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Monday, August 17, 2009

Action Insight Daily Report 8-17-09

ActionForex.com
Action Insight Daily Report

Markets Rocked by Falling China Stocks, Dollar and Yen Up

Financial markets are rocked by another wave of selling in the China stock market which saw Shanghai A stocks dropping more than 5% today. Commodities are sent lower with crude oil dropping further to as low as 66.35 so far. Massive buying of Japanese yen is seen, which takes most yen crosses through near term support level to confirm decline resumptions. AUD and NZD are hardiest hit with AUD/JPY dropping over -1.8% and AUD/USD dropping -1.4% so far. Dollar is helped by strength in yen and rebounds further against most major currencies. As note in our weekly report, there is possibly a developing trend that funds are starting to flow back from emerging markets and commodities into safer assets. The development in the next week or two will likely clear out the picture.

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Candlesticks & Ichimioku Analysis

Trade Idea: USD/CHF - Buy At 1.0725

As dollar's rebound from 1.0671 has finally broke above the Kijun-Sen, confirm the fall from 1.0885 has ended there and the Tenkan-Sen on 4 hour chart has just started turning north, further consolidation would be seen with upside bias for gain towards 1.0845/50 but it is necessary to see a break of 1.0885/91 resistance to retain this bullish view for headway towards 1.0935/40 strong resistance area later

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Trade Idea: GBP/USD - Sell At 1.6465, O.C.O Buy At 1.6270

Current break of last week's low at 1.6391 support confirms the decline from1.7044 has resumed and further fall to 1.6340/44 (50% projection of 1.7044 to 1.6391 measuring from1.6670) is under way, however, near term oversold condition would limit downside to 1.6266 (previous support as well as 61.8% projection level) and bring a rebound later.

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Trade Idea: EUR/USD - Exit Long Entered At 1.4175

Although the single currency recovered after falling to 1.4160 last Friday, as euro has fallen again this morning partly due to active cross-selling (in EUR/JPY), suggesting downside risk remains for a retest of 1.4086 support, however, only break there would indicate the decline from 1.4448 top has resumed and bring stronger retracement of recent upmove to 1.4050 and possibly towards chart support at 1.4007.

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Trade Idea: USD/JPY - Buy At 94.05

As the greenback is still trading with a soft bias, suggesting the decline from 97.79 top is still in progress and weakness towards 94.01/04 (previous support and 61.8% Fibonacci retracement of 91.73-97.79) would be seen, however, near term oversold condition (hourly oscillators are showing low readings) should prevent sharp fall below there and reckon 93.50 would hold and bring a rebound later.

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Featured Technical Report Market Highlights

GBP/JPY Daily Outlook

Daily Pivots: (S1) 155.88; (P) 157.14; (R1) 158.28; More

GBP/JPY's fall from 163.05 resumes today by taking out 155.95 support and reaches as low as 154.67 so far. At this point, intraday bias remains on the downside and further decline should be seen to 153.81 support next. As discussed before, a short term top is at least formed at 163.05 with bearish divergence conditions in 4 hours MACD and RSI. Break of 153.81 will confirm that whole rise form 146.75 has completed and will bring deeper decline to retest this low. On the upside, above 157.06 will turn intraday outlook neutral and bring consolidation. But risk will remain on the downside as long as 160.34 resistance holds.

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All Technical Outlook Reports

Daily Top Movers

Top 5 Current Last Change
(Pips)
Change
(%)
AUDJPY 77.64 79.03 -139 -1.79%
NZDJPY 63.29 64.34 -105 -1.66%
AUDUSD 0.8202 0.8325 -123 -1.50%
GBPJPY 154.84 157.03 -219 -1.41%
NZDUSD 0.6686 0.6777 -91 -1.36%

Last Updated: Aug 17, 07:25 GMT

Currency Heat Map Daily View

USD EUR JPY GBP CHF CAD AUD
USD
EUR
JPY
GBP

Last Updated: Aug 17, 07:25 GMT

Economic Indicators Update
GMT Ccy Events Actual Consensus Previous Revised
23:01 GBP Rightmove House Prices M/M Aug -2.20% -- 0.60%
23:01 GBP Rightmove House Prices Y/Y Aug -3.10% -- -3.10%
23:50 JPY GDP Q/Q Q2 P 0.90% 1.00% -3.80%
23:50 JPY GDP Annualized Q2 P 3.70% 3.90% -14.20%
23:50 JPY GDP Deflator Y/Y Q2 P 0.50% 1.80% 0.90%
7:15 CHF Retail Sales Y/Y Jun 0.9% 0.80% -1.40%
9:00 EUR Eurozone Trade Balance Jun 1.3B 0.8B
12:30 USD Empire State Manufacturing Aug 2.2 -0.55
13:00 USD Net Long-term TIC Flows Jun $17.5B -$19.8B
17:00 USD NAHB Housing Market Index Aug 18 17
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