NZD/USD Technical Analysis August 25, 2011

The NZD/USD pair fell slightly on Wednesday as the pair continues to consolidate just under the 0.83 level. The area is a minor support and resistance area, and until we get some clear indication out of the Federal Reserve on any future QE3 plans on Friday – we may see very little action in this pair. The Kiwi dollar being a commodity currency will be directly affected by the plans of the Fed for the Dollar. Any hint of QE3 sends this pair much higher on Friday, but until that announcement, it might be a quiet market.

EUR/USD Technical Analysis August 24, 2011

EUR/USD rose on Tuesday as traders bought stocks and risk-related assets around the world. The candle that was formed rose all the way to 1.45, but was sold aggressively as the level hold again. The close is just below the downtrend line that we have also drawn on the chart as well. Because of this, even with the massive bullish action during the session, we feel that this pair isn’t’ quite ready to launch just yet. The pair would have to close above the 1.45 level on the daily chart first for us to get in on the long side. A break below the lows on Tuesday would signal selling for us in this pair.

USD/JPY Technical Analysis August 24, 2011

The USD/JPY pair fell on Tuesday, but managed to bounce slightly the closer it got to 76. The pair is being artificially supported by the jawboning of the Bank of Japan warning against “excessive speculation in the Yen.” This will hold the downtrend up a bit in the mean time, and makes this a least favorite pair for us to trade at the moment. If we can break the top of the Monday doji – we might be tempted to buy with a small position. Otherwise, we find this pair is best left alone as the trend is down, but a central bank stands just below.

GBP/USD Technical Analysis August 24, 2011

For the last 5 sessions, the GBP/USD has tried to break through the 1.65 level. While it can do that, it simply cannot stay above that level. Tuesday saw a shooting star form from this level, and the technical set up is certainly to the downside. The breaking of the bottom of the Tuesday candle signals selling, and this could lead to the lower levels of the recent consolidation area, which would have us looking for 1.61 roughly. A break to the upside would have to break the Friday highs in order to get us bullish of this pair.

USD/CHF Technical Analysis August 24, 2011

The USD/CHF continued to be the “place were money goes to die” on Tuesday. The market is in a very tight range, and it appears that it is “stuck” at this time. The 0.8000 level is massive resistance, and the Swiss National Bank is willing to step in and keep this market up. This will make for very difficult trading conditions for the foreseeable future. The pair needs a large red or green candle to make us get involved. The trend is down – so we prefer that candle to be red.

EUR/CHF Technical Analysis August 24, 2011

The EUR/CHF pair rose on Tuesday, but managed to fall short of breaking above the 1.15 level again. The 1.15 level is a massive resistance area, and it seems that the pair simply cannot break it. If it ever does – this would be a massive buy signal. However, we are looking for sell signals as the trend is without a doubt to the downside overall. With the Swiss National Bank willing to step in to get this pair afloat, we might be waiting for that sell signal for a while. Until then, we sit on our hands and let the market tell us what to do. And at this point – it isn’t telling us to buy or sell.

AUD/USD Technical Analysis August 24, 2011

The AUD/USD shot straight up on Tuesday, and jumped over the 1.05 level. This resistance level keeps getting in the way, and it should be noted that the candle did stop once it broke through. However, the trend overall is up and that makes us bullish overall. The breaking of 1.06 has us buying this pair. If we break 1.03, we are ready to short as well, possibly going down to the 1.01 level.

USD/CAD Technical Analysis August 24, 2011

The USD/CAD pair fell during the Tuesday session, but only slightly. This might be because of the uncertainty involving the Jackson Hole meeting of central bankers this week. On Friday, Ben Bernanke, the Federal Reserve Chairman, will give a speech. This speech is becoming more and more important as traders convince themselves that the Fed is going to step in and bail them out again. If there is no quantitative easing to be found, the USD should gain as the market has been selling it on the whole, and with these two currencies being so interconnected, there is a real chance to see this pair shoot straight up if he doesn’t offer QE3. However, the parity level needs to be broken above, or the 0.98 needs to be broken below in order to finally get a signal as to the direction of this pair.

NZD/USD Technical Analysis August 24, 2011

The NZD/USD pair rose on the Tuesday session, and ended at the top of the candle. The candle did stop at the 0.8350 resistance level, which has been tough lately. The pair could react by falling a bit, but it should also me mentioned that the level isn’t a major one. More than likely, the pair continues to rise, and any fall from this level should have the prudent trader watching for bullish and supportive candles – especially around the 0.8000 to 0.8100 levels. The market isn’t sellable until we close below the 0.8000 area. With the especially strong candle on Tuesday, it looks as if this pair is finally ready to move – to the upside.

