Daily Market Outlook by Kate Curtis from Trader's Way

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Forex Major Currencies Outlook (April 22, 2013)

USD

The U.S. dollar seems to be benefitting from the risk rallies these days as most major economies have been showing signs of a slowdown. For now, it appears that weak U.S. data is still positive for the U.S. dollar as the risk off environment boosts the lower-yielding Greenback. Only the U.S. existing home sales is due for today and the reading is projected to rise from 4.98M to 5.02M in March.

EUR

Political uncertainty in Italy has been weighing on the euro for the past few trading days as the country still hasn’t formed a unified government. This stalemate could be negative for their economy as it would delay the passage of important laws, particularly those concerning fiscal austerity. Euro zone economic confidence data is set for release in today’s London session and the report is projected to show a stable reading of -24, which would still reflect pessimism.

GBP

The pound has retreated against the Greenback on Friday as the risk off trading environment kept GBP/USD’s rallies in check. In fact, a potential reversal is underway as a head and shoulders pattern formed on the 4-hour time frame. Only the speech by monetary policy committee member Paul Tucker is due today and this could weigh on the pound if he talks about openness to further asset purchases. Be wary of early pricing in of expectations for the UK’s Q1 GDP report due Thursday as this would confirm if the UK has entered a triple-dip recession or not.

CHF

No major reports are due from Switzerland today as USD/CHF could simply react to US data while EUR/CHF could be sensitive to the goings-on in Europe, particularly to Italy’s political situation.

JPY

There are no reports scheduled for release from Japan as traders could simply focus on risk sentiment this week. Bear in mind though that the BOJ will make its interest rate decision later on this week and traders might wish to unload their recent yen positions before the actual event.

Commodity Currencies (AUD, CAD, NZD)

There are no reports due from any of the comdoll economies for today as the pairs could simply react to risk sentiment. Commodity prices have been sliding lately as risk aversion has been moving the markets mostly for the past week. For now, weak Chinese data has been weighing on the Australian dollar, along with the drop in gold prices.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (April 24, 2013)

USD

The U.S. dollar reigned supreme against most of its counterparts, particularly the euro and the Australian dollar, as risk aversion stayed in the markets in yesterday’s trading sessions. Even the U.S. printed weaker than expected medium-tier data with the Richmond Fed manufacturing index and flash manufacturing PMI for the country both fell short of consensus. The U.S. will release durable goods orders data later today and more disappointments could lead to more safe-haven rallies.

EUR

PMI reports from the euro zone were generally mixed as France printed higher than expected manufacturing and services numbers while Germany’s mixed expectations. The region’s overall manufacturing and services PMIs remained below the 50.0 level, which meant that the industries contracted during the period. For today, only the German Ifo business climate report is on tap and a decline is expected, which might keep weighing the euro down.

GBP

The CBI industrial orders expectations came in weaker than expected at -25 versus -14, triggering a pound selloff. For today, only the realized sales report is due and the figure is projected to rise from 0 to 7, but another disappointment could worsen the pound’s decline.

CHF

The Swiss trade balance came in better than expected yesterday yet the franc sold off heavily against the U.S. dollar when the euro zone PMI figures disappointed. For today, the UBS consumption indicator is set for release from Switzerland and another weak figure could push USD/CHF even higher. The reading landed at 1.26 last time and an improvement could allow the Swissy to recover.

JPY

Yen pairs have been trading carefully lately as traders await the BOJ interest rate decision tomorrow. Only the corporate services price index was released from Japan recently and the report chalked up a stronger than expected figure. It still printed a 0.2% decline, which was smaller than the estimated 0.4% drop, while the previous period’s reading was revised down to 0.0%. No other reports are due from Japan today.

Commodity Currencies (AUD, CAD, NZD)

The Australian dollar suffered a sharp selloff this morning after yesterday’s quick retracement when the quarterly CPI missed expectations. The report showed a mere 0.4% uptick instead of the projected 0.7% rise, which is still higher than the recent 0.2% increase. Meanwhile, Canada printed stronger than expected retail sales and core retail sales data, which allowed USD/CAD to stay around its current levels. The RBNZ kept rates on hold at 2.50% as expected.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (April 25, 2013)

USD

The U.S. dollar lost a bit of ground to its major counterparts in yesterday’s trading as the U.S. durable goods orders data missed expectations. The headline figure showed a 5.7% drop, almost twice the estimated 2.9% decrease, while the core version of the report printed a 1.4% decline. This reveals that economic activity in the U.S. has been losing steam, and this may be a reason for the Fed to keep their current easing programs in place for much longer than expected. For today, there are no top-tier reports due from the U.S.

EUR

Germany’s Ifo business climate figure missed expectations for the current month as the reading fell from 106.7 to 104.4, lower than the estimated dip to 106.4. As it turns out, sentiment weakened because of the impact of cold weather on businesses in euro zone’s largest economy. Some say that this bleak report is grounds for potential rate cut talks when the ECB meets in the coming days, yet it didn’t trigger a long-lasting selloff for EUR/USD because of the rally in European equities yesterday. Markets seemed to pay more attention to the end of the political stalemate in Italy, which turned out to be positive for the shared currency.

GBP

Today is a big day for the pound pairs as the U.K. will release the much-awaited Q1 2013 GDP reading. The report is expected to show a 0.1% uptick following the previous 0.3% decline in economic growth, which would mean that the U.K. could narrowly escape a triple-dip recession. In this case, pound pairs could stage relief rallies as a positive GDP reading would reduce the need for further QE from the BOE. On the other hand, another negative reading would trigger a sharp selloff as it would put pressure on the BOE to ease further.

CHF

There are no reports due from Switzerland today, which suggests we’ll see quiet trading conditions for USD/CHF since there’s no major data from the U.S. as well.

