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| Action Insight Weekly Report | Markets Snapshot |
Daily Report: EUR, GBP, CHF Weak ahead of ECB Meeting, Spain AuctionEuropean majors are generally weak as markets await ECB meeting as the main event of the week, as well as Spain's bond auction. There are intense worry that the peripheral debt crisis is finally spreading to the core of Eurozone nations. It's widely believed that ECB could play an important role, be it scaling up the bond purchases to limit yields below 7%, or any other number, or allowing ESM to be a bank to draw ECB funds to leverage. The three-year LTRO operation announced last month was a disappointment as the funds are mostly parked back to the central bank and Italian 10 year yield is still hovering around the unsustainable 7% level. At this moment, though, ECB seems not ready to add any additional measures and is expected keep everything unchanged today. |
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| Featured Technical Report | |
GBP/JPY Daily OutlookDaily Pivots: (S1) 117.30; (P) 118.21; (R1) 118.70; More GBP/JPY's break of 118.25 indicates that recent decline has resumed and the cross reached as low as 117.66 so far, meeting mentioned target of 61.8% projection of 127.30 to 119.37 from 122.76 at 117.85. Intraday bias remains on the downside for the moment and current decline should extend towards 116.83 key support. On the upside, break of 119.10 resistance is needed to confirm short term bottoming. Otherwise, outlook will remain bearish even in case of recovery. |
| 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. |
| Economic Indicators Update | Don’t miss the largest investor and trader gathering in the World—The World MoneyShow Orlando, February 9-12, 2012 at the Gaylord Palms Resort. Be there as recommendations and advice are revealed for how to best position your portfolio for profit—in 2012 and beyond. Register Free Today! | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| 2012 Elliott Wave Forecast | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Orders and Options Watch | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
European Session: Orders and Options WatchEUR: Despite breaking recent low at 1.2666, the single currency found support at 1.2662 yesterday and has rebounded on short-covering and also partly due to comments from Geithner as he said Europe appears to be moving forward in solving debt crisis, some offers are reported at 1.2730 and also 1.2750 with mixture of offers and stops seen further out at 1.2790-00, followed by bigger stops above 1.2820-30. On the downside, combination of bids and stops remains at 1.2650-60 with more option related buying interest likely to emerge further out at 1.2600-10. In the meantime traders are watching Italy's and Spain's debt auction. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Trade Idea: USD/CHF – Hold long entered at 0.9480Although dollar has retreated after yesterday’s bounce to 0.9567, reckon the Ichimoku cloud bottom (now at 0.9500) would limit downside and bullishness remains for another rebound later, above said resistance would bring a retest of recent high of 0.9595 but only break there would confirm recent upmove from record low of 0.7068 has resumed and extend gain towards 0.9630 Trade Idea: GBP/USD – Sell at 1.5475Yesterday’s selloff together with the breach of previous support at 1.5361 confirm recent downtrend has resumed and indicated projection target at 1.5305-10 (1.6167-1.5408 measuring from 1.5775) had been met, bearishness remains for further decline towards 1.5255-60 (100% projection of 1.5775-1.5361 measuring from 1.5672), however, near term oversold condition should limit downside to 1.5200-05 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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