Major Market Movers

Welcome 2008…

Well dear reader another year has come to an end, and as they say the end is merely a new beginning and that is what we hope to you and the US economy as well. What better way to end our year journey but with data from the tarnished sector in the US shedding over us glimpse of hope, as we need optimism…

The National Association of Realtors released their November figures to sales of previously owned homes which provided a sense of stability rising 0.4 percent on the month to an annualized 5.0 million units, from the upside revised previous of 4.98 million in October. That was probably the push markets needed to just be happy celebrating this eve, while the truth is there is no solid proof that misery has come to an end as expectations are still gloomy for the US in 2008.

The thing better than the rise in sales was the actually inventories of unsold units in the market ticked down 3.6% yet prices are still down 3.3 percent on the year. The disturbing news was the words of NAR Chief Economist Yun as he suggested the Feds make a large one rate cut in January of minimum 50 basis points and preferably 75 basis points rather multiple smaller cuts.

One might wonder does that mean the US is finding shore or that what we have seen is just the tip of the iceberg, tonight is the night were the fed needs to set their resolutions for the year and it should be revolving around two things, be more TRANSPARENT and recruit all means possible to salvage the ECONOMY!

From me to you are sincere wishes of a Happy New Year, enjoy your holiday and make the start good enough to remember for we are about to enter a new era and you need all the energy and mental stability that one can have… ENJOY

Major Technical Analysis

euro

Last Friday, the European currency drove through the upside direction, ending the day with significant signs of an upside wave confirmed with the rounding bottom after the long bearish wave, due to this move the technical oscillators have been affected to show the continuation pattern for the week ahead till the key 1.4880 levels.
The trading range for today might be between the key resistance level at 1.4880 and the key support level at 1.4570.
The general trend is up as far as 1. 3860 remains intact targets now at 1.4760 and 1.4930.
We expect buying Euro above 1.4700 with a target at 1.4820 stop loss below 1.4660.

gbp

The British pound rallied in an upside trend last Friday morning to hit the major resistance level at 2.0020s, then it couldn't progress due to the uncertainty causing a huge sell-off, which in role pressured the pound down ounce again near the opening levels; however, the technical directional indicators still show an upside potential as a progressive pattern.
The trading range for today might be between the key resistance level at 2.0100 and the key support level at 1.9800.
The general trend is up as far as 1.9540 remains intact targets now at 2.0940 and 2.1050.
We expect buying sterling above 1.9945 with a target at 2.0040 stop loss below 1.9890.

jpy

Last week, the US dollar against the Japanese yen fell to the downside since it has gathered enough momentum to break through the strong support level at 113.50 reaching to the next key resistance around 112.20s; in the meantime the pair just breached the miner ascending trend line, hence today, the pair is expected drop down back to the downside direction finishing the upside projection movements.
The trading range for today will be between the key resistance at 113.70 and the key support at 111.00.
The general trend is down as far as 121.30 remains intact, targets at 112.40 and 111.20.
We expect selling USD/JPY below 112.55 with a target at 111.50, stop loss above 113.00.

Major Market Movers

Housing Data…2007

As the year 2007 is taking her last breaths, and the year 2008 is just about to be born, markets are putting the final touches on the U.S. economy's grave, with some housing data to be released, and expectations that the housing slump CONTINUED throughout all 2007, and probably will continue in 2008.


The U.S. new home sales probably fell in the month of November to 717,000 units, down 1.6% from October's reading of 728,000 units on an annual base, the decline is expected despite 0.75% rate cuts which took place in the American economy till the beginning of November.

The economical growth is expected to slow down in the 4th quarter of 2007 to 1.0%, all as a result of the housing slump that happened in 2007, while inflation skyrocketed in this particular quarter, now the U.S. economy is in deep crisis if growth actually slowed down considerably, the interest rate decision will be like mission impossible, and the reaction for any decision will not be favored in the markets.

The housing slump has done a great deal of trouble for the economy, not only in America but even worldwide, leading to a huge credit crisis that struck the financial sector all over the world, and drove financial markets into everlasting turmoil.

Today's data along with Monday's will be the finals for this year, and they will carry a great significance, until the release of the advanced reading of GDP in the 4th quarter, new and existing home sales will be the most important.

Let me remind you again dear reader that due to low volumes in the markets the volatility increases, and sometimes the sensitivity to any release increases, as a small number of investors can achieve huge market movements.