JPY

Japan has no top-tier reports set for release today, which could mean that the yen could simply trade on risk sentiment for the rest of the day. Keep an eye out for potential profit taking prior to the next set of reports from Japan and the BOJ rate decision scheduled in tomorrow’s early Asian session.

Commodity Currencies (AUD, CAD, NZD)

Commodity currencies managed to recover against the U.S. dollar in yesterday’s trading as overall risk sentiment improved. Australian CPI came in weaker than expected at only 0.4% instead of the estimated 0.7% increase, but was still able to provide support for the Aussie. Both Australia and New Zealand have bank holidays today, which could mean quiet trading for AUD/USD and NZD/USD.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (April 26, 2013)

USD

The U.S. dollar generally lost ground to most of its major counterparts in yesterday’s trading although it was able to limit its losses during the U.S. session. The initial jobless claims report came in stronger than expected at 339K for the previous week instead of the estimated 352K in first-time claimants. For today, the biggest market mover could be the U.S. GDP report for the first quarter of the year. Growth of 3.0% is expected to follow the previous 0.4% uptick and a strong figure could provide support for the dollar.

EUR

The euro managed to rally beyond the 1.3000 major psychological level in yesterday’s trading despite the recent weak data from the euro zone. Spanish unemployment reached 27.2% recently, higher than the estimated rise from 26.0% to 26.5%. There are no major reports due from the euro zone today as EUR/USD price action could be dependent on the U.S. GDP release.

GBP

The U.K. narrowly escaped a triple-dip recession for the first quarter of the year as the GDP reading showed a 0.3% expansion, enough to rebound from the last quarter’s 0.3% contraction. This triggered a sharp rally for pound pairs as it convinced traders that the BOE isn’t likely to ease further for now. No other reports are due from the U.K. today, leaving the pound on its current uptrend.

CHF

The Swiss UBS consumption indicator printed a small increase from 1.24 to 1.25 for March, allowing the franc to recover from its losing streak against the Greenback. No other reports are scheduled from Switzerland today, which suggests that USD/CHF price action could be directed by the U.S. GDP figure later on.

JPY

Inflation is still weak in Japan, judging from the recent CPI figures that were released. The Tokyo core CPI showed a 0.3% drop while the national core CPI printed a 0.5% decline, which suggests that the BOJ could do more to ward off deflation. The BOJ rate statement is scheduled today and this could result in huge moves for the yen once again if the central bank emphasizes its stance on monetary policy.

Commodity Currencies (AUD, CAD, NZD)

The commodity currencies were able to bounce higher against the U.S. dollar in yesterday’s trading as risk appetite improved. New Zealand and Australian banks are on a holiday, which means that there are no major reports due from these economies. Canada’s schedule is empty as well, which suggests that AUD/USD, NZD/USD, and USD/CAD could be at the mercy of U.S. data.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (April 30, 2013)

USD

The U.S. dollar was outpaced by most of its major counterparts in yesterday’s trading when personal income and spending data disappointed. The core PCE price index, which is rumored to be the Fed’s preferred inflation measure, posted a flat reading instead of the estimated 0.1% uptick. For today, CB consumer confidence and Chicago PMI could be the main movers for U.S. dollar price action. The currency has been sensitive to fundamentals lately, which means that weak data could drive the dollar lower.

EUR

EUR/USD has put up a strong fight to stay above the 1.3000 major psychological level as it took advantage of dollar weakness yesterday and jumped to 1.3100. There are several medium-tier reports on the euro zone’s schedule for today but none are expected to have a lasting impact on euro price action as traders are awaiting the ECB rate decision later on in the week. Further weakness from the U.S. economy could prop EUR/USD higher but the 1.3200 level should hold as resistance.

GBP

Last week’s stronger than expected U.K. Q1 2013 GDP figure and this week’s weaker than expected U.S. economic data have boosted GBP/USD close to the 1.5600 major psychological level in yesterday’s trading. There are no major reports on the U.K.’s schedule for today, which suggests quiet trading for pound pairs. Take note though that U.S. figures could still push GBP/USD higher if they come in below expectations.

CHF

There are no major reports due from Switzerland today, leaving USD/CHF vulnerable to U.S. data. Luckily for the franc, U.S. reports have disappointed lately so USD/CHF was able to edge lower. Continue to keep an eye out for U.S. reports due today if you’re trading this pair.

JPY

Lack of liquidity kept the yen’s gains in check during yesterday’s trading as most pairs simply ranged. Today’s set of reports, however, triggered a slight selloff in the early Asian session as some figures disappointed. Industrial production and retail sales both missed expectations while housing starts and the jobless rate came out strong.

Commodity Currencies (AUD, CAD, NZD)

Commodity currencies edged slightly higher against the U.S. dollar as the Loonie packed its fourth straight day of wins. However, the freshly released ANZ business confidence report from New Zealand posted a decline from 34.6 to 32.3 while the Australian private sector credit report fell short of consensus. Canada will release its monthly GDP report in today’s New York session and this should determine if the Canadian dollar could sustain its recent rallies.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 6, 2013)

USD

The U.S. dollar initially had a positive reaction to stronger than expected NFP data but was soon weighed down when risk appetite boosted the higher-yielding currencies. The NFP figure came in at 165K, higher than the estimated 146K reading, while the previous figure was revised up from 88K to 138K. This pushed the jobless rate down from 7.6% to just 7.5% for April. For today, there are no major reports from the U.S. as the dollar could continue to lose ground on improved risk sentiment.

EUR

Although the ECB cut rates last week, EUR/USD still manages to keep its head above the 1.3000 major psychological level. Negative interest rates are currently the talk of the town and ECB President Draghi’s speech later today could set the record straight on what the central bank plans to do next in order to stimulate the euro zone economy. The improvement in risk appetite may have lifted the euro last Friday but the fact remains that the EU just downgraded their growth forecasts for the region.


