USD/CHF Daily Fundamental Analysis for August 12, 2011

On Thursday, the pair continued its advance as after the SNB Vice President Thomas Jordan said that there are talks about pegging the franc as the bank face mounting difficulties to halt the franc’s appreciation. The announcement along with yesterday and last week’s measures managed to halt the franc’s rally. It seems that the SNB is insisting on curbing the franc’s advance, which is hurting Swiss exporters, yet it is facing a hard mission as investors resort to the franc amid the undergoing tension and fears. Thus, the pair is expected to continue its rebound with the SNB monetary tools used and as the dollar is facing downside pressure due the risks surrounding the U.S. economy which led to the downgrade of U.S. top sovereign rating. On Friday, the week ends with the release of some fundamentals from the U.S. which are retail sales for July, University of Michigan confidence for August and business inventories for June at 12:30 GMT, 13:55 GMT and 14:00 GMT respectively. The released data may have an impact on the pair especially if it showed further deterioration as it will increase fears in markets, particularly after the S&P downgrade to U.S. rating; therefore, the pair may return to the downside direction.

USD/JPY Technical Analysis August 12, 2011

USD/JPY had a back and forth day on Thursday as traders tested the lows again, but backed off as fear of intervention certainly must come into play every time we get close to the lows. The 77 level has become a bit of a battleground for bears and bulls in order to determine the future direction of this pair. The trend is down, but with the Bank of Japan willing to jump into the market in order to buy this pair – we are not comfortable selling at these low prices. The buy side doesn’t look all that rosy either. Quite frankly – we are avoiding this pair at this time, but would consider a small position on the buy side if we can break above 77.50 or so.

USD/CHF Technical Analysis August 12, 2011

The USD/CHF pair rose on Thursday as a SNB member mentioned the possibility of a peg to the Euro. The truth is this rise if probably going to be short-lived, and traders should be on the lookout for any weakness in this market as a possible selling opportunity. The pair certainly will run into resistance at the 0.80 level, but is facing it in a minor way at the current area of 0.77 and could possibly signal more selling at this point as well. We won’t buy this pair under any circumstances as being patient for selling opportunities has made a lot of money for us over the last several months.

USD/CAD Technical Analysis August 12, 2011

The USD/CAD pair fell on Thursday as the oil markets climbed, pushing the demand for Canadian dollars in the marketplace. The pair has a natural back stop in the form of parity, and the trend is certainly down. Because of this, we like selling this pair still, and will continue to say so until we can clear 1.02 or beyond. This pair is going to be very beholden to the oil markets, and as those charts look healthy all of the sudden, we feel that all rallies are to be sold, and eventually we will see a return to lower pricing in this pair.

NZD/USD Technical Analysis for August 12, 2011

The NZD/USD pair continued its wild swings on Thursday as the markets seem to run from one direction to another every 24 hours. The pair seems like it is in consolidation between 0.84 and 0.81 and could stay in that range for a little while. A break to either side runs into opposing forces just 100 pips away. Because of this, we are sitting out of this market until we can do analysis on Friday as to the longer-term look of it. If you are inclined to scalp the markets, this could be a good pair for you, depending on the spread you pay.

GBP/USD Technical Analysis for August 12, 2011

GBP/USD bounced on Thursday as traders bought into the markets, pushing risk higher again. However, this pair is finding a little bit of trouble at the 1.6300 area. This is roughly the area that once served as support, and could serve as resistance. This is classic “what was once the floor becomes the ceiling” technical analysis, and now all we can do is wait to see if it happens to hold the advance in this pair. If not, we feel that there is a serious ceiling in place at the 1.65 area. We are looking to sell weakness in the 1.6250 area, and if we don’t get it – are willing to wait until closer to 1.65 in order to sell weakness.

EUR/USD Technical Analysis for August 12, 2011

The EUR/USD rose for a while on Thursday, but started to pull back in the later hours as the markets continue to go back and forth around the world. The pair is still grinding lower overall, and we prefer selling until the pair can break above the top of the downtrend channel drawn on the chart. The 1.40 area giving way would be a massive sell signal, and we would then become very aggressive at that point in our selling. Any weakness near the 1.44 area, the recent highs, we will sell as well.

EUR/CHF Technical Analysis for August 12, 2011

The EUR/CHF pair rose on Thursday as traders ran from the Franc due to a comment from SNB officials suggesting that a peg to the Euro might be a possible solution to the rapidly appreciating Franc. This spooked the Franc bulls, and the buying of this pair kicked off. The trend is down, and it remains so. This move is setting up as another pop in the pair that could be sold if we see bearish action. The 1.10 area is just above, and we are very interested in selling at that area if we get negative candles. We do not buy this pair under any circumstances.

AUD/USD Technical Analysis for August 12, 2011

The AUD/USD pair rose again on Thursday as the trading world continues its tug-o-war on a global scale. The AUD/USD caught a bid in a risk-seeking move, and we are presently at the top of the most recent consolidation area between the 1.04 and 1.01 areas. The pair has resistance just above at 1.05, and we feel that is the real fight to come. Because of this, we buy only on a daily close above that area. If not, we are willing to sell a break below parity if we get it on the close. In the meantime, it is a decent scalping pair as it continues to go back and forth.

