Tuesday, September 1, 2015

Action Insight Mid-Day Report 9-1-15

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Action Insight Market Overview Markets Snapshot

Mid-Day Report: Stocks Weighed Down by China Worry Again, Yen Firm

Global equities are once again weighed down by worries over slowdown in China after another batch data was released earlier today. US stocks follow and suffer heavy selling in initial trading. DJIA once loses more than -400 pts and there is no clear sign of stabilizing yet. Additional pressure is seen after worse than expected data. Yen gains across the board today on risk aversion. The ISM manufacturing index dropped to 51.1 in August versus consensus of 52.8. Deteriorations were seen in most components, including production, new orders and inventories. Meanwhile, the employment component also dropped to 51.2, down from 52.7 and hit the lowest level since April. Released from Canada, GDP rose more than expected by 0.5% mom in June.

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Featured Technical Report

USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 120.84; (P) 121.24; (R1) 121.60; More...

The break of 119.78 minor support suggests that rebound from 116.13 has completed at 121.62 already. Intraday bias is turned back to the downside for 115.55/116.38 support again. Overall, the corrective pattern from 125.85 is expected to extend lower in short to medium term. Sustained break of 115.55 will pave the way to next key support level at 110.05. Meanwhile, in case of another rise, we'd continue to expect strong resistance below 125.27 to limit upside.

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Economic Indicators Update

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GMT Ccy Events Actual Consensus Previous Revised
22:45 NZD Terms of Trade Index Q/Q Q2 1.30% -2.00% 1.50% 1.20%
23:50 JPY Capital Spending Q2 5.60% 8.90% 7.30%
01:00 CNY Manufacturing PMI Aug 49.7 49.7 50
01:00 CNY Non-manufacturing PMI Aug 53.4 53.9
01:30 AUD Current Account Balance (AUD) Q2 -19.0B -15.8B -10.7B -13.5B
01:30 AUD Building Approvals M/M Jul 4.20% 3.00% -8.20% -5.20%
01:35 CNY Caixin PMI Manufacturing Aug F 47.3 47.2 47.1
01:45 CNY Caixin PMI Services Aug 51.5 53.9 53.8
04:30 AUD RBA Rate Decision 2.00% 2.00% 2.00%
07:30 CHF SVME-PMI Aug 52.2 49.8 48.7
07:45 EUR Italy Manufacturing PMI Aug 53.8 55 55.3
07:50 EUR France Manufacturing PMI Aug F 48.3 48.6 48.6
07:55 EUR German Unemployment Change Aug -7K -4K 9K 8K
07:55 EUR German Unemployment Rate s.a. Aug 6.40% 6.40% 6.40%
07:55 EUR Germany Manufacturing PMI Aug F 53.3 53.2 53.2
08:00 EUR Eurozone Manufacturing PMI Aug F 52.3 52.4 52.4
08:00 EUR Italian Unemployment Rate Jul P 12.00% 12.70% 12.70% 12.50%
08:30 GBP Mortgage Approvals Jul 68.8K 68.3K 66.6K
08:30 GBP M4 Money Supply M/M Jul 1.00% 0.20% -0.50%
08:30 GBP PMI Manufacturing Aug 51.5 51.9 51.9
09:00 EUR Eurozone Unemployment Rate Jul 10.90% 11.10% 11.10%
12:30 CAD GDP M/M Jun 0.50% 0.20% -0.20%
14:00 USD Construction Spending M/M Jul 0.70% 0.80% 0.10%
14:00 USD ISM Manufacturing Aug 51.1 52.8 52.7
14:00 USD ISM Prices Paid Aug 39 39 44
Orders and Options Watch

US Session: Orders and Options Watch

EUR: The single currency retreated after intra-day bounce to 1.1332, offers are still noted at 1.1335 and 1.1360 (sizeable), selling interest should emerge around 1.1395-00 (stops above). On the downside, bids are seen at 1.1220-30, 1.1200 and 1.1180 (stops below), more buy orders are expected at 1.1160 with stops placed below 1.1150, buying interest is tipped further out at 1.1120-30 and 1.1100 (stops below barrier at 1.1100).

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Forex Trade Ideas

Trade Idea Update: USD/CHF - Sell at 0.9665

As the greenback has rebounded after finding support at 0.9569, suggesting initial upside bias is seen for recovery to 0.9655-65, however, if our view that top has been formed at 0.9690 is correct, upside would be limited and price should falter below this yesterday's high, bring another retreat later, below said support would add credence to this view, bring retracement of the rise from 0.9259 to 0.9525-30 (38.2% Fibonacci retracement of 0.9259-0.9690)

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Trade Idea Update: EUR/USD - Stand aside

Despite yesterday's retreat to 1.1180, the single currency found renewed buying interest there and rebounded in line with our near term bullish expectation, the breach of indicated resistance at 1.1244 adds credence to our view that temporary low has been formed at 1.1156 on Friday, hence consolidation with mild upside bias is seen for retracement to 1.1334 (38.2% Fibonacci retracement of 1.1622-1.1156)

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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

Technical Highlights

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