Market Overview | Written by ActionForex.com | Jul 29 08 07:04 GMT |

Daily Report: Dollar Soft but Still in Range Dollar remains generally soft against Euro and Sterling today but the rebound in EUR/USD and GBP/USD are both lacking decisive momentum yet. Overall outlook in the fx markets is still mixed. Traders are still in hesitation to commit to buying or selling the greenback. On the other hand, the Japanese yen paid little attention to mixed data released overnight, nor did it react to weakness in US and global stock markets. Japanese unemployment rate unexpected climbed from 4.0% to 4.1% in Jun. Household spending dropped -1.8% yoy in Jun, better than expectation of -2.8%. Retail sales was flat mom in Jun, climbs 0.3% yoy. The IMF Global Financial Stability report called for attention to the fragile state of the global financial markets. Foreclosures in US housing markets is causing widespread deterioration in the credit markets. Pressure in the banking sector is still severe and banks' ability to raise capital to cover losses is being questioned. Risks are also seen to be rising in emerging markets. Looking ahead, markets's main focus will be on US house price report, consumer confidence and Germany prelim CPI. In particular, markets are expectation CPI to retreat from 3.3% to 3.2% yoy in Jul. Markets will be sensitive to any downside surprise in this piece of data as it will put pressure on the ECB for removing policy tightening to stimulate the slowing Eurozone economy. Conference board consumer confidence in the US is expected to continue the down trend and dip further from 50.4 to 50.0. GBP/USD Daily Outlook Daily Pivots: (S1) 1.9863; (P) 1.9913; (R1) 1.9986; More Choppy sideway trading continues in cable. The pair strengthens mildly today but after all it's still struggling to have another decisive movements. Outlook remains neutral for the moment. On the downside, below 1.9816 will suggest that correction from 2.0158 is still in progress. Nevertheless, downside is still expected to be contained well above 1.9647 support and bring rally resumption. On the upside, above 2.0030 resistance will indicate that such correction from 2.0158 has completed and rise from 1.9408 should have resumed for 161.8% projection of 1.9363 to 1.9852 from 1.9408 at 2.0199. In the bigger picture, down trend from 2.1161 have made a low at 1.9337. The corrective nature of the rise from 1.9337 to 2.0391 and fall from 2.0391 to 1.9363 suggests that price actions from 1.9337 are developing into sideway consolidation to whole fall from 2.1161. The structure and length of this consolidation could either be in form of a three wave sideway consolidation or in form of five wave triangle pattern. In either case, another rise is still expected to test 2.0391 resistance. Nevertheless upside of such consolidation should still be limited by 61.8% retracement of 2.1161 to 1.9337 at 2.0464. On the downside, though, below 1.9647 support will be the first signal that the final rise in the consolidation pattern has completed. Sustained break of 1.9337/63 support zone will indicate that decline from 2.1161 has resumed.

Economic Indicators Update

GMT	Ccy	Events	Actual	Consensus	Previous	Revised
23:30	JPY	Japan Household spending Y/Y Jun	-1.80%	-2.80%	-3.20%
23:30	JPY	Japan Unemployment rate Jun	4.10%	4.00%	4.00%
23:50	JPY	Japan Retail sales M/M Jun	0.00%	-0.60%	-0.20%	-0.10%
23:50	JPY	Japan Retail sales Y/Y Jun	0.30%	-0.20%	0.20%	0.30%
10:00	GBP	U.K. CBI distribution trade Jul		-15	-9
13:00	USD	U.S. S&P/CaseShiller Composite-20 Y/Y May		-16.00%	-15.30%
14:00	USD	U.S. Consumer confidence Jul		50	50.4
	EUR	German Prelim CPI M/M Jul		0.50%	0.30%
	EUR	German Prelim CPI Y/Y Jul		3.20%	3.30%
	EUR	German Prelim HICP M/M Jul		0.50%	0.40%
	EUR	German Prelim HICP Y/Y Jul		3.40%	3.40%