MARKET REVIEW: Dollar rises on Fed rate hike and hawkish
statement
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Dollar rebounded strongly on Tuesday after the FOMC meeting, with the Fed deciding to raise the Fed Fund rate by 0.25% to 1.50% as anticipated and also issuing a hawkish statement on the U.S. economic and inflationary outlook. The Fed reaffirmed her bullish view by stating that the recent soft batch of U.S. economic data was transitory and there would be more rate hikes going forward. This led to economists revising their forecasts and there are now expectations that another quarter point hike would be seen in the next FOMC meeting.
Earlier, U.K. released weaker than expected CPI (1.4%) and RPI (-0.2%) for July, the data suggesting that the BOE is not likely raise U.K interest rates in the next MPC meeting after five consecutive hikes. Hence, cable fell sharply versus the dollar and especially the euro.
Euro and cable fell to 1.2225 and 1.8250. The greenback also rose to 1.2638 and 111.48 against the Swiss franc and Japanese yen respectively.
Wednesday will see the release of German inflation data, U.K. claimant count, as well as U.S. Federal Budget.
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Premier Package
Intraday/daily/weekly recommendations, medium term outlook, daily technical outlook, wave analysis
(Majors) - USD 300/m, (Majors/Minors/Crosses) - USD 360/m
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Major Economic Indicators for Today ( Aug 11, 2004 )
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Time Country Indicator
2350 Japan Current Account NSA Jun
0600 Germany HICP Final M/M Jul
0600 Germany HICP Final Y/Y Jul
0830 U.K. Claimant Count Jul
0830 U.K. Average Earning Y/Y Jul
1800 U.S. Fed Budget Jul
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TODAY'S FOREX MARKET OUTLOOK
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USD/YEN - 111.28
Update Time : 01:10GMT
Yesterday's strong rebound after the Fed raised interest rate by 25 basis points (reaffirming its bullish view on the U.S. economic recovery) suggests retracement of the decline from 2.49 remains in force, however, broad outlook remains consolidative and reckon upside should be capped below 111.90 res today and yield retreat later.
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Daily Technical Outlook
EUR/USD, USD/CHF, GBP/USD, USD/YEN
USD 80/m, Contact us for further information query@acetrader.com
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DAILY TECHNICAL OUTLOOK ON USD/YEN
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Last Update At : 2004/08/11 00:55
USD/YEN - 111.22..Despite yesterday's initial choppy sideways trading, the greenback penetrated 110.93/99 (now sup) after the U.S. expected rate hike (at 1815GMT). Our apologies to those who followed our daily recommendation n made some losses.
Today, dollar's rebound fm 109.82 suggests a strg retracement of the decline fm 112.49 is under way n as long as 110.93/99 holds, intra-day upside bias remains for marginal gain to 111.50/60, however, chart res at 111.90 shud hold fm here due to o/bot readings on the hourly oscillators. On the downside, a firm break below 110.99 wud indicate price wud continue to gyrate within recent established 109.82-112.49 board range with downside bias for test of y'day's low at 110.42 but sup at 109.82 is expected to remain intact.
Looking ahead, a daily close abv 111.90 wud signal recent upmove fm 107.02 has resumed n bring one more rise abv 112.49, however, weakening of momentum wud limit upside to 113.20 (62% proj. of 107.02-112.49 measured fm 109.82) n yield retreat later...
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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 TRADES
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INTRA-DAY EUR/USD OUTLOOK - +1.2240+
Update Time : 2004/08/10 18:58GMT
As euro has retreated after early gain to 1.2320, suggesting intra-day top has possibly been formed n consolidation with downside bias to 1........................................................................................................................................2235/40 is seen but reckon 1.2200/05 wud remain intact n yield rebound later due to o/sold condition.
Sell at market with stop as indicated, abv wud signal recent upmove has resumed, 1.2235/40 1st...
Rate: +1.2240+
Strategy: +Target met+
Position: Short at 1.2277
Objective: 1.2240
Stop-Loss:
Resistance: 1.2320/1.2351/1.2400
Support: 1.2245/1.2190/1.2121
INTRA-DAY EUR/USD OUTLOOK - +1.2300+
Update Time : 2004/08/10 13:56GMT
As euro has remained confined within nr term established range suggesting further sideways trading wud be seen, however, as long as 1.2263 holds, bullishness is seen for recent upmove to resume for marginal gain twds 1.2310/15 b4 retreat.
Hold long with stop as indicated, only below 1.2245 wud confirm temp. top is made, risk 1.2210/15.
Rate: +1.2300+
Strategy: +Target met+
Position: Long at 1.2270
Objective: 1.2300
Stop-Loss:
Resistance: 1.2317/1.2351/1.2400
Support: 1.2245/1.2190/1.2121
INTRA-DAY USD/YEN OUTLOOK - +111.40+
Update Time : 2004/08/10 18:57GMT
As dlr has penetrated 110.99, suggesting retrace. of recent fall fm 112.49 remains in force n further gain to 111.45/50 is seen but 111.70/75 wud hold due to o/bot condition n bring retreat later.
Buy at market with stop as indicated n take profit on such move, below wud signal temp. top is made n yield 110.40/45...
