EUR/JPY Fundamental Analysis August 24, 2012, Forecast

Analysis and Recommendations:

The EUR/JPY is trading at 98.50 soaring on the strength of the euro which gained over 1.25 cents yesterday against the USD after the release of FOMC minutes. Earlier in the day the euro had been weak on disappointment with the ECB, but the hopes of QE3 shown in the minutes from the Fed sparked global reactions.

The JPY was weakened by a negative trade balance report earlier in the day showing a decline in both imports and exports and an overall deficit.

This morning a poor print from China for HSBC manufacturing PMI also disappointed markets and weights on the yen at this time, but the hopes of stimulus from China is also viewed as positive.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our  weekly reports and we provide daily updates and outlooks

Economic Data August 23, 2012 actual v. forecast

Date

Time

 

Currency

 

 

Event

Actual

 

Previous

 

 

Aug. 23

03:30

 

CNY

 

 

Chinese HSBC Manufacturing PMI 

47.80

 

49.30 

   

 

Upcoming Economic Events that affect the AUD, NZD, JPY and USD

Date

Time

Currency

Event

Forecast

Previous

Aug 27 

09:00

EUR

German Ifo Business Climate Index 

102.7 

103.3 

Government Bond Auctions

Date  Time  Country 

23/8  05:45  Japan 

23/8  11:30  UK 

23/8  19:00  US 

27/8  11:30  Germany 

28/8  10:30  Spain

28/8  11:00  Italy 

28/8  19:00  US 

29/8  11:00  Italy 

29/8  19:00  US 

30/8  05:35  Japan

30/8  11:00  Italy 

30/8  19:00  US

NZD/USD Fundamental Analysis August 24, 2012, Forecast

Analysis and Recommendation:

The NZD/USD climbed on the back of the US dollar to trade at 0.8171 adding 0.0030. The currency was trading in a tight range with limited eco data and little news to support any price changes.

The FOMC minutes was a catalyst for an immediate change in commodity and commodity currency prices all gaining as the US dollar declined.

This morning’s poor print in China had little effect on the kiwi, although under normal circumstances the currency would have tumbled as New Zealand depends on its exports to China, although the promise of stimulus from both the US and China are very good for the kiwi economy.

Japan’s poor trade balance report yesterday also weighs on the currency as New Zealand exports a great deal of its dairy product to Japan.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Economic Data August 23, 2012 actual v. forecast

Date

Time

 

Currency

 

 

Event

Actual

 

Previous

 

 

Aug. 23

03:30

 

CNY

 

 

Chinese HSBC Manufacturing PMI 

47.80

 

49.30 

   

 

Upcoming Economic Events that affect the AUD, NZD, JPY and USD

Date

Time

Currency

Event

Forecast

Previous

Aug 27 

09:00

EUR

German Ifo Business Climate Index 

102.7 

103.3 

Government Bond Auctions

Date  Time  Country 

23/8  05:45  Japan 

23/8  11:30  UK 

23/8  19:00  US 

27/8  11:30  Germany 

28/8  10:30  Spain

28/8  11:00  Italy 

28/8  19:00  US 

29/8  11:00  Italy 

29/8  19:00  US 

30/8  05:35  Japan

30/8  11:00  Italy 

30/8  19:00  US

Natural Gas Forecast August 23, 2012, Technical Analysis

The natural gas markets initially fell during the Wednesday session, but bounce in order to form a bit of a hammer. The $2.70 level below is the support that we are trying to break through at this moment in time, but this hammer formed on Wednesday has somewhat concerned as to the ability of this market to break below there in the short term. Is because of this that we close our short positions today.

Obviously, if we get a daily close below the $2.70 level we are more than willing to start selling. We are also more than willing to start selling again if we get some type of failed rally. We will not buy this market until we get well above the highs that we said just a few weeks ago. In the meantime, we will be very flat of this market and on the sidelines.

