USD/CHF Forecast Jan. 19, 2012, Fundamental Analysis

USD/CHF Forecast Jan. 19, 2012, Fundamental Analysis
USD/CHF Forecast Jan. 19, 2012, Fundamental Analysis
The pair fell sharply on Wednesday trading, for the third straight session, as the improvement in the sentiment after the IMF plan to expand its lending capacity by $500 billion and successful European debt auctions damped demand on the dollar.   

The IMF is looking forward to expanding its lending capacity to $885 billion from the current $385 billion to protect the global economy from the negative consequences of the European debt crisis, according to an official at a Group of 20 nation.

The announcement provided optimism in markets, especially after a successful bond selling by both Germany and Portugal.

Germany managed to sell two-year bonds at lower yields and stronger demand, where the government sold 3.44 billion euros of 2-year notes with an average yield of 0.17% from 0.29% in the prior auction, while the bid-to-cover ratio improved to 2.2 times compared with the previous 1.43 times recorded December’s auction.

Portugal also auctioned 1.25 billion euros, 754 million euros and 496 million euros of 11-, 6- and 3-month bonds respectively, where the yield of the six-month bills retreated to 4.74% from 5.25% in the prior auction.  

Moreover, Greece will resume talks with private sector debt holders on Wednesday after the halt of the negotiations on January 13, to reach an agreement over the size of losses to be bared by creditors to avert a possible default as early as in March.

On the other hand, the Swiss franc took advantage of the dollar’s drop and gained another support from the ZEW survey which showed that the index rose to the highest level since seven months as it surged to -50.1 in January from -72.0 last month.

On Thursday, the U.S. economy will release initial jobless claims for the week ended Dec. 24 and continuing claims for the week ended Dec. 16, where they will be available at 13:30 GMT. At 14:45 GMT, Chicago purchasing manager is estimated to retreat to 60.2 in Dec. from the previous 62.6. 15 minutes later, pending home sales for Nov. will signal 1.8% advance compared with the preceding 10.4% rise.

The U.S. will start the data at 13:30 GMT with the Inflation Report. The CPI index is expected with 0.1% rise on the month after holding unchanged the previous month and on the year to slow to 3.1% after 3.4%. Excluding food and energy the index is expected with 0.1% rise on the month after 0.2% gain and on the year to hold at 2.2%.

December Housing Starts index is also due the same time and expected flat at 685,000 while Building Permits are expected with 0.7% drop to 675,000 from 681,000.

As for the Jobless Claims for the week ending in January 14 it is also due at 13:30 GMT as usual after last week they rose 24,000 to 399,000 last week.

As for the Philadelphia Fed Index for January the index is due 15:00 GMT and expected to improve slightly to 11.0 from 10.3.

The data will affect the pair’s movement due to its relevance, yet the pair will probably be more affected by the general sentiment which will focus on an auction from Spain.  

EUR/CHF Forecast January 19, 2012, Fundamental Analysis

EUR/CHF Forecast January 19, 2012, Fundamental Analysis
EUR/CHF Forecast January 19, 2012, Fundamental Analysis
The EUR/CHF pair traded narrowly yesterday and ended the session very weak, yet during the session the pair fluctuated heavily within those narrow levels; however, the upbeat sentiment in the euro-area region in addition to the unexpected improvement in the ZEW Expectations for the Swiss economy led the pair to remain around the opening level.

Today, the EUR/CHF pair is expected to trade narrowly as usual as there are no crucial data from the Switzerland, where the eyes will be focused on the trade figures from the euro zone and also on the Spanish bond sale, as investors are still tracking whether the improvement in the bond auctions are meant to last or not.

The ECB will release the monthly report for January at 09:00 GMT. At the same time we have the Current Account for November which is likely to improve from the previous recorded 7.5 billion euro deficit in October after the reported huge trade surplus on the back of exports gains.

