Forex Crunch |
| Forex Weekly Outlook - September 7-11 2009 Posted: 05 Sep 2009 02:25 AM PDT  After an extremely busy week, the upcoming week is more relaxed, especially for North American traders, which enjoy the Labor Day weekend. Later in the week, things warm up with rate decisions from Britain, Canada and New Zealand, and many other important indicators. Non-Farm Payrolls, as well as a big number of other important indicators, didn’t move most currencies out of their ranges. Only AUD/USD made a breakout. What will move the markets this week? Let’s see what’s up:
Monday, September 7th: Americans and Canadians will be enjoying the Labor Day weekend. Trading will be significantly thinner, but there still are some indicators around the world. ANZ Job Advertisements are published in Australia. In Europe, German Factory Orders are expected to continue growing, this time by 2%. In Britain, BRC Retail Sales Monitor and RICS House Price Balance are published late in the day. The latter is expected to fall by 0.1%. Tuesday, September 8th: Australian NAB Business Confidence starts the day. British Manufacturing Production will draw attention, with an expected rise of 0.3%. Late in the day, Nationwide Consumer Confidence is expected to increase in Britain. In Germany, Industrial Production is expected to turn positive and rise by 1.6%. The German economy has shown strength recently. In Canada, Building Permits are the first major release after Labor Day. They’re expected to rise by 0.5%. Wednesday, September 9th: Australia has many releases today - Westpac Consumer Sentiment starts, and is then followed by Home Loans (expected to fall by 1%) and Retail Sales which are predicted to rise by 0.6%. German Final CPI will be interesting to watch: did German prices really rise? British Trade Balance is expected to remain stable, with a deficit of 6.3 billion. At night, NIESR GDP Estimate will be interesting to follow. Canadian Housing Starts are expected to rise modestly after disappointing last month. In the US, finally there’s an important release: the Beige Book will supply a broad view about the economy, in the ongoing debate if the recovery is real or not. In New Zealand, the interest rate is expected to remain at 2.5%. Some traders are expecting the RBNZ to lower the Official Cash Rate, so there could surprises here. Also the RBNZ Rate Statement, which will hint future policy is important. We’ll hear more at the RBNZ Press Conference. And just before midnight GMT, Japanese Core Machinery Orders is expected to turn negative, after rising nicely last month. Thursday, September 10th: Australian employment figures provide a strong start for the day: Employment Change is predicted to fall by 14.7K, and the Unemployment Rate is predicted to rise from 5.8% to 5.9%. Will the Australian job market surprise again? In Europe, French Industrial Production is expected to rise. Also France, like Germany, is ahead of the continent in recovery. Later, the ECB Monthly Bulletin will be of interest to EUR/USD traders. The British interest rate isn’t expected to move from the historic low of 0.5%. After the surprising expansion of the Quantitative Easing program last month, the BoE could surprise again. The Pound will shake during the MPC Rate Statement. It’s time for the double-feature trade balance, at 12:30 GMT. American Trade Balance is expected to show a deficit of 26.8 billion, while the Canadian balance is predicted to be almost almost balanced. Half an hour later, Canadian interest rate will be published. Also here, the rock bottom Overnight Rate of 0.25% isn’t expected to be changed - not now and not until the end of the year. Loonie traders will listen to the BOC Rate Statement, which might hint about the economy, but not about rate hikes. In the aftermath of the Non-Farm Payrolls, American Unemployment Claims are expected to ease to 555K. After many disappointments from this figure, we cannot expect a positive surprise. Speeches by Timothy Geithner, Dennis Lockhart and Donald Kohn will also move the greenback today. Near midnight GMT, Japan’s Final GDP is predicted to confirm the second quarter growth of 0.9%. Friday, September 11th: British PPI Input has fallen last time, and is now expected to rise by 0.6%. Also British prices are far from rising. In the US, Import Prices are expected to rise by 1% after falling last time. Prelim UoM Consumer Sentiment is also expected to be on the rise and reach 67.1 points. Are American consumers becoming more optimistic? Near the end of the day, in the twilight zone of “Friday effects”, the Federal Budget Balance is released, and is expected to show a deficit of “only” 172 billion. That’s it for the major events this week. Check out Larry Greenberg’s outlook for next week. I’ll follow with coverages of the British Pound, the Canadian and the Australian dollars and EUR/USD.      |
| Posted: 05 Sep 2009 01:23 AM PDT  Here are interesting forex-related articles for the weekend. It’s an extended edition, due to the long labor day weekend in the US:
Have a great weekend!    |
| Posted: 04 Sep 2009 02:52 PM PDT  While most currency pairs were stuck in a range, AUD/USD managed to break above a month’s range. This happened in the late hours of Friday afternoon. Though it didn’t blast the roof, this breakout repeats the pattern of the previous breakout - exactly 5 weeks ago. After yet another week of AUD/USD range trading, Friday finally brought some news. AUD/USD made a move on late Friday afternoon, breaking above the round number of 0.85. It peaked at 0.8535 before closing on 0.8503.
Non-Farm Payrolls Circus Non-Farm Payrolls fell by 216K jobs, better than expected. On the other hand, last month’s excellent number was revised downwards. The really bad news came from the Unemployment Rate - it rose sharply and unexpectedly higher - from 9.4% to 9.7%. This caused wild price action, as usual during this release. Most currencies lost ground to the dollar, and later corrected this fall. The Aussie didn’t just correct the initial drop, but rose higher and made a breakout. AUD/USD Action During the critical hour of the Non-Farm Payrolls release (around 12:30 GMT), AUD/USD traded wildly and eventually went down, in the low 0.84s. Around 14:00. It made an initial move upwards at 14:00 GMT, playing with 0.8460. But the big break came only at 15:50 GMT: AUD/USD went sharply higher, above the resistance line. 25 minutes later, it already reached 0.8525. When trading volume began declining near the long weekend, AUD/USD kept trading above 0.85, closing at 0.8503. Second Friday Breakout for AUD/USD AUD/USD didn’t make a huge breakout. Hundreds of pips weren’t left behind. But this move is significant since the exact pattern already happened in the near past. On Friday, July 31st, AUD/USD was in a similar situation: it was blocked by a resistance line at 0.8230, which held strong for almost two months. Also then, around 16:00 GMT, resistance was encountered, and AUD/USD broke above this level. It didn’t close much above it: 0.8348. Only 18 pips above the line. When trading resumed on Monday, August 3rd, the Aussie left this line behind. Aussie Short Summary I had a strong bullish sentiment for the Aussie. This week’s GDP reconfirmed the strength of the Australian economy once again. After breaking the technical barrier (while other currencies didn’t), it managed to close higher. Learning from the past, this breakout is enough. AUD/USD should continue higher. The next target is around 0.88. Further reading: Mohammed Isah with an insightful technical view of AUD/USD. Did I mention that AUD/USD tops the list of most predictable currencies?    |
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