USD/CAD Forecast Jan. 2, 2012, Fundamental Analysis

The USD/CAD pair dropped though no data was released by major economies during the last trading day of 2011, noting that the Canadian dollar gained strength slightly, however worsening debt crisis in Europe made traders seek safe haven like the U.S. Treasuries during the last days.

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

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.

Tuesday January 3:

No economic data will be released from Canada so eyes will still focused on Europe and the crises that could cause any change in trading.

USD/JPY Forecast Jan. 02, 2012, Fundamental Analysis

The USD/JPY pair dropped last week to its lowest level in three weeks, where the Japanese yen soared against other majors as risk aversion returned to the financial market.

The risk aversion game is the main theme for the global financial market, where investors’ confidence determined the trading direction; whether to boost risky assets or to abandon higher-yielding currencies.

The expectations for the New Year still not clear, as the EU debt crisis still the main theme in the financial market, which will keep the risk aversion scenario fueled in the market.

While the BOJ could intervene in the FX market if the Japanese yen continued its upside movements against the dollar, which hurts Japan’s exporting companies.

On Monday, both economics will not issue any fundamental due to the New Year holiday, where low volume will dominate the pair’s movement.

NZD/USD Forecast Jan. 02, 2012, Fundamental Analysis

The NZD/USD pair dropped last week on the back of the strong US dollar, while the New Zealand economy did not issue any fundamentals which reduced demand for the Kiwi.

The risk aversion helped the greenback to overtake other majors, as demand increased for the dollar after the ECB announced that its balance sheet soared after it lent the financial institutions more money.

The New Zealand economy will not issue any fundamental during this week, in addition to the low volume in the market due to the New Year holiday, which will drag the NZD/USD pair to narrow range trading.

On Monday, both economics will not issue any fundamental due to the New Year holiday, where low volume will dominate the pair’s movement.

USD/CHF Forecast Jan. 2, 2012, 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 amid the mounting speculations the European debt crisis will cloud global recovery in 2012.

Last week, a bond selling inItalysaw a drop in yield of the 10-year notes to 6.98% compared with 7.56% in the previous auction, yet the rate is considered high since it is the same rate which triggered bailouts forGreeceandPortugal.

On the other hand, the ECB said the balance sheet soared to 2.73 trillion euros, where lending to banks climbed to 879 billion euros in the week ended Dec. 23, raising concerns the ECB will continue its support to banks to avert a financial disaster.

This week the main focus will be the infamous jobs report in theUnited Statesas well as manufacturing, services and minutes of the FOMC meeting. On the flip side, the Swiss economy will release PMI manufacturing and CPI.

Expectations refer to seeing further incline in the pair amid the high demand on the dollar as a favorite safe haven due to the turbulences in European markets.

GBP/USD Forecast Jan. 2, 2012, 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 amid the mounting speculations the European debt crisis will cloud global recovery in 2012.

Last week, a bond selling inItalysaw a drop in yield of the 10-year notes to 6.98% compared with 7.56% in the previous auction, yet the rate is considered high since it is the same rate which triggered bailouts forGreeceandPortugal.

On the other hand, the ECB said the balance sheet soared to 2.73 trillion euros, where lending to banks climbed to 879 billion euros in the week ended Dec. 23, raising concerns the ECB will continue its support to banks to avert a financial disaster.

This week, the main focus will be the infamous jobs report in theUnited Statesas well as manufacturing, services and minutes of the FOMC meeting. On the flip side, the British economy will release less important data yet focus will be on PMI manufacturing, services and construction.

Expectations refer to seeing further decline in the pair amid the high demand on the dollar as a favorite safe haven due to the turbulences in European markets. The CBI said on Friday the European debt crisis is performing a significant threat on the U.K. economy.

EUR/USD Forecast January 2, 2012, Fundamental Analysis

The EUR/USD pair declined sharply last week after the downbeat Italian bond auction, whereItalysold bonds less than the targeted quantity despite the drop in yields, which remained around the 7.0% and are still considered relatively high.

The pair declined sharply after fears spread in the market on Thursday, where the euro hit the lowest record seen in more than 15 months on concerns Italy will not be able to fight the debt crisis anymore in case yields remained unsustainable

The focus on Monday will be onGermanyand the euro zone, which are to release manufacturing data for December, with expectations the performance of the manufacturing sectors will remain contracted in the month, affected by the escalating debt crisis and the global slowdown.

