CFD Markets News and Forecasts — 26-07-2011

The rate reached a new session high $1.4525 and retreated to $1.4515. Bulls may move towards 1.4580. Immediate support remians at $1.4355.

S&P industry groups are trading mixed and mostly didn’t changed more than by 0.3%.
The led gainer is Technology sector (+0.7%) due to strong earnings reports and forecasts: Sanmina-SCI Corp. +22%, Lexmark International Inc.+17%, Sanmina-SCI Corp. And Broadcom Corp. +10%.
Conglomerats and Industrial Goods sustain the largest losses (-1.3% and -1.5% respectively)

The pair showed the low at Y77.82 and then bounded back to the earlier support area at Y77.90. If the pressure holds, the rate may fall to Y77.10. Initial resistance remains at Y78.20. A further fall is curbed by speculation about possible intervention of the national bank of Japan.

Today the dollar significantly weakened against a basket of rival currencies on concerns about a lack of agreement on raising the U.S. debt ceiling. The dollar fell as US President Barack Obama said the U.S. may experience a “deep economic crisis” if leaders fail to reach a compromise on spending cuts and the nation defaults.
If the debt ceiling isn’t raised from the current $14.3 trillion by August 2, the country would face technical default.
The Swiss franc reached a new record high versus the dollar on demand for safety.
The loonie moved against the dollar to highest level over the last three years.
The pound continue its growth after the U.K. economy expanded for a second quarter.
The British economy expanded by 0.2% in the second quarter, down from 0.5% in the first three months of the year, the Office for National Statistics said today. GDP would have grown by 0.7% without special factors such as Japan’s earthquake, an extra holiday for the royal wedding, and unusually warm weather in April, the statistics office said.

Oil advanced as concerns about the US economy put pressure on the dollar, boosting the appeal of commodities, but countering concern that the crisis will hurt demand.
Currently September WTI Crude oil is at $100.27 per barrel (+1.08%).

U.S. stocks shed on debt ceiling debate, but are supported by a wave of corporate earnings: Broadcom +10%, Lexmark +20%.

"Both weekly sales indices cooled in July  but record high temps in NE and clearances might have been reasons.  Weakening consumer confidence and high gasoline prices do not bode well for the back-to-school shopping season."

Resistance 3: $ 1.4700 (high of June)

Resistance 2: $ 1.4580 (high of July)

Resistance 1: $ 1.520 (session high)

Ccurrent price: $1.4490

Support 1 : $1.4440/50 (Jul 21-22 high, US sesseion high)

Support 2 : $1.4355 (session low)

Support 3 : $1.4320 (Jul 22-25 low)

Comments: the pair is near today’s highs. The immediate support - $1.4440/59 area. Below losses are possible to $1.4355. Currently the pair tests resistance at $1.520. Above growth is possible to $1.4580. 

EUR/USD $1.4450, $1.4430, $1.4400, $1.4350
USD/JPY Y77.75, Y78.10, Y78.75
GBP/USD $1.6000
AUD/USD $1.0900, $1.1100
USD/CAD C$0.9540

U.S. stocks were poised for a flat open Tuesday after President Obama's warning on the risk of a potentially devastating default.
Stocks started the week in the red Monday.

Economy: The Conference Board's July consumer confidence report and the Commerce Department's new home sales report, will be out at 14:00 GMT.
Economists expect that consumer confidence fell slightly in July. New home sales for June are expected to remain roughly unchanged at an annual rate of 320,000 units.
Companies: Ford (F, Fortune 500) reported better than expected quarterly net income of $2.4 billion, down 7% from a year earlier. Sales climbed 13% to $35.5 billion. Shares gained 2% in premarket trading.
Before the opening bell, BP (BP) reported earnings of $5.6 billion - a stark contrast to last year's second-quarter loss of $17.2 billion, when the company was struggling with the Gulf oil spill.
Delivery company UPS (UPS, Fortune 500) reported earnings per share of $1.05, beating expectations by one cent.
3M (MMM, Fortune 500) reported earnings per share of $1.60 per share, that in-line with forecasts. Shares dropped 3% in premarket trading.

EUR/USD holds at $1.4481 and the dollar remains on the defensive amid US debt talks. Euro stalled around $1.4520, where offers lie. Bids back at $1.4450.

GBP/USD trades above $1.6400 again, as continued squaring of shorts support the pound. Cable touched a high of $1.6414 after UK GDP data release, with the corrective pullback meeting support ahead of $1.6370. Offers remain in place from $1.6414 through to $1.6420 with stops above. Further offers noted between $1.6440/50.

