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Friday December 15, 2006 - 10:48:33 GMT
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ACM - www.ac-markets.com
Dollar raised again on lower expectation for a US rate cut soon.
By Jean-Claude Braha - ACM Senior Trader
Yesterdays News and Events:
The Swiss National Bank raised short-term interest rates by 25bp at a mid-point of 2% on Thursday for the fifth consecutive quarter and said it would continue to tighten policy despite ultra-low inflation. The bank said it expected inflation in 2007 to fall to 0.4% compared with its previous forecast of 1.1%. In addition, it expects inflation to rise slightly to 0.9% in 2008. The Dollar rose at first yesterday after a good reading of US jobless claims at giving investors new incentive to buy the currency. The report showed that the number of people filing initial unemployment claims last week fell to 304k more sharply than economists had expected around 320k supporting the view of a robust labour market. However, while housing and manufacturing data have been weak, reports on employment, service sector activity and consumer spending paint a healthier picture of the US economy and financial futures traders have already priced the expectation of no rate cut in the first quarter. Last Tuesday, the Fed left rates at 5.25% and said nothing in its post-meeting to suggest a rate cut any time soon. In addition, expectation for a rate hike in Japan has been recently lowered after comments that the Bank of Japan will keep policy unchanged on its 19th December meeting. EurUsd, having hit a session low at 1.3141, was down -0.5% at 1.3155. UsdChf ended up 0.65% at 1.2137 after spotting high at 1.2161. UsdJpy rose at 117.89 up 0.28% and EurJpy hit new record hit at 155.59 before hedging lower at 154.88 down -0.2%.
Todays Key Issues:
Are due at 10:00 GMT; Eurozone November CPI expected 0% vs 0.1% (MoM) and 1.8% unchanged (YoY), Eurozone Core CPI expected 1.6% vs 1.5%, Eurozone October Industrial Production expected 0.4% vs -1% (MoM) and 4.4% vs 3.3% (YoY). Are due at 13:30 GMT; US November CPI expected 0.2% vs -0.5% (MoM) and 2.1% vs 1.3% (YoY), CPI ex-food & energy expected 0.2% vs 0.1% (MoM) and 2.7% unchanged (YoY), US December Empire Manufacturing expected 18.3 vs 26.7. US November Industrial Production due at 14:15 GMT is expected 0.1% vs 0.2%.
The Risk Today:
EurUsd would certainly hold at 1.3130 support. A break of this level would be needed to threaten the immediate positive tone for a setback towards 1.3030 (38.2% retracement of the 1.2843 to 1.3368 advance). While 1.3130 remains intact, the focus is still on 1.3293, the high from. UsdChf had overcome the formerly resistant 1.2120 level is now heading for next resistance 1.2185. A move through this would be necessary to end the broader bear channel that has kept this pair under pressure since mid-Oct 1.2771 high. Renewed weakness below the 1.1920 would reinstate a bearish tone for a fresh assault on the 1.1880 trend. GbpUsd remains constructive above 1.9435 (38.2% retracement of the 1.8835 to 1.9849 advance). As long as this continues to hold, it could favor a move through 1.9730 and will re-focus attention on the 1.9850 pivot point high early December. UsdJpy has scope for further corrective gains towards 118.60 (76.4% retracement of the 119.90 to 114.43 decline).
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 ||1.2221 S |
|1.3370 S ||1.9730 M ||117.90 M ||1.2185 S |
|1.3170 ||1.9625 ||117.89 ||1.2137 |
|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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Amazing Trader EVENT RISK Calendar:
Wed 18 Oct /ul>
12:30 US- Housing Starts & Permits
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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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