Weekly Review and Outlook Risk Recovery Short Lived, Dollar to Extend Rally in a Busy Week ahead

Risk markets attempted a recovery last week on some positive news as Germany and Finland approved expansion of the EFSF while Troika returned to Greece finally. However, strength of the recovery was far from impressive and lost momentum towards the end of the week. While major US and European stock indices managed to hold well above recent low, the CRB commodity index made a new low on Friday and closed below 300 level for first in almost a year. Dollar index's retreat was rather shallow and was contained at 77.30 while Friday's rally put the index back pressing recent high of 78.86. This could also be reflected in major dollar pairs which lost momentum. Commodity currencies also turned weak with Canadian dollar and New Zealand dollar making new record low against US dollar.

Markets are facing a number of even risks this week and it's great opportunity for traders to watch the reactions, and thus, get a sense on the underlying sentiments. China manufacturing PMI was released on Saturday and has surprisingly rose to 51.2 in September. More importantly, this marked the second consecutive months of increase, though little. There have been much worries on hard landing in China. While PMI only showed little improvements in the outlook, at least, it's not deteriorating and indicates that economic development is stabilizing.

EU finance ministers are not likely to approve the disbursements of next EUR 8b tranche of Greece bailout this week. However troika, the EU/IMF/ECB inspection team will complete an evaluation as early as on Monday and thus give the signal on whether Greece has done their austerity jobs satisfactorily. Also, as the Bundestag has now passed the bill for expanding the EFSF, there would possibly be some news on how the fund would be enlarged to a size that's capable to contain Italy and Spain eventually.

While the surprised surge in inflation dented hope for a rate cut from ECB, the bank would nonetheless announce new stimulus measures in Trichet's last meeting as President this week. The unconventional measures to be adopted would include resumption of the one-year refinancing operations and restart of covered-bonds purchase. These should be positive to the markets.

While these events might trigger some recovery in risk markets, we'd anticipate that the impact would be short-lived. We're staying bearish in risks and bullish in dollar. The technical developments suggest that dollar is ready for another round of rally this week while stocks would likely revisit recent lows. Market sentiment would once again be proved to remain bearish if the above mentioned events fail to provided sustainable boost to risk markets. And, extension in decline in the CRB, if accompanied by a break of 10600 level in dow, and a sustained break of 79 in dollar index, should confirm the trend of risk selling in the first half of Q4.

The week ahead

In addition to the above events, Fed will also start the operation twist program on October. Fed will purchase a total of $44b of longer-mautrity treasuries and sell that same amount of short term debts. Four central banks will meet including RBA, ECB, BoE and BoJ. In addition, there will be key economic data release including Japanese Tankan, UK PMIs, US ISM indices and Non-farm payroll, Canadian job report. So, be prepared for a busy and volatile week.

• Monday: Japanese quarterly Tankan; Swiss retail sales, SVME PMI; Eurozone PMI manufacturing final; UK PMI manufacturing; US ISM manufacturing
• Tuesday: Australian building approvals, trade balance, RBA rate decision; UK construction PMI; Bernanke speech, US factory orders
• Wednesday: Australian retail sales; Eurozone PMI services final, retail sales; UK services PMI, GDP final; US ADP job, ISM services
• Thursday: BoE rate decision; ECB rate decisions; Canada building permits, Ivey PMI; US jobless claims
• Friday: BoJ rate decision; Swiss unemployment; UK PPI; Canada employment; US non-farm payrolls

Technical Highlights

Dollar index's strong rally on Friday suggests that recent rise from 72.69 is ready to resume. Initial focus is on 78.86 resistance today and break there will confirm this bullish case and should send the index through 80 psychological level to 50% retracement of 88.70 to 72.69 at 80.69 next. Break of last week's low of 77.30 will delay this case and bring more consolidations but we'll stay bullish as long as 76.06 support holds. 

The CRB commodity index extended recent down trend to close at 298.15. Near term outlook will remain bearish as long as last week's high of 312.26 holds and further fall should be seen to 50% retracement of 200.15 to 370.70 at 285.43. The main focus would indeed be on whether the current decline would accelerate again. That's crucial in determining whether CRB could draw support inside 247.25/293.75 zone and rebound. 

S&P 500 stayed in recently established range last week but felt strong pressure well ahead of 55 weeks EMA at 1230.3. While the 38.2% retracement support at 1101.7 might provide some more support in near term, it shouldn't last long. Friday's fall puts initial focus this week on 1101.54 recent low. Break there will resume whole decline from 1370.58 and should send the index through 1010.91 support within October. In any case, we'll stay bearish as long as 1258 head and shoulder resistance holds. 

EUR/USD Weekly Outlook

EUR/USD turned into brief recovery last week but such recovery was likely finished at 1.3689 already. Initial bias is mildly on the downside this week for 1.3362 first. Break will confirm resumption of recent decline and should target 161.8% projection of 1.4939 to 1.3969 from 1.4548 at 1.2979, which is close to 1.3 psychological level. On the upside, above 1.3689 will delay the bearish case and bring more consolidations. But recovery is, nonetheless, expected to be limited below 1.3936 resistance and bring another fall eventually.

In the bigger picture, current development indicates that medium term rise from 1.1875 has completed with three waves up to 1.4939 already. That also suggests that it's merely part of the consolidation pattern that started back in 2008 at 1.6039. Further decline would now be seen to 1.2873 support first and break will target 1.1875 and below. On the upside, above 1.4548, resistance is needed to confirm completion of the fall from 1.4939 or we'll stay bearish in EUR/USD.

In the long term picture, EUR/USD turned into a long term consolidation pattern since reaching 1.6039 in 2008. Such consolidation is still in progress and we'd expect range trading to continue for some time between 1.1639 and 1.6039.

EUR/JPY Weekly Outlook

EUR/JPY formed a temporary bottom at 101.93 last week and recovered to 104.95. Such recovery is treated as consolidation in recent decline only. Hence, while another rise cannot be ruled out yet, even in that case, we'd expect upside to be limited by 106.98 resistance (50% retracement of 111.93 to 10.93 at 106.93) and bring fall resumption. Below 103.00 minor support will flip bias back to the downside. Further break of 101.93 should target 100 psychological level next.

In the bigger picture, whole down trend from 2008 high of 169.96 is still in progress and is building up downside momentum again. Sustained trading below 100 psychological level should pave the way to 100% projection of 139.21 to 105.42 from 123.31 at 89.52, which is close to 88.96 all time low. On the upside, break of 111.93 resistance is needed to be the first signal of medium term reversal. Otherwise, we'll stay bearish.