Auctions:

09:30 GMT Spain sells bills

 

EUR/USD Forecast January 19, 2012, Fundamental Analysis

EUR/USD Forecast January 19, 2012, Fundamental Analysis
EUR/USD Forecast January 19, 2012, Fundamental Analysis
The EUR/USD pair ended a strongly bullish session yesterday affected by the flow of positive data, which supported the pair to regain momentum and negated the effect of other bearish data from the euro zone.

Yesterday, the euro advanced sharply against the U.S. dollar after the International Monetary Fund said that it could expand its capacity to 1 trillion dollars from 385 billion dollar in order to support the global economy and prevent the debt crisis from spreading outside the euro-area region.

The German successful bond sale also added positivity to the market and supported the euro to hold onto the gains despite the government’s act of revising growth forecasts.

Today, the pair could fluctuate heavily with the heavy load of fundamentals awaited from the euro-zone and the United States, where during the European session the concentration is expected to remain on the Spanish bond sale and the trade balance figures, where better than expected data could support the euro to continue the upside move against the weakening U.S. dollar.

The data from the United States are expected weak; however, better than expected fundamentals could also support the sentiment to remain positive in the market, in case it was seen in the first place during the European session.

The ECB will release the monthly report for January at 09:00 GMT. At the same time we have the Current Account for November which is likely to improve from the previous recorded 7.5 billion euro deficit in October after the reported huge trade surplus on the back of exports gains.

The U.S. economy will release initial jobless claims for the week ended Dec. 24 and continuing claims for the week ended Dec. 16, where they will be available at 13:30 GMT. At 14:45 GMT,Chicagopurchasing manger is estimated to retreat to 60.2 in Dec. from the previous 62.6. 15 minutes later, pending home sales for Nov. will signal 1.8% advance compared with the preceding 10.4% rise.

The U.S. will start the data at 13:30 GMT with the Inflation Report. The CPI index is expected with 0.1% rise on the month after holding unchanged the previous month and on the year to slow to 3.1% after 3.4%. Excluding food and energy the index is expected with 0.1% rise on the month after 0.2% gain and on the year to hold at 2.2%.

December Housing Starts index is also due the same time and expected flat at 685,000 while Building Permits are expected with 0.7% drop to 675,000 from 681,000.

As for the Jobless Claims for the week ending in January 14 it is also due at 13:30 GMT as usual after last week they rose 24,000 to 399,000 last week.

As for the Philadelphia Fed Index for January the index is due 15:00 GMT and expected to improve slightly to 11.0 from 10.3.

Auctions:

09:30 GMT Spain sells bills

USD/JPY Forecast Jan. 19, 2012, Fundamental Analysis

USD/JPY Forecast Jan. 19, 2012, Fundamental Analysis
USD/JPY Forecast Jan. 19, 2012, Fundamental Analysis
The USD/JPY pair dropped for the third day, where the US dollar and the yen continued to lose ground against other majors, giving the higher-yielding currencies a chance to recover from previous losses.

The U.S. economy is showing many signs of recovery in different sectors, which could reflect negatively on the greenback as a safe haven, where investors will increase their appetite for risky assets.

On Thursday at 13:30 GMT, the U.S. economy will release the Consumer Price Index for December, where the prior reading was 0.0% and it’s expected to come at 0.1%. The annual CPI had a prior reading of 3.4% and expected to come at 3.1%.

The Housing Starts for December will be released also at 13:30 GMT, where the previous reading was up by 9.3% at 685 thousand, and expected to remain unchanged at 685 thousand. The U.S. Building Permits are expected with 0.7% drop to 675 thousand from the prior reading of 681 thousand.

The weekly initial claims are also due at the same time, where the number of people filing for first-time claims for the state unemployment insurance increased to 399 thousand last week.

NZD/USD Forecast Jan. 19, 2012, Fundamental Analysis

NZD/USD Forecast Jan. 19, 2012, Fundamental Analysis
NZD/USD Forecast Jan. 19, 2012, Fundamental Analysis
The NZD/USD pair traded near its highest level in two months, where the New Zealand dollar maintains its strong performance against greenback, pushing the pair to record more gains.

