USD/CAD Technical Analysis for the Week of August 22, 2011

The USD/CAD pair had a volatile week this past week as the trading community keeps going back and forth with their risk tolerance. The oil markets have been volatile and as such – so has the USD/CAD. The shooting star from the previous week hasn’t been broken to the downside, so a sell signal never really came for this pair on the longer-term charts. The markers now are the top and bottom of that candle from the week before as a serious break of parity would be bullish, and a serious break of the 0.9750 level would be massively bearish. Watch the oil markets, they will lead the way. The more bullish oil is, the more bearish this pair is, and vice versa.

NZD/USD Technical Analysis for the Week of August 22, 2011

The NZD/USD pair fell this past week as traders sold off the “risk on” trade. The commodity currencies look vulnerable at the moment, and the Kiwi dollar is no exception. The large red candle is currently plowing into the hammer from last week, but because of that hammer, we see there will be some support at the 0.8000 level. This area is where the real battle begins. If we can get a solid close below it – we are looking to sell. However, that area does look like it could be very supportive, so we will wait for a closing bar on the daily, if not weekly to make that decision.

USD/JPY Weekly Fundamental Analysis for August 22-26, 2011

The USD/JPY pair dropped for the second week reaching its pre-intervention levels, as market jitters prevail which drove market participants to abandon higher-yielding currencies and open the door for the safe haven currencies like yen and dollar to increase against other major currencies.

The bearish bias dominated the USD/JPY pair even after the BOJ intervened in the FX market, as the current financial situation inU.S.and EU fueled more fears regarding the global recovery outlook.

Investors increased demand for safer assets as risk aversion controls the market, where the Japanese yen was the first target for investors which ignored the fact that the yen is already at its highest level against greenback.

The drop in Japanese exports affected the outlook, as the world’s third-largest economy is depending on the exports to lead the Japanese recovery.

On the other hand, the U.S. economy slowdown coupled with declining demand from China diminished any hope of recovery in Japan’s exports, which already suffer from the March 11 earthquake.

Major highlights for this week that will affect the USD/JPY pair’s trading:

Monday August 22:

The Japanese economy will release the supermarket store sales for July at 05:00 GMT, where the previous reading showed a rise of 0.1%. The convenience store sales for July will be released at 07:00 GMT, where it had a prior reading of 9.0%.

The U.S. economy will issue the Chicago Fed Activity Index for July at 12:30 GMT, where it’s expected to drop by 0.48 from the previous fall of 0.46.

Tuesday August 23:

On Tuesday at 14:00 GMT, the U.S. economy will release the new home sales for July, where the previous reading was down by 1.0% at 312 thousands and expected to rebound by 1.0% to 315 thousand.

Wednesday August 24:

The U.S. durable goods orders for July will be due at 12:30 GMT, where it’s expected to show a rise of 2.0% from the prior drop of 2.1%. On the other hand, the durable goods excluding transportations for July had a previous reading of 0.1%, and expected to drop by 0.6%.

The house price index for June will be released at 14:00 GMT, where the previous reading was up by 0.4% and expected to come at 0.2%. As for the house price purchase index for the second quarter, it had a prior reading of –2.5%.

Thursday August 25:

At 12:30 GMT, U.S. economy will issue its weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance increased 408 thousand last week.

Friday August 26:

On Friday at 23:50 GMT (Thursday), Japan will release the national consumer price index (YoY), where the previous reading was up by 0.2% and expected to show a rise of 0.1%.

The national CPI exclude fresh food for July is expected to show a drop of 0.1% from the previous rise of 0.4%, while the national CPI excluding food and energy for July is expected at –0.6% from the previous 0.1%.

The U.S. economy will release the annualized Gross Domestic Product for the second quarter at 12:30 GMT, where the previous reading showed a growth of 1.3% and expected to be revised lower to 1.1%.

The Personal Consumption for the second quarter is expected to show a rise of 0.2% from the prior reading of 0.1%, while the core PCE for the second quarter is expected to remain unrevised at 2.1%.

