| EUR/USD Outlook – March 8-12 Posted: 06 Mar 2010 07:04 AM PST 
EUR/USD is getting used to a range also after the NFP. The upcoming week contains many events that will move the Euro. Here’s the outlook for these events and an updated technical analysis for EUR/USD. EUR/USD graph with support and resistance lines on it. Click to enlarge: 
A lot of progress has been made in resolving the Greek crisis, but it will probably be in the headlines this week as well and might continue to overshadow the regular indicators. Let’s start seeing them. The technical analysis will follow: - Sentix Investor Confidence: Published on Monday at 9:30 GMT. This wide survey of 2,800 investors and analysts has shown a deterioration of economic conditions in recent months. The index, currently at -8.2, is expected to edge up to -7.6, still in the negative zone. Most European business surveys aren’t too good.
- German Industrial Production: Published on Monday at 11:00 GMT. Europe’s largest economy saw a surprising drop of 2.6% in its industrial output last month. This followed previous disappointments. A renewed rise is expected this time – 1.1%.
- German Final CPI: Published on Wednesday at 7:00 GMT. A month of accelerated price hikes was erased one month later, and Germany is back to stability now – a rise of 0.2% according to the initial release. This will probably be confirmed now.
- French Industrial Production: Published on Wednesday at 7:45 GMT. Europe’s second largest industry is more stable than Germany, but it also saw a small dip of 0.1% last month. It’s expected to rise by 0.3% this time.
- Jean-Claude Trichet talks: Will speak on Wednesday at 18:00 GMT and on Friday at 20:45 GMT. The president of the ECB always has strong influence on Euro, as his words are carefully listened to. the first speech is at the inauguration ceremony of the The Language of Money in Frankfurt. The second will be at Institute of Economic Policy Research, in Stanford. The times of his speeches will sure be volatile.
- French Final Non-Farm Payrolls: Published on Thursday at 7:45 GMT. The French employment situation is getting worse. According to the first release, the number of employees fell by 0.4% in Q4 – the sixth quarter in a row. This will probably be confirmed now.
- ECB Monthly Bulletin: Published on Thursday at 9:00 GMT. This publication contains the data that the ECB sees before it makes its decisions, and usually reveals economic data that hasn’t been release before. It has some impact on the Euro.
- German WPI: Published on Friday at 7:00 GMT. The wholesale price index gives another glimpse on Europe’s prices. A big surprise was reported last month, as prices jumped by 1.3%. They weren’t expected to budge. A rise of 0.6% is predicted this time.
- Industrial Production: Published on Friday at 10:00 GMT. After Germany and France already released their figures, the all-European number is due, but it still moves the currency and tends to surprise. Last month’s output dropped by 1.6%, quite a disappointment. A rise of half this scale, 0.8% is expected this time.
EUR/USD Technical Analysis The Euro began with a new test of the 1.3423 line, but bounced back up and reached a peak at 1.3735 before closing at 1.3612, slightly lower than last week’s close. I’ve added 1.3735 as a minor resistance line. It didn’t appear last week. Above, 1.3780 is another minor resistance line. 1.3850 already supports major resistance for the Euro and hasn’t been breached in over a month. Beyond 1.3850, 1.40 was a previous support line and now serves as resistance. It’s followed by 1.42, but that’s far now. Looking down, 1.3530 is still a very minor support line. As aforementioned, 1.3423 still holds, and this is the critical line for the Euro. A break of this important line will send the Euro tumbling down to 1.3080, the only significant hurdle out there. I remain bearish on the EUR/USD. Europe continues to suffer from economic stagnation, unemployment and debt. Although some data is marginally better, the sentiment continues to be negative. This pair receives lots of great review on the web. Here are a few: Further reading: Want to see what other traders are doing in real accounts? Check out Currensee. It’s free. |
| GBP/USD Outlook – March 8-12 Posted: 06 Mar 2010 07:03 AM PST 
Mervyn King sure got a weaker Pound this week – it collapsed across the board. The upcoming week consists of 8 events that will move the Pound. Here’s an outlook for these events and updated technical analysis for GBP/USD in its lower ground. GBP/USD graph with support and resistance lines on it. Click to enlarge: 
The rate decision that we saw this week wasn’t different than previous ones, but the chance of renewing the Quantitative Easing program (hurting the Pound) still exists. Let’s start: - Kate Barker talks: Starts speaking on Monday at 13:00 GMT. Barker is about to finish her job as a voting member of the MPC in May. This might make her words, in a speech in London, more loose. The last rate decision didn’t contain any big surprises, but she might indicate something about the future.
- BRC Retail Sales Monitor: Published on Tuesday at midnight GMT. The British Retail Consortium releases this unofficial retail sales release before the government, but it isn’t always accurate. After four months of expansion, sales volume fell by 0.7% in the previous month. A small rise is expected this time.
- RICS House Price Balance: Published on Tuesday at midnight GMT and overshadowed by the BRC release. The balance between areas reporting house price rises and ones showing a drop has been OK. After this indicator reached a peak at 45%, it fell back to 30%. It’s now expected to rise again – from 32% to 36%.
- Trade Balance: Published on Tuesday at 9:30 GMT. The British deficit rose to 7.3 billion last month, and it’s now expected to drop back to to 6.9. A deficit in trade balance is normal for Britain.
- Manufacturing Production: Published on Wednesday at 9:30 GMT. This event will probably have the strongest immediate impact on the Pound. Production surprised with a nice rise of 0.9% last month, and is now predicted to get back to slower growth – 0.3%. Note that the Industrial Production figure contains manufacturing (80%) and other sectors, but the manufacturing number is eyed.
- NIESR GDP Estimate: Published on Wednesday at 15:00 GMT. The NIESR independent institute is known for its accuracy. They release a monthly estimate that relates to the three months that just ended. Their last projection showed growth at a scale of 0.4%. A similar number is expected this time.
- Consumer Inflation Expectations: Published on Thursday at 9:30 GMT. The BOE releases a quarterly figure that shows what consumers expect. Prices have risen in the UK, but Mervyn King has a tendency to dismiss it. Well, now we’ll see what consumers think. In the previous three quarters, expectations were identical – 2.4%.
- Spencer Dale talks: Starts speaking on Friday at 10:00 GMT. As chief economist of the BOE, Dale’s words have an impact on the Pound. He’ll talk in front of Cambridge students close to the close of the markets and could shake the Pound.
GBP/USD Technical Analysis The Pound began the week with a big collapse: it lost 1.50 and dropped quickly to 1.4780, were it bounced back. The close at 1.5133 isn’t too bad considering the bad start, but it still reflects a third week of lower closes. GBP/USD is currently bound by two minor lines: 1.50 from below, being a round number, and this week’s peak of 1.5167 – a line that didn’t appear in last week’s outlook. Looking up, 1.5350 is a very strong resistance line. The break of this line (when it served as support) sent GBP/USD tumbling down. Higher, 1.5833 is the next important line. GBP/USD wasn’t above it for many weeks now. Looking down, 1.4780 provides strong support. It worked as a support and resistance line in the spring of 2009, and held the Pound from falling further just now. Even lower, 1.44 is the next significant line of support, working as such during May 2009. A break of 1.4780 is needed for further downside towards this line. I remain bearish on GBP/USD. Worries about a political stalemate, debt and unemployment continue to weigh on the Pound. The loss of important technical levels reflects the situation. Further reading: Want to see what other traders are doing in real accounts? Check out Currensee. It’s free. |
| AUD/USD Outlook – March 8-12 Posted: 06 Mar 2010 07:02 AM PST 
With interest rate rising to 4%, the Aussie continued north. Australia’s employment figures will be watched this week, among other releases. Here’s an outlook for the Australian events and an updated technical analysis for AUD/USD. AUD/USD graph with support and resistance lines on it. Click to enlarge: 
The Aussie hardly felt the American Non-Farm Payrolls. This shows its strength, also seen in the strong Q4 growth. Let’s start the review. The technical analysis will follow: - ANZ Job Advertisements: Published on Tuesday at 00:30 GMT. The number of job ads in papers is a good indicator for the employment situation. After two sharp rises, this indicator dropped by 8.1% last time. It’s predicted to rise once again. Since it’s released before the official job numbers, it tends to shake the Aussie, but it isn’t always correct.
- NAB Business Confidence: Published on Tuesday at 00:30 GMT and overshadowed by ANZ. National Bank Australia surveys about 350 businesses for this highly regarded survey. Optimism reached a peak in December, at 19 points and then dropped. A score similar to last month’s 15 points is predicted now.
- Westpac Consumer Sentiment: Published on Tuesday at 23:30 GMT. This bank measures the consumers – 1200 of them. This indicator isn’t stable – it fell by 2.6% after rising by 5.6% beforehand. A slower rise is predicted this time.
- Home Loans: Published on Wednesday at 00:30 GMT. The housing sector is very important for the whole economy. Home Loans tends to have a strong impact on the Aussie. Three months of drops, including two drop above 5%, are expected to end now with a rise of 2.1% in loans.
