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| Action Insight Weekly Report | Markets Snapshot |
Daily Report: Dollar Firm after Bernanke Triggered Rebound, More Upside AheadDollar remains generally firm today after overnight rebound. The disappointment over lack of hints of QE3 from Bernanke sent gold sharply lower and pressured stocks. Gold subsequently breached 1700 level before recovering mildly in Asia. Asian equities are generally weak even though China's manufacturing PMI came in slightly better than expected. Technically, EUR/USD has clearly made a short term top and thus more downside would be seen in near term. Due to the EUR/CHF peg, USD/CHF has likely bottomed too. Meanwhile, even though the picture is less clear against Sterling and commodity currencies, dollar is in favor to extend the rebound against them for the rest of the week. |
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| Featured Technical Report | |
AUD/USD Daily OutlookDaily Pivots: (S1) 1.0734; (P) 1.0761; (R1) 1.0793; More The break of 1.0728 minor support turned intraday bias in AUD/USD neutral again. At this point, we'd favor another rise as long as 1.0597 support holds. Above 1.0852 will flip bias back to the upside for a test on 1.1079 high. However, break of 1.0597 will indicate that a short term top is at least formed. In such case, deeper fall should be see back to 1.0377 resistance turned support. Break there will indicate that another falling leg inside the consolidation pattern from 1.1079 has started and should target 0.9663 support and below. |
| Special Reports |
No Signals Of QE3 Disappointed InvestorsIn the testimony before the House Committee, Fed Chairman Ben Bernanke was less downbeat on the macroeconomic outlook. He stated that 'pace of the expansion has been uneven and modest by historical standard'. Yet, growth in the coming quarters is likely to be 'at a pace close to or somewhat above the pace that was registered during the second half of last year'. He also acknowledged positive developments in the job market including job gains that were 'relatively widespread across industries' and the 'more rapid than expected' decline in the unemployment rate over the past year. ECB Allotted over 500B Euro in LTROThe ECB has allotted 529.5B euro of 3-year LTRO to 800 banks. Together with the first auction, the central bank has injected 1trillion of 3-year funds into the system. This amount equals to 131% total European bank bond maturities in 2012 and 72% for 2012 and 2013 combined. The average allotment is 0.66B euro, compared with 1B euro in December 2011 and 0.40B euro in June 2009. The total number of bidders is huge, suggesting participation of a lot of small banks. The ECB would probably view the result as positive as it's expected that the funds will be passed to the real economy. |
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Orders and Options Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
European Session: Orders and Options WatchEUR: Despite testing recent high of 1.3486 again yesterday, the single currency ran into heavy offers there and retreated sharply from there in New York on less dovish testimony from Bernanke, stops below 1.3380, 1.3360 and 1.3340 were all tripped, however, bids from Asian names are still noted at 1.3310-15 and 1.3300, followed by mixture of bids and stops located further out at 1.3270. On the upside, offers from semi-official names are reported at 1.3370-80, 1.3400 and also at 1.3450-60, option defensive offers remain strong ahead of 1.3500 option barrier. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Trade Idea: USD/CHF – Sell at 0.9075As the greenback staged a strong rebound after holding above previous support at 0.8931, suggesting further consolidation would be seen and near term upside risk is seen for retracement of recent decline to 0.9050-55, however, renewed selling interest should emerge below 0.9080/83 and bring another decline later. A break of the Kijun-Sen (now at 0.8996) would suggest top is possibly formed and bring test of the Ichimoku cloud Trade Idea: GBP/USD – Buy at 1.5810Despite yesterday’s rally to 1.5979, the subsequent euro-led retreat signals a temporary top has been formed and retracement of recent rise to the Ichimoku cloud top (now at 1.5893), then the lower Kumo (now at 1.5869), however, renewed buying interest should emerge above support at 1.5801, bring another rise later. Only a breach of 1.5993-1.6000 (yesterday’s high and the psychological resistance would extend recent upmove to 1.6030 Candlesticks Intraday Trade Ideas Update Schedule (GMT): Elliott Wave Daily Trade Ideas Update Schedule (GMT): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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