GBP/USD Technical Analysis for the Week of August 15, 2011

The GBP/USD pair continues its range bound behavior between the 1.65 and 1.60 areas, and we think this will continue. It should be noted we got a nice bounce in the previous week on Thursday, but it still wasn’t enough to break the range. The pair looks like a short-term trader’s market, and longer-term trading will be very difficult until we break below 1.60 or above 1.68.

USD/CHF Technical Analysis for the Week of August 15, 2011

The USD/CHF pair fell hard this past week, and then bounced as traders left the Franc in droves. There is concern about a potential pegging of the Franc to the Euro, and if that happens….the Franc will be valued much, much lower. However, until that happens there isn’t much to work off of except this casual comment by a SNB member. We are waiting for a selling opportunity, and this potential bounce is about to give it to us. The 0.80 and 0.83 level s are possible selling areas as the trend should be set to continue.

EUR/CHF Technical Analysis for the Week of August 15, 2011

The EUR/CHF pair fell hard in the early days of the week, only to bounce back and form a hammer that is nice and extended. This is a classic buy signal when the highs get broken, and although we are aware of this, we don’t want to buy still. We see the 1.15 area above as massive resistance, and think that any bounce will get stopped cold at that point. Also, there is a Swiss National Bank meeting this week, as well as one for the Federal Reserve. This next week could be rough sailing. By Friday, we should have a much more clear picture.

AUD/USD Technical Analysis for the Week of August 15, 2011

AUD/USD fell, and then bounced as traders whipped the global markets back and forth this previous week. The AUD/USD shows this in the form of a very long hammer that bounced from the parity level. The pair looks set to push higher, but with the 1.05 level being so resistive (according to the massive support it offered previously) and so close, we are waiting for a daily close above the level before we buy. If it does – we could see a run back to the highs around 1.10 or so. A break below the 1.0000 level gets us very bearish for the long-term.

USD/CAD Technical Analysis for the Week of August 15, 2011

The USD/CAD pair found itself rising during the week, but failed at the parity level. The pair looks set to fall from the current level, and as such – we could see a nice run for a few handles. The trend is down, and we think that the oil markets are trying to find a bottom. This will be bullish for the CAD as well. Any hint of QE3 from the Fed this week: This pair falls, and falls fast.

NZD/USD Technical Analysis for the Week of August 15, 2011

NZD/USD fell hard, bounced from the 0.80 level, and then formed a hammer this past week. This shows that the pair is ready to continue its bullish run, and as the Kiwi has been so strong – we are not willing to go against that trend. The pair is a buy if we can break the highs of the previous week, and the Kiwi will without a doubt appreciate. The breaking below 0.80 would be devastating, and we would sell this market aggressively.

USD/JPY Daily Fundamental Analysis for August 15, 2011

The USD/JPY pair dropped last week, as the Japanese yen was able to cover its previous losses against the dollar when BOJ intervened in the FX market and sold the yen.

The U.S. credit rating downgrade increased pressure on the central banks, where investors are monitoring any move or intervention in the financial market after S&P’s move changed many scenarios.

On the other hand, the global stock markets dropped sharply on concerns about the outlook of the global economy recovery, where investors are looking for safer investments, which could bring the Japanese yen higher once again.

On Monday at 23:50 GMT (Sunday), Japan will issue the gross domestic product for the second quarter, where the preliminary reading is expected to shrink by 0.7% compared with the previous contraction of 0.9%.

On the other hand, the annualized gross domestic product for the second quarter is expected at – 2.6% from the previous – 3.5%.

The U.S. empire manufacturing for August will be issued at 12:30 GMT, where the previous reading was down by 3.76 and expected to show a rise of 1.50.

At 13:00 GMT, theU.S.economy will release the net long-term TIC flows for June, where the previous reading was $23.6 billion. The total net TIC flows for June will be up at 13:00 GMT, where it had a previous reading of – $67.5 billion.

USD/CAD Daily Fundamental Analysis for August 15, 2011

The USD/CAD pair rose on Friday, where worse than expected consumer confidence from the University of Michigan index overshadowed rising retail sales, while 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 for long, since risk aversion will provide the USD/CAD pair with the needed bullish momentum.

