Oct 24, 2011

Forex Crunch Risk Trade Supports GBP/USD

Forex Crunch Risk Trade Supports GBP/USD

Risk Trade Supports GBP/USD

Posted: 24 Oct 2011 02:55 AM PDT

Both Asian and European markets moved higher after positive sentiment seen at the close of the New York session on Friday. Despite a gap lower on Eur/Usd and Aud/usd at yesterdays open that appeared because of the "no real news from weekends EU summit", pairs managed to recover on hopes that by Wednesday final decisions will be made.

From a technical perspective, the RISK appetite may easily continue in this week, after Weekly/Fridays close above 1230 mark on the S&P Futures. A running triangle is considered as finished, so more gains to come while 1192 holds. Based on this outlook, "Risk currencies", such as Eur, Aud, Cad, Chf, and Gbp should also extend the gains, as corrective "B" patterns also show sign of a completion on the FX.

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EUR/USD Oct. 24 – Edges Up on Summit Hopes, Remains Vulnerable

Posted: 24 Oct 2011 01:01 AM PDT

Euro dollar managed to overcome a Sunday gap and is now moving higher, helped by strong Chinese data and by hopes. The first EU Summit made some progress but failed to reach a comprehensive agreement. There are still high hopes for Wednesday’s summit. The calendar is busy for a Monday. French Flash Services PMI disappointed and hurt the euro’s rally. German figures are mixed. All European numbers are a disappointment.

Here's a quick update on technicals, fundamentals and what's going on in the markets.

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UK deficit-reduction strategy on track

Posted: 24 Oct 2011 12:37 AM PDT

The UK is a fiscal test case that many are watching closely. The economy has ground to a halt over the past nine months but the government is sticking to its plans to rein in the deficit. The borrowing numbers released on Friday show that the deficit is currently on track to meet the targets set out earlier this year.

Looking at public sector net borrowing (ex. interventions on banks), the Office for Budget Responsibility gauges this at GBP 122bln for the current financial year, some 11% lower than the GBP 136.7bln outturn in the 2010/11 financial year. On current trends, the UK is on course to meet this, with the first six months showing an 11% improvement vs. last year. Sterling has held up comparatively well, no doubt gaining some benefit from Europe's growing problems, but the government still has its work cut out ensuring that borrowing is kept in check against the backdrop of a stagnant economy.

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A Nice Initiative

Posted: 24 Oct 2011 12:35 AM PDT

Off-topic. Jessie Thornburg, a 16 years old from California decided she wanted to raise $5,000 to build preschools in South Africa and provide school supplies to impoverished children in Kenya.

So, instead of having a regular charity, Jessie and her classmates developed nice colorful bracelets and she’s selling them for $5 on Bracelets That Benefit. The money will go for the people who need them in Africa.

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EUR/USD Gaps Lower on Weak EU Summit Progress

Posted: 23 Oct 2011 01:35 PM PDT

Intense negotiations over the weekend in Brussels haven’t yielded significant progress. There is still a lot of work towards Wednesday’s summit, and hope for a comprehensive solution is fading.

EUR/USD started the week with a gap of 50 pips lower over this disappointment. Update.

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Forex Daily Outlook – October 24 2011

Posted: 23 Oct 2011 01:00 PM PDT

Mo – We start the week with Flash Manufacturing PMI in Europe and MPC Member Tucker speech in the UK as the main highlight on today’s outlook. Let’s see what awaits us today.

In the US, William Dudley, Federal Reserve Bank of New York President, is due to deliver a speech in Bronx.

Read the rest of the article Forex Daily Outlook – October 24 2011

EU Summit: Not Enough Progress Made – Pressure Remains on EUR/USD

Posted: 23 Oct 2011 11:23 AM PDT

The leaders of the European Union have made some progress in the first summit on Sunday, and it seems that some kind of watered down compromise will be reached on Wednesday.

It looks far from comprehensive and is likely to weigh on the euro. Here are the main points, and what’s missing to make it a real deal.

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USD/CHF Outlook – October 24-28

Posted: 23 Oct 2011 06:00 AM PDT

The Swiss franc was looking for a direction in the past week and eventually strengthened. The upcoming week features two interesting surveys. Here is an outlook for the upcoming events, and an updated technical analysis for USD/CHF.

The talk about a higher floor for EUR/CHF is still around, but there’s no action. Without action, the franc remains strong, especially against the US dollar. Will it change this week?

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