Research Desk


16th May 2005

Monday



Daily Support & Resistance levels:




Levels
EUR/USD
GBP/USD

Resistance 3
1.2769
1.8798

Resistance 2
1.2734
1.8730

Resistance 1
1.2679
1.8618

Pivot Point
1.2644
1.8550

Support 1
1.2589
1.8438

Support 2
1.2554
1.8370

Support 3
1.2499
1.8258

Trend (Long-Term)
Upwards
Upwards

Trend (Current)
Downwards-Below 1.3000
Downwards-Below 1.8900





Awaiting correction…Focus on TIC numbers



Whether we like it or not, the USD is on the verge of breaking out of its 2 year long bearish momentum. This week`s PPI and CPI data should provide the latest thrust for this new found dollar strength.




Technically, Euro is headed downwards after breaking its yearly low and we don’t have any major support coming up till 1.2500.Cable had a strong support around 1.8500, which is taken out in Asian session and the next support lies around
1.8200. However, both the pairs are highly oversold against the greenback; hence correction is likely this week.



Fundamentally, the reason for this rally in USD is because of positive economic numbers .Next in line is TIC data, expected at $70 Bln... If the number falls short of expectations, we could see a very sharp and deep correction in the latest USD move. If the number is as expected or higher - we may see a try for the recent USD highs followed by a sharp correction anyway, because market is oversold and is getting over-positioned.








*Economic Calendar:



Date/Time (GMT)
Loc
Description
Forecast
Previous





5/16 15:30
US
Fed Board Governor Olson Speaks
-- --
-- --

5/16 09:00
US
Mar TICS Capital Flows
$70.0 bln
$84.5 bln

5/16 08:30
US
May Empire Manufacturing Survey
12.0
3.1





*Source: forexnews.com



Hemendra A.Ghaghada
Emirates FX L.L.C. - Chief Trading Analyst
P. O. Box: 114211, Dubai
Tel: +971-4-33 400 90
Fax: +971-4-33 448 28
Email: hemendra@emiratesfx.ae

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