Trading Tips from 21 to 30

[walid]

The market sentiment has been contained in the beginning of this week by rumors about European pressure on Portugal to join the bailing out package following Ireland. The single currency has opened the week down below 1.29 versus the greenback before retracing some of its recent loses but it is still trading below its previous support level at 1.297 which is still worrying the buyers of this pair as confirming it as a resistance can open the way for falling to the next major supporting level at 1.2585 with the market focusing on higher yielding bonds issuance from Portugal and Spain, in spite of the ECB funding which can increase the market worries about the debt contagion inside the Euro zone by god's will even though the recent good performance of the European stock following the growth recovery optimism in US and better economic data like December EU PMI manufacturing index which rose above US to 57.1 and the recent continuous improving of the market risk appetite which came by the greenback side this time as the market is still worried about the debt contagion inside the Euro zone gloomy by the Estonia recent adoption at this time focusing on the downgrading probabilities of the credit rating of the Euro zone ailing countries of debt which have fallen previously on these countries with negative outlook of their debts as we have seen recently Portugal which has been downgraded by Fitch one notch to A+ with a negative outlook following Ireland which has been downgraded five notches to B with a negative outlook from Aa2 by Moody's which has announced that it can downgrade the Spanish long term credit rating of Aa1 too.
While The Greenback is still looking well supported by rising of its bonds yields which have started to trigger the treasury and the Fed worries recently as the economy seems in better shape now and there is a limited probability of adding new funds from the Fed with the current improving of the economic data while the budget deficit is still going larger and the call of raising the taxes are increasing even from the former Fed's Chairman Mr. Alan Greenspan.
The confidence in the greenback could gain momentum recently by better than expected data reflect bullish economic growth outlook in US and better demand for the US dollar borrowing underpinning the US bonds yields helping the equities markets and the business spending driving the gold prices down as we have seen previously despite the lower than expected the non-farm payrolls which have just added 103k while the market was waiting for 135k in December, the unemployment has fallen significantly to 9.4% from 9.8% in November and the private sector has added 113k after December ADP Employment release which came at nearly triple of the market expectations of just 100k at 297k added jobs from 93k in November and Nov US factory orders data which have shown rising by .7% while the market was waiting for decreasing by .4% after falling in October by .7% and also both of US December manufacturing index and non-manufacturing index getting better to 57 and 57.1 consecutively after US December Chicago PMI had come at 68.6 while it was waited to be 61.5 from 62.5 in November which are the best since the ending of the credit crisis as the market sees now that the US economy is much more credible driving the greenback up across the broad even versus the commodities and the energy which fuel this better growth outlook asking for the greenback weighing negatively on the Aussi which came back to parity with the US dollar driving the gold down with better business sentiment getting out the money from the safe haven stance pushing it to test its next supporting level at 1360$ which can be followed by 1329$ and 1315$ with investors rising confidence in the greenback which has been boosted from another side this week by the announcement of the Fed's recent meeting minutes which have shown easing of the Fed's fear about deflation and appreciation of the yield rising with rising confidence in the US recovery which can increase the borrowing and the prices too easing back the growth downward pressure which helped the greenback to get off its low at .93 versus the Swiss Franc which always takes use of the market tendency for taking a safe haven stance too with the worries about growth.
The British pound could add more gains reaching 1.56 after the lower than expected figure of non-farm payroll of December has hit the greenback by the end of last week to help the cable to have a floor at 1.54 after falling under pressure because of Q4 2010 mortgage defaults value which rose for the first time since Q2 2009 and the sudden slump of December services PMI below 50 at 49.7 in the contracting territory to temper the positive sentiment towards the UK economy and the British pound which has been triggered by December manufacturing PMI rising to 58.3 while the market was waiting for the same reading of November at 57.5 which brought back some confidence in the UK economy reducing some of the market discounting of adding more funds to its buying bonds plan getting off some of the pressure on the British.
God Willing, the market will be waiting this week for November US trade balance to be -40.6b $ after we had seen significant tightening of the trade deficit in October reaching 38.7b$ from 44.6b$ in September while the market was waiting for 44.8b$ on the current US easing policy which weakened the USD lowering the costs of exporting and the imports specially from china which is worrying about the inflation outlook taking a tightening monetary stance by raising interest rate .25% twice in less than 3 months requesting from its banks to increase their reserve requirements 6 times last year for curbing this inflation upside risks which was at a 28-month high at 5.1% in November while it is still looking benign in US as we have seen November US CPI coming at .1% monthly while it was foreseen to be .2% and the core figure excluding the food and energy rising by just .1% as expected after 2 months of flat reading and we wait by the end of this week for December CPI figures which are expected to show rising of the broad rate by .4% while the core excluding the food and energy is expected to be up by .1% again and we also wait next Friday for January preliminary reading of University of Michigan monthly consumer sentiment index to be 75.5 after getting up to 74.2 in mid December from 71.6 at the end of November while it was forecasted to be 73.
Kind Regards

