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Greenback Well Supported After TIC, PPI Releases |
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Written by Jason
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Tuesday, 18 October 2005 |
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The dollar appreciated today on the back of positive TIC flows and higher than expected PPI readings. Treasury International Capital flows was measured at $91.3 billion in August, up from $87.5 billion in July. This data continued to underscore the containment of the growing trade deficit with strong foreign capital inflows offsetting the balance. Further adding support to the dollar was a sharp increase in producer prices in September which lends support to the Fed�s decision to continue raising rates. Positive interest rate differentials for the U.S. remain the best argument for buying the dollar as short-term capital looks for attractive yields. Technicals for the euro-dollar remain neutral to bearish as the single pair struggles to keep its foothold ahead of the weekly uptrend support line (see below). Upside resistance is slated at 1.2065, with a breach leaving the dollar vulnerable to 1.2115 and beyond. To the downside, bids are noted at 1.1910/20; however, this support has weakened considerably. On a break, our target is the yearly low of 1.1860, then 1.1745. Dollar-yen hit a 2-year high and we continued to see downside risks for the yen with a target of 117.00 in the near term.
 ClockworkFX's Daily Forex Insight - October 18, 2005
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Core Consumer Inflation Weaker Than Expected |
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Written by Jason
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Friday, 14 October 2005 |
Core inflation increased 0.1%, according to the Labor Department, with the market expecting an increase of 0.2%. This dealt a blow to the dollar across the board, despite the headline CPI rate advancing at a 25-year high of 1.2% mainly on the back of rising energy prices. The euro-dollar was capped at 1.2110 after a nice rally from thursday's low of 1.1912. Our current view remains neutral with upside break risk at 1.2115 which could yield 1.2200, and to the downside we see significant support at 1.1900/10, with a break (weekly uptrend line) leaving the pair vulnerable to 1.1580.as long-term momentum would continue for the dollar.
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Euro Gives Up Gains Against Dollar |
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Written by Jason
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Wednesday, 12 October 2005 |
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Dollar Resumes Strength; EUR/USD Downside Eyed |
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Written by Jason
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Tuesday, 11 October 2005 |
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The dollar resumed its strength against the euro as the pair fell to 1.1952 in early euro session trading. FOMC minutes did not reveal anything new, contrary to some traders thinking. Nevertheless, traders continued to use the interest rate differential excuse to buy back the dollar. Our downside target is the daily low of 1.1899 - an imperative level which if violated would penetrate below the weekly uptrend line as previously mentioned. This could severely limit the euro's upside chances in the near-term. To the upside, rallies should be capped at 1.2070 which is our current risk-limit level for a bearish strategy.
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Dollar Appreciates As Inflation Expectations Come Back Into Focus |
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Written by Jason
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Monday, 10 October 2005 |
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The dollar appreciated today on inflation speculation with CPI being forecasted at +0.9% for September, following a 0.5% rise in August. Further adding to the dollar’s gains is concern that Merkel’s Christian Democrats will concede too much to Schroeder’s Social Democrats, thus making it more difficult to pass crucial reform to recondition Germany’s weak economy. Aside from contracting the persistent unemployment, Merkel seeks to reduce the country’s debt as well as alter the checks and balances between all 16 of Germany’s states and the federal government.
We currently maintain a neutral stance with the euro-dollar settled at 1.2051, It sits just above an imperative support level of 1.2040, which if broken would allow the pair to concede lower and test the most recent weekly low of 1.1897. Offers are noted 1.2060/70 and 1.2110/20. The dollar-yen has begun to firm up with bids emerging through 114.00. A break of the most recent 114.40 high will initiate a new bullish position with the target of 115.00 and then possibly 118.30. The current downside risk-level is 113.05.
 ClockworkFX's Daily Forex Insight - October 10, 2005 (97.50 KB)
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