GBP

Cable is having a tough time making any headway above the 1.5600 major psychological level as traders could start pricing in their expectations for this week’s BOE interest rate decision. No monetary policy changes are expected since the U.K. has actually posted some economic improvements in some sectors lately. British banks are on a holiday today, which suggests tight trading conditions for pound pairs.

JPY

Japanese banks are on a holiday today, which means that liquidity is low for yen pairs. The yen has been on a losing streak, thanks to the risk on market environment and it seems that the lower-yielding currency is poised for more losses if risk appetite keeps up.

CHF

The Swissy had quite a topsy turvy run on Friday as it lost ground to the U.S. dollar right after the NFP release then recovered its losses when risk appetite surged later on. From there, USD/CHF consolidated around the .9350 area for the rest of the day. With no reports due from Switzerland today and with Japanese and British banks on a holiday, Swiss pairs could continue to move sideways for the rest of the trading day.

Commodity currencies (AUD, NZD, CAD)

The commodity currencies were able to benefit from the rebound in risk last Friday, as strong U.S. jobs data renewed demand for higher-yielding currencies. This week, it remains to be seen whether these currencies could hold on to their gains and go for more since there are a bunch of red flags on their schedules. The Ivey PMI is set for release tonight while the RBA will make its interest rate decision in tomorrow’s Asian session. New Zealand quarterly jobs data is due later on this week.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 7, 2013)

USD

The U.S. dollar bounced back on its feet in yesterday’s trading when risk aversion popped its head back in the markets. There were no major reports released from the U.S. but the new set of economic problems from a few major economies kept risk taking in check. Disappointing Chinese and Australian data, as well as Draghi’s remarks stating that the ECB was open to further easing, discouraged traders from parking their money in higher-yielding currencies. For today, there are no major reports due from the U.S. so the dollar could continue to trade on risk sentiment.

EUR

The euro started the week on a poor note as the shared currency slid back down against the U.S. dollar. As it turns out, ECB President Draghi said that the central bank is still considering further stimulus if necessary. This revived talks of negative interest rates since the ECB just slashed its benchmark rate to 0.50% last week. Only a few medium-tier reports are set for release from the euro zone today, starting with the French industrial production data and Germany factory orders. Weak data could continue to weigh on the euro for the rest of the trading day.

GBP

GBP/USD continues to tread carefully below the 1.5600 major psychological resistance level as though awaiting further economic clues. Unfortunately, there are no new pieces of data due from the U.K. in today’s trading sessions, which suggest that GBP/USD could continue to move sideways. Be mindful of potential changes in risk sentiment though as dollar pairs have been selling off during risk-off market environments.

CHF

Switzerland’s SECO consumer climate figure came in worse than expected as the reading landed at -5. Economists had expected a larger improvement from -6 to -3 for the past three months. However, the Swiss franc barely reacted to this report, probably because the unemployment rate held steady at 3.1%. No other reports are due from Switzerland for the rest of the day, which suggests that USD/CHF could either move sideways or be sensitive to market sentiment.

JPY

The Japanese yen regained a bit of ground against its major counterparts in yesterday’s trading as the lower-yielding currency trumped the higher-yielding ones in a risk-off market day. There are no major reports due from Japan for the rest of the day, which suggests further risk flows from the yen.

Commodity Currencies (AUD, CAD, NZD)

The RBA just cut their interest rates by 0.25% in today’s Asian session, pushing AUD/USD below the 1.0200 major psychological support level. This rate cut came as a surprise since Australian data hasn’t been as bad as those of other major economies. There are no reports due from Canada but New Zealand is set to print its RBNZ financial stability report in the late U.S. session.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 8, 2013)

USD

The U.S. dollar’s rally gained legs against most of the other major currencies in yesterday’s trading when some economies once again showed signs of weakness. For one, Australia underwent a rate cut from the RBA while the RBNZ financial stability report highlighted the weaknesses in the New Zealand economy. European pairs also tumbled as risk appetite was down for the rest of the trading day. There were no major reports released from the U.S. and none are due for today. Watch out for a couple of speeches from top U.S. finance officers, namely Treasury Secretary Lew and FOMC member Stein.

EUR

It was a mixed day for the euro yesterday as France printed weaker than expected industrial production data while Germany posted stronger than estimated factory orders figures. French industrial production slipped by 0.9% while German factory orders jumped by 2.2%. For today, there are no reports due from the euro zone as French banks are on a holiday. With that, expect lower liquidity and possibly higher volatility in today’s London session.

GBP

After days of consolidating between 1.5550 and 1.5600, GBP/USD broke down and reached the 1.5450 support area. There were no major reports released from the U.K. then but expectations of dovishness from the BOE in their rate statement this week seems to be weighing on the pair as early as today. BRC retail sales posted a 2.2% decline, erasing the 1.9% gain seen in the previous month, while the Halifax HPI is set for release. Further weakness in the housing market could push GBP/USD even lower today.

CHF

Swiss reports were generally mixed yesterday as the SECO consumer climate figure disappointed while the foreign currency reserves of the SNB showed a bit of improvement. Reserves of foreign currencies declined for the month, as the central bank is having an easier time defending its EUR/CHF peg. However, the SECO consumer climate figure climbed from -6 to -5 only, instead of improving to -3. Swiss CPI is due later on today and another weak figure could drag the Swiss franc lower.

JPY

Yen pairs barely saw any action in yesterday’s trading as traders awaited more data from most major economies. The yen pairs that did budge moved to the downside as risk remained off. There are no reports due from the Japan lately so yen pairs could continue to trade on market sentiment, with a risk on environment causing losses for the lower-yielding yen.


