Daily Technical Analysis by Forexalt.com

[Forexalt]

Early Technical Analysis for Tuesday August 8 2006

Full report with charts on Forexalt.com

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Early Technical Analysis: The Market Prepares for the Main Event of Week



At the yesterday's tenders the dollar managed to become stronger a little against the major currencies. This movement can be considered as correction Friday's rally of competitors of dollar. Probably, many investors have preferred to fix profit before today's meeting of the Federal Reserve.
In the morning influence on the currency market can render the data by Germany: parameters of the foreign trade balance and industrial production. Predictably, proficiency of Trade balance can grow, that will support a rate of euro. As to, the data on Industrial production though the market waits for the worse, than the last month a parameter, however expect, that strong forecast value will be rather can also support euro.
The dollar can get some support from an unit labour cost (Q2) preliminary. As expect, the index will confirm inflationary expectations.
But, certainly, the main news of day will be decision FRS under rates. Basically, the market was adjusted that the Federal reserve of the rate to raise any more will not be, and has put in pawn these expectations in the current rate. However the situation not so is unequivocal, as it seems. Performances of some functionaries FRS show, that they stay in uncertainty concerning decision FOMC. Therefore it is impossible to exclude probability of increase of the rate on 25 bp with sharp growth of a dollar exchange rate.

EUR
Weekly chart EUR trend – Bullish
Resistances
1.2908 (Friday’s high 08.04.2006), 1.2971/78 (highs 05.15.2006 and 06.05.2006), 1.3043 (76.4% retracement of 1.3483 to 1.1640)
Supports
1.2801 (76.4% retracement from 1.2908 to 1.2459), 1.2778 (61.8% retracement of 1.3483 to 1.1640 at 1.2778 and 61.8% retracement of 1.2978 to 1.2459 at 1.2778), 1.2705 (23.6% retracement from 1.1825 to 1.2978)


GBP

Weekly chart GBP trend - Bullish
Resistances
1.9127 (Friday’s high 08.04.2006), 1.9145 (high 02.18.2004), 1.9177 (towards 61.8% projection of 1.7229 to 1.9023 from 1.8089)
Supports
1.8913 (Thursday’s high 08.03.2006), 1.8795 (short time ascending trend line from low at 07.25.2006 at 1.8383 to low 08.03.2006 at 1.8700), 1.8680 (23.6% retracement from 1.7229 to 1.9127)


CHF

Weekly chart CHF trend – Bearish
Resistances
1.2285 (50.0% retracement from 1.3284 to 1.1920), 1.2365 (Tuesday high 08.01.2006), 1.2395 (the top part of “orchid” channel)
Supports
1.2190/80 (Friday’s low at 1.2190, low 06.05.2006 at 1.2185 and 61.8% retracement of 1.1920 to 1.2593 at 1.2180), 1.2049 (38.2% retracement from 1.3284 to 1.1287), 1.2015 (low 06.05.2006)


JPY

Weekly chart JPY trend – Capped?
Resistances
115.53 (high 08.04.2006), 115.77/81 (23.6% retracement from 108.96 to 117.86 at 115.77 and low 07.21.2006 at 115.81), 116.63 (resistance line from high 12.04.2005 to 04.11.2006 at 116.63 and 61.8% retracement from 121.38 to 108.96)
Supports
113.97 (Friday’s low 08.04.2006), support 113.44/43 (low 07.10.2006 and 50% retracement of 108.96 to 117.86 at 113.43), 111.32 (low 06.02.2006)

[Forexalt]

Midday Technical Analysis for Tuesday August 8 2006

Full report with charts on Forexalt.com

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Midday Technical Analysis: FX await FOMC meeting announcement



