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This Give you Some of informations about forex.... Read more...

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G20 issues a grab bag of hopes and promises, and pushes real decision making out to the spring of 2009 and an Obama presidency. Japan slips into recession. Currencies relatively calm after last minute meltdown in Friday's North American session. MAJOR HEADLINES – PREVIOUS SESSION Japan Q3 GDP out at -0.1% QoQ vs. 0.0% expected and Q2 growth revised down to -0.9% Japan Q3 GDP Deflator out at -1.6% YoY vs. -1.7% expected UK Nov. Rightmove House Prices fell -7.1% YoY vs. -4.9% in Oct. Australia Q3 Retail Sales out at +0.1% YoY vs. +0.4% expected THEMES TO WATCH – UPCOMING SESSION Events Today: Norway Oct. Trade Balance (0900) EuroZone Sep. Trade Balance (1000) US Nov. Empire Manufacturing (1330) US Fed's Hoenig to Speak (1400) US Oct. Industrial Production and Capacity Utilization (1415) US Treasury Secretary Paulson to Speak (2330) Australia RBA November Meeting Minutes (0030) Japan Oct. Department Store Sales (0530) - Market Comment: The market action on Friday was clearly all about nervousness ahead of the weekend's G20 meeting, with US equities rising sharply to new highs late in the afternoon, only to hit an air pocket and fall an astounding 6% in the final hour of trading. Currencies followed suit, with EURUSD again knocking on the 21-day moving average resistance up around 1.2800 only to close the day at 1.2600. Liquidity must have been awful for such moves to have taken place. - The G20 outcome was largely as expected: lots of talk and little action. Any major decision, should it come, will have to wait until after Mr. Obama is sworn into office in two months time. The G20 is set to reconvene on April 30 of next year, though the G20 statement discussed March 31 as a deadline for policy recommendations - this is a date to mark in our calendars. Still, there were a few points of interest from the meeting. Perhaps most interest for the future of international banking regulation was a reference to a new "college of supervisors", basically a group of bank regulators from the major economies that would monitor banks and meet regularly to perhaps recommend coordinated policy. Interestingly, and addressing one of the great risks to the global economy going forward, the G20 made a very clear statement on the perils of protectionism and set the goal of resuming the Doha round of WTO trade talks - let's all hope that this effort bears fruit. Most of the very long G20 statement and measures are focused on the problems that got us here in the first place, which isn't of much help at the present time. The market was perhaps hoping for concrete stimulus measures to prop up growth, but these will clearly have to wait until spring, as will any major reform of the IMF, another focus for EM country stability. Japan offered to help the IMF with funds ahead of the weekend, raising hopes of more international coordination, but of the other countries with the biggest reserves, like China, Russia and Saudi Arabia, their focus will be domestic stimulus above all else as these three countries have regime legitimacy issues should their economies spiral out of control. All in all, the G20 has done little to alter the global landscape and is perhaps a mild disappointment at best, as no stimulus action plan is on the table at this time. This raises the risk that the USD and JPY continue to strengthen, though with momentum coming out of the market lately, we'd like to see, for example, EURUSD breaking below 1.2400 again for proof that we have more wood to chop in the near term on the risk aversion theme. The economic calendar this week is rather lightly populated. We've got quite a bit of inflation data on tap, both from the UK (UK CPI/RPI tomorrow), from the US (PPI tomorrow, CPI on Wed.), and from Germany (Producer Prices on Thu.) though this is not much of a focus at present. A few articles are out talking up the prospect of deflation and potentially the sharpest fall in monthly CPI since 1949. The BOE Minutes are out on Wednesday. We have two of the regional US manufacturing indices out this week, and any ability to post new lows would be remarkable as these surveys tend to bounce sharply higher once they have gone super-negative due to the comparative nature (so November relative to October has to be worse than October relative to September, etc.. for the index to be able to post new lows). The BoJ is out on Friday, but there is little excitement there, with virtually nothing left to cut from the 0.30% overnight rate Chart: EURUSD We revisit the EURUSD chart for the umpteenth time lately. The 21-day SMA (in blue on the chart below) held miraculously once again on Friday and now lies at 1.2775. Clearly, the bulls will need for that one to give way before generating any upside argument. Meanwhile, the daily trading ranges are constricting a bit, and the bears need for 1.2400/1.2330 to fall for another leg down and perhaps a try at the 1.2000 area initially. We lean to the downside argument for now. Risk warning Finexo Ltd. shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee or implication by Finexo that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis especially leveraged investments such as foreign exchange trading and investment in derivatives can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated .

Administrative address: Finexo Ltd. Moersenbroicher Weg 191 40470 Dusseldorf GERMANY Tel: +49.7956.9954.211 | Fax number: +49.211.2049.162 | accounts@finexo.com | www.finexo.com

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Stocks stepped away from the brink in the US once again, triggering a desperate short squeeze on long JPY and USD positions Move may mostly reflect nervousness ahead of weekend's G20 meeting. US Retail Sales for October could etch new historical low. MAJOR HEADLINES – PREVIOUS SESSION US Oct. Monthly Budget Statement out at -$237.2 vs. -$200B expected New Zealand Oct. Non-resident Bond Holdings out at 74.7% vs. 74.3% in Sep. THEMES TO WATCH – UPCOMING SESSION Events Today: Sweden Oct. Average House Prices (0830) EuroZone Oct. CPI (1000) EuroZone Q3 GDP (1000) Canada Sep. Manufacturing Shipments (1330) US Oct. Import Price Index (1330) US Oct. Advance Retail Sales (1330) US Fed's Bernanke and ECB's Trichet to speak at conference (1330) US Nov. University of Michigan Confidence (1500) US Sep. Business Inventories (1500) US Treasury's Kashkari to testify before Congress (1500) US Fed's Pianalto to Speak (1730) New Zealand Sep. Performance of Services Index (Sunday 2130) Japan Q3 GDP (Sunday 2350) UK Nov. Rightmove House Prices (Monday 0001) Australia Q3 Retail Sales (Monday 0030) MAJOR HEADLINES – PREVIOUS SESSION - Market Comment: The US Fed's Plosser was out last night talking out against the idea of cutting the Fed funds rate any further due to "technical ramifications" for money markets (the difficulty of maintaining positive yields, perhaps) and was comfortable with where rates stand. This was one of the most hawkish Fed members previously, however, so it's a bit doubtful that his words carry much weight. As for the Fed funds rate, it is largely academic at this point anyway, with the Fed essentially already performing de facto "quantitative easing" measures similar to those that the BoJ did in its ZIRP days. The Fed's balance sheet has expanded to some $2 trillion, no small portion of which is doubtless backed by toxic waste in various forms of ABS - and they haven't even begun to employ the money market fund bailout plan. Now Congress and some in the private sector want to know who is getting all of these funds. The Fed is not the lender of last resort - it is the ONLY lender right now. - On the US political front, it appears that the potential size of and stimulus plan and auto industry bailout is contracting by the day as the lame duck Congress may have a hard time coming up with any bipartisan measure. And if the Obama camp is already playing politics, they may want to wait until Obama is sitting in the White House before any major stimulus measures are extended in order to take credit for any beneficial effects of said stimulus. Meanwhile, the shift in focus by Paulson and company toward more directly supporting consumer credit is in flux as it is clear that the Fed and Treasury want to get the consumer spending again - this is key because so much of aggregate demand in the US economy is centered on private consumption and getting this part of the economy rolling again is critical as long as the financial system is propped up enough to not fall apart. It will be a tough if not insurmountable task in the short run, however. While interbank spreads have been falling of late, the consumer is still experiencing a tightening noose in the credit market and not seeing any of this benefit. Today's October Retail Sales could be one of the worst ever as October was when the biggest part of the crunch set in across markets. The pound keeps getting pounded for further losses after the negative view trotted out by King and company midweek and by the backdrop of the country's current account deficit and huge fiscal challenges. These are the same types of problems faced by the typical emerging market country in a global crisis and some are even starting to talk up the idea of a currency crisis for the UK. The negative momentum that GBP has worked up at this point is getting worrisome and may demand an official response very soon if GBPUSD moves to 1.4000 and EURGBP to 0.9000. We've been taken aback at the vehemence of the moves - the GBP crosses are dangerous territory. There are hopes that this weekend's G20 may see strong new efforts aimed at stabilizing emerging market countries. Japan has offered as much as $100 billion of its reserves for the IMF to employ and China's PBOC was out overnight also making noises about possible help to EM via the IMF. A stimulus package of some kind is likely in the works, but none of the G7 countries save for Japan has the financial resources to contribute anything but a bunch of rhetoric. Any risk appetite generated by this weekend's event is likely to be fleeting. On a technical basis, we have bullish reversal formations galore across markets, but traders should beware the nervousness of markets and question the motives for the latest moves at all times. Our guess is that yesterday was a short squeeze by risk averse traders stopping themselves out of their positions. This could continue ahead of the weekend here, and by all means, traders who can find a very attractive way to play the reversal/squeeze in terms of risk/reward should have a go, but we're staying aside on this rally in risk for now and we'll have a second look on Monday. The overall picture and negative momentum in the economy is getting worse and worse. Those looking for a move back to risk aversion should look at perhaps 96.25 in USDJPY, 0.6475 in AUDUSD, and 1.2600 in EURUSD. If these levels are failing again today, then the squeeze may be off, and another round of risk aversion may ensue. Be extra careful out there and beware the risk of a gap opening on Monday. Risk warning Finexo Ltd. shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee or implication by Finexo that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis especially leveraged investments such as foreign exchange trading and investment in derivatives can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated .

Administrative address: Finexo Ltd. Moersenbroicher Weg 191 40470 Dusseldorf GERMANY Tel: +49.7956.9954.211 | Fax number: +49.211.2049.162 | accounts@finexo.com | www.finexo.com

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USD strength coming back... key resistance could be taken out in the USD crosses today

Watch the 20th of August highs 110.41 in USDJPY and 1.1041 in USDCHF... and buy the breaks (slightly higher).

Overnight News Bullets

EC Current Account (Jun) out at -8.2B vs. -7.3B prior. UK GDP QoQ/YoY (2Q P) out at 0.0%/1.4% vs. 0.1%/1.5% expected. UK Private Consumption (2Q P) out at -0.1% vs. 0.5% expected. UK Exports (2Q P) out at -0.5% vs. 0.4% expected. UK Import (2Q P) out at -1.4% vs. -0.3% expected. EC Industrial New Orders MoM (Jun) out at -0.3% vs. -1.1% expected. EC Industrial New Orders YoY (Jun) out at -7.4% vs. -6.3% expected. NZ Food Prices MoM (Jul) out at 0.6% vs. 1.3% prior.

Markets

FX: USD making a strong comeback, likely testing key resistance levels today. Fixed Income: 10-year contracts coming back, but Bunds lacking a bit behind. Stocks: Very positive price action in all regions, generally up 1.5-2% on Friday and over the weekend. Commodities: All commodity prices except agriculturals are down on USD strength.

O/N Data Heat map: EU US JP UK SZ AU CA NZ NO SE FR - -

Calendar

Today's Highlights:

Time (GMT) Region Release Consensus 07:30 SW Trade Balance (Jul) 8.2B (prior) 14:00 US Existing Home Sales (Jul) 4.91M 14:00 US Existing Home Sales MoM (Jul) 1.0%

What's going on?

USD rose against the Euro on speculations that the drop of the crude oil price support the US growth. Additionally the German business confidence tomorrow is expected to drop to the lowest level since 2005.

FX

USDCHF to break higher...

EUR USD JPY GBP CHF AUD CAD NZD NOK SEK PLN + - - -

FX Trading Strategies

Pair Supp. Resis. Comments USDCHF 1.0856 1.1047 Last week's figures were not that positive for the economies in the US nor Switzerland. However with US inflation continuing elevated and risk appetite high, USDCHF remains well bid. We look for a test of February highs at 1.1107, buying at 1.1045 bid, stop offer at 1.1025.

Risk warning Finexo Ltd. shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee or implication by Finexo that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis especially leveraged investments such as foreign exchange trading and investment in derivatives can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated.

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USD correcting vs. Everything

Commodities a lot higher. There might be more downside intraday...