Commodity Currencies (AUD, CAD, NZD)

The RBA’s surprise rate cut weighed on the Australian dollar and New Zealand dollar in yesterday’s trading but the Loonie seemed more resilient. The RBNZ’s financial stability report pinpointed the prevailing weaknesses in the economy, prompting market participants to think that the central bank might cut rates as well. Chinese trade balance came in strong earlier today, providing support for the comdolls, but the Kiwi’s fate could rest on the upcoming New Zealand jobs data release.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 9, 2013)

USD

The Greenback weakened against most of its major currency counterparts in yesterday’s trading as risk appetite generally improved. There have been no major reports released from the U.S. lately, which explains why dollar pairs’ moves have been limited in the past few days. The only report due from the U.S. today is the initial jobless claims report, which could show a slight increase from the other week’s 324K to 333K for last week. A significantly higher than expected reading could undermine the recent recovery in the U.S. labor market, but a figure close to the consensus isn’t likely to result in huge dollar moves.

EUR

The euro got a boost from improved economic data from Germany as the country’s industrial production figure beat expectations. The report printed a 1.2% increase for March, much better than the estimated 0.1% decline, while the previous month’s figure was revised up to 0.6%. Only the ECB monthly bulletin is set for release from the euro zone today as French and German banks are on a holiday. With that, expect lower liquidity in the London session and possibly higher volatility.

GBP

It’s a big day for the pound pairs today as the BOE will be making its interest rate decision. No changes to its 0.50% interest rate and 375 billion GBP asset purchases are expected, so traders will be all eyes and ears on the accompanying speech by BOE Governor Mervyn King. If the central bank head decides to emphasize the recent improvements in the British economy, such as the strong PMI figures and the fact that the U.K. dodged a triple-dip recession, the pound could be in for some gains. Be wary though that the BOE might also join the currency intervention camp in order to retain its competitiveness in the global economy.

JPY

Only the leading indicators report will be printed by Japan today. A slight improvement from 97.6% to 97.7% is expected as the BOJ’s recent stimulus efforts might have already kicked in. Other than that, the yen’s price action could be mostly dictated by risk sentiment for the rest of the trading day.

CHF

The Swiss CPI missed expectations and fell flat in April, chalking up a 0.6% decline on an annual basis. Despite that, the Swiss franc managed to outpace the U.S. dollar in yesterday’s trading. There are no major reports due from Switzerland today so expect quiet trading among franc pairs or that USD/CHF will be swayed by dollar reports.

Commodity Currencies (AUD, CAD, NZD)

Both Australia and New Zealand enjoyed stronger than expected jobs data recently, with Australia printing a 50.1K increase in monthly hiring while New Zealand showed 1.7% employment growth for Q1 2013. What’s currently weighing on the Kiwi though is RBNZ head Graeme Wheeler’s admission that the central bank intervened in the forex market recently to curb Kiwi strength. As for the Canadian dollar, only the NHPI report is on tap for today and this isn’t likely to spur a huge reaction from USD/CAD.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 10, 2013)

USD

The U.S. dollar gained a lot of ground against its major counterparts in yesterday’s trading, despite the lack of top-tier data from most major economies. EUR/USD is back to testing the 1.3000 major psychological support while USD/JPY finally breached the 100.00 barrier. Better than expected U.S. initial jobless claims may have sparked a stronger than usual reaction in the markets, as the actual figure landed at 323K, lower than the estimated 333K in first-time claimants. The G7 meetings are set to take place starting today so watch out for potential gaps over the weekend.

EUR

The ECB monthly bulletin was the only report on the euro zone’s agenda yesterday and the release didn’t contain any surprises. The euro sold off against the dollar, which benefitted from strong initial jobless claims figures, and rallied against the Japanese yen. German trade balance and Italian industrial production figures are set for release in today’s European session so watch out for these reports.

GBP

As expected, the Bank of England kept monetary policy unchanged in their latest rate decision. The central bank maintained interest rates at 0.50% and their asset purchase program at the current 375 billion GBP level. BOE Governor Mervyn King thought that there was no need to add stimulus for now as the British economy has shown signs of improvement and was able to avoid a recession for the first quarter of the year. UK manufacturing production came in stronger than expected and showed 1.7% growth, but this wasn’t enough to keep the pound afloat against the dollar in yesterday’s trading.

CHF

There were no reports released from Switzerland yesterday but the franc suffered a massive selloff against the U.S. dollar since the latter enjoyed a strong initial jobless claims report. There are no reports due from Switzerland today so USD/CHF could be sensitive to dollar flows once more.

JPY

The Japanese yen lost a lot of ground to the U.S. dollar lately with USD/JPY breaching the 100.00 mark and even reaching 101.00 in today’s Asian session. Japanese current account was weaker than expected at 0.34 trillion JPY versus the estimated 0.48 trillion JPY surplus. The Economy Watchers Sentiment figure is due from Japan later today.

Commodity Currencies (AUD, CAD, NZD)

Although Australian and New Zealand jobs data both came in strong yesterday, the Aussie and the Kiwi were no match to dollar strength. AUD/USD broke below the key 1.0200 support while NZD/USD retreated upon pulling back to the .8480 area. Canada is next to release its jobs report today and a 14.8K rebound in hiring is projected, which could keep the jobless rate steady at 7.2%.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 13, 2013)

USD

The US dollar got a strong boost from the Fed’s announcement of their concrete plans to exit their open-ended asset purchase program. Although an actual date hasn’t been specified, the fact that the Fed is considering tightening monetary policy renewed demand for the dollar, especially since other major economies are considering loosening monetary policy in order to devalue their currencies and retain competitiveness in global trade. US data set for release this week, including the retail sales figures due today, could reinforce dollar strength as strong data could push the Fed closer to exiting their easing program. Slight declines are expected for the April retail sales report, but an upside surprise could be likely as the jobs report for the same month has turned out well.