At 13:55 GMT, the U.S. economy will release the University of Michigan survey of consumer confidence sentiment for August, where the final reading is expected to be revised higher to 56.0 from 54.9.

USD/CHF Weekly Fundamental Analysis for August 22 – 26, 2011

The USD/CHF continued its rebound for the second week in the week ended August 19 as the ongoing monetary interventions by the SNB managed to weaken the currency against majors, including the dollar.

The SNB said it would raise sight deposits to 200 billion francs from 120 billion francs, repurchase outstanding SNB bills, and adopt foreign exchange swaps, plus it revealed that it may take further measures if needed.

On the other hand, the dollar benefited from being as safe haven currency as it advanced with the sell-off in shares on the back of the mounting concerns theU.S.would lead the world to another recession. Data from theU.S.worsened the outlook further and added to worries after the downgrade of the country’s sovereign rating in the week ended August 12.

This week, the Swiss economy will release important trade data which will show the status of exports in the month of July and how much it was affected by the franc’s appreciation.

In theU.S., the main focus will probably on GDP for the second quarter in addition to a number of important reports. The annualized GDP for the second quarter is predicted to be downwardly revised which may increase worries that the slowdown would lead theU.S.to another recession.

For this week, the release of the data will be as follows:

Monday August 22:

As of 07:00 GMT, the Swiss economy will release money supply M3 for the year ending April, yet it is expected to have slight effect on the pair’s movements, where theUSwill release some mortgage data.

Tuesday August 23:

At 06:00 GMT, the Swiss economy will release important trade data for July with exports and imports during the month as the recent reports a rise in exports despite the franc’s appreciation, where the US new home sales report for July, due at 14:00 GMT, is expected to show 1.0% advance from the prior 1.0% fall. The data is expected to be carefully watched as it will provide evidence about the status of the housing market that led to the eruption of the 2008 financial crisis.

Wednesday August 24:

As the Swiss economy lacks economic data, the main focus will be onU.S.data which are MBA mortgage applications for August 19 at 11:00 GMT followed by durable goods orders which is projected to advance 2.0% in July relative to the preceding 2.1% drop.

Thursday August 25:

Credit Suisse Zew survey (expectations) for June will be available at 09:00 GMT. For the US, initial jobless claims for the week ended August 19 and continuing claims for the week ending August 13 will be available at 12:30 GMT. The jobless data is predicted to have an impact after the previous one which showed more than expected rise in initial jobless claims.

Friday August 26:

The week ends with the release KOF Swiss leading indicator which is estimated to retreat to 1.85 in August from 2.04 a month earlier, yet the main highlight of the week will be on U.S. growth data due at 12:30 GMT. GDP annualized for the first second is predicted to be downwardly revised at 1.1% from 1.3%. At 13:55 GMT, University of Michigan confidence will show a rise to 56.0 in August from 54.9 in July, according to median forecasts.

NZD/USD Weekly Fundamental Analysis for August 22-26, 2011

The New Zealand dollar started this week with a decline after the pair gained during the past week. Kiwi failed to continue its upside movement as US economic growth slowed during the period, supporting the dollar to incline.

Still the investors are afraid from the main events that dominate the market that has negative results on the global economic growth which pushed the New Zealand currency down on concerns over a slowdown in the global economic recovery.

The NZ dollar declined against majors as expectations indicated that European debt crisis is to escalate, while fears extended over the heading into another global recession which dampened the appeal of risky assets and commodities and surely growth linked currencies as kiwi.

On the other hand, the market will continue its downside movement until cheerful data reverses the market movement to the upside.

Amid the lack of fundamental data this week especially from the New Zealand economy, the NZD/USD pair will trade according to the market sentiment this week.

Major highlights for this week that will affect the NZD/USD pair’s trading:

Monday August 22:

The U.S. economy will issue the Chicago Fed Activity Index for July at 12:30 GMT, where it’s expected to drop by 0.48 from the previous fall of 0.46.

Tuesday August 23:

New Zealand economy will release the 2-year inflation expectations index for the third quarter at 03:00 GMT where the prior reading inclined by 3.0% in the second quarter of the year.

