Dollar rebounded overnight on the back of sharp pull back in US stocks where S&P 500 dropped -1%. Crude oil also dived to 76 after inventory report. The greenback remains firm with general weakness in Asian equities. Gold's sustained trading below 55 hours EMA argues that a short term top is formed at 1123.4 and we're looking at the prospect of deeper pull back to 1085 fibonacci and below. Thus, some support should be seen in the greenback in near term for a test of near term resistance in both the dollar index and against major currencies.
Looking at the dollar index, intraday bias remains on the upside as long as 75.27 minor support holds. Rebound from 74.78 is in favor to continue for 75.99 resistance first and break there will confirm that whole fall from 76.82 has completed. In such case, stronger rise should be seen to take on 76.82 resistance next. On the downside, however, below 75.27 will invalidate this bullish case and flip bias back to the downside for 74.78 first and then 74.31 key support next.
Eurozone GDP will be the main focus today. The Eurozone Economy is expected to have grown +0.5% qoq, the first positive reading since 1Q08, in 3Q09 after contracting -0.2% in the previous quarter. While no detailed breakdown will be released in the report, we expected net trade, inventories and government spending contributed the most to the expansion while consumption was stable. Geographically, Germany and France probably recorded the strongest growth while Spain contracted for another quarter. Other data to be featured include Swiss combined PPI, Canadian trade balance, US trade balance, import price and U of michigan consumer sentiment.
USD/CHF Daily Outlook
Daily Pivots: (S1) 1.0090; (P) 1.0142; (R1) 1.0224; More
USD/CHF's rebound from 1.0034 extended further to as high as 1.1019 so far and at this point, intraday bias remains on the upside as long as 1.0105 minor support holds. Break of 1.0200 resistance will confirm that decline from 1.0337 has completed at 1.0034 already. In such case, stronger rally should be seen to retest 1.0337 next. However, failure below the current level, followed by break of 1.0105 minor support will suggest that rebound from 1.0034 has completed and maintain the short term bearish outlook for a new low below 1.0032.
In the bigger picture, there is no indication of medium term bottoming yet and the fall from 1.1963 might still extend beyond 1.0032 low to parity. Also, sustained trading below 1.000 level will pave the way to retest 2008 low of 0.9634. However, a break of 1.0337 resistance will complete a double bottom reversal pattern (1.0032, 1.0034) which will be an important indication that a medium term bottom is formed. In such case, stronger rise should be seen to 1.0590 support turned resistance for confirmation.
Economic Indicators Update
|4:30||JPY||Industrial Production M/M Sep F||2.10%||1.40%||1.40%|
|4:30||JPY||Industrial Production Y/Y Sep F||-18.40%||-18.90%||-18.90%|
|5:00||JPY||Households Confidence Oct||40.5||40.9||40.5|
|7:00||EUR||German GDP Q/Q Q3 P||0.7%||0.80%||0.30%||0.4%|
|8:15||CHF||Combined PPI M/M Oct||0.10%||0.20%|
|8:15||CHF||Combined PPI Y/Y Oct||-4.10%||-4.90%|
|10:00||EUR||Eurozone GDP Q/Q Q3 A||0.50%||-0.20%|
|10:00||EUR||Eurozone GDP Y/Y Q3 A||-3.90%||-4.80%|
|13:30||CAD||Trade Balance (CAD) Sep||-1.6B||-2.0B|
|13:30||USD||Trade Balance Sep||-$31.6B||-$30.7B|
|13:30||USD||Import Price Index M/M Oct||1.00%||0.10%|
|15:00||USD||U. of Michigan Confidence Nov P||71||70.6|
|15:30||USD||Natural Gas Storage||17B||29B|