Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (August 8, 2013)

USD
The U.S. dollar weakened against most of its counterparts in yesterday’s trading, as risk appetite continued to stay in the markets. EUR/USD climbed above the 1.3300 handle while GBP/USD reached 1.5500. There were no major reports released from the US then, which explains why the currency was unable to draw any support. For today, the jobless claims data could renew demand for the dollar as the report is slated to show 336K in first-time unemployment claimants for the previous week.

EUR
The euro was able to hold on to most of its recent gains, as the German industrial production report printed stronger than expected results. The actual figure showed an increase of 2.4%, higher than the estimate of a 0.3% uptick and the previous month’s 0.8% decline. German trade balance and the ECB monthly bulletin are due from the euro zone today.

GBP
Pound trading was much more volatile yesterday as the BOE’s inflation report rocked the pound pairs. At first, the pound underwent heavy selling when BOE Governor Carney said that the interest rate will be tied to the jobless rate, which they want to see to drop to 7% before tightening. In addition, they specified that inflation and financial stability will also have a say in monetary policy adjustments. However, the pound was able to recover when the central bank upgraded their growth forecasts for this year and next year. No reports are due from the UK today.

CHF
Switzerland printed weaker than expected data yet the franc was still able to outpace most of its counterparts. The SECO consumer climate figure came in at -9 instead of improving from -5 to -2 while the CPI report showed a 0.4% decline in price levels, worse than the estimated 0.1% downtick. The Swiss jobless rate is due today and it’s expected to stay at 5.2%.

JPY
The yen continued to pack its gains against its counterparts in yesterday’s trading, although traders took profits prior to today’s BOJ interest rate statement. No monetary policy changes are expected but the policymakers might highlight the recent improvements in the Japanese economy and suggest that they could reduce stimulus, which could be positive for the yen.

Commodity Currencies (AUD, NZD, CAD)
The comdolls were able to recover against the Greenback during the US session, although the Loonie saw some weakness when Canada printed bleak figures. The Ivey PMI fell short of expectations and came in at 48.4 instead of climbing from 55.3 to 56.3. The building permits was also significantly weaker than expected at a 10.3% decline, worse than the estimate of a 2.5% drop. Australian jobs data was mixed, with the jobless rate holding steady at 5.7% and the employment change weaker than expected at -10.2K. Chinese trade balance is up for release within the day.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (August 12, 2013)

USD
The dollar bounced back to action against some of its counterparts on Friday, as traders booked profits off their short trades ahead of the weekend. There were no major reports released from the US then, but the wholesale inventories release which turned out stronger than expected may have also lifted the Greenback. For today, only the Federal budget balance is up for release from the US and this isn’t likely to cause huge waves among dollar pairs, unless there are significant surprises.

EUR
EUR/USD retreated after reaching the 1.3400 major psychological level on Friday, but the pair could be ready to resume its climb this week. Weaker than expected data from France and Italy were responsible for the euro’s slide that day, although traders remain optimistic that the improvements in Germany could still provide support for the entire region. There are no reports due from the euro zone today though.

GBP
The pound was stuck in consolidation last Friday, even though the UK trade balance came in better than expected. The deficit stood at 8.1 billion GBP, smaller than the estimated 8.4 billion GBP shortfall and the previous 8.7 billion GBP deficit. There are no reports due from the UK today, which suggests that further consolidation could be in the cards.

CHF
The franc was able to hold on to its recent gains against the US dollar last week. There were no reports released from Switzerland on Friday yet the pair was able to take advantage of risk appetite and dollar weakness. Swiss retail sales are up for release today and an improvement from 1.8% to 1.9% is eyed. If the actual figure comes in strong, the franc could be in for more gains.

JPY
Japan printed weaker than expected consumer confidence last week, as the figure dipped from 44.3 to 43.6 instead of improving to 45.3. This reveals that not all Japanese citizens are confident that the economy is seeing improvements, in contrast to what government officials and BOJ policymakers believe. Earlier today, Japan’s preliminary GDP figure fell short of consensus as it printed 0.6% growth, lower than the estimate at 0.9%. Revised industrial production and preliminary machine tool orders data are due later today.

Commodity Currencies (AUD, NZD, CAD)
The comdolls continued to flex their muscles on Friday, as AUD/USD climbed to the .9200 mark while NZD/USD kept inching higher. What’s surprising though is that Chinese CPI came in weaker than expected at 2.7% instead of the 2.8% estimate while Canada’s jobs data fell short of consensus. Hiring fell by 39.4K in July instead of rising by 6.2K, bringing the unemployment rate up from 7.1% to 7.2%. There are no reports due from these economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (August 13, 2013)

USD
The US dollar started the week on a strong note, despite the Federal budget balance release which confirmed that the government surplus of more than 100 billion USD has turned into a deficit of nearly 100 billion USD. There were no other reports released from the US yesterday, as traders gear up for the release of US retail sales figures today. Stronger increases are eyed for July, although the possibility of a downside surprise is on the table since the July jobs figures missed expectations.

EUR
The euro came under selling pressure again yesterday as news that Greece would need another round of bailout funds hit the airwaves. With that, traders seemed to ignore the better than expected GDP reading of Greece, which showed that the nation contracted by only 4.6% for the second quarter instead of the estimated 4.9% drop in growth. For today, German ZEW figures are on tap and it is likely it that it will show an improvement from 36.3 to 40.3 in August. Euro zone industrial production data and ZEW economic expectations figures are also due today.

GBP
The pound was no match to dollar strength on Monday, as GBP/USD broke below the 1.5500 major psychological level and dipped to 1.5450. There were no economic reports released from the UK yesterday and today has the CPI figures on tap. The CPI is expected to be at 2.8%, a notch lower than the previous 2.9% reading. However, stronger than expected readings might be positive for the pound as it could convince the BOE to scale back on its stimulus efforts.

CHF
The Swiss retail sales figure beat expectations of a 1.9% increase and came in at 2.3%. This was also better than the previous reading of 1.8%. However, the franc still gave way to dollar strength in yesterday’s trading as USD/CHF pulled up a few pips close to the .9300 handle. There are no reports from Switzerland today so watch out for the US retail sales release if you’re trading USD/CHF.

JPY
The yen was outpaced by most of its counterparts in yesterday’s trading as Japan’s GDP report printed a weaker than expected reading of 0.6% instead of the estimated 0.9% growth. Earlier today, core machinery orders showed a smaller than expected decrease of 2.7% compared to the estimate of a 7.1% decline. No other reports are due from Japan today so yen pairs might be affected by fundamentals or risk sentiment mostly.

Commodity Currencies (AUD, NZD, CAD)
There were no major releases from the comdolls in yesterday’s trading, although some retreated from their recent rallies. AUD/USD was unable to make any headway past the .9200 handle as it dropped back down to the .9100 area while USDCAD held steady around 1.0300. There are no major releases from Australia and Canada but New Zealand is set to print its quarterly retail sales figures in the next Asian session.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (August 14, 2013)

USD
The Greenback enjoyed stellar gains in yesterday’s trading, as the US retail sales report came in better than expected. In particular, the core version of the report showed a 0.5% uptick, which is better than the estimate of a 0.4% increase, while the headline figure came in at 0.2% as expected. On top of that, the June figures enjoyed significant upward revisions, enough to convince most traders that the Fed will push through with its plans to reduce bond purchases in September. PPI figures are on tap today and these could be treated as clues on how the CPI data will turn out. Stay tuned for FOMC voting member Bullard’s speech as well.

EUR
The euro lost ground to the dollar in yesterday’s trading but managed to score some gains against the yen. German ZEW economic sentiment came in better than expected while the euro zone ZEW also beat expectations. However, euro zone industrial production fell short of consensus as the actual figure showed a 0.6% increase instead of the estimated 1.1% growth. For today, the euro could be in for strong moves as the GDP figures are up for release. Indications that the region could be out of the long recession could trigger a strong rally as early as the release of the French and German GDP around the start of the London session.

GBP
The pound posted strong gains against the yen and managed to hold on to its current levels against the dollar, as the UK printed CPI that was in line with expectations of a 2.8% increase. This means that inflation is still way above the central bank’s 2% target and that this might lead them to think about dialing back their stimulus sooner rather than later. Claimant count change is up for release today and another decline in joblessness is projected.

