Natural Gas Forecast for the Week of December 19, 2011

Natural gas continues to fall as the last week has seen quite the selloff in this obviously bearish market. The supply far outweighs the demand in this economy, and the technicals are obviously broken down. With this in mind, buying this market isn’t even an option. Selling at this level for a long-term trade might be a bit difficult as it is certainly oversold, but selling the rallies could be the way to go. We like selling any returns to the $3.50 level as well as $4 if we can rally that far. Selling at this level would simply be chasing the trade.

Natural Gas Forecast for the Week of December 19, 2011
Natural Gas Forecast for the Week of December 19, 2011

Gold Forecast for the Week of December 19, 2011

Gold markets had an absolutely brutal week over the last 5 session as the “risk off” trade came back into vogue. The $1,550 level has held so far, and the Friday session showed that the $1,600 to $1,500 level will more than likely produce a bounce, which would make sense as the fall was so massive and over such a short amount of time. The overall look at the chart shows that the highs are getting lower, so this bounce might just be that – a bounce. Either way, we would be willing to buy on the idea that this market should regain some of its losses recently. However, this is a trade, and not an investment as the $1,700 level might be overly resistive this next time around.

The European situation continues to upset the general attitude of the markets, and as long as that is the case, the Dollar will get a bid. The selloff lately in this market can also be thought of as yearend position squaring, and the next couple of weeks will be very light in volume. The light volume could produce fireworks as the lack of liquidity can exaggerate moves. The mood of the market going forward will be determined by the $1,500 level. If the area gives way, there is a real chance that we see a serious move down, with $1,350 being a real possibility at that point. The bounce that we envision looks to be good for about $100 or so, but the headlines in Europe can always throw a monkey wrench into the progression of the markets.

The rise of the Dollar seems to be the biggest thing that is working against the value of gold. It is most certainly not the certainty in the markets. The markets are showing that the situation in Europe will continue to take front stage in the next year, and the headlines will have to be watched. The overall long-term uptrend is still up, and we think that will return to the markets, but we think it could be next year before we see a return to that tone.

Gold Forecast for the Week of December 19, 2011
Gold Forecast for the Week of December 19, 2011

Oil Forecast December 19, 2011, Technical Analysis

Light Sweet Crude

The CL contract found support in the $92.50 level on Friday, an area that is minor support. The market has been sold off hard over the last several sessions and a bounce looks ready to come. However, as the move recently has been so decisive, we are now looking for rallies to sell. Until we get back above the $105 level – this will be our strategy.

Oil Forecast December 19, 2011, Technical Analysis
Oil Forecast December 19, 2011, Technical Analysis

Brent

The Brent markets found a bit of support again on Friday as the daily bar formed a doji. However, the Thursday candle was a shooting star, and the session on Friday will have triggered sell signals for many traders. The breaking below looks very weak, and we are willing to sell rallies at this point.

Natural Gas Forecast December 19, 2011, Technical Analysis

Friday saw the second quiet day in the natural gas pits in a row. The recent selloff has been brutal, and the market certainly needs to take a rest. With the holidays quickly approaching, the volume will shrink, and the markets could be prone to sudden spikes. Knowing this, we are very keen to sell those spikes as the show signs of slowing down. Also, we like selling rallies in general.

Natural Gas Forecast December 19, 2011, Technical Analysis
Natural Gas Forecast December 19, 2011, Technical Analysis

Gold Forecast December 19, 2011, Technical Analysis

The Friday session saw gold regain some of its losses for the week, albeit in a very small way. The session actually broke the top of the shooting star on Thursday, and could be the start of a possible bounce as a breaking of that top signifies at least some interest in buying the yellow metal. The long-term trend is still up, but the move recently has been brutal. We are waiting to see another day or two of calm before we buy again. The support level extends all the way down to $1,500 or so, and as a result we could see support here – meaning we won’t buy.

Gold Forecast December 19, 2011, Technical Analysis
Gold Forecast December 19, 2011, Technical Analysis

USD/JPY Weekly Forecast Dec. 19-23, 2011, Fundamental Analysis

USD/JPY Weekly Forecast Dec. 19-23, 2011, Fundamental Analysis
USD/JPY Weekly Forecast Dec. 19-23, 2011, Fundamental Analysis
but it still trading in the same range, as the dollar and the yen advanced against other major currencies with the high levels of risk aversion that dominated the financial market.

On the other hand, the pair is expected to trade in the same range during the upcoming week until the BOJ interest rate decision, where the central bank is expected to keep the rate steady.

The BOJ’s statement will be closely monitored, where any intervention from the BOJ or the Ministry of finance is a key factor for the yen to move.

The BOJ intervention is still an option, since the yen remains strong on haven demand and the previous interventions till now did not weaken the yen enough.

The U.S. economy will release the GDP numbers for the third quarter, where it’s expected unrevised at 2.0%, but any change on the GDP reading will be faced by a violence move from the greenback.

The greenback just like the yen is finding strong demand, where investors increased their appetite for the lower-yielding currency such as the dollar, sending the federal currency to its highest level in eleven month against the euro.

The next move for the USD/JPY pair will depend on the market sentiment, where the BOJ’s decision and the U.S. GDP numbers will contribute in defining the current sentiment.

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

Monday December 19:

Both economies are not due to release any major fundamentals leaving the focus on the market sentiment.

Tuesday December 20:

On Tuesday at 04:30 GMT, the Japanese economy will issue the All Industry Activity Index for October where it’s expected at 1.1% compare to the previous drop of 0.9%.

