Stocks and Dollars

Canadian economic growth basically stalled in the third quarter of 2010, with a measly 1.0% annualized gain – missing the Bank of Canada’s forecast of 1.6%. All the weakness in the quarter was in trade and residential construction. Exports fell 5%, a reflection of weak U.S. demand, while residential construction fell 5.3%.

The Case-Shiller Composite-20 Home Price Index (HPI) decline by 0.8% in September, worst than analyst’s expectations for a 0.4% fall. Further, on a year-over-year basis, the index posted its worst result in eight months but remained positive at 0.6% — shy of the 1.0% forecast by markets.

The EUR/USD shows no retracement attempt as it continues to dip below 1.30. The the market may find some support at 129.40. If there is a rebound from there, there are resistance pivots at 1.30, and 1.3150. On the downside, the market is looking to extend this decline towards 1.2750,

The GBP/JPY shows bearish continuation. The market is at the moment traveling from the 131.00 pivot towards the 129.90/130.00 area. If there is a bounce when the market reaches this pivot, look for it to find resistance at 131.00. The current swing with a 100% projection of the previous swing

EUR/USD’s fall accelerates further to as low as 1.2969 so far today. At this point, intraday bias remains on the downside for further decline. Break of 100% projection of 1.4281 to 1.3447 from 1.3785 at 1.2951 will target 1.2587 support next. On the upside, above 1.3149 minor resistance will turn

As the single currency has remained under pressure after breaking support at 0.8421, suggesting recent decline from 0.8941 top is still in progress and further weakness to 0.8350, however, loss of downward momentum should prevent sharp fall below 0.8310/15 and bring rebound later.

Intraday bias in GBP/USD remains on the downside with 1.5648 minor resistance intact. Current decline from 1.6298 is expected to continue to 1.5296 support next. On the upside, above 1.5648 minor resistance will turn intraday bias neutral and bring consolidations. But upside should be limited by 1.5858 resistance and bring fall resumption.

Current breach of resistance at 1.0265 signals the rise from 0.9977 (b leg trough) is still in progress and further gain to previous resistance at 1.0340 would be seen, however, reckon the a leg top at 1.0374 would hold on first testing and bring retreat later.