Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Major Forex Currencies Outlook (May 28, 2013)

USD

U.S. traders are back in the grind today, after taking a day off in honor of Memorial Day. The U.S. will be printing its CB consumer confidence report for May and possibly show a strong rise in optimism. The reading is slated to increase from 68.1 to 70.7 for the month, which should provide strong support for the dollar and the U.S. economy as well. After all, consumers have been driving most of the country’s economic activity and an improvement in confidence could be indicative of more spending later on.

EUR

More liquidity for euro pairs is expected today as U.K. and U.S. traders are back on their trading desks. The only report due from the euro zone is the German import prices data, which shouldn’t have such a huge impact on EUR/USD or EUR/JPY. With that, keep close tabs on market sentiment and U.S. data as these could dictate price action across the board.

GBP

U.K. traders are back from their Spring Bank holiday today, which means there could be bigger price movements among pound pairs. There are no economic releases from the U.K. but monetary policy committee member and Deputy Governor Paul Tucker is set to give a testimony. If the central bank official drops hints on the BOE’s future monetary policy moves, it could send the pound rallying or dropping, depending on what he says.

CHF

Swiss employment data is on tap for today and the report is estimated to show a drop from 4.12 million to 4.11 million for the first quarter of the year. If so, that would mark the first drop in employment for the past five quarters, which could be negative for the franc. Otherwise, the franc might have a chance at holding on to its recent levels or even pocketing some gains. Take note that the Swiss trade balance is also up for release today.

JPY

The Nikkei has been able to get back on its feet for today’s Asian session, allowing USD/JPY to climb as well. There are no major reports due from Japan, as yen pairs could take their cue from market sentiment today.

Commodity Currencies (AUD, CAD, NZD)

Commodity currencies edged slightly lower against the U.S. dollar as commodity prices declined on Monday. AUD/USD is currently testing the key .9600 support while NZD/USD is sitting close to .8000. There are no major reports due from these commodity-dependent economies today, which suggests that they could stay sensitive to commodity price action and market sentiment.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 29, 2013)

USD

The U.S. dollar was supported by stronger than expected consumer confidence data in yesterday’s New York session. The CB consumer sentiment figure came in higher than the estimate as it jumped from an upwardly revised 69.0 to 76.2, beating the consensus at 70.7. This reflects how consumers have been the backbone of U.S. economic growth, as spending comprises nearly 70% of the GDP. For today, the only event on the U.S. schedule is FOMC member Rosengren’s speech. Watch out for his remarks concerning the Fed’s plan to scale down asset purchases.

EUR

The euro was driven sharply lower in yesterday’s trading when the topic of negative deposit rates came up again. It didn’t help that German import prices fell more than expected, chalking up a 1.4% decline instead of the estimated 0.2% decline. For today, Germany will print its preliminary CPI and employment change report, and these should have a huge impact on euro trading since Germany is seen to be the economy responsible for most of the growth in the euro zone.

GBP

The pound gave way to U.S. dollar strength in yesterday’s trading as GBP/USD fell back to the 1.5050 minor psychological level. MPC member Bean is set to give a testimony today while the U.K. will print its CBI realized sales report. Downbeat remarks, combined with a weak sales figure, could drive the pound even lower. CBI realized sales are projected to improve from -1 to 4, which might provide support for GBP/USD.

CHF

Swiss data was mixed yesterday as the trade balance disappointed but the employment level report came in strong. The level was at 4.15 million for the first quarter of the year, higher than the 4.12 million figure posted for the last quarter of 2012. Meanwhile, the Swiss trade surplus narrowed from 1.89 billion CHF to 1.73 billion CHF instead of widening to 2.02 billion CHF. For today, the UBS consumption indicator showed an improvement from 1.24 to 1.46. No other reports are due from Switzerland for the rest of the trading day.

JPY

The Japanese yen lost ground to most of its counterparts in yesterday’s trading, despite the stronger than expected retail sales report. Consumer spending is down by only 0.1% on an annual basis instead of the estimated 0.4% drop. This was also an improvement over the previous 0.3% year-on-year decline. No other reports are due from Japan today.

Commodity Currencies (AUD, CAD, NZD)

The commodity currencies lost ground to the Greenback once more, as the U.S. printed strong economic data yesterday. AUD/USD has broken below the key .9600 support while USD/CAD bounced from 1.0350. NZD/USD remains perched above the .8000 mark, waiting for more catalysts. The BOC rate decision is scheduled in today’s New York session and this should spark some volatility for USD/CAD. Take note that this is Carney’s last rate statement as BOC head so no changes are expected.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (May 30, 2013)

USD

The US dollar continued to slide against its major counterparts in yesterday’s trading sessions as markets seemed to show exhaustion from its recent rallies. Fed official Rosengren’s speech was probably the highlight of the New York session yesterday and even if he did say that he supported a modest reduction of asset purchases in a few months, it wasn’t enough to spark a fresh round of dollar buying. For today, the U.S. will be printing its preliminary GDP reading for the first quarter of the year and no revisions from the advanced reading of 2.5% is expected. Initial jobless claims and housing sector data could also drive dollar action today.

EUR

The OECD lowered its global growth forecasts, citing Europe as one of the major drags to overall economic growth. German data came in mixed yesterday, with a stronger than expected inflation figure and a weaker than expected jobs report. German CPI increased by 0.4% while unemployment grew by 21K, much higher than the estimated 4K increase in joblessness. Only medium-tier reports, namely the retail PMI and Italian bond auction outcome, are due from the euro zone today.

