Industrial Production Shows Unexpected Increase In July

Government data released on Friday showed that output from the nation`s industrial sector rose in July. The increase marked a slow-down from the pace of growth seen in the previous month but still represented an improvement over economists` expectations.

The Federal Reserve said industrial production increased by 0.2 percent in July. This followed a revised 0.4 percent increase in the previous month. Economists had expected production to come in unchanged compared to the 0.5 percent increase originally reported for June.

July marked the second consecutive month of growth in industrial production after several months of declines.

The increase in July was led by a 0.9 percent increase in output at the nation`s mines. There was also a 0.4 percent increase in manufacturing output, which was boosted by a 3.6 percent increase in the production of motor vehicles and parts.

These combined to offset a 1.9 percent contraction in output at utilities. This segment of the industrial sector has been volatile lately. Output in utilities grew by a revised 2.3 percent in June, after contracting by 2.2 percent in May.

Industrial production was 0.1 percent below its level at the same time last year.

The Fed added that the capacity utilization rate edged up to 79.9 percent in July. This measures how efficiently industrial firms are using their resources.

Friday`s report showed a revised 79.8 percent capacity utilization rate in June. The measure had been expected to slip to 79.8 percent from the 79.9 percent originally reported for the previous month.

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Forex Market Overview

Forex Market Overview 15 August 2008

The Usd was slightly stronger in the Asian session, as commodities, specifically precious metals, weakened. The Gold fell below $800oz for the first time this year and silver followed right behind down a whopping -11.00%. The EurUsd slipped from 1.4803 to 1.4754, while UsdJpy trended higher from 109.57 to 110.34. The GbpUsd continued to come under selling pressure on the back of BoE inflation report, dropping steadily from 1.8710 to 1.8628. The commodity bloc gave up much of their gains over the past few days, with the AudUsd continuing to slide from 0.8732 to 0.8635. Wall Street closed higher yesterday and Asia regional indexes are all positive, with the exception of the Hang Seng down 0.84%. European stock futures are pointing to a higher opening.

In New Zealand, retail sales declined 1.5% q/q slightly better than the -1.8% expected fall. However, the drop was the largest on record and the second consecutive quarter of declines. The Nzd advanced on the news, but then reversed as the market released this figure just pointing to a continued economic weakness. We are still expecting the RBNZ to cut 25bp at the next meeting (in a string of cuts), which should continue to weigh on the Nzd sentiment

With no major events or data scheduled for European session, the market will have to wait for the US session. With Industrial Production, Capacity Utilization and Consumer confidence on the docket, the market will have their hands full. The Michigan confidence might have benefited from a modest recovery in equities and decline in gasoline prices. However, the housing markets will still weigh on the consumer.

Daily Forex Pivot Point
AUDUSD
R 3: 0.8952
R 2: 0.8846
R 1: 0.8797
CURRENT: 0.8629
S 1: 0.8625
S 2: 0.8593
S 3: 0.8513

EURJPY
R 3: 165.59
R 2: 164.41
R 1: 163.88
CURRENT: 162.56
S 1: 162.01
S 2: 161.39
S 3: 160.14

USDSGD
R 3: 1.4265
R 2: 1.4219
R 1: 1.4159
CURRENT: 1.4164
S 1: 1.4025
S 2: 1.3891
S 3: 1.3819

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Weakness In Oil Prices | ForexGen Newsletter

Renewed weakness in oil prices and a break of 1.4850

News and Events:

The Dollar rallied to an almost six-month high against the Euro on Thursday amid growing concern over euro zone economic weakness and accelerating inflation in the United States.

Traders sold the Euro after reports showed contraction in the Euro zone's economy in the second quarter. The Euro zone single currency accelerated its losses and fell below 1.4800 after it broke through key technical levels, analysts said. Government data showed US consumer prices rose at twice the rate expected in July. Analysts said higher prices in the short term may help boost the case for interest rate hikes by the Federal Reserve, although they warned that over time, inflation would hurt the economy.

Oil prices are down more than $30 from a record high 145.45 hit in
July. Crude oil settled 1.26% lower on Thursday at $114.93 a barrel.

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Consumer Sentiment

Expect some volatility on the markets today as consumer sentiment will be released. The expectation is 62% and if the actual value released is greater than the 62% expectation then that will normally indicate strength for the Dollar.

Euro had a minimal intra day bounce before it's downtrend continuation but a further continuation or a reversal could pend on today's consumer sentiment.

