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Forexpros.com Daily Analysis - 03/03/2009

Discussion in 'Fundamental Analysis' started by ForexAnalysis, Mar 3, 2009.

  1. ForexAnalysis

    ForexAnalysis Contributing Member

    Apr 13, 2008
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    Forexpros.com Daily Analysis - 02/03/2009

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    Overnight Asia/Europe

    • USD mixed to start Asia, firms in Europe
    • BOK sells USD to support WON
    • Stops in-range in most pairs, tech trading dominates

    Today’s Economic Reports
    All times EASTERN (-5 GMT)

    • 8:30am USD Core PCE Price Index m/m
    • 8:30am USD Personal Spending m/m
    • 8:30am USD Personal Income m/m
    • 10:00am USD ISM Manufacturing PMI
    • 10:00am USD Construction Spending m/m
    • 10:00am USD ISM Manufacturing Prices

    Looking Ahead to Tuesday
    All times Eastern (-5 GMT)

    • 8:00am USD FOMC Member Lockhart Speaks
    • 10:00am USD Fed Chairman Bernanke Testifies
    • 10:00am USD Pending Home Sales m/m
    • All Day USD Total Vehicle Sales

    The USD is mixed this morning, lower against Yen but better against the other majors after a quiet overnight session which had minor economic news for traders. Overnight intervention selling of USD by the BOK to stem the slide in the WON helped in several Asian currencies but rebalancing needs also saw the BOK sell EURO; EURO dropped below 1.2580 area for stop-driven lows at 1.2544 before the rate regained the 1.2600 handle briefly. High prints at 1.2638 earlier in Asia are unchallenged at the start of New York trade with the rate holding around 1.2580 area. Eurozone flash HICP at 1.2% y/y was slightly above expectations putting some floor under the rate. GBP continued to slide as cross-spreaders sold the GBP side of the crosses; high prints at 1.4303 in early Asia with lows in early New York at 1.4120; traders note stops under the 1.4280 area in range but the main driver was under the 1.4200 handle. UK mortgage approvals were unchanged from the previous month suggesting some possible stabilization in housing.
    Forex traders note that weaker equities overnight as well as potential for the DJIA to slide under 7000 today were keeping some upside on the USD against the European currencies. USD/CHF has returned to the 1.1750 area with a high print at 1.1779; lows were 1.1701 suggesting bid interest is firm above the 1.1700 handle but the rate has failed to make a firm close above 1.1700 this year leaving the door open for a technical pullback from this area. USD/CAD has rallied to the 1.2800 handle for a high print at 1.2858; lows in Asia at 1.2723 as the rate is bought on the open. Traders expect overhead resistance to hold gains ahead of 1.2920 area suggesting a short opportunity is brewing. USD JPY high prints at 97.92 in Asia before corrective selling pushed the rate to low prints at 96.90; the rate recovered back to the highs before dropping back to open New York around 97.00/10 area. Traders note good two-way action with willing buyers on the dips but note exporter selling on the rallies with more said to be resting above the 98.00 handle. Stops are said to be resting under the market around the 96.70/80 area suggesting more downside is likely as the rate is weak on the open compared with other USD strength elsewhere. Today’s US data will likely be unfriendly to equities and further declines may continue the upside pressure on USD but the Greenback is up against some strong overhead resistance at this point. Despite the better start to the week it is important to watch the close today and for the week as a lot of this buying may be technical due to the February close; if these buyers are late with little follow-through the USD could slide off quickly. Look for focus to shift towards the Friday NFP data once the news is out today.

    GBP USD Daily

    Resistance 3: 1.4550
    Resistance 2: 1.4500/10
    Resistance 1: 1.4440
    Latest New York: 1.4052
    Support 1: 1.4020/30
    Support 2: 1.3950
    Support 3: 1.3900

    Rate tests support in early NY at 1.4050 area; lows at the time of press at 1.4032; shorts are gaining confidence for a break to under 1.4000. Rally to clear close in stops above 1.4300 and a close over the handle suggest more upside and a short-squeeze; today’s break to 1.4020/30 area likely put’s that scenario on hold. Two-way action between existing S/R the past 72 hours likely to continue. Stops likely building on both sides increasing the chance for whipsaw. Traders report stops in-range adding for two-way action. Long-term tech resistance now at 1.5000 area likely to cap near term but stops are building above and the 1.5000 handle is a big psychological number. 23 year lows are very likely to hold on any break with initial support now at 1.3900 in play. Two-way action continues suggesting that shorts are aggressively adding and longs are trying to find a bottom.
    Data due Tuesday: All times EASTERN (-5 GMT)
    4:30am GBP Construction PMI
    7:01pm GBP Nationwide Consumer Confidence

    EUR USD Daily

    Resistance 3: 1.3020/30
    Resistance 2: 1.2950
    Resistance 1: 1.2900
    Latest New York: 1.2565
    Support 1: 1.2550
    Support 2: 1.2500
    Support 3: 1.2480

    Rate follows GBP lower and cross-spreading likely adding pressure; rate holds a test of 1.2550 area but rally is needed to hold support zone otherwise another low is likely. Stops building on both sides as the rate tests for stops on the downside first. Upside stops likely now rolled down to the 1.2630 area for now; likely layered through 1.2750 area. Key 1.3030 area likely next; failure to hold 1.2900 likely going to be the test for the bulls this week. Close above key 1.3030 area needed for further upside until then rallies likely to be sold so expect more two-way action. Bulls are still attempting to find a bottom. 100 day MA falling to key resistance area of 1.3030 area by next week likely to add to overhead resistance. Technical levels around the 1.2920/50 area now likely to offer resistance so expect two-way action and consolidation underneath.
    Data due Tuesday: All times EASTERN (-5 GMT)
    2:00am EUR German WPI m/m
    12:30pm EUR ECB President Trichet Speaks

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    Analysis Provided by: Forexpros.com - Written by Jason Alan Jankovsky

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    #1 ForexAnalysis, Mar 3, 2009
    Last edited: Mar 3, 2009

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