Forex Tips & Daily Analysis

Economical News

USD

The current account deficit is the broadest measure of the nation's economic balance sheet with the rest of the world. It encompasses both trade and capital flows. It essentially measures the nation's debt with the rest of the world, which must be financed by loans from abroad or asset sales to foreigners.

Yesterday The US current account deficit was released extremely low in the fourth quarter to its lowest quarterly level in more than a year, while the annual gap hit a record for the fifth consecutive year.

Moreover, import prices rose 0.2%, which was below the market expectation of 0.8% growth and the core number fell 0.1%, this drop in import prices is a result of the softening in light sweet crude oil prices which has reduced import prices and narrowed the deficit.

Also the Dow Jones Industrial Average traded below the 12,000 level, causing some panic in the USD trading session.

Today's figure will play into tomorrow's TIC data release in the morning. Although producer prices will be considered in tandem, the TIC will likely supports today's findings, or counter them, turning the market dollar bearish. Comparatively, producer prices will help to ensure that the Federal Reserve will keep at the current stance of no-decision in the immediate future.

EUR

Yesterday, in the early morning, Euro Zone industrial production fell by 0.2 percent on the month over month measure. The decline subsequently brought the annualized figure lower, suggesting that production may be softer in the near term due to thinner global demand. However, one cannot preclude the possibility of a near term pullback in productivity as the report vaulted a whopping 1 percent last month.

Trichet has turned his attention to labor costs saying that the ECB will be monitoring these more closely. In making this comment he highlighted the concentration on money supply data as an indicator of expectations in the economy. This may well become the watch word when assessing future ECB rate hike decisions although one more is more-or-less in the cards.

Looking ahead, Core CPI is scheduled for release with markets expecting a figure of 1.8% slightly higher than the previous 1.7%. The decline will not sit easily in Europe and is a little surprising considering the mostly positive numbers seen in the first two months although these have been dotted with the occasional surprises. There is still some possibility of the January numbers being affected by the German blip over the VAT hike and overall these will probably prove to be a temporary abnormality.

JPY

Yesterday, the JPY strengthened against most of the majors and rose to 115.75 against the USD. However, in the NY trading session, US investment bank Lehman Brothers Holding said that the home mortgage loan delinquency will not affect their earning and the risk is well contained. The carry trade unwinding action stopped and JPY bearishness was rekindled. USD/JPY rose sharply to 117.50 however ,another strengthening is expected .

Today ,due to a lack of information from Japan, we are expecting range trading that will test the support and resistance levels and only a breach of one of them implies the establishment of new forces which may cause another significant movement.

Technical Analysis

EUR/USD

Volatility is relatively low and strong resistance at 1.3245 and support at 1.3114 forms a tight range. Yesterday this pair moved to the 1.3225 level and is stalling at current price level of 1.3210 - 1.3222. On the daily chart we can see a slight bearish reversal forming on the slow stochastic which crosses just above 80 and turning downwards.

GBP/USD

Are bears waking up after a bullish trend ending ? Well, it seems like the pair is building a significant down move towards support at 1.9200. However, today it seems as though stochastic are showing reason for the USD to gain some ground as the RSI is in neutral area.

USD/JPY

Daily Studies are pretty neutral , when next resistance is at 118.47 and it seems that this barrier won't be breached today . On the downside, there is a trend line expected to test near current levels, at 116.00.

Today range trading is expected between those levels.

USD/CHF

The USDCHF range trades between 1.2100 and 1.2260 in the last days and is in an overall short term down trend. There are significant signs of reversal present and intraday's are neutral. We favor the upside and it may be a good entry point .

Wild Card

EURGBP

4H charts slow stochastic are implying an upcoming bearish trend when crossroads above 80 is observed , however daily charts showing us mixed data when slow stochastic is at 50 and RSI at 43. Forex traders: today we are expecting range trading between the 78.50 - 82.00.

Market Trend

	EUR/USD	GBP/USD	USD/JPY	USD/CHF	AUD/USD	EUR/GBP
Daily Trend
Weekly Trend
Resistance	1.3288	1.9508	119.27	1.2326	0.7954	0.6888
	1.3257	1.9461	118.40	1.2255	0.7916	0.6869
	1.3236	1.9388	117.78	1.2220	0.7895	0.6850
Support	1.3178	1.9270	116.70	1.2156	0.7790	0.6802
	1.3150	1.9248	116.05	1.2140	0.7756	0.6760
	1.3104	1.9210	115.18	1.2121	0.7699	0.6726

Indicators

Date	Time GMT	$€£¥	Event	Period	Prev.	Forecast	Imp
15/03/2007	10:00	EUR	Euro-Zone Consumer Price Index (MoM)	Feb	-0.5%	0.3%
15/03/2007	10:00	EUR	Euro-Zone Consumer Price Index (YoY)	Feb	1.8%	1.8%
15/03/2007	10:00	EUR	Euro-Zone Consumer Price Index - Core (YoY)	Feb	1.7%	1.8%
15/03/2007	12:30	USD	Producer Price Index Ex Food & Energy (YoY)	Feb	0.2%	N/A
15/03/2007	12:30	USD	Producer Price Index Ex Food & Energy (YoY)	Feb	1.8%	N/A
15/03/2007	12:30	USD	Empire Manufacturing	MAR	24.4	N/A
15/03/2007	13:00	USD	Net Long-Term Treasury International Capital Flows	JAN	$15.6B	$45.0B
15/03/2007	16:00	USD	Philadelphia Fed Index	MAR	0.6	4.0