Forex News and Market Commentary

Summer is near – Time for family barbeques and shorting the Euro

Mon, 20 May 2013 11:09:58 -0400

If there is one thing that traders appreciate, it would have to be repetition. The world of technical analysis is built upon repeating cycles and patterns, the primary strategy that provides a clue as to what might transpire in the near-term future. As soon as repetition is recognized, however, you must act quickly. Once the herd takes notice, it is time to move on, since their pounding hooves will dampen even the strongest impulses of the market to repeat itself. Strategies lose their power when everyone tries the same thing.

Ever since the European debt crisis burst upon the scene in its full glory back in May of 2010, the Euro has been on a rollercoaster ride that refuses to quit. The fear of an expanding crisis drives the valuation down, while any hint that a solution might be at hand drives the value back up again. This tragedy, comedy, or whatever descriptor you wish to attach to the situation has been locked in a repeating cycle for three years, reminiscent of that hilarious movie “Groundhog Day”.

Veteran traders often counsel beginners to avoid the bad habit of trying to pick reversal points in the market. “Make the trend your friend” is the intuitive advice given. In other words, prepare for a reversal or breakout by recognizing the signals, and once the market confirms your interpretation, go for it. For the past few years, the Euro has fallen sharply during the summer months, and this summer portends to be more repetition on the way. Let’s take a detailed look at a weekly chart for the “EUR/USD” currency pair:

Another piece of veteran advice for traders is to step back and review a long timeframe chart to make sense of the long-term trends at play. In this case, we have chosen a weekly chart that includes 2011 to the present day. Fibonacci lines have been added for the major downward move that occurred over the period, with additional annotations to provide further guidance.

The rollercoaster nature of the Euro pricing behavior is apparent. The previous summer drops in 2011 and 2012 are noted by the blue boxes “1” and “2”, and 2013 seems headed in the same direction at this stage. Here are a few more brief observations of a technical nature regarding the Euro’s travails:

The general trend over the period is in the downward direction, as suggested by the 100-Week EMA (the gradually curving red line in the middle of the chart);
The Average True Range (ATR) indicator also indicates a downward trend, as volatility has diminished. Officials in Europe have approached each crisis quickly and developed a temporary fix, but the market yearns for a solution that will actually produce sustained GDP growth in the region. The EU has been in recession for the last three quarters of 2012, and data for the first quarter is due out shortly. A negative 0.1% is the current guesstimate;
Try as it might, the Euro has been unable to mount a charge strong enough to break completely through and move beyond the imposing Kumo Cloud that hovers over the weekly candlesticks;
A rather prominent Head-and-Shoulders formation has been under development over the past several months. The neckline and head have formed within key Fibonacci levels, while the final shoulder may be classified as still “in process”. The Euro is currently hovering under $1.30, but if the “H&S” holds true, then a breakout down to the $1.18 level is definitely within the realm of possibilities.

What is happening behind the scenes to cause such pricing behavior? The fact that the market perceives that there is no end in sight to the crisis conditions in Europe is the reason for the overall downward trend shape. Greece is only one member state. Spain, Portugal, and Italy may be next, but the recent financial debacle in Cyprus was more Greek related than anything else. Austerity programs have not borne fruit, and the general thinking is that a weaker Euro would be the best cure for current ailments.

A few of the most respected forex hedge fund managers have been predicting parity with the greenback for several years, only to be countered by actions from central banks to prevent the inevitable crash from ever taking place, at least on an immediate basis. The United States and Japan have both been conducting major quantitative easing programs, and foreign exchange reserve managers have bolstered the Euro by shifting funds away from the weakening dollar.

What are traders to make of this situation? Summer seems to be the time for shorting the Euro, if repetition is in the cards. A solid break below the 23.6% neckline may be all the market needs to force the Euro to more expected valuation levels.

This has been a special report by Tom Cleveland, Forextraders.com

Weekly Forex Market Forecast (May 20th - May 24th 2013)

Mon, 20 May 2013 09:44:26 -0400

Key Fundamental Forex Events and Forecasts for the Coming Week

The following table lists the key economic data and other events that are due out during the week of May 20th – May 24th, with release times displayed for the GMT time zone.

The list also includes the current market consensus forecast for each event and indicates what sort of deviation might affect the forex market valuation of the indicated currency positively.

Monday, May 20th

All Day CHF Bank Holiday
All Day EUR French Bank Holiday
All Day EUR German Bank Holiday
All Day CAD Bank Holiday

Tuesday, May 21st

2:30am AUD Monetary Policy Meeting Minutes (hawkish = good for currency.)
9:30am GBP CPI (2.6% expected, > good for currency.)

Wednesday, May 22nd

Tentative JPY Monetary Policy Statement (hawkish = good for currency.)
Tentative JPY BOJ Press Conference (hawkish = good for currency.)
9:30am GBP MPC Meeting Minutes (0-0-9 expected, > good for currency.)
9:30am GBP Retail Sales (0.0% expected, > good for currency.)
11:00am CHF SNB Chairman Jordan Speaks (hawkish = good for currency.)
1:30pm CAD Core Retail Sales (0.2% expected, > good for currency.)
3:00pm USD Existing Home Sales (4.99M expected, > good for currency.)
3:00pm USD Fed Chairman Bernanke Testifies (hawkish = good for currency.)
7:00pm USD FOMC Meeting Minutes (hawkish = good for currency.)

Thursday, May 23rd

2:45am CNY HSBC Flash Manufacturing PMI (50.5 expected, > good for currency.)
8:00am EUR French Flash Manufacturing PMI (44.8 expected, > good for currency.)
8:30am EUR German Flash Manufacturing PMI (48.9 expected, > good for currency.)
9:30am GBP Second Estimate GDP (0.3% expected, > good for currency.)
1:30pm USD Unemployment Claims (347K expected, > good for currency.)
3:00pm USD New Home Sales (429K expected, > good for currency.)
8:30pm EUR ECB President Draghi Speaks (hawkish = good for currency.)
11:45pm NZD Trade Balance (480M expected, > good for currency.)

Friday, May 24th

3:55am JPY BOJ Governor Kuroda Speaks (hawkish = good for currency.)
9:00am EUR German Ifo Business Climate (104.6 expected, > good for currency.)
1:30pm USD Core Durable Goods Orders (0.6% expected, > good for currency.)

Technical Forecast and Levels to Watch for the Majors This Week

EURUSD: Lower

Resistance:

Initial: 1.2842/79, 1.2904/90, 1.3000/47, 1.3093/1.3106, 1.3126/61, 1.3194/1.3201, 1.3224, 1.3242/99, 1.3305/08, 1.3318/21, 1.3353, 1.3376/85, 1.3398/1.3403, 1.3433/34 and 1.3478/95.

Above: 1.3519, 1.3544/46, 1.3568, 1.3597, 1.3614, 1.3710, 1.3795/98, 1.3836, 1.3969, 1.4000, 1.4246, 1.4500/17, 1.4695 and 1.4939.

Support:

Initial: 1.2799/1.2801, 1.2744/54, 1.2623/92, 1.2588/89, 1.2501/19, 1.2407/96, 1.2381/91, 1.2323/33 and 1.2241/55.

Below: 1.2162, 1.2143, 1.2133, 1.2041 and 1.1938.

USDJPY: Mildly Higher

Resistance:

Initial: 103.30

Above: 107.18, 108.42 and 110.47.

Support:

Initial: 102.76, 101.43, 101.25, 100.00, 99.26/94, 98.87, 98.48, 98.08, 97.79/83, 97.55, 97.00, 96.65/70, 96.55, 96.05, 95.79, 95.44, 94.90/95.07, 94.55, 94.05/19, 93.76, 93.68, 93.50 and 93.17.

Below: 92.77/95, 92.14/30, 91.19, 90.85, 90.20/32, 89.40/66, 88.05, 87.95/99 and 87.79.

GBPUSD: Lower

Resistance:

Initial: 1.5173/87, 1.5198, 1.5208/23, 1.5260/93,1.5313/92, 1.5403/18, 1.5458, 1.5479, 1.5498/99, 1.5514/16, 1.5545, 1.5568, 1.5591, 1.5601/06, 1.5624/50, 1.5673, 1.5685/92, 1.5714, 1.5781, 1.5803/07, 1.5825, 1.5844, 1.5874/77 and 1.5886/90.

Above: 1.5900/27, 1.5961, 1.5975/91, 1.6001/08, 1.6051/66, 1.6077, 1.6083/96, 1.6109/16, 1.6130/51, 1.6151/54 and 1.6177/98.

Support:

Initial: 1.5152/57, 1.5130, 1.5123, 1.5092, 1.5081, 1.5072, 1.5026/32, 1.4985, 1.4966/67, 1.4884, 1.4872, 1.4830 and 1.4785.

Below: 1.4345 and 1.4232.

AUDUSD: Mildly Higher

Resistance:

Initial: 0.9794, 0.9849/96, 0.9900, 0.9925/83, 1.0000/18, 1.0052, 1.0099/1.0100, 1.0114/17, 1.0148/51, 1.0165/77, 1.0181/82, 1.0201, 1.0220/26, 1.0255/66,1.0280/92,1.0300/03, 1.0319/47, 1.0357, 1.0384/85, 1.0392/96, 1.0354/74, 1.0402/40, 1.0457/98, 1.0508/28 and 1.0561/66.

Above: 1.0572/84, 1.0596/1.0638, 1.0654, 1.0668/86, 1.0751/53, 1.0792/98, 1.0842/54, 1.1010, 1.1064 and 1.1079.

Support:

Initial: 0.9732, 0.9710, 0.9620/89, 0.9585 and 0.9536/41.

Below: 0.9500, 0.9486, 0.9404, 0.9398, 0.9383/86 and 0.8066.

USDCAD: Mildly Lower

Resistance:

Initial: 1.0283/84, 1.0293/94, 1.0302/1.0312, 1.0334/37, 1.0341, 1.0353/61, 1.0415/81, 1.0500, 1.0506 and 1.0522.

Above: 1.0646/56, 1.0669 and 1.0742/85.

Support:

Initial: 1.0262, 1.0255, 1.0245/49, 1.0233/35, 1.0199/1.0226, 1.0178/82, 1.0172, 1.0151/56, 1.0148, 1.0128/42, 1.0103/05, 1.0081/99, 1.0050/56, 1.0029/34, 1.0018, 1.0012, 0.9993/98, 0.9984, 0.9969, 0.9945/60, 0.9931, 0.9922, 0.9902/07, 0.9899, 0.9858, 0.9814/26 and 0.9724/99.

Below: 0.9686, 0.9645, 0.9631, 0.9525, 0.9445 and 0.9405.

NZDUSD: Mildly Higher

Resistance:

Initial: 0.8078/0.8109, 0.8121/53, 0.8160/63, 0.8172/95, 0.8204/14, 0.8221/24, 0.8237/95, 0.8312/16, 0.8322/50, 0.8359/65, 0.8376, 0.8387, 0.8394/96, 0.8405/06, 0.8425/47, 0.8453/59, 0.8472/79, 0.8487/89, 0.8504/08, 0.8532, 0.8561, 0.8571 and 0.8584.

Above: 0.8605, 0.8641, 0.8671/74, 0.8764 and 0.8840.

Support:

Initial: 0.8030/52 and 0.8013.

Below: 0.7996, 0.7906/66, 0.7804/88, 0.7783/95, 0.7723, 0.7605/76 and 0.7500/85.

Weekly Forex Market Followup (May 13th - May 17th 2013)

Fri, 17 May 2013 11:59:26 -0400

Key Fundamental Forex Events for the Week of May 13th through May 17th

The following table lists the key economic data and other events that came out during the week of May 13th through May 17th, with release times displayed for the GMT time zone.

The list also indicates how much each release deviated from the market consensus forecast upon release, as well as what the affected major currency pair or pairs did after each event or set of events.

Monday, May 13th

1:30pm USD Core Retail Sales -0.1% versus -0.1% expected. The currency rose.
1:30pm USD Retail Sales 0.1% versus -0.3% expected. The currency rose.
11:45pm NZD Retail Sales 0.5% versus 0.9% expected. The currency fell.

Tuesday, May 14th

10:00am EUR German ZEW Economic Sentiment 36.4 versus 39.5 expected. The currency fell.
10:30am AUD Annual Budget Release noted that, "In response to difficult global conditions and the sustained high Australian dollar, this Budget charts a pathway to return to balance in 2015 16 and to surplus by 2016 17, improves the sustainability of Australia's public finances and builds on Australia's record of fiscal and economic strength. This Budget delivers $43 billion in savings to return the budget to surplus and fund key nation-building reforms." The currency fell.