On Tuesday at 14:00 GMT, the U.S. economy will release the new home sales for July, where the previous reading was down by 1.0% at 312 thousands and expected to rebound by 1.0% to 315 thousand.

Wednesday August 24:

At 22:45 GMT (Tuesday) the market is waiting important data from the New Zealand economy, where the economy is to present its trade data for the month of July after the recorded trade surplus of NZ$230 million in June.

Exports are expected to show an increase during July after rising to NZ$3.97 billion in June, while the nation’s imports showed NZ$3.74 billion in June.

The U.S. durable goods orders for July will be due at 12:30 GMT, where it’s expected to show a rise of 2.0% from the prior drop of 2.1%. On the other hand, the durable goods excluding transportations for July had a previous reading of 0.1%, and expected to drop by 0.6%.

The house price index for June will be released at 14:00 GMT, where the previous reading was up by 0.4% and expected to come at 0.2%. As for the house price purchase index for the second quarter, it had a prior reading of –2.5%.

Thursday August 25:

At 22:45 GMT (Wednesday) New Zealand will show report the retail sales ex. Inflation index for the second quarter after rising by 0.9% during the first quarter of the year.

At 12:30 GMT, the U.S. economy will issue its weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance increased 408 thousand last week.

Friday August 26:

The U.S. economy will release the annualized Gross Domestic Product for the second quarter at 12:30 GMT, where the previous reading showed a growth of 1.3% and expected to be revised lower to 1.1%.

The Personal Consumption for the second quarter is expected to show a rise of 0.2% from the prior reading of 0.1%, while the core PCE for the second quarter is expected to remain unrevised at 2.1%.

At 13:55 GMT, the U.S. economy will release the University of Michigan survey of consumer confidence sentiment for August, where the final reading is expected to be revised higher to 56.0 from 54.9.

GBP/USD Weekly Fundamental Analysis for August 22 – 26, 2011

The GBP/USD showed advance as the dollar weakness pushed the pair to the upside. Data from theU.S.worsened the outlook of the economy more, especially after it lost its AAA top rating in the week ended August 12. Data from theU.S.showed a drop in manufacturing and rise in jobless claims and inflation along with the slowdown seen over the recent data raised speculations theU.S.would lead the world to another recession.

On the other hand, the situation was not much better as the data released from the U.K, moved in line with the latest cut to growth outlook by the BoE. Retail sales retreated, jobless claims rose to the highest level in more than two years and inflation accelerated to 4.4% in July, causing King to write the third letter this year. In addition, MPC policy makers Dale and Weale stalled their call for increasing interest rate and joined the majority as the outlook for the economy worsens, according to August’s BoE minutes. Yet, the pound rose on technical movements and on bets theU.K.economy would recover faster than theU.S.economy.

This week, the main focus will be on growth data from both economies as investors will be eager to see whether there will be revisions to the second quarter readings to assess the extent of slowdown.

In theU.S., the annualized GDP for the second quarter is predicted to be downwardly revised which may increase worries that the slowdown would lead theU.S.to another recession, whileU.K.growth is estimated to remain unrevised.

The release of the data this week will be as follows:

Monday August 22:

Both economies lack economic fundamentals which propose that there would be calm trading on the pair which is predicted to follow the general trend in market as it will not able to get direction from data.

Tuesday August 23:

The U.K. will release CBI trends for August at 10:00 GMT , yet it is not expected to have an impact on the pair, where the US new home sales report for July, due at 14:00 GMT, is expected to show 1.0% advance from the prior 1.0% fall. The data is expected to be carefully watched as it will provide evidence about the status of the housing market that led to the eruption of the 2008 financial crisis.

Wednesday August 24:

As the Swiss economy lacks economic data, the main focus will be onU.S.data which are MBA mortgage applications for August 19 at 11:00 GMT followed by durable goods orders which is projected to advance 2.0% in July relative to the preceding 2.1% drop.

Thursday August 25:

Initial jobless claims for the week ended August 19 and continuing claims for the week ending August 13 will be available at 12:30 GMT. The jobless data is predicted to have an impact after the previous one which showed more than expected rise in initial jobless claims, whileU.K.lacks fundamentals.