In the long term picture, up trend from 88.96 (00 low) has completed at 169.96 and made a long term top there. Based on the five wave structure of the rise from 88.96 to 169.96, we're favoring that fall from 169.96 is corrective in nature. Hence, look for reversal signal ahead of 88.96 low.

USD/CHF Weekly Outlook

USD/CHF's consolidation form 0.9182 continued last week but drew some support from 4 hours 55 EMA and recovered. The development suggests that retreat from 0.9182 might be cover already and initial bias is back on the upside this week. Break of 0.9182 will confirm resumption of the whole rise from 0.7065 and should target 161.8% projection of 0.7065 to 0.8246 from 0.7710 at 0.9621 next. On the downside, below 0.8917 minor support will delay the bullish case and bring more consolidations first. But we'll stay bullish as long as 0.8647 support holds and extend another rise eventually.

In the bigger picture, medium term down trend from 1.1730 is already completed at 1.7065. But there is no indication of long term reversal yet. Rebound from 0.7065 is treated as part of a medium term consolidation pattern. Such rebound would possibly extend to 0.9916/1.1730 resistance zone. But strong resistance should be seen there and bring reversal. On the downside, break of 0.7710 is needed to indicate completion of the rebound from 0.7065. Otherwise, we'll stay near term bullish in the pair for the moment.

In the longer term picture, long term down trend from 2000 high of 1.8305 is still in progress and there is no indication of a reversal yet. Such down trend would still extend to 100% projection of 1.8305 to 1.1288 from 1.3283 at 0.6266 after finishing the consolidation from 0.7065.

GBP/USD Weekly Outlook

GBP/USD's recovery from 1.5327 extended to 1.5715 last week and lost momentum since then. Such recovery might be finished already and initial bias is cautiously on the downside this week for retesting 1.5327 first. Break will confirm resumption of recent fall from 1.6746 and should target 161.8% projection of 1.6746 to 1.5780 from 1.6618 at 1.5055 next. On the upside, above 1.5715 will delay the bearish case and bring another recovery. But upside should be limited by 38.2% retracement of 1.6618 to 1.5327 at 1.5820 and bring fall resumption eventually.

In the bigger picture, rise from 1.4229, which is treated as the third leg of consolidation from 1.3503 (2008 low) should be finished at 1.6746 after GBP/USD completed a head and shoulder top reversal pattern (ls: 1.6298, h: 1.6746, rs: 1.6618). Fall from 1.6746 could be the fourth leg of the consolidation pattern from 1.3503 (2008 low) or resuming long term down trend from 2.1161 (2007 high). In either case, retest of 1.4229 resistance should be seen. Break of 1.4229 will bolster the down trend resumption case and would possibly push GBP/USD through 1.3503 low. On the upside, break of 1.6618 resistance is needed to invalidate this view. Or we'll now stay cautiously bearish in GBP/USD.

In the longer term picture, the corrective nature of the multi-decade advance from 1.0463 (85 low) to 2.1161 as well as the impulsive nature of the fall from there suggests that GBP/USD is now in an early stage of a long term down trend. Another low below 1.3503 is anticipated after consolidation from 1.3503 is confirmed to be completed.

USD/JPY Weekly Outlook

USD/JPY sideway trading from 75.94 continued last week and outlook remains unchanged. Stronger recovery might be seen initially this week but upside is expected to be limited by near term falling trend line (now at 77.71) and bring fall resumption eventually. Below 76.11 will turn bias back to the downside and break of 75.94 low will confirm resumption of whole fall from 85.51 and would target 70 psychological level.

In the bigger picture, USD/JPY is still staying well inside the falling channel that started back in 2007 at 124.13. There is no indication of trend reversal yet even though medium term downside momentum is diminishing with bullish convergence condition in weekly MACD. Such down trend is still in favor to continue to 70 psychological level. In any case, break of 80.23 resistance is first needed to indicate completion of fall from 85.51. Secondly, break of 85.51 is needed to be the first signal of medium term reversal. Otherwise, we'll stay cautiously bearish in the pair.

In the long term picture, current decline suggests that the long term down trend in USD/JPY is still in progress. Such down trend is expected to extend further into uncharted territory with 70 psychological level as next target. In any case, we'd at least need to see sustained break of 85.51 before considering trend reversal.

EUR/CHF Weekly Outlook

EUR/CHF struggled around 1.22 level for most of last week but finally gave up and dipped to close at 1.2155. More sideway trading would be seen in near term with bias mildly on the downside to send the cross back below 1.21 level. Nevertheless, note that SNB has made it clear about their intention to keep a floor at 1.2 and any decline attempt should be contained by this level. On the upside, even in case of another rise, strong resistance should be seen in 1.2399/3243 resistance zone to limit upside unless there is a drastic turn in risk sentiments.

In the long term picture, so now after SNB intervention, the long term down trend in EUR/CHF is put into a halt at 1.0061. But there is no scope of a trend reversal yet before a break of 1.3243 resistance. EUR/CHF should stay in range for sometime.

USD/CAD Weekly Outlook

After brief retreat, USD/CAD rally resumed last week and jumped to as high as 1.0502 so far. Initial bias remains on the upside this week and further rise should be seen to 161.8% projection of 0.9406 to 1.0009 from 0.9725 at 1.0701 next. On the downside, below 1.0372 minor support will turn bias neutral and bring consolidations. But retreat should be contained above 1.0142 support and bring rally resumption.

In the bigger picture, sustained trading above 55 weeks EMA affirms the case that whole down trend from 2009 high of 1.3063 has finished at 0.9406 on bullish convergence condition in weekly. Current rally from 0.9406 should now target 1.0851 resistance (38.2% retracement of 1.3063 to 0.9406 at 1.0803). Break there will extend the rebound to 61.8% retracement 1.1666 and above. On the downside, break of 1.0009 support is needed indicate completion of the rally from 0.9406. Otherwise, we'll stay bullish in USD/CAD.

In the longer term picture, there is no clear indication that the long term down trend from 2002 high of 1.6196 has reversed even though bullish convergence condition was seen in monthly MACD. The fall from 1.3063 to 0.9406 looks corrective and could either be part of a sideway pattern from 0.9056, or a corrective to rise from there. The long term outlook, i.e., the possibility of taking out 1.3063 high, will depend on whether rise from 0.9406 would eventually develop into a strong impulsive wave. We'll wait and see.