Overnight News Bullets

JN Machine Tool Orders YoY (Jul F) out at -8.9% vs. -8.9% prior. SZ Trade Balance (Jul) out at 2.37B vs. 2.00B expected. SZ PPI MoM/YoY (Jul) out at 0.5%/4.9% vs. 0.3%/4.6% expected. GE PMI Manufacturing (Aug A) out at 49.9 vs. 50.5 expected. GE PMI Services (Aug A) out at 50.6 vs. 52.1 expected. SW Unemployment Rate (Jul) out at 5.8% vs. 5.9% expected. NO GDP sa QoQ (2Q) out at 0.6% vs. 0.4% expected. NO GDP Mainland QoQ (2Q) out at 1.0% vs. 0.6% expected. EC PMI Manufacturing (Aug A) out at 47.5 vs. 47.0 expected. EC PMI Services (Aug A) out at 48.2 vs. 48.0 expected. EC PMI Composite (Aug A) out at 48.0 vs. 47.7 expected. UK Retail Sales MoM/YoY (Jul) out at 0.8%/2.1% vs. -0.2%/1.8% expected. UK Total Business Investment QoQ/YoY (2Q P) out at 1.9%/-1.9% vs. 3.1%/-0.7% expected. SZ ZEW Survey Expectations (Aug) out at -79.6 vs. -76.9 prior. CA CPI MoM/YoY (Jul) out at 0.3%/3.4% vs. 0.4%/3.4% expected. CA Core MoM/YoY (Jul) out at 0.1%/1.5% vs. 0.2%/1.6% expected. US Initial/Continuing Jobless Claims out at 432K/3362K vs. 440K/3405K expected. US Philly Fed (Aug) out at -12.7 vs. -12.6 expected. US Leading Indicators (Jul) out at -0.7% vs. -0.2% expected. US EIA Natural Gas Storage Change out at 88 vs. 84 expected. JN Supermarket Sales YoY (Jul) out at 0.9% vs. -0.9% prior.

Markets

FX: USD dropping heavily vs. all currencies and commodities. Fixed Income: Bearish price action in most 10-year contracts. STIR Futures: 10% chance of a 25 bps. rate hike at the 16th of September FOMC Meeting. Stocks: Rather negative European session, down more than 1%. US mixed, but back from an intraday sell-off. Commodities: Massively higher across the board. Crude now trading above $121/bbl.

O/N Data Heat map: EU US JP UK SZ AU CA NZ NO SE GE + - + + + - + + -

Calendar

Today's Highlights:

Time (GMT) Region Release Consensus 08:00 EC ECB Euro-Zone Current Account 08:30 UK GDP (Q2) 1.5%/0.1% 08:30 UK Private Consumption (Q2) 0.5% 08:30 UK Government Spending (Q2) 0.5% 08:30 UK Gross Fixed Capital Formation (Q2) -1.2% 08:30 UK Imports and Exports (2Q P) 09:00 EC Industrial New Orders (June) -1.1%/-6.3% 14:00 US Fed’s Bernanke speaks on financial stability at Jackson

What's going on?

Despite gains earlier this week, Asian stocks are set to close the week lower, dragging the regional benchmark index to lowest levels since mid 2006. Spreading credit losses amongst the financial companies are seen as the primary driver for equity losses as well as the high oil prices that have been bid back up over $121. Helped by sudden rush in oil prices and USD once again on the offer, commodities are set for a the largest weekly gain in 33 years as measured by the popular CRB commodities index. Despite the weak Asian equity performance, Japanese yen remains on the offer and yen funded carry trades strong in formation as Japanese investors are seen continually flocking to higher yielding foreign investments.

FX

USDTRY to resume the downtrend...

FX Trading Strategies

Pair Supp. Resis. Comments USDTRY 1.1850 1.1904 While pair has been bid strongly back up after touching the 1.15 mark the greater downtrend is intact and 1.1985 has capped advances on the upside. We are looking for a retracement back towards the 1.18 mark and have placed an order to sell at 1.1880 offered. Stop loss 1.1901 bid.

Risk warning Finexo Ltd. shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee or implication by Finexo that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis especially leveraged investments such as foreign exchange trading and investment in derivatives can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated.

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USD weaker vs. EUR and JPY. AUD and GBP still not performing EUR and JPY going higher. Stocks slightly higher, but financials still under pressure.

