Forex Crunch EUR/USD Aug. 24: Sliding To Next Support – New Plunge Coming? |
- EUR/USD Aug. 24: Sliding To Next Support – New Plunge Coming?
- Fundamental Overview – Market Movers Last Week – 8/23/2010
- Forex Daily Outlook – August 24 2010
- [Video] Falling Euro, Risk Aversion, Potential Breakouts and More
| EUR/USD Aug. 24: Sliding To Next Support – New Plunge Coming? Posted: 24 Aug 2010 12:10 AM PDT
EUR/USD continues losing ground and is now approaching the next line of support. Will it bounce here or break this line and drop faster? Here’s a quick update on fundamentals, technicals and community trends.
EUR/USD below long term support – click to enlarge EUR/USD Technicals
EUR/USD Fundamentals
EUR/USD Sentiment
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| Fundamental Overview – Market Movers Last Week – 8/23/2010 Posted: 23 Aug 2010 11:09 PM PDT
Guest post by ForexTraders.com The U.S. Dollar did not move much last week, and showed mixed results overall in terms of its performance against the other major currencies. Traders reported that the primary shock to the Dollar's fortunes was the news out last Thursday that U.S. Initial Jobless Claims had risen to the psychological 500K mark — considerably above the market's expectations for the number of 478K. Also, the previous number was upwardly revised from 484K to 488K, which did not help matters at all.
The Greenback gained modest ground against the Euro, Pound Sterling and Canadian Dollar, rising 0.3%, 0.4% and 0.7% respectively against those major currencies. However, the U.S. Dollar gave back some of its recent gains against the Japanese Yen and New Zealand Dollar by falling respectively -0.7% and -0.3% against those currencies. Observers noted that the sustained threat of intervention by the Bank of Japan has kept the U.S. Dollar from falling further against the Japanese Yen. Nevertheless, seemingly unconcerned comments about the current level for USDJPY by former head Japanese currency official Eisuke "Mr. Yen" Sakakibara on Tuesday kept the Yen supported for the latter part of last week. In addition, the Dollar was more or less flat versus the Aussie on the week, with AUDUSD closing just 3 pips lower on the week as uncertainty surrounded the Australian Parliamentary Election that resulted in a hung parliament. Dollar Performance Mixed Last Week The largest rise in the Greenback last week against the other majors was seen against the Canadian Dollar, where the U.S. Dollar gained 0.7%. The Loonie weakness came on the back of reduced Bank of Canada rate hike speculation after last week's release of a disappointing Canadian Core CPI number that showed an unexpected drop of 0.1% for the month versus the market's consensus for a rise of 0.1%. This modest but significant rise in USDCAD was followed in magnitude by the Dollar's gains versus the Pound Sterling against which the Dollar rose 0.4% on the week. Although the Greenback was largely unchanged versus the Aussie, it came off the most against the Japanese Yen — showing an overall 0.7% drop on the week largely on the back of the aforementioned Yen supportive comments by Mr. Sakakibara. The New Zealand Dollar also gained at the U.S. Dollar's expense by posting a 0.3% rise in the NZDUSD exchange rate on the week. The Kiwi was boosted by the New Zealand PPI Input number that came out showing a rise of +1.4% for the quarter. This was substantially above the market's consensus for a +0.6% rise. Also, New Zealand PPI Output gained by a higher than expected +1.1% compared with the market's consensus for a +0.7% increase. The market seems to have taken these higher N.Z. Producer Price Index numbers as increasing the chances of an upcoming hike in the New Zealand's benchmark Official Cash Rate by the RNBZ and this generally supported the Kiwi. Forex Market Implications The forex market basically treaded water last week, refusing to take the Dollar far in either direction against the other major currencies. This relatively quiet period allowed some of the more dramatic and apparently corrective movements upward seen the previous week in the Greenback to consolidate the exchange rates at new valuation positions. Since the fundamental outlook for the United States continues to be questionable, shorting the U.S. Dollar remains the favored longer term play at these levels. This short Dollar strategy even makes some sense against the Japanese Yen where the Greenback is trading close to its fifteen year lows Weekly Recap and Outlook for the U.S. Financial Markets and Dollar – 8/23/2010 The U.S. Dollar turned in a mixed performance last week, rising against the Euro, Sterling and Loonie while declining against the Yen and the Kiwi and ending virtually unchanged against the Aussie. Read full report Weekly Recap and Outlook for EURUSD – 8/23/2010 EURUSD traded in a range during much of last week. The rate rose initially on Monday in the wake of weaker U.S. numbers that were released the Friday before, but it then erased all of its gains and fell even lower. Monday also saw the pair benefiting from the news that Eurozone CPI had come out at 1.7% for the year and Core CPI printed at 1.0%. Both numbers were more or less in line with market expectations. In addition, U.S. TIC Long Term Purchases were out on Monday and showed a rise of $9 Billion to $44.4 Billion versus the preceding $35.3 Billion reading. This was a substantial improvement over the $36.3 Billion consensus that was anticipated. Read full report Weekly Recap and Outlook for GBPUSD – 8/23/2010 GBPUSD began last week on a stronger note, but then traded off of its weekly high of 1.5700 that was seen last Monday to show a small loss for the week. The Pound was undermined by news of the U.K. Rightmove HPI falling by -1.7% on the month against the previous reading of only -0.6% and of an improvement in U.S. TIC Long Term Purchases of $9 Billion to $44.4 Billion versus the preceding $35.3 Billion reading. This was a substantial improvement over the $36.3 Billion consensus that was anticipated. Cable then came under additional selling pressure on Tuesday after U.K. Core CPI gained just 2.6% on the year against a market consensus for a 3.0% rise, while