Forex Crunch EUR/USD Sep. 14- Settling in Higher Range |
- EUR/USD Sep. 14- Settling in Higher Range
- Fundamental Overview – Market Movers Last Week – 9/13/2010
- Forex Daily Outlook – September 14 2010
- AUD/USD Breaks Significant Barrier
| EUR/USD Sep. 14- Settling in Higher Range Posted: 14 Sep 2010 12:30 AM PDT
EUR/USD continued upwards and settled in a higher range. Economic indicators start pouring in day, and promise an exciting day. Will the Euro continue north or drop? Here is a quick update on technicals, fundamentals and community trends.
EUR/USD settling in higher range. Click to enlarge. EUR/USD Technicals
EUR/USD Fundamentals All times are GMT. Most important events emphasized.
EUR/USD Sentiment
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| Fundamental Overview – Market Movers Last Week – 9/13/2010 Posted: 13 Sep 2010 04:00 PM PDT
Guest post by ForexTraders.com The U.S. Dollar put in a mixed performance last week against the other major currencies, falling against the Yen and commodity dollars, while rising significantly versus the European currencies that included both the Euro and the Pound Sterling. The most significant price action was seen last week against the Euro which fell considerably versus the Greenback on renewed stress test skepticism and higher yields at the Portuguese sovereign debt auction. Furthermore, the commodity dollars of the Aussie and Kiwi, and to a lesser extent the Loonie, were the best performers versus the Greenback in last week's trading, buoyed in part by strong commodity prices.
Overall, the Greenback gained 1.5% against the Euro and was up by 0.7% versus the Pound Sterling. On the downside, the U.S. Dollar fell by -1.1% against the Australian Dollar, -1.0% against the New Zealand Dollar. It declined by a more modest -0.4% versus the Canadian Dollar and -0.2% against the Japanese Yen. Dollar Performance Mixed Last Week The largest rise in the Greenback last week against the other majors was seen against the Euro, where the U.S. Dollar gained by -1.5%. Furthermore, the price of gold approaching its all time high also buoyed the Aussie and the Kiwi, as well as the Loonie to a lesser extent. Although the Greenback actually managed to rise versus the Pound Sterling by +0.7%, the Dollar came off once again against the Japanese Yen where it showed an overall -0.2% drop on the week. This fresh fall came despite BOJ intervention threats and Japanese official talk of fresh measures to weaken the Yen. Japanese Officials' Verbal Intervention to Weaken Yen Still Unsuccessful Markets observers also continued to note fresh attempts by Japanese finance officials to weaken the Japanese Yen after it strengthened once again last week. This sent USDJPY to trade at yet another fifteen year low at the 83.32 level seen last Wednesday. Specifically, the notable Yen strength prompted additional verbal intervention, this time from Japanese Finance Minister Noda who said that the Japanese would take necessary "decisive steps, which, of course, include intervention”. In addition, BOJ Governor Shirakawa expressed that the central bank would take extra measures to soften the Yen rise as and when "downside risks materialize and the economy worsens at a faster pace than we expect.” Euro Weaker on Stress Test Questions and Higher Portuguese Debt Yields For its part, the Euro was weaker by -1.5% versus the Greenback largely on the back of news out on Tuesday that the influential Wall Street Journal had printed an article regarding the European bank stress tests. Significantly, the piece noted that the tests had, "understated some lenders’ holdings of potentially risky government debt.” EURUSD fell precipitously on these comments. Also hurting the Euro's prospects were the significantly higher yields seen at the Portuguese three and ten year debt auction last week, as well as widening Credit Default Swaps or CDSs for Spain, Portugal and Ireland's sovereign debt, with Irish CDSs going to record high levels last week. Forex Market Implications The forex market took the initiative to sell the U.S. Dollar early last week despite no news out from the United States due to the observance of the Labor Day Bank Holiday by U.S. based traders. Nevertheless, the European currencies failed to gain from this, and they remain a sale based on remaining sovereign debt issues in that region. In addition, the Yen still presents a good buying opportunity versus the Greenback in spite of USDJPY making a fresh fifteen year low last week. Accordingly, selling USDJPY on a rally would seem to make sense, although traders should watch out for verbal or actual market intervention by the BOJ that could cause a sharp spike to the upside in the rate that would then provide an opportunity to purchase Yen. Furthermore, the Commodity Dollars may well continue to trade higher, along with commodity prices led by the still bullish price of gold. Also, their issuing countries' more buoyant economic pictures have generally resulted in higher interest rates and asset yields that continue to attract less risk adverse international investors toward carry trades.
Weekly Recap and Outlook for the U.S. Financial Markets and Dollar – 9/13/2010 The U.S. Dollar turned in mixed results against the major currencies last week, rising against the Euro and Sterling, while falling against the Australian and New Zealand dollars and dropping to a lesser extent versus the Canadian Dollar and the Japanese Yen. Read full report Weekly Recap and Outlook for EURUSD – 9/13/2010 EURUSD fell significantly in last week's trading after growing concerns regarding the European sovereign debt situation once again took center stage compounded by fresh questions arising over the recent Eurozone bank stress test results. The week began with EURUSD coming off from its weekly high point of 1.2917 seen in Monday's session while U.S. traders took the day off for the Labor Day Bank Holiday. In European economic news, the Eurozone Sentix Investor Confidence survey fell to the 7.6 level that was worse than its expected value of 8.7. In addition, the previous number was revised down to 8.2 from 8.5. Read full report Weekly Recap and Outlook for GBPUSD – 9/13/2010 GBPUSD fell somewhat last week, starting the week out on a weak note after the release of BRC Retail Sales Monitor on Monday that came out at 1.0%, as was widely anticipated. Furthermore, expectations grew that the BOE may increase the size of its Quantitative Easing or QE liquidity program in the near future. This factor — in combination with rumors in the forex market to the effect that a major U.K. clearing bank had purchased a billion Euros versus the Pound Sterling due to concerns regarding the U.K. contributing to the European Union's agricultural budget — pushed Cable down to hit its weekly low of 1.5293 seen on Tuesday. Also, the U.K. BRC Shop Price Index was released at 1.7% that compared favorably with its previous reading at 1.5%. Read full report Weekly Recap and Outlook for AUDUSD – 9/13/2010 AUDUSD gained considerable ground once again last week as risk appetite grew among investors. Also favorable for the Aussie was the decline in political uncertainty surrounding the recent national election that resulted in a hung parliament. Prime Minister Julia Gillard has now asserted leadership over a minority government that she forged as a "Rainbow Alliance" between her Labour Party, the Green Party and various independents. Read full report Weekly Recap and Outlook for NZDUSD – 9/13/2010 NZDUSD gained significant ground last week as increased risk appetite permeated the forex market. This rally came despite little in the way of significant economic releases coming out from New Zealand, as the Kiwi traded higher mostly in sympathy with its neighboring commodity currency the Aussie. Read full report Weekly Recap and Outlook for USDJPY – 9/13/2010 USDJPY made yet another fifteen year low in last week's eventful trading, with the pair initially coming off from its weekly high point of 84.47 that was seen during Monday's U.S. Labor Day Bank Holiday. Tuesday saw the rate start heading further south in spite of efforts by Japanese finance officials to continue attempting to talk the Yen down. In addition, the BOJ announced that it had decided to keep its benchmark Overnight Call Rate steady at the low 0.1% level as the market was expecting. In its associated statement, the central bank noted that it would, "carefully examine the outlook for economic activity and prices, and, if judged necessary, take policy actions in a timely and appropriate manner.” Read full report Weekly Recap and Outlook for USDCAD – 9/13/2010 USDCAD experienced rather volatile trading last week as the commodity currencies generally appreciated amid the renewed risk appetite that affected the forex market. The rate initially started off the week by trading softer during Labor Day Bank Holidays that were observed in both Canada and the United States. The rate dropped despite the absence of economic data releases from either country. Read full report Want to see what other traders are doing in real accounts? Check out Currensee. It's free.. |
| Forex Daily Outlook – September 14 2010 Posted: 13 Sep 2010 03:00 PM PDT
U.S. Retail Sales, U.S. Business Inventories and German ZEW Economic Sentiment are the leading events on our calendar. Here is an outlook for the main activities awaiting us today. In the US, Retail Sales important gauge of consumer spending measuring the total receipts at retail establishments improved last month after two drops. Retail sales are predicted to rise by 0.4%, the same as last month, and core retail sales predicted to rise by 0.3 after 0.2% rise last month.
