Technical Level

	EUR/USD	GBP/USD	USD/JPY	AUD/USD	USD/CAD	USD/CHF
R3:	1.3090	1.6137	82.33	1.0476	0.9971	0.9282
R2:	1.3075	1.6118	82.19	1.0466	0.9965	0.9275
R1:	1.3059	1.6100	82.12	1.0449	0.9957	0.9267
S1:	1.3045	1.6082	82.05	1.0432	0.9949	0.9252
S2:	1.3031	1.6064	81.91	1.0422	0.9942	0.9245
S3:	1.3015	1.6045	81.77	1.0395	0.9927	0.9238

Daily Afternoon Report 03/12/2012 | Forex Trading Analysis

The euro pushed higher Monday after Greece launched a scheme to buy back its debt from private investors, as part of an agreement to unlock a new bailout package worth EUR44 billion.

Euro zone finance ministers were to hold talks in Brussels later in the day to discuss the terms of the new Greek aid deal, after Germany’s parliament gave it the green light on Friday. Furthermore, euro showed little reaction after Spain formally requested a bailout worth EUR37 billion for its banking sector.

Forex Bulletproof 2.0 Patented Striker Technology! Elsewhere, data showed that the final euro zone manufacturing purchasing managers’ index remained unchanged at 46.2 in November, the highest level since March, but remaining in contraction territory for the 16th consecutive month.

In the U.K., data showed that the manufacturing PMI rose to 49.1 last month, its highest level since August, from October's downwardly revised 47.3 and beating expectations for a reading of 48.1. However, the index remained below the 50.0 level which separates contraction from expansion for the seventh successive month.

Earlier Monday, official data showed that retail sales in Switzerland rose by 2.7% in October, less than the expected 4.1% increase. A separate report showed that the SVME PMI rose to 48.5 in November, a four-month high, from a reading of 46.1 in October.

In other news, the yen remained under pressure ahead of upcoming elections on December 16 which could lead to further monetary easing by the Bank of Japan, whereas the Australian dollar remained also under pressure after official data were published showing that domestic retail sales were flat in October fuelled expectations for a rate cut by the Reserve Bank of Australia at its policy meeting on Tuesday.

In latest news, the Institute for Supply Management’s U.S. factory index fell to 49.5 in November from 51.7 a month earlier, the Tempe, Arizona-based group said today. The dividing line between expansion and contraction is 50, and economists’ estimates ranged from 49 to 53.5. 

Forex Bulletproof 2.0 Patented Striker Technology!

Daily Morning Report 03/12/2012 | Forex Trading Analysis

The Australian dollar traded lower versus the greenback as Australian business’ reported a 2.9 percent operating loss in the third quarter while inventories increased by 1.1 percent suggesting the overall economic climate appears to have slowed.

Forex Bulletproof 2.0 Patented Striker Technology!

The greenback has gained strongly versus the yen after the dissolution of parliament in Japan and the dollar yen rate has increased over 3% on the monthly basis; this scripts the largest increase since February this year.

The euro suffered a bit of a setback as the wake of Moody's downgrade of the euro zone rescue fund late last week.  China's official manufacturing purchasing managers' index rose to a 7-month high of 50.6 in November from 50.2 in October, following a preliminary private sector survey that showed factory activity reviving to a 13-month high.

Forex Bulletproof 2.0 Patented Striker Technology!

Daily Afternoon Report 29/11/2012 | Forex Trading Analysis

The U.S. dollar was broadly lower against the other major currencies on Thursday, as hopes for headway in tackling the U.S. fiscal cliff dampened safe haven demand for the greenback ahead of U.S. data on third quarter growth later in the session.

Meanwhile, the euro hit fresh session highs against the U.S. Click Here! dollar on Thursday, after official data showed that the U.S. economy grew at a faster rate than initially estimated during the third quarter of 2012, as export figures were revised up.

As the Commerce Department said, gross domestic product expanded by 2.7% in the three months to September, up from a preliminary estimate of 2.0%, but below expectations for growth of 2.8%.

Separately, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits last week fell 393,000 from 416,000 the previous week, slightly less than expectations for a decline to 390,000.

Elsewhere Europe, Italy saw borrowing costs fall sharply at an auction of five and 10-year government bonds on Thursday, with the yield on 10-year bonds down to 4.45%, a two year low and the yield on five-year bonds falling to 3.23%, also a two-year low.