EUR/GBP Weekly Outlook

After brief consolidations, EUR/GBP dived to as low as 0.8578 towards the end of the week. The development affirmed the case that rebound from 0.8529 is already finished at 0.8795 after failing to sustain above 55 days EMA. Fall fro 0.9083 should be ready to resume. Initial bias remains on the downside this week for 0.8529 first. Break will target 100% projection of 0.8884 to 0.8529 from 0.8795 at 0.8440 next. On the upside, above 0.8651 minor resistance will delay the bearish case and turn bias neutral for more consolidations first.

In the bigger picture, price actions from 0.9799 (2008) should be unfolding as a consolidation pattern in the long term up trend. The first leg is completed with three waves down to 0.8067. Second leg should also be finished at 0.9083. Fall from 0.9083 is treated as the third leg and should now target 0.8067 first and possibly further to 61.8% projection of 0.9799 to 0.8067 from 0.9083 at 0.8013 (which is closes to 0.8 psychological level). Nevertheless, we'd expect strong support from 0.7693/8186 support zone to contain downside to finish off the consolidation. On the upside, break of 0.8884 resistance is needed to invalidate this view or we'll stay bearish now.

In the long term picture, long term up trend from 2000 low of 0.5680 shouldn't be over yet and the choppy fall from 2008 high of 0.9799 should be a correction only. We'd expect such correction to be contained by 0.7963/0.8186 support zone and bring up trend resumption. Rise from 0.5680 is still expected to extend beyond 0.9799 high eventually.

Daily Report: NZD Lower after Downgrade, Dollar Building Up Momentum

New Zealand dollar is noticeably lower in another quiet Asian session after rating downgrade. Meanwhile, exporters buying send Japanese yen generally higher. Sentiments are still weak in the markets but was somewhat steady as the HSBC China Manufacturing PMI was revised higher to 49.9 in September. Technically speaking, major currencies' recovery against dollar has been losing momentum and there are signs of selloff resumption. USD/CAD takes the lead by breaking 1.0390 resistance. We'll see if dollar regains momentum against as the quarter closes.

Fitch's and S&P's downgraded New Zealand's credit rating amid concerns over the country's fiscal deficits. Fitch trimmed New Zealand's rating to AA from AA+, citing the country's high level of net external debt is an outlier among rated peers - a key vulnerability that is likely to persist as the current account deficit is projected to widen again'. S&P also lowered the country's rating by 1 notch after the 'assessment of the likelihood that New Zealand's external position will deteriorate further'. The downgrades are expected to increase borrowing costs of New Zealand. They will also make it more difficult for the RBNZ to remove the emergency cut implemented after the earthquake.

Sterling is relatively resilient against Euro as an SNB official said the bank will increase Sterling holdings in reserves "in a year's time". Current, the bank is holding 3% of its reserves in the pound which is significantly lower than the 10% between 2004 and 2005. On the other hand, it's holding 55% reserves in Euro, which markets are expecting SNB to reallocate after setting the floor on EUR/CHF. Meanwhile, there are also some support to sterling as Gfk consumer confidence unexpectedly improved to -30 in September.

Yen is broadly higher today as Japanese exports sold both euro and dollar at the end of the fiscal half-year and buy back the yen. But gain is so far limited after Finance Minister Jun Azumi said a further JPY 15T would be authorized or market intervention, bringing the amount up to a record JPY 46T. Azumi also noted that "the recent 75- to 80-yen range could pour cold water on the Japanese economy's recovery,: suggesting the government is deeper concerned with USD/JPY a the current level.

On the data front, New Zealand building building permits rose 12.5% mom in August while NBNZ business confidence dropped to 30.3 in September. UK Gfk consumer sentiments improved to -30 in September. Japan manufacturing PMI dropped to 49.3 in September. Household spending dropped -4.1% yoy in August while jobless rate dropped to 4.3%, industrial production rose 0.8% mom, housing starts rose 14% in August. National CPI core rose 0.2% yoy in August. Look gin ahead, Eurozone CPI flash and Swiss KOF will be the main focus in European session while Canada GDP and US personal income and spending will be the main focus in US session. 

USD/CAD Daily Outlook

Daily Pivots: (S1) 1.0276; (P) 1.0338; (R1) 1.0421; 

USD/CAD rises to as high as 1.0407 so far today and the break of 1.0385 indicates that recent rebound from 0.9406 has resumed. Intraday bias is back on the upside and further rally should be seen towards 161.8% projection of 0.9406 to 1.0009 from 0.9725 at 1.0701 next. On the downside, below 1.0256 minor support will turn bias neutral. Further break of 1.0142 support will suggest short term topping, possibly with bearish divergence condition in 4 hours MACD, and bring deeper pull back.

In the bigger picture, sustained trading above 55 weeks EMA affirms the case that whole down trend from 2009 high of 1.3063 has finished at 0.9406 on bullish convergence condition in weekly. Current rally from 0.9406 should now target 1.0851 resistance (38.2% retracement of 1.3063 to 0.9406 at 1.0803). Break there will extend the rebound to 61.8% retracement 1.1666. On the downside, break of 0.9725 support is needed to confirm completion of the rise from 0.9406. Or, we'll stay bullish in the pair.

EUR/USD Daily Outlook

Daily Pivots: (S1) 1.3516; (P) 1.3598 (R1) 1.3676; 

With 1.3477 minor support intact, EUR/USD's recovery form 1.3362 might extend further. But after all, the current rise is treated as a correction in the larger decline only. Hence, we'd expect upside to be limited by 1.3936 resistance and bring fall resumption. Below 1.3477 minor support will flip bias back to the downside. Further break of 1.3362 will target 161.8% projection of 1.4939 to 1.3969 from 1.4548 at 1.2979, which is close to 1.3 psychological level.

In the bigger picture, current development indicates that medium term rise from 1.1875 has completed with three waves up to 1.4939 already. That also suggests that it's merely part of the consolidation pattern that started back in 2008 at 1.6039. Further decline would now be seen to 1.2873 support first and break will target 1.1875 and below. On the upside, above 1.4548, resistance is needed to confirm completion of the fall from 1.4939 or we'll stay bearish in EUR/USD.