Wednesday, May 15th

9:30am GBP Claimant Count Change -7.3K versus -3.1K expected. The currency rose.
10:30am GBP BOE Governor King said that, "Today's projections are for growth to be a little stronger and inflation a little weaker than we expected three months ago. That's the first time I've been able to say that since before the financial crisis" The currency rose.
10:30am GBP BOE Inflation Report noted that, "CPI inflation remains above the 2% target and is set to edge higher over coming months. Inflation is likely to stay above the target for much of the next two years, bolstered by external price pressures and administered and regulated prices. But inflation is expected to fall back to around 2% in the latter part of the forecast period, as external price pressures fade and a gradual revival in productivity growth curbs increases in domestic costs." The currency rose.
1:30pm CAD Manufacturing Sales -0.3% versus 0.6% expected. The currency rose.
1:30pm USD PPI -0.7% versus -0.6% expected. The currency rose.

Thursday, May 16th

3:00am NZD Annual Budget Release noted that, "The NZDMO continues to focus on extending the duration of the Crown’s debt portfolio and is considering launching two longer-dated bonds as part of the 2013/14 bond programme. Possible maturities being considered include an April 2027 nominal and a September 2030 inflation-indexed bond." The currency fell.
1:30pm USD Building Permits 1.02M versus 0.94M expected. The currency fell.
1:30pm USD Core CPI 0.1% versus 0.2% expected. The currency fell.
1:30pm USD Weekly Initial Jobless Claims 360K versus 332K expected. The currency fell.
3:00pm USD Philly Fed Manufacturing Index -5.2 versus 2.5 expected. The currency fell.

Friday, May 17th

1:30pm CAD Core CPI 0.1% versus 0.2% expected. The currency fell.
2:55pm USD Preliminary University of Michigan Consumer Sentiment 83.7 versus 77.9 expected. The currency rose.

Saturday, May 18th

4:00pm USD Fed Chairman Bernanke has not yet spoken. Hawkish = good for currency.

Technical Recap for the Majors This Week

EURUSD:

Forecast: Mildly Higher
Actual: Lower from a 1.2977 open to a 1.2828 close.

USDJPY:

Forecast: Higher
Actual: Higher from a 101.77 open to a 102.87 close.

GBPUSD:

Forecast: Mildly Lower
Actual: Lower from a 1.5355 open to a 1.5199 close.

AUDUSD:

Forecast: Lower
Actual: Sharply lower from a 1.0007 open to a 0.9735 close.

USDCAD:

Forecast: Mildly Higher
Actual: Higher from a 1.0111 open to a 1.0277 close.

NZDUSD:

Forecast: Mildly Lower
Actual: Lower from a 0.8288 open to a 0.8074 close.

Weekly Forex Market Forecast (May 13th - May 17th 2013)

Mon, 13 May 2013 11:15:06 -0400

Key Fundamental Forex Events and Forecasts for the Coming Week

The following table lists the key economic data and other events that are due out during the week of May 13th – May 17th, with release times displayed for the GMT time zone.

The list also includes the current market consensus forecast for each event and indicates what sort of deviation might affect the forex market valuation of the indicated currency positively.

Monday, May 13th

1:30pm USD Core Retail Sales (-0.1% expected, > good for currency.)
1:30pm USD Retail Sales (-0.3% expected, > good for currency.)
11:45pm NZD Retail Sales (0.9% expected, > good for currency.)

Tuesday, May 14th

10:00am EUR German ZEW Economic Sentiment (39.5 expected, > good for currency.)
10:30am AUD Annual Budget Release (hawkish = good for currency.)

Wednesday, May 15th

9:30am GBP Claimant Count Change (-3.1K expected, > good for currency.)
10:30am GBP BOE Governor King speaks (hawkish = good for currency.)
10:30am GBP BOE Inflation Report (hawkish = good for currency.)
1:30pm CAD Manufacturing Sales (0.6% expected, > good for currency.)
1:30pm USD PPI (-0.6% expected, > good for currency.)

Thursday, May 16th

3:00am NZD Annual Budget Release (hawkish = good for currency.)
1:30pm USD Building Permits (0.94M expected, > good for currency.)
1:30pm USD Core CPI (0.2% expected, > good for currency.)
1:30pm USD Weekly Initial Jobless Claims (332K expected, > good for currency.)
3:00pm USD Philly Fed Manufacturing Index (2.5 expected, > good for currency.)

Friday, May 17th

1:30pm CAD Core CPI (0.2% expected, > good for currency.)
2:55pm USD Prelim University of Michigan Consumer Sentiment (77.9 expected, > good for currency.)

Saturday, May 18th

4:00pm USD Fed Chairman Bernanke speaks (hawkish = good for currency.)

Technical Forecast and Levels to Watch for the Majors This Week

EURUSD: Mildly Higher

Resistance:

Initial: 1.3000/47, 1.3093/1.3106, 1.3126/61, 1.3194/1.3201, 1.3224, 1.3242/99, 1.3305/08, 1.3318/21, 1.3353, 1.3376/85, 1.3398/1.3403, 1.3433/34 and 1.3478/95.

Above: 1.3519, 1.3544/46, 1.3568, 1.3597, 1.3614, 1.3710, 1.3795/98, 1.3836, 1.3969, 1.4000, 1.4246, 1.4500/17, 1.4695 and 1.4939.

Support:

Initial: 1.2990, 1.2946/66, 1.2935, 1.2904/19, 1.2801/79, 1.2799, 1.2744/54, 1.2623/92, 1.2588/89, 1.2501/19, 1.2407/96, 1.2381/91, 1.2323/33 and 1.2241/55.

Below: 1.2162, 1.2143, 1.2133, 1.2041 and 1.1938.

USDJPY: Mildly Higher

Resistance:

Initial: 101.97

Above: 107.18, 108.42 and 110.47.

Support:

Initial: 101.43, 100.00, 99.26/94, 98.87, 98.48, 98.08, 97.79/83, 97.55, 97.00, 96.65/70, 96.55, 96.05, 95.79, 95.44, 94.90/95.07, 94.55, 94.05/19, 93.76, 93.68, 93.50 and 93.17.

Below: 92.77/95, 92.14/30, 91.19, 90.85, 90.20/32, 89.40/66, 88.05, 87.95/99 and 87.79.

GBPUSD: Mildly Lower

Resistance:

Initial: 1.5375/92, 1.5403/18, 1.5458, 1.5479, 1.5498/99, 1.5514/16, 1.5545, 1.5568, 1.5591, 1.5601/06, 1.5624/50, 1.5673, 1.5685/92, 1.5714, 1.5781, 1.5803/07, 1.5825, 1.5844, 1.5874/77 and 1.5886/90.

Above: 1.5900/27, 1.5961, 1.5975/91, 1.6001/08, 1.6051/66, 1.6077, 1.6083/96, 1.6109/16, 1.6130/51, 1.6151/54 and 1.6177/98.

Support:

Initial: 1.5362, 1.5334, 1.5313, 1.5260/93, 1.5208/23, 1.5198, 1.5175/87, 1.5152, 1.5130, 1.5123, 1.5092, 1.5081, 1.5072, 1.5026/32, 1.4985, 1.4966/67, 1.4884, 1.4872, 1.4830 and 1.4785.

Below: 1.4345 and 1.4232.

AUDUSD: Lower

Resistance:

Initial: 1.0052, 1.0099/1.0100, 1.0114/17, 1.0148/51, 1.0165/77, 1.0181/82, 1.0201, 1.0220/26, 1.0255/66,1.0280/92,1.0300/03, 1.0319/47, 1.0357, 1.0384/85, 1.0392/96, 1.0354/74, 1.0402/40, 1.0457/98, 1.0508/28 and 1.0561/66.

Above: 1.0572/84, 1.0596/1.0638, 1.0654, 1.0668/86, 1.0751/53, 1.0792/98, 1.0842/54, 1.1010, 1.1064 and 1.1079.

Support:

Initial: 1.0000/18, 0.9925/83, 0.9900, 0.9849/96, 0.9794 and 0.9732.

Below: 0.9620/89, 0.9585, 0.9536/41, 0.9500 and 0.9486.

USDCAD: Mildly Higher

Resistance:

Initial: 1.0103/05, 1.0128/42, 1.0151/56, 1.0172, 1.0178/82, 1.0199/1.0226, 1.0233/35, 1.0245/49, 1.0255, 1.0262, 1.0283/84, 1.0293/94, 1.0302/1.0311, 1.0334/37, 1.0341, 1.0353/61, 1.0415/81, 1.0500, 1.0506 and 1.0522.

Above: 1.0646/56, 1.0669 and 1.0742/85.

Support:

Initial: 1.0082/99, 1.0050/56, 1.0029/34, 1.0018, 1.0012, 0.9993/98, 0.9984, 0.9969, 0.9945/60, 0.9931, 0.9922, 0.9902/07, 0.9899, 0.9858, 0.9814/26 and 0.9724/99.

Below: 0.9686, 0.9645, 0.9631, 0.9525, 0.9445 and 0.9405.

NZDUSD: Mildly Lower

Resistance:

Initial: 0.8312, 0.8322/50, 0.8359/65, 0.8376, 0.8387, 0.8394/96, 0.8405/06, 0.8425/47, 0.8453/59, 0.8472/79, 0.8487/89, 0.8504/08, 0.8532, 0.8561, 0.8571 and 0.8584.

Above: 0.8605, 0.8641, 0.8671/74, 0.8764 and 0.8840.

Support:

Initial: 0.8237/95, 0.8221/24, 0.8204/14, 0.8172/95, 0.8160/63, 0.8121/53, 0.8078/0.8109, 0.8030/52 and 0.8013.

Below: 0.7996, 0.7906/66, 0.7804/88, 0.7783/95, 0.7723, 0.7605/76 and 0.7500/85.

Weekly Forex Market Followup (May 6th - May 10th 2013)

Fri, 10 May 2013 12:07:40 -0400

Key Fundamental Forex Events for the Week of May 6th through May 10th

The following table lists the key economic data and other events that came out during the week of May 6th through May 10th, with release times displayed for the GMT time zone.

Monday, May 6th

All Day JPY Bank Holiday
2:30am AUD Retail Sales -0.4% versus 0.2% expected. The currency fell.
All Day GBP Bank Holiday
1:30pm CAD Building Permits 8.6% versus 0.7% expected. The currency rose.
2:00pm EUR ECB President Draghi said that, "There are many complications and consequences to take into account that need to be studied carefully and the council has decided to study them, to analyse these consequences in order to be able to act if necessary". The currency fell.
3:00pm CAD Ivey PMI 52.2 versus 58.3 expected. The currency rose.

Tuesday, May 7th

2:30am AUD Trade Balance 0.31B versus 0.20B expected. The currency fell.
5:30am AUD Cash Rate Decision: cut 25bps to 2.75% versus 3.00% expected. The currency fell.
5:30am AUD RBA Rate Statement noted that, “The Board has previously noted that the inflation outlook would afford scope to ease further, should that be necessary to support demand. At today's meeting the Board decided to use some of that scope. It judged that a further decline in the cash rate was appropriate to encourage sustainable growth in the economy, consistent with achieving the inflation target." The currency fell.
8:00am CHF Foreign Currency Reserves 433.6B versus last 438.3B expected. The currency fell.
10:00pm NZD RBNZ Financial Stability Report noted that, "Low interest rates and a significant improvement in global financial market sentiment over the past six months have supported the recovery in domestic credit growth. Policy actions in advanced economies have reduced the near-term risks of a break-up of the euro area, and a very sharp fiscal contraction in the US. More generally, exceptionally low interest rates and unconventional monetary policy in the major advanced economies have supported a rally in the prices of riskier assets." The currency fell.

Wednesday, May 8th

2:49am CNY Trade Balance 18.2B versus 15.5B expected.
All Day EUR French Bank Holiday
8:15am CHF CPI 0.0% versus 0.1% expected. The currency rose.
11:45pm NZD Employment Change 1.7% versus 1.1% expected. The currency fell.
11:45pm NZD Unemployment Rate 6.2% versus 6.8% expected. The currency fell.

