| EUR/USD Outlook – October 5-9 2009 Posted: 04 Oct 2009 03:45 AM PDT The Euro lost ground this week but managed to remain above the major support line. Jean-Claude Trichet’s rate decision and 8 other European releases will shape the direction of the Euro this week. Here’s an outlook for this week’s events in the Euro-zone, and an updated technical analysis for EUR/USD. EUR/USD forex chart with support and resistance lines. Click to enlarge: 
ECB President, Jean-Claude Trichet, contributed to the Euro’s weakness when he said that a strong dollar is extremely important. Indicators were mixed. Let’s see the nice amount of data this week:
- Sentix Investor Confidence: The first notable indicator in Europe is this survey of 2000 investors. Like many other surveys, the Sentix Investor Confidence show pessimism, but smaller. In the past three months, this index has improved, hitting -14.6 last time. This month it’s predicted to edge up to -11.9. Published on Monday at 8:30 GMT.
- Retail Sales: This all-European figure impacts ECB policy makers, despite it’s late release, after Germany and France. Retail salesalways move currencies, and the disappointing European decline in sales has hurt the Euro. In the past three months, they fell short of expectations and also declined. After last month’s 0.2% drop, pessimism has taken over, and they’re expected to fall by 0.4% this time. Published on Monday at 9:00.
- Final GDP: The second quarter was not too bad in Europe. The economy shrank by only 0.1%, better than expectations. This was the initial release. On Wednesday at 9:00 GMT, this number is expected to be confirmed. Any surprise means no contraction or even growth. A surprise would definitely boost the Euro. Germany got out of recession in Q2. Did the rest of the continent follow?
- German Factory Orders: Europe’s biggest economy enjoys strong factory orders. In the last three months, factory orders grew in very strong numbers: 4.4%, 4.5% and 3.5%. Expectations continue to be more modest, for a growth of 1.2% this time. Published on Wednesday at 11:00 GMT.
- German Industrial Production: This industry related figure from Germany hasn’t been that good. German Industrial Production has declined in the past two months, not meeting growth expectations. Estimations continue to be strong. A rise of 1.6% is expected to follow last month’s 0.9% decline.
- Rate decision: Jean-Claude Trichet and fellow ECB members will probably leave the Minimum Bid Rate unchanged, at 1%. This major event is due on Thursday at 11:45 GMT. Recent signs in Germany such as Factory Orders and Q2 GDP have shown that Europe is slowly recovering. The very modest Quantitative Easing program will probably not be modified. Possible hints about future policy might be released in the accompanying ECB Press Conference, due at 12:30 GMT.
- German Final CPI: After one month of surprise, prices fell again in Germany. September’s Consumer Price Index is fell by 0.4% according to the initial release. This number is expected to be confirmed on Friday at 6:00 GMT.
- French Industrial Production: Europe’s second largest economy, France, also showed slow and steady recovery. Industrial production is expected to grow for a fourth month in a row, rising by 0.4% after a 0.1% rise last month.
- Jean-Claude Trichet talks: Less than one day after the rate decision, the head of the ECB will talk again. His statements move the markets many time. This is due on Friday at 8:30 GMT.
