SYDNEY: Australia looks set to become the first country to phase out incandescent light bulbs in favor of more energy-efficient compact fluorescent bulbs, as part of its drive to reduce emissions of greenhouse gases. The Australian federal environment minister, Malcolm Turnbull, said Tuesday that he would work with the states to get rid of incandescent bulbs by 2009 or 2010. “The most effective and immediate way we can reduce greenhouse-gas emissions is by using energy more efficiently,”...
Daily Report: All Eyes on ECB & BoE
May 16, 2008 on 3:57 am | In Currency |
Action Insight | Written by ActionForex.com | Oct 04 07 07:02 GMT |
Forex Daily Technical Report All Eyes on ECB & BoE
Dollar extends recovery on the back of positive expectation for Friday’s NFP after yesterday’s data. Before that, market’s focus is turned to ECB and BoE rate decision today first. BoE will announce rate decision first today at 11:00 GMT. Markets widely expect BoE to keep rates unchanged at 5.75%. Expectation for a rate hike vanished in the past two months after the credit turmoil. Also, inflation continued to moderate with CPI staying below BoE’s target of 2% for the second consecutive months in Aug. The speculation of a near term rate cut faded in the past few weeks as financial markets rebounded. Also, strong nationwide house price growth of 9.0% yoy in Sep also threatens that inflation could re-emerge in case of a premature rate cut. Recent PMIs, though retreated, still suggest robust growth in the coming months. So economists expect that BoE would be on hold for the rest of the year first, wait for next round of data, and probably consider a rate cut in first half of 08. Nevertheless, the vote could be tight and there is still risk of a surprise today. BoE normally don’t release a statement if they keep rates on hold but it did issue one last month and the bank may again do so again this time to explain its actions.
ECB is also widely expected to keep rates unchanged at 4.00%, to be announced at 11:45 GMT today. Focus will again be on Trichet’s press conference at 12:30 GMT following the rate announcement. Recent data showed slowing momentum in the economy but after all, the PMIs remain in expansionary territory. Germany Ifo also remains high. Price pressure re-emerges with HICP rising back to 2.1% in Aug, above top of ECB’s comfort zone of 2%. M3 money supply growth, though moderated slightly remains at an extremely high level of 11.6% yoy. After all, Trichet is expected to maintain the hawkish tone and ECB’s tightening bias and will likely continue to describe monetary policy as “on the accommodative side” and “acting in a firm and timely manner” will be warranted. However, note that recent strength in the Euro is based on strong expectation of further rate hike from ECB and hawkish tone from Trichet is needed to maintain the strength. Should Trichet softens such tone today, further correction in the Euro could be triggered.
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BoJ Deputy Governor Iwata said that the Japanese economy could be hurt by recent financial-market turmoil and a slowdown in the U.S. or Europe. He said that “if the stock slump and the yen’s gain continue, that would have a negative effect on Japan’s economic growth”. Also, growth could also be cooled if “U.S. economic slowdown deepens and European economies suffer a deceleration.” Regarding monetary policy, Iwata emphasized that It’s important that we adjust interest rates while closely examining risks to the economy.” EUR/USD
Daily Pivots: (S1) 1.4116; (P) 1.4177; (R1) 1.4214; «www.actionforex.com»
EUR/USD’s correction from 1.4281 continues today. Break of inner rising channel support indicates rise from 1.3550 has completed after meeting 200% projection of 1.3360 to 1.3719 from 1.3550 at 1.4268 and deeper correction could be seen towards 1.3828/3926 support zone. But downside is expected to be by 1.3828 cluster support (61.8% retracement of 1.3550 to 1.4281 at 1.3829, 50% retracement of 1.3360 to 1.4281 at 1.3821) and bring another rise. On the upside, above 1.4197 will turn intraday bias back to the upside but firm break of 1.4281 high is needed to confirm recent rally has resumed. Otherwise, another fall could still be seen before completing the current consolidation.
