AUD/USD Forecast May 1, 2012, Technical Analysis

AUD/USD fell during the session on Monday as the “risk off” trade came back. The fears of recession now are back out there as the Spanish situation continues to deteriorate. Because of this, risk assets in general fell for the session, and the Aussie dollar wasn’t any different. The pair retreated to the 1.04 level, but more importantly the 200 day EMA.

The session sees a Reserve Bank of Australia rate decision, and the market seems to be pricing in a .25 percent cut. There are some people that believe a .50 percent cut is in store, and as a result the pair may have been beat up a bit too much lately. The general consensus is that the .25 percent cut will be the result. If we get a .50 percent cut, there could be further selling. However, as a general rule, we prefer buying this pair once the decision is out if it is indeed a .25 percent cut. Obviously, if they don’t cut at all – this would be a buy signal as well.

There will more than likely be a knee-jerk reaction to sell on the cut, but it should simply prove a buying opportunity in the end.

AUD/USD Forecast May 1, 2012, Technical Analysis
AUD/USD Forecast May 1, 2012, Technical Analysis

In The Eyes of the Experts – 30/4/2012

What is this report?

In the morning the experts meet in the dealing room in order to prepare themselves for another trading day. They read the business press, and note relevant economic announcements expected during the day. They also consider the support and resistance lines and discuss the important rates in the major pairs; they indicate which pairs may strengthen and those which could weaken. Afterwards they wish everyone a successfully day of trading and turn on the computer screens…

Below you can find pairs the experts assume may be strengthen and weaken during the trading day; support and resistance lines relevant to the day’s trading and critical time for trading each day (important news etc.).

Currencies to watch for Long:

  • JPY
  • GBP

 

Currencies watch for Short:

  • AUD
  • NZD

 

Today’s important times (GMT+2):

  • 15:30 CAD

 

Important rates:

Pair R2 R1 Pivot S1 S2
EURUSD 1.3108    1.3172 1.3220 1.3284 1.3332
GBPUSD 1.6101 1.6178    1.6228 1.6304 1.6355
USDJPY    79.62 79.99 80.71 81.08 81.80
USDCHF 0.9004 0.9038 0.9085    0.9194 0.9166
USDCAD 0.9755 0.9781 0.9825 0.9852    0.9895
AUDUSD 1.0307 1.0384 1.0428 1.0504 1.0549   

AUD/USD Fundamental Analysis May 1, 2012 Forecast

Analysis and Recommendation: (close of Asian session)

The AUD/USD  has risen steeply on weak US growth data. Official data released on Friday showed the US economy has expanded by an annual rate of 2.2 per cent – less than the forecast 2.5 per cent. This allowed the Australian currency to spike up.

The main move upwards for the Aussie dollar was based on US dollar weakness because of that GDP result.

However, the Aussie dollar had moderated down since then, with little other data to support it. The next big event for markets would be the Reserve Bank of Australia’s rates decision on Tuesday, when a rate cut of 25 basis points was expected.

Economic Data for April 29-30, 2012 actual v. forecast

NZD

 

 

 

Building Consents (MoM) 

19.8%

 

6.0% 

 

-6.2% 

   

NZD

 

 

 

Trade Balance 

134M

 

445M 

 

202M 

   

KRW

 

 

 

South Korean Service Output  

-1.00%

 

 

 

1.20% 

   

 

KRW

 

 

 

South Korean Industrial Production

-3.1%

 

0.2% 

 

0.6% 

   

 

AUD

 

 

 

MI Inflation Gauge (MoM) 

0.3%

 

 

 

0.5% 

 

 

 

NZD

 

 

 

Business Confidence 

35.80

 

 

 

33.80 

 

 

 

AUD

 

 

 

HIA New Home Sales (MoM) 

 

 

 

 

3.0% 

 

 

 

AUD

 

 

 

Private Sector Credit (MoM) 

0.4%

 

0.3% 

 

0.4% 

 

 

 

SGD

 

 

 

Singaporean Unemployment Rate 

2.1%

 

2.0% 

 

2.0% 

 

 

 

SGD

 

 

 

Singaporean Bank Landing (MoM) 

432.60B

 

 

 

426.40B 

 

 

 

                                   

Economic Events for May 1, 2012 for the Asian and US Markets

02:00     CNY                      Chinese Manufacturing PMI                                          53.60                      53.10       

China Manufacturing Purchasing Managers Index (PMI) provides an early indication each month of economic activities in the Chinese manufacturing sector. It is compiled by China Federation of Logistics & Purchasing (CFLP) and China Logistics Information Centre (CLIC), based on data collected by the National Bureau of Statistics (NBS).Li & Fung Research Centre is responsible for drafting and disseminating the English PMI report. Every month questionnaires are sent to over 700 manufacturing enterprises all over China. The data presented here is compiled from the enterprises responses about their purchasing activities and supply situations. The PMI should be compared to other economic data sources when used in decision-making.

02:30     AUD                      House Price Index                                                             -0.50%           -1.00%

The Australian House Price Index (HPI) measures the change in the selling price of homes in the nation’s eight state capitals. It is a leading indicator of health in the housing sector.

05:30     AUD                      Interest Rate Decision                                                       4.00%                    4.25%

Reserve Bank of Australia (RBA) board members come to a consensus on where to set the rate. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.

15:00     USD                       ISM Manufacturing Index                                               53.5                        53.4

The Institute of Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) rates the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. The data is compiled from a survey of approximately 400 purchasing managers in the manufacturing industry. On the index, a level above 50.0 indicates industry expansion, below indicates contraction. 

23:45     NZD                      Employment Change                                                        0.4%                      0.1%

Employment Change measures the change in the number of people employed. Job creation is an important indicator of consumer spending.

23:45     NZD                      Unemployment Rate                                                         6.3%                      6.3%

The Unemployment Rate measures the percentage of the total work force that is unemployed and actively seeking employment during the previous quarter.