- MI Inflation Expectations: Published on Thursday at midnight GMT. The Melbourne Institute has shown that inflation expectations are tame – they softened from 3.5% to 3.2% last month. The same score is expected this time. As inflation is officially reported only once a quarter, this unofficial number is of importance.
- Employment data: Published on Thursday at 00:30 GMT. Australian employment has beaten expectations for four months in a row. Employment Change rose by 52,700 last month, more than three times the early expectations. Also the unemployment rate didn’t stay behind – it dropped to 5.3%, the lowest in a year. The unemployment rate isn’t expected to change and a gain of 15,300 jobs is expected this time. Will we have a fifth consecutive surprise?
- RBA Bulletin: Published on Friday at 00:30 GMT. This collection of economic data is what the RBA sees when making policy decisions. It’s importance is about to rise as the frequency is about to be changed to once a quarter, from once a month.
AUD/USD Technical Analysis The Aussie climbed steadily from the 0.8850 support line up to the 0.9090 resistance line, closing higher than last week – at 0.9076. The lines haven’t changed since last week. Below, 0.8850, 0.8735 provides additional support – it was December’s low. Even lower, 0.8567 was a support line when the Aussie was going up, and was also tested at the beginning of this year. Looking up, if AUD/USD breaks 0.9090, the next line of resistance is at 0.9170, a line that served as temporary support. The most important line of resistance is at 0.9327, where the Aussie bounced many times in the past. I am bullish on AUD/USD. The rate hike and the strong growth showed the strength of the Australian economy once again. The employment data should do it this week, and help it move above 0.9090. Further reading: Want to see what other traders are doing in real accounts? Check out Currensee. It’s free. |
| USD/CAD Outlook – March 8-12 Posted: 06 Mar 2010 07:01 AM PST 
The Canadian dollar broke lower. It’s now awaiting the all-important employment figures. Here’s an outlook for the upcoming events in Canada and an updated technical analysis for USD/CAD. USD/CAD graph with support and resistance lines on it. Click to enlarge: 
One of the things that helped the loonie was the GDP release – it showed that the Canadian economy is growing at a faster rate than expected. Will jobs continue to show the same positive trend? Let’s start the review. The technical analysis will follow:
- Housing Starts: Published on Monday at 13:15 GMT. The Canadian housing sector is advancing steadily month by month. 186K housing starts were reported last month, slightly better than expected. This figure is expected to be left unchanged this time.
- Trade Balance: Published on Thursday at 13:30 GMT. Canada’s trade balance is expected to flip from a deficit of 0.2 billion to a surplus of 0.4 billion. The American trade balance is released at the same time, making it a very volatile time to trade USD/CAD.
- NHPI: Published on Thursday at 13:30 GMT and overshadowed by the trade balance. The second housing sector figure this week relates to new house prices. Prices have risen in the past six months, usually in small scale. Following last month’s 0.4% rise, prices will probably advance by 0.5%.
- Mark Carney talks: Starts speaking on Thursday at 19:05 GMT. In the recent rate decision, Carney didn’t change the schedule for a rate hike (as in previous decisions), but he did cite rising inflation as a concern. The tone of this speech, in the Carleton University in Ottawa will probably shake the loonie.
- Employment data: Published on Friday at 12:00 GMT. In recent months, the Canadian job market is improving with occasional hiccups. Last month was really excellent: employment change showed a big rise in jobs 43,000. The unemployment rate dropped to 8.3%, also a great positive surprise. The unemployment rate is expected to remain unchanged at 8.3% and the number of employed people is expected to rise by 17,500. This will supply a strong ending for the week.
USD/CAD Technical Analysis USD/CAD broke below the 1.04 line that it struggled with at the beginning of the week. Later in the week, it steadily went lower, bottoming out at 1.0260 before closing at 1.0290. Support and resistance lines haven’t changed since last week’s outlook. USD/CAD is now bound between 1.02 and 1.04, a range that it knows from the past. Above 1.04 (which is now a resistance line), 1.0680 provides minor resistance before 1.0780 which is a big technical hurdle. It’s the upper border of a bigger range that the loonie traded for a long time. Even higher, 1.0850 is the next resistance line. It was a peak before the pair entered the current range. Higher, 1.1130 was tested a few times in the past and serves as another resistance line. Looking down, 1.02 is a strong support line – it worked as such earlier this year. 1.02 was also the 2009 low for this pair. The ultimate support line is 1.0000 – USD/CAD parity. This was last seen a long time ago, but it could be approached soon. I am bearish on USD/CAD. The strength of the Canadian economy was seen again in the GDP release and will probably be seen in jobs. 1.02 is a very strong hurdle before parity. Further reading: Want to see what other traders are doing in real accounts? Check out Currensee. It’s free. |
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