EUR/JPY Daily Outlook

Daily Pivots: (S1) 103.53; (P) 104.23; (R1) 105.15; 

With 103.00 minor support intact, EUR/JPY's recovery from 101.93 might extend further. But after all, it's treated as a correction in the larger decline only. Hence, we'd expect upside to be limited by 106.98 resistance and bring fall resumption. Below 103.00 minor support will flip bias back to the downside for 101.93 and then 100 psychological level.

In the bigger picture, whole down trend from 2008 high of 169.96 is still in progress and is building up downside momentum again. Sustained trading below 100 psychological level should pave the way to 100% projection of 139.21 to 105.42 from 123.31 at 89.52, which is close to 88.96 all time low. On the upside, break of 123.31 resistance is needed to confirm trend reversal or we'll stay bearish.

GBP/USD Daily Outlook

Daily Pivots: (S1) 1.5540; (P) 1.5627; (R1) 1.5713; 

With 1.5542 minor support intact, recovery from 1.5327 might still extend higher. But after all, such recovery is treated as a correction only and hence, we'd expect upside to be limited by 38.2% retracement of 1.6618 to 1.5327 at 1.5820 and bring fall resumption. Below 1.5542 minor support will flip bias back to the downside. Further break of 1.5327 will resume recent decline and target 161.8% projection of 1.6746 to 1.5780 from 1.6618 at 1.5055 next.

In the bigger picture, rise from 1.4229, which is treated as the third leg of consolidation from 1.3503 (2008 low) should be finished at 1.6746 after GBP/USD completed a head and shoulder top reversal pattern (ls: 1.6298, h: 1.6746, rs: 1.6618). Fall from 1.6746 could be the fourth leg of the consolidation pattern from 1.3503 (2008 low) or resuming long term down trend from 2.1161 (2007 high). In either case 1.4229 resistance should be seen. Break of 1.4229 will bolster the down trend resumption case and would possibly push GBP/USD through 1.3503 low. On the upside, break of 1.6618 resistance is needed to invalidate this view. Or we'll now stay cautiously bearish in GBP/USD.

Economic Indicators Update

GMT	Ccy	Events	Actual	Consensus	Previous	Revised
21:45	NZD	Building Permits M/M Aug	12.50%		13.00%	14.30%
23:01	GBP	GfK Consumer Sentiments Sep	-30	-33	-31
23:15	JPY	Nomura/JMMA Manufacturing PMI Sep	49.3		51.9
23:30	JPY	Household Spending Y/Y Aug	-4.10%	-2.80%	-2.10%
23:30	JPY	Jobless Rate Aug	4.30%	4.70%	4.70%
23:30	JPY	Tokyo CPI Core Y/Y Sep	-0.10%	-0.10%	-0.20%
23:30	JPY	National CPI Core Y/Y Aug	0.20%	0.10%	0.10%
23:50	JPY	Industrial Production M/M Aug P	0.80%	1.50%	0.40%
1:00	NZD	NBNZ Business Confidence Sep	30.3		34.4
5:00	JPY	Housing Starts Y/Y Aug	14.00%	4.50%	21.20%
9:00	EUR	Eurozone CPI Estimate Y/Y Sep P		2.50%	2.50%
9:00	EUR	Eurozone Unemployment Rate Aug		10.00%	10.00%
9:30	CHF	KOF Swiss Leading Indicator Sep		1.33	1.61
12:30	CAD	GDP M/M Jul		0.30%	0.20%
12:30	USD	Personal Income Aug		0.10%	0.30%
12:30	USD	Personal Spending Aug		0.20%	0.80%
12:30	USD	PCE Deflator Y/Y Aug		3.00%	2.80%
12:30	USD	PCE Core M/M Aug		0.20%	0.20%
12:30	USD	PCE Core Y/Y Aug		1.70%	1.60%
13:45	USD	Chicago PMI Sep		56.5	56.5
13:55	USD	U. of Michigan Confidence Sep F		57.8	57.8

USDCAD - Very Cautiously Bearish Below 1.0311

his week's exceptional gains continue with a fourth straight daily improvement. This move took the currency pair to a correction of 62 percent of the fall from the May 2010 peak, and the high levels traded since October 2010. Intraday signals for sentiment remain at overbought extremes   with some profit taking developing to correct that situation. This setback is expected to be temporary but our call is therefore Cautiously Bearish below 1.0311. The immediate target is 1.0245 with a move through that point focusing on the overnight low of 1.0224 or even 1.0183, half of yesterday's net gains, but probably no further.

The risk to this call is that the decline was more temporary and limited than currently assessed and this would be signalled by a move above 1.0311. Prices and sentiment should then improve to 1.0340 then yesterday's peak at 1.0363.

Weekly Review and Outlook: Sentiments to Deteriorate Further in a Week of Central Bank Meetings

While the market sentiments have stabilized in the last few weeks, the theme didn't change. Occupying investors' mind are the fear of global recession as well and the never-ending European debt crisis. There is increasing chance that Fed will announce some sort of QE3 problem later in the month. But markets are also getting increasingly inconvinced by effectiveness of further easing from Fed on saving economic recovery. DOW and S&P 500 spent most of the week recovering, but the hard work was undone after a poor job report from US and both indices indeed closed the week mildly lower. Safe haven assets regained much ground last week with US 10 year yields closed below 2% at 1.99%, just 4 points above the record low. German 10 yield bund yields also dropped to a record low of 1.996 before closing at 2.01%. Gold surged 3.15% on Friday at 1876.9 and is heading back to 1900. In the currency markets, Swiss Franc rebounded strongly last week after SNB refrained from announcing new measures to curb the currency's gains while dollar index staged a strong rebound. Sentiments are vulnerable to further deterioration this week and next before FOMC meets on September 20.

Economic data were generally poor. US August non-farm payroll showed 0k job growth, against expectation of 90k. 17k of private sector job growth was offset by -17k government cuts. Gains for July was revised down from 117k to 85k while that for June was also revised down from 46k to 20k. Unemployment rate was unchanged at 9.1%. US consumer confidence plunged to 44.5 in August. ISM manufacturing avoided dipping into contraction region below 50 but did dropped slightly to 50.6 in August. Eurozone PMI manufacturing was revised down to 49 in August, while UK manufacturing PMI dropped to 49, both suggesting deeper contraction. China manufacturing PMI recovered slightly to 50.9 in August but missed expectation of 51.