GBP

The U.K. printed a weaker than expected CBI realized sales figure as the reading slipped from -1 to -11 instead of improving to 4. However, GBP/USD still managed to rebound off its recent lows and climb back to the 1.5150 area earlier today. Only the Nationwide HPI is due from the UK in today’s London session and this report isn’t expected to have a material effect on pound price action.

JPY

The yen rallied against its counterparts once more, bringing USD/JPY back to the 101.00 region. No reports are due from Japan today, as traders could position themselves ahead of the CPI figures due tomorrow. Both Tokyo and the national level are projected to show declines in price levels but smaller ones compared to the previous period.

CHF

Swiss UBS consumption indicator improved from 1.24 to 1.46, lending strong support to the franc. USD/CHF fell back to the .9600 area as a result. Today’s Swiss GDP release could determine whether this level would hold, as the economy is expected to have grown by another 0.2% in the first quarter of the year.

Commodity Currencies

The commodity currencies were able to recover against the U.S. dollar in yesterday’s trading as most traders took profits off key levels, such as .9600 for AUD/USD. The BOC retained its relatively hawkish bias as it said that some modest withdrawal of stimulus might be needed. Australian building approvals came in strong at 9.1% but private capital expenditure posted a 4.7% quarterly drop.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 3, 2013)

USD

There are a lot of red flags on the U.S. calendar this week, which could determine if markets are really shifting their stance on the U.S. dollar or just making huge corrections before trends resume. Take note though that it’s already the start of summer season in the United States, which means that liquidity could be dried up. This could make room for more range plays than actual trends. For today, the ISM manufacturing PMI is set for release and a small downtick from 50.7 to 50.6 is expected.

EUR

EUR/USD is currently trading above the 1.3000 major psychological level, as the dollar rallies were capped last week. However, fundamentals in the euro zone remain very weak and this could be highlighted in this week’s ECB interest rate statement. Traders could start pricing in expectations of negative deposit rates as early as today, with only medium-tier reports due from the euro zone.

GBP

The pound is showing resilience against the U.S. dollar, as GBP/USD made a bounce off the neckline of the double bottom on its 1-hour chart. The manufacturing PMI is set for release from the U.K. today and an improvement from 49.8 to 50.3 is eyed, which would mean that the industry is expanding once more. A stronger than expected figure could push GBP/USD to new highs.

JPY

The Japanese yen has been rallying against its counterparts last week as Japanese equities have been falling. There are no major reports due from Japan this week, as the yen could take its cue from risk sentiment and Japanese stock markets or bond yields.

CHF

The Swiss franc has been gaining against the Greenback, after breaking below the .9600 handle last week. Swiss SVME PMI is due today and this could print a jump from 50.2 to 50.9, which would lend more support for the Swiss franc. However, traders might be cautious about buying the currency more as the SNB has previously reiterated its pledge to keep the franc undervalued.

Commodity Currencies (AUD, NZD, CAD)

The commodity currencies suffered a bloodbath last Friday, as RBNZ officials expressed their intention to intervene again. The last time this happened, the central bank actually staged a secret intervention before admitting to it months later. As for the Australian dollar, Chinese official manufacturing PMI figures stayed above 50.0 but the HSBC final reading came in at 49.2. Australian retail sales were also weaker than expected at 0.2%. No reports are due from Canada today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 4, 2013)

USD

The U.S. dollar suffered a sharp selloff in yesterday’s trading when the ISM manufacturing PMI came in worse than expected. The actual figure showed a contractionary reading of 49.0, worse than the estimated decline from 50.7 to 50.6. Only the trade balance is due from the U.S. today and a wider deficit is expected, showing that imports outpaced exports for the month.

EUR

The euro landed back above the 1.3000 mark against the dollar yesterday, with the pair even reaching 1.3100. Better than expected manufacturing PMI from Spain and Italy helped boost the euro, but EUR/USD’s strong move came after the US printed a bleak ISM manufacturing PMI figure. For today, only the Spanish unemployment change report is due and it’s expected to show a decline in joblessness.

GBP

The pound chalked up even more gains against the U.S. dollar yesterday, as the UK manufacturing PMI came in much better than estimated. The figure climbed from 50.2 to 51.3, instead of rising to just 50.3. The construction PMI is due from the UK today and it’s estimated to improve from 49.4 to 49.7, with a good chance of an upside surprise.

CHF

USD/CHF tested the broken support at .9600 yesterday and dipped even lower when the US manufacturing figures came out. SVME PMI turned out stronger than expected at 52.2, stronger than the estimated improvement from 50.2 to 50.9. For today, the Swiss calendar is empty, which suggests that USD/CHF could take its cue from U.S. data.

JPY

The Nikkei suffered another strong selloff yesterday, leading USD/JPY to test the 99.50 former support. It didn’t help that US data was weaker than expected. Japanese monetary base increased by 31.6%, which means that there’s much more liquidity in the economy, while the average cash earnings came in short at 0.3% instead of the estimated 0.6% rise. No other reports are due from Japan today.

