AUD/USD Fundamental Analysis May 7, 2012 Forecast

Analysis and Recommendation: (close of Asian session)

The AUD/USD is currently at 1.0263 as the Aussie continues to decline. Earlier today the RBA announced a reduction in their growth forecast for 2012, stating that problems for the eurozone and exports as well as higher inflation are limiting growth in Australia.

This coupled with the .50bp rate reduction earlier in the week has caused the weakness in the AUD.

Economic events for May 3-4, 2012 actual v. forecast

May 3

 

GBP

 

 

 

Nationwide HPI (MoM) 

-0.2%

 

0.5% 

 

-1.0% 

 

 

 

 

TRY

 

 

 

Turkish CPI (MoM) 

1.52%

 

1.18% 

 

0.41% 

 

 

 

 

GBP

 

 

 

Services PMI 

53.3

 

54.6 

 

55.3 

 

 

 

 

EUR

 

 

 

Interest Rate Decision 

1.00%

 

1.00% 

 

1.00% 

 

 

 

 

BRL

 

 

 

Brazilian Industrial Production (YoY) 

-2.1%

 

1.5% 

 

-4.0% 

   

 

 

USD

 

 

 

Nonfarm Productivity (QoQ) 

-0.5%

 

-0.5% 

 

1.2% 

   

 

 

USD

 

 

 

Initial Jobless Claims 

365K

 

380K 

 

392K 

   

 

 

USD

 

 

 

Unit Labor Costs (QoQ) 

2.0%

 

2.8% 

 

2.7% 

   

 

 

USD

 

 

 

Continuing Jobless Claims 

3276K

 

3311K 

 

3329K 

   
 

 

USD

 

 

 

ISM Non-Manufacturing Index 

53.5

 

55.5 

 

56.0 

 

 

 

Economic Events for May 7, 2012 for the Asian and US Markets

02:30   AUD               NAB Business Confidence                                                    3         

The National Australia Bank (NAB) Business Confidence Index rates the current level of business conditions in Australia. Changes in business sentiment can be an early signal of future economic activity such as spending, hiring, and investment. The index is based on data collected from a survey of around 350 companies. A level above zero indicates improving conditions; below indicates worsening conditions.

02:30   AUD               Retail Sales                                                     0.2%                0.2%

Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity.

02:30   AUD               Building Approvals                                        3.0%               -7.8%

Building Approvals (also known as Building Permits) measures the change in the number of new building approvals issued by the government. Building permits are key indicator of demand in the housing market.

Government Bond Auctions (this week)

Date  Time  Country 

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 May 4, 2012, Technical Analysis

The AUD/USD pair fell hard on the session for Thursday as traders prepared for the important Non-Farm Payroll numbers today. The announcement should be one of the most important this year, as the markets try to figure out if the Federal Reserve will have to ease again. If this is the case, there is a real chance that gold and other commodities will be bought, and the Aussie should rise in concert as well. The 1.02 level looks as if it is very important as support, so a break below it has us selling this pair none the less. In fact, there is a case to be made for a bearish flag if it gives way. On a daily close below that level – we are selling. If we rise and close higher for the day, we would buy on Monday.

 

AUD/USD Forecast May 4, 2012, Technical Analysis
AUD/USD Forecast May 4, 2012, Technical Analysis

Australia Cuts Growth Projection Due to Eurozone Crisis

Australia, home of kangaroos and the outback, the last frontier, a land mass as large as the United States, rich in minerals and cultural diversity continues to deal with economic hardships.

The country had weathers the global financial crisis better than most, they did not have to pump up their banking system, unemployment increase but within tolerable limits, the housing market declined but not significantly, interest rates were lowered to stimulate  growth but no to levels like in the US or the UK or the EU.

Just last week the Reserve Bank of Australia reduced its key lending rate from 4.25% to 3.75%.

The government has not had to jump in and save major businesses and their mining industry is on solid ground.

With strong political and economic leadership, the country looked like it would be able to navigate through the global economic disasters.

That is until recently. Australia is dependent on its neighbors in Asian for exports, income, and jobs. With the recent economic problems in Japan, beginning with the tsunami to more direct financial problems, Australia begun to lose a good portion of their exports and business, only due to the fact that as their neighbors suffer, they do also.