EUR/USD Technical Analysis After reaching new highs of 1.4842 in the previous week, this week saw a steady decline of EUR/USD. Following Friday’s Non-Farm Payrolls, EUR/USD went as low as 1.4480, less than 50 pips above the previous resistance line, which it had a very hard time to break. Finally, the close at 1.4574 is in the range once again. Looking down, the nearest support line is 1.4444, which the Euro broke about 3 weeks ago. Below this major support, 1.42 serves as minor support, as it did during the summer. Looking up, 1.4720 was a peak at the beginning of the year, and also now worked as a minor resistance line. Further up, there’s a stronger resistance line at 1.4908, which was also a support line in the past, and was tested several times as a resistance line afterwards. I’m slightly bullish on the Euro. The European economies, and especially Germany, are making a solid recovery. For this popular pair, there are many excellent technical analyses I recommend reading: Further reading in Forex Crunch: |
| AUD/USD Outlook – October 5-9 2009 Posted: 04 Oct 2009 03:08 AM PDT After reaching new highs and retreating, a very busy week awaits the Aussie. A rate decision, employment figures and 4 other indicators are released during the week. Here’s an outlook for major events in Australia, and an updated technical analysis. AUD/USD forex graph, with support and resistance lines inside. Click to enlarge: 
Strong growth in retail sales, 0.9%, helped the Aussie reach new highs, but weren’t enough to stop the greenback. This week, some indicators are released very early in the week. They are followed by major indicators. Let’s see what’s up:
- AIG Services Index: The Australian Industry Group is the first to publish any news this week. This survey of about 200 companies is similar to PMI releases. A score above 50 marks growth and below 50 marks expectations for contraction. Three months ago, this index was above 50, but it dipped again since then. After last month’s score of 48, it’s expected to rise above 50. While this isn’t a very important indicator, the timing, 22:30 GMT on Sunday, makes it important.
- ANZ Job Advertisements: This employment indicator is based on ad space in the media, showing how companies are willing to spend on hiring. After over a year of squeezing ad space, this indicator grew last month by 4.1%. The scenario of growth should repeat itself this time as well. Published on Monday at 00:30 GMT.
- Trade Balance: Australia’s trade balance is negative in the past 4 months, after traditionally showing a surplus. Also this time, it’s expected to be negative, with a deficit of 0.91 billion, less than last month’s 1.56 billion deficit. Published on Tuesday at 00:30 GMT.
- Rate decision: Glenn Stevens and his colleagues at the RBA will probably leave the interest rate unchanged. In a speech before the parliament, Stevens hinted that the rates should “get back to normal”, but this isn’t expected to be so soon. The Cash Rate of 3%, the highest rate in the West is expected to be kept. Hints about future policy are expected to be released in the accompanying RBA Rate Statement. Published on Tuesday at 3:30 GMT.
- Home Loans: This housing figure is lagging behind other, positive, Australian figures. Last month, home loans were a great disappointment, falling by 2%, after 9 months of growth. This time, they’re expected to drop by 0.4%. Published on Wednesday at 00:30 GMT.
- Employment Change: This Australian employment figure is very volatile. After a surprising rise in the number of employees two months ago, it fell badly last month. This month, the drop in the number of employees is expected to be 9.7K, about a third of last month’s drop. Published on Thursday at 00:30, together with the unemployment rate.
- Unemployment Rate: Contrary to the employment change figure, this one is very stable. In fact, the unemployment rate has been steady on 5.8% for three months in a row, beating expectations. Yet again, economists are pessimistic, expecting a rise to 6%. A positive surprise sure is possible here, something that will boost AUD/USD. Published on Thursday at 00:30.
AUD/USD Technical Analysis AUD/USD pushed forward at the beginning of the week reaching new YTD highs of 0.8860. It later gave in to the dollar’s strength and returned to the middle of September’s trading range closing at 0.8642, very close to last week’s close. Looking up, the next hurdle is 0.8950, which served as a support line in 2008. Further up, on the road to parity, 0.9300 is out there, but the Aussie moves slowly. On the downside, the area of 0.85, which served as a strong resistance line in recent months, is now the first major support line. Further down, another former resistance line works as support – 0.8230. All the lines are marked in the graph. I continue to have a strong bullish sentiment for the Aussie. AUD/USD has been climbing nice and steady. The Australian dollar is backed by a strong economy, which enjoys trading with China rather than bad banks. Also Mohammed Isah is Aussie-bullish. Check out his interesting analysis. Further reading: |
| British Pound Outlook – October 5-9 2009 Posted: 04 Oct 2009 02:43 AM PDT The Pound bounced off a resistance line and went back down, continuing to struggle. This week features a rate decision and 8 other important economic indicators that will move the Pound. Here’s an outlook for this week’s events and an updated technical analysis for GBP/USD GBP/USD forex chart with support and resistance lines marked on it. Click to enlarge. 