At 05:00 GMT, the Japanese Leading Index for October will be released, where the prior reading was 91.5, while the Coincident Index for October had a previous reading of 90.3.

The U.S. economy will release the Housing Starts for November at 13:30 GMT, where it’s expected to show a rise of 0.3% to 630 thousand compare to the prior drop of 0.3%.

As for the U.S. Building Permits it’s expected to drop 1.4% to 635 thousand from 653 thousand.

Wednesday December 21:

On Wednesday at 23:50 GMT (Tuesday), Japan will issue Merchandise Trade Balance Total for November, where it’s expected to show a deficit of 442.4 billion yen widening from the deficit of 273.8 billion.

The Adjusted Merchandise Trade Balance had a prior reading of –457.9 billion yen, and expected to narrow to -292.8 billion.

At 04:00 GMT, the Bank of Japan will announce its rate decision regarding where the central bank is expected to keep the interest rate steady at 0.10%.

The U.S. economy will release the Existing Home Sales for November at 15:00 GMT and it’s expected to advance 2.4% to 5.09 million from 4.97 million.

Thursday December 22:

The U.S. economy will release the final GDP reading for the third quarter at 13:30 GMT, the annualized Gross Domestic Product for the third quarter is expected to remain unrevised at 2.0%.

The Personal Consumption for the third quarter is also expected steady at 2.3% as well as the Core Personal Consumption Expenditure to hold at 2.0%.

The U.S. economy will also issue its weekly initial claims, where the number of people filing for first-time claims for the state unemployment insurance dropped to 366 thousand last week.

At 14:55 GMT, the United States will issue the University of Michigan Confidence for December, where the previous reading was 67.7 and it’s expected to rise to 68.2.

The U.S. leading index for November will be released at 15:00 GMT and expected to slow to 0.3% from 0.9%.

Friday December 23:

On Friday at 13:30 GMT, the U.S. economy will release the Durable Goods Orders for November with a previous reading of –0.7% and it’s expected to come at 2.1%.

The Personal Income for November is expected to slow to 0.3% from 0.4%, while the Personal Spending is expected to come at 0.4% from the previous 0.1%.

The core Personal Consumption Expenditure for November is expected in line with the previous rise of 0.1% on the month and 1.7% on the year.

At 15:00 GMT, the U.S. economy will issue the New Home Sales for November, where it’s expected to rise 1.8% to 313 thousand from 307 thousand.

USD/CHF Forecast Dec. 19-23, 2011, Fundamental Analysis

USD/CHF Forecast Dec. 19-23, 2011, Fundamental Analysis
USD/CHF Forecast Dec. 19-23, 2011, Fundamental Analysis
In the week ended Dec. 16, the USD/CHF showed incline for the second week as the tensions stemming from the euro area enhanced demand on the dollar as a refuge.

The rise in Italian bond yields, downgrade by Fitch to large European lenders and weak growth outlook for the euro area in addition to the uncertain outlook for the global economy gave strong support for the greenback.

However, the improvement in the U.S. data managed to ease some of the tensions in the market, yet it did not shift the sentiment as the main concern meanwhile is still on the euro zone as investors believe the debt crisis may drag global economies into another recession as well as financial turbulences with the beginning of 2012.

The franc got some support, however, after the SNB’s monetary policy opted to leave the 3-month Libor target rate at 0.0–0.25% while keeping the cap of the franc against the euro at 1.20, resisting pressure from exporters to push the rate to negative or raise the cap.

This week, the main focus will be on Swiss trade data, especially after the SNB said last week it still believes that “the franc is still high and should continue to weaken over time.” In the U.S., the main highlight will be GDP 3q annualized third reading, housing data and other important news.

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

Monday Dec. 19:

Both economies lack economic fundamentals which propose that there would be calm trading on the pair which is predicted to follow the general trend in market as it will not able to get direction from data.

Tuesday Dec. 20:

At 07:00 GMT, the Swiss economy will release its most important data for the week which is trade data for Nov. with exports and imports during the month. The trade surplus is predicted to narrow to 2.00 billion Swiss francs from the prior surplus of 2.15 billion francs.

The main focus in the U.S. will be housing starts and building permits for Nov. due at 13:30 GMT which will provide evidence about the status of the housing market that triggered the 2008 crisis. Housing starts are expected to decrease to 630,000 from 628,000 in Oct., while building permits will probably show a fall to 633,000 from the prior 653,000.

Wednesday Dec. 21:

The Swiss economy will start the day with the release money supply M3 for the year ending Nov. at 08:00 GMT.

Eyes will be on MBA mortgage applications for Nov. 18 at 12:00 GMT while will be followed by existing home sales, as of 15:00 GMT, which are estimated to record 2.2% drop in Nov. compared with a prior of 1.4%.

Thursday Dec. 22:

In the U.S., the main focus will be on the main highlight of the week which is GDP annualized for the third quarter (third reading), which is predicted to remain unrevised at 2.0%, where it will be available at 13:30 GMT, while personal consumption will also linger at 2.3%.

Moreover, initial jobless claims for the week ending Dec. 9 and continuing claims for the week ending Dec. 18 will also be available at 13:30 GMT. Thereafter, at 14:55 GMT, University of Michigan confidence will show a rise to 68.0 in Dec. from the prior 67.7.

Friday Dec. 23:

The week ends with the release of durable goods report, at 13:30 GMT, which is predicted to show 2.1% advance in Nov. from the prior 0.7% drop.