On the other hand, the Kiwi found strong support from the Chinese GDP figures which came better than expected, adding more signs that the strong demand from China will help the New Zealand economy to recover.

The U.S. dollar has lost ground against the Kiwi since the beginning of the week, as the cheerful data from the U.S. economy reduced demand for safe assets such as the greenback and the Japanese yen.

On Thursday at 21:45 GMT (Wednesday), New Zealand will release the Consumer Prices Index for the fourth quarter, where it’s expected to come at 0.4% in line with the previous quarter.

The annual Consumer Prices Index for the fourth quarter is expected to come at 2.6% from the prior reading of 4.6%.

At 00:00 GMT, the ANZ Consumer Confidence Index will be released, with a prior reading of 108.4.

On Thursday at 13:30 GMT, the U.S. economy will release the Consumer Price Index for December, where the prior reading was 0.0% and it’s expected to come at 0.1%. The annual CPI had a prior reading of 3.4% and expected to come at 3.1%.

The Housing Starts for December will be released also at 13:30 GMT, where the previous reading was up by 9.3% at 685 thousand, and expected to remain unchanged at 685 thousand. The U.S. Building Permits are expected with 0.7% drop to 675 thousand from the prior reading of 681 thousand.

The weekly initial claims are also due at the same time, where the number of people filing for first-time claims for the state unemployment insurance increased to 399 thousand last week.

AUD/USD Forecast Jan. 19, 2012, Fundamental Analysis

AUD/USD Forecast Jan. 19, 2012, Fundamental Analysis
AUD/USD Forecast Jan. 19, 2012, Fundamental Analysis
The AUD/USD pair traded near its highest level in 11 weeks, where the US dollar continued to drop against other higher-yielding currencies, while the strong GDP numbers from China still has its optimistic effect on Aussie.

The US dollar retreated for the second day against the euro and other majors, where anticipations refer to some recovery in the U.S. industrial sector and confidence between homebuilders which was enough to support the risk appetite.

On the other hand the Chinese economy reported a better than expected GDP during the fourth quarter, which supported the Aussie demand since China is number one trade partner for Australia.

On Thursday at 00:30 GMT, Australia will release the Employment Change for December where the prior reading was –6.3 thousand and it’s expected to come at 10.0 thousand.

On the other hand, the Unemployment Rate for December is expected to hold at 5.3%.

On Thursday at 13:30 GMT, the U.S. economy will release the Consumer Price Index for December, where the prior reading was 0.0% and it’s expected to come at 0.1%. The annual CPI had a prior reading of 3.4% and expected to come at 3.1%.

The Housing Starts for December will be released also at 13:30 GMT, where the previous reading was up by 9.3% at 685 thousand, and expected to remain unchanged at 685 thousand. The U.S. Building Permits are expected with 0.7% drop to 675 thousand from the prior reading of 681 thousand.

The weekly initial claims are also due at the same time, where the number of people filing for first-time claims for the state unemployment insurance increased to 399 thousand last week.

NZD/USD Fundamental Analysis Jan.19, 2012 Forecast

Close of  the Asian Session

Economic Events:

There are no economic events  or reports expected to effect the kiwi today.

Analysis and Recommendation:

Levels of Support and Resistance can be found today at:

S1: 0.7829 |S2: 0.7758 |S3: 0.7718

R1: 0.7940 |R2: 0.7980 |R3: 0.8051

The New Zealand dollar moved higher against its U.S. counterpart on Wednesday, but gains were limited as investors were cautious ahead of a series of debt auctions in the euro zone and new Greece bailout talks.

NZD/USD hit 0.8012 after Asian trade, the pair is trading in a tight range, opening this morning at 0.8003 and remaining in this range all through the session. As with its neighbor, the USD/AUD, we expect them to slowdance for the next few days, waiting for news from the EU.

There is no upside to this trade at present, its just a wait see.

