GBPUSD
Although the British pound has fallen again after brief recovery, has formed a nice candlestick bearish engulfing indication lower prices however we have seen ni the past that you can have a retracement back into the bearish reversal candle with loss of near term downward momentum should prevent sharp fall below 1.660 and reckon 1.6345-50 would hold from here, bring about a consolidation phase which could form the right shoulder between 1.6410 and 1.6514
above 1.6514 would bring a test of the highs @ 1.6604, upside and bring another selloff later towards 1.6345- 1.6215 but reckon Minor support Zone at 1.6350 and 1.6410 would hold from here.
In view of this, we are looking to sell cable on subsequent recovery and trend line conformation break will help strengthen the sell argument. Only above 1.6514 would we suggest waiting to see if the high holds or breaks.
Eurusd
The US ISM Manufacturing PMI holds at 57 points in December 2013, showing strong growth. It was expected to fall down from 57.3 to 56.8 points in December. The employment component is a significant hint for the Non-Farm Payrolls report next week.“Job growth has been steady and stable in the past year or so,” says Yohay Elam, adding that “optimism could have pushed hiring a bit higher in the last month of the year.” He expects that the US added 200-230K jobs in December. Could this lead to further tapering of the government lead QE program. which may also Bid the dollar further.
The impulsive move from 1.3805 allows me to count a 5 wave decline down ending @ 1,3550 161.8 fid expansion from (i) and (ii)
i am expecting a possible short term Bounce from A into B and bring another move down in momentum in the Euro against the Dollar.
As I’ve mentioned many times before as traders have to remember we are detectives in the Market looking for subtle clues in the and understanding the human behaviour is repetitive forming similar pattern of action now eurusd is mincing the price of cable at the beginning of last year which may also strengthen my view that a turn to the down side in the euro is highly probable. however i will only marry this idea in extremely overbought condition and also how Price action and low of momentum to the upside prevails. @ 1.3695 and 1.3616 {B}
AUDUSD
With Triple Bottom in AUD @ 0.8832 area and recent break out from the range resistance @ 0.8955 slight better from from the US last weeks, Unemployment Claims and New Home Sales brought a sharp pull back into that range in the AUDUSD. However i gather that despite the strong numbers, the US dollar could only bring about minor gains. and the audusd may consolidate and then break out to the upside if 0.8914 holds and bring an ABC=D test of 161.8 expansion - 0.9033 price area then extend to 0.9076
However, even if this is a short term recovery i do think it audusd upside potential will be limited to 0.9123 0.9173 area simply because the tone of the RBA Below. dec 02
At dec 03 2013 meeting, the Board decided to leave the cash rate unchanged at 2.5 per cent.
In Australia, the economy has been growing a bit below trend over the past year and the unemployment rate has edged higher. This is likely to persist in the near term, as the economy adjusts to lower levels of mining investment. Further ahead, private demand outside the mining sector is expected to increase at a faster pace, though considerable uncertainty surrounds this outlook. There has been an improvement in indicators of household and business sentiment recently, but it is still unclear how persistent this will be. Public spending is forecast to be quite weak.
Recent data on prices and wages show inflation consistent with the medium-term target. The Bank's assessment is that this is likely to remain the case over the next one to two years.
The easing in monetary policy that has already occurred since late 2011 has supported interest-sensitive spending and asset values. The full effects of these decisions are still coming through, and will be for a while yet. The pace of borrowing has remained relatively subdued overall to date, though recently there have been signs of increased demand for finance by households. There is also continuing evidence of a shift in savers' behaviour in response to declining returns on low-risk assets. Housing and equity markets have strengthened further over recent months, trends which should in time be supportive of investment.
The Australian dollar, while below its level earlier in the year, is still uncomfortably high. A lower level of the exchange rate is likely to be needed to achieve balanced growth in the economy.
At today's meeting, the Board judged that the setting of monetary policy remained appropriate. The Board will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the target.
i will be looking out for the next meeting to give further clues as to whether the sellers have run out of excuses to sell or the buyers faking its muscles.
Private Sector Credit: Tuesday, 00:30.
Chinese Manufacturing PMI: Wednesday, 1:00.
AIG Manufacturing Index: Wednesday: 22:30.
commodity Prices: Thursday, 5:30.
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