NZD/USD Weekly Forecast Dec. 19-23, 2011, Fundamental Analysis

NZD/USD Weekly Forecast Dec. 19-23, 2011, Fundamental Analysis
NZD/USD Weekly Forecast Dec. 19-23, 2011, Fundamental Analysis
The NZD/USD pair retreated last week to reach its lowest level in three weeks, where the current risk aversion in the FX market led the higher-yielding currencies to fall against the safe haven dollar.

The New Zealand economy will release the Gross Domestic Product for the third quarter, and the economy is expected to have expanded by 0.6% from the prior 0.1% which could support the Kiwi against the dollar but the general movement will remain to the downside for the pair.

On the other hand, the U.S. economy will release the final GDP revision for the third quarter, where it’s expected steady at 2.0%, but any change will be faced by a violence move from the greenback.

Expectations remain for a weaker New Zealand dollar since the RBNZ announced their decision to keep the interest rate steady at its lowest level of 2.50%, in addition to the comfortable tone regarding the current inflation pressure.

The current sentiment supports the US dollar and pushed it to record its highest level in eleven months against the euro, as concerns increased regarding the EU debt crisis after the latest EU leaders’ summit failed to provide the market with confidence.

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

Monday December 19:

On Monday at 21:00 GMT (Sunday), the New Zealand economy will issue the Westpac NZ Consumer Confidence for the fourth quarter, which had a previous reading of 112.

The Performance Services Index for November will be released at 21:30 GMT with a prior reading of 50.6.

At 00:00 GMT the New Zealand economy will release the NBNZ Activity Outlook for December which had a previous reading of 28.8. As for the NBNZ Business Confidence for December it had a prior reading of 18.3.

Tuesday December 20:

The U.S. economy will release the Housing Starts for November at 13:30 GMT, where it’s expected to show a rise of 0.3% to 630 thousand compare to the prior drop of 0.3%.

As for the U.S. Building Permits it’s expected to drop 1.4% to 635 thousand from 653 thousand.

Wednesday December 21:

On Wednesday at 21:45 GMT (Tuesday), New Zealand will issue the Current Account Balance for the third quarter, where the previous reading showed a deficit of NZ$0.921 billion.

The U.S. economy will release the Existing Home Sales for November at 15:00 GMT and it’s expected to advance 2.4% to 5.09 million from 4.97 million.

Thursday December 22:

On Thursday at 21:45 GMT (Wednesday), the New Zealand economy will release the Gross Domestic Product for the third quarter, where the economy is projected to have expanded by 0.6% after 0.1% and on the year by 2.2% after 1.5%.

The U.S. economy will release the final GDP reading for the third quarter at 13:30 GMT, the annualized Gross Domestic Product for the third quarter is expected to remain unrevised at 2.0%.

The Personal Consumption for the third quarter is also expected steady at 2.3% as well as the Core Personal Consumption Expenditure to hold at 2.0%.

The U.S. economy will also issue its weekly initial claims, where the number of people filing for first-time claims for the state unemployment insurance dropped to 366 thousand last week.

At 14:55 GMT, the United States will issue the University of Michigan Confidence for December, where the previous reading was 67.7 and it’s expected to rise to 68.2.

The U.S. leading index for November will be released at 15:00 GMT and expected to slow to 0.3% from 0.9%.

Friday December 23:

On Friday at 13:30 GMT, the U.S. economy will release the Durable Goods Orders for November with a previous reading of –0.7% and it’s expected to come at 2.1%.

The Personal Income for November is expected to slow to 0.3% from 0.4%, while the Personal Spending is expected to come at 0.4% from the previous 0.1%.

The core Personal Consumption Expenditure for November is expected in line with the previous rise of 0.1% on the month and 1.7% on the year.

At 15:00 GMT, the U.S. economy will issue the New Home Sales for November, where it’s expected to rise 1.8% to 313 thousand from 307 thousand.

GBP/USD Forecast Dec. 19-23, 2011, Fundamental Analysis

GBP/USD Forecast Dec. 19-23, 2011, Fundamental Analysis
GBP/USD Forecast Dec. 19-23, 2011, Fundamental Analysis
In the week ended Dec. 16, the GBP/USD showed decline as the tensions stemming from the euro area enhanced demand on the dollar as a refuge.

The rise in Italian bond yields, downgrade by Fitch to large European lenders and weak growth outlook for the euro area in addition to the uncertain outlook for the global economy gave strong support for the greenback.

On the other hand, downbeat data from the U.K. increased speculations the BoE may add to the stimulus at the beginning of the year, especially after the slowdown in inflation to 4.8% in the year ended November, according to the consumer price index annual gauge, from 5.0% in October.

The releases showed that U.K. unemployment hovered around the highest level in 17 years in the three months to Oct. while retail sales with auto fuel dropped 0.4% in Nov.

However, the improvement in the U.S. data managed to ease some of the tensions in the market, yet it did not shift the sentiment as the main concern meanwhile is still on the euro zone as investors believe the debt crisis may drag global economies into another recession as well as financial turbulences with the beginning of 2012.

This week, the main focus will be on GDP final reading from both economies, BoE minutes from the U.K. and housing data from theU.S.in addition to other important news.

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

Monday Dec. 19:

Both economies lack economic fundamentals which propose that there would be calm trading on the pair which is predicted to follow the general trend in market as it will not able to get direction from data.