Commodity Currencies (AUD, CAD, NZD)

The commodity currencies recovered against the U.S. dollar in yesterday’s trading, with AUD/USD climbing back above .9700 and NZD/USD recovering above .8000. The RBA kept interest rates unchanged as expected, but said that there’s room for more rate cuts and that the Australian dollar is still overvalued. Canada will release its trade balance today and a deficit of 0.4 billion CAD is expected.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 5, 2013)

USD

The U.S. dollar had a mixed day in the markets, as it managed to rally against the commodity currencies and the yen but held steady against most European currencies. Only the trade balance was released from the U.S. yesterday and this came out better than expected, as the deficit widened from 37.1 billion USD to 40.3 billion USD instead of 41.1 billion USD. For today, the U.S. is set to print its ADP non-farm employment change figure and its ISM non-manufacturing PMI. The ADP report could show a 171K increase in private payrolls while the ISM non-manufacturing PMI is slated to improve from 53.1 to 53.4. However, weaker than expected data could be negative for the dollar, as these might imply that the U.S. recovery isn’t that strong yet.

EUR

The euro managed to stay above the 1.3000 major psychological level in yesterday’s trading as Spain’s unemployment change figure came in better than expected. Euro zone’s third largest economy chalked up a 98.3K drop in joblessness for May. For today, the euro zone will be releasing services PMI from Spain and Italy. Both countries printed better than expected results for their manufacturing sector earlier this week so there’s a chance that services data could beat expectations as well.

GBP

Despite the better than expected construction PMI figure, the pound’s gains were limited below the 1.5300 handle against the dollar yesterday. Construction PMI climbed from 49.4 to 50.8 for May, showing that the sector returned to growth after months of consecutive contractions. Services PMI is up for release from the U.K. today and a better than expected reading could give the pound a stronger boost above 1.5300. The reading is projected to climb from 52.9 to 53.1.

CHF

USD/CHF moved sideways in yesterday’s trading because of the lack of market catalysts from both the US and Switzerland. The pair cruised around the .9475 handle for almost the entire trading day. There are no major reports from Switzerland today so USD/CHF is likely to take its cues from U.S. data, which are the ADP non-farm employment change and ISM non-manufacturing PMI.

Commodity Currencies (AUD, CAD, NZD)

Commodity currencies lost against the dollar in yesterday’s trading, as AUD/USD fell back below the .9700 handle and NZD/USD dipped to .7900. The Australian economy printed weaker than expected growth of 0.6% versus the estimated 0.8% expansion, causing AUD/USD to weaken in the Asian session. Canada is set to print its building permits today and possibly show a 2.3% decline.

By Kate Curtis from Trader's Way

 

[Coleen]

EUROPEAN SESSION UPDATE: No specific expectations from today’s G8 summit; PM Abe ally calls for more BoJ easing…

It’s been a quiet European session in Forex markets, as little news from the UK and Euro-zone have left the Euro and Pound relatively unchanged during today’s trading. The major winners of the day have been the Aussie and Kiwi, as the Yen has shown the biggest daily losses, thereby reflecting a risk-on environment in Forex trading. This risk appetite is reflected in the major European and Asian equities, which have been trading higher following the weekly open.

The major story of the day is the Group of 8 summit, which will begin today. There doesn’t seem to be a specific topic that Forex traders are waiting for a decision on, but there is still the possibility of a decision at the summit which moves markets in an unexpected way. The major story consuming Forex Traders’ attention remains Wednesday’s Fed meeting and monetary policy decisions.

 

[katetrades]

Forex Major Currencies Outlook (June 21, 2013)

USD

The U.S. dollar continued its winning streak against its major currency rivals, as the U.S. data came in mostly better than consensus. Both Philly Fed index and the existing home sales report beat expectations, with the manufacturing index landing back in the positive region indicating industry expansion. However, initial jobless claims came in worse than estimated, also posting a higher figure compared to the previous week. There are no reports due from the U.S. today so dollar behavior could be dictated by risk flows and market sentiment.

EUR

The euro slid lower against the U.S. dollar, as EUR/USD dipped below the 1.3200 mark briefly. Euro zone PMI figures came in mostly better than expectations, with only the German manufacturing PMI slipping below the estimate. German services PMI made up for this, as the figure landed back above the 50.0 mark, indicating that the industry grew during the month. For today, only the current account and ECOFIN meetings are scheduled for the euro zone, and these aren’t likely to have a huge impact on euro price action.

GBP

The pound lost ground to the dollar, despite the stronger than expected U.K. retail sales figure. Consumer spending increased by 2.1%, much higher than the estimated 0.8% rebound. Against the yen, the pound was able to post some gains. For today, only the public sector net borrowing report is due from the United Kingdom, and the report is slated to print higher borrowing of 12.7 billion GBP. A higher than expected borrowing figure might force the pound move south.

JPY

The Japanese yen had a mixed performance yesterday, as it gained against the commodity currencies but lost ground to the dollar, euro, and pound. There were no reports released from Japan then, which explains why the Asian currency had no clear direction. Today, BOJ Governor Kuroda is set to give a speech, in which he could defend the BOJ’s quantitative easing program.

CHF

USD/CHF rallied at the start of the day, but resistance at .9350 held and pushed the pair right back down. There were no surprises from the SNB monetary policy announcement, as the Swiss central bank simply reiterated its pledge to maintain the franc peg and kept interest rates unchanged. There are no reports due from Switzerland today.

Commodity Currencies (AUD, CAD, NZD)

Commodity currencies suffered in yesterday’s trading as the weak Chinese HSBC manufacturing PMI weighed on risk sentiment. AUD/USD continued to tumble below the .9200 handle while USD/CAD edged closer to the 1.0400 mark. There are no reports due from New Zealand or Australia, but Canada is set to print its CPI and retail sales data in today’s U.S. session. Weak data could push USD/CAD to the 1.0400 mark while strong reports could trigger a downside break from the current consolidation.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 24, 2013)

USD

Dollar bulls kept charging until the end of the week, spurred by the Fed’s recent announcement regarding its plan to reduce bond purchases by the end of the year. There are no reports due from the United States today, which either suggests quiet trading for most major currency pairs or the possibility of surprise movement from any market event.

