Daily Market Outlook by Kate Curtis from Trader's Way

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Forex Major Currencies Outlook (June 24, 2013)

USD

Dollar bulls kept charging until the end of the week, spurred by the Fed’s recent announcement regarding its plan to reduce bond purchases by the end of the year. There are no reports due from the United States today, which either suggests quiet trading for most major currency pairs or the possibility of surprise movement from any market event.

EUR

The euro continued to lose ground to the dollar at the end of the week, but managed to post some gains against the Japanese yen. Only the German Ifo business climate report is set for release from the euro zone today and an improvement from 105.7 to 106.00 is expected for June. A higher than expected reading could allow EUR/USD to climb back above the 1.3100 or even 1.3200 area while a poor figure could set off a break below 1.3000.

GBP

The pound sold off heavily against the dollar on Friday but gained against the Japanese yen. There were no major releases from the UK then, although the government did report a smaller than expected public sector net borrowing figure, suggesting that UK finances are improving. There are no releases from the UK today.

CHF

The Swiss franc seems ready to post more losses against the US dollar in the coming trading days as an inverse head and shoulders pattern formed on its 1-hour and 4-hour time frames. There are no reports due from Switzerland today, which suggests that there’s no market catalyst to trigger a break just yet.

JPY

The yen lost ground to its counterparts on Friday after BOJ Governor Kuroda pointed to the prevailing weaknesses in the Japanese economy and how their easing program is helping to address those. This allowed traders to renew confidence in the BOJ’s stimulus program, thinking that further easing could be necessary if the Japanese economy continues to underperform. There are no reports due from Japan today.

Commodity Currencies (AUD, CAD, NZD)

Commodity currencies sank to new lows against the US dollar on Friday, with AUD/USD slipping below 0.9200 and USD/CAD breaking above 1.0400. Canadian retail sales came in weaker than expected, as the headline figure showed a mere 0.1% uptick while the core figure printed a 0.3% decline. Canadian CPI also disappointed with a 0.2% headline figure and 0.2% core figure. No reports are due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

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GBP/JPY Falling Channel (June 26, 2013)

GBP/JPY is on a short-term downtrend based on its 1-hour time frame. The pair has made lower lows and lower highs, forming a falling channel.

At the moment, GBP/JPY is in the middle of the channel on its way down. Stochastic is moving lower, although it has already reached the oversold area. It hasn’t crossed yet though, which means that pound bears are still in control. The pair could still make its way to the bottom of the channel before bouncing back up.



The market events for the UK today are the BOE financial stability report and the government spending review. Public sector borrowing has improved in the UK recently, which could suggest that we’d hear upbeat comments from both the central bank and the government. If that’s the case, GBP/JPY could find its way back up sooner or later.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (June 27, 2013)

USD

The US dollar lost ground to some of its major counterparts in yesterday’s trading as the US Q1 2013 final GDP figure suffered a huge downward revision from 2.4% to just 1.8%. This led market participants to worry that the US economy would do even worse when the stimulus measures are reduced. Up ahead, the core PCE price index and personal income and spending data are due. The Fed is watching inflation closely and it is rumored that the core PCE price index is their preferred measure. Meanwhile, the consumer sector is seen to be the backbone of growth in the US so improved personal spending and income figures could provide support for the dollar.

EUR

The euro weakened again in yesterday’s trading, as ECB President Draghi reiterated that the ECB is ready to adjust monetary policy if necessary. However, the GfK consumer climate did show an improvement from 6.5 to 6.8, showing that consumer confidence is still doing well in euro zone’s largest economy. For today, the biggest mover on euro zone’s schedule is the German unemployment change report which could show a 7K increase in joblessness. This is lower than the previous 21K rise in unemployment, suggesting that there is some recovery in the German labor market.

GBP

The pound sold off heavily against its counterparts when the BOE financial stability report showed that there is a huge danger posed by the volatility in bond yields. Apparently, the central bank believes that this points to a potential increase in borrowing costs, which would make mortgages more expensive. In addition, the UK government announced a fresh batch of spending cuts in its recent spending review. An additional 11.5 billion GBP in austerity measures, which includes the removal of the automatic annual salary increase for public sector workers and caps on welfare spending, would be implemented starting 2015. Current account and final GDP figures are due from the UK today.