Friday August 26:

The week ends with the release the most awaited data from both economies which is GDP for the second quarter. As of 08:30 GMT, U.K. GDP is predicted to remain unrevised at 0.2% on the quarter and 0.7% on the year.

In theU.S., GDP annualized for the first second is predicted to be downwardly revised at 1.1% from 1.3%. At 13:55 GMT,University of Michigan confidence will show a rise to 56.0 in August from 54.9 in July, according to median forecasts.

AUD/USD Weekly Fundamental Analysis for August 22-26, 2011

Aussie dropped against its major counterparts, while it slumped sharply versus the U.S. dollar after the Reserve Bank of Australia minutes showed that the Bank won’t increase rates in the next month as inflation eased.

We can see the Australian economy is still in a foggy phase through the negative data released by the nation along with concerns the European debt crisis, which dampens demand for higher yielding currencies.

Projections indicate that the pair will stabilize around those areas before returning to decline once again. The main reason behind this decline could be the absence of significant economic data for the Australian economy as well as improved performance of the U.S. dollar recently, with the power of the economic data released from the U.S. economy.

The Australian economy is to release this week few fundamentals that do not have a heavy impact on the market’s movements, so the AUD/USD pair will trade in line with the market sentiment.

Major highlights for this week that will affect the AUD/USD pair’s trading:

Monday August 22:

The U.S. economy will issue the Chicago Fed Activity Index for July at 12:30 GMT, where it’s expected to drop by 0.48 from the previous fall of 0.46.

Tuesday August 23:

On Tuesday at 14:00 GMT, the U.S. economy will release the new home sales for July, where the previous reading was down by 1.0% at 312 thousands and expected to rebound by 1.0% to 315 thousand.

Wednesday August 24:

The Australian economy will release the leading index for June at 00:00 GMT, while it dropped by 0.1% during May.

At 01:30 GMT, Australia will introduce its construction word done for the second quarter of the year, which has a low impact on the Aussie’s movements.

The U.S. durable goods orders for July will be due at 12:30 GMT, where it’s expected to show a rise of 2.0% from the prior drop of 2.1%. On the other hand, the durable goods excluding transportations for July had a previous reading of 0.1%, and expected to drop by 0.6%.

The house price index for June will be released at 14:00 GMT, where the previous reading was up by 0.4% and expected to come at 0.2%. As for the house price purchase index for the second quarter, it had a prior reading of –2.5%.

Thursday August 25:

At 12:30 GMT, U.S. economy will issue its weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance increased 408 thousand last week.

Friday August 26:

The U.S. economy will release the annualized Gross Domestic Product for the second quarter at 12:30 GMT, where the previous reading showed a growth of 1.3% and expected to be revised lower to 1.1%.

The Personal Consumption for the second quarter is expected to show a rise of 0.2% from the prior reading of 0.1%, while the core PCE for the second quarter is expected to remain unrevised at 2.1%.

At 13:55 GMT, the U.S. economy will release the University of Michigan survey of consumer confidence sentiment for August, where the final reading is expected to be revised higher to 56.0 from 54.9.

USD/CAD Weekly Fundamental Analysis for August 22-26, 2011

The USD/CAD pair was little changed last week, as investors were concerned over the outlook for global growth amid signs economic growth is slowing down in the United States, while mounting fears from the European debt crisis boosted demand for lower yielding assets, which provided the USD/CAD pair with the needed momentum to maintain its previous gains.

Rising pessimism in global financial markets should put the CAD under more pressure over the coming period, where investors fear the U.S. economy is heading into a double dip recession, and since the United States is Canada’s largest trading partner, we should expect the Canadian economy to suffer deeply, and that should provide the USD/CAD pair with bullish momentum, unless of course the Fed announce a third round of quantitative easing, since it will put the USD under huge pressure. Moreover, a looming liquidity crisis in Europe could also weigh down on confidence levels, and that should also provide the USD/CAD pair with more upside momentum.

Highlights for this week that will probably affect the USD/CAD pair’s direction are:

Monday August 22:

No major data is queued for release from both the United States and Canada on Monday, as the start of the week will be focused on the prevailing downbeat sentiment and fear of the worsening outlook.