Overnight News Bullets JN Convenience Store Sales YoY (Jul) out at 11.7% vs. 4.2% prior. UK BoE Minutes: 7-2 to maintain rates in Aug. 1 for cut. 1 for hike. EC Construction Orders MoM/YoY (Jun) out at -0.6%/-2.4% vs. -0.2%/-1.1% prior. US MBA Mortgage Applications out at -1.5% vs. -1.5% prior. CA Leading Indicators MoM (Jul) out at 0.0% vs. 0.1% expected. CA Retail Sales MoM (Jun) out at 0.5% as expected. CA Retail Sales Less Autos MoM (Jul) out at 1.4% vs. 0.6% expected. US DOE/API Energy Storage: Massive build in DOE Crude Oil (9390K), but massive draw in DOE Gasoline (-6202K). NZ Visitor Arrivals (Jul) out at 2.1% vs. -1.4% prior. JN Merchandise Trade Balance (Jul) out at Y91.1B vs. Y257.5B expected. AU New Motor Vehicle Sales MoM/YoY (Jul) out at -3.4%/-4.1% vs. 1.0%/1.4% prior. AU RBA Foreign Exchange Transactions (Jul) out at A$300M vs. A$875M prior. NZ Credit Card Spending YoY (Jul) out at 3.8% vs. 3.3% prior.

O/N Data Heat map: EU US JP UK SZ AU CA NZ NO SE FR - - - + +

Calendar Today's Highlights: Time (GMT) Region Release Consensus 07:30 GE PMI Manufacturing (Aug) 50.5 07:30 GE PMI Services (Aug) 52.1 07:30 SW Unemployment Rate (Jul) 5.9% 08:00 NO GDP (2Q) QoQ 0.4% 08:00 EC PMI Manufacturing (Aug) 47.0 08:00 EC PMI Services (Aug) 48.0 08:00 EC PMI Composite (Aug) 47.7 08:30 UK Retail Sales (Jul) MOM/YoY -0.2%/1.8% 08:30 UK Total Business Investment (2Q) QoQ/YoY -0.7%/3.1% 09:00 SZ ZEW Survey (Expectations) (Aug) -76.9 prior 11:00 CA Consumer Price Index (Jul) MoM/YoY 0.4%/3.4% 11:00 CA Bank Canada CPI Core (Jul) MoM/YoY 0.2%/1.6% 12:30 US Initial Jobless Claims (Aug 16) 440K 12:30 US Continuing Claims (Aug 9) 3405K 14:00 US Philadelphia Fed. (Aug) -12.6 14.00 US Leading Indicators (Jul) -0.2%

This and Next Week’s Highlights: Date Region Release Aug 22 EC Current Account, Industrial New Orders Aug 22 UK GDP, Private Consumption, Government Spending Aug 22 US Fed’s Bernanke Speaks on Financial Stability at Jackson Hole Aug 25 GE Import Prices Aug 25 SW Trade Balance Aug 25 US Existing Home Sales

FX GBPUSD to break higher...

EUR USD JPY GBP CHF AUD CAD NZD NOK SEK PLN - + - -

FX Trading Strategies Pair Supp. Resis. Comments GBPUSD 1.8510 1.8825 With the recent rapid sell-off in the GBP, we look for a correction keeping the bearish outlook longer term with additional downside below support. With buying interest at the 50% fibo, we look for a break of trend, buying at 1.8682 bid, stop offer at 1.8660, targeting 1.8755

Risk warning Finexo Ltd. shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee or implication by Finexo that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis especially leveraged investments such as foreign exchange trading and investment in derivatives can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated.

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USD on the retreat... short-term

It looks like we will have a correction here. Keep a bearish bias for the short term, unless the USD makes new highs.

Overnight News Bullets GE PPI MoM/YoY (Jul) out at 2.0%/8.9% vs. 0.7%/7.5% expected. SW Total Number of Employees YoY (2Q) out at 2.0% as prior. SW Industry Capacity (2Q) out at 90.4% vs. 91.4% prior. GE ZEW Econ. Sentiment (Aug) out at -55.5 vs. -62.0 expected. GE ZEW Curr. Situation (Aug) out at -9.2 vs. 10.0 expected. EC ZEW Econ. Sentiment (Aug) out at -55.7% vs. -65.0 expected. CA Wholesale Sales MoM (Jun) out at 2.0% vs. 0.7% expected. US PPI MoM/YoY (Jul) out at 1.2%/9.8% vs. 0.6%/9.3% expected. US PPI Ex Food & Energy (Jul) out at 0.7%/3.5% vs. 0.2%/3.2% expected. US Housing Starts (Jul) out at 965K vs. 960K expected. US Building Permits (Jul) out at 937K vs. 970K expected. US ABC Consumer out at -49 vs. -50 expected. JN All Industry Activity Index MoM (Jun) out at -0.9% as expected. AU Westpac Leading Index MoM (Jun) out at 0.1% vs. 0.0% prior. AU DEWR Skilled Vacancies MoM (Aug) out at -1.7% vs. -0.5% prior.

