USD Looking Tired

Poor US Industrial Production, Initial Jobless, Philly Fed has the market second guessing the ‘soft landing’ theme...which is weighing on the USD in the short-term.

MAJOR HEADLINES – PREVIOUS SESSION

CAD

Not much going on as we head into the NY session. We have no economic data due out from the US ,  and the major release from Canada looks set to come in line with expectations. Most analysts believe inflation will remain timid, with CPI dropping to -0.3% mom and CPI ex.  core rising slightly to 0.3%.  September's drop in oil prices will most likely be the culprit - however, upside risk due to wage pressures cant be ruled out.  That said, inflation levels are right where the dovish BoC wants them (around 2.0% yoy) and this figure wouldn’t influence their decision. USDCAD is currently sitting on the 20ma (1.1257) support and looking very heavy. The market seems to have accepted the fact that the BoC will remain neutral until 2007 , so confirming CPI figures should not affect the CAD's overall momentum.

THEMES TO WATCH – UPCOMING SESSION
FX Order Book

Euro/US Dollar    

EURUSD  (1.2608 @ 10:05 GMT)

Support:

1.  1.2460 daily base which coincides with 1.2465 38% retracement

2.  1.2320 double top form march 2006

3.  1.2260 bull trend line from March 2006

4.  1.1635 38% retracement (0.8350-1.3667), also low from 2005.

Resistance:

1.  1.2635 old wave support from September 2006.

2.  1.2764 high from October 2006.

3.  1.2940 old top from August 2006.

4.  1.2980 long term inverse head-and-shoulder target.

 Resist.

1.2827

1.2713

1.2668

1.2608

1.2554

1.2484

1.2369

Support

British Pound/US Dollar    

GBPUSD  (1.8802 @ 10:06 GMT)

Support:

1.  1.8520 lower end of the bear channel from early August 2006.

2.  1.8500 daily base support.

3.  1.8090 wave support from July 2006.

4. 1.7330 long term bull trend support from 2001.

Resistance:

1. 1.8830 low from 4th of September.

2. 1.8860 61% (from 1.9072-1.8520).

3. 1.8900-5 top from early October along with 615 retracement (1.9072-1.8632).

4. 1.9145 Old top from August.

 Resist.

1.9017

1.8882

1.8829

1.8802

1.8694

1.8612

1.8477

Support

Australian Dollar/US Dollar    

AUDUSD  (0.7595 @ 10:40 GMT)

Support:

1.  0.7470 wave low from mid-September.

2.  0.7405 base on daily chart and low from October.

3.  0.7270 July lows.

Resistance:

1.  0.7603 61% retracement (from 0.7988-0.7014).

2.  0.7715-20 top from late August.

3.  0.7795 2006 highs.

 Resist.

0.7694

0.7636

0.7613

0.7595

0.7555

0.7520

0.7462

Support