EUR

The euro continued to lose ground to the dollar at the end of the week, but managed to post some gains against the Japanese yen. Only the German Ifo business climate report is set for release from the euro zone today and an improvement from 105.7 to 106.00 is expected for June. A higher than expected reading could allow EUR/USD to climb back above the 1.3100 or even 1.3200 area while a poor figure could set off a break below 1.3000.

GBP

The pound sold off heavily against the dollar on Friday but gained against the Japanese yen. There were no major releases from the UK then, although the government did report a smaller than expected public sector net borrowing figure, suggesting that UK finances are improving. There are no releases from the UK today.

CHF

The Swiss franc seems ready to post more losses against the US dollar in the coming trading days as an inverse head and shoulders pattern formed on its 1-hour and 4-hour time frames. There are no reports due from Switzerland today, which suggests that there’s no market catalyst to trigger a break just yet.

JPY

The yen lost ground to its counterparts on Friday after BOJ Governor Kuroda pointed to the prevailing weaknesses in the Japanese economy and how their easing program is helping to address those. This allowed traders to renew confidence in the BOJ’s stimulus program, thinking that further easing could be necessary if the Japanese economy continues to underperform. There are no reports due from Japan today.

Commodity Currencies (AUD, CAD, NZD)

Commodity currencies sank to new lows against the US dollar on Friday, with AUD/USD slipping below 0.9200 and USD/CAD breaking above 1.0400. Canadian retail sales came in weaker than expected, as the headline figure showed a mere 0.1% uptick while the core figure printed a 0.3% decline. Canadian CPI also disappointed with a 0.2% headline figure and 0.2% core figure. No reports are due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 26, 2013)

USD

The US dollar had some trouble sustaining its gains recently, despite stronger than expected data from the US. This may have been a result of an improvement in risk sentiment, which helped lift the higher-yielding currencies against the Greenback. The CB consumer confidence figure posted another record high, as it climbed from 74.3 to 81.4, higher than the estimated 75.2 reading. Meanwhile, new home sales improved from 466K to 476K, higher than the consensus at 462K. Durable goods orders were up by 3.6% and the core version of the report printed a 0.7% uptick instead of staying flat for the month. Today, only the US final GDP figure for the first quarter of the year is set for release, and no revisions are expected from the 2.4% reading.

EUR

The euro was barely able to benefit from ECB head Draghi’s speech, as the central bank governor focused on the existing challenges in the euro zone region. German GfK consumer confidence data is on tap for today and a small improvement from 6.5 to 6.6 is expected. A weaker than expected reading could push EUR/USD deeper below the 1.3100 major psychological level.

GBP

Cable managed to keep its head above the 1.5400 mark in yesterday’s trading, as UK data didn’t disappoint. BBA mortgage approvals rose by 36.1K while the CBI realized sales climbed from -11 to 1, as expected. The events on today’s schedule include BOE Governor King’s speech, the BOE financial stability review, and the government spending review. Given the recent improvement in public sector borrowing, upbeat remarks could be in the cards. If that’s the case, the pound could have a chance at holding on to its recent gains.

CHF

There have been no major reports on Switzerland’s calendar recently, which explains why USD/CHF has been slowly climbing up the charts. The UBS consumption indicator has just been released and it showed an improvement from 1.43 to 1.46, revealing that consumer-based indicators were better in May. No other reports are due from Switzerland today.

JPY

The Japanese yen rebounded against most of its major counterparts recently, as USD/JPY tested 97.00 while EUR/JPY found resistance around 128.00. There have been no major releases from Japan over the past 24 hours and none are due for the next trading sessions, suggesting that yen pairs could move to the tune of risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar and New Zealand dollar recovered slightly against the Greenback yesterday when the People’s Bank of China tried to reassure markets that a credit crunch won’t take place in China. AUD/USD climbed to the 0.9300 area while NZD/USD held on to the .7750 mark. As for USD/CAD, the pair continued to rally to the 1.0500 mark. No reports are due from the comdoll economies, other than the New Zealand trade balance in the next Asian session.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 27, 2013)

USD

The US dollar lost ground to some of its major counterparts in yesterday’s trading as the US Q1 2013 final GDP figure suffered a huge downward revision from 2.4% to just 1.8%. This led market participants to worry that the US economy would do even worse when the stimulus measures are reduced. Up ahead, the core PCE price index and personal income and spending data are due. The Fed is watching inflation closely and it is rumored that the core PCE price index is their preferred measure. Meanwhile, the consumer sector is seen to be the backbone of growth in the US so improved personal spending and income figures could provide support for the dollar.

EUR

The euro weakened again in yesterday’s trading, as ECB President Draghi reiterated that the ECB is ready to adjust monetary policy if necessary. However, the GfK consumer climate did show an improvement from 6.5 to 6.8, showing that consumer confidence is still doing well in euro zone’s largest economy. For today, the biggest mover on euro zone’s schedule is the German unemployment change report which could show a 7K increase in joblessness. This is lower than the previous 21K rise in unemployment, suggesting that there is some recovery in the German labor market.

