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Mid-day Report: Markets Steady ahead of Central Bank Meetings, Sterling TumbledMarkets remain relatively steady ahead of the heavy weight events later this week. Euro recovers against dollar, sterling and yen, but stays pressured against Aussie. Sterling was weighed down by news that Moody's cut UK's growth forecast. Dollar, on the other hand, received little inspiration from US data. Personal income rose more than expected by 0.5% in June but spending missed by being flat. Headline PCE and core PCE were unchanged at 1.5% yoy in 1.8% yoy respectively. Employment cost index rose 0.5% in Q2. Data from Canada saw GDP rose 0.1% mom in May versus expectation of 0.2% mom. IPPI and RMPI unexpectedly dropped -0.3% mom and -4.0% mom respectively. | |
Featured Technical Report | |
GBP/USD Mid-Day OutlookDaily Pivots: (S1) 1.5671; (P) 1.5711; (R1) 1.5749; More... GBP/USD's pull back from 1.5767 temporary top extends lower today but loss is so far limited. Intraday bias remains neutral first. Aso, note that we'll stay cautiously bullish as long as 1.5457 support holds and expect rebound from 1.5268 to resume sooner or later. Above 1.5777 will target 1.5901/6 (61.8% retracement of 1.6300 to 1.5268 at 1.5906 and 100% projection of 1.5268 to 1.5777 from 1.5392 at 1.5901). |
Special Reports |
Fed To Extend Low-Rate Guidance Until 2015, QE3 To Be Announced In SeptemberWe expect the Fed would continue to leave the QE3 decision on hold in August as the better timing for action would be in September when two employment reports would be released for gauging the impacts of extension of operation twist in June. Moreover, a press conference will be held and staff forecasts will be published by then. Yet, what the Fed might do to drive sentiment in August might be extending the low rate guidance to 2015 and pledging the Fed would use whatever tools to stimulate the economy. ECB to Disappoint in AugustThe market has been eagerly awaiting the ECB meeting which will be held Thursday after President Mario Draghi's comment last week that the central bank would do whatever it can to preserve the euro. This has raised speculations that the ECB would resume bond purchases in the form of SMP. However, there are many hurdles to this move, in particular opposition of the Bundesbank. While the case of ECB purchases of bond has greatly increased due to worsening of situations in Spain and Italy, the timing of the move is an important issue. The ECB obviously prefer to see the Spanish government request support from the EFSF with conditionality in place before the central bank's involvement in bond purchases. However, this may not come earlier than the Thursday. In such case, we expect the ECB would not announce SMP in August, leaving it to September possibly. We also believe the central bank to leave interest rates unchanged this month, after the surprising rate cut in July. |
Economic Indicators Update | Learn Expert Strategies to Profit in a Presidential Election Year. Join me at this year's MoneyShow San Francisco, August 24-26, at the San Francisco Marriott Marquis and be there as recommendations and advice are revealed for how to best position your portfolio for profit - in 2012 and beyond! | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Orders and Options Watch | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
US Session: Orders and Options WatchGBP: The British pound slipped again in London session as Moody's Investors Service cut its UK GDP forecast, bids at 1.5665-75 were filled and some stops below there were also tripped, more stops below 1.5640 are now in focus but fresh demand from Middle East names should emerge further out at 1.5590-00. On the upside, offers are lowered to 1.5685-90 and also at 1.5700 with stops now placed above 1.5705 and 1.5730-35, however, sizeable sell orders remain at 1.5760-70, followed by mixture of offers and stops in good size around 1.5780-00 region. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Forex Trade Ideas | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trade Idea Update: GBP/USD Hold short entered at 1.5750Although cable rebounded after falling to 1.5673 yesterday, as price has retreated from 1.5729 after meeting renewed selling interest around the Ichimoku cloud top, suggesting near term downside bias remains for the fall from 1.5768 to bring retracement of recent rise to 1.5645-50 but reckon 1.5610-19 (50% Fibonacci retracement of 1.5452-1.5768 and current level of the Ichimoku cloud bottom) would limit downside Trade Idea: EUR/JPY Buy at 94.80Despite last week’s late rise to 97.33, failure to extend such move and the subsequent retreat suggest first leg of correction from temporary low at 94.12 has ended there and consolidation with mild downside bias is seen for weakness to 95.50 and possibly 95.20-25, however, if our view that a temporary low has been formed at 94.12 is correct, downside should be limit to support at 94.66 and bring another rebound later. A break of said resistance would bring retracement of recent decline to 97.88 Candlesticks Intraday Trade Ideas Update Schedule (GMT): Elliott Wave Daily Trade Ideas Update Schedule (GMT): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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