ECB Coordinates with Fed, BoE, BoJ, SNB to Offer Loans to Banks, Dollar Tumbles

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ECB Coordinates with Fed, BoE, BoJ, SNB to Offer Loans to Banks, Dollar Tumbles Market sentiments are given a strong boost after ECB announced to coordinate with Fed, BoE, BoJ and SNB to conduct three US dollar liquidity providing operations eurozone banks to cover the rest of the year. Such loans will be additional to ECB's regular seven day dollar offerings and will be conducted as fixed-rate tenders with full allotment. This is seen as a response to a report prepared by European finance ministers meeting in Poland on Friday and Saturday. In the report prepared by the Economic and Financial Committee, it's warned that "while tensions in sovereign debt markets have intensified and bank funding risks have increased over the summer, contagion has spread across markets and countries and the crisis has become systemic. European equities jump sharply after the news while US stock futures also advances for gap high opening. Euro extends recent rebound against dollar is and is heading back to 1.39 level while dollar is broadly pressured, except versus the Japanese yen. Full Report Here...
Featured Technical Report
USD/CHF Mid-Day Outlook Daily Pivots: (S1) 0.8702; (P) 0.8778; (R1) 0.8827; More... USD/CHF's retreat from 0.8927 extends further to as low as 0.8647 in early US session. Deeper decline could be seen to 4 hours 55 EMA (now at 0.8591) and below. But after all, downside should be contained above 0.8246 resistance turned support and bring rise resumption. Above 0.8927 will resume the whole rebound from 0.7965 and target 55 weeks EMA (now at 0.9020, which is close to 0.9 psychological level). Break will pave the way to 0.9916 support turned resistance 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

Featured Technical Report

SNB Lowers Growth And Inflation Forecasts, Pledges To Maintain Minimum EURCHF Rate The SNB revised down its growth and inflation forecasts at the September meeting global economic slowdown and strength in Swiss franc are beginning to erode Swiss growth. In the meeting statement, the central bank showed its commitment in defending EURCHF at 1.20 or above. The SNB pledged it has 'utmost determination' and may take 'further measures' to enforce the minimum exchange rate. Read more... RBNZ Will Probably Not Raise Interest Rates Until 2012 The RBNZ left the OCR unchanged at 2.5% and delivered a less hawkish statement in September. Where these have been widely expected, NZD fell after the announcement as the chance of a rate hike this year has markedly reduced given global economic uncertainty. The central bank also trimmed growth and inflation forecasts, signaled the macroeconomic shock in the US and Europe would have some impacts on New Zealand's path of recovery. Read more...

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GMT Ccy Events Actual Consensus Previous Revised 21:00 NZD RBNZ Rate Decision 2.50% 2.50% 2.50% 22:30 NZD Business NZ Manufacturing Index Aug 52.9 53.2 07:15 CHF Industrial Production Q/Q Q2 3.60% 3.00% -9.20% -9.60% 07:15 CHF Industrial Production Y/Y Q2 2.30% 2.70% 5.00% 4.50% 07:30 CHF SNB Rate Decision <0.25% <0.25% <0.25% 08:00 EUR ECB Monthly Bulletin 08:30 GBP Retail Sales M/M Aug -0.10% -0.20% 0.20% 0.20% 08:30 GBP Retail Sales Y/Y Aug -0.10% -0.20% -0.20% 0.00% 08:30 GBP Retail Sales w/Auto Fuel M/M Aug -0.20% -0.30% 0.20% 0.20% 08:30 GBP Retail Sales w/Auto Fuel Y/Y Aug 0.00% -0.10% 0.00% 0.20% 09:00 EUR Eurozone CPI Y/Y Aug 2.50% 2.50% 2.50% 2.50% 09:00 EUR Eurozone CPI - Core Y/Y Aug 1.20% 1.20% 1.20% 1.20% 09:00 EUR Eurozone Employment Q/Q Q2 0.30% 0.20% 0.00% 0.10% 12:30 CAD Manufacturing Shipments M/M Jul 2.70% 1.20% -1.50% 12:30 USD CPI M/M Aug 0.40% 0.20% 0.50% 12:30 USD CPI Y/Y Aug 3.80% 3.60% 3.60% 12:30 USD CPI Core M/M Aug 0.20% 0.20% 0.20% 12:30 USD CPI Core Y/Y Aug 2.00% 1.90% 1.80% 12:30 USD Current Account Balance Q2 -118B -121B -119B 12:30 USD Empire State Manufacturing Sep -8.82 -3.9 -7.72 12:30 USD Initial Jobless Claims 428K 410K 414K 13:15 USD Industrial Production Aug 0.10% 0.90% 13:15 USD Capacity Utilization Aug 77.50% 77.50% 14:00 USD Philly Fed Survey Sep -16 -30.7 14:30 USD Natural Gas Storage 85B 64B
Forex Trade Ideas
Trade Idea: USD/CHF – Buy at 0.8700 Although the greenback has rebounded after yesterday’s fall to 0.8729, as long as resistance at 0.8854 (yesterday’s high) holds, near term downside risk remains for the fall from this week’s high of 0.8927 to bring a stronger retracement of recent upmove to 0.8706 (previous support), however, reckon 0.8688 (61.8% Fibonacci retracement of 0.8540 to 0.8927) would limit downside and bring another rise later. A breach of said resistance at 0.8854 would bring test of indicated resistance at 0.8880/85 but break there is needed to signal the pullback from 0.8927 has ended Read more... Trade Idea: EUR/USD – Sell at 1.3820 The single currency has continued to edge higher in line with our expectation in our previous updates, suggesting near term upside risk remains for retracement of recent decline to 1.3800, however, reckon 1.3820/25 (50% Fibonacci retracement of 1.4150-1.3495) would attract renewed selling interest and bring another decline later. A break of minor support at 1.3635-40 would signal top is formed and then test of yesterday’s low at 1.3591 would follow, below there would confirm and extend weakness to indicated support at 1.3556-58. 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
Orders and Options Watch
US Session: Orders and Options Watch EUR: The single currency jumped in U.S. morning as ECB announced liquidity measures in cooperation with the Fed, BOE, BOJ and SNB with a maturity of around 3 months till the end of 2011. Euro has already traded higher on buying by real money accounts in European session and the release of weaker-than-expected U.S. Empire State manufacturing index also put pressure on the greenback. Stops at 1.3830, 1.3850, 1.3870 and 1.3900 were all tripped and price is still keeping a firm tone as traders rushing to cover their shorts. Bids are now noted at 1.3850 and from 1.3820 down to 1.3800 with stops building up below 1.3750-60, only light offers are reported at 1.3940-50 with more stops seen above there and also 1.4000. Read more...
Suggested Readings
Fundamental Highlights USD Weaker ahead of Top Tier Data, Bernanke Risk Sentiment Improves ahead of Key Data SNB Will Aggressively Defend CHF Ceiling Euro Extends Rebound As EMU Panic Eases (Slightly) Technical Highlights EUR/JPY in an Ascending Triangle Breakout to the Upside; Targets 106.80-107.00 if Confirmed Will The Quiet GBP/USD Weaken Further? FX Thoughts for the Day EURUSD - Cautiously Bearish Below 1.3784.