EUR

EUR/USD finally made a strong break below the 1.3000 major psychological level on Friday as the US Federal Reserve talked about their stimulus exit plan. Data from the euro zone has been disappointing as German trade balance missed expectations while Italy posted weaker than expected industrial production. No euro zone reports are due for today.

GBP

GBP/USD suffered a strong selloff on Friday, although the pair’s uptrend still seems to be intact. The BOE is one of the more relatively upbeat central banks, providing a bit of support for the pound amidst the sudden surge in dollar buying. For the week, the UK claimant count change and the quarterly inflation report could dictate pound price action. BOE Governor King is also set to give a testimony later in the week, which could also affect GBP/USD’s movement.

CHF

The Swiss franc got sold off against the US dollar and the euro on Friday. For today, the Swiss retail sales report could determine the franc’s movement as the report is slated to show a mere 1.0% annual uptick for March. This is much lower than the previously reported 2.4% increase for February. A weaker than expected figure could worsen the franc’s selloff while a strong figure could keep the losses at bay.

JPY

USD/JPY finally breached the 100.00 major psychological barrier when the US Fed unveiled its plans to exit its stimulus program. Japanese trade deficit has also come in weaker than expected, worsening the yen’s selloff. There are no major reports due from Japan today so watch out for any changes in market sentiment when trading yen pairs.

Commodity Currencies (AUD, CAD, NZD)

Although some commodity currencies enjoyed upbeat jobs reports, they were still sold off when the US Fed talked about their plans to exit quantitative easing. AUD/USD broke below the key 1.0200 support while NZD/USD suffered sharp selloff to the .8300 area. Canadian hiring was weaker than expected in April, with only 12.5K in additional hiring, lower than the estimated 14.8K rise. For today, Australian data came in mixed with a strong 5.2% increase in home loans and a decline in NAB business confidence from 2 to -2.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 14, 2013)

USD

Dollar strength is still in vogue today as the latest U.S. retail sales release somewhat came in line with consensus. The headline figure showed a 0.1% increase instead of the estimated 0.3% drop while the core version of the report printed a 0.1% downtick as expected. There are no major reports due from the U.S. today, which suggests quiet trading for most dollar pairs, but it would be helpful to keep your eyes and ears peeled for any comments from Fed officials regarding the schedule and scale of their planned withdrawal of stimulus. Any hints that the Fed is ready to wind down their bond purchases soon could send the dollar rallying once more.

EUR

The euro is still trying to hold on to the 1.3000 handle against the U.S. dollar, as today’s set of euro zone data could determine whether it’ll hold or break. Germany is set to print its ZEW economic expectations report in today’s European session and possibly show an improvement from 36.3 to 39.5, which could boost the euro. The region could see its ZEW figure improve from 24.9 to 27.3, also a potential boost to the euro.

GBP

The pound has sold off strongly against the U.S. dollar recently even though the BOE didn’t ease monetary policy last week. Traders are probably starting to price in their expectations for the claimant count change report due later on in the week and possibly expecting cautious comments from BOE Governor King. No reports are due from the U.K. today.

CHF

The Swissy lost a lot of ground to the U.S. dollar, which has enjoyed additional strength from the recent retail sales release. Swiss retail sales have disappointed with a 0.9% decline instead of the estimated 1.0% jump in consumer spending. For today, there are no major reports from Switzerland but the downbeat economic outlook is likely to keep dragging the franc lower.

JPY

The Japanese yen is slowly recovering against the U.S. dollar as USD/JPY appears to be having trouble breaking above 102.00. A potential retracement play could work, especially since Japan is set to print its preliminary GDP report later on this week. No reports are due from Japan today.

Commodity Currencies (AUD, CAD, NZD)

Commodity currencies seem to have stalled from their recent selloffs today as AUD/USD struggles to climb back to parity while NZD/USD found support around .8250. There are no major reports due from the comdoll economies for the week, except for the Canadian CPI release on Friday, so the behavior of the comdoll pairs could hinge on dollar demand.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 15, 2013)

USD

The U.S. dollar continued to advance against its major currency counterparts in yesterday’s trading session as the upbeat monetary policy expectations from the Fed provide support for the Greenback. Today’s set of economic data could confirm if the Fed will be moving closer to implementing their exit plan, as the U.S. will be printing its Empire State manufacturing index, PPI, and industrial production data. The Empire State index is projected to improve from 3.1 to 3.6 while producer prices are likely to post small upticks. Note that worse than expected figures could convince traders that the Fed isn’t likely to wind down their asset purchases anytime soon, which could force the dollar to return some of its recent gains.

EUR

Euro zone GDP is set to come in weaker than the estimated -0.1% figure for Q1 2013, as France and Germany have both posted lower than expected growth. The French economy contracted by 0.2%, worse than the estimated 0.1% dip, while the German economy posted a mere 0.1% uptick for the quarter. Italian GDP is still set to be printed but the odds seem to favor a downside surprise, as analysts predict a 0.4% drop in economic growth. Overall, this should weigh on the region’s GDP, which could come in negative and mark the euro zone’s sixth quarter in recession.

GBP

The U.K. will be printing is claimant count change and releasing its BOE inflation report in today’s London session. Another gain in hiring is projected to follow the previous month’s 7.0K drop in claimants, which should be enough to keep the jobless rate steady at 7.9%. However, worse than expected jobs data could worsen the pound’s slide against the U.S. dollar, possibly pushing GBP/USD below the 1.5200 major psychological level.

CHF

Switzerland is set to release its ZEW economic expectations figure and PPI figures in today’s European session. The ZEW report could show a drop from the previous month’s 20.0 reading as recent economic data from Switzerland have disappointed while the PPI report is slated to show a 0.2% drop in producer prices. Downbeat reports could continue to weigh on the franc, which is already undergoing heavy selling pressure against the U.S. dollar.

