30/01/06
last week’s recap
The Dollar weakened early in the week due to risk averse behavior on the part of market participants globally, on increased geo-political risks. Concerns over
The week ahead
The coming week could possibly show a pause in the pace of activity with US GDP growth expected to have dipped in Q4, and the German IFO survey is expected to have declined. However, analysts feel in both cases this could prove to be a pause, rather than a fundamental change of trend.
In the States the key focus for the week will be the FOMC (Tuesday) announcement. The Fed is expected to raise rates by 25 basis points and the market will be playing close attention to the accompanying statement. With two months worth of data ahead in addition to a new chairman arriving the next day, the market does not expect a definitive signal. This will see the market very focused on the upcoming data releases. The Chicago PMI (Tuesday) and ISM (Wednesday) is expected to show continued strength.Non-farm payrolls (Friday) are also expected to remain firm.Consumer confidence readings, firstly Conference Board (Tuesday) and
In the Eurozone the market consensus is that the ECB is unlikely to move on rates this Thursday. The market will pay close attention to the press conference that follows to see if there are any hawkish comments by ECB President Trichet. On the data front, the manufacturing PMI (Wednesday) and services PMI (Friday) are expected to hold at high levels. The Eurozone CPI estimate (Friday) is expected to show a rebound from last month. In the
In
Key Weekly Pivot levels
Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 |
EUR/USD | 1.2137 | 1.2181 | 1.2285 | 1.2365 | 1.2590 |
USD/JPY | 113.79 | 113.99 | 114.75 | 115.91 | 116.35 |
GBP/USD | 1.7523 | 1.7702 | 1.7840 | 1.7901 | 1.7947 |
AUD/USD | 0.7406 | 0.7446 | 0.7510 | 0.7577 | 0.7600 |
- Euro – 1.2285
Initial support at 1.2181 (Former resistance from Jan 6)) followed by secondary support at 1.2137 (Jan 23 low). Initial resistance is now located at 1.2365 (76.4% retracement of the 1.2590 to 1.1638 decline) followed by 1.2590 (Sep 2, 2005 high).
- Yen – 114.75
Initial support is located at 113.99 (Trendline support) followed by 113.79 (Jan 16 low). Initial resistance is located at 115.91 (Jan 17 high & trendline resistance area) followed by 116.35 (61.8% of 118.16-113.41 decline and near Jan 5 high).
- Pound – 1.7840
Initial support is located at 1.7702 (Jan 18 low) followed by 1.7523 (Jan 11 low). Initial resistance is located at 1.7901 (Oct 27 high) followed by 1.7947 (61.8% retracement of the 1.8501 – 1.7052 decline).
- Aussie – 0.7510
Initial resistance is located at 0.7577 (Jan 18 high) followed by 0.7600 (Trendline resistance). Initial support is located at 0.7446 (38.2% retracement of the 0.7235-0.7577 climb) followed by 0.7406 (50.0% retracement of the 0.7235-0.7577 high).