O/N Data Heat map: EU US JP UK SZ AU CA NZ NO SE FR + + + -

Calendar Today's Highlights:

Time (GMT) Region Release Consensus 07:00 JN Convenience Store Sales YoY (Jul) 4.2% (prior) 07:00 SZ Money Supply M3 YoY (Jul) 1.5% (prior) 08:30 UK BoE Minutes 08:30 UK Public Finances (Jul) -£10.B 08:30 UK Public Sector Net Borrowing (Jul) -£4.3B 09:00 EC E-Z Construction Output MoM/YoY (Jul P) 0.5%/10.7% 11:00 US MBA Mortgage Applications -1.5% (prior) 12:30 CA Leading Indicators MoM (Jul) 0.1% 12:30 CA Retail Sales MoM (Jun) 0.5% 12:30 CA Retail Sales Less Autos MoM (Jun) 0.6% 14:30 US DOE/API Energy Storage figs. Crude Oil: 1000K 22:45 NZ Visitor Arrivals (Jul) -1.4% (prior)

This and Next Week’s Highlights:

Date, Region, Release Aug 21 SZ Trade Balance, PPI, ZEW Survey Aug 21 NO GDP Aug 21 EC PMI Indices Aug 21 UK Retail Sales, Total Business Investment Aug 21 CA CPI, Bank of Canada CPI Aug 21 US Jobless Claims, Philly Fed, Leading Indicators, EIA Nat. Gas Storage Aug 21 JN BoJ Minutes for July Aug 22 EC Current Account, Industrial New Orders Aug 22 UK GDP, Private Consumption, Government Spending Aug 22 US Fed’s Bernanke Speaks on Financial Stability at Jackson Hole Aug 25 GE Import Prices Aug 25 SW Trade Balance Aug 25 US Existing Home Sales

What's going on?

USD went slightly lower yesterday and is likely to correct further today The Bank of England’s minutes from the last round of interest rate decision, scheduled for release today at 8:30 GMT, will be keenly observed for hints of future policy decisions. The speculation is currently pointing towards a language of easing inflationary pressures and as such fueling expectations of a future rate cuts.

FX GBPUSD to break higher...

EUR USD JPY GBP CHF AUD CAD NZD NOK SEK PLN (-) -

FX Trading Strategies Pair Supp. Resis. Comments GBPUSD 1.8510 1.8785 We think it is very likely that dollar strength will take a breather, if for no other reason that the technical set up is there for antother relief rally after finally seeing some higher lows on our hourly charts. We placed an order to buy 1.8683 bis, stop 1.8660, targeting 1.8770.

Risk warning Finexo Ltd. shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee or implication by Finexo that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis especially leveraged investments such as foreign exchange trading and investment in derivatives can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated.

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Consolidation In The Majors

Overnight News Bullets

FR Bank of France Business Sentiment (Jul) out at 92 vs. 94 expected. EC Euro-Zone Trade Balance (Jun) out at -3.0B vs. 0.5B expected. CA Int’l Securities Transactions (Jun) out at C£7.247 vs. C$5.000 expected. US NAHB Housing Market Index (Aug) out at 16 as expected (all time low). NZ PPI Inputs QoQ (2Q) out at 5.6% vs. 2.3% prior. NZ PPI Outputs QoQ (2Q) out at 3.5% vs. 1.8% prior. AU Preliminary BoP Imports MoM sa (Jul) out at 5.0% vs. -2.0% prior. JN BoJ Target Rate out at 0.50% (unchanged) as expected. GE Producer Prices MoM/YoY (Jul) out at 2.0%/8.9% vs. 0.7%/7.5% expected.