FX Consultant
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

The optimism could contain the market sentiment by the Japanese promises of buying European bonds this month to restore market confidence in the European debt markets the European equities market could open up and the market optimistic expectations about US earning reports to come about the fourth quarter could add to this improving of the markets risk appetite weighing negatively on the Japanese yen and the greenback across the broad but the Aussi which is still under the pressure of the floods in Queensland the third biggest Australian cities.
The single currency could get over 1.297 again passing for a while above 1.30 after the Japanese announcement which could light the pressure on it after it has been depressed by by rumors about European pressure on Portugal to join the bailing out package following Ireland opening the week below 1.29 reaching 1.2873 versus the greenback before retracing some of its recent loses but being back below 1.297 can bring the technical pressure on the pair worrying the buyers to unwind more of their holding can open the way for falling to the next major supporting level at 1.2585 with the market focusing on higher yielding bonds issuance from Portugal and Spain, in spite of the ECB funding efforts for lowering the bonds prices which have not looked enough this time to calm down the market worries about the debt contagion inside the Euro zone even though the recent good performance of the European stock following the growth recovery optimism in US and better economic data like December EU PMI manufacturing index which rose above US to 57.1 and the recent continuous improving of the market risk appetite which came by the greenback side this time as the market is still worried about the debt contagion inside the Euro zone gloomy by the Estonia recent adoption at this time focusing on the downgrading probabilities of the credit rating of the Euro zone ailing countries of debt which have fallen previously on these countries with negative outlook of their debts as we have seen recently Portugal which has been downgraded by Fitch one notch to A+ with a negative outlook following Ireland which has been downgraded five notches to B with a negative outlook from Aa2 by Moody's which has announced that it can downgrade the Spanish long term credit rating of Aa1 too.
While The Greenback is still looking well-supported by rising of its bonds yields which have started to trigger the treasury while the Fed's worries about deflation seem easing back to the markets as we wait to be confirmed in its Beige book today with appreciation of the yield rising by god's will with rising confidence in the US recovery which can increase the borrowing costs and the prices too decreasing the growth downward risks which helped the greenback to get off its low at .93 versus the Swiss Franc which always takes use of the market tendency for taking a safe haven stance with the gold which could not be able to stand above 1400$ with the current better business spending sentiment getting out the money from the safe haven stance pushing it to test its next supporting level at 1360$ which can be followed by 1329$ and 1315$ with investors rising confidence in the greenback by better than expected data reflect bullish economic growth outlook in US and better demand for the US dollar borrowing underpinning the US bonds yields helping the equities markets and the business spending driving the gold prices down as we have seen previously despite the lower than expected the non-farm payrolls which have just added 103k while the market was waiting for 135k in December, the unemployment has fallen significantly to 9.4% from 9.8% in November and the private sector has added 113k after December ADP Employment release which came at nearly triple of the market expectations of just 100k at 297k added jobs from 93k in November and Nov US factory orders data which have shown rising by .7% while the market was waiting for decreasing by .4% after falling in October by .7% and also both of US December manufacturing index and non-manufacturing index getting better to 57 and 57.1 consecutively after US December Chicago PMI had come at 68.6 while it was waited to be 61.5 from 62.5 in November which are the best since the ending of the credit crisis as the market sees now that the US economy is much more credible driving the greenback up across the broad even versus the commodities and the energy which fuel this better growth outlook asking for US dollars.
The British pound could add more gains trading above 1.56 since the lower than expected figure of non-farm payroll of December has hit the greenback by the end of last week to help the cable to have a floor at 1.54 after falling under pressure because of Q4 2010 mortgage defaults value which rose for the first time since Q2 2009 and the sudden slump of December services PMI below 50 at 49.7 in the contracting territory to temper the positive sentiment towards the UK economy and the British pound which has been triggered by December manufacturing PMI rising to 58.3 while the market was waiting for the same reading of November at 57.5 which brought back some confidence in the UK economy reducing some of the market discounting of adding more funds to its buying bonds plan getting off some of the pressure on the British.
God Willing, The markets eyes will be watching for the coming bonds auctions results in Spain and Portugal which has denied need of the bailing out funds again while they will be listening today for the treasuries secretary Geithner after the recent increasing worries about budget deficit which is still going larger driving the yields up increasing calls for raising the taxes are increasing even from the former Fed's Chairman Mr. Alan Greenspan despite the recent improvement of the US trade balance which we wait its November release to be -40.6b $ after we had seen significant tightening of the trade deficit in October reaching 38.7b$ from 44.6b$ in September while the market was waiting for 44.8b$ on the current US easing policy which weakened the USD lowering the costs of exporting and the imports specially from china which is worrying about the inflation outlook taking a tightening monetary stance by raising interest rate .25% twice in less than 3 months requesting from its banks to increase their reserve requirements 6 times last year for curbing this inflation upside risks which was at a 28-month high at 5.1% in November while it is still looking benign in US as we have seen November US CPI coming at .1% monthly while it was foreseen to be .2% and the core figure excluding the food and energy rising by just .1% as expected after 2 months of flat reading and we wait by the end of this week for December CPI figures which are expected to show rising of the broad rate by .4% while the core excluding the food and energy is expected to be up by .1% again and we also wait next Friday for January preliminary reading of University of Michigan monthly consumer sentiment index to be 75.5 after getting up to 74.2 in mid December from 71.6 at the end of November while it was forecasted to be 73.
Kind Regards

