Thursday, October 1, 2009

Forex Crunch Forex Daily Outlook – October 1st 2009

Forex Crunch Forex Daily Outlook – October 1st 2009

Forex Daily Outlook – October 1st 2009

Posted: 01 Oct 2009 12:39 AM PDT

American figures dominate the scene on the first day of the last quarter. Unemployment Claims, Pending Home Sales and Ben Bernanke will stand out. There are many other releases today, including two unemployment rate figures. Let’s see what’s up for today:

German Retail Sales started the day with a serious fall of 1.5%, after last month’s gain. Later in Europe, Unemployment Rate is expected to rise from 9.5% to 9.6%. While this figure is published after Germany and France published their figures, this number has a strong impact on policy makers.

In Australia, Commodity Prices showed an annually adjusted fall  of 32.3%. This was deeper than last month. Steady commodity prices aren’t helping the Aussie. But it doesn’t need any help at the moment…

In Switzerland, the day after the SNB intervention brings the SVME PMI, which established its place above 50 and even rose to 54.3 points, much more than expected.

In Britain, Manufacturing PMI is predicted to jump above the crucial 50 mark and rise from 49.7 to 50.2. The Pound is very shaky these day.

In the US, data begins pouring early, with the Challenger Job Cuts. Unemployment Claims are expected to rise from 530K to 532K. This weekly release now serves as another prelude to tomorrow’s NFP.

At the same time, 12:30 GMT,  Personal Spending is expected to rise by 1.2%, much more than last month’s 0.2%. The Core PCE Price Index is expected to stay steady and rise by 0.1%.

Half an hour later, Ben Bernanke begins testifying in front of the Financial Services Committee. His words (almost) always move the markets.

A second wave of data is expected at 14:00 GMT. The ISM Manufacturing PMI is expected to push forward, from 52.9 to 53.9 points, settling above 50 points, meaning expansion.

Another major figure released at the same time is Pending Home Sales. After a surprising leap of 3.2% last month, it’s expected to rise by 0.9% this time.

At night, Japan’s strong Yen is expected two important figures: Household Spending is expected to remain almost unchanged, and drop by 0.1%. Last time it fell by 2%. The Japanese Unemployment Rate is predicted to edge upwards from 5.7% to 5.8%.

That’s it for today. Happy forex trading!

Support Line – Courtesy of the Bank

Posted: 30 Sep 2009 09:40 AM PDT

The SNB did it again. They intervened in the forex market to weaken the Swiss Franc. Against the dollar, these moves sure are short lived, but regarding the Euro, the central bank sure marked a support line for EUR/CHF.

The Swiss National Bank intervened again in the currency markets to weaken the national currency. Like in previous cases, USD/CHF jumped in minutes by about 150 pips, from 1.03 to 1.0450. Like in previous cases, this jump was short lived. USD/CHF is now back down to 1.0370. Looking at the near past once again, USD/CHF is going down.

Each intervention takes it up for short time. Later on, the pair falls down below the pre-intervention levels. I’ve already written that such interventions are a great trade opportunity. EUR/CHF

Switzerland has lots of trade with members of the European Union, including its two close neighbors: Germany and France. Both economic giants are the pillars of the EU. Data in both countries moves the Euro. A strong Euro is an interest of the SNB.

Swiss exports paid in Euros are worth more Swiss Franc after each intervention. This helps the Swiss economy. While the moves against the dollar fail, the moves against the Euro manage to keep it above a very specific line: 1.50. Each time that EUR/CHF drops towards this level, the bank intervenes and keeps it above the water.

The central bank doesn’t change the direction of the Swiss Franc against the Euro. It just safe guards it from reaching low levels. Since the big intervention on March 12th,EUR/CHF hasn’t fallen below 1.50.This number is a round number, but it has never served before as a support or resistance line. The SNB created it and is guarding it.
Posted by at 5:18 AM

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