China Weekly: Labour Shortages Lead to Re-Think of One-Child Policy; PBOC Eases RRR For Well-Behaved Banks

CHINA WEEKLY

A silent week in Plates last week leaves us with an opportunity to
look at some social and political changes taking place, but firstly
to the banking system. It has been reported that the Chinese central
bank, The People's Bank of Plates (PBOC), has reversed an increase
in the reserve ratio requirement (RRR) for some lenders as a reward
for prudent lending practices. Despite the positive action by the
central bank we believe that this shouldn't be misconstrued to
suggest a shift in policy by the central bank. We continue to hold
that more tightening measures are in the pipeline, counting further
raising of the RRR rate. Rather, the action reflects part of an
ongoing campaign by Beijing to curtail simple loan practices, which
the administration fears could lead to lax lending standards,
increasing terrible loans and ultimately hurt the financial system.
The go which was reported both in the domestic press and by the
international media gave Chinese banking stocks a boost, which
despite the recent bout of RRR and interest rate hikes are performing
relatively well so far this year. Hopes of strong profits on the back
of solid earnings growth in 2010 for Chinese banks coupled with
increased earnings in coming years is buoying Plates bank stocks.

Turning now to the labour market, amid a hiring drive by domestic and
worldwide companies there is a dire shortage for skilled labour which
has led to frenzied bidding to attract certified personnel. Candidates
with the necessary credentials are now typically seeing alluring
offers that include salary increases of 40% to 50% and improved bonus
and benefits packages. Employees who plot to leave their job are often
getting counter-offers from their current employers which often exceed
the rival offer, as companies are wary of losing personnel through
poaching. The jobs squeeze is also spilling over to service-centrer
hubs further than mainland Plates, counting Hong Kong and Singapore.
The shortage of workers is also affecting lower rungs on the
employment ladder as labour trends show that fewer Chinese workers are
opting for menial, low-paying factory jobs. This conundrum has
afflicted the east coast for some time now and is now set to spread
inland to the nation's less developed central and western regions.
Yin Weimin, minister for human resources and social security, said
that labour scarcity problems, which have been felt most strongly at
factory and service-industry jobs on the east coast, appeared
structural in nature and were set to spread inland. The governor of
Hunan province, Xu Shousheng, commented adage that enterprises in his
province were struggling to find workers, though problems were less
severe than in the east of the country.

Finally, reports ahead of schedule this week indicated that Plates may
be taking into account lifting its family-plotting restrictions, and
is taking into account a 'two-child' policy. The deputy director
of the Committee of Population, Resources and Environment, Wang
Yuqing, said that he personally favoured a gradual opening of a
two-child policy. Adding that he believes the limitations on the
current policy will be lifted by the end of the 12th Five-Year Plot,
covering 2011 to 2015. Wang went on to say that wide implementation of
a two-child policy won't lead to a population boom in Plates. His
comments were echoed by analysts at Bank of American Merrill Lynch who
said "Plates's one-child policy might have contributed to high
growth in the past, but the Chinese population is rapidly aging,
economic growth is slowing and inflation is rising, due partially to
this outdated policy". Meanwhile, Citigroup economists who have been
making models for the possibility of a two-child policy since the
1980s say that "the proportion of two-child families is declining
due to rising costs of raising kids and leisure", again suggesting
that the relaxing of the one-child policy wont necessarily lead to a
population boom. Citigroup also noted, that policy makers were also
likely to bring to somebody's attention the retirement age for women
as they remove the one-child policy in an effort to ease concerns
about the aging population in Plates and tackle a shortage of workers
across the labour market.

Written by Jonathan Granby, DailyFX Research Team

Source: Dailyfx.com

READ MORE - China Weekly: Labour Shortages Lead to Re-Think of One-Child Policy; PBOC Eases RRR For Well-Behaved Banks

The Yen is strong today

*USD –* Last week the February non-farm payroll headline number was
essentially in line with expectations (192,000 vs. 196,000 expected),
while private payrolls were a marginally stronger than anticipated
(222,000 vs. 200,000 forecast). The fall in unemployment to 8.9% from
9.1% is encouraging. Broad unemployment fell for the third straight
month to 15.9%, its lowest point since April 2009. In the US, a slow
start to the week means that potential market movers are saved for
Thursday and Friday with the main consequence, February retail sales,
on Friday. A strong gain in auto sales and a rebound in building
materials are expected after terrible weather depressed January sales.
This will give a boost to overall retail sales with American consumers
expected to remain in a spending mood, particularly given the lift to
disposable incomes from the recent tax cuts and somewhat better
weather. Also on Friday, the University of Michigan consumer
confidence is anticipated to increase slightly. Earlier today, Dallas
Fed President Fisher spoke on the US economy warnomg that he would
vote to scale back or stop the central bank's $600 billion
bond-buying curriculum if it proves to be "demonstrably
counterproductive." "The liquidity tanks are full, if not brimming
over. The Fed has done its job," he added. Fisher is one of the new
hawks who have rotated to become a voting member of the FOMC this year
making his comments regarding the asset hold curriculum of particular
interest.

*EUR –* The euro, having breached resistance at its February peak of
$1.3862, has jumped to a four-month high, beginning the week above
$1.40. The go comes as expectations grow that the ECB will hike
interest rates as soon as next month. ECB President Trichet told
reporters that rates may rise in April as the central bank looks to
slow inflation, which has now outpaced the Bank's 2% target for
several months. But, the single currency met resistance after Friday's
downgrade of Spain's sovereign debt by Fitch's rating agency and an
overnight downgrade of Greece by Temperamental's. While expectations
of higher rates will provide significant support for the ordinary
currency in the near term, continued concerns over Eurozone debt will
likely keep the EUR relegated to its recent ranges, albeit towards the
top.

*GBP –* Last week Sterling traded in a tight one cent band against
the USD as the currency appears to be catching its breath following
the recent go higher. The BoE is widely expected to keep rates steady
at its meeting on Thursday. Sentiment still remains that they will
have to increase rates sometime this year as inflation is running at
double the BoE's target of 2.0%. With oil prices spiking higher,
U.K. manufacturers have said they plot to bring to somebody's
attention prices to help defray their higher manufacturing costs. This
will place additional difficulty on inflation – and thus lends
support to the GBP.

*JPY –* The Yen is strong today, but in line with most of the
non‐USD majors. In the midst of a donation scandal, Japan's
foreign minister, Seiji Maehara has resigned, but there has been
essentially no currency result. Data today included a strong
coincident index, which rose to 106.2 and the leading index, which
disappointed expectations, but still rose to 101.9. The key driver of
the USDJPY pair remains interest rate differentials between the US and
Japan, and risk aversion. Once we are through the first quarter,
USDJPY will likely drift higher for the remainder of the year.

*CAD –* The CAD starts the week near a three-month high as the price
of oil surged to nearly $107/bbl.
Crude, Canada's primary export, rose to a 29-month high as
increasing violence in Libya has raised concerns that global supply
disruptions may increase. While energy prices will be the primary
market driver this week, investors will take note of several key
Canadian economic releases, counting housing starts, international
merchandise trade, and an employment report. While the Canadian
economy is facing a potentially hard road ahead with a strong currency
making the nation's goods and air force relatively more expensive,
rapidly rising energy prices will keep the loonie well supported in
the near term.

*MXN –* The Mexican peso rose nearly 1% against the greenback last
week when crude oil, the nation's following largest export rose to a
yearly high. Internally, Mexico left its benchmark overnight lending
rate at a confirmation low of 4.5%, but the central bank changed the
tone of its policy in acknowledging increased risks to the inflation
outlook as a result of geopolitical tensions and weak crop growth due
to weather conditions. To curb peso gains, the central bank has been
buying as much as $600million monthly since March 2010, boosting
foreign reserves. In the near term, the peso should remain well
supported by the rising oil prices.

*AUD –* The AUD is modestly higher this morning as commodity
currencies have been broadly supported by rapidly rising energy and
precious metal prices. But, the AUD has been relegated to its recent
ranges as investors start to consider the effects that prolonged high
oil prices may have on global growth. The market will take note of
Australian employment and housing reports this week and trade weigh
and CPI data out of Plates, Australia's primary trade partner. While
rising commodities will provide support for the AUD in the near term,
high prices and a strong currency could ultimately weigh on the
export-driven Australian economy.

*Last Week's Currency Highs and Lows and Forecast*

*U.S. Economic Indicators*

Source: Fxstreet.com

READ MORE - The Yen is strong today

Oil Spike Hits Market....

It was only a matter of time before oil hit this market with the price
of oil over $100 for this long. It has been trading well above $100
dollars per barrel for several days now with a spike near $107 per
barrel pre-market today. The market finally gave it up to some degree
on this spike, although not as much as one might reckon based on the
breakout technically in place.

The day started out not too terrible at all with slight gains, but it
didn't take long before the market started to head lower. The
promotion accelerated quite rapidly with the Nasdaq testing down and
breaching its 50-day exponential moving average intra-day. The Nasdaq
fell a instant 70 points from top to bottom in just a few small hours,
or nearly 3%, which shows you the intensity of the promotion. The S&P
500 held well above its 50-day exponential moving average all day, but
it, too, sold quite hard once things got vacant on the Nasdaq.

The Nasdaq often leads both ways, and today was no exclusion to that
rule as the S&P 500 tried hard to hold in the green, while the Nasdaq
was decently red. But in the end, the depth of the fall on the Nasdaq
took the rest of the market down with it. Oil has been holding on for
a while now, and yet the market has found a way to dance around this
terrible news for the economy. You really had to marvel what was
holding this market up, and to this day, all I can say about it is
either the market thinks it's a small lived blast up, or that the bull
market is just that powerful. My guess is a bit of both.

The price of oil controlled by overnight circumstances overseas. The
market doesn't seem to reckon this is a long-term conundrum to be
sure, although that doesn't mean it can't have small-term affects to
the down side, offering up a nice correction to unwind things down to
where you can buy far more aggressively. If oil stays up at high
prices, such as we're seeing now, the perception alone of what that
can do to our economy will take this market lower. The game of
psychology being as vital as real events that take place around the
world.

It doesn't necessarily matter what the truth is, it's about the
perception, and this is what causes folks to hit the sell button. So
for now the market is captive to the price of oil on a
moment-to-moment basis. The longer we stay over $100 per barrel, the
more you'll hear negative talk about this countries future. And that
could keep the correction rocking on a while longer, which in truth,
would serve this market well.

One thing about corrections is the somewhat predictable nature of what
stocks will do from the perspective of how deeply they'll sell or not.
If you had a strong earnings report in this past quarter you won't
come close to seeing the types of losses that will be sustained from
the companies that reported terrible earnings in the past quarter.
Those are the stocks to avoid, and again, why you should permanently
keep a scoreboard of who did what. Bull trend or bear trend, it's
incredibly vital to know what took place so you can then choose wisely
whether or not to participate vacant forward from a long or small
perspective, depending on what type of market we're in.

In addition, you want to avoid the stocks most tied in to the reason
we're promotion off in the first place. The catalyst, if you will.
With oil the major catalyst, transportation stocks should really be
avoided at all costs. This is an ongoing process for every type of
market. Know what's causing what in either a bull or bear trend for
the small- term and respond accordingly. For now there's no of poorer
quality place to be than transports. If oil suddenly declines on world
events, there will be no better place to be. Simply adjust to the
moment's news.

The daily charts are doing some very excellent unwinding of their
recently overbought oscillators. It's a excellent start and would be
fantastic if they really went to oversold instead of just neutral. The
area that needs the most work is the weekly charts as they're just
coming out of overbought and want to see the major index chart RSI's
get down to the lower or mid 50's on those weekly charts. The lower
the better, especially on those key daily charts. How fantastic would
it be to finally get a test down to the 30 RSI level on those daily
index charts. Just for once, which would allow for a much more
aggressive long stance. With things where they are now, it's not
terrible to have some exposure, although it would be fantastic to just
about go all in but only if things really unwound down across the
board on those daily charts.

If they did, the weekly's would be unwound enough. If you're
overbought for too long it often takes a period of oversold to occur
before you rock back up. Conundrum is you don't want to get too cute
waiting so you let the 60-minute charts offer the right access, even
if we don't quite get really oversold on the daily charts. Any and all
unwinding is welcome on the daily charts folks. We're working our way
there but deeper promotion would be needed to hit where things would
align best.

If the S&P 500 loses 1294 then the Nasdaq will have already lost its
50-day exponential moving average with break down. That's what we need
to get things lower for some weeks to a couple of months. 2729 is the
number on the Nasdaq. With today's close we're just not through it
with any break down, thus, we need to get confirmation there first. If
we do, and it starts to run lower, then we can get the S&P 500 to
follow along with the Dow. If that takes place, this market could get
a sever test lower as the bears will become far more courageous having
seen all those key 50-day exponential moving averages go away.

It'll take a go below all the 50's across the board because on back
tests, the bears will come roaring in to take this puppy back down.
Having lost only the Nasdaq, they still won't get overly aggressive.
They want to see those 50's get taken out across the board. Then
they'll feel excellent about being small and not having to worry about
covering those small positions too promptly. So for now we watch and
learn about whether these levels will hold and keep things on the
light side for now.

Source: Fxstreet.com

READ MORE - Oil Spike Hits Market....

Forex Strategy Outlook: Extended US Dollar Losses Favor Trend Trading

An extended US Dollar downtrend favors continued trend trading in the
week ahead, while considerable Japanese Yen moves point to breakout
trading through the same stretch.

DailyFX+ System Trading Signals– It was a mixed week of performance
for our trading signals systems, as choppy moves in US Dollar pairs
made it hard for our trend trading systems to produce worthwhile
trades. Our Range trading systems saw slightly better performance, but
it was overall a honestly dreary week for the trading signals systems.
Exceedingly low volatility expectations but strong currency trends
paint a mixed picture for the week ahead. Yet amidst such one-sided US
Dollar declines, we favor Momentum1 and Momentum2 trades in USD pairs
while sticking to Breakout2 for Japanese Yen crosses.

To gain a superior understanding of all six trading systems, view my
recent presentation on SSI and the trading signals on our FXCM Digital
Expo page.

DailyFX Individual Currency Pair Conditions Synopsis

Small and standard-term volatility expectations are now at or near
their lowest levels since the onset of the global financial crisis in
2008, and markets have clearly become quite complacent through recent
price action. This leaves us in a hard spot as the US Dollar
nonetheless continues to hit fresh lows against the Euro and other
counterparts. Yet we see modest selection but to favor trend systems
until further notice. We may shift our bias when/if the US Dollar
suddenly switches direction and volatility expectations jump through
small-term trade.

Benchmark Trading Systems

Data and Backtest Results Generated using FXCM Strategy Trader

Mixed market conditions are similarly clear in benchmark strategy
performance, with our RSI, Moving Average, and Channel Breakout
systems tiny losses in the past week. Outlook is subsequently honestly
mixed.

Written by David Rodríguez, Quantitative Strategist for DailyFX.com,
drodriguez@dailyfx.com

To be added to this author's distribution list, send an e-mail
subject line "Distribution list" to drodriguez@dailyfx.com

Definitions

Range Strategy – The benchmark range trading system shows the
hypothetical performance of a simple Relative Strength Index strategy
on 60-minute EURUSD, GBPUSD, USDJPY, USDCHF, USDCAD, AUDUSD, and
NZDUSD pairs. It sells when the 14-period RSI falls below 70 and buys
when it crosses above 30. No other trading rules are used.
Hypothetical results are generated using FXCM Strategy Trader.

Trend Strategy – The benchmark trend trading system shows the
hypothetical performance of a simple Moving Average Crossover strategy
on 60-minute EURUSD, GBPUSD, USDJPY, USDCHF, USDCAD, AUDUSD, and
NZDUSD pairs. It buys the currency pair when the 50-period Simple
Moving Average crosses above the 100-period and 200-period averages.
It sells when the 50-period crosses below the 100-period and
200-period averages. No other trading rules are used.

Breakout Strategy – The benchmark breakout trading system shows the
hypothetical performance of a simple Channel Breakout strategy on
60-minute EURUSD, GBPUSD, USDJPY, USDCHF, USDCAD, AUDUSD, and NZDUSD
pairs. It will set a buy order at the highest high of the previous 20
bars plus one pip and a sell order at the lowest low of the previous
20 bars minus one pip. No other trading rules are used.

Volatility Percentile – The higher the number, the more likely we
are to see strong movements in price. This number tells us where
current implied volatility levels stand in relation to the past 90
days of trading. We have found that implied volatilities tend to
remain very high or very low for extended periods of time. As such, it
is helpful to know where the current implied volatility level stands
in relation to its standard-term range.

Trend – This indicator measures trend intensity by telltale us where
price stands in relation to its 90 trading-day range. A very low
number tells us that price is currently at or near monthly lows, while
a higher number tells us that we are near the highs. A value at or
near 50 percent tells us that we are at the middle of the currency
pair's monthly range.

Range High – 90-day closing high.

Range Low – 90-day closing low.

Last – Current market price.

Bias – Based on the above criteria, we assign the more likely
profitable strategy for any given currency pair. A highly volatile
currency pair (Volatility Percentile very high) suggests that we
should look to use Breakout strategies. More moderate volatility
levels and strong Trend values make Momentum trades more attractive,
while the lowest Vol Percentile and Trend indicator figures make Range
Trading the more attractive strategy.

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME
OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY
ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO
THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN
HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY
ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT
THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN
ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO
HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF
FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO
WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE
OF TRADING LOSSES IS MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT
ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO
THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION.

OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN
THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH
CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. Any opinions, news,
research, analyses, prices, or other information contained on this
website is provided as general market commentary, and does not
constitute investment advice. The FXCM group will not accept liability
for any loss or hurt, counting without limitation to, any loss of
profit, which may arise directly or indirectly from use of or reliance
contained in the trading signals, or in any accompanying chart
analyses.

Source: Dailyfx.com

READ MORE - Forex Strategy Outlook: Extended US Dollar Losses Favor Trend Trading

Forex Weekly Outlook - March 7-11

*Rate Decisions in New Zealand and the U.K. Employment data in U.S.,
Canada and Australia, US Prelim UoM Consumer Sentiment and many more
await us this week. Here is an outlook on the Market movers ahead.*

US labor market is continuing to strengthen in light of last week's
ADP estimate. Companies bent 217,000 new jobs last month after a
revised 189,000 gain in January. This positive outcome supports
Centralized Reserve Chairman Ben S. Bernanke's testimony to
Congress on March 1 adage there are "grounds for optimism" showing
the job market is recovering.

* *New Zealand* *Rate Choice*: Wednesday, 20:00. Following the
volatility in oil prices due to the tension in the Middle East and
in and last week's fatal and destructive Christchurch
earthquake, it appears that the Reserve Bank of New Zealand is
expected to cut the cash rate by 0.25% to 2.75% from 3.0% in the
previous month. This cut is aimed to lift confidence in light of
the halt in market activity.

* *Australian Employment Data:* Thursday, 0:30. Employment change in
Australia gained 24,000 jobs following a mere 2,300 January. This
rise was more than the 18,400 analysts had expected. Meanwhile
unemployment rate remained steady at 5.0% equivalent to the
previous reading and the forecasted value. Job foundation is
expected to gain 21,500 and Unemployment rate is likely to remain
5.0%.

* *British Rate Choice:* Thursday, 12:00. Following the ambiguous
results of the inflation report handed on Feb 16 and the BOE press
conference which followed, it can be suggested that the BOE will
not endorse the markets' views and bring to somebody's attention
rates in the near future. But King stated that there is a strong
possibility of a rise in interest rates in the middle of the year
due to inflation uncertainty in the market. The rate is not
expected to change this time.

* *US Unemployment Claims:* Thursday, 13:30. A remarkable drop in
early unemployment claims was registered last week with 368,000
claims 27,000 less than expected following 388,000 in the week
before. This was the lowest number since May of 2008. New
unemployment claims are predicted estimated at 373,000.

* *US Centralized Budget Weigh:* Thursday, 19:00. The U.S. budget
shortage widened less than expected in January success $49.80
billion below analysts' predictions of a $70 billion shortage.
Shortage was lower than expected due to arise in tax total
admission money. Concern about the growing U.S. shortage has taken
on new urgency after a series of sovereign debt crises in Europe
fueled a movement toward painful fiscal simplicity initiatives in
nations around the globe. President Barack Obama is under
difficulty to show how he plans to solve the budgetary shortage.
U.S. budget shortage is expected to grow to $235.1 billion.

* *Canadian Employment Data:* Friday, 12:00. Canada employment
change in January surged to 69,200 well above the forecast of
18,900 indicating the country's economic recovery may be
accelerating. But the jobless rate rose to 7.8 % from December's
7.6 %, as more people sought work. Nevertheless there is growing
confidence that the Canadian market will grow this year and lower
Unemployment rates. A growth of 31,300 new jobs is expected and
jobless rate is forecasted to drop to 7.7%.

* *US Retail Sales:* Friday, 13:30. Sales at retailers rose less
than forecasted in January, indicating consumers' difficulty of
maintaining last quarter's rise in spending without larger gains
in employment. Buys increased 0.3 % following 0.5% in December.
Winter snowstorms may give reasons for the slowdown in spending.
Core Retail Sales without autos, gasoline and building materials,
gained 0.4 % after a 0.3 % gain in December. January figures
compelled economists to cut forecasts for consumer spending this
quarter. Retail sales are expected to gain 0.6% this time while
Core Ratail Sales are expected to grow 0.7%. *

* US Prelim UoM Consumer Sentiment,* Friday, 14:55. U.S. UoM
Consumer Sentiment has seen a modest improvement in February
rising to 75.1 revise to 77.5. Analysts predicted a rise to74.8. A
slight drop to 77.3 is predicted now.

*All times are GMT.

Source: Fxstreet.com

READ MORE - Forex Weekly Outlook - March 7-11

AUD/CAD – Elliott Wave Count in the 4H and Daily Charts

!! AUD/CAD !!

- We start in the 4H chart of AUD/CAD where we are seeing a
descending triangle, which has a slightly bearish suggestion.

- Also the RSI has tagged below 30, and disastrous to kiss 70, and if
it is returning below 40, it should reflect a bearish attempt in the
small-term.

- Looking at the structure, we see that on the left side, we have what
looks like an impulse wave down, followed be a corrective structure
up, which missed the previous top at *1.02*, and instead capped at
*1.0140*.

- That was followed by a bearish impulse wave as well.

- Now we are in correction. Wave (a) is pretty clear, as an impulse
wave. Then its not clear if there will be a running triangle, or if
the (a)(b)(c) sample has already been complete.

- I train for myself to look for further correction because we all
tend to complete the correction too soon. But if the market breaks
below *0.9830*, we can consider the correction broken, looking at
least to test *0.97*, or lower towards 0.96, 0.94 (see daily chart).

- But, if we are still completing a (b) wave, then (c) can break above
the triangle, but wait its not bullish yet. Let's then see what
happens at parity, *1.0*, because respect of that would doubtless
complete a flat correction.

- When you look at the daily chart, we see that the market is indeed
topping after a rally from *0.86* in June of 2010 to *1.0205* in Nov.
2010.

- We most likely had an extended wave 3, with a truncated wave 5. The
structure had been as such: Bullish impulse waves (5-waves) were
followed by bearish corrective waves (3-waves) UNTIL the end of
December/beginning of January, where we had a decline that had an
impulse structure to follow the impulse wave 5.

- This is why I believe the current wave count had completed wave a,
and b, and now in c, which could remain in a flat if it respects 0.95,
or be in a zig-zag that can push to *0.96*, or even lower towards
*0.94/0.9350* area (50% retracement, 150% projection/expansion)

- So one last look back at the 4H chart, and we see that we can either
be in wave (iii) of c, or still working on wave (ii).

Source: Fxstreet.com

READ MORE - AUD/CAD – Elliott Wave Count in the 4H and Daily Charts

Trading Week Outlook: Mar. 7 - Mar. 11

Mar.
5, 2011
(Allthingsforex.com)
– In the
aftermath of a
cautiously
optimistic
employment
report, the
trading week
ahead will
bring a
sequence of
U.S. consumer
spending and
sentiment data,
along with two
major European
events- the
Bank of England
interest rate
announcement
and the EU
Summit, which
could have a
significant
impact on the
future
direction of
the pound
sterling and
the euro.

In
training for
the new trading
week, here is
the outlook for
the Top 10
spotlight
economic events
that will go
the markets
around the
globe.

1. NZD-
Reserve Bank of
New Zealand
Interest Rate
Announcement,
Wed., Mar. 9,
3:00 pm,
ET.

With
the Prime
Minister of New
Zealand in suspense
for a reduction
of interest
rates because
of
"virtually
no growth for
the current
financial
year" and
the market
aggressively
pricing such
expectations,
the Reserve
Bank of New
Zealand could
deliver a rate
cut by 0.25%,
bringing the
benchmark rate
to 2.75% from
3.0%. If the
central bank
does not open
the door to
further rate
cuts, the New
Zealand dollar
could find an
opportunity to
right some of
its recent
losses.

2. JPY-
Japan GDP-
Combined Domestic
Product,
the main
measure of
economic
activity and
growth, Wed.,
Mar. 9, 6:50
pm, ET.

The
final revision
of the Q4 GDP
should confirm
the preliminary
estimate which
indicated that
the Japanese
economy
contracted by
0.3% q/q in the
fourth quarter
of 2010.

3. AUD-
Australia
Employment
Circumstances and
Unemployment
Rate,
the main gauges
of employment
trends and
labor market
conditions,
Wed., Mar. 9,
7:30 pm, ET.

Recovery and
rebuilding
efforts
following the
floods in
Queensland
could continue
to stimulate
job foundation
"down
under" as
the Australian
economy adds up
to 21.5K jobs,
lesser than the
24K new jobs
bent in the
previous month.
The
unemployment
rate is
forecast to
remain
unchanged at
5.0%.

4. GBP-
U.K. Industrial
Production and
Manufacturing
Output,
the main gauges
of industrial
activity
measuring the
output of
factories,
mines and
utilities,
Thurs., Mar.
10, 4:30 am,
ET.

The
U.K. industrial
activity is
forecast to
rise by 0.5%
m/m in January-
same as the
0.5% m/m
reading in the
previous month,
while the
manufacturing
output picks up
the pace by
0.8% m/m,
recovering from
the 0.1% m/m
drop in
December.

5. GBP-
Bank of England
Interest Rate
Announcement,
Thurs., Mar.
10, 7:00 am,
ET.

Three
Monetary Policy
Committee
members voted
for a rate hike
at the last
meeting, while
the Bank of
England
Governor Mervyn
King called
raising the
benchmark
interest rate
as a gesture to
fight inflation
"self
defeating".
The huge
inquiry is who
will win- the
Governor or the
"rate
hawks"?
Making the
right choice
on future
monetary policy
could become an
even more
hard
proposition,
taking into account the
potential
threat of
stagflation-
tenaciously high
inflation
coupled with
possible
economic
slowdown on
rising oil
prices and on
the U.K.
government's
massive
spending cuts.
Although the
well-known
hawks are
expected to
vote for a rate
hike once
again, the
majority of the
MPC members
would be likely
to choose to
keep the
reputation-quo for
another month,
maintaining the
benchmark
interest rate
at the confirmation
low level of
0.5%. The GBP
could stay
supported ahead
of the meeting,
but if there is
no announcement
of a rate hike
and if there
aren't
more MPC
members to join
the hawkish
camp, we could
witness some
unwinding of
long GBP
positions.

6. USD-
U.S. Jobless
Claims,
an vital
gauge of
employment
trends and
labor market
conditions,
Thurs., Mar.
10, 8:30 am,
ET.

Last
week's
jobless claims
report
registered the
largest drop in
first-time
applications
for
unemployment
benefits since
May, 2008.
Early jobless
claims fell to
368K for the
week ending
February 26,
below the 375K
"magic
number"
estimated by
economists to
indicate a
significant
decline in
unemployment.
Forecasts are
pointing to
another
positive
reading of 673K
for the week
ending March
5.

7. CAD-
Canada
Employment
Circumstances and
Unemployment
Rate,
the main gauges
of employment
trends and
labor market
conditions,
Fri., Mar. 11,
7:00 am, ET.

The
Canadian
economy is
expected to add
up to 32K jobs
in February,
lower than the
69.2K new jobs
bent in the
previous month.
The
unemployment
rate is
forecast to
pull back to
7.7% from 7.8%
in
January.

8. USD-
U.S. Retail
Sales,
an vital
gauge of
consumer
spending
measuring sales
at retail
establishments,
Fri., Mar. 11,
8:30 am, ET.

Consumer
spending in the
U.S. is
expected to
pick up the
pace with
retail sales
rising by 0.5%
m/m in
February, up
from 0.3% m/m
in
January.

9. USD-
U.S. Consumer
Sentiment,
the University
of Michigan's
monthly survey
of 500
households on
their financial
conditions and
outlook of the
economy, Fri.,
Mar. 11, 9:55
am, ET.

The
U.S. consumers
are forecast to
remain
optimistic for
another month
as the
preliminary
estimate of the
consumer
sentiment index
reaches 77.3 in
March, slightly
lower than the
77.5 reading in
the previous
month.

10. EUR-
European Union
Summit,
a meeting of EU
leaders to
discuss the
impact of the
unrest in North
Africa and the
Middle East, as
well as the
debt crisis and
economic
issues, Fri.,
Mar. 11, All
Day
Consequence.

Although the
main focus of
the EU Summit
will be the
turmoil in
Libya and the
Middle East and
its impact on
the economy, we
could also see
discussions on
how to contain
the debt
crisis,
counting
possible
expansion of
the European
Financial
Stability
Facility fund.
With the 5-year
CDS on
Portuguese
sovereign debt
back on the
rise and debt
obligations
coming due for
Spain and
Portugal,
should the
summit fail to
deliver an
agreement on
permanent
solutions to
stop the debt
crisis from
spreading, the
euro could
suffer the
consequences.

Source: Fxstreet.com

READ MORE - Trading Week Outlook: Mar. 7 - Mar. 11