 

Government Bond Auctions (this week)

Date  Time  Country 

May 01  09:30  UK 

May 02  09:10  Sweden 

May 02  09:30  Portugal 

May 02  13:00  US 

May 03  08:30  Spain

May 03  08:50  France 

May 03  09:10  Sweden 

May 03  09:30  UK 

May 08  09:15  Austria 

May 08  09:30  Belgium 

May 08  14:30  UK 

May 08  15:30  Italy  

May 08  17:00  US 

May 09  09:10  Sweden 

May 09  09:30  Germany 

May 09  09:30  Swiss 

May 09  09:30  UK 

May 09  14:30  Sweden 

May 09  15:30  Italy  

May 09  17:00  US 

May 10  15:00  US 

May 10  17:00  US 

May 11  09:10  Italy   BOT auction

May 11  10:00  Belgium

AUD/USD Forecast April 30, 2012, Technical Analysis

The AUD/USD pair shot straight up on Friday as the “risk on” attitude came back into the markets. The pair is often used as a proxy for risk appetite and the gold markets, both of which rose during the session. 

The recent bounce has come from the 50% Fibonacci retracement level, and as a result suggests that the bigger players are now involved to the upside again. The pair is overall bullish during the past several years, but is often subject to serious corrections. The Aussie of course will continue to be heavily influenced by gold and copper both, of which Australia exports plenty.

The 200 day exponential moving average is now below the closing price for Friday, and this is one of the two conditions we needed to see in order to be comfortable to buy the Aussie again. The other was of course if a closed above the 1.0450 level, which it has just barely done. However, simply looking at this candle suggests that the move higher is the most likely in the near term, and as a fact we are willing to go long on a break of the Friday highs now.

The pair will now be considered a “buy on the dips” one again, although one will have to keep an eye on expectations out of Australia, as the Reserve Bank of Australia is expected to cut rates soon. This could be harmful to the health of this pair in the future, but the short term is certainly suggesting that the upside will be visited. The selling of this pair isn’t a thought at these levels now, as there are far too many potential support levels below current prices.

The shorter time frames can be used in order to find supportive candles. We are especially fond of 4 hour and even hourly charts for entries, but defer to the higher time frames in order to make the boundaries of our trades known. The pair looks as if the bounce has more to go, and we are going to buy it as a result. 

AUD/USD Forecast April 30, 2012, Technical Analysis
AUD/USD Forecast April 30, 2012, Technical Analysis

AUD/USD Forecast for the Week of April 30, 2012, Technical Analysis

The AUD/USD pair originally fell for the week, but the 50% Fibonacci retracement level acted as support again to send this pair much higher. The resulting candle was a hammer and this pair now looks set to breakout to the upside. As a result, we are willing to buy on a break higher. However, it should be noted that there is a rate decision in Australia on Monday, so that will have to be considered, although we still like buying at this point. Selling isn’t a thought as there are simply too many support areas below. 

AUD/USD Forecast for the Week of April 30, 2012, Technical Analysis
AUD/USD Forecast for the Week of April 30, 2012, Technical Analysis

AUD/USD Weekly Fundamental Analysis April 30 – May 4, 2012, Forecast

Introduction:  The Australian dollar still isn’t in its good old days, but the performance is definitely improving. Resistance lines tend to work in a smoother manner than support lines, but they also work well. The pair move well together, not much volatility, but easy to chart and easy to trade with low risk factors

Weekly Analysis and Recommendation:

The AUD/USD ended the week at 1.0472 soaring as the USD lost momentum after the final blow, on a disappointing GDP report, showing the economy was only growing at a rate of 2.2%, when economists had expected a data to show a rate of 2.5% after the 4th quarter last year of 3.%

Date

Last

Open

High

Low

Change %

Apr 27, 2012

1.0472

1.0370

1.0475

1.0354

0.99%

Apr 26, 2012

1.0369

1.0359

1.0399

1.0350

0.10%

Apr 25, 2012

1.0359

1.0334

1.0374

1.0307

0.24%

Apr 24, 2012

1.0334

1.0308

1.0336

1.0248

0.26%

Apr 23, 2012

1.0307

1.0382

1.0383

1.0272

-0.72%

The Aussie traded up most of the week on strong indications that the RBA would cut rates at their next meeting.

A rate cut to 4.0 per cent from 4.25 per cent is widely expected after March quarter inflation figures, out on Tuesday, were much lower than expected.

The US Federal Reserve’s policy making committee, the Federal Open Market Committee (FOMC), met on Tuesday and Wednesday (US time) and released a short statement saying the American economy was growing moderately.

Fed chairman Ben Bernanke also indicated the FOMC was prepared to take action to stimulate the American economy.

Major Economic Events for the past week actual v. forecast

 

 CAD

 

Core Retail Sales (MoM)

0.5%

1.0%

-0.8%

 

 

 

 USD

 

New Home Sales

328K

320K

353K

 

 

 

 GBP

 

GDP (QoQ) 

-0.2%

0.1%

-0.3%

 

 

 

 GBP

 

GDP (YoY) 

0.0%

0.3%

0.5%

 

 

 

 USD

 

Core Durable Goods Orders (MoM)

-1.1%

0.5%

1.9%

 

 

 

 USD

 

Interest Rate Decision

0.25%

0.25%

0.25%

 

 

 

 NZD

 

Interest Rate Decision

2.50%

2.50%

2.50%

 

 

 

 USD

 

Initial Jobless Claims

388K

375K

389K

 

 

 

 USD

 

GDP (QoQ) 

2.2%

2.5%

3.0%

 

 

 

Economic Highlights of the coming week that affect the Yuan, Yen, Aussie and the Kiwi

 

Apr 29

9:00pm

NZD

NBNZ Business Confidence

   

33.8

 

Apr 30

9:00pm

CNY

Manufacturing PMI

 

53.6

53.1

 

May 1

12:30am

AUD

Cash Rate

 

4.00%

4.25%

12:30am

AUD

RBA Rate Statement

     

10:00am

USD

ISM Manufacturing PMI

 

53.0

53.4

 

May 2

8:15am

USD

ADP Non-Farm Employment Change

 

179K

209K

6:45pm

NZD

Employment Change q/q

 

0.5%

0.1%

6:45pm

NZD

Unemployment Rate

 

6.2%

6.3%

 

May 3

8:30am

USD

Unemployment Claims

 

382K

388K

10:00am

USD

ISM Non-Manufacturing PMI

 

55.5

56.0

9:30pm

AUD

RBA Monetary Policy Statement

     

 

May 4

8:30am

USD

Non-Farm Employment Change

 

176K

120K

8:30am

USD

Unemployment Rate

 

8.2%

8.2%

Upcoming Government Bond Auctions

Date  Time  Country 

May 01  09:30  UK 

May 02  09:10  Sweden 

May 02  09:30  Portugal 

May 02  13:00  US 

May 03  08:30  Spain

May 03  08:50  France 

May 03  09:10  Sweden 

May 03  09:30  UK 

May 08  09:15  Austria 

May 08  09:30  Belgium 

May 08  14:30  UK 

May 08  15:30  Italy  

May 08  17:00  US 

May 09  09:10  Sweden 

May 09  09:30  Germany 

May 09  09:30  Swiss 

May 09  09:30  UK 

May 09  14:30  Sweden 

May 09  15:30  Italy  

May 09  17:00  US 

May 10  15:00  US 

May 10  17:00  US 

May 11  09:10  Italy   BOT auction

May 11  10:00  Belgium

AUD/USD Fundamental Analysis April 30, 2012 Forecast

Analysis and Recommendation: (close of Asian session)

The AUD/USD  is trading at 1.0379 with very little reaction to the news out of Japan, as the BoJ announces new monetary easing program.

The Australian dollar has receded from its overnight gains but could move past the 104 US cent mark heading into the weekend.

Since 0700 AEST on Friday, the Australian dollar traded between 103.59 US cents and 103.98 cents.

There was a strong performance from US stock markets, which have benefited from a string of better than expected earnings reports this week, could finally push the Australian dollar past 104 US cents overnight.

The central bank is announced a five trillion yen ($A59.45 billion) stimulus package, called quantitative easing (QE).

Economic Data for April 26-27th, 2012 actual v. forecast

 

 

GBP

 

 

 

Nationwide Consumer Confidence 

53

 

42 

 

44 

 

 

 

 

GBP

 

 

 

BBA Mortgage Approvals 

31.9K

 

34.3K 

 

32.8K 

   

 

 

GBP

 

 

 

CBI Distributive Trades Survey 

-6

 

-4 

 

 

 

 

 

EUR

 

 

 

German CPI (MoM) 

0.1%

 

0.1% 

 

0.3% 

 

 

 

 

USD

 

 

 

Initial Jobless Claims 

388K

 

375K 

 

389K 

   

 

 

USD

 

 

 

Continuing Jobless Claims 

3315K

 

3295K 

 

3312K 

   

 

 

USD

 

 

 

Pending Home Sales (MoM) 

4.1%

 

1.0% 

 

0.4% 

   

Apr. 27

 

JPY

 

 

 

Unemployment Rate 

4.5%

 

4.5% 

 

4.5% 

 

 

 

 

JPY

 

 

 

Tokyo Core CPI (YoY) 

-0.5%

 

-0.4% 

 

-0.3% 

 

 

 

 

JPY

 

 

 

Industrial Production (MoM) 

1.0%

 

2.4% 

 

-1.6% 

 

 

 

 

JPY

 

 

 

Retail Sales (YoY) 

10.3%

 

9.8% 

 

3.4% 

   

 

 

JPY

 

 

 

Interest Rate Decision 

0.10%

 

0.10% 

 

0.10% 

 

 

 

Economic Events for April 30, 2012 for the Asian and US Markets

13:30     USD                       Core PCE Price Index     

The Core Personal Consumption spending (PCE) Price Index measures the changes in the price of goods and services purchased by consumers for the purpose of consumption, excluding food and energy. Prices are weighted according to total expenditure per item. It measures price change from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.

14:45     USD                       Chicago PMI                                                                      

The Chicago Purchasing Managers’ Index (PMI) determines the economic health of the manufacturing sector in Chicago region. A reading above 50 indicates expansion of the manufacturing sector; a reading below indicates contraction. The Chicago PMI can be of some help in forecasting the ISM manufacturing PMI.

18:45     NZD                      Labor Cost Index                                                                                            

The Labor Cost Index measures the change in the price businesses pay for labor, excluding overtime. It is a leading indicator of consumer inflation.

21:00     CNY                      Chinese Manufacturing PMI                                                                     

China Manufacturing Purchasing Managers Index (PMI) provides an early indication each month of economic activities in the Chinese manufacturing sector. It is compiled by China Federation of Logistics & Purchasing (CFLP) and China Logistics Information Centre (CLIC), based on data collected by the National Bureau of Statistics (NBS).Li & Fung Research Centre is responsible for drafting and disseminating the English PMI report. Every month questionnaires are sent to over 700 manufacturing enterprises all over China. The data presented here is compiled from the enterprises responses about their purchasing activities and supply situations. The PMI should be compared to other economic data sources when used in decision-making. 

21:30     AUD                     House Price Index                                                                                            

The Australian House Price Index (HPI) measures the change in the selling price of homes in the nation’s eight state capitals. It is a leading indicator of health in the housing sector.

