Forex and Dow Jones recommended levels for 09-Apr-08

Today’s support: -1.0125, 1.0103 and 1.0057(main), where correction could happen. Break would give 1.1039, where a correction may happen. Then 1.1.022. If a strong impulse, we would see 0.9976. Continuation will give 0.9956 and 0.9928.
Today’s resistance: - 1.0154. 1.0172 and 1.0188 (main), where a delay and correction may happen. Break would give 1.0219, where also could be a correction. Then 1.0233. If a strong impulse, we would see 1.0252. Continuation will give 1.0266 and 1.0281.

GBP/USD

Today’s support: - 1.9642 and 1.9617(main), where correction may happen. Break would present 1.9595, where a correction may also be. Then 1.9577. If a strong impulse, we would see 1.9560. Continuation will give 1.9543.
Today’s resistance: - 1.9710, 1.9733 and 1.9756(main). Break would give 1.9772, where a correction may be. Then 1.9789. Break of the latter would give 1.9808. If a strong impulse, we would see 1.9827. Continuation will bring 1.9845 and 1.9864.

DOW JONES INDEX

Today’s support: - 12 573.28, 12 551.13, 12 526.88 ? 12 504.37(main), where a delay and correction may happen. Break of the latter will give 12 476.25, where correction also can be. Then 12 454.45. Be there a strong impulse, we would see 12 431.30. Continuation will bring 12 414.37 and 12 403.12.
Today’s resistance: - 12 692.78, 12 729.36 ? 12 757.50(main), where a a delay and correction may happen.Break would bring 12 782.11, where a correction may happen.Then 12 801.10, where a delay and correction could also be. Be there a strong impulse, we’d see 12 830.63. Continuation would bring 12 859.45 and 12 870.00.

Forex - Czech crown weakens on news govt approves deal to curb currency growth

PRAGUE (Thomson Financial) - The Czech crown weakened in midday trade after news the government had approved a finance ministry and central deal meant to curb the currency's gains.

At 12 noon, the crown was 0.3 percent weaker against the euro at 25.1, gaining some after losing as much as 0.5 percent in earlier trade.

The ministry and central bank's deal includes freezing all privatisation income and not converting it into the Czech currency, as well as not converting European Union subsidies, however final details will be known later today.

"The deal has been approved," a central bank spokeswoman said, adding that final details will be released at an afternoon press conference from the finance ministry.

The measures are expected to keep major fund flows outside the market without effecting the exchange rate and demand for the crown.

Portugal 2007 revised trade deficit widens to 19.47 bln eur vs 18.59 bln - INE

LISBON (Thomson Financial) - Portugal's revised global trade deficit widened to 19.47 billion euros in the 12 months to December from 18.59 billion euros a year earlier, as an 8.8 percent rise in exports failed to offset a 7.4 percent rise in imports, the INE statistics institute said.

In a statement, INE said it has revised the figures it published last month, which showed the trade deficit widening to 19.3 billion euros, due to updated and corrected data supplied by companies regarding their international trade activities.

Forex News: Pound Falters on Home Prices, Greenspan Says U.S. Prices to Stabilize.

Fundamental Headlines

• AUDUSD – Confidence amongst Australian companies fell for the third straight month to -4 from -2 in February, due to high interest rates and a slowing global economy. RBA Governor Stevens has recently confirm that the central bank’s tightening policy for the time being has come to an end, as they are lowering growth forecasts for the economy and inflation. Speculation is increasing that as growth slows, future rate cuts may be in store. For more news and resources, visit our Australian Dollar Currency Room.
• USDJPY – The Eco Watchers Survey showed that confidence among merchants rose to a four month high of 36.9. Expectations are that confidence will start to wane now that companies have started to cut back on hiring as a U.S. slowdown weighs on demand. The BoJ is expected to keep rates unchanged tomorrow, but recent comments from Deputy Governor Shirakawa that the bank is willing to take “flexible action”, has increased speculation that there may be a rate cut in the near-term future.. For more news and resources, visit our Japanese Yen Currency Room.
• GBPUSD – U.K house prices fell by 2.5%, the lowest since 1992. Average prices in March fell to 191,566 pounds as demand has fallen on tight lending standards. Banks have been reluctant to pass on recent rate cuts by the BoE to borrowers. The central bank is expected to again cut rates by as much as 50 points at there next meeting, as downside risks remain. Discuss the topic and your trade ideas in the GBP/USD Forum.

• Detroit Sets Bold Goal: Exporting U.S. Cars (link) – Wall Street Journal
• Alcoa Net Falls Amid U.S. Slowdown (link) – Wall Street Journal
• Vetting of Overseas Investors Stepped Up (link) – Financial Times
• Greenspan Says U.S. Home Prices May Stabilize in 2008 (link) – Bloomberg
• Rice Jumps To Record On Philippine Imports, Exporter Sale Curbs (link) – Bloomberg

British Pound Accelerates Lower: Decline Should Continue

A triangle may be unfolding in the EURUSD. If so, then price would come lower in wave E towards 1.5575. The GBPUSD decline has accelerated, which is expected to continue. The USDJPY is still expected to test 103.75/104.00 before forming a top.

Near term, both legs of the down-up sequence from 1.5904 are not clear impulses. This makes it likely that a larger correction is underway; either a triangle or a flat. It is possible that waves A through D of a triangle are complete and that wave E is underway towards 1.5600 or just below. E waves of triangles are usually sharp and have a tendency to penetrate the lower triangle line. The triangle line crosses through 1.5593 tomorrow. It does remain possible that a larger correction is underway.

Visit our recently updated Euro Currency Room for specific resources geared towards this currency.

Top Currency Trading Ideas

If our EURUSD bearish count is correct, then the pair needs to accelerate lower this week. The USDJPY is likely to form another significant top this week or next and Cable should accelerate lower as well.

Candlesticks Point to Divergence in the Majors

Following the passing of last week’s dollar event risk, the majors present conflicting scenarios on further price action. While the Euro and Australian Dollar bullish trends remains intact, the Greenback looks decidedly strong against the Sterling and leaning to be so against the Yen. USD/CAD and NZD/USD lack strong directional conviction, as it seems each pair is determined to set out its own path going forward.

Candlestick forum.



EUR/USD


Dollar tries to build momentum, but bullish trend still intact

The beginning of last week saw EURUSD price action has consolidated in a tight 130-pip range. The up-trend had not been violated, so we advocated continuing to buy the pair, adding a cautionary note that the lack of a strong signal meant we will keep a close eye on price action and cut losses quickly. Our hesitation was warranted – EURUSD responded sharply to the marginally better ISM Manufacturing report, dropping out of the range to hit our stop for a loss of 100 pips.

Friday’s NFP report disappointed hopeful dollar bulls, showing losses 30k greater than expected and revising the previous month’s result to the downside. EURUSD has once again found itself at the familiar trend line stretching from 02/07. With last week’s event risk behind us, we continue to hold the view that EURUSD is poised to test the 1.6000 mark. A Hammer at the trend line confirmed by a bullish candle seen last week adds credence to the up-side bias.