Thursday, May 9th

2:30am AUD Employment Change 50.1K versus 11.5K expected. The currency fell.
2:30am AUD Unemployment Rate 5.5% versus 5.6% expected. The currency fell.
2:30am CNY CPI 2.4% versus 2.3% expected.
All Day CHF Bank Holiday
All Day EUR French Bank Holiday
All Day EUR German Bank Holiday
9:30am GBP Manufacturing Production 1.1% versus 0.4% expected. The currency fell.
12:00pm GBP Asset Purchase Facility 375B, as expected. The currency fell.
12:00pm GBP Official Bank Rate was unchanged at 0.50%, as expected. The currency fell.
1:30pm USD Weekly Initial Jobless Claims 323K versus 333K expected. The currency rose.

Friday, May 10th

12:50am JPY Current Account 0.34T versus 0.48T expected. The currency fell.
2:30am AUD RBA Monetary Policy Statement noted that, "The sustained high level of the exchange rate may have a longer-lasting effect on pricing behaviour than the historical experience suggests, especially as firms remain focused on cost reductions and seeking efficiency gains." The currency fell.
All Day ALL G7 Meetings Day 1. IMF Managing Director Christine Lagarde said that, "I'm looking forward to an excellent G7 meeting with discussion on recovery and moving from a 3 speed recovery to a 4 speed recovery."
1:30pm CAD Employment Change 12.5K versus 13.5K expected. The currency fell`.
1:30pm CAD Unemployment Rate 7.2%, as expected. The currency fell.
2:30pm USD Fed Chairman Bernanke said that, "Ongoing monitoring of the financial system is vital to the macroprudential approach to regulation. Systemic risks can only be defused if they are first identified. That said, it is reasonable to ask whether systemic risks can in fact be reliably identified in advance; after all, neither the Federal Reserve nor economists in general predicted the past crisis." The currency rose.

Saturday, May 11th

All Day ALL G7 Meetings Day 2: Has not yet occurred.

Technical Recap for the Majors This Week

EURUSD:

Forecast: Lower
Actual: Lower from a 1.3117 open to a 1.2945 close.

USDJPY:

Forecast: Mildly Higher
Actual: Higher from a 99.13 open to a 101.86 close.

GBPUSD:

Forecast: Lower
Actual: Lower from a 1.5566 open to a 1.5324 close.

AUDUSD:

Forecast: Mildly Higher
Actual: Sharply lower from a 1.0305 open to a 0.9978 close.

USDCAD:

Forecast: Mildly Lower
Actual: Mildly higher from a 1.0076 open to a 1.0121 close.

NZDUSD:

Forecast: Higher
Actual: Lower from a 0.8532 open to a 0.8270 close.

Weekly Forex Market Forecast (May 6th - May 10th 2013)

Mon, 06 May 2013 12:04:41 -0400

Key Fundamental Forex Events and Forecasts for the Coming Week

The following table lists the key economic data and other events that are due out during the week of May 6th – May 10th, with release times displayed for the GMT time zone.

The list also includes the current market consensus forecast for each event and indicates what sort of deviation might affect the forex market valuation of the indicated currency positively.

Monday, May 6th

All Day JPY Bank Holiday
2:30am AUD Retail Sales (0.2% expected, > good for currency.)
All Day GBP Bank Holiday
1:30pm CAD Building Permits (0.7% expected, > good for currency.)
2:00pm EUR ECB President Draghi Speaks (hawkish = good for currency.)
3:00pm CAD Ivey PMI (58.3 expected, > good for currency.)

Tuesday, May 7th

2:30am AUD Trade Balance (0.20B expected, > good for currency.)
5:30am AUD Cash Rate Decision (unchanged at 3.00% expected, > good for currency.)
AUD RBA Rate Statement (hawkish = good for currency.)
8:00am CHF Foreign Currency Reserves (last 438.3B expected, > good for currency.)
10:00pm NZD RBNZ Financial Stability Report (hawkish = good for currency.)

Wednesday, May 8th

Tentative CNY Trade Balance (15.5B expected, > good for currency.)
All Day EUR French Bank Holiday
8:15am CHF CPI (0.1% expected, > good for currency.)
11:45pm NZD Employment Change (1.1% expected, > good for currency.)
NZD Unemployment Rate (6.8% expected, < good for currency.)

Thursday, May 9th

2:30am AUD Employment Change (11.5K expected, > good for currency.)
2:30am AUD Unemployment Rate (5.6% expected, < good for currency.)
2:30am CNY CPI (2.3% expected, > good for currency.)
All Day CHF Bank Holiday
All Day EUR French Bank Holiday
All Day EUR German Bank Holiday
9:30am GBP Manufacturing Production (0.4% expected, > good for currency.)
Tentative EUR Spanish 10-Year Bond Auction (last average yield 4.61 percent, with a 2.6 bid to cover ratio expected, < yield and > ratio good for currency.)
12:00pm GBP Asset Purchase Facility (375B expected, > good for currency.)
12:00pm GBP Official Bank Rate (unchanged at 0.50% expected, > good for currency.)
12:00pm Tentative GBP MPC Rate Statement (hawkish = good for currency.)
1:30pm USD Weekly Initial Jobless Claims (333K expected, < good for currency.)

Friday, May 10th

12:50am JPY Current Account (0.48T expected, > good for currency.)
2:30am AUD RBA Monetary Policy Statement (hawkish = good for currency.)
Day 1 ALL G7 Meetings (hawkish = good for currency.)
1:30pm CAD Employment Change (13.5K expected, > good for currency.)
1:30pm CAD Unemployment Rate (7.2% expected, < good for currency.)
2:30pm USD Fed Chairman Bernanke Speaks (hawkish = good for currency.)

Saturday, May 11th

Day 2 ALL G7 Meetings (hawkish = good for currency.)

Technical Forecast and Levels to Watch for the Majors This Week

EURUSD: Lower

Resistance:

Initial: 1.3126/61, 1.3199/1.3201, 1.3224, 1.3242/99, 1.3305/08, 1.3318/21, 1.3353, 1.3376/85, 1.3398/1.3403, 1.3433/34 and 1.3478/95.

Above: 1.3519, 1.3544/46, 1.3568, 1.3597, 1.3614, 1.3710, 1.3795/98, 1.3836, 1.3969, 1.4000, 1.4246, 1.4500/17, 1.4695 and 1.4939.

Support:

Initial: 1.3106, 1.3093, 1.3047, 1.3031/39, 1.3018/22, 1.3009/10, 1.3000, 1.2990, 1.2946/66, 1.2904/19, 1.2801/79, 1.2799, 1.2744/54, 1.2623/92, 1.2588/89, 1.2501/19, 1.2407/96, 1.2381/91, 1.2323/33 and 1.2241/55.

Below: 1.2162, 1.2143, 1.2133, 1.2041 and 1.1938.

USDJPY: Mildly Higher

Resistance:

Initial: 99.26, 99.50, 99.60/68, 99.75 and 99.83/94.

Above: 100.00, 101.43, 108.42 and 110.47.

Support:

Initial: 98.87, 98.48, 98.08, 97.79/83, 97.55, 97.00, 96.65/70, 96.55, 96.05, 95.79, 95.44, 94.90/95.07, 94.55, 94.05/19, 93.76, 93.68, 93.50, 93.17, 92.77/95, 92.14/30, 91.19, 90.85, 90.20/32, 89.40/66, 88.05, 87.95/99 and 87.79.

Below: 87.11/13, 86.63, 85.92, 85.51, 84.09/80, 83.85/96, 83.01, 82.53/82.83 and 82.01/22.

GBPUSD: Lower

Resistance:

Initial: 1.5568, 1.5601/06, 1.5624/50, 1.5673, 1.5685/92, 1.5714, 1.5781, 1.5803/07, 1.5825, 1.5844, 1.5874/77 and 1.5886/90.

Above: 1.5900/27, 1.5961, 1.5975/91, 1.6001/08, 1.6051/66, 1.6077, 1.6083/96, 1.6109/16, 1.6130/51, 1.6151/54 and 1.6177/98.

Support:

Initial: 1.5545, 1.5514/16, 1.5498/99, 1.5479, 1.5458, 1.5418, 1.5410, 1.5403, 1.5375/92, 1.5362, 1.5334, 1.5260/93, 1.5208/23, 1.5198, 1.5175/87, 1.5152, 1.5130, 1.5123, 1.5092, 1.5081, 1.5072, 1.5026/32, 1.4985, 1.4966/67, 1.4884, 1.4872, 1.4830 and 1.4785.

Below: 1.4345 and 1.4232.

AUDUSD: Mildly Higher

Resistance:

Initial: 1.0300/03, 1.0319/47, 1.0357, 1.0384/85, 1.0392/96, 1.0354/74, 1.0402/40, 1.0457/98, 1.0508/28, 1.0561/66, 1.0572/84, 1.0596/1.0638, 1.0654, 1.0668/86, 1.0751/53, 1.0792/98 and 1.0842/54.

Above: 1.1010, 1.1064 and 1.1079.

Support:

Initial: 1.0280/92, 1.0255/66, 1.0220/26, 1.0201, 1.0181/82, 1.0165/77, 1.0148/51, 1.0114/17, 1.0099/1.0100 and 1.0052.

Below: 1.0000/18, 0.9925/83, 0.9900, 0.9849/96, 0.9794, 0.9732, 0.9620/89, 0.9585, 0.9536/41, 0.9500 and 0.9486.

USDCAD: Mildly Lower

Resistance:

Initial: 1.0082/99, 1.0103/05, 1.0128/42, 1.0156, 1.0172, 1.0178/82, 1.0199/1.0226, 1.0233/35, 1.0245/49, 1.0255, 1.0262, 1.0283/84, 1.0293/94, 1.0302/1.0311, 1.0334/37, 1.0341, 1.0353/61, 1.0415/81, 1.0500, 1.0506 and 1.0522.

Above: 1.0646/56, 1.0669 and 1.0742/85.

Support:

Initial: 1.0050/56, 1.0029/34, 1.0018, 0.9993/98, 0.9984, 0.9969, 0.9945/60, 0.9931, 0.9922, 0.9902/07, 0.9899, 0.9858, 0.9814/26 and 0.9724/99.

Below: 0.9686, 0.9645, 0.9631, 0.9525, 0.9445 and 0.9405.

NZDUSD: Higher

Resistance:

Initial: 0.8532, 0.8561, 0.8571, 0.8584, 0.8605, 0.8641 and 0.8671/74.

Above: 0.8764 and 0.8840.

Support:

Initial: 0.8504/08, 0.8487/89, 0.8472/77, 0.8453/59, 0.8425/47, 0.8405/06, 0.8394/96, 0.8387, 0.8376, 0.8359/65, 0.8322/50, 0.8312, 0.8237/95, 0.8221/24, 0.8204/14, 0.8172/95, 0.8160/63, 0.8121/53, 0.8078/0.8109, 0.8030/52 and 0.8013.

Below: 0.7996, 0.7906/66, 0.7804/88, 0.7783/95, 0.7723, 0.7605/76 and 0.7500/85.

EURJPY WEEKLY OUTLOOK II – MAY 6 - 10

Mon, 06 May 2013 09:21:42 -0400

The ECB met market expectations at its last policy meeting of May 2 where the Governing Council cut the minimum bid rate by 25bps to 0.50%. The Board also agreed to extend the LTRO program.

A summary of the press conference stated that the bank expects a decline in economic growth for now and that leaves more room for continuous easing. The major news turned out to be that the ECB is now nursing the idea of negative deposit rates.

Although ECB President Draghi did say that it's not an attractive alternative in the current situation. This means the markets will not price in such a move at the moment.

Most data within the Eurozone has been very disappointing in the past few months especially as indices from its biggest economies still show countries steep in recession territory.

Therefore analysts will start looking out for comments from Council members in order to expect a future shift in monetary policy.

Meanwhile, Japan's unemployment rate has now dropped from 4.3% to 4.1% as household spending keeps improving. BoJ's Governor Kuroda is already implementing bold policies that aim to jumpstart Japan's economy with a weakening Yen.

Stronger exports and rejuvenated domestic spending are also results of improving sentiment among the general public, despite critics of the ambitious inflation target set by Prime Minister Abe.

All these point to the fact that the ongoing stimulus spending programs are producing positive results and that the overall economic forecasts are achievable.

This week, figures from Japan which include its Current Account and Leading Indicators will further help to decide the direction of the Yen.

Technical study on 4-hour chart indicates that EURJPY is due for a correction down to 125.10 from 130.10 so a short is recommended at the 100.0% fib level.

