Daily FX Market Outlook by Ace

U.S. non-farm payrolls were much worse than market expectation as no new jobs were added vs street forecast of a 75k increase and July's figure was revised sharply down from 117k to 85k. Private payrolls came in at 17k vs forecast of 105k whilst the unemployment rate remained unchanged at 9.1%.  
 
Versus the Japanese yen, the greenback edged lower from Asian higher at 76.97 to 76.75 in European session on cross buying of yen vs other currencies. Despite dollar's recovery to 76.88, the pair quickly dipped to 76.53 in NY morning after the release of the dismal U.S. jobs data but then climbed back to 76.85 ahead of NY closing on short-covering. 
 
The single currency ratcheted lower from Asian high at 1.4287 to 1.4209 in European morning on cross-selling of euro (eur/jpy, eur/gbp and eur/chf tumbled from 109.87 to 108.85, from 0.8820 to 0.8748 and from 1.1354 to 1.1002 respectively) together with the selloff in European equities. Despite euro's knee-jerk recovery to 1.4288 after release of the U.S. jobs data, renewed selling sent the pair lower to session low of 1.4183 in NY afternoon due to the sharp fall of U.S. stock markets.  
 
The British pound edged higher from Thursday NY low of 1.6132 on active cross buying of sterling vs euro and rose to 1.6255 after the release of U.S. jobs data. Despite a brief but strong retreat to 1.6172, cross-buying of sterling vs euro lifted the pair again to 1.6228 in NY afternoon. 
 
Earlier in European morning, cable was pressured after the release of U.K. Aug construction PMI which came in at 52.6 (forecast was 52.6) versus previous reading of 53.5 in July. The data suggested British construction activity expanded at its weakest pace since December, 2010 due to a slowdown in orders and output growth, as well as a more negative outlook. 
 
The DJI tumbled by 253.31 points or 2.20% and closed at 11240.26 whilst major European bourses ended the day in the red with the FTSE-100, CAC-40, and DAX indices falling by 2.34%, 3.59% and 3.36% respectively. 
 
Data to be released next week include: 
 
U.K. Lloyds employment confidence, services PMI, Germany services PMI, EU services PMI, sentix investor confidence, retail sales on Monday (U.S. and Canada are closed for Labor Day market holiday). 
 
U.K. BRC retail sales, Australia current account, RBA rate decision, Swiss CPI, EU GDP, Germany factory orders, U.S. ISM non-manufacturing on Tuesday. 
 
Australia GDP, Japan BoJ rate decision, leading indicators, U.K. industrial production, manufacturing production, Canada BoC rate decision, Ivey PMI on Wednesday. 
 
Japan current account, machinery orders, economic watch DI, Australia unemployment rate, trade balance, Swiss unemployment rate, Germany trade balance, export, imports, U.K. BoE rate decision, EU ECB rate decision, U.S. jobless claims, Canada building permits, new housing price index, trade balance, exports, imports on Thursday. 
 
Japan GDP, consumer confidence, Germany CPI final, HICP final, U.K. PPI input, PPI output, PPI core, Canada unemployment rate, housing starts, U.S. wholesales inventories on Friday.

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Daily FX Market Outlook by AceTrader-31-8-2011

Although the single currency edged higher to 1.4533 at Asian midday following Monday's rise to a near 2-month high of 1.4550, failure to re-test this resistance caused price to retreat at European open, the pair tumbled sharply to 1.4385 due to weaker-than-expected EU data together with the widening bond yield spread (Italian/German 10-year government bond yield spread rose above 300 basis points, the highest since ECB started buying the bonds) but later pared its losses on rumours the ECB bought significant amount of Italian 10-year bonds. Euro eventually recovered to 1.4465 in NY afternoon after the release of FOMC minutes. 
 
The single currency was pressured as Italy sold 7.7 billion euros ($11.1 billion) of debt, including 3.75 billion euros of 10-year bonds, with the average yield of 5.22%, down from a yield of 5.77% in July. The auction was disappointing as bids for the 10-year supply exceeded the amount on offer by just 1.27 times. 
 
EU economic and consumer sentiment were worse than expected, coming in at 98.3, the lowest since May 2010, and -16.5 vs forecasts of 100.5 and -12.0 respectively whilst EU business climate and industrial sentiment in Aug came in at 0.07 and -2.9 vs forecasts of 0.15 and -1.5 respectively. 
 
FOMC minutes for August showed most members agreed economic outlook had deteriorated enough to warrant a response and some wanted more substantial action. They discussed a range of tools reinforcing forward guidance such as asset purchases and increasing the average maturity of the Fed's balance sheet. 
 
