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Stock futures pointed to a sharply lower open Thursday as credit market fears spooked financial markets. Nasdaq futures were down 16 points vs. fair value S&P down 16 points and Dow down 121.

There’s lots of earnings news, but that’s not the focus. Investors are very nervous about credit conditions with investment banks, lenders and home builders falling hard before the open. Oil prices are soaring toward record highs. Treasury yields are at their lowest levels since May.

A couple of big-cap leaders bucked the trend. Apple () traded higher by about 8% in the premarket. Late Wednesday, the iPhone maker delivered a 70% jump in fiscal Q3 profit, smashing views, on strong Mac and iPod sales. For the current quarter, Apple gave a very conservative outlook. But the company has a history of low-balling its guidance.

Baidu.com () was sharply higher after it continued its streak of triple-digit growth. Late Wednesday, the Chinese Internet search firm said second-quarter profit surged 128% to 57 cents a share, easily beating analysts’ estimates of 43 cents. According to Beijing-based research firm Analysys International Baidu had 58% of China’s search revenues in the second quarter vs. Google’s () 23%.

Meanwhile, Dow component Exxon Mobil () reported second-quarter income of $1.83 a share, missing views of $1.96. Shares edged lower in pre-market trading.

Fellow Dow member 3M () beat views and raised its full-year outlook. The Scotch tape maker now sees earnings between $5.40 and $5.60 per share, well ahead of views of $4.86 a share.

Intercontinental Exchange () delivered Q2 profit excluding charges ahead of views. But the stock slipped in pre-market trading.

Online real estate information provider LoopNet () beat views for the fifth straight quarter since coming public last June. The company also guided Q3 and full-year guidance mostly in line with estimates.

On the economic front, durable goods orders rose 1.4% in June, the biggest gain in three months. But that was below expectations of a 2% rise. Orders ex transportation fell 0.5%, while core capital goods orders also fell.

New home sales for June will be out at 10:00 a.m. ET. Economists expect 900,000 units. Pulte Homes (), D.R. Horton (), Beazer Homes () and Ryland () all swung to quarterly losses.

WASHINGTON— on Wednesday reiterated his threat to veto Senate legislation that would substantially increase funds for children’s by levying a 61-cent-a-pack increase in the federal excise tax on cigarettes.

The tax increase would be used to subsidize health insurance for children and some adults with incomes too high to qualify for Medicaid but not high enough to afford insurance on their own.

The renewal of the , or SCHIP, is considered by many to be the most important health legislation that Congress will take up this year.

“Members of Congress have decided, however, to expand the program to include, in some cases, up to families earning $80,000 a year Д which would cause people to drop their private insurance in order to be involved with a government insurance plan,” Bush said in a speech in suburban Maryland.

“If Congress continues to insist upon expanding health care through the SCHIP program Д which, by the way, would entail a huge tax increase for the American people Д I’ll veto the bill,” he said.

Democratic leaders called for adding $50 billion to the program over the next five years. Bush had recommended a $5 billion increase.

On Friday, a bipartisan group of lawmakers in the Senate signaled their support for a $35 billion increase, bringing total funding to $60 billion over five years. The Senate proposal would provide health insurance coverage to current participants as well as an additional 3.3 million uninsured children, according to estimates from the Congressional Budget Office.

The American Hospital Association, the American Medical Association and the American Cancer Society support the increase. But the administration, which has consistently refers to SCHIP as government-run health care, says billions of dollars in insurance costs will be shifted from the private sector to the federal government under the Senate proposal.

Bush spoke after attending a round-table discussion at Man & Machine Inc. in Landover with small business leaders the president said feel pinched by high health care costs. “They don’t like the idea of having to make the decision between providing health care for their employees and not expanding their businesses,” he said.

Man & Machine, which employs 20 people, makes water-resistant computer accessories designed for hospitals, medical laboratories and industry. During the tour, Bush typed on a white keyboard immersed in a pan of water. He wrote: “G Tro N was the first president.” Clifton Broumand, company president, joked that Bush, who apparently was trying to write “George Washington was the first president,” might want to practice his typing.

Action Insight | Written by ActionForex.com | Jul 26 07 08:09 GMT |
Forex Daily Technical Report Focus on New Homes Sales and Durables, Kiwi Tumbles after RBNZ Hike

Dollar is generally firm and sets to continue the current recovery as markets are turning focus to today’s new home sales and durable goods orders data. As pointed out before, the greenback was in extremely oversold condition and the current correction is inevitable. Even if today’s data disappoints, reaction could be muted as the more important Q2 GDP is on the card for release tomorrow. Though, Euro should also be provided some support by stronger than expected M3 growth which reaccelerated to Mar’s peak of 10.9%. Germany Ifo dropped to 106.4, slightly below expectation of 106.5 but remains health.

