Natural Gas Fundamental Analysis August 22, 2012, Forecast

Analysis and Recommendations:

Natural Gas gained 0.029 to trade at 2.805 following cues from the overall commodities pack, as all energy and metals traded positive today.

Temperatures in the US are higher than expected which might help reduce inventory this week. There are no storms or pressures to cause any fundamental increase, except a recent article stated that natural gas as of April surpassed coal as the prime fuel for electricity and that NG was more efficient and natural gas plants had lower capital expense. The article points out that all new power plants will use natural gas now that it is abundant supply.

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 22, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 21

 

AUD

 

 

 

Monetary Policy Meeting Minutes 

 

 

 

 

 

 

 

 

 

NZD

 

 

 

Inflation Expectations (QoQ) 

2.3%

 

 

 

2.4% 

 

 

 

 

HKD

 

 

 

Hong Kong CPI (YoY) 

1.60%

 

3.40% 

 

3.70% 

 

 

 

 

GBP

 

 

 

CBI Industrial Trends Orders 

-21

 

-8 

 

-6 

 

 

 

 

CAD

 

 

 

Wholesale Sales (MoM) 

-0.1%

 

0.4% 

 

0.9% 

   

 

WEEKLY

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

Aug 22

7:00am

CHF

Trade Balance

2.10B

 
 

8:00am

EUR

French Flash Manufacturing PMI

43.8

2.25B

 

8:00am

EUR

French Flash Services PMI

50.1

43.4

Aug 23

8:30am

EUR

German Flash Manufacturing PMI

43.6

50.0

 

8:30am

EUR

German Flash Services PMI

50.2

43.0

 

9:00am

EUR

Flash Manufacturing PMI

44.3

50.3

 

9:00am

EUR

Flash Services PMI

47.9

44.0

 

9:30am

GBP

BBA Mortgage Approvals

28.2K

47.9

 

11:00am

GBP

CBI Realized Sales

16

26.3K

 

1:30pm

USD

Unemployment Claims

365K

11

 

2:00pm

USD

Flash Manufacturing PMI

51.3

366K

 

3:00pm

USD

New Home Sales

362K

51.4

 

9:30am

GBP

Revised GDP q/q

-0.5%

350K

 

9:30am

GBP

Prelim Business Investment q/q

2.8%

-0.7%

 

1:30pm

USD

Core Durable Goods Orders m/m

0.5%

1.9%

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 

21/8  10:30  Spain

21/8  12:00  EFSF 

22/8  11:30  Germany 

22/8  11:10  Sweden 

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

Gold Fundamental Analysis August 22, 2012, Forecast

Analysis and Recommendations:

Gold is trading at 1638.65. Gold inched up underpinned by a strong Euro, but investors are cautiously approaching bullion due to prevailing vague global economic conditions. Investors are waiting for more cues of stimulus measures from the central banks to prop up their brittle economy. Meanwhile, improved consumer sentiment figures in the US have reduced the prospects of launching another round of monetary easing programs from the country. Global demand for gold has seen easing in the second quarter of the current financial year due to a drop in consumption by the major consumers India and China. Substantial decrease in jewelry and investment demand has been recorded in the period.

As per CFTC data money managers and hedge funds have cut their net long positions in gold futures and options for the second consecutive period last week while the holdings of SPDR gold trust rose slightly. However investors are keenly watching the outcome of the FOMC meeting minutes and Euro zone leaders meeting this week to track gold’s direction. At the same time, lingering worries in South Africa, the world’s top platinum producer, has boosted platinum prices to a six week high level yesterday.

Comments today from China also helped support markets as it became more obvious that China is preparing to introduce a program of monetary stimulus, the question is now when.