GBP

The pound sold off heavily against its counterparts when the BOE financial stability report showed that there is a huge danger posed by the volatility in bond yields. Apparently, the central bank believes that this points to a potential increase in borrowing costs, which would make mortgages more expensive. In addition, the UK government announced a fresh batch of spending cuts in its recent spending review. An additional 11.5 billion GBP in austerity measures, which includes the removal of the automatic annual salary increase for public sector workers and caps on welfare spending, would be implemented starting 2015. Current account and final GDP figures are due from the UK today.

CHF

The Swiss franc continued to weaken against the Greenback, as USD/CHF broke above the .9400 handle. Only the SNB quarterly bulletin is on tap from Switzerland today and it isn’t likely to cause a huge move among franc pairs.

JPY

The yen regained strength against most of its major counterparts as risk aversion came into play yesterday. However, USD/JPY managed to hold on to the 97.80 area while GBP/JPY is currently trading below 150.00. There are no major reports due from Japan today as traders await the release of Japanese inflation reports for tomorrow.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to sneak in some gains yesterday, as AUD/USD tested the .9300 area while USD/CAD retreated from 1.0500. This recovery was spurred by a drop in Chinese interbank lending rates, squashing fears that a credit crunch is taking place. In Australia, Prime Minister Julia Gillard was ousted by rival Kevin Rudd. No major reports are due from these economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 28, 2013)

USD

The US dollar dominated the day’s price action once more, as strong economic data boosted the currency against its counterparts. The initial jobless claims printed better than expected results while the core PCE price index, which is considered to be the Fed’s preferred inflation gauge, showed a 0.1% increase. In addition, personal income and spending both posted gains. Speeches by Fed officials showed that they support the central bank’s plans to taper stimulus at the end of the year but reiterated that this is still dependent on data. For today, the Chicago PMI and the revised UoM consumer sentiment index are due. Strong figures could continue to lift the US dollar.

EUR

The euro managed to hold steady above the 1.3000 major psychological level in yesterday’s trading sessions. German unemployment declined by 12,000 effectively bringing the unemployment rate from 6.9% to 6.8%. This was better than the estimated increase of 8,000 in joblessness. For today, German retail sales are due and an upside surprise could be likely, given the improvement in its labor market. German preliminary inflation is also on tap and an increase of 1.7% is expected.

GBP

GBP/USD edged close to the 1.5200 major psychological support in yesterday’s trading, before bouncing back above 1.5250. The UK current account was weaker than expected as it showed a larger deficit of 14.5 billion GBP instead of the estimated 11.9 billion GBP deficit. Only the Nationwide HPI is set for release from the UK and an increase of 0.4% in house prices is expected.

CHF

The Swiss franc posted huge losses against the euro while it struggled to hold steady against the dollar around .9450. The SNB quarterly bulletin emphasized the points made during the central bank’s monetary policy decision earlier during the month. For today, the KOF economic barometer is due and it is expected to improve from 1.10 to 1.21, indicating a better economic outlook for the next six months.

JPY

The yen lost ground to most of its major counterparts during the European and US sessions, although it did show signs of strength during the Asian session. There were mixed reports released from Japan earlier today, as the Tokyo CPI came in line with expectations while retail sales beat expectations. However, unemployment ticked higher for the month to 4.1%. No other reports are due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The commodity currencies fought hard to stay afloat against the US dollar, as AUD/USD climbed back above the .9300 handle briefly while NZD/USD moved sideways. Canada is set to print its monthly GDP report and show a 0.1% economic expansion for May. A weaker than expected report could push USD/CAD higher up the charts.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 1, 2013)

USD

The US dollar has a lot of major reports in line for the week, with the ISM manufacturing PMI, ISM non-manufacturing PMI, and NFP report due. Last week, dollar demand was strong as most of the data came in stronger than expected. Another round of upbeat figures from the US would mean that the Fed is moving closer to tapering its bond purchases and that the US economy could stay on its feet even with less stimulus. The ISM manufacturing PMI on tap for today is slated to show an improvement from 49.0 to 50.6, showing that the sector rebounded back to expansion for June.

EUR

The euro tested the 1.3000 handle against the dollar last week, and today’s top-tier data could determine if the pair will bounce or break. Only medium-tier reports such as Italian PMI and CPI estimate are due from the euro zone today, which suggests that EUR/USD performance could be more impacted by US data. However, significantly weak data from the euro zone could trigger an early break below the 1.3000 mark.

GBP

The pound could have a chance to rebound against the dollar today as the UK will print its manufacturing PMI. The figure is projected to hold steady at 51.3 but an upside surprise could lift the pound against its counterparts. Data from the UK has been more or less strong recently, which could increase the odds for better than expected results.

CHF

The Swiss franc weakened against the Greenback on Friday, mostly because of the strong dollar bias. The SVME PMI is due from Switzerland today and the report could print an improvement from 52.2 to 52.5, indicating that the manufacturing sector posted a stronger expansion. A weaker than expected result could worsen the ongoing franc selloff.

JPY

The yen had a mixed performance on Friday, as it weakened against the dollar and strengthened against the Aussie. It managed to consolidate against the euro and the pound. Data from Japan has been mostly stronger than expected, save for the household spending report, which showed a 1.6% decline. The Tankan figures released earlier today came in strong, posting an improvement for both manufacturing and non-manufacturing sectors.

Commodity Currencies (AUD, CAD, NZD)

The comdolls edged slowly lower on Friday, as though the recent selloffs were starting to get exhausted. China printed its HSBC final manufacturing PMI and official government PMI for June and both came in line with expectations. The government PMI fell from 50.8 to 50.1 while the HSBC figure was revised slightly down from 48.3 to 48.2. Canadian banks are on a holiday and there are no other reports due from the comdoll economies for the rest of the day.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 2, 2013)

USD

The dollar was off to a good start for the week, as risk aversion remained in the markets for most of the Asian session. However, the U.S. ISM manufacturing PMI failed to impress market participants as it clocked in at 50.9. This was only slightly higher than expectations of a 50.6 reading, an improvement over the 49.0 figure last May. There are no major reports from the U.S. today, only the medium-tier factory orders data and speeches by a couple of Fed officials. Dudley has downplayed the Fed’s stimulus taper plan last week and could dish out similar remarks again today, which could lead to dollar selling.

EUR

The euro was able to gain strength against the dollar in yesterday’s trading, as it climbed from the 1.3000 area until the 1.3050 level. Data from the euro zone came in stronger than expected, as Italian manufacturing PMI came in better than expected and so did the euro zone jobless rate. For today, only the Spanish unemployment change is expected from the euro zone, and it could show another round of improvements in the labor sector. If that’s the case, the euro could continue to draw support.

GBP

The pound was off to a good start but returned most of its gains, even though the U.K. manufacturing PMI came in better than expected. The figure improved from 51.5 to 52.5 instead of dipping to the expected 51.3 reading. Net lending to individuals fell short at 1.0B instead of climbing from 1.3B to 1.4B. For today, the construction sector will release its PMI figure and possibly print an improvement from 50.8 to 51.3. Aside from that, MPC member Tucker is set to give a speech and the 10-year bond auction will be conducted in the UK.

CHF

The franc weakened in yesterday’s trading since the SVME PMI showed slower manufacturing activity in Switzerland. The reading slipped from 52.2 to 51.9 instead of improving to 52.5. There are no major reports due from Switzerland today which suggests that USD/CHF movement could be driven by US data.

JPY

USD/JPY edged higher in yesterday’s trading, moving closer to the 100.00 handle. Average cash earnings in Japan remained flat and missed the expectations of a 0.6% uptick. There are no reports due from Japan today, which suggests that yen pairs could be dependent on risk sentiment and currency-specific events.

Commodity Currencies (AUD, CAD, NZD)

Comdolls retreated in yesterday’s trading as risk aversion remained in the markets. The Australian dollar tested the .9250 level, but dropped right back below .9200 when the RBA decided to keep rates unchanged and mentioned that the Aussie is still relatively overvalued. There are no other releases due from the commodity-dependent economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 3, 2013)

USD

The US dollar made a stellar recovery against its major counterparts in yesterday’s trading, pushing EUR/USD below the 1.3000 handle and USD/JPY above the 100.00 mark. There were no major reports released from the US yesterday, as risk aversion was the main reason for the dollar’s climb. The US is set to print its ISM non-manufacturing PMI today and possibly show an improvement from 53.7 to 54.3. However, a weaker than expected figure could force the dollar to return some of its recent gains. Bear in mind that US traders will be off on a Fourth of July holiday tomorrow so we could witness some profit-taking for today.

EUR

The euro was sold off heavily yesterday when news a potential delay in Greece’s next batch of bailout funds could be delayed. Apparently, the country was unable to fulfill some of the requirements to secure the next tranche of aid. As for data, there have been no major reports released from the euro zone and only the medium-tier retail sales report is due today.

GBP

The pound was relatively one of the more resilient currencies in yesterday’s trading, although it still lost some ground to the US dollar. UK construction PMI improved from 50.8 to 51.0, slightly lower than the estimated 51.3 reading. Today, the UK will release its services PMI data and possibly show a dip from 54.9 to 54.6, reflecting weaker expansion in the industry.

CHF

The franc lost ground to the dollar, as USD/CHF climbed past the .9500 handle. There were no reports released from Switzerland for the past 24 hours and none are due today, suggesting that the franc could continue to be sensitive to US data or risk sentiment.

JPY

The yen saw a round of weakness yesterday, particularly to the US dollar. The Nikkei chalked up a 13% rebound recently, contributing to the yen’s selloff. As for reports, Japanese average cash earnings and monetary base both missed expectations. There are no reports due from Japan for the rest of the trading day.

Commodity Currencies (AUD, NZD, CAD)

Among the comdolls, the Aussie suffered the biggest losses in yesterday’s trading as AUD/USD slipped back below the .9200 handle. Earlier today, Australia printed weak retail sales of 0.1% instead of the expected 0.4% increase while the previous period’s figure was revised down to -0.1%. CAD and NZD simply consolidated around their current levels, but breakouts could be in sight for today as traders may book profits ahead of the Fourth of July holiday.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 4, 2013)

USD

The US dollar lost to most of its major counterparts in yesterday’s trading, as some traders booked profits ahead of the Fourth of July holiday in the United States. EUR/USD rebounded back to the 1.3000 major psychological level while USD/JPY slipped back below the 100.00 mark. US ISM non-manufacturing PMI came in weaker than expected, showing only a 52.2 reading instead of the estimated improvement from 53.7 to 54.3. There are no reports due from the US today.