CHF

The Swiss franc continued to weaken against the Greenback, as USD/CHF broke above the .9400 handle. Only the SNB quarterly bulletin is on tap from Switzerland today and it isn’t likely to cause a huge move among franc pairs.

JPY

The yen regained strength against most of its major counterparts as risk aversion came into play yesterday. However, USD/JPY managed to hold on to the 97.80 area while GBP/JPY is currently trading below 150.00. There are no major reports due from Japan today as traders await the release of Japanese inflation reports for tomorrow.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to sneak in some gains yesterday, as AUD/USD tested the .9300 area while USD/CAD retreated from 1.0500. This recovery was spurred by a drop in Chinese interbank lending rates, squashing fears that a credit crunch is taking place. In Australia, Prime Minister Julia Gillard was ousted by rival Kevin Rudd. No major reports are due from these economies today.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (June 28, 2013)

USD

The US dollar dominated the day’s price action once more, as strong economic data boosted the currency against its counterparts. The initial jobless claims printed better than expected results while the core PCE price index, which is considered to be the Fed’s preferred inflation gauge, showed a 0.1% increase. In addition, personal income and spending both posted gains. Speeches by Fed officials showed that they support the central bank’s plans to taper stimulus at the end of the year but reiterated that this is still dependent on data. For today, the Chicago PMI and the revised UoM consumer sentiment index are due. Strong figures could continue to lift the US dollar.

EUR

The euro managed to hold steady above the 1.3000 major psychological level in yesterday’s trading sessions. German unemployment declined by 12,000 effectively bringing the unemployment rate from 6.9% to 6.8%. This was better than the estimated increase of 8,000 in joblessness. For today, German retail sales are due and an upside surprise could be likely, given the improvement in its labor market. German preliminary inflation is also on tap and an increase of 1.7% is expected.

GBP

GBP/USD edged close to the 1.5200 major psychological support in yesterday’s trading, before bouncing back above 1.5250. The UK current account was weaker than expected as it showed a larger deficit of 14.5 billion GBP instead of the estimated 11.9 billion GBP deficit. Only the Nationwide HPI is set for release from the UK and an increase of 0.4% in house prices is expected.

CHF

The Swiss franc posted huge losses against the euro while it struggled to hold steady against the dollar around .9450. The SNB quarterly bulletin emphasized the points made during the central bank’s monetary policy decision earlier during the month. For today, the KOF economic barometer is due and it is expected to improve from 1.10 to 1.21, indicating a better economic outlook for the next six months.

JPY

The yen lost ground to most of its major counterparts during the European and US sessions, although it did show signs of strength during the Asian session. There were mixed reports released from Japan earlier today, as the Tokyo CPI came in line with expectations while retail sales beat expectations. However, unemployment ticked higher for the month to 4.1%. No other reports are due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The commodity currencies fought hard to stay afloat against the US dollar, as AUD/USD climbed back above the .9300 handle briefly while NZD/USD moved sideways. Canada is set to print its monthly GDP report and show a 0.1% economic expansion for May. A weaker than expected report could push USD/CAD higher up the charts.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (July 1, 2013)

USD

The US dollar has a lot of major reports in line for the week, with the ISM manufacturing PMI, ISM non-manufacturing PMI, and NFP report due. Last week, dollar demand was strong as most of the data came in stronger than expected. Another round of upbeat figures from the US would mean that the Fed is moving closer to tapering its bond purchases and that the US economy could stay on its feet even with less stimulus. The ISM manufacturing PMI on tap for today is slated to show an improvement from 49.0 to 50.6, showing that the sector rebounded back to expansion for June.

EUR

The euro tested the 1.3000 handle against the dollar last week, and today’s top-tier data could determine if the pair will bounce or break. Only medium-tier reports such as Italian PMI and CPI estimate are due from the euro zone today, which suggests that EUR/USD performance could be more impacted by US data. However, significantly weak data from the euro zone could trigger an early break below the 1.3000 mark.