Market sentiments were slightly on the greener side, lifted by optimism over the European Central Bank’s monetary policy action and European leader’s meeting later this week. European shares rose to 13-month high while Euro strengthened against the USD, hitting a two week high. In the commodities segment, bullion, base metals as well as crude oil firmed up in both international and domestic markets. Spot silver appeared glossier than gold, rising to an eight week high and was just shy of testing $29 an ounce. LME base metals rose with copper gaining more than one per cent closely followed by zinc. However, worries over demand from the top consumer China and bleak economic outlook continue to haunt market, limiting gains. The expectation that the Euro Zone leaders may make headway in tackling the region’s debt crisis boosted

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 22, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 21

 

AUD

 

 

 

Monetary Policy Meeting Minutes 

 

 

 

 

 

 

 

 

 

NZD

 

 

 

Inflation Expectations (QoQ) 

2.3%

 

 

 

2.4% 

 

 

 

 

HKD

 

 

 

Hong Kong CPI (YoY) 

1.60%

 

3.40% 

 

3.70% 

 

 

 

 

GBP

 

 

 

CBI Industrial Trends Orders 

-21

 

-8 

 

-6 

 

 

 

 

CAD

 

 

 

Wholesale Sales (MoM) 

-0.1%

 

0.4% 

 

0.9% 

   

  

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

Aug 22

7:00am

CHF

Trade Balance

2.10B

 
 

8:00am

EUR

French Flash Manufacturing PMI

43.8

2.25B

 

8:00am

EUR

French Flash Services PMI

50.1

43.4

Aug 23

8:30am

EUR

German Flash Manufacturing PMI

43.6

50.0

 

8:30am

EUR

German Flash Services PMI

50.2

43.0

 

9:00am

EUR

Flash Manufacturing PMI

44.3

50.3

 

9:00am

EUR

Flash Services PMI

47.9

44.0

 

9:30am

GBP

BBA Mortgage Approvals

28.2K

47.9

 

11:00am

GBP

CBI Realized Sales

16

26.3K

 

1:30pm

USD

Unemployment Claims

365K

11

 

2:00pm

USD

Flash Manufacturing PMI

51.3

366K

 

3:00pm

USD

New Home Sales

362K

51.4

 

9:30am

GBP

Revised GDP q/q

-0.5%

350K

 

9:30am

GBP

Prelim Business Investment q/q

2.8%

-0.7%

 

1:30pm

USD

Core Durable Goods Orders m/m

0.5%

1.9%

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 

21/8  10:30  Spain

21/8  12:00  EFSF 

22/8  11:30  Germany 

22/8  11:10  Sweden 

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

GBP/USD Fundamental Analysis August 22, 2012, Forecast

Analysis and Recommendations:

The GBP/USD added 0.0077 to trade at 1.5787. Sterling is up 0.4% vs the USD but underperforming most of its peers as a result of poor public borrowing figures and a challenged CBI industrial trends survey release.  Public finance metrics are a major risk for GBPUSD as the UK remains vulnerable to any negative developments regarding its AAA rating.  GBP has enjoyed a relative benefit as investors have considered it to be a regional safe haven amid ongoing uncertainty in the euro area.  Of the three rating agencies, S&P holds a stable outlook in contrast to the negative outlook from both Moody’s and Fitch.

Today markets were in a very positive mood, moving away from the USD and supporting crosses and commodities worldwide.

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 22, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 21

 

AUD

 

 

 

Monetary Policy Meeting Minutes 

 

 

 

 

 

 

 

 

 

NZD

 

 

 

Inflation Expectations (QoQ) 

2.3%

 

 

 

2.4% 

 

 

 

 

HKD

 

 

 

Hong Kong CPI (YoY) 

1.60%

 

3.40% 

 

3.70% 

 

 

 

 

GBP

 

 

 

CBI Industrial Trends Orders 

-21

 

-8 

 

-6 

 

 

 

 

CAD

 

 

 

Wholesale Sales (MoM) 

-0.1%

 

0.4% 

 

0.9% 

   

 

 

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

Aug 22

7:00am

CHF

Trade Balance

2.10B

 
 

8:00am

EUR

French Flash Manufacturing PMI

43.8

2.25B

 

8:00am

EUR

French Flash Services PMI

50.1

43.4

Aug 23

8:30am

EUR

German Flash Manufacturing PMI

43.6

50.0

 

8:30am

EUR

German Flash Services PMI

50.2

43.0

 

9:00am

EUR

Flash Manufacturing PMI

44.3

50.3

 

9:00am

EUR

Flash Services PMI

47.9

44.0

 

9:30am

GBP

BBA Mortgage Approvals

28.2K

47.9

 

11:00am

GBP

CBI Realized Sales

16

26.3K

 

