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Monday, 9 Jan 2012
Positive US Data Fails to Boost EUR
Despite a positive US jobs report on Friday, which would have normally boosted riskier assets like the euro, the common currency maintained its bearish trend to close out the week. The EUR/USD dropped to its lowest level in 15-months, while the EUR/JPY fell to a fresh 11-year low. This week, traders will want to pay attention to several important indicators, notably Thursday's statements from both the European Central Bank and the British Monetary Policy Committee.
USD - US Non-Farm Data Sends USD to 15-Month High vs. Euro
The US Non-Farm Payrolls data came in well above expectations on Friday, and managed to boost the US dollar against most of its main currency rivals to close out the week. The EUR/USD ended Friday's session at 1.2718, down well over 300 pips from its peak earlier in the week. In addition, the GBP/USD was down well over 200 pips from highs reached earlier in the week to close out Friday at 1.5428.
The fact that the safe-haven US dollar maintained its bullish trend despite the positive jobs figure is largely because of the ongoing euro-zone debt crisis which continues to drive investors away from the common currency. Typically, positive US data sends investors to riskier assets like the euro. It appears that until positive European data is released, it will be difficult for the euro to rebound.
Turning to this week, euro-zone data is likely to dictate the direction the USD will take. In particular, Thursday's ECB Press Conference may prove to create significant market volatility. With regards to today, Canadian data is forecasted to influence the USD/CAD. The pair has been largely bullish as of late. With today's Canadian Building Permits figure forecasted to come in well below last month's, the upward trend may continue.
EUR - Euro Tumbles despite Positive Global Economic Data
Riskier assets like the euro failed to rebound last week, despite positive global data like the latest monthly US jobs report. The euro remains bearish against virtually all of its currency rivals, in particular the Japanese yen. The EUR/JPY hit a fresh 11-year low and closed out last week at 97.88. Italian debt worries were largely to blame for the bearish euro. Additionally, Greece's future in the euro-zone has caused many investors to divert their funds away from the EUR.
This week, traders will want to pay attention to any news out of the euro-zone. In particular, Thursday's ECB Press Conference is likely to generate heavy market volatility. Investors will be looking for a concrete plan from the EU to combat its ongoing debt problems. Positive signs that a plan exists for the euro-zones current economic troubles are likely to boost the euro, at least in the short term.
CHF - Swiss Data May Help CHF Extend Bullish Trend Today
The Swiss franc had mixed trading throughout last week. While it was able to maintain a bullish trend against the euro, the currency slipped against both the dollar and yen. Analysts attribute the trends to the current euro-zone debt crisis and positive US jobs data released last Friday. The EUR/CHF closed last week at 1.2147 while the USD/CHF finished at 0.9551.
Today, the Swiss retail sales figure may help the franc against the dollar and yen. Forecasts are calling for the indicator to come in at around 0.6%, a considerable increase over last month. If the predictions turn out to be true, the franc may be able to recoup some its losses last week, while extending its current trend against the euro.
Crude Oil - Crude Oil Closes Week on a Bearish Note
Positive US jobs data combined with a weak euro caused crude oil to close last week on a slight bearish note. While oil is still trading above the psychologically significant $100 a barrel level, the strong dollar weighed down on the commodity. Typically, a strong US dollar makes oil more expensive for international consumers and brings prices down. In addition, the euro-zone debt crisis has brought equities markets down, resulting in bearish momentum for oil.
This week, traders will want to pay attention to any news out of the euro-zone. Further bearish movement by the euro will likely cause crude oil to move down as well. At the same time, Middle East tensions may cause oil to go bullish again. Any news out of Iran which may cause investors to fear oil supplies may drive the commodity higher throughout the week.
Technical indicators on the daily chart place this currency pair in the oversold zone, indicating that an upward correction may take place in the near future. A bullish cross is forming on the Stochastic Slow, while the Williams Percent Range is right around the -90 level. Going long in your positions may be a wise choice.
Indicators on the weekly chart are showing a possible upward correction for this pair may take place. The Relative Strength Index is drifting toward the oversold zone, while the Williams Percent Range is already below the -90 level. Traders may want to go long in their positions.
Most long-term technical indicators are showing this pair trading in neutral territory, meaning that a clear trend has yet to present itself. Traders are advised to take a wait-and-see approach with their trades until a clearer picture develops.
After spiking in trading last week, technical indicators are showing possible bearish movement for this pair in the near future. The daily chart's Stochastic Slow has formed a bearish cross, while the Relative Strength Index is hovering in the overbought zone. Traders may want to go short in their positions.
The Wild Card
Following a steady decline in prices last week, technical indicators are showing that this pair is trading in the oversold region and may see an upward correction in the near future. The Stochastic Slow on the daily chart has formed a bullish cross, and the Relative Strength Index is trading well below the 30 level. traders may want to go long in their positions. Forex traders may want to go long in their positions.
|07:00||JPY||BoJ Outlook Report||-||-||-|
|08:00||EUR||German Retail Sales||m/m||2.5%||-0.8%||-|
|08:45||EUR||French Consumer Spending||m/m||0.7%||-0.3%||-|
|10:00||EUR||Italian Monthly Unemployment Rate||12.3%||12.4%||-|
|11:00||EUR||CPI Flash Estimate||y/y||0.3%||0.4%||-|
|11:00||EUR||Italian Prelim CPI||m/m||-0.3%||-0.1%||-|
|13:30||USD||Core PCE Price Index||m/m||0.1%||0.1%||-|
|13:30||USD||Employment Cost Index||m/m||0.7%||0.6%||-|
|14:55||USD||Revised UoM Consumer Sentiment||86.4||86.4||-|
|14:55||USD||Revised UoM Inflation Expectations||2.8%||-||-|