Tue, Sep 30 2008, 13:59 GMT
by ActionForex.com Team
Action Insight Mid-Day Report
Euro Dives Following Dexia $9.2b Bailout
Euro dives sharply in early US session as markets get more bad news from European financial sector. France and Belgium are believed to be leading a state-backed rescue of the world's largest lender to local government, Dexia SA. Belgian Prim Minister Leterme said that Dexia will receive $9.2b to shore up its capital after its shares had a record decline yesterday. This, in addition to the still fresh news of failure of Belgian Fortis, UK B&B and German Hypo Real Estate, is raising concern that problems in Europe might not be much better than that in the US. EUR/USD dived to below 1.42 level and the development is so far consistent with the technical view that corrective rebound from 1.3881 has completed at 1.4867 already. Further downside is expected to be seen to retest this low at least.
US President Bush warned in early US morning that the US economy is depending on decisive actions from the government or the economic damage could be "painful and lasting". Presidency candidate McCain and Obama urged Congress to redouble efforts to save the financial system bailout. Stocks rebounded after yesterday's historical sell off following surprised rejection of the $700b bailout plan by House. The Japanese yen gives back some against but remains generally firm.
The economic calendar is very busy today but markets paid little attention to the load of data released. US S&P Case-Shiller dropped more than expected by -16.3% yoy in Jul. Chicago PMI dropped less than expected to 56.7 in Sep. Conference Board Consumer Confidence improved more than expected to 59.8 in Sep. Canadian GDP was surprisingly strong, rising 0.7% mom in Jul. UK Q2 GDP final was revised higher from 1.4% yoy to 1.5% yoy. Gfk consumer sentiment improved from -36 to -32 in Sep. Eurozone HICP flash moderated to 3.6% yoy as expected. Germany unemployment rate was unchanged at 7.6% in Sep. Australia retail sales posted stronger than expected gain of 0.3% mom in Aug. Japanese manufacturing PMI dropped further to 44.3 in Sep. Household spending dropped much fore than expected by -4% yoy in Aug. Unemployment rate rose more than expected to 4.2% in Aug. Industrial production fell -3.5% mom, -6.9% yoy in Aug. Housing started rose 53.6% in Aug.
More Forex Technical Analysis Reports Here.
EUR/USD Mid-Day Outlook
Daily Pivots: (S1) 1.4300; (P) 1.4435; (R1) 1.4567; More
EUR/USD's fall from 1.4867 resumes by taking out 1.4302 low and reaches as low as 1.4150 so far. Break of 1.4512 support confirms that rebound from 1.3881 has completed at 1.4867, below 1.4908 resistance as expected. At this point, intraday bias remains on the downside as long as 1.4429 minor resistance holds. Further decline is expected to be seen to retest 1.3881 low and 1.3851 key medium term support. On the upside, above 1.4429 will turn intraday outlook neutral first but another fall is still expected after recovery.
In the bigger picture, rebound from 1.3881 is treated as correction to whole decline from 1.6038 only and should have met upside target of 1.4629 and 1.4908 resistance zone already. Recent development argues that such correction should have completed. And the whole fall from 1.6038 is probably set to resume. As discussed before, the double top reversal pattern (1.6019, 1.6038) confirms that medium term up trend from 1.1639 has completed at 1.6038. Sustained break of 50% retracement of 1.1639 to 1.6038 at 1.3839 will encourage further decline to next target of 61.8% retracement of 1.1639 to 1.6038 at 1.3319 first.On the upside, sustained break of double top neckline resistance at 1.5284 is needed to confirm decline from 1.6038 has completely finished. Otherwise, medium term outlook will remain bearish even though the rebound from 1.3881 might be stronger than we expect.
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 Tue, Sep 30 2008, 14:06 GMT
Action Forex Company Limited
| Room 1707, 17/F Treasure Centre 42 Hung To Road Kwun Tong, Kowloon
http://www.actionforex.com | contact@actionforex.com
Weekly Market Commentary - Libor and Official Interest rates are at their narrowest by Mizuho Corporate Bank
Fri, Jul 3 2009, 14:33 GMT
London Gold Market Report by BullionVault.com
Fri, Jul 3 2009, 13:24 GMT
European Market Update - Spain June Services PMI: 41.2 v 39.1 prior by TradeTheNews.com
Fri, Jul 3 2009, 12:32 GMT
Friday Notes - W-shaped recovery increasingly probable by UniCredit Group
Fri, Jul 3 2009, 12:08 GMT
Asia Market Update - Most Asian equities indices track the US session declines as nonfarm payrolls data disappoints by TradeTheNews.com
Fri, Jul 3 2009, 11:55 GMT
European Markets mixed, EUR rises and GBP lower
FXstreet.com | Fri, Jul 3 2009, 14:38 GMT
Forex: EUR/USD rebounds at 1.3980, back above 1.4000
FXstreet.com | Fri, Jul 3 2009, 11:46 GMT
CURRENCIES: Dollar Edges Higher In Thin Trade Ahead Of Holiday
Dow Jones | Fri, Jul 3 2009, 11:46 GMT
CORRECT: DATA SNAP:Euro-Zone Jun Output Decline Slows Further
Dow Jones | Fri, Jul 3 2009, 09:39 GMT
UPDATE: Euro-Zone Output Decline Slows Further In June
Dow Jones | Fri, Jul 3 2009, 09:30 GMT
GET CASH BACK FOR YOUR TRADES! Learn more about the Pip Rebate Program