1:30pm

USD

Unemployment Claims

365K

11

 

2:00pm

USD

Flash Manufacturing PMI

51.3

366K

 

3:00pm

USD

New Home Sales

362K

51.4

 

9:30am

GBP

Revised GDP q/q

-0.5%

350K

 

9:30am

GBP

Prelim Business Investment q/q

2.8%

-0.7%

 

1:30pm

USD

Core Durable Goods Orders m/m

0.5%

1.9%

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 

21/8  10:30  Spain

21/8  12:00  EFSF 

22/8  11:30  Germany 

22/8  11:10  Sweden 

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

EUR/USD Fundamental Analysis August 22, 2012, Forecast

Analysis and Recommendations:

The EUR/USD gained on positive market sentiment today to trade at 1.2469. Markets around the globe so far were seen heading for a bull run on escalating speculation that leader’s could carve out plan during meetings this week to tame off the crisis in the Euro region and avert a possible contagion. The series of meetings between leaders in Europe are likely to set the tone for market moves this week. Into the twilight session, no major economic data are scheduled for release from the U.S.

German Chancellor Angela Merkel and French president François Hollande are expected to converge in Berlin on 23rd August to discuss on possible bond buying measures by the ECB and on adjustment over the interest on the Greek bailout loans. 

Also, Greek Prime Minister Antonis Samaras will hold this week his first meetings with Euro zone leaders since taking office in a bid to assure for more austerity measures. As far as economic data are concerned, the U.S housing and durable goods orders would be the key events to watch out for and are more likely to paint further assurance for the U.S economic recuperation. Overall, the week moves could remain incarcerated to outcome of meetings in Europe.

The expectation that the Euro Zone leaders may make headway in tackling the region’s debt crisis boosted the euro in today’s session

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 22, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 21

 

AUD

 

 

 

Monetary Policy Meeting Minutes 

 

 

 

 

 

 

 

 

 

NZD

 

 

 

Inflation Expectations (QoQ) 

2.3%

 

 

 

2.4% 

 

 

 

 

HKD

 

 

 

Hong Kong CPI (YoY) 

1.60%

 

3.40% 

 

3.70% 

 

 

 

 

GBP

 

 

 

CBI Industrial Trends Orders 

-21

 

-8 

 

-6 

 

 

 

 

CAD

 

 

 

Wholesale Sales (MoM) 

-0.1%

 

0.4% 

 

0.9% 

   


 

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

Aug 22

7:00am

CHF

Trade Balance

2.10B

 
 

8:00am

EUR

French Flash Manufacturing PMI

43.8

2.25B

 

8:00am

EUR

French Flash Services PMI

50.1

43.4

Aug 23

8:30am

EUR

German Flash Manufacturing PMI

43.6

50.0

 

8:30am

EUR

German Flash Services PMI

50.2

43.0

 

9:00am

EUR

Flash Manufacturing PMI

44.3

50.3

 

9:00am

EUR

Flash Services PMI

47.9

44.0

 

9:30am

GBP

BBA Mortgage Approvals

28.2K

47.9

 

11:00am

GBP

CBI Realized Sales

16

26.3K

 

1:30pm

USD

Unemployment Claims

365K

11

 

2:00pm

USD

Flash Manufacturing PMI

51.3

366K

 

3:00pm

USD

New Home Sales

362K

51.4

 

9:30am

GBP

Revised GDP q/q

-0.5%

350K

 

9:30am

GBP

Prelim Business Investment q/q

2.8%

-0.7%

 

1:30pm

USD

Core Durable Goods Orders m/m

0.5%

1.9%

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 

21/8  10:30  Spain

21/8  12:00  EFSF 

22/8  11:30  Germany 

22/8  11:10  Sweden 

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

EUR/GBP Fundamental Analysis August 22, 2012, Forecast

Analysis and Recommendations:

The EUR/GBP added 0.0041 to trade at 0.7899. Today’s session was very pro euro, as sentiment became more positive the European leaders were moving to get a handle on the debt crisis, although nothing has happened and there have been announcements. It is simply rumors and speculation, although Angela Merkel seems to have softened her stance.

Spain continues to be a thorn in the side as they have not asked for an official bailout, but the bond market saw a successful auction today.

Greece is just about broke and asking for a quick response from the EFSF, although they want to renegotiate terms of the bailout but want funding released in the meantime, not likely to happen, but I am sure it will, it seems with Greece the more absurd it can get the more likely it is to happen.

Remember the movie My Big Fat Greek Wedding….

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 22, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 21

 

AUD

 

 

 

Monetary Policy Meeting Minutes 

 

 

 

 

 

 

 

 

 

NZD

 

 

 

Inflation Expectations (QoQ) 

2.3%

 

 

 

2.4% 

 

 

 

 

HKD

 

 

 

Hong Kong CPI (YoY) 

1.60%

 

3.40% 

 

3.70% 

 

 

 

 

GBP

 

 

 

CBI Industrial Trends Orders 

-21

 

-8 

 

-6 

 

 

 

 

CAD

 

 

 

Wholesale Sales (MoM) 

-0.1%

 

0.4% 

 

0.9% 

   

  

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

Aug 22

7:00am

CHF

Trade Balance

2.10B

 
 

8:00am

EUR

French Flash Manufacturing PMI

43.8

2.25B

 

8:00am

EUR

French Flash Services PMI

50.1

43.4

Aug 23

8:30am

EUR

German Flash Manufacturing PMI

43.6

50.0

 

8:30am

EUR

German Flash Services PMI

50.2

43.0

 

9:00am

EUR

Flash Manufacturing PMI

44.3

50.3

 

9:00am

EUR

Flash Services PMI

47.9

44.0

 

9:30am

GBP

BBA Mortgage Approvals

28.2K

47.9

 

11:00am

GBP

CBI Realized Sales

16

26.3K

 

1:30pm

USD

Unemployment Claims

365K

11

 

2:00pm

USD

Flash Manufacturing PMI

51.3

366K

 

3:00pm

USD

New Home Sales

362K

51.4

 

9:30am

GBP

Revised GDP q/q

-0.5%

350K

 

9:30am

GBP

Prelim Business Investment q/q

2.8%

-0.7%

 

1:30pm

USD

Core Durable Goods Orders m/m

0.5%

1.9%

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 

21/8  10:30  Spain

21/8  12:00  EFSF 

22/8  11:30  Germany 

22/8  11:10  Sweden 

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

Crude Oil Fundamental Analysis August 22, 2012, Forecast

Analysis and Recommendations:

Crude Oil climbed to trade at 97.36, ignoring warning from the Obama Administration on the possible release of the strategic reserves, although the International Energy Association said there were more than enough crude oil supplies that supply was not the reason for price increases.

Geopolitical tensions are also not the main focus, as Israel and Iran are only using rhetoric during the US presidential campaign.

Nymex crude oil prices gained around 0.7 percent today taking cues from expectations that European policymakers will take steps to curtail Euro Zone debt crisis coupled with weakness in the DX. However, expectations of rise in US crude oil inventories prevented sharp upside in the prices.

The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to increase by 0.1 million barrels for the week ending on 17th August 2012. Gasoline stocks are expected to fall by 0.1 million barrels and distillate inventories are expected to rise by 1.3 million barrels for the same week.

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 22, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 21

 

AUD

 

 

 

Monetary Policy Meeting Minutes 

 

 

 

 

 

 

 

 

 

NZD

 

 

 

Inflation Expectations (QoQ) 

2.3%

 

 

 

2.4% 

 

 

 

 

HKD

 

 

 

Hong Kong CPI (YoY) 

1.60%

 

3.40% 

 

3.70% 

 

 

 

 

GBP

 

 

 

CBI Industrial Trends Orders 

-21

 

-8 

 

-6 

 

 

 

 

CAD

 

 

 

Wholesale Sales (MoM) 

-0.1%

 

0.4% 

 

0.9% 

   

 

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

Aug 22

7:00am

CHF

Trade Balance

2.10B

 
 

8:00am

EUR

French Flash Manufacturing PMI

43.8

2.25B

 

8:00am

EUR

French Flash Services PMI

50.1

43.4

Aug 23

8:30am

EUR

German Flash Manufacturing PMI

43.6

50.0

 

8:30am

EUR

German Flash Services PMI

50.2

43.0

 

9:00am

EUR

Flash Manufacturing PMI

44.3

50.3

 

9:00am

EUR

Flash Services PMI

47.9

44.0

 

9:30am

GBP

BBA Mortgage Approvals

28.2K

47.9

 

11:00am

GBP

CBI Realized Sales

16

26.3K

 

1:30pm

USD

Unemployment Claims

365K

11

 

2:00pm

USD

Flash Manufacturing PMI

51.3

366K

 

3:00pm

USD

New Home Sales

362K

51.4

 

9:30am

GBP

Revised GDP q/q

-0.5%

350K

 

9:30am

GBP

Prelim Business Investment q/q

2.8%

-0.7%

 

1:30pm

USD

Core Durable Goods Orders m/m

0.5%

1.9%

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 

21/8  10:30  Spain

21/8  12:00  EFSF 

22/8  11:30  Germany 

22/8  11:10  Sweden 

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

US Dollar Index Forecast August 21, 2012, Technical Analysis

The US dollar had a back-and-forth session on Monday, as denoted buying the Dixie. This contract is currently sitting just above the 82.50 handle, and as such is sitting on top of an uptrend line. We have been trading in the channel for some time, essentially the entire summer, and we think that eventually we will break out of this channel. Of course, the real question is in one direction.

We think that there is quite a bit of support below, and wouldn’t really be interested in selling this market unless we got below the 81.50 level. You have to remember that the Euro is 40% of the contract, and as such it’s difficult to see this contract melting down. However, we never really know what’s going to happen so anything’s possible. On a break above 83, we are willing to go along. On a break below 81.50, we are more than willing to short this contract. Until then, we think there is a lot of noise in this chart and will be sitting on the sidelines.

US Dollar Index Forecast August 21, 2012, Technical Analysis
US Dollar Index Forecast August 21, 2012, Technical Analysis

USD/JPY Fundamental Analysis August 22, 2012, Forecast

Analysis and Recommendation:

The USD/JPY is trading at 79.29 as the US dollar continues to drift downward. There is no single element that can be blamed for the dip in the dollar index, but investors are looking waiting on home sales number which could be the deciding factor in monetary stimulus for the US as hopes have faded with better than expected eco data last week. Also tomorrow the FOMC minutes for its July report will be released.

The JPY has been struggling against the US due to weak eco data on the Japanese economy and as risk aversion has left the markets. Bond yields have also been weighing on the currency. The pair are expected to move towards the 80.00 price this week

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 21, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 21

 

AUD

 

 

 

Monetary Policy Meeting Minutes 

 

 

 

 

 

 

 

 

 

NZD

 

 

 

Credit Card Spending (YoY) 

0.1%

 

 

 

3.9% 

   

 

 

NZD

 

 

 

Inflation Expectations (QoQ) 

2.3%

 

 

 

2.4% 

 

 

 

 

JPY

 

 

 

All Industries Activity Index (MoM) 

0.2%

 

0.3% 

 

-0.2% 

   

 

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

Aug. 22

00:50

 

JPY

 

 

Trade Balance 

 

-0.46T 

-0.30T 

 

 

 

15:00

 

USD

 

 

Existing Home Sales 

 

4.52M 

4.37M 

 

 

 

19:00

 

USD

 

 

FOMC Meeting Minutes 

         

 

S&P 500 Index Forecast August 21, 2012, Technical Analysis

The S&P500 Index had a fairly interesting session on Monday, as it initially fell only to turn around and bounce to form a hammer. The hammer of course is pressing the resistance level above which is also considered to be massive in its go. The 1425 level represents the highs from April, and this would in fact be a return trip from that fall if we were to clear it.

The index is currently sitting at the top of an up trending channel, so the fact that this market is continue to press higher really is impressive in that sense. If we manage to break higher, this would be smashing through two separate resistance levels and have us buying S&P 500 futures. This could also be a signal to start buying higher beta companies, perhaps even financials for once.

As for selling this market, we could make a play for that but it would have to be under the 1400 level. Even if that does come to pass, we think that will only reach the bottom of the channel unless something serious happens.

