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Tuesday July 24, 2007 - 13:56:03 GMT
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ACM - www.ac-markets.com
Sterling rose to a 26-year high versus Dollar above 2.0600
By Jean-Claude Braha - ACM Advanced Currency Markets, Geneva, Switzerland
News and Events:
The dollar edged higher against the euro on Monday, recovering from a record low as dealers awaited economic data later in the week to see if U.S. credit market turmoil has spread to other sectors. Short-term investors closed their bets against the Dollar after the euro failed to sustain gains beyond record highs 1.3847, allowing the dollar to stabilize near 12-year lows against a basket of major currencies. Analysts said â€śweâ€™ve had an enormous rally in currencies against the Dollar and at some point in time people want to take some money off the table. But bearish sentiment on the dollar is still the strongest weâ€™ve seen in some time, and any good dips in the euro are probably going to be seen as opportunities to buy againâ€ť.
Yesterday, EurUsd traded at 1.3796 down 0.2%, after hitting an all-time high earlier in the session of 1.3847. GbpUsd rose to a 26-year high above 2.0600, before paring those gains to trade only slightly up on the day at 2.0591 up 0.15%. UsdChf climbed 0.42% percent to 1.2060. UsdJpy slipped 0.2% to 120.96, having hit a six-week low around 120.80 yen earlier in the day. The New Zealand dollar surged above 0.80 against Dollar for the first time since the currency was floated in 1985, strengthening to a high of 0.8072 and gaining 1.07% on the day. The Reserve Bank of New Zealand is expected later this week to continue raising rates, which are already among the highest in industrialized countries.
The US currency is coming off five consecutive weeks of declines, mostly on fears of widespread fallout from the US sub-prime mortgage crisis. Analysts said â€śReflecting the growth and interest rate divergence between the U.S. and the rest of the world, the dollar will likely continue to be treated as the sub-prime currencyâ€ť.
There were no major economic data releases from the United States, UK or the euro zone on Monday, leaving FX investors to focus on equity, credit and bond markets for direction. U.S. existing home sales data for June are due on Wednesday and new home sales data comes on Thursday. The market will also get its first look at second-quarter U.S. Gross Domestic Product growth on Friday.
Today's Key Issues (time in GMT):
07.30 JPN Governor Toshihiko Fukui speaks at Financial conference
08.00 EUR July Euro-zone Manufacturing PMI 55.5 vs 55.6
08.00 EUR May Euro-zone Current Account -â‚¬1.2B vs -â‚¬4.0B
08.00 EUR May Euro-zone Industrial New Orders 1.2% vs -0.4%
10.00 GB July CBI Industrial Trends survey 2 to 10 vs 8
11.30 GB Bank of Englandâ€™s Gieve speaks in London
12.30 CAD May Retail Sales 0.5% vs 0.4%
12.30 CAD May Retail Sales ex-autos 0.6% vs 0.0%
13.00 US Fedâ€™s Mishkin speaks at ECB conference, Frankfurt
14.00 US July Richmond Fed Manufacturing Index 2 to 5 vs 4
21.30 US Fedâ€™s Poole speaks on energy and the economy, Delaware
The Risk Today:
EurUsd is consolidating on top of the trend after having hit 1.3847 yesterday high. Further uptrend will open the way toward 1.3925 and 1.3986 resistances. A return below 1.3750 and 1.3659 former resistances will put the actual positive trend on hold. Initial minor support holds 1.3780. Minor resistance holds 1.3845.
GbpUsd bullish trend remains intact. Market hit yesterday a new 26-year peak 2.0604 and jumped this morning to 2.0654 high. It marks also initial support. Further upside may open the door toward 2.0706 trend top. Range formed from 2.0459 Wednesday low to Friday 2.0482 low marks support area. Market 2.0100 former trend resistance holds strong support. A break there will open the door back down to 2.0000 pivot point.
UsdJpy dropped for the third session after having failed to hold over 122.10 2nd July low. The risk is now of further setbacks; the break of 120.78 may now accelerate the slide towards 119.55 and 118.37, and possibly even 116.58. Initial minor resistance holds 120.98 low from 10th of July.
UsdChf consolidate since last week low of 1.1962. Renewed downtrend, may shift on 1.1881 early December low and 1.1739 April 2005 trend supports. Former support 1.2234 marks resistance after initial resistance 1.2080 yesterday high. Rebound from current situation may target 1.2082 resistance (23.6% retracement of 1.2470 to 1.1962 decline).
Resistance and Support:
|S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot |
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