Latest news on European Morning Update 18th April 2008
| Dollar trades quietly in Asian trading Releases from Australia:
March Prior Current
Certainly, considering the poor department store sales in March it certainly doesn’t support a confident consumer. Indeed, during a month when new seasonal fashions appear in the stores it would be normal to see a boost in sales. The implication is possibly that more funds are being diverted to pay for energy related goods. The new BOJ Governor Shirakawa took the opportunity to make clear his own outlook at the meeting of regional BOJ branch managers. “Japan's economic growth is slowing due to the effects of high energy and material prices,” he said. “Corporate profits have been leveling off, albeit at a high level, and business sentiment has recently been cautious.” As such growth is expected to “grow at a slower pace for the time being and follow a moderate growth path thereafter.” On the impact of the subprime problem he felt that the situation has been manageable although the reports of subprime losses continue to expand. He sees no threat to the stability of the country's financial system.
February
The Euro itself pulled back nicely to the top of the 1.5802-44 retracement range. I still can’t rule out a dip down to the lower end (and allow for a slightly larger dip with a major support line from the 1.4437 low coming in around the 1.5750-75 area. Breach of this would confirm a larger trend reversal. However, I can’t see that breach coming directly. Again, all round I still feel that there is room for Dollar losses against all Europeans and the Aussie – probably the Canadian Dollar also though this is less certain. But in all case the relative structures all imply a stronger Dollar rally thereafter. The losses should begin to develop tonight at least but whether they reach targets today is touch and go. It may require Monday’s trading also. As mentioned yesterday – with the Dollar sentiment so bearish it’s either a brave call or a stupid one. However the signals are there, the Dollar cycles are turning bullish and momentum is also indicating potential for reversal. Therefore let’s keep this in mind and if we get the right reactions at the right levels and possibly something stronger from the central banks (or some other event) it’ll make the decision a lot easier.
USDJPY EURUSD USDCHF GBPUSD Spt: 101.85-15 1.5802-45 1.0023-50 1.9816-40 See Also
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