Government Bond Auctions (this week)

May 01  09:30  UK  Auctions 4.5% 2042 Conventional Gilt

May 02  09:10  Sweden  Nominal bond auction

May 02  09:30  Portugal  Eur 1.25-1.5bn new Nov 2012 & new May 2013 T-bills

May 02  13:00  3Y Notes on May 08, 10Y Notes on May 09 & 30Y Bonds on May 10

May 02  14:30  Sweden  Details T-bill auction on May 09

May 03  08:30  Spain  Bono auction

May 03  08:50  France  OAT auction

AUD/USD Forecast April 27, 2012, Technical Analysis

 

The AUD/USD pair rose on Thursday in order to reach the 200 day exponential moving average. The indicator is often used by trend traders, and as such will often act as dynamic support and resistance. Because of this, we are weary of buying at this point, but certainly aren’t ready to sell as the pair looks to be trying to form a base off of 50% Fibonacci level. The pair looks stronger recently, but we are going to wait until we close at or above 1.0450 in order to buy as it would show that the pair has cleared a few hurdles. With that being said, we don’t sell the Aussie at the moment regardless. We are waiting to go long, and will once the conditions are met.

AUD/USD Forecast April 27, 2012, Technical Analysis
AUD/USD Forecast April 27, 2012, Technical Analysis

AUD/USD Fundamental Analysis April 27, 2012 Forecast

Analysis and Recommendation: (close of Asian session)

The AUD/USD  is exchanging today at 1.0373. The Australian dollar is stronger, following the market higher in the absence of any other leads for the currency.

At mid day Thursday, the Aussie was trading at 103.54 US cents, up from 102.77 cents on Tuesday before the Anzac Day public holiday on Wednesday.

The Australian dollar has traded in a tight range between 103.50 US cents and 103.76 cents.

The local unit is caught in a range as traders wait for next week’s interest rate decision by the Reserve Bank of Australia (RBA). A rate cut to 4.0 per cent from 4.25 per cent is widely expected after March quarter inflation figures, out on Tuesday, were much lower than expected.

The US Federal Reserve’s policy making committee, the Federal Open Market Committee (FOMC), met on Tuesday and Wednesday (US time) and released a short statement saying the American economy was growing moderately.

Fed chairman Ben Bernanke also indicated the FOMC was prepared to take action to stimulate the American economy.

Economic Data for April 25-26th, 2012 actual v. forecast

   

GBP

 

 

 

GDP (QoQ) 

-0.2%

 

0.1% 

 

-0.3% 

 

 

 

 

GBP

 

 

 

GDP (YoY) 

0.0%

 

0.3% 

 

0.5% 

 

 

 

 

GBP

 

 

 

CBI Industrial Trends Orders 

-8

 

-6 

 

-8 

 

 

 

 

USD

 

 

 

Core Durable Goods Orders (MoM) 

-1.1%

 

0.5% 

 

1.9% 

   

 

 

USD

 

 

 

Durable Goods Orders (MoM) 

-4.2%

 

-1.7% 

 

1.9% 

   

 

 

USD

 

 

 

Interest Rate Decision 

0.25%

 

0.25% 

 

0.25% 

 

 

 

 

NZD

 

 

 

Interest Rate Decision 

2.50%

 

2.50% 

 

2.50% 

 

 

Apr. 26

 

KRW

 

 

 

South Korean GDP (QoQ) 

0.9%

 

0.9% 

 

0.3% 

 

 

 

 

KRW

 

 

 

South Korean GDP (YoY) 

2.8%

 

3.0% 

 

3.3% 

 

 

 

 

GBP

 

 

 

Nationwide Consumer Confidence 

53

 

42 

 

44 

 

 

 

Economic Events scheduled for April 27, 2012 that affect the NZD, AUD, and JPY

01:00     AUD       HIA New Home Sales (MoM) (Mar)                                       

HIA New Home Sales released by the Housing Industry Association presents the number of new home sales in Australia. It indicates the housing market condition. House buyers spend money on furnishing and financing their homes, which stimulates the demand for goods, services, and the employees

05:00     JPY         Housing Starts (YoY) (Mar)                                        

The Housing Starts released by the Ministry of Land, Infrastructure and Transport captures how many new single-family homes or buildings were constructed. It shows the strength of the Japanese housing market, which can be considered as the economy as a whole due to Housing Starts” sensitivity to changes in the business cycle

05:00     JPY         Annualized Housing Starts (Mar)                            

The Annualized Housing Starts released by the Ministry of Land, Infrastructure and Transport captures how many new single-family homes or buildings were constructed. It shows the strength of the Japanese housing market, which can be considered as the economy as a whole due to Housing Starts’ sensitivity to changes in the business cycle

12:30     USD       Gross Domestic Product Annualized (Q1)                            

The Gross Domestic Product annualized released by the US Bureau of Economic Analysis shows the monetary value of all the goods, services and structures produced within a country in a given period of time. It is a gross measure of market activity because it indicates the pace at which a country’s economy is growing or decreasing.

12:30     USD       Gross Domestic Purchases Price Index (Q1)                       

The GDP Price Index released by the Bureau of Economic Analysis, Department of Commerce gauges the change in the prices of goods and services. Changes in the GDP price index are followed as an indicator of inflationary pressure that may anticipate interest rates to rise.

12:30     USD       Real Personal Consumption Expenditures (QoQ) (Q1)

The Real Personal Consumption Expenditure released by the US Bureau of Economic Analysis is an average of the amount of money the consumers spend in a month on durable goods, consumer products, and services.. It is considered as an important indicator of inflation.

13:55     USD       Reuters/Michigan Consumer Sentiment Index (Apr)

The Reuters/Michigan Consumer Sentiment Index released by the Reuters/University of Michigan is a survey of personal consumer confidence in economic activity. It shows a picture of whether or not consumers are willing to spend money.

Government Bond Auctions (this week and first week in May)

Apr 27  09:10  Italy   BTP/CCTeu auction

Apr 27  09:10  Italy   Eur 1.5-2.5bn 4.75% May 2017 & Eur 1.5-2.5bn 5.5% Sep 2022 & Eur

0.75-1.25bn 3.75% Apr 2016 & 4.25% Feb 2019 BTPs

May 01  09:30  UK  Auctions 4.5% 2042 Conventional Gilt

May 02  09:10  Sweden  Nominal bond auction

May 02  09:30  Portugal  Eur 1.25-1.5bn new Nov 2012 & new May 2013 T-bills

May 02  13:00  US  Announces details of 3Y Notes on May 08, 10Y Notes on May 09 & 30Y

Bonds on May 10

May 02  14:30  Sweden  Details T-bill auction on May 09

May 03  08:30  Spain  Bono auction

May 03  08:50  France  OAT auction

 

AUD/USD Forecast April 26, 2012, Technical Analysis

 

The AUD/USD pair rose during the session on Wednesday as the markets priced in more “risk on” to the global trade. The pair had formed a hammer on Tuesday, and we suggested that the pair could be ready to make a move higher. However, we also warned that the 200 day exponential moving average is just above, and floating around the 1.04 level. It should also be noted that there is an expectation that the Reserve Bank of Australia is getting ready to cut rate in the summer, and this would weigh on the Aussie on the whole. However, if we get that bounce to a daily close above the 200 day EMA – we are buyers. We don’t sell at the moment, as we see too many potential support levels below. 

AUD/USD Forecast April 26, 2012, Technical Analysis
AUD/USD Forecast April 26, 2012, Technical Analysis

In The Eyes of the Experts – 25/4/2012

What is this report?

In the morning the experts meet in the dealing room in order to prepare themselves for another trading day. They read the business press, and note relevant economic announcements expected during the day. They also consider the support and resistance lines and discuss the important rates in the major pairs; they indicate which pairs may strengthen and those which could weaken. Afterwards they wish everyone a successfully day of trading and turn on the computer screens…

Below you can find pairs the experts assume may be strengthen and weaken during the trading day; support and resistance lines relevant to the day’s trading and critical time for trading each day (important news etc.).

Currencies to watch for Long:

  • EUR
  • CHF

 

Currencies watch for Short:

  • GBP
  • USD

 

Today’s important times (GMT+2):

  • 15:30 ,19:30 ,21: USD
  • 23:15 CAD

 

Important rates:

Pair R2 R1 Pivot S1 S2
EURUSD    1.3112    1.3153    1.3185    1.3226    1.3258
GBPUSD 1.6082 1.6123 1.6137 1.6166 1.6192
USDJPY 80.64 81.01 81.22 81.59 81.80
USDCHF 0.9060 0.9082 0.9112 0.9131 0.9164
USDCAD 0.9824 0.9845 0.9886 0.9908 0.9949
AUDUSD 1.0215 1.0274 1.0304 1.0364 1.0393   

AUD/USD Forecast April 25, 2012, Technical Analysis

The AUD/USD pair fell for much of the session on Tuesday, but bounced at the end in order to form a hammer. This bullish sign is at the bottom of the most recent consolidation level, and it looks as if the 50% Fibonacci retracement level is trying to hold as support going forward. The 200 day EMA is just above, so although we see a lot of support at this point, it is difficult to get overly bullish at this moment.

We would be willing to buy this pair on a break of the top of the daily range, but suspect it only sets up a run to 1.04 or so. Of course if we manage to plow ahead to close over the 1.0450 level, we would have to hang on to any longs that we had, or even buy at that point. Selling isn’t a thought just yet – but could be if this pair continues to weaken. 

AUD/USD Forecast April 25, 2012, Technical Analysis
AUD/USD Forecast April 25, 2012, Technical Analysis

AUD/USD Fundamental Analysis April 26, 2012 Forecast

Analysis and Recommendation: (close of Asian session)

The AUD/USD is trading at 1.0311. Financial markets in Australia are closed today for a local holiday.

The main event this week—the Federal Open Market Committee meeting/Ben Bernanke press conference—kicks off today and concludes tomorrow, which may overshadow [other] releases.

The Federal Open Market Committee is expected to only tweak its economic forecasts at its two-day meeting this week, keeping all its options on the table given cross currents in recent economic data, analysts say.

The dollar had gained ground on Monday, with economic data and political developments raising more questions about Europe’s ability to tackle its debt problems.

U.S. home prices dropped sharply in February to hit the worst level in nearly a decade, according to a closely followed index released Tuesday. The S&P/Case-Shiller 20-city composite fell 0.8% compared to January levels

 A gauge of U.S. consumer confidence has declined for a second month, ticking down in April on lower expectations, even as views on the present situation increased, the Conference Board reported Tuesday. The consumer-confidence index fell to 69.2

New homes in the U.S. were sold at an annual rate of 328,000 in March, slightly above market forecasts. Yet sales fell by 7.1% last month because purchases of new homes in February were revised sharply higher, according to Commerce Department

 Economic Reports for April 24, 2012 actual v. forecast

 

AUD

 

CPI (QoQ) 

0.1%

 

0.6% 

 

0.0% 

 

 

 

AUD

 

Trimmed Mean CPI (QoQ) 

0.3%

 

0.6% 

 

0.6% 

 

 

 

EUR

 

Finnish Unemployment Rate 

7.50%

 

 

 

7.40% 

 

 

 

HUF

 

Hungarian Retail Sales (YoY) 

-1.40%

 

0.60% 

 

0.60% 

 

 

 

SEK

 

Swedish Unemployment Rate 

7.70%

 

8.00% 

 

7.80% 

 

 

 

EUR

 

Industrial New Orders (MoM) 

-1.3%

 

-0.5% 

 

-2.9% 

   

 

CAD

 

Core Retail Sales (MoM) 

0.5%

 

1.0% 

 

-0.8% 

   

 

CAD

 

Retail Sales (MoM) 

-0.2%

 

0.2% 

 

0.2% 

   

 

USD

 

CB Consumer Confidence 

69.2

 

69.7 

 

69.5 

   

 

USD

 

New Home Sales 

328K

 

320K 

 

353K 

   

 

Economic Events scheduled for April 26, 2012 that affect the NZD, AUD, JPY and CNY

00:00     AUD       Conference Board Australia Leading Index (Feb)                                                            0.2%     

The Conference Board Australia leading Index released by the Conference Board measures future trends of the overall economic activity including employment, average manufacturing workweek, initial claims, permits for new housing construction, stock prices and yield curve. It forecasts short to mid-term growth in the Australian economy.