Monday August 15:

The U.S. economy will start the data this week with the Empire Manufacturing for August at 12:30 which is expected to rebound to 0.50 from -3.76.

At 13:00 GMT the U.S. will release the TIC flows for June which surely were affected by the start of the debt debate before it intensified in July.

NZD/USD Daily Fundamental Analysis for August 15, 2011

The NZD/USD pair propped sharply last week, as demand increased on the greenback and low yielding currencies due to concerns over the global economic outlook, and the uncertainty about financial markets.

The New Zealand currency reached to the lowest level in two months against the US dollar as Standard Poor’s reduced the US’s long-term on August 15 to AA+ from AAA.

New Zealand dollar dropped also against the Japanese yen after Asian stocks declined to the lowest level since 2008 on concern the U.S. economy might fall in recession again, damping demand for the higher-yielding currencies.

At 22:30 GMT (Sunday), the New Zealand economy is to release the first data during the week with the performance service index for July that reached 54.7 a previous month.

The U.S. empire manufacturing for August will be issued at 12:30 GMT, where the previous reading was down by 3.76 and expected to show a rise of 1.50.

At 13:00 GMT, the U.S. economy will release the net long-term TIC flows for June, where the previous reading was $23.6 billion. The total net TIC flows for June will be up at 13:00 GMT, where it had a previous reading of – $67.5 billion.

EUR/USD Daily Fundamental Analysis for August 15, 2011

The EUR/USD will start the week on Monday with heavy volatility as the market continues to react to the short-selling ban and will be jittered ahead of the German-Franco meeting to discuss the crisis.

The French economy stalled in the second quarter and the GDP figures from the euro area will follow on Tuesday and with the lack of major data on Monday the focus will remain on what is coming ahead, especially as the sudden move to ban short selling signaled the deep fear in the EU from the spreading and deepening debt crisis.

Choppy trading will prevail with the start of the week for sure as investors assess the outlook for the euro area under the new ban and whether the taken measures from central banks worldwide where sufficient to stem the contagion and ease the pressure on markets.

The euro area is not scheduled to release any fundamentals on Monday leaving the focus on the United States.

The U.S. economy will start the data this week with the Empire Manufacturing for August at 12:30 which is expected to rebound to 0.50 from -3.76.

At 13:00 GMT the U.S. will release the TIC flows for June which surely were affected by the start of the debt debate before it intensified in July.

EUR/CHF Daily Fundamental Analysis for August 15, 2011

The pair is expected to start a new volatile week on Monday and the EUR/CHF will still be dominated by the outlook expectations and the prevailing sentiment with focus on the SNB’s next move.

The fear of the currency peg signaled from the SNB and the intensified intervention and increased liquidity from the SNB started to take effect with the end of last week as the EUR/CHF rebounded to close slightly bullish and with this move we expect that swissy might weaken further this week and the pair still be biased to the upside.

Still with the start of the week mixed trading will prevail and swissy might recover some of the losses especially as investors remain jittered ahead of this week’s meeting between Sarkozy and Merkel to discuss the worsening crisis which will affect the pair.

As for the data, the euro area is no scheduled to release new data while Switzerland will star the week with the Producer & Import Prices for July at 07:15 after the reported drop in June by 0.5%.

USD/CHF Daily Fundamental Analysis for August 15, 2011

As of 07:15 GMT, the Swiss economy will release the only data for the week which is producer and import prices for the month of July. In theU.S., at 12:30 GMT, empire manufacturing for August will be out, where half an hour later, the US will release net TIC flows. The releases are not expected to have significant impact on the pair.

However, the releases from both economies are not expected to have an impact on the pair’s movements which suggest that the pair will get direction from market.

In the previous week, tensions and fears dominated market, enhancing demand on safe havens, yet the intervention from the SNB by using monetary tools and announcement vice president of the SNB managed to push the franc to the downside. Thus, the pair may continue its rebound on expected further interventions by the SNB to halt the franc’s appreciation.

GBP/USD Daily Fundamental Analysis for August 15, 2011

While the U.S. lacks fundamentals, at 12:30 GMT, the U.S. will release empire manufacturing for August, where half an hour later, net TIC flows will be available. The releases are not expected to have significant impact on the pair.

