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199857 Resource 128466 128654 128654 1205904964883 1205904964883 Controlled European Morning Update 19th March 2008

Dollar back under pressure in Asia

News from Australia:Australia                                                Prior    Current January Westpac Leading Index              - 0.2%   - 0.1% March DEWR Skilled Vacancies                 +4.7%    +4.1% Q4 Dwelling Starts                                  +1.3%    +2.6% February Preliminary BoP Imports  (MoM)  +6.0%   - 1.3%Numbers from Australia this morning were soft but not excessively and basically reflect the gentle slowdown in the economy. The leading index implied growth moderating to around 3.5%-3.8% so no one is going to get too bearish at this stage.Dwelling Starts were still firm in Q4 but it is likely that the two interest rate hikes this year will take the steam off the housing market. Jobs ads were soft again and tend to suggest that the record low unemployment may not last for too many months if the trend continues. Releases from Japan:Japan                                                  Forecast   Actual January All Industry Activity Index (MoM)   +0.1%   +0.0%Industrial activity was a little softer in January but that wasn’t far from forecasts and again does reflect the mild downturn that has already been seen, so no great surprises.However, the Reuter’s Tankan report was not quite so rosy with corporate sentiment deteriorating due to the continuing rise in raw material prices. The Manufacturer’s MI slipped by 1 point to +8 which is less than half the level seen 3 month’s ago at +21. The scene is set for the BOJ’s Tankan report on April 1st. The following economic releases are due today:January Italian Industrial Orders           (MoM)   +1.3% Italian Industrial Orders            (YoY)   +5.0% Italian Industrial Sales             (MoM)   +1.1% Italian Industrial Sales              (YoY)   +4.5% Euro-zone Trade Balance            EUR   - 7.0bn Euro-zone Construction Output  (MoM)  Euro-zone Construction Output   (YoY) February U.K. Claimant Count Rate                    +2.5% U.K. Jobless Claims Change                 - 5.0K U.K. ILO Unemployment Rate                5.2%March U.S. MBA Mortgage Applications U.K. CBI Industrial Trends Since this is the last update until Thursday the 26th I shall do my best to describe the general outlook for the coming week. I do have to add a caveat in that quite frankly I think it could prove to be quite choppy and therefore support & resistance levels could change substantially each day. For a start Friday is a bank holiday and Monday a partial one. That should keep the market subdued and this will mean the recovery seen overnight is unlikely to last too long. It is very unlikely that without any further positive input that the market will change its mind and become Dollar bullish. More likely the daggers will be out before long to know it back.Today I do see potential for further gains but not excessive. The areas I feel will cap are at around 101.23 Dollar-Yen, 1.5531 Euro, 1.9944-77 Pound and 1.0130-60 Swissie. From these areas I suspect a pullback. Whether the market will push it substantially lower is uncertain given the long weekend but the downward pressure should be renewed by Monday and more likely Tuesday next week.However, at this stage I think the Dollar has done enough to break the current downward path and I’m not really in favor of seeing new lows. Thus any approach to this week’s lows should see momentum falter and cause a pullback into range. I suspect when I get back on Thursday that I’ll see rates around current levels and possibly a touch lower.The only other comment I’ll make is a long shot but best kept in the back of minds. The sharp losses amid almost hysteria do fit the description of a spike bottom. If we are seeing a spike bottom then the implication is for a headlong rush higher. However, I’d only follow that if there is some surprising/amazing announcement to trigger it. Otherwise the bearish sentiment is just too much for the dollar right now. Note important support and resistance areas:         USDJPY        EURUSD       USDCHF       GBPUSD Res:  100.95-23    1.5791-31    1.0132-60    2.0192-18 Res:  100.10-43    1.5714-57    1.0018-52    2.0123-46Spt:     98.32-63    1.5612-50    0.9900-34    2.0042-72 Spt:     97.51-81    1.5495-31    0.9780-00    1.9941-77 9 application/xml false All industry activity Australia currencies employment Forex FX Imports Japan jobs ads US Find Forex fascinating? Read more about the largest global market http://www.gftforex.com/land/index.asp?aid=446 Mozilla/4.0 (compatible; MSIE 7.0; Windows NT 5.1; hc; .NET CLR 1.1.4322; .NET CLR 2.0.50727; MS-RTC LM 8) 127.0.0.1 127.0.0.1 ICopsey 202.216.243.97 false true false false true 128466 blog blogsite/GFTForex/web