FX Consultant
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

The optimism could continue containing the current market sentiment after the Japanese promises of buying European bonds this month by a successful Portuguese auction driving the single currency up above 1.31 after it has started the week under the pressure of rumors about European efforts to convince Portugal to join the bailing out package following Ireland to reach 1.2873 versus the greenback but the Portuguese denying of the need for this made package by European countries and the IMF could help the single currency to rebound underpinned by new Japanese pledges of buying European bonds following china which has done the same to restore market confidence in the European debt markets driving the market risk appetite up amid increased market expectations of better US earning reports to come showing improving in the fourth quarter of last year which weighed negatively on the low costing funding currency like the Japanese yen and the greenback across the broad but versus the Aussi which is still under the pressure of the floods in Queensland which is the third biggest Australian cities while the British pound could add more gains reaching 1.578 fueled by this returning back of the market cheeriness but it is still below key resisting area from 1.58 to 1.5907 whereas the cable failed to pass recently forming its recent top where it has fallen to 1.534 before finding support and strength to rebound by lower than expected figure of non-farm payroll of December has hit the greenback by the end of last week after it has been under pressure because of Q4 2010 mortgage defaults value which rose for the first time since Q2 2009 and the sudden slump of December services PMI below 50 at 49.7 in the contracting territory to temper the positive sentiment towards the UK economy and the British pound which has been triggered by December manufacturing PMI rising to 58.3 while the market was waiting for the same reading of November at 57.5 which has brought back some lost confidence in the UK economy reducing some of the market discounting of adding more funds to the BOE buying bonds plan which is expected to be kept unchanged today with the coming MPC meeting keeping the interest rate unchanged at .5%. The MPC recent minutes have shown that there was opposing from Andrew Sentence who preferred hiking the interest rate by 25 basis points as the leader of the inflation worried members while from the other side there was Adam Posen came again suggesting adding new 50B Stg to the current 200b Stg buying bonds plan but he was also the sole voter for this adding while the other preferred keeping everything as it is elevating their appreciation of the EU debt risks on the British economy and the increasing of the commodities and energy prices on the inflation outlook in UK.
God Willing, We will be waiting today for November US trade balance to be -40.6b $ after we had seen significant tightening of the trade deficit in October reaching 38.7b$ from 44.6b$ in September while the market was waiting for 44.8b$ on the current US easing policy which weakened the USD lowering the costs of exporting and the imports specially from china which is worrying about the inflation outlook taking a tightening monetary stance by raising interest rate .25% twice in less than 3 months requesting from its banks to increase their reserve requirements 6 times last year for curbing this inflation upside risks which was at a 28-month high at 5.1% in November while it is still looking benign in US as we have seen November US CPI coming at .1% monthly while it was foreseen to be .2% and the core figure excluding the food and energy rising by just .1% as expected after 2 months of flat reading and we wait by the end of this week for December CPI figures which are expected to show rising of the broad rate by .4% while the core excluding the food and energy is expected to be up by .1% again and we also wait next Friday for January preliminary reading of University of Michigan monthly consumer sentiment index to be 75.5 after getting up to 74.2 in mid December from 71.6 at the end of November while it was forecasted to be 73.
Kind Regards