However, the releases from both economies are not expected to have an impact on the pair’s movements which suggest that the pair will get direction from market.

In the previous week, tensions and fears dominated market, enhancing demand on safe havens which may push the pair further to the downside, especially as last week’s inflation report from the U.K. worsened the outlook for the British economy which would make the pound less attractive for investors.

AUD/USD Daily Fundamental Analysis for August 15, 2011

The AUD/USD pair dropped to its lowest level in four months as fears controlled the markets due to the uncertainty about the global recovery, which reduced demand for high yielding currencies.

The Australian dollar declined sharply against greenback with the outlook for the sluggish economic recovery, adding that the Reserve Bank of Australia will leave the interest rates unchanged until the end of the year.

Moreover, Aussie continues its slide as Asian stock markets slumped the most in three years on concerns that we might fall into a double-dip recession.

The Australian economy will start this week with new motor vehicle sales index July at 01:30 GMT, while the prior reading inclined by 1.3% in June.

The U.S. empire manufacturing for August will be issued at 12:30 GMT, where the previous reading was down by 3.76 and expected to show a rise of 1.50.

At 13:00 GMT, the U.S. economy will release the net long-term TIC flows for June, where the previous reading was $23.6 billion. The total net TIC flows for June will be up at 13:00 GMT, where it had a previous reading of – $67.5 billion.

USD/JPY Weekly Fundamental Analysis for August 15-19, 2011

The USD/JPY pair ended last week with a sharp decline, where the risk aversion controlled the FX market last week which drove investors to abandon high yielding currencies and shift their investment to the yen.

The U.S. credit rating downgrade increased pressure on the central banks, where investors are monitoring any move or intervention in the financial market after S&P’s move changed many scenarios.

Investors increased demand on the Japanese currency as a safe haven, after risk aversion returned to control the market increasing pressure on the yen to soar to the dangerous zones against greenback.

The U.S. sovereign credit rating downgrade by Standard and Poor’s opened the door for a sell-off across global bourses, where investors abandoned risky assets and shifted their investments to the yen, which increased expectations for another intervention from the BOJ.

The Federal Reserve announced that it will keep interest rate at exceptionally low levels, but the market participants did not deal well with this announcement, where traders continued to abandon the higher yielding currencies due to the risk aversion.

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

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

Monday August 15:

On Monday at 23:50 GMT (Sunday), Japan will issue the gross domestic product for the second quarter, where the preliminary reading is expected to shrink by 0.7% compared with the previous contraction of 0.9%.

On the other hand, the annualized gross domestic product for the second quarter is expected at – 2.6% from the previous – 3.5%.

The U.S. empire manufacturing for August will be issued at 12:30 GMT, where the previous reading was down by 3.76 and expected to show a rise of 1.50.

At 13:00 GMT, the U.S. economy will release the net long-term TIC flows for June, where the previous reading was $23.6 billion. The total net TIC flows for June will be up at 13:00 GMT, where it had a previous reading of – $67.5 billion.

Tuesday August 16:

The U.S. economy will release the import price index for July, where the previous reading was – 0.5% and expected to come at –0.1%, while the annual import price index for July is expected to come at 13.4% from the previous 13.6%.

The U.S. housing starts index for July will be up released at 12:30 GMT, where it had a previous reading of 629 thousand and expected to come at 608 thousand down by 3.3%.

As for the building permits for July it will be up at 12:30 GMT, where it’s expected at 605 thousand down by 1.9% from the previous 624 thousand.

On the other hand, the industrial production for July will be published at 13:15 GMT, where it had a previous reading of 0.2% and expected to come at 0.5%. The capacity utilization for July is expected to come at 76.9% from the previous reading of 76.7%.

Wednesday August 17:

The U.S. economy will release the PPI index for July at 12:30 GMT, where the previous reading was down by 0.4% and expected at 0.1%, while the annual reading is expected to come at 7.0% in line with the previous.

Thursday August 18:

On Thursday at 23:50 GMT (Wednesday), Japan will release the merchandise trade balance for July, where it’s expected to show a surplus of 71.0 billion yen from the previous surplus of 70.7 billion yen.

The adjusted merchandise trade balance for July had a previous deficit of 191.2 billion yen and expected to show a deficit of 152.5 billion yen.