Tuesday Dec. 20:

The U.K. will release Gfk consumer confidence survey for Dec. and nationwide consumer confidence for Nov. will be available at 00:01 where the former is predicted to linger at -31 while the later will steady at 36. At 11:00 GMT, U.K. CBI trends total orders for Dec. will be out, yet the news is not expected to have a significant impact on the pair’s movements.

The main focus in the U.S. will be housing starts and building permits for Nov. due at 13:30 GMT which will provide evidence about the status of the housing market that triggered the 2008 crisis. Housing starts are expected to decrease to 630,000 from 628,000 in Oct., while building permits will probably show a fall to 633,000 from the prior 653,000.

Wednesday Dec. 21:

Attention will be toward BoE minutes, due at 09:30 GMT; at the same time, public finance excluding interventions will be due with expectations referring to a deepening deficit to 19.0 billion pounds in Nov. from the prior 6.5 billion pounds.

Eyes will be on MBA mortgage applications for Nov. 18 at 12:00 GMT while will be followed by existing home sales, as of 15:00 GMT, which are estimated to record 2.2% drop in Nov. compared with a prior of 1.4%.

Thursday Dec. 22:

The U.K. will release 3q GDP final reading will be released at 09:30 GMT which is estimated to remain unrevised at 0.5% on the quarter and on the year.

Also, in the U.S. the main focus will be on the main highlight of the week which is GDP annualized for the third quarter (third reading), which is predicted to remain unrevised at 2.0%, where it will be available at 13:30 GMT, while personal consumption will also linger at 2.3%.

Moreover, initial jobless claims for the week ending Dec. 9 and continuing claims for the week ending Dec. 18 will also be available at 13:30 GMT. Thereafter, at 14:55 GMT, University of Michigan confidence will show a rise to 68.0 in Dec. from the prior 67.7.

Friday Dec. 23:

The week ends with the release of U.K. BBA loans for house purchase for the month of Nov. will be released at 09:30 GMT and the index of services for the Oct.

In the U.S., durable goods report which is predicted to show 2.1% advance in Nov. from the prior 0.7% drop will be out at 13:30 GMT.

AUD/USD Weekly Forecast Dec. 19-23, 2011, Fundamental Analysis

AUD/USD Weekly Forecast Dec. 19-23, 2011, Fundamental Analysis
AUD/USD Weekly Forecast Dec. 19-23, 2011, Fundamental Analysis
The AUD/USD pair dropped heavily last week reaching its lowest level in two weeks, where the US dollar advanced sharply against higher-yielding currencies such as the Aussie with the risk aversion dominating the FX market.

The latest RBA decision to cut the interest rate to 4.25% reduced demand for the Australian dollar. While the RBA will release its Board meeting minutes for December, which will show the reasons behind cutting the interest rate.

The RBA’s meeting minutes will affect Aussie which mainly will continue its downside movement against the US dollar, as the current policy makers’ vision for the Australian economy is comfortable with the current interest rate levels.

On the other hand, the U.S. economy will release its GDP numbers for the third quarter, where expectations refer to steady growth at 2.0%, while the US dollar remains the main focus in the FX market nowadays due to the high levels of uncertainty regarding the global outlook.

The EU sovereign debt crisis is still in the picture, where the latest development from the ECB and EU summit did not reflect any acceptance from investors, who still expect the worst to come for the EU region.

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

Monday December 19:

Both economies are not due to release any major fundamentals leaving the focus on the market sentiment.

Tuesday December 20:

On Tuesday at 23:30 GMT (Monday), the Australian economy will issue the Conference Board Leading Index for October which had a previous reading of 0.1%.

At 00:30 GMT, the Reserve Bank of Australia will release the Board’s December meeting minutes, where the central bank will announce its reasons behind its last rate cut.

The U.S. economy will release the Housing Starts for November at 13:30 GMT, where it’s expected to show a rise of 0.3% to 630 thousand compare to the prior drop of 0.3%.

As for the U.S. Building Permits it’s expected to drop 1.4% to 635 thousand from 653 thousand.

Wednesday December 21:

On Wednesday at 23:30 GMT (Tuesday), Australia will release the Westpac Leading Index for October, where the previous reading was down by 0.3%.

The U.S. economy will release the Existing Home Sales for November at 15:00 GMT and it’s expected to advance 2.4% to 5.09 million from 4.97 million.

Thursday December 22:

The U.S. economy will release the final GDP reading for the third quarter at 13:30 GMT, the annualized Gross Domestic Product for the third quarter is expected to remain unrevised at 2.0%.

The Personal Consumption for the third quarter is also expected steady at 2.3% as well as the Core Personal Consumption Expenditure to hold at 2.0%.

The U.S. economy will also issue its weekly initial claims, where the number of people filing for first-time claims for the state unemployment insurance dropped to 366 thousand last week.

At 14:55 GMT, the United States will issue the University of Michigan Confidence for December, where the previous reading was 67.7 and it’s expected to rise to 68.2.

The U.S. leading index for November will be released at 15:00 GMT and expected to slow to 0.3% from 0.9%.

Friday December 23:

On Friday at 13:30 GMT, the U.S. economy will release the Durable Goods Orders for November with a previous reading of –0.7% and it’s expected to come at 2.1%.

The Personal Income for November is expected to slow to 0.3% from 0.4%, while the Personal Spending is expected to come at 0.4% from the previous 0.1%.

The core Personal Consumption Expenditure for November is expected in line with the previous rise of 0.1% on the month and 1.7% on the year.