USD/CAD Daily Fundamental Analysis for August 24, 2011

The USD/CAD pair continued to drop on Tuesday, as optimism spread through global markets amid speculations the Fed will announce more stimulus to help the economic recovery regain its momentum, where traders increased their bets of further monetary policy easing by the Federal Reserve Bank, which weighed down on the U.S. dollar, and provided the CAD with momentum to push the USD/CAD pair to the downside.

If the Fed announces QE3, we should expect the USD/CAD pair to extend its losses over the coming period, since it will weaken the USD and will also boost demand for riskier assets, which will provide the CAD with strong momentum to push the USD/CAD pair further to the downside.

Wednesday August 24:

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

Expectations of Further Monetary Policy Easing Boost Confidence Despite Weak Housing Data

Traders continue to speculate that the Federal Reserve Bank’s Chairman will announce later this week new monetary easing measures to help aid the economic recovery amid recent signs of slowing economic activities in the United States, and accordingly, confidence remained high among investors, as they continued to target higher yielding and more risky assets on Tuesday.

Meanwhile, data from the U.S. housing market confirmed the ongoing deterioration in housing activities, where the new home sales index fell in July to 298,000 units, compared with median estimates of 310,000 units, nonetheless, investors were still focused on speculations of a third round of quantitative easing.

Stocks in the United States rose by opening on Tuesday, where the Dow Jones Industrial Average was up by nearly 1.20% to trade around 10,985, while the S&P 500 index was up by nearly 1.30% to trade around 1138. European stock indexes were mixed before closing on Tuesday, where FTSE 100 was nearly unchanged to trade at 5095 and the DAX was up by nearly 0.30% to trade around 5490.

The U.S. dollar fell against a basket of major currencies on Tuesday, where the U.S. dollar index was trading at 73.92, compared with the opening level at 74.06. The Euro rose against the Dollar, where the EUR/USD pair gained to trade at $1.4410, compared with the opening level at $1.4357, and the British Pound rose against the Dollar, where the GBP/USD pair traded around $1.6527, compared with the opening level at $1.6457.

Gold prices fell on Tuesday from a record high above $1900 an ounce to trade around $1877 an ounce, and crude oil prices were little changed to trade around $84 a barrel.

EUR/CHF Daily Fundamental Analysis for August 24, 2011

The EUR/CHF fluctuated heavily on Tuesday with the bias seen to the upside on eased fears and expectations for action from central banks to support slowing growth.

With rising equities and commodities the sentiment improved slightly with less than expected slowdown in the euro area composite sectors’ performance in August in the euro area and also the Chinese PMI supported the general sentiment which helped unwind demand for haven assets including the franc.

The volatility will be evident also on Wednesday with the focus still on the annual Federal Reserve symposium in Jackson Hole with the expectations the Fed will take more action to support the faltering recovery, with bets rising for QE3.

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

EUR/USD Daily Fundamental Analysis for August 24, 2011

Volatile and mixed trading prevailed on Tuesday as well with the downbeat data on the one end and the optimism over the Feds on the other, which kept choppy trading evident for the EUR/USD.

Commodities and equities were generally trading higher which supported the euro over haven currencies as the expectations for the fed to move and support the recovery and possibly with QE3 remained the upbeat aspect amid the downside pressure.

The euro area data were abysmal on Tuesday with the slump in confidence figures on the back of the debt crisis, while although the composite index held unexpectedly at July levels, yet the manufacturing sector contracted which reflects the worsening outlook for the economy.

On Wednesday, we expect the jitters to remain evident and volatile trading to prevail with the eyes still on the Fed and more downbeat data expected from the euro area.

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

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

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

GBP/USD Daily Fundamental Analysis for August 24, 2011

On Tuesday, the pound showed advance against the dollar after three days of decline as the pair followed the general sentiment in the market which was boosted by the release of the better-than-estimated German and Chinese manufacturing reports.

Also, the increasing expectations the Fed Chairman would announce a third round of stimulus in his speech at the an annual central bank conference in Jackson Hole later in the week sapped demand on the dollar.

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

The data may have an impact on the pair’s movements as meanwhile the main focus is onU.S.data to see the progress in the economy amid rising expectations the Fed Chairman would announce a third round of stimulus to stimulate growth.

 

USD/CHF Daily Fundamental Analysis for August 24, 2011

On Tuesday, the dollar showed slight decline against the franc as the better-than-estimated German and Chinese manufacturing reports as well as above forecasted European PMI composite index eroded demand on the safe havens, yet the dollar was much affected on expectations the Fed would announce a third round of stimulus to boost the waning recovery. However, the franc’s advance over the dollar was minimized as investors approached intervention from the Swiss National Bank to curb the franc’s advance.

Moreover, the data released from the Swiss economy showed improvement as trade surplus widened to 2.83 billion francs in July from 1.74 billion francs a month earlier.