Later in the US, Business Inventories another indicator of consumer spending, expected 0.5% rise in stock ,0.2% more than in the previous month, due to a forecasted rise in sales. In Canada, BOC Governor Mark Carney delivers a speech titled “The Economic Consequences of the Financial Reforms” at the Deutsche Bundesbank, in Berlin. Will affect currency and provide info regarding future monetary policy. More in Canada, Labor Productivity released quarterly is predicted to increase by 0.9% following a weaker than expected rise of 0.8% in the previous quarter. For more on USD/CAD, read the Canadian dollar forecast. In Europe, German ZEW Economic Sentiment a leading indicator of economic conditions and business expectations in the Euro-zone dropped significantly in the past four months, reaching 14 points last month another drop to 11.3 points is expected now. Further drops to negative figures will weaken the Euro considerably and ZEW Economic Sentiment for the Eurozone is expected to reach 14.9 points almost 1 point weaker than in the previous month. Finally in Europe, Axel Weber President of Deutsche Bundesbank delivers opening remarks at the 7th Bundesbank Lecture, in Berlin. Will affect currency and provide info regarding future monetary policy. For more on the Euro, read the EUR/USD forecast and Casey Stubbs' latest analysis. In Great Britain, CPI- Consumer Price Index, the main measure of inflation expected to drop to 2.9% below the 3.0% BOE ceiling after 3.1% rise in July and Core CPI remains 2.6% as in the previous month. Read more about the Pound in the GBP/USD forecast. In Australia, NAB Business Confidence index based on a survey of about 350 businesses dropped 2 points from 4 in July a small rise is expected now. For more on the Aussie, read the AUD/USD forecast. 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. |
| AUD/USD Breaks Significant Barrier Posted: 13 Sep 2010 09:19 AM PDT
AUD/USD made an important breakout and reached a 5 month high on Chinese data and risk appetite. There are more technical barriers ahead for this strong currency. Update on technicals and fundamentals. In the weekly AUD USD forecasts, I’m always mentioning the important 0.9327 line. This accompanies the Aussie for almost a year. It was finally broken during the New York session: Steaming China Strong Chinese data that was published over the weekend. Chinese industrial production rose at an annual rate of 3.9%, higher than 13.1% that was predicted. Also other indicators such as the amount of new loans, came out better than expected. China is Australia’s principal trade partner. As the data was published over the weekend, the reaction came in the form of a weekend gap – AUD/USD opened around 0.93, higher than the 0.9263 close. During the Asian session, the pair stayed around these levels. Breaking out and further lines But as the day continued, the Aussie got a boost from an unexpected direction – Europe. The good news about the Basel III accord to stabilize banks helped improve the global mood and pushed the Aussie over 0.9327. After the breakout, AUD/USD continued north and bounced back at 0.9362, just 4 pips under the next resistance line of 0.9366 which was the peak back in April. So, at 0.9350, the Aussie is at a 5 month high. A break above this level will send the pair towards the 2009 high of 0.9405 which is also a significant barrier. The next lines are at 0.95 and 0.97 which were last seen before the financial crisis, back in 2008. A failure to hold these gains will send AUD/USD towards support at 0.9220 which was the peak in August and was broken last week on the excellent job figures. Further below, the next lines of support are at 0.9135 and 0.9080. Aussie factors All in all, the Australian economy is doing well, and so is its main trade partner at that side of the world. But, the Aussie doesn’t move solely on Australian data – it’s also categorized as a “risk” currency, that rises with global optimism and falls with pessimism. If the global mood dampens, it will be a test for the Aussie – can it rally on its own, or is it still vulnerable to global mood? Want to see what other traders are doing in real accounts? Check out Currensee. It's free.. |
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