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Thursday, 13 Oct 2011
Global Trade Balance Data on Tap
Global reports on the trade activity and budgeting will be released today from several major economies. News of this kind tends to have a delayed effect, but volume should be heightened in today's later trading sessions. On tap for these reports is the trade balance figure from China, Great Britain, Canada, and the United States, in that order.
CAD - Canadian Dollar Falls ahead of Trade Balance Data
The Canadian dollar (CAD) was seen moving lightly bearish late Wednesday as investors fled the higher yielding assets from speculation on a market downturn following recent releases on manufacturing. A weaker-than-forecast uptick in US private sector employment last week added to risk sensitivity for many investors, leading some to await today's news before entering more strongly.
The Bank of Canada (BOC) also held rates steady in its latest decision, along with every other major economy announcing a rate decision, but talk was slightly more optimistic in the northern giant's economy than elsewhere. The downtick seen in the Loonie was significantly milder than in other currencies. This may be partially due to the CAD's disconnect from some of the market turmoil, but it could also be from some optimistic data emerging from the economy lately.
Most significant on today's calendar will be the Canadian publication of its employment change data and unemployment rate. Should today's news foreshadow a modest growth in the Canadian economy's employment sector, an assessment that does, however, seem less likely from data released these past few weeks, there is a possibility that more investment will get pushed towards the higher yielding abilities of the European currencies as investors seek to diversify their portfolios, which could also support the CAD in short term trading.
GBP - GBP Moving Bullish as Data Supports Growth
The Great Britain pound (GBP) is expected to be seen trading with bullish results this week ahead of a slew of reports on the country's manufacturing, housing, and service sectors. Against the US dollar (USD) the pound has actually been trending upwards despite the greenback's bullish moves against its other currency rivals.
A mildly pessimistic sentiment towards investing in the euro at the moment has many investors on edge when considering regional investments. An embattled euro zone is sending financial ripples through its neighbors and some are concerned it could pull growth down across the entire continent. With yesterday's inflationary data out of Britain, this doesn't seem to be the case, at least for the island economy north of Western Europe. Housing data seemed a bit pessimistic, but consumer prices are indeed growing at a healthy rate in the UK.
Sentiment across the region may have turned negative, with many analysts and economists expecting moves towards safety by traders this week, but the GBP could see a solid weathering of this financial storm so long as data remains bullish. Great Britain appears positioned for a relatively better quarter than its southerly neighbors. The pound could see some bullish movement this week as a result of this overall sentiment.
AUD - Australian Data Expected to be Bearish
The Australian dollar (AUD) was weighed down yesterday, as market reports showed contraction across the boards. Piling atop recent reports on Australia's slowly stabilizing housing sector, today's publication of Australian employment shows a broadening contraction striking several sectors of Australia's economy.
Expectations for today's reports have been for a modest growth from last month's poor numbers. The actual reports may lead many investors to push slowly back into the Australian dollar (AUD). National data on housing and employment may also have driven many investors away from the once-burgeoning AUD. This data, combined with dismal HPI and building approvals reports, has so far dragged the Aussie lower and looks to continue doing so this week.
Oil - Oil Sees Uptick after Inventory Report Expected to Rise
Crude Oil prices found support Wednesday, moving towards $91 a barrel in late trading as sentiment appeared to shift in favor of a price increase following news that supply in the United States may increase by 0.4 million barrels this week. With supply holding and manufacturing and industry in decline, the balance between supply and demand appear to be reaching agreement as the value of oil seems to be leveling out in recent trading, despite the recent swings in currency values.
As investors seek shelter from recent market uncertainty, the value of crude oil, which was seen holding steady all week, may see additional gains before today's close. A sudden jump in dollar values due to a sudden return to risk aversion, as was expected following the recent interest rate announcements, could drive many investors into lower investments on physical assets; driving oil prices back downward by the middle of next week.
The price of this pair appears to be floating in the over-bought territory on the8-hour chart's RSI indicating a downward correction may be imminent. The downward direction on the hourly chart's Momentum oscillator also supports this notion. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.
The pair has recorded much bullish behavior in the past several days. However, the technical data indicates that this trend may reverse anytime soon. For example, the 8-hour chart's RSI signals that a bearish reversal is imminent. A downward trend today is also supported by the daily chart's Slow Stochastic. Going short with tight stops may turn out to pay off today.
The pair has been range-trading for a while now, with no specific direction. The Daily chart's Slow Stochastic providing us with mixed signals. The 4 hour charts do not provide a clear direction as well. Waiting for a clearer sign on the hourlies chart might be a good strategy today.
The typical range trading on the hourly chart continues. The daily chart RSI is floating in neutral territory. However, the pair currently sits near the bottom border of the 8-hour chart's RSI, suggesting an upward correction may be imminent. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.
The Wild Card
This pair's sustained upward movement has finally pushed its price into the over-bought territory on the 4-hour chart's RSI. Not only that, but there actually appears to be a bearish cross on the Slow Stochastic pointing to an imminent downward correction. Forex traders have the opportunity to wait for the downward breach on the hourlies and go short in order to ride out the impending wave.
|15:30||USD||Crude Oil Inventories||-4.5M||1.1M||-|
|01:00||AUD||HIA New Home Sales||1.2%||*||-|
|EUR||German Prelim CPI||m/m||0.3%||0.0%||-|
|01:00||EUR||Italian 10-y Bond Auction||2.60|1.5||*||-|
|02:30||AUD||Private Capital Expenditure||q/q||-4.2%||-0.8%||-|
|08:55||EUR||German Unemployment Change||-12K||-6K||-|
|09:00||EUR||M3 Money Supply||y/y||1.5%||1.5%||-|
|09:00||EUR||Italian Retail Sales||m/m||-0.7%||-0.2%||-|
|11:00||GBP||CBI Realized Sales||21||25||-|
|13:30||USD||Prelim GDP Price Index||q/q||2.0%||2.0%||-|
|15:00||USD||Pending Home Sales||m/m||-1.1%||0.6%||-|