EUR

EUR/USD suffered a heavy selloff at the start of the trading day as brewing political trouble in Portugal weighed on the country’s bailout prospects and caused a spike in bond yields. However, EUR/USD managed to pull up to the 1.3000 handle towards the end of the day as traders closed their positions around the fresh lows. Euro zone data was mixed as retail sales showed a better than expected 1.0% increase while Italian PMI fell short of expectations. The ECB rate decision is on tap for today and, even though no monetary policy changes are expected, Draghi could emphasize their readiness to add stimulus if necessary.

GBP

The pound managed to end the day higher than the dollar and the euro, as the UK printed better than expected services PMI. The reading jumped from 54.9 to 56.9 instead of dipping to 54.6. The BOE rate decision is scheduled today and it will be Mark Carney’s first statement as BOE Governor. Market participants are interested in how the new Governor will approach monetary policy so this event could trigger a large reaction among pound pairs.

CHF

The franc managed to recoup some of its recent losses to the dollar, as USD/CHF slipped back below the .9500 handle. There were no reports released from Switzerland then, leaving USD/CHF sensitive to US data. There are no reports due from Switzerland again today and none are due from the US.

JPY

The yen regained ground against its major counterparts, as the Labor Ministry reported that there was no change in Japan’s average cash earnings. On top of that, the BOJ noted that the Japanese economy is starting to pick up pace. There are no other reports due from Japan today.

Commodity Currencies (AUD, CAD, NZD)

The comdolls had a weak start, as AUD sold off and fell below the .9100 handle. Australia printed weaker than expected building permits and retail sales, although its trade balance did come in strong. Canada’s trade balance also came in better than expected, allowing USD/CAD to hold on to its recent levels. There were no reports from New Zealand, leaving NZD/USD in consolidation.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 5, 2013)

USD

The US dollar was one of the strongest performing currencies in yesterday’s trading as it posted huge gains against the pound and euro. US traders were off on a holiday celebrating the Fourth of July, which explains why there were no economic reports released from the US yesterday. For today, the US NFP report is due and a smaller increase in hiring is projected. Based on the results of the ADP report released earlier this week though, an upside surprise could be in the cards, which could continue to lift the dollar.

EUR

The euro suffered a heavy selloff in yesterday’s London and US sessions when ECB head Mario Draghi announced that interest rates would be kept low for an extended period of time. This triggered a sharp reaction from euro pairs, as the central bank opted to practice forward guidance in influencing longer-term interest rates. Only the German factory orders report is due today and it is expected to show a rebound of 1.3% from the previous 2.3% decline.

GBP

The pound was also under heavy selling pressure in the previous trading sessions when the BOE practiced forward guidance in saying that there will be no rate hike until mid-2015. This was a surprise, considering it was Mark Carney’s first statement as BOE head. There are no reports due from the UK today, which suggests that the pound could continue to sell off if there are no changes in market sentiment.

CHF

The franc was outpaced by the dollar but it managed to pack some gains against the euro. USD/CHF spiked to the .9580 area despite the lack of data from the US and Switzerland. Swiss foreign currency reserves data and CPI are due today. Higher foreign currency reserves could mean that the SNB is finding it more expensive to maintain its currency peg. Price levels are foreseen to drop by 0.1%, which could worsen the franc’s selloff.

JPY

The yen managed to gain against the pound and euro but it lost ground to the dollar, as USD/JPY spiked to the 100.40 area from 99.50. There were no reports released from Japan, but BOJ Governor Kuroda had a speech in which he said that their current easing efforts are starting to work out.

Commodity Currencies (AUD, CAD, NZD)

Comdolls struggled to hold on to their current levels, with AUD/USD holding on to the .9100 handle and USD/CAD staying around the 1.0500 mark despite the jump in volatility. NZD/USD is still stuck in its recent range between .7700 and .7830. There are no major reports due from Australia and New Zealand but Canada is set to print its jobs data and Ivey PMI. Joblessness could drop by 4.2K in June while the Ivey PMI is projected to dip from 63.1 to 59.6.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 8, 2013)

USD

Better than expected jobs data boosted the dollar against its counterparts on Friday, as the NFP figure came in at 195K. This was higher than the estimated 163K reading while the previous month’s figure saw an upward revision to 195K. However, the jobless rate held steady at 7.6% instead of improving to 7.5% as more and more Americans returned to the labor force. For today, there are no major reports due from the US.

EUR

The euro sold off heavily on Friday, still weighed down by the dovish ECB rhetoric during the previous day. As Draghi said, euro zone interest rates will remain low for an extended period. It didn’t help that Portugal was still undergoing political trouble while Greece’s next set of bailout funds is at risk. The Troika will be evaluating whether Portugal met its requirements to secure the next batch of bailout funds today, and this could have a huge impact on the euro. Eurogroup meetings are also taking place today and Germany will be releasing its industrial production report.

GBP

The pound was one of the weakest currencies last week, as BOE Governor Carney clarified that there will be no rate cut in the next couple of years. There are no reports due from the UK today, as the downbeat monetary policy statement could continue to drag the pound lower.

CHF

The Swiss franc reached the .9650 minor psychological resistance against the dollar last Friday, as strong US NFP data boosted the Greenback. Switzerland will release its unemployment rate today and possibly show no change from the current 3.2% rate. An increase in joblessness though could push USD/CHF even higher.

JPY

The yen weakened against the dollar on Friday but managed to gain against the euro and pound. There were no major reports released from Japan then, but the country reported a 0.62 trillion JPY current account balance for May as expected. The Economy Watchers Sentiment index is due from Japan today, and a higher than expected figure could help keep the yen’s losses in check.

