Euro Recovers Further on China Growth and Gain in European Equities

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Action Insight Market Overview	Markets Snapshot
Mid-Day Report: Euro Recovers Further on China Growth and Gain in European Equities The single currency continued to rebound in European session, reclaimed some ground lost early this week, euro rose to as high as 1.4111 against the greenback on buying by sovereign names, narrowing of peripheral eurozone debt spreads over German Bunds also seen supporting the euro. Some traders suspected that the climax of euro selling has passed and more room for recovery is in store, however, concerns over eurozone debt crisis spreading to Italy and the results from stress test of European banks may keep euro’s rally in check. At the moment, bids are starting to appear as high as 1.4050 with large option expires at 1.4000 (NY cut), on the upside, offers are reported from 1.4100 up to 1.4130 with mixture of offers and stops located at 1.4200-10. Full Report Here...
Featured Technical Report
EUR/USD Mid-Day Outlook Daily Pivots: (S1) 1.3850; (P) 1.3956 (R1) 1.4075; More. Intraday bias in EUR/USD remains neutral and more consolidations could be seen above 1.3837 temporary low. But upside of recovery is expected to be limited by 4 hours 55 EMA (now at 1.4223) and bring fall resumption to medium term trend line support (now at 1.3736). Also, note that break of 1.4577 resistance is needed to confirm completion of the correction from 1.4939 or risk will remain on the downside even in case of stronger than expected rebound. Read more... EURUSD Technical Outlook USDJPY Technical Outlook GBPUSD Technical Outlook USDCHF Technical Outlook USDCAD Technical Outlook AUDUSD Technical Outlook EURJPY Technical Outlook EURGBP Technical Outlook EURCHF Technical Outlook GBPJPY Technical Outlook

Special Reports

Chinese Macro Data Surprise To The Upside The new set of Chinese macroeconomic data presented pleasant surprises and further signaled talks of hard landing might have been overdone. While GDP growth moderated to +9.5% y/y in 2Q11 from +9.7% in the prior quarter, it exceeded market consensus of a +9.3% expansion. The upside surprise was driven by strong growth in industrial production (IP). Considering the policy outlook, we expect the government will maintain a tight monetary stance in order to keep inflation under control. Yet, chances of further rate hikes and increases in RRR in the second half of the year must be lower than the first half. Read more...

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GMT Ccy Events Actual Consensus Previous Revised 00:30 AUD Westpac Consumer Confidence Jul -8.30% -2.60% 02:00 CNY Real GDP YTD Y/Y Q2 9.50% 9.50% 9.70% 04:30 JPY Industrial Production M/M 6.20% 5.70% 5.70% 05:00 JPY BoJ Monthly Report 06:00 EUR German WPI M/M Jun -0.60% -0.20% 0.00% 07:15 CHF Producer & Import Prices M/M Jun -0.50% -0.30% -0.20% 07:15 CHF Producer & Import Prices Y/Y Jun -0.40% -0.30% -0.40% 08:30 GBP Jobless Claims Change Jun 24.5K 15.0K 19.6K 22.5K 08:30 GBP Claimant Count Rate Jun 4.70% 4.70% 4.60% 08:30 GBP ILO Unemployment Rate (3M) May 7.70% 7.70% 7.70% 09:00 EUR Eurozone Industrial Production M/M May 0.10% 0.40% 0.20% 12:30 USD Import Price Index M/M Jun -0.50% -0.60% 0.20% 14:00 USD Bernanke Semi-Annual Testimony to House 14:30 USD Crude Oil Inventories -2.3M -0.9M 18:00 USD Monthly Budget Statement Jun -68.0B -57.6B
Forex Trade Ideas
Trade Idea Update: EUR/USD – Hold short entered at 1.4095 Despite intra-day rise to 1.4111, as the single currency has retreated after meeting resistance around the Ichimoku cloud top, retaining our bearishness and test of the Kijun-Sen (now at 1.4007) is likely, however, break of 1.3951-54 (intra-day low and current level of the Ichimoku cloud bottom) is needed to confirm top is formed, bring further weakness to 1.3900/05. Read more... Trade Idea: USD/CAD – Exit short entered at 0.9740 Although the greenback has fallen after yesterday’s rally to 0.9780 in line with our expectation and weakness to previous support at 0.9564 is likely, break there is needed to retain bearishness and extend weakness towards indicated support at 0.9513. Looking ahead, a break of this level is needed to signal wave 5 is underway for an eventual retest of wave 3 low of 0.9446. Read more... Candlesticks Intraday Trade Ideas Update Schedule (GMT): 1st Update: 0630 - 0700; 2nd Update: 0930 - 1000; 3rd Update: 1230 - 1300; 4th Update: 1500 - 1530 Pairs Covered: EUR/USD, USD/JPY, GBP/USD, USD/CHF Elliott Wave Daily Trade Ideas Update Schedule (GMT): AUD/USD, EUR/JPY: 0800 - 0830; EUR/GBP, USD/CAD: 1430 - 1500
Suggested Readings
Fundamental Highlights Time is Running Out for Europe How Far Could Eurozone Contagion Spread? London Session: China Comes To The Rescue 5 Reasons Why The Euro Isn’t Trading Much Weaker Chinese Data Gives Market Hope Technical Highlights FX Thoughts for the Day GBPUSD - Vulnerable Despite Recovery USD/JPY Shrinks Further Down To 77.47