At 05:00 GMT, Japan will release coincident index for June, where it had a previous reading of 108.6, while the leading index for June had a previous reading of 103.2.

The U.S. economy is to release the consumer price index for July at 12:30 GMT, where it is expected to rise by 0.2% following 0.2% drop, and on the year expected at 3.3% from the prior reading of 3.6%.

At 12:30 GMT, U.S. economy will release the weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance eased to 395 thousand last week.

The U.S. leading indicators for July will be released at 14:00 GMT and expected with 0.2% rise following 0.3%. The Philadelphia Fed for August is expected to come at 4 from the prior reading of 3.2.

At 14:00 GMT, the U.S. economy will release the existing home sales for July, where it’s expected to come at 4.94 million rising 3.5% from the previous 4.77 million.

Friday August 19:

Japan will release the all industry activity index for June at 04:30 GMT, where it had a previous reading of 1.9% and expected to come at 2.0%.

NZD/USD Weekly Fundamental Analysis for August 15-19, 2011

The following events and economic reports may influence trading for Asian currencies, where New Zealand’s dollar dropped for the fifth time in six days, reaching the lowest level in more than 6 weeks versus the dollar after commodities that make up a majority of the South Pacific nation’s exports declined.

The market’s movements affected after the Standard & Poor’s agency reduced the U.S. long-term credit rating from AAA to AA+, increasing demand for safe havens currencies such as the Yen and Franc.

Moreover, New Zealand dollar dropped against the Japanese yen after Asian stock markets declined to the lowest level since 2008 on concern the U.S. economy might fall in recession again, damping demand for the higher-yielding currencies.

The NZ unemployment witnessed some improvement in the second three months on rising consumer spending, and employment add to evidence the nation’s economy grew modestly in the second quarter, buoyed by record-low interest rates and a surge in commodity prices. Continued growth in domestic demand this year may prompt central bank Governor Alan Bollard to raise interest rates as early as the fourth quarter.

In the week ahead, the NZD/USD pair will move in line with the market sentiment that will be the main driver for markets with the focus on the slowing growth and deepening debt crisis in Europe.

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

Monday August 15:

At 22:30 GMT (Sunday), the New Zealand economy is to release the first data during the week with the performance service index for July that reached 54.7 a previous month.

The U.S. empire manufacturing for August will be issued at 12:30 GMT, where the previous reading was down by 3.76 and expected to show a rise of 1.50.

At 13:00 GMT, theU.S.economy will release the net long-term TIC flows for June, where the previous reading was $23.6 billion. The total net TIC flows for June will be up at 13:00 GMT, where it had a previous reading of – $67.5 billion.

Tuesday August 16:

NZ economy will release the producer price inputs for the second quarter at 22:45 GMT (Monday) that is expected to rise by 1.0% compared with a previous 2.2%.

The U.S. economy will release the import price index for July, where the previous reading was – 0.5% and expected to come at –0.1%, while the annual import price index for July is expected to come at 13.4% from the previous 13.6%.
The U.S. housing starts index for July will be up released at 12:30 GMT, where it had a previous reading of 629 thousand and expected to come at 608 thousand down by 3.3%.

As for the building permits for July it will be up at 12:30 GMT, where it’s expected at 605 thousand down by 1.9% from the previous 624 thousand.

On the other hand, the industrial production for July will be published at 13:15 GMT, where it had a previous reading of 0.2% and expected to come at 0.5%. The capacity utilization for July is expected to come at 76.9% from the previous reading of 76.7%.

Wednesday August 17:

The U.S. economy will release the PPI index for July at 12:30 GMT, where the previous reading was down by 0.4% and expected at 0.1%, while the annual reading is expected to come at 7.0% in line with the previous.

Thursday August 18:

The U.S. economy is to release the consumer price index for July at 12:30 GMT, where it is expected to rise by 0.2% following 0.2% drop, and on the year expected at 3.3% from the prior reading of 3.6%.

At 12:30 GMT, U.S. economy will release the weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance eased to 395 thousand last week.

The U.S. leading indicators for July will be released at 14:00 GMT and expected with 0.2% rise following 0.3%. The Philadelphia Fed for August is expected to come at 4 from the prior reading of 3.2.