Weekly Forex Market Followup (April 29th - May 3rd 2013)

Fri, 03 May 2013 12:13:37 -0400

Key Fundamental Forex Events for the Week of April 29th through May 3rd

The following table lists the key economic data and other events that came out during the week of April 29th through May 3rd, with release times displayed for the GMT time zone.

Monday, April 29th

All Day JPY Bank Holiday
All Day CNY Bank Holiday
All Day EUR German Preliminary CPI -0.5% versus -0.2% expected. The currency rose.
10:12am EUR Italian 10-Year Bond Auction average yield 3.94 versus last 4.66 percent, with a 1.4 bid to cover ratio versus last 1.3. The currency rose.
1:30pm USD Core PCE Price Index 0.0% versus 0.1% expected. The currency rose.
1:30pm USD Personal Spending 0.2%, as expected. The currency rose.
3:00pm USD Pending Home Sales 1.5% versus 1.1% expected. The currency rose.

Tuesday, April 30th

All Day CNY Bank Holiday
2:00am NZD ANZ Business Confidence 32.3 versus 34.6 expected. The currency rose.
1:30pm CAD GDP 0.3% versus 0.2% expected. The currency rose.
3:00pm USD CB Consumer Confidence 68.1 versus 60.6 expected. The currency rose.

Wednesday, May 1st

All Day CNY Bank Holiday
2:00am CNY Manufacturing PMI 50.6 versus 50.8 expected. The currency rose.
All Day CHF Bank Holiday
All Day EUR French Bank Holiday
All Day EUR German Bank Holiday
All Day EUR Italian Bank Holiday
9:30am GBP Manufacturing PMI 49.8 versus 48.6 expected. The currency rose.
1:15pm USD ADP Non-Farm Employment Change 119K versus 153K expected. The currency rose.
3:00pm USD ISM Manufacturing PMI 50.7 versus 51.1 expected. The currency rose.
7:00pm USD FOMC Statement noted that, "The Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability." The currency rose.
7:00pm USD Fed Funds Rate Decision <0.25%, as expected. The currency rose.

Thursday, May 2nd

12:50am JPY Monetary Policy Meeting Minutes noted that, "Members shared the recognition once again on the Bank's basic thinking that its mission was to achieve at the earliest possible time the price stability target of 2 percent interms of the year-on-year rate of change in the CPI, which was decided at the Monetary Policy Meeting held on January 21 and 22, 2013." The currency fell.
2:30am AUD Building Approvals -5.5% versus 1.3% expected. The currency fell.
8:15am EUR Spanish Manufacturing PMI 44.7 versus 44.6 expected. The currency fell.
9:30am GBP Construction PMI 49.4 versus 48.1 expected. The currency fell.
12:45pm EUR Minimum Bid Rate Decision: 0.50%, as expected, cut by 25 basis points. The currency rose.
1:30pm CAD Trade Balance 0.0B versus -0.7B expected. The currency fell.
1:30pm EUR ECB Press Conference: ECB President Mario Draghi said that, "We are also closely monitoring money market conditions and their potential impact on our monetary policy stance and its transmission to the economy. As said on previous occasions, we will continue with fixed rate tender procedures with full allotment for as long as necessary." noted that, ““. The currency fell.
1:30pm USD Trade Balance -38.8B versus -42.1B expected. The currency rose.
1:30pm USD Weekly Initial Jobless Claims 324K versus 345K expected. The currency rose.

Friday, May 3rd

All Day JPY Bank Holiday
2:30am AUD PPI 0.3%, as expected. The currency rose.
9:30am GBP Services PMI 52.9 versus 52.5 expected. The currency rose.
10:00am EUR EU Economic Forecasts noted that, "Following the recession that marked 2012, the EU economy is expected to stabilise in the first half of 2013. GDP growth is projected to turn positive gradually in the second half of the year before gaining some traction in 2014. Annual GDP this year is now forecast to contract 0.1% in the EU and 0.4% in the euro area. For 2014, economic activity is projected to expand by 1.4% in the EU and 1.2% in the euro area." The currency rose.
1:30pm USD Non-Farm Payrolls Change 165K versus 155K expected. The currency rose.
1:30pm USD Unemployment Rate 7.5% versus 7.6% expected. The currency rose.
3:00pm USD ISM Non-Manufacturing PMI 53.1 versus 54.1 expected. The currency rose.

Technical Recap for the Majors This Week

EURUSD:

Forecast: Lower
Actual: Mildly higher from a 1.3061 open to a 1.3109 close.

USDJPY:

Forecast: Lower
Actual: Higher from a 97.96 open to a 99.12 close.

GBPUSD:

Forecast: Mildly Higher
Actual: Mildly Higher from a 1.5483 open to a 1.5560 close.

AUDUSD:

Forecast: Mildly Higher
Actual: Mildly higher from a 1.0287 open to a 1.0310 close.

USDCAD:

Forecast: Mildly Lower
Actual: Mildly lower from a 1.0166 open to a 1.0081 close.

NZDUSD:

Forecast: Higher
Actual: Mildly higher from a 0.8489 open to a 0.8535 close.

EURUSD WEEKLY OUTLOOK II: APRIL 29 – MAY 3

Thu, 02 May 2013 07:46:14 -0400

The topmost events for this week involve the Fed and ECB, then Friday’s non-farm payrolls report. First off, FOMC’s statement will be closely monitored for the Committee’s policy modifications based on recent economic data.

The US will have to endure the harsh impact of sequesters even as the Fed looks to bring up new ideas on how to reduce the negative effects on the struggling economy.

So it seems the monetary policy presently in place will not feature any surprises and may extend to 2014. Economists therefore believe most FOMC members will maintain their commitment to non-stop QE as they look to push the unemployment rate under 6.5%.

Market watchers are already expecting the ECB to slash overnight interest rates for a continent still reeling from the effects of a prolonged recession and very high unemployment.

After holding on for several months, the acute decline in the services and manufacturing sectors of the Eurozone is likely to make the ECB finally yield to pressure.

Analysts are now expecting further easing as LTRO 3; in addition to a reduction in the benchmark rate at its Thursday Governing Council meeting.

This means EURUSD is poised to retreat down to the $1.20s. Anything short of the above actions, investors will be on the lookout for hints of the awaited rate cut in the weeks ahead.

With the weak jobs number printed for March three weeks back, it is expected that April’s should be much better. This will suggest that it was only a temporary blip and that growth will resume again.

Other economic reports to come from the US are pending home sales, consumer confidence, ADP private sector employment and ISM indexes for manufacturing and services sectors.

Technical reading on 4-hour chart shows EURUSD is a buy above 1.3200 towards 1.3425, or a sell below 1.2970 down to 1.2750.

Weekly Forex Market Forecast (April 29th - May 3rd 2013)

Mon, 29 Apr 2013 11:40:44 -0400

Key Fundamental Forex Events and Forecasts for the Coming Week

The following table lists the key economic data and other events that are due out during the week of April 29th – May 3rd, with release times displayed for the GMT time zone.

The list also includes the current market consensus forecast for each event and indicates what sort of deviation might affect the forex market valuation of the indicated currency positively.

Monday, April 29th

All Day JPY Bank Holiday
All Day CNY Bank Holiday
All Day EUR German Prelim CPI (-0.2% expected, > good for currency.)
Tentative EUR Italian 10-Year Bond Auction (last average yield 4.66 percent, with a 1.3 bid to cover ratio, < yield and > ratio good for currency.)
1:30pm USD Core PCE Price Index (0.1% expected, > good for currency.)
1:30pm USD Personal Spending (0.2% expected, > good for currency.)
3:00pm USD Pending Home Sales (1.1% expected, > good for currency.)

Tuesday, April 30th

All Day CNY Bank Holiday
2:00am NZD ANZ Business Confidence (34.6 expected, > good for currency.)
1:30pm CAD GDP (0.2% expected, > good for currency.)
3:00pm USD CB Consumer Confidence (60.6 expected, > good for currency.)

Wednesday, May 1st

All Day CNY Bank Holiday
2:00am CNY Manufacturing PMI (50.8 expected, > good for currency.)
All Day CHF Bank Holiday
All Day EUR French Bank Holiday
All Day EUR German Bank Holiday
All Day EUR Italian Bank Holiday
9:30am GBP Manufacturing PMI (48.6 expected, > good for currency.)
1:15pm USD ADP Non-Farm Employment Change (153K expected, > good for currency.)
3:00pm USD ISM Manufacturing PMI (51.1 expected, > good for currency.)
7:00pm USD FOMC Statement (hawkish = good for currency.)
7:00pm USD Fed Funds Rate Decision (<0.25% expected, > good for currency.)

Thursday, May 2nd

2:30am AUD Building Approvals (1.3% expected, > good for currency.)
9:30am GBP Construction PMI (48.1 expected, > good for currency.)
12:45pm EUR Minimum Bid Rate Decision (0.50%, with a 25 basis point cut from 0.75% expected, > good for currency.)
1:30pm CAD Trade Balance (-0.7B expected, > good for currency.)
1:30pm EUR ECB Press Conference (hawkish = good for currency.)
1:30pm USD Trade Balance (-42.1B expected, > good for currency.)
1:30pm USD Weekly Initial Jobless Claims (345K expected, < good for currency.)

Friday, May 3rd

All Day JPY Bank Holiday
2:30am AUD PPI (0.3% expected, > good for currency.)
9:30am GBP Services PMI (52.5 expected, > good for currency.)
10:00am EUR EU Economic Forecasts (hawkish = good for currency.)
1:30pm USD Non-Farm Payrolls Change (155K expected, > good for currency.)
1:30pm USD Unemployment Rate (7.6% expected, < good for currency.)
3:00pm USD ISM Non-Manufacturing PMI (54.1 expected, > good for currency.)

Technical Forecast and Levels to Watch for the Majors This Week

EURUSD: Lower

Resistance:

Initial: 1.3036/39, 1.3047, 1.3093, 1.3106, 1.3126/61, 1.3199/1.3201, 1.3224, 1.3251/99, 1.3305/08, 1.3318/21, 1.3353, 1.3376/85, 1.3398/1.3403, 1.3433/34 and 1.3478/95.

Above: 1.3519, 1.3544/46, 1.3568, 1.3597, 1.3614, 1.3710, 1.3795/98, 1.3836, 1.3969, 1.4000, 1.4246, 1.4500/17, 1.4695 and 1.4939.

Support:

Initial: 1.3018/22, 1.3009/10, 1.3000, 1.2990, 1.2946/66, 1.2904/19, 1.2801/79, 1.2799, 1.2744/54, 1.2623/92, 1.2588/89, 1.2501/19, 1.2407/96, 1.2381/91, 1.2323/33 and 1.2241/55.

Below: 1.2162, 1.2143, 1.2133, 1.2041 and 1.1938.

USDJPY: Lower

Resistance:

Initial: 98.08, 98.48, 98.87, 99.50, 99.60/68 and 99.83/94.

Above: 101.43, 108.42 and 110.47.

Support:

Initial: 97.83, 97.79, 97.55, 96.65/70, 96.55, 96.05, 95.79, 95.44, 94.90/95.07, 94.55, 94.05/19, 93.76, 93.68, 93.50, 93.17, 92.77/95, 92.14/30, 91.19, 90.85, 90.20/32, 89.40/66, 88.05, 87.95/99 and 87.79.

Below: 87.11/13, 86.63, 85.92, 85.51, 84.09/80, 83.85/96, 83.01, 82.53/82.83 and 82.01/22.

GBPUSD: Mildly Higher

Resistance:

Initial: 1.5479, 1.5498/99, 1.5514/16, 1.5545/1.5601, 1.5624/50, 1.5673, 1.5685/92, 1.5714, 1.5781, 1.5803/07, 1.5825, 1.5844, 1.5874/77 and 1.5886/90.

Above: 1.5900/27, 1.5961, 1.5975/91, 1.6001/08, 1.6051/66, 1.6077, 1.6083/96, 1.6109/16, 1.6130/51, 1.6151/54 and 1.6177/98.

Support:

Initial: 1.5458, 1.5418, 1.5410, 1.5403, 1.5375/92, 1.5362, 1.5334, 1.5260/93, 1.5208/23, 1.5198, 1.5175/87, 1.5152, 1.5130, 1.5123, 1.5092, 1.5081, 1.5072, 1.5026/32, 1.4985, 1.4966/67, 1.4884, 1.4872, 1.4830 and 1.4785.

Below: 1.4345 and 1.4232.

AUDUSD: Mildly Higher

Resistance:

Initial: 1.0280/92, 1.0300/03, 1.0319/47, 1.0357, 1.0385, 1.0392/96, 1.0354/74, 1.0402/40, 1.0457/98, 1.0508/28, 1.0561/66, 1.0572/84, 1.0596/1.0638, 1.0654, 1.0668/86, 1.0751/53, 1.0792/98 and 1.0842/54.

Above: 1.1010, 1.1064 and 1.1079.

Support:

Initial: 1.0255/66, 1.0220/26, 1.0201, 1.0181/82, 1.0165/77, 1.0148/51, 1.0114/17, 1.0099/1.0100 and 1.0052.

Below: 1.0000/18, 0.9925/83, 0.9900, 0.9849/96, 0.9794, 0.9732, 0.9620/89, 0.9585, 0.9536/41, 0.9500 and 0.9486.

USDCAD: Mildly Lower

Resistance:

Initial: 1.0172, 1.0178/82, 1.0199/1.0226, 1.0233/35, 1.0245/49, 1.0255, 1.0262, 1.0283/84, 1.0293/94, 1.0302/1.0311, 1.0334/37, 1.0341, 1.0353/61, 1.0415/81, 1.0500, 1.0506 and 1.0522.

Above: 1.0646/56, 1.0669 and 1.0742/85.

Support:

Initial: 1.0156, 1.0142, 1.0128, 1.0103/05, 1.0082/99, 1.0056, 1.0029/34, 1.0018, 0.9993/98, 0.9984, 0.9969, 0.9945/60, 0.9931, 0.9922, 0.9902/07, 0.9899, 0.9858, 0.9814/26 and 0.9724/99.

Below: 0.9686, 0.9645, 0.9631, 0.9525, 0.9445 and 0.9405.

NZDUSD: Higher

Resistance:

Initial: 0.8472/77, 0.8487/89, 0.8504/08, 0.8532, 0.8561, 0.8571, 0.8605, 0.8641 and 0.8671/74.

Above: 0.8764 and 0.8840.

Support:

Initial: 0.8459, 0.8425/47, 0.8405/06, 0.8394/96, 0.8387, 0.8376, 0.8359/65, 0.8322/50, 0.8312, 0.8237/95, 0.8221/24, 0.8204/14, 0.8172/95, 0.8160/63, 0.8121/53, 0.8078/0.8109, 0.8030/52 and 0.8013.

Below: 0.7996, 0.7906/66, 0.7804/88, 0.7783/95, 0.7723, 0.7605/76 and 0.7500/85.

Weekly Forex Market Followup (April 22nd - April 26th 2013)

Fri, 26 Apr 2013 12:50:20 -0400

Key Fundamental Forex Events for the Week of April 22nd through April 26th

The following table lists the key economic data and other events that came out during the week of April 22nd through April 26th, with release times displayed for the GMT time zone.

Sunday, April 21st

All Day ALL IMF Meetings: IMF Deputy Managing Director Min Zhu said that, "Low-income countries have worked to develop institutional capacity and build fiscal buffers that they were able to use during the crisis, and now, all the hard work has paid off".
6:30pm EUR German Buba President Weidmann said that, "A point that I think is important to make —perhaps less for my central bank colleagues than for finance ministers — is that the medication monetary policy makers administer only cures the symptoms and that it comes with side-effects and risks". The currency fell.

Monday, April 22nd

3:00pm USD Existing Home Sales 4.92M versus 5.02M expected. The currency fell.
7:30pm GBP MPC Member Tucker said that, "So it matters enormously that much of the risk in the main derivatives markets and in some cash markets is becoming concentrated on the clearinghouses. That simplifies the network of exposures via multilateral netting, and it can assist the management and monitoring of risk." The currency rose.

Tuesday, April 23rd

2:45am CNY HSBC Flash Manufacturing PMI 50.5 versus 51.4 expected.
8:00am EUR French Flash Manufacturing PMI 44.4 versus 44.2 expected. The currency fell.
8:30am EUR German Flash Manufacturing PMI 47.9 versus 49.0 expected. The currency rose.
1:30pm CAD Core Retail Sales 0.7% versus 0.5% expected. The currency fell.
1:45pm CAD BOC Governor Carney said that, "With continued slack in the Canadian economy, the muted outlook for inflation, and the constructive evolution of imbalances in the household sector, the considerable monetary policy stimulus currently in place will likely remain appropriate for a period of time, after which some modest withdrawal will likely be required, consistent with achieving the 2 per cent inflation target." The currency fell.
3:00pm USD New Home Sales 417K versus 419K expected. The currency rose.
10:00pm NZD Official Cash Rate Decision: 2.50%, as expected. The currency rose.
10:00pm NZD RBNZ Rate Statement: RBNZ Governor Graeme Wheeler noted that, "The New Zealand dollar remains overvalued and is higher than projected in March. Further appreciation has occurred partly in response to the announcement of a substantial quantitative easing programme in Japan. The high New Zealand dollar continues to be a significant headwind for the tradables sector, restricting export earnings and encouraging demand for imports." The currency rose.

Wednesday, April 24th

2:30am AUD CPI 0.4% versus 0.7% expected. The currency rose.
9:00am EUR German Ifo Business Climate survey 104.4 versus 106.4 expected. The currency rose.
1:30pm USD Core Durable Goods Orders -1.4% versus 0.5% expected. The currency was unchanged overall.
9:15pm CAD BOC Governor Carney said that, "Despite the projected recovery in exports, they are likely to remain below their pre-recession peak until the second half of 2014 owing to restrained foreign demand and ongoing competitiveness challenges, including the persistent strength of the Canadian dollar." The currency rose.
10:00pm NZD Bank Holiday
All Day AUD Bank Holiday

Thursday, April 25th

All Day EUR Italian Bank Holiday
8:00am EUR Spanish Unemployment Rate 27.2% versus 26.5% expected. The currency fell.
9:30am GBP Preliminary GDP 0.3% versus 0.1% expected. The currency rose.
1:30pm USD Weekly Initial Jobless Claims 339K versus 352K expected. The currency fell.
3:00pm USD Treasury Secretary Lew said that, ““. The currency fell.
11:45pm NZD Trade Balance 718M versus 472M expected. The currency rose.

Friday, April 26th

12:30am JPY Tokyo Core CPI -0.3% versus -0.4% expected. The currency rose.
5:35am JPY BOJ Monetary Policy Statement noted that, "At the Monetary Policy Meeting held today, the Policy Board of the Bank of Japan decided, by a unanimous vote, to set the following guideline for money market operations for the inter meeting period: The Bank of Japan will conduct money market operations so that the monetary base will increase at an annual pace of about 60-70 trillion yen.” The currency rose.
5:35am JPY BOJ Overnight Call Rate Decision: <0.10%, as expected. The currency rose.
7:00am JPY BOJ Outlook Report noted that, “Japan's economy has stopped weakening and has shown some signs of picking up. Looking ahead, it is expected to return to a moderate recovery path around mid-2013, mainly against the background that domestic demand remains resilient due to the effects of monetary easing as well as various economic measures, and that growth rates of overseas economies gradually pick up." The currency rose.
8:40am JPY BOJ Press Conference: BOJ Governor Kuroda stated that, "Personally, I think many on the board feel that inflation will reach around 2 per cent in the first half of fiscal 2015". The currency rose.
8:00am CHF KOF Economic Barometer 1.02 versus 0.98 expected. The currency rose.
9:00am CHF SNB Chairman Jordan said that, "The SNB will ... continue to enforce the minimum exchange rate with the utmost determination and, if required, is prepared to buy foreign currency in unlimited quantities for this purpose". The currency rose.
9:00am EUR M3 Money Supply 2.6% versus 3.0% expected. The currency rose.
1:30pm USD Advance GDP 2.5% versus 3.1% expected. The currency fell.

Technical Recap for the Majors This Week

EURUSD:

Forecast: Mildly Lower
Actual: Mildly Lower from a 1.3067 open to a 1.3024 close.

USDJPY:

Forecast: Mildly Lower
Actual: Lower from a 99.77 open to a 97.89 close.

GBPUSD:

Forecast: Lower
Actual: Higher from a 1.5232 open to a 1.5475 close.

AUDUSD:

Forecast: Higher
Actual: Unchanged from a 1.0273 open to a 1.0273 close.

USDCAD:

Forecast: Mildly Lower
Actual: Mildly lower from a 1.0255 open to a 1.0169 close.

NZDUSD:

Forecast: Higher
Actual: Higher from a 0.8401 open to a 0.8501 close.

EURUSD OUTLOOK I: 22 – 26 APRIL

Mon, 22 Apr 2013 14:42:37 -0400

This weekend, Italy’s President Giorgio Napolitano was handed another mandate after he bowed to pressure from party leaders to go for a 7^th straight term in office.

This seems a positive development towards resolving the country’s political stalemate after February’s election impasse.

Few months ago, the President had rejected calls for him to run for office once again but stated after his re-election that he cannot “ignore responsibility toward the country.”

The markets expect that his first assignment is to find an immediate solution to the nation’s desperate need for a government.

EURUSD had a roller-coaster week – opening at 1.3095 and attaining a high of 1.3200 before tumbling down to a close at 1.3048.

This was partly due to comments from ECB President Draghi saying the Eurozone’s economic data has not shown any progress since the Central Bank’s last meeting of this month.

Also, recent information revealed that Cyprus needed more bailout funds than was initially stated. Now, other European economies are being scrutinized for signs of early weakness.

More events that will influence Euro-dollar this week are US durable goods data including companies’ Q1 earnings which keep trickling in.

The big number for unemployment claims will be a push or pull for the pair as well. First quarter GDP is perhaps the last major piece of data to watch out for the week as several economists forecast a 3% growth.

EURUSD is still oscillating within a range and will need some good news to clearly breakout upwards. These may be a newly formed Italian government or favorable US jobs data next month.

Meanwhile, a brief long or short can be considered for this week only. On the 4-hour chart, a break below 1.30 can be shorted down to 1.29. Likewise an opposite break of 1.32 should be bought towards a price target at 1.33.

Weekly Forex Market Forecast (April 22nd - April 26th 2013)

Mon, 22 Apr 2013 10:02:50 -0400

Key Fundamental Forex Events and Forecasts for the Coming Week

The following table lists the key economic data and other events that are due out during the week of April 22nd – April 26th, with release times displayed for the GMT time zone.

The list also includes the current market consensus forecast for each event and indicates what sort of deviation might affect the forex market valuation of the indicated currency positively.

Sunday, April 21st

All Day ALL IMF Meetings (hawkish = good for currency.)
6:30pm EUR German Buba President Weidmann speaks (hawkish = good for currency.)

Monday, April 22nd

3:00pm USD Existing Home Sales (5.02M expected, > good for currency.)
7:30pm GBP MPC Member Tucker speaks (hawkish = good for currency.)

Tuesday, April 23rd

2:45am CNY HSBC Flash Manufacturing PMI (51.4 expected, > good for currency.)
8:00am EUR French Flash Manufacturing PMI (44.2 expected, > good for currency.)
8:30am EUR German Flash Manufacturing PMI (49.0 expected, > good for currency.)
1:30pm CAD Core Retail Sales (0.5% expected, > good for currency.)
1:45pm CAD BOC Governor Carney speaks (hawkish = good for currency.)
3:00pm USD New Home Sales (419K expected, > good for currency.)
10:00pm NZD Official Cash Rate (2.50% expected, > good for currency.)
10:00pm NZD RBNZ Rate Statement (hawkish = good for currency.)

Wednesday, April 24th

2:30am AUD CPI (0.7% expected, > good for currency.)
9:00am EUR German Ifo Business Climate survey (106.4 expected, > good for currency.)
Tentative EUR Italian 10-Year Bond Auction (last average yield 4.66 percent, with a 1.3 bid to cover ratio expected, with a < yield and > ratio good for currency.)
1:30pm USD Core Durable Goods Orders (0.5% expected, > good for currency.)
9:15pm CAD BOC Governor Carney Speaks (hawkish = good for currency.)
10:00pm NZD Bank Holiday
All Day AUD Bank Holiday

Thursday, April 25th

All Day EUR Italian Bank Holiday
8:00am EUR Spanish Unemployment Rate (26.5% expected, > good for currency.)
9:30am GBP Prelim GDP (0.1% expected, > good for currency.)
1:30pm USD Unemployment Claims (352K expected, > good for currency.)
3:00pm USD Treasury Sec Lew speaks (hawkish = good for currency.)
11:45pm NZD Trade Balance (472M expected, > good for currency.)