For their sake, their major trading partner China, has been able to weather the storm also, with continued growth and expansion, until recently, when China begin to show signs of a slowdown.

Although China will not have a hard landing and they will still maintain over 7% growth, this is well under the forecast, this reduction flows to their neighbors.

One cannot say that it was not expected, as China is the supplier to the world, when the eurozone is in the midst of a recession and the US is just beginning an economic recovery, their suppliers will see a drop in business. But in 2008 who knew this would still be going on in 2012.

Last week Glenn Stevens, Governor of the Reserve Bank of Australia announced a surprise rate cut of 50bps to help stimulate the economy.

The Reserve Bank of Australia has cut growth and inflation forecasts for 2012-2013, as weaker global conditions hit exports and restricted wage growth keeps prices in check.

But the central bank noted that outside of Europe, there are a number of indications that conditions have stabilized over recent months.

The RBA expects underlying inflation to be about 2.0 per cent for the year to the end of June, 0.25 percentage points lower than it forecast three months ago.

But the inflation outlook rests on the key assumption that labor costs will remain consistent with the forecasts.

This is particularly concerning to the RBA because, now that the Australian dollar has stopped rising, the deflationary effect in the prices of internationally tradable goods and services has also waned.

At the same time, non-tradable prices, driven by domestic economic conditions, are still rising.

Europe’s sovereign debt crisis remained the biggest threat to global growth, although the situation had improved there in recent months, it said.

In the year to December 2013 the economy is expected to grow at a rate of between 2.5 and 3.5 per cent, compared to its previous forecast of 3.0-4.0 per cent.

In its statement, the RBA also confirmed that although Europe’s sovereign debt crisis remains the biggest risk to world economy, its interest rate cut on Tuesday was a response to slower economic activity in Australia.

AUD/USD Fundamental Analysis May 4, 2012 Forecast

Analysis and Recommendation: (close of Asian session)

The AUD/USD continues to decline trading in today’s session at 1.03 even.

The recent Chinese eco data showing a continued slowdown is having negative effects on the Australian and New Zealand economy. The two major trading partners for Australia are Japan and China and both have been showing signs of continued slowdown.

China’s non-manufacturing purchasing managers index (PMI) was 56.1 in April, down from 58.0 in March, according to the data released earlier today.

Economic events for May 2-3, 2012 Actual  v. Forecast

 

 

CHF

 

 

 

SVME PMI 

46.9

 

50.5 

 

51.1 

 

 

 

 

EUR

 

 

 

French Manufacturing PMI 

46.9

 

47.3 

 

47.3 

 

 

 

 

EUR

 

 

 

German Manufacturing PMI 

46.2

 

46.4 

 

46.3 

 

 

 

 

EUR

 

 

 

German Unemployment Rate 

6.8%

 

6.7% 

 

6.8% 

   

 

 

EUR

 

 

 

German Unemployment Change 

19K

 

-10K 

 

-18K 

 

 

 

 

EUR

 

 

 

Manufacturing PMI 

45.9

 

46.0 

 

46.0 

 

 

 

 

EUR

 

 

 

Unemployment Rate 

10.9%

 

10.9% 

 

10.8% 

 

 

 

 

USD

 

 

 

ADP Nonfarm Employment Change 

119K

 

177K 

 

201K 

   

May 3 

 

NZD

 

 

 

Employment Change (QoQ) 

0.4%

 

0.3% 

 

0.2% 

   

 

 

NZD

 

 

 

Unemployment Rate 

6.7%

 

6.3% 

 

6.4% 

   

 

Economic Events for May 4, 2012 for the Asian and US Markets

12:30   USD               Nonfarm Payrolls                                         170K    120K   

Nonfarm Payrolls measures the change in the number of people employed during the previous month, excluding the farming industry. Job creation is the foremost indicator of consumer spending, which accounts for the majority of economic activity.

 12:30  USD               Unemployment Rate                                    8.2%    8.2%

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

Government Bond Auctions (this week)

Date  Time  Country 

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 May 3, 2012, Technical Analysis

The AUD/USD pair fell for much of the session on Wednesday, but bounced in order to form a hammer at the end of the day. The 1.03 level looks very supportive, and a bounce from this area could be coming. In fact, if we break the top of the Wednesday range, this would be a classic buy signal. However, the pair can also be said to potentially be forming a bearish flag, and if we break below the bottom of the hammer from Wednesday, there is a very good chance that we will fall much farther. In fact, we are sellers below the 1.02 handle. 

AUD/USD Forecast May 3, 2012, Technical Analysis
AUD/USD Forecast May 3, 2012, Technical Analysis

In The Eyes of the Experts – 02/5/2012

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:

  • GBP
  • USD
  • JPY

 

Currencies watch for Short:

  • CHF
  • EUR

 

Today’s important times (GMT+2):

  • 15:15 USD

 

Important rates:

Pair R2 R1 Pivot S1 S2
EURUSD    1.3161    1.3199    1.3241    1.3279    1.3321   
GBPUSD 1.6156 1.6187 1.6216 1.6248 1.6277
USDJPY 79.38 79.79 80.04 80.45 80.70
USDCHF 0.9014 0.9045 0.9071 0.9102 0.9128
USDCAD 0.9796 0.9825 0.9861 0.9890 0.9926
AUDUSD 1.0232 1.0284 1.0355 1.0407 1.0478

AUD/USD Fundamental Analysis May 3, 2012 Forecast

Analysis and Recommendation: (close of Asian session)

The AUD/USD has recovered slightly from the fall yesterday when the Reserve Bank surprised markets dropping rates by 50bps. Markets had expected a reduction of 25bps.

As soon as the RBA announced their decision the Aussie began to decline, falling below the 1.0326 level.

Yesterday, the USD was able to gather some strength on eco data which showed an expansion in the US manufacturing sector.

Also, Chinese PMI was released a bit under forecast; which is a negative for the AUD.

The pair are presently trading at 1.0334 as the Aussie makes a small comeback.

Economic Data for May 1 – 2, 2012 actual v. forecast

( Most markets were closed for “May Day” Holiday)

 

 

GBP

 

 

 

Manufacturing PMI 

50.5

 

51.4 

 

51.9 

 

 

 

 

USD

 

 

 

ISM Manufacturing Index 

54.8

 

53.0 

 

53.4 

 

 

May 02

 

CNY

 

 

 

Chinese HSBC Manufacturing PMI 

49.30

 

 

 

49.10

   

Economic Events for May 3, 2012 for the Asian and US Markets

8:30am            USD     Unemployment Claims                                             

Measures the number of individuals who filed for unemployment insurance for the first time during the past week. Although it’s generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions.

8:30am            USD     Prelim Nonfarm Productivity q/q                          

Measures annualized change in labor efficiency when producing goods and services, excluding the farming industry. Productivity and labor-related inflation are directly linked – a drop in a worker’s productivity is equivalent to a rise in their wage. When businesses pay more for labor the higher costs are usually passed on to the consumer.

8:30am            USD     Prelim Unit Labor Costs q/q                                    

This measures annualized change in the price businesses pay for labor, excluding the farming industry. It’s a leading indicator of consumer inflation – when businesses pay more for labor the higher costs are usually passed on to the consumer.

10:00am          USD     ISM Non-Manufacturing PMI                                              

The Institute for Supply Management measures the level of a diffusion index based on surveyed purchasing managers, excluding the manufacturing industry. It’s a leading indicator of economic health – businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy.

1:00pm            USD     FOMC Member Lockhart Speaks

Federal Reserve FOMC members vote on where to set the nation’s key interest rates and their public engagements are often used to drop subtle clues regarding future monetary policy.       

9:30pm            AUD     RBA Monetary Policy Statement                

Released quarterly the Statement on Monetary Policy provides valuable insight into the bank’s view of economic conditions and inflation – the key factors that will shape the future of monetary policy and influence their interest rate decisions.

Government Bond Auctions (this week)

Date  Time  Country 

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 May 2, 2012, Technical Analysis

The AUD/USD pair fell on Tuesday as the Reserve Bank of Australia cuts rates by .50 percent during the early part of the session. This of course led to Aussie selling, and as a result the pair poked back below the 1.04 handle again.

