Euro came under pressure from plummeting German Industrial Orders and dovish comments from ECB President Trichet after he held rates at 2.0%. Trichet Indicated further rate cuts were on the table and noted that Eurozone exports were weakening. December Industrial fell -6.9% vs. -2.5% forecast. Looking ahead for December German Industrial Output is forecast at -2.5% vs. -3.1% previously. Sterling rallied after the Bank of England cut rates to 1.0% and Halifax House Price Index rose for the first time in 12 months 1.9% m/m. Looking ahead for Industrial Output forecast to drop -1.2% vs. -2.3% previously and January PPI Input Costs are forecast to rise 0.5% vs. -2% previously as the weakening Pound increases import costs.
Technical Outlook:
EURO R1: 1.2950 S1:1.2720
R2: 1.2980 S2:1.2710
chart pattern hints sideways to bull note . Trading range for the day is expected between 1.2740-1.2920 levels for the day. Momentum is seen trending up giving a small upward correction. Stochastic and momentum are seen trending up giving indication of small upward correction.
GBP R1: 1.4750 S1: 1. 4520
R2: 1.4760 S2: 1. 4480
chart pattern shows a bull trend for the day. Trading range is expected between 1.4530-1.4730 levels for the day. Currency is trading above the moving average and Momentum and stochastic are seen trending up giving bullish outlook but caution required as market is trading at overbought levels.
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