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Monday July 9, 2007 - 09:41:04 GMT
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ACM - www.ac-markets.com
Dollar fell after an unexpectedly strong non-farm payrolls report
By Jean-Claude Braha - ACM Advanced Currency Markets, Geneva, Switzerland
News and Events:
The Dollar slid against the Euro on Friday after an unexpectedly strong US Jobs report failed to change views that US interest rates will stay on hold this year while overseas rates rise. The Dollar initially rallied after the report, but quickly gave up its gains, hitting a 30-year low against the Canadian Dollar and approaching a record low against the Euro. A large US bank and a Central Bank stepped in to Buy Euro, snuffing out a fleeting dollar rally after data, traders said.
The Government‚Äôs non-farm payrolls report, the most closely watched barometer of the health of the US labor market, showed 132k jobs were created in June, beating the consensus forecast of 120k.
The Dollar rose for a fourth straight session against the Yen. But it fared worse against European currencies as the Jobs data merely confirmed a view that the Federal Reserve will keep interest rates on hold at 5.25% this year, in contrast to the Euro-zone and Britain, where further monetary tightening is in store. Analysts said ‚Äúinterest rate trends for Europe and the UK still favor the Euro and to some extent the pound compared to the Dollar, considering the Fed‚Äôs steady-rate stance‚ÄĚ.
EurUsd was up 0.24% on Friday at 1.3627, a little more than half a cent below a record high of 1.3681 hit in April. Earlier in the session the Euro had fallen as low as 1.3569. UsdJpy was up 0.31% to 123.34. The Yen continued to suffer across the board, hitting a record low against the Euro for the second straight sessions as investors continued to sell the currency for high-yielding alternatives in so-called carry trades. GbpUsd was little changed on Friday at 2.0107, around a cent below a 26-year peak hit earlier in the week. The biggest winner was the Canadian Dollar, supported by firm commodity prices and solid economic data, which has supported expectations that the Bank of Canada will raise interest rates next week. UsdCad was down -0.72% to 1.0493 after hitting low 1.0463 at mid-session.
Today's Key Issues (time in GMT):
08.30 UK June PPI Core output 0.3% vs 0.2% (MoM)
08.30 UK June PPI Core output 2.3% vs 2.3% (YoY)
08.30 UK June PPI Input Prices 0.8% vs 1.2% (MoM)
08.30 UK June PPI Input Prices 2.0% vs 1.1% (YoY)
08.30 UK June PPI Output Prices 0.3% vs 0.4% (MoM)
08.30 UK June PPI Output Prices 2.6% vs 2.5% (YoY)
08.30 UK May Trade Balance ¬£-6.6B vs ¬£-6.32B
08.30 UK May Trade Balance Non-EU ¬£-4B vs ¬£-3.9B
10.00 EUR Germany May Industrial Output 1.8% vs -2.3% (MoM)
19.00 US May Consumer Credit $6.0B vs $2.6B
The Risk Today:
EurUsd is consolidating within 1.3594 ‚Äď 1.3659 trading range after hitting 1.3659 high last week. A return below 1.3554 and 1.3522 former resistances will put the recent 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 1.3569 Friday low. Market focus may return quickly on 1.3681 high from April 27th and 1.3750 trend high.
GbpUsd hit 2.0207 high last week. A clear and strong consolidation above 2.0100 former resistance will help to recover toward 2.0200 resistance and put the 2.0305 Trend in sight. A break down of 2.0100 support will open the door down to 2.0000 pivot point and renew focus on 1.9823 for further downside toward 1.9700 and 1.9659 (50% retracement of the 1.9184 to 2.0134 advance) next support. Initial resistances are 2.0201 and 2.0207.
UsdJpy found strong support on 122.10 support and 122.24 former Trendline early last week. This double bottom line has renewed strength toward 123.55 high Friday. Further advance will focus on 124.15 late June high. A break toward 124.15 will reopen the way to 125.57 December 2002 high. Initial resistance holds 123.67.
UsdChf Range 1.2092-1.2099 marks strong short term support. It rebounded up to 1.2233 last week. The 3-months high 1.2472 marks the strong resistance. On the recent downtrend, focus shifted on 1.1996 trend low support. Former support 1.2234 marks the initial resistance.
Resistance and Support:
|EURUSD ||GBPUSD ||USDJPY ||USDCHF |
|1.3750 T ||2.0305 T ||125.57 T ||1.2573 T |
|1.3681 S ||2.0201 M ||124.15 M ||1.2472 S |
|1.3650 M ||2.0173 T ||123.67 M ||1.2325 S |
|1.3610 ||2.0105 ||123.60 ||1.2190 |
|1.3569 M ||2.0100 S ||122.22 S ||1.2092 M |
|1.3373 S ||2.0000 P ||120.78 S ||1.2083 M |
|1.3277 K ||1.9823 S ||119.55 T ||1.1996 T |
|S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot |
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