U.K. CPI fell to 3.1% on the year from 3.2%, as expected. Read full report Weekly Recap and Outlook for AUDUSD – 8/23/2010 AUDUSD traded in a tight consolidation range last week, although the rate began the week on a positive note in spite of news coming out that Australian New Motor Vehicle Sales had fallen by -2.6%. This was considerably below the previous print of a -1.2% decline that also saw a minor downward revision to -1.4%. Read full report Weekly Recap and Outlook for NZDUSD – 8/23/2010 NZDUSD started last week off by trading softer in spite of the preceding week's favorable New Zealand Retail Sales data. The rate improved from its weekly low print of 0.6994 seen on Monday despite the lack of any notable economic data coming from New Zealand. NZDUSD then started rallying impressively on Tuesday as risk appetite started to return to the market and after the Greenback saw its weekly low versus the Japanese Yen. Read full report Weekly Recap and Outlook for USDJPY – 8/23/2010 USDJPY managed to fall a bit further last week, but the rate nevertheless traded in a tight range for much of the week. The rate began the week by coming off from its weekly high print of 86.23 that was seen on Monday after U.S. Treasury yields came off sharply and in spite of a lower than expected Japanese GDP number that only managed to rise a mere 0.1% on the quarter against the anticipated 0.6% rise the market was looking for. Read full report Weekly Recap and Outlook for USDCAD – 8/23/2010 USDCAD traded with considerable volatility last week within its existing consolidation pattern. The rate began last week on a favorable note by rallying as high as 1.0461 on Monday before dropping sharply after Tuesday's release of Canadian Manufacturing Sales that showed the number had risen by 0.1% on the month — considerably better than the market's expectations for a fall of -0.4%. Also on Tuesday, Canadian Foreign Securities Purchases were up by only C$5.39 Billion against the anticipated C$9.42 Billion rise and versus the much higher C$23.04 Billion number seen the previous month. Read full report Want to see what other traders are doing in real accounts? Check out Currensee. It's free.. |
| Forex Daily Outlook – August 24 2010 Posted: 23 Aug 2010 02:00 PM PDT
We have some interesting updates coming up today, Existing Home Sales in the US, Core Retail Sales in Canada, Inflation Expectations Percentage in New Zealand and more. Let’s see what awaits us today. In the US Existing Home Sales, the main gauge of the condition of the US housing market measuring the number of closed sales of previously constructed homes, condominiums and co-ops, that triggers a wide-reaching ripple effect. The sales of existing homes are expected to expose more weakness in the US housing market with up to 7.2% drop and 4.63 M homes sold in July from 5.37 M in June.
In the US, Richmond Manufacturing Index, Monthly Survey of about 100 manufacturers in the Richmond area which asks respondents to rate the relative level of business conditions including shipments, new orders, and employment, indicates improving conditions with 14 points. In Canada, Core Retail Sales, the total value of sales at the retail level, excluding automobiles, increased by 0.2%. Automobile sales account for about 20% of Retail Sales that increased by 6%, but they tend to be very volatile and distort the underlying trend. The Core data is therefore thought to be a better gauge of spending trends; More in Canada, Bank of Canada (BOC), Deputy Governor John Murray delivers a speech titled “Re-examining Canada’s Monetary Policy Framework: Recent Research and Outstanding Issues” at the Canadian Association for Business Economics, in Kingston; and influence the future monetary policy; For more on USD/CAD, read the Canadian dollar forecast. In Europe, Industrial New Orders, the total value of new purchase orders placed with manufacturers decreased by 2.2%. a leading indicator of production. Also in Europe, Belgium National Bank of Belgium (NBB); Business Climate, Monthly Survey of about 6,000 businesses which asks respondents to rate the relative level of current business conditions and expectations for the next 6 months, increased by 0.4%, it’s a leading indicator that can be an early signal of future economic activity such as spending, hiring, and investment. For more on the Euro, read the EUR/USD forecast and Casey Stubbs' latest analysis. In Great Britain, British Bankers’ Association (BBA); Mortgage Approvals, the Number of new mortgages approved for home purchase by BBA-represented banks during the previous month decreased by 0.5%. It’s a leading indicator of housing market, so it provides an excellent gauge of how many qualified buyers are entering the market. Read more about the Pound in the GBP/USD forecast. In New Zealand, Inflation Expectations Percentage that business managers expect the price of goods and services to change annually during the next 2 years stabilized on 2.8%, and expectations of future inflation can manifest into real inflation. In Japan, Trade Balance of the difference between imported and exported goods. The Japanese trade surplus is forecasted to show a minimal increase to 470 B yen from 460 B in the previous month, but a decline in exports would signal that the Japanese economic recovery could be losing momentum. More in Japan, Corporate Services Price Index (CSPI); the price of services purchased by corporations decreased by 0.8%, It’s a leading indicator of consumer inflation, the higher costs are usually passed on to the consumer. That’s it for today. Happy forex trading! Want to see what other traders are doing in real accounts? Check out Currensee. It's free. |
| [Video] Falling Euro, Risk Aversion, Potential Breakouts and More Posted: 23 Aug 2010 10:51 AM PDT
On the weekly interview on Forex TV, I spoke with Julie Sinha about the falling Euro, summer trading and also touched a few interesting currency pairs that could break out this week, given the calendar events (also covered here). Enjoy! Want to see what other traders are doing in real accounts? Check out Currensee. It's free.. |
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