Tuesday August 23:

Canada will release the retail sales index for the month of June at 12:30 GMT, where retail sales are expected to rise by 0.5%, compared with 0.1% in May, while retail sales less autos are expected to rise by 0.2% in June, compared with 0.5% in May.

The United States will start the data at 14:00 GMT with the New Home Sales for July which are expected with 1.0% rebound to 315 thousand from 312 thousand.

Wednesday August 24:

The Durable Goods Orders are due from the United States at 12:30 GMT for July and expected with 2.0% rebound following 2.1% slump while excluding transportation expected with 0.6% drop following 0.1% rise.

Thursday August 25:

The weekly jobless claims are due from the U.S. as usual at 12:30 GMT after last week they unexpectedly rose to 408 thousand.

Friday August 26:

The week will end with the infamous GDP from the U.S. at 12:30 GMT. The preliminary reading for the second quarter is expected downbeat on the market with the projected downside revision to 1.1% from 1.3%. Personal consumption expected with upside revision to 0.2% from 0.1% while the Core PCE expected steady at 2.1%.

The week will end with the University of Michigan Confidence final reading for August at 13:55 GMT, which is expected with an upside revision to 56.0 from the advanced estimate of 54.9.

EUR/USD Weekly Fundamental Analysis for August 22-26, 2011

We can still see the heavy pressure on the market and the evident risk aversion and anxiety for a new protracted and harsh recession, which is still keeping the EUR/USD under heavy pressure.

Last week the EUR/USD fluctuated heavily with the mixed sentiment and the jitters are evident with the slowing growth in the United States and deepening debt crisis in the euro area, all pressuring risk aversion and affecting the euro’s stability.

The euro is expected to continue fragile this week after Merkel and Sarkozy failed to stem the confidence crisis and the instability on the back of prevailing fear of contagion and deepening debt crisis. Last week the sluggish GDP from the euro area will add more pressure with the expected weak sectors performance and contraction expected in the manufacturing sector, further pressuring the euro.

Eyes will also be on the U.S. GDP which is expected with a downside revision that will keep the fear predominant and risk aversion the strong theme in the market.

The pessimism is dominant and the negativity is gaining momentum and we do not expect a drastic change from the data which will keep the EUR/USD biased south on haven demand and risk aversion and the only support to the sentiment is an intervention from policy makers to stem the crisis and coordinated action to ease the jitters and calm investors which so far is still not expected and accordingly we can expected the same trend and fear to prevail this week as well.

Other news from the euro area and the U.S. economy to affect the pair this week:

Monday August 22:

No major data is queued for release from both nations on Monday as the start of the week will be focused on the prevailing downbeat sentiment and fear of the worsening outlook.

Tuesday August 23:

Germany will start at 07:30 with the flash Manufacturing PMI for August which is expected to slow to 51.0 from 52.0 while the PMI Services is also expected weaker at 52.0 from 52.9.

The euro area starts the fundamentals this week with the flash estimate for the August PMI at 08:00 GMT. The Manufacturing PMI is expected to contract in August at 49.5 from 50.4 while the services PMI is expected to slow to 51.0 from 51.6 and the Composite PMI is expected flat at 50 from 51.1.

Germany will return with the ZEW Survey for August at 09:00 GMT with the Current Situation Index expected to slow to 85.0 from 90.6 while the Economic Sentiment to slow to -25.0 from -15.1.

The euro Area ZEW Economic Sentiment Index is due also at 09:00 GMT and likely declined in August following -7.0.

The United States will start the data at 14:00 GMT with the New Home Sales for July which are expected with 1.0% rebound to 315 thousand from 312 thousand.

Wednesday August 24:

Germany will start at 08:00 GMT with the IFO Survey for August. The IFO Business Climate index is expected to slow to 111.2 from 112.9 while the Current Assessment is expect at 120.1 from 121.4 and the IFO Expectations to drop to 103.2 from 105.0.

The euro area will report the Industrial New Orders for June at 09:00 GMT which is expected flat down from the previous month’s rally of 3.6%.

