| EUR/USD Outlook – April 19-23 Posted: 18 Apr 2010 03:25 AM PDT 
Greek hopes and worries dominated the Euro’s trading in the past week. The upcoming week will be dominated by economic indicators, with two major surveys to rock the currency. Here’s an outlook for the 12 events that await the Euro this week, and an updated analysis for EUR/USD. EUR/USD graph with support and resistance lines on it. Click to enlarge: 
After starting the week with an impressing weekend gap on Greek hopes – the Euro returned closed almost at the same spot. The Greek story won’t let go, but there are so many events this week. So, let’s start: - German PPI: Published on Tuesday at 6:00 GMT. After a leap two months ago, German producer prices took a break and remained unchanged last month. Given the rise in commodity prices, this inflation indicator is expected to rise by 0.5% this time.
- Current Account: Published on Tuesday at 8:00 GMT. After two months of surplus, Europe’s current account, consisting of good (trade balance), services and money, fell into a deficit of 8.1 billion last month. This deficit is predicted to narrow down to 5.3 billion this time.
- German ZEW Economic Sentiment: Published on Tuesday at 9:00 GMT. This survey of 350 analysts and institutional investors always rocks the Euro. In the past 6 months, the ZEW economic sentiment has been on the fall, hurting the Euro almost each time. This time, it’s predicted to edge up from last month’s score of 44.5 to 45.2 points. Also the all-European figure is expected to rise from 37.9 to 38.9 points, but it has a smaller impact.
- Axel Weber talks: Starts speaking on Tuesday at 16:00 GMT at a conference in Mannheim. The president of the Bundesbank is not only an influential member of the ECB, but the leading candidate to replace Jean-Claude at the top position. His words about the debt crises and monetary policy in the continent are always monitored carefully.
- French Flash PMI: Published on Thursday at 7:00 GMT. France begins a busy morning of purchasing managers’ indices, that will keep EUR/USD busy. Flash Manufacturing PMI is predicted to rise from 56.5 to 56.8 points. The services sector is somewhat lagging behind, in Europe’s second-largest economy, and it’s predicted to tick up from 52.8 to 54.4 points.
- German Flash PMI: Published on Thursday at 7:30 GMT. Europe’s largest economy enjoys a super strong manufacturing sector, according to the PMI – the high score of 60.2 will probably be repeated. The services sector is expected to advance from 54.9 to 55.2 points.
- All-European Flash PMI: Published on Thursday at 8:00 GMT. The last figure is for all the continent – the manufacturing sector is expected to see a small rise from 56.6 to 56.8 points, while the services sector will probably rise from 54.1 to 54.5. Note that all the numbers are above the critical line of 50 – marking economic expansion.
- Jean-Claude Trichet talks: Starts speaking on Thursday at 11:00 GMT in a conference in Frankfurt. The president of the ECB might comment about the situation of debt-struck countries and might also say something about the stagnant economy.
- French Consumer Spending: Published on Friday at 6:45 GMT. Europe’s second largest economy saw two months of disappointing dips in consumer spending – 2.7% and 1.2%. A halt in this quick deterioration is expected now with a rise of 0.3% in spending. This can help the Euro.
- German Ifo Business Climate: Published on Friday at 8:00 GMT. The second major survey from Germany is very wide: 7,000 businesses are polled about their expectations for the next months. Contrary to the ZEW survey, this has been on the rise almost each month, reaching 98.1 points, the highest in almost two years. This positive trend will likely continue with a score of 98.9 points.
- Industrial New Orders: Published on Friday at 9:00 GMT. After two positive months, the value of new orders that manufacturers received took a 1.6%. A correction is expected this time, with a rise of 0.9%.
- NBB Business Climate: Published on Friday at 13:00 GMT. This survey, coming from the small nation of Belgium, reflects the situation of the Euro-zone’s economies quite well – negative but improving. After edging up to -3.6 points last month, a score of -2.5 will probably be seen this time.
