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| Action Insight | Candlesticks Trades | Markets Summary | Action Bias | Top Movers | Daily Technicals |
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| Action Insight Market Overview | Markets Snapshot |
Daily Report: Dollar Higher ahead of ECB, BoE, Spain Auction and ISM ServicesDollar and yen continue to recover as markets are awaiting a jam-packed calendar with heavy weight events. ECB and BoE will announce rate decisions today and both are expected to provide additional stimulus to the markets. ECB is expected to cut rates by 25 bps while BoE is expected to expand the asset purchase program by GBP 50b. In addition, Spain and France will hold long term bond auctions today which will be an important test on markets' response to the EU accord agreed last week. In Greece, prime minister Samaras is set to meet with troika with finance minister Stournaras. And from US, there will be release of ADP employment and ISM services, which will also have an impact on overall risk sentiments. |
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| Featured Technical Report | |
AUD/USD Daily OutlookDaily Pivots: (S1) 1.0250; (P) 1.0285; (R1) 1.0310; More With 4 hours MACD staying well below signal line, a temporary top is in place at 1.0319 and intraday bias is turned neutral. Deeper retreat could be seen to 4 hours 55 EMA (now at 1.0174). But downside should be contained well above 0.9968 support and bring another rally. Above 1.0319 will target 61.8% projection of 0.9588 to 1.0233 from 0.9968 at 1.0360 first and then 100% projection at 1.0603 next. |
| Special Report |
BOE To Raise Asset Purchase Size To 375B Pound, 25% Of GDPAdditional asset purchases of 50B pounds in the July BOE meeting have been priced in the GBP. Indeed, Governor Mervyn King has hinted since the last meeting that further easing would be adopted to boost the economy. In June, MPC members voted 5-4 to maintain the asset purchases unchanged. Those voted against additional easing would like to gauge the impact of the emerging 'Funding for Lending', i.e. the Long Term Repo Operation (LTRO). It did not mean they were against increasing stimulus ultimately. Rather most of them expected to ease further in due course. ECB To Cut Policy Rate To 0.75%, No Further Unconventional MeasuresWe expect the ECB to cut the main refinancing rate by -25 bps to 0.75% and the deposit rate by -15 bps to 0.1% at the July meeting. President Draghi admitted the economic outlook has been deteriorating and accompanying with 'serious' downside risks. Yet, further unconventional measures will not be announced at this meeting. While the sovereign debt crisis in the bloc has remained a fundamental problem, it is officially the responsibility of the national governments to find resolutions, instead of the central bank. |
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Orders and Options Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
European Session: Orders and Options WatchJPY: Although the greenback finally rose above psychological resistance at 80.00 and offers as well as stops at 80.00-05 were tripped, dollar quickly ran into another layer of heavy offers from U.S. names and exporters, price then swiftly dropped back to below 79.70 in Tokyo. Selling interests from same parties still tracked from 80.00 up to 80.30 and mixture of offers and stops in good size remains at 80.60-70. On the downside, bids from Japanese investors are reported at 79.50-60 with combination of bids and stops located at 79.30-35, followed by defensive bids at 79.00-10 for protection of stops below 79.00 and 78.80 (large). | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Forex Trade Ideas | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trade Idea: GBP/USD – Hold long entered at 1.5575Despite yesterday’s selloff to 1.5574, as the British pound has rebounded from there in part due to cross-buying in sterling, suggesting further consolidation would be seen ahead of BOE rate decision today but as long as said support holds, mild upside bias remains, above the Kijun-Sen (now at 1.5627) would bring test of previous support at 1.5658, break there would suggest low is possibly formed, then gain to the Ichimoku cloud (now at 1.5682-83) would follow Trade Idea: USD/CHF – Sell at 0.9655As dollar has traded narrowly after yesterday’s rally to 0.9605, suggesting minor consolidation would be seen ahead of ECB rate decision but near term upside risk remains for the rise from last week’s low of 0.9463 to extend gain to 0.9615-20 (100% projection of 0.9463-0.9564 measuring from 0.9514), however, reckon 0.9655-60 (previous minor resistance) would limit upside due to near term overbought condition, bring retreat later. Candlesticks Intraday Trade Ideas Update Schedule (GMT): Elliott Wave Daily Trade Ideas Update Schedule (GMT): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fundamental Highlights
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