Asian Morning Update 1st April 2008
Dollar fails to breach old lows…
European releases overnight:
March Forecast Actual
Euro-zone CPI (Est) (YoY) +3.3% +3.5%
Italian CPI (P) (MoM) +0.3% +0.5%
Italian CPI (P) (YoY) +3.1% +3.3%
Euro-zone Business Climate Indicator 0.70 0.80
Euro-zone Consumer Confidence -12.0 -12.0
Euro-zone Economic Confidence 100.0 99.6
Euro-zone Industrial Confidence 1.0 0.0
Euro-zone Services Confidence 10.0 9.0
Mixed numbers from Europe with inflation pushing above forecasts and in general confidence numbers ticking lower. That consumer confidence remained stable is a surprise given recent softer indications from the retail PMI. It will be interesting to see how the rest of the PMI releases fair over the course of this week and could set a marker for future numbers.
Even ECB board members are not bouncing with confidence. If they were then interest rates would be higher. Yesterday Liikanen confirmed that by highlighting the continuing risk of a global slowdown. It is clear too that he doesn’t rule out worsening conditions in Europe when commenting “experience and history shows that price stickiness in Europe is higher than for instance in America, so changes take place at a slower pace.”
Even Bafin, the German banking supervisor, is estimating a minimum of EUR 43bn in writedowns and possibly as high as EUR70bn. There are also risks for LBO’s which have been facing problems in meeting debt repayments so the seeds are there to be grown.
And while both ECB and BOE make warnings on second round inflation frankly control is mostly out of their hands as oil prices remain at extremely elevated levels that are causing consumers to hold back on spending as they see their wealth at risk.
These are testing times indeed.
States releases overnight:
March Forecast Actual
Chicago PMI 46.5 48.2
N.Y. Current Business Conditions 43.4 (prior) 46.3
There was limited data from the States with just the Chicago PMI and N.Y. business conditions which both saw healthy upticks. Certainly it is nowhere close to indicating any strong recovery but they provide time for the market to consolidate and for the fiscal stimulation to begin taking effect next month.
So while the doomsayers were out in force crying for a weaker Dollar as it spiked towards the 1.5901 peak there were no signs of follow-through and conversely a sharp pullback. While it shows the market’s preference to sell Dollars it also suggests that momentum conditions aren’t quite right yet.
Indeed, there still remain several possibilities at this stage of the game and one of those could be a return to the 1.5340 low…
However, as we start the day in Asia focus will be on the Japanese Tankan report and the growing pessimism that has been developing as the penny has clicked that Japan is stuck between a rock and a hard place. The domestic economy has never recovered from the 1980’s bubble and the export economy is facing a bleak outlook as the globalization bubble also threatens to dump the country back in not only recession but the possibility of stagflation.
More later once the daily analysis has been done…
There following releases are due from Asia due today:
Australia
March AiG Performance of Manufacturing Index
The RBA are due to announce their rate decision
Japan
Q1 Tankan Large Manufacturer’s Index 13.0
Q1 Tankan Large Manufacturer’s Outlook 9.0
Q1 Tankan Non-Manufacturing 12.0
Q1 Tankan Non-Manufacturing Outlook 10.0
.
Monday, March 31, 2008
GBP/USD - British Pound Dollar
Short term (Intraday)
1,9837. GBP USD is in a consolidation after the last bearish movement. The volatility is low. Bollinger bands are parallel and form the trend. ForexTrend 1H (Mataf Trend Indicator) is in a bearish configuration. The downtrend should continue on 1,9720 (110 pips) support.
Resistances
1,9875 - 1,9935
Supports
1,9810 - 1,9770
Long term chart
GBP/USD - British Pound Dollar
updated 01 avr 2008 05:57 GMT
.
USD/JPY - Dollar Yen
Short term (Intraday)
99,94. USD JPY is in a range between 99,10 and 100,20. USD JPY moves without trend and swings around exponential moving averages (EMA 50 and 100). The volatility is low. Bollinger bands are flat. ForexTrend 4H, daily (Mataf Trend Indicator) is in a bearish configuration. The price should continue to move in Bollinger bands. We won't take a position. The risk/reward ratio is too high to take a position..
Resistances
100,20 - 100,70
Supports
99,65 - 99,10
Long term chart
USD/JPY - Dollar Yen
updated 01 avr 2008 05:51 GMT
.