EUR/USD Technical Analysis The Euro had the best weekend gaps, starting above 1.36 and almost reaching 1.37. It later dropped and closed the gap on Friday. The close at 1.3504 is a full round trip. Some lines have changed since last week’s outlook. The current range of this pair is between 1.3380 and 1.36. Note that 1.3380 is a strong support line while 1.36 is a minor one. Looking up, the next line after 1.36 is 1.37, which was the peak last week and also a resistance line in the past. Higher, 1.3850 is a very strong resistance line – after the Euro failed breaking this line, it collapsed. Looking down, the next support line under 1.3380 is found at 1.3267, the year to date low for EUR/USD. Even lower, strong support is found at 1.3080 – the line where the Euro began a long term run last year. I am bearish on EUR/USD. The Greek troubles aren’t over yet. Together with a new dollar storm on the Goldman Sachs scandal, and a lame economy, I EUR/USD renewing its falls. This pair receives many good reviews on the web. Here are some of my favorites: - James Chen watches how the gap is filled and sees this as a bearish sign.
- Mohammed Isah discusses how the pair is struggling ahead of 1.3537/1.3498 Levels.
- TheLFB analyzes the impact of Goldman Sachs on the oversold dollar.
- Andrei sees further weakness in EUR/USD.
- TheGeekKnows reviews the week and looks forward.
Further reading: Want to see what other traders are doing in real accounts? Check out Currensee. It’s free. |
| USD/CAD Outlook – April 19-23 Posted: 18 Apr 2010 02:00 AM PDT 
A busy week awaits the Canadian dollar with the rate decision being the highlight. Here’s an outlook for the 7 Canadian events and an updated technical analysis for USD/CAD. USD/CAD graph with support and resistance lines on it. Click to enlarge: 
The Canadian dollar continued to struggle with parity, and seemed to improve its positions in the past week before retreating on the Goldman Sachs news. Now it will depend mostly on Canadian indicators. Let’s start the review. The technical analysis will follow: - Foreign Securities Purchases: Published on Monday at 12:30 GMT. The flow of money into Canada has exceeded expectations in recent months. Each time, expectations were for a flow of under 10 billion dollars, but they hit 11 billion at times. Also this time, the 11.8 billion figures is predicted to be followed by only 7.29 billion. Will there be another surprise? This figure shows the confidence in the economy.
- Rate decision: Published on Tuesday at 13:00 GMT. Mark Carney and the BOC are getting close to the boiling point. Canadian indicators continue to improve, the price of oil is rising and the end of June – the time for an interest rate hike is getting very close. If he repeats his statement about a hike at the end of Q2, the loonie will only shake. But if this line is removed, traders can expect a move in the Overnight Rate to come sooner than later. Every word in the BOC Rate Statement will be closely watched. This is the key event for the week, and may be decisive for the ongoing battle for parity.
- Wholesale Sales: Published on Wednesday at 12:30 GMT. While this is a late figure, released 50 days after the month ends, this still has a strong impact on the currency. The rise of 3% in sales last month was a big surprise and helped the loonie. This time, a rise of 1.3% is predicted.
- Leading Index: Published on Thursday at 12:30 GMT. Also here, the composite index is based on economic indicators that have already been released, but this still has an impact. This indicator slowed down in the past two months, growing at a rate under 1%. The rise of 0.8% that was seen last month will probably be repeated this time.
- BOC Monetary Policy Report: Published on Thursday at 14:30 GMT. The report outlines the economic situation and inflation status. It usually provides strong hints about future policy and tends to shake the markets. This can be viewed as a complementary event to the rate decision. 45 minutes after the release, BOC governor Mark Carney will hold a press conference to explain the report.
- CPI: Published on Friday at 11:00 GMT. After a few stable months, Core CPI picked up last month, rising by 0.7%, more than 0.3% that was predicted. It’s now predicted to rise by only 0.1%. CPI, that rose by 0.4%, as predicted, will probably rise by 0.2%. Note that a similar rise a few months ago didn’t turn into a trend. If these expectations are realized, there will be no reason to rush with a rate hike – a bigger rise in prices is needed in this key indicator.
