Tuesday, April 22, 2014

Action Insight Daily Report 4-23-14

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Action Insight Market Overview	Markets Snapshot
Daily Report: Aussie Plummets on CPI Miss Aussie tumbles sharply today on lower than expected inflation data. Headline CPI rose 0.6% qoq, 2.9% yoy in Q1. The yoy reading showed acceleration from prior quarter's 2.7% but that was below market expectation of 3.2%. Note that RBA's target range for inflation is 2-3% and today's data showed inflation is staying in the range rather than exceeding it. Meanwhile, RBA trimmed mean CPI was unchanged at 2.6% yoy versus expectation of 2.9% yoy. Weighted mean CPI rose to 2.7% yoy versus expectation of 2.9% yoy. Today's data won't affect RBA's neutral stance to keep rates unchanged for a period of time. However, there was some talk that RBA could begin normalization of rates early next year. The current inflation outlook could afford RBA some more time and delay the normalization. Full Report Here...
Featured Technical Report
AUD/USD Daily Outlook Daily Pivots: (S1) 0.9332; (P) 0.9354; (R1) 0.9388; More... AUD/USD tumbles sharply today and focus is now on 0.9294 support, which looks vulnerable. Break will confirm short term topping at 0.9460 and fall from there could be corrective the whole rally from 0.8659. In that case, deeper fall should be seen to 38.2% retracement of 0.8659 to 0.9460 at 0.9154 next. We'd expect strong support from there to at least bring a rebound. Meanwhile, break of 0.9377 minor resistance is needed to indicate completion of such decline from 0.9460. Otherwise, outlook will stay mildly bearish in near term. 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
01:30	AUD	CPI Q/Q Q1	0.60%	0.80%	0.80%
01:30	AUD	CPI Y/Y Q1	2.90%	3.20%	2.70%
01:30	AUD	CPI RBA Trimmed Mean Q/Q Q1	0.50%	0.70%	0.90%
01:30	AUD	CPI RBA Trimmed Mean Y/Y Q1	2.60%	2.90%	2.60%
01:30	AUD	CPI RBA Weighted Median Q/Q Q1	0.60%	0.70%	0.90%
01:30	AUD	CPI RBA Weighted Median Y/Y Q1	2.70%	2.90%	2.60%
01:45	CNY	HSBC China Manufacturing PMI Apr P	48.3	48.3	48
07:00	EUR	French Manufacturing PMI Apr P		51.9	52.1
07:00	EUR	French Services PMI Apr P		51.3	51.5
07:30	EUR	German Manufacturing PMI Apr P		53.8	53.7
07:30	EUR	German Services PMI Apr P		53.3	53
08:00	EUR	Eurozone Manufacturing PMI Apr P		53	53
08:00	EUR	Eurozone Services PMI Apr P		52.5	52.2
08:30	GBP	BoE Minutes		0--0--9	0--0--9
08:30	GBP	Public Sector Net Borrowing (GBP) Mar		8.5B	7.5B
10:00	GBP	CBI Trends Total Orders Apr		7	6
12:30	CAD	Retail Sales M/M Feb		0.50%	1.30%
12:30	CAD	Retail Sales Less Autos M/M Feb		0.50%	1.00%
14:00	USD	New Home Sales Mar		450K	440K
14:30	USD	Crude Oil Inventories			10.0M

Orders and Options Watch

US Session: Orders and Options Watch

GBP: The British pound continued to edge higher and offers at 1.6820-25 were filled but sell orders in good size are still seen at 1.6840-50 (stops above), more selling interest is expected at 1.6875 and further out at 1.6900-10. On the downside, bids are raised to 1.6810, 1.6785-90 and 1.6765-75 (stops below), buy orders are expected at 1.6750 (more stops below 1.6740), 1.6715-25 and 1.6700, mixture of bids and stops is tipped at 1.6680-90.

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Forex Trade Ideas

Trade Idea: USD/CAD - Hold long entered at 1.0890

As last week's high of 1.1034 has continued to cap the pair's upside, suggesting further consolidation would be seen and pullback to 1.0980-85 cannot be ruled out, however, reckon support at 1.0960 would limit downside and bring another rise later, above said resistance would extend the rise from 1.0858 low for at least a retracement of recent decline to 1.1065-70 (50% Fibonacci retracement of 1.1279-1.0858), break there would add credence to our view that low has been formed at 1.0858 as either the first leg of iv or entire wave iv

Trade Idea Wrap-up: GBP/USD - Buy at 1.6790

Although the British pound rose to 1.6839 earlier today in London, as cable has retreated after faltering below last week's high of 1.6842, suggesting further consolidation below this level would be seen and pullback to 1.6785-90 cannot be ruled out, however, as long as support at 1.6774 holds, prospect of another rise remains, above said resistance would extend recent upmove to 1.6870-80 and possibly towards 1.6900-10, however, overbought condition should prevent sharp move beyond 1.6940-50