USD/CHF - Dollar Swiss Franc
Short term (Intraday)
0,9942. There is an horizontal range between 0,9900 and 0,9960. Support and resistance are given by Bollinger bands. USD CHF moves without trend and swings around exponential moving averages (EMA 50 and 100). The volatility is low. Bollinger bands are flat. ForexTrend 4H, daily (Mataf Trend Indicator) is in a bearish configuration. The price should continue to move in Bollinger bands. If the support is broken then the target will be 0,9800.
Resistances
0,9965 - 0,9990
Supports
0,9930 - 0,9890
Long term chart
USD/CHF - Dollar Swiss Franc
updated 01 avr 2008 05:53 GMT
.
EUR/USD - Euro Dollar
Short term (Intraday)
1,5775. EUR USD is in a consolidation after the last bullish movement. The volatility is low. Bollinger bands are flat. ForexTrend 4H, daily (Mataf Trend Indicator) is in a bullish configuration. The consolidation should continue. The price should continue to move in 1,5725 / 1,5860 range. If the resistance is broken then the target will be 1,5950.
Resistances
1,5805 - 1,5850
Supports
1,5725 - 1,5700
Long term chart
EUR/USD - Euro Dollar
updated 01 avr 2008 05:59 GMT
.
GBP/USD - British Pound Dollar
Short term (Intraday)
1,9876. GBP USD is in a consolidation after the last bearish movement. The volatility is high. Bollinger bands are parallel and form the trend. ForexTrend 1H (Mataf Trend Indicator) is in a bearish configuration. 4H ForexSto (Modified Stochastic) indicate a bearish pressure on GBP USD. The downtrend should continue on 1,9800 support.
Resistances
1,9900 - 1,9975
Supports
1,9800 - 1,9765
Long term chart
GBP/USD - British Pound Dollar
updated 31 mars 2008 14:14 GMT
.
USD/JPY - Dollar Yen
Short term (Intraday)
99,53. There is an horizontal range between 99,00 and 100,00. Support and resistance are given by Bollinger bands. USD JPY moves without trend and swings around exponential moving averages (EMA 50 and 100). Bollinger bands are flat. ForexTrend daily (Mataf Trend Indicator) is in a bearish configuration. The price should continue to move in Bollinger bands. If the support is broken then the target will be 97,00.
Resistances
100,00 - 100,90
Supports
99,10 - 98,70
Long term chart
USD/JPY - Dollar Yen
updated 31 mars 2008 14:08 GMT
.
SD/CHF - Dollar Swiss Franc
Short term (Intraday)
0,9938. USD CHF moves without trend and swings around exponential moving averages (EMA 50 and 100). The volatility is low. Bollinger bands are flat. ForexTrend 1H, 4H, daily (Mataf Trend Indicator) is in a bearish configuration. The price should find a resistance below 1,0000. The downtrend should resume.
=> We could take a short position at 0,9940. We will put the stop loss above 0,9980 (-40 pips). The targets are 0,9800 (+140 pips) 0,9700 (+240 pips). Each trade is dangerous, take care and put your stop loss. Trade configuration (1 Speculative -> 4 Trend following): 2.
Resistances
0,9960 - 0,9990
Supports
0,9920 - 0,9870
Long term chart
USD/CHF - Dollar Swiss Franc
updated 31 mars 2008 14:10 GMT
.
UR/USD - Euro Dollar
Short term (Intraday)
1,5808. EUR USD is in an uptrend supported by 1H exponential moving averages. EUR USD is in a consolidation after the last bullish movement. The volatility is low. Bollinger bands are flat. ForexTrend 1H, 4H, daily (Mataf Trend Indicator) is in a bullish configuration. The price should find a support above 1,5790. The uptrend should continue to gather momentum.
=> We could take a long position at 1,5800. We will put the stop loss below 1,5750 (-50 pips). The targets are 1,5900 (+100 pisp) 1,6000 (+200 pips). Each trade is dangerous, take care and put your stop loss. Trade configuration (1 Speculative -> 4 Trend following): 3.
Resistances
1,5820 - 1,5860
Supports
1,5790 - 1,5750
Long term chart
EUR/USD - Euro Dollar
updated 31 mars 2008 14:16 GMT
.
