Sep 29, 2012

Forex Crunch Forex Weekly Outlook October 1-5

Forex Crunch Forex Weekly Outlook October 1-5

Forex Weekly Outlook October 1-5

Posted: 29 Sep 2012 02:00 AM PDT

The US dollar was able to advance for a second week in a row, as concerns over global growth intensified. As a new month and a new quarter begin ,the calendar is very busy. US employment figures including the ADP Non-Farm Employment Change, Unemployment claims and the important NFP release together with rate decisions in the UK, the Euro-zone and Japan are the main market movers on our list. Here is an outlook on the main market-movers to shape forex trading this week.

Last week Final GDP was downwardly revised to 1.3% in the second quarter from last month’s estimate of 1.7%. This was the lowest reading since the third quarter of 2011 suggesting a sluggish economic recovery. However there were a few pleasant surprises last week with a 26,000 drop in jobless claims to 359K and CB Consumer Confidence unexpectedly climbing to 70.3 in September from 61.3 in August. Will the QE3 bail out the US economy from its slow recovery? In Europe, the supposedly positive news from Spain doesn’t seem to convince many.

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EUR/USD Sep. 28 – Spain Giveth, Spain Taketh Away?

Posted: 28 Sep 2012 08:20 AM PDT

EUR/USD first enjoyed the Spanish budget release which included a statement regarding no need for an official bailout. However, fear about the upcoming release of the bank stress tests and a Moody’s downgrade is taking its toll on the common currency. Concerns about global growth also weigh on the euro and help the dollar regain ground. Today is the last day of the week, month and quarter, so lots of volatility is not surprising. Where will the pair end the week?

Here's an update about technical lines, fundamental indicators and sentiment regarding EUR/USD.

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Squaring up

Posted: 28 Sep 2012 07:19 AM PDT

The risks are that we see a choppy end to the week, month and also quarter today, with a lot of flows to be executed to square things up. There are also holidays in China next week. Markets got a taste of this yesterday with EUR/USD trading the session lows and highs within the space of an hour as details of the Spanish budget were announced.

In sum, expectations were raised that Spain was paving the way for a bailout in the coming weeks. The past 24 hours have seen the dollar softer against all the major currencies, with the Aussie and Kiwi gaining the most, sending AUD/USD to the week's highs at 1.0475.  For today, it's a case of steering through the volatility and shaping up for the new quarter ahead.

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Moody’s Could Dampen the Mood for Spain

Posted: 28 Sep 2012 07:06 AM PDT

The EUR remained bid overnight as the USD weakened as “risk sentiment” came to the forefront after the release of the Spanish budget.  Positive feelings over the budget helped move the Spanish 10 year yield back below the 6% level.  According to officials, the budget is “a crisis budget aimed at emerging from the crisis”.  

EU commissioner Rehn gave credit to the budget saying “the reforms are clearly targeted at some of the most pressing policy challenges”.  There are some skeptics, as usual, who are concerned that this plan is focused on spending cuts rather than in increasing revenues.  The decision over sovereign bailout also remains unanswered as we get to the end of the week.

Read the rest of the article Moody’s Could Dampen the Mood for Spain
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