The fact that the central bank decided to cut rates more than anticipated suggests that there are more worries out there for the RBA than traders are willing to admit. This will certainly have some traders concerned, and as a result this pair could struggle going into the future. However, it should be noted that the Europeans weren’t trading during the session, and this means that the market hasn’t fully expressed its opinion in this pair yet.

The pair fell back down to the 1.03 level, but bounced a bit in the end. The level that we are seeing at the end of the day isn’t much in the way of a change after the initial knee-jerk reaction. This will of course catch the eye of traders out there, and it leads us to think that perhaps the downside is somewhat limited in the Australian dollar.

Also, one has to think about the fact that there is a suggestion in the markets that the Federal Reserve could be easing a bit further in to the later part of the year, and this would help alleviate some of the interest rate swap differential lost for the pair over the last 24 hours. The Federal Reserve hasn’t explicitly stated when they would ease, but the simple fact that Ben Bernanke is willing to say that there are more easing tools they could use if the economy gets worse suggests to a lot of traders that the Fed will be loosening yet again. This will certainly push this pair higher as the gold markets will heat up at that point.

The Non-Farm Payroll numbers come out on Friday, and this could move the market as well. Because of this, we suggest that the pair could be somewhat consolidative in tone until then. At this point, we are flat of this market until we get more clarity, perhaps at the end of the Wednesday session. 

AUD/USD Forecast May 2, 2012, Technical Analysis
AUD/USD Forecast May 2, 2012, Technical Analysis

In The Eyes of the Experts – 01/5/2012

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:

  • CAD
  • USD
  • EUR

 

Currencies watch for Short:

  • GBP
  • NZD
  • AUD

 

Today’s important times (GMT+2):

  • 17:00 USD

 

Important rates:

Pair R2 R1 Pivot S1 S2
EURUSD    1.3178    1.3208    1.3237    1.3266    1.3295   
GBPUSD 1.6169 1.6199 1.6249 1.6279 1.6329
USDJPY 79.36 79.64 80.03 80.28 80.63
USDCHF 0.9033 0.9053 0.9074 0.9094 0.9115
USDCAD 0.9766 0.9821 0.9857 0.9911 0.9947
AUDUSD 1.0373 1.0398 1.0429 1.0453 1.0487

The RBA Surprises Markets with a 50bp Rate Cut

One can never predict what Glenn Steven’s is going to do, he is almost as confusing as his partner in the US, Fed Chairman Bernanke.

They seem to never cater to politics and have their own interpretation of the economy and their own long term picture and guide.

Once again the RBA surprised the markets. It was already a given that there would be rate reduction of .25bps. The markets had factored that in, but no one would have been surprised if the RBA decided to hold. But they went for the kill.  Sixteen economists surveyed last week expected the RBA to cut the cash rate at its May 1 board meeting. Almost all agreed a ¼ pt cut was likely.

The statement issued today said:

The Reserve Bank of Australia (RBA) has cut the official cash rate by 50 basis points to 3.75 per cent.

In a statement accompanying the decision, RBA governor Glenn Stevens said growth in the world economy slowed in the second half of 2011, and is likely to continue at a below-trend pace this year.

“A deep downturn is not occurring at this stage, however, and in fact some forecasters have recently revised upwards their global growth outlook,” Mr Stevens said.

“Conditions in Europe remain very difficult, while the United States continues to grow at a moderate pace.

“Commodity prices have been little changed, at levels below recent peaks but which are nonetheless still quite high.

“Australia’s terms of trade similarly peaked about six months ago, though they too remain high.”

Mr Stevens said financial market sentiment had improved this year and that capital market is supplying funding to corporations and well-rated banks.

“At the margin, wholesale funding costs have declined over recent months, though they remain higher, relative to benchmark rates, than in mid 2011,” he said.

“Market sentiment remains skittish, however, and the tasks of putting European banks and sovereigns onto a sound footing for the longer term, and of improving Europe’s growth prospects, remain large.

“Hence Europe will remain a potential source of adverse shocks for some time yet.”

The Aussie dropped in immediate trade, but markets and traders hailed the decision.

AUD/USD Fundamental Analysis May 2, 2012 Forecast

Analysis and Recommendation: (close of Asian session)

The AUD/USD has dropped more than half a cent after the Reserve Bank of Australia cut the official cash rate by a substantial 50 basis points.