The minutes of the August FOMC meeting unveiled that 'a few members' preferred 'a more substantial move at this meeting'. The range of tools that policymakers discussed to stimulate the economy included reinforcing forward guidance about the likely path of monetary policy, additional asset purchases, increasing the average maturity of securities holdings, reducing the interest rate paid on excess reserve balances. Policymakers did not show preference on the stimulating tools but they 'agreed that the September meeting should be extended to two days' as more time is needed for discussion. 

Greece came back to spotlight again on worry that the country would miss its7.4% budget deficit target, which is a key condition in funding of the original EUR 100b bailout package and that was admitted by Finance minister Evangelos Venizelos. IMF has confirmed that the "mission has temporarily left Athens to allow the authorities to complete technical work related to the 2012 budget and growth-enhancing structural reforms". Greece is given ten days to come up with proposals to put the austerity plan back on track and the talk between Greece and IMF will resume on September 15. Greek two-year yields soared above 47 percent.

On the other hand, there were increasing concern over Italy's waffling on its austerity proposal. The latest revision involves a increased crackdown on tax evasions which triggered criticism from many parties. Also there were concerns that the new proposal will create EUR 7b hole in the EUR 45b austerity plan agreed on August 5. ECB stepped up pressure on Italy as Trichet warned on Saturday that "it is essential that the target which was announced to diminish the deficit will be fully confirmed and implemented. And it's "absolutely decisive to consolidate and reinforce the quality and the credibility of the Italian strategy and of its creditworthiness".

Swiss Franc was notably stronger last week. Prior to Wednesday, where SNB usually announce new measures, markets have been anticipate some sort of announcements, like deposit taxes, to further curb Franc strength. However, nothing happened. And there are speculations that SNB is so far comfortable with EUR/CHF now well above parity and would refrain from more intervention in near term. We'd anticipate some more Franc strength in near termon risk aversion but will be cautious on reversal as it's believed that SNB is strongly determined to defend parity in EUR/CHF.

Technical Highlights

DOW's rebound from 10604 did extended further to as high as 11716 last week but faced strong resistance from 55 days EMA and 11862 prior support and reversed. It's likely that such corrective recovery is finished with three waves up already and the index is now vulnerable for more downside ahead. We'll be cautiously bearish for 10604 in near term, possibly later this month. Break there will resume the correct down trend from 12876 towards 9614 cluster support (50% retracement of 6470 to 12876 at 9672. In any case, we'll stay bearish as long as 11862 resistance holds. 

XAU/EUR staged a strong rebound last week and pull back from 1331.41 has apparently finished at 1180.07 already. XAU/EUR is holding well above the rising 55 days EMA and the up trend is still intact. We're cautiously bullish this week as long as 1280 minor support holds. Break of 1331.41 will confirm up trend resumption for 261.8% projection of 954 to 1088 from 1021 at 1372 next. 

Dollar index rebounded strongly last week but it's, after all, still staying in range of 73.42/75.38. Outlook remains rather mixed for the moment and we'll stay neutral before a break out. On the downside, below 73.42 will suggest that down trend from 88.70 is still in progress and resuming for 72.69 and below. On the upside, above 75.38 will turn bias to the upside for 76.71. Break there will in turn indicate that 72.69 is already the medium term bottom and the trend has reversed. 

The Week Ahead

Five central banks will meet this week, RBA, BoC, BoJ, BoE, ECB. ECB will be of particular interest as Trichet hinted on possible downward revision in its growth and inflation forecasts. We argued that ECB Remains on Hold Through 2012 and will look for some comments from Trichet to affirm this view. Also, BoJ is expected to remain accommodative after FM Noda became the new PM. RBA is expected to be stand pat at 4.75% through 2011. There are speculations on rate cut but so far they're not supported by economic data yet.

• Monday: Eurozone services PMI, Sentix Investor Confidence, retail sales; UK services PMI
• Tuesday: RBA rate decision; Swiss CPI; Eurozone GDP revision; US ISM non-manufacturing
• Wednesday: Australia GDP; BoJ rate decision; UK industrial and manufacturing production; BoC rate decision, Ivey PMI; Fed's Beige Book
• Thursday: Australia employment; Swiss unemployment; BoE rate decision; ECB rate decision; Canada building permits, trade balance; US trade balance, jobless claims.
• Friday: Japan GDP; China CPI; UK PPI, trade balance; Canada employment, housing starts.

USD/CAD Weekly Outlook

USD/CAD's consolidation from 1.0009 continued last week with a dip to 0.9725 but quickly rebounded. Current development suggests that such consolidation is possibly finished already. Initial bias is mildly on the upside for retesting 1.0009 first. Break will confirm resumption of whole rise from 0.9406 and should target 61.8% retracement of 1.0851 to 0.9406 at 1.0299. However, break of 0.9725 will now dampen this bullish view and will turn focus back to 0.9406 instead.

In the bigger picture, a medium term bottom is possibly formed at 0.9406 on bullish convergence condition in weekly MACD. Further rise is in favor for a test on key resistance level at 1.0851 and break there will confirm completion of the down trend from 2009 high of 1.3063. However, sustained trading below 55 days EMA (now at 0.9743) will dampen this bullish case and argue that down trend from 1.3063 (2009 high) is still in progress for another low below 0.9406.

In the longer term picture, firstly, there is no clear indication that the long term down trend from 2002 high of 1.6196 has reversed. Secondly, the medium term fall from 1.3063 is so far looking corrective. Hence, we're slightly favoring the case that price actions from 0.9056 are developing into a long term corrective pattern.

Daily Report: Currency Markets Calm While Risk Aversion Dominates Markets

Risk aversion continues to dominate the financial markets in Asian session today. Following the nearly -420 pts fall in DOW, Asian equities are broadly lower with Korea KS11 down most by more than -5%, Australian all ordinaries down -3% while Japan Nikkei, Hong Kong HSI and Singapore Straits Times all down more than -2%. Gold manages to ride of safe haven flow and jumps to new record high close to 1850 level against dollar. The current market is relatively calm though. Dollar and yen are generally firm but markets are stuck in tight range so far.

Concerns on European banking sectors and global slowdown are the two major factors for the bearish sentiments in the markets, the former being a near to medium term while the latter being the medium to longer term. Investors are on the one hand clearly dissatisfied with the lack of feasible solutions for the debt crisis out of the Franco-German summit. The proposed imposition of a new financial transaction tax across all Eurozone members even did irritate some investors. On the other hand, markets are concerned with the possibility of liquidity dry up in the interbank lending markets due to lack of trust. Fears that more banks will seek ECB's funding because of their heavy exposure to debts of Greece and other debt-ridden countries increased and would make the market outlook negative.