The pair will trade narrowly however due to low volumes with the start of 2012, where theUnited Stateswill be gone for the New Year’s Day holiday.

Germanywill start this week at 08:55 GMT with the final PMI Manufacturing index for December, where the manufacturing performance is expected unrevised at 48.1.

The euro zone will join this week at 09:00 GMT with the final PMI Manufacturing index for December, which is expected to linger at 46.9.

TheUnited Stateswill be on New Year’s DayHoliday.

EUR/CHF Forecast January 2, Fundamental Analysis

The EUR/CHF pair ended a bearish week, and now with the start of 2012 the pair could return to trade with more volumes, especially when investors will return after the absence for the Christmas and New Year holidays.

Today the focus will be limited on Europe sinceSwitzerlandwill be out of the market, as eyes will be concentrated on the PMI manufacturing from the euro-area region andGermany; however, the pair is expected to move slightly as the volume is to remain low during the session today.

Germanywill start this week at 08:55 GMT with the final PMI Manufacturing index for December, where the manufacturing performance is expected unrevised at 48.1.

The euro zone will join this week at 09:00 GMT with the final PMI Manufacturing index for December, which is expected to linger at 46.9.

Switzerlandwill be on New Year’s DayHoliday.

AUD/USD Forecast Jan. 02, 2012, Fundamental Analysis

The AUD/USD pair fluctuated last week as the US dollar dominated the FX market, after risk aversion returned to the financial market to increase demand for safer assets.

The higher-yielding currencies retreated against the greenback and the yen, as a result of the weak risk appetite in the FX market, where the US dollar was the big winner after investors considered it the safe haven currency in the market along with the Japanese yen.

The main trend in the market remains for further gains for safer assets such as the yen and the greenback, as the escalating EU debt crisis did not show any clear signs of finding an appropriate resolution for the current predicament.

On Monday, both economics will not issue any fundamental due to the New Year holiday, where low volume will dominate the pair’s movement.

USD/CAD Forecast Dec. 30, 2011, Fundamental Analysis

The USD/CAD pair depreciated on Thursday, after jobless claims rose last week above expectations, while Chicago PMI index came better than forecasted in December, in addition, sales of pending homes in the U.S climbed 7.3 percent above expectations of 1.5 percent.

While The euro fell to a 15-month low against the US dollar as Italian bond yields rose after the nation sold less than its maximum target at an auction, highlighting funding problems amid the region’s sovereign-debt crisis.

Still, the light is spotted on this period of time, as this year is coming in to an end as this day is the last trading day before the New Year infamous for low volume and tight ranged trading. The sentiment will start to shape as investors stay aside ahead of the start of the coming year and closely eye developments from the euro area.

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

Friday December 30:

No economic data will be released from Canada so eyes will be focused on Europe and the crisis that could impact trading during the last trading day of the year.

Crude Oil Forecast Dec. 30, 2011, Fundamental Analysis

Crude oil prices declined on Thursday as US dollar gained strength again after the US data that came mixed, as jobless claims rose last week above expectations, while Chicago PMI index came better than forecasted in December, in addition, sales of pending homes in the U.S climbed 7.3 percent above expectations of 1.5 percent.

While The euro fell to a 15-month low against the US dollar as Italian bond yields rose after the nation sold less than its maximum target at an auction, highlighting funding problems amid the region’s sovereign-debt crisis.

Still, the light is spotted on this period of time, as this year is coming in to an end as this day is the last trading day before the New Year infamous for low volume and tight ranged trading. The sentiment will start to shape as investors stay aside ahead of the start of the coming year and closely eye developments from the euro area.

The outlook for crude oil prices remains generally to the downside, as persistent fears from the EU debt crisis and signs global growth is slowing are likely to keep crude oil prices under pressure, where traders will also continue to monitor the developments from the 17-bloc euro nation and the European leaders’ latest moves to contain the debt crisis, where we expect volatility to persist through the sessions this day.

Gold Forecast Dec. 30, 2011, Fundamental Analysis

Gold prices declined on Thursday as US dollar strengthened back after the US data that came mixed, where jobless claims rose last week above expectations, while Chicago PMI index came better than forecasted in December, in addition, sales of pending homes in the U.S climbed 7.3 percent above expectations of 1.5 percent.

