| Forex Weekly Outlook – March 8-12 Posted: 06 Mar 2010 02:00 AM PST 
After the NFP, the upcoming week is somewhat less busy. Nevertheless, rate decision in Switzerland and New Zealand, job figures from Australia and Canada and two major American releases on Friday among other events, will provide lots of action. Here’s the weekly outlook. On Monday and Tuesday, there are many events on the calendar, but not too many important ones. The effect of the Non-Farm Payrolls will still strongly felt at the beginning of the week, until fresh important indicators are released. Let’s start: - Swiss Retail Sales: Published on Monday at 8:15 GMT. Switzerland enjoys a strong and stable economy with confident consumers. Last month, sales volume jumped by 4.7%, a very strong pace. This time, a rise of 1.6% is predicted. This will have a strong impact on the Swissy as well as a collateral effect as the beginning of the week doesn’t contain too many figures.
- British NIESR GDP Estimate: Published on Wednesday at 15:00 GMT. NIESR is usually more accurate than other economists in understanding the economy. The upcoming release will show the growth rate for the three months that ended in February, as Britain hardly got out of recession at the end of 2009. This tends to have a long term impact on the Pound.
- American Federal Budget Balance: Published on Wednesday at 19:00 GMT. It’s no secret that the US government owes a lot of money. The size of the deficit fell to more “normal” levels last month – only 40 billion. But this time, it’s predicted to surge back to 200 billion, weighing on the dollar.
- New Zealand rate decision: Published on Wednesday at 20:00 GMT. New Zealand has the second highest interest rate among the major currencies, 2.5%, but it didn’t follow its neighbor Australia and didn’t raise the rates. Also now, Alan Bollard is expected to leave the Official Cash Rate unchanged but may hint about future hikes in the RBNZ Press Conference. This decision has an impact beyond New Zealand and impacts also the Aussie.
- Japanese Final GDP: Published on Wednesday at 23:50 GMT. According to the initial release, the land of the rising sun experienced a stronger growth than expected – 1.1% in Q4. This is expected to be revised to the downside – 1.0%, shaking the Japanese Yen against the dollar and all the Yen crosses
- Australian employment data: Published on Thursday at 00:30 GMT. In the past four months, Australian employment figures were fantastic, beating expectations each time. The predictions remain cautious: Employment Change is expected to rise by a modest number – 15,300 and the Unemployment Rate is expected to remain unchanged at 5.3%, after dropping from 5.5% last time.
- American and Canadian Trade Balance: Published on Thursday at 13:30 GMT. This double-feature release in Canada and the US always triggers action in USD/CAD. The American deficit is expected to remain high at around 40 billion, while Canada is expected to turn from a deficit of 0.2 to a surplus of 0.4 billion.
- American Unemployment Claims: Published on Thursday at 13:30 GMT. Together with trade balance, the first jobless claims report after the Non-Farm Payrolls will probably show an improvement – a drop from 469K to 452K, pushing the dollar higher.
- Swiss rate decision: Published on Thursday at 14:00 GMT. The Swiss National Bank makes rate decisions on the Libor rate only once a quarter. The rate is expected to remain unchanged at 0.25%. At the same time last year, the central bank accompanied the rate decision with a massive intervention. They now intervene all the time, not only on rate decisions.
- Canadian employment data: Published on Friday at 12:00 GMT. Also Canada experienced an improving job market. Last month, the unemployment rate surprised by falling to 8.3%. This is expected to remain unchanged. The superb employment change figure showed a rise of 43,200 jobs last time. It’s expected to be followed by a gain of 17,500 jobs this time. This will rock USD/CAD and also impact the greenback elsewhere.
- American Retail Sales: Published on Friday at 13:30 GMT. Sales were stronger than expected in January, but the freezing month of February probably weighed on this growth in the volume of sales. A drop of 0.1% is predicted in retail sales and a drop of 0.1% in core retail sales.
- American Consumer Sentiment: Published on Friday at 15:00 GMT. According to the University of Michigan, consumer confidence has been stable in the past three months, remaining almost unchanged at a score of 73.6. A small rise to 74.3 points is expected this time. The timing of the release, close to the close of the markets, promises lots of action around this release.
That’s it for the major events this week. I’ll later post specific currency coverages. Further reading: Want to see what other traders are doing in real accounts? Check out Currensee. It’s free. |
| Forex Links for the Weekend Posted: 05 Mar 2010 02:00 PM PST 
A busy week has ended with the monthly NFP circus. It’s now time to relax with some longer-term reads for the weekend. Here are my favorite picks: - Kathy Lien wonders out loud what Larry Summers, Obama’s senior economic advisor knows about payrolls, having a role in lowering expectations.
- Jakob Dupont Knudsen announces a new site: ForexPop in which he concentrates news from the world of forex. I’m glad that Forex Crunch is cited there.
- Larry Greenberg dives into a controversial issue: the US debt, a factor that weighs on the dollar.
- Adam Kritzer discusses the continued Chinese currency peg and how it influences currency trading.
- Casey Stubbs explains how to detect forex price trends using candlesticks.
- James Chen announces a webinar in which he shows how he does his daily analysis and finds high probability trading setups.
- Ash, on Michael Greenberg’s site, asks the question many new traders ask: where is my Stop Loss? He also supplies some answers…
That’s it for now. Have a great weekend! Want to see what other traders are doing in real accounts? Check out Currensee. It’s free. |
| No Expectations, No Disappointments – NFP Separates Currencies Posted: 05 Mar 2010 05:36 AM PST 
As mentioned in my NFP previews, the low expectations were in favor of the dollar, but not all against all currencies – Euro, Pound, Swissy and Yen weaken, while the Aussie and loonie beat the dollar. This NFP is different: Non-Farm Payrolls came out a little bit better than expected: they showed a loss of 36,000 jobs, better than about 50,000 that was expected. Last month’s number was revised to a loss of 26,000, an insignificant change from the loss of 20,000 initially reported. A small positive surprise was also seen in the Unemployment Rate which remained at 9.7% and didn’t rise back up to 9.8% as expected. Let’s see the reaction: Forex reaction – Pound going under 1.50 EUR/USD fell from 1.3580 to 1.3530 after the release. This 50 pips instant drop is a good reflection of the slightly better results. The most important support line for EUR/USD is 1.3423, and that’s still far away. EUR/USD recovered afterwards, but remained lower than GBP/USD is also vulnerable to good American figures and it fell from 1.5040 to 1.4995, just below the round psychological number of 1.50. The important bottom line for the Pound is at 1.4780. This is a historic support line and also this week’s bottom – GBP/USD bounced off this line after the big collapse. GBP/USD recovered later. USD/CHF and USD/JPY are on the rise – the US dollar gains ground against these majors. But the picture is different in the commodity currencies: AUD/USD rises from 0.9010 to 0.9060, getting ready to attack the 0.90 resistance line that it failed to breach earlier this week. Also the Canadian dollar is beating the US dollar – USD/CAD fell from 1.0320 to 1.0270. It went as low as 1.0269 earlier this week, and the most important support line is at 1.02 – the 2009 low. - Post still being updated - Want to see what other traders are doing in real accounts? Check out Currensee. It’s free. |
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