AUD/USD Fundamental Analysis January 19, 2012, Forecast

Close of Asian Markets

Economic Events:

Jan. 19 

00:30   AUD   Employment Change   10.00K   -6.30K  

00:30   AUD   Unemployment Rate   5.30%   5.30%

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

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.

08:30 USD Initial Jobless Claims 385.00K 399.00K

08:30  USD Continuing Jobless Claims 3590.00K 3628.00K

Initial Jobless Claims measures the number of individuals who filed for unemployment insurance for the first time during the past week. This is the earliest U.S. economic data, but the market impact varies from week to week.

Continuing Jobless Claims measures the number of unemployed individuals who qualify for benefits under unemployment insurance.

A higher than expected reading should be taken as negative/bearish for the USD, while a lower than expected reading should be taken as positive/bullish for the USD.  If the report comes in under the 385K we can expect to see the USD fall against the AUD, but if the report is at the 399K level or above expect to see the USD rally and trend upwards on solid economic news.

Analysis and Recommendation:

Support and Resistance can be found at these levels    S1: 1.0284 |S2: 1.0198 |S3: 1.0146 |

R1: 1.0422 |R2: 1.0474 |R3: 1.0560

AUD/USD was trading at 1.0374, having made no moves at all during this session.

No economic news is expected out of the Austrailian reports and the US jobs reports are expected to be inline with forecast. This weeks moves if any will be on EU updates. Yesterday and today seems to be a wait and see day. Most currencies are trading within tight ranges. It seems to be the calm before the storm. Gold was slightly down at the end of the US session, but not enough to make any significant dent and it seems it was a more profit taking.

USD/JPY Fundamental Analysis Jan. 19, 2012, Forecast

Close of the Asian Session

Economic Events:

Jan. 19

08:30   USD   Core CPI (MoM)   0.10%   0.20%

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

A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

08:30   USD   CPI (MoM)   0.20%   0.00%

08:30   USD   Initial Jobless Claims   385.00K   399.00K

08:30   USD   Continuing Jobless Claims   3590.00K   3628.00K

Initial Jobless Claims measures the number of individuals who filed for unemployment insurance for the first time during the past week. This is the earliest U.S. economic data, but the market impact varies from week to week.

Continuing Jobless Claims measures the number of unemployed individuals who qualify for benefits under unemployment insurance.

A higher than expected reading should be taken as negative/bearish for the USD, while a lower than expected reading should be taken as positive/bullish for the USD.  If the report comes in under the 385K we can expect to see the USD fall against the Yen, but if the report is at the 399K level or above expect to see the USD rally and trend upwards on solid economic news.

23:30   JPY   All Industries Activity Index (MoM)   -0.70%   0.80%

The All Industries Activity Index measures the monthly change in overall production by all sectors of the Japanese economy. The index closely follows Japanese gross domestic product (GDP) and overall growth figures.

A higher than expected reading should be taken as positive/bullish for the JPY, while a lower than expected reading should be taken as negative/bearish for the JPY.

Analysis and Recommendation:

Levels of Support and Resistance can be found today at:

S:1: 76.5800 |S2: 76.4185 |S3: 76.2210 |R1: 76.9390 |R2: 77.1365 |R3: 77.2980

USD/JPY was trading at 76.70, down at time of writing.

Earlier, economic reports indicated that Industrial production dropped more-than-expected to a seasonally adjusted -2.7% last month from -2.6% in the preceding month

This pair is continuing to trade in a tight range, the long term view is that the duo will be range bound for sometime. I would rate this a neutral. Go somewhere else to earn trade, if the dollar rallys on economic data, it might push the yen down, but at this time, we expect the reports to come in close to forecast or below. Not enough to move the markets.

Gold Fundamental Analysis Jan. 18, 2012, Forecast

Analysis and Recommendations:

Gold rallied to its best in more than a month, relying on a weakening U.S. dollar and ongoing concerns about Europe’s recent debt downgrades.

Gold futures for February were up $24.80, or 1.5%, to $1,655.60 an ounce on the Comex division of the New York Mercantile Exchange. This was gold’s highest close since Dec. 13.

