The doubts about the consuming pace in US could temper the market sentiment yesterday again by a new dovish US Conference Board's Consumer Confidence of July which was waiting to be to come down to 52 after a massive falling in June to 52.9 to but it declined further to 50.4 in July. God Willing, We are to wait today for the Fed's Beige book for having a look at its current assessment by its next meeting which expected to have the interest rate unchanged again nearly 0% for extended period of time again next month as Ben Bernenke has highlighted in his testimony the Fed's worries about the current growth downside risks and the struggling pace performance of the labor market and our eyes will be focusing by the end of the week on the US consuming pace again with the release of July University of Michigan consuming sentiment revision which is expected to be 67.5 after the falling of the preliminary reading to 66.5 from 76.0 in June while the market was waiting for declining by just 2 figures to 74.

June US retail sales which have declined by .5% and even on the business spending direction, we have seen US July Empire State Manufacturing which was forecasted to be 18.95 from 19.57 in June collapse to 5.08 and US July Philadelphia Fed Business Survey which was waited to be 11.5 from 8.0 in June and dropped to 5.1 and yesterday July Richmond Fed Manufacturing Index coming down to 16 from 23 in June after June US ISM manufacturing index which was expected to be 59 from 59.7 in May and came down to 56.2 which will make next week releases of the numbers of July very important to the investors and next Friday release of Chicago PMI of July which is widely used as a clue of it and waited to be down to 56 from 59.1 in June.

The single currency is still struggling to have footing above 1.30 versus the greenback cheered by the stress test results of 91 European Banks which told the market that only 7 of them failed in these test. The EUR could touch 1.3045 but it could not keep its progress falling to 1.296 again. 1.30 is expected to keep forming an obstacle in the EURUSD ascending way and crossing this level should lead to a harder test of this pair to cross the area between 1.3096 whereas the pair has fallen making another lower high on 10th of last may after breaking it as a support and tested it back as a resistance and 1.3114 which is the 38.2% Fibonacci retracement level of the falling from 1.5142 to 1.1874 while the next major support is at 1.2735, 1.255, 1.2452, 1.2165, 1.2044 and 1.1954 and 1.1875 which has become the pair main defending line before 1.16 whereas the pair has started its rally to 1.604 before falling again to 1.233 amid the credit crisis and rising back forming a lower high at 1.515 in the beginning of last December.
 
The US equities market could keep these gains again yesterday and Dow could add another 12 points to close at 10537 opening its way up technically to this year high at 11258 with a great probability of having a lower high before it as the worries about the US growth slow down is still increasing and the dovish data are expected to continue. The US Stocks could get over the weaker than expected earning reports of its banking sector earning reports owes after the disappointing earning of Goldman Sacks which shrank by 82% in the second quarter because of the fraud settlements after accusing it of hiding the real financial position of some sub-prime mortgage securities from the investors who have been exposed to defaulting later because of this misleading position of it subtracting 550$m from its earning beside 600$m from Britain new imposed taxes on its bounces getting just 78 cents a share from $4.93 a share a year earlier earning of Goldman Sacks in the last quarter could not help the market to forget the weak earning of Bank of America and Citigroup but joined them to add more doubts about the credit market earning ability.

Best wishes


FX Consultant

Walid Salah El Din

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