The Durable Goods Orders are due from the United States at 12:30 GMT for July and expected with 2.0% rebound following 2.1% slump while excluding transportation expected with 0.6% drop following 0.1% rise.

Thursday August 25:

Germany will start at 06:00 GMT with the Gfk Consumer confidence for September which is expected to slow to 5.2 from 5.4.

The weekly jobless claims are due from the U.S. as usual at 12:30 GMT after last week they unexpectedly rose to 408 thousand.

Friday August 26:

The euro area’s week will end with the M3 Money Supply for July at 08:00 GMT which is expected to rise slightly on the year to 2.2% from 2.1%.

The week will end with the infamous GDP from the U.S. at 12:30 GMT. The preliminary reading for the second quarter is expected downbeat on the market with the projected downside revision to 1.1% from 1.3%. Personal consumption expected with upside revision to 0.2% from 0.1% while the Core PCE expected steady at 2.1%.

The week will end with the University of Michigan Confidence final reading for August at 13:55 which is expected with an upside revision to 56.0 from the advanced estimate of 54.9.

EUR/CHF Weekly Fundamental Analysis for August 22-26, 2011

The EUR/CHF ended another hectic week and about to start a new one with the prevailing negative sentiment and evident risk aversion which keeps the franc poised for more gains.

Fears are evident over the worsening outlook for the global economic recovery and the deepening debt crisis which intensifies the flow of haven demand on the franc amid the high risk and uncertainty. The heavy selloff across the board last week fueled swissy gains despite the continued efforts from the SNB to stem the rally.

It is clear that the pessimism is dominant and no relief is in sight with the existing fear of a double-dip recession driving the market back to its financial crisis times, and that is only more volatile for swissy on fears of a sudden SNB move again.

Last week the SNB assured again their readiness to act which fell short of market expectations as an expansion of sight deposits to 200 billion francs and talk of intervention in forwards as well as expanding the money supply did not weaken the franc much especially as investors were still expecting something drastic as far as a currency fix or peg.

This week we foresee the same volatility and choppy trading to be evident with the downbeat sentiment over the outlook for growth and also anxiety over any sudden SNB moves and we expect the EUR/CHF to maintain the bearish trend and will only turn higher if the SNB acted strongly to stem the rally and indeed intervened to alter the gains as the sentiment is surely still bearish and risk aversion will keep the franc strong.

Other news from the euro area and the Swiss economy to affect the pair this week:

Monday August 22:

Switzerland will start the week at 07:00 GMT with the M3 Money Supply for the year ending in July after the reported previous 5.2%.

Tuesday August 23:

Swiss trade figures for July are due at 06:00 GMT as investors will assess the impact of the appreciating franc on trade after Switzerland reported a trade surplus of 1.74 billion in June with 5.2% rise in exports and 2.5% rise in imports.

The euro area starts the fundamentals this week with the flash estimate for the August PMI at 08:00 GMT. The Manufacturing PMI is expected to contract in August at 49.5 from 50.4 while the services PMI is expected to slow to 51.0 from 51.6 and the Composite PMI is expected flat at 50 from 51.1.

The euro Area ZEW Economic Sentiment Index is due also at 09:00 GMT and likely declined in August following -7.0.

Wednesday August 24:

The euro area will report the Industrial New Orders for June at 09:00 GMT which is expected flat down from the previous month’s rally of 3.6%.

Thursday August 25:

Both nations have no data queued for release which will leave the pair subject to the market sentiment and the focus on critical GDP figures from the United States on Friday which will affect the sentiment.

Friday August 26:

The euro area’s week will end with the M3 Money Supply for July at 08:00 GMT which is expected to rise slightly on the year to 2.2% from 2.1%.

Switzerland will end the week with the KOF Swiss Leading Indicators for August at 09:30 GMT which is expected to retreat to 1.85 from 2.04.

USD/JPY Daily Fundamental Analysis for August 22, 2011

The USD/JPY pair continued its bearish move reaching its post-war levels, where investors increased demand for lower-yielding currencies due to the uncertainty regarding the global recovery.

