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Wednesday December 6, 2006 - 09:44:28 GMT
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ACM - www.ac-markets.com
Dollar rebounds after jumps in services reports and ISM data.
By Jean-Claude Braha - ACM Senior Trader
Yesterdays News and Events:
Euro-zone Services PMI point to solid 4Q; the rise in Novemberâ€™s euro-zone services PMI suggests that there is a good chance that services growth will pick-up in the 4Q. The headline business index rose to 57.6 from 56.5 better than consensus. The Dollar advanced against the Euro and the Jpy on Tuesday after after US report showing massive downward revisions to the recent growth in labor costs which should ease the Fed's inflation concerns. The jump in the services sector followed recent indications of a contraction in US manufacturing and helped ease expectations the Federal Reserve may have to cut the benchmark lending rate in coming months. The rise in November services sector activity surprised the market, which expected a much weaker reading after previous soft US data. The US ISM index rose to 58.9 in November better than 56 expected. This number stopped any option for further Dollar sell-off before the non-farm payrolls data on Friday and will certainly restrain volume in the Forex market. Softer Japanese data ended expectations of a BOJ rate rise this year, helping to send the Yen to record low against the Euro on Monday. EurUsd closed 1.3317 near previous day closing level, after having slipped to 1.3288 low and 1.3364 20-months high. GbpUsd fell 0.3% at 1.9733 pulling back from Fridayâ€™s high 1.9848. UsdJpy fell nearly 0.5% to 114.96 having hit 114.44 (4-month) low. EurJpy ended down 0.8% at 153.07 after BOJ comments on interest rates and lower expectation for a BOJ rate rise this year. Japanese rate at 0.25% is keeping the Yen under pressure and facilitates carry-trades.
Todays Key Issues:
Are due at 9:30 GMT; GB October Industrial Production expected 0.1% vs 0.2% (MoM) and 1.6% vs 0.5% (YoY), Manufacturing Production expected 0.2% vs 0% (MoM) and 3% vs 2% (YoY). Euro October Germany Factory Orders due at 11:00 GMT is expected 0.9% vs -2.5% (MoM) and 9.1% vs 5.8% (YoY). CAD November Ivey Purchasing Managers Index due at 15:00 GMT is expected 60 vs 59.5. NZD Reserve Bank of New Zealand Rate Decision is due at 20:00 GMT expected unchanged at 7.25%
The Risk Today:
EurUsd maintains a positive outlook with further gains expected beyond Tuesday's 1.3364 high to yield an extension to 1.3400. Beyond there, the target is 1.3480 key level and the major 1.3665 all time traded high from late-December 2004. Near-term support cuts in at 1.3220 (61.8% retracement of the 1.3132-1.3368 advance). UsdChf down trend is likely to extend with the focus on 1.1760 (76.4% retracement of the major rally from 1.1286 to 1.3287) and then 1.1740 lower support. It maintains a bearish tone below last Wednesday's 1.2118 high. The closest resistance holds 1.2009 Fridayâ€™s high. GbpUsd must retest last Friday's 1.9848 trend high to open the door for further advance toward 2.0100 (top from Sep 1992). Near support cuts in at last Friday's 1.9635 low, but it would take drop below the former resistance 1.9550 level to threaten the broader up-trend. UsdJpy trend remains clearly bearish at this stage and continues to target 114.45 support (50% retracement of the 108.98 to 119.90 decline). Where a break down will create further downside toward 114 and lower.
Resistance and Support:
|EURUSD ||GBPUSD ||USDJPY ||USDCHF |
|1.3665 T ||2.0100 T ||119.90 T ||1.2346 K |
|1.3480 K ||1.9900 S ||118.60 S ||1.2120 S |
|1.3400 P ||1.9825 S ||116.60 S ||1.2009 M |
|1.3317 ||1.9707 ||114.70 ||1.1924 |
|1.3220 S ||1.9635 M ||114.98 M ||1.1920 P |
|1.3130 P ||1.9550 S ||114.45 S ||1.1760 S |
|1.2941 M ||1.9435 K ||114.00 S ||1.1740 S |
|S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot |
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Amazing Trader EVENT RISK Calendar:
Wed 18 Oct /ul>
12:30 US- Housing Starts & Permits
14:30 US- EIA Crude
Thu 19 Oct
01:30 AU- Employment
08:30 GB- Retail Sales
12:30 US- Weekly Jobless
Fri 20 Oct
12:30 CA- Retail Sales & CPI
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John M. Bland, MBA
- POTENTIAL PRICE RISK: HIGH Tue-- 08:30 GMT GB- CPI top tier confirmation of Inflation.
- POTENTIAL PRICE RISK: Medium Tue-- 09:00 GMT DE- ZEW Survey second most important German monthly Survey.
- POTENTIAL PRICE RISK: Medium Tue-- 09:00 GMT EZ- final HICP revision to flash report. Revisions are usually minor.
- POTENTIAL PRICE RISK: Medium Tue-- 13:15 GMT US- Industrial Production. Top output indicator.
- POTENTIAL PRICE RISK: Medium Wed-- 12:30 GMT US- Housing Starts and Permits revision to flash report. Useful housing leading indicator.
- POTENTIAL PRICE RISK: Medium Wed-- 14:30 GMT US- EIA Crude. Top WTI inventory measure.
- POTENTIAL PRICE RISK: Medium Thu-- 01:30 GMT AU- Employment. Top economic indicator.
- POTENTIAL PRICE RISK: Medium Thu-- 02:00 GMT CN- GDP. Top economic indicator.
- POTENTIAL PRICE RISK: HIGH Thu-- 08:30 GMT GB- Retail Sales. Top consumption indicator.
- POTENTIAL PRICE RISK: Medium Thu-- 12:30 GMT US- Weekly Jobless. Employment Indicator.
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