In addition to that, official data showed that the German unemployment rate remained unchanged at 6.9% in November as the number of unemployed people rose by 5,000, better than expectations for an increase of 15,000.

In other news, the Bank of England warned earlier that U.K. banks may not have enough capital put aside to insulate them from future financial market shocks.

Finally, the yen remained under pressure amid expectations that upcoming elections on December 16 will result in growing political pressure on the Bank of Japan to implement more aggressive monetary easing measures.

Later Thursday, German Bundesbank President is due to speak at the Christian Democratic Union Economics Council in Berlin.

Click Here!

Daily Morning Report 29/11/2012 | Forex Trading Analysis

The dollar fell against the major currencies on Thursday. President Obama told the world that “something will be done” to steer the country away from the fiscal cliff, which boosted the euro on sentiment U.S. policymakers will put politics aside and make tough tax and spending reforms needed to avoid the cliff. U.S., the Commerce Department reported earlier that new home sales fell by 0.3% to a seasonally adjusted 368,000 units in October, confounding expectations for an increase to 390,000.

Later Thursday, the U.S. is to produce revised data on third quarter gross domestic product, as well as data on pending home sales and initial jobless claims.

Daily Afternoon Report 28/11/2012 | Forex Trading Analysis

Greece bailout agreement, most of the responding chatter has already been exhausted, and we have been left in today’s European session without a major fundamental story to guide trading. Data showing U.S. consumer confidence at a four-year high also provided a modest boost for the dollar, though a looming budget crisis tempered optimism about the American economy and kept dollar gains in check.

The agreement to provide aid for Greece did not help the market sentiment. In fact, that agreement may fail as the International Monetary Fund did not accept its terms. The inability of the US politicians to find a compromise and avoid the fiscal cliff did not help traders’ confidence either.

The Australian dollar fell against the Japanese yen and the US dollar yesterday and remained soft today. Like its Canadian counterpart, the Aussie managed to strengthen versus the euro.

CHARTING FOREX: Dollar Biased Down Vs FX Majors Except Yen This Week

 By Jerry Tan 
 

SINGAPORE--Following is technical analysis of seven major currency pairs for this week:

 
        USD/JPY 
 
1st support - 79.11 (minor) 
1st resistance - 80.14 (minor) 
2nd support - 78.61 (minor) 
2nd resistance - 80.61 (minor) 
 

USD/JPY (last 79.63) is likely to trade in a higher range this week as the daily MACD and stochastic indicators are bullish. Resistance is at the May 22 high of 80.14, currently near the 100-day moving average; a breach would expose the upside to the 80.56-80.61 band, defined by the May 16 high and the May 2 high and currently near the 55-day moving average; and then to the April 27 high of 81.43 and the 81.71-81.77 band, defined by the April 25 high and the April 20 high. Support is at Friday's low of 79.11; breach would expose the downside to Wednesday's low of 78.61, currently near the 200-day moving average, and then to the June 1 low of 77.65 and the Feb. 14 low of 77.36. An extension of the fall would target the Feb. 6 low of 76.49, and then the Feb. 1 reaction low of 76.02. USD/JPY negative medium-term outlook is tempered as the weekly stochastic measure is turning bullish at the oversold level. However, the five-week moving average is still below the 15-week moving average and falling. A drop below 77.65 would open the way down to 76.02, and then to the Oct. 31 record low of 75.31 in the weeks ahead.

 
        EUR/USD 
 
1st support - 1.2435 (minor) 
1st resistance - 1.2825 (minor) 
2nd support - 1.2375 (minor) 
2nd resistance - 1.2935 (minor) 
 

EUR/USD (last 1.2641) is likely to trade in a higher range this week as the daily MACD and stochastic indicators are bullish. Resistance is at the May 21 high of 1.2825; a breach would expose the upside to the 55-day moving average, coming in now at 1.2935, and then to 1.2994, the previous base set on April 16. An extension of the rise would target the 100-day moving average, coming in now at 1.3054, and then the 200-day moving average, coming in now at 1.3231. Support is at Friday's low of 1.2435; a breach would target the June 4 low of 1.2375, and then 1.2288, the 23-month low hit on June 1. An extension of the fall would target the June 29, 2010 low of 1.2151. EUR/USD negative medium-term outlook is tempered as the weekly stochastic measure has turned bullish at the oversold level. However, the five-week moving average is still below the 15-week moving average and falling. A drop below 1.2288 would open the way down to the psychological 1.2000 line, and then to the June 7, 2010 low of 1.1875 in the weeks ahead.

