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Monday July 2, 2007 - 10:36:00 GMT
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ACM - www.ac-markets.com
Dollar fell ahead of major US holiday week
By Jean-Claude Braha - ACM Advanced Currency Markets, Geneva, Switzerland
News and Events:
The Dollar fell against the Euro and Yen on Friday, the last trading day of the quarter, with investors selling the currency ahead of a holiday-shortened week in the United States. Demand for the Dollar has been waning since Thursday, when the Federal Reserve left benchmark interest rates unchanged and said core inflation had eased a bit, boosting the view that overnight rates will remain at 5.25% for some time.Â This helped depress implied volatility on currency options, a prerequisite for putting on carry trades, where demand seems still high, pushing the Yen lower on a Friday ahead of a major holiday week in the US. US markets will close Wednesday, July 4th, to mark Independence Day. A tame reading on US consumer inflation on Friday also weighed on the Dollar, while reports on Midwest manufacturing and Consumer Sentiment had little impact.
UsdJpy was nearly unchanged on Friday after it climbed as high as 123.56. Dollar gave up the gains in tandem with a reversal in benchmark US stock indexes. EurUsd jumped above 1.3500 for the first time in three weeks, it was up 0.78% to 1.3544. The European currency was up 0.73% versus the Yen at 166.79.
The New Zealand Dollar was up 0.42% at 0.7717, having hit 0.7739, its highest since its 1984 float. The Australian Dollar hit an 18-year high of 0.8522 before paring gains to 0.8479.
The gains in the Euro, alongside those in the Australian and New Zealand currencies, compared with weakness in the Yen, highlight gaping relative interest rate differentials.
The Canadian Dollar retreated from a 30-year high against the US Dollar after data showed Canada's Gross Domestic Product grew at a slower pace than expected in April. UsdCad was up 0.5% at 1.0653 above a 30-year low of 1.0479 hit earlier in the session.
Today's Key Issues (time in GMT):
Holidays in Canada & Hong Kong
08.00 EUR June Euro zone Purchasing Managers Index 55.4 vs 55.4
08.30 UK June PMI â€“ Manufacturing 54.8 vs 54.9
08.30 UK April 3mths Index of Services 0.8% vs 0.8%
14.00 US June ISM Manufacturing 55 vs 55
14.00 US June ISM Manufacturing Prices paid 69 vs 71
The Risk Today:
EurUsd Remains positive in the trend started Mid-June at 1.3263. Market broke up 1.3500 resistance and hit today 1.3554 resistance from early June high. Focus shift on 1.3681 high from April 27th before 1.3750 trend high. A return below 1.3554 will put the actual positive trend on hold. Any further set back lower than 1.3373 could open the way toward 1.3277 key support (50% retracement from 1.2872 to 1.3681 advance). Initial support holds 1.3346 last Friday high.
GbpUsd 3-week bull trend from Friday 8 June hit 2.0095 high on Friday and 2.0129 this morning. Further advance will focus on 2.0133 18th April high and 2.0173 trend high. Initial support holds 2.0000 pivot point. On the down side, despite 1.9823 support (61.8% retracement of the 1.9733-1.9969 rise); a return under 1.9900 could deep toward 1.9700 and 1.9659 (50% retracement of the 1.9184 to 2.0134 advance) next support.
UsdJpy is trading in 124.15 June 22nd high and 122.24 June 27th low. Market found support last week on 122.24 (former Trendline). Renewed advance through 124.15 will reopen the way toward 125.57 December 2002 high. On the downside, a move under 122.24 could open the door down 120.78 double bottom from 7-8 June.
UsdChf reversed deeply from mid-June 1.2472 high. This morning, market broke through 1.2178 support (61.80% retracement of 1.1996 â€“ 1.2472 advance). The 3-months high 1.2472 marks the strong resistance. On the current downtrend, a move lower than 1.2148 early June low will open the way toward 1.1996 trend low support. In case of reversal, 1.2178 marks the initial resistance (former support) before 1.2234.
Resistance and Support:
|EURUSD ||GBPUSD ||USDJPY ||USDCHF |
|1.3750 T ||2.0173 T ||125.57 T ||1.2573 T |
|1.3681 S ||2.0133 S ||123.67 M ||1.2472 S |
|1.3610 M ||2.0100 T ||124.15 M ||1.2178 M |
|1.3570 ||2.0100 ||122.65 ||1.2170 |
|1.3546 M ||2.0000 M ||122.42 M ||1.2127 S |
|1.3373 S ||1.9823 S ||122.22 S ||1.2083 M |
|1.3277 K ||1.9700 S ||119.55 T ||1.1996 T |
|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
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08:30 GB- Retail Sales
12:30 US- Weekly Jobless
Fri 20 Oct
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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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