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Daily Forex Technical Report

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Mid−Day Forex Technical Report − Markets Remains Steady after Disappointing Data from US and Eurozone

Wed, Sep 24 2008, 14:32 GMT
by ActionForex.com Team

ActionForex.com

Action Insight Mid-Day Report

Markets Remains Steady after Disappointing Data from US and Eurozone

Markets remain pretty steady today as traders are still holding their bets before conclusion of the approval of Paul's rescue package. Yen was mildly lower earlier today on news that Warren Buffett will invest in Goldman Sachs but gives back earlier gains as US stock markets open lower. Dollar continues to trade in tight range against most majors. As discussed before, as we're expecting dollar to bottom out near to current level in most pairs and in the dollar index, attention will continue to be on reversal signal.

Economic data continue to take a back seat today. US existing home sales dropped more than expected by -2.2% to 4.91M annualized rate in Aug, below expectation of 4.95M. Though, it's still above Jun's low of 4.85M. Germany Ifo business climate dropped more than expected to -92.9 in Sep, below expectation of 94.1. Eurozone current account deficit was unchanged at -1.1b. UK CIB realized sales improved from -46 to -27 in Sep.

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GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.8450; (P) 1.8542; (R1) 1.8612; More

No change in GBP/USD's outlook as the pair continues to stay in tight range. An intraday top is in place with 4 hours MACD staying below signal line. Considering that rebound from 1.7445 has met upside target of 1.8512/8794 resistance zone already, rebound from 1.7445 might be near to completion. Below 1.8263 will turn intraday bias back to the downside first. Break of 1.7916 will confirm rebound from 1.7445 has finished and bring retest of this low and long term fibonacci level of 50% retracement of 1.3680 to 2.1161 at 1.7421.

In the bigger picture, while there rebound from 1.7445 might be strong, there is no change in the medium term outlook yet. Fall from 2.1161 (07 high) is expected to developing into a five wave decline before making a medium term bottom. In other words, such fall is still in progress and should extend further lower after completing the current corrective rise. Break of 1.7421/45 support zone will confirm that this fall has resumed for next target of 61.8% retracement of 1.3680 to 2.1161 at 1.6538 first. Break of 1.9337 support turned resistance is needed to invalidate this view.

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Published on  Wed, Sep 24 2008, 14:35 GMT