FX Consultant
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

The pressure increased on the greenback after the bigger than expected weekly jobless claim release which came at 445k from 410 a weak earlier while the market was waiting for improving to 404k which shows that the labor market is still struggling lagged behind the other US sectors which increase the probability of having the easing stance further in US. The Japanese yen dived below 83 versus the greenback with equities selling with these disappointing data which tempered the markets optimism which contained the markets after the Japanese promises of buying European bonds this month and the successful bonds auctions in Portugal , Spain and Italy this week helping the single currency which could find another unexpected support from Trichet's reference to building inflation pressure in the Euro zone which can suggest another pressure on the ECB to cap its funding which was weighing negatively on the single currency which add more gains to reach 1.3382 versus the greenback which has started to run out of stream since the release of December non-farm payrolls which have just added 103k while the market was waiting for 135k in December and this weak jobless claim figure claim to add more doubts about the labor market performance which is always worrying the Fed and trigger its easing steps.
The British pound could also add more gains reaching 1.5881 getting use of the pressure on the greenback but it is still exposed to find it resisting pressure protecting breaking 1.5907 whereas the cable failed to pass recently forming its recent top where it has fallen to 1.534 before finding support and strength to rebound by lower than expected figure of non-farm payroll of December has hit the greenback by the end of last week after it has been under pressure because of Q4 2010 mortgage defaults value which rose for the first time since Q2 2009 and the sudden slump of December services PMI below 50 at 49.7 in the contracting territory to temper the positive sentiment towards the UK economy and the British pound which has been triggered by December manufacturing PMI rising to 58.3 while the market was waiting for the same reading of November at 57.5 which has brought back some lost confidence in the UK economy reducing some of the market discounting of adding more funds to the BOE buying bonds plan which has been kept unchanged again by the MPC with the interest rate unchanged at .5% worrying about the inflation which is still above its 2% target and above 3% in the recent months and it can accelerate to 4% yearly which by God's will can rule out any expected easing action soon from the BOE to support the economy which seems to be in need of its supporting to be under stagflation pressure this year.
God Willing, We will be waiting today for watching December EU CPI which is expected to be up yearly by 2.2% while the core is expected to be 1.1%, after Trichet's firmer remarks about the potential inflation upside risks while we will be waiting later today for December CPI figures which are expected to show rising of the broad rate by .4% while the core excluding the food and energy is expected to be up by .1% again after November US CPI coming at .1% monthly while it was foreseen to be .2% and the core figure excluding the food and energy rising by just .1% as expected after 2 months of flat reading and we also will be waiting for January preliminary reading of University of Michigan monthly consumer sentiment index to be 75.5 after getting up to 74.2 in mid December from 71.6 at the end of November while it was forecasted to be 73.
Kind Regards

FX Consultant
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

The improving investors' risk appetite is still containing the market sentiment pushing the equities markets up and also the commodities and energy prices on expected better growth rates in US this year and on better earning reports to come expressing about the fourth quarter of last year which have started by the end of last week with better than expected increasing of JP Morgan profits by 47% driving the banking sector stocks up and Dow to close last week up 112 points at 11787 to be the 7 consecutive weekly rising in raw as the confidence has been brought back to the US recovery after easing last year by better than expected series of economic data has been released out since the end of last year like December ADP Employment release which came at nearly triple of the market expectations of just 100k at 297k added jobs from 93k in November and Nov US factory orders data which have shown rising by .7% while the market was waiting for decreasing by .4% after falling in October by .7% and also both of US December manufacturing index and non-manufacturing index getting better to 57 and 57.1 consecutively after US December Chicago PMI had come at 68.6 while it was waited to be 61.5 from 62.5 in November which are the best since the ending of the credit crisis as the market sees now that the US economy is much more credible for better business spending despite the labor market which is still looking unstable and is still struggling lagged behind the other sectors performance as we have seen the bigger than expected weekly jobless claim release which came at 445k from 410 a weak earlier while the market was waiting for improving to 404k and December non-farm payrolls which have just added 103k while the market was waiting for 135k putting pressure on the greenback which has started to run out of stream across the broad after reaching 1.2873 on rumors about European efforts to convince Portugal to join the bailing out package following Ireland but the Portuguese denying of the need for this made package by European countries and the IMF and the Japanese promises of buying European bonds this month could help it to rebounds dueled by markets cheeriness of successful bonds auctions in Portugal , Spain and Italy to close last week at 1.3382 after another push from Trichet's reference to building inflation pressure in the Euro zone after the ECB meeting decision of keeping the interest rate unchanged at 1% again which can suggest that there is another pressure on the ECB for capping its funding reducing its provided ample of liquidities fearing of further inflation pressure directing some of their care to the easing value risks of the single currency.

