Shrewd Investing

[Shrewd Dude]

MARKET REVIEW: Dollar is steady on mixed U.S. economic outlook
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Dollar ended the week on a firmer undertone against euro and Swiss franc but weaker against sterling and Japanese yen on active cross trading. Earlier on Friday, the U.S. unit fell on the news that the U.S. GDP for Q2 expanded at a pace of 3% after the upward revision of 4.5% in Q1. The data was weaker than expectations and showed that the overall U.S. economic growth was slowing down during an inflationary period.

However, the dollar rebounded strongly against continental currencies but was steady against sterling and Japanese yen after news that both U.S. Michigan sentiment and Chicago PMI rose strongly to 96.7 and 64.7. Both numbers were above expectations of 96.5 and 59.0 respectively.

As a result, Euro fell back to 1.2002 in late U.S. session after rising to 1.2121 while dlr/chf rallied to 1.2832 from an intra-day low of 1.2686. Cable was trading within a range of 1.8157-1.8247 and dlr/yen fell to 111.08 before stabilising.

This week's focus will be the U.S. unemployment report for July. Monday will see the release of U.S. ISM (manufacturing) index for July and construction spending for June.


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Major Economic Indicators for Today (Jul 30, 2004)
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Time Country Indicator
0755 Germany Reuters Mfg PMI Jul
0800 E-12 Reuters Mfg PMI Jul
0830 U.K. Reuters Mfg PMI Jul
1400 U.S. ISM Manufacturing Jul
1400 U.S. Construction Spending Jun


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TODAY'S FOREX MARKET OUTLOOK
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Update Time : 00:50GMT

USD/YEN - 111.27

Dollar's Friday's strong retreat from suggests a temporary top has been formed at 112.49 last week and consolidation with initial downside bias is seen for a retracement of recent upmove before rebound.

Above 112.23 would signal erratic rise from 107.02 has resumed and bring one more rise.


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Daily Technical Outlook
EUR/USD, USD/CHF, GBP/USD, USD/YEN
USD 80/m, Contact us for further information [e-mail]
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WEEKLY TECHNICAL OUTLOOK ON GBP/USD

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Last Update At : 2004/08/02 00:42

GBP/USD..1.8212..Cable fell to as low as 1.8085 last week on dlr's broad-based rally b4 staging a rebound, however, last Friday's stronger than anticipated retreat fm 1.8247 to 1.8158 stopped out our long position. Despite the choppy trading seen in eur/dlr, cross buying in stg has kept cable relatively firm.

As long as 1.8240/47 res holds, further consolidation is in store, how-ever, as a temp. low has been formed at 1.8085, upside bias remains for a retracement of the intermediate decline fm 1.8447 n abv 1.8247 wud extend gain to 1.8300/09 previous sup n 61.8% r) but break there is needed to signal a correction of the entire fall fm 1.8774 is under way n bring test of 1.8447 later this week.

On the downside, below Friday's low at 1.8125 wud signal recent decline has resumed n extend weakness twd daily chart sup at 1.8012 but a break there is needed to signal corrective rise fm 1.7480 (May '04 low) has ended. As the outlook is somewhat mixed, we will stand aside initially...



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YESTERDAY'S RECOMMENDED TRADE
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Update Time : 2004/07/30 07:08GMT
DAILY GBP/USD OUTLOOK - 1.8146

Y'day's rebound fm 1.8085 strongly suggests recent decline fm 1.8774 has finally made a temp. low, abv 1.8210 wud add credence to this view n bring subsequent corrective gain twd 1.8287.

Trade fm long side, stop now at 1.8100, a firm break there wud risk marginal weakness but 'loss of momentum' shud keep cable abv 1.8040/50 today...

Rate: 1.8146
Strategy: Hold long
Position: Long at 1.8135
Objective: 1.8220 1st
Stop-Loss: 1.8100
Resistance: 1.8210/1.8287/1.8348
Support: 1.8085/1.8012/1.7974


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AceTrader Performance in 1H04
Intraday: USD/YEN (+67pips), EUR/USD (+2041pips), USD/CHF
(+1892pips), GBP/USD (+2189pips)
Daily: USD/YEN (+0pips), EUR/USD (+944pips), USD/CHF (+502
pips), GBP/USD (+ 247pips)
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Alex Tsui
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