At 15:00 GMT, the U.S. economy will issue the New Home Sales for November, where it’s expected to rise 1.8% to 313 thousand from 307 thousand.

EUR/USD Weekly Forecast December 19-23, 2011, Fundamental Analysis

EUR/USD Weekly Forecast December 19-23, 2011, Fundamental Analysis
EUR/USD Weekly Forecast December 19-23, 2011, Fundamental Analysis

The EUR/USD ended last week with heavy losses after the market saw the ECB and the EU summit nothing but a major disappointment and rating agencies continued to add their negative imputes to the abysmal equation.

We can surely see the euro crisis predominant in the market and this week our eyes will be on market movements rather than the data as this is the last week before Christmas and the end of the week and position squaring and closing the books will be evident as traders step aside ahead of the New Year and that will be the main focus.

We need to track the debt sales this week as well with eyes on Italy, France, Greece and Portugal as the yields and demand will be closely observed. The euro area lacks major fundamentals yet the debt crisis developments and any comments from leaders will be watched and the Italian Senates are expected to follow the lower house of Parliament vote and also okay Monti’s 30 billion austerity package this week.

As for the United States the data is heavy housing data alongside the GDP and income report. The data will add to the volatility in the market, especially if the data worsens and adds to fears of slowing global growth yet good data might help in easing the strain on markets that are preparing for the holidays ahead.

Other news from the euro area and the U.S. economy to affect the pair this week:

Monday December 19:

The euro area will start the week at 09:00 GMT with the Current Account for October where the deficit might have widened from the previous 0.5 billion after we saw the trade surplus on Friday shrink to 0.3 billion from the previous 2.1 billion euros.

Construction Output for October is due at 10:00 GMT and unlikely to have improved drastically after the previous drop of 1.3%.

Tuesday December 20:

Germany will release the Gfk Consumer Confidence Survey for January at 07:00 GMT which is expected to slow slightly to 5.5 from 5.6.

Also at 07:00 GMT we have the Producer Price Index from Germany which is expected with 0.1% gain in November after 0.2% and on the year to ease to 5.2% after 5.3%.

At 09:00 GMT we have the IFO survey for December were the Business Climate index is expected to fall to 106.0 from 106.6, the Current Assessment index to fall to 116.0 from 116.7 and the Expectations index to fall to 97.0 from 97.3.

The United States will start the day at 13:30 GMT with the November housing starts which are expected with 0.3% rebound to 630 thousand from 628 thousand. Building permits are expected to drop 1.8% to 633 thousand from 653 thousand.

Wednesday December 21:

At 15:00 GMT the US Existing Home Sales for November are due and expected with 2.2% rise to 5.06 million from 4.97 million.

Thursday December 22:

The United States will start the busy day at 13:30 GMT with the final and third revision for the third quarter GDP as the expansion is expected unrevised at 2.0%. Personal consumption is expected to hold at 2.3% and the Core PCE to remain at 2.0%.

The Jobless Claims are due the same time after the unexpected huge drop in the past week to 366 the lowest in three and a half years.

The University of Michigan Confidence final estimate for December is due at 14:55 GMT and expected with an upside revision to 68.0 from 67.7.

The leading indicators for November will be released at 13:00 GMT and expected to ease to 0.3% from 0.9%.

Friday December 23:

The week will end with the United States as well starting with the Durable Goods Orders at 13:30 GMT which is expected with 2.1% rebound in November after 0.7% drop and excluding transportation it’s expected to rise by 0.4% after 0.7% gain.

The November Income Report is also due at 13:30 GMT with the Personal Income expected with 0.3% rise after 0.4% and personal spending expected to rise 0.3% after 0.1% as for the core PCE it is expected to hold at the previous gains with 0.1% rise on the month and 1.7% on the year.

New Home Sales for November will be released at 13:00 GMT which is expected with 2.0% rise after 1.3% gain to 313 thousand.

EUR/CHF Weekly Forecast December 19-23, 2011, Fundamental Analysis

EUR/CHF Weekly Forecast December 19-23, 2011, Fundamental Analysis
EUR/CHF Weekly Forecast December 19-23, 2011, Fundamental Analysis
The EUR/CHF ended with bearishness as the franc gained ground once again after the SNB did not make any move this month and opted to leave rates and the franc cap unchanged.

The pair moved to the downside after the SNB withheld the wait and see approach to eye the developments in the euro area and how much damage it will reflect on the Swiss economy that is already feeling the pressure.

Growth is slowing in Switzerland and deflation threats are rising and that is keeping the franc under a close watch for any move from the SNB that reiterated its commitment to support growth and fight deflation.

This week we still expect the pair to return to its tight range trading as the effect of the SNB action dims and deprive the pair of upside momentum and clearly the defense is seen and will prevent the pair from downside movement.

The debt crisis will remain center stage and the lack of major data deprives the pair of momentum which will likely remain biased sideways in a tight range this week especially as this is the last week before Christmas and the start of the end of the year thin trading volumes.

Other news from the euro area and the Swiss economy to affect the pair this week:

Monday December 19:

The euro area will start the week at 09:00 GMT with the Current Account for October where the deficit might have widened from the previous 0.5 billion after we saw the trade surplus on Friday shrink to 0.3 billion from the previous 2.1 billion euros.

Construction Output for October is due at 10:00 GMT and unlikely to have improved drastically after the previous drop of 1.3%.

Tuesday December 20:

At 07:00 GMT, the Swiss economy will release its most important data for the week which is trade data for Nov. with exports and imports during the month. The trade surplus is predicted to narrow to 2.00 billion Swiss francs from the prior surplus of 2.15 billion francs.

