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| Action Insight Weekly Report | Markets Snapshot |
Daily Report: Yen Resuming Decline after CPI DataThe Japanese yen weakens today and looks set to extend recent decline against most major currencies. Indeed, GBP/JPY and AUD/JPY have taken out recent high already. BoJ Governor Shirakawa pledged again that the bank will "continue with monetary easing until consumer inflation of 1 percent is in sight". And he also emphasized that spike in energy prices alone is not enough to trigger policy reversal. Inflation data from Japan released today saw national CPI core unchanged at -0.1% yoy in January. The Japanese yen was sold off since BoJ announced the inflation target of 1% last month and paved the way for further quantitative easing. It's believed that BoJ would finally be narrow that difference between size of QE program with Fed and other central banks. Other data from Japan saw household spending dropped -2.3% yoy in January, monetary base rose 11.3% yoy in February. Unemployment rate was unchanged at 4.6% in January. |
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| Featured Technical Report | |
GBP/JPY Daily OutlookDaily Pivots: (S1) 128.89; (P) 129.24; (R1) 129.73; More GBP/JPY's break of 129.65 indicates that recent rise has resumed and intraday bias is back on the upside for 61.8% retracement of 140.02 to 116.83 at 131.16 first. As noted before, the decline from 140.02 should have finished at 116.83 already. Break of 131.16 fibo level will target a test on 140.02 next. On the downside, below 128.75 minor support will turn bias neutral and bring consolidations. But near term outlook will stay bullish as long as 126.68 support holds. |
| 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 WatchJPY: Dollar's broad-based strength has kept price firm here and offers at 81.50 were filled, however, option related offers together with selling interests from exporters are still noted at 81.60-70 with stops building up above 81.80 and 82.00 option barrier. On the downside, bids from various parties (including Japanese investors and U.S. funds) are lined up at 81.00-10 with mixture of bids and stops seen around 80.60-70, followed by bigger stops below 80.20 and 80.00. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Forex Trade Ideas | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trade Idea: USD/CHF – Hold short entered at 0.9080Although the greenback has continued to edge higher after staging a strong rebound from 0.8937, as this move from 0.8931 (last week’s low) is viewed as retracement of recent decline, reckon upside would be limited to 0.9080-83 and bring another decline later. A break of the Kijun-Sen (now at 0.9053) would bring test of yesterday’s low at 0.9021 but break of the Ichimoku cloud top (now at 0.9015) is needed to suggest top is possibly formed Trade Idea: USD/JPY – Hold short entered at 81.45Although the greenback has continued to edge higher on dollar’s broad-based strength and marginal gain from here cannot be ruled out, still reckon upside would be limited to 81.66 and bring retreat later. Below the Ichimoku cloud top (now at 80.98) would suggest top is possibly formed and bring test of yesterday’s low at 80.83 but break of the lower Kumo (now at 80.70) is needed to add credence to this view, bring weakness to 80.25/30 Candlesticks Intraday Trade Ideas Update Schedule (GMT): Elliott Wave Daily Trade Ideas Update Schedule (GMT): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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