In the bigger picture, medium term up trend from 1.1639 is still in force. Also, such rise is treated as resumption of the long term up trend from 0.8223 (00 low) to 1.3668 (04 high) and is expected to extend to 61.8% projection of 0.8223 to 1.3668 from 1.1639 at 1.5004 which will overlap with 1.5 psychological resistance. However, EUR/USD will need to overcome next important cluster resistance zone at 1.4523 (261.8% projection of 1.3360 to 1.3719 from 1.3550 at 1.4490 and 200% projection of 1.3262 to 1.3851 from 1.3360 at 1.4538) first.
On the downside, sustained break of 1.3828 cluster support will indicate that rise from 1.3360 has likely completed and bring deeper decline. But still, the medium term up trend from 1.1639 remains in force as long as EUR/USD is supported by the medium term rising channel (support at 1.3500).
GBP/USD
Daily Pivots: (S1) 2.0373; (P) 2.0410; (R1) 2.0452; «www.actionforex.com»
Cable’s retreat from 1.0492 continues and is now drawing support from 4 hours 55 EMA (now at 2.0283). Further decline could still be seen as long as 2.0441 resistance holds. However, rise from 1.9879 should still be in force as long as pull back is contained above 2.0195 support. Above 2.0441 again will indicate rally from 1.9879 has resumed for next upside target of 100% projection of 1.9652 to 2.0365 from 1.9879 at 2.0592 and probably extends further to retest 2.0652 high too
In the bigger picture, a medium term top is in place at 2.0652 with bearish divergence condition and daily and weekly MACD. The three wave structure of the fall from 2.0652 suggest that such correction is either completed at 1.9652, or is developing into sideway consolidation. Hence, 61.8% projection of 1.3680 (01 low) to 1.9554 (05 high) from 1.7047 (05 low) at 2.0677 remains a key resistance. Decisive break of this resistance is needed to confirm rally from 1.7047 has resumed for 100% projection of 1.3680 to 1.9554 from 1.7047 at 2.2901. Otherwise, another fall could still be seen before completing the consolidation.
On the downside, below 2.0195 will warn that the rise from 1.9652 has completed and break of 1.9879 low will confirm this case. In other words, the last leg of consolidation that started at 2.0652 has begun in such case and a retest of 1.9652 low could be seen.
USD/CHF
Daily Pivots: (S1) 1.1689; (P) 1.1733; (R1) 1.1791; «www.actionforex.com».
USD/CHF’s rebound from 1.1622 continues and touches mentioned 1.1800/1922 resistance zone as expected. At this point, further rebound could still be seen as long as 1.1712 support holds. However, upside is expected to be limited by 1.1922 cluster resistance (50% retracement of 1.2214 to 1.1622 at 1.1918) and bring another fall. Below 1.1712 will turn intraday bias back to the downside. But still, break of 1.1622 low is needed to confirm recent decline has resumed. Otherwise, another rise could still be seen before completing the consolidation.
In the bigger picture, sustained trading below the lower trend line support (1.1919, 1.1878, 1.1816) confirmed medium term bearishness. Current fall from 1.2214 is treated as resumption of decline from 1.2467 and is expected to head towards mentioned 1.1590 projection target first. Also, this will be tentatively treated as resumption of medium term down trend that started at 1.3283 which could extend further to retest 1.1288 (04 low).
On the upside, even though stronger rebound could be seen in case of a break of 1.1922 resistance, break of 1.2214 resistance is needed to confirm a medium term bottom is formed. Otherwise, further decline is still in favor, just after lengthier consolidation.
USD/JPY
Daily Pivots: (S1) 115.35; (P) 115.67; (R1) 116.07; «www.actionforex.com».
