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Forex Technical & Market Analysis FXCC Mar 01 2013

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Forex Technical & Market Analysis FXCC Mar 01 2013

Postby alayoua » Fri Mar 01, 2013 11:03 am

Forex Technical & Market Analysis FXCC Mar 01 2013

It's official, the US sequestration kicks in

The sequestration, for those unfamiliar with the term, is defined by the US Federal Budget as "the practice of using mandatory spending cuts in the federal budget if the cost of running the government exceeds either an arbitrary amount or the the gross revenue it brings during the fiscal year." These automatic federal budget cuts are officially kicking in within as we write these lines, after a final bill presented by Democrats and Republicans in the Senate failed to win enough support. What this means is that the US will now go through an across-the-board spending cuts in the face of annual budget deficits, which are thought to amount over $85 billion in the current fiscal year. "Assuming that every dollar cut in spending reduces GDP by a dollar, the sequester will shave US growth by around 0.5% this year" comments Marc Chandler, Global Head of Currency Strategy at BBH.

Marc adds: "The sequester itself is a bit of a farce in the sense that it was never intended to be enacted. It was purposely designed to be absurd to give the political class incentive to find an alternative." The analyst suspects that what is behind the 'sequester' is the fact that main political players did their calculations concluding is the best worst alternative. Obama crossed the wires later Thursday, saying that "tomorrow I will bring together leaders from both parties to discuss a path forward; as a nation, we can’t keep lurching from one manufactured crisis to another. Middle-class families can’t keep paying the price for dysfunction in Washington.” Kathy Lien, co-founder at BK Asset Management, notes: "We've been down this road before with the debt ceiling and survived." But as Kathy adds, here comes the kicker: "The Obama Administration has another 30 days to come up with a deal to cancel and avoid the cuts. The more important deadline is March 27th, when the government runs out of money and will be forced to shutdown if no additional measures are taken." Investors are holding out hope for a last minute deal, Kathy says.

Forex Economic Calendar
2013-03-01 09:28 GMT | United Kingdom. Markit Manufacturing PMI (Feb)
2013-03-01 13:30 GMT | United States. Core Personal Consumption Expenditure - Prices Index (YoY) (Jan)
2013-03-01 13:30 GMT | Canada. Gross Domestic Product (YoY) (Dec)
2013-03-01 13:58 GMT | United States. Markit Manufacturing PMI (Feb)

Forex News
2013-03-01 05:57 GMT | GBP/USD above 1.5150; slows down avrg vol
2013-03-01 05:34 GMT | EUR/USD continues sequestered by sellers
2013-03-01 03:50 GMT | Gold below $1590 as 'sequester' looms
2013-03-01 02:55 GMT | AUD/USD little moved around 1.0220

HIGH 1.30836 LOW 1.30532 BID 1.30775 ASK 1.30783 CHANGE 0.17% TIME 08 : 02:53



MARKET ANALYSIS - Intraday Analysis

Upwards scenario: Price get momentum on the downside yesterday however we see potential to overcome our next resistance level at 1.3094 (R1). Clearance here might pull the pair towards to eventual targets at 1.3121 (R2) and 1.3146 (R3). Downwards scenario: Near term outlook is negative for the EURUSD as the price setup is taken a form of a downside formation. Expected progress below the initial support level at 1.3051 (S1) might expose intraday targets at 1.3024 (S2) and then 1.2996 (S3).

Resistance Levels: 1.3094, 1.3121, 1.3146
Support Levels: 1.3051, 1.3024, 1.2996

HIGH 1.51824 LOW 1.51513 BID 1.51811 ASK 1.51824 CHANGE 0.12% TIME 08 : 02:54



Upwards scenario: Sideways formation remains in power today. Next on tap is resistance level at 1.5198 (R1). Clearance here might open a route towards to our initial target at 1.5227 (R2) and then further price appreciation would be limited to last resistance at 1.5258 (R3). Downwards scenario: On the other hand, yesterday lows at 1.5148 (S1) offers an important technical level. Clearance here is required to keep the downside extension intact and expose our lower targets at 1.5118 (S2) and 1.5086 (S3).

Resistance Levels: 1.5198, 1.5227, 1.5258
Support Levels: 1.5148, 1.5118, 1.5086

HIGH 92.731 LOW 92.466 BID 92.536 ASK 92.541 CHANGE -0.03% TIME 08 : 02:55


TREND CONDITION : Upward penetration

Upwards scenario: Ascending uptrend formation remains in power today. Next resistance is seen at 92.73 (R1). If the pair manages to successfully climb above it, we expect next targets to be exposed at 92.97 (R2) and 93.20 (R3). Downwards scenario: On the other side, price depreciation below the supportive barrier at 92.45 (S1) might provide sufficient space for the recovery action. In such case e we would suggest next intraday targets at 92.23 (R2) and then 92.01 (R3).

Resistance Levels: 92.73, 92.97, 93.20
Support Levels: 92.45, 92.23, 92.01

Source: FX Central Clearing Ltd
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