Overnight, RBNZ raised OCR again by 25bps to 8.25%. In the accompanying statement, Governor Bollard pointed to the recent strength in the economy and growing capacity constraints to justify today’s move. Also, he once again mentioned the overvalued Kiwi currency. Conditionally, RBNZ believed that this would be the last rate hike in their cycle if no surprises come in with the next round of data. Kiwi tumbled after the news as markets believe that RBNZ will at least be on hold to assess the impact of the prior successive rate hikes before making another move. EUR/USD

Daily Pivots: (S1) 1.3667; (P) 1.3749; (R1) 1.3803; «www.actionforex.com»

EUR/USD’s correction from 1.3851 is still in progress today. Outlook remains unchanged. A short term top is likely in place at 1.3851, with bearish divergence condition in 4 hours MACD and RSI, and after failing to sustain above 1.3822 projection target. Intraday bias is currently still on the downside and further decline should be seen towards support zone of 1.3567 to 1.3658, with 38.2% retracement of 1.3262 to 1.3851 at 1.3626. On the upside, above 1.3711 will turn intraday outlook consolidative first and could probably bring recovery to 4 hours 55 EMA (now at 1.3770). But sustained break of 1.3851 is needed to confirm recent rally has resumed. Otherwise, risk remains on the downside.

In the bigger picture, the current development dampened the original view that rise from 1.3262 is the last advance in a five wave structure that started at 1.2483. Firstly, the current momentum of the rise from 1.3262 is seen stronger than the prior rally from 1.2865 to 1.3681. Secondly, the falling trend line in both daily MACD and RSI were broken, negating the bearish divergence conditions. In other words, the underlying bullishness in EUR/USD could be much stronger than we originally thought.

Focus remains on 1.3822 resistance. Sustained trading above this level will add much weight to the case that whole medium term rally from 1.1639 is indeed resumption of multi-year up trend from 0.8223 (00 low). That is, further rise should be seen in medium term towards 95 high of 1.4523 with much chance to extend further to 61.8% projection of 0.8223 to 1.3668 from 1.1639 at 1.5004.

On the downside, as long as 1.3481 cluster support (61.8% retracement of 1.3262 to 1.3851 at 1.3487) holds, any pull back will still be treated as correction to rally from 1.3262 only and another rise is still in expected after completion. However, break will put 1.3262 low into focus. And break will indicate that medium term rally from 1.1639 has likely completed after being limited by 1.3822 resistance as originally expected.

GBP/USD

Daily Pivots: (S1) 2.0470; (P) 2.0550; (R1) 2.0615; «www.actionforex.com»

Cable’s correction from 2.0652 is still in progress and continues to press 4 hours 55 EMA (now at 2.0485). As discussed before, a short term top is in likely place at 2.0652, with bearish divergence condition in 4 hours MACD and RSI. Intraday bias is still on the downside and further decline is expected to be seen to short term rising trend line (now at 2.0400). On the upside, above 2.0652 will indicate an intraday low is formed. But sustained break of 2.0677 fibo resistance is needed to confirm recent rally has resumed. Otherwise, risk remains on the downside.

In the bigger picture, the sustained break of 2.0207 projection target confirms underlying upside momentum is still strong. Also, it added much credence to the case that whole up trend from 1.7047 is resumption of multi-year up trend from 1.3680. In such case, further rally should then be seen to 61.8% projection of 1.3680 (01 low) to 1.9554 (05 high) from 1.7047 (05 low) at 2.0677 first. Sustained trading above 2.0677 will target 2.1 psychological resistance.

On the downside, in case of a pull back, downside should be contained by support zone between 2.0056 and 2.0206 and bring another rally. Break of 2.0056 will suggest that lengthier consolidation will come first with the prospect of another test the medium term rising trend line (now at 1.9823) But medium term outlook will be neutral at worst at long as 1.9621 support remains intact.

USD/CHF

Daily Pivots: (S1) 1.2048; (P) 1.2107; (R1) 1.2192; «www.actionforex.com».

USD/CHF’s correction from 1.1960 is still in progress today. Intraday bias remains on the upside as long as 1.2114 minor support holds and further rebound should still be seen. On the downside, below 1.2114 will turn intraday outlook consolidative fist. Also, since a short term bottom is in place at 1.1960 with bullish convergence conditions in 4 hours MACD and RSI, firm break of 1.1960 is needed to confirm fall from 1.2467 has resumed. Otherwise, consolidation could still extend further.

In the bigger picture, USD/CHF has likely completed a medium term triangle consolidation already, which started at 1.1919 with five waves to 1.2467. Firm break of 1.1993 will confirm this case. 1.1878 (06 low) will be the initial target. And since, in such case, fall from 1.2467 is viewed as resumption of medium term down trend from 1.3283, further weakness should be seen to 100% projection of 1.3283 to 1.1919 from 1.2768 at 1.1404, with much chance to extend to retest 1.1288 (04 low).

On the upside, break of 1.2232 resistance will mess up the short term picture a little bit. In such case, chance is swung to the case that the triangle consolidation indeed started at 1.1878. In other words, the overall outlook didn’t change and just that another rally should be seen before completion. Hence, even in such case, upside should be limited below 1.2467 high and bring another medium term decline.