Commodity Currencies (AUD, CAD, NZD)

There were no major releases from Australia and New Zealand on Friday, but Canada was able to release its jobs data and Ivey PMI. Canada lost only 0.4K jobs in June, better than the estimated 4.2K decline while the jobless rate held steady at 7.1%. As for the Ivey PMI, the figure posted a sharp decline from 63.1 to 55.3 instead of just dipping to 59.6. Only the Canadian building permits is due from the comdoll economies for today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 9, 2013)

USD

The US dollar lost ground to most of its major counterparts in yesterday’s trading, as traders took profits off their positions from last week. EUR/USD rebounded off the 1.2800 area while USD/JPY dipped below the 101.00 mark. There were no reports released from the US yesterday and there are no big ones for today, as traders could position themselves early ahead of the FOMC meeting minutes release later on in the week.

EUR

The euro made a slight recovery against the US dollar while EUR/JPY moved mostly sideways below 130.00. The resolution of the conflict in Portugal, as the Prime Minister declared a cabinet reshuffle, and the approval of the bailout funds for Greece was enough to boost the euro even though data was weak. German industrial production showed a 1.0% decline instead of the estimated 0.5% dip while its trade balance showed a 14.1 billion EUR surplus, which is lower than the estimated 17.4 billion EUR surplus. There are no reports due from the euro zone today so keep tabs on updates regarding the ongoing ECOFIN meetings.

GBP

The pound rebounded from its previous lows against the dollar on Monday, as GBP/USD climbed back above 1.4900. There were no releases from the UK at the start of the week, but the country will be printing its manufacturing production and trade balance figures today. Manufacturing production could rebound by 0.5% after dipping by 0.2% in the previous month while the trade deficit is expected to widen from 8.2 billion GBP to 8.4 billion GBP.

CHF

USD/CHF gapped up over the weekend but the gap was quickly filled as the pair retreated on Monday. Swiss joblessness held steady at 3.2% and its retail sales report is due today. On an annualized basis, Swiss retail sales could see a 3.7% increase, better than the previous 3.3% figure. A better than expected reading could support the franc against the dollar and euro today.

JPY

The yen may have gained against the dollar on Monday but it lost to its other major counterparts as Japan still showed some signs of weakness. Current account surplus fell from 0.85 trillion JPY to 0.62 trillion JPY as expected while bank lending accelerated from 1.8% to 1.9%. The Economy Watchers Sentiment index slipped from 55.7 to 53.0 instead of just dipping to 55.6. No reports are due from Japan today.

Commodity Currencies (AUD, CAD, NZD)

The comdoll bunch managed to recover against the Greenback on Monday, buoyed by a rebound in commodity prices. The ongoing conflict in Egypt is boosting oil prices, as the possibility of a spillover in other Middle East countries could limit the production and supply of oil. Meanwhile, Canada printed stronger than expected building permits while New Zealand showed an improvement in business confidence. Australian NAB business confidence also saw a return to neutral territory from a -1 reading previously.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 10, 2013)

USD

Once again, the US dollar proved its strength against the euro and the pound. EUR/USD dipped to fresh lows around the 1.2775 area while GBP/USD fell below the 1.4900 handle. There were no major reports released from the US yesterday, as traders gear up for the release of the FOMC meeting minutes at 7:00 pm GMT today. Recall that the Fed announced its plans to reduce bond purchases at the end of the year, causing a huge dollar rally during their rate statement. The minutes of their policy meeting should shed light on the data that led them to this taper plan and if a lot of policymakers support the idea. If the minutes don’t contain much surprises, it could turn out to be a non-event for the dollar pairs.

EUR

The euro dropped to new lows against the dollar when euro zone debt concerns started popping up again. An ECB member said that the euro zone should be ready for more capital shortfalls, as the region could be in for more refinancing operations and a much longer period of low interest rates. Meanwhile, Italy suffered a downgrade from S&P, as the credit rating agency cited growth concerns. There are no major reports due from the euro zone today, which suggests that EUR/USD’s movement could be focused on the FOMC minutes.

GBP

The pound tumbled against the Greenback once more when British data disappointed. Manufacturing production fell by 0.8% in May, following the 0.2% decline seen last April. This was worse than the estimated 0.3% increase. Industrial production remained flat instead of climbing by 0.3% while the previous month’s figure was revised down to show a 0.1% decline. There are no reports due from the UK today, as traders could pay close attention to the FOMC minutes.

CHF

The franc lost ground to the dollar again as Swiss retail sales disappointed. Analysts predicted an increase from 3.3% to 3.7% but the actual figure showed a measly 1.8% annual increase for May. No reports are due from Switzerland today.

JPY

The yen had a mixed performance as it gained against the euro and pound but held steady against the dollar. Data from Japan has been mixed, as machine tool orders showed a 12.4% decline while tertiary industry activity showed a stronger than expected 1.2% increase. Consumer confidence came in worse though, as the reading fell from 45.7 to 44.3 instead of improving to 47.2.

Commodity Currencies (AUD, CAD, NZD)

The commodity currencies managed to score gains against the dollar, as AUD/USD climbed above the .9200 handle and NZD/USD broke out of its recent range. USD/CAD is holding steady above the 1.0500 handle, as the Loonie is supported by rising oil prices. Australian Westpac consumer confidence posted a 0.1% decline. New Zealand is set to print its Business NZ manufacturing index in the upcoming Asian session. No other reports are due from Canada and Australia.

By Kate Curtis from Trader's Way