Natural Gas Forecast August 23, 2012, Technical Analysis
Natural Gas Forecast August 23, 2012, Technical Analysis
 

Gold Prices August 23, 2012, Technical

The gold markets hit a four-month high after the Federal Reserve releasing the minutes on Wednesday from the previous meeting. It does appear that the Federal Reserve has serious thoughts of quantitative easing, and this was the last “nail in the coffin” for the gold bears.

For several months now, we have been watching the $1640 level as a spot in which the market had to get above in order to continue higher. This essentially was the top of an ascending triangle, and that was decidedly smashed through during the Wednesday session. There can be little doubt as to what the sentiment is towards gold at the moment as not only did this level get close above, but the daily close is at the absolute highs.

The market certainly looks like it’s ready continue higher at this point, but it should be noted that there is little bit of noise between here and $1700. Because of this, it won’t necessarily be a shot straight up but nonetheless we do look like were going higher. Based upon the measurement of the base of the triangle, we think that this market will continue and target the $1740 level before the move said and done.

With this in mind, we certainly want to go long of this market and will not sell it. We have been saying for some time that the $1500 level is the “line in the sand” for the buyers. Quite simply, we aren’t selling gold until we get below that level. It now appears that that level will be a thing of the past, and we will see that pricing for some time. We are willing to buy this market right here as we believe in the move long-term.

However, if you are living more conservative there probably will be a pullback coming at one point or another from which you can buy this market. We also think that the $1640 level should now be very supportive. As such, if we see a pullback and supportive action close to that level we are more than willing to get aggressively long.

Gold Prices August 23, 2012, Technical
Gold Prices August 23, 2012, Technical
 

EUR/USD Mid-Session Analysis for August 22, 2012

After trading in a tight range for most of the session, the EUR/USD is moving sharply higher, confirming Tuesday’s trend line breakout and setting up the market for further upside action. While yesterday’s action was related to expectations of positive moves by the European Central Bank, today’s surge was triggered by speculation the Federal Reserve is preparing to take steps to boost the economy.

Today, the Fed sent a strong signal to traders that it is preparing to make moves to stimulate the economy unless there is new evidence of stronger growth. Most traders now believe the chosen form of stimulus will be additional bond purchases.

Daily EUR/USD Chart
Daily EUR/USD Chart

In its official statement the Fed said, “Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery.”

The words “fairly soon” are driving up demand for higher risk assets at the mid-session, pressuring the U.S. Dollar while helping the Euro gain ground. The minutes also showed that the idea of additional stimulus is gaining support amongst members. However, “substantial and sustainable strengthening” could mean that the Fed has set some pretty high requirements for additional stimulus.

Technically, the EUR/USD is breaking out over Gann angle resistance at 1.2517. Additionally, the currency pair is also trading on the bullish side of a major retracement zone at 1.2394 to 1.2478. This area is now expected to be new support.

The main trend is up decisively up on the daily chart with main bottoms formed at 1.2255 and 1.2241. The strong rally on the daily chart is also attracting attention on the weekly chart. Although the main trend is still down on the weekly chart, the Euro is beginning to work its way through a series of former resistance levels, suggesting that short traders are beginning to weaken their stance. Further short-covering is expected if the dollar continues to weaken because of expectations of Fed activity and if the ECB decides to launch its own bond purchasing program. 

EUR/GBP Fundamental Analysis August 23, 2012, Forecast

Analysis and Recommendations:

The EUR/GBP  is trading at 0.7892 down a bit since yesterday, as the euro eased off a drop, it is strange but so it the puzzle of the UK economy. The GBP traded up against a strong USD and the euro held pretty much to its open, how this pair declined.

