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| Action Insight | Candlesticks Trades | Markets Summary | Action Bias | Top Movers | Daily Technicals |
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| Action Insight Weekly Report | Markets Snapshot |
Daily Report: Dollar Mildly Firmer in Mixed MarketsDollar is mildly firmer in mixed Asian markets today. DOW breached 12500 psychological level briefly overnight but failed to sustain gain above there. Asian equities are generally firmer but without clear follow through buying. Earlier selloff in the greenback seems to be losing momentum. In particular, EUR/USD and GBP/USD are showing mild sign of weakness as the recovery lost steam. The economic calendar is light today and markets would remain cautiously in range ahead of ECB meeting tomorrow. Bond auctions will also be a major focus in the latter part of the week. Germany will auction EUR 4b of five-year notes today. Spain will auction EUR 5b of 2015, 2016 bonds tomorrow. Italy will also sell EUR 12b of bills. |
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| Featured Technical Report | |
EUR/JPY Daily OutlookDaily Pivots: (S1) 97.93; (P) 98.20; (R1) 98.43; More Intraday bias in EUR/JPY remains neutral for the moment and more consolidations could be seen above 97.27 temporary low. Stronger recovery could be seen to 4 hours 55 EMA (now at 99.16). But upside should be limited well below 101.04 support turned resistance and bring fall resumption. Below 97.27 will extend recent decline to 100% projection of 123.31 to 100.74 from 111.57 at 89.00 next. |
| Special Report |
2012 Forecast: Sterling Has Potential to Weaken Against EuroSimilar to the euro, the British pound will likely weaken against the US dollar amid risk aversion in the first half of the year. Against the euro, the pound had gained for 3 consecutive years since 2009 although the magnitude has been declining. In 2011, EURGBP has been on a down trend since the EU summit as pessimism that EU finance leaders would not be able to derive effective measures to resolve the sovereign debt crisis has made sterling a safe-haven asset in the short-term. We do not expect this to continue this year as the UK has its own fiscal and economic problems to struggle. The disaster these might cause is not less than the debt problems in the17-nation region. An option to alleviate the economic problems would be monetary easing. Without the need of majority vote, the BOE may deliver more dovish stance on the monetary outlook than the ECB in 2012. This would then weaken the British pound. 2012 Forecast: USDJPY To Move SidewaysWe expect the movement of Japanese yen this year will be directed by factors including BOJ’s intervention, risk appetite and Fed’s QE3. Optimism of FOMC policymakers and the fiscal situation in the US will exert downward pressure on USD/JPY in the first half of the year but the BOJ will likely defend the level of 75 via intervention. Upside of the currency pair will also be capped by sluggish US economic growth and probable implementation of Fed’s QE3 later in the year. In this case, USD/JPY will likely be range-bounded this year. |
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| 2012 Elliott Wave Forecast | |||||||||||||||||||||||||||||||||||||||||||||||||
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| Orders and Options Watch | |||||||||||||||||||||||||||||||||||||||||||||||||
European Session: Orders and Options WatchEUR: Although Fitch indicated in London that Germany, France and Austria have low risk of downgrading, the single currency slipped after rising to 1.2819 yesterday, there was rumor that Italy may exit from euro and stops below 1.2740 were triggered. At the moment, offers from real money accounts and U.S. corporate are lined up from 1.2790 up to 1.2820 with stops building up above latter level. On the downside, fresh bids are tipped at 1.2715-25 with stops seen below 1.2700 and mixture of bids and stops is located further out at 1.2650-60. | |||||||||||||||||||||||||||||||||||||||||||||||||
| Forex Trade Ideas | |||||||||||||||||||||||||||||||||||||||||||||||||
Trade Idea: USD/CHF – Hold long entered at 0.9480Despite yesterday’s fall to 0.9466, the subsequent rebound from there has retained our mild upside bias for test of indicated minor resistance at 0.9540-45, however, above there (this would also penetrate the upper Kumo at 0.9530) is needed to confirm low is formed and signal the retreat from 0.9595 has ended, then recent upmove from record low of 0.7068 may bring a retest of this level Trade Idea: GBP/USD – Sell at 1.5560Although cable has retreated after yesterday’s rebound to 1.5500, reckon downside would be limited to 1.5447 and as long as 1.5420 holds, upside risk remains for a stronger retracement of the fall from 1.5672, however, renewed selling interest should emerge around 1.5555-60 (61.8% Fibonacci retracement of 1.5672-1.5376) and bring another decline later. A sustained breach below said support at 1.5420 would signal the rebound from 1.5376 has ended Candlesticks Intraday Trade Ideas Update Schedule (GMT): Elliott Wave Daily Trade Ideas Update Schedule (GMT): | |||||||||||||||||||||||||||||||||||||||||||||||||
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2012 Outlook
Fundamental Highlights
Technical Highlights
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