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201717 Resource 128466 128654 128654 1208152130956 1208152130956 Controlled European Morning Update 14th April 2008

Following the spike higher the Dollar has consolidated in Asia

Releases from Australia:                                                       Forecast   Actual February Home Loans           (MoM)    +0.5%    - 5.9% February Investment Lending (MoM)   - 9.5%Global fears have certainly reached the Australian shores as home and investment loans crashed over February and will probably also be accompanied by a general fall in consumer confidence also. It stacks up the evidence of a global consumer sentiment that is hovering over the panic line which could generate a much stronger global turndown as monthly household spending is curtailed while inflation and high energy prices sucks the life out of spending on other goods and services. The Bank of Japan published the minutes of the 6th-7th March Monetary Policy Meeting which summarized the fragility of the global economy which would have a dampening impact on the Japanese economy. They noted that production, which holds the key to the sustainability of the virtuous cycle, recently turning more or less flat, that "it was too early to conclude that the recent developments suggested a change in its (rising) trend, but careful attention should continue to be paid"."In this situation, it was appropriate to carefully examine economic and financial developments at home and abroad and to grasp the situation more accurately," it said.These comments have now been overtaken by the Tankan Report 2 weeks ago which caused a downgrading of the economy. The following economic releases are due today:February Euro-zone Industrial Production   (MoM)    +0.2% U.S. Business Inventories                        +0.5%March Bank of France Business Sentiment           106.0 U.K. PPI: Input                         (MoM)     +1.9% U.K. PPI: Input                         (YoY)      19.3% U.K. PPI: Output                       (MoM)     +0.5% U.K. PPI: Output                        (YoY)     +5.6% U.S. Advanced Retail Sales         (MoM)     +0.1% U.S. Retail Sales less Autos        (MoM)     +0.2% Dollar losses were seen on Friday and a spike higher on open this morning. I’ll basically point out the situation in the Euro which seems central to the picture for the Dollar, and which I described on Friday. There are three basic patterns I am looking at. The first is a direct bullish Euro picture that will send it straight back above 1.5912 and which I feel has potential to either 1.5985 or possibly as high as 1.6065. The second is a flat correction that would send it back to the 1.5340 area before back above 1.5912. Finally the last option is that the 1.5912 high was a stunted final wave. For this again we should see a move down to 1.5340 but then a decisive break. Now which? Well, if I consider the fact that the Swissie held up quite well and the Pound does look decisively bearish I may even begin to get swayed to the third option – that we’ll see stronger Dollar gains.I’ll just make a mention of the G7 conference references to Forex rates. Frankly I think it is still more words than action and therefore it is indecisive. Certainly it doesn’t reverse the poor U.S. figures and without action could easily be forgotten by the end of the week. Will there be concerted central bank intervention? Well, recent comments suggest they don’t really consider it a realistic option. The only niggling thought in the back of my mind is that this financial crisis is nothing like we’ve seen for a long while. If these officials consider that a continuing weak Dollar could threaten to worsen the basic financial situation then it could be a tool they would use in the short term to smooth out the moves somewhat.So with this in mind, watch the break levels – we are very close to the Dollar making further gains and if so then I’ll begin to watch the second scenario looking for the Euro to retest the 1.5340 area. Beyond that I’d want to get other confirmations that there is a bigger chance of this following through. Note important support and resistance areas:         USDJPY        EURUSD       USDCHF       GBPUSD Res:  102.56-93    1.5854-87    1.0171-17    1.9842-48 Res:  101.60-97    1.5729-52    1.0088-25    1.9746-67Spt:   100.30-40    1.5653-91    1.0025-25    1.9605-48 Spt:     99.34-60    1.5587-94    0.9902-49    1.9505-46 9 application/xml false Australia BOJ currencies Forex FX home intervention investment lending meeting Thinking of switching to trade currencies? Read more about the opportunities in the Forex 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