| Market Overview | Written by ActionForex.com | Feb 20 09 07:56 GMT | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dollar's pull back was rather brief and the greenback rebounds strongly today on risk aversion, back pressing 88 level. Asia stocks are broadly lower, with Nikkei down 141 pts, after DOW closed at 6 year low of 7465. Markets are clearly dissatisfied that Germany Chancellor Merkel declined to comment on whether Europe's the country will step in to bail out any of the 16 euro members. Gold remains firm above 970 level while most major currencies are lower against the greenback and yen. Though, the Japanese yen continues to lag behind dollar in the current risk averse environment. Technically speaking, with 86.35 support intact, there is no change in short term bullish outlook in the dollar index. However, some more consolidation could still be seen below 88.24 before resuming recent rally to 88.46 high and then 90 psychological resistance. Elsewhere, note that recoveries in EUR/USD and AUD/USD are both limited by 4 hours 55 EMA and both pairs weakens sharply today. Further weakness is in favor to retest this week's low.
The European economic calendar is rather busy today. A series of flash PMI data will be released in the Eurozone, both services and manufacturing PMIs in February are expected to show improvement, to 42.4 and 35 respectively, from 42.2 and 34.4 last month as the manufacturing should have benefited from the end of production cut. Separately for Germany, services PMI in February probably slid to 45 from 45.2 in January while manufacturing PMI rose to 32.5 from 32. Despite stabilization, the levels continued to show that the region remained in deep recession. In the UK, retails sales in January should have fallen -0.1% mom after rising 1.6% in the previous month. On annual basis, the gauge should have gained 2.2%, eased from a 4% rise in December driven by shopping season. In the US, CPI in January is anticipated to show a rise of 0.3% mom after contracting for 5 consecutive months given higher gasoline and fuel oil prices and largely unchanged food prices. Core CPI, excluding energy and food, is expected to have risen 0.1% mom after a small drop in December as contributed by increase 'owner's equivalent rent' which contributed over 30% of core CPI. On annual basis, overall CPI probably fell 0.2% after gaining 0.1% in December and reaching a peak of 5.5% in July 2008. Core CPI should have eased to 1.5% yoy in January from 1.8% in December. Real earnings in January should also have eased to +0.2% from +0.6% a month ago. Canada's CPI likely contracted 0.1% mom in January after a 0.1% fall a month ago. On yearly basis, the gauge should have gained another 1.2%. Core CPI is forecast to come in at -0.1% mom and +2.2% yoy in January from -0.4% mom and +4% yoy in December. Earlier in Asia, Japan's All Industry Index plunged -2.7%, inline with market expectation but worse than the revised -2.4% drop in November. RBA Governor Stevens said in his semi-annual testimony that the present expectations are not for rates to reach zero and there will probably be a point where easing won't be as effective. Though, there is room for more rate cut to stimulate the economy if needed. AUD/USD Daily OutlookDaily Pivots: (S1) 0.6355; (P) 0.6439; (R1) 0.6518; More AUD/USD's recovery was limited at 0.6521 after hitting 4 hours 55 EMA and weakens sharply again. Intraday outlook is turned neutral again. On the downside, below 0.6330 will suggest that fall from 0.6489 is resuming for 0.6248 first. Break will confirm there decline from 0.7267 is also resuming for retesting 0.6008 low. On the upside, however, above 0.6521 will revive the case fall from 0.6849 is merely a correction to rebound from 0.6248, which should then be resuming for another rise above 0.6849 before completion. In the bigger picture, main question is still on whether consolidation from 0.6008 has completed at 0.7267 already. Below 0.6248 will reaffirm the case that consolidation from 0.6008 has completed at 0.7267 already. Decisive break of 0.6008 will confirm this case. On resumption, down trend from 0.9849 is expected to development another five wave medium term decline, targeting 0.4773 (01 low). Nevertheless, before that, another rise cannot be ruled out, towards 0.7267 or even further to 38.2% retracement of 0.9849 to 0.6008 at 0.7475 before completing the consolidation from 0.6008.
Forex News Digest
Economic Indicators Update
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Friday, February 20, 2009
Daily Report: Dollar Rebounds after Brief Pullback
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment