Daily Market Outlook by Kate Curtis from Trader's Way

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Forex Major Currencies Outlook (August 20, 2013)

USD

The US dollar was off to a strong start in this Asian session, as traders booked profits off key resistance and support levels on the medium-term time frames. This is perhaps because most market participants aren’t willing to keep their trades open ahead of the major market catalysts from the US this week, and these are the FOMC meeting minutes due tomorrow and the Jackson Hole Symposium scheduled to start on Thursday. In addition, rising bond yields is adding pressure for the Fed to push through with its Septaper plans. There were no reports released from the US yesterday.

EUR

There were no reports released from the euro zone yesterday and there are none due today. With that, EUR/USD could stay within its current range or stay below the resistance at 1.3400 since there are no major catalysts for a strong break in either direction. Take note though that there is a bit of political tension brewing in the region, as Merkel is up for re-election. Although she is likely to hold on to her position as confidence in her leadership and reforms stays strong, the uncertainty could weigh on the euro in the coming trading days.

GBP

The pound was one of the stronger currencies in recent trading hours, with GBP/USD managing to make new highs and hold on to the 1.5650 area. Strong UK fundamentals are mostly responsible for keeping this pair afloat, as the country printed stellar jobs and spending figures last week. For this week, the main event risk for pound pairs is the release of the UK revised GDP figures later on in the week.

CHF

The franc was stuck in consolidation once more as neither Switzerland nor the US printed any economic data recently. There are also no major reports due from Switzerland today, which means that USD/CHF could continue with its sideways movement.

JPY

Yen weakness is still pretty evident across the charts, although the selloff was a bit more muted recently. In fact, the yen was able to rebound against the Australian dollar in today’s early Asian session. Japanese trade balance printed weaker than expected results while the all industries activity index is slated to show a downturn for the recent month.

Commodity Currencies (AUD, NZD, CAD)

Mixed performance was seen among the commodity currencies, as AUD/USD returned most of its recent gains and NZD/USD was unable to make headway past .8100. USD/CAD is still sitting above the rising trend line on its daily chart, although rising oil prices are allowing the Loonie to hold on to its current levels near 1.0300. RBA minutes were released earlier today and revealed that the Australian central bank is still disappointed with Australia’s economic performance and could be ready to ease once more.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (August 21, 2013)

USD

Today is a big day for the U.S. dollar as the FOMC meeting minutes are up for release. Traders are expecting to see clearer clues on whether the Fed is likely to push through with its Septaper plan or not. On one hand, the U.S. has shown respectable improvements in economic data, which could convince the Fed that a recovery is underway. On the other hand, some Fed officials are wary of using estimates as basis for monetary policy decisions instead of looking at actual reports. However, the rise in bond yields could be another factor to convince the Fed to reduce bond purchases next month, although this component might not be included in the recent minutes just yet. Just the same, brace for additional volatility when trading dollar pairs during today’s US session.

EUR

There are no reports due today, which suggests that traders could start pricing in their expectations for the upcoming top-tier reports. The euro could be in for some strong action in tomorrow’s London session with the euro zone PMI figures up for release. Last month, these PMI readings all came in stronger than expected and hinted that the euro zone could be recovering. This time around, further improvements are expected, with some figures slated to show expansions in manufacturing and services for August. If that’s the case, the euro might be able to make significant headway past the nearby resistance levels.

GBP

Public sector borrowing and CBI industrial orders expectations are up for release from the UK today and strong figures could push pound pairs above the nearby inflection points. The public deficit of 10.2 billion GBP in the past month is slated to turn into a surplus of 3.7 billion GBP, which would be a good sign for the UK’s finances. Remember that one of the complications in the UK economy is its swelling government debt, but an improvement in this area could solidify the rally for the pound. CBI industrial orders are also expected to improve, with the reading projected to climb from -12 to -8.

CHF

As usual, there are no major reports scheduled from Switzerland in today’s trading, which could mean another round of quiet trading for the franc. Take note though that USD/CHF could be very sensitive to US events, namely the FOMC minutes release in today’s US session.

JPY

There are no reports on deck from Japan today, which means that the yen could be vulnerable to risk sentiment. In particular, USD/JPY’s moves, which could result from the FOMC meeting minutes release, could carry a huge impact on the behavior of dollar pairs for today.

Commodity Currencies (AUD, NZD, CAD)

A couple of medium-tier Chinese data could dictate the movement of the comdolls today since there are no other reports due from Australia, Canada, or New Zealand. In addition, keep close tabs on the release of the FOMC meeting minutes when trading AUD/USD, USD/CAD, or NZD/USD. Crude oil inventories, which have been affected by the ongoing conflict in Egypt, could also have an impact on Loonie trading as lower supply could push oil prices and the Canadian dollar up.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (August 22, 2013)

USD

As expected, the release of the FOMC meeting minutes did cause some waves among dollar pairs but the contents of the report didn’t contain a lot of surprises. After all, the meeting was conducted prior to the release of sentiment-changing reports recently, and traders are still looking for more clues in this week’s Jackson Hole Symposium. Bernanke is set to give the much-awaited keynote address and answer monetary policy questions in the following press conference. In addition, Janet Yellen, who is set to become the next Fed Chairman, is also going to participate in the press conference and it would be interesting to see how she assesses the US economy.

EUR

It’s a big day for the euro as PMI figures are up for release from Germany’s and France’s manufacturing and services sector. Last month, the better than expected results triggered a strong euro rally from the 1.3200 to 1.3400 area against the dollar, as these provided hope that the region is in recovery mode. For August, the flash reports are likely to show another set of upbeat figures, with some projected to climb above the 50.0 mark and show industry expansion. If that’s the case, EUR/USD could sustain its gains to new highs.

GBP

There are no major reports due from the UK today, leaving traders to price in their expectations for the upcoming release of the second quarter GDP figure tomorrow. Strong improvements in the UK economy could be incorporated in this figure, which might come in higher than the previous 0.6% estimate. Recall that traders were a bit disappointed with this figure, although it was higher than the predicted 0.3% uptick, and might get their hopes up for an upward revision. Another disappointment though could erase some of the pound’s recent gains.

CHF

Swiss trade balance is up for release today and might trigger some additional volatility for the franc. The surplus is expected to fall from 2.82 billion CHF to just 2.91 MILLION CHF, which would reflect lower export activity. If that’s the case, the franc could see its losing streak get extended.

JPY

There are no reports due from Japan yet again, leaving the yen vulnerable to risk sentiment. Take note that the potential of higher taxes is currently weighing on sentiment, as market watchers foresee lower spending and growth as a result of this. Stay tuned for updates from Japanese government officials though, as indications of compensating for these higher tax rates could still support the yen.

Commodity Currencies (AUD, CAD, NZD)

Australia is set to print its leading index while China will release the HSBC flash manufacturing PMI for August. Recall that this index, which mostly constitutes smaller industries, has been sliding deeper in contraction and another drop could be very negative for Australia while a bounce could keep AUD afloat. Canada is set to print its retail sales figures in today’s US session and possibly show downside surprises owing to the bleak jobs data for July.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (August 23, 2013)

USD

It’s the last day of the trading week and, with the recent price swings, it could be time for most traders to book profits at the end of the week and avoid potential weekend gaps. After all, the Jackson Hole Symposium is still taking place until Saturday and there could be surprises that’d take place before the markets reopen on Monday. Only the new home sales report is up for release from the US today and this report could still have an impact on dollar movement, especially if the actual figures fall far behind or come in way above the estimate at 487K.

EUR

Only medium-tier data is due from the euro zone today, paving the way for smaller moves among euro pairs. Germany will print its final GDP reading for the second quarter and no changes are expected from the initial 0.7% figure. Belgium would release its NBB business climate index and possibly show a small improvement from -12.0 to -11.1.

GBP

The pound could be in for additional volatility before the week comes to a close since the UK will release the second estimate of its quarterly GDP for the second quarter of 2013. The initial estimate was at 0.6% and this wasn’t enough to please pound bulls at that time. However, an upward revision this time might be enough to extend the pound’s gains, as further growth is also eyed for the succeeding months.

CHF

Switzerland’s calendar is empty again for today, leaving USD/CHF at the mercy of market sentiment. Although there are hardly any major reports from other economies, the Jackson Hole Symposium might still have a few surprises lined up and might cause action for USD/CHF.

JPY

There are no reports due from Japan today so make sure you keep tabs on updates or speeches from Japanese government officials detailing what they plan to do with the country’s tax rates and how they can provide support to spending and growth. Other than that, pay attention to how Japanese equities are trading as well in order to predict sentiment for the Japanese economy.

Commodity Currencies (AUD, NZD, CAD)

There are no reports from Australia or New Zealand, as Canada is the only comdoll economy set to print economic figures for today. The CPI data is due during the US session and is expected to show a 0.1% uptick in headline consumer price levels and a flat reading for core price levels. Weaker than expected data could undermine Loonie strength, which has been a result of higher oil prices so far.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (August 27, 2013)

USD

Dollar pair movement was mostly calm at the start of trading on Monday, as there were hardly any major catalysts save for the US durable goods orders data. Both core and headline figures turned out to be huge disappointments, as the core version printed a 0.6% decline while the headline figure showed a 7.3% drop. For today, CB consumer confidence and the Richmond manufacturing index are on tap. Consumer optimism is expected to retreat from 80.3 to 79.6 while the Richmond manufacturing index could improve from -11 to -7. Bear in mind though that another set of disappointments from the US could trigger a dollar selloff.

EUR

The euro remained mostly stable against the dollar in yesterday’s trading since there were no major reports released from the euro zone. For today, the German Ifo business climate report is up for release and it is expected to print a reading of 107.1, up from the previous 106.2. A higher than expected figure might push EUR/USD above its current consolidation below the 1.3400 mark and possibly push it to new highs.

GBP

Pound trading was restricted yesterday as UK banks were on holiday. Today, trading in the UK resumes and might cause a burst of volatility during the London open. There are no reports due from the UK though, as GBP/USD might take its cue from US data.

CHF

There were no major reports from Switzerland yesterday, leaving franc pairs stuck in consolidation for most of the trading sessions. USD/CHF saw a little bit of movement as the US printed poor durable goods orders figures. For today, Switzerland’s calendar is still empty, which suggests that franc pairs might be in for more sideways movement.

JPY

The yen lost ground against most of its counterparts in yesterday’s trading, although reports revealed that several major institutions cut back on their short positions. There are no reports due from Japan today, which means that the yen might continue trading on this sentiment or react to changes in market optimism.

Commodity Currencies (AUD, CAD, NZD)

Trading for the comdolls was relatively calm yesterday, as there were no major releases from Australia, New Zealand, or Canada. There are still no reports due from these economies today, which means that AUD/USD, USD/CAD, and NZD/USD might be in for much more consolidation across the charts or could be sensitive to the US release of durable goods orders data.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (August 28, 2013)

USD

The US dollar was still ahead of the pack in yesterday’s trading, as risk aversion stayed in the markets. As it turns out, the ongoing turmoil in Syria is causing traders to worry about a full-out war in the Middle East, which in turn could limit oil supply and have negative repercussions for overall growth. This has led to a rally in gold and other safer assets, including the US dollar. For today, pending home sales are up for release and a 0.2% rebound is expected to follow the previous 0.4% decline. Crude oil inventories are also due and a large decline in stockpiles could fuel more risk-off trades.

EUR

The euro managed to hold its ground against the dollar but was no match to yen strength. German Ifo business climate data came in better than expected, as the reading climbed from 106.2 to 107.5, higher than the estimate at 107.1. For today, German GfK consumer climate data is due along with Germany’s import prices. Strong data from the euro zone could allow the euro to stay resilient against its counterparts should risk aversion remain in the markets.

GBP

The pound gave up more ground to the dollar and the yen, as a result of risk aversion. There were no reports released from the UK in yesterday’s trading, which was why the currency was unable to draw any support. For today, CBI realized sales are up for release and an improvement from 17 to 19 is eyed. Also today, BOE Governor Carney will be giving a speech and possibly highlight the recent improvements in the UK economy.

CHF

The franc was beat up by the US dollar in yesterday’s trading when traders bought up lower-yielding currencies. Today’s release of the UBS consumption indicator could provide some support for the Swiss currency if the actual figure comes in higher than the previous 1.44 reading. Otherwise, the franc could continue to lose ground to the U.S. dollar if risk aversion stays.

JPY

The yen emerged victorious in yesterday’s trading as risk off flows benefitted the Japanese currency. There were no releases from Japan yesterday and none are due today so the yen’s movement could continue to depend on market sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were no match to dollar strength, although the Loonie managed to pare some of its losses. The reason is that the ongoing turmoil in Syria is causing a run to the safe-haven assets but is also lifting oil prices, which is good for the Canadian dollar. For today, there are no major reports due from any of the comdoll economies but the US crude oil inventories report might have an impact on the Canadian dollar.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (August 29, 2013)

USD

The dollar had a mixed performance in yesterday’s trading, although it did manage to store some gains against most of its counterparts. EUR/USD dipped to the 1.3305 area while GBP/USD traded below the 1.5500 handle briefly. The tension in Syria is still playing a role in risk sentiment and the possibility of a military strike is keeping traders from stocking up on higher yielding currencies. However, crude oil inventories were better than expected and showed that an oil supply shock hasn’t taken place yet. For today, the US revised GDP is due and an upward revision from 1.7% to 2.2% is expected.

EUR

German data has been mostly supporting the euro in the past few trading days, as data from periphery nations has turned out weaker than expected. However, yesterday’s release of German consumer climate data turned out to be a disappointment also, as the actual figure dipped from 7.0 to 6.9 instead of improving to 7.1. German jobs figures are up for release today and an increase of 5K in hiring is projected.

GBP

The pound sold off initially when risk aversion was still dominating price action but it rebounded when Governor Carney spoke and mentioned his positive outlook for the UK economy. There are no reports due from the UK today, which suggests that GBP/USD could move to the tune of US data or risk sentiment.

CHF

The franc lost ground to both the euro and the dollar yesterday, as risk aversion kept its head in the markets. For today, Swiss employment level is up for release and it’s expected to show a drop from 4.15M to 4.14M, which might be negative for the franc. Although strong figures could still provide support for the Swiss currency, overall risk sentiment could still favor lower-yielding currencies.

JPY

The yen still packed some gains against most of its counterparts as risk aversion from the potential military strike in Syria still kept lower-yielders on top. There are no reports due from Japan recently as a round of Japanese data are due on Friday, which might lead to more volatility and direction among yen pairs.

Commodity Currencies (AUD, NZD, CAD)

Comdolls were able to recover slightly in earlier trading sessions but ended up mostly returning their gains to the dollar. The rise in gold and oil prices is having less of an effect on correlated currencies, as risk aversion is still a bigger theme in the markets. Only medium tier reports are due from Canada for the US session while New Zealand’s ANZ business confidence report churned out a weak result and reflected business pessimism.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (August 30, 2013)

USD

The dollar continued to flex its muscles in yesterday’s trading, as strong US GDP was responsible for boosting the safe-haven Greenback. The GDP reading for the second quarter of the year was revised up from 1.7% to 2.5%, higher than the estimate at 2.2%. This was enough to prompt traders into believing that the Septaper is a go. Meanwhile, tensions in Syria seem to have a limited impact on currency behavior recently, although the possibility of a military strike is still present. Medium-tier US data such as core PCE price index, personal spending and income, and revised UoM consumer sentiment reports are on tap.

EUR

The euro lost a lot of ground to the dollar in yesterday’s trading but managed to consolidate against the yen. German data was weaker than expected, as CPI remained flat instead of jumping by 0.2% while joblessness increased by 7K instead of dropping by 5K. This was enough to erase the jobs gains seen in the previous month, hinting that Germany could be in for weaker growth prospects. German retail sales figures are due today and a rebound is eyed, although a downside surprise could result from the recent decline in hiring.

GBP

The pound was also one of the weaker currencies in yesterday’s trading as there were no major reports to support it. Earlier today, the GfK consumer confidence figure turned out better than expected and improved from -16 to -13. More medium-tier releases are due from the UK today, such as the Nationwide HPI, net lending to individuals, and mortgage approvals.

CHF

The franc was still victim of dollar strength in yesterday’s trading but it managed to recover some of its recent losses against the euro. Switzerland’s employment level was better than expected as it improved from 4.15M to 4.17M instead of dipping to 4.14M. Switzerland will release its KOF economic barometer later today and possibly show an improvement from 1.23 to 1.34.

JPY

The yen was mostly stuck in consolidation against its counterparts, as EUR/JPY consolidated above 130.00 while USD/JPY formed a symmetrical triangle. This was perhaps because traders were awaiting this day’s set of data, which came in mixed. Manufacturing PMI improved from 50.7 to 52.2 while household spending fell short at 0.1% instead of the estimate at 0.4%. CPI figures on the national and Tokyo level were improvements over previous ones, suggesting that the BOJ’s recent easing efforts are still working.

Commodity Currencies (AUD, CAD, NZD)

The comdolls were still no match to dollar strength yesterday, as risk aversion and strong US GDP made the Greenback nearly invincible. However, data from Australia and Canada still came in better than expected. Australian private capital expenditure rose by 4.0% while Canada reported a smaller than expected current account deficit. Canadian monthly GDP is on tap for today and a drop of 0.4% in growth is expected for June, following the previous 0.2% expansion.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (September 3, 2013)

USD

The dollar still managed to gain against most of its major counterparts although the recent rallies seem weaker. USD/JPY broke to the upside of the symmetrical triangle on the 4-hour time frame but the pair is stalling at the previous week highs. There were no reports released from the US since traders were on a Labor Day holiday, but liquidity is expected to pick up strongly in today’s New York session as traders return to their desks. US ISM manufacturing PMI could be a major market mover today and a small decline from 55.4 to 54.2 is expected.

EUR

The euro zone printed strong improvements in its manufacturing sector, allowing its overall manufacturing PMI to hold at 51.3 for August. Spain and Italy printed record-high figures, but this seemed to be ignored by EUR/USD which was mostly driven by risk sentiment and the possibility of a Septaper. For today, Spanish unemployment change and euro zone PPI figures are up for release.

GBP
The pound enjoyed some gains when the UK printed a sharp increase in its manufacturing PMI from 54.8 to 57.2, marking its highest level in more than two years. This ups the odds for a higher than expected construction PMI due today and a better services PMI reading due later on this week. Construction PMI is expected to climb from 57.0 to 58.4, reflecting a stronger expansion in the industry.

JPY

The yen lost ground to its counterparts yesterday as Abe got support for his proposed sales tax increase. This was enough to push USD/JPY above the 99.25 resistance area and most yen pairs above their inflection points. There are no reports due from Japan today, which suggests that yen pairs could be swayed by risk sentiment mostly.

CHF

The franc lost ground to the euro and the Greenback in yesterday’s trading as the Swiss SVME PMI turned out to be a disappointment. The figure slipped from 57.4 to 54.6, reflecting a slower expansion in the Swiss manufacturing industry. Swiss GDP is up for release today and a lower growth figure of 0.3% is expected for Q2 2013, down from the previous 0.6% reading.

Commodity Currencies (AUD, NZD, CAD)

Australia recently printed bleak reports in the form of its retail sales and current account balance. Spending was up by a mere 0.1% instead of the estimated 0.4% uptick while the current account showed a deficit of 9.4 billion AUD. However, support from the recent improvement in Chinese manufacturing is still keeping AUD and NZD afloat. The RBA kept rates unchanged at 2.5% as expected, lending more support for AUD pairs. No reports are due from New Zealand and Canada today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (September 4, 2013)

USD

The US dollar continued to assert its dominance on the charts in yesterday’s trading, although it lost some ground to the Aussie and Kiwi. US data was stronger than expected, with the ISM manufacturing PMI climbing from 55.2 to 55.7 instead of dipping lower for the month of August. At the same time, the growing possibility of a US military strike on Syria is weighing on risk appetite and lifting the lower-yielding Greenback. Data due today is the trade balance, which is likely to show a wider deficit, and the Beige Book report.

EUR

The euro dipped to new lows against the U.S. dollar, as the Spanish unemployment change report printed a flat reading and put a halt to the country’s positive streak in hiring. For today, the euro zone is set to print services PMIs from Spain and Italy, both of which aren’t likely to have a huge impact on EUR/USD, based on the previous non-reaction to the manufacturing PMIs. Euro zone retail sales are also due today and a 0.5% rebound is eyed.

GBP
The pound had a topsy-turvy trading against the dollar as the UK construction PMI also came in strong but failed to sustain GBP/USD’s rally. As it turns out, risk aversion still played a huge role in price action of dollar pairs yesterday. Services PMI is due from the UK today and another upside surprise is likely.

CHF

The franc posted some gains against its counterparts when the Swiss GDP was released. The actual figure was stronger than expected at 0.5% versus the estimate at 0.3%, but still lower than the previous 0.6% growth figure. There are no reports due from Switzerland today, which suggests that franc trading could depend on market sentiment or its counterparts’ data.

JPY

The yen continued to lose ground against most of its counterparts as the possibility of a sales tax increase fueled speculations of further easing from the BOJ. Although Abe stated that he won’t be making the decision until October, analysts are starting to price in the likelihood of more stimulus from the central bank as early as their rate statement this week. No reports are due from Japan today as traders could start positioning ahead of the BOJ statement tomorrow.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar exhibited some resilience yesterday and earlier today, when the GDP report came in line with expectations. The actual report showed 0.6% growth, but the previous quarter’s reading was revised lower. Still, this was enough to push AUD/USD above the .9050 level. Canada will print its trade balance later on today and possibly show a smaller deficit, but the bigger mover for the Loonie is the BOC rate statement. No actual changes are expected so stay tuned for Poloz’s accompanying statement

By Kate Curtis from Trader's Way.

 

[katetrades]

Forex Major Currencies Outlook (September 5, 2013)

USD

The dollar returned some of its recent gains yesterday, as traders covered their short positions ahead of the event risks for today. In particular, EUR/USD bounced back to the 1.3200 handle while GBP/USD rallied above the 1.5600 mark. There were no major releases from the US yesterday, except for the Beige Book report which revealed that the economic expanded at a “modest to moderate” pace recently. For today, ADP jobs data and ISM non-manufacturing PMI are up for release. After rising by 200K in July, a 175K increase in ADP hiring is expected for August. Meanwhile, the ISM non-manufacturing PMI is projected to dip from 56.0 to 55.2.

EUR

The euro recovered against most of its major counterparts yesterday, as traders booked profits ahead of today’s ECB rate decision. No monetary policy changes are expected but it will be interesting to see whether Draghi acknowledges the recent improvements in euro zone’s large nations or not. Upbeat remarks could keep the euro afloat while words of caution could force it to retreat. Euro zone retail sales was weaker than expected at 0.1% for July while the GDP report showed no revisions for the 0.3% growth figure in Q2 2013.

GBP

The pound extended its gains in yesterday’s trading, as the services PMI turned out better than expected. The figure climbed from 60.2 to 60.5 instead of dipping to 59.3. Services comprises a majority of overall UK economic activity so it’s understandable why the pound jumped after the strong release. Today the BOE will make its interest rate decision and no changes are expected since Carney already adopted forward guidance and said that no hikes should be expected for the near term.

CHF

The franc was stuck in choppy trading against the US dollar yesterday while EUR/CHF managed to make headway. There were no reports released from Switzerland yesterday and none are due today, which suggests that more choppy trading could be seen unless US or euro zone events provide direction.

JPY

The yen was still under heavy selling pressure yesterday as traders continued to price in their expectations regarding the proposed sales tax. The BOJ will be making its rate decision within the day and market participants will hear of whether the central bank is planning on making any stimulus adjustments to make up for the potential impact of the sales tax on growth.

Commodity Currencies (AUD, NZD, CAD)

The Aussie was on a roll yesterday, as the GDP came in line with consensus at 0.6%. For now, both AUD and NZD are rallying on the heels of strong Chinese reports earlier this week while the Loonie is stuck in consolidation against the US dollar. No reports are due from these economies today so comdoll trading could depend on US data or risk sentiment.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (September 6, 2013)

USD

The US dollar extended its rally against its major counterparts, as the US ISM non-manufacturing PMI turned out better than expected. The actual figure climbed from 56.0 to 58.6 instead of falling to the estimate at 55.2. The ADP non-farm employment change was slightly below expectations but this doesn’t take away the possibility of a strong NFP release for today. The August reading is expected to come in at 178K, higher than the previous month’s 162K reading. A lower than expected figure might cast doubts on the Fed’s Septaper and trigger a dollar selloff.

EUR

The euro sold off sharply during the ECB press conference that followed their interest rate decision. Governor Draghi mentioned that policymakers had discussed the possibility of lowering interest rates, as the recovery in the euro zone is still faced with several potential risks. He upgraded the growth forecast for the year, although the region is still expected to stay in contraction, then downgraded the GDP forecast for 2014. Only medium-tier reports are due from the euro zone today and these aren’t likely to have a huge impact on euro movement.

GBP

The pound struggled to sustain its momentum in yesterday’s trading, as GBP/USD was weighed down by dollar strength. There were no major releases from the U.K. yesterday, as traders focused on the BOE rate decision. Carney did not make any huge waves since he simply reiterated his forward guidance and said that rate hikes aren’t to be expected in the near term. For today, UK manufacturing production and trade balance data are up for release. Manufacturing is expected to rise by 0.3%, weaker than the previous 1.9% jump.

CHF

The franc lost a lot of ground to the dollar but managed to rally against the euro. There were no reports released from Switzerland yesterday while today’s schedule has Swiss foreign currency reserves and CPI on tap. Reserves are slated to rise above the previous 434.9 billion CHF reading while inflation could stay flat. Weaker than expected readings could mean more losses for the franc.

JPY

The yen was still under heavy selling pressure, although the BOJ did not announce any actual monetary policy changes. Kuroda highlighted the recent improvements in the Japanese economy but also noted that the central bank is ready to ease further if the upcoming increase in sales tax weighs on overall economic activity. No major reports are due from Japan today, as the yen could keep selling off on the prospect of further BOJ easing.

Commodity Currencies (AUD, NZD, CAD)

The comdolls lost a bit of ground to the dollar in yesterday’s trading but were quick to bounce back in today’s Asian session. Australia printed a weak trade balance and actually showed a deficit, reflecting a downturn in export activity, particularly to China. Canada is set to print its jobs data and Ivey PMI later today. Employment could rebound by 21.2K while manufacturing could improve from 48.4 to 52.6.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (September 9, 2013)

USD

The dollar gave back some of its recent gains on Friday, when the NFP release printed a weak figure. The actual result showed a mere 162K increase in hiring instead of the estimated 178K rise. On top of that, the previous month’s figure was revised lower to 104K. Although the jobless rate improved, it was mostly a result of a drop in participation rate. This was enough to cast doubts on the Septaper, as many knew that the Fed was looking at the jobs sector to determine how much it would reduce bond purchases. There are no major reports due from the US today.

EUR

The euro rebounded against the dollar on Friday, as it took advantage of the weak NFP release. The pair was able to rally from the 1.3100 area back to 1.3150. Data from the euro zone was actually weak then, as Germany printed a lower than expected industrial production figure and a smaller than expected trade surplus. Only the Sentix investor confidence report is due from the euro zone today and isn’t likely to cause a huge impact on the shared currency’s movement.

GBP

The pound was selling off during the London session, as UK data such as manufacturing production were both weak. However, the weak US NFP reading allowed GBP/USD to rally back to the 1.5600 area. For today, the UK schedule is free from any economic reports so pound trading could rely on risk sentiment.

CHF

The franc recovered against the dollar last Friday, although Swiss data was actually weaker than expected. Swiss CPI printed a 0.1% decline in price levels, lower than the estimated flat reading. This followed the previous 0.4% decline, prompting some to worry about deflation in Switzerland. Swiss retail sales are due today and a strong rebound from 2.3% to 3.2% is expected.

JPY

The yen regained strength against the dollar on Friday but USD/JPY gapped up over the weekend on renewed support for Abe’s sales tax increase. Japanese data also came in mostly weaker than expected earlier today, as the final GDP reading was revised down from 1.0% to 0.9%. No other reports are due from Japan for the rest of the day as the prospect of the sales tax increase could keep hurting the yen.

Commodity Currencies (AUD, NZD, CAD)

The comdolls packed in strong gains against the dollar starting on Friday, as the weak NFP reading dragged the Greenback down. The Australian dollar tested the .9200 resistance while NZD/USD jumped above .8000. Canadian building permits are due in the US session and a strong figure could keep boosting the Loonie. Earlier today, Chinese inflation data came in line with consensus at 2.6%. 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 (September 10, 2013)

USD

The dollar started Monday off on a weak note, as it continued to selloff after Friday’s NFP fiasco. The weak jobs report prompted traders to worry if the September will push through, leading to an unwinding of some dollar long positions. Consumer credit data from the U.S. revealed a slight downturn, hinting at a drop in spending and confidence. No major reports due from the U.S. today could mean that risk sentiment will dominate price action for dollar pairs.

EUR

The euro extended its gains against the dollar and yen in yesterday’s trading, although a fresh batch of worries could be present in the euro zone. Italian officials are trying to unseat Silvio Berlusconi from the Senate because of the charges he is facing, reviving political troubles in Italy. A snap election could lead to a hung parliament, which might make it more difficult to implement fiscal reforms. As for data, only the French industrial production report is due today and it isn’t likely to spur large moves for the euro.

GBP

The pound was able to trump the dollar and the yen yesterday, as GBP/USD climbed to the 1.5700 handle. There were no economic reports released from the UK, as the pound simply took advantage of dollar weakness and the improvement in risk sentiment. For today, the UK just reported a huge jump in its RICS house price balance, providing more support for the pound. Later today, the UK will hold its 30-year bond auction.

CHF

Swiss retail sales came in weaker than expected, but it wasn’t enough to stop the franc from rallying against the dollar. Spending increased by only 0.8%, a fourth of the estimated 3.2% jump and less than half the previous 2.3% increase. This spells negative prospects for Swiss economic growth, which might later on weigh on the franc. There are no reports due from Switzerland today so the franc pairs could take their cue from US or euro zone reports.

JPY

The yen continued to sell off against its major counterparts, as data from Japan hinted at further weaknesses. The BOJ monetary policy meeting minutes contained no surprises but the policymakers did express their openness to further easing if necessary. Japan released its tertiary industry activity index today and showed a 0.4% decline. The 30-year bond auction is scheduled later today.

Commodity Currencies (AUD, CAD, NZD)

The comdolls were big winners in Monday’s trading, as the improvement in risk appetite and dollar weakness allowed the Aussie, Kiwi, and Loonie to extend their gains. AUD/USD broke above the key .9200 handle while NZD/USD solidified its stay above the .8000 mark. Australian NAB business confidence showed an improvement from -3 to 6, reflecting a return to optimism. Chinese fixed asset investment, retail sales, and industrial production are due today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (September 12, 2013)

USD

The US Dollar extended its losing streak yesterday, as there were no reports for the currency to draw support from. At the same time, the risk rallies aren’t doing so good for the safe-haven dollar. Only the initial jobless claims release is on the U.S. schedule today and a slightly higher number of claimants is expected, from 323K the other week to 332K last week. Also keep tabs on Dudley’s speech at 2:00 pm GMT as he could discuss more details on the upcoming Septaper.

EUR

The euro continued to rally against the dollar but lost ground to the Japanese yen yesterday. Risk flows benefitted the euro, but it appears that the improvements in Japan’s business index outweighed euro strength. For today, Draghi is set to give a speech sometime in the London session and possibly give more details as to why the central bankers discussed lowering interest rates in their latest meeting.

GBP

The pound traded above the 1.5800 mark against the U.S. Dollar but retreated to the Japanese yen. The UK claimant count change report printed better than expected results, showing a 32.6K drop in joblessness and bringing the unemployment rate from 7.8% to 7.7%. BOE inflation report hearings are scheduled today and this should shed more light on whether Carney will alter his stance on not hiking rates for the next two years. UK 10-year bond auction is also scheduled today.

CHF

USD/CHF sank to the .9300 level in yesterday’s trading as dollar weakness persisted. The pair is consolidating around this area though, as it coincides with last week’s lows. There are no major reports released from Switzerland yesterday and today so the behavior of USD/CHF could depend on US data and risk sentiment.

JPY

The yen rebounded strongly yesterday on the heels of better than expected business indicators. The BSI manufacturing index improved from 5.0 to 15.2, reflecting stronger optimism among manufacturers and hinting at better business prospects in the coming months. Core machinery orders, however, came in weaker than expected as it showed a flat reading and hints at lower production in the coming months.

