SingForex Weekly Market Watch http://www.singforex.com.sg/ Weekly currency markets watch from one of the world's leading providers of foreign exchange services. Tue, 7 9 2010 08:51:20:000 GMT en-us SingForex Daily Forex Commentary http://www.fxcontent.com/fx/images/singforexLogoMob.gif 118 24 http://http://www.singforex.com.sg/ Weekly Market Watch - Monday, 06 Sep 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=15052 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=15052 Sun, 05 Sep 2010 23:07:03:910 GMT Last Week Recap

EUR/USD strengthened last week as the U.S. Dollar weakened against all the majors with the exception of the Pound Sterling. The week began with no significant economic releases out of the Eurozone on Monday, although the rate still traded down to 1.2659. Also on Monday, the U.S. Core PCE Price Index came out at 0.1% month on month — as was widely anticipated — while Personal Spending increased by 0.4% month on month, showing a slight improvement over the previous reading of 0.0%. On Tuesday, EUR/USD made its weekly low of 1.2625 after the German Unemployment Change fell less than expected at -17K versus an expected reduction of -19K. Also, Eurozone Unemployment held steady at 10% and the Eurozone CPI Flash Estimate came out at 1.6%, with both numbers being consistent with the market’s expectations. Tuesday also saw some positive U.S. numbers, with the CB Consumer Confidence survey increasing to 53.5 — significantly better than the consensus of 50.7. Also, the S&P/ CS Composite 20 HPI increased by 4.2% year on year, versus a consensus of only a 3.8% increase. Nevertheless, the Chicago PMI survey came out slightly worse than expected at 56.7 compared with the 57.3 number anticipated. EUR/USD then began rallying sharply on Wednesday after a disappointing U.S. ADP Non-Farm Employment Change number. It showed a decline of -10K that was considerably worse than the expected increase of +20K, while the previous number was also revised downward from 42K to 37K. On a more positive note, U.S. ISM Manufacturing PMI came out at 56.3 versus the 53.2 expected, and ISM Manufacturing Prices increased to 61.5 versus a consensus of only 55.5. Also out on Wednesday, German Retail Sales declined by -0.3% month on month versus an expected increase of 0.6%. On Thursday, the Euro held steady against the Greenback as the ECB kept its benchmark Minimum Bid Rate at 1.00% — as was widely expected. In his speech made after the rate announcement, ECB President Jean Claude Trichet stated that, “Recent economic data for the euro area have been stronger than expected, partly owing to temporary factors. Looking ahead, the recovery should proceed at a moderate pace, with uncertainty still prevailing.” He added that the ECB’s "current monetary policy stance remains accommodative". In addition to its Rate Decision, the European Union announced plans to limit naked short selling of E.U. government debt and stock shares to "ensure that the security can be borrowed so that settlement can be effected." Elsewhere on Thursday, U.S. Initial Jobless Claims came out at 472K — just slightly lower than the consensus of 476K expected —and Pending Home Sales showed a month on month increase of +5.2% that was considerably higher than the decline of -1.3% the market was expecting. Nevertheless, U.S. Factory Orders increased by only 0.1% versus an expected increase of 0.4%, although the previous number was revised significantly upward from -1.2% to -0.6%. EUR/USD continued rallying into Friday, eventually making its weekly high of 1.2896 in spite of news that U.S. Non Farm Payrolls fell by -54K. This number was considerably better than the -101K anticipated, and the previous number was also revised significantly higher from -131K to -54K. In addition, the U.S. Unemployment Rate held steady at 9.6% in line with the market’s expectations. Also on Friday, Eurozone Retail Sales showed an increase of just 0.1% versus an expected 0.3% increase. The rate then went on to close just a pip under its weekly high at 1.2895, up 1.2% on the week.


USD/JPY lost some ground last week despite the August 29th emergency meeting of the BOJ to curb the rise of the Japanese Yen. In the meeting, the BOJ revealed a new six month loan program featuring low interest rates. The central bank also hiked the amount of funding available to banks to ¥30 trillion from ¥20 trillion. Despite these moves by the BOJ, USD/JPY began the week by dropping sharply. The rate initially traded off of its weekly high of 85.88 after the BOJ announced it was leaving its benchmark Overnight Call Rate at 0.10% — as was widely expected. Other Japanese economic releases on Monday included Japanese Retail Sales, which increased by +3.9% year on year versus the +3.6% expected. In addition, Japanese Preliminary Industrial Production gained +0.3% month on month, versus a decline of -0.3% expected. Finally, Japanese Average Cash Earnings showed an increase of +1.3% versus the +0.9% number anticipated. USD/JPY continued its decline into Tuesday, trading down to 83.80 after Japanese Housing Starts showed an increase of 4.3% year on year — a result that was considerably better than the 2.5% consensus. In addition, Japanese Finance Minister Naoto Kan announced an allocation of an additional ¥920 billion in order to stimulate domestic demand and help weaken the Yen. The market was apparently not very impressed since USD/JPY then made its weekly low of 83.65 on Wednesday after the Japanese Monetary Base grew by only 5.4% year on year, versus the consensus of a 6.3% increase. The rate then consolidated somewhat on Thursday in the wake of positive U.S. New Home Sales and Initial Jobless Claims numbers that help support the Greenback. USD/JPY then managed to rally sharply on Friday to 85.21 in response to favourable U.S. employment numbers before selling off just as sharply to close the week at 84.39, and showing an overall decline of 1.1% on the week.

