MARKET REVIEW: Dollar rebounds on renewed rate hike
speculation
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Dollar gained ground slightly on Tuesday on renewed speculation that the Fed would likely hike the Fund rate by another 0.25% in September. U.S. housing starts and permits for July rose by 1.98 million units and 2.06 million units respectively, suggesting consumer spending in U.S. remained strong.
Although the headline CPI for July fell by 0.1% m/m against economists' forecast of 0.1% growth, the core CPI rose by 0.1% m/m, reflecting that mild inflationary pressure remained.
Therefore, Euro and cable retreated to 1.2308 and 1.8265 after rising briefly to 1.2390 and 1.8438 respectively. Dlr/chf rebounded to 1.2480 from an intra-day low at 1.2377. However, the greenback fell to 109.89 against the Japanese yen due to the softening of crude oil price.
Wednesday will see the release of E-12 inflationary report.
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(Majors) - USD 300/m, (Majors/Minors/Crosses) - USD 360/m
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Major Economic Indicators for Today (Aug 18, 04)
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Time Country Indicator
0900 E-12 HICP final M/M Jul
0900 E-12 HICP final Y/Y Jul
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TODAY'S FOREX MARKET OUTLOOK
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USD/YEN - 109.90
Update Time : 01:10GMT
Active cross buying in yen has continued to pressure price, suggesting erratic decline from 112.49 to retrace upmove from 107.02 remains in force and marginal weakness is likely but dynamic sup at 109.11 would remain intact due to oversold condition n yield rebound 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 EUR/USD
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Last Update At : 2004/08/18 00:08
EUR/USD..1.2347..The single currency rose marginally to 1.2390 after the release of weaker than expected U.S. CPI data before retreating strongly due to profit-taking n euro subsequently fell to an intra-day low of 1.2308.
Although y'day's retreat fm 1.2390 (a spike) suggests a temp. top is possibly made n another day of choppy sideways trading wud be seen, as long as 1.2283 (50% r of last Friday's rally fm 1.2175-1.2390) holds, upside bias remains for upmove fm 1.1968 to resume later today or tom. n yield marginal gain to 1.2416, being 50% proj. of 1.2175-1.2390 fm 1.2308, however, as hourly oscillators wud display bearish divergences on such move, suggesting daily res at 1.2462 is expected to remain intact n bring correction.
In view of the above analysis, buying euro again on intra-day
pullback is favoured with stop below 1.2283, only a breach of
1.2250/55 wud confirm recent upmove has formed a top n bring a
strg retrace. of the rise fm 1.1968 but renewed buying shud emerge abv 1.2175/79 (chart sup n 50% r) n yield rebound 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 - +1.2370+
Update Time : 2004/08/17 12:32GMT
Failure to re-test res 1.2384 n current retreat suggest further
consolidation wud be seen b4 U.S. opening n although marginal
weakness is seen, downside shud be ltd to 1.2300, yield rebound but abv 1.2384 needed to confirm upmove resumes, 1.2405/10.
Buy on next fall, stop +1.2310+, break wud risk retrace. to 1.2290/95 b4 up...
Rate: +1.2370+
Strategy: +Target met+
Position: +Long at 1.2338+
Objective: +1.2370+
Stop-Loss:
Resistance: 1.2384/1.2462/1.2500
Support: 1.2315/1.2263/1.2175
INTRA-DAY USD/CHF OUTLOOK - +1.2380+
Update Time : 2004/08/17 07:10GMT
As dlr has remained under pressure after early retreat fm 1.2456, suggesting recent decline fm 1.2860 has 'possibly' resumed n re-test of 1.2378 sup is envisaged, however, near term loss of momentum wud limit downside to 1.2350.
Hold short, stop as indicated, only abv 1.2456 res defers n risks stronger retrace. to 1.2475/85..
Rate: +1.2380+
Strategy: +Target met+
Position: Short at 1.2420
Objective: 1.2380
Stop-Loss:
Resistance: 1.2456/1.2491/1.2547
Support: 1.2315/1.2268/1.2202
INTRA-DAY GBP/USD OUTLOOK - +1.8305+
Update Time : 2004/08/17 14:17GMT
As cable has remained under pressure, suggesting retrace. of nr term rise fm 1.8133 remains in progress n further weakness to 1.8305/10 is seen, however, reckon 1.8280/85 wud hold due to o/sold condition n bring rebound later.
Sell again with stop as indicated, abv wud signal pullback has
possibly ended, 1.8405/10...
Rate: +1.8305+
Strategy: +Target met+
Position: Short at 1.8342
Objective: 1.8305
Stop-Loss:
Resistance: 1.8418/1.8475/1.8511
Support: 1.8300/1.8260/1.8231
INTRA-DAY GBP/USD OUTLOOK - +1.8330
Update Time : 2004/08/17 13:25GMT
Cable retreat after early gain to 1.8435/40 suggests intra-day top is made there n consolidation with downside bias for retrace. of nr term rise fm 1.8135 to 1.8340/45 is seen, however, reckon 1.8310/15 wud hold due to o/sold condition.
Turn short on recovery with stop as indicated. Abv said res needed to revive bullishness, 1.8468.
