Thursday, February 6, 2014

Action Insight Mid-Day Report 2-6-14

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Action Insight Market Overview	Markets Snapshot
Mid-Day Report: Euro Rebounds as ECB Stands Pat, Draghi Not Dovish Euro rebounds strongly against dollar and is back above 1.36 level as ECB delivered no additional stimulus after the meeting, and there was a lack of dovishness in Draghi's press conference. ECB held the benchmark refinancing rate at 0.25% today while the deposit rate was kept at 0.00%, marginal lending facility rate at 0.75%. In the post meeting press conference, ECB president Draghi reiterated that the central bank is "firmly determined to maintain the high degree of monetary accommodation and to take further decisive action if required". And he "firmly" reiterated the "forward guidance" and expected the key ECB interest rates to be "remain at present or lower levels". And, that's it. Draghi didn't sound too concerned with deflation risk and didn't signal imminent easing neither. He sounded optimistic that there is no similarity between Eurozone and Japan in the 90s and there is no deflation. Risks to economic outlook remains on the downside but unemployment is stabilizing. Full Report Here...
Featured Technical Report
EUR/USD Mid-Day Outlook Daily Pivots: (S1) 1.3502; (P) 1.3528 (R1) 1.3559; More.... EUR/USD rebounds strongly today and reaches as high as 1.3601 so far. However, it's still staying inside near term falling channel, not to mention that it's kept well below 1.3739 resistance. Intraday bias stays neutral first and another decline remains in favor to 38.2% retracement of 1.2755 to 1.3892 at 1.3458. Break will target 50% retracement at 1.3324. Though, break of 1.3739 will indicate that the fall from 1.3829 has completed and will turn near term outlook bullish again. 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

Economic Indicators Update

GMT	Ccy	Events	Actual	Consensus	Previous	Revised
00:30	AUD	Trade Balance (AUD) Dec	468M	-300M	-118M
00:30	AUD	Retail Sales M/M Dec	0.50%	1.20%	0.70%
00:30	AUD	NAB Business Confidence Q4	8		3	5
06:45	CHF	SECO Consumer Confidence Jan	2	1	-5
07:00	CHF	Trade Balance (CHF) Dec	0.50B	2.41B	2.11B	2.03B
11:00	EUR	German Factory Orders M/M Dec	-0.50%	0.30%	2.10%	2.40%
12:00	GBP	BoE Rate Decision	0.50%	0.50%	0.50%
12:00	GBP	BoE Asset Purchase Target	375B	375B	375B
12:30	USD	Challenger Job Cuts Y/Y Jan	11.60%		-5.90%
12:45	EUR	ECB Rate Decision	0.25%	0.25%	0.25%
13:30	EUR	ECB Press Conference
13:30	CAD	International Merchandise Trade (CAD) Dec	-1.7B	-0.7B	-0.94B
13:30	USD	Trade Balance Dec	-38.7B	-$35.8B	-$34.3B
13:30	USD	Non-Farm Productivity Q4 P	3.20%	2.50%	3.00%
13:30	USD	Unit Labor Costs Q4 P	-1.60%	-0.50%	-1.40%
13:30	USD	Initial Jobless Claims (FEB 1)	331K	334K	348K	351K
15:00	CAD	Ivey PMI SA Jan		50	46.3
15:30	USD	Natural Gas Storage			-230B

Orders and Options Watch

US Session: Orders and Options Watch

EUR: The single currency has rallied in reaction to comments from ECB's Draghi, offers at 1.3550-1.3580 area and 1.3600 were filled, some sell ordersare still noted at 1.3620-30 (stops above) and further out at 1.3650-60 with bigger stops expected above 1.3680-90. On the downside, bids are raised to 1.3570 and 1.3545-50, fresh demand should emerge above 1.3500 with stops building up below 1.3470-80.

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Forex Trade Ideas

Trade Idea: GBP/USD - Sell at 1.6400

Despite yesterday's marginal fall to 1.6252, lack of follow through selling on break of previous support at 1.6257 and the subsequent rebound suggest consolidation above this level would be seen and another corrective rise to 1.6345 and 1.6367 resistance cannot be ruled out but reckon 1.6400 would limit upside and bring another decline later. A break of said support at 1.6252 would extend decline from 1.6669 top for further weakness to 1.6210-15

Trade Idea Update: USD/JPY - Sell at 102.00

Despite yesterday's retreat to 100.80, as the greenback has rebounded after holding above this week's low of 100.76, retaining our view that further consolidation is in store and another bounce to 101.80-85 (50% Fibonacci retracement of 102.93-100.76) cannot be ruled out, however, 102.00 should limit upside, bring another decline later. A break of said support at 100.76 is needed to signal recent decline from 105.44 top has resumed for weakness to 100.50