Commodity Currencies (AUD, NZD, CAD)

The RBNZ expressed its intention to hike interest rates starting next year, allowing NZD/USD to trade above the .8100 major psychological level. The Australian jobs release, on the other hand, turned out to be a huge disappointment as the economy reportedly shed 10.8K jobs in August and had a downward revision to the July figure. As for the Loonie, only the national house price index is set for release in today’s NY session.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (September 16, 2013)

USD

The US dollar lost ground to most of its major counterparts on Friday’s New York session, as the retail sales report printed weaker than expected results. The headline figure showed a mere 0.2% uptick instead of the estimated 0.5% increase while the core version of the report showed a 0.1% rise. Headline PPI was better than expected at 0.3% while the core PPI printed a flat reading. Meanwhile, the consumer sentiment report also turned out to be a disappointment as confidence fell from 82.1 to 76.8. For today, US capacity utilization and industrial production data are due, along with the release of the Empire State manufacturing index.

EUR

The euro was unable to stay afloat on Friday as downbeat remarks from Draghi weighed on the shared currency. However, EUR/USD opened higher for this week as doubts on the Septaper triggered dollar weakness. Another speech by Draghi is scheduled for today but this might not have such a huge impact on the euro anymore. Italian trade balance and euro zone CPI are up for release and inflation is expected to be at 1.3% for the headline figure and 1.1% for the core figure.

GBP

The pound struggled to hold on to its recent gains against the dollar and yen last Friday, as there were no new reports from the UK to lift it higher. There are no reports from the UK today as well so pound trading could be range-bound. Take note though that the US is set to print a few medium-tier reports and disappointing results might push GBP/USD higher.

CHF

The franc packed in more gains against the dollar on Friday, as it took advantage of the weaker than expected US retail sales data. There have been no reports from Switzerland then and none are due today, which means that USD/CHF could continue to depend on US figures.

JPY

The yen was able to rebound strongly on Friday as the Japanese Cabinet upgraded its growth forecasts for the economy, citing that Japan’s recovery is already picking up. Although they mentioned that there are still several weak areas, additional stimulus from the BOJ could be enough to keep the economy afloat. Japanese banks are on holiday today, which paves the way for volatile movement among yen pairs.

Commodity Currencies (AUD, NZD, CAD)

Commodity currencies took advantage of dollar weakness on Friday and today, after the US economy showed weak consumer spending data. New Zealand recently reported a bounce in house prices but a weaker Westpac consumer sentiment figure. No reports are due from Australia and New Zealand for the rest of the day while Canada has its foreign securities purchases data up for release in the US session.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (September 17, 2013)

USD

The Greenback still gave up some ground to the major currencies during yesterday’s trading, as news of Summers’ withdrawal from the Fed head race led to more dollar-selling. This is because Yellen is seen as a dove and is likely to keep the stimulus programs in place for the foreseeable future. As for economic data, both reports from the US came in weaker than expected yesterday. The Empire State manufacturing index fell from 8.2 to 6.3 instead of improving to 9.2 while industrial production was lower than expected at 0.4%. For today, there are no major releases from the US as traders might start pricing in expectations for the FOMC statement or start unwinding their dollar positions early.

EUR

The euro rallied yesterday but stopped a few pips shy of the 1.3400 handle against the dollar. Data from the euro zone was weaker than expected but Draghi’s speech contained no surprises, as he already said most of his forward guidance and monetary policy remarks during the ECB statement recently. For today, trade balance and current account balance are due from the euro zone but these aren’t likely to cause huge waves among euro pairs. The German ZEW sentiment figure is likely to have a bigger impact and a small improvement is expected.

GBP

The pound extended its gains to the dollar but was unable to reach the 1.6000 major psychological level despite yesterday’s rallies. There were no reports released from the UK yesterday, as traders are just gearing up for today’s CPI reports. Weaker headline inflation is eyed at 2.7% versus the previous 2.8%, but a higher than expected reading might prompt calls for monetary policy tightening and should be positive for the pound.

CHF

There were no reports released from Switzerland yesterday and none are due today. This means that franc trading could depend mostly on US and euro zone data, as USD/CHF and EUR/CHF have been moving back and forth lately.

JPY

Japanese traders were on holiday yesterday, which is why most yen pairs were simply stuck in their ranges. For today, Japanese traders will return and possibly result to more moves among yen pairs for the rest of the Asian session. There are no news releases from Japan though, as yen pairs could also be sensitive to market sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to edge a little higher against the dollar yesterday but it seems the rallies were short-lived. This was probably because most traders already started unwinding their dollar shorts ahead of tomorrow’s FOMC event. Canadian foreign securities purchases came out better than expected and today’s manufacturing sales release is also expected to print good results. There are no major reports due from Australia and New Zealand today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (September 18, 2013)

USD

The US dollar edged lower against its counterparts but seems to be consolidating for today’s Asian session, as traders are awaiting the FOMC statement. The Fed is expected to taper bond purchases by $10 billion, possibly as a combination of a reduction in Treasury purchases and in mortgage-backed securities. In addition, market watchers will keep close tabs on the accompanying statement by Bernanke as he is expected to adopt forward guidance and provide clues on future monetary policy moves. Fed estimates on growth and inflation are also set for release along with the rate statement.

EUR

The euro struggled to rebound against the dollar in yesterday’s trading but EUR/USD’s movement is slated to stay muted today. German ZEW came in stronger than expected, allowing the region’s ZEW figure to land above the 50.0 mark. There are no reports due from the euro zone, as EUR/USD traders will probably position themselves ahead of the FOMC statement.