GBP/USD also gave back some territory last week. The rate began the week on a firm note by trading to its weekly high point of 1.5573 on Monday while the United Kingdom celebrated its Summer Bank Holiday. The rate then reversed direction to the downside and made its weekly low of 1.5324 on Tuesday after the release of the U.K. GfK Consumer Confidence survey that came out with a reading of -18 that was considerably better than the consensus of a -23 reading. Also out on Tuesday was U.K. Net Lending to Individuals which gained 0.3B month on month, versus an expected 0.7B rise. Also, U.K. Final Mortgage Approvals came out slightly better than expected at 49K versus the expected 47K. GBP/USD then began rallying sharply on Wednesday after a disappointing U.S. ADP Non-Farm Employment Change number and despite news that U.K. Manufacturing PMI came out at only 54.3 versus a consensus of 57.1, with the previous reading also being revised downward from 57.3 to 56.9. The rate then reversed and began heading south on Thursday after news broke that the U.K. Nationwide PMI had declined by -0.9% month on month, versus an expected decline of only -0.3%. Also contributing to the decline in Cable was U.K. Construction PMI which came out at 52.1 versus the expected 53.5. GBP/USD then rallied on Friday despite U.K. Services PMI coming out at 51.3 and below the expected 53.0 number. The rate eventually closed the week down at 1.5461, showing a modest overall decline of 0.3% for the week.

In spite of a still-uncertain national election result, AUD/USD had the best week of all the major currency pairs overall, as risk appetite returned in force to the currency markets and the price of gold neared its all time high level. Despite gapping up at the Monday open, the pair then traded softer on Monday and into Tuesday after Australian HIA New Home Sales out on Monday declined by -7.0% month on month, versus a previous decline of -5.1. Nevertheless, on the brighter side, Australian Company Operating Profits showed an increase of a whopping +18.9% quarter on quarter that was considerably better than the mere 5.9% increase the market was expecting. In addition, the previous number was revised modestly upward from 3.9% to 4.3%. AUD/USD still continued declining on Tuesday despite news that Australian Building Approvals had increased by 2.3% month on month — significantly better than the decline of -0.6% expected. In addition, Australian Retail Sales had increased by 0.7% month on month, versus the increase of only 0.4% anticipated. Also out on Tuesday was the Australian Current Account which showed a deficit of only -5.6B versus a consensus of a -6.4B deficit. Furthermore, Australian Private Sector Credit increased by only 0.1% month on month, versus an expected increase of 0.3%. AUD/USD then reversed sharply and began a steep rally on Wednesday aided by news that the Australian Labour and Green parties had agreed to form a coalition, thereby increasing former PM Julia Gillard’s chances of achieving a majority. Also fuelling the rally were higher gold prices and news that Australian GDP showed an impressive rise of 1.2% quarter on quarter that was significantly better than the 0.9% increase expected. The previous GDP number was also revised upward from 0.5% to 0.7%. The rate consolidated somewhat on Thursday after the Australian Trade Balance came in showing a surplus of 1.89B that was significantly below the 3.11B consensus and which was compounded by the previous number being revised slightly downward from 3.54B to 3.44B. In addition, the AIG Services Index printed at 47.5 versus a previous reading of 46.6. On Friday, AUD/USD made its weekly high of 0.9173 as risk appetite kept demand for the Aussie high, thereby leaving the rate to close at 0.9166 — showing an overall increase of 1.9% on the week.

USD/CAD lost ground last week as the Loonie benefitted from increased risk appetite in the currency markets, as well as higher gold prices. The rate began the week by rallying sharply after the Canadian Current Account showed a deficit of -11.0B versus a consensus of a -10.2B deficit that was compounded by the previous number being revised downward from -7.8B to -8.5B. Nevertheless, the Canadian RMPI increased by 1.8% that was considerably better than the 0.3% expected. USD/JPY continued trading higher on Tuesday after news that Canadian GDP had increased by 0.2%, as was widely expected. On Wednesday, USD/CAD began dropping sharply after U.S. ADP Non-Farm Employment Change numbers came out considerably worse than expected. USD/CAD then consolidated somewhat on Thursday as U.S. Initial Jobless Claims showed some improvement in the U.S. employment picture. The rate then traded down on Friday despite an encouraging U.S. Non-Farm Payrolls number, as risk appetite permeated the market. USD/CAD eventually ended the week at 1.0390, showing a significant loss of 1.2% versus the previous weekly close.

NZD/USD had a volatile week last week, initially beginning the week on a soft note after the New Zealand Trade Balance came out showing a deficit of -186M that was worse than the expected deficit of -28M by a factor of seven. Also, the previous number was revised down from a surplus of +276M to a surplus of only +214M. Monday also saw the release of the NBNZ Business Confidence survey which came out at 16.4 — considerably lower than the previous reading of 27.9. NZD/USD continued its sharp decline on Tuesday, eventually making its weekly low of 0.6962 after New Zealand Business Consents increased by just 3.1% versus a previous reading of 3.3% that was also revised down from 3.5%. The rate then began rallying sharply on Wednesday as gold neared its all time highs and despite news that ANZ Commodity Prices had fallen by -1.4% month on month against its previous reading of a decline of -0.8%. NZD/USD continued rallying on Thursday and into Friday, eventually making its weekly high of 0.7214 before ending the week a bit lower at 0.7205 and showing an overall gain of 1.2% on the week.

The Week Ahead

AUD: The coming week of economic data for Australia is about as active as last week, and its releases feature the key RBA Rate Decision and associated Rate Statement scheduled for Tuesday. Monday starts the busy week off with the release of the MI Inflation Gauge (last 0.1% m/m) and ANZ Job Advertisements (last 1.3% m/m). Tuesday then follows with the AIG Construction Index (last 43.3), as well as the highlighted RBA Cash Rate announcement in which the central bank is expected to maintain its benchmark interest rate at the current 4.50% level. The RBA’s associated Rate Statement may also give some guidance as to the current economic situation in Australia. On Wednesday, look for important Australian Home Loans data (1.1% m/m), while Thursday has the closely watched Australian Employment Change (25.3K) and Unemployment Rate (5.2%). In addition, RBA Assistant Governor Guy Debelle will speak in Sydney. That ends the important week since Friday has nothing notable scheduled for release. Technically, AUD/USD softened to 0.8859 early last week before rallying sharply to 0.9173. The rate closed the week just lower at 0.9166. Last week’s price action remained within AUD/USD’s overall up channel that has a rising lower trend line now drawn at 0.8835. Resistance is seen near current levels at 0.9173, above that at 0.9220 and then in the 0.9323/88 region. Support for the rate is indicated in the 0.9115/19, 0.9029/64 and 0.8843/59 regions, and below that at 0.8769.

To view a live chart follow the link:

CAD: The coming week of economic data due out in Canada heats up considerably from the previous week, and features a variety of important Canadian GDP data, including the BOC’s Rate Decision and associated Rate Statement due out on Wednesday that could well involve another interest rate increase. Monday is quiet due to Canada’s observance of the Labour Day Bank Holiday, and Tuesday also has nothing noteworthy due out. As a result, Wednesday starts the active week with the release of Building Permits (-4.7% m/m) and Ivey PMI (55.9). Wednesday also offers the highlighted BOC Rate Statement in which the central bank is expected to raise its benchmark Overnight Rate by 25 basis points from 0.75% to 1.00%. Thursday then follows with Canadian Housing Starts (185K), the Canadian Trade Balance (-0.8B) and NHPI (0.1% m/m). Friday ends the busy week with the key Canadian Employment Change (23.9K) and Unemployment Rate (8.0%) data. Technically, USD/CAD fell back below the declining upper trend line now drawn at 1.0429 of its apparent descending triangular consolidation pattern last week. The rate traded as high as 1.0669 last Tuesday before selling off sharply to 1.0383 and then closing slightly higher at 1.0390 on Friday. The chart for USD/CAD now shows resistance at 1.0584, in the 1.0665/76 region and above that at 1.0742. Support for the rate shows up in the 1.0441/1.0516, 1.0347/85 and 1.0201/1.0253 regions ahead of psychological support seen at the key 1.0000 parity level.

To view a live chart follow the link:

EUR: The upcoming economic data week in the Eurozone is slightly less active than the previous week, but nevertheless features important data like Thursday’s Monthly Bulletin from the European Central Bank. Sunday starts the week out with a speech by ECB President Trichet in Bucharest. Monday then offers just Sentix Investor Confidence (8.7), while Tuesday only has scheduled German Factory Orders (0.6% m/m). Wednesday has the German Trade Balance (12.8B), the French Government Budget Balance (-61.7B), the French Trade Balance (-4.2B) and German Industrial Production (1.1% m/m). Thursday follows with German Final CPI (0.0% m/m), French Final Non-Farm Payrolls (0.2% q/q) and the weekly highlight of the ECB Monthly Bulletin. Friday ends the week with the release of French Industrial Production (0.8% m/m) and Italian Industrial Production (0.4% m/m). Technically, EUR/USD failed to make a fresh low last week, only dropping as low as 1.2625 on Tuesday. The rate then continued its upward correction to 1.2896 before closing just a tick lower at 1.2895 on Friday. Support for EUR/USD shows at 1.2854, in the 1.2742/76 region, and below that at 1.2660. Resistance to the topside is seen near present levels in the 1.2896/1.2931 and 1.30007/28 regions, and above that at 1.3106.

To view a live chart follow the link:

GBP: The week of upcoming economic data releases in the United Kingdom heats up a bit from last week, and features the important BOE Rate Decision and its associated MPC Rate Statement due out on Thursday. Monday has nothing notable scheduled for release, so Tuesday starts the active week off with the BRC Retail Sales Monitor (last 0.5% y/y). The important Halifax HPI (-0.3% m/m) is also scheduled for release on either Tuesday or Wednesday. Wednesday offers the BRC Shop Price Index (last 1.5% y/y), Manufacturing Production (0.3% m/m) and Industrial Production (0.4% m/m). The NIESR GDP Estimate (last 0.9%) is also tentatively due out on Wednesday. Thursday then offers the weekly highlight of the BOE’s Rate Decision in which the central bank is expected to keep its benchmark interest rate unchanged at 0.5% and the Asset Purchase Facility at GBP 200 Billion. The associated MPC Rate Statement is also tentatively due out. Thursday also has the U.K. Trade Balance (-7.5B) scheduled for release. Friday ends the week with the release of the important PPI Input (0.2% m/m) and PPI Output (0.1% m/m) data, in addition to the CB Leading Index (last 0.5% m/m). Technically, GBP/USD sold off early last week as far as 1.5324 — a new recent low — before consolidating above that level and closing the week at 1.5461 on Friday. This close was again just above its 200 day Moving Average that now comes in at 1.5433 and remains downward sloping. Resistance to the topside for GBP/USD shows in the 1.5465/1.5488, 1.5590/1.5616 and 1.5669/1.5711 regions. Support is indicated at 1.5440, in the 1.5324/69 region and at 1.5227.

To view a live chart follow the link:

JPY: The coming week of economic data releases in Japan is roughly as active as the previous week, and features the important Japanese Monetary Policy Statement and associated BOJ Press Conference that are both tentatively scheduled for Tuesday. Monday is quiet, so Tuesday starts the busy week with the tentatively scheduled release of the highlighted BOJ Monetary Policy Statement, along with the Overnight Call Rate (0.10%), and the associated BOJ Press Conference. Also out on Tuesday are Japanese Leading Indicators (98.3%). Wednesday is especially busy and offers Core Machinery Orders (2.0% m/m), Bank Lending (last -1.8% y/y), the Japanese Current Account (1.38T), M2 Money Stock (2.6% y/y), the BOJ Monthly Report, and the Economy Watchers Sentiment survey (50.3). Thursday has scheduled the release of BSI Manufacturing Index (6.3), Household Confidence (43.8) and Preliminary Machine Tool Orders (last 144.9% y/y). Friday ends the busy week with the BOJ Monetary Policy Meeting Minutes, CGPI (-0.2% y/y), Final Japanese GDP (0.4% q/q) and the Final GDP Price Index (-1.8% y/y). Technically, USD/JPY made its weekly high of 85.88 last Monday before selling off sharply to 83.65 — just shy of another new low — and then closing the week at 84.39. Resistance for USD/JPY shows up in the 84.58/64 and 85.21/90 regions, and above that at 86.35. Initial strong support is seen in the 84.71/88 and 83.57/65 regions, and below that at the major 79.75 support level.

To view a live chart follow the link:

NZD: The coming week of economic data releases in New Zealand again has rather little to offer in terms of important numbers, but the week does include the release of the Overseas Trade Index on Friday. Monday and Tuesday are quiet, so Wednesday starts the peaceful week with New Zealand Manufacturing Sales (last 0.9% q/q). Thursday has nothing of note due out, and Friday ends the week with the highlighted Overseas Trade Index (2.3% q/q). Technically, NZD/USD softened to 0.6962 early last week before rallying sharply to 0.7214. The rate closed the week a bit lower at 0.7205. Last week’s price action remained above a new upward sloping trend line now drawn at 0.6990 that also goes through the 0.6571 low of June 8th. Support for NZD/USD is now seen on the charts in the 0.7120/75 and the 0.6945/0.7000 congestion regions — the latter being right around the key psychological 0.7000 level — as well as at 0.6885. Resistance shows up at 0.7214, at 0.7264 and in the 0.7341/94 region.

To view a live chart follow the link:

USD: The economic data week coming up in the United States cools down considerably this coming week. In terms of data, it features the important U.S. Trade Balance data due out on Thursday. Monday starts the week on a peaceful note as the United States observes the Labor Day Bank Holiday, and Tuesday is also quiet. Accordingly, Wednesday starts the week out with the release of the important Beige Book from the Federal Reserve, as well as Consumer Credit (-4.5B m/m). Thursday offers the highlighted U.S. Trade Balance (-47.4B), as well as the important Initial Jobless Claims number (470K). Friday ends the week with just Wholesale Inventories (0.4% m/m) scheduled for release.

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]]> Weekly Market Watch - Monday, 30 Aug 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=14779 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=14779 Sun, 29 Aug 2010 22:27:56:750 GMT Last Week Recap

EUR/USD traded in a limited range last week, starting the week on a soft note as German Flash Manufacturing PMI came out at 58.2 — versus a consensus of 60.9 — while German Flash Services PMI came out slightly better than expected at 58.5 against an expected number of 56.3, with the previous number revised downward from 57.3 to 56.5. Also, Eurozone Flash Services PMI came out at 55.6 — in line with expectations — while Eurozone Flash Manufacturing PMI came out at a somewhat disappointing 55.0, versus a consensus of 56.3. On Tuesday, the pair made its weekly low of 1.2708 as S&P downgraded Irish sovereign debt from AA+ to AA-. The S&P downgrade came despite last week’s strong demand for Irish debt and was partly the cause for the yield on Irish 10-year bonds to rise by 22 basis points to 5.478% — almost 50 basis points more than the 5% Greece is paying on its E.U. bailout package funding. In better news for the Euro, German Final GDP came out at 2.2% quarter on quarter — in line with market expectations — and Eurozone Industrial New Orders rose 2.5% — much better than the 1.6% expected. In addition, the Belgium NBB Business Climate survey showed a decline of -5.1 versus a worse expected decline of -6.1. Also on Tuesday, U.S. Existing Home Sales came out at 3.83M, considerably lower than the 4.68M expected, while the previous number was revised slightly downward from 5.37M to 5.26M. The U.S. Richmond Manufacturing Index printed lower at 11 versus a market consensus of 14. EUR/USD reversed its downtrend on Wednesday as German Ifo Business Climate came out at 106.7 versus a consensus of 105.8, while U.S. Core Durable Goods came in showing a disappointing decline of -3.8% — considerably worse than the rise of 0.6% expected. Nevertheless, the previous number was revised upward from a decline of -0.6% to a small increase of 0.2%. Furthermore, Durable Goods Orders rose just 0.3%, significantly lower than the 2.9% increase expected, although the previous number was revised upward from -1.0% to -0.1%. Also on Wednesday, U.S. New Home Sales came out at 276K, considerably less than the 333K expected, while the previous number was revised downward from 330K to 315K. Adding to the weak U.S. housing numbers was HPI, which declined by -0.3% month on month, versus an expected rise of 0.1%. Elsewhere on Wednesday, Ireland’s National Treasury Management Agency voiced strong disagreement with the aforementioned downgrade of Ireland’s sovereign debt by S&P. The Irish agency stated, "In terms of the specific analysis by S&P, this is largely predicated upon an extreme estimate of bank recapitalization costs of up to 50 billion euros." On Thursday, EUR/USD continued climbing as German GfK Consumer Climate came out at 4.1, in line with expectations, while Eurozone M3 Money Supply increased by 0.2% year on year, versus an expected 0.4%. Also on Thursday, U.S. Initial Jobless Claims came out at 473K, beating the expected 488K and representing a considerable improvement over the previous week’s 500K print, which was revised upward to 504K. In addition, U.S. Mortgage Delinquencies declined to 9.85% from a previous 10.06% number. Thursday was also the first day of the Kansas City Fed’s Economic Symposium held in Jackson Hole, Wyoming. On Friday, EUR/USD made its weekly high of 1.2778 despite news that German Import Prices declined -0.2% month on month, versus an expected increase of 0.1%, while German Preliminary CPI came out with a flat reading versus an expected increase of 0.2%. Also on Friday, U.S. Preliminary GDP came out slightly better than expected at 1.6%, versus an expected increase of 1.5%, while the Preliminary GDP Price Index rose by 1.9% quarter on quarter — just higher than the 1.8% consensus. Also on Friday, the University of Michigan Consumer Sentiment survey came out at 68.9, only slightly worse than the 69.8 number expected. Furthermore, Federal Reserve Chairman Ben Bernanke speaking on Friday in an address at the Jackson Hole Symposium made observations to the effect that the U.S. economy will continue expanding in the second half of the year — albeit not as strongly as was previously thought — and that the Fed will do all that it can to ensure the recovery continues. EUR/USD then sold off on profit taking to end the week at 1.2732, up 0.2% overall from the previous weekly close.


USD/JPY had a volatile week last week, beginning the week by trading off of the pair’s weekly high of 85.69 seen on Monday. The rate then began heading south as BOJ Governor Shirakawa and Prime Minister Naoto Kan discussed recent forex market developments over the phone, as well as “economic conditions at home and abroad”. This led the market to believe that the BOJ would not be taking any immediate action to stem the recent Yen strength. On Tuesday, the rate made its weekly and 15-year low of 83.57 as the Japanese Trade Balance showed a surplus of 0.61T — considerably better than the expected 0.47T — while the previous number was revised slightly higher from 0.46T to 0.51T. Japanese Finance Minister Yoshihiko Noda also met with Prime Minister Kan and stated that the Japanese government would, “have to take appropriate action when necessary” to deal with the strong Yen. The rate then reversed and started heading higher on Wednesday despite weak U.S. housing numbers and in the absence of any economic data out of Japan. USD/JPY then paused somewhat on Thursday as the K.C. Fed’s Jackson Hole Symposium got under way, with BOJ Governor Shirakawa and other high level finance officials in attendance. Thursday also saw Japanese Household Spending increase by 1.1% year on year — versus an expected increase of 1.5%. In addition, Tokyo Core CPI declined by -1.1% year on year — just slightly better than the consensus of a -1.2% drop, and Japanese National Core CPI fell by 1.1% — as was widely expected. Also out on Thursday was the Japanese Unemployment Rate which contracted to 5.2% — just slightly better than the 5.3% expected. On Friday, the Greenback rebounded strongly against the Yen on the back of a slightly better U.S. GDP number, as well as comments from PM Naoto Kan which noted that, "volatile movements in the currency market have a negative impact on economic and financial stability." USD/JPY went on to close at 85.33, a drop of 0.3% on the week.

