Shrewd Investing

[Shrewd Dude]

MARKET REVIEW: Dollar weakens on benign U.S. inflation outlook
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The dollar weakened on Tuesday as U.S. personal income and consumption reports came in weaker than expected at 0.2% and -0.7% m/m respectively. The softer data eroded some lingering expectations that the Fed might be gearing up for a more aggressive cycle of interest rate hikes.

Euro and cable rebounded from intra-day lows of 1.1993 and 1.8172 to 1.2077 and 1.8265 in late U.S. session, while the Swiss franc bounced from 1.2831. Despite high oil prices, dlr/yen remained under pressure and fell to 110.40 on persistent cross buying of yen against European currencies.

Wednesday will see the release of the German employment report for July and eurozone retail sales for June. In addition, U.S. factory orders for June and U.S. ISM (non-manufacturing) for July are scheduled for release at 1400GMT.


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Major Economic Indicators for Today (Jul 23, 2004)
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Time Country Indicator
0750 Germany Unemployment Change Jul
0750 Germany Unemployment Jul
0755 Germany Reuters Svcs PMI Jul
0800 E-12 Reuters Svcs PMI Jul
0830 U.K. Reuters Svcs PMI Jul
0900 E-12 Retail Sales M/M Jun
0900 E-12 Retail Sales Y/Y Jun
1400 U.S. Factory Orders Jun
1400 U.S. ISM non-manufacturing Jul


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TODAY'S FOREX MARKET OUTLOOK
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USD/YEN - 110.58
Update Time : 00:45GMT

Although dollar's present weakness suggests decline from 112.49 to retrace intermediate upmove from 107.56 remains in progress, loss of momentum would limit downside and yield rebound, however, above 111.15 is needed to signal a temporary low has been formed.


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Daily Technical Outlook
EUR/USD, USD/CHF, GBP/USD, USD/YEN
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DAILY TECHNICAL OUTLOOK ON GBP/USD
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Last Update At : 2004/08/04 00:49

GBP/USD..1.8245..Although cable fell to an intra-day low of 1.8172 y'day on cross unwinding in stg, subsequent rebound in euro allowed cable to rebound to 1.8270, however, as y'day's Asian high at 1.8285 has held, further consolidation is envisaged within broad range of 1.8172-1.8336.

Today, in view of the consolidative outlook on euro n swissy (which continue to gyrate within established ranges of 1.1990-1.2121 n1.2686-1.2860 respectively), we will stand aside initially as a break abv 1.8285 is needed to signal upmove fm 1.8085 has resumed, bring re-test of this week's high at 1.8336, break there wud confirm retracement of the decline fm 1.8774 is under way n extend gain twd 1.8430 (50% r), however, res at 1.8447 is expected to limit upside n yield consolidation.

On the downside, only a break below 1.8158 sup wud signal decline fm 1.8774 has resumed instead, bring re-test of 1.8085. On the bigger picture, stg's selloff fm 1.8774 is retracing the rise fm 1.7480 n below 1.8085 wud extend weakness twd daily chart lvl at 1.8012...


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YESTERDAY'S RECOMMENDED TRADE
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Update Time : 2004/08/03 11:52GMT
DAILY OUTLOOK ON USD/CAD - +1.3340+

Although usd's nr term rise fm 1.3184 is likely to extend marginally, broad outlook remains consolidative n 1.3385 res shud hold n yield retreat.

Sell recovery n exit on decline as below 1.3256 is needed to extend weakness to 1.3220/30...


Rate: +1.3340+
Strategy: +Short at 1.3340+
Position: +Short at 1.3340+
Objective: 1.3260
Stop-Loss: 1.3388
Resistance: 1.3329/1.3385/1.3449
Support: 1.3256/1.3184/1.3155



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