Thursday, January 23, 2014

Action Insight Mid-Day Report 1-23-14

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Mid-Day Report: Euro Surges on Strong PMI Readings Euro jumps today and takes the Swiss Franc higher after positive PMI data. The preliminary Eurozone PMI composite rose to 53.2 in January, up from December's 52.1, beating expectation of 52.4. That was also the highest reading since June 2011. Eurozone manufacturing PMI rose to 53.9, highest level since May 2011. PMI service also rose to 51.9. German PMI manufacturing also surged to 32-month high of 56.3 even though the German PMI services missed expectation. Larger than expected improvements were also seen in French PMIs. Full Report Here...
Featured Technical Report
GBP/USD Mid-Day Outlook Daily Pivots: (S1) 1.6486; (P) 1.6536; (R1) 1.6622; More... GBP/USD rises further to as high as 1.6615 so far today and the break of 1.6603 resistance indicates that recent rally has resumed. Intraday bias remains on the upside and GBP/USD should target 61.8% projection of 1.4813 to 1.6259 from 1.5853 at 1.6747, which is close to 1.6476 next medium term resistance. On the downside, below 1.6490 minor support will turn bias neutral. But in that case, retreat should be contained above 1.6309 support and bring another rally. 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	Revised
21:30	NZD	Business NZ Manufacturing Index Dec	56.4		56.7	57
00:00	AUD	Consumer Inflation Expectation Jan	2.30%		2.10%
01:45	CNY	HSBC/Markit Flash Manufacturing PMI Jan	49.6	50.4	50.5
02:00	CNY	Conference Board Leading Index Dec	0.4		1.4
05:00	JPY	BoJ Monthly Report
08:00	EUR	French PMI Manufacturing Jan P	48.8	47.6	47
08:00	EUR	French PMI Services Jan P	48.6	48.2	47.8
08:30	EUR	German PMI Manufacturing Jan A	56.3	54.4	54.3
08:30	EUR	German PMI Services Jan A	53.6	53.9	53.5
09:00	EUR	Eurozone Current Account (EUR) Nov	23.5B	19.2B	21.8B
09:00	EUR	Eurozone PMI Manufacturing Jan A	53.9	53	52.7
09:00	EUR	Eurozone PMI Services Jan A	51.9	51.4	51
09:00	EUR	Eurozone PMI Composite Jan A	53.2	52.4	52.1
11:00	GBP	CBI Reported Sales Jan	14	28	34
13:30	CAD	Retail Sales M/M Nov	0.60%	0.30%	-0.10%
13:30	CAD	Retail Sales Less Autos M/M Nov	0.40%	0.40%	0.40%
13:30	USD	Initial Jobless Claims (JAN 18)	326K	331K	325K
14:00	USD	House Price Index M/M Nov	0.10%	0.30%	0.50%
15:00	USD	Existing Home Sales Dec	4.87M	4.95M	4.90M
15:00	USD	Leading Indicators Dec	0.10%	0.10%	0.80%
15:30	USD	Natural Gas Storage			-287B
16:00	USD	Crude Oil Inventories			-7.7M

Orders and Options Watch

US Session: Orders and Options Watch

EUR: The single currency continued to surge after rallying on PMI data, stops above 1.3610 and 1.3650 were tripped, however, offers are still noted at 1.3670 and 1.3685, combination of offers and stops is seen at 1.3700. On the downside, buy orders are raised to 1.3620-25, 1.3590 and in good size at 1.3530-40 as well as 1.3500-10 (stops below), more bids are expected at 1.3485, 1.3465 and 1.3450.

Trade Idea Update: GBP/USD - Buy at 1.6490

As the British pound has continued to trade with a firm bias after yesterday's rally and broke above previous resistance at 1.6604, adding credence to our view that early uptrend has resumed and further gain to 1.6640-50 would be seen but near term overbought condition should prevent sharp move beyond 1.6670-75 and reckon 1.6695-00 should hold from here, bring correction later.

Trade Idea Update: EUR/USD - Buy at 1.3590

Euro's current rally after stronger-than-expected PMI suggests recent decline has formed a temporary low at 1.3508 and consolidation with upside bias is seen for test of resistance at 1.3650, break there would add credence to this view, bring at least a strong retracement of recent decline from 1.3894 to 1.3680 but reckon resistance at 1.3699 would hold on first testing.