A broad risk-off tone in global markets has little by way of new information to back it.  The USD is being embraced at the expense of most of the major crosses.  Bond markets are curiously buying the safe havens as well as the more strained European sovereigns as just about everything is rallying.  Equity markets are selling off by about a full percentage point across several European exchanges and are picking up the tone left off from yesterday afternoon’s North American session and the spillover into Asian markets overnight.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Economic Data August 23, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 22

 

JPY

 

 

 

Trade Balance 

-0.33T

 

-0.46T 

 

-0.32T 

   

 

 

CAD

 

 

 

Core Retail Sales (MoM) 

-0.4%

 

0.3% 

 

0.4% 

   

 

 

CAD

 

 

 

Retail Sales (MoM) 

-0.4%

 

0.1% 

 

0.2% 

   

 

 

USD

 

 

 

Existing Home Sales 

4.47M

 

4.52M 

 

4.37M 

 

 

 

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

Event 

Forecast

Previous

Aug 24

1:30pm

USD

Durable Goods Orders m/m

2.8%

-1.4%

 

2:00pm

EUR

Belgium NBB Business Climate

-10.8

1.3%

Government Bond Auctions

Date  Time  Country 

27/8  11:30  Germany 

28/8  10:30  Spain

28/8  11:00  Italy 

28/8  19:00  US 

29/8  11:00  Italy 

29/8  19:00  US 

30/8  05:35  Japan

30/8  11:00  Italy 

30/8  19:00  US

 

USD/CAD Fundamental Analysis August 23, 2012, Forecast

Analysis and Recommendations:

The USD/CAD is trading at 0.9933 as the Looney sank today, after the release of a negative retails sales report, the CAD just collapsed. This followed a month of negative eco data, although Canadian’s seem to think that things are doing fairly well and the BoC seems oblivious to the state of the poor economy in Canada.

The Looney is down 0.3% from yesterday’s close as markets indicate a reluctance to drive further strength following the 2.4% rally since July 25th.  Yesterday’s candle suggests a near term bottom in USDCAD (see technical snapshot), with the potential for a short term rally.  USDCAD has declined to levels lower than what would be expected by both oil prices and 2Y bond yield spreads, and a small rally would merely restore USDCAD back to levels suggested by some of its key drivers. 

However, the key risks for USDCAD in today’s session remain the FOMC minutes as well as BoC Governor Carney’s speech,  in which he will be discussing Globalization, Stability, and Employment instead of speaking about the failing economy. CAD supporter’s think low debt, high credit ratings and good yields will support the economy. Eventually debt will grow as jobs fall and housing drops.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Economic Data August 23, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 22

 

JPY

 

 

 

Trade Balance 

-0.33T

 

-0.46T 

 

-0.32T 

   

 

 

CAD

 

 

 

Core Retail Sales (MoM) 

-0.4%

 

0.3% 

 

0.4% 

   

 

 

CAD

 

 

 

Retail Sales (MoM) 

-0.4%

 

0.1% 

 

0.2% 

   

 

 

USD

 

 

 

Existing Home Sales 

4.47M

 

4.52M 

 

4.37M 

 

 

  

Upcoming Economic Events that affect the USD

Date

Time

Currency

Event 

Forecast

Previous

Aug 24

1:30pm

USD

Durable Goods Orders m/m

2.8%

-1.4%

Government Bond Auctions

Date  Time  Country 

27/8  11:30  Germany 

28/8  10:30  Spain

28/8  11:00  Italy 

28/8  19:00  US 

29/8  11:00  Italy 

29/8  19:00  US 

30/8  05:35  Japan

30/8  11:00  Italy 

30/8  19:00  US

 

GBP/USD Fundamental Analysis August 23, 2012, Forecast

Analysis and Recommendations:

The GBP/USD continued to climb today, with little in the way of supportive data. Overall market sentiment continued to push the crosses and commodities to trade higher as traders move from the shadow of the USD. The pair are trading at 1.5798.

While outperforming its peers as markets pause following the considerable amount of bullish movement seen over the past session the GBP bucked the trend today.

