Daily Currency report for Thursday August 2 2007

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This Week's Economic Calendar
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Date ET Release For Actual Briefing.com Consensus Prior Revised From
Jul 31 08:30 Personal Income Jun 0.5% 0.5% 0.4%
Jul 31 08:30 Personal Spending Jun 0.1% 0.1% 0.5%
Jul 31 08:30 Core PCE Inflation Jun 0.1% 0.2% 0.1%
Jul 31 08:30 Employment Cost Index Q2 0.9% 1.0% 0.8%
Jul 31 09:45 Chicago PMI Jul 59.5 59.0 60.2
Jul 31 10:00 Construction Spending Jun -0.1% 0.3% 0.9%
Jul 31 10:00 Consumer Confidence Jul 109.0 105.0 103.9
Aug 01 10:00 ISM Index Jul 56.5 55.5 56.0
Aug 01 10:00 Pending Home Sales Jun -3.5%
Aug 01 10:30 Crude Inventories 07/27 NA NA -1103K
Aug 01 17:00 Auto Sales Jul 5.4M 5.5M 5.2M
Aug 01 17:00 Truck Sales Jul 6.9M 7.0M 6.5M
Aug 02 08:30 Initial Claims 07/28 315K NA 301K
Aug 02 10:00 Factory Orders Jun 1.5% 1.3% -0.5%
Aug 03 08:30 Nonfarm Payrolls Jul 150K 135K 132K
Aug 03 08:30 Unemployment Rate Jul 4.6% 4.5% 4.5%
Aug 03 08:30 Hourly Earnings Jul 0.3% 0.3% 0.3%
Aug 03 08:30 Average Workweek Jul 33.8 33.9 33.9
Aug 03 10:00 ISM Services Jul NA 59.5 60.7

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EUR/USD

Weekly Trend direction: Bearish

Weekly trend reversal level: 1.3860

Strategy: Whilst below the weekly trend reversal level, sell rallies to resistance levels after an entry signal.

Medium term: The euro has broken above the large flag formation which has dominated the technical picture in 2006. Now, whilst above 1.2900 (1.2800 max), the euro remains in an uptrend which is heading back towards 1.3800, and possibly higher still, towards 1.4100.

Today's trade suggestion: No change as the euro dithers above the 1.3600 level, but below resistance at 1.3720. Weekly momentum is bearish, which means we still look to sell into rallies, with 1.3720 now seen as an important intermediate top. (above here and 1.3800 should stop any rallies) Wave analysis suggests we still have another leg lower to go, which might take the euro down to 1.3550/70 (200 SMA, previous S/R and 50% Fib), where counter-trend longs might be a possibility. watch to sell at 1.3720, or to buy near 1.3550, only on clear signs of reversal. Below 1.3550 (unlikely on first attempt) means another drop to 1.3400/20. Watch here for a bounce. Patience is required this week, but it will pay off!

Key G7 Resistance levels: 1.3720, 1.3800

Counter-trend opportunities: Buy at 1.3550

EUR/USD Hourly chart:



EUR/USD Weekly chart: