Nearness of strong levels and importance of the evening release do not exclude significant correction…Rate dynamics and recommendations on USD-CHF and USD-CAD. by OpenForex.com

Nearness of strong levels and importance of the evening release do not exclude significant correction…Rate dynamics and recommendations on USD-CHF and USD-CAD.

12:17 07/29/2004

Nearness of strong levels and importance of the evening release do not exclude significant correction…Rate dynamics and recommendations on USD-CHF and USD-CAD. Yesterday\'s data were of quite a contradictory nature. Durable goods orders in the U.S. in June rose by 0,7% in July, forecasted +1,5%. Index came out two times lower than forecasted. Still, the detailed analysis shows that the volume of investments in the U.S. economy increases. Thus, orders for transportation equipment rose by 4,2% following 1.8% dip in May. Orders foe non-military capital goods, excluding aircraft, increased by 1,1% for the first time since April. Besides, FRS “Beige book” report, published yesterday, shows that American economy steeply advanced in June and stabilized in July. The level of production, as well as employment, rises very steadily. Production prices also grow, however that does not significantly affect the level of inflation. Let us remind that yesterday’s data is so be taken into account at the regular meeting of FRS due August, 10. Economists assume that interest rate target is to be raised 25 base points. At 12:30 GMT today, pay attention to Jobless claims in the U.S.in the week ended July 24. The forecast is 340000, previous value equaled 339000. Employment cost index in the U.S. in the second quarter is also scheduled for 12:30 GMT (forecasted +0.9%, previous value was +1.1%). The mentioned above data might prove that labor market situation is improving, or might be a total disappointment for the market participants, which is in favor of the dollar “bears”. However, the key data of the week are to be released tomorrow at 16:30 Moscow time. That is data on the U.S. GDP in the second quarter, forecasted 3,8%, previous value equaled 3,9%. Recommendations: taking into account nearness of the key levels, from where the turn, or a leap might take place, and a risk of significant speculative movements that might be carried out by intraday thin market players, we recommend pulling protective stops to the levels that will be current for the moment of the release. We assume that jobless claims, exceedding 340000, might provoke the start of the long-awaited correction against the dollar. As a result, we recommend keeping strategy long positions on the dollar, however, you should close them in case the release comes out negative. Recommendations: taking into account nearness of the key levels, from where the turn, or a leap might take place, and a risk of significant speculative movements that might be carried out by intraday thin market players, we recommend pulling protective stops to the levels that will be current for the moment of the release. We assume that jobless claims, exceedding 340000, might provoke the start of the long-awaited correction against the dollar. As a result, we recommend keeping strategy long positions on the dollar, however, you should close them in case the release comes out negative.

The forecast was created by trans1.