The British pound could also add more gains reaching 1.5881 getting use of the pressure on the greenback for taking risks but it is still exposed to find resisting pressure protecting 1.5907 whereas the cable failed to pass recently forming its recent top where it has fallen to 1.534 before finding support and strength to rebound by the lower than expected figure of non-farm payroll of December which has hit the greenback recently after it has been under pressure because of Q4 2010 mortgage defaults value which rose for the first time since Q2 2009 and the sudden slump of December services PMI below 50 at 49.7 in the contracting territory to temper the positive sentiment towards the UK economy and the British pound which has been triggered by December manufacturing PMI rising to 58.3 while the market was waiting for the same reading of November at 57.5 driving up the confidence in the UK economy reducing some of the market discounting of adding more funds to the BOE buying bonds plan which has become ruled out later by the MPC increased worrying about the inflation upside risks while UK CPI is still well above its 2% target and also above 3% in the recent months and it can accelerate further to 4% yearly by God's will putting the UK economy under stagflation pressure this year as the economy is not yet at the shape which does not need of its easing measures.

Kind Regards



FX Consultant

Walid Salah El Din

E-Mail: mail@fx-recommends.com

http://www.fx-recommends.com

[walid]

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Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

The Chinese new requesting for reducing the banking sector reserved amount of liquidity available for lending by another .5% after cutting it 6 times last year could temper the market sentiment weighing negatively on the dividends in Asian and EU session while the US equities markets were off for the martin Luther King holidays but it has appeared on the future prices of US indexes which refer to a negative opening as it looks that china is still worrying about the inflation which hit 28 months high last November by 5.1% to put pressure on the commodities and energy prices on growing market expectations of cooling of the Chinese demand for curbing the crediting and curbing the prices at the current levels which forced the gold to fall below 1360$ support for a while in the beginning of this week before rebounding back above it trading currently at 1362$ while its next supporting are standing at 1329$ then 1315$. The gold has been under pressure recent by series of good US economic data have brought back the market confidence in the US economy and the risk appetite of the business spending in the greenback which is expected to be much credibly wanted this year with better growth outlook containing the markets sentiment currently pushing the US stocks up in the beginning of this year.
The single currency came also under pressure receding below 1.33 trading currency at 1.328 as the market uncertainty about the next EU Financial ministers meeting this week in Brussels as the calls for adding new funds to the EU and the IMF package for lending the EU debt ailing economies have increased recently putting pressure on the Fin Ministers to come out with what's new to add more confidence in the debt market and the single currency dominations creditability earning reports to come expressing about the fourth quarter of last year which have started by the end of last week with better than expected increasing of JP Morgan profits by 47% driving the banking sector stocks up and Dow to close last week up 112 points at 11787 to be the 7 consecutive weekly rising in raw despite the worries about the US labor market which are still tempering this market sentiment as we have seen Nov US factory orders data which have shown rising by .7% while the market was waiting for decreasing by .4% after falling in October by .7% and also both of US December manufacturing index and non-manufacturing index getting better to 57 and 57.1 consecutively after US December Chicago PMI had come at 68.6 while it was waited to be 61.5 from 62.5 in November but again the labor data came disappointing by the recent bigger than expected weekly jobless claim release which came at 445k from 410 a weak earlier while the market was waiting for improving to 404k and December non-farm payrolls which have just added 103k while the market was waiting for 135k putting pressure on the greenback to allow the single currency to get back some of its loses underpinned by repeated Portuguese denying of the need for this made package by European countries and the IMF and the Japanese promises of buying European bonds this month could help it to rebounds dueled by markets cheeriness of successful bonds auctions in Portugal , Spain and Italy to close last week at 1.3382 after another push from Trichet's reference to building inflation pressure in the Euro zone after the ECB meeting decision of keeping the interest rate unchanged at 1% again which can suggest that there is another pressure on the ECB for capping its funding reducing its provided ample of liquidities fearing of further inflation pressure directing some of their care to the easing value risks of the single currency which is waiting today EU ZEW economic sentiment of January to be 17.3 from 13.8 in December.
While the British pound is still trading above 1.59 after stronger than expected housing prices data as UK Jan Right move housing prices index has risen up by .3% after falling in December by 3% and RICS Housing prices balance had improved to -39 in December 2010 from -44 in November while it was expected to be just -42 to be in line with the recent MPC members meeting last week which has shown their worrying about inflation as UK CPI is still well above its 2% target and also above 3% in the recent months and it can accelerate further to 4% yearly and god willing we are waiting today for UK CPI of December which is expected to be up yearly by 3.3% as the same as November which can show that the UK economy is exposed to stagflation risks this year as it has become ruled out to have a new added funds to the BOE 200b Stg buying bonds plan while the economy is not yet at the shape which does not need of its easing measures. The cable rose to 1.595 before easing back below 1.59 but it is still expected to find intermediate support at 1.5835 where it has tried to for a new base for ascending up while breaking this level can expose it to fall further to 1.57 then 1.558 while the main supporting level is now at 1.534 where it was its recent bottom.
Kind Regards

