Euro leading higher - 1.2900 next

Daily Currency report for Thursday August 17 2006

This is only a guide. Please refer to our specific entry signals for exact entries and stops.

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This Week's Economic Calendar
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Date ET Release For Actual Briefing.com Consensus Prior Revised From
Aug 15 08:30 Core PPI Jul 0.2% 0.2% 0.2%
Aug 15 08:30 NY Empire State Index Aug 17.0 15.0 15.6
Aug 15 08:30 PPI Jul 0.4% 0.3% 0.5%
Aug 15 09:00 Net Foreign Purchases Jun NA NA $69.6B
Aug 16 08:30 Building Permits Jul 1825K 1845K 1869K
Aug 16 08:30 Core CPI Jul 0.3% 0.3% 0.3%
Aug 16 08:30 CPI Jul 0.4% 0.4% 0.2%
Aug 16 08:30 Housing Starts Jul 1800K 1810K 1850K
Aug 16 09:15 Capacity Utilization Jul 82.7% 82.6% 82.4%
Aug 16 09:15 Industrial Production Jul 0.6% 0.5% 0.8%
Aug 16 10:30 Crude Inventories 08/11 NA NA -1114K
Aug 17 08:30 Initial Claims 08/12 315K NA 319K
Aug 17 10:00 Leading Indicators Jul 0.1% 0.1% 0.1%
Aug 17 12:00 Philadelphia Fed Aug 10.0 8.0 6.0
Aug 18 09:50 Mich Sentiment-Prel. Aug 82.5 84.0 84.7

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EUR/USD

Medium Term Trend: Another step higher after trading in a 20 pip range for 24 hours prior to the rally, the euro is steadily making its way higher back towards 1.2900. The gains in the British Pound have not been nearly as convincing as the euro, and this is a little concerning, meaning that the pound will catch up over the next few days, or they are both due for a "mini collapse". Because we have been range-bound since May this year, it is likely that the market has become complacent, and this means that unpredictable moves are quite possible before the end of the summer. For today, allow for a little more work above 1.2750 and a push up to 1.2900. Generally, as long as we can hold above 1.2700, the euro should now remain bullish for a target of 1.3000 and higher. Below 1.2700, and the euro may be heading back to 1.2500.

Strategy today: Try small longs at 1.2800/1.2750, stops below 1.2700, target 1.2900 and then 1.3000.

Chart: Rather odd price action has created step-wise increases. This has been happening since last month, as the price has reacted according to each news release, rather than purely technical factors.