Meanwhile, markets are deeply concerned with slow down in the US after getting some poor economic data recently. All eyes will be on next week's Jackson Hole symposium and that might help keep downside of stocks contained in near term. After the Fed announced to keep interest rates at exceptionally low levels at least through mid-2013 on August 9, the market has been increasingly speculating that Chairman Ben Bernanke will signal additional easing measures at the meeting next week. According to a CNBC survey done after the FOMC meeting, 46% of respondents said the Fed will resume QE, up from 19% in the July survey while 37% said the Fed will not do QE, down from 68% in July. Also, of those who believe the Fed will resume QE, the asset purchases are expected to average at 628B, up from 377B in July. 

As for today, Canadian CPI will be a main focus. Economists expect headline CPI to moderate from 3.1% yoy to 2.8% yoy in July while core CPI is expected to rise from 1.3% yoy to 1.6% yoy. USD/CAD looks breaking out from recent triangle consolidation and a lower than expected figure today will likely trigger further rally through parity. Other data to be released include German PPI and UK public sector net borrowing.

A near term focus of the markets will be on how far gold could go, not just against dollar, but also against other currencies. XAU/EUR just makes another record high at 1291.67 today. The up trend has been accelerating after breaking of the upper rising trend line and momentum is still very strong in the pair. We'll stay bullish in XAU/EUR as long as 1201.96 support holds and expect a break of 1300 psychological level in near term. The up trend should also extend to 261.8% projection of 954.11 to 1088.1 from 1021.21 at 1371.96 in medium term. 

USD/CAD Daily Outlook

Daily Pivots: (S1) 0.9821; (P) 0.9880; (R1) 0.9961; 

Intraday bias in USD/CAD remains cautiously on the upside for a retest on 1.0009 resistance. As noted before, consolidations from 1.0009 might have completed at 0.9774 already. Break of 1.0009 will confirm resumption of whole rise from 0.9406. Also, sustained trading above 0.9912 resistance will confirm double bottom reversal pattern (0.9444, 0.94056) and should target 61.8% retracement of 1.0851 to 0.9406 at 1.0299. On the downside, below 0.9847 minor support will turn bias neutral and will extend the consolidation from 1.0009. But even in case of another fall, we'll stay bullish as long as 0.9741 support holds.

In the bigger picture, the break of 0.9912 resistance and 55 weeks EMA (now at 0.9918) is taken as a signal that a medium term bottom is already formed at 0.9406. This view is affirmed by bullish convergence condition in weekly MACD. Outlook is turned bullish for a test on key resistance level at 1.0851. Nevertheless, note that failure to sustained above 0.9912, followed by break of 0.9741 minor support, will dampen this bullish case and argue that down trend from 1.3063 (2009 high) is still in progress for another low below 0.9406.

The current U.S major stumbling block; the deeply deteriorated labor market, may be healing but still at a slow pace and around the same levels…

Today, as every first Friday of a new month, the Bureau of Labor Statistics of the world's superpower will release it's well-known and vital Jobs Report; a report that traders and overall people were patiently waiting for since it gives a lucid hint of the current health of the economy, knowing regrettably that the U.S key sector; the labor market, remains deteriorated to continue on postponing a full recovery from the recession, although some clear signs of enhancement have been witnessed today, indicating only that a revival of this sector remains on taking place but at an extreme slow pace.

Accordingly today, the job losses may have slowed down as the change in Non Payrolls for January, which covers almost 80% of workers who produce the total GDP in the United States, in other words the total number of added or shed jobs in the world's leading economy, showed that the country added cheerfully 117,000 jobs in last month compared to a prior revised add of only 46 thousand from an add of 18 thousand while that the market projected only an add of 85 thousand workers.

As for the change in manufacturing Payrolls it added cheerfully 24 thousand workers in July compared to a prior revised add of only 11 thousand from an add of 6 thousand while that the market projected only an add of 10 thousand workers and the change in private payrolls added unexpectedly and gladly 15 thousand workers whereas the market predicted only an add of 113 thousand.

Not forgetting that ahead of today's report, hopes were already spread throughout jobs data and today's jobs reports was expected to be in some way cheerful after that the country's its ADP Employer Services showed that U.S companies were able to add more than forecasted employees cheerfully to payrolls last month; adding 114 thousand workers to payroll in July although the market only projected only an add of 100 thousand employees, which was in fact an early positive indicator of the jobs report.

Nevertheless, up till now the jobless rate continues on being highly crucial, proving the fact that the easing of the labor market deterioration is taking place but at a sluggish rate, knowing that the rate of people unemployed has optimistically plunged but very slightly to come in at 9.1 percent in July from 9.2 percent  , having therefore the ongoing depreciated labor market continuing on pushing back a stronger overall economical recovery from the enduring downside pressures of the worst crisis seen since WWII, as already forecasted by the Fed beige Book and throughout overall economic forecasts.

As for the Average Hourly Earnings, they showed a cheerful incline to the upside to come in around 0.4% from a prior reading of 0.0% in July and climbing up to 2.3 percent for the year ending July, while the Average Weekly Hours throughout the same period remain unchanged as already expected at 34.3, demonstrating that the overall pay growth may be improving but continues on being weak.

In fact throughout these hard times and weakened economical conditions it is a positive sign to watch better-than-forecasted job data but on a realistic state of mind these signs of enhancement are only few and minor, in other words the labor market is only reviving at a mediocre pace and continues on struggling deeply to revive from the recession although some employers are becoming a bet more encouraged to hire workers, having in mind that a true revival of this sector would not be witnessed except by the second quarter of next year.

Currency Pairs Update

 

EUR/USD is trading over 0.60% higher near 1.4180.
USD/JPY is trading over 0.95% lower near 78.4250.
GBP/USD is trading over 0.35% higher near 1.6319.
EUR/CHF is trading over 0.70% higher near 1.0884.
USD/CAD is trading over 0.55% lower near 0.9823.
AUD/USD is trading over 0.45% higher near 1.0503.

The U.S. Dollar Index is trading over 0.45% lower near 74.948.

AUDUSD at record highs on 2Q Australian CPI data

The biggest mover and news overnight was the much better than expected Australian CPI data and thus in tandem the AUDUSD has hit record highs, roughly where it trades at the time of writing 1.1070 or thereabouts. The data came in much higher than expected not only on the q/q side but more importantly now on a y/r basis pushes the rate of inflation to the upper bounds of the Reserve Bank of Australia comfort zone. This clearly puts pay to any thoughts of rate cuts and for the time being leaves the potential for another hike on the table. If you cast your minds back there have been several instances whereby RBA speakers have intimated that before any move is made they will wait to see this data printed last night and thus react accordingly. While a stronger AUD is in some contributing to the overall inflationary picture, chatter on the news wires this morning has indicated that there will not be any intervention in the market, and quite frankly nor should there be. Fair to say then that a rate cut is off the table and now all eyes will be on the November RBA meeting, where if a move happens, it will likely be at that meeting.

Elsewhere, the AUD was not the only beneficiary of the continued USD weakness, the other cross painting most movement is the USDJPY which is now not far from the extreme reactionary low of 76.25 (March earthquake print). 

We’re set to continue to see more of the same as the suggested vote due to take place today has now been postponed till tomorrow, really cutting a fine line into the deadline set at August 2nd. With such uncertainty come new highs in Gold understandably and even more calls from various quarters for a return to the gold standard, and you know for the first time, I’m loathed to disagree… Bottom line: where is everyone keeping their money right now? Simple really, Gold, CHF and JPY… the other hidden safe haven is the CNY although you won’t hear too many shouting about it…

Other news overnight centered predominantly on political issues and while the U.S. debt ceiling debate remains at the forefront of headlines, people should still focus on the Eurozone, as the proposed package put forward last week, still needs to be ratifies by individual governments etc etc…

With regard to data on the day we have CHF KOF index, U.S. durable goods and later tonight the Reserve Bank of new Zealand rate decision. The last point will be of interest as given the lofty heights to which the NZD has climbed we had an almost incredulous headline last night stating that the NZD is now becoming a safe haven destination… Without resorting to blasphemy , I’m not entirely sure how to express my amazement at the stupidity of this statement and scenario…

On the majors, directionally difficult to play in thin markets, but nonetheless here’s what I’m seeing;

EURUSD: Still looks bid on the back of USD weakness, but will likely struggle above the 1.4550 level (good sized stops above), having said that though a dodgy false break will see us print 1.4570 before we retreat lower again. The downside should be supported with bids at 1.4430, small stops below and more bids into 1.4360/80.

GBPUSD: Still looks bright (again more of a USD play) and 1.6470 should keep us contained for the time being. The downside however begins to look interesting below 1.6330 (stops) and then legitimate support lies in the 1.6270/80 area.

USDJPY: Well you all know how I feel about the JPY, so for now 78.30/80 keeps the topside well capped.

AUDUSD: An initial consolidation should see us test 1.0980, but for now it’s no retreat, no surrender… Other downside levels to watch (although not today) are 1.0830/1.0780.

USDCAD: Looks like a slightly healthier buy into 0.9390/80, but the topside will be seriously limited into 0.9470.

EURGBP: Trapped! That is all… Levels to keep an eye on are 0.8775 and 0.8850, although the latter is unlikely on the day…

EURJPY: As mentioned all along, the failure to close last week above the 114 level, paints the picture for more downside and rallies into 113.30/50 can be faded looking for a return into 111.60 and lower over the coming days.

Daily Report: Dollar Rebounds on U.S. Debt-Ceiling Talk Progress

The greenback rebounded as U.S. President Obama signaled there is some progress in the debt-ceiling negotiations. Republican House leader Eric Cantor said the deficit reduction plan, so called Gang of Six proposal, was constructive but more work are still needed to be done. President Barack Obama also called the reveal of this proposal ‘good news', his endorsement of the deficit-cutting measures was interpreted as a step forward in raising the debt-limit so as to avoid default. His remarks led some dollar-buying activities especially against the low yielding currencies like yen and Swiss franc, USD/JPY rebounded from yesterday's low of 78.82 to an intra-day high of 79.32 before retreating again as IMF reported that Japan's economy is showing signs of recovering from March earthquake and tsunami which shook the country and could expand later this year especially in its manufacturing sector, they expect Japan to show a 2.9% growth from this year's 0.7% contraction. Meanwhile Bank of Japan deputy governor Yamaguchi said the central bank is closely watching forex moves and will take decisive actions as needed, Japan's MOF also commented that currency markets are showing one-sided moves and he is carefully monitoring market moves. At the moment, offers remain at 79.30 up to 79.50 with stops still seen above 79.65-70, on the downside, bids are tipped from 79.00 (option related) down to 78.80 and more buying interest is seen at 78.50-60 with big stops remain at 78.40.

Despite yesterday's rise in euro to as high as 1.4217 before retreating as Germany's Chancellor Merkel said Thursday meeting will not provide any big steps to solve all the debt problems in the near future, the pair slipped overnight to 1.4108 on dollar's broad-based rebound after president Obama said he welcomed the ‘Gang of Six' proposal. Traders are likely to stay on the side ahead of the special summit tomorrow, bids from Asian and Eastern European names are reported at 1.4100-10 and further out at 1.4070 and 1.4050 with mixture of bids and stops remain around 1.4000-10 whilst option related offers are located at 1.4180-00.

The British pound remained locked within narrow range as focus is on Europe and U.S., some traders are also awaiting the release of Bank of England MPC policy meeting minutes at 08:30GMT. The minutes are expected to show a voting result of 7-2 with both Martin Weale and Spencer Dale voted for an immediate rate hike whilst another committee member Adam Posen remains supportive for an expansion of the QEP, if any more members of the remaining 6 also favoring an increase in QE, this would become positive news of sterling. U.S. fund and sovereign names were seen buying cable yesterday and bids from same parties are noted at 1.6070-80, 1.6050 and 1.6000-10 with big stops remain below 1.6000. On the upside, offers are reported at 1.6150-60 and further out at 1.1.6190-1.6200. 

The Swissy also rebounded overnight on President Obama's remarks, however, the pair ran into offers around 0.8278 and retreated, safe-haven demand for Swiss franc are still seen with offers tipped at 0.8280-0.8300 and further out at 0.8330 and 0.8350 with stop above whilst option-related bids are reported from 0.8200 down to 0.8170 with stops placed below 0.8150 and further out at 0.8100.