FX Consultant
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

The single currency could find new support from Russia this time by promises of considering buying Spanish debts and this consideration is coming after Japan had given a pledge for buying European bonds following China for restoring confidence in the European debt market. The single currency could come over 1.34 again after easing back below 1.33 versus the greenback earlier this week as the market uncertainty about the next EU Financial ministers meeting this week in Brussels as the calls for adding new funds to the EU and the IMF package for lending the EU debt ailing economies have increased recently putting pressure on the Fin Ministers to come out with what's new to add more confidence in the debt market. The single currency should meet the next important resistance at 1.35 soon after passing above 1.34 supported by better than expected EU ZEW economic sentiment of January could reach 25.4 and the markets were waiting for 17.3 from 15.5 in December while the next supporting level is expected to be at 1.326 where it has dropped to this week and this level can be followed by 1.309 and then the recent bottom of the pair at 1.287 level.
The British pound could also continue passing above 1.60 versus the greenback supported by strong inflation figures of December as UK CPI has reached 3.7$ yearly while it was expected to be just 3.3% while the monthly figure has been 1% and it was expected to be just .7% after UK Jan Right move housing prices index has risen up by .3% after falling in December by 3% and RICS Housing prices balance had improved to -39 in December 2010 from -44 in November while it was expected to be just -42 to be in line with the recent MPC members meeting last week which has shown their worrying about inflation as UK CPI is still well above its 2% target and also above 3% in the recent months and it can accelerate further to 4% as we have seen UK CPI of December coming at 3.7% which can show that the UK economy is exposed to stagflation risks this year as it has become ruled out to have a new added funds to the BOE 200b Stg buying bonds plan, if there is a new tightening action from the MPC to come for fighting the inflation upside risks as Andrew Sentence the MPC voting member has called for hiking the interest rate by 25 basis points in their last meeting while the economy is not yet at the shape which does not need of its easing measures. The cable rose to 1.6058 before retracing some of its recent gains to 1.594 but it is still expected to find intermediate support at 1.5835 where it has tried to form a new base for ascending up while breaking this level can expose it to fall further to 1.57 then 1.558 while the main supporting level is now at 1.534 where it was its recent bottom while the next resisting level can be at 1.6092 then its recent main top at 1.6296.
God Willing, it is important to wait today for December UK jobless claimant change to be -1.4k from -1.2 in November and ILA unemployment rate to be 7.9% and also we wait from US for December housing starts to be .550m from .555 in November and building permits to be .56m from .53m in November. It is important after that to wait for tomorrow Asian session looking for the Chinese inflation to ease back to 4.7% after reaching 28 months high in November at 5.1% trigging PBOC to hike the interest rate 25 basis points and to request for reducing the banking sector reserved amount of liquidity available for lending by another .5% after cutting it 6 times last year and it's important too to wait for its Q4 GDP which is expected to get down from 9.6% in the third quarter to 9.4% yearly while its industrial productions are expected to up by13.6% in December from 13.3% in November and also its yearly retail sales to be up y/y by 18.9% from 18.7% in November.
Kind Regards

FX Consultant
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

The British pound which had better than expected December UK jobless claimant change to -4.1k from -3.2k while the market was waiting for just -1.4k could keep most of its recent gains trading around 1.6 psychological level versus the greenback which had mixed housing data today by better than expected building permits rising to .635m in December and they were expected to be .560m and lower than expected housing starts have come at just .529m while the market was waiting for .555m.
The cable is still well-supported by strong inflation figures of December as UK CPI has reached 3.7% yearly while it was expected to be just 3.3% while the monthly figure has been 1% and it was expected to be just .7% after UK Jan Right move housing prices index has risen up by .3% after falling in December by 3% and RICS Housing prices balance had improved to -39 in December 2010 from -44 in November while it was expected to be just -42 to be in line with the recent MPC members meeting last week which has shown their worrying about inflation as UK CPI is still well above its 2% target and also above 3% in the recent months and it can accelerate further to 4% as we have seen UK CPI of December coming at 3.7% which can show that the UK economy is exposed to stagflation risks this year as it has become ruled out to have a new added funds to the BOE 200b Stg buying bonds plan, if there is a new tightening action from the MPC to come for fighting the inflation upside risks as Andrew Sentence the only MPC voting member who has called for hiking the interest rate by 25 basis points in their last meeting while the economy is not yet at the shape which does not need of its easing measures.
The cable rose to 1.6058 after the inflation data but it has retraced some of its recent gains to 1.594 and it is still expected to find intermediate support at 1.5835 where it has tried to form a new base for ascending up and breaking down this level can expose it to fall further to 1.57 then 1.558 while the main supporting level is now at 1.534 where it was its recent bottom while the next resisting level can be at 1.6092 then its recent main top which has been formed in the beginning of last November at 1.6296 when the greenback was under pressure from the Fed's decision to add another 600b$ in another step of its QE policy for stimulating the economic growth in US.
The single currency is still underpinned by the recent announced Russian consideration of buying Spanish debts which came after Japan had given a pledge for buying European bonds following China for restoring confidence in the European debt market.
The single currency could come over 1.35 for a while before easing back again to 1.345 versus the greenback as the market uncertainty about this week EU Financial ministers meeting in Brussels has been cleared out by their announcement about studying adding more funds to the EU and the IMF package for lending the EU debt ailing economies and ruling banking stress tests as in US for giving better transparent view to the markets about the current EU banking sector crediting position.
The single currency should face next important resistance at 1.3785 in case of having the ability of footing over 1.35 after it could get over 1.34 supported by better than expected EU ZEW economic sentiment of January could reach 25.4 and the markets were waiting for 17.3 from 15.5 in December while the next supporting level is expected to be at 1.326 where it has dropped to this week and this level can be followed by 1.309 and then the recent bottom of the pair at 1.287 level.
God Willing, it is important now to wait for the Chinese inflation to ease back to 4.7% after reaching 28 months high in November at 5.1% trigging PBOC to hike the interest rate 25 basis points and to request for reducing the banking sector reserved amount of liquidity available for lending by another .5% after cutting it 6 times last year and it's important too to wait for its Q4 GDP which is expected to get down from 9.6% in the third quarter to 9.4% yearly while its industrial productions are expected to up by13.6% in December from 13.3% in November and also its yearly retail sales to be up y/y by 18.9% from 18.7% in November.
We should wait too for the EU session to read in the ECB monthly report after its recent appreciation of inflation building up risks and after that we need to wait for the US session for having the weekly initial jobless claim which is forecasted to be 425k from strong rising to 445k a weak earlier which has risen strongly and also US existing homes sales of December to be up monthly by 4.5% from 5.6% in November and the US leading indicator of December to be .7% from 1.1% in November and also Philadelphia Fed manufacturing Survey to be 22.3 from 24.3 in December.
Kind Regards