World financial community, including share platforms of Asia and Europe, and also the market of currencies, the result of session FOMC, and all themes which are discussed at the moment expect, anyhow, concern the given event. Market observers see risks of that today the Federal Reserve will make the decision to lift the interest rate on 25 bp while still one week ago when the dollar amplified rates started to hand over positions against the basic competitors, the majority of players was sure in the opposite. Well, the market is not perfect and declined to excessive reactions to any events which at all thus, can be also are incorrectly interpreted.
Philosophy FRS is the basic source of formation of market moods concerning a monetary and credit policy. The markets try to read and understand correctly all federal instructions with all their nuances, then to form expectations and to embody these expectations in actions which find reflection in dynamics of rates of financial actives.
Before the key unknown person there was inflation, therefore the market watched statistics on price pressure, and also rhetoric of federal officials which anyhow concerned this factor. On the basis of the received information expectations about increase of the rate as both the rhetoric and statistics specified preservation of increase in inflationary risks were formed. In this key the situation has not changed at all. The new component which has acted from comments B.Bernanke, specified on anxieties concerning delay of economic growth was simply added. The subsequent statistics began to bring numerical acknowledgement to these fears. From last parameters it is possible to allocate gross national product for the second quarter which publication has caused rough reaction of the market.
This tandem - economic growth and inflation have brought in uncertainty of expectations of participants of the market. The statistics specifies economic delay, and also the statistics specifies kept inflationary risks. The rhetoric of the Federal Reserve specifies anxieties concerning price pressure, and also the rhetoric specifies anxieties concerning economic growth. To form expectations of result of session FOMC for participants of the market is a problem not from simple.
Some experts speak, that the rhetoric about inflation and economic expansion the Federal Reserve has cornered itself, however we on the other hand look at this situation: FRS thus leaves for itself open both directions that in case of any result to not cause shock reaction on the part of the financial markets. First of all is the national market of the real estate and the stock market.
We expect increase of the interest rate on 25 bp with the subsequent pause which will not mean final end of a cycle. Instruction FOMC will keep anxieties on inflationary risks, but in the greater degree will be concentrated on economic prospects.

EUR

Weekly chart EUR trend – Bullish
Resistances
1.2908 (Friday’s high 08.04.2006), 1.2971/78 (highs 05.15.2006 and 06.05.2006), 1.3043 (76.4% retracement of 1.3483 to 1.1640)
Supports
1.2801 (76.4% retracement from 1.2908 to 1.2459), 1.2778 (61.8% retracement of 1.3483 to 1.1640 at 1.2778 and 61.8% retracement of 1.2978 to 1.2459 at 1.2778), 1.2705 (23.6% retracement from 1.1825 to 1.2978)

GBP

Weekly chart GBP trend - Bullish
Resistances
1.9127 (Friday’s high 08.04.2006), 1.9145 (high 02.18.2004), 1.9177 (towards 61.8% projection of 1.7229 to 1.9023 from 1.8089)
Supports
1.8913 (Thursday’s high 08.03.2006), 1.8795 (short time ascending trend line from low at 07.25.2006 at 1.8383 to low 08.03.2006 at 1.8700), 1.8680 (23.6% retracement from 1.7229 to 1.9127)

CHF

Weekly chart CHF trend – Bearish
Resistances
1.2285 (50.0% retracement from 1.3284 to 1.1920), 1.2365 (Tuesday high 08.01.2006), 1.2385 (the top part of “orchid” channel)
Supports
1.2190/80 (Friday’s low at 1.2190, low 06.05.2006 at 1.2185 and 61.8% retracement of 1.1920 to 1.2593 at 1.2180), 1.2049 (38.2% retracement from 1.3284 to 1.1287), 1.2015 (low 06.05.2006)

JPY

Weekly chart JPY trend – Capped?
Resistances
115.53 (high 08.04.2006), 115.77/81 (23.6% retracement from 108.96 to 117.86 at 115.77 and low 07.21.2006 at 115.81), 116.63 (resistance line from high 12.04.2005 to 04.11.2006 at 116.63 and 61.8% retracement from 121.38 to 108.96)
Supports
113.97 (Friday’s low 08.04.2006), support 113.44/43 (low 07.10.2006 and 50% retracement of 108.96 to 117.86 at 113.43), 111.32 (low 06.02.2006)