Wednesday January 18, 2006 - 05:57:00 GMT
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Tricom Futures and Foreign Exchange -
Forex: While we continue to trade sideways, look to fade the action
The US dollar was trading mixed against the major currency pairs today, but is expected to hold support after strong US economic data releases overnight.
The US dollar was bought overnight following solid industrial production and capacity utilization data for December, increasing doubts the Federal Reserve may halt its tightening cycle after the expected Jan 31 hike. US industrial production for December rose 0.6 pct from a revised 0.8 pct increase in November, previously estimated at 0.7 pct, but was above market expectations of a 0.5 pct rise. The rise was the third consecutive monthly increase in US industrial production, with annual growth now at 2.8 pct which is in line with the average since 1990.
The market's proving hard to trade, the action's quite choppy, and there's little in the way of trend at the moment. Looking at EUR/USD for example, we've seen sideways movement since the start of January, trading a range of 1.2040-1.2180. I guess until we see any movement outside of this range, we should look to buy at the bottom of this range, and sell at the top.
Consumer price index data in the US tonight will be the immediate focus. The market consensus is for a 0.2 pct increase in CPI following a 0.6 pct fall in November which would lift annual CPI to 3.7 pct from 3.5 pct previously.
Today's Economic Release:
US: Beige Book
Today's Top Trades
- Sell EUR/USD around 1.2130-40, with stops above 1.2180
For more ideas send me an email, [email protected]
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