Rate: +1.8330
Strategy: +Target met+
Position: Short at 1.8367
Objective: 1.8330
Stop-Loss:
Resistance: 1.8418/1.8475/1.8511
Support: 1.8340/1.8310/1.8247
INTRA-DAY GBP/USD OUTLOOK - +1.8415+
Update Time : 2004/08/17 12:32GMT
Although cable has continued to edge lower, as y'day's fall fm 1.8468 is viewed as retrace. of the upmove fm 1.8133, reckon downside wud be ltd to 1.8340 n yield rebound later but abv 1.8418 res is needed to signal correction has ended.
Buy dips, stop +1.8360, break wud risk weakness to 1.8340 but 1.
8300 shud remain intact...+
Rate: +1.8415+
Strategy: +Target met+
Position: +Long at 1.8382+
Objective: +1.8415+
Stop-Loss: +1.8360+
Resistance: 1.8418/1.8475/1.8511
Support: 1.8340/1.8310/1.8247
INTRA-DAY AUD/USD OUTLOOK - +0.7195+
Update Time : 2004/08/17 12:38GMT
As aussie has continued to trade below 0.7197 res, suggesting minor consolidation wud be seen b4 U.S. opening, however, 0.7143 wud limit downside n yield re-test of said res, abv wud signal recent upmove has reusumed for further gain to 0.7200/05.
Buy dips, stop below there, break signals temp. top has been formed n risks retrace. to 0.7115/20.
Rate: +0.7195+
Strategy: +Target met+
Position: Long at 0.7165
Objective: 0.7195 1st
Stop-Loss:
Resistance: 0.7197/0.7263/0.7313
Support: 0.7143/0.7103/0.7058
INTRA-DAY EUR/GBP CROSS OUTLOOK - +0.6760+
Update Time : 2004/08/17 21:50GMT
Euro's firmness after early breach of 0.6733 res suggests recent upmove fm 0.6580 wud extend marginal gain to 0.6765/70, however, reckon 0.6785/90 is likely to cap upside due to loss of upward momentum n risk has increased for a retreat later.
Hold long, stop as indicated. Only below 0.6730 wud signal temp. top is made, 0.6700/05...
Rate: +0.6760+
Strategy: +Target met+
Position: Long at 0.6740
Objective: 0.6760
Stop-Loss:
Resistance: 0.6768/0.6797/0.6815
Support: 0.6733/0.6685/0.6652
INTRA-DAY EUR/GBP CROSS OUTLOOK - +0.6740+
Update Time : 2004/08/17 14:12GMT
As y'day's rebound fm 0.6686 has kept euro firm, suggesting
bullishness remains for recent upmove fm 0.6580 to resume for re-test of res at 0.6733, however, reckon upside wud be ltd at 0.6755/60 due to loss of momentum n yield retreat.
Buy dips, stop as indicated, only below 0.6686 wud signal temp. top formed n risk 0.6670...
Rate: +0.6740+
Strategy: +Target met+
Position: Long at 0.6720
Objective: 0.6740
Stop-Loss:
Resistance: 0.6768/0.6773/0.6815
Support: 0.6733/0.6685/0.6652
INTRA-DAY EUR/GBP CROSS OUTLOOK - +0.6721+
Update Time : 2004/08/17 06:54GMT
Euro's rebound fm 0.6685 indicates recent upmove fm 0.6580 has
resumed for test of strg res at 0.6733, abv there wud bring marginal gain twds 0.6740/45, however, loss of momentum has increased risk of a correction.
Hold long with stop as indicated, below defers but sup at 0.6685 shud hold...
Rate: +0.6721+
Strategy: +Target met+
Position: Long at 0.6700
Objective: 0.6720
Stop-Loss:
Resistance: 0.6733/0.6768/0.6773
Support: 0.6685/0.6652/0.6622
EUROPEAN CLOSING EUR/YEN OUTLOOK - +135.70+
Update Time : 2004/08/17 14:39GMT
As euro has remained under pressure, suggesting nr term fall fm 137.07 to retrace recent upmove is still in progress n further weakness to 135.60/65 is seen, however, o/sold condition wud keep price abv 135.30/35 n yield rebound.
Hold short, stop as indicated, abv wud risk recovery to 136.60/65.
Rate: +135.70+
Strategy: +Target met+
Position: Short at 136.10
Objective: 135.70
Stop-Loss:
Resistance: 137.07/137.20/137.86
Support: 135.63/135.14/135.00
GBP/YEN DAILY CROSS OUTLOOK - +202.50+
Update Time : 2004/08/17 14:22GMT
Stg's retreat after holding below 203.59 suggests decline fm 204.79 wud extend one more fall to 202.20/25 b4 rebound due to o/sold condition.
Turn short, stop as indicated, abv wud risk re-test of said res.
Rate: +202.50+
Strategy: +Target met+
Position: +Short at 203.50+
Objective: 202.50
Stop-Loss:
Resistance: 203.59/204.79/205.29
Support: 202.90/202.63/201.83
SEP T-BOND FUTURES DAILY OUTLOOK - +111.02+
Update Time : 2004/08/17 12:55GMT
Despite y'day's strg retreat, as T-bond has rebounded fm 110.11, consolidation with upside bias is seen, however, res at 111.17 is likely to hold.
Trade fm long side, stop below there, break wud shift risk to
downside for test of 110.02 sup...
Rate: +111.02+
Strategy: +Target met+
Position: Long at 110.16
Objective: 111.02
Stop-Loss:
Resistance: 111.17/112.00/112.22
Support: 110.28/110.02/109.15
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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
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Trendsetter Financial Markets Limited
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email: alex@acetrader.com
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