Fresh informations

Market awaits the U.S. jobs data
Only one piece of news out so far in Europe, this being the French Trade Deficit which widened by 400mn to EUR -3.6bn in October. Forecasts had centered on an unchanged deficit at EUR -3.2bn. October exports were unchanged on the month at EUR 34 bn, while imports rose to EUR 37.7 bn, from EUR 37.2 bn the previous month. The strength of the Euro is causing further strains.
The following economic releases are due today:
Q3Italian GDP (Final)                (QoQ)   +0.4%Italian GDP (Final)                 (YoY)   +1.9%Italian Private Consumption   (QoQ)   +0.4%
OctoberGerman Industrial Production (MoM)   - 0.5%German Industrial Production  (YoY)   +5.9%Euro-zone OECD Leading Indicator 
NovemberU.S. Change in non-farm payrolls          70KU.S. Unemployment Rate                    4.8%U.S. Change in manufacturing payrolls  - 19K
DecemberUniversity of Michigan Confidence (P)     75.8
The market waited for the two rate decisions and the U.S. mortgage relief plan but found no real catalyst for a strong move. The Dollar edged slightly lower but […]

A guide to avoid loss making trades
When is a pattern not a pattern?
The easy answer to the question is “when it’s not a pattern”. And that really is the real crux of the issue… Let me explain.
Let’s take a look at one of the most simple patterns in technical analysis, the Double Top (Bottom).

This is the hourly chart of Dollar-Swissie in a run up from the 1.0883 low which found a high at 1.1324. Following this it pulled back lower and then attempted to move back to the high once again. However, it failed just 6 points from that high and then declined quite sharply.
In this process it formed what we call a “Double Top.” This is a classic reversal pattern that through measurements will provide a minimum target in the reversal. Basically, by taking the number of points from the peaks and the intervening corrective low it […]

An excerpt from FX-Strategy’s Pro Commentary
 
 Price:                            1.1302

Resistance:
1.1308
1.1330
1.1352
1.1382

Support:
1.1279
1.1248
1.1228
1.1195

Bias:
While 1.1248-53 supports we should see gains continue above 1.1352 and to 1.1400-36

Daily Bullish:
Gains have continued though in a steady if unspectacular manner. Indeed, while the 1.1248-53 support continues to stall any losses the upside does still remain favored. We shall require a break back above 1.1308 which should maintain the upward move for 1.1330 & 1.1352. This may cause a small pullback but then follow-through to 1.1382 minimum and probably to the 1.1400-36 area which should cap for a larger pullback.

MT Bullish:
As we move higher we should become more cautious. Targets are at 1.1382 through to 1.1444 and we should be aware of the risk of reversal at any time. Above 1.1450 extends to 1.1523. (7th December)

Daily Bearish:
The 1.1260-66 support has served well and may just get tested again. We should allow for 1.1248-53. Thus any bearish stance will really require […]

Lots of news… no reaction
U.K. overnight releases:
Bank of England cuts rates by 0.25% to 5.5%
October                                       Forecast ActualIndustrial Production          (MoM) +0.2%    +0.4%Industrial Production           (YoY) +0.7%    +1.0%Manufacturing Production    (MoM) +0.2%    +0.3%Manufacturing Production     (YoY) +0.4%    +0.3%
The Bank of England decision to cut, if taken from their statement, seems somewhat strange. It cited the reasons being “there are now signs that growth has begun to slow. Forward-looking surveys of households and businesses suggest spending is moderating.”
However, at the very next breath they also stated concern over the level of inflation “Higher energy and food prices are expected to keep inflation above the target in the short term. Although upside risks to inflation remain, which the Committee will continue to monitor carefully, slowing demand growth should ease the pressures on supply capacity, bringing inflation back to target in the medium term.”
They have already forecast that inflation will remain high for some months but should moderate in the second […]

Do the ECB & BOE rate decisions really make any difference?
Hot on the tail of the leading economic indicators still pointing to a downturn in Japan the government-linked Economic Planning Association issued the results of a survey of leading private sector economists who lowered their forecast for 4th quarter growth in Japan. They now expect Japan to post an annualized 1.2% GDP figure, down from the previous poll of 1.67%. However, they do forecast a pick up in Q1 next year to an annualized 2.05%. This, they argue will mean the BOJ rate hike will be delayed to somewhere between March and July…
And from the Teflon economy November’s unemployment rate remained unchanged at 2.6% although the nsa measure ticked higher to 2.7%. The Swiss National Bank is expected to hike rates this month in response to the continuing strong numbers being released while the rest of Europe suffers. A […]

