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Monday, 30 Nov 2009

U.S Non-Farm Payrolls Week Begins

As the Crises in Dubai created some volatility in the market approaching the weekend, the affect of this story appears to have eased at the moment. Currently the most important data this week looks to be the U.S Non-Farm Employment Change expected on Friday. This publication usually creates unique opportunities to make profits, and traders should take advantage.

EUR/USDGBP/USDUSD/JPYUSD/CHFAUD/USDEUR/GBP
Daily Trenddowndowndowndowndowndown
Weekly Trenddowndowndowndownupup
Resistance1.51311.662186.951.00930.92410.9171
1.51121.660286.761.00710.92240.9152
1.50811.657386.451.00410.91950.9121
Support1.50221.651185.840.99800.91350.9061
1.49911.648085.530.99520.91060.9032
1.49721.646185.320.99310.90850.9010

Economic News

USD - Dollar Continues to Slide

After showing some signs of recovery, the Dollar continued to drop during last week's session. The Dollar most significant drops were against the Yen and the Euro. The EUR/USD pair is once again trading above the 1.50 level.

The Dollar saw a downtrend despite relatively positive data published from the U.S. economy. The Existing Home Sales rose by 10.1% in October, as 6.10M residential buildings were sold during this month. Also, last week the Consumer Confidence survey rose from 47.7 in October, to 49.5 in November. This states that U.S. citizens are regaining confidence in their financial security, and thus feel safer to consume. It seems that the positive data from the U.S. economy has turned investors on to higher-yielding assets such as the Euro and the Yen. The main catalyst for this is that the global economies including the Euro-Zone and Japan are relying on their export to the U.S, and thus, if the financial condition in the U.S. will improve, it is likely to have a positive impact on these economies as well. However in the long-term, a continuous stream of positive data from the U.S economy is likely to support the Dollar.

As for the week ahead, many impacting news events are expected, yet the most significant one is likely to be the Non-Farm Payrolls, on Friday. This is one of the most exciting publications, and has the deepest affect on the market, and traders shouldn't miss out on it. Traders should also focus on the ADP forecast for this indicator on Wednesday, as it has the potential to shake the market as well.

EUR - Interest Rates Announcement Expected This Week

The Euro continued to strengthen against most of the major currencies during last week's trading session. Despite a mild drop against the Yen, the Euro soared against the Dollar and the Pound.

The Euro rose following a batch of positive data published from the Euro-Zone. The positive publications from the German and French economies have boosted the Euro in particular. The German Business Climate survey rose from 91.9 in October to a 93.9 index in November, making a 15-month record high. This survey is considered to be very reliable in forecasting the German economic outlook for the next 6 months, and thus such a high figure shows that the German economy is indeed on its way to recovery. The French economy also saw positive signs last week. The Flash Services Purchasing Mangers' Index rose from a 57.7 index in October to 60.4 in November. This survey is showing an improving figure for the fourth consecutive month, stating that the French economy is on its way to recover from the recession as well. As long as the positive data from the Euro-Zone's leading economies continue, the Euro is likely to continue to rise.

As for this week, the most interesting data from the Euro-Zone is the Minimum Bid Rate announcement expected on Thursday. The Minimum Bid Rate is in fact the Euro-Zone's Interest Rates decision for December. Currently, analysts assume that the European Central Bank (ECB) will leave rates at 1.00%. However, if the ECB will surprise and hike rates, this has the potential to create mayhem in the market. Traders are advised to follow this event with extra caution.

JPY - Yen Continues to Rise

Despite a modest correction which took place close to the weekend, the Yen continues to strengthen on all fronts. The Yen rose against the Dollar, the Euro and the Pound during last week's trading session.

The Yen rose on positive data that was published from the Japanese economy. The most significant economic publication from last week was the Japanese Trade Balance. This report measured the difference in value between imported and exported goods during October. The report showed a surprising result of 0.42T, the best figure in 4 months. This has shown that Japanese exports are advancing beyond expectations. Considering that the Japanese economy relies first and foremost on its export industry, the results were likely to boost the Yen.

As for this week, a batch of data is expected from the Japanese economy. The most significant publication is likely to be the Capital Spending indicator, expected on Wednesday. The Capital Spending measures the change in the total value of new capital expenditures made by businesses. A positive result is likely to support the Yen, which could extend its bullish trend.

Oil - Oil Recovers and Reaching over $76 a Barrel

After a week in bearish trading, crude oil is beginning to recover some of its losses, and is currently traded at $76.60 a barrel. During last week's session crude oil reached a 6-week low, and dropped to the 72.40 level.

Crude Oil dropped last week on speculations that Dubai World, the United Arab Emirates' largest corporate entity, has gone into serious debt. This has increased worries that global recovery could halt, and thus decreased demand for energy commodities such as crude oil. However, the depreciation of the Dollar has supported crude oil prices close to the weekend.

As for the week ahead, traders are advised to follow the major news events from the U.S economy and the Euro-Zone as they have a great impact on crude oil's value. In addition, traders should follow the Crude Oil Inventories report on Wednesday, as it has proven to have an instant impact on the market.

Technical News

EUR/USD

The EUR/USD may enter into a bearish trend after gains made last week. The 1-hour chart's Stochastic Slow supports this, although the 4-hour chart's RSI shows the pair in neutral territory. Entering the pair when the signs are clearer seems to be the wise choice today.

GBP/USD

The 4-hour chart's Stochastic Slow show the pair currently poised to enter into a bearish trend, and the 1-hour chart's Stochastic Slow confirms this. Going short today may be the best bet for traders.

USD/JPY

All technical data, including the RSI and Stochastic Slow on the 1-hour and 4-hour charts, indicate that this pair is in neutral territory. Traders are advised to enter into the pair only when a clearer picture presents itself

USD/CHF

The 4-hour charts Stochastic Slow indicate this pair is set to enter a bullish trend. This is supported by the RSI on the 1-hour chart. Traders may want to go long with tight stops today, as the pair may make some gains.

The Wild Card

Crude Oil

The RSI on the 1-hour chart indicates that crude is poised to enter a bearish trend. This is supported by the Stochastic Slow on the 4 hour chart. Forex traders may want to go short with tight stops today, as prices may fall.

Current Time: 04/18 15:39 GMT
# Time $€£¥ Event Per. Prev. Fore. Act. Imp.
04/21
15:00USD+ CB Leading Index m/m0.5%0.8%-1
04/22
01:00AUD+ CB Leading Index m/m0.2%*-3
13:30CAD+ Wholesale Sales m/m0.8%0.7%-3
14:00USD+ HPI m/m0.5%0.6%-1
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