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Wednesday December 20, 2006 - 08:50:14 GMT
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ACM - www.ac-markets.com
Euro hits record high against the Yen before Mr. Trichet testimony.
By Jean-Claude Braha - ACM Senior Trader
Yesterdays News and Events:
The Euro posted a record high against the Yen and climbed against the Dollar after an upbeat survey of German IFO Business Sentiment which renewed expectations for higher Euro-zone interest rates in early 2007. The strong rise in the IFO index in December shows not only that German GDP growth remains strong in the near term, but also that expectations for the economy are still rising. The headline index rose form 106.8 in November to 108.7 in December; its highest level since the survey began in 1991. In addition, the rise in Expectations Index to 102.5 from 100.2 shows that business are becoming more confident about prospects for the economy in the next six months and suggests that the underlying momentum in the economy remains healthy. Investors will look for any clues on the rate outlook from ECB President Jean-Claude Trichet, who will testify at the European Parliament at 8:30 GMT. Jpy was under pressure, hitting eight-year lows against Sterling, as BoJ Governor Toshihiko Fukui tempered expectations for a rate increase in January in a cautious comment on consumer spending and prices. US wholesales report gave a brief boost to the Dollar but went again under pressure in sell-off across the board. UsdJpy was nearly unchanged at 118.02 and close from last week one-month high 118.33. EurJpy rose 0.75% to 155.86 taking this year advance to nearly 13.7%. GbpJpy rose 1.15% to 232.62, the strongest since August 1998. EurUsd rose 0.78% to 1.3205, with a high at 1.3217, rebounding from Monday one-month low 1.3053.
Todays Key Issues:
GB Bank of England Minutes for 6-7 December meeting is due at 9:30 GMT. CAD October Wholesale Sales due at 13:30 GMT is expected 0% vs -1.6% (MoM). NZD 3Q Gross Domestic Product due at 21:45 GMT, previous was 0.5%. Are due at 23:50 GMT; JPN November merchandise Trade Balance total expected Yen 601.8B vs 610.6B, Adjusted Merchandise Trade Balance Yen 658.3B vs 648.6B, October All Industry Activity Index expected 1.6% -0.9% (MoM).
The Risk Today:
EurUsd reversed last week pressure and broke up 1.3130 pivot resistance heading now to 1.3370 strong resistance. A break down of 1.3030 level is now unlikely to come and leave far away 1.2980 key support. On the upside, 1.3190 has been cleared quickly. This is confirming the medium-term view bull trend is still active. Next resistance is holding 1.3290 door before 1.3370 and therefore 1.3400 pivot. UsdChf short term bull trend remains with focus on 1.2326 (50% retracement of 1.2771-1.1879 decline). Yesterday closing and minor support 1.2118 could support intraday decline. GbpUsd did well rebound from Monday low 1.9436 and is heading to 1.9850 pivot resistance. It still needs a confirmation above 1.9730 to mark an end to the recent decline. 1.9340 remains strong support (50% retracement of the 1.8835-1.9849 advance). UsdJpy remains bullish but must now clear the strong resistance at 118.60 (76.4% retracement of the 119.90 to 114.45 decline). A break of this resistance would be seen as an important bullish development. Initial support is holding the door closed at 117.44.
Resistance and Support:
|EURUSD ||GBPUSD ||USDJPY ||USDCHF |
|1.3400 P ||1.9900 S ||119.90 T ||1.2346 K |
|1.3370 S ||1.9850 P ||118.60 S ||1.2326 S |
|1.3390 S ||1.9730 M ||117.90 M ||1.2220 S |
|1.3240 ||1.9720 ||118.07 ||1.2120 |
|1.3130 P ||1.9480 M ||117.44 M ||1.2118 M |
|1.3030 S ||1.9435 M ||116.60 M ||1.1920 P |
|1.2980 K ||1.9340 S ||114.00 S ||1.1880 T |
|S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot |
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Amazing Trader EVENT RISK Calendar:
Mon 18 Dec
10:00 EZ- final HICP
Tue 19 Dec
09:00 DE- IFO Survey
13:30 US- Housing Starts/Permits
13:30 US- Current Account
Wed 20 Dec
15:00 US- Existing Homes Sales
15:30 US- EIA Crude
Thu 21 Dec
03:00 JP- BOJ Decision
13:30 CA- CPI & Retail Sales
13:30 US Weely Jobless
13:30 US- GDP
Fri 22 Dec
09:30 US- GB- GDP
13:30 US- core PCE Deflator & Presonal Income
15:00 US- New Homes Sales
15:00 US- final University of Michigan
17:00 US- early Closes
Mon 25 Dec
00:00 Christmas Holidays
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- POTENTIAL PRICE RISK: Medium Mon--10:00 GMT-- EZ- final November HICP. flash data are rarely changed.
- POTENTIAL PRICE RISK: HIGH- Medium Tue --09:00 GMT-- DE- IFO Survey. Key report but usually not a market-mover
- POTENTIAL PRICE RISK: HIGH- Medium- Tue --13:30 GMT-- US- Housing Starts and Permits. Leading indicators of activity
- POTENTIAL PRICE RISK: HIGH-Medium- Wed --15:00-- US- Existing Homes Sales. Top Housing statistic
- POTENTIAL PRICE RISK: Medium- Wed --15:30-- US- EIA Crude
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