- Retail Sales: Published on Friday at 12:30 GMT. This important consumer related indicator is published just 90 minutes after the CPI and closes the week for the loonie. The volume of retail sales is expected to rise by 1.1%, more than last month’s 0.7% rise. Core retail sales, which surprised with a 1.8% growth rate last month, will probably rise by 0.9% this time.
USD/CAD Technical Analysis Contrary to other currencies, the loonie didn’t enjoy a weekend gap, and continued trading around parity. USD/CAD later plunged to a new yearly low – 0.9953, before retreating. Friday’s dollar storm sent the pair high up, closing at 1.0126, above last week’s peak. Small changes have been made to the lines since last week’s outlook. USD/CAD is currently in a range between the minor support line of 1.01 and 1.02, the 2009 low. Looking up above 1.02, the next line is also rather minor – 1.03. This was a significant line in 2008, and a swing high in March. Higher, 1.04 is an important line that worked well as a support and resistance line many times in recent months, and is now a very strong resistance line. Looking down below the minor line of 1.01, parity continues to be a critical line that the currencies battle on. This battle isn’t over yet. Even lower, 0.98 is the next support line, working as such way back in 2008. It’s followed by a stronger one – 0.97. I remain bearish on USD/CAD. Despite the Goldman Sachs scandal, after reaching parity, strong Canadian indicators will probably push USD/CAD lower. Further reading: Want to see what other traders are doing in real accounts? Check out Currensee. It’s free. |
| NZD/USD Outlook – April 19-23 Posted: 18 Apr 2010 01:00 AM PDT 
The kiwi was hurt by the drop in retail sales that was reported in the past week. Here’s an outlook for this week’s major events, and a technical analysis for NZD/USD. NZD/USD graph with support and resistance lines on it. Click to enlarge: 
Note: I haven’t made a weekly outlook for the kiwi in a long time, and I’ve received comments that showed interest, so here goes: - CPI: Published on Monday at 22:45 GMT. New Zealand didn’t follow Australia with raising the interest rates, and one of the reasons is that prices are rising – in the fourth quarter of 2009, prices actually fell by 0.2%. The first quarter is expected to show a rise of 0.6%, back to normal levels. The kiwi will rock around this release.
- Visitor Arrivals: Published on Thursday at 22:45 GMT. The economy of New Zealand depends on tourism, so the number of visitors, especially in the first quarter which is summertime, is very important. The number of visitor dropped last time by 1.9%, and is expected to rise this time.
- Credit Card Spending: Published on Friday at 3:00 GMT. Consumers have been raising their spending in the past 4 months, showing confidence in the direction of the economy. Following the 1.1% growth last time, spending is predicted to grow at a smaller level this time.
NZD/USD Technical Analysis The weekend gap sent the kiwi to test the 0.72 resistance line, but it failed to breach it and fell within the range, and finally closed at 0.7084. NZD/USD is currently trading between 0.70, a round number that provided support in recent months, and 0.72, the line it failed to break just now and also a month ago. Above 0.72, the next line of resistance is 0.7320, which worked as a support and resistance line around the end of 2009. Even higher, 0.7440 was a peak the pair failed to break in January, and also was a point where the kiwi closed before a big fall in October. Looking down below 0.70, the next support line is 0.68 – this was the lowest line in the past 6 months – the bottom at the beginning of February. Even lower, 0.6685 was a bottom line in September and provides distant support. I am bullish on NZD/USD. New Zealand will also enjoy a devaluation of the Chinese yuan, as well as the rise of commodity prices. The inflation figure this week is a key event for a rate hike in the near future. Further reading: Want to see what other traders are doing in real accounts? Check out Currensee. It’s free. |
| GBP/USD Outlook – April 19-23 Posted: 18 Apr 2010 12:20 AM PDT 
After a mostly- positive week, Goldman Sachs sent the Pound back to the critical technical line. The upcoming week is very busy – inflation, employment and GDP figures are all released this week, among other indicators. Here’s an outlook for the British events and an updated technical analysis for GBP/USD. GBP/USD graph with support and resistance lines on it. Click to enlarge: 
British trade balance was one of the factors that pushed the Pound higher, as the deficit significantly narrowed. This week, bigger events will rock the Pound. Let’s start the review. The technical analysis will follow: - Rightmove HPI: Published on Sunday at 23:00 GMT (midnight UK). The earliest report on house prices is published early in the week, but it isn’t considered too accurate. Last month’s rise of 0.1% was significantly weaker than previous months, and could indicate a drop in prices this time.
- CPI: Published on Tuesday at 8:30 GMT. After breaching the government’s target of 3%, prices have eased, as Mervyn King expected. The inflationary pressures come mostly from the rising price of oil. CPI is predicted to rise by an annual rate of 3.2%, stronger than last month’s 3%. Core CPI that showed a rise of 2.9% is expected to ease to 2.8%. Also note the RPI (Retail price index), that posted 9 months of drops, but turned positive. It’s expected to show a rise of 4.1%.
- Employment data: Published on Wednesday at 8:30 GMT. The Claimant Count Change is the most important figure, being the earliest report. Last month it was outstanding, showing a drop of 32,300 unemployed people. A smaller drop is predicted this time – 5,700. Britain’s unemployment rate is late figure, relating to the month of February. It’s predicted to remained unchanged at 7.8% for a fourth month in a row. Also note the Average Earnings Index, which rose at a moderate pace of 0.9% last month, and is now expected to rise by 2.5%.
- MPC Meeting Minutes: Published on Wednesday at 8:30 GMT, and overshadowed by the employment data. This time, the release will probably have a small impact. The last rate decision didn’t bring any news, and the bankers probably didn’t say anything of importance in the last decision before the elections. A surprise is always possible, but big news will probably wait to after the elections.
- Retail Sales: Published on Thursday at 8:30 GMT. This major consumer related figure was great last month, with a rise of 2.1%, much better than expected, but this came on top of a downwards revision last time, so it’s important to notice these fluctuations. A rise of 0.7% is expected this time.
- Public Sector Net Borrowing: Published on Thursday at 8:30 GMT, and overshadowed by retail sales. The big government debt, is weighing on the Pound, especially as its a highly debated issue towards the elections. Government borrowing, or excessive spending if you wish, is expected to double from 12.4 to 24.2 billion pounds, hurting the currency.
- Mortgage Approvals: Published on Thursday at 8:30 GMT, and overshadowed by retail sales. This is the preliminary release of mortgage approvals, an important indicator of the housing sector which affects the whole economy. After three months of drops, the number of approvals will probably rise from 48K to 51K.
- CBI Industrial Order Expectations: Published on Thursday at 10:00 GMT. This indicator is based on a survey of 550 manufacturers, and has been negative for quite a while., although improving. Yet another improvement is expected this time – from -37 to -31. The negative score means expectations for lower sales volume.
- GDP: Published on Friday at 8:30 GMT. The best is kept for last. Britain’s economy grew by 0.4% in Q4 of 2009, according to the final release. This is also thanks to a downwards revision of the data for Q3. The current expectations talk about a similar 0.4% growth rate in the first quarter of 2010. For a change, the consensus of economists is line with those of the NIESR institute. Any result, even if in line with expectations, will rock the Pound.
