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Friday, 2 Oct 2009
Major U.S. Data Publications to Set the Tone for Forex Trading Today
As this week's trading comes to an end, the market awaits vital data from the U.S. economy. Both the U.S. Non-Farm Employment Change and the U.S. Unemployment Rate is set to drive the volatility of the forex market when they are released at 12.30 GMT. Also important for forex traders to follow is the Halifax HPI figures from Britain at 06:00 GMT. It is recommended that forex traders open big positions in USD and GBP crosses now, as today's trading unfolds.
USD - Dollar Soars Ahead of Non-Farm Payrolls
The Dollar saw much bullishness against most of the major currency pairs during yesterday's trading session. The Dollar gained over 100 pips against the EUR, as the EUR/USD pair dropped to the 1.4501 level. However, the Dollar weakened against the Yen during yesterday's trading.
The rising Dollar came as both disappointing jobs and manufacturing data increased worries that the global economy recovery may be farther than expected, boosting the Dollar's safe-haven status. The weekly U.S. Unemployment Claims report showed that the number of Americans filing for unemployment insurance for the first time during the past week rose to 551,000 from a revised 534,000 last week.
Also yesterday, the Manufacturing Purchasing Managers' Index failed to reach expectations of the forecasted 53.9 result, as the end result was actually 52.6. The unsatisfying figures from yesterday's U.S. data seems to have contributed to investors' worries that a halt in the economic recovery will continue strengthening the greenback going into next week's trading..
Looking ahead to today, the most significant data of the month is expected, as the Non-Farm Employment Change is scheduled for 12:30 GMT. It measures the change in the number of employed people during September, excluding the farming industry. Due to its early publication, this report tends to have an immense impact on the market. If the end result will continue to show that the American jobs sector is recovering, it may extend the Dollar's bullish trend.
EUR - EUR Tumbles as Unemployment Rate Hits 10-Year High
The EUR dropped against all the major currencies on Thursday. The EUR slid to close lower by 150 pips against the EUR/USD, as the pair dropped to the 1.4501 level. The EUR also saw falling trends against the Yen and the Pound.
The EUR's weakness yesterday came as a result of some negative data that was published from the Euro-Zone. The German Retail Sales fell by 1.5% in August as opposed to July. It seems that the fear of rising unemployment in Germany kept consumer spending in check, even as the economy showed signs of recovery. Adding to yesterday's dismal data, the Euro-Zone Unemployment Rate rose to 9.6% in August, hitting a 10-Year high. The poor data has contributed to speculations that the Euro-Zone is still far from reaching economic recovery. As a result, the Dollar gained and the EUR weakened.
As for today, the most significant news event expected from the Euro-Zone is the European Producer Price Index (PPI). The PPI measures the change in the price of finished goods and services sold by producers. Despite being expected to have a large impact on the market, traders are also advised to focus their attention on the U.S employment figures, as they are expected to set the tone for today's trading.
JPY - Yen Rises against the Majors
The JPY underwent a bullish trend against the major currencies during yesterday's trading. The Yen rose over 150 pips against the EUR, as the pair dropped below the 130.00 level. The Yen also saw rising trends against the Dollar and the Pound. The Yen's bullishness was largely due to a batch of positive data published from the Japanese economy. The Retail Sales figures for August dropped by 1.8%, better than the 2.4% drop expected. The Non-Manufacturing Index which measures the general business condition also delivered a better-than-expected figure.
We can see that the continuing publication of the combination of the positive economic data will continue increasing speculations that the Japanese economy is recovering, boosting the Yen. As for Friday's trading, no significant data is expected from the Japanese economy. Traders should follow the leading publications from the U.S and the Euro-Zone, as they are likely to set the tome for the market today. Special attention should be put on the U.S Payrolls data.
Crude Oil - Crude Oil Stays at $70 a Barrel
Crude Oil saw a very volatile session during yesterday's trading session. However, by the end of it, Crude returned to trade around $70 a barrel. Crude Oil began yesterday's trading with a rising trend, reaching the 71.33 level at the peak. Yet due to the poor data from the U.S, Crude Oil dropped to almost $69 a barrel just a few hours later. The combination of lower-than-expected Manufacturing figures and the surge of the weekly American Unemployment Claims has increased concerns that the global recovery is not certain, which has put downward pressure on Crude.
As for today, traders are advised to follow the leading publications from the U.S economy, in order to set their positions on Crude Oil. Traders should focus on the Non-Farm Employment Change, as its result is likely to have a large impact on today's trading, and bear in mind that a positive figure might have the potential to boost Oil prices once again today. It is therefore recommended that you open large positions in Crude Oil as soon as possible.
The pair experienced much bullishness yesterday, as it now stands at the 1.4545 level. The chart's oscillators seem to be showing much mixed data, but the 1-week chart actually shows the most accurate picture. The 1-week chart's MACD and RSI show the cross floating in the overbought territory, signaling that the next move will be lower. Taking advantage of the upcoming trend now seems to be the best choice for Friday's trading.
The GBP/USD cross has experienced much volatility in the past week. The MACD of the hourly chart, the RSI of the daily chart and the Stochastic Slow of the 4-hour chart shows the pair in the oversold territory. On the other hand, the MACD of the weekly chart shows the cross floating in the overbought territory. The best choice for today may be to enter the pair when the signals are clearer.
In yesterday's trading, the USD/JPY cross experienced much bullishness. However, the chart's oscillators support a bullish reversal for today. The Slow Stochastic of the weekly chart shows that a bullish cross has recently formed, indicating that an upward correction is imminent. Opening big positions in this pair at an early stage may turn out to pay off today.
The pair has recorded a 3-day winning streak, and currently stands at the 1.0400 level. The Slow Stochastic of the hourly chart shows that a bullish cross has recently formed, indicating that today's trend will be bullish. Additionally, the daily chart's MACD also supports this view. Going long with tight stops may turn out to bring you big profits today.
The Wild Card
The black gold has gone increasingly bullish this week, and now stands at about $70.15. The MACD of the 4-hour chart and the MACD of the weekly chart show that the recent bullish trend may be running out of steam, and that a bearish correction may happen anytime soon. The RSI of the 4-hour chart also supports this view. Going short with tight stops may turn out to bring big returns for forex traders today.
|EUR||French Bank Holiday||-||-||-|
|EUR||German Bank Holiday||-||-||-|
|07:00||JPY||BoJ Monthly Report||-||-||-|
|17:00||USD||FOMC Member Fisher Speaks||-||-||-|