Dollar breaks higher against the Euro
Japan’s Leading Economic Indicators continue to point to a slowdown, registering a level of just 20 in October and marked the third consecutive month below the boom or bust 50 level.
The Coincident Index remains above 50 with October returning a level of 66.7 and up from September’s 54.5.
The results confirm the outlook has deteriorated due to the slowdown in both U.S. and European economies, higher commodity & oil prices and a decline in job offers. This is hardly a surprise as the outcome has been clear from much earlier in the year.
Indeed, next week’s BOJ quarterly Tankan Report is expected to show that business confidence has slumped on the back of stagnant wages and rising costs. This has come on the back of a higher tax burden being placed on consumers which has resulted in poor retail sales. With concerns still evident […]

An excerpt from FX-Strategy’s Pro Commentary
 
 Price:                            1.4585

Resistance:
1.4620
1.4650
1.4670
1.4700

Support:
1.4562
1.4530
1.4504
1.4467

Bias:
Losses look likely but we need be careful of a possible correction to 1.4670-00

Daily Bullish:
The breach of the long term trend support implies any rallies will be corrective. This line rests around 1.4670-00 and that should be the maximum we see. This may be seen if price manages to break back above 1.4620 and if seen look for gains to the 1.4645-50 pivot area at least – care as this could cause a reaction but overall we should see a test of 1.4670 minimum and 1.4700 maximum.

MT Bullish:
1.4670-00 should be the tops now and only a break back above here would revisit 1.4831 and 1.4966 – max 1.5003. (6th December)

Daily Bearish:
While loss of the trend support is clearly bearish we must allow for a retest of that line which is currently around 1.4670 – at most 1.4700. If seen this area […]

The Dollar awaits its fate from the ECB & Bush mortgage relief plan
Data from Europe overnight:                                            Forecast   ActualOctoberEuro-zone Retail Sales  (MoM)   - 0.3%   - 0.7%Euro-zone Retail Sales  (YoY)    +1.2%    +0.2%
NovemberItalian Services PMI                     53.7      50.8French Services PMI                     56.8      59.2German Services PMI                   53.5      53.1Euro-zone Services PMI                 53.7     54.1Euro-zone Composite PMI             53.8     54.1U.K. Services PMI                         52.9     51.9U.K. BRC Shop Price Index  (YoY)            +1.1%
There were some pretty mixed numbers from the Euro-zone overnight with the Services PMI results coming in mostly far better than expected and follows the manufacturing results earlier in the week. Does this provide a small hint that things aren’t so bad as the doom and gloom merchants suggest?
From the numbers it is too early to say but the October Retail Sales numbers provided a contrary view sliding down on the back of weaker equity markets with a -0.7% MoM drop to bring the annualized number to a mere +0.2% YoY. These […]

Dollar recovering lost ground in early Europe
No more releases as yet but a report from the U.K.’s Financial Services Authority is warning of a bad year next year. It is forecasting both funding shortages and increased bad debts stemming from continued turmoil in markets. It also points out that something like 1.4 million borrowers are due to see their low fixed rate mortgages maturing to be replaced by market rates. It claims that this will result in failures with many having overstretched themselves in an effort to climb on the property ladder. It’s probably an overstatement, but without a doubt there are risks…
Indeed, its seems as if house prices in the U.K. are imploding with the Halifax Building Society reporting that house prices fell by -1.1% MoM in November to bring the annual pace to just 6.9% YoY. This is as forecast and does follow the same tack as the […]

Dollar mixed to firmer in Asian trading
Australia’s GDP rose in line with forecasts over the 3rd quarter by +1.0% although the year-on-year number fell slightly short of target at +4.3% versus forecasts of +4.8%. It comes as no surprise after a string of positive numbers and the longest period of growth for decades.
Consumer spending made a large contribution to the final number although imports of goods and services provided a drag in overall performance. Business investment was also lower but still leaves the economy in a robust condition as we move into the new fiscal year but with the global economy under so much pressure there is no doubt the Australian economy will also moderate.
The 4th quarter should still show considerable strength as well. The November AiG Performance of Services saw a rise of 3.2 points to 56.4 to suggest the economy has not really slowed that much […]