Germany will release the Gfk Consumer Confidence Survey for January at 07:00 GMT which is expected to slow slightly to 5.5 from 5.6.

Also at 07:00 GMT we have the Producer Price Index from Germany which is expected with 0.1% gain in November after 0.2% and on the year to ease to 5.2% after 5.3%.

At 09:00 GMT we have the IFO survey for December were the Business Climate index is expected to fall to 106.0 from 106.6, the Current Assessment index to fall to 116.0 from 116.7 and the Expectations index to fall to 97.0 from 97.3.

Wednesday December 21:

The Swiss Money Supply M3 for the year ending November is due at 08:00 GMT and likely did not change heavily from the previous 8.2%.

Thursday December 22:

Both economies lack economic fundamentals and the pair is expected to continue trading within its tight range.

Friday December 23:

Both economies lack economic fundamentals and the pair is expected to continue trading within its tight range.

Crude Oil Weekly Forecast December 19-23, 2011, Fundamental Analysis

Crude Oil Weekly Forecast December 19-23, 2011, Fundamental Analysis
Crude Oil Weekly Forecast December 19-23, 2011, Fundamental Analysis
Crude oil prices declined last, as the U.S. dollar strengthened on mounting fears the European debt crisis is worsening, after the market saw the ECB and the EU summit nothing but a major disappointment and rating agencies continued to add their negative imputes to the abysmal equation..

Over the week, economic data from the United States basically showed better than expected economic progress, where the manufacturing sector activities continued to expand in December, while this week our eyes will be on market movements rather than the data as this is the last week before Christmas and the end of the week and position squaring and closing the books will be evident as traders step aside ahead of the New Year and that will be the main focus.

We need to track the debt sales this week as well with eyes on Italy, France, Greece and Portugal as the yields and demand will be closely observed. The euro area lacks major fundamentals yet the debt crisis developments and any comments from leaders will be watched and the Italian Senates are expected to follow the lower house of Parliament vote and also okay Monti’s 30 billion austerity package this week.

As for the United States the data is heavy housing data alongside the GDP and income report. The data will add to the volatility in the market, especially if the data worsens and adds to fears of slowing global growth yet good data might help in easing the strain on markets that are preparing for the holidays ahead.

Our overall outlook for crude oil prices is somewhat neutral with a downside tendency, as the outlook for global growth is worsening due to mounting concerns from Europe and the fact that major economies around the globe are still weak, and that should put negative pressure on crude oil prices. Nonetheless, if the outlook for global growth improves, crude oil prices are likely to rise in that case.

Other news from the euro area and the U.S. economy to affect the pair this week:

Monday December 19:

We don’t have news from the United States, and accordingly, traders will be focused on the developments from Europe.

Tuesday December 20:

The United States will start the day at 13:30 GMT with the November housing starts which are expected with 0.3% rebound to 630 thousand from 628 thousand. Building permits are expected to drop 1.8% to 633 thousand from 653 thousand.

Wednesday December 21:

At 15:00 GMT the US Existing Home Sales for November are due and expected with 2.2% rise to 5.06 million from 4.97 million.

At 15:30 GMT, the EIA report for crude oil inventories will be released for the week ending December 16, where last week crude oil inventories decreased by 1.9 million barrels.

Thursday December 22:

The United States will start the busy day at 13:30 GMT with the final and third revision for the third quarter GDP as the expansion is expected unrevised at 2.0%. Personal consumption is expected to hold at 2.3% and the Core PCE to remain at 2.0%.

The Jobless Claims are due the same time after the unexpected huge drop in the past week to 366 the lowest in three and a half years.

The University of Michigan Confidence final estimate for December is due at 14:55 GMT and expected with an upside revision to 68.0 from 67.7.

The leading indicators for November will be released at 13:00 GMT and expected to ease to 0.3% from 0.9%.

Friday December 23:

The week will end with the United States as well starting with the Durable Goods Orders at 13:30 GMT which is expected with 2.1% rebound in November after 0.7% drop and excluding transportation it’s expected to rise by 0.4% after 0.7% gain.

The November Income Report is also due at 13:30 GMT with the Personal Income expected with 0.3% rise after 0.4% and personal spending expected to rise 0.3% after 0.1% as for the core PCE it is expected to hold at the previous gains with 0.1% rise on the month and 1.7% on the year.

New Home Sales for November will be released at 13:00 GMT which is expected with 2.0% rise after 1.3% gain to 313 thousand.

Gold Weekly Forecast December 19-23, 2011, Fundamental Analysis

Gold Weekly Forecast December 19-23, 2011, Fundamental Analysis
Gold Weekly Forecast December 19-23, 2011, Fundamental Analysis
, as the U.S. dollar strengthened on mounting fears the European debt crisis is worsening, after the market saw the ECB and the EU summit nothing but a major disappointment and rating agencies continued to add their negative imputes to the abysmal equation.

Over the week, economic data from the United States basically showed better than expected economic progress, where the manufacturing sector activities continued to expand in December, while this week our eyes will be on market movements rather than the data as this is the last week before Christmas and the end of the week and position squaring and closing the books will be evident as traders step aside ahead of the New Year and that will be the main focus.

We need to track the debt sales this week as well with eyes on Italy, France, Greece and Portugal as the yields and demand will be closely observed. The euro area lacks major fundamentals yet the debt crisis developments and any comments from leaders will be watched and the Italian Senates are expected to follow the lower house of Parliament vote and also okay Monti’s 30 billion austerity package this week.

