Tuesday, January 21, 2014

Action Insight Mid-Day Report 1-21-4

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Action Insight Market Overview	Markets Snapshot
Mid-Day Report: USD/CAD Breaches 1.1 ahead Tomorrow's BoC Meeting Canadian dollar's decline against dollar extends today with USD/CAD breaching 1.1 level and a long term trend line resistance. Economic data from Canada provided little inspiration so far. Wholesale sales was flat mom in November versus expectation of 0.6% mom rise. Manufacturing shipments rose 1.0% mom in November versus expectation of 0.4% mom. The major focus is tomorrow's BoC meeting and announcement. The loonie has been very much pressured by recent batch of economic data. And traders are wondering just how dovish governor Poloz would be in post meeting statement. Full Report Here...
Featured Technical Report
USD/CAD Mid-Day Outlook Daily Pivots: (S1) 1.0926; (P) 1.0948; (R1) 1.0968; More... USD/CAD's rally continues today and reaches as high as 1.1018 so far in early US session. The long term falling trend line is breached but there is not follow through buying to sustain above it yet. We'll stay cautious on reversal from the current level. Below 1.0904 support will indicate short term topping and turn bias to the downside for 1.0736 support. However, sustained break of the trend line resistance will have larger bullish implications. Read more... EURUSD Technical Outlook USDJPY Technical Outlook GBPUSD Technical Outlook USDCHF Technical Outlook USDCAD Technical Outlook AUDUSD Technical Outlook EURJPY Technical Outlook EURGBP Technical Outlook EURCHF Technical Outlook GBPJPY Technical Outlook

FX Outlook 2014

GBP To Outperform Euro, Underperform USD

Strong economic growth in the UK should support GBP against other key European currencies, resulting in our forecasts that the pound would strengthen against both the euro and the defensive Swiss franc. UK's job market has improved significantly and the BOE would likely revised lower its threshold of unemployment rate that might lead the consideration of a rate hike. Yet, the revision should only have short-term, if any, negative impacts, on sterling. With domestic demand the key driver of recent growth, the economic environment in the country should allow greater tolerance of currency strength. We remain cautious in GBPUSD, anticipating the pair to fall this year amid expectations that US' growth would be stronger. Moreover, the Fed's kickoff of QE tapering vs BOE's sidelined stance could widen the yield differential.

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2014 Elliott Wave Forecast

Economic Indicators Update

GMT	Ccy	Events	Actual	Consensus	Previous
21:45	NZD	CPI Q/Q Q4	0.10%	0.00%	0.90%
10:00	EUR	German ZEW (Economic Sentiment) Jan	61.7	63	62
10:00	EUR	German ZEW (Current Situation) Jan	41.2	34	32.4
10:00	EUR	Eurozone ZEW (Economic Sentiment) Jan	73.3	70.2	68.3
11:00	GBP	CBI Trends Total Orders Jan	-2	12	12
13:30	CAD	Wholesale Sales M/M Nov	0.00%	0.60%	1.40%
13:30	CAD	Manufacturing Shipments M/M Nov	1.00%	0.40%	1.00%

Orders and Options Watch

US Session: Orders and Options Watch

EUR: The single currency slipped on weaker-than-expected German data, bids at 1.3530 were filled but defensive buy orders remain at 1.3500-05 with stops building up below barrier at figure, more buying interest is located at 1.3485, 1.3465 and 1.3450. On the upside, indicated offers remain at 1.3570-80, 1.3600-10 and also at 1.3630, more sell orders are located at 1.3650, 1.3670 and 1.3685, mixture of offers and stops is seen at 1.3700-05.

Trade Idea Update: GBP/USD - Hold short entered at 1.6430

As the British pound has rebounded again after holding above the upper Kumo, suggesting caution on our short position entered at 1.6430 and resistance at 1.6464 needs to hold to retain bearish prospect of another decline, below the Ichimoku cloud bottom (now at 1.6384) would bring weakness to 1.6345-50 but break there is needed to suggest the rebound from 1.6309 has ended

Trade Idea Update: EUR/USD - Sell at 1.3580

Although the single currency has retreated after meeting resistance at 1.3568, break of yesterday's low of 1.3508 is needed to signal recent decline from 1.3894 top has resumed and extend weakness to 1.3480-85 (61.8% projection of 1.3894-1.3548 measuring from 1.3699) but oversold condition should limit downside and 1.3450 would hold from here, bring rebound later.