Data, Data Everywhere

[mercaforex]

By Mercaforex

USD:
In early Monday trading, the USD lost ground to the major currencies and finished the day in rather weak territory against the EUR. The U.S. stock markets did have a positive day of gains, both the S&P and Dow Jones indexes performed well. The Existing Home Sales figures turned in a better than expected number with a result of 6.10 million compared to the forecast of 5.7 million. Today will be a critical day of releases with the Preliminary GDP on tap and it carries an estimate of 2.9%. Also the CB Consumer Confidence reading is due and is projected to turn in an outcome that basically matches last month’s statistics. Because of the approaching Thanksgiving holiday in the U.S., data has been pushed up, thus the S&P/ CS Composite 20 HPI is on schedule too and expected to show an improvement. Lastly, the FOMC will publish their Meeting Minutes today.
Today’s avalanche of numbers will have investors on a razor’s edge and the question is what type of reaction any surprises will generate. The GDP number could prove critical if it shows any hints of a retracement. The HPI index will be watched because the sentiment around the housing market continues to be frail. Also the FOMC report which will cover its last meeting may prove very interesting if it shows that disagreement is starting to grow within the Federal Reserve enclaves regarding monetary policy. Wall Street was able to rebound yesterday and it is possible investors are trying to set the tone for a positive run before the holiday, but with so many economic risk events coming today and tomorrow traders will have to be ready for rapid movements. Tomorrow the weekly Unemployment Claims figures will be brought forth along with Core Durable Good and the University of Michigan Consumer Sentiment reports. By late tomorrow the markets may find that volume begins to drop off rapidly, but today should provide plenty of fireworks and opportunity for traders who are bold enough to traverse what will be a day filled with significant financial barometers.

EUR:
The EUR started the day off fast against the USD, rebounding from its losses before going into the weekend, and it finished the day off with gains against the greenback. PMI releases from across Europe on Monday showed very slight gains. Today Germany will publish its Final GDP numbers and the Ifo Business Climate survey. The GDP is forecasted to show a gain of 0.7% and the Ifo reading is estimated to show improvement. Also Europe will produce its broad Industrial New Orders. Tomorrow the GfK German Consumer Climate figures will be published. The EUR did well against the USD yesterday, but once again this came on the heels of better results in the equity markets. The strong trend the EUR has shown the past six months in many ways is a reflection of risk appetite. Though many questions still exist about the state of the European banking system, until now these concerns have been swept to the side. The GDP data from Germany may prove tame for investors unless any unanticipated results filter in.

GBP:
The Sterling struggled on Monday compared to the EUR and once again is showing signs of being within its own divergent range against the USD. Though it did not lose ground to the greenback, the GBP did not gain either. It was a light day of data from the U.K., but that will change today with the BBA Mortgage Approvals release and testimony from the Bank of England before Parliament for a scheduled hearing on inflation and the state of the economy. The BoE may provide investors with significant sound bites that cause an impact. Coupled with the fact that the Revised GDP statistics will be released tomorrow, this could give traders a rather grueling range to deal with. Perhaps the consolidation seen in the Sterling yesterday was a result of caution before today’s and Wednesday’s risk events.

JPY:
The JPY continued to show signs of strength and this is a result of the rather poor performance from the Nikkei bourse. Risk adverse trading seems to be gaining impetus and this is certainly helping propel the JPY to the stronger side of its trend against the USD. Gold had a respite yesterday after making significant gains in its previous trading session. Gold remains to show a speculative flair and trying to stand in front of its trend could prove dangerous.

Has The Dollar Found A Bottom? Shortened Trading Week May Shake It Loose

SPX/USD:
I constantly hint at the strength in this market. Yesterday at the end of my short recommendation I wrote “However, be cautious as we know that there are serious buyers slinking in the background who are waiting to snatch up the shorts”. Well, these buyers picked up all the sells in the market like a black hole sucking in the surrounding stars. The market gapped up 20 points on the open and traded all the way up to 1 point off resistance of 1113.4. Interestingly enough, like a 15 year old boy on his first date, the market failed to live up to the hype it created with this gap, and formed a nice selling tail. I want to be a seller here but can’t. At this point, I recommend standing aside. Resistance of 1113.4 held well, suggesting a potential down move unless you consider the gap up over support of 1101.3 which was bullish. Keep an eye on the dollar as any weakness could send the American equity market much higher. With a shortened trading week because of the thanksgiving holiday, trading could continue to be very volatile, and I will probably wait until things settle down somewhat before jumping back in. Unless of course things start to fall apart completely! Support 1101.3, 1094.9, 1091.7, 1085.3, 1077, 1068.9 Resistance 1113.45, 1132.2, 1153.8

XAU/USD:
Hitting a record high of 1173.75 the Gold market continues to dazzle. But dollar strength towards the end of the trading day, saw us trade back down to $1161. While yesterday’s selling tail is not bullish, this market is in serious bull mode. Plowing through resistance levels like a runaway train I can’t put a sell recommendation on this market just yet. I anticipate this week to be volatile across all markets including the XAU. At this point hold onto any long positions you still have, make sure your stop is in place and hold on tight. We’re in for a wild ride! Support 1155.7, 1151, 1121.9, 1100.3, 1070.6, 1024. Resistance 1173.75…

GBP/USD:
The Sterling continues to trade within a well defined trading channel. Yesterday’s performance was not enough to stop the move down towards the lower end of the trading range. At this point, I am expecting this market to try and push below 1.6460 towards 1.6249. With lots of data on the horizon for the pound we still expect to try and continue trading lower. Dollar strength or weakness will be the decisive factor for this market, and I continue to maintain that the Greenback may have found a temporary bottom at these levels. Support 1.6460, 1.6249, 1.6125, 1.5769 Resistance 1.6609, 1.6741, 1.6876, 1.7042

EUR/USD:
The Euro is ranging. Since the beginning of the month we have essentially traded a two cent range, each time forming lower highs. This currency’s strong dollar relationship could see us break out of this range if the dollar truly continues to hold at these levels (and of course eventually starts to gain). Meaning, we will trade lower if the dollar begins to rise. We have to wait for a breakout of the trading range. At the moment I am inclined to sell this currency pair anywhere around 1.50 give or take 25 pips. With a stop just past the 1.5062 high. After analyzing the weekly chart it looks like we are setting up for a nice down move, and I don’t think that a target of 1.4480 or lower is unreasonable. Support 1.4800, 1.4683, 1.4613, 1.4480 Resistance 1.4999, 1.5062, 1.5144, 1.5284, 1.5343, 1.5460.

[rightnwrong]

Originally Posted by mercaforex

By Mercaforex
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Wow! This data is very informative. Thanks for posting it.

[nathanieljacobs]

Some very nice historical data there to analyse. Isn't it a pity we couldn't trade retrospectively? You were pretty much spot on with regards to gold though.