At 14:00 GMT, the U.S. economy will release the existing home sales for July, where it’s expected to come at 4.94 million rising 3.5% from the previous 4.77 million.

Friday August 19:

The New Zealand economy will end the week by releasing its credit card spending at 03:00 GMT after the 0.4% reported rise in June.

AUD/USD Weekly Fundamental Analysis for August 15-19, 2011

The Australian currency (Aussie) slumped to the most level in more than five months against the dollar as global economic growth falters dampening demand for higher yielding investments.

We witnessed very important events that pressured markets to move sharply lower after the Standard & Poor’s agency reduced the U.S. long-term credit rating from AAA to AA+, increasing demand for safe havens currencies such as the Yen and Franc.

Moreover, the market faced aggressive movements after investors saw more evidence that the global economy is losing momentum increasing demand for the precious metal as alternative investments.

Currently, the Australian economy is still suffering from first-half natural disasters, along with the European debt crisis and the sluggish U.S. economy that has a negative impact on the global economy.

Still the fears dominate the market and the Australian currency will witness more volatility against majors with the lack of confidence in the market.

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

Monday August 15:

The Australian economy will start this week with new motor vehicle sales index July at 01:30 GMT, while the prior reading inclined by 1.3% in June.

The U.S. empire manufacturing for August will be issued at 12:30 GMT, where the previous reading was down by 3.76 and expected to show a rise of 1.50.

At 13:00 GMT, theU.S.economy will release the net long-term TIC flows for June, where the previous reading was $23.6 billion. The total net TIC flows for June will be up at 13:00 GMT, where it had a previous reading of – $67.5 billion.

Tuesday August 16:

The Reserve Bank of Australia is to issue heavy data that has high impact on the market’s movements, while it will release the Bank’s minutes at 01:30 GMT for the last meeting.

The U.S. economy will release the import price index for July, where the previous reading was – 0.5% and expected to come at –0.1%, while the annual import price index for July is expected to come at 13.4% from the previous 13.6%.

The U.S. housing starts index for July will be up released at 12:30 GMT, where it had a previous reading of 629 thousand and expected to come at 608 thousand down by 3.3%.

As for the building permits for July it will be up at 12:30 GMT, where it’s expected at 605 thousand down by 1.9% from the previous 624 thousand.

On the other hand, the industrial production for July will be published at 13:15 GMT, where it had a previous reading of 0.2% and expected to come at 0.5%. The capacity utilization for July is expected to come at 76.9% from the previous reading of 76.7%.

Wednesday August 17:

At 00:30 GMT, Australia will release the Westpac leading index for the month of June, where the previous was -0.1% in May.

The U.S. economy will release the PPI index for July at 12:30 GMT, where the previous reading was down by 0.4% and expected at 0.1%, while the annual reading is expected to come at 7.0% in line with the previous.

Thursday August 18:

Australia is to end the week with its average weekly wages (QoQ) due at 01:30 GMT and expected to hold at 1.0% in line with the previous.

The U.S. economy is to release the consumer price index for July at 12:30 GMT, where it is expected to rise by 0.2% following 0.2% drop, and on the year expected at 3.3% from the prior reading of 3.6%.

At 12:30 GMT, U.S. economy will release the weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance eased to 395 thousand last week.

The U.S. leading indicators for July will be released at 14:00 GMT and expected with 0.2% rise following 0.3%. The Philadelphia Fed for August is expected to come at 4 from the prior reading of 3.2.

At 14:00 GMT, the U.S. economy will release the existing home sales for July, where it’s expected to come at 4.94 million rising 3.5% from the previous 4.77 million.

Friday August 19:

Both economies aren’t going to release any fundamentals on Friday.

USD/CHF Weekly Fundamental Analysis for August 15 – 19, 2011

In the week ended August 12, the USD/CHF did slight rebound to halt its southern direction as the SNB monetary intervention and announcement pushed the franc lower from record high against the dollar.  Following last week’s interest rate cut by the SNB, the bank in its battle to curb the franc’s advance decided to increase the supply of liquidity in markets, raise sight deposits to 120 billion francs from 80 billion francs and adopt foreign-exchange swap transactions to reinforce liquidity.

