Forex Daily Analysis for Monday, Aug 27th

USD Offered Despite Strong Housing Figures
New home sales and durables from the US beat forecasts, but the USD remained offered.
Overnight News Bullets EC PMI Composite (AUG) out at 57.9, while 56.9 expected, 57.5 prior. UK GDP QoQ/YoY (2Q) out at 0.8%/3.0%, while 0.8%/3.0% expected, 0.8%/3.0% prior. UK Private Consumption (2Q) out at 0.8%, while 0.7% expected, 0.5% prior. UK Government Spending (2Q) out at 0.8%, while 0.5% expected, 0.5% prior. UK Exports (2Q) out at -1.0%, while -0.8% expected, -0.8% prior. UK Imports (2Q) out at -0.4%, while -0.3% expected, -0.7% prior. US Durable Goods Orders (JUL) out at 5.9%, while 1.4% expected, 1.0% prior. US Durable ex. Transportation (JUL) out at 3.7%, while 0.6% expected, -0.5% prior US New Home Sales (JUL) out at 870K, while 820K expected, 834K prior. US New Home Sales YoY (JUL) out at 2.8%, while -1.7% expected, -6.6% prior. US Baker Hughes U.S. Rig Count (AUG) out at 1816, while 1795 prior. O/N Data Heat map: EU US JP UK SZ AU CA NZ NO SE FR 0 + 0 + 0 0 0 0 0 0 0 Calendar Today's Highlights: Time (GMT) Region Release Consensus 07:30 SW Trade Balance 11.0B 13:00 E-Z Trichet Speaks on monetary policy and prod. in Budapest 14:00 US Existing Home Sales (JUL) 5.70M 14:00 US Existing Home Sales MoM (JUL) -0.9% 23:50 JN BoJ Monetary Policy Meeting Minutes for July This and Next Week’s Highlights: Date Region Release 28 Aug FR Housing starts, Housing Permits 28 Aug SW PPI, Retail Sales 28 Aug SZ UBS Consumption Indicator 28 Aug GE IFO – Business Climate, IFO – Current Assesment, IFO – Expectations, CPI 28 Aug UK BBA Loans for house purchase 28 Aug US S&P/Case Shiller House Price Index, Consumer Confidence, Richmond Fed Manufacturing Index, ABC Consumer Confidence 29 Aug AU HIA New Home Sales, Construction Work Done 29 Aug GE GfK Consumer Survey, IFO August Business Climate Survey 29 Aug SW Manufacturing Confidence, Economic Tendency Survey, Economic forecast 29 Aug US MBA Mortgage Applications, DOE U.S. Crude Oil Inventories 29 Aug NZ Building Permits 29 Aug JN Net Stocks Investment, Net Bonds Investment, Large Retailers Sales, Retail Trade What's going on? The USD remained offered on top of the strong figures from both durables and new home sales. However, both series are very volatile, so the impact was non-existent. The US Housing market has is still far from safe and despite the strong figures, the sales are down -10% from a year ago, making it difficult to declare an end to the downtrend. Rate expectations still dominates. Carry trades back in style, but the JPY has been bid this morning. EURJPY leading the carry trade – watch for the 200 day MA for current resistance at 159.64. FX Market: JPY strengthening overnight, USD unchanged, EUR unchanged. EUR USD JPY GBP CHF AUD CAD NZD NOK SEK PLN 0 0 + 0 0 0 0 0 + 0 0 FX Trading Strategies Pair Supp. Resis. Comments USDCHF 1.1990 1.2135 If the USD remains offered, further downside in USDCHF looks attractive. Sell the break of support, stop bid at 1.2020, targeting 1.1890.

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