We took another position on the AUDJPY with 80 pips in profit zone and managing the trade. It is unlikely we will hold this position over the weekend.

Below are today's daily pivot points.

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Currencies Risk Manager

Currencies Risk Manager 13-08-2008

EurUsd Market dropped to 1.4816 low on Tuesday following Friday break below 1.5304 former strong support from 13th June. Further weakness below 1.5000 will put the focus on 1.4779 26th February low. Strong support holds 1.4685 22nd January low. On the upside, only a return over 1.5500 will release actual pressure and put key initial resistance 1.6000 into focus. A break up there would open the way to Trendline resistance 1.6200.

GbpUsd Cable hit 2.0158 high 4-weeks ago and 1.8953 low yesterday. Key level holds 2.0100 resistance. On the downside, Friday break below on 1.9337 January low support lead to market below 1.9105 (50% retracement of 1.7049 – 2.1162 advance). Former support 1.9363 holds strong resistance. Initial support holds 1.8953 yesterday low.

UsdJpy Last 3-weeks recovery pushed the market up to 110.40 high on Friday. The last break of 108.59 former resistance put focus on 110.10 strong resistance (Trendline). Further advance would open the way toward 111.92 early January high. On the downside, a return below 108.59 former resistance will undermine the current advance. Profit taking might bring back down to 105 level and may open the way toward 102.73 support and 100 pivot point. Initial support holds 108.53 today low.

UsdChf Recent Dollar strength pushed over 1.0500 last week and hit 1.0926 high yesterday. Market broke up resistance of the 3-months upper trendline at 1.0766 last week. Initial support holds 1.0500 key level. Renewed weakness below 1.0375 would retest the 1.0000 pivot point and may open the way toward 0.9637 17th March low.

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Dollar Demand

Dollar Demand Waned On Tuesday After US Trade Deficit Unexpectedly Shrank In June

News and Events:

The Dollar slipped against the Euro on Tuesday, breaking a five-session rally as investors locked in profits ahead of key economic data later in the week.

EurUsd has already dropped 4.11% this month with help from a sell-off in Oil prices and growing fears economies elsewhere may slow at a faster pace than in the United States.

Oil prices traded down 1.31% on Tuesday at $113 per barrel, after dropping more than $35 since a record 145.45 high hit in July.

Data on Tuesday showed the US trade deficit shrank unexpectedly in June to $56.8b, down from a revised $59.2. But losses in the Dollar were limited as investors awaited data on US retail sales and consumer prices for July, due out Wednesday and Thursday.

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Economic Slowdown In Europe

Signs of economic slowdown in Europe, Asia and Australia reduced outlooks for higher interest rates and boosted demand for Dollar

News and Events:

The Dollar rallied to a five-and-a-half month high against the Euro on Monday, boosted by another drop in Crude Oil prices and speculation that the US economy slowdown was spreading worldwide. Mounting signs of economic difficulties in Europe, Asia and Australia have diminished prospects of higher interest rates outside the United States, bolstering demand for the Dollar.

The euro briefly recouped some of its losses after European Central Bank council member Klaus Liebscher warned that policy-makers remained focused on taming high inflation. Liebscher told Market News International that inflation risks remained to the upside in the medium term and that there is no room for "complacency" on euro zone interest rates and inflation.

Declining Oil prices helped ease worries about the impact of higher energy costs on the US economy and also helped boost demand for the greenback.

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ForexGen is continuously providing the Forex market's safest trading terms & conditions. Providing professional currency trading services that meet our client's expectations is our first priority.

ForexGen principals:

ForexGen customer satisfaction is our major objective. To reach our business goals, we strive to put our client's goals in focus. We highly value our clients and always aim to exceed their expectations and cross the limitations encountered by the sophistication of the Forex trading industry.

Forex Market Overview

Forex Market Overview 11 August 2008

The Usd was broadly stronger in Asian session, as market prepare for a heavy week of economic indicators. Perhaps the most interesting aspect of last week aggressive Usd rally was the lack of strong confirmation from other financial markets, specifically rate and oil. The EurUsd strength clearly outpaced the gains in crude prices, while across practically all maturities the interest rate differential between the euro area and US are unchanged. This suggests the Usd is overbought. The EurUsd broke the critical 1.5000 support, trading down to 1.4911, while UsdJpy climbed to 110.40 before easing back to the figure. The AudUsd consolidated around the 0.8860 level, as August Statement of Monetary Policy held no real surprise one way or the other.