JPY

The Japanese yen resumed its selloff in today’s Asian session as Japan’s tertiary industry activity index disappointed and posted a 1.3% drop in services activity. This was way off the estimated 0.6% decline and enough to erase the 1.2% increase seen in the previous period. Consumer confidence in Japan also weakened, with the index falling from 44.8 to 44.5 instead of rising to the estimated 45.8 reading.

Commodity Currencies (AUD, CAD, NZD)

The commodity currencies still sold off against the dollar although at a slower pace in yesterday’s trading. These pairs are currently nearing significant inflection points on longer-term time frames, which explains why price movement is stalling. Perhaps markets are awaiting more catalysts or confirmation from the U.S. economy that could allow these selloff to resume.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 16, 2013)

USD

The U.S. dollar retreated against most of its major counterparts in yesterday’s New York session, as weak economic figures put a cap on its recent rallies. The Empire State manufacturing index turned out to be a huge disappointment as it printed a -1.4 figure instead of the estimated improvement from 3.1 to 3.6. Producer price levels have also disappointed as a 0.7% decline in input prices was recorded for May, its largest drop in three years. This goes to show that inflation is still weak in the country, which means the Fed might not tighten monetary policy just yet. For today, watch out for the CPI, housing figures, and Philly Fed index. Note that weak data could drive the dollar lower against its counterparts again.

EUR

Weaker than expected GDP readings from euro zone’s largest economies put the entire region deeper in recession for the first quarter of the year. The GDP reading showed a 0.2% contraction, worse than the estimated 0.1% downtick in growth. This suggests that the ECB could move forward with its plan to implement negative deposit rates and possibly increase its purchases of corporate and long-term bonds just to boost the economy. Only medium-tier data are set for release today but these leading indicators could force the euro to resume its drop if they come in weak.

GBP

The pound managed to hold on to its recent levels against the U.S. dollar as the U.K. claimant count change beat expectations. The report showed a 7.3K drop in the number of people claiming jobless benefits for April, allowing the jobless rate to drop from 7.9% to 7.8%. There are no major reports due from the U.K. today which suggests that pound price action could be dependent on market sentiment and U.S. reports.

CHF

Switzerland reported a huge drop in its ZEW economic expectations figure from 20.0 to 2.2 in May, reflecting weaker optimism for the country’s economic outlook. Nonetheless, the franc was able to rebound against the euro and the dollar in yesterday’s trading as both the euro zone and U.S. printed weak data. For today, there are no major reports from Switzerland, which suggests that franc trading could be dependent on market sentiment or data from other economies.

JPY

The Japanese yen made a small recovery against some of its major counterparts in yesterday’s trading, as USD/JPY fell short of hitting the 103.00 handle. EUR/JPY suffered a similar selloff as GDP figures from the euro zone while other yen pairs managed to hold on to their recent levels. Japan’s industrial production report came in better than expected as it showed a 0.9% uptick, higher than the estimated 0.2% increase. No other reports are due from Japan for the rest of the day.

Commodity Currencies (AUD, CAD, NZD)

The commodity currencies managed to pare their losses against the U.S. dollar as a weak round of data from the U.S. kept dollar gains at bay. These currencies were also able to hold steady against the yen. There were no major reports released from Australia and New Zealand recently, but Canada did print a weaker than expected manufacturing sales report. This showed a 0.3% drop in sales instead of the estimated 0.6% growth. Only the producer prices report is due from New Zealand in the next few trading hours, leaving the commodity currencies dependent on market sentiment.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 17, 2013)

USD

The U.S. economy chalked up another day’s worth of weak economic figures as its CPI and Philly Fed index ended up below expectations. The core CPI figure for April showed a 0.1% uptick instead of the projected 0.2% increase while the headline figure showed a 0.4% decline, worse than the estimated 0.3% drop and the previous 0.2% decline. The Philly Fed index highlighted another disappointment in the manufacturing sector, with the figure for May slipping from 1.3 to -5.2 instead of improving to 2.5. For today, the preliminary University of Michigan consumer sentiment figure is set for release and it’s expected to print an improvement from 76.4 to 77.9 for the current month. Weak results could keep the dollar’s gains in check.

EUR

The euro had a small rebound against the U.S. dollar in yesterday’s trading as the U.S. economy printed a set of poor figures. However, EUR/USD was unable to sustain its gains past the 1.2900 mark as euro zone officials kept talking about the possibility of implementing negative deposit rates. Euro zone CPI came in line with consensus as the headline figure showed a 1.2% annual increase while the core report printed a 1.0% uptick. There are no reports from the euro zone today so pay special attention to speeches from finance officials in the region.

GBP

The pound continued its rally against the Greenback in yesterday’s trading, pushing GBP/USD back above the 1.5200 major psychological support level. No reports were released from the U.K. yesterday but the positive sentiment from the previous day, when the U.K. printed strong jobs data and the BOE upgraded growth forecasts, continued to provide support for the pound. There are no reports on the U.K. schedule today but MPC member Weale is scheduled to give a speech, so pay attention to his assessment and outlook for the economy.

CHF

USD/CHF dipped below the .9600 level in yesterday’s trading when the U.S. printed worse than expected CPI and manufacturing reports. However, the pair was able to rebound quickly and land back above .9600. There were no reports released from Switerland yesterday and none are due today so keep close tabs on market sentiment and U.S. data if you’re trading USD/CHF.

JPY

The Japanese yen fought hard against the U.S. dollar in yesterday’s trading, allowing USD/JPY to linger around the 102.00 area. Japanese industrial production came in stronger than expected, clocking in a 0.9% increase for April, up from the 0.2% previous figure. Core machinery orders, which was printed earlier today, also came in stronger than expected with a 14.2% jump.

