Latest news on European Morning Update 6th March 2008
| Asia treads water again waiting for Europe Releases from Australia: Australia’s trade deficit was slightly wider than expected but not excessively so, fueled by growing imports. While exports were solid on the back of higher commodity prices and other seasonal factors they still couldn’t outweigh the imports. However, the underlying pace of trade is still positive and should keep the economy on track for another good year of growth albeit it at a slower pace than last year. Signs that the combination of higher interest rates and the passing on of funding costs by banks are evident from the building approvals that fell well short of forecasts. It is a volatile series but it does seem as if the peak has been seen and set the trend for a slowdown over the year.
Japan’s leading indicators generally do not spark any great reaction and today was no different but the numbers do reflect exactly what is happening in Japan right now. The outlook is still negative and with global growth on the decline and the Yen at the highest levels in over three years the prospects for Japanese exporters is bleak.
Q4 January February March
If it gets above there then I’ll have to concede yet again as we cannot forget that the larger targets are still higher with a minimum of 1.5659 and at most 1.5797. This has also put the Pound on warning as well following its strong rebound after what I thought was a break lower. The pattern can still be read as bearish but the break area is close – at the 1.9971-83 area – above which brings a larger retracement target at 2.0248. I’d like to remain bearish though… The Swissie didn’t make a new low and the Yen hardly reacted at all to the European shenanigans. Even this in itself confuses the entire picture since there is really very little room on the upside here if the Dollar did rebound against the Europeans. Euro-Yen looks similarly mixed and may well have seen a corrective high but there has been no clear reversal signal from momentum at least. In the end it leaves us rather frustrated and having to try and spot breaks which in a choppy market does hold more risks. Let’s just remember that the main direction (and targets) is still on the Dollar’s downside but technically a correction would bring welcome relief. It’s just not a good idea to stand on an express train’s tracks when it’s coming at you…
USDJPY EURUSD USDCHF GBPUSD Spt: 103.20-50 1.5227-38 1.0307-33 1.9868-90 See Also
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