While The euro fell to a 15-month low against the US dollar as Italian bond yields rose after the nation sold less than its maximum target at an auction, highlighting funding problems amid the region’s sovereign-debt crisis.

Still, light is spotted on this period of time, as this year is coming to an end as this day is the last trading day before the New Year infamous for low volume and tight ranged trading. The sentiment will start to shape as investors stay aside ahead of the start of the coming year and closely eye developments from the euro area.

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 Dec. 30, 2011, Fundamental Analysis

Natural gas prices fell on Thursday after the EIA report showed a smaller decline in US stockpiles than analysts expected, while meteorologists predicted colder weather than before, and that could boost the demand on natural gas in the next few days.

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 between gains and losses in next period.

EUR/CHF Forecast Dec. 30, 2011, Fundamental Analysis

The EUR/CHF pair retreated on Thursday after the Italian downbeat bond auction, where the weakening common currency supported the Swiss Franc to gain slightly. The euro declined on fearsItalywill not handle the mounting debt anymore especially after borrowing cost on long-term debts remained unsustainable.

Italy sold as much as 7.0 billion euros of bonds with different maturities, below the targeted quantity, where the nation saw borrowing costs remained relatively high and preferred not to meet the auction’s target.

We still expect thin trading on Friday with the low trading volumes, and especially when no major news are scheduled. The market movement is expected thin due to low volume and will be focused on the sentiment, especially when this week and this year are to end today.

EUR/USD Forecast Dec. 30, 2011, Fundamental Analysis

The EUR/USD pair declined on Thursday, reaching the lowest level recorded since September 2010 after the Italian bond sale wasn’t as successful as expected, where yields on long-term bonds remained relatively high around the 7.0%, while the treasury was not able to sell as much bonds as targeted.

Fears spread in the market after the Italian bond sale highlighted the inability ofItalyto handle the high borrowing costs, whereItalysold bonds yesterday below the targeted quantity as yields remained unsustainable.

After the major event ended yesterday (Italian BondSale), volatility and fluctuations are expected to remain evident during the session today, especially with the lack of major fundamentals from Europe and theUnited Statesand as this week and this year comes to an end, awaiting the next year’s developments in Europe and theU.S.

No major news scheduled and the market movement will be thin on low volume and focused on the sentiment.

GBP/USD Forecast Dec. 30, 2011, Fundamental Analysis

On Thursday trading, the pair showed a drop for the second straight session as it followed the general sentiment which was full of bearishness after Italian bond sale and as the ECB announcements remained to affect investor’s risk appetite.

Still, the main focus is on the latest developments from the euro area amid the mounting speculations the European debt crisis will cloud global recovery in 2012.

A bond selling in Italy on Thursday saw a drop in yield  of the 10-year notes to 6.98% compared with 7.56% in the previous auction while the 2014 bills recorded a drop in yields to 5.62% from 7.89% in Nov. 29 auction.

Although the yield has declined for the 10-year bills, still the rate is considered high as it is still near 7%, the rate which triggered bailouts forGreeceandPortugal.

It is noticeable that the downbeat announcement by the ECB on Wednesday, which stated that the balance sheet soared to 2.73 trillion euros, where lending to banks climbed to 879 billion euros in the week ended Dec. 23 on the back of last week’s 489 billion euros three-year loans lent to 523 banks, remained to have effect on investor’s risk appetite.  

The announcement raised concerns the ECB will continue its support to banks to avert a financial disaster.

The worries are helping the dollar as a refuge at the expense of high-yielding currencies.  

Furthermore, data from theU.S.showed that initial jobless claims for the week ended Dec. 23 rose to 381,000 compared with the revised 366,000 a week before.

On Friday, the week ends with the release of no data from both economies and therefore the pair is predicted to follow the general sentiment in the market.

 

 

USD/CHF Forecast Dec. 30, 2011, Fundamental Analysis

On Thursday trading, the pair showed an advance for the second straight session as it followed the general sentiment which was full of bearishness after Italian bond sale and as the ECB announcements remained to affect investor’s risk appetite.

Still, the main focus is on the latest developments from the euro area amid the mounting speculations the European debt crisis will cloud global recovery in 2012.

A bond selling in Italy on Thursday saw a drop in yield  of the 10-year notes to 6.98% compared with 7.56% in the previous auction while the 2014 bills recorded a drop in yields to 5.62% from 7.89% in Nov. 29 auction.

