Monday, September 14, 2009

Forex Crunch Forex Daily Outlook – September 14th 2009

Forex Crunch Forex Daily Outlook – September 14th 2009

Forex Daily Outlook – September 14th 2009

Posted: 14 Sep 2009 03:02 AM PDT

Forex trading began with a stronger dollar this week. European Industrial Production is the highlight of this rather calm day. Let’s see what’s on the menu today.

The late dollar comeback that began late on Friday continues today. While the British Pound and the New Zealand dollar suffer, the Swissy and the Yen are weathering this strength.

In New Zealand, Retail Sales disappointed with a fall of 0.5%. A rise in the same scale was expected. Also Core Retail Sales were expected to post a nice rise but fell by 0.5% instead.

Swiss PPI met expectations and rose by 0.1%. This is the first rise in a long long time, and it helps the Swissy not to get carried away by the dollar’s strength.

For more on the Swiss Franc, read the USD/CHF Outlook.

In Europe, Industrial Production fell by 0.3%, exactly like last month and within expectations. Last month’s figure was revised upwards.

For more on the Euro’s week, check out the EUR/USD Outlook.

In Canada, Capacity Utilization Rate is expected to decline to 66%, from 69.3%. For more on the Canadian dollar, read the USD/CAD Outlook.

In the US, there are many speeches due today, but no economic indicators released: FOMC members Elizabeth Duke, Jeffrey Lacker and Janet Yellen will all speak in conferences.

President Barack Obama will speak about the financial crisis and might move the markets.

At night, RICS House Price Balance will be published in Britain and might help the Pound, which is falling now. For more on GBP/USD read the British Pound Outlook.

That’s it for today. Check out the Forex Weekly Outlook for the major events during the rest of the week.

Swiss Franc Outlook – September 14-19 2009

Posted: 13 Sep 2009 10:46 AM PDT

The Swiss Franc has been one of the currencies that most enjoyed the dollar’s big fall last week. Together with the very crowded week ahead, the Swissy sure is worth to watch. Here’s an outlook for 5 key events and a technical analysis for USD/CHF.

USD/CHF forex chart with support and resistance lines

USD/CHF Breakout

Last week’s better-than-expected unemployment rate helped the Swissy with it’s rally. This week features a new Libor Rate and other key indicators. Let’s review them:

  1. PPI: In the past year, the Producer Price Index always fell below expectations. In the past two months, prices haven’t fallen, and that’s already a positive change. This time, prices are expected to rise by 0.1%. Published early in the week, on Monday at 7:15 GMT.
  2. Industrial Production: Swiss Industrial Production is quite choppy. This quarterly figure fell by 13.1% last time, and this quarter its expected to leap by 7.6%. The figure includes the manufacturing production component. Published on Tuesday at 7:15 GMT.
  3. Retail Sales: Swiss Retail Sales have grown last month, after falling the month before. This rather volatile figure has a strong impact on USD/CHF. It’s expected to rise again, this time by 1.1%. Published on Wednesday at 7:15 GMT.
  4. ZEW Economic Expectations: This German institute surveys the Swiss industrialists as well. After a long period of pessimism (negative score), this indicator has been above the water in the past three months, scoring 18.6 points last time. Will optimism continue? We;ll know on Wednesday at 9:00 GMT.
  5. Libor Rate: The best is kept for last – Swiss interest is unique – it’s published only once in three months, and is related to the London interest for the Swiss Franc. The target Libor rate has remained at 0.25% time, after declining from higher levels. It’s expected to remain at 0.25% also this time. The more interesting part of this event is the SNB Monetary Policy Assessment. The SNB lays out future plans, and sometimes declares market interventions. They want a weaker exchange rate for their currency, but the recent weakness of the dollar shows us again how central bank intervention is short lived. Published on Thursday at 12:00 GMT.

USD/CHF Technical Analysis

The Swiss Franc had an excellent week. Not only did it break the 1.0530 support line that it was hovering over for many weeks, it fell below 1.0369, which was a swing bottom in the height of the crisis, down o 1.0340. It finally closed slightly higher at 1.0383.

