MARKET REVIEW: Dollar fell against European currencies but rose
against Japanese yen
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Dollar fell on Thursday against the European currencies due to a steep decline in stock markets, however, it rallied strongly versus the yen on a surge in oil prices. Three-month crude oil futures traded on NYMEX jumped nearly 4% to $44.50 a barrel, the highest level since the exchange opened in 1983. In other news, U.S. weekly jobless claims came to 336,000, slightly better than the forecast of 340,000.
The BOE MPC decided to raise the benchmark interest rate by 0.25% to 4.75%. However, the news was already discounted and did not make much impact on sterling. ECB decided to leave interest rate unchanged at 2.0%, also in line with expectations.
Euro and cable rebounded to 1.2074 and 1.8298 respectively while dlr/chf retreated to 1.2730. The U.S. unit rose to 111.77 in late U.S. trading from a low of 110.82 in Asian session.
Friday will see the release of July U.S. unemployment rate and non-farm payrolls, as well as Canadian unemployment rate and jobs change (also for July). The data are expected to create good volatility in the forex markets.
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Major Economic Indicators for Today (Jul 23, 2004)
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Time Country Indicator
1100 Canada Unemployment Jul
1100 Canada Jobs Change Jul
1230 U.S. Non-Farm Payrolls Jul
1230 U.S. Unemployment Jul
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TODAY'S FOREX MARKET OUTLOOK
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Update Time : 00:45GMT
As dollar has penetrated 111.75 resistance, suggesting consolidation with upside bias is seen but above 112.49 is needed to signal upmove from 107.02 to retrace decline from 114.90 has resumed, bring further gain toward 113.00 before retreat due to loss of momentum.
Below 111.20/25 would indicate dollar remains within broad range but 110.40 is expected to hold.
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Standard Package
Daily/weekly recommendations, medium term outlook, daily
technical outlook, wave analysis
(Majors) - USD 150/m, (Majors/Minors/Crosses) - USD 240/m
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YESTERDAY'S RECOMMENDED TRADE
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DAILY EUR/YEN CROSS OUTLOOK - 133.94
Current price action suggests as long as 133.53 sup holds, consolidation with upside bias is seen for erratic rise fm 132.86 to retrace decline fm 135.40 to extend gain to 134.60/65, however, as broad outlook is consolidative, 134.94 wud hold.
Buy again on dips, stop below there, break wud defer n risk 133.14 but 132.86 shud remain intact..
Rate: 133.94
Strategy: Buy again
Position:
Objective: 134.60
Stop-Loss: 133.50
Resistance: 134.28/134.94/135.40
Support: 133.53/133.14/132.83
Alex Tsui
Sales Manager - Internet Based Business
Trendsetter Financial Markets Limited
Tel: (852) 2865 2059
Fax: (852) 2525 9443
email: alex@acetrader.com
URL: www.acetrader.com - 24 hours real-time intra-day forex
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Reuters Index: TREN01 since 1989
