Forex Crunch EUR/USD Outlook – April 5-9

EUR/USD Outlook – April 5-9
GBP/USD Outlook – April 5-9
AUD/USD Outlook – April 5-9
USD/CAD Outlook – April 5-9

Posted: 03 Apr 2010 11:57 PM PDT

EUR/USD recovered from the breakdown and ended the week higher. The upcoming week is quite busy – a rate decision and 7 other events are due. Here’s an 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:

The recovery seemed temporary at first, but the Euro found new strength, changing my sentiment about it. OK, let’s start the review. The technical analysis will follow:

Sentix Investor Confidence: Published on Tuesday at 8:30 GMT. Sentix continues to show pessimism among the 2,800 investors it surveys. The score is predicted to advance from -7.5 to -5.9 points, still in the negative zone.
Final GDP: Published on Wednesday at 9:00 GMT. While this figure rarely surprises, it still moves the markets. The final release of GDP is expected to confirm the limited growth rate in Q4 – 0.1%. Germany’s economy didn’t grow in Q4.
German Factory Orders: Published on Wednesday at 10:00 GMT. The continent’s largest economy surprised with big growth in orders last time – 4.3%. A correction is predicted in this release – a drop of 0.9%. This usually moves the markets.
Retail Sales: Published on Thursday at 9:00 GMT. Despite the earlier releases by France and Germany, this all-European figure moves the markets – the drop of 0.3% in sales hurt the Euro last month. This time, they are predicted to remain unchanged.
German Industrial Production: Published on Thursday at 10:00 GMT. The second major figure from Germany is expected to be better – the industrial product is expected to rise by 0.7%, slightly better than last month’s 0.6% rise. The timing, just before the rate decision, makes this releases choppy.
Rate decision: Published on Thursday at 11:45 GMT. Jean-Claude Trichet isn’t predicted to move theMinimum Bid Rate from 1%. Trichet’s words in the ECB press conference will probably shake the Euro – he will probably relate to the Greek accord, other debt-struck countries and the future of the European economies.
French Industrial Production: Published on Friday at 6:45 GMT. Europe’s second largest economy is expected to show a 0.4% rise in industrial output, less than half the scale of last time’s rise. The French economy is advancing.
Jean-Claude Trichet talks: Begins speaking on Friday at 15:30 GMT. A day after the rate decision, Trichet will speak in Milan about “Shaping a New World: Economic Crisis and Global Governance” – this is a direct continuation of the expected agenda after the rate decision.

EUR/USD Technical Analysis

The Euro began the week with an important move above 1.3423, recovering from the blow in the previous week, and managed to stay strong. EUR/USD touched 1.36 and finally closed at 1.3503.

Some lines have changed since last week’s outlook. The current range of the Euro is between the last week’s limits – 1.3380 below and 1.36 above.

Above 1.36, the next line of resistance is an important one – 1.3850 – this is an area that the Euro failed to break, and began a collapse from there. Even higher, 1.40 is the next line of resistance, followed by 1.42, but these are quite far now.

Looking down below 1.3380, the next line is the year-to-date low of 1.3267, which was also half the way between the previous support line of 1.3423 and the next one – 1.3080, which remains as a far support line.

I am neutral on EUR/USD.

The impressive recovery following the Greek accord changed my sentiment to neutral, despite the continent’s many problems such as the double-digit unemployment rate and debt issue in other countries.

This popular pair receives excellent articles on the web. Here are my favorites:

Casey Stubbs sees a pattern forming in EUR/USD in the 1-hour charts.
Kathy Lien compares the EUR/USD reaction to a similar release in the past, and sees further dollar strength.
Joel Kruger, on DailyFX, sees the Euro’s strength as merely a corrective move.
The Geek Knows reviews the week and looks forward.

Further reading on Forex Crunch:

For a broad view of all the week’s major event in all currencies, read the forex weekly outlook.
For the British Pound, look into the GBP/USD forecast.
For the Australian dollar, read the AUD/USD forecast.
For USD/CAD, check out the Canadian dollar forecast.

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free.

GBP/USD Outlook – April 5-9

Posted: 03 Apr 2010 10:00 AM PDT

The British Pound expects a busy week, with the rate decision being the peak. Here’s an outlook for this week’s events, and an updated GBP/USD technical analysis.

GBP/USD graph with support and resistance lines on it. Click to enlarge:

Together with the rise of GBP/USD, also the GBP/JPY cross went up and broke an important resistance line. We could see this popular cross continue going north. OK, let’s see the British events. The technical analysis will follow:

Halifax HPI: Publication time unknown at the moment. Delayed from last week. This house inflation indicator is important due to its wide array of data – internal data from the HBOS bank. After a disappointing drop of 1.5% last month, a rise of 0.6% is predicted this time.
Construction PMI: Published on Tuesday at 8:30 GMT. Te second housing figure this week comes from purchasing managers in the construction sector. 170 managers in this sector have continued to show pessimism and left the index under 50 – meaning economic contraction. The score is predicted to rise from 48.5 to 48.8 points this time.
Nationwide Consumer Confidence: Published on Tuesday at 23:00 GMT. This important survey by the Nationwide Building Society was quite good last time – it rose to 80 points – the highest in two years. It shows optimism from Brits. It’s now predicted to edge up to 81 points.
Services PMI: Published on Wednesday at 8:30 GMT. The services sector is doing quite well – purchasing managers have been expecting economic expansion in the past 10 months. After the leap to 58.4 points last month, this indicator is predicted to tick down to 58.2 points.
Manufacturing Production: Published on Thursday at 8:30 GMT. This important indicator dropped by 0.9% last month, the first drop in in 5 months hurting the Pound. A correction is predicted this time – a rise of 0.7%. Note that manufacturing is 80% is of industrial production which is published at the same time, and is expected to rise by 0.5%.
Rate decision: Published on Thursday at 11:45 GMT. Mervyn King wants a weaker pound, and talked about an option to re-open the Quantitative Easing program, after the money ran out of it. But, he hasn’t done it yet. This Asset Purchase Facility is expected to remain unchanged, and so is the interest rate, that stands at 0.5%. In the MPC rate statement, the bank might relate to the situation of economy, that is in an election year.
NIESR GDP Estimate: Published on Thursday at 14:00 GMT. This unofficial estimate proves correct in many cases. This release will complete the first quarter of 2010 and is expected to show a small rise in GDP. NIESR showed a rise of 0.3% last time – it reflected the three months that ended at February.
PPI: Published on Friday at 8:30 GMT. British producer prices leaped for one month and then calmed down last time – PPI Input rose by 0.1%. This time, a rise of 1.2% is predicted in this indicator. PPI Output is expected to rise by 0.4%, similar to last month. As with CPI, British inflation didn’t pick up.

GBP/USD Technical Analysis

The Pound began the week by rising towards 1.50 and resting there. It later rose to the resistance line of 1.5110 and stayed there for some time before rising. The peak was at 1.53, a safe distance from the all-important 1.5350 resistance line.

The lines hardly changed since last week’s outlook. The Pound now trades between 1.5110, a minor support line, and 1.5350, which provides strong resistance.

Above, 1.5530 is another minor resistance line that worked recently, followed by 1.5833 which is a very strong line resistance.

Looking down, 1.50, the round number, provides some support. The strongest support line appears at 1.4780, the year-to-date low, and also a support line last year.

If 1.4780 is broken, the next line of support appears only at 1.44. This probably won’t be approached this week.

I remain bearish on GBP/USD.

The uncertainty towards the elections and the failure to enjoy the dollar’s weakness to rise above 1.5350 are a bearish sign for me.

Further reading:

For a broad view of all the week’s major event in all currencies, read the forex weekly outlook.
For the Euro, read the EUR USD Forecast.
For the Australian dollar, read the AUD/USD forecast.
For USD/CAD, check out the Canadian dollar forecast.

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free.

AUD/USD Outlook – April 5-9

Posted: 03 Apr 2010 09:00 AM PDT

The Aussie is expected a critical week that contains an unknown outcome in the rate decision and the all-important employment figures among other events. Here’s an outlook for the Australian events and an updated AUD/USD technical analysis.

AUD/USD graph with support and resistance lines on it. Click to enlarge:

Despite the greenback’s weakness during the week, the Aussie got hurt by two Australian figures – retail sales and building approvals. Is the Aussie losing its charm? Or was it a temporary glitch? I’m optimistic… Let’s start the review:

ANZ Job Advertisements: Published on Tuesday at 1:30 GMT. The number of jobs advertised on newspapers continues to serve as a good gauge for the job market, despite its volatility. After a drop of 8.1% two months ago, a leap of 19.1% was reported last month. A smaller rise is predicted this time. The impact will be strong as it’s published close tot eh official job figures.
Rate decision: Published on Tuesday at 4:30 GMT. The Australian interest rate reached 4% last month. This high rate is a result of 4 consecutive rate hikes. No other Western countries followed Australia. The head of the RBA, Glenn Stevens, signaled that another hike is due, but the recent figures showed that the Australian economy cooled down and that a pause could be seen this time. Economists are split between expectations of a hike to 4.25% and a unchanged decision. This uncertainty means a shaky time for the currency.
AIG Services Index: Published on Tuesday at 23:30 GMT. The Australian Industry Group releases a PMI-like index for the services sector. After being above 50 (economic expansion), this index went under in the past two months, indicating contraction. A rise from 48.3 to around 50 is expected this time.
Employment data: Published on Thursday at 1:30 GMT. 4 months of excellent surprises came to a halt with last month’s employment figures, which were only OK – and insignificant job gain of 400 jobs. This time, a gain of 20,000 is predicted. The unemployment rate is predicted to remain unchanged at 5.3%. This will definitely rock the Aussie, and could send it above 0.9327.
AIG Construction Index: Published on Thursday at 23:30 GMT. The second release by AIG relates to the housing sector. Last month’s score was fine – 52.8 points, but the recent building approvals figure was disappointing. It’s now predicted to drop.

AUD/USD Technical Analysis

The Aussie began the week with a quick recovery above the 0.9090 resistance line. It later climbed above 0.9190 but didn’t really manage to close above it.

Note that some lines have changed since last week’s outlook. Looking down, 0.9090 continues to be a line of support for the Aussie. This is followed by 0.8980, which worked in the previous week.

Lower, 0.8735, December’s low is an important line of support, followed by 0.8567, which was last seen in October and retested in February.

Looking up above 0.9190, 0.9327 is still the strongest resistance line around. It stopped the Aussie many times in the past. In the one time that this line was breached, 0.94 served as the next line of resistance – the 2009 high.

I am bullish on AUD/USD.

The rate decision and the employment figures, that should be better than last time, could supply the Aussie the fuel needed to make the break.