FX Consultant
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

Despite the easing of the Chinese inflation to 4.6% from 28 months high in November at 5.1% yearly, it could not sway the market from expecting further tightening actions from PBOC its Q4 GDP came up yearly by 9.8% and it was expected to be just 9.6% and also December retail sales of December rose by 19.1% while the markets were waiting for just 18.7% and December industrial productions came up by 13.5% and they were expected to be 13.3% which shows to the market that the economic growth in china is still strong which can open the door for further tightening in spite of the inflation up side risk easing worries in December lowering their demand for commodities which can effect negatively on both of Australia and New Zealand exports and GDP as well as they are the nearest markets to china which put pressure on the Aussi to reach .983 and the Kiwi to fall to .7525 from .7785 undermined by lower than expected December all industrial activities index release which came down by .1% while the markets were waiting for rising by .2% from declining by .2% in November and also import prices in December came down by 3.8% quarterly while they were expected to rise by .9% from .8% a quarter earlier thanks to the taken tightening actions in New Zealand.
The gold also as a mirror of inflation has come under pressure from the strong easing of CPI in China during December and also the better than expected weekly US inventories of the crude oil which rose by 2.6% from falling a week earlier by 2.2% while the markets were waiting for declining by 1.1% which weighed negatively on the oil prices and from other side, we have had new better than expected weekly initial jobless claim which came down to 404k and they were forecasted to be 425k from strong rising to 445k a weak earlier and also US existing homes sales of December which rose to 5.28m from 4.7m while the markets were waiting for 4.8 m monthly in December to be up monthly by 4.5% from 5.6% in November and also US leading indicator of December which was forecasted to be .7% from 1.1% in November and it could rose to 1% which suggest that the growth pace in US.
The gold has broken 1360$ supporting level and its next expected support is expected to be at 1329$ then 1315$ after it has been under pressure recently getting down below 1400$ by better growth outlook could contain the market sentiment bringing back the market confidence in the US economy and the risk appetite of the business spending in the greenback which had which is expected to be much credibly wanted this year having stronger yielding debt outlook.
The strong demand for the greenback could put pressure on the cable which was unable to gain further having strong footing on 1.60 psychological level after rising to 1.6058 on strong December inflation data retracing to 1.5835 as an intermediate support whereas I have mentioned in the recent reports that it has tried to form a new base at to continue ascending up and breaking down this level can expose it to fall further to 1.57 then 1.558 while the main supporting level is now at 1.534 where it was its recent bottom while the next resisting level can be at 1.6092 then its recent main top which has been formed in the beginning of last November at 1.6296 when the greenback was under pressure from the Fed's decision to add another 600b$ in another step of its QE policy for stimulating the economic growth in US.
God Willing, We wait today for UK retail sales of December to be down monthly by just .1% from rising by just .3% in November, after it had stronger than expected data recently as we have seen better than expected December UK jobless claimant change to -4.1k from -3.2k while the market was waiting for just -1.4k and strong inflation figures of December as UK CPI has reached 3.7% yearly while it was expected to be just 3.3% while the monthly figure has been 1% and it was expected to be just .7% after UK Jan Right move housing prices index has risen up by .3% after falling in December by 3% and RICS Housing prices balance had improved to -39 in December 2010 from -44 in November while it was expected to be just -42 to be in line with the recent MPC members meeting last week which has shown their worrying about inflation as UK CPI is still well above its 2% target and also above 3% in the recent months and it can accelerate further to 4% as we have seen UK CPI of December coming at 3.7% which can show that the UK economy is exposed to stagflation risks this year as it has become ruled out to have a new added funds to the BOE 200b Stg buying bonds plan, if there is a new tightening action from the MPC to come for fighting the inflation upside risks as Andrew Sentence the only MPC voting member who has called for hiking the interest rate by 25 basis points in their last meeting while the economy is not yet at the shape which does not need of its easing measures.
The cable rose to 1.6058 after the inflation data but it has retraced some of its recent gains to 1.594 and it is still expected to find intermediate support at 1.5835 where it has tried to form a new base for ascending up and breaking down this level can expose it to fall further to 1.57 then 1.558 while the main supporting level is now at 1.534 where it was its recent bottom while the next resisting level can be at 1.6092 then its recent main top which has been formed in the beginning of last November at 1.6296 when the greenback was under pressure from the Fed's decision to add another 600b$ in another step of its QE policy for stimulating the economic growth in US.
The single currency has eased back from above 1.35 versus the strong greenback after it has been still underpinned by the recent announced Russian consideration of buying Spanish debts which came after Japan had given a pledge for buying European bonds following China for restoring confidence in the European debt market.
The single currency could come over 1.35 for a while before easing back again to 1.345 versus the greenback as the market uncertainty about this week EU Financial ministers meeting in Brussels has been cleared out by their announcement about studying adding more funds to the EU and the IMF package for lending the EU debt ailing economies and ruling banking stress tests as in US for giving better transparent view to the markets about the current EU banking sector crediting position.
God willing, we wait now for the Germane IFO to continue rising in January after making new highs at 110.1 after reaching 109.9 in December, after the recent better than expected EU ZEW economic sentiment of January could reach 25.4 and the markets were waiting for 17.3 from 15.5 in December could help the single currency to get over 1.35 while the next supporting level is expected to be at 1.326 where it has dropped to this week and this level can be followed by 1.309 and then the recent bottom of the pair at 1.287 level.
Kind Regards

FX Market Strategist
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com