Gold was also riding the coattails of sharp increases for U.S. stocks and oil. Moreover, gold investors are worried about currency devaluation and loss of purchase power.The downgrades of the euro-zone countries means fiscal stimulus is not far behind.

Economic data is also helping moving markets as news that China’s output rose in the fourth quarter.

Data released earlier showed that China’s fourth-quarter GDP rose 8.9% from the year-ago period, beating estimates.

Support and Resistance levels for tomorrow       S:1628.20             1609.30 1593.40

R:1697.20             1664.10 1659.00

Gold continues to be a strong buy, adding on the dips.

Crude Oil Forecast Jan. 18, 2012, Fundamental Analysis

Crude Oil Forecast Jan. 18, 2012, Fundamental Analysis
Crude Oil Forecast Jan. 18, 2012, Fundamental Analysis
Crude oil prices rose as the USD lost strength after the Chinese GDP that showed an expansion in fourth quarter growth better than expected, adding that markets continued the sharp rebound after the upbeat European economic sentiment and the slowdown in inflation in addition to the Spanish bond sale.

On the other hand, sentiment continued to be positive after the European Financial Stability Facility (EFSF) sold the targeted amount of bills at an auction today which was met with strong demand.

Now, eyes will be spotted the performance of the European economy, especially after the ECB lent the European banks huge amount of money, and if that money will help the euro zone to continue recovery process amid big challenges.

Gold Forecast Jan. 18, 2012, Fundamental Analysis

Gold Forecast Jan. 18, 2012, Fundamental Analysis
Gold Forecast Jan. 18, 2012, Fundamental Analysis
Gold prices inclined as the USD lost strength after the Chinese GDP that showed an expansion in fourth quarter growth better than expected, adding that markets continued the sharp rebound after the upbeat European economic sentiment and the slowdown in inflation in addition to the Spanish bond sale.

On the other hand, sentiment continued to be positive after the European Financial Stability Facility (EFSF) sold the targeted amount of bills at an auction today which was met with strong demand.

Now, eyes will be spotted on this year, and the performance of the European economy, especially after the ECB lent the European banks huge amount of money, and if that money will help the euro zone to continue recovery process amid big challenges.

Accordingly, we should expect more fluctuations for gold, but should the current pessimism persist, we should expect gold prices to extend the rallies, however, the level of uncertainty is very high, and investors are ought to remain cautious.

Natural Gas Forecast Jan. 18, 2012, Fundamental Analysis

Natural gas prices declined on Tuesday for the sixth day, reaching the lowest price in more than two years on speculations that milder weather will result in below-normal demand for the fuel through the end of the month.

Traders will continue to focus on weather developments, where weather forecasts suggest temperatures will be likely lower than average over the coming period, and that could put natural-gas/”>natural gas between gains and losses in next period.

USD/CAD Forecast Jan. 18, 2012, Fundamental Analysis

USD/CAD Forecast Jan. 18, 2012, Fundamental Analysis
USD/CAD Forecast Jan. 18, 2012, Fundamental Analysis
The USD/CAD pair dropped on Tuesday as the USD lost strength after markets turned optimistic, as the Chinese GDP showed an expansion in fourth quarter growth better than expected, adding that markets continued the sharp rebound after the upbeat European economic sentiment and the slowdown in inflation in addition to the Spanish bond sale.

On the other hand, sentiment continued to be positive after the European Financial Stability Facility (EFSF) sold the targeted amount of bills at an auction today which was met with strong demand.

And as already strongly expected the Bank of Canada left its benchmark rate unchanged as it did for this long past period to continue on supporting its stable and gradual growth and present economical conjuncture since that overall global and local conditions remain mixed and the global recession continue on limiting its sectors activities enhancement.

The USD/CAD pair could still rise if pessimism continues to dominate markets, as uncertainty remains the main theme in markets, and that could also lead to deep fluctuations for the USD/CAD pair.

Wednesday January 18:

Canada will be absent over the session tomorrow, so fluctuating trading in the USD/CAD pair is expected, and eyes will be focused on Europe and the crisis that could cause any change in trading.

Crude Oil Fundamental Analysis Jan. 18, 2012, Forecast

Analysis and Recommendations:

Crude-oil futures rose today on economic news on China’s fourth-quarter gross domestic product in higher than expected and comments from Saudi Arabia bid prices higher. Crude for February delivery added $2.01, or 2%, to end at $100.71 a barrel on the New York Mercantile Exchange, back to above $100 for the first time since last week.

Light sweet crude for February delivery was up $1.68, or 1.7%, to $100.37 a barrel on the New York Mercantile Exchange.

Also the Saudi Arabia oil minister said oil at $100 a barrel is acceptable to the kingdom, the world’s top oil exporter.

Crude  found support in a weaker dollar, with the dollar index trading at 81.093

A softer USD tends to encourage investment in crude, as it makes the commodity more affordable to holders of other currencies.

Support and Resistance levels for tomorrow       S:            99.89     100.13   100.44

R:            101         101.24   101.55

Crude is a strong buy, and should test the 101.24 resistance level.

Natural Gas Fundamental Analysis Jan. 18, 2012, Forecast

Analysis and Recommendations:

Natural Gas dropped today as expectations of warmer weather have reduced  demand expectations for the fuel amid ongoing production growth. Natural gas for February delivery declined 18 cents, or 6.8%, to settle at $2.49 per million BTU, the lowest since 2002. Storage have accumulated due to the warmer weather trend in most of the U.S. and spring is getting close, and the total days left in winder are running out.Prices are likely to end below $2 by late February and early March. Natural Gas is a good sell especially if you sell on the blips up.

Support and Resistance levels for tomorrow       S:            2.49        2.51        2.54

R:            2.58        2.61        2.63

USD/CAD Fundamental Analysis Jan. 18, 2012, Forecast

Economic Events:

10:30   CAD   BoC Monetary Policy Report

11:15   CAD   BoC Gov Carney Speaks

These two reports will have no effects on the markets as the data was released today with a statement.

08:30   USD   Core PPI (MoM)   0.10%   0.10%

08:30   USD   PPI (MoM)   0.10%   0.30%

The Producer Price Index (PPI) measures the change in the price of goods sold by manufacturers. It is a leading indicator of consumer price inflation, which accounts for the majority of overall inflation.

A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

09:15   USD   Industrial Production (MoM)   0.50%   -0.20%  

Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.

A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

Analysis and Recommendations:

Support and Resistance levels for tomorrow       S:            1.0123   1.0134   1.0146

R:            1.0169   1.018     1.0192

The Bank of Canada made no change to monetary policy on Monday, keeping its benchmark rate at one percent despite headwinds from Europe and sluggish U.S. growth.

“The outlook for the global economy has deteriorated and uncertainty has increased” in the past few months, a statement from the Bank read.

“The sovereign debt crisis in Europe has intensified, conditions in international financial markets have tightened and risk aversion has risen. The recession in Europe is now expected to be deeper and longer than the Bank had anticipated in October.”

Sill, the decision to not hold off on additional monetary stimulus was expected by economists. In recent speeches, central bankers have been hinting they are more concerned with inflation than economic weakness spilling over to Canada. Today, Canada, Germany and Sweden are the only three nations with a AAA credit rating and this has caught the attention of investors.

The USD/CAD is currently trading at 101.64 as the session closes for the day down .015%

This might be a good buy opportunity, if the US reports are at forecast or better than tomorrow, the dollar might just rally. Crude Oil has quieted down, so there is nothing pushing the looney higher against the USD.

EUR/CHF Fundamental Analysis Jan. 18, 2012, Forecast

Economic Events:

 04:00   EUR   Italian Trade Balance   -0.94B   -1.08B  

The Italian Trade Balance measures the difference in value between imported and exported goods during the reported month.

A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.

