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Friday January 19, 2007 - 08:36:48 GMT
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ACM - www.ac-markets.com
Dollar rose on strong US economic data and rate decision by the BoJ.
By Jean-Claude Braha - ACM Senior Trader
Yesterdays News and Events:
US economic data were supportive to the Dollar and it rose to nearly a four-year peak against the Yen as the Bank of Japan kept interest rates steady. The bullish Dollar market sentiment was boosted by a broadly in-line Consumer Price Index at 0.2%, a rise in US Housing Starts at 1642k vs 1588k and Initial Jobless Claims at 290k vs 299k. Thursday data confirmed expectations the Federal Reserve wonâ€™t have to cut US rate any time soon. In fact, market is anticipation rates will not change in the first quarter of 2007. The market focus remained on the Yen, which has been under intense pressure after the BoJ kept rates on hold at 0.25%. That pushed UsdJpy as high as 121.59 before closing at 121.26 +0.52%, the highest since March 2003. Eurjpy rose to a two-week high at 157.38 before trading back down 157.13 +0.68%. Also Gbpusd sharply rose to an 8 Â˝ years high at 237.75 +0.87%. After the BoJ meeting, Governor Toshihiko Fukui said the Bank may be prudent to await more data, given that latest indicators have been mixed. Forex market reacted strongly to that comment which appeared to be under political pressure. On European currencies; EurUsd initially fell on the robust US data and recovered late in the day to 1.2960 +0.16%, meanwhile GbpUsd was up 0.2% at 1.9740.
Todays Key Issues:
ECBâ€™s Stark speaks in Budapest at 9:00 GMT. GB December Retail Sales due at 9:30 GMT is expected 0.5% vs 0.3% (MoM) and 3.2% unchanged (YoY). US January University of Michigan Consumer Sentiment due at 14:45 GMT is expected 92.5% vs 91.7%.
The Risk Today:
EurUsd is continuing its recovery from the 1.2866 last week trend low but remains heavy below 1.3050 resistance. Only a move above there would reverse the January bear trend heading for 1.2866 and maybe 1.2820 support (61.8 retracement of the 1.2483-1.3368 rise). UsdChf consolidates near 1.2534 latest high and is now holding above supports 1.2430 and 1.2400, keeping the underlying bull trend intact. A more likely move above 1.2540 would reinstate the bull trend for a push above the 1.2585. GbpUsd tried to break up actual strong resistance at 1.9753. A move above this level and yesterday 1.9780 high would expose 1.9850. Initial support is at 1.9570. UsdJpy strongly jumps to new high and tested actual key resistance at 121.40, Dec 2005 high. A firm break of this level would confirm a significant bullish development. Initial support is 120.50 yesterday low.
Resistance and Support:
|EURUSD ||GBPUSD ||USDJPY ||USDCHF |
|1.3130 P ||2.0000 T ||122.15 S ||1.2770 T |
|1.3050 S ||1.9850 P ||121.88 S ||1.2585 M |
|1.2980 K ||1.9753 S ||121.40 T ||1.2540 S |
|1.2960 ||1.9745 ||121.25 ||1.2475 |
|1.2900 T ||1.9570 S ||119.90 T ||1.2430 K |
|1.2820 S ||1.9428 M ||118.00 P ||1.2400 M |
|1.2771 S ||1.9315 S ||117.44 S ||1.2220 S |
|S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot |
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Amazing Trader EVENT RISK Calendar:
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
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