday low should be in place at 1.9906. Intraday outlook is turned neutral for the moment. On the upside, above 2.0072 2.0072 minor resistance will suggest that such correction from 2.0158 has completed and rise from 1.9408 has resumed for 161.8% projection of 1.9363 to 1.9852 from 1.9408 at 2.0199 first and probably extends further to retest 2.0391 resistance. Though, on the downside, below 1.9906 will indicates that such correction has resumed, and will target inner channel support (now at 1.9814). Nevertheless, downside is expected to be contained well above 1.9647 support and bring rally resumption.

In the bigger picture, down trend from 2.1161 have made a low at 1.9337. The corrective nature of the rise from 1.9337 to 2.0391 and fall from 2.0391 to 1.9363 suggests that price actions from 1.9337 are developing into sideway consolidation to whole fall from 2.1161. Though, 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. But in either case, another rise is still expected to test 2.0391 resistance. Nevertheless upside of such consolidation should still be limited by 61.8% retracement of 2.1161 to 1.9337 at 2.0464. On the downside, though, below 1.9647 support will be the first signal that the final rise in the consolidation pattern has completed. Sustained break of 1.9337/63 support zone will indicate that decline from 2.1161 has resumed.

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Published on  Tue, Jul 22 2008, 07:27 GMT