CHF
The franc gave way to dollar strength in yesterday’s trading as there were no major releases from Switzerland. Swiss PPI is up for release today and a 0.4% uptick in producer prices could be printed, which might be positive for the franc. On the other hand, lower than expected producer price inflation could worsen the ongoing franc selloff.

JPY
The yen lost a lot of ground in yesterday’s trading, brought in part by economic improvements in its currency counterparts. What really triggered the strong selloff though was a news report that revealed Abe is considering reducing corporate taxes in order to make up for the increase in consumption tax. He hopes to spur consumer spending and also encourage foreign investment in the process, leading to a strong Nikkei rally and a yen selloff. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)
There were no major reports released from Australia and Canada, as New Zealand was the only comdoll economy with data. The quarterly retail sales release came in stronger than expected as the headline figure showed a 1.7% increase while the core version of the report printed a 2.3% jump. There are no other reports due from the comdolls today so watch out for commodity price behavior and market sentiment to dictate price action.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (August 15, 2013)

USD
The dollar weakened yet again in yesterday’s trading as the PPI reports turned out to be a disappointment while Bullard’s speech cautioned against easing too soon. This throws water at the Fed’s Septaper plans, considering how Bullard is a voting member of the FOMC. For today, CPI figures are up for release and it might be disappointing as well. Also due today are the initial jobless claims and a couple of manufacturing indices, which are likely to show improvements. However, weaker than expected data could continue to undermine the dollar’s performance for the rest of the week.

EUR
The euro zone is officially out of the recession, as seen from the GDP figures which printed growth of 0.3% versus the estimated 0.2%. However, this wasn’t good enough for the euro as the currency didn’t rally at all after the release. Instead, it even lost ground as some traders thought that the figures were not good enough. For today, banks in the euro zone are on a holiday so there might not be enough liquidity in the euro session.

GBP
The UK printed better than expected jobs data, as claimants dropped by nearly 30K again. This was enough to keep the jobless rate steady at 7.8%. For today, retail sales are up for release and a higher than expected growth of 0.7% is eyed compared to the previous 0.2% uptick. Another strong figure could lift the pound higher, possibly above 1.5600 against the dollar.

CHF
The franc lost ground to the dollar yet again even though Switzerland printed an improvement in its ZEW expectations report. This was probably because Swiss PPI came in weaker than expected as it printed a flat reading. No other reports are due from Switzerland for the rest of the day.

JPY
The yen continued showing signs of weakness as it lost appeal among traders. After all, Abe is going to impose a tax hike, and this could take its toll on consumer spending and businesses. There are no reports due from Japan today so the yen might take its cue from Japanese equities.

Commodity Currencies (AUD, CAD, NZD)
The comdolls were able to take advantage of dollar weakness in yesterday’s trading, as AUD/USD retested .9200 and NZD/USD landed back above .8000. There were no major reports, except for the New Zealand retail sales and the improvement in Australia’s Westpac consumer confidence figure. No other reports are due from the comdolls for the rest of the day.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (August 20, 2013)

USD

The US dollar was off to a strong start in this Asian session, as traders booked profits off key resistance and support levels on the medium-term time frames. This is perhaps because most market participants aren’t willing to keep their trades open ahead of the major market catalysts from the US this week, and these are the FOMC meeting minutes due tomorrow and the Jackson Hole Symposium scheduled to start on Thursday. In addition, rising bond yields is adding pressure for the Fed to push through with its Septaper plans. There were no reports released from the US yesterday.

EUR

There were no reports released from the euro zone yesterday and there are none due today. With that, EUR/USD could stay within its current range or stay below the resistance at 1.3400 since there are no major catalysts for a strong break in either direction. Take note though that there is a bit of political tension brewing in the region, as Merkel is up for re-election. Although she is likely to hold on to her position as confidence in her leadership and reforms stays strong, the uncertainty could weigh on the euro in the coming trading days.

