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Thursday March 8, 2007 - 11:34:33 GMT
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ACM - www.ac-markets.com
The Dollar fell after report showed US economy lost strength.
By Jean-Claude Braha - ACM Senior Trader
News and Events:
The Dollar fell on Wednesday after a Federal Reserve report showed evidence of slowing US economy ahead of the key February payrolls report due on Friday. The ADP employer survey suggests that US private non-farm payrolls increased by a small 57k in February, with a 100,000 increase in services being partially offset by a 29,000 decline in manufacturing and a 14,000 decline in other goods-producing industries (mainly construction). The forecast for change in Non-Farm payrolls due Friday is between 100k vs 200k against 111k in January. The Beige Book report on US economy showed 4 of 12 districts reported slowing activity in the later part of February. This report pushed down the Dollar and renewed expectations that the Federal Reserve may have to cut interest rates more than once this year. Even before the Beige Book, dealers had already started positioning themselves for lower-than-expected payrolls growth in February by setting up bets against the Dollar.
EurUsd rose 0.31% to 1.3177 after hitting 1.3186 intraday high. EurUsd is trading in 1.3071-1.3260 since mid-February. UsdChf fell -0.58% to 1.2164. UsdJpy fell -0.95% to 115.69 with most of de decline during US session. EurJpy was only down -0.63% at 152.45 after posting its biggest weekly loss in 2 Â½ years last week.
New Zealand's Central Bank raised interest rates as expected to 7.5%, the highest in the industrialized world, and comments it may lift them further due to persistent inflationary concerns. NzdUsd fell -1.04% to 0.6777 following the announcement , as traders interpreted the Central Bank statement as less hawkish than expected and believes that another quarter rise as unlikely. The Reserve Bank of New Zealand said that the 0.25% increase from 7.25%, a level maintained since December 2005, was necessary to cool a robust housing market and domestic demand.
Today's Key Issues:
GB 10:30 GMT: February BRC Shop Price Index previously -0.6% (MoM) and 1.8% (YoY)
Euro 12:00 GMT: January German Industrial Production 0.3% vs -0.5% (MoM) and 6.1% vs 5.2% (YoY)
GB 12:00 GMT: Bank of England announces Rates decision
Euro 12:45 GMT: European Central Bank announces Rates decision
CAD 13:30 GMT: February Housing Starts 215k vs 249.3k and January New Housing Price Index 0.3% vs 5% (MoM)
Euro 13:30 GMT: Trichet speaks at European Central Bank news conference
US 13:30 GMT: Initial Jobless Claims (March 3rd)
JPN 23:50 GMT: January Machine Orders 2.1% vs -0.7% (MoM) and 0.9% vs -3.8% (YoY)
The Risk Today:
EurUsd recovered from Monday's 1.3073 low. Further advance above the nearby 1.3189 minor resistance (61.8% of 1.3261-1.3072) would confirm a return of the underlying bull trend from the 1.2666 mid-January low, opening the door toward the 1.3250 (76.4% retracement of the 1.3368-1.2865 decline) and 1.3260 late-February trend high. On the downside, a break of 1.3074 would confirm the short term negative trend and expose further downside toward 1.3024. There market would target 1.2990 (61.8% retracement of the 1.2865 to 1.3191 advance).
GbpUsd remains heavy after the recent break of the bottom of the large trading range at the 1.9402 Mid-February low. Focus remains on the 1.9146 Pivot support from last November. Initial resistances are 1.9360, therefore resistance at the 1.9403 should cap the upside for the near term.
UsdJpy recent bounce from 115.15 appears corrective. UsdJpy is still under pressure following the sharp losses over last week. Only a move above 117.44 resistance to 118 pivot area would put the bear on hold in the short term. Until then, note that there is little support below 115.15 until the 114.38 support.
UsdChf recent recovery from Monday's low 1.2109 lost strenght in front of resistance from Friday's 1.2263 high. Only a move above there would offset the broader downward pressure from the 1.2575 late January high. Until then, note that there is little support below the current 1.2108 trend low until 1.2030 trendline support and 1.1980 December low.
Resistance and Support:
|EURUSD ||GBPUSD ||USDJPY ||USDCHF |
|1.3364 T ||1.9750 S ||119.90 K ||1.2575 S |
|1.3290 T ||1.9403 S ||118.00 P ||1.2477 S |
|1.3250 S ||1.9360 M ||117.44 S ||1.2363 M |
|1.3170 ||1.9325 ||116.60 ||1.2200 |
|1.3074 S ||1.9220 M ||114.44 S ||1.2109 S |
|1.2990 S ||1.9188 S ||114.07 M ||1.2030 T |
|1.2900 T ||1.9146 P ||111.96 S ||1.1980 S |
|S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot |
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Amazing Trader EVENT RISK Calendar:
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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