Commodity Currencies (AUD, CAD, NZD)

Commodity currencies continued to bleed against the U.S. dollar as the recent slide in commodity prices started to weigh on their price action. There were no reports released from Australia and New Zealand recently, while Canada is slated to print its CPI data in today’s U.S. session. A 0.2% increase in core price levels are projected while the headline figure is likely to stay flat.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 20, 2013)

USD

The U.S. dollar is still able to draw support from news of the Fed mapping out its stimulus exit plan, despite the wave of bad economic data from the U.S. last week. Inflation reports and manufacturing indices all came in weaker than expected, yet consumer sentiment for the month managed to beat the consensus. There are no major reports on the U.S. schedule for today, as most banks are on a holiday. Be mindful of higher volatility in reaction to FOMC member Evans’ speech in today’s U.S. session.

EUR

The euro dipped to the 1.2800 major psychological support level last week but managed to pullback to 1.2850 earlier this week. Sentiment for the euro remains bearish as the ECB is mulling negative deposit rates and increasing its bond purchases in order to stimulate growth in the region. There are no major reports due from the euro zone today.

GBP

The pound is struggling to stay afloat against the U.S. dollar, as this week’s set of data from the U.K. could determine if the pair could hold on to the 1.5200 major psychological level. There are no reports due from the U.K. today as the first set of data, which are the inflation reports, are due tomorrow. U.K. annual CPI is slated to fall from 2.8% to 2.6% for April, which might mean the BOE has enough scope to ease further if necessary.

JPY

The yen lost ground to the dollar on Friday as the latter benefitted from strong consumer sentiment figures, pushing USD/JPY above the 103.00 handle. There are no major reports due from Japan today as traders await the BOJ interest rate decision on Wednesday. Traders could book profits off their yen shorts prior to the actual event as the central bank could highlight the recent developments in the Japanese economy.

CHF

The franc also lost a lot of ground to the U.S. dollar on Friday as the University of Michigan preliminary consumer sentiment figure beat expectations. Swiss banks are on a holiday today, which means that there could be quiet trading among franc pairs.

Commodity Currencies (AUD, CAD, NZD)

There are no major reports from the comdoll economies today as AUD/USD, USD/CAD, and NZD/USD could be more sensitive to U.S. events. Bear in mind that FOMC member Evans is set to testify in today’s U.S. session and he could remark on the need to withdraw stimulus as early as June. If that’s the case, the commodity currencies could continue to sell off against the Greenback.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 21, 2013)

USD

The US dollar continued to retreat against its major counterparts, as traders booked profits from key support and resistance levels on the major currency pairs. It seems as though market participants are waiting for further clues on the US economy and the Fed’s monetary policy before pushing the dollar any higher. The FOMC minutes release and Fed head Bernanke’s speech could set the tone for dollar trading this week, but these events are scheduled for tomorrow. For today, only a few speeches from some finance officials and Fed members are on tap. If these officials talk about the urgency of withdrawing monetary policy stimulus as early as June, the dollar could resume its recent rallies.

EUR

The euro has recovered some of its recent losses against the US dollar, as EUR/USD has pulled up to the 1.2900 major psychological level. European banks were on a holiday yesterday, which explains the careful trading of euro pairs, and we might see more of the same today. There are no major events on the euro zone calendar, as the only economic release is the German PPI figure.

GBP

Cable is fighting to stay above the 1.5250 minor psychological level as the pound managed to rebound against the dollar in the past few trading sessions. UK CPI data are set for release today and this should show if the BOE has scope to loosen up monetary policy. Although the BOE isn’t looking to do so anytime soon, as the British economy has recently shown signs of life, weak inflation could still spur the central bank to pump up liquidity in the system. The annual inflation reading is projected to fall from 2.8% to 2.6% in April.

CHF

The Swiss franc has been holding its ground against the US dollar so far this week, as USD/CHF reached resistance near the .9700 major psychological level. There are no major catalysts on Switzerland’s schedule for today, which suggests that the pair could maintain its current levels as traders await for more signs from the markets.

JPY

The Japanese government recently upgraded its growth forecasts, citing a rebound in exports and domestic economic activity. This was enough to keep USD/JPY trading below the 103.00 major psychological resistance this week. Yen traders might be feeling a little more cautious today, as the BOJ is gearing up for its monetary policy decision in tomorrow’s Asian session.

Commodity Currencies (AUD, CAD, NZD)

Commodity currencies are currently stalling at key inflection points, with USD/CAD finding resistance at 1.0300 and AUD/USD perched at the 0.9750 support area. NZD/USD seems to be breaking off its recent selloff as well, with the pair retesting the .8200 major psychological level. The RBA just released the minutes of its latest monetary policy meeting wherein they decided to slash interest rates by 0.25%. However, the minutes didn’t provide any clues as to whether the central bank will ease again, which explains why AUD/USD is staging a relief rally after the release. BOC Governor Carney is set to give a speech in today’s US session and this could determine if USD/CAD makes a bounce and retests 1.0300.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 22, 2013)

USD

The U.S. dollar lost ground to most of its major counterparts as some Fed officials talked about the low likelihood that the Fed will reduce its stimulus program soon. Fed officials Bullard and Dudley seem to favor the current easing measures, saying that these are appropriate for the meantime and that stronger improvements are necessary before warranting a reduction of bond purchases. With that, market participants will be all eyes and ears on the release of the FOMC meeting minutes later today to see how the Fed is divided on the issue. Fed head Bernanke is also set to give a speech later today and possibly talk about his monetary policy stance as well.

EUR

The euro continues to recover against the U.S. dollar as EUR/USD has found itself back above the 1.2900 major psychological resistance in today’s Asian session. The only events on the euro zone’s calendar today are the current account release and the German bond auction. With that, EUR/USD action could be more dependent on U.S. market events, which are Bernanke’s speech and the FOMC minutes release.