GBP

The pound was one of the stronger currencies in recent trading hours, with GBP/USD managing to make new highs and hold on to the 1.5650 area. Strong UK fundamentals are mostly responsible for keeping this pair afloat, as the country printed stellar jobs and spending figures last week. For this week, the main event risk for pound pairs is the release of the UK revised GDP figures later on in the week.

CHF

The franc was stuck in consolidation once more as neither Switzerland nor the US printed any economic data recently. There are also no major reports due from Switzerland today, which means that USD/CHF could continue with its sideways movement.

JPY

Yen weakness is still pretty evident across the charts, although the selloff was a bit more muted recently. In fact, the yen was able to rebound against the Australian dollar in today’s early Asian session. Japanese trade balance printed weaker than expected results while the all industries activity index is slated to show a downturn for the recent month.

Commodity Currencies (AUD, NZD, CAD)

Mixed performance was seen among the commodity currencies, as AUD/USD returned most of its recent gains and NZD/USD was unable to make headway past .8100. USD/CAD is still sitting above the rising trend line on its daily chart, although rising oil prices are allowing the Loonie to hold on to its current levels near 1.0300. RBA minutes were released earlier today and revealed that the Australian central bank is still disappointed with Australia’s economic performance and could be ready to ease once more.

By Kate Curtis from Trader's Way

 

[RahmanSL]

Just to let you know that I follow your post because they are concise....short & sweet....which compliment other reports which allows me to digest the market faster and make trades accordingly.

Thank you.

 

[katetrades]

Forex Major Currencies Outlook (August 21, 2013)

USD

Today is a big day for the U.S. dollar as the FOMC meeting minutes are up for release. Traders are expecting to see clearer clues on whether the Fed is likely to push through with its Septaper plan or not. On one hand, the U.S. has shown respectable improvements in economic data, which could convince the Fed that a recovery is underway. On the other hand, some Fed officials are wary of using estimates as basis for monetary policy decisions instead of looking at actual reports. However, the rise in bond yields could be another factor to convince the Fed to reduce bond purchases next month, although this component might not be included in the recent minutes just yet. Just the same, brace for additional volatility when trading dollar pairs during today’s US session.

EUR

There are no reports due today, which suggests that traders could start pricing in their expectations for the upcoming top-tier reports. The euro could be in for some strong action in tomorrow’s London session with the euro zone PMI figures up for release. Last month, these PMI readings all came in stronger than expected and hinted that the euro zone could be recovering. This time around, further improvements are expected, with some figures slated to show expansions in manufacturing and services for August. If that’s the case, the euro might be able to make significant headway past the nearby resistance levels.

GBP

Public sector borrowing and CBI industrial orders expectations are up for release from the UK today and strong figures could push pound pairs above the nearby inflection points. The public deficit of 10.2 billion GBP in the past month is slated to turn into a surplus of 3.7 billion GBP, which would be a good sign for the UK’s finances. Remember that one of the complications in the UK economy is its swelling government debt, but an improvement in this area could solidify the rally for the pound. CBI industrial orders are also expected to improve, with the reading projected to climb from -12 to -8.

CHF

As usual, there are no major reports scheduled from Switzerland in today’s trading, which could mean another round of quiet trading for the franc. Take note though that USD/CHF could be very sensitive to US events, namely the FOMC minutes release in today’s US session.

JPY

There are no reports on deck from Japan today, which means that the yen could be vulnerable to risk sentiment. In particular, USD/JPY’s moves, which could result from the FOMC meeting minutes release, could carry a huge impact on the behavior of dollar pairs for today.

Commodity Currencies (AUD, NZD, CAD)

A couple of medium-tier Chinese data could dictate the movement of the comdolls today since there are no other reports due from Australia, Canada, or New Zealand. In addition, keep close tabs on the release of the FOMC meeting minutes when trading AUD/USD, USD/CAD, or NZD/USD. Crude oil inventories, which have been affected by the ongoing conflict in Egypt, could also have an impact on Loonie trading as lower supply could push oil prices and the Canadian dollar up.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (August 22, 2013)

USD

As expected, the release of the FOMC meeting minutes did cause some waves among dollar pairs but the contents of the report didn’t contain a lot of surprises. After all, the meeting was conducted prior to the release of sentiment-changing reports recently, and traders are still looking for more clues in this week’s Jackson Hole Symposium. Bernanke is set to give the much-awaited keynote address and answer monetary policy questions in the following press conference. In addition, Janet Yellen, who is set to become the next Fed Chairman, is also going to participate in the press conference and it would be interesting to see how she assesses the US economy.