GBP

The pound could have a chance to rebound against the dollar today as the UK will print its manufacturing PMI. The figure is projected to hold steady at 51.3 but an upside surprise could lift the pound against its counterparts. Data from the UK has been more or less strong recently, which could increase the odds for better than expected results.

CHF

The Swiss franc weakened against the Greenback on Friday, mostly because of the strong dollar bias. The SVME PMI is due from Switzerland today and the report could print an improvement from 52.2 to 52.5, indicating that the manufacturing sector posted a stronger expansion. A weaker than expected result could worsen the ongoing franc selloff.

JPY

The yen had a mixed performance on Friday, as it weakened against the dollar and strengthened against the Aussie. It managed to consolidate against the euro and the pound. Data from Japan has been mostly stronger than expected, save for the household spending report, which showed a 1.6% decline. The Tankan figures released earlier today came in strong, posting an improvement for both manufacturing and non-manufacturing sectors.

Commodity Currencies (AUD, CAD, NZD)

The comdolls edged slowly lower on Friday, as though the recent selloffs were starting to get exhausted. China printed its HSBC final manufacturing PMI and official government PMI for June and both came in line with expectations. The government PMI fell from 50.8 to 50.1 while the HSBC figure was revised slightly down from 48.3 to 48.2. Canadian banks are on a holiday and there are no other reports due from the comdoll economies for the rest of the day.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (July 2, 2013)

USD

The dollar was off to a good start for the week, as risk aversion remained in the markets for most of the Asian session. However, the U.S. ISM manufacturing PMI failed to impress market participants as it clocked in at 50.9. This was only slightly higher than expectations of a 50.6 reading, an improvement over the 49.0 figure last May. There are no major reports from the U.S. today, only the medium-tier factory orders data and speeches by a couple of Fed officials. Dudley has downplayed the Fed’s stimulus taper plan last week and could dish out similar remarks again today, which could lead to dollar selling.

EUR

The euro was able to gain strength against the dollar in yesterday’s trading, as it climbed from the 1.3000 area until the 1.3050 level. Data from the euro zone came in stronger than expected, as Italian manufacturing PMI came in better than expected and so did the euro zone jobless rate. For today, only the Spanish unemployment change is expected from the euro zone, and it could show another round of improvements in the labor sector. If that’s the case, the euro could continue to draw support.

GBP

The pound was off to a good start but returned most of its gains, even though the U.K. manufacturing PMI came in better than expected. The figure improved from 51.5 to 52.5 instead of dipping to the expected 51.3 reading. Net lending to individuals fell short at 1.0B instead of climbing from 1.3B to 1.4B. For today, the construction sector will release its PMI figure and possibly print an improvement from 50.8 to 51.3. Aside from that, MPC member Tucker is set to give a speech and the 10-year bond auction will be conducted in the UK.

CHF

The franc weakened in yesterday’s trading since the SVME PMI showed slower manufacturing activity in Switzerland. The reading slipped from 52.2 to 51.9 instead of improving to 52.5. There are no major reports due from Switzerland today which suggests that USD/CHF movement could be driven by US data.

JPY

USD/JPY edged higher in yesterday’s trading, moving closer to the 100.00 handle. Average cash earnings in Japan remained flat and missed the expectations of a 0.6% uptick. There are no reports due from Japan today, which suggests that yen pairs could be dependent on risk sentiment and currency-specific events.

Commodity Currencies (AUD, CAD, NZD)

Comdolls retreated in yesterday’s trading as risk aversion remained in the markets. The Australian dollar tested the .9250 level, but dropped right back below .9200 when the RBA decided to keep rates unchanged and mentioned that the Aussie is still relatively overvalued. There are no other releases due from the commodity-dependent economies today.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (July 3, 2013)

USD

The US dollar made a stellar recovery against its major counterparts in yesterday’s trading, pushing EUR/USD below the 1.3000 handle and USD/JPY above the 100.00 mark. There were no major reports released from the US yesterday, as risk aversion was the main reason for the dollar’s climb. The US is set to print its ISM non-manufacturing PMI today and possibly show an improvement from 53.7 to 54.3. However, a weaker than expected figure could force the dollar to return some of its recent gains. Bear in mind that US traders will be off on a Fourth of July holiday tomorrow so we could witness some profit-taking for today.

