NEWS / Fiscal Policy, Budget

Euro reaches medium term technical support

Daily Currency report for Monday September 11 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
Sep 12 08:30 Trade Balance Jul -$65.0B -$65.5B -$64.8B
Sep 13 10:30 Crude Inventories 09/08 NA NA -2212K
Sep 13 14:00 Treasury Budget Aug -$67.0B -$64.0B -$51.3B
Sep 14 08:30 Export Prices ex-ag. Aug NA NA 0.2%
Sep 14 08:30 Import Prices ex-oil Aug NA NA -0.1%
Sep 14 08:30 Initial Claims 09/09 315K 315K 310K
Sep 14 08:30 Retail Sales Aug -0.2% -0.1% 1.4%
Sep 14 08:30 Retail Sales ex-auto Aug 0.4% 0.3% 1.0%
Sep 14 10:00 Business Inventories Jul 0.5% 0.5% 0.8%
Sep 15 08:30 Core CPI Aug 0.3% 0.2% 0.2%
Sep 15 08:30 CPI Aug 0.4% 0.2% 0.4%
Sep 15 08:30 NY Empire State Index Sep 20.0 14.0 10.3
Sep 15 09:15 Capacity Utilization Aug 82.4% 82.5% 82.4%
Sep 15 09:15 Industrial Production Aug 0.2% 0.2% 0.4%
Sep 15 09:50 Mich Sentiment-Prel. Sep 84.0 83.5 82.0

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EUR/USD

Medium Term Trend: The euro has dropped to the 1.2650 level, where we expected it might try to reach once 1.2700 was broken. This is a key technical and structural level and the euro is very oversold, along with a variety of other currencies. We continue to expect that the euro will try to base in September and rally to new highs, and the 1.2650 level is an ideal spot to doe so. Watch for attempts to reverse from here early in this week, with a break above 1.2700 needed to start proceedings and a rally through 1.2800 to confirm that another attempt higher is beginning.

Strategy today: Buy at 1.2660, stops below 1.2630, target 1.2700 and then 1.2800

Chart: An interesting technical set-up, plus oversold conditions, should allow the euro to base at 1.2650.