Last week’s bad Manufacturing PMI, which showed a return to contraction, hurt the Pound, and erased its gains. Non-Farm Payrolls found the Pound in a weak spot, but it managed to stay above the support line. Apart from the rate decision, the NIESR GDP Estimate and the Services PMI also stand out. Let’s see what’s awaiting the Pound
- Halifax HPI: HBOS’s broad house prices survey is based on the bank’s data. While the data itself is important and reliable, the release data isn’t known. It will happen in one of the mornings during the week. House prices have been recovering in Britain quite nicely. The Halifax HPI has risen in the last two months, and is expected to do so also this time by 0.6%.
- Services PMI: Britain’s services sector is pushing forward and doing better than the rest of the economy. The Purchasing Managers’ Index has been above 50 for the past 4 months. This means that they are expecting expansion in this sector. After a score of 54.1 points, this index is predicted to edge up to 54.6 this time. A break in this sector’s rise will hurt the Pound. Published on Monday at 8:30 GMT.
- Manufacturing Production: 80% of industrial production belongs to manufacturing. The release, on Tuesday at 8:30 GMT will probably shake the Pound. A third consecutive month of growth is expected with a rise of 0.4%. The Manufacturing Production, published at the same time, is expected to follow with a rise of 0.1%, also for the third consecutive month.
- NIESR GDP Estimate: The National Institute of Economic and Social Research publishes a monthly, unofficial estimate of the GDP, preceding the official quarterly number. According to the NIESR, Britain has gone out of recession in August. The Pound isn’t impressed. Will their estimation become negative again? Published on Tuesday at 14:00 GMT.
- Nationwide Consumer Confidence: This survey of 1000 consumers has improved steadily in the past few months, and surprised economists every time. After scoring 64 points last time, it’s expected to push further up to 68 points. Published on Tuesday at 23:00 GMT (midnight UK).
- CB Leading Index: This compound index of 7 economic indicators is based on past data. Despite this fact, the timing, just two hours before the rate decision, can fuel nervousness. The leading index rose in the past four months, with a 0.7% rise last time. Published on Thursday at 9:00 GMT.
- Rate Decision: The Bank of England isn’t going to raise the rock bottom Official Bank Rate of 0.5%. The British economy isn’t doing so well, and no inflationary pressures are seen around. The focus will be on the Quantitative Easing program, also known as the Asset Purchase Facility. Two months ago, Mervyn King stunned traders with an expansion of this program to 175 billion. This sent GBP/USD straight down. He didn’t move this number last time. Any change will shake the Pound. It’s important to closely follow the words of the MPC Rate Statement, which might hint future moves. Published on Thursday at 11:00 GMT.
- PPI Input: Prices in Britain have also slowed down, following continental Europe. While the Producer Price Index isn’t so stable, the release always moves the Pound. A rise of 2.2% last month is expected to be followed by a drop of 0.9% this time. Published on Friday at 8:30 GMT.
- Trade Balance: Published a the same time as the PPI, this figure isn’t expected to move strongly. After the deficit remained at 6.5 billion last month, it’s expected to decrease to 6.3 billion. Only a major change will move the Pound.
