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Tuesday December 12, 2006 - 09:15:15 GMT
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ACM - www.ac-markets.com
Dollar fell after Greenspan comment ahead of today FOMC.
By Jean-Claude Braha - ACM Senior Trader
Yesterdays News and Events:
Mr. Alan Greenspan, former Federal Reserve Chairman, warned investors to expect â€śa few years of dollar weaknessâ€ť. This comment addressed at a business conference in Tel Aviv accelerate yesterday Dollarâ€™s slide against the Euro. He added that he believed it was â€śimprudent to hold everything in one currencyâ€ť joining the trend of Central Banks reserve diversification into other currencies. This has been view as a clear sell signal from dealers. Investors closed shorts positions built on Friday when new US jobs data was strong enough to start a small Dollar rally. The FOMC is widely expected to leave the benchmark US overnight Federal Funds Rate unchanged at 5.25%; and given numerous cautious comments from Fed officials on inflation, there is a risk that the port-meeting statement will echo this concerns once more. Also yesterday, ECB policymakers signaled more interest rate increase to come in the Euro-zone, saying rates in the region are still low and that they are watching incoming data to gauge the need for further tightening rates. EurUsd was up 0.36% at 1.3250 after having hit 1.3130 low. UsdYen ended yesterday up 0.4% at 116.78 pulling back from intraday high 117.25. EurJpy was up 0.8% at 154.74, high level not reached since 7th Oct. 1998.
Todays Key Issues:
Are due at 9:30 GMT; UK November CPI expected 0.2% unchanged (MoM) and 2.6% vs 2.4% (YoY), UK November RPI (Retail Prices Index) expected 0.3% vs 0.1% (MoM) and 3.8% vs 3.7% (YoY). Euro-zone December ZEW Survey due at 10:00 GMT is expected -8.5 vs -11. Are due at 13:30 GMT; CAD October International Merchandise Trade expected CAD 3.8B vs 4B, US October Trade Balance expected -$63.3B vs -$64.3B. US FOMC Rate Decision due at 19:15 GMT expected unchanged at 5.25%. Are due at 23:50 GMT; JPN October Current Account Total expected 1372.4B vs 2024.9B, Adjusted Current Account Total 1643.8B vs 1408.7B, and October Trade Balance 710B vs 1107B.
The Risk Today:
EurUsd has confirmed support at 1.3130 yesterday and resistance at 1.3370. These two levels are now seen as the key directional triggers. Momentum conditions remain a concern and any further weakness would expose 1.3085. On the upside, a break above 1.3370 is now required to confirm a resumption of the bull trend, and cancel any developing bearish threat. Note that overall. UsdChf recent advance is now exposing resistance at 1.2120 following the recent sharp recovery from 1.1880 last week low. The 1.2120 resistance needs to hold to prevent a strong near term recovery in the USD. While 1.2120 holds, the underlying trend remains bearish; a break below 1.1880 would confirm a resumption of this trend. GbpUsd recent weakness in Cable is exposing 1.9435 support (38.2% retracement of the 1.8835-1.9849 rise). Only a break of this support would damage the lately bull trend. The outlook remains bullish overall and 1.9730 marks the initial resistance. UsdJpy remains firmer having cleared some important resistance levels, the most recent being 116.60. While the very short-term conditions might be overbought for the USD, Friday's recovery does suggest that further gains are likely in the days ahead. The next key resistance is the 117.40 trendline.
Resistance and Support:
|EURUSD ||GBPUSD ||USDJPY ||USDCHF |
|1.3480 K ||1.9900 S ||119.90 T ||1.2346 K |
|1.3400 P ||1.9850 P ||118.60 S ||1.2120 S |
|1.3370 S ||1.9730 M ||117.40 T ||1.2060 M |
|1.3246 ||1.9611 ||116.91 ||1.2017 |
|1.3130 P ||1.9550 S ||116.60 M ||1.1920 P |
|1.3085 S ||1.9435 K ||114.00 S ||1.1880 T |
|1.2941 M ||1.9340 S ||113.45 T ||1.1760 S |
|S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot |
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Mon 16 Oct /ul>
01:30 CN- CPI
21:45 NZ- CPI
Tue 17 Oct
08:30 GB- CPI
09:00 DE- ZEW Survey
09:00 EZ- Final HICP
Wed 18 Oct
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
14:00 US- Existing Homes Sales
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.
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