O/N Data Heat map: EU US JP UK SZ AU CA NZ NO SE FR - + +

Calendar

Today's Highlights:

Time (GMT) Region Release Consensus 06:00 GE Producer Prices MoM/YoY (Jul) 0.7%/7.5% 07:30 SW Total Number of Employees YoY (2Q) 2.0% (prior) 07:30 SW Industry Capacity (2Q) 91.4% (prior) 09:00 GE ZEW Survey (Econ. Sentiment) (Aug) -62.0 09:00 GE ZEW Survey (Current Situation) (Aug) 10.0 09:00 EC ZEW Survey (Econ. Sentiment) (Aug) -65.0 12:30 CA Wholesale Sales MoM (Jun) 0.7% 12:30 US Producer Price Index MoM/YoY (Jul) 0.6%/9.3% 12:30 US PPI Ex Food & Energy MoM/YoY (Jul) 0.2%/3.2% 12:30 US Housing Starts (Jul) 960K 12:30 US Building Permits (Jul) 970K 21:00 US ABC Consumer Confidence (Aug 17) -50

What's going on?

FX: Consolidation in the majors. USD looks overbought, only buy on new highs (break-outs). The king of carry is shifting from EURJPY to USDJPY and we believe that the correlation seen over the past 4 weeks will continue to favor higher levels in USDJPY on the back of strong bidding for the dollar and continuing cross selling in EUR crosses.

FX EURCHF to break lower

FX Trading Strategies Pair Supp. Resis. Comments EURCHF 1.60 1.6180 The pair sustained below the 100 day SMA, which has capped the down- side since April. With risk aversion highly present and EURCHF still not responding to recent EUR-weakness, downside is attractive. We sell at 1.6095 offer, stop bid at 1.6116, targeting 1.6010.

Risk warning Finexo Ltd. shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee or implication by Finexo that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis especially leveraged investments such as foreign exchange trading and investment in derivatives can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated.

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USD to revert lower for now? USDCAD looking prone for a reversal (lower).

Overnight News Bullets

SW Activity Index Level (Jun) out at 123.4 vs. 123.6 prior. NO Trade Balance NOK (Jul) out at 37.4B vs. 38.5B expected. CA Manufacturing Shipments MoM (Jun) out at 2.1% vs. 1.0% expected. CA New Motor Vehicles Sales MoM (Jun) out at -1.0% vs. 0.0% expected. US Empire Manufacturing (Aug) out at 2.8 vs. -4.0 expected. US Net Long-Ter TIC Flows (Jun) out at $53.4B vs. $60.0B expected. US Total Net TIC Flows (Jun) out at $51.1B vs. -$2.5B prior. US Industrial Production (Jul) out at 0.2% vs. 0.0% expected. US Capacity Utilization (Jul) out at 79.9% vs. 79.8% expected. US Univ. Of Michigan Confidence (Aug P) out at 61.7 vs. 62.0 expected. UK Rightmove House Prices MoM/YoY (Aug) out at -2.3%/-4.8% vs. -1.8%/-2.0% prior. JN Tokyo Dept. Store Sales YoY (Jul) out at -0.9% vs. -7.4% prior. JN Nationwide Dept. Store Sales YoY (Jul) out at -2.5% vs. -7.6% prior.

O/N Data Heat map: EU US JP UK SZ AU CA NZ NO SE FR + -

Calendar Today's Highlights:

Time (GMT) Region Release Consensus 07:15 SZ Retail Sales YoY (Jun) 3.3% 09:00 EC Euro-Zone Trade Balance Jun 1.2B 12:30 CA Int’l Securities Transactions (Jun) C$5.000 17:00 US NAHB Housing Market Index (Aug) 16 22:45 NZ PPI Inputs QoQ (2Q) 2.3% (prior) 22:45 NZ PPI Outputs QoQ (2Q) 1.8% (prior)

This and Next Week’s Highlights:

Date Region Release Aug 19 JN BOJ Target Rate Aug 19 GE Import Price Index, Producer Prices, ZEW Survey Aug 19 US PPI, Housing Starts, Building Permits Aug 19 CA Wholesale Sales Aug 20 JN BoJ Monthly Report, Convenience Store Sales Aug 20 UK BoE Minutes Aug 20 CA Leading Indicators, Retail Sales Aug US DOE/API Inventories Aug EC Construction Output

What's going on?

Discussions in the US increasing about the role of the FED in the current credit crisis. Bernanke has to define which financial institutions it’s safe to let fail and which companies are important to protect. U.K. house prices in August are falling 2.3% lead by a significant drop of the London house prices (-5.3%). The BOE highlighted the problem last week by saying that the housing market faces a significant adjustment as banks ration loans for homebuyers. The USD TWI finally seeing a little weakness over the weekend. EUR and AUD doing best.