There are no domestic data releases today, leaving GBPUSD to trade on broader market sentiment ahead of tomorrow’s GDP revision.  Expectations for an improvement in the data should help propel GBP higher, as it is currently trading at levels not seen since mid-May

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Economic Data August 23, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 22

 

JPY

 

 

 

Trade Balance 

-0.33T

 

-0.46T 

 

-0.32T 

   

 

 

CAD

 

 

 

Core Retail Sales (MoM) 

-0.4%

 

0.3% 

 

0.4% 

   

 

 

CAD

 

 

 

Retail Sales (MoM) 

-0.4%

 

0.1% 

 

0.2% 

   

 

 

USD

 

 

 

Existing Home Sales 

4.47M

 

4.52M 

 

4.37M 

 

 

 

 

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

Event 

Forecast

Previous

Aug 24

1:30pm

USD

Durable Goods Orders m/m

2.8%

-1.4%

 

2:00pm

EUR

Belgium NBB Business Climate

-10.8

1.3%

Government Bond Auctions

Date  Time  Country 

27/8  11:30  Germany 

28/8  10:30  Spain

28/8  11:00  Italy 

28/8  19:00  US 

29/8  11:00  Italy 

29/8  19:00  US 

30/8  05:35  Japan

30/8  11:00  Italy 

30/8  19:00  US

 

EUR/USD Fundamental Analysis August 23, 2012, Forecast

Analysis and Recommendations:

The EUR/USD is trading at 1.2468 holding pretty much to yesterday’s close after a surge of positive sentiment pushed the euro upwards.

Markets are trading with a risk-off tone, giving back some of the recent gains over the past few sessions following the release of weaker trade data from Japan and ahead of the release of minutes from the August 1 FOMC meeting.  Jean-Claude Juncker, head of the euro group, is meeting Greek PM Antonis Samaras in Athens today, kicking off four days of high level meetings among euro area politicians that include meetings between Germany’s Merkel, France’s Hollande, and Greece’s Samaras.  JPY and GBP are flat, as EUR is slightly weaker.  CAD is down roughly 0.3%, while some of the higher beta majors such as NOK, AUD, and SEK are down between 0.4% and 0.5%

In the US housing data released today showed that home sales were slightly less then the forecast but well improved over last month. Markets saw the report as fairly positive as the forecast was very enthusiastic and a reach.

FOMC minutes from the August 1st meeting are likely to be largely discounted by markets since they reflect the period of time before the US data began to turn. The statement released on August 1st included only minor changes from the June 20th statement and an added emphasis on the importance of incoming data. What could prove interesting is any reference to what policy tools from communication to asset purchases might be used in the future. However, we suspect that with substantial event risk beginning August 31st, when Chair Bernanke speaks in Jackson Hole, today’s minutes will quickly be forgotten. The minutes will not be released to close to the end of the trading day and are not expected to have a serious affect on the markets.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports

Economic Data August 23, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 22

 

JPY

 

 

 

Trade Balance 

-0.33T

 

-0.46T 

 

-0.32T 

   

 

 

CAD

 

 

 

Core Retail Sales (MoM) 

-0.4%

 

0.3% 

 

0.4% 

   

 

 

CAD

 

 

 

Retail Sales (MoM) 

-0.4%

 

0.1% 

 

0.2% 

   

 

 

USD

 

 

 

Existing Home Sales 

4.47M

 

4.52M 

 

4.37M 

 

 

  

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

Event 

Forecast

Previous

Aug 24

1:30pm

USD

Durable Goods Orders m/m

2.8%

-1.4%

 

2:00pm

EUR

Belgium NBB Business Climate

-10.8

1.3%

Government Bond Auctions

Date  Time  Country 

27/8  11:30  Germany 

28/8  10:30  Spain

28/8  11:00  Italy 

28/8  19:00  US 

29/8  11:00  Italy 

29/8  19:00  US 

30/8  05:35  Japan

30/8  11:00  Italy 

30/8  19:00  US

 

Silver Fundamental Analysis August 23, 2012, Forecast

Analysis and Recommendations:

Silver dipped a bit today, after a huge day yesterday, as investors took profits. Otherwise, silver followed the positive moves of the metals pack and took cues from gold holding pretty firm to yesterday’s price.

