Daily Market Outlook by Trader's Way

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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

 

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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

 

[katetrades]

Forex Major Currencies Outlook (April 12, 2013)

USD

The U.S. dollar could be in for another sharp selloff during today’s U.S. session as the retail sales report is set for release. Remember that the jobs data for March came in significantly weaker than expected at 88K versus the projected 198K reading, which suggests that consumer spending could also disappoint. March retail sales are projected to stay flat while the core figure could show a 0.1% downtick, lower than the previous month’s 1.0% increase. Also due during today’s New York session is the preliminary consumer sentiment report from the University of Michigan, which is also expected to show a slight decline.

EUR

The euro continued to gain against the U.S. dollar in yesterday’s trading as dollar weakness propped the shared currency higher. Only minor reports, namely the German WPI and euro zone industrial production, are due from the region today and these aren’t likely to have a material impact on euro movement.

GBP

The pound packed on more gains against the Greenback, with GBP/USD climbing to the 1.5400 major psychological level. There were no major reports released from the U.K. recently and none are due today, suggesting that pound pairs could continue to take advantage of dollar and yen weakness.

CHF

USD/CHF suffered another strong selloff, this time to the 0.9280 levels, as dollar weakness ensued. There were no reports released from Switzerland then and none are due today, which means that USD/CHF could react solely to the U.S. retail sales in the New York session.

JPY

The Japanese yen fought to hold on to its current levels against its major counterparts as the tertiary industry activity index provided a bit of support. The figure posted a 1.1% increase for February, better than the estimated 0.8% uptick. USD/JPY is stalling at the 99.50 area during the Asian session but we could see more action once the U.S. retail sales are printed.

Commodity Currencies (AUD, CAD, NZD)

The comdolls had a strong start during yesterday’s Asian sessions as traders sought to take advantage of the carry opportunities between the higher-yielding commodity currencies and the lower-yielding yen and dollar. However, these gains were reversed later on as traders took profits off significant inflection points. There are no major releases from their economies later today as comdoll pairs could be affected heavily by the U.S. retail sales release.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (April 15, 2013)

USD

As expected, the U.S. retail sales data printed bleak figures and triggered a dollar selloff. The headline figure showed a 0.4% decline instead of the flat reading expected while the core figure also printed a 0.4% drop, worse than the estimated 0.1% decrease. On top of that, the consumer sentiment figure measured by the University of Michigan printed a downturn in confidence as the actual figure slipped from 78.6 to 72.3 in April. Producer price inflation reports from the U.S. also missed expectations. Only the Empire State manufacturing index is due from the U.S. today and another round of weak figures could push the dollar lower. The reading is expected to dip from 9.2 to 7.2 in April, reflecting a slowdown in manufacturing.

EUR

Cyprus is currently undergoing additional challenges with its bailout package as a recently released debt sustainability report showed that the country needs to find an additional 6 billion EUR to weather the potential effects of the ongoing fiscal tightening on economic growth. With no other report due on the euro zone schedule today, markets could stay focused on the updates on Cyprus’ debt situation and possibly sell the euro off if the country shows little to no progress in securing additional funds. The EU and IMF have already said that they’re not willing to provide extra cash, which means that Cyprus is running out of options.

GBP

The U.K. economic calendar is empty for today as pound traders could brace themselves for the release of British claimant count change data and retail sales later on. At the moment, the pound is benefitting from dollar and yen weakness but fundamentals in the U.K. remain very weak and this could be reflected by this week’s set of economic data.

CHF

There was hardly any movement from franc pairs lately as USD/CHF and EUR/CHF have simply been reacting to U.S. and euro zone reports. There are no reports on Switzerland’s schedule for today, which suggests quiet trading for these pairs.

JPY

The Japanese yen has managed to recover some of its previous losses against its major counterparts as the Japanese economy has shown signs of improvement last week. Core machinery orders and tertiary industry activity index have both surprised to the upside and contributed to yen support. The industrial production report also surprised to the upside and boosted the yen in today’s Asian session. Japan is set to print a few more medium-tier reports within the week and more improvements could keep the yen selloff at bay.