GBP/USD Technical Analysis The Pound followed the Euro’s lead and enjoyed the Sunday gap to blow past the 1.5350 line. It then relaxed and tested this line, before going up and bouncing off the 1.5520 resistance line, mentioned in last week’s outlook. Friday’s dollar rally sent it back down to 1.5360, exactly where it was last week. GBP/USD is now at crossroads, around the 1.5350 line, which has a smaller role now. Looking up, 1.5530 is a strong resistance line – it worked in the past week as a resistance line, and in the past as a support line. Even higher, 1.5833 provided support before the Pound collapsed, and also halted an attempt to rise. Above, 1.6260 is the next important resistance line – working in both roles in the past. Looking down below 1.5350, 1.5120 proved as a powerful support line in recent weeks, preventing the Pound from falling 3 times and could provide immediate support now. Lower, 1.4780 is the year-to-date low, and also worked as a support line in 2009. Beyond this critical line, 1.44 is the next area of support. I am neutral on GBP/USD. On one hand, the failure to hold to its gains, the growing uncertainty towards the elections and the new dollar storm on Goldman Sachs weigh on GBP/USD, but on the other hand, the important economic indicators will probably support the pair. It will undoubtedly be an exciting week. Further reading: Want to see what other traders are doing in real accounts? Check out Currensee. It’s free. |
| AUD/USD Outlook – April 19-23 Posted: 17 Apr 2010 08:00 AM PDT 
After a strong start, the Aussie surrendered to the Goldman Sachs news and closed the week lower. The upcoming will consist of the RBA’s meeting minutes among other events. 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 enjoyed the strong Chinese growth figures to rise – Australia’s main trade partner is Australia. A devaluation of the yuan, that is talked about, could also boost the Australian dollar. Let’s start:
- NAB Quarterly Business Confidence: Publication time unknown at the moment. National Bank Australia publishes a quarterly report in addition to the monthly one. This report refers to Q1 of 2010. After nice scores in Q3 and Q4 of 2010 (18 points), this survey of 1000 businesses will probably make a small drop this time.
- Monetary Policy Meeting Minutes: Published on Tuesday at 1:30 GMT. The fifth rate hike wasn’t fully expected and it pushed the Aussie higher. But there doubts about the next meeting – will the central bank pause? We might get big hints at the release of meeting protocols. This release always shakes the Aussie.
- MI Leading Index: Published on Wednesday at 12:30 GMT. The Melbourne Institute’s index is composed of 9 indicators and has shown a slowdown in in this index in the past three months – from a rise of 1% to a rise of only 0.2% last month. Another small rise is predicted.
- New Motor Vehicle Sales: Published on Thursday at 1:30 GMT. Given Australia’s vast outback, vehicle sales are an important factor in the economy. The past two months saw drops in vehicle sales. Following last month’s 1.9% drop, stability is predicted this time.
- Import Prices: Published on Friday at 1:30 GMT. This quarterly price indicator dropped in the past year, as the world slowed down. The first quarter of 2010 will probably see a smaller drop in prices – 1.5% after 4.3% in Q4 of 2009. With the rise in the price of oil, a rise in prices is also possible.
- Glenn Stevens talks: He begins speaking on Friday at 2:50 GMT. The week begins with hints about the next move by the RBA, and also ends with a similar event – RBA governor Glenn Stevens will talk about the economic situation in the city of Toowoomba, and might release some hints.
AUD/USD Technical Analysis The Aussie enjoyed the weekend gap to start the week at 0.9372, a level unseen since November. This didn’t hold. The pair then struggled around the 0.9327 line that held it low for many months, but fell towards the end of the week. Some of the lines have move since last week’s outlook. AUD/USD now trades between 0.9220, a support line in recent weeks, and 0.9327, which has a weaker role now. Looking up, 0.9405, the 2009 high, continues to be the next barrier. Even higher, 0.95 used to be a strong support line during 2008, when the Aussie was trading at a high range. Below, 0.9090 is the next support line after 0.9220, working as both support and resistance in the past months. Looking lower, 0.8980 is another minor line of resistance on the way down, followed by 0.8567, the 2010 low, which was also a resistance line in in 2009. I remain bullish on AUD/USD. The high interest rate, good fundamentals in Australia and also in China continue to support the Aussie, despite a pause in the job market’s improvement. I recommend reading Casey Stubbs’ analysis for AUD/USD. Further reading: Want to see what other traders are doing in real accounts? Check out Currensee. It’s free. |
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