USD/CAD Daily Fundamental Analysis for August 12, 2011

The USD/CAD pair was little changed on Thursday, where the trade deficit in Canada widened worse than expectations, which weighed down on the CAD against the USD, while the better than expected jobless claims from the United States failed to boost optimism in higher yielding currencies, as traders remained cautious on rising fears the European debt crisis is spreading into major economies within the Euro Zone area, which provided the USD/CAD pair with bullish momentum.

The huge pessimism 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, since risk aversion will provide the USD/CAD pair with the needed bullish momentum.

Friday August 12:

The United States will end the week with a high note starting with the retail sales index for July at 12:30 GMT, which are expected with 0.4% rise following 0.1% and excluding autos with 0.2% rise after remaining unchanged in June and excluding auto and gas to hold steady with 0.2% rise.

The University of Michigan Confidence for August is due at 13:55 GMT, and expected with a slight drop to 63.2 from 63.7.

The business inventories index for June will follow at 14:00 GMT and expected to slow to 0.6% from 1.0% the previous month.

EUR/USD Daily Fundamental Analysis for August 12, 2011

The EUR/USD continued to trade with high volatility on Thursday with the lack of major fundamentals to alter the outlook for the debt-laden euro area that fell a victim of rumors and keeping the downside pressure on the euro.

The downside bias was still evident on the pair with the euro still weak against the dollar amid the prevailing risk aversion and uncertainty over the outlook and the debt crisis status. The market is still recovering from the French rumors and speculations that forced the French president to summon the ministers from the holiday to contain a new confidence crisis.

Pressures mounted on the French president after the cost to insure French debt hit a record and borrowing costs rallied on speculation that the top credit rating might be lost amid slowing growth and inability to meet the fiscal targets.

Rating agencies still affirm their stable outlook for the French credit rating while Sarkozy provided the ministers with a week to provide spending cuts details to ensure bringing the debt burden lower and the deficit reduction to 3.0% of the GDP.

The pressure is evident and the banking sector shares are suffering especially after the rumors also on the French bank Societe Generale is about to go under, which intensified the negative pressure in the market.

The volatility will prevail on Friday with the fragile sentiment and end of the week trading. Also on Friday the euro area industrial production for June is due at 09:00 GMT and expected to remain steady on the month with 0.1% gain and to rise 4.5% on the year following 4.0%.

The United States will end the week with a high note starting with the retail sales index for July at 12:30 GMT which are expected with 0.4% rise following 0.1% and excluding autos with 0.2% rise after remaining unchanged in June and excluding auto and gas to hold steady with 0.2% rise.

The University of Michigan Confidence for August is due at 13:55 and expected with a slight drop to 63.2 from 63.7.

The business inventories index for June will follow at 14:00 GMT and expected to slow to 0.6% from 1.0% the previous month.

EUR/CHF Daily Fundamental Analysis for August 12, 2011

The EUR/CHF continued to trade with high volatility on Thursday and the franc was on the receiving end as the talk of further intervention from the SNB powered the euro to rise from the record low versus swissy.

The focus remains on the debt-laden euro area and the deepening debt woes, which accordingly is favoring swissy gains on haven demand and keeping the euro fragile. Nevertheless, a week after the SNB intervention and the ECB action to ease the jitters the market is starting to respond, though the volatility remains evident.

On Friday, the market is expected to be affected by intervention expectations again alongside end of the week position squaring. The comments from SNB Vice President in an interview with Tages-Anzeiger newspaper that a temporary peg of the franc might be a coming measure to stem the franc broad rally was the main trigger of renewed intervention jitters.

The comments were confirmed from the SNB spokesman and added downside pressure on the franc with the possible peg as means to ease the pressure on the franc and the economy.

Those comments will keep choppy trading evident for the EUR/CHF. In other news the euro area industrial production for June is due at 09:00 GMT and expected to remain steady on the month with 0.1% gain and to rise 4.5% on the year following 4.0%.

GBP/USD Daily Fundamental Analysis for August 12, 2011

On Thursday, the showed slight rebound, where the pound hovered around three-week low versus the dollar, after falling in the previous three sessions.

Yet, the pair is predicted to continue its downside direction as the undergoing tensions are expected to lower demand on high-yielding currencies.

In addition, the sterling remains under pressure after the release of August’s quarterly inflation report which included cutting of growth and inflation outlook by the BoE. The BoE said growth outlook is now weaker and inflation will decline below target in the medium term.  

On Friday, the week ends with the release of some fundamentals from the U.S. which are retail sales for July, University of Michigan confidence for August and business inventories for June at 12:30 GMT, 13:55 GMT and 14:00 GMT respectively, while the U.K. lacks fundamentals. 

The released data may have an impact on the pair especially if it showed further deterioration as it will increase fears in markets, particularly after the S&P downgrade toU.S.rating; therefore, the pair may return to the downside direction.

