Molfx

Good morning welcome to a new day in FX market. A quite interesting day we have yesterday, since early European session, with GBP falling despite the Trade Balance come out better than expected ( yet with deficit) and ZEW Euro zone survey, that fell to -37.2 vs. -34.5 projected, its lowest value since 1993, pushing Euro under the 1.4700 mark. Finally the Federal Reserve cut both, the Fed funds and discount rate by 25bp, triggering major rallies all across the board. While US dollar strength against most rivals, Japanese yen run in the other way, as carry trades unwind; the rate cut, far from harming the already beaten greenback, has been understood as favoring the American economy, at least in the medium term.

Today we have the following news, East Time: 04:30 GBP Jobless Claims Change for November (Expected -5.0K Previous -9.9K) 05:00 EUR Euro-Zone Industrial Production for October MoM (Expected 0.2% Previous -0.7%) and YoY (Expected 3.7% Previous 3.5%) 08:30 Export Prices ex-ag Nov (Previous 0.5%) and Import Prices ex-oil (Previous 0.5%): This reports related with Trade Balance, meaning international trade, can play an important role in GDP forecasts. Net exports are a relatively volatile component of GDP, and the trade report provides the only early clues to the net export performance each quarter. 08:30 Trade Balance for October (Expected -$57.0B Previous -$56.5B): This report, that shows the balance between exports and imports of total goods and services of a country, gives two important clues about American economy: the export data is important to watch for indications that a strengthening competitive position at home and/or strengthening economies overseas are boosting U.S. growth; the imports provide an indication of domestic demand, although this report is relative poor compared to other consumption indicators. 10:30 Crude Inventories 12/07 (Previous -7913K): This report measures the weekly increase in barrels of commercial crude oil held in inventory by US firms.

The level of inventories influences the price of petroleum products, which can have an impact on inflation and other economic forces. 14:00 Treasury Budget Nov (Expected -$90.0B Previous -$75.6B): this monthly budget follows strong seasonal patterns which produce huge month-to-month fluctuations in the deficit. But they tell little about long term budget trends. EUR/USD is right now at 1.4664, slightly bearish in 4 hours charts, although we expect a correction for the next hours, after yesterday’s fall; in that case, resistances will be at 1.4674, followed by 1.4695, the zone around 1.4710, and finally 1.4736. Supports, in case of a continuation will be at 1.4640, followed by the zone around 1.4615/20, 1.4590, and finally the zone around 1.4550. USD/JPY is quoting at 110.95, quickly recovering the bullish strength: above 110.10 the pair will find it’s next resistance around 110.33, followed by 110.60, 110.88 and finally 111.04. Supports today will be at 110.68, 110.50 yesterday’s minimum, followed by 110.25, 38.2% Fibonacci rally 107.21/112.13, and finally the zone around 110.00. GBP/USD is right now at 2.0372 turning bearish in bigger charts: under 2.0330, the pair could easily continue to 2.0295, the zone around 2.0250, followed by 2.0220, and finally 2.0180. Resistances for the next hours will be at 2.0390, followed by 2.0410, the zone around 2.0440, 2.0486 and finally 2.0505. Have a great trading day!