USD/JPY retreats mildly after reaching as high as 116.76 but after all, further rally is still in favor as long as 115.54 support holds. The whole corrective rise from 111.59 is regarded as resumed and such rise is expected to extend towards 100% projection of 111.59 to 117.11 from 112.58 at 118.10 before completion. On the downside, however, below 115.54 will turn intraday bias back to the downside and indicate USD/JPY is possibly still bounded in choppy sideway consolidation. And still, below 112.58 support is needed to be the first alert that consolidation has completed and encourage a retest of 111.59 low.
In the bigger picture, as discussed before, daily MACD’s stay above signal line suggests that the whole decline from 124.12 could have already completed at 111.59. Hence, further break of this low is needed to confirm that sharp fall from 124.13 has resumed. Otherwise, USD/JPY could still develop into lengthier consolidation.
Prior break of long term rising trend line (101.65, 108.99) indicates the the whole up trend from 101.65 could also have completed at 124.13 already, with bearish divergence condition in weekly MACD and RSI.. Break of 111.59 will indicate fall from 124.13 has resumed for support zone between 108.99 and 61.8% retracement of 101.65 to 124.13 at 110.23.
EUR/JPY
Daily Pivots: (S1) 163.34; (P) 164.11; (R1) 164.57; «www.actionforex.com»
EUR/JPY’s upside momentum continues to diminish, as seen in bearish divergence condition in 4 hours MACD, as it tested mentioned 165.39 cluster resistance (100% projection of 149.27 to 159.67 from 155.15 at 165.55) again. A short term top could be around the corner, but a break of 163.51 support is needed to confirm first. Otherwise, further rally could still be seen and sustained trading above 165.39 cluster resistance will encourage further rise to retest 168.93 high. On the downside, below 163.51 support will be another signal that a short term top is in place. Break of short term rising trend line (now at 161.95) will confirm such case and bring deeper decline to 115.15 support.
In the bigger picture, firstly the break of trend line support (137.16, 150.75) confirmed that rally from 130.60 has already completed at 168.93, with bearish divergence condition in weekly RSI. Hence, an important medium term top is in place at 168.93 already. However, secondly, since EUR/JPY is still supported within the rising channel shown in the monthly chart. the whole up trend from 88.9 could still be in force and price actions from 168.93 is probably just developing into consolidation to this long term up trend. Also, the three wave structure of the fall from 168.93 to 149.27 suggests that it’s probably developing into sideway consolidation instead of deeper correction.
So, further rise to retest 168.93 high cannot be ruled out. But firm break of 168.93 is needed to confirm long term up trend has resumed, otherwise, another fall could still be seen before completing the consolidation that started from 168.93. On the downside, a firm break of 149.27 low will have the long term channel support taken out too. This will add much favor to the case that up trend from 88.9 has indeed completed and bring much deeper decline.
Forex News Digest
«c.moreover.com»
Thu, 4 Oct 2007 01:58:00 GMT from Forbes.com
«c.moreover.com»
Thu, 4 Oct 2007 01:58:00 GMT from The Australian
«c.moreover.com»
Thu, 4 Oct 2007 01:19:00 GMT from Reuters UK
«c.moreover.com»
Thu, 4 Oct 2007 00:34:00 GMT from International Herald Tribune
«c.moreover.com»
Thu, 4 Oct 2007 00:17:00 GMT from Japan Times
«c.moreover.com»
Thu, 4 Oct 2007 00:05:00 GMT from Marketing News International
«c.moreover.com»
Wed, 3 Oct 2007 23:24:00 GMT from Reuters Canada
«www.actionforex.com» Economic Indicators Update
GMT Ccy Events Actual Consensus Previous Revised
11:00 GBP BOE rate decision Oct 5.75% 5.75%
11:45 EUR ECB rate decision Oct 4.00% 4.00%
12:30 EUR ECB Press conference
12:30 USD Jobless claims 310K 298 K
12:30 CAD Building permits Apr 1.00% -11.30%
14:00 CAD Ivey PMI Sep 61 58.5
14:00 USD Factory orders Aug -1.50% 3.70%
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