USD/JPY

Daily Pivots: (S1) 119.99; (P) 120.31; (R1) 120.81; «www.actionforex.com»

4 hours MACD’s cross above signal line suggest that a short term low is possibly in place at 119.76. But still, break above 190.95 resistance is needed to confirm. Otherwise, intraday bias remains on the downside and further decline is still in favor towards 118.35/57 cluster support zone (38.2% retracement of 108.99 to 124.13 at 118.35 and 61.8% retracement of 115.13 to 124.13 at 118.57).

On the upside, above 120.95 will indicate a short term bottom is formed and turn into consolidation. But a break above 120.60 resistance is still needed to indicate fall from 124.13 has completed. Otherwise, risk remains on the downside after finishing recovery.

In the bigger picture, rise from 115.13 has made a top at 124.13 and turned into consolidation since then. But still, rally from 108.99, which is treated as resumption of whole up trend from 101.66, is in progress. Even in case of a deeper correction, downside is expected to be contained by 118.35/57 cluster support zone (38.2% retracement of 108.99 to 124.13 at 118.35 and 61.8% retracement of 115.13 to 124.13 at 118.57) and bring rally resumption. Next medium term upside target will be resistance zone of 100% projection of 101.65 to 121.38 from 108.99 at 128.72 and 100% projection of 108.99 to 122.17 from 115.13 at 128.31.

However, break of 118.35/57 cluster support argue that rise from 108.99 has possibly completed and put 115.13 low into focus.

EUR/JPY

Daily Pivots: (S1) 164.57; (P) 165.44; (R1) 166.18; «www.actionforex.com»

EUR/JPY turns sideway after reaching as low as 164.70. At this point, correction 168.93 is still in progress and intraday bias remains on the downside as long as 166.18 minor resistance holds. Next downside target will be 164.23 cluster support (61.8% retracement of 161.49 to 168.95 at 164.34). On the upside, above 166.19 will indicate a temporary low is formed and bring consolidation, probably with recovery to 4 hours 55 EMA (now at . But break of 167.32 resistance is needed to indicate fall from 168.93 has completed. Otherwise, risk remains on the downside even in case of recovery.

In the bigger picture, break of the short term rising trend line suggest that rally from 150.75 has possibly completed with bearish divergence condition in daily MACD and RSI. Deeper correction could not be seen to 161.49 support first. And break will confirm that a medium term top is in place at 168.93 and bring deeper correction, possibly with a retest of medium term trend line support (now at 155.67

However, with medium term trend line remains intact, whole medium term rally from 130.60 is still treated as in progress and the interpretation remains unchanged. First wave up ended at 143.60, subsequent correction ended at 137.167. The third wave up ended at 159.63 while fourth wave correction has ended at 150.75. Rise from there represents the final advance in this structure. With 61.8% projection of 137.16 to 159.63 from 150.75 at 164.64 taken out decisively, next medium term upside target will be 100% projection of 137.16 to 159.63 from 150.75 at 173.22.

Forex News Digest

«www.bloomberg.com»

«www.bloomberg.com»

«www.bloomberg.com»

«www.bloomberg.com»

«c.moreover.com»
Thu, 26 Jul 2007 03:18:00 GMT from Daily Telegraph Australia

«c.moreover.com»
Thu, 26 Jul 2007 02:45:00 GMT from Nine MSN

«c.moreover.com»
Thu, 26 Jul 2007 02:38:00 GMT from Bloomberg

«c.moreover.com»
Thu, 26 Jul 2007 02:38:00 GMT from Sympatico MSN Finance

«c.moreover.com»
Thu, 26 Jul 2007 01:27:00 GMT from Bloomberg

«www.actionforex.com» Economic Indicators Update
GMT Ccy Events Actual Consensus Previous Revised
21:00 NZD RBNZ’s rate decision 8.25% 8.25% 8.00%
23:50 JPY Japan CSPI Y/Y Jun 1.40% 1.40% -0.30%
6:00 GBP U.K. N’wide hse prices M/M Jul 0.10% 0.50% 1.10%
6:00 GBP U.K. N’wide hse prices Y/Y Jul 9.90% 10.60% 11.10%
8:00 EUR Euro-Zone M3 sa Y/Y Jun 10.9% 10.70% 10.70%
8:00 EUR Euro-Zone M3 sa 3 Mth Jun 10.60% 10.70%
8:00 EUR Germany IFO index Jul 106.4 106.5 107.0
12:30 USD U.S. Durable goods orders Jun 1.80% -2.40%
12:30 USD ex. defence Jun 1.00% -2.80%
12:30 USD ex. transportation Jun 0.50% -0.40%
12:30 USD U.S. Jobless claims 310 K 301 K
14:00 USD U.S. New home sales Jun 895 K 915 K
14:00 USD U.S. New home sales M/M Jun -1.60% -1.60%

«www.actionforex.com»