 
       AUD/USD 
 
1st support - 0.9817 (minor) 
1st resistance - 1.0126 (minor) 
2nd support - 0.9706 (minor) 
2nd resistance - 1.0143 (minor) 
 

AUD/USD (last 0.9983) is likely to trade with risks skewed to the upside this week as long as the pair stays above Friday's low of 0.9817. The daily MACD and stochastic indicators are bullish, but the latter is at the overbought level. Resistance is at the 55-day moving average, coming in now at 1.0126, and then at the May 10 high of 1.0143; a breach would target the May 7 high of 1.0219, roughly matching the previous base set on April 11; and then the 200-day moving average, coming in now at 1.0261. An extension of the rise would target the 100-day moving average, coming in now at 1.0358. But a fall below 0.9817 would temper the near-term positive outlook, targeting Tuesday's low of 0.9706, and then the June 4 low of 0.9623. An extension of the fall would target 0.9579, the eight-month low hit on June 1. AUD/USD negative medium-term outlook is tempered as the weekly stochastic measure has turned bullish at the oversold level. However, the five-week moving average is still below the 15-week moving average and falling. A drop below 0.9579 would open the way down to the Oct. 4 swing low of 0.9386, and then to the Aug. 25, 2010 low of 0.8769 in the weeks ahead.

 
       NZD/USD 
 
1st support - 0.7614 (minor) 
1st resistance - 0.7797 (minor) 
2nd support - 0.7516 (minor) 
2nd resistance - 0.7902 (minor) 
 

NZD/USD (last 0.7767) is likely to trade with risks skewed to the upside this week as long as the pair stays above Friday's low of 0.7614. The daily MACD and stochastic indicators are bullish, but the latter is at the overbought level. Resistance is at the May 15 high of 0.7797; a breach would expose the upside to the May 10 minor reaction high of 0.7902, and then to the 55-day moving average, coming in now at 0.7925. An extension of the rise would target the 200-day moving average, coming in now at 0.7963, and then 0.8054, the previous base set on March 22. But a fall below 0.7614 would temper the near-term positive outlook, targeting Tuesday's low of 0.7516, and then the June 4 low of 0.7492. An extension of the fall would target 0.7451, the six-month low hit on June 1. NZD/USD negative medium-term outlook is tempered as the weekly stochastic measure has turned bullish at the oversold level. However, the five-week moving average is still below the 15-week moving average and falling. A drop below 0.7451 would open the way down to the Nov. 25 swing low of 0.7367, and then to the March 17, 2011 swing low of 0.7113 and the psychological 0.7000 line in the weeks ahead.

 
        GBP/USD 
 
1st support - 1.5401 (minor) 
1st resistance - 1.5600 (minor) 
2nd support - 1.5320 (minor) 
2nd resistance - 1.5717 (minor) 
 

GBP/USD (last 1.5555) is likely to trade in a higher range this week as the daily MACD and stochastic indicators are bullish. Resistance is at Thursday's high of 1.5600; a breach would expose the upside to the May 28 high of 1.5717, and then to the 200-day moving average, coming in now at 1.5759. An extension of the rise would target the May 22 minor reaction high of 1.5848, currently near the 100-day moving average. Support is at Friday's low of 1.5401; a breach would target Tuesday's low of 1.5320, and then 1.5265, the 4.5-month low hit on June 1. An extension of the fall would target the Jan. 12 swing low of 1.5233, and then the psychological 1.5000 line and the July 12, 2010 low of 1.4946. GBP/USD negative medium-term outlook is tempered as the weekly stochastic measure is turning bullish at the oversold level. However, the five-week moving average is still below the 15-week moving average and falling. A drop below the 1.5233 support would open the way down to the psychological 1.5000 line, and then to the May 20, 2010 swing low of 1.4230 in the weeks ahead.