Major Technical Analysis

euro

The European currency yesterday rallied also with high levels of volume to pass the major resistance level at 1.4550s and then 1.4600 again to close above 1.4630s. This move came after the euro confirmed the upside direction to set the upside target now at 1.4800 resistance area.
The trading range for today might be between the key resistance level at 1.4800 and the key support level at 1.4530.
The general trend is up as far as 1. 3860 remains intact targets now at 1.4760 and 1.4930.
We expect buying Euro above 1.4610 with a target at 1.4710 stop loss below 1.4560.

gbp

The British pound yesterday further confirmed the bullish trend after the technical oscillators moved to show the bullish pattern; after the pound rallied in a strong pattern to the upside resistance area around 1.9960s, today we expect the pound to progress towards the key resistance level at 2.0080s.
The trading range for today might be between the key resistance levels at 2.0100and the key support level at 1.9850.
The general trend is up as far as 1.9800 remains intact targets now at 2.0940 and 2.1050.
We expect buying sterling above 1.9920 with a target at 2.0045, stop loss below 1.9850.

jpy

The dollar against the Japanese yen tended to move down in a strong move with high levels of volume despite the slight bullish move at the beginning of the trading session; in the meanwhile the technical indicators readjusted to show the downside move until the key support area at 112.80s.
The trading range for today will be between the key resistance at 114.60 and the key support at 112. 20.
The general trend is down as far as 121.30 remains intact, targets at 112.40 and 111.20.
We expect selling USD/JPY below 113.85 with a target at 113.00, stop loss above 114.35.

Crosses Technical Analysis

GBP/JPY

The Pound inclined against the Yen as investors resumed their Carry Trades on the Yen, the short term indicators are showing an upside potential for the pair to reach the next target at 227.20s, and the point at 225.81 seems to offer good demand for the pair.

EUR/JPY

The Euro gained against the Yen as well as investors sold the Yen in what is know as the Carry Trades, the short term indicators are showing an upside potential too for the pair to reach the next targets at 167.20s then 168.80s, and the point at 165.19 seems to offer good demand point for the pair.

EUR/GBP

The Euro gained against the Pound to hit the target at 0.7300s but couldn't hold above it, and now even if the short term technical indicators are showing the pair resides in an overbought area yet they are showing an upside potential as well, as the next target is set to be at the 0.7315s level, and the point at 0.7280 seems to offer good demand for the pair.

Major Technical Analysis

euro

The European currency yesterday rallied to the upside since it succeeded in launching the bullish wave, breaking through the major resistance level at 1.450; meanwhile the solid reversal base played a significant role in helping the euro maintain it's upside wave, today we expect the euro to progress the upside trend as well.
The trading range for today might be between the key resistance level at 1.4620 and the key support level at 1.4400.
The general trend is up as far as 1. 3860 remains intact targets now at 1.4760 and 1.4930.
We expect buying Euro above 1.4480 with a target at 1.4545 stop loss below1.4440.

gbp

The British pound yesterday traded above the reversal pattern it formed in the past three days and that's despite the low levels of volume; on the other hand the short term technical oscillators pointed to reversal signals with targets at 2.0000 in the upcoming days and it could be a sign for the retracement's end.
The trading range for today might be between the key resistance levels at 1.9950 and the key support level at 1.9750.
The general trend is up as far as 1.9800 remains intact targets now at 2.0940 and 2.1050
We expect buying sterling above 1.9785 with a target at 1.9890, stop loss below 1.9735.

jpy

The dollar against the Japanese yen yesterday fluctuated at the peak of the bullish wave in neutral patterns with low levels of volume reflecting the weakness of the upside move; hence, the pair is expected to start dropping down as it couldn't break through the descending trend line, confirming the technical parameters pattern that pointed out the move last week.
The trading range for today will be between the key resistance at 115.00 and the key support at 113. 00.
The general trend is down as far as 121.30 remains intact, targets at 112.40 and 111.20.
We expect selling USD/JPY below 114.45 with a target at 113.60, stop loss above 114.85.

Crosses Technical Analysis

GBP/JPY

Due to the holiday's thin volume, the pair GBPJPY stayed calm, between the 223.80 levels and 227.12, we see another adjustment towards the upside.

EUR/JPY

The Euro is still inclining against all majors, yet with the holidays' thin volume, it looks like its going to stay calm between 164.70 and 167.70, while the wider range is between 162.31 and 164.73.

EUR/GBP

The target at 0.7300 almost met, we don’t expect further hikes above it before the New Year, yet it looks very supported from the downside with a slight possibility to go below 0.7230.