EUR

It’s a big day for the euro as PMI figures are up for release from Germany’s and France’s manufacturing and services sector. Last month, the better than expected results triggered a strong euro rally from the 1.3200 to 1.3400 area against the dollar, as these provided hope that the region is in recovery mode. For August, the flash reports are likely to show another set of upbeat figures, with some projected to climb above the 50.0 mark and show industry expansion. If that’s the case, EUR/USD could sustain its gains to new highs.

GBP

There are no major reports due from the UK today, leaving traders to price in their expectations for the upcoming release of the second quarter GDP figure tomorrow. Strong improvements in the UK economy could be incorporated in this figure, which might come in higher than the previous 0.6% estimate. Recall that traders were a bit disappointed with this figure, although it was higher than the predicted 0.3% uptick, and might get their hopes up for an upward revision. Another disappointment though could erase some of the pound’s recent gains.

CHF

Swiss trade balance is up for release today and might trigger some additional volatility for the franc. The surplus is expected to fall from 2.82 billion CHF to just 2.91 MILLION CHF, which would reflect lower export activity. If that’s the case, the franc could see its losing streak get extended.

JPY

There are no reports due from Japan yet again, leaving the yen vulnerable to risk sentiment. Take note that the potential of higher taxes is currently weighing on sentiment, as market watchers foresee lower spending and growth as a result of this. Stay tuned for updates from Japanese government officials though, as indications of compensating for these higher tax rates could still support the yen.

Commodity Currencies (AUD, CAD, NZD)

Australia is set to print its leading index while China will release the HSBC flash manufacturing PMI for August. Recall that this index, which mostly constitutes smaller industries, has been sliding deeper in contraction and another drop could be very negative for Australia while a bounce could keep AUD afloat. Canada is set to print its retail sales figures in today’s US session and possibly show downside surprises owing to the bleak jobs data for July.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (August 23, 2013)

USD

It’s the last day of the trading week and, with the recent price swings, it could be time for most traders to book profits at the end of the week and avoid potential weekend gaps. After all, the Jackson Hole Symposium is still taking place until Saturday and there could be surprises that’d take place before the markets reopen on Monday. Only the new home sales report is up for release from the US today and this report could still have an impact on dollar movement, especially if the actual figures fall far behind or come in way above the estimate at 487K.

EUR

Only medium-tier data is due from the euro zone today, paving the way for smaller moves among euro pairs. Germany will print its final GDP reading for the second quarter and no changes are expected from the initial 0.7% figure. Belgium would release its NBB business climate index and possibly show a small improvement from -12.0 to -11.1.

GBP

The pound could be in for additional volatility before the week comes to a close since the UK will release the second estimate of its quarterly GDP for the second quarter of 2013. The initial estimate was at 0.6% and this wasn’t enough to please pound bulls at that time. However, an upward revision this time might be enough to extend the pound’s gains, as further growth is also eyed for the succeeding months.

CHF

Switzerland’s calendar is empty again for today, leaving USD/CHF at the mercy of market sentiment. Although there are hardly any major reports from other economies, the Jackson Hole Symposium might still have a few surprises lined up and might cause action for USD/CHF.

JPY

There are no reports due from Japan today so make sure you keep tabs on updates or speeches from Japanese government officials detailing what they plan to do with the country’s tax rates and how they can provide support to spending and growth. Other than that, pay attention to how Japanese equities are trading as well in order to predict sentiment for the Japanese economy.

Commodity Currencies (AUD, NZD, CAD)

There are no reports from Australia or New Zealand, as Canada is the only comdoll economy set to print economic figures for today. The CPI data is due during the US session and is expected to show a 0.1% uptick in headline consumer price levels and a flat reading for core price levels. Weaker than expected data could undermine Loonie strength, which has been a result of higher oil prices so far.

By Kate Curtis from Trader's Way