S&P 500 Index Forecast August 21, 2012, Technical Analysis
S&P 500 Index Forecast August 21, 2012, Technical Analysis

AUD/USD Fundamental Analysis August 22, 2012 Forecast

Analysis and Recommendation:

The AUD/USD gained momentum on Monday and traded above the 1.05 level again, but dipped ahead of the RBA meeting minutes. The pair is trading at 1.0481 regaining momentum after the release showed a positive view of the economy. The main event for markets this week would be RBA Governor Glenn Stevens’ speech to the House of Representatives Standing Committee on Economics on Friday.

Weighing on the Aussie is the FOMC minutes due in the US tomorrow and the possibility of monetary stimulus from the Chinese government. Stimulus would be a positive for the Aussie in terms of business, trade and exports but also in the lowering value of the USD.

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 21, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 21

 

AUD

 

 

 

Monetary Policy Meeting Minutes 

 

 

 

 

 

 

 

 

 

NZD

 

 

 

Credit Card Spending (YoY) 

0.1%

 

 

 

3.9% 

   

 

 

NZD

 

 

 

Inflation Expectations (QoQ) 

2.3%

 

 

 

2.4% 

 

 

 

 

JPY

 

 

 

All Industries Activity Index (MoM) 

0.2%

 

0.3% 

 

-0.2% 

   

 

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

Aug. 22

00:50

 

JPY

 

 

Trade Balance 

 

-0.46T 

-0.30T 

 

 

 

15:00

 

USD

 

 

Existing Home Sales 

 

4.52M 

4.37M 

 

 

 

19:00

 

USD

 

 

FOMC Meeting Minutes 

         

 

FTSE 100 Index Forecast August 21, 2012, Technical Analysis

The FTSE 100 Index had a positive session during the Monday trading day, to continue with the consolidation just above the 5800 level. The market looks like it’s trying to build momentum to breakout above the overhead resistance, which we see as being settled around the 5900 to the 6000 level.

Our suspicion is that the trading world is simply waiting for the volume to come back into the markets, as traders returned from holiday. Also of concern would be the reaction of the European Central Bank to current problems in the European Union. The ECB is expected to begin easing; one has to wonder however whether or not it is going to be enough to make the markets happy.

With this being said, this could be part of the reason why the market is struggling to get above the 6000 level. Once this happens though, we would be very bullish on London stocks in general, and would be buying everything that suggested higher beta returns. Why frankly, even though the Bank of England has suggested recently that monetary policy is about where it needs to be, we suspect that sooner or later the Bank of England will have to consider some type of monetary easing.

As central banks around the world continue to pump liquidity into the system, this will drive people out of fiat currencies and into stock markets. This includes the bond markets as well, as yields will drop due to quantitative easing by the world’s major central banks.

This is of course by design, but it should be pointed out that these monetary policy moves are starting to return less and less with each attempt. In other words, it is a situation where you have “diminishing returns” on each central bank policy action. However, there will certainly be a boost to stocks in the immediate term. If we get above the 6000 level, we suspect that would have something to do with the European Central Bank. It is possible however, that earnings could be coming into play as well as some of the larger British companies have in fact done fairly well recently.

As long as we can get above the 6000 level, we think that the London stocks will be a fairly positive market. As for selling, we would only sell the FTSE if we manage to break below the 5500 level as there is so much support in various places below.

FTSE 100 Index Forecast August 21, 2012, Technical Analysis
FTSE 100 Index Forecast August 21, 2012, Technical Analysis

EUR/JPY Fundamental Analysis August 22, 2012, Forecast

Analysis and Recommendations:

The EUR/JPY declined to trade at 97.99 on Tuesday morning. The EUR/JPY cross is in a struggle as the Euro slightly bounces from recent downside in the FX market while the Japanese Yen strengthens since the US session on a wave of “risk off” sentiment. 

The ECB fully rejected Der Spiegel’s report about the plan to cap yields in the Spanish and Italian bond markets, and German officials also criticized the idea if to be true. As expected, the ECB didn’t buy any bonds last week. The euro has been trading stronger against the USD. The EUR/JPY is currently moving in the same relative terms as the EUR/USD since the greenback is trading sideways against the Japanese Yen. The Euro is on the move, downwardly, as rumors about the ECB’s plan to cap yields in the Spanish and Italian bond markets, meaning unlimited buying, are being rejected by the central bank itself, after previous German denials. 