Data released:
06:45     France     Consumer confidence (July)    86    81    83
08:30     UK     GDP (Q2) preliminary    0.2%    0.1%    0.5%
08:30     UK     GDP (Q2) preliminary Y/Y     0.7%    0.7%    1.6%

The dollar fell as President Barack Obama said the U.S. may experience a “deep economic crisis” if leaders fail to reach a compromise on spending cuts and the nation defaults.
The U.S. currency slid below Y78 versus yen for the first time since March and fell to a record versus the Swiss franc as lawmakers struggled to reach an accord to raise the nation’s $14.3 trillion debt ceiling by an Aug. 2 deadline.
“The uncertainty is a clear negative for the dollar across the board,” said Niels Christensen, chief currency strategist at Nordea Bank AB. “Until we have more news, I can’t see sentiment changing.”
Obama blamed the current stalemate on a group of Republicans in the House who are insisting on budget cuts and no tax increases. “If we stay on the current path, our growing debt could cost us jobs and do serious damage to the economy,” Obama said.
The pound rallied from a two-week low against the euro after the U.K. economy expanded for a second quarter.
The British economy expanded by 0.2% in the second quarter, down from 0.5% in the first three months of the year, the Office for National Statistics said today. GDP would have grown by 0.7% without special factors such as Japan’s earthquake, an extra holiday for the royal wedding, and unusually warm weather in April, the statistics office said.
“The market was positioned for a weak number, so this flicker of hope that the U.K. isn’t about to fall back into recession helped boost sentiment to sterling,” Kathleen Brooks at Forex.com.
Gains in the yen were limited on speculation Japanese officials will intervene to weaken the currency.
Japanese Finance Minister Yoshihiko Noda said currency moves have been one-sided and he will continue to watch the yen closely. Bank of Japan Governor Masaaki Shirakawa said yesterday that the yen’s strength could hurt the economy and the central bank is ready to take appropriate action as needed.

EUR/USD continues to hold within the narrow range. Rate earlier fell from highs on $1.4523 to the lows around $1.4462. Offers remain at $1.4520/25 with stops above.

GBP/USD recovers to current $1.6401.Resistance seen at $1.6400/05, a break to expose earlier highs at $1.6414. Offers
noted near highs, strengthening toward $1.6420.

USD/JPY printed session lows on Y77.85 before recovered to Y78.20. But rate failed to hold above and retreated to the figure.

US data start at  1400GMT by both New Home Sales as well as Consumer Confidence data and the Richmond Fed Manufacturing Index.

EUR/GBP remains under pressure, holding at session lows on stg0.8824. Strong bids at stg0.8800/0.8795 with stops seen through stg0.8795/90.

GBP/USD recovers again. Rate edges to current $1.6401.Resistance seen at $1.6400/05, a break to expose earlier highs at $1.6414. Offers
noted near highs, strengthening toward $1.6420.

EUR/JPY is trading near the bottom of the Y112.99-31 EU session. Initial bids seen at Y112.90/80, ahead of Y112.66 (5 dayMA). Further demand placed between Y112.20/00. Resistance at Y113.50/60 (Y113.52 16 Jun low) ahead of Y113.66 (22 Jul high, Kijun line & 50% of July), a break to open Y114.05/10.

The dollar fell to a record low versus the Swiss franc as President Barack Obama said that the nation’s burgeoning debt threatens to do “serious” damage to the economy.

EUR/USD $1.4450, $1.4430, $1.4400, $1.4350
USD/JPY Y77.75, Y78.10, Y78.75
GBP/USD $1.6000
AUD/USD $1.0900, $1.1100
USD/CAD C$0.9540

• Households won't drive emand as they did before 
• Per capita income growth rate may moderate
• Recent level of savings rate more normal
• Productivity key to improving consumer sentiment
• Consumption unlikely to grow like 1995-2005 era
• Many factors responsible for drop in confidence
• Income not reason for lack of consumption growth

The US dollar falls against a basket of rival currencies as U.S. lawmakers failed to agree on raising the nation’s $14.3 trillion debt ceiling and Greece’s credit rating was cut.
The euro bounces back after its drop amid investors are in a gloomy mood after Moody's Investors Service cuts Greece's credit rating three notches to Ca, their second lowest rating, from Caa1 and assigned a developing outlook to the ratings.
Canada’s dollar is at the highest level since November 2007 as investors sought shelter after U.S. lawmakers failed to find consensus on raising the nation’s $14.3 trillion debt ceiling. The loonie capped a second-straight weekly gain on July 22 on speculation the nation’s central bank will raise interest rates at least once this year.
Switzerland’s franc strengthened to a record against the dollar on demand for the safest assets amid U.S. debt ceiling talks and downgrade of Greece
The yen retreats from today’s advance against 15 of 16 major peers, including US dolar.

Resistance 3: Y79.30 (Jul 15 and 20 high) 

Resistance 2: Chf0.8180 (close price of the last week)

Resistance 3: $ 1.6440 (Jun 14 high)

Resistance 3: $ 1.4700 (high of June)

00:00 Australia Conference Board Australia Leading Index (May) -0.1% 0.2%