GBP

There are several event risks on the pound’s calendar today, and these are the release of the MPC meeting minutes and the UK retail sales figure. The pound underwent heavy selling pressure yesterday when annual inflation missed forecasts of a decline from 2.8% to 2.6% and fell all the way down to 2.4%. This suggests that the central bank has room to ease further if necessary, and the minutes of their lates meeting should shed light on the outlook of monetary policy committee members.

CHF

SNB Chairman Thomas Jordan is set to give a speech in today’s London session, adding to the event risk for USD/CHF. So far, the pair has been very sensitive to U.S. economic updates, with the FOMC meeting minutes and Bernanke’s testimony set to rock the markets in today’s U.S. session.

JPY

As expected, the Bank of Japan made no changes to its monetary policy in today’s interest rate decision. However, Governor Kuroda did give himself a pat on the back for the positive effects of their aggressive easing program, which boosted domestic economic activity and provided support for Japan’s exports. The Japanese trade balance did show a slight improvement for April but the actual figure was still weaker than expected because of the slowdown in Europe’s demand for Japanese products.

Commodity Currencies (AUD, CAD, NZD)

Commodity currencies struggled to hold their ground against the U.S. dollar as the lack of top-tier data kept these pairs mostly in sideways consolidation. AUD/USD continues to test the .9800 major psychological resistance as the country printed a 7.0% decline in Westpac consumer confidence. Meanwhile, Canada is gearing up to release the latest retail sales figures in today’s U.S. session.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 24, 2013)

USD

Despite the recent wave of strong U.S. data, the dollar still lost ground to its major counterparts, particularly the yen in yesterday’s trading. Traders took profits off key support levels, such as 0.9600 on AUD/USD, which paved the way for a dollar selloff. In addition, the rally in U.S. equities has sparked a risk rally, which has benefitted the higher-yielding currencies. The U.S. initial jobless claims reading was at 340K, better than the estimated 350K reading and consistent with the recent improvements in the labor market. The flash manufacturing PMI and the new home sales also came in better than consensus. For today, the U.S. is set to print its durable goods orders data and possibly print a 1.5% rebound in its headline figure.

EUR

Euro zone PMI figures came in mixed for April, although most still remained below 50.0 indicating industry contraction. The German and French services PMI both missed expectations while the manufacturing industries showed better than expected results. Overall, euro zone’s services PMI landed at 47.7 up from 46.9 while the manufacturing PMI rose from 46.7 to 47.8. German GDP and German GfK consumer sentiment data are set for release today.

GBP

The British pound was able to stage a nice recovery against the U.S. dollar in yesterday’s trading as it bounced above the 1.5100 major psychological level. U.K. GDP came in line with consensus, with no revision to the 0.3% uptick in growth. For today, the BBA mortgage approvals report should set the tone for pound trading during the U.K. session. The report is expected to show an improvement from 31.2 to 32.8.

JPY

The Japanese yen made a strong rally in yesterday’s trading after the Nikkei stock index slumped by 7.3%. This pushed USD/JPY to test the 101.00 major psychological support before rebounding up to 102.50. Analysts attribute the drop to a major correction in the markets and risk aversion, although the uptrend on USD/JPY remains intact. There are no major reports due from Japan today but Governor Kuroda is slated to deliver a speech within the trading day.

CHF

The Swissy had a choppy trading day yesterday as it retreated from its recent gains then made a strong rebound. There are no major reports due from Switzerland today so USD/CHF trading could depend mostly on U.S. data.

Commodity Currencies (AUD, CAD, NZD)

The commodity currencies staged a nice rebound against the dollar in yesterday’s trading, boosted in part by risk appetite. Chinese manufacturing PMI came in below consensus and below the 50.0 mark, which weighed on the Australian dollar during the Asian session, but the pair was able to bounce off the .9600 level. New Zealand printed a weaker than expected trade surplus while Canada’s economic schedule remains empty.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 27, 2013)

USD

The dollar had a mixed trading day on Friday as it lost ground to the Japanese yen and euro but managed to pocket some gains against its other major counterparts. US durable goods orders data came in better than expected, as both headline and core figures printed rebounds from the previous month’s data. Headline durable goods orders increased by 3.3%, erasing part of the previous 6.9% decline, while core durable goods orders rose by 1.3%. There are no reports from the US today as banks are on a Memorial Day holiday.

EUR

The euro is still struggling to stay above the 1.2900 level against the US dollar, as data from Germany came in stronger than expected on Friday. The German GfK consumer climate figure improved from 6.2 to 6.5 while the German IFO business climate report printed a rise from 104.4 to 105.7, higher than the estimated increase to 104.6. There are no reports due from the euro zone today.

GBP

The pound continued to climb slowly against the US dollar on Friday, despite weaker than expected BBA mortgage approvals from the UK. The housing loan report showed a 32.2K reading, down from the estimated 32.7K figure but still better than the recent 31.4K reading. There are no reports due from the UK today.

CHF

The Swiss franc took advantage of dollar weakness on Friday as USD/CHF slid lower to the .9600 major psychological support. There were no reports released from Switzerland then and none are due today, which suggests that USD/CHF might be stuck in consolidation for the next trading sessions.

JPY

The Japanese yen staged another strong rally on Friday as the Nikkei index chalked up another drop. The selloff in equities is currently supporting the yen as traders are selling stocks in exchange for the yen. However, the USD/JPY pair is likely to rebound as the BOJ has made no changes to its easing policy while the Fed is mulling an exit to its stimulus program. The minutes of the latest BOJ meeting were released in today’s Asian session.

Commodity Currencies (AUD, CAD, NZD)

Commodity currencies continue to test key levels (0.9600 for AUD/USD and .8100 for NZD/USD) as markets await further catalysts. There are no major reports from the comdolls this week, except for the BOC rate decision and Canadian monthly GDP release.

By Kate Curtis from Trader's Way