GBP/USD Technical Analysis After being beaten in recent weeks, the Pound was left behind also this time, and plunged as low as 1.5767. It later showed hope and had a mid-week peak at 1.6126. This was short lived – GBP/USD closed at 1.5944. Looking down, 1.5720 is a strong support line. In the past week, the Pound got close to this point, which was also a resistance line last year. Further down, 1.5370 serves as a support line. It was a resistance line twice. In order to climb, GBP/USD first needs to pass the 1.6130 handle, which it failed to breach last Wednesday. It also worked as a support line during September. Further up, the all-important 1.6660 continues to cap any strength. My sentiment towards the Pound remains very bearish. The weak British economy is trailing after the rest of the world, and inflation pressures are weakening as well. In the rate decision, Mervyn King can pound the Pound once again. Further reading: |
| Canadian Dollar Outlook – October 5-9 2009 Posted: 04 Oct 2009 12:35 AM PDT The Canadian dollar stood out this week by making against the US dollar while other currencies lost ground. This week’s employment figures, as well as 6 other major Canadian events, will shape the direction of the loonie. Here’s an outlook for the main Canadian events, and an updated technical analysis for USD/CAD. USD/CAD forex chart, with support and resistance lines marked on it. Click to enlarge: 
This week’s disappointing GDP release, which was worse than expected, hurt the loonie only temporarily. Apart from the employment figures, the double feature trade balance releases in the US and Canada will shake USD/CAD. Let’s see what’s on the menu: - Building Permits: This housing figure is very important for the loonie, yet very shaky. Last month plunge of 11.4% was explained by a civic workers’ strike in Toronto. But looking back at previous months shows that the wild changes aren’t new to this index. A return to normal moves is expected this time – a rise of 2.3%. Published on Tuesday at 12:30 GMT.
- Ivey PMI: The Richard Ivey School of Business publishes this highly regarded purchasing managers’ index on Tuesday at 14:00 GMT. This PMI figure has shown economic expansion in the past three months, a trend that is expected to continue. Ivey PMI is predicted to rise from 55.7 to 56.9 points this time.
- Housing Starts: The complementary figure for Tuesday’s building permits holds less hopes. After rising nicely from 138K to 151K last month, housing starts in Canada are expected to calm down and stand on 147K. Any surprise will sure shake the loonie.
- Paul Jenkins speaks: In a previous public appearance, BOC Senior Deputy Governor Paul Jenkins has been optimistic about recovery. He’ll speak on Thursday at 20:05 GMT, and his words could move the markets when volume isn’t so high.
- Employment Change: Canada’s own NFP has already shown a growth in jobs twice this year. Last month’s growth of 27.1K jobs surprised the markets and helped the loonie. Job losses are expected to return this time, with an expected fall of 6.7K. A positive number will sure shake the loonie. Published on Friday at 11:00 GMT, together with the unemployment rate.
- Unemployment Rate: The complementary figure for the employment change is expected to rise from 8.7% to 8.8%. Looking at the past, economists have been too pessimistic in many cases. This figure is closely looked by the media and by policy makers. Published on Friday at 11:00 GMT.
- Trade Balance: Canada has a small deficit in the trade balance for the past 4 months. This time, it’s expected to squeeze from 1.4 to 0.8 billion. The release time, on Friday at 12:30 GMT, is at the same time with the American Trade Balance release. This double-feature timing means that USD/CAD will strongly shake.
- BOC Business Outlook Survey: Last but not least, the Bank of Canad releases this important survey of 100 businesses on Friday at 14:30 GMT. This report is considered very reliable, and hints about future rate decisions. The timing, near the end of the forex trading week, when a “Friday effect” is looming over the markets, makes it very important.
USD/CAD Technical Analysis The Canadian dollar managed to gain against the US dollar this week. It began the week in a strong manner, with USD/CAD going as low as 1.0671 on Wednesday. With the dollar’s recovery later in the week, USD/CAD went up again, and closed at 1.0795. 1.0625, the bottom from August, served as a support line also afterwards. This is the first important support. Below, 1.03 is the next support line. IT served as such during the height of the crisis, about a year ago. Looking up, 1.1130 is a strong resistance line. It has been tested twice in recent months. Further up, 1.1470 worked well as a support line in the past, and is now a resistance line. My sentiment on USD/CAD is neutral. Extraordinary employment figures can push it out of the recent range. Further reading: |
No comments:
Post a Comment