Apr 17, 2010

Forex Crunch Forex Weekly Outlook – April 19-23

Forex Crunch Forex Weekly Outlook – April 19-23

Forex Weekly Outlook – April 19-23

Posted: 17 Apr 2010 02:00 AM PDT


Contrary to last week, the important events are shared between many countries this time. Among the 12 major events, the highlights are British employment and GDP releases, major German surveys and American durable goods orders. Will we see another roller-coaster week? Here’s the weekly outlook.

Greek hopes created weekend gaps, but fresh worries from that debt-struck country continue to catch the headlines. It’s not only about Greece – we now have a hot story about Goldman Sachs that triggered fear and helped the dollar and the yen.

Another note – the financial leaders of the G20 nations are meeting in Washington DC on Thursday and Friday. Statements released during these meetings could also shake the markets. OK, let’s begin:

  1. Ben Bernanke talks: Starts speaking on Monday at 13:00 GMT in Chicago, at the Financial Literacy and Education Summit. The chairman of the Federal Reserve doesn’t always say something meaningful or related to the economy, but his speeches are closely watched and any small hint can shake the markets, especially as the calendar isn’t crowded on Monday.
  2. British CPI: Published on Tuesday at 8:30 GMT. British inflation already missed the target and forced Mervyn King to write a letter explaining the situation. Since then, prices have calmed, but could lift their head again with a 3.2% CPI. A stronger rise in inflation could cause worries in other countries as well.
  3. German ZEW Economic Sentiment: Published on Tuesday at 9:00 GMT. This important survey was a burden on the Euro – it dropped in the past 6 months, but there are hopes for a rebound this time – a rise from 44.5 to 45.2 points. This could boost the Euro.
  4. Canadian rate decision: Published on Tuesday at 13:00 GMT. The BOC is getting close to raising the rates. Leaving the clear statement of moving the rates at the end of Q2 will probably leave USD/CAD unchanged, yet any change in the statement will rock the pair. There is a very small chance that the Overnight Rate will be raised at this occasion, but the consensus is that it will stay at 0.25%.
  5. British employment data: Published on Wednesday at 8:30 GMT. Following last month’s impressing drop in unemployment (32.3K), another small drop of 5.7K is expected this time. This is the last release before the elections, and it will be closely watched by everyone. Also note the unemployment rate, which will probably remain unchanged at 7.8%.
  6. American Unemployment Claims: Published on Thursday at 12:30 GMT. Two disappointing weeks of jumps in jobless claims put a big question mark on the strength of the recovery. Also now, hopes are high – a drop from 484K to 449K is expected in claims - probably the most accurate indicator for the Non-Farm Payrolls.
  7. American PPI: Published on Thursday at 12:30 GMT, together with jobless claims. Similar to consumer prices, producer prices aren’t moving and aren’t putting pressure for a rate hike. A drop of 0.6% last month will probably be followed by a rise of 0.4% this time.
  8. American Existing Home Sales: Published on Thursday at 14:00 GMT. Most home sales are of existing ones. After remaining at around 5 million, exactly as expected, the recent housing figures create expectations for a rise in sales – the number is expected to be 5.28 million. This usually rocks the markets.
  9. German Ifo Business Climate: Published on Friday at 8:30 GMT. The second major German survey is the opposite of the first one – it showed steady growth, almost reaching pre-crisis levels. Another rise, from 98.1 to 98.9 is expected this time.
  10. British GDP: Published on Friday at 8:30 GMT. After Britain got out of recession in Q4 on the downwards revision of the data for Q3, another quarter of growth is expected this time. The initial release for Q1 of 2010 is expected to show a growth rate of 0.4%, exactly like the previous quarter and exactly like the fresh estimate from the NIESR institute. Also here, the elections make it a very sensitive release.
  11. American Durable Goods Orders: Published on Friday at 12:30 GMT. This important gauge saw a neat rise last month – a rise of 0.9%. Orders are predicted to rise more slowly this time – 0.2% growth. Also Core durable goods orders, which are no less important, are expected to rise by only 0.7%, half of last month’s rise.
  12. American New Home Sales: Published on Friday at 14:00 GMT. Although new home sales are only a small portion of all home sales, the timing of this release, near the end of the week, means that it will have a strong impact. Similar to existing home sales, this figure is expected to improve from 308K to 323K.

That’s it for the major events this week. I’ll later post coverages on specific currencies.

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Forex Links for the Weekend

Posted: 16 Apr 2010 02:00 PM PDT


After a long week of forex trading, the weekend is here, and it’s time for some reading – here are my favorite forex related articles from the web. All have a long-term scope. Enjoy:

  • Sophia Todorova, on Casey Stubbs’ site, talks about desperation being the enemy of forex trading success.
  • Francesc Riverola brings two articles that show that the forex market volume is recovering, but that it’s still far from previous highs.
  • Andrei presents a review of bonuses available from forex brokers, with detailed information and user reviews.
  • Adam Kritzer discusses the changes in forex trading – how it inverts as emerging markets soar.
  • Larry Greenberg discusses the Chinese figures with the talks about devaluation, and says that China is in the driver’s seat.
  • ForexCycle’s editor explains why blaming “market manipulators” for losses is a huge obstacle to success.
  • James Wooley talks about a major trend change for the British Pound, according to the Supertrend indicator.

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.

Dollar Builds on Housing Figures

Posted: 16 Apr 2010 05:43 AM PDT


Both building permits and housing starts came out better than expected.. This data might save the dollar from a very bad week.

I’ve already written that American housing is off the bottom. Now it took one step forward. American building permits printed 690K, the best since October 2008, at the height of the crisis. This was also significantly better than the early expectations that stood on 630K. Note that also last month’s number was revised to the upside – 630K. The second figure was good as well:

Housing starts, another important indicator of the housing sector, rose to 630K, also the best since October 2008 and also beating early expectations. Both figures were published together.

Yesterday, we had disappointing unemployment claims which sent USD/JPY down on risk aversive trading, while other currencies hardly moved. Today, good American figures leave the pair unchanged - money isn’t shifted away from the “safe haven” currency – the Japanese yen.

The state of the global economy is still fragile, and this is reflected in the reactions of the forex market – the risk factor plays a big role in trading, especially on bad figures. This was seen with every small bit of news that came out of Greece, and was seen yesterday. But today, hope returned, and normal behavior with it – good American figures = dollar strength across the board

The day and the week aren’t over – we have the consumer sentiment from the University of Michigan. A high score is expected – another positive sign will probably help the dollar and will join these housing figures in an effort to save the dollar from a bad week. I hope to update on this release as well, and see if the risk factor is taking over, or if “normal” behavior will return to dominate trading.

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