Commodity Currencies (AUD, CAD, NZD)

Weak Chinese data have been weighing on the commodity currencies recently as China’s CPI and trade balance have disappointed last week. Earlier today, the Chinese GDP also came in below the consensus, which inspired a massive Aussie selloff. No reports are due from the comdoll economies today, which suggests that the worse than expected Chinese figures could keep their rallies capped.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (April 16, 2013)

USD

The U.S. dollar regained ground against most of its counterparts on Monday even though they printed weak economic data. The Empire State manufacturing index fell from 9.2 to 3.1 this month, worse than the estimated 7.2 reading, while the TIC long-term purchases report showed a surprise negative reading of -17.8 billion USD instead of the expected growth from 25.7 billion USD to 41.3 billion USD. Lastly, the NAHB housing market index also disappointed as it dropped from 44 to 42 instead of rising to 45. The U.S. is scheduled to print building permits and housing starts, along with CPI data, during today’s U.S. session. Also on tap are the industrial production and capacity utilization numbers. It is unclear if it’s still fundamentals or risk sentiment that’s driving price action these days but the odds are that weaker than expected U.S. figures might drag the dollar lower again.

EUR

Only the euro zone trade balance was printed from the 17-nation bloc yesterday and the report came in stronger than expected with a 12.0 billion EUR surplus instead of the projected 9.9 billion EUR reading. This was enough to boost the euro in yesterday’s trading but today’s reports might erase those gains if the actual figures disappoint. Germany will print its ZEW economic expectations figure, which is slated to drop from 48.5 to 41.5 in April. Euro zone CPI is also on tap for today but this isn’t likely to have a huge impact on euro price action as no changes are expected from the headline figure of 1.7% and the core figure of 1.3%. Keep close tabs on the debt and bailout situation in Cyprus as positive developments could provide support for the euro.

GBP

The pound lost ground to the yen and dollar in yesterday’s trading despite the lack of data from the United Kingdom. For today only the CPI reports are due from the U.K. and this should provide an indication of whether the BOE has room to ease further or not. If the actual figure comes in below or beyond the government’s target, which is unlikely, the BOE will have to submit an inflation letter to the Chancellor explaining why. Weaker than expected data could still trigger a pound selloff though.

CHF

No major reports due from Switzerland today as USD/CHF and EUR/CHF remain stuck in tight ranges. U.S. reports or euro zone updates could move these pairs a little more though but unless we see significantly worse or better data, these pairs could be in consolidation for a longer while.

JPY

The Japanese yen rallied against its counterparts on Monday as risk aversion popped back in the markets and traders started liquidating their recent yen shorts. USD/JPY eased back to the 96.00 area before rebounding but it remains to be seen whether the bounce would last or not. There are no major reports due from Japan for the rest of the day.

Commodity Currencies (AUD, CAD, NZD)

Commodity currencies continued to selloff on Monday as risk aversion started to take its toll on the higher-yielding assets. On top of that, prices of precious metals have slumped, with gold falling to its two-year lows. Canada will release manufacturing sales and foreign securities purchases data in today’s New York session, as worse than expected data might trigger a Loonie selloff. No other reports are due from the comdoll economies for the rest of the day.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (April 22, 2013)

USD

The U.S. dollar seems to be benefitting from the risk rallies these days as most major economies have been showing signs of a slowdown. For now, it appears that weak U.S. data is still positive for the U.S. dollar as the risk off environment boosts the lower-yielding Greenback. Only the U.S. existing home sales is due for today and the reading is projected to rise from 4.98M to 5.02M in March.

EUR

Political uncertainty in Italy has been weighing on the euro for the past few trading days as the country still hasn’t formed a unified government. This stalemate could be negative for their economy as it would delay the passage of important laws, particularly those concerning fiscal austerity. Euro zone economic confidence data is set for release in today’s London session and the report is projected to show a stable reading of -24, which would still reflect pessimism.

GBP

The pound has retreated against the Greenback on Friday as the risk off trading environment kept GBP/USD’s rallies in check. In fact, a potential reversal is underway as a head and shoulders pattern formed on the 4-hour time frame. Only the speech by monetary policy committee member Paul Tucker is due today and this could weigh on the pound if he talks about openness to further asset purchases. Be wary of early pricing in of expectations for the UK’s Q1 GDP report due Thursday as this would confirm if the UK has entered a triple-dip recession or not.

CHF

No major reports are due from Switzerland today as USD/CHF could simply react to US data while EUR/CHF could be sensitive to the goings-on in Europe, particularly to Italy’s political situation.

JPY

There are no reports scheduled for release from Japan as traders could simply focus on risk sentiment this week. Bear in mind though that the BOJ will make its interest rate decision later on this week and traders might wish to unload their recent yen positions before the actual event.

Commodity Currencies (AUD, CAD, NZD)

There are no reports due from any of the comdoll economies for today as the pairs could simply react to risk sentiment. Commodity prices have been sliding lately as risk aversion has been moving the markets mostly for the past week. For now, weak Chinese data has been weighing on the Australian dollar, along with the drop in gold prices.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (April 24, 2013)

USD

The U.S. dollar reigned supreme against most of its counterparts, particularly the euro and the Australian dollar, as risk aversion stayed in the markets in yesterday’s trading sessions. Even the U.S. printed weaker than expected medium-tier data with the Richmond Fed manufacturing index and flash manufacturing PMI for the country both fell short of consensus. The U.S. will release durable goods orders data later today and more disappointments could lead to more safe-haven rallies.

EUR

PMI reports from the euro zone were generally mixed as France printed higher than expected manufacturing and services numbers while Germany’s mixed expectations. The region’s overall manufacturing and services PMIs remained below the 50.0 level, which meant that the industries contracted during the period. For today, only the German Ifo business climate report is on tap and a decline is expected, which might keep weighing the euro down.

GBP

The CBI industrial orders expectations came in weaker than expected at -25 versus -14, triggering a pound selloff. For today, only the realized sales report is due and the figure is projected to rise from 0 to 7, but another disappointment could worsen the pound’s decline.

CHF

The Swiss trade balance came in better than expected yesterday yet the franc sold off heavily against the U.S. dollar when the euro zone PMI figures disappointed. For today, the UBS consumption indicator is set for release from Switzerland and another weak figure could push USD/CHF even higher. The reading landed at 1.26 last time and an improvement could allow the Swissy to recover.

JPY

Yen pairs have been trading carefully lately as traders await the BOJ interest rate decision tomorrow. Only the corporate services price index was released from Japan recently and the report chalked up a stronger than expected figure. It still printed a 0.2% decline, which was smaller than the estimated 0.4% drop, while the previous period’s reading was revised down to 0.0%. No other reports are due from Japan today.

Commodity Currencies (AUD, CAD, NZD)

The Australian dollar suffered a sharp selloff this morning after yesterday’s quick retracement when the quarterly CPI missed expectations. The report showed a mere 0.4% uptick instead of the projected 0.7% rise, which is still higher than the recent 0.2% increase. Meanwhile, Canada printed stronger than expected retail sales and core retail sales data, which allowed USD/CAD to stay around its current levels. The RBNZ kept rates on hold at 2.50% as expected.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (April 25, 2013)

Forex Major Currencies Outlook (April 25, 2013)

USD

The U.S. dollar lost a bit of ground to its major counterparts in yesterday’s trading as the U.S. durable goods orders data missed expectations. The headline figure showed a 5.7% drop, almost twice the estimated 2.9% decrease, while the core version of the report printed a 1.4% decline. This reveals that economic activity in the U.S. has been losing steam, and this may be a reason for the Fed to keep their current easing programs in place for much longer than expected. For today, there are no top-tier reports due from the U.S.