Versus the Japanese yen, the greenback fell sharply from Australian high at 76.97 to 76.66 in European morning due to broad-based selling of yen. Despite dollar's recovery to 76.89, the pair dropped again to 76.61 on the worse-than-expected U.S. consumer confidence (44.5 vs forecast of 52.0 and the previous figure of 59.2) before stabilising. 
 
Although the British pound ratcheted higher to 1.6419 at Asian midday, cable tumbled sharply in tandem with euro to an intra-day low of 1.6255 before rebounding to 1.6318 in NY afternoon on short-covering after the release of FOMC minutes. 
 
Data to be released on Wednesday include: 
 
U.K. Gfk consumer confidence, Japan manufacturing PMI, industrial production, construction orders, housing starts, New Zealand NBNZ business confidence, Australia private-sector credit, Germany retail sales, unemployment rate, Unemployment change, EU HICP flash, unemployment rate, Canada GDP, U.S. ADP unemployment rate, Chicago PMI, factory orders, durable goods.

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Daily FX Market Outlook by AceTrader-2-9-2011

The single currency edged lower from Asian high at 1.4381 and then tanked to 1.4263 in European morning on cross selling of euro vs other currencies (eur/jpy, eur/gbp and eur/chf tumbled from 111.00 to 109.53, from 0.8856 to 0.8797 and from 1.1603 to 1.1321 respectively). Although euro rebounded to 1.4315 after the release of better-than-expected U.S. ISM manufacturing data (50.6 vs street forecast of 48.5), the pair eventually dropped to session low at 1.4227 before staging a recovery to 1.4298 at NY midday. 
 
Earlier in Europe, euro was pressured as German and EU Manufacturing PMI for August were reported worse than expected at 50.9 and 49.0 versus forecasts of 52.0 and 49.7 respectively. 
 
Against the Japanese yen, the greenback rallied initially to 77.25 in Asian morning before retreating to 76.76. Although the pair rebounded to 77.18 after the release of U.S. ISM manufacturing data, selling interest below indicated Asian high at 77.25 sent price back to 76.73 at NY midday before a recovery to 76.93 was seen ahead of NY closing. 
 
The British pound traded sideways in Asia and then fell in tandem with euro from 1.6253 to 1.6195 in European session. Later, cable tanked to as low as 1.6132 in NY morning as the U.S. ISM manufacturing data strongly beat expectations before stabilising in NY afternoon. 
 
Earlier at European open, cable was under pressure after the release of weaker-than-expected U.K. house prices data as U.K. Nationwide House prices for Aug. came in at -0.6% m/m and -0.4% y/y vs forecasts of 0% and 0.4% respectively.  
 
On the data front, U.S. initial jobless claims were 409K vs 410K forecast, prior figure was revised up from 417K to 421K whilst Constructing spending for July was -1.3% vs forecast of 0.2% and June's figure was revised up from 0.2% to 1.6%. German GDP for Q2 reported as forecasted at 0.1% q/q and 2.8% y/y. 
 
Data to be released on Friday include: 
 
Japan business capex, U.K. PMI construction, EU PPI, U.S. non-farm payrolls, private payrolls, unemployment rate, avg. hourly earnings

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Forex and Dow Jones recommended levels

Today’s support: - 1.3997 (main), where correction is possible. Break would give 1.3966, where correction also may be. Then follows 1.3928. Break of the latter would result in 1.3905. If a strong impulse, we would see 1.3872. Continuation will give 1 .3857 and 1.3826 .
Today’s resistance: - 1.4136 and 1.4178 (main). Break would give 1.4197, where a correction is possible. Then goes 1.4226. Break of the latter would result in 1.4277. If a strong impulse, we’d see 1.4296. Continuation will give 1.4312.

USD/JPY
Today’s support: - 76.61, 76.45 and 76.27 (main). Break would bring 76.17, where correction is possible. Then 75.91, where a correction may also happen. Break of the latter will give 75.66. If a strong impulse, we would see 75.44. Continuation would give 75.18.
Today’s resistance: - 77.17, 77.48 and 77.96 (main), where a correction may happen. Break would bring 78.47, where also a correction may be. Then 78.89. If a strong impulse, we would see 79.03. Continuation will give 79.27.

DOW JONES INDEX

Today’s support: - 11160.00 (main), where a delay and correction may happen. Break of the latter will give 11138.26, where correction also can be. Then follows 11109.40. Be there a strong impulse, we shall see 11072.30. Continuation will bring 11030.63 and 10986.52.
Today’s resistance: - 11340.23 and 11393.62 (main), where a delay and correction may happen. Break would bring 11426.35, where a correction may happen. Then follows 11460.50, where a delay and correction could also be. Be there a strong impulse, we’d see 11497.44. Continuation would bring 11522.86 and 11542.50.

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