GBP/USD started last week on a soft note by trading off of its weekly high of 1.5616 seen on Monday. The rate then made its weekly low of 1.5369 on Tuesday as the BOE’s Monetary Policy Committee’s newest member — Martin Weale — made comments to the effect that the growth forecast by the BOE might be too optimistic, with the U.K. economy facing the risk of a second recession, higher unemployment, falling housing prices and another crisis in the banking sector. He went on to observe that this could come in the form of, “a sovereign debt crisis or it could be a new liquidity crisis in the private sector." Also on Tuesday, U.K. BBA Mortgage Approvals came out at 33.7K — slightly worse than the 35.3K expected. On Wednesday, Cable recovered somewhat on weaker U.S. housing numbers which brought the rate up to 1.5466. Thursday saw the rate continue to improve after U.K. CBI Realized Sales came out at 35 — significantly higher than the market consensus of 23 and also better than the previous print of 33. On Friday, GBP/USD softened somewhat as U.K. Preliminary Business Investment declined by -1.6% versus an expected increase of 2.3%. Nevertheless, the previous number was revised significantly upward from +6.0% to +7.8%. Also out on Friday, U.K. Revised GDP rose 1.2% quarter on quarter — just edging the consensus of a 1.1% increase. Cable then went on to close at 1.5511, down just 0.1% on the week.

AUD/USD gained some ground last week on the back of weaker U.S. economic numbers. This came despite the fact that the forex market was still digesting the news of the hung parliament in the previous weekend’s Australian lower house elections, which failed to deliver a majority government for the first time in 70 years. The pair began the week by selling off sharply in reaction to the political climate fresh out of the election, eventually trading down to 0.8857 before finding support. The pair continued heading south on Tuesday despite weaker U.S. New Home Sales and HPI numbers. Nevertheless, as gold rallied sharply from 1213 to 1235 in the wake of the Ireland downgrade by S&P, AUD/USD reversed and began climbing sharply. Also benefitting the Aussie was the market’s impression that prospects for a coalition government which would reduce or postpone a controversial mining tax appeared increasingly likely. In addition, Wednesday saw Australian Construction Work Done increase by 3.5% quarter on quarter, versus a lower expected increase of 3.0%, while the previous number was revised substantially higher to 4.2% from 1.9%. Spurred by this good news, the rate continued its run higher on Thursday as the Australian CB Leading Index increased by 0.1%, while the previous number was revised upward from 0.3% to 0.4%. On the negative side, Australian Private Capital Expenditure dropped by -4.0% — considerably worse than the increase of 2.3% expected — while the previous number was also revised downward from -0.2% to -1.0%. On Friday, AUD/USD rallied sharply — in spite of positive U.S. GDP numbers — to make its weekly high of 0.8997 before selling off on profit taking to close at 0.8989, showing an overall gain of 0.7% on the week.

USD/CAD saw volatile trading last week, moving higher off of its weekly low of 1.0484 seen on Monday. The pair continued rallying sharply on Tuesday as Canadian Core Retail Sales disappointed the market by declining by -0.5% — versus an expected increase of 0.1% — while the previous number was revised down from -0.1% to -0.3%. Also, Retail Sales increased by only 0.1% month on month, versus an expected increase of 0.4%, with the previous number revised downward from -0.2% to -0.4%. USD/CAD then made its weekly high on Wednesday as Canadian Corporate Profits declined by a disappointing -1.8% quarter on quarter — versus a previous reading of an increase of 4.8%. The rate then started heading south on the back of stronger gold prices and weaker U.S. housing market numbers that began weighing on the Greenback. The rate continued trading off on Thursday, despite a better than expected U.S. Initial Jobless Claims release. On Friday, USD/CAD continued lower — in spite of better than expected U.S. GDP data — eventually ending the week at 1.0520, and showing an overall gain of 0.3% on the week.

NZD/USD gained some ground last week, initially starting Monday off on a firm note, but then weakening after New Zealand Inflation expectations came in lower at 2.6% quarter on quarter, versus a previous reading of 2.8%. This sent the rate to test the 0.7000 level, which was subsequently broken on Wednesday when the pair made its weekly low of 0.6945. NZD/USD then reversed to trade higher in sympathy with gold and the Aussie and in the absence of any significant data coming out of New Zealand. On Thursday, NZD/USD continued rallying sharply despite positive U.S. Employment numbers. Friday saw NZD/USD make its weekly high of 0.7128 before selling off on profit taking to close the week at 0.7120, showing an overall gain of 0.7% on the week.

The Week Ahead

AUD: The coming week of economic data for Australia heats up considerably versus as last week, and its releases feature the important Australian GDP data due out on Wednesday. Monday starts the active week off with the release of Company Operating Profits (5.9% q/q), and the tentatively scheduled HIA New Home Sales (-5.1% m/m). Tuesday offers a speech by RBA Assistant Governor Debelle in Sydney, as well as important Building Approvals (-0.6% m/m) and Retail Sales (0.4% m/m) data. Also out on Tuesday are the Australian Current Account (-6.3B) and Private Sector Credit (0.3% m/m). Wednesday has scheduled the release of the AIG Manufacturing Index (last 54.4), Commodity Prices (last 51.0% y/y) and the highlighted Australian GDP data (0.9% q/q). Thursday has the Australian Trade Balance (3.11B) due out, while Friday ends the busy week with the AIG Services Index (last 46.6). Technically, AUD/USD traded down to a low of 87.69 last Wednesday before rallying up to 0.8997 on Friday to close the week on a stronger note at 0.8989. Last week’s price action remained within AUD/USD’s overall up channel that has a rising lower trend line now drawn at 0.8775. Resistance is seen just below the psychological 0.9000 level at 0.8997 and just above it in the 0.9016/77 region, as well as at 0.9163 and at 0.9220. Support for the rate is indicated in the 0.8840/57 and 0.8737/69 regions and at 0.8632.

To view a live chart follow the link:

CAD: The coming week of economic data due out in Canada is about as peaceful as the previous week, but it does feature the important Canadian GDP data due out on Tuesday. Monday starts the week out with the release of the Canadian Current Account (-10.2B), RMPI (0.3% m/m) and IPPI (0.5% m/m). Tuesday then has the highlighted Canadian GDP number (0.2% m/m) to close out the week since nothing else of note is scheduled for release. Technically, USD/CAD sustained its break of the upper descending trend line now drawn at 1.0454 of its apparent descending triangular consolidation pattern last week. The rate traded as high as 1.0665 on Wednesday before selling off to close at 1.0520 on Friday. The chart for USD/CAD now shows resistance at 1.0584, in the 1.0665/76 region and above that at 1.0742. Support for the rate shows up in the 1.0490/1.0516, 1.0347/90, 1.0201/1.0244 and 1.0104/79 regions ahead of key psychological support seen at the 1.0000 parity level.

To view a live chart follow the link:

EUR: The upcoming economic data week in the Eurozone calms down considerably from the previous week, but nevertheless features important data like Thursday’s Rate Decision from the European Central Bank. Monday is quiet, so Tuesday starts the week out on a very active note with the German Unemployment Change (-19K), Italian Retail Sales (0.2% m/m), the CPI Flash Estimate (1.6% y/y), the Eurozone Unemployment Rate (10.0%), Italian Preliminary CPI (0.2% m/m) and the Italian Monthly Unemployment Rate (8.6%). Wednesday offers German Retail Sales (0.6% m/m) and Final Manufacturing PMI (55.0), while Thursday has EZ PPI (0.2% m/m), Revised GDP (1.0% q/q), and the highlighted ECB Rate Decision and its associated Press Conference in which the central bank is expected to keep its Minimum Bid Rate unchanged at 1.00%. Friday ends the week with EZ Final Services PMI (55.6) and EZ Retail Sales (0.3% m/m). Technically, EUR/USD sold off as low as 1.2586 early last week, but then corrected upward to 1.2778 on Friday before closing the week a bit lower at 1.2732. In doing so, the rate made a fresh low last week that was confirmed by the 14-day RSI as it continued to sustain its downside break of a recent medium term upwards sloping trend line. Support for EUR/USD shows at 1.2586, in the 1.2480/1.2522 region and below that at 1.2151. Resistance to the topside is seen at 1.2778, at 1.2921 and in the 1.30007/28 region.

To view a live chart follow the link:

GBP: The week of upcoming economic data releases in the United Kingdom remains roughly as active as last week, and features important housing sector data like Wednesday and Thursday’s Halifax and Nationwide House Price Indexes (HPIs). Monday starts the week off on a quiet note as the U.K. observes its summer Bank Holiday, so Tuesday starts the economic data week with the release of GfK Consumer Confidence (-23), Net Lending to Individuals (0.7B m/m) and Final Mortgage Approvals (47K). On Wednesday, watch for the highlighted Halifax HPI (last 0.6% m/m) — that can also come out as late as September 7th — as well as Manufacturing PMI (57.1). Thursday offers the important Nationwide HPI (-0.3% m/m) and Construction PMI (53.7). Friday ends the week with Services PMI (53.1) and a speech by MPC Member Tucker in Seoul. Technically, GBP/USD started last week on a firm note by making its high of 1.5616 on Monday. Nevertheless, Cable then traded to fresh near term lows on Tuesday as it went down to 1.5369 before rebounding later in the week to 1.5595 before closing on Friday at 1.5511. The rate is currently trading just above its 200 day Moving Average that now comes in at 1.5456 and remains downward sloping. Resistance to the topside for GBP/USD shows in the 1.5590/1.5616 and 1.5669/1.5711 regions, and above that at 1.5817 and 1.5996 — just below the psychological 1.6000 level. Support is indicated at 1.5440/62 region, just below the psychological 1.5500 level, and then below that at 1.5369 and at 1.5227.

