|Forex News Center|||||Forex News Archive||||
Thursday, 3 Sep 2009
U.S. Unemployment Claims to Set the Level for the USD Today
The U.S. Unemployment Claims is the primary publication today that is set to determine the level of the USD when it is released at 12:30 GMT. The other main releases that are set to dominate forex trading, especially for currencies such as the Dollar and EUR is the publication of the Services PMI for Britain at 08:30 GMT, the EUR Minimum Bid Rate at 11:45 from the Euro-Zone, and the ISM Non-Manufacturing PMI from the U.S. at 14:00 GMT. What are you waiting for traders! Open your positions in the USD, EUR, GBP, and AUD now.
USD - USD Setback Caused by Market Uncertainty
The US Dollar dropped slightly yesterday as equity markets began to slow the pace of their recovery. Erasing part of Tuesday's gains, the EUR/USD retraced itself back towards 1.4300 at the opening of US markets as stocks slowly recovered, and the EUR followed suit against the greenback. Similar behavior was experienced against the British Pound as well, with a price reaching towards 1.6300 as of yesterday's late trading hours.
Economic recovery does not appear to be improving at the speed many investors were hoping for, and currencies appear to be tracing the movement of stocks as a result. While recovery floats between positive and negative economic data, risk appetite may be suffering as a result; hence the surge in the value of the JPY. One thing is certain, the economic news expected for today and tomorrow will no doubt generate an intense level of trading volume and volatility as investors try to price in the new growth forecasts for Europe and unemployment levels for the United States.
For today, traders need to be watching 3 currencies: the AUD, EUR, and USD. Australia released its trade balance figures this morning, which showed a deeper contraction than was expected, putting downward pressure on the Aussie. The European Central Bank will release its decision on short-term interest rates, which always creates volatility. Also, the US is going to give a glimpse into tomorrow's NFP report with today's Unemployment Claims figures. These will be the more exciting news days for trading that an investor can get. Make sure you're in the market today!
EUR - Euro-Zone Interest Rate Decision Today at 11:45 GMT
While rallying against the USD yesterday, the EUR faced a moderate setback versus the British Pound and Yen. Climbing towards 1.4300 against the USD, the EUR dropped to as low as 0.8750 versus the Pound Sterling and 131.30 compared to the Yen.
The price behavior of the EUR these past few days has been to mimic the movement of stocks, since most economic data has failed to provide a clear signal about market direction. Since global stocks are inching their way towards positive growth, the EUR also inched its way up against its primary rival. However, the lack of optimism meant that the safe-haven JPY continued to gain momentum against all of its rivals.
For today, EUR traders have an important economic event to be on the lookout for. The European Central Bank (ECB) is going to announce its decision regarding its Minimum Bid Rate (short-term interest rates for the region), and could also potentially give hints about its economic growth forecasts for the next 6 months. Any indication of a rate increase in the next half-year could spell heavy optimism for the EUR and traders would be foolish to miss out on this event.
JPY - Yen Continues to Gain from Risk Aversion
Sitting on top of a mountain of bullish growth, the Japanese Yen has been on the receiving end of much optimism lately, or should we say, a lack of optimism. The uncertainty in the market lately has pushed many investors away from even the modestly risky currencies and into the safety of the Yen, which helps explain its recent strength.
Whether or not this momentum can carry itself into the near future, however, may be decided by the news events today and tomorrow from Europe and the United States. The ECB will announce its rate decisions today, as well as any updates about economic outlook. This decision always carries a strong impact and may see the EUR/JPY head into an upward correction directly after its release if the ECB brings good news. American employment data today and tomorrow may also help reverse the recent trend of the USD/JPY. Traders beware, today is going to be a bumpy ride!
Crude Oil - Commodities Spike, but Crude Oil Remains Flat
Unlike yesterday's Gold prices, Crude Oil failed to see any bullish growth following the opening of the US markets at 12:30 GMT. Once the New York markets opened, the USD faced a modest downturn against the EUR while stocks gained slightly. As a result, the price of precious metals, such as Gold and Silver, spiked drastically while the price for a barrel of Crude Oil remained relatively flat at $68.
With so much news affecting the stock market and forex, many traders tend to overlook the benefits of commodity trading. Crude Oil tends to be an investment with a lot of potential as it moves in large wave trends with fewer volatile spikes, making it one of the safer investments for a portfolio looking for a hedge against inflation, or away from the volatility of many currencies. Today's and tomorrow's news releases about European interest rates and American employment data are expected to create a heavy level of volume and volatility, meaning most commodities will experience something similar. Don't miss out on these opportunities if you're an active forex trader.
The cross has been very volatile lately, and recorded much bullishness yesterday. Much of today's oscillators seem to be misleading. However, both the 4-hour and weekly charts offer a more accurate picture. The 4-hour chart's Stochastic Slow shows that the pair is floating in the overbought territory, and a downward correction is imminent. The MACD also supports the view that the pair is overbought. Going short with tight stops may turn out to pay off today.
The popularly traded pair experienced much bullishness yesterday, despite recording a very bearish trading day on Tuesday. The Stochastic Slow of the weekly chart shows the pair in the overbought territory, and that a bearish correction could happen anytime soon. The RSI of the hourly chart indicates that there is likelihood for much bearishness in the pair today. Going short on the pair seems like a popular strategy for traders today.
As a whole, the USD/JPY cross went through much bearishness in the past 2 weeks. This trend looks set to reverse according to the daily and 4-hour hour charts. The Stochastic Slow of the daily chart shows the pair sitting in the oversold territory, signaling that the next move will be in an upward direction. This view is also supported by the MACD of the 4-hour chart. Going long with tight stops could pay off today.
The USD/CHF cross has been range trading between the 1.0540 and the 1.0705 levels. On the one hand, the MACD of the weekly chart signals that the pair is set for a downward trend for today. On the other hand, both the Stochastic Slow of the 4-hour chart and the MACD of the hourly chart supports an upward trend for today. Entering the pair when the signals are clearer seems to be a wise choice for today.
The Wild Card
Despite much bearishness for the black gold this week, the popular commodity went through some flat trading yesterday. Crude currently stands at the $68.10 level. Both the RSI and the Stochastic Slow of the daily chart indicates that there will be much bullish behavior for Crude today. Going long with tight stops may bring big profits for forex traders today.
|09:15||EUR||Spanish Manufacturing PMI||54.5||54.2||53.6|
|09:45||EUR||Italian Manufacturing PMI||54.1||54.6||55.3|
|09:50||EUR||French Manufacturing PMI (p)||49.6||49.6||49.6|
|09:55||EUR||German Manufacturing PMI||51.5||51.5||51.8|
|10:00||EUR||Final Manufacturing PMI||52.2||52.2||52.4|
|14:30||USD||Core PCE Price Index||m/m||0.1%||0.1%||-|
|15:45||USD||Final Manufacturing PMI||53.8||53.8||-|
|16:00||USD||ISM Manufacturing PMI||53.5||53.6||-|
|16:00||USD||ISM Manufacturing Prices||49.5||49.5||-|
|16:50||USD||FOMC Member Powell Speaks||-||-||-|
|03:00||NZD||ANZ Commodity Prices||m/m||-3.1%||-||-|
|03:30||JPY||Average Cash Earnings||y/y||0.7%||0.9%||-|