Forex Technical & Market Analysis FXCC Jul 26 2013

[alayoua]

Forex Technical & Market Analysis FXCC Jul 26 2013

What does Japan CPI rise mean for the BoJ?

In a clear sign of temporary victory by 'Abenomics' radical policies, Japan printed the sharpest rise in core inflation in almost 5 years, with the read out at +0.4% y/y vs 0.3% exp. The rest of indicators were also encouraging. ne of the top priorities by Japan is to end a 15-year deflation cycle, so that the country can start to develop a self-sustaining recovery. In large part, this is the main reason behind the radical ultra-loose monetary policy being currently deployed by the BoJ, which has committed to double the amount the central bank purchases in Japanese government debt. The country will continue to actively assess how these increases in price pressure - still minimal - are having an impact on the mindset of the population, potentially leading to support more credit, spending and rise in salaries. However, as IFR Markets Editor Amanda Tan notes, "a planned sales tax hike in April next year - from 5% to 8% - poses a downside risk to spending & sentiment, particularly if wages don't start to rise."


FOREX ECONOMIC CALENDAR :
2013-07-26 06:00 GMT | Germany. Import Price Index
2013-07-26 06:00 GMT | UK. Nationwide Housing Prices n.s.a
2013-07-26 13:55 GMT | USA. Reuters/Michigan Consumer Sentiment Index

FOREX NEWS :
2013-07-26 04:58 GMT | EUR/GBP lurking below Fibonacci resistance at 0.8631 and 0.8646 ahead of data
2013-07-26 04:28 GMT | GBP/USD pares all loses post-UK GDP dump
2013-07-26 02:46 GMT | EUR/USD higher on the back of broad USD weakness
2013-07-26 02:43 GMT | USD/JPY breaking lower, lowest at 98.70

----------------------------
EURUSD :
HIGH 1.32889 LOW 1.32687 BID 1.32787 ASK 1.32790 CHANGE 0.02% TIME 08:36:57



OUTLOOK SUMMARY : Up
TREND CONDITION : Upward penetration
TRADERS SENTIMENT : Bearish
IMPLIED VOLATILITY : Low

MARKET ANALYSIS - Intraday Analysis

Upwards scenario: EURUSD commenced new step of uptrend formation. Possibility of further market appreciation is seen above the resistance level at 1.3296 (R1). Break here is required to validate next targets at 1.3316 (R2) and 1.3336 (R3). Downwards scenario: Any downside extension is limited now to the next support level at 1.3257 (S1). Below here we see potential for the price acceleration towards to next targets at 1.3237 (S2) and 1.3217 (S3).

Resistance Levels: 1.3296, 1.3316, 1.3336
Support Levels: 1.3257, 1.3237, 1.3217

----------------------
GBPUSD :
HIGH 1.54058 LOW 1.53732 BID 1.53913 ASK 1.53920 CHANGE 0.03% TIME 08:36:57



OUTLOOK SUMMARY : Up
TREND CONDITION : Upward penetration
TRADERS SENTIMENT : Bearish
IMPLIED VOLATILITY : Low

Upwards scenario: While price is traded above the moving averages short-term bias would be considered as bullish. Next on tap is resistive barrier at 1.5419 (R1) on the way towards to higher targets at 1.5445 (R2) and 1.5470 (R3). Downwards scenario: On the other hand, break below the support at 1.5370 (S1) is required to enable further market decline. Our next supportive measures locates at 1.5343 (S2) and 1.5316 (S3).

Resistance Levels: 1.5419, 1.5445, 1.5470
Support Levels: 1.5370, 1.5343, 1.5316

-------------------------
USDJPY :
HIGH 99.402 LOW 98.626 BID 98.766 ASK 98.771 CHANGE -0.52% TIME 08:36:58



OUTLOOK SUMMARY : Down
TREND CONDITION : Up trend
TRADERS SENTIMENT : Bearish
IMPLIED VOLATILITY : Low

Upwards scenario: USDJPY gained momentum on the downside and likely will close on the negative territory today. However clearance of our next resistive structure at 98.94 (R1) would open way towards to our initial target at 99.11 (R2) and any further market rise would then be targeting 99.29 (R3). Downwards scenario: On the other side, a dip below the initial support level at 98.53 (S1) is liable to trigger protective orders execution and drive market price towards to supportive means at 98.38 (S2) and 98.21 (S3).

Resistance Levels: 98.94, 99.11, 99.29
Support Levels: 98.53, 98.38, 98.21

Source: FX Central Clearing Ltd,( )