Data on Tap - US Empire State Business Conditions.
Economical News
USD
The greenback continues to float at record highs against the EUR and GBP, as Friday was characterized in moderate ranged price movement at the release of several news event.
The US Retail Sales was release much weaker then expected at -0.9% after a wide expectation of flat 0.0%, and the Core figure also disappointed and entered negative territory of -0.4%, with a consensus of 0.2%. The Consumer Sentiment on the other hand came in much stronger than expected at 92.4, with expectations around 86.0 and a previous release of 85.3. The mixed news releases did not cause any sharp changes in the USD behavior and it continued its movement with a light negative sentiment that culminated today as it is now traded again at all time highs of 1.3790.
Today's most important release is the Empire State Business Conditions Index which measures the general business conditions of manufacturers in New York State. The index is derived from a survey that asks respondents to rate the level of general business activity as 'decrease', 'increase', or 'no change'. The forecast for the index is 18.0, which is a sharp decrease from last month's 25.8, and might cause a further weakening for the Greenback.
The rest of the week will contain several more news events that might determine the USD's fate for the near future such as the US PPI, Core CPI, and the FOMC Minutes.
It looks as if the negative trend will continue and we might see new records this week.
EUR
With almost no major news releases at the end of last week, the EUR showed once again how strong it really is and climbed to a new all time high. It looks as if it is not susceptible to any major economical concept as it is just rallying up without actually paying too much interest to fundamental releases. Beyond the obvious problems in the US housing market and the sub-prime rate, it looks as if the peaks in EUR/USD are now deriving from pure trading momentum, and massive USD selling.
The Euro-Zone calendar is clean of major news events today, and will be relatively light in the following few days, apart for the UK economy which will provide us with the UK CPI, and Minutes Meeting. It looks as if the trend will continue, taking the EUR/USD to all time highs again.
JPY
The Asian markets were closed overnight for Marine Day, and low liquidity was seen as expected on JPY pegged currency pairs. The only major news release expected from the Japanese market today is the Tertiary Industry Activity Index which Measures the change in spending for services. The release is relatively important for the nation's currency because about half of the nation's workers are employed in the service industry. Strong spending in the services sector not only signals higher employment rates, but can also be a sign of strong consumer spending in the future.
The index is expected to come in lower than last month's 1.7% at 0.2%, which might cause the JPY to weaken a bit and initiate carry trades again, after a small correction which is probably derived from profit taking.
Technical Analysis
EUR/USD
With the pair trading at all time highs, and the daily charts stronger than ever, it looks as if the next move up is imminent. The hourlies are extremely overbought and a preferable strategy might be to wait for an unwinding before entering the long position.
GBP/USD
The 2.0350 proves once again to be a strong resistance as the pair could not break through for the forth time. But it looks as if it is only a matter of time before the strong trend will overcome the resistance level, and than the next target price for the move would be around 2.0420
USD/JPY
The pair is in the midst of a very strong downtrend that shows no signals of a slowdown. The 4 Hour chart is very bearish with a supportive slow stochastic. The daily chart shows that the next target price is 121.00.
USD/CHF
The pair shows consolidation around the key level of 1.2000 which proves to be very important. A small breach beyond that level occurred on Friday, but the pair could not continue. It looks as if the negative trend will continue if an additional breach will occur, so a preferable strategy might be to wait for the oversold hourlies levels to unwind before taking a short position.
Wild Card
NZD/USD
A very distinct upwards channel is forming in the 4 Hour chart, providing Forex traders with opportunity to join in a very strong uptrend with a target price of 0.7950, at the first move, and 0.8020 at the second wave. The hourlies support the bullish notion and provide the immediate timing for the long position.
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 | 1.3510 | 1.9945 | 124.14 | 1.2514 | 0.8534 | 0.6843 |
| 1.3476 | 1.9899 | 123.78 | 1.2495 | 0.8500 | 0.6810 | |
| 1.3400 | 1.9849 | 123.50 | 1.2423 | 0.8478 | 0.6767 | |
| Support | 1.3315 | 1.9779 | 122.99 | 1.2360 | 0.8400 | 0.6700 |
| 1.3265 | 1.9753 | 122.50 | 1.2312 | 0.8367 | 0.6682 | |
| 1.3240 | 1.9625 | 122.23 | 1.2289 | 0.8334 | 0.6653 |
Indicators
| Date | Time GMT | $€£¥ | Event | Period | Prev. | Forecast | Imp |
|---|---|---|---|---|---|---|---|
| 16/07/07 | 9:00a | EUR | CPI (f) | m/m | 0.2% | 0.1% |  |
| 16/07/07 | 12:30 | USD | Empire State Business Conditions Index | 25.8 | 18.0 |  | |
| 16/07/07 | 12:30 | CAD | Manufacturing Shipments | m/m | -0.6% | 0.4% |  |
| 16/07/07 | 11:50 | JPY | Tertiary Industry Activity Index | m/m | 1.7% | 0.2% | |