 

NZD/USD Daily Fundamental Analysis for August 12, 2011

The New Zealand dollar inclined for the first time against the dollar after heavy losses during last past period especially after the Standard & Poor’s cut reduced the US’s long-term credit rating. However kiwi recovered in a relief rally on the slight improvement for commodities and equities.

Commodities recovered slightly which supported the New Zealand dollar to gain versus greenback, also it increased after data showed consumer confidence rose.

On Friday, at 22:45 GMT, NZD retail sales Ex. inflation for the second quarter is due after the recorded 0.9% in the first quarter.

At 12:30 GMT, the U.S. economy will release the advanced retail sales for July, where the previous reading was 0.1% and expected to come at 0.4%. The University of Michigan confidence for August will be released at 09:55 GMT, where the preliminary reading is expected to come at 63.2 from the previous of 63.7.

The U.S. business inventories for June will be released at 10:00 GMT, where it had a previous of 1.0% and expected to come at 0.6%.

AUD/USD Daily Fundamental Analysis for August 12, 2011

The Australian economy is still struggling at this period as a result of the natural disaster that hit the nation in the first half of the year, along with the European debt crisis and the slowing global growth, all reducing the demand for higher yielding assets.

On the other hand, Australian unemployment increased to the most since October 2010 as a result of higher interest rates after the central bank sought to restrain inflation with 175 basis points of rate increases from October.

The outlook for the Australian economy worsened with the negative events that face the nation’s economic recovery as the Bank sees that the economy needs time to recover, adding that the Bank isn’t going to increase borrowing costs until the year’s end to support the recovery.

Moreover, the Bank has noted that Australian policy makers won’t increase the interest rates until the end of the year, as the government wants to support the economic recovery amid the negative obstacles that face the global economy.

On Friday, Australian isn’t going to release any fundamental data, but at 12:30 GMT, the U.S. economy will release the advanced retail sales for July, where the previous reading was 0.1% and expected to come at 0.4%. The University of Michigan confidence for August will be released at 09:55 GMT, where the preliminary reading is expected to come at 63.2 from the previous of 63.7.

The U.S. business inventories for June will be released at 10:00 GMT, where it had a previous of 1.0% and expected to come at 0.6%.

USD/JPY Daily Fundamental Analysis for August 12, 2011

The USD/JPY pair remained aggressively bearish as the pair hovers near post-war lows, where the Japanese yen enjoys the strongest performance against the majority of its major counterparts on concerns over the global economic outlook.

Fears over Europe’s debt crisis increased demand for the safest assets, in addition to the Federal Reserve which assured the loose monetary policy and pledged to keep the interest rate at all time low till mid-2013.

The USD/JPY pair is now trading near pre-intervention levels, which fueled fears of another intervention from the BOJ, especially with the ongoing slump across global bourses which increased demand for safe haven currencies like green back and the Japanese yen.

On Friday at 04:30 GMT,Japanwill release the industrial production for June, where the previous reading was 3.9%, as for the annual reading it had a prior reading of – 1.6%.

At 12:30 GMT, the U.S. economy will release the advanced retail sales for July, where the previous reading was 0.1% and expected to come at 0.4%. The University of Michigan confidence for August will be released at 09:55 GMT, where the preliminary reading is expected to come at 63.2 from the previous of 63.7.

The U.S. business inventories for June will be released at 10:00 GMT, where it had a previous of 1.0% and expected to come at 0.6%.

EUR/USD Technical Analysis August 11, 2011

EUR/USD continued its choppiness on Wednesday as the pair fell back to the 1.41 level again, and then promptly started to bounce back up again. The pair looks like what it truly is: a fight between two currencies most people don’t want to own. The consolidation area between 1.41 and 1.44 should continue to hold for a short time. Once we break either higher or lower – that will be your signal as to what direction you want to be trading in. In the meantime, it is a good market to scalp.

USD/JPY Technical Analysis August 11, 2011

USD/JPY fell on Wednesday again, but managed to form a hammer, at the 77 support area. The pair is certainly being watched by the Bank of Japan, who has intervened recently and has been making statements about doing it again. Because of this, we won’t sell this pair anymore as the risk simply isn’t worth it. The pair rising past 77.50 would be enough for us to try a small long position.

GBP/USD Technical Analysis August 11, 2011

GBP/USD fell on Wednesday, breaking below the 1.63 support area that had been the bottom of a recent rectangle pattern. We see this pair as being in two rectangles at the same time, with one being between 1.63 and 1.65, and the larger one being within the 1.60 and 1.65 levels. The pair will continue to be choppy, but with the unrest in England at the moment, as well as fears around the world in various markets – the USD is probably the stronger of the two currencies at the moment. Because of this, we look to sell any rallies now.

USD/CHF Technical Analysis August 11, 2011

USD/CHF barely moved on Wednesday, even as the rest of the markets around the world fell apart. The pair was unusually quiet, and as such – we feel that a bounce could be coming. This would only be a selling opportunity of course, and the 0.75 level would be a great place to short from, but we will have to wait to see if this comes about. The breaking of the lows would be a selling opportunity as well, and we wouldn’t hesitate to take that signal. The market being this quiet certainly has us becoming more and more patient for the longer-term set up that surely will come soon.