Sep 15, 2011

Forex Crunch EUR/USD Drifts Away From Uptrend Resistance On Rising US Inflation

Forex Crunch EUR/USD Drifts Away From Uptrend Resistance On Rising US Inflation

EUR/USD Drifts Away From Uptrend Resistance On Rising US Inflation

Posted: 15 Sep 2011 05:34 AM PDT

Euro/dollar is now dropping below minor support and more importantly getting away from uptrend resistance as US CPI surprises with a rise of 0.4%, higher than +0.2% that was expected. Core CPI rose by 0.2% as expected. Persistent inflation lowers the chance of QE3. 

On the downside, weekly jobless claims unexpecdely rose to 428K. A figure of 410K was expected. It’s important to note that this is still within the range seen in recent months.

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EUR/USD Sep. 15 – Rising in Upper End of Channel, Enjoying Swiss Moves

Posted: 15 Sep 2011 02:41 AM PDT

Euro dollar continues moving forward at the high end of a distinct uptrend channel. Hopes for a prevention of a Greek default, eurobonds and a small push from the SNB all help the euro, as it approaches critical resistance. We have a big bulk of US news today – important information towards the FOMC meeting next week.

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

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The world listens but in disbelief

Posted: 15 Sep 2011 12:58 AM PDT

Stocks and also the single currency are firmer on the back of the warm words from Merkel and Sarkozy yesterday in the wake of their conference call with Greece.  Whilst they are "convinced" Greece will stay in the euro area, markets are totally unconvinced that Greece will avoid default, with Greek CDS having nearly "maxed out" and 10 year yields at 25%.  For his part the Greek PM committed to meet deficit–reduction targets, but there is no credibility in this promise. In May of last year, the Greek plan saw the deficit at 7.6% for this year. 

If the January to August trends of this year are continued (deficit 22% higher vs. forecast), then the deficit for this year is likely to be around 11%.  Herein lies the problem.  The longer the EU and IMF lend to a country which is going in the opposite direction to the conditions put onto that lending, the bigger the eventual train crash will be. As we wrote yesterday in our blog, September will be seen as the month in which Greece passed the point of no return.

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SNB Reaffirms Intervention – EUR/CHF and EUR/USD Rise

Posted: 15 Sep 2011 12:49 AM PDT

In the quarterly rate decision, the Swiss National Bank reaffirmed the decision to put a floor of 1.20 under EUR/CHF. The move boosts EUR/CHF which was getting too close to this floor. 

It also indirectly pushed EUR/USD higher within the rising channel.

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Forex Daily Outlook – September 15 2011

Posted: 14 Sep 2011 01:20 PM PDT

US inflation data, Unemployment claims and Philly Fed Manufacturing Index are the main highlight on today’s outlook. Let’s see what awaits us today.

In the US, Inflation rate, Headline inflation increased by 0.5% in July following 0.2% decrease in the previous month. This reading was above the 0.2% increase predicted. Meanwhile, Core prices increased by 0.2% in July in line with expectations following 0.3% rise in June. CPI is expected to increase again by 0.2% while Core CPI is predicted to climb 0.3%.

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EUR/USD: Trading the Philadelphia Fed Manufacturing Index

Posted: 14 Sep 2011 08:00 AM PDT

The Philadelphia Fed Index is one of three key manufacturing reports coming out this week, as we head into Q4. The manufacturing sector is an important component of the economy and the index provides a useful reading for determining whether the economy is in a growth or contraction phase. An actual reading which exceeds the forecast bodes well for the US dollar.

Here are all the details, and 5 possible outcomes for EUR/USD.

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