Apr 29, 2013

Forex Crunch EUR/USD April 29 – Moves Higher As Italy Forms Government

Forex Crunch EUR/USD April 29 – Moves Higher As Italy Forms Government

EUR/USD April 29 – Moves Higher As Italy Forms Government

Posted: 29 Apr 2013 03:34 AM PDT

EUR/USD is moving higher as we begin the new trading week. The markets were treated to some good news on the weekend, as Italy has finally formed a government, ending a prolonged political deadlock, In economic news, Eurozone PMI rose from 43.7 points to 44.2 points.The markets will be keeping an eye on German CPI, hoping that the inflation indicator can improve on recent disappointing German numbers. In the US, GDP was a major disappointment on Friday, falling well below the estimate. Today’s US highlight is Pending Home Sales.

Here is a quick update on the technical situation, indicators, and market sentiment that moves euro/dollar.

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GBP/USD Extends Gains

Posted: 29 Apr 2013 02:53 AM PDT

GBP/USD continues to rally and has crossed the 1.55 line. Cable is still riding on the GDP releases last week, where the UK avoided a triple dip recession and grew by 0.3% in Q1 2013, while the US disappointed with an annual growth rate of 2.5%.

The pair jumped the UK release and extended its gains towards 1.55 on the US one, but failed to break 1.55 – it missed by one pip. But now, a new week brings new momentum.

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USD on the Defensive

Posted: 29 Apr 2013 02:20 AM PDT

The USD opens this week on the defensive as traders show concern that the US economy is not growing as much as had been expected. On Friday, it was announced that the US economy grew at a 2.5% annual rate in the first quarter. Estimates by economists were looking for a 3% gain. Traders are now expecting no changes in policy from the FED when they meet later this week.

Apparently the end of the Italian political stalemate where Prime Minister Enrico Letta was sworn in yesterday, ending two months of political stalemate was enough to push the EUR higher in overnight trading. Letta's government could be installed today. The new Italian government has PM Letta's party forming an alliance with Berlusconi's PDL party.

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USD/CAD: Trading the Canadian GDP

Posted: 29 Apr 2013 02:02 AM PDT

Canadian GDP is a measurement of the production and growth of the economy. Analysts consider GDP one the most important indicators of economic activity, and it is always a widely-anticipated release. A reading which is better than the market forecast is bullish for the Canadian dollar.

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

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The euro and rate cuts

Posted: 29 Apr 2013 02:02 AM PDT

USD: Today's data will be of only minor interest for the dollar. The income and spending numbers at 12:30 have been superseded by the GDP numbers on Friday and the pending home sales is never a big issue for market unless it's drastically away from expectations.

EUR: The single currency will have one eye on the Italian and Eurozone confidence data released this morning, especially in light of the weaker confidence data seen from Germany recently. Softer data would further increase speculation of a lowering of interest rates from the ECB this week.

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Advanced GDP?

Posted: 28 Apr 2013 11:12 AM PDT

On Friday, 4/26 Advance GDP was reported for the 1st calendar quarter of 2013. The report came in at 2.5% vs. 3.1% expected. If you looked at some of the headlines that came out after the report; they read "US Economy Grows by 2.5 Percent" completely omitting the fact that this was way less than expected. Now unfortunately traders only view headlines without looking beyond it. So consequently they're thinking "wow the US economy grew, let's go long." As such the Dow gained a whopping 12 points yet the NASDAQ and S&P didn't.

I've been stating for some time that the effects of the sequester will eventually come home to roost, yet Wall Street is treating it as if it's a famine in China; meaning that it's so far removed it couldn't possibly effect us. Has anyone been viewing earnings season thus far?

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