In addition, the SNB Vice President Thomas Jordan said that there are talks about pegging the franc giving further bearishness to the franc.

On the other hand, the dollar fluctuated as it benefited from being a safe haven amid the tensions and fears spreading in markets after the downgrade of the U.S. sovereign rating last Friday, yet it was under pressure due to sluggish growth and high debt the U.S. are suffering from.

In addition, the Fed pledge would keep record-low borrowing cost through mid-2013 and to use a wide range of tools to boost recovery that slowed down was considered week compared to other central bank’s interventions seen last week.

With the insistence of the SNB to halt the franc’s rally, the pair may continue its upside rebound in the coming period.

This week, the main focus will be on housing and inflation data from theU.S.while the Swiss economy lacks important fundamentals.

The release of the data will be as follows:

Monday August 15:

As of 07:15 GMT, the Swiss economy will release the only data for the week which is producer and import prices for the month of July. In theU.S., at 12:30 GMT, empire manufacturing for August will be out, where half an hour later, theUSwill release net TIC flows. The releases are not expected to have significant impact on the pair.

Tuesday August 16:

At 12:30 GMT, the market’s attention will be back to housing data with the release housing starts and building permits for July as it will provide evidence about the status of the housing market that triggered the 2008 crisis. Housing starts are predicted to retreat to 608,000 from 629,000 a month earlier, while building permits is set to decline to 606,000 from 624,000. At the same time, with lower relevance, import price index is due. At 13:15 GMT, industrial production and capacity utilization for July will be out.

Wednesday August 17:

MBA mortgage applications for August 12 will be available at 11:00 GMT, while the main focus will also be on inflation data with the release of PPI at 12:30 GMT, where the annual reading excluding food and energy will inch down to 2.3% from 2.4%, according to median forecasts.

Thursday August 18:

Eyes will be on a batch ofUSdata including important inflation data 12:30 GMT which is CPI which is expected to edge down to 3.3% in the year ending July from 3.6%. At the same time theUS, initial jobless claims for the week ending August 12 and continuing claims for the week ended August 6 will be available. Thereafter, particularly at 14:00 GMT, Philadelphia Fed, leading indicators and existing home sales will be out.

Friday August 19:

The week ends with the release no data from both economies, thus the pair is predicted to follow the general sentiment in the market.

USD/CAD Weekly Fundamental Analysis for August 15-19, 2011

The USD/CAD pair extended its gains last week, as investors were concerned over the outlook for global growth amid signs economic growth is slowing down in the United States, while mounting fears from the European debt crisis boosted demand for lower yielding assets, which weighed down on the CAD, as it boosted demand for the USD, and accordingly, the USD/CAD pair was able to gain momentum.

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

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

Monday August 15:

The U.S. economy will start the data this week with the Empire Manufacturing for August at 12:30 which is expected to rebound to 0.50 from -3.76.

At 13:00 GMT the U.S. will release the TIC flows for June which surely were affected by the start of the debt debate before it intensified in July.

Tuesday August 16:

Germany will start the GDP day at 06:00 GMT with the expected slowing pace of expansion into the second quarter with 0.5% from 1.5% recorded in the first quarter.

The GDP data from the euro zone is due at 09:00 GMT for the second quarter and surely expectations are for slowing pace of expansion at 0.3% following 0.8% in the first quarter of the year.

Other than the critical GDP data, the focus will also be on the scheduled meeting between Merkel and Sarkozy to discuss the worsening crisis in the euro area which markets will track closely and increase the volatility.

From the United States the Housing Starts for July is due at 12:30 GMT which is expected with 3.3% drop to 608 thousand from 629 thousand.

At 12:30 GMT, Canada will release the manufacturing sales index for June, where it’s expected to drop by 0.5%, compared with the prior drop of 0.8% back in May.

At 13:15 GMT, the Industrial Production for July is expected with 0.5% rise following 0.2% while the Capacity Utilization to rise marginally to 76.9% from 76.7%.

Wednesday August 17:

At 12:30 GMT, the U.S. July Producer Price Index is due and expected to rebound with 0.1% rise on the month following 0.4% drop. Core annual PPI is expected at 2.3% following 2.4%.

