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Friday, 23 May 2008
Euro-Zone News On Tap
Yesterday the USD gained some strength against most of the major currencies. The Unemployment Claims were forecasted 8k higher than the actual figure. As such the decrease in unemployment claims helped the USD's strengthening. The most interesting trend was when the USD/JPY pair appreciated. This resulted in an appreciation of 80 pips from 12 GMT until 18 GMT, almost uninterrupted, the USD/JPY rose from 103.52 to 104.32.
Today the only indicator to come out from the land of Old Glory is the important Existing Home Sales indicator. This indicator is a monthly demand measurement for homes sales. Although the indicator does not hint directly about the growth of the economy, these home owners tend to purchase new appliances and furniture to furnish their homes which does affect the economy's growth. Thus, a rising trend will have a positive affect on the USD, when the forecast is at 48.6 million compared to the previous month's forecast of 49.6 million, the USD may decrease in value. This weekend will be longer than usual for the USD as Memorial Day is celebrated this Monday, which will cause low liquidity in the New-York session.
Today an investor may expect mixed trends for the USD. In the first part of the day a continuation of yesterday's ascending trend. And in the second part of the day, if the Existing Home Sales' figure will come out as expected a descending trend will be seen by the greenback.
The Euro was traded yesterday with mixed results versus the major currencies. This can be explained by the good news that came from the U.S. and the U.K. Traders should note that the EUR/JPY gained 93 points in trading. As such a minimum position of 10k, going long, opened with leverage of 1:20, could have earned 18.6%; this is amazing feat not only on a daily basis but also on an annual basis.
Yesterday was a slow news day in the Euro-Zone as the Corpus Christi Day was observed in Germany. The major indicator published in the Euro-economic zone was the Industrial New Orders m/m which came in lower than forecasted at -1.0%. Today greater volatility is expected as more news will be published throughout the day. As the majority of the indicators are expected to be lower then the previous publication, this should cause the EUR to have a declining trend.
Beware of French Finance Minister, Christine Lagarde's attempt to promote the strengthening of the USD. She is promoting the USD after it lost approximately 17% in the past 12 months. Despite the fact that she has not specified a plan, she did use strong language that she would arm twist whoever is holding the strings to pull the dollar up. This can mean that a plan is in the working that would shift the current economic situation.
The opportunities to succeed are out three. Hence investors should scrutinize in order to invest correctly in the EUR.
The GBP/JPY gained just under 1% in trading yesterday. In addition, the remainders of the major currencies have gained as well vs. the Yen. As there was no news published during New-York trading session from Japan, the weakening of the Yen was based on news from its counterparts. Investors may note that even though the Yen has lost strength yesterday, it actually has been gaining strength since mid-June 2007 at just about 16% altogether.
In last night's Publication of the Monetary Policy Meeting Minutes, the Bank of Japan set 0.5% as the goal for the uncollateralized overnight call, which is the inertest rate in Japan. Today the word is mum from Japan. Investors should pay close intention to news from other countries.
For interesting episodes yesterday involving the Yen please refer to the previous analysis.
There is a very interesting bullish channel forming on the 4 hour chart, as the pair now bounces back from the bottom section of it. The Slow Stochastic is showing a very strong cross which indicate that the direction of the pair should be heading up. Going long appears to be preferable.
After the pair hit the rock bottom of 1.9400, the momentum appears to be consistently bullish. Oscillators are showing that the trend might continue to the next key level of 1.9900, and if a breach will occur, there will probably be a stronger fresh bullish momentum. Going long might be the smart choice today.
The pair has been going through a bullish trend for a while and is now floating in a flat channel on the daily chart. The Slow Stochastic is showing that it's a matter of time before the bullish trend resumes, and that going long will most probably be the best choice today.
The pair is currently floating in a wide range on the daily chart, and appears to be heading down at the moment. The Slow Stochastic of the daily chart is moderately bearish, and the RSI confirm the bearish notion. It appears that going short with tight stops might be the right strategy today.
The Wild Card
WILD - Crude Oil
It seems that the bullish momentum is still relevant, and that oil is heading up with plenty of room to run. There is a local corrective move on the hourlies that is losing momentum, which gives forex traders a great opportunity to rejoin the trend at an excellent entry price.
|14:30||USD||Crude Oil Inventories||1.4M||2.1M||6.2M|
|17:01||USD||10-y Bond Auction||2.80|2.5||*||-|
|18:00||USD||Federal Budget Balance||-10.4B||-223.2B||-|
|20:00||NZD||Official Cash Rate||2.50%||2.75%||-|
|20:00||NZD||RBNZ Press Conference||*||*||*|
|20:00||NZD||RBNZ Rate Statement||*||*||*|
|20:00||AUD||RBNZ Monetary Policy Statement||*||*||*|
|23:50||JPY||Core Machinery Orders||m/m||-15.7%||7.3%||-|
|00:00||AUD||MI Inflation Expectations||2.3%||*||-|
|00:01||GBP||BoE Quarterly Bulletin||*||*||*|
|00:01||GBP||RICS House Price Balance||53%||52%||-|
|01:10||NZD||RBNZ Gov Wheeler Speaks||*||*||*|
|09:00||EUR||ECB Monthly Bulletin||*||*||*|
|12:30||CAD||Capacity Utilization Rate||81.7%||82.3%||-|
|12:30||USD||NZD Core Retail Sales||m/m||0.0%||0.2%||-|