USD/CAD Daily Outlook

Daily Pivots: (S1) 0.9450; (P) 0.9526; (R1) 0.9569; 

Intraday bias in USD/CAD remains neutral as fall from 0.9912 is in progress and should be targeting 0.9444 support next. Break will confirm medium term down trend resumption. In that case, next near term target is 61.8% projection of 1.0671 to 0.9444 from 0.9912 at 0.9154. On the upside, break of 0.9635 resistance will indicates short term bottoming and argue that consolidation from 0.9444 is going to extend further. But before that, we'll stay cautiously bearish in USD/CAD even in case of recovery. 

In the bigger picture, medium term outlook in USD/CAD remains bearish and the down trend from 2009 high of 1.3063 is expected to continue lower. Nevertheless, even in that case, we'd again start to look for reversal signal as USD/CAD approaches 0.9056 key support (2007 low). On the upside, however, break of 0.9912 will be a signal that 0.9444 might be the medium term bottom already and should turn outlook bullish for a test on 1.0851 key resistance next.

Mid-Day Report: Commodity Currencies Soar on Risk Appetite

Commodity currencies are all strong today as boosted by recovery in global risk appetite on optimism that Greece would avoid an immediate default. Data from Canada maintains a firm tone in the loonie. Canadian GDP avoided a contraction in May and was flat m/m. Crude oil is staying firm around 95 level for the moment and helps support the loonie, which will likely extend the CPI triggered rally against dollar in near term. This week's data fuel speculation that while BoC would likely be on hold in Q3, it may restart tightening in Q4.

New Zealand dollar rises to new record high against dollar today, getting additional boost from RBNZ Governor Bollard and confidence data. Bollard said that "rising commodity prices are improving export incomes but putting pressure on the exchange rate." Bollard noted that the New Zealand economy will continue to be driven by growth in our East Asia and Australian trading partner" and "volatility will pose challenges for monetary policy." NBNZ business confidence jumped sharply from 38.3 to 46.5 in June.

Greece's development will remain the focus of markets in near term. The article-by-article approval of the austerity plan is expected to be just a formality. Investors are expecting EU and IMF to approve release of the EUR 12b tranche of the EUR 110 bailout package to Greece in July when finance minister meet on July 3. Meanwhile, focus is gradually shifting to the formulation of the second bailout package for Greece, and in particular, on how private investors would be involved. Some details would be released after German banks meet with the Finance ministry.

Sterling is one of the weakest currency today, as driven by strong rally in EUR/GBP. Economists continue to delay the expectation of rate hike and some are now forecasting BoE to be on hold till next Q2 2012. Economic data from UK provided no help to the poind neither, with Gfk consume sentiment dropped more than expected to -25 in May. Nationwide house price index was flat in June, below expectation of 0.1% mom rise as demand in the housing market remained subdued.

Other data released today saw US initial jobless claims roe to 428k in the week ended June 25. Eurozone CPI was unchanged at 2.7% yoy in June, M3 money supply grew 2.4% yoy in May. German unemployment dropped less than expected by -8k in June while unemployment rate was unchanged at 7%. Japan housing starts rose 6.4% yoy in May, PMI manufacturing dropped to 50.7 in June.

USD/CAD Mid-Day Outlook

Daily Pivots: (S1) 0.9650; (P) 0.9737; (R1) 0.9785;

USD/CAD's decline is still in progress and reaches as low as 0.9653 so far in early US session. Intraday bias remains on the downside with 0.9714 minor resistance intact. As noted before, , rebound from 0.9444 low should have completed at 0.9912 already. Further decline is now expected to retest 0.9444 low next. On the upside, above 0.9714 minor resistance will turn bias neutral and bring consolidations. But recovery should bel limited below 0.9912 resistance and bring fall resumption.

In the bigger picture, at this point, there is no indication that medium term down trend from 2009 high of 1.3063 has completed yet. Outlook will remain bearish as long as 0.9973 resistance (38.2% retracement of 1.0851 to 0.9444 at 0.9981) holds and further fall could be seen towards 0.9056 key support (2007 low). Though, we'd again start to look for reversal signal as USD/CAD approaches this key support level. Meanwhile, sustained break of 0.9973 will suggest that USD/CAD has indeed bottomed out already and should bring stronger rally towards 1.0851 key medium term resistance. 

More erratic price action, ugly swings and cleanouts ahead

Well another frantic finish to the Friday session (second week running) with more cleanouts in a thin U.S. market taking place. We saw the EURUSD, Cable, AUDUSD and even USDCHF move as a direct result of some rather interesting USD repositioning coming into the weekend. Suffice it to say it was mainly one way traffic as we saw more buyers of the big dollar emerging. Futures positioning data suggests that EURUSD long contracts were reduced by around 30% last week with more pain to come as USD shorts, on the whole, still remain at hefty levels.

The inference here is that there is likely to be more USD buying ahead this week, and sadly for those trying to trade this market it could well mean more pain as rather than being a relatively smooth one way move, we’re going to be seeing more erratic price action and ugly swings and cleanouts of the kind we have now experienced over the last two Friday evening sessions.

News over the weekend was limited outside of the head of the IMF being arrested on charges of sexual assault, clearly hampering his ability to attend today’s meeting in Brussels to ratify the Portuguese bailout package. The calendar for the day is relatively light as we have the final Eurozone CPI print (no change expected), Empire manufacturing out of the U.S. and rounding out the event risk for the day we have Bernanke speaking in the afternoon.

In regards to levels and/or direction…. Much like Friday, I’m not entirely sure.
As written above, USD purchases are still on the agenda as are, however, headlines that may well disrupt the show.
With that in mind I look for the following over the course of the next day or so;

EURUSD:              1.4030/00 should contain the downside with good sized bids sitting in and around, while the topside will invariably struggle above the 1.4230/50 levels with 1.4180 being the first hurdle.
USDCAD:             Remains a little better bid, however moves above 0.9730/50 can be faded with stops going in above 0.9830, looking for a return to 0.9590 and lower.
GBPUSD:             Still at the broader mercy of the USD, the downside should be contained around the 1.6030/1.5980 levels while the topside might struggle into 1.6250/80.
USDJPY:               I remain long of the 80 Put for expiry this Wednesday and outside of levels mentioned last week there really is little to add, look for 81.35/50 to 81.80 to cap any upside and stop cleanouts while the downside had decent bids sitting around the 80.30 level and then 79.80.
USDCHF:              Should for the time being be contained to 0.9020/30 and 0.8890.
XAUUSD:             Punters long the yellow metal should be wary of 1,477 as a break here opens quite a move with stops sitting below 1475/65.