Precious metals rose, stretching the previous session gains. Spot gold inched up, testing the 200 day moving average while spot silver advanced to ten week high. Meanwhile, platinum continued to rule firm bolstered by worries over supply disruptions. MCX base metal complex were mostly trading in a positive territory tracking movements in the major LME. Nickel gained the most followed by zinc. In the mean time, LME copper eased from the one month high level and was trading mostly steady. Top global miner BHP Billiton planning to delay its project expansion and forecast that global demand for copper may exceed supply despite slowing economic growth in the top consumer China providing firm support.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Economic Data August 23, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 22

 

JPY

 

 

 

Trade Balance 

-0.33T

 

-0.46T 

 

-0.32T 

   

 

 

CAD

 

 

 

Core Retail Sales (MoM) 

-0.4%

 

0.3% 

 

0.4% 

   

 

 

CAD

 

 

 

Retail Sales (MoM) 

-0.4%

 

0.1% 

 

0.2% 

   

 

 

USD

 

 

 

Existing Home Sales 

4.47M

 

4.52M 

 

4.37M 

 

 

 

 Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

Event 

Forecast

Previous

Aug 24

1:30pm

USD

Durable Goods Orders m/m

2.8%

-1.4%

 

2:00pm

EUR

Belgium NBB Business Climate

-10.8

1.3%

Government Bond Auctions

Date  Time  Country 

27/8  11:30  Germany 

28/8  10:30  Spain

28/8  11:00  Italy 

28/8  19:00  US 

29/8  11:00  Italy 

29/8  19:00  US 

30/8  05:35  Japan

30/8  11:00  Italy 

30/8  19:00  US

 

Crude Oil Fundamental Analysis August 23, 2012, Forecast

Analysis and Recommendations:

Crude Oil is trading at 97.00 even at this writing.

With EIA inventories just released in the US, which stated:

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 5.4 million barrels from the previous week. At 360.7 million barrels, U.S. crude oil inventories are above the upper limit of the average range for this time of year.

Crude inventories remain high for this time of the year, but have been steadily decreasing week after week which should support price.

With an optimistic view in the markets and talk of Chinese stimulus and action from the ECB and possible US QE, crude should remain in the mid to upper 90 range as the global meetings loom closer.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Economic Data August 23, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 22

 

JPY

 

 

 

Trade Balance 

-0.33T

 

-0.46T 

 

-0.32T 

   

 

 

CAD

 

 

 

Core Retail Sales (MoM) 

-0.4%

 

0.3% 

 

0.4% 

   

 

 

CAD

 

 

 

Retail Sales (MoM) 

-0.4%

 

0.1% 

 

0.2% 

   

 

 

USD

 

 

 

Existing Home Sales 

4.47M

 

4.52M 

 

4.37M 

 

 

 

WEEKLY

  • This Week in Petroleum
    Release Schedule: Wednesday @ 1:00 p.m. EST (schedule)
  • Gasoline and Diesel Fuel Update
    Release Schedule: Monday between 4:00 and 5:00 p.m. EST (schedule)
  • Weekly Petroleum Status Report
    Release Schedule: The wpsrsummary.pdf, overview.pdf, and Tables 1-14 in CSV and XLS formats, are released to the Web site after 10:30 a.m. (Eastern Time) on Wednesday. All other PDF and HTML files are released to the Web site after 1:00 p.m. (Eastern Time) on Wednesday. Appendix D is produced during the winter heating season, which extends from October through March of each year. For some weeks which include holidays, releases are delayed by one day. (schedule)

 

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

Event 

Forecast

Previous

Aug 24

1:30pm

USD

Durable Goods Orders m/m

2.8%

-1.4%

 

2:00pm

EUR

Belgium NBB Business Climate

-10.8

1.3%

Government Bond Auctions

Date  Time  Country 

27/8  11:30  Germany 

28/8  10:30  Spain

28/8  11:00  Italy 

28/8  19:00  US 

29/8  11:00  Italy 

29/8  19:00  US 

30/8  05:35  Japan

30/8  11:00  Italy 

30/8  19:00  US

 

 

 

Gold Fundamental Analysis August 23, 2012, Forecast

Analysis and Recommendations:

Gold spent the day bouncing between small gains and losses to trade at 1640.25 after climbing for several days, on talks of stimulus and on positive outlook from the EU, gold took a breather today.

Commodities were seen extending the previous session gains underpinned by hopes that European Central Bank will opt for solid measures to contain the region’s long running debt crisis. Still, weak economic indicator from Japan weighed on the overall market sentiments limiting gains. Precious metals rose, stretching the previous session gains. Spot gold inched up, testing the 200 day moving average while spot silver advanced to ten week high. Meanwhile, platinum continued to rule firm bolstered by worries over supply disruptions. MCX base metal complex were mostly trading in a positive territory tracking movements in the major LME. Nickel gained the most followed by zinc. In the mean time, LME copper eased from the one month high level and was trading mostly steady. Top global miner BHP Billiton planning to delay its project expansion and forecast that global demand for copper may exceed supply despite slowing economic growth in the top consumer China providing firm support.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Economic Data August 23, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 22

 

JPY

 

 

 

Trade Balance 

-0.33T

 

-0.46T 

 

-0.32T 

   

 

 

CAD

 

 

 

Core Retail Sales (MoM) 

-0.4%

 

0.3% 

 

0.4% 

   

 

 

CAD

 

 

 

Retail Sales (MoM) 

-0.4%

 

0.1% 

 

0.2% 

   

 

 

USD

 

 

 

Existing Home Sales 

4.47M

 

4.52M 

 

4.37M 

 

 

  

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

Event 

Forecast

Previous

Aug 24

1:30pm

USD

Durable Goods Orders m/m

2.8%

-1.4%

 

2:00pm

EUR

Belgium NBB Business Climate

-10.8

1.3%

Government Bond Auctions

Date  Time  Country 

27/8  11:30  Germany 

28/8  10:30  Spain

28/8  11:00  Italy 

28/8  19:00  US 

29/8  11:00  Italy 

29/8  19:00  US 

30/8  05:35  Japan

30/8  11:00  Italy 

30/8  19:00  US

 

Natural Gas Fundamental Analysis August 23, 2012, Forecast

Analysis and Recommendations:

Natural Gas continued to climb trading at 2.841 as weather continued to remain unseasonably warm and the National Weather forecast is predicting a longer summer season than expected. Also several storms are brewing in the Atlantic and the Gulf.

Overall commodities climbed universally as traders turn to more risk and were in positive moods.

With little in the way of eco data and news flow, traders were left to their own sentiment.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Economic Data August 23, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 22

 

JPY

 

 

 

Trade Balance 

-0.33T

 

-0.46T 

 

-0.32T 

   

 

 

CAD

 

 

 

Core Retail Sales (MoM) 

-0.4%

 

0.3% 

 

0.4% 

   

 

 

CAD

 

 

 

Retail Sales (MoM) 

-0.4%

 

0.1% 

 

0.2% 

   

 

 

USD

 

 

 

Existing Home Sales 

4.47M

 

4.52M 

 

4.37M 

 

 

 

WEEKLY

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

Event 

Forecast

Previous

Aug 24

1:30pm

USD

Durable Goods Orders m/m

2.8%

-1.4%

 

2:00pm

EUR

Belgium NBB Business Climate

-10.8

1.3%

Government Bond Auctions

Date  Time  Country 

27/8  11:30  Germany 

28/8  10:30  Spain

28/8  11:00  Italy 

28/8  19:00  US 

29/8  11:00  Italy 

29/8  19:00  US 

30/8  05:35  Japan

30/8  11:00  Italy 

30/8  19:00  US

 

September British Pound Enters Retracement Zone

The technical picture improved for the daily September British Pound on Tuesday when the currency broke through a pair of former tops at 1.5767 and 1.5773. The move wasn’t met with much enthusiasm, however, as it entered a potential resistance zone bounded by 1.5771 to 1.5890.