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 21, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 21

 

AUD

 

 

 

Monetary Policy Meeting Minutes 

 

 

 

 

 

 

 

 

 

NZD

 

 

 

Credit Card Spending (YoY) 

0.1%

 

 

 

3.9% 

   

 

 

NZD

 

 

 

Inflation Expectations (QoQ) 

2.3%

 

 

 

2.4% 

 

 

 

 

JPY

 

 

 

All Industries Activity Index (MoM) 

0.2%

 

0.3% 

 

-0.2% 

   

 

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

Aug. 22

00:50

 

JPY

 

 

Trade Balance 

 

-0.46T 

-0.30T 

 

 

 

15:00

 

USD

 

 

Existing Home Sales 

 

4.52M 

4.37M 

 

 

 

19:00

 

USD

 

 

FOMC Meeting Minutes 

         

 

Dow Jones Industrial Average Forecast August 21, 2012, Technical Analysis

The Dow Jones had a very similar day to the S&P 500, as it fell originally but found support later in the day to form a hammer. This hammer is pressing up against the massive resistance at the 13,300 or so level, and as such we think that a breakout is coming. Certainly, we can see that we are at the top of some type of resistance line, almost a up trending channel but think that the real mark that needs to be overcome is that 13,300 level.

We aren’t interested in selling Dow Jones futures or even the market on the whole currently. We do see the potential for a pullback, but see far too much support at the 13,000 level to think that it will have any significant legs.

Dow Jones Industrial Average Forecast August 21, 2012, Technical Analysis
Dow Jones Industrial Average Forecast August 21, 2012, Technical Analysis

NZD/USD Fundamental Analysis August 22, 2012, Forecast

Analysis and Recommendation:

The NZD/USD gained its momentum back after the US declined in Monday’s session. The kiwi is trading at 0.8109

It was a sleepy day around the world on Monday, with markets waiting for the FOMC meeting minutes on Wednesday.

The ECB caught trader’s attention on rumors of a program to cap bond yields but it was just rumor at present.

Markets are also waiting for Chinese HSBC data due later which will indicate if we will see monetary stimulus from the PBoC.

Data released today in New Zealand showed a drop in credit card spending but also showed a drop in inflation which has been viewed as positive for the kiwi.

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 21, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 21

 

AUD

 

 

 

Monetary Policy Meeting Minutes 

 

 

 

 

 

 

 

 

 

NZD

 

 

 

Credit Card Spending (YoY) 

0.1%

 

 

 

3.9% 

   

 

 

NZD

 

 

 

Inflation Expectations (QoQ) 

2.3%

 

 

 

2.4% 

 

 

 

 

JPY

 

 

 

All Industries Activity Index (MoM) 

0.2%

 

0.3% 

 

-0.2% 

   

 

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

Aug. 22

00:50

 

JPY

 

 

Trade Balance 

 

-0.46T 

-0.30T 

 

 

 

15:00

 

USD

 

 

Existing Home Sales 

 

4.52M 

4.37M 

 

 

 

19:00

 

USD

 

 

FOMC Meeting Minutes 

         

 

EUR/USD Forecast August 21, 2012, Technical Analysis

The EUR/USD pair had a back-and-forth session during the Monday trading day, to in the session and basically unchanged. The candle is very neutral, and sitting on an uptrend line from the rising wedge that we’ve been talking about. This suggests to us that the 1.23 level is going to act as support, and as such we think the market will continue to rise.

We still see the 1.24 to 1.25 level as massively resistive, and as such we are still looking for candles that are bearish enough to sell. We simply do not have that right now, but we think it’s only a matter of time. Because of this, and all the problems in the European Union, we are flat of this market. For short-term traders, a move to the 1.24 level is very likely.

EUR/USD Forecast August 21, 2012, Technical Analysis
EUR/USD Forecast August 21, 2012, Technical Analysis

USD/JPY Forecast August 21, 2012, Technical Analysis

The USD/JPY pair fell during the Monday session after initially trying to push higher. This shouldn’t be much of a surprise, as it has surged so high in such a short amount of time. This could be the pullback that many of the bullish in this market have been waiting on as the move has been so sudden.