04:30     JPY         All Industry Activity Index (MoM) (Feb)                                                               -0.2%          -1%

The All Industry Activity Index released by the Ministry of Economy, Trade and Industry captures the monthly change in overall production by all industries of the Japanese economy. The index indicates the Japanese GDP and the overall growth figures, providing insight into current levels of Japanese economic expansion.

23:30     JPY         National Consumer Price Index (YoY) (Mar)                                                                          0.3%

The National Consumer Price Index is released by the Statistics Bureau and it’s a measure of price movements obtained by comparison of the retail prices of a representative shopping basket of goods and services. CPI is the most significant way to measure changes in purchasing trends. The purchase power of JPY is dragged down by inflation.

23:30     JPY         Overall Household Spending (YoY) (Mar)                                                             4.2%           2.3%     

The Overall Household Spending released by the Ministry of Internal Affairs and Communications is an indicator that measures the total expenditure by households. The level of spending can be used as an indicator of consumer optimism. It is also considered as a measure of economic growth.

23:30     JPY         Unemployment Rate (Mar)                                                                                        4.5%          4.5%

The Unemployment Rate which comes from the Ministry of Health, Labor and welfare and it’s published by the Japan Statistics Bureau, is a measure of the percentage of unemployed in Japan. A high percentage indicates weakness in the labor market which influences the strength and direction of the Japanese economy.

23:50     JPY         Industrial Production (YoY) (Mar)                                                                                              1.5%

The Industrial Production released by the Ministry of Economy, Trade and Industry measures outputs of the Japanese factories and mines. Changes in industrial production are widely followed as a major indicator of strength in the manufacturing sector.

23:50     JPY         Retail Trade (YoY) (Mar)                                                                                               11.5%        3.5%

The Retail Trade released by the Ministry of Economy, Trade and Industry captures the aggregate sales made through a business location (usually a store) in which the principal activity is the sale of merchandise and related services to the general public, for household or personal consumption. Consumer spending is a key important indicator for the Japanese economy.

23:50     JPY         Large Retailer’s Sales (Mar)                                                                                                           0.2%

The Large Retailers’ Sales released by the Ministry of Economy, Trade and Industry” captures the total value of goods sold in large stores, chain convenience stores, and supermarkets. It indicates the level of consumption and consumer confidence. A high level of Large Retailers´ Sales stimulates economic expansion while a low level drives to economic downturn.

Government Bond Auctions (this week)

Apr 26  00:30  Japan  Auctions 2Y JGBs

Apr 26  09:10  Italy   BOT auction

Apr 26  14:30  Sweden  Details I/L bond auction on May 03

Apr 26  17:00  US  Auctions 7Y Notes

Apr 27  09:10  Italy   BTP/CCTeu auction

A Look at the New Zealand Dollar and Central Bank

The New Zealand dollar may finish the week lower as investors push out expectations on the timing of Reserve Bank interest rate hikes because a high kiwi and modest economic recovery are keeping inflation well within the bank’s target range.

The New Zealand dollar recently traded at 81.67 US cents, little changed from 81.74 at 8am this morning and from 81.87 cents at the close of trading in New York on Friday. That’s at the lower end of this week’s forecast range of 80.50 cents to 83.50 cents,

Three of the six analysts predict the kiwi will finish the week lower, two higher and one unchanged.

Traders have been reassessing the timeline for a rate hike by the Reserve Bank, and are pricing in just 10 basis points of increases over the coming 12 months, according to the Overnight Index Swap curve.

Governor Alan Bollard has kept the Official Cash rate at a record low 2.5 per cent for two of the past three years and is expected to keep the OCR on hold this Thursday.

Investors will be eyeing central bank meetings in the US and Japan this week. Federal Reserve policymakers are scheduled to meet on Tuesday, with post-meeting comments by Chairman Ben Bernanke on Wednesday being closely watched for fresh clues on any new supportive measures.

The Bank of Japan meets on Friday, where it is expected to give the economy a helping hand with further easing.

The RNZ Bank announcement could be easily overshadowed by anything the Fed might say. Bernanke will repeat the theme the US economy is in recovery but that the recovery is moderate.

Minutes from the Reserve Bank of Australia’s March meeting released earlier this month showed it’s poised to cut the cash rate in the face of a slowing economy. Governor Glenn Stevens has kept the cash rate unchanged at 4.25 per cent since December. Investors at this time have factored in a 100% chance of a rate reduction.

In the US, the world’s largest economy, home prices dropped sharply in February to hit the worst level in nearly a decade, according to a closely followed index released Tuesday. The S&P/Case-Shiller 20-city composite fell 0.8% compared to January levels

 A gauge of U.S. consumer confidence has declined for a second month, ticking down in April on lower expectations, even as views on the present situation increased, the Conference Board reported Tuesday. The consumer-confidence index fell to 69.2

New homes in the U.S. were sold at an annual rate of 328,000 in March, slightly above market forecasts. Yet sales fell by 7.1% last month because purchases of new homes in February were revised sharply higher, according to Commerce Department

There is no significant data set for release in New Zealand today.

It is a short week with markets closed in New Zealand and Australia on Wednesday for the Anzac Day holiday.

