Dollar Vulnerable Ahead of ISM Manufacturing and FOMC Minutes

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Dollar Vulnerable Ahead of ISM Manufacturing and FOMC Minutes

Author: admin | Total views: 54 | Word Count: 433 | Category: Forex trading signals | Date: Apr 5th 2008

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A rebound is expected by economists to push this index back to flat level 50 and end the losing streak. Price paid index is expected to continues rebound to 54.0. The employment sub-index has been hovering around 50 expansion/contraction level for 3 months and will also be closely watched for hindsight to Friday's NFP. Another employment related data will be released today. ADP employment is expected to show 128k jobs growth in Dec. This will also serve as a preview to Friday's NFP.

FOMC Minutes from the December 12 meeting will also be released today. The accompanying statement in this meeting to hold rate unchanged at 5.25% was largely unchanged from prior one with two expectations. The FOMC cited the slowing in economic growth “partly reflecting a substantial cooling of the housing market”. The word “substantial” was an addition from October. Also, the statement noted that "recent indicators have been mixed", which was new. Focus will be on how the minutes will elaborate on the above issues which could give further hint on whether Fed will cut rates this year.

Cable's rally extended to as high as 1.9751 but is still limited by 1.9747 resistance and retreats mildly into European session. As discussed before, break of 1.9618 resistance as well as the short term falling trend line (now at 1.9682) indicates corrective fall from 1.9846 has completed at 1.9433 and hence further rise is expected to follow retest this high. Also, break of 1.9846 resistance will confirm and bring further rise towards 138.2% projection of 1.8090 to 1.9142 from 1.8517 at 1.9971.

On the downside, touching of 1.9638 support will turn intraday outlook consolidative first but downside should be contained above 1.9565 support and bring rally resumption. Though, break of 1.9565 will turn focus back to 1.9433 low.

In the bigger picture, cable's medium term up trend from 1.7047 is still in progress and further rise is expected to follow towards 2.0106 cluster resistance (1992 high, 100% projection of 17047 to 1.9024 from 1.8090 at 2.0067). Close attention will be paid to sign of loss of upside momentum and reversal pattern formation as cable approaches 2.0106 cluster resistance. Though, decisive break of this resistance will confirm that long term up trend from 1.3680 has resumed for next upside target of 61.8% projection of 1.3680 to 1.9554 from 1.7047 at 2.0677 first. On the downside, sustained break of 1.9177 cluster support (50% retracement of 1.8517 to 1.9846 at 1.9182, 23.6% retracement of 1.7047 to 1.9846 at 1.9185) will turn medium term outlook neutral and argue that the whole rise from 1.7047 has possibly completed.

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A rebound is expected by economists to push this index back to flat level 50 and end the losing streak. Price paid index is expected to continues rebound to 54.0. The employment sub-index has been hovering around 50 expansion/contraction level for 3 months and will also be closely watched for hindsight to Friday's NFP. Another employment related data will be released today. ADP employment is expected to show 128k jobs growth in Dec. This will also serve as a preview to Friday's NFP. 
FOMC Minutes from the December 12 meeting will also be released today. The accompanying statement in this meeting to hold rate unchanged at 5.25% was largely unchanged from prior one with two expectations. The FOMC cited the slowing in economic growth “partly reflecting a substantial cooling of the housing market”. The word “substantial” was an addition from October. Also, the statement noted that "recent indicators have been mixed", which was new. Focus will be on how the minutes will elaborate on the above issues which could give further hint on whether Fed will cut rates this year. 
Cable's rally extended to as high as 1.9751 but is still limited by 1.9747 resistance and retreats mildly into European session. As discussed before, break of 1.9618 resistance as well as the short term falling trend line (now at 1.9682) indicates corrective fall from 1.9846 has completed at 1.9433 and hence further rise is expected to follow retest this high. Also, break of 1.9846 resistance will confirm and bring further rise towards 138.2% projection of 1.8090 to 1.9142 from 1.8517 at 1.9971. 
On the downside, touching of 1.9638 support will turn intraday outlook consolidative first but downside should be contained above 1.9565 support and bring rally resumption. Though, break of 1.9565 will turn focus back to 1.9433 low. 
In the bigger picture, cable's medium term up trend from 1.7047 is still in progress and further rise is expected to follow towards 2.0106 cluster resistance (1992 high, 100% projection of 17047 to 1.9024 from 1.8090 at 2.0067). Close attention will be paid to sign of loss of upside momentum and reversal pattern formation as cable approaches 2.0106 cluster resistance. Though, decisive break of this resistance will confirm that long term up trend from 1.3680 has resumed for next upside target of 61.8% projection of 1.3680 to 1.9554 from 1.7047 at 2.0677 first. On the downside, sustained break of 1.9177 cluster support (50% retracement of 1.8517 to 1.9846 at 1.9182, 23.6% retracement of 1.7047 to 1.9846 at 1.9185) will turn medium term outlook neutral and argue that the whole rise from 1.7047 has possibly completed. Article Source: <a href="http://www.easyforexstrategy.com" target="_blank">Easy Forex Strategy</a> About the Author: <a href="http://www.actionforex.com">ActionForex</a>