As for the United States the data is heavy housing data alongside the GDP and income report. The data will add to the volatility in the market, especially if the data worsens and adds to fears of slowing global growth yet good data might help in easing the strain on markets that are preparing for the holidays ahead.

We expect gold prices will continue to rise over the coming period, however, but we also expect volatility dominate gold prices, despite of the recent economic improvement, yet risks are still surrounding the progress of several economies, especially as the outlook for global economies remains full of uncertainty, and that should continue to provide gold prices with the safe haven appeal. We also expect Europe to take over the steer next week, where investors will look forward to the final process of European nations and the European bond auctions.

Natural Gas Weekly Forecast December 19-23, 2011, Fundamental Analysis

Natural Gas Weekly Forecast December 19-23, 2011, Fundamental Analysis
Natural Gas Weekly Forecast December 19-23, 2011, Fundamental Analysis
, as warmer than expected weather conditions boosted speculations of falling demand for natural gas as a heating fuel. While the EIA report showed natural gas inventories decreased by 102 billion cubic feet, below estimates of a decrease by 92 billion cubic feet.

Traders will be focused on the weather forecasts, as warm weather conditions are expected to weigh down on demand for natural gas, and that could push prices lower since demand for the heating fuel would decrease accordingly.

Highlights for this week that will probably affect the Natural Gas direction are:

Thursday December 22:

At 15:30 GMT, The EIA will release the weekly natural gas storage change for the week ending December 16, where the prior report showed that natural gas inventories decreased by 102 billion cubic feet.

USD/CAD Weekly Forecast December 19-23, 2011, Fundamental Analysis

USD/CAD Weekly Forecast December 19-23, 2011, Fundamental Analysis
USD/CAD Weekly Forecast December 19-23, 2011, Fundamental Analysis
The USD/CAD pair rallied to the upside last week, as the U.S. dollar strengthened on mounting fears the European debt crisis is worsening, after the market saw the ECB and the EU summit nothing but a major disappointment and rating agencies continued to add their negative imputes to the abysmal equation..

Over the week, economic data from the United States basically showed better than expected economic progress, where the manufacturing sector activities continued to expand in December, while this week our eyes will be on market movements rather than the data as this is the last week before Christmas and the end of the week and position squaring and closing the books will be evident as traders step aside ahead of the New Year and that will be the main focus.

We need to track the debt sales this week as well with eyes on Italy, France, Greece and Portugal as the yields and demand will be closely observed. The euro area lacks major fundamentals yet the debt crisis developments and any comments from leaders will be watched and the Italian Senates are expected to follow the lower house of Parliament vote and also okay Monti’s 30 billion austerity package this week.

As for the United States the data is heavy housing data alongside the GDP and income report. The data will add to the volatility in the market, especially if the data worsens and adds to fears of slowing global growth yet good data might help in easing the strain on markets that are preparing for the holidays ahead.

The high level of uncertainty in markets could provide the USD/CAD pair with more bullish momentum, where traders will be eyeing developments in Italy and Spain, and accordingly, we should expect Europe to dominate the pair’s movement next week. Nonetheless, if optimism spreads through markets, the USD/CAD pair will decline, as demand for higher yielding assets is likely to rise in that case, and that should provide the Canadian dollar with flow.

Other news from the euro area and the U.S. economy to affect the pair this week:

Monday December 19:

We don’t have news from the United States and Canada, and accordingly, traders will be focused on the developments from Europe.

Tuesday December 20:

The United States will start the day at 13:30 GMT with the November housing starts which are expected with 0.3% rebound to 630 thousand from 628 thousand. Building permits are expected to drop 1.8% to 633 thousand from 653 thousand.

The inflation week continues in the Canada with the Consumer Price Index for November at 12:00 GMT. The index is expected to ease to 0.1% and on the year to ease to 2.9%. Core CPI is expected to ease to 0.2% and on the year to ease to 2.2%.

Wednesday December 21:

At 13:30 GMT, Canada will release the retail sales for October, where retail sales are expected rise by 0.5%, while retail sales excluding autos are expected to rise by 0.3%, compared with 0.5% in September.

At 15:00 GMT the US Existing Home Sales for November are due and expected with 2.2% rise to 5.06 million from 4.97 million.

Thursday December 22:

The United States will start the busy day at 13:30 GMT with the final and third revision for the third quarter GDP as the expansion is expected unrevised at 2.0%. Personal consumption is expected to hold at 2.3% and the Core PCE to remain at 2.0%.

The Jobless Claims are due the same time after the unexpected huge drop in the past week to 366 the lowest in three and a half years.

The University of Michigan Confidence final estimate for December is due at 14:55 GMT and expected with an upside revision to 68.0 from 67.7.

The leading indicators for November will be released at 13:00 GMT and expected to ease to 0.3% from 0.9%.

Friday December 23:

The week will end with the United States as well starting with the Durable Goods Orders at 13:30 GMT which is expected with 2.1% rebound in November after 0.7% drop and excluding transportation it’s expected to rise by 0.4% after 0.7% gain.

The November Income Report is also due at 13:30 GMT with the Personal Income expected with 0.3% rise after 0.4% and personal spending expected to rise 0.3% after 0.1% as for the core PCE it is expected to hold at the previous gains with 0.1% rise on the month and 1.7% on the year.