The slowing U.S. economy and the disappointing Japanese data increased concerns over the global recovery, which in turn drove investors to abandon the higher-yielding currencies and focus on the safe haven investments.

On the other hand, the Japanese currency advanced against other majors despite comments from the Japanese Finance Minister that the government is monitoring the yen’s movements, and another intervention in the FX market could be witnessed.

The Japanese economy will release the supermarket store sales for July at 05:00 GMT, where the previous reading showed a rise of 0.1%. The convenience store sales for July will be released at 07:00 GMT, where it had a prior reading of 9.0%.

The U.S. economy will issue the Chicago Fed Activity Index for July at 12:30 GMT, where it’s expected to drop by 0.48 from the previous fall of 0.46.

USD/CHF Daily Fundamental Analysis for August 22, 2011

As of 07:00 GMT, the Swiss economy will release money supply M3 for the year ending April, yet it is expected to have slight effect on the pair’s movements, where theUSwill release some mortgage data.

If the negative general negative sentiment seen last week continued, it is more likely that the pair will move to the downside as the franc is predicted to strengthen. However, further monetary intervention or announcements by Swiss policy makers may enable the franc to continue its drop as targeted by the SNB which pledged to take all necessary measures to halt the franc’s runaway.

The main high this week is the Swiss trade data which will show the status of exports in the month of July and how much it was affected by the franc’s appreciation.  In the U.S., the main focus will probably on GDP for the second quarter as the annualized GDP for the second quarter is predicted to be downwardly revised which may increase worries that the slowdown would lead the U.S. to another recession.

USD/CAD Daily Fundamental Analysis for August 22, 2011

The USD/CAD pair dropped on Friday, as a slight wave of optimism after Spain announced more budget cuts to help reduce the swelling deficit overshadowed fears over the outlook for global growth, which provided the CAD with momentum to rise against the USD, pushing the USD/CAD pair to the downside.

Moreover, the consumer price index was released from Canada for July, where CPI rose in line with expectations, signaling core inflation remains under control in Canada.

The uncertainty that continues to dominate global financial markets should continue to boost demand for lower yielding and more safe assets, and accordingly, we preserve our bullish outlook for the USD/CAD pair, and any downside movements are not expected to prevail for long, since risk aversion will provide the USD/CAD pair with the needed bullish momentum.

Monday August 22:

No major data is queued for release from both the United States and Canada on Monday, as the start of the week will be focused on the prevailing downbeat sentiment and fear of the worsening outlook.

NZD/USD Daily Fundamental Analysis for August 22, 2011

New Zealand’s currency (Kiwi) has declined to the most in three weeks, and extended its loss versus greenback to the longest losing streak since May 2010, after commodity prices declined.

On the other hand, Asian stocks fell, with the regional index revisiting levels from last week’s global stocks rout, amid signs the world economy is slowing and Europe’s debt crisis will damage the banking system.

The New Zealand currency slumped to the lowest level in two weeks, affected by the bad outlook for the global economic recovery, while started its sharp downside movement after the Standard & Poor’s 500 index posted its biggest loss since February 2009.

On Monday, the NZ economy won’t release any fundamental data, but theU.S.economy will issue the Chicago Fed Nat Activity Index for July at 12:30 GMT, where it’s expected to drop by 0.48 from the previous fall of 0.46.

GBP/USD Daily Fundamental Analysis for August 22, 2011

Both economies lack economic fundamentals which propose that there would be calm trading on the pair which is predicted to follow the general trend in market as it will not able to get direction from data.

If the negative general negative sentiment seen last week continued, it is more likely that the pair will move to the downside as the dollar is predicted to benefit from being a safe have currency.

The main focus this week will be on growth data from both economies as investors will be eager to see whether there will be revisions to the second quarter readings to assess the extent of the slowdown. In theU.S., the annualized GDP for the second quarter is predicted to be downwardly revised which may increase worries that the slowdown would lead theU.S.to another recession, whileU.K.growth is estimated to remain unrevised.

