Daily Market Outlook by Kate Curtis from Trader's Way

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Forex Major Currencies Outlook (March 29, 2013)

USD

Most banks are on a holiday today, paving the way for quiet trading conditions. Take note though that it’s the last trading day for the month and the quarter, which could also set the stage for profit-taking moves towards the end of the U.S. session. Bear in mind that low liquidity could result in more volatile price action as well. The U.S. is scheduled to release a few medium-tier reports, including the core PCE price index which is rumored to be the Fed’s preferred inflation measure.

EUR

The euro managed to edge slightly higher against the U.S. dollar during yesterday’s trading but it seems the currency is unable to make any further headway. European banks are on holiday today but France is set to print its consumer spending report within today’s London session and possibly report a 0.3% rebound from the previous 0.8% decline.

GBP

GBP/USD is testing the major psychological resistance at the 1.5200 area once more as the pair climbed in yesterday’s trading. Without any major market catalysts on tap, it seems unlikely that GBP/USD could make a strong break above the 1.5200 to 1.5250 levels. Do stay on your toes for potential profit-taking around those recent levels.

CHF

Swiss banks are on holiday today, which suggests that franc pairs could be in for sideways trading for most of the day. USD/CHF seems set on staying above the -.9500 major psychological support while EUR/CHF has been edging lower gradually.

JPY

Japanese housing starts came in much stronger than expected at 3.0% for February, better than the estimated 1.0% decline but lower than the previous 5.0% jump in January. No other reports are due from Japan this week as the yen pairs could be vulnerable to profit-taking scenarios and possible movements after Japanese repatriation efforts are booked.

Commodity Currencies (AUD, NZD, CAD)

There are no economic reports due from these commodity-dependent economies for the day, which suggests that AUD/USD, USD/CAD, and NZD/USD could simply take their cues from U.S. reports or might be in for quiet trading until the end of the week.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (April 1, 2013)

USD

Traders are now back from the shortened trading week last week, which suggests we could see more action on the charts for the coming days. Today, the U.S. will release its ISM manufacturing PMI for March and possibly show that the figure stayed at 54.2 for the period. A higher than expected reading would reflect a stronger expansion in the industry, which would be positive for the U.S. economy and possibly the U.S. dollar. A weaker than expected result could hint at slower manufacturing activity, which could be negative for the U.S. dollar.

EUR

European banks are still on a holiday today, which could mean euro pairs are in for quiet trading once more. Take note though that Cyprus banks are set to reopen this week and it would be the start of deposit taxes and withdrawal limits. So far, no bank run has been reported but it is likely that flight of capital will be seen, particularly for foreign investors with large deposits in the country. If that’s the case, the euro could head further south in the next few trading days.

GBP

Banks in the United Kingdom are still on holiday for today so pound pairs might see more sideways movement for the next few hours. Traders might want to start pricing in their expectations for this week’s BOE rate decision and business PMIs, which could dictate pound price action for the near term. The BOE is expected to keep rates and bond purchases unchanged but we might hear of dovish remarks from King if the manufacturing and construction PMI releases this week turn out worse than expected.

CHF

There are no reports due from Switzerland today as USD/CHF and EUR/CHF continue to trade carefully. When trading these pairs, make sure you keep tabs on updates regarding Cyprus’ banking situation or U.S. economic data (ISM manufacturing PMI) to figure out where they could be headed.

JPY

Japan just released a couple of weaker than expected figures during today’s Asian session, which could weigh on the yen for the next few hours. The Tankan manufacturing index came in at -8 from -12 instead of rising to -7. The non-manufacturing component rose from 4 to 6, short of the consensus at 8. These show that manufacturing and services activity in Japan is weaker than projected for the first quarter of 2013.

Commodity Currencies (AUD, CAD, NZD)

There are no reports due from Australia, Canada, or New Zealand for today. China just printed weaker than expected manufacturing PMI for March as the reading climbed from 50.1 to 50.6 instead of the projected 51.6 reading. Meanwhile, the HSBC flash manufacturing PMI came closer in line with the consensus of 51.7 as it logged in a 51.6 reading for March.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (April 2, 2013)

USD

The weak U.S. ISM manufacturing PMI figure for March triggered a round of dollar selling during yesterday’s New York session as the actual reading slipped from 54.2 to 51.3. This reflects how the expansion in the manufacturing industry slowed down during the month, making traders worry that the U.S. will be unable to sustain its recovery. For today, there are no major U.S. reports on tap so we might see quiet trading conditions during the New York hours.

EUR

The euro was able to recover against the U.S. dollar during yesterday’s trading hours despite the lack of liquidity during the London session. Only medium-tier reports are due from the euro zone today but these reports could still usher in some volatility for euro pairs. Germany will be releasing its CPI while Spain will print its employment data and manufacturing PMI. Italy is also set to report is manufacturing PMI during the euro session. Bear in mind that weaker than expected readings could weigh on the euro while stronger than expected reports could give the shared currency a boost. Euro zone employment data is also set for release later on during the day.

GBP

The pound was able to take advantage of dollar weakness during yesterday’s market hours yet the currency might be forced to return its recent gains today if the U.K. manufacturing PMI falls below expectations. The reading for March is projected to improve from 47.9 to 48.9, reflecting slower contraction in the industry. If it fails to impress, it could have a negative impact on the upcoming BOE rate decision, which might lead traders to start selling the pound early. After all, policymakers did remark that they will be keeping close tabs on business surveys to figure out if more easing is necessary or not.

CHF

Switzerland will be reporting its SVME PMI figure for March during today’s London session. The reading is expected to dip from 50.8 to 50.5 for the month, showing that the expansion in the manufacturing industry was slower during the period. Stronger than expected data could push USD/CHF lower while weaker than expected results could give the pair a boost.

JPY

There are no major releases from Japan for now as traders await the BOJ interest rate decision on Thursday. Yen pairs are trading on country-specific events, with USD/JPY selling off after the U.S. printed a weak ISM manufacturing PMI figure.

Commodity Currencies (AUD, CAD, NZD)

The RBA decided to keep rates on hold at 3.00% as expected, barely triggering any reaction on Aussie pairs. Governor Glenn Stevens noted that while global growth has slowed below average pace, downside risks to the Australian economy have been reduced. He remained optimistic as he pointed out that there are still plenty of opportunities for growth. As for Canada and New Zealand, there are no reports on their schedules, which might mean we’ll see mostly sideways trading for USD/CAD and NZD/USD.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (April 3, 2013)

USD

A couple of top-tier data are due from the US today. These are the ADP non-farm employment change and the ISM non-manufacturing PMI. The ADP report could show a slight improvement from 198K to 203K for March, reflecting a slight increase in hiring. Meanwhile, the ISM report is expected to post a dip from 56.0 to 55.9, showing that manufacturing still expanded during the month. Take note that the US dollar is trading on fundamentals lately, which suggests that strong data could boost the dollar while weak figures could spark a selloff.

EUR

There are no major reports from the euro zone today, which could suggest quiet trading for euro pairs. Take note though that there were several weak data released from euro zone’s top economies recently, as Spain and Italy both printed weak manufacturing PMIs, suggesting that growth isn’t so strong in some of the large nations in the region.

GBP

Another potential pound selloff could be in the cards if the British construction PMI disappoints. Yesterday, the weaker than expected manufacturing PMI set off a massive round of pound selling, pushing GBP/USD to the 1.5100 area. The construction report could print an improvement from 46.8 to 47.7 but a disappointment is likely since mortgage approvals are down in the past few months.

CHF

Weaker than expected Swiss SVME PMI is lifting franc pairs for now as there are no major reports on Switzerland’s schedule. Keep an eye out for euro zone data or US reports when trading EUR/CHF or USD/CHF.


JPY

Earlier today, Prime Minister Abe and BOJ heads Kuroda and Iwata spoke in front of the Japanese parliament and outlined some of their plans for monetary policy. They are considering scrapping the bank note rule, which is a limit on the total government asset purchases. If this happens, the BOJ could have more scope for easing as they could decide to increase asset purchases, extend the duration of longer-term bonds, or implement an open-ended asset purchase program just like the Fed. The decision is still up to the rest of the BOJ policymakers and we’ll hear more of this on the BOJ rate statement tomorrow.

Commodity Currencies (AUD, CAD, NZD)

Commodity currencies managed to stay resilient in yesterday’s trading as the 7.4% rise in ANZ commodity prices boosted these currencies. In addition, Australia’s trade balance came in strong as the deficit shrank to 0.18 billion AUD. No other reports are due from the commodity-dependent economies for the rest of the day, which suggests that US data could have a large impact on the price action of AUD/USD, USD/CAD, and NZD/USD.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (April 4, 2013)

USD

The U.S. dollar suffered another selloff during yesterday’s trading as the economy printed a couple of weaker than expected data. The ADP non-farm employment change, which can be considered as a preview of the NFP release, came in below the expected 203K reading and printed a mere 158K increase in hiring for March. Meanwhile, the ISM non-manufacturing PMI came in at 54.4 instead of the estimated 55.9 figure, showing that the expansion in the industry slowed down more than expected. There are no major releases from the U.S. today but be mindful of speeches from FOMC members Bernanke, Yellen, and George as they could talk about future monetary policy plans.

EUR

The euro was able to recover slightly against the U.S. dollar, which suffered a selloff due to weak U.S. data. The only report released from the euro zone yesterday was the CPI flash estimate which came in higher than expected at 1.7%. The ECB rate decision today could be a bigger market mover for euro pairs even though the central bank could still keep rates on hold for the meantime. However, recent uncertainties in the euro zone could result to a less upbeat statement from Governor Draghi, which might weigh on the euro.

GBP

Despite weaker than expected construction PMI from the U.K., the pound managed to pocket a few gains as GBP/USD pulled up to the 1.5150 area. The construction PMI came in at 47.2 from 46.8, a slight improvement but still lower than the estimated 47.7 reading. With BOE policymakers keeping close tabs on business surveys, the weaker than expected PMIs might warrant a pessimistic statement from the BOE during the interest rate decision today. No monetary policy changes are expected but BOE Governor King could focus on the challenges to the British economy.

CHF

There were no major reports released from Switzerland during yesterday’s trading but the franc managed to catch some gains as USD/CHF fell from 0.9500 due to weak U.S. economic data. There are no reports due from Switzerland today which suggests that franc pairs could move to the tune of economic data from other economies.

JPY

The BOJ announced their new quantitative and qualitative easing measures today, triggering a sharp yen selloff. Kuroda mentioned that they will keep implementing these measures until the economy is able to achieve its 2% inflation target. They doubled their monetary base for easing, eliminated the bank note rule, and declared that they plan to achieve their inflation goal within two years. The vote on these aggressive easing measures was close to unanimous, signaling that central bankers are very serious about warding off deflation. Yen selling could continue for the rest of the day as USD/JPY edges close to 94.00.

Commodity Currencies (AUD, NZD, CAD)

Commodity currencies were unable to sustain their rallies during yesterday’s trading as weak economic data weighed on risk sentiment and dragged higher-yielding currencies lower. AUD/USD fell short of testing the 1.0500 major psychological level while NZD/USD came close to .8450. Australia released stronger than expected building approvals and retail sales data for February during today’s Asian session, confirming that the recent RBA easing efforts are just starting to take effect. No other reports are due from the comdoll economies for the rest of the day as AUD/USD, USD/CAD, and NZD/USD could be swayed by risk sentiment once more.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (April 5, 2013)

USD

The U.S. dollar rallied against most of its counterparts during the Asian session and first few hours of the London session as the strong USD/JPY rally affected other dollar pairs. However, the dollar choked up its recent gains to the euro, pound, and commodity currencies when risk appetite surged later in the day. Weekly jobless claims data came in weaker than expected, confirming that the U.S. jobs market is currently struggling. The upcoming NFP release today should provide a better picture of how the labor market is faring as the actual figure could post a weaker increase of 198K for March. Note that the ADP non-farm employment change figure and the Challenger job cuts report both posted bleak results, which hint at a downside surprise for the NFP.