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

Now, the main focus is on U.S. data to see the progress in the economy amid increasing expectations the Fed Chairman would announce a third round of stimulus in his speech at the an annual central bank conference in Jackson Hole on Friday, thus the data may have an impact on the pair’s movements.
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USD/JPY Daily Fundamental Analysis for August 24, 2011

The USD/JPY pair traded in a narrow range early Tuesday near its post-war levels, as the risk appetite remains subdued due to the crisis in the EU and U.S. in addition to the uncertainty about the global economy outlook.

On the other hand, the greenback advanced against its major counterparts due to expectations that the Federal Reserve will take extra measures to help the U.S. economy.

The Bank of Japan and the Japanese Government made many comments during the last period, as they tried to provide more confidence in the Japanese financial market, and prevent the yen from achieving more gains against the dollar and other currencies.

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

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

NZD/USD Daily Fundamental Analysis for August 24, 2011

The New Zealand dollar rose against its US counterpart after the report today showed that executives expect inflation to average 2.86% in two years time, a report from the Reserve Bank of New Zealand.

Meanwhile, the New Zealand dollar also advanced as equities gains boosted demand for the commodity currencies along with cheerful data about the Chinese economy, where China’ industrial production continued to accelerate, adding that New Zealand products will increase on strong demand from China.

The New Zealand economy gives some signs of picking up as rising consumer spending and employment add to evidence the nation’s economy grew modestly in the first quarter, buoyed by record-low interest rates and a surge in commodity prices.

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

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

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

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

AUD/USD Daily Fundamental Analysis for August 24, 2011

The Australian currency, nicknamed Aussie rose versus the greenback after the Chinese economy reported that its manufacturing sector declined at a slower pace during August, easing the fear over the outlook.

The Australian economy showed cheerful data, where the nation’s export prices increased more than expected, curbing speculation the RBA will cut interest rates next month.

Moreover, Aussie advanced after Asian stocks rose, with the regional benchmark index rebounding from its lowest level in almost a year, as exporters climbed on speculation that the Federal Reserve will announce additional measures to shore up the recovery in the U.S.

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

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

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

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

Sharp Losses For the USD as Risk Appetite Improves

Speculations that the U.S. will announce later this week a third quantitative easing program in an attempt to sustain the economic recovery, has been improving investors sentiment and demand for the higher yielding assets.

The Asian and European stocks are rising since this morning as the appetite for risk improved, while the dollar index is loosing ground as demand for safe heaven narrowed, trading around 73.65 as of this writing.

Also supporting confidence today was the Chinese manufacturing data, which indicated that the manufacturing sector shrank in August at a slower pace, fueling believes that China’s growth will continue to sustain the region.

The euro is trading near 1.4450 while the GBP is trading around 1.6550, especially after Germany and Europe released a better than expected PMI manufacturing report, while U.K. released an improved BBA home loans for July.

Worries aboutEurope’s sovereign debt crisis and the European banking structure continue to affect sentiment in the region. As a resultGermany’s ZEW survey for the economic sentiment fell to -37.6 in August from -15.1 previous.

Meanwhile Europe’s ZEW survey for the current situation fell to -40.0 from -7.0 previous. The effect on the euro was limited as markets are anxiously awaiting the developments from the U.S. by the end of this week.

Gold broke the $1900.00 barrier today, reaching a new record high early this morning at $1911.45, indicating that nervousness continues to affect some investors. Yet as risk appetite improved it fell near $1886.35 as of this writing.

Although demand on safe haven was limited today, the yen and the CHF managed to gain today as the dollar is weakening. The JPY is trading near 76.63, while the Swiss Frank is trading around 0.7873.

The AUD gained today after equity markets managed to stabilize, trading around 1.0500; while crude oil found additional support on believes the U.S .economy might find support soon, and now is trading near $85.55.

The U.S. will release today its new home sales for July, and no good news is expected as the housing sector continues to be depressed. Yet of more interest will be tomorrow’s durable goods orders and Ben Bernanke’s speech on Friday.

The uncertainties regarding the global recovery will keep volatility and caution within the financial markets this week, yet any good news may create buying opportunities within the equity, commodity and currency markets.

EUR/USD Technical Analysis August 23, 2011

The EUR/USD pair rose on Monday, but pulled back to form a shooting star. This is an especially bearish signal as it not only shows a lack of follow through, but the top of a downward channel as well. This shows that the pair is very weak, and a break below the 1.4350 level looks like a trigger to fall again, perhaps down to 1.41 or so as it is the bottom of the most recent consolidation area. We will not go long until we break above the 1.4525 level or so. With all of the European debt issues, it is very difficult to own the Euro in this environment.