Just prior to the decision, the local unit was trading at 104.09, but fell to 103.50 after the decision.

Reserve Bank beat analyst expectations of a 25 basis point rate cut on Tuesday, lowering interest rates to 3.75 per cent.

The Australian dollar finished yesterday’s session at 104.58.

The Reserve Bank of Australia (RBA) has cut the official cash rate by 50 basis points to 3.75 per cent, beating market consensus of a 25 basis point reduction.

The RBA’s decision to drop interest rates at its May board meeting comes after it kept the cash rate on hold since December last year.

In a statement accompanying the decision, RBA governor Glenn Stevens said growth in the world economy slowed in the second half of 2011, and is likely to continue at a below-trend pace this year.

“A deep downturn is not occurring at this stage, however, and in fact some forecasters have recently revised upwards their global growth outlook,” Mr Stevens said. “Conditions in Europe remain very difficult, while the United States continues to grow at a moderate pace.

Economic Data for April 30- May 1, 2012 actual v. forecast

 

 

EUR

 

 

 

CPI (YoY) 

2.6%

 

2.5% 

 

2.6% 

 

 

 

 

USD

 

 

 

Core PCE Price Index (MoM) 

0.2%

 

0.2% 

 

0.1% 

 

 

 

 

CAD

 

 

 

GDP (MoM) 

-0.2%

 

0.2% 

 

0.1% 

 

 

 

 

USD

 

 

 

Personal Spending (MoM) 

0.3%

 

0.4% 

 

0.9% 

   

 

 

USD

 

 

 

Chicago PMI 

56.2

 

61.0 

 

62.2 

 

 
 

 

NZD

 

 

 

Labor Cost Index (QoQ) 

0.5%

 

0.5% 

 

0.7% 

 

 

May 01  

 

CNY

 

 

 

Chinese Manufacturing PMI 

53.30

 

53.60 

 

53.10 

 

 

 

 

AUD

 

 

 

House Price Index (QoQ) 

-1.10%

 

-0.50% 

 

-0.70% 

   

 

 

AUD

 

 

 

Interest Rate Decision 

3.75%

 

4.00% 

 

4.25% 

 

 

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

01:30     JPY         Labor Cash Earnings                                                                                                

Indicator released by the Ministry of Health, Labor and Welfare shows the average income, before taxes, per regular employee. It includes overtime pay and bonuses but it doesn’t take into account earnings from holding financial assets or capital gains. Higher income puts upward pressures over consumption; therefore an increasing trend in earnings is inflationary for the Japanese economy.

02:30     CNY       HSBC Manufacturing PMI                                                                                             

The HSBC Manufacturing Purchasing Managers Index (PMI) released by the Markit Economics is an early indicator of economic health in the Chinese manufacturing sector. Any reading above 50 signals expansion, while a reading under 50 shows contraction. As the Chinese economy has influence on the global economy, this economic indicator would have an impact on the Forex market.

12:15     USD       ADP Employment Change                                                                                          

The Employment Change released by the Automatic Data Processing, Inc is a measure of the change in the number of employed people in the US Generally speaking; a rise in this indicator has positive implications for consumer spending which stimulates economic growth.                

14:00     USD       Factory Orders                                                                                                              

The Factory orders released by the US Census Bureau is a measure of the total orders of durable and non durable goods such as shipments (sales), inventories and orders at the manufacturing level which can offer insight into inflation and growth in the manufacturing sector. 

22:30     AUD       AIG Performance of Services Index                                                                        

AIG Performance of Services Index released by the Australian Industry Group presents business conditions in the Australian service sector. The group surveys 200 manufacturers on their assessment of the business situation including employment, production, orders, prices, and inventories, and their short-term planning. A result above 50 is seen as positive (or bullish) for the AUD, whereas a result below 50 is seen as negative (or bearish).

22:45     NZD       Unemployment Rate                                                                                                   

The Unemployment Rate released by the Statistics New Zealand is the number of unemployed workers divided by the total civilian labor force. If the rate is up, it indicates a lack of expansion within the New Zealand lobar market. As a result, a rise leads to weaken the Australian economy.

Government Bond Auctions (this week)

Date  Time  Country 

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 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