Forex Blog

The long-term support line formed at a weekly timeframe chart of the EUR/CHF currency pair now holds even more strength as the price has shown a very interesting trend consolidation pattern during several last weeks. As you can see on the chart the currency pair remain in a fading bearish downtrend with each new candle smaller than previous. A weekly close below the support line may signal a strong downtrend tendency, while the sudden jump in the price rate may be considered as a beginning of the long-term upward trend. Click on the image below to see the full-size chart:

EUR/USD trend: sell.
GBP/USD trend: sell.
USD/JPY trend: buy.
EUR/JPY trend: buy.
GBP/JPY trend: buy.

The dollar is going to end this week trading near neutrality versus the euro as several days of alternating risk appetite and aversion moved markets both ways during the past 5 days. Today, better than expected employment data in the U.S. allow the dollar to end this week trading with a slight advantage versus the euro in the weekly comparison. EUR/USD currently trades at 1.3617.

Nonfarm payrolls were at -36k in February from a previous revised reading of -26k in January. This report brought more positive news than what forecasts suggested at -56k jobs.

Unemployment rate held at 9.7 percent in February, the U.S. Bureau of Labor Statistics reported today. Employment fell in construction and information, while temporary help services added jobs. Average hourly earnings increased by 0.1% compared to 0.2% — the average forecast for this indicator.

Consumer credit increased by $5.0 billion in January from a previous revised decline of $4.6 billion in the previous report. Forecasts were completely wrong expecting a reading of -$4.2 billion.

The EUR/USD currency had a change on its positive trend today despite a fall in the U.S. number of pending home sales, as factory orders rose in North America and mainly thanks to an ECB statement affirming that stimulus will last as long as they are necessary to help the region’s economy to increase its pace of recovery. EUR/USD is falling and currently trades at 1.3565.

Pending Home Sales, a forward-looking indicator based on contracts signed in January, fell 7.6% to 90.4 from a revised number of 97.8 in December. The actual figures came considerably below forecasts which expected an increase of 1.4% in pending home sales.

U.S. factory orders advanced 1.7% in January from a previous revised advance of 1.5% in December. Forecasts expected a less expressive advance of 1.4% for new orders.

Nonfarm business productivity was revised from 6.2% to 6.9% during the fourth quarter of 2009, while forecasts expected the rate to be at 6.2% like the previous report.

Initial jobless claims were at 469k last week from a previous revised data of 498k applications. Forecasts were near the correct number expecting 472k applications.

The dollar continued to fall versus the euro this Wednesday despite positive data provided by the monthly ISM non-manufacturing report, as, once again, news involving Greece are the main factor influencing the EUR/USD currency pair’s trend, this time, on the euro’s side as Greece showed a new series of measures to tighten its budget deficit, which were received positively by traders. EUR/USD is currently at 1.3653.

Nonfarm payrolls were at -20k in February from a previous revised reading of -60k in January. This report came within the range of forecasts that expected -15k jobs.

U.S. crude oil inventories increased by 4.1 million barrels from the previous week. At 341.6 million barrels, crude oil inventories are above the upper limit of the average range for this time of year. Total motor gasoline inventories increased by 0.7 million barrels last week, and are above the upper limit of the average range.

ISM non-manufacturing index rose to 53.0 in February from a previous reading of 50.5 in January. This report came slightly above forecasts that expected this index to be at 51.

The dollar pared much of the euro’s advance from last week as several reports in the U.S. indicated that economic improvements in the country are far more positive than the situation in most Eurozone member countries, as manufacturing increased for another month and personal spending rose beyond forecasts. The EUR/USD currency pair trades currently at 1.3505.

Personal income rose by 0.1% in January from a previous revised increase of 0.3% in December and below forecasts that suggested a rise by 0.5%. Personal spending rose considerably more, showing an advance of 0.5% from a previous one of 0.3%, while forecasts expected a growth by 0.4%. Core PCE price index remain unchanged while forecasts expected a rise by 0.1%.

ISM PMI Index was to 56.5 in February with a slighltly lower result for this index from a previous reading at 58.4. Forecasts expected this manufacturing index to be at 57.7. Readings above 50 mean expansion in the sector.

Total construction spending declined by 0.6% in January confirming numbers expected by forecasts, and from a previous decline of 1.2% in December.

The U.S. dollar posted its sharpest decline versus the euro today despite a gross domestic product report published today showed growth in the North American economy for last year’s final quarter. Existing home sales slid much beyond forecasts, allowing the euro to pare a good amount of this week’s losses. EUR/USD currently trades at 1.3674.

Preliminary GDP report for last year’s fourth quarter showed a growth of 5.9%, from the previous advance report that showed showed an increase of 5.7%. Forecasts expected a decline to 5.6%, being the GDP numbers an optimistic sign of recovery in the U.S. economy.

Existing home sales declined to a seasonally adjusted annual rate of 5.05 million units in January from a previous revised reading of 5.44 million units in December. The actual figures came considerably below forecasts that expected 5.51 million units sold.

Michigan Consumer Sentiment index declined to 73.6 in February from a previous reading of 73.7 in January. Forecasts expected this important confidence index to be at 74.0.

Chicago PMI rose to 62.6 in February from a previous reading of 61.5 in January. Forecasts missed out once again expecting a decline to 59.6 for this business barometer index.

The dollar allowed the euro to retreat slightly after the Eurozone currency reached the lowest level in 2010 versus the greenback, as unemployment figures and durable goods data published today cooled down the optimism towards the U.S. economic recovery. Even with negative reports in North America, the euro had only a timid rise considering the extremely unfavorable market sentiment towards its region. EUR/USD is currently at 1.3528.

Initial jobless claims rose again to 496k applications during the past week from a previous revised reading of 474k applications. Forecasts were wrong expecting just 461k unemployment people applying for benefits.

Core durable goods orders frustrated traders showing a declined of 0.6% in January from a previous revised advance of 2% in December. Forecasts expected this report to rise by 1.1%.

After the dollar gained in the beginning of the week as the U.S. economy provided traders with more optimism than in the Eurozone, the greenback slid today as Federal Reserve Chairman Ben Bernanke said that low borrowing costs shall remain in the country as long as the economy need them to surge, declining appeal for the dollar in forex markets. At the moment, the EUR/USD currency pair is at 1.3581.

New home sales declined for another month reaching 309k in January, from a previous revised reading of 348k in December. Forecasts were completely wrong expecting an advance to 354k new home sales.

U.S. crude oil inventories increased by 3.0 million barrels from the previous week. At 337.5 million barrels, crude oil inventories are above the upper limit of the average range for this time of year. Total motor gasoline inventories decreased by 0.9 million barrels last week, and are above the upper limit of the average range.

The U.S. currency continued to climb versus the euro despite mixed data being published today in North America, with some considerably bad figures as consumer confidence slumped much below forecasts. The factors behind the euro’s downfall are still much stronger than any eventual turbulence caused by negative reports published today in the U.S. EUR/USD currently trades at 1.3547.

Richmond Fed manufacturing index rose to 2 in February, from a previous reading of -2 in January. Forecasts expected this production index to be at 0. This report is definitely positive for the U.S. manufacturing, as its the first reading above 0 in months, indicating an increase in production.

Consumer Confidence, which had increased in January, reverted the trend and fell to 46.0 in February, down from the revised value of 56.5 in the past month. Forecasts didn’t expect such sharp drop and suggested confidence to be at 55.0.

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