In Australia, the Statement of Monetary Policy didn't provide evidence that rates would be coming down near term. The main paragraph was unchanged from the last statement "On the assumption that the subdued demand conditions are likely to continue, scope to move to a less restrictive monetary policy stance in the period ahead is increasing." If there was a noticeable change in the statement it was a shift in the usual upbeat tone regarding China and India.

Consideration this week will be focused on if the long-bullish sentiment surrounding the Eur has come to an end, due to the slide in commodity prices and change in market perceptions regarding the direction of ECB monetary policy.

In the UK, today's PPI report might show that prices pressures have peaked. However, the CPI released due Thursday is unlikely to have such positive news. We are expecting CPI to rise to 4.1%, with the potential to peak in September

Daily Forex Pivot Point
AUDUSD
R 3: 0.9206
R 2: 0.9131
R 1: 0.9074
CURRENT: 0.8873
S 1: 0.8889
S 2: 0.8875
S 3: 0.8819

EURJPY
R 3: 169.97
R 2: 169.49
R 1: 167.82
CURRENT: 164.58
S 1: 165.01
S 2: 163.00
S 3: 161.73

USDSGD
R 3: 1.4265
R 2: 1.4219
R 1: 1.4058
CURRENT: 1.4072
S 1: 1.3925
S 2: 1.3819
S 3: 1.3767

Throughout our partnership with the industrial leaders, we are capable of delivering incomparable quality of online currency trading service.
ForexGen services are all controlled by the international banking and financial regulatory standards.
ForexGen is continuously providing the Forex market's safest trading terms & conditions. Providing professional currency trading services that meet our client's expectations is our first priority.

ForexGen principals:

ForexGen customer satisfaction is our major objective. To reach our business goals, we strive to put our client's goals in focus. We highly value our clients and always aim to exceed their expectations and cross the limitations encountered by the sophistication of the Forex trading industry.

Forex Market Overview

Forex Market Overview 11 August 2008

The Usd was broadly stronger in Asian session, as market prepare for a heavy week of economic indicators. Perhaps the most interesting aspect of last week aggressive Usd rally was the lack of strong confirmation from other financial markets, specifically rate and oil. The EurUsd strength clearly outpaced the gains in crude prices, while across practically all maturities the interest rate differential between the euro area and US are unchanged. This suggests the Usd is overbought. The EurUsd broke the critical 1.5000 support, trading down to 1.4911, while UsdJpy climbed to 110.40 before easing back to the figure. The AudUsd consolidated around the 0.8860 level, as August Statement of Monetary Policy held no real surprise one way or the other.

In Australia, the Statement of Monetary Policy didn't provide evidence that rates would be coming down near term. The main paragraph was unchanged from the last statement "On the assumption that the subdued demand conditions are likely to continue, scope to move to a less restrictive monetary policy stance in the period ahead is increasing." If there was a noticeable change in the statement it was a shift in the usual upbeat tone regarding China and India.

Consideration this week will be focused on if the long-bullish sentiment surrounding the Eur has come to an end, due to the slide in commodity prices and change in market perceptions regarding the direction of ECB monetary policy.

In the UK, today's PPI report might show that prices pressures have peaked. However, the CPI released due Thursday is unlikely to have such positive news. We are expecting CPI to rise to 4.1%, with the potential to peak in September

Daily Forex Pivot Point
AUDUSD
R 3: 0.9206
R 2: 0.9131
R 1: 0.9074
CURRENT: 0.8873
S 1: 0.8889
S 2: 0.8875
S 3: 0.8819

EURJPY
R 3: 169.97
R 2: 169.49
R 1: 167.82
CURRENT: 164.58
S 1: 165.01
S 2: 163.00
S 3: 161.73

USDSGD
R 3: 1.4265
R 2: 1.4219
R 1: 1.4058
CURRENT: 1.4072
S 1: 1.3925
S 2: 1.3819
S 3: 1.3767

Throughout our partnership with the industrial leaders, we are capable of delivering incomparable quality of online currency trading service.
ForexGen services are all controlled by the international banking and financial regulatory standards.
ForexGen is continuously providing the Forex market's safest trading terms & conditions. Providing professional currency trading services that meet our client's expectations is our first priority.

ForexGen principals:

ForexGen customer satisfaction is our major objective. To reach our business goals, we strive to put our client's goals in focus. We highly value our clients and always aim to exceed their expectations and cross the limitations encountered by the sophistication of the Forex trading industry.