1.0369 serves as an initial support line.. Below that, the magical round number of 1, or parity, is the next support level. USD/CHF was at parity in July 2008.

Looking up, 1.0530 is the first resistance line. Further up, 1.07 and 1.09 served as minor support / resistance lines in the past.

SNB Intervention

The problem with the Swissy is the Swiss National Bank – SNB. They don’t hesitate to intervene in the markets to weaken their local currency. While this move has proven to be short lived, they still do it.

So, beware of such intervention! It will send USD/CHF jumping upwards unexpectedly. Afterwards, the move cannot hold for a long time – making such an intervention an opportunity.

All in all, it looks like the current bearish trend will continue, even if the SNB intervenes.

James Chen also wrote on the breakout of USD/CHF.

Further reading:

Canadian Dollar Outlook – September 14-18 2009

Posted: 13 Sep 2009 08:09 AM PDT

The loonie didn’t fully enjoy the fall of the US dollar, and didn’t get far away from the the resistance line. This week’s CPI and 6 other events will shape the direction of the loonie. Here’s an outlook for this week’s events in Canada and an updated technical analysis for USD/CAD.

USD/CAD forex chart with support and resistance lines highlighted:

USD/CAD

Building Permits hurt the loonie at the beginning of the week, and stopped it’s rally. The rate decision didn’t bring any surprises. This week, CPI is the king:

  1. Capacity Utilization Rate: The percentage of utilized resources impacts inflation directly. When there too many unused resources, prices tend to slide. Canada’s utilization rate has fallen in recent months, reaching 69.3% last time. It’s expected to fall further, up to 66%. Published on Monday at 12:30 GMT, and starts the week.
  2. Labor Productivity: This is also an inflation related factor. When productivity rose surprisingly last month by 0.3%, this meant that it costs less to produce products. This means that prices are heading down. Productivity is expected to rise by 0.2% this time. Published on Tuesday at 12:30 GMT.
  3. John Murray talks: BOC Deputy Governor John Murray is expected to talk about Canada’s situation in the current economic crisis. How dependent is Canada on the US? Answers on Tuesday at 13:30 GMT.
  4. Manufacturing Sales: Manufacturers are at the core of the economy, responding to demand or the lack of it. Canada’s manufacturing sales have been unstable recently, with a rise of 1.9% last month, following a 6% beforehand. This time, a rise of 2.3% is expected. Published on Wednesday at 12:30 GMT.
  5. CPI: After some preludes to the inflation figure, it comes on Thursday at 11:00 GMT. Consumer Price Index in Canada has been going up and down, with a drop of 0.3% last month. A rise in the same scale is predicted this time. Core CPI, excluding the most volatile items, has been more stable, with two consecutive months of standing at 0%. Core CPI is predicted to rise by 0.1% this time.
  6. Leading Index: This composite index of 10 important indicators is based on data that has already been released, but has an impact on policymakers. After a relatively strong rise of 0.4% last month, it’s predicted to rise by 0.5% this time.
  7. Wholesale Sales: The last indicator this week is released on Friday at 12:30 GMT. Wholesalers see the “big picture”, receiving orders from retails. Sales have surprised recently, and rose by 0.6% last month. Further growth is expected this month – a rise of 0.7%.

USD/CAD Technical Analysis

The greenback’s weakness at the beginning of the week helped the USD/CAD dive under 1.08, reaching a bottom of 1.0673. This was short lived. Bad figures sent pair rising up to 1.0879, while other currencies celebrated against the dollar. It then recovered and closed the week at 1.0766.

All in all, USD/CAD went lower. The resistance line of 1.08 is bruised and battered. I still marked it on the graph, but it won’t be there so long. Looking down, 1.0625 was August’s bottom and serves as a support line. Beyond that, a terrible collapse of the greenback will send the pair towards 1.0340.

Looking up, 1.1130 is a strong resistance line, that recently served as such. Beyond that, 1.1470 is out there, but seems highly unlikely.

Like in last week’s Canadian dollar outlook, I’m quite neutral on the direction of the loonie.

Further reading:
Posted by at 5:19 AM

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)