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

• Send
• Print
• Add To
• Rss

8f11cbc0-0557-453b-959c-43d78aa5af4d

0

0

Mid−Day Forex Technical Report − Yen and Oil Remain Dominant

Thu, Aug 21 2008, 12:21 GMT
by ActionForex.com Team

ActionForex.com

Action Insight Mid-Day Report

Yen and Oil Remain Dominant

Rebound in oil and risk aversion continues to be the main theme in the market into US session. Crude oil extends the rebound to above $118 level. The Japanese yen is sharply higher across the board. As a result, dollar yen dives through 108.36 support. While the greenback is weak, reaction in other dollar majors are relatively mild so far as Euro, Aussie and Sterling are all pressured in respectively yen crosses. Indeed, EUR/JPY and GBP/JPY both resume recent decline which AUD/JPY breaks through this week's low.

Canadian dollar continues to recover on the back of dollars weakness and rebound in oil prices. Canadian CPI rose 0.3% mom, 3.4% yoy in Jul, hitting a 5 year high, inline with expectation. Core CPI rose 0.1% mom, 1.5% yoy, slightly below consensus of 0.2% mom, 1.6% yoy. US jobless claimes improved to 432k. Leading indicators and Philly Fed index will be released later in US session.

Little reaction was paid to European data today. Manufacturing PMI and Services PMI both stayed below 50 in Aug, at 47.5 and 48.2 respectively. The bigger surprise today was indeed the sharp deterioration in Germany manufacturing to 49.9 and services PMI to 50.6. UK retail sales unexpectedly rebound by 0.8% mom in Jul with yoy rate dropped slightly to 2.1% yoy. Swiss ZEW index dropped from -76.90 to -79.6 in Aug. Swiss combined PPI jumped 0.5% mom, 4.9% yoy in Jul, above expectation. Japanese Jul trade balance released overnight showed 91.1b surplus, narrow than expected on strong rise of 18.2% in imports. Export rose 8.1%.

More Technical Analysis Reports Here

USD/CAD Mid-Day Outlook

Daily Pivots: (S1) 1.0594; (P) 1.0598; (R1) 1.0601; More.

USD/CAD's correction from 1.0727 is still in progress and dives to as low as 1.0520. At this point, intraday bias remains on the downside for 38.2% retracement of 0.9974 to 1.0727 at 1.0439. But downside should be contained above 1.0273 support and bring rally resumption. On the upside, above 1.0653 minor resistance will suggest that retreat from 1.0727 has completed and recent rise from 0.9974 has possibly resumed for mentioned 1.0791/98 cluster resistance.

In the bigger picture, medium term rise from 0.9056 is still in progress towards mentioned cluster resistance at 1.0791/98 (61.8% retracement of 1.1874 to 0.9056 at 1.0798, 61.8% projection of 0.9056 to 1.0378 from 0.9974 at 1.0791) first. Sustained break of 1.0791/98 will argue that rise from 0.9056 is probably more than just a correction in the long term down trend and will set the stage to test key long term resistance at 1.1874. On the downside, a break below 0.9974 support is needed to confirm that rise from 0.9056 has completed. Otherwise, further rally is still expected even in case of a deep pull back.

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, Aug 21 2008, 12:34 GMT