Thursday August 18:

The United States at 12:30 GMT will continue with inflation data and the Consumer Price Index for July which is expected with 0.2% rise following 0.2% drop to an annual 3.3% from 3.6%. Core CPI inflation is expected with 0.2% rise in July to an annual 1.7%.

Also at 12:30 GMT the weekly jobless claims are due after last week’s unexpected decline to 395 thousand.

At 12:30 GMT, Canada will release the wholesale sales index for June, where wholesale sales increased by 1.9% back in May.

At 12:30 GMT, Canada will also release the leading indicators for the month of July, where the leading indicators expanded by 0.2% back in June.

The busy U.S. day will continue with the leading indicator for July at 14:00 GMT and is expected to ease to 0.2% following 0.3%.

Existing home sales for July are also due at 14:00 GMT and expected with 2.7% rebound to 4.90 million from 4.77 million.

Friday August 19:

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

GBP/USD Weekly Fundamental Analysis for August 15 – 19, 2011

The GBP/USD retreated for the second week as the undergoing tensions in markets after the S&P downgrade to theU.S.top rating sparked demand on the dollar as safe haven, thereby pushing the pair to the downside. The sluggish global growth, substantial debt inU.S.and euro zone raised concerns that the globe is in the throes of new crisis.

On the other hand, the outlook for the British economy worsened after the BoE cut growth and inflation outlook in the quarterly inflation report, indicating the economy is signaling a slowdown in growth.

The report revealed that growth outlook is weaker and inflation will decline below target in the medium term, pushing the pound to the downside.

This week, theU.K.will release a batch of important data where main focus will be inflation data, particularly annual CPI for July. Also, unemployment, public finance and retail sales reports are going to be closely watched by investors as the spending cuts by the government along with the rise in inflation are expected to have negative impact on the economy. In theU.S., the main focus will be on housing and inflation data.

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

Monday August 15:

While theU.S.lacks fundamentals, at 12:30 GMT, theU.S.will release empire manufacturing for August, where half an hour later, net TIC flows will be available. The releases are not expected to have significant impact on the pair.

Tuesday August 16:

CPI and RPI data will grab attention at 08:30 GMT where expectations refer to rise in CPI annual reading for July to 4.4% from the prior 4.2%. The data is predicted to have an impact on the pair if it came much higher or lower than forecasts.

For the US, at 12:30 GMT, the market’s attention will be back to housing data with the release housing starts and building permits for July as it will provide evidence about the status of the housing market that triggered the 2008 crisis. Housing starts are predicted to retreat to 608,000 from 629,000 a month earlier, while building permits is set to decline to 606,000 from 624,000. At the same time, with lower relevance, import price index is due. At 13:15 GMT, industrial production and capacity utilization for July will be out.

Wednesday August 17:

Unemployment data from the British economy will be out at 08:30 GMT, where ILO unemployment for the three months ended June will linger at 7.7% while jobless claims will decline to 20.0 thousands in July from 24.5 thousands a month earlier. At the same time, the BoE minutes for August’s rate decision will be under scrutiny as investors aim to know how was the last voting for keeping both interest rate and APF unchanged.

Thereafter, MBA mortgage applications for August 12 will be available at 11:00 GMT, while the main focus will also be on inflation data with the release of PPI at 12:30 GMT, where the annual reading excluding food and energy will inch down to 2.3% from 2.4%, according to median forecasts.

Thursday August 18:

At 08:30 GMT, theUKwill release retail sales for July; analysts are predicting a decline to 0.5% in the reading with auto fuel from 0.7% in June.

For theUS, eyes will be on a batch ofUSdata including important inflation data 12:30 GMT which is CPI which is expected to edge down to 3.3% in the year ending July from 3.6%. At the same time theUS, initial jobless claims for the week ending August 12 and continuing claims for the week ended August 6 will be available. Thereafter, particularly at 14:00 GMT, Philadelphia Fed, leading indicators and existing home sales will be out.

Friday August 19:

The week ends with the release of public finance and public sector net borrowing for July at 08:30 GMT; PSNB excluding interventions is predicted to show that the deficit narrowed to 1.0 billon pounds compared with the prior 12.0 billon pounds deficit, while theU.S.lacks fundamentals.