Friday, April 26th

12:30am JPY Tokyo Core CPI (-0.4% expected, > good for currency.)
12:30am Tentative JPY Monetary Policy Statement (hawkish = good for currency.)
12:30am Tentative JPY Overnight Call Rate Decision (<0.10% expected, > good for currency.)
7:00am JPY BOJ Outlook Report (hawkish = good for currency.)
7:00am Tentative JPY BOJ Press Conference (hawkish = good for currency.)
8:00am CHF KOF Economic Barometer (0.98 expected, > good for currency.)
9:00am CHF SNB Chairman Jordan speaks (hawkish = good for currency.)
9:00am EUR M3 Money Supply (3.0% expected, > good for currency.)

Technical Forecast and Levels to Watch for the Majors This Week

EURUSD: Mildly Lower

Resistance:

Initial: 1.3106, 1.3126/61, 1.3199/1.3201, 1.3224, 1.3251/99, 1.3305/08, 1.3318/21, 1.3353, 1.3376/85, 1.3398/1.3403, 1.3433/34 and 1.3478/95.

Above: 1.3519, 1.3544/46, 1.3568, 1.3597, 1.3614, 1.3710, 1.3795/98, 1.3836, 1.3969, 1.4000, 1.4246, 1.4500/17, 1.4695 and 1.4939.

Support:

Initial: 1.3047, 1.3036/39, 1.3018/22, 1.3009/10, 1.3000, 1.2990, 1.2946/66, 1.2904/19, 1.2801/79, 1.2799, 1.2744/54, 1.2623/92, 1.2588/89, 1.2501/19, 1.2407/96, 1.2381/91, 1.2323/33 and 1.2241/55.

Below: 1.2162, 1.2143, 1.2133, 1.2041 and 1.1938.

USDJPY: Mildly Lower

Resistance:

Initial: 99.50, 99.60/68 and 99.87/94.

Above: 101.43, 108.42 and 110.47.

Support:

Initial: 98.87, 98.08, 97.83, 97.79, 96.65/70, 96.55, 96.05, 95.79, 95.44, 94.90/95.07, 94.55, 94.05/19, 93.76, 93.68, 93.50, 93.17, 92.77/95, 92.14/30, 91.19, 90.85, 90.20/32, 89.40/66, 88.05, 87.95/99 and 87.79.

Below: 87.11/13, 86.63, 85.92, 85.51, 84.09/80, 83.85/96, 83.01, 82.53/82.83 and 82.01/22.

GBPUSD: Lower

Resistance:

Initial: 1.5260/93, 1.5334, 1.5362, 1.5375/92, 1.5403, 1.5410, 1.5458/99, 1.5514/16, 1.5545/1.5601, 1.5624/50, 1.5673, 1.5685/92, 1.5714, 1.5781, 1.5803/07, 1.5825, 1.5844, 1.5874/77 and 1.5886/90.

Above: 1.5900/27, 1.5961, 1.5975/91, 1.6001/08, 1.6051/66, 1.6077, 1.6083/96, 1.6109/16, 1.6130/51, 1.6151/54 and 1.6177/98.

Support:

Initial: 1.5208/23, 1.5198, 1.5175/87, 1.5152, 1.5130, 1.5123, 1.5092, 1.5081, 1.5072, 1.5026/32, 1.4985, 1.4966/67, 1.4884, 1.4872, 1.4830 and 1.4785.

Below: 1.4345 and 1.4232.

AUDUSD: Higher

Resistance:

Above: 1.1010, 1.1064 and 1.1079.

Support:

Initial: 1.0255/66, 1.0226, 1.0201, 1.0181/82, 1.0165/77, 1.0148/51, 1.0114/17, 1.0099/1.0100 and 1.0052.

Below: 1.0000/18, 0.9925/83, 0.9900, 0.9849/96, 0.9794, 0.9732, 0.9620/89, 0.9585, 0.9536/41, 0.9500 and 0.9486.

USDCAD: Mildly Lower

Resistance:

Initial: 1.0283, 1.0293/94, 1.0302/1.0311, 1.0334/37, 1.0341, 1.0353/61, 1.0415/81, 1.0500, 1.0506 and 1.0522.

Above: 1.0646/56, 1.0669 and 1.0742/85.

Support:

Initial: 1.0262, 1.0255, 1.0249, 1.0233/35, 1.0199/1.0226, 1.0178/82, 1.0172, 1.0142, 1.0128, 1.0103/05, 1.0082/99, 1.0056, 1.0029/34, 1.0018, 0.9993/98, 0.9984, 0.9969, 0.9945/60, 0.9931, 0.9922, 0.9902/07, 0.9899, 0.9858, 0.9814/26 and 0.9724/99.

Below: 0.9686, 0.9645, 0.9631, 0.9525, 0.9445 and 0.9405.

NZDUSD: Higher

Resistance:

Initial: 0.8425/47, 0.8459, 0.8472/77, 0.8487/89, 0.8504/08, 0.8532, 0.8571, 0.8605, 0.8641 and 0.8671/74.

Above: 0.8764 and 0.8840.

Support:

Initial: 0.8405/06, 0.8394/96, 0.8387, 0.8376, 0.8362/65, 0.8322/50, 0.8312, 0.8237/95, 0.8221/24, 0.8204/14, 0.8172/95, 0.8160/63, 0.8121/53, 0.8078/0.8109, 0.8030/52 and 0.8013.

Below: 0.7996, 0.7906/66, 0.7804/88, 0.7783/95, 0.7723, 0.7605/76 and 0.7500/85.

Weekly Forex Market Followup (April 15th - April 19th 2013)

Fri, 19 Apr 2013 12:34:08 -0400

Key Fundamental Forex Events for the Week of April 15th through April 19th

The following table lists the key economic data and other events that came out during the week of April 15th through April 19th, with release times displayed for the GMT time zone.

Monday, April 15th

1:30am JPY BOJ Governor Kuroda said that, "Our financial system is stable overall, and monetary conditions are accommodative”. The currency rose.
3:00am CNY GDP 7.7% versus 8.0% expected.
7:15am JPY BOJ Governor Kuroda said that, "A decline in risk aversion among global investors and expectations for domestic policy are helping markets improve.” The currency rose.

Tuesday, April 16th

2:30am AUD Monetary Policy Meeting Minutes noted that, "Most major currencies continued their recent trends. The Japanese yen depreciated further against the US dollar as the new Governor of the Bank of Japan stated that the central bank would do ‘whatever it can’ to achieve the new inflation target of 2 per cent. The euro had depreciated against the US dollar as a result of developments in Cyprus, while better-than-expected domestic economic data saw the Australian dollar reach its highest level on a trade-weighted basis since early 1985." The currency rose.
9:30am GBP CPI 2.8%, as expected. The currency rose.
9:30am GBP PPI Input -0.1% versus -0.3% expected. The currency rose.
10:00am EUR German ZEW Economic Sentiment survey 36.3 versus 41.5 expected. The currency fell.
1:30pm CAD Manufacturing Sales 2.6% versus 0.6% expected. The currency rose.
1:30pm USD Building Permits 0.90M versus 0.94M expected. The currency fell.
1:30pm USD Core CPI 0.1% versus 0.2% expected. The currency fell.
2:00pm EUR ECB President Draghi said that, "Following two years of recovery, the euro area moved into recession in 2012. Unemployment has reached unprecedented levels, especially among young people. This economic weakness was driven by declining private consumption and faltering investment, in an environment of weak business and consumer confidence and financial market tensions. We expect a gradual recovery in euro area economic activity for the second half of this year. But this scenario is subject to downside risks." The currency fell.
11:45pm NZD CPI 0.4% versus 0.5% expected. The currency rose.

Wednesday, April 17th

9:30am GBP Claimant Count Change -7.0K versus 0.0K expected. The currency fell.
9:30am GBP MPC Meeting Minutes vote: 0-0-9, as expected. The minutes noted that, "There had been further evidence of a gradual recovery in global growth, with early signs that both world trade and investment had picked up a little in the first quarter. But the pattern of that growth remained uneven, with a lack of momentum in the euro area contrasting with a stronger outlook for the United States and much of Asia." The currency fell.
3:00pm CAD BOC Monetary Policy Report noted that, "Commodity prices received by Canadian producers remain elevated by historical standards and, overall, they are little changed since January. The Bank expects global economic activity to grow modestly in 2013 before strengthening over the following two years." The currency fell.
3:00pm CAD BOC Rate Statement noted that, "Following a weak second half of 2012, growth in Canada is projected to regain some momentum through 2013 as net exports pick up and business investment returns to more solid growth." The currency fell.
3:00pm CAD Overnight Rate 1.00%, as expected. The currency fell.
4:15pm CAD BOC Press Conference: BOC Governor Mark Carney said that, "Both total and core inflation are expected to remain subdued in coming quarters before gradually rising to 2 per cent by mid-2015 as the economy returns to full capacity, the special factors that are weighing on core inflation subside, and inflation expectations remain well-anchored. Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent." The currency fell.

Thursday, April 18th

8:44am EUR Spanish 10-Year Bond Auction 4.61 average yield and 2.6 bid to cover ration versus last 4.48 yield and 2.1 bid to cover ratio. The currency rose.
9:30am GBP Retail Sales -0.7% versus -0.3% expected. The currency rose.
1:30pm USD Weekly Initial Jobless Claims 352K versus 347K expected. The currency fell.
3:00pm USD Philly Fed Manufacturing Index 1.3 versus 3.1 expected. The currency fell.
4:00pm CAD BOC Governor Carney said that, "The U.S. is moving towards that class of advanced economies that has well-functioning financial systems, private credit is growing now". The currency rose.
Day 1 ALL G20 Meetings: BOJ Governor Kuroda said that, "In general, I don't see signs of asset price bubbles brewing in emerging economies as a result of the monetary easing steps of advanced nations. It's true that the massive monetary stimulus of advanced economies may affect emerging economies including through capital inflows ... Such spill-over effects had been discussed even before the G20 meeting, and will likely be on the agenda at (this week's) meeting too."
5:00pm USD FOMC Member Raskin said that, "I will argue that at the start of this recession, an unusually large number of low- and middle-income households were vulnerable to exactly the types of shocks that sparked the financial crisis. These households, which had endured 30 years of very sluggish real-wage growth, held an unusually large share of their wealth in housing, much of it financed with debt." The currency fell.

Friday, April 19th

7:00am EUR German PPI -0.2% versus 0.2% expected. The currency rose.
9:00am EUR Current Account 16.3B versus 13.9B expected. The currency rose.
1:30pm CAD Core CPI 0.2%, as expected. The currency rose.
1:30pm CAD CPI 0.2% , as expected. The currency rose.
1:30pm CAD Wholesale Sales 0.0% versus 0.5% expected. The currency rose.
Day 2 ALL G20 Meetings: IMF Managing Director Christine Lagarde said that, "(The) Cyprus resolution is not a template. And the way in which the two largest banks of Cyprus and the rest of the banking system has been restructured in the way it has, and in the way it should have been, is not a template for other countries, if only because the situation of Cyprus is extremely specific for all sorts of reasons."

Technical Recap for the Majors This Week

EURUSD:

Forecast: Mildly Lower
Actual: Mildly Lower from a 1.3107 open to a 1.3088 close.

USDJPY:

Forecast: Mildly Lower
Actual: Mildly higher from a 98.34 open to a 99.26 close.

GBPUSD:

Forecast: Lower
Actual: Mildly lower from a 1.5337 open to a 1.5263 close.

AUDUSD:

Forecast: Higher
Actual: Lower from a 1.0500 open to a 1.0311 close.

USDCAD:

Forecast: Mildly Lower
Actual: Higher from a 1.0141 open to a 1.0259 close.

NZDUSD:

Forecast: Higher
Actual: Lower from a 0.8569 open to a 0.8445 close.

The Euro is channel-bound until GDP growth for the region improves

Wed, 17 Apr 2013 15:11:22 -0400

It may be difficult to believe, but May will mark the three-year anniversary of the European Debt Crisis, or at least the point at which it exploded on the international financial scene. It has been stealing headlines ever since. The vaunted Euro, the combined currency experiment for the region, had soared to the heavens after its inception, cresting at $1.60 when parity with the greenback was the initial goal. In hindsight, currency experts have decried the over-valued nature of the Euro, but it has continued to maintain its lofty position, hovering near a general average of $1.30 of late.

Why has the Euro’s valuation confounded even the experts? While fundamentals drive market valuations, two key parameters remain hidden away in the shadows, but the forces they wield in currency markets have been enough to stall gravity in its tracks and keep the Euro floating on a healthy cushion of hot air. A constantly weakening U.S. Dollar, coupled with the effects of globalization, has re-shaped capital flow dynamics across the globe.

Whenever the Euro appeared ready to fall, foreign exchange reserve managers would quickly buy more Euros or European corporations would repatriate more profits from overseas for security reasons, both actions increasing market demand for the currency. The result has been that the Euro has tended to form frequent range-bound channels, similar to the one depicted in the diagram below:

Over the past eighteen months, three distinct downward channels have formed, including the one above that began at the end of January. An hourly chart is presented here, but some analysts would contend that monthly charts all the way back to 2009 would also illustrate this same propensity to form elongated downward channels, as the Euro inexorably fell from grace. Central bankers and corporations can only do so much to stem the tide of true economic fundamentals, and the key element missing from the European scenario is sustained GDP growth well above the accepted 2% benchmark.

In the latest bout with gravity, finance officials in Europe have had to assemble a bailout package for little Cyprus, an island nation faring no better than Greece in many economic respects. The recent dip below and then subsequent rise above its 100-Day EMA reflects the beginning and ending for this latest crisis. At present, the Euro rests snugly below $1.31, a ceiling of resistance that will persist in the absence of positive economic results on a sustained basis.

What is the major roadblock in Europe? Many economists have suggested that the Euro may be the biggest hurdle standing in the way of progress. A combined currency may work well for countries with a strong economic base, but for weaker members that depend on tourism and exports, a weaker currency unit is a necessity. Many look to the European Central Bank (“ECB”) to make this necessity a reality.

Mario Draghi, the head of the ECB, has made public pronouncements to this effect, but there is only so much that the central a bank can do. In a public speech this week, Draghi lamented that the ECB “can't do everything for everyone at any time.” He and his cohorts have expanded the money supply and reduced interest rates to all time lows to add liquidity to credit markets, but credit was still not flowing freely to small and medium-sized enterprises. Bankers remain transfixed on risk and their own survival.

This same issue has plagued Japan for decades. The West has yet to find the magic formula to right the ship, as well, but substantial GDP growth is badly needed on both sides of the Atlantic.

This has been a special report by the team at forextraders.com

EURCAD OUTLOOK II: 15 - 19 APRIL

Mon, 15 Apr 2013 12:58:07 -0400

After half a decade of recession, the Eurozone’s economy is still wobbling on its wheels and trying hard not to disintegrate due to its single currency’s problems among member nations.

Stats released by the EU last week stated that the Euro area’s industrial output for the first quarter of the year was slightly more positive than what analysts’ expected.

A marginal increase in factory production was also recorded for the same period which exceeded economists’ forecasts.

Although these are weak numbers, they are however good signs which can be attributed to an economy that is gradually finding its way out of a long and bitter recession.

Last week, the ECB President Mario Draghi stated that the bank is always alert to data showing signs of economic deterioration where rates will have to be reduced further.

He also said the bank is looking to increase growth through “both standard and non-standard measures.”

As stated above, the good news is that data reports signify that the economic decline of the past few years is now back on the rise. GDP is also expected to drop for the first quarter before picking up as the year progresses.

Meanwhile, Bank of Canada is scheduled to hold its monthly policy meeting on Wednesday this week. Economists surveyed all expect that its 1% overnight rate will be left untouched.

“The Canadian economic landscape remains frustrating as the expected rotation from consumer spending/housing/government spending towards external trade/capital spending is sputtering,” according to the BoC.

Minutes of its policy meeting for March 6 expressed optimism that the economy will improve through the year as it aims for 2% annual growth.

From the 4-hour chart, watch out for a break of 1.3316 at 100.0% fib level to buy, or a drop to 1.3135 for a fresh long towards 1.35.

Weekly Forex Market Forecast (April 15th - April 19th 2013)

Mon, 15 Apr 2013 09:57:33 -0400

Key Fundamental Forex Events and Forecasts for the Coming Week

The following table lists the key economic data and other events that are due out during the week of April 15th – April 19th, with release times displayed for the GMT time zone.

The list also includes the current market consensus forecast for each event and indicates what sort of deviation might affect the forex market valuation of the indicated currency positively.

Monday, April 15th

1:30am JPY BOJ Governor Kuroda Speaks (hawkish = good for currency)
3:00am CNY GDP (8.0% expected, > good for currency)
7:15am JPY BOJ Governor Kuroda Speaks (hawkish = good for currency)

Tuesday, April 16th

2:30am AUD Monetary Policy Meeting Minutes (hawkish = good for currency)
9:30am GBP CPI (2.8% expected, > good for currency)
9:30am GBP PPI Input (-0.3% expected, > good for currency)
10:00am EUR German ZEW Economic Sentiment survey (41.5 expected, > good for currency)
10:00am Tentative GBP BOE Inflation Letter (hawkish = good for currency)
1:30pm CAD Manufacturing Sales (0.6% expected, > good for currency)
1:30pm USD Building Permits (0.94M expected, > good for currency)
1:30pm USD Core CPI (0.2% expected, > good for currency)
2:00pm EUR ECB President Draghi Speaks (hawkish = good for currency)
11:45pm NZD CPI (0.5% expected, > good for currency)

Wednesday, April 17th

9:30am GBP Claimant Count Change (0.0K expected, < good for currency)
9:30am GBP MPC Meeting Minutes (vote: 0-0-9 expected, hawkish = good for currency)
3:00pm CAD BOC Monetary Policy Report (hawkish = good for currency)
3:00pm CAD BOC Rate Statement (hawkish = good for currency)
3:00pm CAD Overnight Rate (1.00% expected, > good for currency)
4:15pm CAD BOC Press Conference (hawkish = good for currency)

Thursday, April 18th

9:30am GBP Retail Sales (-0.3% expected, > good for currency)
9:30am Tentative EUR Spanish 10-Year Bond Auction (hawkish = good for currency)
1:30pm USD Weekly Initial Jobless Claims (347K expected, < good for currency)
3:00pm USD Philly Fed Manufacturing Index (3.1 expected, > good for currency)
4:00pm CAD BOC Governor Carney Speaks (hawkish = good for currency)
Day 1 ALL G20 Meetings (hawkish = good for currency)
5:00pm USD FOMC Member Raskin Speaks (hawkish = good for currency)

Friday, April 19th

7:00am EUR German PPI (0.2% expected, > good for currency)
9:00am EUR Current Account (13.9B expected, > good for currency)
1:30pm CAD Core CPI (0.2% expected, > good for currency)
1:30pm CAD CPI (0.2% expected, > good for currency)
1:30pm CAD Wholesale Sales (0.5% expected, > good for currency)
Day 2 ALL G20 Meetings (hawkish = good for currency)
5:00pm USD FOMC Member Stein Speaks (hawkish = good for currency)

Technical Forecast and Levels to Watch for the Majors This Week

EURUSD: Mildly Lower

Resistance:

Initial: 1.3126/61, 1.3224, 1.3251/99, 1.3305/08, 1.3318/21, 1.3353, 1.3376/85, 1.3398/1.3403, 1.3433/34 and 1.3478/95.

Above: 1.3519, 1.3544/46, 1.3568, 1.3597, 1.3614, 1.3710, 1.3795/98, 1.3836, 1.3969, 1.4000, 1.4246, 1.4500/17, 1.4695 and 1.4939.

Support:

Initial: 1.3106, 1.3047, 1.3036/39, 1.3018/22, 1.3009/10, 1.2990, 1.2946/66, 1.2904/19, 1.2801/79, 1.2799, 1.2744/54, 1.2623/92, 1.2588/89, 1.2501/19, 1.2407/96, 1.2381/91, 1.2323/33 and 1.2241/55.

Below: 1.2162, 1.2143, 1.2133, 1.2041 and 1.1938.

USDJPY: Mildly Lower

Resistance:

Initial: 98.87, 99.50, 99.60/66 and 99.87/94.

Above: 101.43, 108.42 and 110.47.

Support:

Initial: 98.08, 97.83, 97.79, 96.65/70, 96.55, 96.05, 95.44, 94.90/95.07, 94.55, 94.05/19, 93.76, 93.68, 93.50, 93.17, 92.77/95, 92.14/30, 91.19, 90.85, 90.20/32, 89.40/66, 88.05, 87.95/99 and 87.79.

Below: 87.11/13, 86.63, 85.92, 85.51, 84.09/80, 83.85/96, 83.01, 82.53/82.83 and 82.01/22.

GBPUSD: Lower

Resistance:

Initial: 1.5362, 1.5375/92, 1.5403, 1.5410, 1.5458/99, 1.5514/16, 1.5545/1.5601, 1.5624/50, 1.5673, 1.5685/92, 1.5714, 1.5781, 1.5803/07, 1.5825, 1.5844, 1.5874/77 and 1.5886/90.

Above: 1.5900/27, 1.5961, 1.5975/91, 1.6001/08, 1.6051/66, 1.6077, 1.6083/96, 1.6109/16, 1.6130/51, 1.6151/54 and 1.6177/98.

Support:

Initial: 1.5334, 1.5267/93, 1.5260, 1.5247, 1.5238, 1.5232, 1.5208, 1.5198, 1.5175/87, 1.5152, 1.5130, 1.5123, 1.5092, 1.5081, 1.5072, 1.5026/32, 1.4985, 1.4966/67, 1.4884, 1.4872, 1.4830 and 1.4785.

Below: 1.4345 and 1.4232.

AUDUSD: Higher

Resistance:

Initial: 1.0508/28, 1.0561/66, 1.0572/84, 1.0596/1.0638, 1.0654, 1.0668/86, 1.0751/53, 1.0792/98 and 1.0842/54.

Above: 1.1010, 1.1064 and 1.1079.

Support:

Initial: 1.0457/98, 1.0440, 1.0418/20, 1.0413, 1.0402, 1.0392/96, 1.0385, 1.0354/74, 1.0319/47, 1.0300/03, 1.0280/92, 1.0255/66, 1.0226, 1.0201, 1.0181/82, 1.0165/77, 1.0148/51, 1.0114/17, 1.0099/1.0100 and 1.0052.

Below: 1.0000/18, 0.9925/83, 0.9900, 0.9849/96, 0.9794, 0.9732, 0.9620/89, 0.9585, 0.9536/41, 0.9500 and 0.9486.

USDCAD: Mildly Lower

Resistance:

Initial: 1.0142, 1.0172, 1.0178/82, 1.0199/1.0226, 1.0233/35, 1.0249, 1.0255, 1.0262, 1.0283, 1.0294, 1.0302/1.0311, 1.0334/37, 1.0341, 1.0353/61, 1.0415/81, 1.0500, 1.0506 and 1.0522.

Above: 1.0646/56, 1.0669 and 1.0742/85.

Support:

Initial: 1.0128, 1.0103/05, 1.0082/99, 1.0056, 1.0029/34, 1.0018, 0.9993/98, 0.9984, 0.9969, 0.9945/60, 0.9931, 0.9922, 0.9902/07, 0.9899, 0.9858, 0.9814/26 and 0.9724/99.

Below: 0.9686, 0.9645, 0.9631, 0.9525, 0.9445 and 0.9405.

NZDUSD: Higher

Resistance:

Initial: 0.8605, 0.8641 and 0.8671/74.

Above: 0.8764 and 0.8840.

Support:

Initial: 0.8571, 0.8532, 0.8504, 0.8487, 0.8472/77, 0.8459, 0.8425/47, 0.8405/27, 0.8394/96, 0.8387, 0.8362/65, 0.8322/50, 0.8312, 0.8237/95, 0.8221/24, 0.8204/14, 0.8172/95, 0.8160/63, 0.8121/53, 0.8078/0.8109, 0.8030/52 and 0.8013.

Below: 0.7996, 0.7906/66, 0.7804/88, 0.7783/95, 0.7723, 0.7605/76 and 0.7500/85.

Weekly Forex Market Followup (April 8th - April 12th 2013)

Fri, 12 Apr 2013 12:16:46 -0400

Key Fundamental Forex Events for the Week of April 8th through April 12th

The following table lists the key economic data and other events that came out during the week of April 8th through April 12th, with release times displayed for the GMT time zone.