05:00   CHF   ZEW Expectations   -72.00

The Zentrum fur Europaische Wirtschaftsforschung (ZEW) Economic Expectations Index rates the relative six-month economic outlook for Switzerland. On the index, a level above zero indicates optimism, below indicates pessimism. It is a leading indicator of economic health.

A higher than expected reading should be taken as positive/bullish for the CHF, while a lower than expected reading should be taken as negative/bearish for the CHF.

Analysis and Recommendations:

Support and resistance levels                     S:            1.2033   1.205     1.2077

R:            1.2121   1.2138   1.2165

The Producer and Import Price Index in Switzerland fell 2.3% (YoY) in December.

This pair is a non story, nothing much happening and too much risk in either direction to trade the pair. Its hands off until a story unfolds. The pair is currently trading at 1.2095 just about even to the open today.

USD/CHF Fundamental Analysis Jan. 18, 2012, Forecast

Economic Events:

04:00   EUR   Italian Trade Balance   -0.94B   -1.08B  

The Italian Trade Balance measures the difference in value between imported and exported goods during the reported month.

A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.

05:00   CHF   ZEW Expectations   -72.00

The Zentrum fur Europaische Wirtschaftsforschung (ZEW) Economic Expectations Index rates the relative six-month economic outlook for Switzerland. On the index, a level above zero indicates optimism, below indicates pessimism. It is a leading indicator of economic health.

A higher than expected reading should be taken as positive/bullish for the CHF, while a lower than expected reading should be taken as negative/bearish for the CHF.

Analysis and Recommendations:

Support and resistance levels                     S: 0.9482              0.9504   0.953

R:0.9578               0.9600   0.9626

The U.S. dollar dropped to a 2day low against the Swissie, as market sentiment firmed up after data showed that China’s economy grew at a faster-than-forecast pace in the fourth quarter of 2011.

USD/CHF hit 0.9468 during European morning trade, the pair’s lowest since Friday; the pair subsequently consolidated at 0.9470, shedding 0.73%. The duet are trading at .9507 at this time

The pair was likely to find support at 0.9406, Friday’s low and resistance at 0.9573, the session high and an almost 11-month high.

The Producer and Import Price Index in Switzerland fell 2.3% (YoY) in December,

The pair is expected to find support at 0.9473, and a fall through could take it to the next support level of 0.9446. The pair is expected to find its first resistance at 0.9551, and a rise through could take it to the next resistance level of 0.9602.

EUR/GBP Fundamental Analysis Jan. 18, 2012, Forecast

Economic Events:

04:30   GBP   Average Earnings Index +Bonus   2.0%   2.0%

The Average Earnings Index measures change in the price businesses and the government pay for labor, including bonuses. The Average Earnings figure gives us a good indication of personal income growth during the given month.

A higher than expected reading should be taken as positive/bullish for the GBP, while a lower than expected reading should be taken as negative/bearish for the GBP.

04:30   GBP   Claimant Count Change   8.0K   3.0K

Claimant Count Change measures the change in the number of unemployed people in the U.K. during the reported month. A rising trend indicates weakness in the labor market, which has a trickle-down effect on consumer spending and economic growth.

A higher than expected reading should be taken as negative/bearish for the GBP, while lower than expected reading should be taken as positive/bullish for the GBP.

04:00   EUR   Italian Trade Balance   -0.94B   -1.08B  

The Italian Trade Balance measures the difference in value between imported and exported goods during the reported month.

A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.

Analysis and Recommendations:

There are support and resistance levels are         S:            0.8286   0.829     0.8294

R:            0.8302   0.8306   0.831

Sterling was down against the euro with EUR/GBP adding 0.37%, to hit 0.8297. Official data showed that the annual rate of consumer price inflation in the U.K. declined to 4.2% in December, from 4.8% the previous month. The decline supported the Bank of England’s view that inflation will fall off sharply in 2012, allowing the bank to ease monetary policy further.

This pair will trade in tandem for a while. No trade is evident here.