CPI in UK and US - on tap today .
Economical News
USD
Yesterday, Retail Sales came stronger than expected, however the strength contained underlying weakness as oil prices drove upwards. Meanwhile the Empire State Manufacturing Survey reported a far smaller improvement in the month of April, suggesting that the manufacturing sector is still struggling to recover. The Treasury International Capital flow data (TIC) reported softer demand for long term US securities ($58.1 billion compared with $98.8 billion in January), we also had the NAHB housing market index, which dropped to 33 from 36, reviving concerns about the housing market.
The current prices continue to highlight the difference between the relative performance of the US versus Europe and Asia and this can only mean further USD weakness. Whether this will come directly or whether there will be an earlier pullback is just a little unclear. We are approaching key peaks for the EUR and GBP at 1.3665 and 2.0045-00 respectively
Looking ahead, the markets expect CPI, housing starts, building permits and industrial production figures today while the CPI and RPI numbers could trigger and push the USD to lower ground.
EUR
The EUR remains strong against the USD after reaching a two-year high at 1.3576. in reaction to hawkish comments made by the ECB that growth is stable and inflation is well controlled which continued to fuel demand for EUR over USD. The market's demand is mainly focused on countries that are looking to raise interest rates and the EUR answers their will.
Tomorrow we are expecting the German ZEW survey of analyst sentiment. The consensus forecast is calling for an increase in analyst sentiment thanks to recent upside surprises in growth and a rally in the stock market. However since analysts are always forward looking, we could actually see a downward surprise since the strong EUR and outlook for higher interest rates could crimp growth in the months to come.
JPY
Yesterday the Industrial Production came out at 0.7 compared with the -0.2 in the previous month .
One of the key factors for the Japanese economy to solidify the base for recovery is consumer confidence and this took a further knock in March with the index edging lower by 1.4 to 47.2 and below forecasts of 47.8.
One reason for the drop has been suggested to be the fact that the survey was conducted in person rather than over the phone. That aside, the Japanese are naturally conservative by nature and generating a reading reflecting strong confidence is always going to be a tough thing.That aside, with the market more Yen bearish the result will add to the desire to buy Dollars on dips - with the 119.00-10 area the first test of key support.
Technical Analysis
EUR/USD
On the 4 hour chart we can see the B wave (Elliot Wave) is establishing and we are expecting the upcoming bearish C wave which probably will test the support level located at 1.3520.
GBP/USD
A bullish channel 1.9723 - 1.9938 can be observed on the hourlies .
A Doji on the 2 hour chart signals an upcoming reversal bullish trend that may convert to a breach of the next resistance level that is located at 1.9925.
In case of breaking this level GBP will probably continue to strengthen and will test the 1.9971 R2.
USD/JPY
On the 1 hour chart we can see a tiny bearish flag forming, this pattern signals that the bearish trend will test the 119.46 (flag length 19 pips).
On the 4 hour chart the RSI and Slow Stochastic are in a neutral territory however a bullish head and shoulders is observed and it may boost this pair to break the 119.85 resistance level in the upcoming days.
USD/CHF
On the 4 hour chart we can see a clearly bearish trend establishing and a breach of the 1.2124 level will send us to wait for the reversal to occur that to be derived from the bullish flag that can be observed on this 4 hour chart.
Wild Card
AUD/JPY
This forex pair is moving in a tight range lately 1.9919 - 1.9988 however a descending triangle is forming which may imply on an upcoming reversal trend that may be an attractive entry point that traders often look for.
Market Trend
| EUR/USD | GBP/USD | USD/JPY | USD/CHF | AUD/USD | EUR/GBP | |
|---|---|---|---|---|---|---|
| Daily Trend |  |
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| Weekly Trend | |
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| Resistance | 1.3644 | 2.0060 | 121.20 | 1.2152 | 0.8330 | 0.6830 |
| 1.3600 | 2.0000 | 120.53 | 1.2130 | 0.8345 | 0.6810 | |
| 1.3575 | 1.9939 | 119.65 | 1.2105 | 0.8350 | 0.6800 | |
| Support | 1.3518 | 1.9828 | 119.11 | 1.2125 | 0.8310 | 0.6800 |
| 1.3459 | 1.9768 | 118.79 | 1.2113 | 0.8300 | 0.6782 | |
| 1.3408 | 1.9604 | 118.00 | 1.2100 | 0.8292 | 0.6770 |
Indicators
| Date | Time GMT | $€£¥ | Event | Period | Prev. | Forecast | Imp |
|---|---|---|---|---|---|---|---|
| 04/17/07 | 9:30 | GBP | CPI | Y/Y | 2.8% | 2.8% |  |
| 04/17/07 | 9:30 | GBP | Core CPI | Y/Y | 1.7% | 1.8% |  |
| 04/17/07 | 9:30 | GBP | RPI | Y/Y | 4.6% | 4.6% |  |
| 04/17/07 | 10:00 | EUR | German ZEW Economic Sentiment | 5.1 | 7.5 | | |
| 04/17/07 | 13:30 | USD | CPI | m/m | 0.4% | 0.6% | |
| 04/17/07 | 13:30 | USD | Core CPI | m/m | 0.2% | 0.2% | |
| 04/17/07 | 13:30 | USD | Building Permits | 1.53M | 1.51M | | |
| 04/17/07 | 14:15 | USD | Industrial Production | 1.0% | 0.2% | | |
| 04/17/07 | 14:15 | USD | Capacity Utilization Rate | 82% | 82% | | |
| 04/17/07 | 16:00 | EUR | ECB President Trichet Speaks | | |||
| 04/17/07 | 17:30 | USD | New York Fed President Geithner Speaks | |