September British Pound Enters Retracement Zone
September British Pound Enters Retracement Zone

Daily September British Pound Pattern, Price & Time Analysis

The market also remained inside of a triangle chart pattern which could continue to compress prices. The resistance line of the triangle drops in at 1.5876 today. The support line is at 1.5551. Short-term Gann angle support is at 1.5715.

Although the breakout move is promising for further upside action, the lack of volatility could mean the currency is poised to straddle the 50% price level at 1.5771 until additional buyers decide to support it.

Fundamentally, a weaker U.S. Dollar was most likely the reason for theSterling’s rally. There are still some lingering concerns about theU.K.economy and further stimulus action that could be keeping traders are on the sidelines until they get a little more clarity as to the Bank of England’s next move.

So while positive developments from the European Central Bank may continue to give the British Pound a boost, economic uncertainty may be setting up traders for another selling opportunity now that the market has reached a retracement zone.

September Euro Breaks Through Resistance

The September Euro is breaking out over the resistance line of triangle chart pattern, perhaps setting the tone for a bullish trading day. In addition to the trend line, the single currency is currently approaching a previous main top at 1.2390 and a major 50% price level at 1.2405. Overtaking all of these levels will put the Euro in a position to challenge the August 6 top at 1.2450.

A trade through this top will mean the market will have one more upside barrier to overcome at 1.2489. Overtaking this important Fibonacci level will put the market on the bullish side of a major retracement zone, indicating that the buying power is currently stronger than the selling power at current price levels.

September Euro Breaks Through Resistance
September Euro Breaks Through Resistance

Daily September Euro Pattern, Price & Time Analysis

Since bottoming at 1.2051 on July 24, the September Euro has zigzagged its way to today’s breakout. The first rally most likely took out the short-traders with the subsequent break attracting fresh buyers when the market tested a retracement zone at 1.2251 to 1.2203.

Fundamentally, the September Euro bottomed after European Central Bank President Mario Draghi vowed to do “whatever it takes” to support the Euro. Although traders believed this meant the ECB would begin buying Spanish and Italian debt, it never really followed through on Draghi’s pledge. However, it didn’t seem to matter since interest rates have dropped in Spain and Italy anyway, easing some of the pressure on the Euro.

Problems still persist in the Euro Zone, but the current retracement on the daily chart suggests that short traders are not going to stand in the way of this rally until the currency reaches more attractive price levels or until the crisis rears its ugly head once again. Until then, don’t fight the trend on the daily chart.

US Dollar Index Forecast August 22, 2012, Technical Analysis

The US Dollar Index had a very bearish session overall on Tuesday, as it broke down below the uptrend line that we have been following recently. This suggests that the sloping uptrend channel is now broken. However, we see the 81.50 as a significant support level as well, and this is why we said would not sell this market unless we got below that level also. By the end of the day, it should be noted that there was a bit of a bounce above that level already

We still think that as long as were over the 81.50 level that the risk is to the upside in this market. If we manage to close the market below 81.50, we would be willing to sell at that point. However, with the “safety trade” been in full effect most of the last several months, it wouldn’t surprise us to see this market gain yet again.

US Dollar Index Forecast August 22, 2012, Technical Analysis
US Dollar Index Forecast August 22, 2012, Technical Analysis

S&P 500 Index Forecast August 22, 2012, Technical Analysis

The S&P 500 Index had an interesting session on Tuesday, as it broke new highs but failed to hold them. The 1425 level was our level in which we need to see the market close on a daily chart to go long the S&P 500 futures, or high beta stocks. In the later hours of the session during New York trading, the S&P absolutely nosedived and reversed the gains for the session.