Rate: +111.40+
Strategy: +Target met+
Position: Long at 111.05
Objective: +111.40+
Stop-Loss:
Resistance: 111.47/111.69/111.90
Support: 110.65/110.42/110.14
INTRA-DAY USD/CHF OUTLOOK - +1.2595+
Update Time : 2004/08/10 18:50GMT
As dlr has risen strongly after marginal weakness to 1.2491, suggesting intra-day low is made n consolidation with upside bias to retrace recent decline fm 1.2860 is under way n gain to 1.2595/00 is seen but 1.2620/25 wud hold n bring retreat later.
Buy at market with stop as indicated, below wud risk re-test of 1.2491 sup...
Rate: +1.2595+
Strategy: +Target met+
Position: Long at 1.2555
Objective: 1.2595
Stop-Loss:
Resistance: 1.2600/1.2686/1.2725
Support: 1.2493/1.2479/1.2436
INTRA-DAY USD/CHF OUTLOOK - +1.2500+
Update Time : 2004/08/10 14:13GMT
Similar to euro, dlr is expected to remain confined within nr term established range n as long as 1.2550/55 holds, bearishness is seen for recent decline to resume for re-test of 1.2493, below wud extend marginal weakness to 1.2470 'later'.
Hold short, stop 1.2555, break wud risk another corrective rebound to 1.2575/78 n possibly 1.2600..
Rate: +1.2500+
Strategy: +Target met+
Position: Short at 1.2540
Objective: 1.2500
Stop-Loss:
Resistance: 1.2575/1.2600/1.2686
Support: 1.2493/1.2479/1.2436
INTRA-DAY GBP/USD OUTLOOK - +1.8310+
Update Time : 2004/08/10 18:49GMT
Cable's present breach of 1.8240 suggests retrace. of recent rise fm 1.8085 remains in progress n further weakness to 1.8305/10 is seen but 1.8270 sup shud remain intact due to o/sold condition n bring rebound later.
Sell at market with stop as indicated, abv wud signal low is made, 1.8415/20...
Rate: +1.8310+
Strategy: +Target met+
Position: Short at 1.8352
Objective: 1.8310
Stop-Loss:
Resistance: 1.8420/1.8445/1.8475
Support: 1.8305/1.8270/1.8201
INTRA-DAY EUR/YEN CROSS OUTLOOK - +136.35+
Update Time : 2004/08/10 14:03GMT
As recent upmove fm 132.86 remains in progress, suggesting further gain to indicated obj. wud be seen, however, weakening of momentum wud prevent strg rise abv 136.60/65 n reckon 137.00 wud cap upside n bring much-needed retreat.
Hold long, stop as indicated, only below 135.57 wud signal intra-day top is made, 135.20...
Rate: +136.35+
Strategy: +Target met+
Position: Long at 136.00
Objective: 136.35
Stop-Loss:
Resistance: 136.70/137.00/137.39
Support: 135.90/135.57/135.20
DAILY EUR/YEN CROSS OUTLOOK - +136.20+
Update Time : 2004/08/10 13:40GMT
Euro's rebound after finding renewed buying at 135.20 suggests recent upmove has resumed n further gain twd 136.30/35 is envisaged, however, loss of momentum wud cap price below daily res at 136.70 n risk fm there has increased for a correction.
Hold long with stop below there, break signals a temp. top is made n risks pullback to 134.80...
Rate: +136.20+
Strategy: +Target met+
Position: Long at 135.60
Objective: 136.20
Stop-Loss:
Resistance: 136.32/136.70/137.02
Support: 135.53/135.20/134.42
INTRA-DAY EUR/GBP CROSS OUTLOOK - +0.6680+
Update Time : 2004/08/10 08:32GMT
As euro has traded narrowly after rebounding fm 0.6652, suggesting consolidation with upside bias remains for recent rise fm 0.6580 to resume, bring further gain to indicated obj. n then twds 0.6700 b4 retreat due to loss of momentum.
Hold long, stop as indicated, below risks stronger correction to 0.6635/40 b4 up.
Rate: +0.6680+
Strategy: +Target met+
Position: Long at 0.6660
Objective: 0.6680
Stop-Loss:
Resistance: 0.6686/0.6700/0.6733
Support: 0.6652/0.6622/0.6591
DAILY EUR/GBP CROSS OUTLOOK - +0.6695+
Update Time : 2004/08/10 14:46GMT
Euro's present firmness suggests as long as 0.6649 sup (prev. res) holds, upside bias remains for early rally fm 0.6580 to retrace the fall fm 0.6733 to resume later twds 0.6700, however, as broad outlook is consolidative, said res wud remain intact.
Hold long, stop at break-even, only below 0.6649 wud signal top is made n risk 0.6622 sup...
Rate: +0.6695+
Strategy: +Target met+
Position: Long at 0.6655
Objective: 0.6695
Stop-Loss:
Resistance: 0.6700/0.6733/0.6768
Support: 0.6676/0.6649/0.6622
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AceTrader Performance Update
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July 2004 (Pips)
Intraday Daily
USD/YEN +217 -31
EUR/USD +509 +186
USD/CHF +529 +499
GBP/USD +752 +301
YTD 2004 (Pips)
Intraday Daily
USD/YEN +338 -31
EUR/USD +2550 +1130
USD/CHF +2421 +1001
GBP/USD +2941 +548
Alex Tsui
Sales Manager - Internet Based Business
Trendsetter Financial Markets Limited
Tel: (852) 2865 2059
Fax: (852) 2525 9443
email: alex@acetrader.com
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strategies
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