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Tuesday, 18 Oct 2011

US PPI and TIC Investment Data on Tap Today

Data on American inflation and investment today may indicate mild optimism that could drive the greenback lower in the short-term. Recent news has done little to alter the current direction of the forex market, though news could hold values steady should they come in near forecasts. PPI and TIC Long-Term Purchases in the US are forecast to hold steady this month, which could have the effect of lifting the value of riskier assets, though this will need further data to be confirmed.

EUR/USDGBP/USDUSD/JPYUSD/CHFAUD/USDEUR/GBP
Daily Trenddowndownupupdowndown
Weekly Trenddowndowndownupdowndown
Resistance1.38551.588877.750.90551.02630.8798
1.38281.586477.400.90321.02410.8776
1.37951.583077.090.89991.02100.8745
Support1.37361.576876.520.89401.01520.8681
1.37001.573476.200.89081.01200.8650
1.36741.570775.960.88791.00950.8631

Economic News

USD - US Dollar Stabilizes as Markets Prepare for Busy News Day

The US dollar (USD) was seen trading mildly bullish early Tuesday morning as investors seemed somewhat more pessimistic about growth in the American economy, but still uncertain due to an assumed temporary state of things at present. Sentiment does not seem to be as stable as many economists would like, though, as investment does seem to be shifting back into safe haven assets like the greenback.

Data on American inflation and investment today may indicate mild optimism that could drive the greenback lower in the short-term. Recent news has done little to alter the current direction of the forex market, though news could hold values steady should they come in near forecasts. PPI and TIC Long-Term Purchases in the US are forecast to hold steady this month, which could have the effect of lifting the value of riskier assets, though this will need further data to be confirmed.

As for today, there will be several major US economic releases, with most focused on inflation, consumer confidence in Europe, and investment in American domestic securities. Liquidity will likely be higher in today's early trading as these data points are published, though the impact of Europe's ZEW reports may be enough to force a surge in any direction on USD pairs and crosses. Inflation and consumer confidence are in focus this week and traders will want to pay attention to the latter in the case of mounting pessimism and its affect on dollar values.

EUR - EUR Trading Lower as Sentiment Shifts to Safety

The euro (EUR) is expected to be seen trading with mildly bearish results this week ahead of a slew of reports on the region's consumer confidence and manufacturing sector. Against the US dollar (USD) the euro has been trending downwards from a recent flight to safety after last week's positive figures.

Traders are looking for a way to balance a renewal of risk aversion with continued shakiness in global markets. A mildly pessimistic sentiment towards investing in global stocks at the moment has many investors on edge and looking for safety. An embattled euro zone, fending off market bears amid turmoil in its peripheral nations, also looks to be losing ground in financial markets as safe haven assets make longer strides.

Sentiment across the euro zone has turned slightly more positive, with many analysts and economists expecting moves towards higher yielding assets by traders later this week. Great Britain, moreover, appears positioned for a relatively better fourth quarter than its southerly neighbors. With several minor reports expected all week, most expecting bullish figures, the GBP is in a position to continue its recent streak, though the same cannot be said for the EUR.

JPY - JPY Still Trending Up as Global Sentiment Quivers

The Japanese yen (JPY) was seen trading mildly higher versus most other currencies this morning as its value as an international safe haven was being evaluated by an air of impending intervention by the Bank of Japan (BOJ). Being linked to international risk sentiment, the yen has experienced an expected uptick during a period when shifts away higher yielding assets became prominent. The JPY has been experiencing several long strides lately from the various shifts into riskier assets.

The latest moves of the yen are causing some concerns, however, as many speculators are anticipating another round of intervention by the BOJ. With industrial production data out this week, traders are waiting to see what the BOJ will do in the face of a downturn. A strengthening yen has benefits for the buying power of the island economy, though its dependence on exports makes a strong yen unfavorable for longer-term growth in Japan's current financial model. As the island currency remains bullish, the pressure begins to mount for the expected bank move to lower its currency strength.

Oil - Crude Holding Steady as Northern Markets Gear Up for Winter

Crude Oil prices held steady Monday as sentiment appeared to favor a mild downtick in global stocks following policies of monetary stagnation being executed by several central banks last week. Data releases out of Europe and the US are still driving many investors back into safe-haven assets as many reports suggested a surprise downtick in growth among global industrial output and consumer spending.

An expected jump in dollar values due to this week's risk sensitive environment has helped many investors ram up their short-taking positions on physical assets, but with the USD's gains leveling off this morning, sentiment appears to have the price of crude oil holding steady near $90 a barrel ahead of the impending winter season in the northern hemisphere. Should Crude Oil sentiment continue to flatten this week, oil prices may reach a decision point which forces a wide swing by mid-week.

Technical News

The Wild Card

forex

Current Time: 11/28 03:13 GMT
# Time $€£¥ Event Per. Prev. Fore. Act. Imp.
11/28
06:00JPY+ Housing Startsy/y-14.3%-14.5%-1
08:00EUR+ German Retail Salesm/m-3.2%1.7%-3
08:00GBP+ Nationwide HPIm/m0.5%0.4%-3
08:45EUR+ French Consumer Spending m/m-0.8%0.2%-3
09:00CHF+ KOF Economic Barometer99.8100.1-3
10:00EUR+ Italian Monthly Unemployment Rate12.6%12.6%-1
10:00EUR+ Italian Quarterly Unemployment Rate12.5%12.4%-1
11:00EUR+ CPI Flash Estimate y/y0.4%0.3%-3
11:00EUR+ Unemployment Rate11.5%11.5%-3
11:00EUR+ Italian Prelim CPI m/m0.1%-0.3%-1
14:30CAD+ GDPm/m-0.1%0.4%-5
14:30CAD+ RMPIm/m-1.8%1.5%-3
14:30CAD+ IPPI m/m-0.4%0.3%-1
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