Markets Are Betting On A Rate Reduction in Australia

Australia was betting on a low CPI today. You would think it was crazy to hope for poor economic data ‎but in the case of Australia, consumers and businesses are hoping and praying for a rate cut by the RBA ‎this month. Markets should know that they can never pre-guess Glenn Stevens.‎

The trimmed mean CPI, a measure of underlying inflation, rose by 0.3 per cent in the quarter and by ‎‎2.2 per cent in the year to March.‎ That puts the pace of underlying price increases in the bottom half of the Reserve Bank’s target for ‎inflation of between two per cent and 3 per cent, and clears the way for a cut in the Reserve’s cash ‎rate when it next meets, on May 1.‎

The Reserve signaled that it was ready to ease rates if inflation remained under control when it left the ‎cash rate unchanged at 4.25 per cent at its last meeting on April 3. It said then that pace of growth was ‎‎”somewhat lower than earlier estimated,” but that it believed that it would be ”prudent to see ‎forthcoming key data on prices to reassess its outlook for inflation, before considering a further step ‎to ease monetary policy”.‎

That data is now in, in the form of today’s quarterly CPI. It’s low enough to create room for a cut of a ‎quarter of a percentage point on May 1, and probably lays for the groundwork for another cut after ‎that.‎ Cuts are overdue: the Reserve has been holding rates high to contain demand and price inflation in the ‎resources boom, but the boom has slowed in the last six months as commodity prices have eased, and ‎impact of the Reserve’s high rates on areas of the economy that are not plugged directly into the ‎boom has been severe.‎The central bank now has the room it has said it needed to hand sectors including tourism and ‎manufacturing relief – relief that will come not from a reduction on borrowing costs that will flow from ‎a cut in the cash rate, but from reduced pressure on the Australian dollar, which is driven to an extent ‎by the strength of interest rates on offer to international investors, and by the stimulus to demand in ‎the economy generally that a rate cut will deliver.‎

An official rate cut next week seems all but a certainty after official inflation data showed prices barely ‎budged in the March quarter.‎ Consumer prices inched up a less than expected 0.1 per cent in the first quarter, following a flat ‎reading in the previous three months.‎ For the year to March 2012, prices increased by 1.6 per cent, following a 3.1 per cent increase over ‎‎2011, the Australian Bureau of Statistics said today. The market had expected a 0.6 per cent rise in the ‎quarter and a 2.2 per cent rise in the year.‎

The core inflation measure, which is watched closely by the Reserve Bank in setting policy, was 2.15 ‎per cent in the year to March, down from 2.6 per cent. For the March quarter it was 0.35 per cent, ‎down from 0.5 per cent.‎ The Aussie dollar fell from $US1.031 to $US1.026 immediately after the data was released, as markets ‎bet on more than one official rate cut.‎ Investors are now pricing in a 100 per cent chance of a 25 basis point cut in May, and a one-in-four ‎chance of a 50 basis point cut. Before the inflation update, the market was tipping only a 93 per cent ‎chance of a rate reduction next month.‎

And with inflation seemingly contained for some time to come, investors were willing to lend the ‎government money for 10 years at just 3.67 per cent. That is the lowest 10-year bond yield since the ‎early 1950s.‎

 

AUD/USD Fundamental Analysis April 25, 2012 Forecast

Analysis and Recommendation: (close of Asian session)

The AUD/USD fell half of one US cent after the release of weaker than expected inflation data on Tuesday morning.

The Aussie was trading at 102.71 down from 103.18 on Monday.

After the release of the inflation figures the Australian dollar fell to an intraday low of 102.57 US cent, its lowest level since April 5.

On Tuesday morning, the Australian Bureau of Statistics (ABS) announced the headline consumer price index (CPI) rose 0.1 per cent in the March quarter, for an annual rate of 1.6 per cent.

The median market forecast was for headline CPI to rise by 0.7 per cent in the March quarter for an annual rate of 2.1 per cent, according to an AAP survey of 17 economists..

The weak data clears the way for the Reserve Bank of Australia to cut the official interest rate next week at its May board meeting.

Economic Data for April 23 & 24, 2012 actual v. forecast

 

 

EUR

 

 

 

French Manufacturing PMI 

47.3

 

47.2 

 

46.7 

 

 

 

 

EUR

 

 

 

German Manufacturing PMI 

46.3

 

49.0 

 

48.4 

 

 

 

 

EUR

 

 

 

Manufacturing PMI 

46.0

 

48.2 

 

47.7 

 

 

 

 

CAD

 

 

 

Wholesale Sales (MoM) 

1.6%

 

-1.0% 

 

-1.1% 

   

Apr. 24

 

AUD

 

 

 

CPI (QoQ) 

0.1%

 

0.6% 

 

0.0% 

 

 

 

 

AUD

 

 

 

Trimmed Mean CPI (QoQ) 

0.3%

 

0.6% 

 

0.6% 

 

 

 

Economic Events scheduled for April 25, 2012 that affect the NZD, AUD, and JPY

13:30     USD       Core Durable Goods Orders (MoM)                                        0.5%                      1.8%

Core Durable Goods Orders measures the change in the total value of new orders for long lasting manufactured goods, excluding transportation items. Because aircraft orders are very volatile, the core number gives a better gauge of ordering trends. A higher reading indicates increased manufacturing activity.

13:30     USD       Durable Goods Orders (MoM)                                                   -1.5%                     2.4%       

Durable Goods Orders measures the change in the total value of new orders for long lasting manufactured goods, including transportation items.

 17:30    USD       Interest Rate Decision                                                                                                  

Federal Open Market Committee (FOMC) members vote on where to set the rate. Traders watch interest rate changes closely as short-term interest rates are the primary factor in currency valuation

 22:00    NZD       Interest Rate Decision                                                                   2.50%                    2.50%   

The Reserve Bank of New Zealand (RBNZ) governor decides where to set the rate after consulting senior bank staff and external advisers. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.