Although the yield has declined for the 10-year bills, still the rate is considered high as it is still near 7%, the rate which triggered bailouts forGreeceandPortugal.

It is noticeable that the downbeat announcement by the ECB on Wednesday, which stated that the balance sheet soared to 2.73 trillion euros, where lending to banks climbed to 879 billion euros in the week ended Dec. 23 on the back of last week’s 489 billion euros three-year loans lent to 523 banks, remained to have effect on investor’s risk appetite.  

The announcement raised concerns the ECB will continue its support to banks to avert a financial disaster.

The worries are helping the dollar which became more favorite refuge than the Swiss franc due to the several interventions and announcements from the SNB to halt the franc’s rally.  

Moreover, data from theU.S.showed that initial jobless claims for the week ended Dec. 23 rose to 381,000 compared with the revised 366,000 a week before.

On Friday, The week ends with the release of no data from both economies and therefore the pair is predicted to follow the general sentiment in the market.

NZD/USD Forecast DEC. 30, 2011, Fundamental Analysis

The NZD/USD pair retreated to its lowest level in a week, after the ECB announced that its balance sheet soared after it lent more money to the financial institutions, which reduced confidence in the financial market.

The US dollar was able to record gains against other majors after the ECB announcement, where risk aversion returned to the FX market and increased demand for lower-yielding assets.

On the other hand, theNew Zealanddollar did not find any support against the greenback, due to the absence of fundamentals and the thin trading which accompanied the Kiwi all the week.

On Friday, both economies will not issue any fundamentals, where the pair’s movement will depend on the current market sentiment.

AUD/USD Forecast DEC. 30, 2011, Fundamental Analysis

The AUD/USD pair retreated to its lowest level in a week after the US dollar soared against most of its major counterparts due to the return of risk aversion in the financial market.

The US dollar soared against other majors, recording its highest level in eleven months against the euro, as the European Central Bank announced that its balance sheet increased after it lent more money to the financial organizations last week.

The market sentiment shifted to risk aversion after the ECB announcement, which reduced demand for higher-yielding currencies such as the Aussie, opening the way for the greenback to record more gains before the year-end.

On Friday, both economies will not issue any fundamentals, where the pair’s movement will depend on the current market sentiment.

USD/JPY Forecast DEC. 30, 2011, Fundamental Analysis

The USD/JPY pair dropped early Thursday after it recorded its lowest level in three weeks the day before, as risk aversion returned to hit the financial market causing the safer assets such as the yen to increase.

The US dollar soared against most of its major counterparts, recording its highest level in eleven months against the euro, as the European Central Bank announced that its balance sheet increased after it lent more money to the financial organizations last week.

The ECB announcement increased demand for safer assets as a safe haven, where the Japanese yen soared against the euro to its highest level in more than ten years, while the USD/JPY pair retreated but still within the same trading range that dominated the pair for five weeks.

On Friday, both economies will not issue any fundamentals, where the pair’s movement will depend on the current market sentiment.

Crude Oil Forecast Dec. 29, 2011, Fundamental Analysis

Crude oil prices declined on Wednesday amid lack of key economic report from the U.S economy, as debt crisis risks were highlighted after the European Central Bank’s balance sheet rose to a record 2.73 trillion euros since it offered three-year loans to financial institutions last week, replacing optimism on Italy’s 9 billion euros of 179-day bills sold at an debt auction today.

No major data was released from US, Euro Zone or UK on Wednesday, so traders were somehow clueless over the economic recovery. Thereby, European and American equities retreated after the Central Bank’s balance sheet was released.

Traders switched on the holiday mode with the year’s trading nearly complete, so trading volumes ebb down and market movement is pretty stuck within a tight range before the New Year’s holiday, yet with slight punch of cautious optimism. Sentiments will start to shape as investors remain cautious ahead of the New Year’s holiday but traders will be mostly concerned about the latest development from the 17-bloc euro area.

The outlook for crude oil prices remains generally to the downside, as persistent fears from the EU debt crisis and signs global growth is slowing are likely to keep crude oil prices under pressure, where traders will also continue to monitor the developments from the 17-bloc euro nation and the European leaders’ latest moves to contain the debt crisis, where we expect volatility to persist through the sessions this week.