Ahead of the final numbers for industrial production Japan’s economy minister Ota has restated the standard “everything’s going so well” line by saying that the recent declines in the stock market are not affecting the real economy which remains on a recovery track. Possibly she didn’t see the economy watcher’s survey yesterday which fell to its lowest level in 4 years as merchants bemoaned reduced consumer spending because of declining wages and a weakening job market amid a background of higher taxes. However, Ota did say she was watching oil prices closely since they impact on both corporate and household sentiment. They are also driving slimmer profit margins which are already under pressure in medium to small size corporations in Japan. It may eventually cause price rises but consumers are expected to react by making cut backs in spending. In the event there were no revisions to September’s figures:
Industrial Production (F) (MoM) - 1.4%
Industrial Production (F) (YoY) +0.8%
Capacity Utilization (F) 109.7
The following economic releases are due today:
September
French Industrial Production (MoM) - 0.5%
French Industrial Production (YoY) +2.8%
French Manufacturing Production (MoM) - 0.5%
French Manufacturing Production (YoY) +3.1%
French Trade Balance EUR -3.0bn
Italian Industrial Production (MoM) - 0.4%
Italian Industrial Production (YoY) +1.9%
U.K. Visible Trade Balance GBP -6.9bn
U.K. Total Trade Balance GBP -4.1bn
Euro-zone OECD Leading Indicator
U.S. Trade Balance USD -58.5bn October
Swiss SECO Consumer Climate 11.0
U.S. Import Price Index (MoM) +1.1%
U.S. Import Price Index (YoY) November
University of Michigan Confidence (P) 80.0
Well yesterday was broadly as expected and didn’t bring any confirmation of a Dollar reversal and possibly we will still need a few days. This morning has seen the losses extend beyond Wednesday’s lows and we are a hair’s breadth away from momentum being strong enough to push this further.
Right low there are minor bullish divergences still remaining but any stronger push will destroy these and thus if there is to be any stronger reversal then this current push lower shouldn’t push too far. The next big Dollar supports are at 1.4805 Euro, the 1.1100 historic low in the Swissie and 2.1174 Pound and there does seem an odds on chance these will be seen. But don’t forget that this weekend is a long NY weekend and thus a sustainable thrust lower doesn’t seem likely. Even Dollar-Yen is maintaining the downward pressure and this is stretching my patience considerably. Clearly we haven’t broken below the August weekly cycle low’s 111.57 price low and I still stubbornly feel it should hold, but it’s making a fair attempt to push this correction to the limits… However, I still see Euro-Yen as bullish also and this does seem to be holding to a good bullish structure so before getting bearish we need both currency pairs to break down.
Note important support and resistance areas:
USDJPY EURUSD USDCHF GBPUSD
Res: 114.00-50 1.4870-00 1.1310-45 2.1292-00
Res: 113.07-38 1.4771-05 1.1250-85 2.1174-00 Spt: 112.07-22 1.4650-90 1.1183-05 2.1030-60
Spt: 111.57-66 1.4604-12 1.1075-00 2.0972-90 | 