GBP

The pound sold off slightly yesterday, as inflation reports simply came in line with consensus. Annual CPI is at 2.7%, down from the previous 2.8%, and closer to the BOE’s 2% inflation target. Core inflation showed a more subdued figure while producer price inflation hinted at lower price pressures in the future. BOE meeting minutes are up for release today and it will be interesting to see if policymakers pushed for an earlier end to easing or not.

CHF

The franc was vulnerable to dollar and euro behavior yesterday as there were no releases from Switzerland. The schedule is still empty again for today, which means that the franc could be sensitive to market sentiment. In particular, watch out for the FOMC statement if you’re trading USD/CHF.

JPY

The yen edged lower against its counterparts as risk appetite improved and there were no reports released from Japan. US TIC long-term purchases data showed that Japanese investors bought a lot of US bonds in the previous month, which reflected strong demand for the dollar and weak demand for the yen. The schedule is empty for today, which suggests that USD/JPY could be driven by the FOMC decision.

Commodity Currencies (AUD, NZD, CAD)

The comdolls tried their best to bounce back against the dollar yesterday, pushing AUD/USD back above .9300 and NZD/USD way past .8200. USD/CAD held steady above the 1.0300 major psychological support. New Zealand is set to print its GDP after the FOMC statement and possibly show weaker growth of 0.2% compared to the previous quarter’s 0.3%. BOC Governor Poloz is set to give a testimony today and possibly spur volatility for USD/CAD ahead of the FOMC.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (September 20, 2013)

USD

The dollar was sold off sharply after the FOMC statement but it was quick to recover some of its recent losses while holding steady against other major counterparts. Economic data from the US was better than expected, with both Philly Fed index and existing home sales printing higher than expected gains. For today, there are no economic releases lined up but three FOMC officials (George, Tarullo, and Bullard) are set to give testimonies.

EUR

The euro was able to extend its rally against the yen but struggled to stay strong against the U.S. dollar. There were no reports released from the euro zone yesterday but the upcoming German elections is starting to weigh on the shared currency. There are no reports due from the euro zone again today as traders could start pricing in expectations for the German elections or unwind some of their euro trades ahead of the event risk.

GBP

The pound returned some of its recent gains to the dollar when the UK retail sales showed disappointing results. Consumer spending fell by 0.9% in August instead of rising by the estimated 0.4%. However, GBP/USD managed to hold on to the 1.6100 area and appears ready for a rebound. Public sector net borrowing data is due today and an improvement might be enough to lift the pound.

CHF

The franc was able to hold on to its recent levels against the U.S. dollar, as the SNB upgraded its growth forecasts for the Swiss economy. There were no actual monetary policy changes made though. There are no reports due from Switzerland today, as the franc could continue to draw support from the hawkish SNB statement.

JPY

The yen was sold off sharply towards the end of the Asian session, as a BOJ official was quoted saying that the central bank is worried about external risks to growth and the possible negative impact of Abe’s sales tax increase. In addition, BOJ Governor Kuroda spoke of the good effects of the recent easing program and emphasized that they could expand it if necessary.

Commodity Currencies (AUD, NZD, CAD)

The comdolls struggled to hold on to their recent gains, as all showed retracements to the dollar yesterday. There were no major reports released from the comdoll economies, but Canada’s medium-tier wholesale sales report printed strong results. For today, Canadian CPI figures are up for release and possibly allow USD/CAD to resume its drop if they come in strong.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (September 23, 2013)

USD

Just when it seemed the US dollar was in for another round of losses, FOMC member Bullard gave a testimony and started talking about the possibility of tapering in October. This was enough to get dollar bulls riled up in anticipation of an Octaper event, which would push interest rates and the dollar higher. For today, there are no major reports due from the US. Only a speech by FOMC member Dudley, which might also spark volatility for dollar pairs, and the manufacturing PMI are up for release.

EUR

The euro gapped up against the dollar over the weekend on the wake of successful German elections. German Chancellor Angela Merkel held on to her position for the third term, although her Christian Democrats party was unable to secure a majority. This paves the way for a grand coalition to be formed and, if there are several challenges along the way, this might force the euro to return its recent gains. French and German PMIs are up for release today and another set of improvements could help the euro extend its gains.

GBP

The pound lost a bit of ground on Friday, as negative sentiment from Thursday’s retail sales release continued to drag the British currency down. Public sector net borrowing was lower than expected for the month but it was much higher than the previous month’s reading, as it showed that the government chalked up another deficit by spending more than what they earned. There are no major reports due from the UK today.

CHF

The Swiss franc was one of the major currencies that was able to hold steady against the Greenback’s rallies on Friday, as USD/CHF held on to the .9150 minor psychological support. Upbeat remarks from the SNB the previous day were enough to keep the currency supported until the end of the week. There are no reports lined up from Switzerland today so USD/CHF and EUR/CHF might be sensitive to U.S. and euro zone data.

JPY

The yen was able to hold on to its recent gains, as news updates revealed that Abe was looking at other alternatives to offset the sales tax increase. The prospect of additional stimulus from the BOJ could lead to more yen selling though so watch out for any updates on this issue. As for economic data, none are due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up some of their recent wins to the dollar, as USD/CAD retreated to the 1.0300 handle on mixed inflation reports while NZD/USD pulled back below the .8400 mark. Chinese final manufacturing PMI came in stronger than expected this morning, adding to support for the Australian dollar and to speculations that China is starting to recover. No reports are due from the comdoll economies for the rest of the day.

By Kate Curtis from Trader's Way