New Home Sales for November will be released at 13:00 GMT which is expected with 2.0% rise after 1.3% gain to 313 thousand.

Canada will release the GDP report for the month of October at 12:30 GMT, where GDP is expected to rise by 0.1%, compared with 0.2% rise in September.

USD/JPY Forecast Dec. 19, 2011, Fundamental Analysis

USD/JPY Forecast Dec. 19, 2011, Fundamental Analysis
USD/JPY Forecast Dec. 19, 2011, Fundamental Analysis
, where the US dollar and the yen continued their upside movements against other major currencies on the back of risk aversion which dominated the FX market.

The next move for the USD/JPY pair will depend on the market sentiment, where the BOJ’s decision and the U.S. GDP numbers will contribute in defining the sentiment.

On the other hand, the pair will likely remain under pressure of a possible intervention from the BOJ in FX market, which could change the short term trend for the USD/JPY pair.

On Monday both economies are not due to release any major fundamentals leaving the focus on the market sentiment.

USD/CHF Forecast Dec. 19, 2011, Fundamental Analysis

USD/CHF Forecast Dec. 19, 2011, Fundamental Analysis
USD/CHF Forecast Dec. 19, 2011, Fundamental Analysis
On Monday, both economies lack economic fundamentals which propose that there would be calm trading on the pair which is predicted to follow the general trend in market as it will not able to get direction from data.

Still, the main focus is on the latest developments from the euro area as many euro zone economies gird for bond selling this week.

Concerns from the euro area may remain after last week’s rise in Italian bond yields, downgrade by Fitch to large European lenders and weak growth outlook for the euro area gave bullishness to the pair as demand increased on the dollar as a refuge.

The Swiss franc has been damped as a safe haven, leaving this mission to the dollar and yen, especially after the Swiss National Bank (SNB) refused calls from exporters to raise the franc’s cap or push interest rate to negative.

Perhaps policy makers will wait till seeing the latest developments in the euro zone, noting that the euro area nations are Switzerland’s main trading partners.

The SNB still believes that “the franc is still high and should continue to weaken over time,” leaving the door opened for further future interventions if needed, especially as the latest data from the Swiss economy referred to a slowdown in the growth pace.

On the other hand, data from the United States gave some positivity to the sentiment last week with the improvement in continuing claims for the week ended December 03, empire manufacturing index and current account.

The Fed’s latest monetary decision signaled holding interest rate at its ultra-low level of 0.25% while policy makers referred that the world’s no.1 economy will continue its expansion.

Thus, it seems that the Fed will not add to stimulus after the progress seen recently.

This week, the main focus will be on Swiss trade data, while in the U.S. the main highlight will be GDP 3q annualized (third reading), housing data and other important news.

NZD/USD Forecast Dec. 19, 2011, Fundamental Analysis

NZD/USD Forecast Dec. 19, 2011, Fundamental Analysis
NZD/USD Forecast Dec. 19, 2011, Fundamental Analysis
The NZD/USD pair dropped to its lowest level in three weeks, after the US dollar soared against most of its major counterparts as the current concerns over the global economic outlook reduced demand for higher-yielding currencies.

The current sentiment supports the US dollar and pushed it to record its highest level in eleven months against the euro, as concerns increased regarding the EU debt crisis after the latest EU leaders’ summit failed to provide the market with confidence.

On Monday at 21:00 GMT (Sunday), the New Zealand economy will issue the Westpac NZ Consumer Confidence for the fourth quarter, which had a previous reading of 112.

The Performance Services Index for November will be released at 21:30 GMT with a prior reading of 50.6.

At 00:00 GMT the New Zealand economy will release the NBNZ Activity Outlook for December which had a previous reading of 28.8. As for the NBNZ Business Confidence for December it had a prior reading of 18.3.

GBP/USD Forecast Dec. 19, 2011, Fundamental Analysis

GBP/USD Forecast Dec. 19, 2011, Fundamental Analysis
GBP/USD Forecast Dec. 19, 2011, Fundamental Analysis
On Monday, both economies lack economic fundamentals which propose that there would be calm trading on the pair which is predicted to follow the general trend in market as it will not able to get direction from data.

So far, the main focus is on the latest developments from the euro zone as many euro area economies prepare for bond selling this week.

Concerns dominated investor’s risk appetite behavior last week after the rise in Italian bond yields, downgrade by Fitch to large European lenders and weak growth outlook for the euro area gave bearishness to the pair as demand increased on the dollar as a refuge.

In addition, the downbeat data released last week from the U.K. increased speculations the BoE may add to the stimulus at the beginning of the year, especially after the slowdown in inflation to 4.8% in the year ended November, according to the consumer price index annual gauge, from 5.0% in October.

The releases showed that U.K. unemployment hovered around the highest level in 17 years in the three months to Oct. while retail sales with auto fuel dropped 0.4% in Nov.

Probably, the BoE will announce further stimuli after in February with the end of the 75 asset purchase program and with the release of the coming inflation report that will provide an update about the latest growth and inflation outlooks.

On the other hand, data from the United States gave some positivity to the sentiment last week with the improvement in continuing claims for the week ended December 03, empire manufacturing index and current account.

The Fed’s latest monetary decision signaled holding interest rate at its ultra-low level of 0.25% while policy makers referred that the world’s no.1 economy will continue its expansion. Hence, it seems that the Fed will not add to stimulus after the progress seen recently.

This week, the main focus will be on GDP final reading from both economies, BoE minutes from the U.K. and housing data from the U.S. in addition to other important news.