EUR

The euro was sold off heavily yesterday when news a potential delay in Greece’s next batch of bailout funds could be delayed. Apparently, the country was unable to fulfill some of the requirements to secure the next tranche of aid. As for data, there have been no major reports released from the euro zone and only the medium-tier retail sales report is due today.

GBP

The pound was relatively one of the more resilient currencies in yesterday’s trading, although it still lost some ground to the US dollar. UK construction PMI improved from 50.8 to 51.0, slightly lower than the estimated 51.3 reading. Today, the UK will release its services PMI data and possibly show a dip from 54.9 to 54.6, reflecting weaker expansion in the industry.

CHF

The franc lost ground to the dollar, as USD/CHF climbed past the .9500 handle. There were no reports released from Switzerland for the past 24 hours and none are due today, suggesting that the franc could continue to be sensitive to US data or risk sentiment.

JPY

The yen saw a round of weakness yesterday, particularly to the US dollar. The Nikkei chalked up a 13% rebound recently, contributing to the yen’s selloff. As for reports, Japanese average cash earnings and monetary base both missed expectations. There are no reports due from Japan for the rest of the trading day.

Commodity Currencies (AUD, NZD, CAD)

Among the comdolls, the Aussie suffered the biggest losses in yesterday’s trading as AUD/USD slipped back below the .9200 handle. Earlier today, Australia printed weak retail sales of 0.1% instead of the expected 0.4% increase while the previous period’s figure was revised down to -0.1%. CAD and NZD simply consolidated around their current levels, but breakouts could be in sight for today as traders may book profits ahead of the Fourth of July holiday.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 4, 2013)

USD

The US dollar lost to most of its major counterparts in yesterday’s trading, as some traders booked profits ahead of the Fourth of July holiday in the United States. EUR/USD rebounded back to the 1.3000 major psychological level while USD/JPY slipped back below the 100.00 mark. US ISM non-manufacturing PMI came in weaker than expected, showing only a 52.2 reading instead of the estimated improvement from 53.7 to 54.3. There are no reports due from the US today.

EUR

EUR/USD suffered a heavy selloff at the start of the trading day as brewing political trouble in Portugal weighed on the country’s bailout prospects and caused a spike in bond yields. However, EUR/USD managed to pull up to the 1.3000 handle towards the end of the day as traders closed their positions around the fresh lows. Euro zone data was mixed as retail sales showed a better than expected 1.0% increase while Italian PMI fell short of expectations. The ECB rate decision is on tap for today and, even though no monetary policy changes are expected, Draghi could emphasize their readiness to add stimulus if necessary.

GBP

The pound managed to end the day higher than the dollar and the euro, as the UK printed better than expected services PMI. The reading jumped from 54.9 to 56.9 instead of dipping to 54.6. The BOE rate decision is scheduled today and it will be Mark Carney’s first statement as BOE Governor. Market participants are interested in how the new Governor will approach monetary policy so this event could trigger a large reaction among pound pairs.

CHF

The franc managed to recoup some of its recent losses to the dollar, as USD/CHF slipped back below the .9500 handle. There were no reports released from Switzerland then, leaving USD/CHF sensitive to US data. There are no reports due from Switzerland again today and none are due from the US.

JPY

The yen regained ground against its major counterparts, as the Labor Ministry reported that there was no change in Japan’s average cash earnings. On top of that, the BOJ noted that the Japanese economy is starting to pick up pace. There are no other reports due from Japan today.

Commodity Currencies (AUD, CAD, NZD)

The comdolls had a weak start, as AUD sold off and fell below the .9100 handle. Australia printed weaker than expected building permits and retail sales, although its trade balance did come in strong. Canada’s trade balance also came in better than expected, allowing USD/CAD to hold on to its recent levels. There were no reports from New Zealand, leaving NZD/USD in consolidation.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 5, 2013)

USD

The US dollar was one of the strongest performing currencies in yesterday’s trading as it posted huge gains against the pound and euro. US traders were off on a holiday celebrating the Fourth of July, which explains why there were no economic reports released from the US yesterday. For today, the US NFP report is due and a smaller increase in hiring is projected. Based on the results of the ADP report released earlier this week though, an upside surprise could be in the cards, which could continue to lift the dollar.

EUR

The euro suffered a heavy selloff in yesterday’s London and US sessions when ECB head Mario Draghi announced that interest rates would be kept low for an extended period of time. This triggered a sharp reaction from euro pairs, as the central bank opted to practice forward guidance in influencing longer-term interest rates. Only the German factory orders report is due today and it is expected to show a rebound of 1.3% from the previous 2.3% decline.

GBP

The pound was also under heavy selling pressure in the previous trading sessions when the BOE practiced forward guidance in saying that there will be no rate hike until mid-2015. This was a surprise, considering it was Mark Carney’s first statement as BOE head. There are no reports due from the UK today, which suggests that the pound could continue to sell off if there are no changes in market sentiment.

CHF

The franc was outpaced by the dollar but it managed to pack some gains against the euro. USD/CHF spiked to the .9580 area despite the lack of data from the US and Switzerland. Swiss foreign currency reserves data and CPI are due today. Higher foreign currency reserves could mean that the SNB is finding it more expensive to maintain its currency peg. Price levels are foreseen to drop by 0.1%, which could worsen the franc’s selloff.

JPY

The yen managed to gain against the pound and euro but it lost ground to the dollar, as USD/JPY spiked to the 100.40 area from 99.50. There were no reports released from Japan, but BOJ Governor Kuroda had a speech in which he said that their current easing efforts are starting to work out.

Commodity Currencies (AUD, CAD, NZD)

Comdolls struggled to hold on to their current levels, with AUD/USD holding on to the .9100 handle and USD/CAD staying around the 1.0500 mark despite the jump in volatility. NZD/USD is still stuck in its recent range between .7700 and .7830. There are no major reports due from Australia and New Zealand but Canada is set to print its jobs data and Ivey PMI. Joblessness could drop by 4.2K in June while the Ivey PMI is projected to dip from 63.1 to 59.6.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 8, 2013)

USD

Better than expected jobs data boosted the dollar against its counterparts on Friday, as the NFP figure came in at 195K. This was higher than the estimated 163K reading while the previous month’s figure saw an upward revision to 195K. However, the jobless rate held steady at 7.6% instead of improving to 7.5% as more and more Americans returned to the labor force. For today, there are no major reports due from the US.

EUR

The euro sold off heavily on Friday, still weighed down by the dovish ECB rhetoric during the previous day. As Draghi said, euro zone interest rates will remain low for an extended period. It didn’t help that Portugal was still undergoing political trouble while Greece’s next set of bailout funds is at risk. The Troika will be evaluating whether Portugal met its requirements to secure the next batch of bailout funds today, and this could have a huge impact on the euro. Eurogroup meetings are also taking place today and Germany will be releasing its industrial production report.

GBP

The pound was one of the weakest currencies last week, as BOE Governor Carney clarified that there will be no rate cut in the next couple of years. There are no reports due from the UK today, as the downbeat monetary policy statement could continue to drag the pound lower.

CHF

The Swiss franc reached the .9650 minor psychological resistance against the dollar last Friday, as strong US NFP data boosted the Greenback. Switzerland will release its unemployment rate today and possibly show no change from the current 3.2% rate. An increase in joblessness though could push USD/CHF even higher.

JPY

The yen weakened against the dollar on Friday but managed to gain against the euro and pound. There were no major reports released from Japan then, but the country reported a 0.62 trillion JPY current account balance for May as expected. The Economy Watchers Sentiment index is due from Japan today, and a higher than expected figure could help keep the yen’s losses in check.

Commodity Currencies (AUD, CAD, NZD)

There were no major releases from Australia and New Zealand on Friday, but Canada was able to release its jobs data and Ivey PMI. Canada lost only 0.4K jobs in June, better than the estimated 4.2K decline while the jobless rate held steady at 7.1%. As for the Ivey PMI, the figure posted a sharp decline from 63.1 to 55.3 instead of just dipping to 59.6. Only the Canadian building permits is due from the comdoll economies for today.

By Kate Curtis from Trader's Way