EUR/USD Daily Fundamental Analysis for August 22, 2011

The EUR/USD continues to fluctuate heavily with the prevailing tension and pressure in the market from the worsening growth outlook and deepening debt crisis in the euro area.

On Monday the pair is expected to start another week with the same bearish and weak sentiment with the lingering pressure and fear over the outlook, especially with the expected flow of weak data and contraction to be reported in the euro area manufacturing.

The lack of major data on Monday will leave the focus on the faltering sentiment and any chances for action from central banks and finance chiefs after Japan states the necessary for coordinated G7 steps to contain the crisis.

Eyes remain on the weekend as well and whether any surprise move from policy makers alter the outlook for the start of the week which remains pessimistic and focused on the rising downside pressure over the recovery.

EUR/CHF Daily Fundamental Analysis for August 22, 2011

Eyes are still on the Swiss National Bank as the franc remains favored in this time of uncertainty which is keeping the EUR/CHF biased to the upside with the risk aversion and fear of recession.

We ended last week on Friday with the same pessimistic sentiment that is mostly to continue with us this week with the downbeat growth signals expected from major economies, confirming further the fears of another recession.

This downbeat sentiment keeps the franc favored for gains on the back of have demand and likely to be the trend with the start of the week unless policy makers and the SNB surprise us again with an unexpected weekend move, which so far is unlikely, yet we will still keep an eye on the SNB for any unexpected moves.

The volatility will prevail on Monday with the lack of major news, where the data will start only from Switzerland at 07:00 GMT with the M3 Money Supply for the year ending in July after the reported previous 5.2%.

AUD/USD Daily Fundamental Analysis for August 22, 2011

Asian stock markets added to heavy losses acrossAsiaon Friday, as risk appetite evaporated on a fresh wave of concerns about global growth, with exporters among the worst performers.

The Australian currency, nicknamed Aussie, fell for a second day versus its U.S. counterpart as Asian stocks extended the global decline in equities, curbing appetite for higher-yielding assets.

Moreover, the investors moved to the low yielding currencies after the Citigroup Inc. cut its forecasts forU.S.growth amid concern about a global economic slowdown, damping demand for higher-yielding investments.

On the other hand, Aussie declined versus all majors after the RBA minutes noted that the Bank won’t increase the interest rates until the end of the year to continue supporting economic recovery amid the European debt crisis that it will pressure growth.

The U.S. economy will issue the Chicago Fed Activity Index for July at 12:30 GMT, where it’s expected to drop by 0.48 from the previous fall of 0.46.

USD/CAD Daily Fundamental Analysis for August 19, 2011

The USD/CAD pair rose back on Thursday, where rising risk aversion around global financial markets supported demand for lower yielding assets, as equity index and commodities including crude oil prices fell sharply on Thursday, which put negative pressure on the CAD, and sent the USD/CAD pair racing to the upside, as investors shunned risky assets.

The uncertainty that continues to dominate global financial markets should continue to boost demand for lower yielding and more safe assets, and accordingly, we preserve our bullish outlook for the USD/CAD pair, and any downside movements are not expected to prevail for long, since risk aversion will provide the USD/CAD pair with the needed bullish momentum.

Friday August 19:

At 11:00 GMT, Canada will release the consumer price index for July, where CPI is expected to rise by 0.2% on monthly basis and 2.8% on yearly basis, compared with June’s -0.7% and 3.1% on monthly and yearly basis respectively, while core CPI is expected to rise by 0.2% in July, compared with -0.6% back in June, while compared with a year earlier, Core CPI is expected to rise by 1.6% up from 1.3% reported in the prior estimate.

USD/JPY Technical Analysis August 19, 2011

The USD/JPY continues its slow march south as the trading world tentatively tests the patience of the Bank of Japan. The central bank intervened just two weeks ago, and at levels just above where we presently sit. Because of this, it is almost a given that they will get involved again, and as such we don’t sell this pair. We know the chart looks poor, but the truth is that you do not want to be on the other side of a central bank intervention. It can go against you 300 pips in a blink of the eye.

We are waiting for a buy signal as it goes with the CB’s wishes. The biggest problem – we haven’t seen one, and don’t expect to anytime soon.