EUR

The euro lost ground to the U.S. dollar when ECB Governor Draghi sounded more pessimistic than before in his recent rate statement. However, the central bank still refrained from making any monetary policy changes as Draghi emphasized that they’re running out of options. Only the euro zone retail sales and final GDP figures are on tap from the region today, which suggests that the euro might rather take its cue from the resulting sentiment from the U.S. NFP report.

GBP

Despite the quick GBP/USD selloff that took place during the start of the London session, the pair was able to recover right away when the BOE didn’t announce any additional stimulus measures. On top of that, services PMI came in stronger than expected and showed a large expansion for the month of March as the reading came in at 52.4 instead of declining from 51.8 to 51.4. Only the Halifax HPI is due from the U.K. today and a weaker increase in house prices is expected.

CHF

There were no reports released from Switzerland yesterday but USD/CHF managed to stay below the .9500 handle despite the strong round of dollar-buying that took place. Today, Switzerland will print its foreign currency reserves report. Note that the previous release hinted that the SNB’s peg is growing more and more expensive and today’s release should highlight the unsustainability of their intervention efforts.

JPY

The yen continues to sell off because of the BOJ’s aggressive easing plans announced yesterday. USD/JPY has already surged past key resistance levels and appears to be testing 97.00 prior to the NFP release, which could spark a quick selloff. However, analysts believe that the pair is headed for the 100.00 mark as the additional stimulus from the BOJ should keep the yen’s value down.

Commodity Currencies (AUD, CAD, NZD)

Aside from the strong Australian retail sales and building approvals data, there weren’t any other reports printed from the comdoll economies yesterday. This left the currencies vulnerable to dollar behavior and risk sentiment, which might be the same case for today. Canada is set to print its trade balance, jobs data, and Ivey PMI later today though and this could spark volatility for USD/CAD.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (April 8, 2013)

USD

The U.S. economy showed weaker than expected jobs growth for March as the NFP report printed an 88K figure instead of the projected 198K increase. The previous figure was revised up from 236K to 268K while the jobless rate ticked down from 7.7% to 7.6%, mostly because of a result of a drop in participation rate. This jobs report resulted in a sharp dollar selloff as this emphasized the Fed’s decision to keep monetary policy unchanged and refrain from withdrawing asset purchases. There are no reports due from the U.S. today as the dollar could recover from its losses last Friday.

EUR

Despite the drop in euro zone retail sales, the euro was able to rally against the U.S. dollar and the Japanese yen on Friday as the U.S. posted weak NFP data while the yen continued to weaken after the recent BOJ decision. Only the euro zone Sentix investor confidence and German industrial production data are on today’s schedule, which suggests quiet trade for the euro. Take note that EUR/USD has reached the 1.3000 major psychological level and this week’s market sentiment and euro zone events could determine if this resistance mark will hold or not.

GBP

The pound staged a strong rally on Friday as it took advantage of yen and dollar weaknesses. The U.K. Halifax HPI came in line with consensus as it clocked in a 0.2% increase in house prices, lower than the previous month’s 0.5% growth. There are no reports due from the U.K. today, which suggests that GBP/USD’s and GBP/JPY’s rally could continue.

CHF

USD/CHF broke below the key .9400 major psychological support level on Friday when the U.S. printed a weak NFP figure. A potential retest could be in the cards for today as there are no major reports due from the U.S. or Switzerland.

JPY

The Japanese yen continued its losing streak on the heels of the BOJ’s aggressive easing announcement on Thursday. USD/JPY is currently trading above the 98.00 handle, despite the weak U.S. NFP figure, and could be headed for the 100.00 mark this week. There are no major releases from Japan for today, but the BOJ minutes are set for release during tomorrow’s early Asian session.

