Daily Analysis for WEDNESDAY - JULY 18th

USD making new lows
The subprime problems are still worrying and likely to get even worse. This is taking its toll on the USD .
Overnight News Bullets SZ Adjusted Real Retail Sales YoY (MAY) out at 7.2%, while 4.5% expected, 3.2% prior. UK CPI MoM/YoY (JUN) out at 0.2%/2.4%, while 0.1%/2.3% expected, 0.3%/2.5% prior. UK CPI Core YoY (JUN) out at 2.0%, while 1.9% expected, 1.9% prior. UK Retail Price Index (JUN) out at 207.3, while 207.0 expected, 206.2 prior. UK RPI MoM/YoY (JUN) out at 0.5%/4.4%, while 0.3%/3.2% expected, 0.4%/4.3% prior. UK RPI Ex. Mortgage Interest Payments YoY (JUN) out at 3.3%, while 3.2% expected, 3.3% prior. GE ZEW Survey Econ. Sentiment (JUL) out at 10.4, while 19.5 expected, 20.3 prior. GE ZEW Survey Current Situation (JUL) out at 88.2, while 88.0 expected, 88.7 prior. EC ZEW Survey Econ. Sentiment (JUL) out at 7.2, while 19.5 expected, 19.0 prior. US Producer Price Index MoM/YoY (JUN) out at -0.2%/3.3%, while 0.2%/3.6% expected, 0.9%/4.1% prior. US Producer Price Index Core MoM/YoY (JUN) out at 0.3%/1.8%, while 0.2%/1.7% expected, 0.2%/1.6% prior. US Net Long-term TIC Flows (MAY) out at $126.1B, while $73.0B expected, $84.1B prior. US Total TIC Flows (MAY) out at $105.9B, while $111.8B prior. US Industrial Production (JUN) out at 0.5%, while 0.5% expected, 0.0% prior. US Capacity Utilization (JUN) out at 81.7%, while 81.6% expected, 81.3% prior. US IBD/TIPP Economic Optimism (JUL) out at 48.2, while 49.3 expected, 49.1 prior. US NAHB Housing Market Index (JUL) out at 24, while 27 expected, 28 prior. US ABC Consumer Confidence (JUL) out at -11, -9 expected, -9 prior. AU Westpac Leading Index MoM (MAY) out at 0.2%, while 0.7% prior. JN Leading Economic Index (MAY) out at 40.9%, while 36.4% expected, 30.0% prior. JN Coincident Index (MAY) out at 60.0%, while 60.0% expected, 66.7% prior. Markets FX: JPY weakness, USD range bound. EUR marginally stronger, but remains range bound. O/N Data Heat map: EU US JP UK SZ AU CA NZ NO SE FR - - + + - Calendar Today's Highlights: Time (GMT) Region Release Consensus 08:30 UK BoE Minutes 08:30 UK Claimant Count Rate (JUN) / Jobless Claims Change (JUN) 2.7% / -7.5K 08:30 UK Avg. Earnings inc. Bonus/ex. Bonus 3M YoY (MAY) 3.6% / 3.6% 08:30 UK ILO Unemployment Rate 3mths (MAY) 5.5% 08:30 UK Manual Unit Wage Cost 3M YoY (MAY) Prior 0.2% 09:00 EC Euro-Zone Trade Balance (MAY) 4.1B 09:00 EC Construction Output MoM/YoY (MAY) Prior -0.9% / 3.9% 11:00 US MBA Mortgage Applications (JUL) Prior 1.1% 11:00 CA Consumer Price Index MoM/YoY (JUN) 0.1% / 2.5% 11:00 CA CPI Core MoM/YoY (JUN) 0.1% / 2.6% 12:30 CA Leading Indicators MoM (JUN) 0.4% 12:30 US CPI MoM/YoY (JUN) 0.1% / 2.6% 12:30 US CPI Core MoM/YoY (JUN) 0.2% / 2.2% 12:30 US CPI Index / CPI Core Index (JUN) Prior 209.9 / 207.9 12:30 US Housing Starts (JUN) 1450K 12:30 US Building Permits (JUN) 1480K 14:00 US Bernanke Testifies Before House Panel on Monetary Policy This and Next Week’s Highlights: Date Region Release 19 July AU RBA Foreign Exchange Transactions (JUN). 19 July JN Nationwide Department Store Sales, Tokyo Department Store Sales. 19 July GE Producer Prices. 19 July UK Retail Sales, Public Finances (PSNCR), Public Sector Net Borrowing, M4 Money Supply, M4 Sterling Lending, BSA Mortgage. 19 July SZ Trade Balance, ZEW Survey (Expectations). 19 July US Initial Jobless Claims, Continuing Claims, Leading Indicators, EIA Natural Gas Storage Change, Minutes of June 28 FOMC Meeting. 19 July CA Wholesale Sales, Interntional Security Transacations. 19 July JN Net Stocks Investment, Net Bonds Investment. 20 July AU Import Price Index, Export Price Index, New Motor Vehicle Sales. 20 July NZ Credit Card Spending. 20 July SZ Producer & Import Prices. 20 July UK GDP, Index of Services. 20 July EC Trichet speaks at seminar. 20 July US Baker Hughes U.S. Rig Count. What's going on? The USD is taking another beating. GBPUSD at fresh 26-year highs on higher than expected inflation figures in the UK. FX USD still headed lower. EUR USD JPY GBP CHF AUD CAD NZD NOK SEK PLN + - + + + - FX Trading Strategies Pair Supp. Resis. Comments GBPUSD 2.0474 2.0547 Very strong price action due to higher than expected CPI readings. But short-term overbought. Needs correction/consolidation. Buy dips towards support and keep stops below 2.0474 if offered. Target 2.06.

Risk warning

Forexwebtrader shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee or implication by Forexwebtrader that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis, especially leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated.