Japanese Prime Minister Abe resigns and the Euro hits all-time record high of 1.3878. ECB President Trichet reiterated that no financial economy is in danger of collapsing.
News and Events:
Trade balance figures yesterday coming out of the U.S. were weaker than expected at a deficit of $59.2billion. The slump in the US economy is being felt around the world despite the recent decline in global dependence on US growth. Patterns resulting in higher long-term interest rates in the US at such a critical stage are not in the interest of economies heavily exposed to US consumption. However, in the short term, growth concerns are having a negative impact on dollar sentiment.
European Central Bank President Trichet reiterated that no financial economy is in danger of collapsing. Furthermore, the ECB remains concerned about inflation. Trichet also said that the ECB’s main role is price stability, not financial stability. In early trading this morning, the Euro hit an all-time tradable high of 1.3678 against the US dollar.
Today there is limited data with mortgage applications index due at 11h GMT.
Today’s Key Issues (time in GMT):
08:30 UK Claimant Count Rate AUG
08:30 UK Jobless Claims Change AUG
08.30 UK Avg Earnings inc bonus 3M/YoY JUL
08:30 UK Avg Earnings ex bonus 3M/YoY JUL
08:30 UK ILO Unemployment Rate (3mths) JUL
08:30 UK Manu.Unit Wage Cost (3Ms/YoY) JUL
09:00 EC Euro-Zone Labour Costs (YoY) 2Q
09:00 EC Euro-Zone Ind. Prod. sa (MoM) JUL
09:00 EC Euro-Zone Ind. Prod. wda (YoY) JUL
11:00 US MBA Mortgage Applications Sep-07
The Risk Today:
EurUsd: finally reached the 100% fibonnacci level at 1.3842 and slammed right through reaching 1.3878 in early trading this morning. This has opened the door for a move to the psychological 1.40 handle. Look for major support at 1.3765.
GbpUsd is reaching for a target of 2.0398 without major obstacles. This pair will be the biggest mover of the majors. Support is found at 2.0235.
UsdJpy has clearly eyed it’s previous low of 111.58 for a few days now. There continues to be heavy resistance at 115.66.
UsdChf still bearish below 1.1962, a resistance, however a key support level is 1.1816.
<!-- 
–>
Resistance and Support:
By James Brandt - ACM Advanced Currency Markets, Geneva, Switzerland