Government Bond Auctions (this week)

Apr 25  09:10  Sweden  Auctions T-bills

Apr 25  09:30  Germany  Eur 3.0bn new Jul 2044 Bund

Apr 25  14:30  Sweden  Details nominal bond auction on May 02

Apr 25  17:00  US  Auctions 5Y Notes

Apr 26  00:30  Japan  Auctions 2Y JGBs

Apr 26  09:10  Italy   BOT auction

Apr 26  14:30  Sweden  Details I/L bond auction on May 03

Apr 26  17:00  US  Auctions 7Y Notes

Apr 27  09:10  Italy   BTP/CCTeu auction

AUD/USD Forecast April 24, 2012, Technical Analysis

The AUD/USD continues to looks weak overall as the slump on Monday indicates. The pair is currently suffering by less than stellar economic numbers out of Australia, and the stronger than usual US dollar. However, it should be noted that the Kiwi looks stronger than the Aussie, so this could be more of an anti-Australia play than a “risk aversion” play. The Reserve Bank of Australia is expected to cut rates soon, and the market looks as if it is pricing this in. Because of this, we aren’t as keen on the Aussie as we once were, but aren’t ready to sell until we see a fresh low. A daily close well above the 200 day EMA could change our minds however, and have us buying again.

AUD/USD Fundamental Analysis April 24, 2012 Forecast

Analysis and Recommendation: (close of Asian session)

The AUD/USD dropped a third of a US cent after the release of weaker than expected producer price index (PPI) data.

The Aussie was trading at 103.28, down from 103.62 T just before the data’s release.

The Australian dollar ended Friday at 103.38 US cents.

The PPI index fell 0.3 per cent in the March quarter, the Australian Bureau of Statistics (ABS) said on Monday, which was below market forecasts of a rise of 0.5 per cent in the quarter.

The PPI is a measure of inflation and can influence expectations for the more closely-watched March quarter consumer price index (CPI), due out on Tuesday.

The CPI figures are seen as crucial for the RBA’s interest rate decision at its May board meeting after the bank’s governor, Glenn Stevens, indicated a cut in the cash rate was likely if inflation was not too high.

Lackluster results from China also helped depress the Australian dollar in today’s trading

China’s manufacturing activity contracted further in April, although the sector improved from levels seen in March, a preliminary reading from HSBC showed Monday. HSBC’s so-called “flash” Purchasing Managers’ Index rose to 49.1 in April, compared with a final reading of 48.3 in March. A reading below 50 shows contraction, while one above 50 indicates an expansion. The improvement in factory conditions in April suggests that the earlier easing measures have started to work and hence should ease concerns of a sharp growth slowdown.

Eco data for Monday April 23, 2012 actual v. forecast that affect the ANZ, JPY, NZD and CNY

Apr. 23

 

AUD

 

 

 

PPI (QoQ) 

-0.3%

 

0.4% 

 

0.3% 

 

 

 

 

CNY

 

 

 

Chinese HSBC Manufacturing PMI 

49.10

 

 

 

48.30 

   

Economic Events scheduled for April 24, 2012 that affect the NZD, AUD, JPY and CNY

02:30     AUD      CPI (QoQ)                                                                                                            0.6%       

The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.

02:30     AUD      Trimmed Mean CPI (QoQ)                                           0.6%                      0.6%

The Trimmed Mean Consumer Price Index (CPI) measures the change in the price of goods and services purchased by consumers, excluding the most volatile 30% of items. This data helps illustrate underlying inflation trends. A higher than expected reading should be taken as positive/bullish for the AUD, while a lower than expected reading should be taken as negative/bearish for the AUD.

15:00     USD       CB Consumer Confidence                                            70.3                        70.8

Conference Board (CB) Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. Higher readings point to higher consumer optimism.

15:00     USD       New Home Sales                                                             320K                      313K     

New Home Sales measures the annualized number of new single-family homes that were sold during the previous month. This report tends to have more impact when it’s released ahead of Existing Home Sales because the reports are tightly correlated

Government Bond Auctions (this week)

Apr 24  00:30  Japan  Auctions 20Y JGBs

Apr 24  08:30  Holland  Eur 1.5-2.5bn Jul 2014 & Jan 2037 DSL auction

Apr 24  08:30  Spain  3 & 6M T-bill auction

Apr 24  09:10  Italy   Auctions CTZ/BTPei

Apr 24  14:30  UK  Details Conventional Gilt auction on May 01 & I/L auction on May 03

Apr 24  17:00  US  Auctions 2Y Notes

Apr 25  09:10  Sweden  Auctions T-bills

Apr 25  09:30  Germany  Eur 3.0bn new Jul 2044 Bund

Apr 25  14:30  Sweden  Details nominal bond auction on May 02

Apr 25  17:00  US  Auctions 5Y Notes

Apr 26  00:30  Japan  Auctions 2Y JGBs

Apr 26  09:10  Italy   BOT auction

Apr 26  14:30  Sweden  Details I/L bond auction on May 03

Apr 26  17:00  US  Auctions 7Y Notes

Apr 27  09:10  Italy   BTP/CCTeu auction

AUD/USD Forecast April 23, 2012, Technical Analysis

The AUD/USD pair continued to move sideways for the session, sitting just below the 200 day EMA. The pair looks as if it is trying to form some kind of base, but the 1.04 level is going to be vital for this market to continue higher. The pair looks a bit supported at this point, and as a result we like the long side, but need to see a daily close above the 200 EMA first. Until then, we are very cautious as we feel that we are at a bit of a crossroads currently. 

AUD/USD Forecast April 23, 2012, Technical Analysis
AUD/USD Forecast April 23, 2012, Technical Analysis

AUD/USD Forecast for the Week of April 23, 2012, Technical Analysis

The AUD/USD pair rose for the week as the bounce from the 50% Fibonacci level continues to push prices higher. The breaking of the highs from the previous week (shooting star) is needed to be completely confident in this bullish attitude of this pair, and until then it is hard to be long. The bearish case will be difficult to make as well since the 1.02 level has been so supportive. With this in mind, we find this pair one that we would rather leave alone until we break above that candle from the previous week.

AUD/USD Forecast for the Week of April 23, 2012, Technical Analysis
AUD/USD Forecast for the Week of April 23, 2012, Technical Analysis