We still see the market as a “buy only” one, but think a pullback is needed in order to start buying again. The 78.50 level should be supportive, and we are looking for some type of supportive candle in that area from which to buy. Alternately, if we get above the 80 handle we think that the pair should take off as well and would be willing to buy at that point too.

USD/JPY Forecast August 21, 2012, Technical Analysis
USD/JPY Forecast August 21, 2012, Technical Analysis

GBP/USD Forecast August 21, 2012, Technical Analysis

GBP/USD rose during the Monday session, but was repelled again just above the 1.57 level. This area has acted as massive resistance over the last few weeks, and we think that it is without a doubt the most important level on this chart. We think that resistance runs all 100 pips higher, and as such are looking to buy a daily close above the 1.58 level.

Even with all of this resistance, this is a chart is difficult to sell mainly because of all of the long wicks underneath. The buyers keep step in and buying this market which of course causes higher lows and shows real tension from below in order to push prices higher. Because of this, we want to buy a daily close above 1.58, but will sit tight until we get that signal.

GBP/USD Forecast August 21, 2012, Technical Analysis
GBP/USD Forecast August 21, 2012, Technical Analysis

EUR/GBP Forecast August 21, 2012, Technical Analysis

The EUR/GBP pair fell during most of the session on Monday, but did bounce in order to form a hammer. The 0.7850 level looks to be supportive at this point in time, and it bounced does seem likely. However, we don’t like buying the Euro in general and will more than likely pass on this signal. After all, the trend is decidedly negative, and there is nothing that has changed over the last couple of sessions to make us believe that the Euro is suddenly going to be a great value.

As for selling, we need to see the hammer from Thursday get broken to the downside in order to start selling again. This would show a capitulation of support, and a continuation of the overall trend. Until then, we are flat.

EUR/GBP Forecast August 21, 2012, Technical Analysis
EUR/GBP Forecast August 21, 2012, Technical Analysis

EUR/JPY Forecast August 21, 2012, Technical Analysis

The EUR/JPY pair fell during the session after going back and forth on Monday. The pair looks like it’s trying to find some type of support in the 98 region, and as such we aren’t quite ready to sell yet.

We still believe that the Euro is doomed to fall in price, and that the 98 to 100 level is a big massive resistance. However, we haven’t got our sell signal yet and as such are staying on the sidelines. With this in mind, we are looking to sell rallies that show weakness, but we don’t see that sign quite yet. As for buying this pair, we would need to see a daily close above the 101 level in order to be convinced.

EUR/JPY Forecast August 21, 2012, Technical Analysis
EUR/JPY Forecast August 21, 2012, Technical Analysis

AUD/USD Forecast August 21, 2012, Technical Analysis

AUD/USD rose during the session on Monday, albeit in a fairly weak fashion. The market is approaching the uptrend line from the ascending channel, and as such we think the support will start to step back into the market here. Although we finished the Monday session with a bit of a shooting star, we are ready to start selling because of this support line.

We should also note that the 1.03 level is looking very supportive, and therefore we think that even a break down below the channel and could only end up being a false breakout. With this in mind, it is very difficult to sell the Australian dollar, not to mention all of the fundamental reasons that could propel this market much higher.

The gold market is typically you what this pair will follow, and as such it looks like the gold market is about to break out to the upside. If this does in fact happen, the Australian dollar should follow. Also, there is a lot of talk about central banks easing again and this would of course be good for precious metals and other hard commodities. Any time precious metals get a bid, the Australian dollar tends to do well.

Also, you have to keep in mind that this is a low yield world we live in now. Because of this, many traders are willing to buy higher yielding currencies in order to get some type of return. With this in mind, we think the Australian dollar is one of the most attractive currencies overall. This is especially true because of the higher than usual or even normal rates for a major currency right now.

If the Federal Reserve does in fact continue the monetary easing policy, it is very likely that the Australian dollar will rise in value. In fact, we think that a lot of traders are trying to front run that decision. If we get however manage to break below the 1.03 level, we would be more than willing to sell this pair as it would show a massive shift in momentum to the downside. On a break of the top of Monday’s shooting star however, we would decidedly the long.

AUD/USD Forecast August 21, 2012, Technical Analysis
AUD/USD Forecast August 21, 2012, Technical Analysis