FX USDCAD to revert lower...

EUR USD JPY GBP CHF AUD CAD NZD NOK SEK PLN + - +

FX Trading Strategies

Pair Supp. Resis. Comments USDCAD 1.0450 1.0675 This pair is running out of steam and we think that further correction is due. We look to sell in below 1.0560, stop at 1.0585, first target will be 1.0500, second target 1.0455.

Risk warning Finexo Ltd. shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee or implication by Finexo that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis especially leveraged investments such as foreign exchange trading and investment in derivatives can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated.

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USD gains further and metals continue to melt down - where is resistance to this move?

No big data catalysts today, but volatility may nonetheless continue to shake the market.

MAJOR HEADLINES – PREVIOUS SESSION US Weekly Initial Jobless out at 450k vs. 435k expected US Jul. CPI out at 5.6% YoY vs. 5.1% expected and ex Food and Energy at 2.5% vs. 2.4% expected New Zealand Jun. Retail Sales out at 0.9% vs. 0.9%. Q2 QoQ ex-Inflation Retail Sales out at -1.5% vs. -1.8% expected

THEMES TO WATCH – UPCOMING SESSION Key Risk Events (All times in GMT) Norway Jul. Trade Balance (0800) Canada Jun. Manufacturing Shipments (1230) US Aug. Empire Manufacturing (1230) US Jun. TIC Flows (1300) US Jul. Industrial Production (1315) US Aug. Preliminary University of Michigan Confidence (1400) US Fed's Evans to Speak (1630) (Sunday evening) New Zealand Jul. Performance of Services Index (2230) (Sunday evening) UK Aug. Rightmove House Prices (2301) (Monday morning) Japan BoJ Monetary Policy Meeting (0400) (Monday morning) Japan Jul. Nationwide Department Store Sales (0530)

Market Comments Metal prices picked up fresh momentum to the downside overnight, with silver off as much as an amazing 3 dollars from the previous day's highs. The USD also saw a fresh wave of strength. There don't seem to be any catalysts to this move other than the massive paradigm shift recognition the market has undergone over the past 10 days. We've gone from a world in which the market was fretting runaway inflation and Fed credibility to a world in which all interest rate and inflation forecasts point south in the space of a few days and the "global recoupling" trade suddenly finds traction after months and months of divergent trajectories around the globe. The catchup of the EM with the rest of the world has been the tipping point in the latest leg of the USD strength (and especially the shift in view on how China may behave on the Yuan as it attempts to avoid a hard landing and the Russian Central Bank's outright statement that it didn't think that the USDRUB trade is a one-way trade anymore.) Yesterday's record high inflation numbers from the US were simply written off as old information as the focus is firmly on commodity prices and the forward implications the fall in these will have for coming months. It's hard to believe that GBPUSD was trading above 1.9900 a mere 11 trading days ago. At this stage, the moves in the USD and commodities are beginning to feel a bit panicky, as if the market was not only far too positioned the other way and getting stopped out of longer term positions, but also getting afraid that it has "missed the move" in the opposite direction as fresh new USD longs and commodity short positions pile in. While the momentum is fresh and hot here and could carry the USD another percent or two higher, we would expect two-way traffic to begin to develop sooner rather than later. For today specifically - it's Friday, and the market is likely thinking back to the monster USD move last Friday with trepidation, so we could get a similar trading range today. Chart: GBPUSD and EURGBP GBPUSD: The pressure on GBP is enormous as GBP has become the goat of the G-10 currencies. One headline this morning trumpeted that GBPUSD has sold off 11 days in a row and that's the worst in 37 years (we haven't double-checked this data, but it sounds plausible). Looking at a longer term chart shows just how severe the sell-off has been. The pair found support yesterday at the 0.618 retracement level of the huge move from late 2005 lows to the Nov. 2007 top, but has since dropped even further. The 200-week moving average, which held so well the last time it was tested, also fell, as did the rising trendline stretching all the way back to 2001. The next major support comes in at 1.8000 (0.764 retracement) and then the flatline level all the way down at 1.7050. The key resistance now is the old rising trendline continuation and the 200-week moving average.

Risk warning Finexo Ltd. shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee or implication by Finexo that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis especially leveraged investments such as foreign exchange trading and investment in derivatives can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated.

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