Commodity Currencies (AUD, NZD, CAD)

The Loonie suffered a sharp selloff against the Greenback on Friday when Canada showed a weak jobs report. Joblessness increased by 54.5K in March, pushing the unemployment rate up from 7.0% to 7.2% during the month. Trade balance also missed expectations as it showed a 1.0 billion CAD deficit instead of the expected 0.2 billion CAD surplus. However, the Ivey PMI beat expectations as the figure jumped from 51.1 to 61.6, outpacing the estimate at 52.4. There are no reports due from the comdoll economies for today, which suggests that the trends from Friday could continue.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (April 9, 2013)

USD

There were no major reports released from the U.S. yesterday, allowing the Greenback to recover from some of its recent losses. There are no reports due from the U.S. once more, which suggests possible quiet trading for the New York session. Do keep close tabs on Q1 earnings reports though as this could affect U.S. equities and overall market sentiment. Take note that fundamentals have been driving the dollar lately and that weak earnings reports could put the dollar back on its downtrend.

EUR

Minor euro zone reports came in mixed during yesterday’s trading as the Sentix investor confidence figure fell below consensus while the German industrial production report in strong. Investor confidence dipped from -10.6 to -17.3 in April, reflecting increased pessimism in the euro zone region. Meanwhile, Germany’s industrial production rose by 0.5% in February while the previous month’s figure suffered a downward revision from 0.0% to -0.6%. There are no major reports due from the euro zone today.

GBP

The pound retraced from its recent gains against the U.S. dollar on Monday as the 1.5350 minor psychological level acted as resistance for the pair. Today’s U.K. data could push GBP/USD back on an uptrend if the actual figures come in strong. The manufacturing production report could show a 0.4% rebound from the 1.5% drop seen before while the trade deficit is expected to widen from 8.2 billion GBP to 8.7 billion GBP.

CHF

USD/CHF stayed mostly in consolidation during yesterday’s trading sessions as the pair was able to keep its head below the .9400 handle. Today’s Swiss reports could determine whether the pair will bounce back up .9400 or head further south. Switzerland will print its monthly CPI figure and possibly show another 0.3% uptick and will also release its latest retail sales report, which is expected to jump by 2.9% on a year-to-year basis.

JPY

Once again, the Japanese yen continues to lose ground against its major counterparts as the BOJ’s aggressive easing measures will have a long-term effect on their currency. Analysts are saying that USD/JPY could reach 100.00 as early as this week, with a potential target of 110.00 in the longer-term. Only the monetary policy meeting minutes were released from Japan today and this didn’t have such a huge impact on yen action as the selloff remains underway.

Commodity Currencies (AUD, CAD, NZD)

Commodity currencies appear poised to test significant inflection points as AUD/USD is on its way back to 1.0500 while NZD/USD is testing .8500. Earlier today, New Zealand printed an improvement in its NZIER business confidence as the figure climbed from 20 to 23 in the first quarter of the year. Chinese CPI is due later today and would probably result in a quick selloff if the actual figure comes in below 2.5%, which is already lower than the previous 3.2% reading. Keep an eye out for the release of Canadian building permits and housing starts during the New York session as this could determine whether USD/CAD will stay on its downtrend or not.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (April 10, 2013)

USD

The U.S. dollar continued to suffer losses against most of its major counterparts, except for the Japanese yen, as the weak March NFP figure dashed hopes of earlier than expected monetary policy tightening from the Federal Reserve. There were no major market-moving releases from the U.S. yesterday but some minor reports did highlight the ongoing slowdown. The NFIB small business index revealed that activity slowed down in March as the reading fell from 90.8 to 89.5. Today, the U.S. will release the minutes of the latest FOMC meeting but these aren’t likely to have a material impact on price action as the meeting was conducted prior to the dismal NFP release. Also due today are the Federal budget balance and the crude oil inventories.

EUR

The euro rallied against both the U.S. dollar and the Japanese yen in yesterday’s trading, despite the lack of top-tier data from the euro zone. German trade balance came in stronger than expected while the French trade balance missed expectations. For today, France and Italy will print their industrial production data and stronger than expected figures could provide support for the euro.

GBP

Data from the U.K. came in mixed yesterday as the manufacturing and industrial production figures both exceeded the consensus while the trade balance came in worse than expected. Manufacturing is up by 0.8%, twice the estimated 0.4% growth, while industrial production grew by 1.0%. The trade deficit widened from 8.2 billion GBP to 9.4 billion GBP, larger than the estimated 8.7 billion GBP shortfall. There are no reports due from the U.K. today which suggests quiet trading among pound pairs unless there’s a significant change in market sentiment.

CHF

Swiss data came in weaker than expected yesterday as the CPI and retail sales figures both missed forecasts. The Swiss CPI posted a 0.2% uptick, lower than the projected 0.3% increase and the previous month’s 0.3% rise, while retail sales grew by 2.4% and not the 2.9% jump that was expected. There are no reports on Switzerland’s schedule for today as USD/CHF and EUR/CHF may stay in consolidation.

JPY

Yen bears seem to have run out of steam as most yen pairs consolidated around significant inflection points yesterday. However, bias for the yen is still very bearish as the BOJ’s decision to implement aggressive easing measures is likely to have a long-term effect on yen pairs. There are no major reports on the yen’s schedule for today but do keep an eye out for the next set of reports due in tomorrow’s early Asian session. Core machinery orders and M2 money stock figures are up for release then.

Commodity Currencies (AUD, CAD, NZD)

Weaker than expected data from China might weigh on the Australian dollar in the near term as China printed weak CPI and trade balance. Annual inflation is at 2.1%, lower than the estimated 2.5% increase and the previous 3.2% reading. The trade balance posted a surprise deficit of 0.9 billion USD instead of the expected 15.2 billion USD surplus. Meanwhile, Canadian housing data came in mixed with housing starts rising more than expected and building permits coming in short. New Zealand will be releasing its Business NZ manufacturing index in tomorrow’s Asian session so watch out for NZD/USD action around then.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (April 11, 2013)

USD

The U.S. dollar had quite a topsy-turvy ride at the start of the U.S. session when the FOMC meeting minutes were suddenly released early. However, price action soon settled down when the minutes revealed nothing special in particular. Fed officials still remained divided on the issue of tapering off asset purchases as many believe that the U.S. is still on shaky ground. On top of that, most traders disregarded the report as the remarks were made prior to the dismal March NFP release. For today, only the initial jobless claims report is due from the U.S. economy and the figure is projected to come in at 362K, lower than the previous week’s 385K.

EUR

The euro let go of some of its recent gains against the U.S. dollar as the 1.3100 major psychological level held as resistance in yesterday’s trading. Euro zone data came in mixed with French industrial production coming in strong and Italian industrial production posting a weaker than expected reading. Only minor reports are on tap from the euro zone again today as the ECB monthly bulletin might be the most relevant report for the day.

GBP

The pound fought to stay above the 1.5300 handle against the U.S. dollar despite the lack of market-moving reports yesterday. For today, the U.K. schedule is still empty, which suggests we could see more consolidation for GBP/USD.

CHF

Just like its other European counterparts, the Swissy had an empty economic schedule yesterday which kept USD/CHF and EUR/CHF stuck in their respective ranges. There are no reports due from Switzerland again today which suggests we could see more sideways movement from franc pairs.

JPY

After a few moments of consolidation, the Japanese yen resumed selling off against its major counterparts, particularly after the FOMC meeting minutes were released. Japanese core machinery orders came in stronger than expected as it showed a 7.5% increase, but this wasn’t enough to support the Japanese yen. There are no other reports due from Japan for the rest of today’s trading sessions, leaving yen pairs to rally on the BOJ’s recent easing efforts.

Commodity Currencies (AUD, CAD, NZD)

The Australian dollar sold off a few hours into the Asian session when Australia printed a very weak jobs report. Hiring is down by 36.1K, worse than the estimated 6.7K drop, bringing the jobless rate up from 5.4% to 5.6% for March. However, Chinese new loans and M2 money supply came in strong, providing some support for the commodity currencies. No other reports are due from Australia, Canada, and New Zealand for the rest of the day, which suggests quiet trading for the comdolls today.

By Kate Curtis from Trader's Way