 
        USD/CHF 
 
1st support - 0.9363 (minor) 
1st resistance - 0.9657 (minor) 
2nd support - 0.9292 (minor) 
2nd resistance - 0.9677 (minor) 
 

USD/CHF (last 0.9506) is likely to trade in a lower range this week as the daily MACD and stochastic indicators are bearish. Support is at the May 21 reaction low of 0.9363; a breach would expose the downside to the 55-day moving average, coming in now at 0.9292, and then to the 100-day moving average, coming in now at 0.9223. An extension of the fall would target the 200-day moving average, coming in now at 0.9176. Resistance is at Friday's high of 0.9657; a breach would target Tuesday's high of 0.9677, and then the 0.9771-0.9785 band, defined by the 15-month high hit on June 1 and the Jan. 11, 2011 high. A rise above 0.9785 would expose the upside to the psychological 1.0000 line, and then to 1.0066, the Dec. 1, 2010 high. USD/CHF positive medium-term outlook is tempered as the weekly stochastic measure has turned bearish at the overbought level. However, the five-week moving average is still above the 15-week moving average and rising. A rise above 0.9785 would open the way up to 1.0066, and then to the July 27, 2010 high of 1.0640 in the weeks ahead.

 
        USD/CAD 
 
1st support - 1.0149 (minor) 
1st resistance - 1.0354 (minor) 
2nd support - 1.0098 (minor) 
2nd resistance - 1.0425 (minor) 
 

USD/CAD (last 1.0207) is likely to trade in a lower range this week as the daily MACD and stochastic indicators are bearish. Support is at the May 22 low of 1.0149; a breach would target the 200-day moving average, coming in now at 1.0098, and then the 55-day moving average, coming in now at 1.0054. An extension of the fall would target the 100-day moving average, coming in now at 1.0011, and then the May 15 low of 0.9986. Resistance is at Friday's high of 1.0354; a breach would target Tuesday's high of 1.0425, and then 1.0446, the six-month high hit on June 4. An extension of the rise would target the Nov. 25 high of 1.0523. USD/CAD positive medium-term outlook is tempered as the weekly stochastic measure has turned bearish at the overbought level. However, the five-week moving average is still above the 15-week moving average and rising. A rise above the 1.0523 resistance would open the way up to the 1.0657-1.0677 band, defined by the Oct. 4 high, 2011 high and the July 6, 2010 high; and then to the May 25, 2010 high of 1.0851 in the weeks ahead.

Stronger Dollar May Be Good For Exporters. Really.

The global slowdown is finally hitting U.S. exports.
The Commerce Department reported Friday that exports fell 0.8% in April, the first drop in five months. Shipments to the euro zone plunged 9.8%. A larger fall in imports narrowed the total U.S. trade deficit to $50.06 billion, but the gap is higher than its first-quarter average.

When exports get crimped, a common reaction from politicians and manufacturing groups is to call for a cheaper dollar. A weaker currency makes a country's products cheaper on global markets--a reason why China micromanages the value of the yuan.

A weak currency, however, is not in the cards for the U.S. The dollar is expected to continue to strengthen as investors seek safety amid no solution to the euro-zone crisis and worries about the global slowdown.
But a strong dollar can be a positive to U.S. companies because it will force them to remain competitive in the long run, argues Michael Drury, chief economist of McVean Trading & Investments.

Mr. Drury calls a cheap currency "a sugar high" that gives a temporary price advantage but doesn't correct the underlying problems that are eroding the currency's value in the first place.

"Meanwhile, [a] stronger currency forces the stronger competitor to up their game--while at the same time providing them with the lower borrowing costs to do so," Mr. Drury argues.

The easier financing enables successful nations to become stronger by "allowing them to acquire the best practices and brightest employees of the weaker nations at a discount," explains Mr. Drury.

A nation like the U.S. that is facing long-run debt problems and an aging population should be taking the long view of its economic health. In an era of cheap financing, the economy can make investments to enhance productivity and global reach. That spending will allow for higher income streams in the future.
"Competitive devaluation is not good long-term economic policy--but it is often seen as good politics," Mr. Drury says.

Indeed, it is very easy for politicians to blame the currency markets for a country's competitive shortfall.
But instead of pointing fingers, the U.S. needs to invest in education, technology and infrastructure and to reform regulatory oversight that will give its exporting sectors the long-term edge in global markets.

(Kathleen Madigan, a special writer, is the primary author of the Big Picture column. She covered the economy for almost two decades at BusinessWeek and worked in the economics departments at several Wall Street firms. She can be reached at kathleen.madigan@dowjones.com.)

(TALK BACK: We invite readers to send us comments on this or other financial news topics. Please email us at TalkbackAmericas@dowjones.com. Readers should include their full names, work or home addresses and telephone numbers for verification purposes. We reserve the right to edit and publish your comments along with your name; we reserve the right not to publish reader comments.)