*EUR/USD* had a volatile time again this week with the rate rising
sharply ahead of schedule on, only to give back its gains later in the
week. The week started with the Euro trading higher after EZ CPI Flash
Estimate came out at +2.4% year on year, versus a previous reading of
+2.2%. Also, German Retail Sales declined by -0.3% month on month,
which was significantly lower than the increase of +1.9% expected.
Nevertheless, the previous number was revised upward from -2.4% to
-1.9% which neutralized its effect somewhat. In U.S. numbers on
Monday, Personal Spending increased by +0.7% month on month, edging
the consensus of a +0.6% increase, and Chicago PMI, which came out at
68.8, beating the consensus of a 65.5 print. On Tuesday, EUR/USD
continued on the upside after news that the German Unemployment Change
declined by -13K versus an expected fall of -11K, and the Eurozone
Unemployment Rate, which held steady at 10.0%. In U.S. releases, ISM
Manufacturing PMI came out at 60.8, which was significantly higher
than the 57.8 expected while ISM Manufacturing Prices also rose
substantially to 81.5 that was considerably higher than the 73.6
expected. Wednesday saw EUR/USD make its weekly high of 1.3861 before
promotion off on news that S&P had cut Ireland's credit rating to A
from A- with a warning of a further downgrade. Also weighing on the
Euro was ADP Non-Farm Payrolls showing an increase of +187K, which was
notably higher than the +148K expected. Nevertheless, the previous
number was significantly revised downward from +297K to +247K. On
Thursday, EUR/USD started a steep decline after EZ Retail Sales came
out at a disappointing -0.6% versus an expected increase of +0.6%.
Adding to the decline was the ECB keeping its benchmark Smallest Bid
Rate at 1.0% as widely expected. The disappointment came from the post
announcement remarks by ECB President Trichet referring to recent
inflationary developments in the Eurozone, "These developments have
not so far unnatural our assessment that price developments will
remain in line with price stability over the policy-significant
horizon." Also adding to the Euro's woes were U.S. Early Jobless
Claims, decreasing to 415K versus 420K that was expected; and U.S. ISM
Non-Manufacturing PMI that came out at 59.4, versus an expected print
of 57.2. On Friday, EUR/USD continued its slide, making its weekly low
of 1.3543 ahead of U.S. Non-Farm Payrolls which came out at a
disappointing +36K, considerably lower than the +138K that was
expected with the previous number revised significantly higher from
+103K to +121K, which dampened the effect. Also supporting the
Greenback was the U.S. Unemployment Rate, which dropped to 9.0% versus
9.5% that was expected. EUR/USD then rallied on small covering to
close at 1.3586 a decline of only -0.2% from its previous weekly
close. Over the weekend, at the EU Economic Summit in Brussels,
Germany led a proposal backed by France to stimulate more challenged
Eurozone economies.
*USD/JPY* started the week trading lower, only to rally sharply by the
end of the week. The rate started the week on a soft note on Monday,
despite news that Japanese Preliminary Industrial Production rose
+3.1% month on month, versus a consensus of a +2.9% rise. Also,
Japanese Housing Starts increased by +7.5% year on year that was
considerably higher than the expected increase of +4.8%. On Tuesday,
USD/JPY dropped sharply despite positive U.S. ISM Manufacturing PMI
and the Japanese Monetary Base, which declined to 5.5% year on year
from a previous reading of 7.0% with the consensus expecting 7.6%. On
Wednesday, USD/JPY reversed and started trading higher after the U.S.
ADP Non Farm Employment Change showed an increase of +187K, versus
+148K that was expected. Thursday saw the Greenback continue to
strengthen after positive U.S. Early Jobless Claims and ISM
Non-Manufacturing PMI. On Friday, USD/JPY made both its weekly high of
82.46, and weekly low of 81.09 after the Non-Farm Payrolls number
showed the U.S. economy had added only 36K jobs in December and the
U.S. Unemployment Rate, which dropped to 9.0% from 9.4%. USD/JPY then
consolidated to close at 82.12, a drop of only 6 pips on the week and
ending the week virtually unchanged.
*GBP/USD* traded sharply higher last week after a series of positive
economic releases. Cable started the week on a strong note trading
higher off of its weekly low of 1.5819 seen on Monday. The rate rose
substantially despite positive U.S. numbers and in the absence of any
significant economic releases in the U.K. On Tuesday, GBP/USD
continued sharply higher after news that the U.K. Manufacturing PMI
came out at 62.0, a confirmation high and considerably higher than the
consensus of 58.0. Also on Tuesday, U.K. Nationwide HPI dropped -0.1%
month on month, versus an expected decline of -0.3%. Cable continued
rallying on Wednesday after U.K. Construction PMI came in at 53.7,
that was considerably better than the consensus of a 49.8 print. On
Thursday, GBP/USD made its weekly high of 1.6276 after U.K. Air force
PMI came out at 54.5, substantially higher than the consensus of 51.2.
The rate then came off as positive U.S. numbers were released later in
the day. On Friday, Sterling continued promotion off despite the U.K.
Hallifax HPI increasing by +0.8%, versus -0.2% expected, and after
news the U.S. Unemployment Rate dropped to 9.0% from 9.4%. GBP/USD
then went on to close at 1.6096, an overall gain of +1.5% for the
week.
*AUD/USD* rose sharply last week after a slew of positive economic
data out of Australia. The week started on a strong note with the rate
trading higher after making its weekly low of 0.9864 seen on Monday.
In economic releases, the Australian MI Inflation Gauge increased by
+0.4% month on month, versus a previous reading of +0.2%, and Aussie
Private Sector Credit increasing by +0.2%, just slightly lower than
the 0.3% that was expected. AUD/USD continued its steep ascent on
Tuesday after Australian HPI increased by +0.7% quarter on quarter,
significantly higher than the flat reading expected. Also, the RBA
left its benchmark Cash Rate unchanged at 4.75% as widely expected.
After the rate announcement, Glenn Stevens made hawkish comments
stating that rebuilding the hurt in Queensland was "unlikely to have
a major impact on inflation" sending the rate even higher. On
Wednesday, AUD/USD consolidated after positive employment data out of
the United States and Australian HIA New Home Sales declining by -0.6%
versus a previous reading of -0.2%. On Thursday, the Aussie resumed
rallying after Australian Building Approvals increased by +8.7%,
notably higher than the +1.6% expected, with the previous number
upwardly revised to -3.9% from -4.2%. Friday saw AUD/USD make its
weekly high of 1.0199 after the RBA released its Monetary Policy
Meeting Minutes for January. In the minutes, the RBA increased its
estimates for Australian GDP growth from +3.75% to +4.25%. AUD/USD
then went on to sell off on profit taking to close at 1.0139, showing
an overall gain of +1.6% from its previous weekly close.
*USD/CAD* lost considerable impose a curfew last week despite positive
U.S. economic numbers. The rate started the week on a soft note,
trading lower off of its weekly high of 1.0056 after news that
Canadian GDP rose by +0.4% month on month, versus an increase of +0.2%
that was expected. Also out on Monday was Canadian RMPI that increased
by +4.2% month on month, that was considerably better than the
increase of +3.3% expected, and Canadian IPPI rising +0.7% month on
month edging the consensus of a 0.6% increase. On Tuesday, the rate
dropped sharply despite positive U.S. ISM Manufacturing PMI and ISM
Manufacturing Price data. The decline continued into Wednesday despite
positive U.S. employment data. On Thursday, the rate reversed and
traded higher after positive U.S. economic data. Friday saw USD/CAD
make its weekly low of 0.9830 after news that Canadian Employment
Change showed the Canadian economy had added +69.2K jobs in December,
significantly higher than the consensus of an increase of +18.9K.
Nevertheless, the Canadian Unemployment Rate increased to 7.8% versus
the consensus which expected the rate to remain at 7.6%. USD/CAD then
rallied on small covering to close the week at 0.9881, showing an
overall decline of 1.3%.
*NZD/USD* lost some impose a curfew last week after trading to new
intermediate term highs ahead of schedule in the week. The rate
started the week on a positive note despite the New Zealand Trade
Weigh showing a shortage of -250M that was considerably of poorer
quality than the -15M expected, and New Zealand Building Consents
which declined by -18.6% month on month, versus a previous increase of
+7.8% revised down from +8.8%. On Tuesday, NZD/USD continued higher
after the New Zealand Labor Cost Index increased by +0.6% quarter on
quarter, edging the consensus of a +0.5% increase. Also on Tuesday,
ANZ Commodity Prices increased by +3.8% versus a previous reading of
+2.0%. Wednesday saw NZD/USD make its weekly high of 0.7823 as the
price of gold climbed over the $1,350 level. The rate then headed
south after New Zealand Employment Change declined by -0.5% versus an
expected increase of +0.2%, and the New Zealand Unemployment Rate,
which jumped to 6.8% from 6.5%. On Thursday, the rate consolidated as
the U.S. released positive economic data. Friday saw the rate continue
its decline with NZD/USD making its weekly low of 0.7665, the rate
then rallied somewhat on spot squaring to close at 0.7684, showing an
overall decline of 0.4% from its previous weekly close.
!! The Week Ahead !!
*USD:* This week's U.S. economic calendar calms down considerably
compared with last week, and it will feature the U.S. Trade Weigh due
out on Friday. Monday starts the week out with the release of Consumer
Credit (2.2B m/m), while Tuesday has the IBD/TIPP Economic Optimism
survey (52.8) scheduled. On Wednesday, Fed Chairman Ben Bernanke will
testify before the House Budget Committee on the U.S. economic
outlook, monetary policy and fiscal policy in Washington D.C. and
Crude Oil Inventories (last 2.6M) is due out. Thursday offers the
vital Weekly Early Jobless Claims (411K), as well as Wholesale
Inventories (+0.7% m/m), Natural Gas Storage (last -189B) and the
Centralized Budget Weigh (-69.5B). Friday then features the
highlighted U.S. Trade Weigh (-40.4B), in addition to the Preliminary
University of Michigan Consumer Sentiment survey (74.6), Preliminary
University of Michigan Inflation Expectations (last +3.4%). Saturday
will end the week with a speech by FOMC Member Raskin in Park City.
*AUD:* The upcoming week's Australian economic calendar calms down
considerably compared with last week, but it will feature the closely
watched Australian Employment Report due out on Thursday. The week
starts on Monday with the release of the AIG Construction Index (last
43.8), ANZ Job Advertisements (+2.0% m/m) and Australian Retail Sales
(+0.5% m/m). Tuesday then offers the tentatively scheduled NAB
Quarterly Business Confidence survey (last 9), while Wednesday has
just the Westpac Consumer Sentiment survey (last -5.7%) due out.
Thursday features the highlighted Australian Employment Report that is
comprised of the Employment Change (+20.3K) and Unemployment Rate
(5.0%). Friday will then end the week with vital testimony by RBA
Governor Stevens in Canberra before the House of Representatives'
Standing Committee on Economics. Technically, AUD/USD broke out of its
consolidation sample to the upside last week, trading mostly higher
off a low of 0.9865 seen on Monday to a high of 1.0199 on Friday
before closing somewhat below that at 1.0139. In doing so, the rate
has broken back above the psychological parity level and the lower
support line of a key bullish standard term upward channel now drawn
at 1.0077, with another mildly rising standard term trend line
offering resistance to the rate at the 1.0274 level currently. In
addition, a shorter term rising wedge sample now seems to be forming
on the daily charts with an upper resistance line currently drawn at
1.0289 converging with a lower support line now at 0.9894.
Furthermore, last week's price action remained well above
AUD/USD's 200-day Moving Average, which now reads at 0.9350 and has
a positive slope that still indicates a bullish standard term outlook
for the pair. Furthermore, the rate's key 14-day RSI broke back
above the neutral line of the indicator and now reads in the upper
central part of neutral territory at 61 that could somewhat block
upside price action over the coming week. Early resistance for the
rate is seen at 1.0182, at 1.0199, and then above that at 1.0255.
Support for AUD/USD is indicated initially in the 1.0004/76 region
around the psychological 1.0000 parity level, and then below that in
the 0.9803/96 region, at 0.9752, 0.9622 and 0.9536.
*NZD:* The forthcoming New Zealand economic calendar calms down to
nearly nothing, and only has the FPI (last -0.8% m/m) due out on
Friday. Technically, last week's sessions saw NZD/USD trade
initially higher to its weekly peak of 0.7823 seen on Wednesday but
then come off to a weekly low of 0.7665 on Friday before closing the
week at 0.7685. Last week's price action in NZD/USD furthered its
recent upward movement and still remained above the key 61.8%
retracement level at 0.6944 of the down go from 0.8213 to the 0.4892
low of March 4th, 2009, thereby keeping the next major technical
target to the upside at the key 0.8213 high last seen on March 14th of
2008. Furthermore, the pair continues to sustain gains above the lower
support line of its slightly diverging standard term up channel that
is now drawn at the 0.7542 level, with its upper line now at 0.8494.
In addition, a longer term rising wedge sample appears on the charts
with an upper line now at 0.8067 and a lower line at 0.7481. A break
of the key lower lines of these rising patterns would be needed to
call into inquiry the rate's bullish outlook from a chart sample
perspective. Furthermore, NZD/USD continues to trade above its vital
200-day Moving Average that now comes in at 0.7323 and retains its
upward slope to yield a bullish standard term outlook for the pair.
Support for NZD/USD is now seen initially on the charts at 0.7665, and
then below that in the 0.7454/0.7575 congestion region that
encompasses the vital psychological 0.7500 level, and then in the
0.7342/85 region. Resistance shows up initially in the 0.7785/91
region and the 0.7812/72 region, and then above that at the vital
0.7973 and 0.8213 levels.
*GBP:* The U.K. economic calendar warms up a bit this coming week, and
it will feature the BOE's Rate Choice and MPC Proclamation due out
on Thursday. Monday has no notable data releases scheduled so the data
week starts on Tuesday with the featured release of the BRC Retail
Sales Monitor (last -0.3% y/y) and the RICS House Price Weigh (-38%).
Wednesday offers the BRC Shop Price Index (last 2.1% y/y) and the U.K.
Trade Weigh (-8.6B). Thursday then features the highlighted BOE Rate
Choice and associated MPC Rate Proclamation in which the central bank
is expected to leave its benchmark Official Bank rate and Asset Hold
Facility at 0.5% and 200B respectively. Thursday also has scheduled
the release of Manufacturing Production (+0.5% m/m), Industrial
Production (+0.5% m/m), and the tentatively scheduled NIESR GDP
Estimate (last +0.5%). Friday will end the week with PPI Input (+1.3%
m/m) and PPI Output (+0.4% m/m). Technically, GBP/USD traded sharply
higher ahead of schedule last week from a low of 1.5819 on Monday to a
weekly high of 1.6228 on Thursday before then coming off to close at
1.6096 on Friday. This price action succeeded in making a new recent
high and sustained a weekly close above the psychological 1.6000
level. Also, GBP/USD remained above its 200-day Moving Average that
now reads 1.5473, and the indicator's increasingly positive slope
yields a mildly bullish standard term outlook for GBP/USD.
Furthermore, last week's rally left the rate's 14-day RSI higher
within the upper part of neutral territory at 61 that may block upside
price action next week. Resistance to the topside for GBP/USD shows
initially at 1.6182, and then above that at 1.6228 and 1.6297. Support
for the pair is indicated initially in the 1.6035/58 region just ahead
of psychological support at 1.6000, and then below that at 1.5909,
1.5750 and 1.5663.
*EUR:* The upcoming Eurozone economic calendar is again reasonably
active this week, and it will feature the release of the ECB's
Monthly Bulletin on Thursday. Monday starts the data week out with the
release of Sentix Investor Confidence (14.1), German Factory Orders
(-1.4% m/m), a speech by Buba President Weber in Tallinn, and
tentatively scheduled testimony by ECB President Trichet before the
European Parliament in Brussels. Tuesday then offers the French
Government Budget Weigh (last -140.7B), the French Trade Weigh (-4.1B)
and German Industrial Production (+0.2% m/m). Wednesday has just the
German Trade Weigh (+11.8B), while Thursday features the release of
the highlighted ECB Monthly Bulletin, in addition to French Industrial
Production (-0.3% m/m), Italian Industrial Production (+0.4% m/m), and
another speech by Buba President Weber, this time in Vienna. Friday
then ends the week with German Final CPI (-0.5% m/m), German WPI
(+0.9% m/m), French Preliminary Non-Farm Payrolls (+0.2% q/q), and a
speech by ECB President Trichet in Bremen. Technically, EUR/USD rose
to a mid week high of 1.3861 last Wednesday before then giving back
its gains to hit Friday's 1.3543 low and closing the week at 1.3586.
In doing so, the rate made another fresh recent high and also
sustained gains and its weekly close above the vital 1.3500
psychological level. EUR/USD also closed the week notably above its
key 200-day Moving Average's present level of 1.3085, and when
combined with the indicator's slight positive slope, this maintains
the mildly bullish standard term outlook for the pair. Nevertheless,
although the rate's 14-day RSI flirted with overbought territory
ahead of schedule last week, that indicator then corrected to end the
week back in neutral territory at the 54 level that should not block
future price action significantly in either direction during the
coming week. Support for EUR/USD shows initially in the 1.3523/60
region, and then below that in the vital 1.3420/98 region, at 1.3395
and at 1.3314 ahead of key psychological support seen around the
1.3000 level. Resistance to the topside is seen initially at 1.3636,
and then above that at 1.3757 within the 1.3697/1.3775 congestion
region, at 1.3861 and at 1.4043.
*JPY:* The Japanese economic calendar warms up significantly this
coming week, and it will feature Japanese Core Machinery Orders due
out on Thursday. Monday will start the week off with a speech by BOJ
Governor Shirakawa in Tokyo, in addition to Leading Indicators
(101.5%). Tuesday then offers Bank Lending (-1.9% y/y), the Japanese
Current Account (+1.55T), M2 Money Stock (+2.3% y/y) and the Economy
Watchers Sentiment survey (45.6). Wednesday has scheduled Household
Confidence (40.5), Preliminary Machine Tool Orders (last 64% y/y),
while Thursday features the highlighted Core Machinery Orders (+5.2%
m/m), in addition to the CGPI (+1.4% y/y). That will end the week
since Japanese markets will close in Friday in observance of the
National Foundation Day bank holiday. Technically, last week saw
USD/JPY trade initially lower to 81.30 on Tuesday before closing above
that at 82.18 after a volatile Friday session saw first the weekly low
of 81.10 trade and then the weekly high of 82.46. Last week's price
action saw the rate again test and even briefly exceed the upper of
its declining standard term channel trend lines that is currently
drawn at the 82.35 level. A sustained break above this key line could
see USD/JPY trade sharply higher. Furthermore, if the 84.51 level is
bested during the coming weeks, then Fibonacci projection targets of
the early corrective wave upward from the major 80.24 low up to the
more recent 84.51 high of December 15th come in at 1:1=85.18, 1:1.236
= 86.19, 1:1.5 = 87.32 and 1:1.618 = 87.82. Nevertheless, the rate
continues to trade significantly below its 200-day Moving Average that
is now at 85.48, and the slope of that key indicator continues to be
quite negative, thereby still yielding a bearish standard term outlook
for the pair. Resistance for USD/JPY currently shows up initially at
82.46 ahead of the 83.37/67 congestion region, and then above that in
the 84.34/51 region and at 85.38. Early support for the rate is seen
in the 81.66/81.97 region, then below that at 81.10, at 80.91, and in
the 80.24/52 region just above key psychological support at the 80.00
level.
*CAD:* The Canadian economic calendar coming up this week is about as
active as the prior week, and it will feature the Canadian Trade Weigh
due out on Friday. The week starts on Monday with the release of vital
Canadian Building Permits data (+2.9% m/m). Tuesday then has the
closely watched Housing Starts data (171K), while Wednesday is silent.
On Thursday, the NHPI (+0.6% m/m) is due out, along with a speech by
Governing Council Member Murray in Regina. Friday then concludes the
week with the highlighted Canadian Trade Weigh data (-0.4B).
Technically, USD/CAD came off of its Monday high of 1.0057 last week
to hit its weekly and new long term low of 0.9830 on Friday before
closing the week a bit above that at 0.9882 after a volatile Friday
trading session. The rate managed to close the week below its key
psychological parity level of 1.0000, and its price action has
generally stayed below the centre point of a gradually downwards
trending channel bounded by an upper line now drawn at 1.0371 and a
lower line that now provides support at 0.9811. Nevertheless, a
descending wedge also seems to be forming within that channel that
indicates significant upside potential for the rate if the wedge
sample's declining upper line now at 1.0037 is exceeded. The rate
also stayed well below its 200-day Moving Average last week that is
now at 1.0247 and is still slightly diminishing, which suggests a
mildly bearish standard term outlook for the rate. The chart for
USD/CAD shows early resistance at 0.9951, and then above that within
the 0.9974/1.0057 congestion region around the key psychological
1.0000 level. Additional resistance appears in the 1.0145/76 region
and at 1.0208. Early support for the rate shows up in the major
0.9835/59 support region, and then below that at 0.9818, in the
0.9709/55 region and at 0.9056.
No comments:
Post a Comment