This suggests that perhaps the market is overbought, and with the Federal Reserve releasing the minutes from the last meeting it had today, there is a lot of anticipation out there as to what the possibility of monetary easing is at this moment time.

It should also be noted that we are at the top of an uptrend channel, and as such we are looking at resistance from that as well. Combining that and the highs from April, it just looks like it was too much for the buyers to maintain. However, we are not looking for massive meltdown, rather a pullback in which the buyers to get involved from. If we were to break the bottom of the uptrend channel however, this would be a massive sell signal.

The real proof will be held in September as the larger firms get involved. Many of the large traders right now are on vacation, and as such the volumes are very light. Once the liquidity comes back into the marketplace, we should see a distinct move in one direction or the other. Truthfully, there seems to be a lot of pessimism around the marketplace, and if that comes to fruition we should see much lower prices. However, it is difficult to bet against this market as it stands right now.

On a daily close above the highs from the Tuesday session we are willing to buy S&P 500 futures, high beta stocks such as financials, and perhaps some small-cap growth stocks as well. On a break below the bottom of the channel however, we would begin to sell S&P futures hand over fist as this should open the door to much lower prices.

FTSE 100 Index Forecast August 22, 2012, Technical Analysis

The FTSE 100 Index had a bearish session on Monday as traders took profits in the vicinity of 5850. Looking at the charts, we are running into serious resistance above and it should be said that overall the market sold off in general for the session. This was especially true in America where we saw a late day selloff in the S&P 500 as well as the Dow Jones Industrial Average.

Because of this it looks like the markets are about to pullback in general, and this one shouldn’t be any different. Looking at this chart, we see support down at the 5700 level and are waiting to perhaps retest that before going long. A supportive candle down at that level would have us buying London stocks. Of course, if we get above the 6000 range as well, we would have to buy.

FTSE 100 Index Forecast August 22, 2012, Technical Analysis
FTSE 100 Index Forecast August 22, 2012, Technical Analysis

Dow Jones Industrial Average Forecast August 22, 2012, Technical Analysis

The Dow Jones 30 initially pushed higher during the trading session on Tuesday as the market got bullish once again. Once we broke above the 13,300 level, the markets seem to have run out of steam as we reach the new highs. Because of this, we saw a massive pullback in the later hours of New York trading; and saw the market close down near the 13,200 level. This looks very weak and it should be said that although there is quite a bit of support below, this move was pretty swift.

We still believe that the 13,000 level as very supportive, and are more than willing to buy a supportive candle near that level. Until we get that or a break above the highs from the Tuesday session, we are fairly cool when it comes to the Dow Jones. A pullback seems to be needed, and as such we would welcome it and watch it from the sidelines.

Dow Jones Industrial Average Forecast August 22, 2012, Technical Analysis
Dow Jones Industrial Average Forecast August 22, 2012, Technical Analysis

EUR/USD Forecast August 22, 2012, Technical Analysis

The EUR/USD pair had a very bullish session on Tuesday as more signs of hope entered the marketplace. However, hope typically gets squashed by someone in Europe, and we feel it is only a matter of time before that happens again. The 1.25 level is just above, and did keep prices lower. There is also a ton of resistance all the way up to 1.27, and as such we don’t really like buying the Euro at this point.

In fact, we see this pair is been at the top of the rising wedge roughly, and we could see a selloff from this point. With the Federal Reserve releasing the minutes from the last meeting, a lot of traders will be trying to figure out what the next move by the Americans central bank is going to be. If there is no sign of quantitative easing in that release, there is a good chance this pair sells off. As such, we are selling the first signs of weakness now.

EUR/USD Forecast August 22, 2012, Technical Analysis
EUR/USD Forecast August 22, 2012, Technical Analysis