Monday, April 8th

12:50am JPY Current Account 0.00T versus 0.46T expected. The currency fell.
2:30am AUD ANZ Job Advertisements -1.5% versus last 3.0%. The currency rose.
11:00am EUR German Industrial Production 0.5% versus 0.4% expected. The currency rose.
3:30pm CAD BOC Business Outlook Survey noted that, "The balance of opinion on investment is positive but has declined, and hiring intentions are little changed. Firms indicated that uncertainty continues to weigh on their plans and decisions." The currency rose.

Tuesday, April 9th

12:00am NZD NZIER Business Confidence 23 versus last 20. The currency rose.
12:15am USD Fed Chairman Bernanke said that, "The results of the most recent stress tests and capital planning evaluations continue to reflect improvement in banks' condition. For example, projected aggregate loan losses under this year's most stressful scenario (the so-called severely adverse scenario) were 7 percent lower than the comparable figure last year, in part because the riskiness of banks' portfolios continues to decline." The currency fell.
2:30am CNY CPI 2.1% versus 2.5% expected.
8:15am CHF CPI 0.2% versus 0.3% expected. The currency rose.
9:30am GBP Manufacturing Production 0.8% versus 0.4% expected. The currency rose.
1:30pm CAD Building Permits 1.7% versus 5.3% expected. The currency rose.

Wednesday, April 10th

1:30am AUD Westpac Consumer Sentiment -5.1% versus last 2.0%. The currency rose.
Tentative CNY Trade Balance -0.9B versus 15.2B expected.
7:45am EUR French Industrial Production 0.7% versus 0.6% expected. The currency fell.
3:30pm USD Crude Oil Inventories 0.3M versus last 2.7M. The currency rose.
6:00pm USD 10-Year Bond Auction: 1.8 average yield versus last 2.03 percent average yield, with a 2.8 bid to cover ratio versus last 3.2.
7:00pm USD FOMC Meeting Minutes noted that, "The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction."
7:00pm USD Federal Budget Balance -106.5B versus last -203.5B.
11:30pm NZD Business NZ Manufacturing Index 53.4 versus last 56.3 expected. The currency rose.

Thursday, April 11th

12:50am JPY Core Machinery Orders 7.5% versus 6.9% expected. The currency was unchanged.
2:00am AUD MI Inflation Expectations 2.2% versus 2.3% expected. The currency was unchanged.
2:30am AUD Employment Change -36.1K versus -7.2K expected.
2:30am AUD Unemployment Rate 2.4% versus 5.4% expected.
9:00am EUR ECB Monthly Bulletin noted that, "Although the global recovery remains muted, diverse across economic regions and fragile, signs of renewed growth momentum have begun to emerge in recent months. Global financial market conditions have continued to improve, while survey indicators have been signaling a sustained pick-up in business sentiment." The currency rose.
1:30pm CAD NHPI 0.2% versus 0.3% expected. The currency rose.
1:30pm USD Weekly Initial Jobless Claims 346K versus 362K expected. The currency fell.
1:30pm USD FOMC Member Bullard said that, "Although economic inclusion or "financial inclusion" cannot be guaranteed, the Federal Reserve System can be a positive force in providing opportunities and knowledge that can help families and communities find ways to more fully participate in the economic success of the nation."
1:30pm USD Import Prices -0.5% versus -0.4% expected.
2:00pm GBP MPC Member Tucker spoke. No text was released by the BOE. The currency rose.

Friday, April 12th

All Day EUR Eurogroup Meetings. Eurogroup President Jeroen Dijsselbloem said that, "And it is our joint mission, in the Eurozone, to speed up the economic pace so the present generation will have once again opportunities in their professional careers. In both the causes of the crisis and the way we rebalance our economies we share a lot of similarities throughout the European Union." The currency fell.
1:30pm USD Core Retail Sales -0.4% versus 0.2% expected. The currency fell.
1:30pm USD PPI -0.6% versus -0.1% expected.
1:30pm USD Retail Sales -0.4% versus 0.0% expected.
2:55pm USD Preliminary University of Michigan Consumer Sentiment 72.3 versus 78.8 expected.
5:30pm USD Fed Chairman Bernanke has not yet spoken.

Technical Recap for the Majors This Week

EURUSD:

Forecast: Mildly Higher
Actual: Mildly Higher from a 1.2991 open to a 1.3090 close.

USDJPY:

Forecast: Higher
Actual: Mildly higher from a 98.28 open to a 98.92 close.

GBPUSD:

Forecast: Mildly Higher
Actual: Mildly higher from a 1.5327 open to a 1.5369 close.

AUDUSD:

Forecast: Mildly Higher
Actual: Higher from a 1.0369 open to a 1.0490 close.

USDCAD:

Forecast: Mildly Lower
Actual: Mildly lower from a 1.0167 open to a 1.0135 close.

NZDUSD:

Forecast: Higher
Actual: Mildly higher from a 0.8414 open to a 0.8556 close.

Trading with Cyprus Brokers. Is It Safe?

Wed, 10 Apr 2013 04:47:51 -0400

What exactly is happening in Cyprus and how does it affect investors?

At this point the final details of the Cyprus bailout are still being hashed out. What has been revealed is that the two largest Cyprus banks- Laiki Bank and Bank of Cyprus- made some poor investment choices (specifically, they invested in Greek Bonds shortly before Greece ran out of funds. In the Greek bailout settlement, investors were only given 25% of the bond value.) Between the two banks, this resulted in a loss of roughly 4.5 billion Euros. This was a greater loss than they were able to handle and still be able to operate as a fully functional banking institution. In an effort to ward off a complete crash in the Cyprus banks, the Cypriot government turned to the European Union for help: the International Monetary Fund, the European Commission and the European Central Bank. The requested bailout amount is 10 billion euros.

As part of the agreement to receive the bailout, Cyprus will be required to make a series of reforms. It is in these reform directives that the confusion for investors emerges. Only accounts under €100,000 are protected and insured. Accounts with amounts above €100,000 are subject to the Cypriot government confiscating possibly as high as 60-80% of each account to reach the 5.8 billion Euro mark it needs as part of the bailout settlement.

It is required by most regulators, including CySec, that brokers keep their operating capital and their trader’s funds in separate accounts. Which brings up two questions: how much operating capital will the broker lose? And, are the trader’s funds all in one collective account - which will surely rise well above the €100,000 mark?

These are very good questions and they are, no doubt, the center of the issue for traders looking to invest with Cyprus based brokers. It is important to note that while many Forex and Binary Options Brokers are based in Cyprus... Their money is not. Typically, brokers keep minimal funds in Cyprus banks and disperse the remaining working capital and trader’s accounts between much larger banks within the EU. It is important to note that we say "many" and "typically" but not all. So the most important question you need to ask any broker you work with right now is - where are the funds kept?

The situation in Cyprus has brought up some very good questions. For Instance: How do you know if your money is safe? With all this talk of governments swooping in and taking large portions of bank deposits (Possibly as high as 60-80%) how is one to know if:

Their current funds are protected and
Their future funds will be secure?

ForexTraders.com recommends several Forex and Binary Options brokers who are based in Cyprus. To help you, we went straight to those brokers and found the answers to some of the toughest questions for you:

These are the answers we received from the brokers who responded:

Forex Brokers:

Markets.com:

Are your trader’s funds and brokerage working capital in separate accounts? "Yes it’s a regulatory requirement we do so."
Do you have significant amounts of either your working capital or trader’s funds in Cyprus banks? "No."
If the funds are not in Cyprus banks... What banks are used? "Markets.com has deposited its own funds and those of its clients, with top-tier multinational financial institutions. The company’s funds are deposited in the most reputable and highly graded global banks, including Barclays Bank Plc, Royal Bank of Scotland Plc, Commerzbank AG and Credit Suisse."
During the freeze placed on Cyprus bank funds, were you still able to make payouts to all your traders who requested it? "Yes."
Is there anything you would like to say to traders who worry about trading with you in the future? "Regulated by the Cyprus Securities and Exchange Commission, (CySEC), under license number 092/08, Markets.com upholds the most stringent regulatory standards and maintains total transparency with the submission to CySEC of regular financial reports. Clients all over the world need to know that the brokers with whom they have accounts, actually have the funds on hand and that such funds are held with strong financial institutions. Markets.com holds itself to a higher standard - one of absolute integrity and total transparency. As such, we plan to issue a regular monthly report from KPMG that will show our clients where we hold our financial assets."

Easy-Forex:

Are your trader’s funds and brokerage working capital in separate accounts? "Yes, the accounts are segregated. So the clients’ money are held in separate accounts."
Do you have significant amounts of either your working capital or trader’s funds in Cyprus banks? "All the funds are distributed equally around different banks worldwide, so there is no one bank with significant amounts of funds."
If the funds are Not in Cyprus banks... What banks are used? "Banks in UK, Poland and Australia such as Barclays Bank and ANZ -Australia and New Zealand Banking Group Limited."
During the freeze placed on Cyprus bank funds, were you still able to make payouts to all your traders who requested it? "As soon as banks have been opened immediately the payments were processed."
Is there anything you would like to say to traders who worry about trading with you in the future? "The business is going as usual."

XEMarkets:

Are your trader’s funds and brokerage working capital in separate accounts? "Yes, XEMarkets Keeps clients’ funds segregated from our company funds, in tier 1 banking institutions and ensures that these cannot be used either by us or by our liquidity providers under any circumstances."
Do you have significant amounts of either your working capital or trader’s funds in Cyprus banks? "No."
If the funds are Not in Cyprus banks... What banks are used? "At XEMarkets our clients’ funds are our top priority. We partner with investment grade bank Barclays Bank Plc. to ensure 100% security” ~ Constantinos Cleanthous, Chief Executive Officer."
During the freeze placed on Cyprus bank funds, were you still able to make payouts to all your traders who requested it? "Yes."
Is there anything you would like to say to traders who worry about trading with you in the future? "XEMarkets ensures high operation standards by submitting regular financial reports to CySEC and to the company’s financial auditor, KPMG; and Provides retail clients with additional protection through the Investor Compensation Fund in the case of company insolvency."

Binary Options:

iOption:

iOption stated that they were completely unaffected as they only use Swiss Banks.

24Bulls

Are your trader’s funds and brokerage working capital in separate accounts? "We offer a segregated account to our traders as mandatory based on the rules and regulations of CYSEC."
Do you have significant amounts of either your working capital or trader’s funds in Cyprus banks? "No."
If the funds are Not in Cyprus banks... What banks are used? Accounts in Ireland (WGZ Bank) and in Australia."
During the freeze placed on Cyprus bank funds, were you still able to make payouts to all your traders who requested it? "Throughout the 10 days (more or less) of the Cyprus banks crises 24bulls never denied payment to any trader."
Is there anything you would like to say to traders who worry about trading with you in the future? With segregated accounts in banks in Ireland and Australia 24 Bulls has a secure future and clients’ money is safe."

EUR/AUD OUTLOOK APRIL 8 – 12, 2013

Tue, 09 Apr 2013 12:10:21 -0400

After the European Central Bank’s meeting last week with some influence from Japan’s fresh stimulus injection, EUR/AUD gained much strength to counter its recent downward trend.

The improving risk-on sentiment within the Eurozone despite the turmoil in Cyprus is largely the reason for this new bull-friendly market.

ECB President Mario Draghi did not commit to more monetary easing, which led investors to conclude that a rate reduction is not yet on the cards.

Therefore, it is expected that EURAUD will keep up with the upward run in the mean time.

To give more strength to this bullish sentiment is the fact that the Cyprus issue has been partially resolved after its government met all the strict conditions for the Troika bailout.

The Aussie Dollar is still being assailed by Foreign Direct Investment (FDI) as some of the country’s huge LNG projects are central to the FDI inflows.

In addition, real estate is also part of the FDI injections which takes advantage of Australia’s business-friendly environment.

Commercial and residential properties are doing well at the moment, giving high yields compared to the real estate sector in the other developed countries.

Further, the Aussie Dollar continues to be determined by the diversification of cash reserves from the US Dollar, Yen and Euro.

The recent retail sales data which shows increasing economic momentum, justifies the previous rate cuts carried out by the Reserve Bank of Australia.

It simply means the RBA has been eased of pressure to embark on more rate cutting exercises in the short term. Concerns due to a strong AUD are still lingering though, especially with the lack of a clear forecast within the non-investment sector of the country’s economy.

The 4-hour chart shows a clear downtrend that has now been broken and should travel all the way to the 50.0 fib level at the 1.27 area.