US business index slows down

Fundamental outlook THE US economy has made globalinvestorswaryasjobmarket highlights looming recovery after the payrolls slowed down in January.

Eurozone hoped to buff up after stimulus has been introduced while Greece will reach itsdebtdeadlineinearlyMarch. UK stayed flat in manufacturing based on the recent production data.

US wholesale inventories was up 0.1 per cent in December, which was lower than 0.8 per cent reported in the previous month, indicating that better sales volume were recorded over the year-end season.

Small business index fell in January 97.9, which was lower than forecast, underscoring the looming sentiment from slower consumer spending.

US retail sales dropped 0.8 per cent in January, which was belowforecast.Excludingautos, core retail sales slid 0.9 per cent after making a similar 0.9 per cent decline in December.

Unemployment claims rose in the week ended January 7 to 304,000 from a revised 279,000 in the previous week, indicating a tough journey to recover in job markets.

German trade surplus advanced 21.8 billion euros in December after rising 17.9 billion in the previous month.

In the 19-nation eurozone region, focus has returned on the debtcrisisasbothpolicymakers and investors are watching the austerity measures in Greece before a bailout can be discussed for a March deadline.

The preliminary gross domestic product (GDP) report for Franceforthefinalquartergrew 0.1 per cent. Germanmade 0.7 per cent advancement in the same period of three-months ended December.

After the eurozone announced that the stimulus in January would last through 18 months, the euro currency slowed down in its fall against US dollar but has yet to make a significant recovery.

UKmanufacturingproduction contracted 0.2 per cent, which was worse than expectated. UK was affected by the jittery euro and sovereign debt of small countries. In a separate report, manufacturing production in January shrank by growing only 0.1 per cent compared to 0.8 per cent gains in the previous month.

Technical forecast US dollar/Japanese yen reached 120.48 highs last week but slid back into 118.6 regions for the weekend closing. The market needs to conquer above 120 benchmarks again if it aims to go northwards.

This week, we target the estimated range will move from 118 to 120 regions but breaking into either direction beyond the aforementioned extremes will lead into new trend.

Euro/US dollar has been trading in a small range last week while support has emerged at 1.126 regions.

This week, the bulls need to conquer above 1.146 resistances to potentially extend further on the upside. Otherwise, falling below 1.126 supports is a sign of resumed weakness and this might drive new selling forces into market.

British pound /US dol lar surged last week and has revealed bullish strength in the market.

This week, the market should sit above 1.53 supports and move higherfromweakerdollartrend. We foresee the target might ascend to 1.56 levels with good potential profit. Abandon your long-view in case of drawd own beneath 1.53 levels.

Disclaimer: This article was written for general information only. No liability by the writer or newspapers. Dar Wong is a registered fund manager in Singapore with 26 years of trading experience in global Derivatives & FX markets. He can be reached at dar@pwforex.com.