EUR

Germany’s Ifo business climate figure missed expectations for the current month as the reading fell from 106.7 to 104.4, lower than the estimated dip to 106.4. As it turns out, sentiment weakened because of the impact of cold weather on businesses in euro zone’s largest economy. Some say that this bleak report is grounds for potential rate cut talks when the ECB meets in the coming days, yet it didn’t trigger a long-lasting selloff for EUR/USD because of the rally in European equities yesterday. Markets seemed to pay more attention to the end of the political stalemate in Italy, which turned out to be positive for the shared currency.

GBP

Today is a big day for the pound pairs as the U.K. will release the much-awaited Q1 2013 GDP reading. The report is expected to show a 0.1% uptick following the previous 0.3% decline in economic growth, which would mean that the U.K. could narrowly escape a triple-dip recession. In this case, pound pairs could stage relief rallies as a positive GDP reading would reduce the need for further QE from the BOE. On the other hand, another negative reading would trigger a sharp selloff as it would put pressure on the BOE to ease further.

CHF

There are no reports due from Switzerland today, which suggests we’ll see quiet trading conditions for USD/CHF since there’s no major data from the U.S. as well.

JPY

Japan has no top-tier reports set for release today, which could mean that the yen could simply trade on risk sentiment for the rest of the day. Keep an eye out for potential profit taking prior to the next set of reports from Japan and the BOJ rate decision scheduled in tomorrow’s early Asian session.

Commodity Currencies (AUD, CAD, NZD)

Commodity currencies managed to recover against the U.S. dollar in yesterday’s trading as overall risk sentiment improved. Australian CPI came in weaker than expected at only 0.4% instead of the estimated 0.7% increase, but was still able to provide support for the Aussie. Both Australia and New Zealand have bank holidays today, which could mean quiet trading for AUD/USD and NZD/USD.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (April 26, 2013)

USD

The U.S. dollar generally lost ground to most of its major counterparts in yesterday’s trading although it was able to limit its losses during the U.S. session. The initial jobless claims report came in stronger than expected at 339K for the previous week instead of the estimated 352K in first-time claimants. For today, the biggest market mover could be the U.S. GDP report for the first quarter of the year. Growth of 3.0% is expected to follow the previous 0.4% uptick and a strong figure could provide support for the dollar.

EUR

The euro managed to rally beyond the 1.3000 major psychological level in yesterday’s trading despite the recent weak data from the euro zone. Spanish unemployment reached 27.2% recently, higher than the estimated rise from 26.0% to 26.5%. There are no major reports due from the euro zone today as EUR/USD price action could be dependent on the U.S. GDP release.

GBP

The U.K. narrowly escaped a triple-dip recession for the first quarter of the year as the GDP reading showed a 0.3% expansion, enough to rebound from the last quarter’s 0.3% contraction. This triggered a sharp rally for pound pairs as it convinced traders that the BOE isn’t likely to ease further for now. No other reports are due from the U.K. today, leaving the pound on its current uptrend.

CHF

The Swiss UBS consumption indicator printed a small increase from 1.24 to 1.25 for March, allowing the franc to recover from its losing streak against the Greenback. No other reports are scheduled from Switzerland today, which suggests that USD/CHF price action could be directed by the U.S. GDP figure later on.

JPY

Inflation is still weak in Japan, judging from the recent CPI figures that were released. The Tokyo core CPI showed a 0.3% drop while the national core CPI printed a 0.5% decline, which suggests that the BOJ could do more to ward off deflation. The BOJ rate statement is scheduled today and this could result in huge moves for the yen once again if the central bank emphasizes its stance on monetary policy.

Commodity Currencies (AUD, CAD, NZD)

The commodity currencies were able to bounce higher against the U.S. dollar in yesterday’s trading as risk appetite improved. New Zealand and Australian banks are on a holiday, which means that there are no major reports due from these economies. Canada’s schedule is empty as well, which suggests that AUD/USD, NZD/USD, and USD/CAD could be at the mercy of U.S. data.

By Kate Curtis from Trader's Way