To view a live chart follow the link:

JPY: The coming week of economic data releases in Japan is roughly as active as the previous week, and features important Japanese Retail Sales data due out on Tuesday. Monday is quiet, so Tuesday starts the week off with the release of the highlighted Japanese Retail Sales (3.1% y/y). Also out on Tuesday are Manufacturing PMI (last 52.8), Preliminary Industrial Production (-0.3% m/m), Average Cash Earnings (0.9% y/y) and Housing Starts (2.5% y/y). Wednesday has nothing of note scheduled for release, but Thursday has the Japanese Monetary Base (6.3% y/y). Friday ends the week with Capital Spending (-6.6% q/y). Technically, USD/JPY sold off sharply last Tuesday to make a new low at 83.57. The rate then traded higher during the rest of the week, eventually touching 85.43 on Friday before closing slightly lower at 85.33. Resistance for USD/JPY shows up in the 85.43/90 region, at 86.35, and in the 86.96/87.01 region. Initial strong support is seen in the 84.71/88 region, and below that at 84.25, at 83.57, and at the major 79.75 support level.

To view a live chart follow the link:

NZD: The coming week of economic data releases in New Zealand again has rather little to offer in terms of important numbers, but the week does feature the important NBNZ Business Confidence survey results due out on Monday (last 27.9). Also out on Monday is the New Zealand Trade Balance (-28M), while Tuesday offers Building Consents (last 3.5% m/m). Wednesday ends the week with the release of ANZ Commodity Prices (last -0.8% m/m) since Thursday and Friday have nothing significant due out. Technically, NZD/USD sustained recent losses last week below its previous upward sloping trend line now drawn at 0.7298. After starting last week near its highs, NZD/USD then traded sharply off to its weekly low of 0.6945 seen on Wednesday. The rate then recovered considerably to make its weekly high of 0.7128 on Friday before closing just lower at 0.7120. Support for NZD/USD is now seen on the charts in the 0.6994/0.7000 region — right around the key psychological 0.7000 level, as well as in the 0.6945/85 and 0.6793/0.6823 regions and at 0.6571. Resistance shows up in the 0.7080/0.7128 and the 0.7180/89 regions, and above those congestion regions at the 0.7264 level.

To view a live chart follow the link:

USD: The economic data week coming up in the United States heats up even further this coming week. In terms of data, it features the key employment data including Non Farm Payrolls and the U.S. Unemployment Rate due out on Friday. Monday starts the busy week off with the Core PCE Price Index (0.1% m/m), Personal Spending (0.4% m/m), Personal Income (0.3% m/m), and a speech by FOMC Member Bullard in St. Louis. Tuesday offers the S&P/CS Composite-20 HPI (3.7% y/y), Chicago PMI (57.5), CB Consumer Confidence (50.9), and the important FOMC Meeting Minutes. On Wednesday, watch for Challenger Job Cuts (last -57.2% y/y) and the ADP Non-Farm Employment Change (20K) for a clue to Friday’s big numbers. Wednesday also has scheduled ISM Manufacturing PMI (53.3), Construction Spending (-0.4% m/m), ISM Manufacturing Prices (55.8) and Total Vehicle Sales (11.6M). Thursday has the important weekly Initial Jobless Claims (477K), Revised Nonfarm Productivity (-1.9% q/q), Revised Unit Labor Costs (1.4% q/q), Pending Home Sales (-1.5% m/m) and Factory Orders (0.5% m/m). Friday will be the weekly highlight featuring the key Non Farm Payrolls number (-101K) and the U.S. Unemployment Rate (9.6%), as well as Average Hourly Earnings (0.1% m/m) and ISM Non-Manufacturing PMI (53.6).

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]]> Weekly Market Watch - Monday, 23 Aug 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=14373 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=14373 Sun, 22 Aug 2010 22:03:34:110 GMT Last Week Recap

EUR/USD range traded most of last week, rising initially after weaker U.S. numbers came out the previous Friday, but then erasing most of its gains and falling even further. On Monday, the pair benefited from news that Eurozone CPI came out at 1.7% year on year and Core CPI was at 1.0% — both more or less as expected. Monday also saw the release of U.S. TIC Long Term Purchases which showed an increase of 9B over the previous reading at 44.4B — considerably better than the 36.3B expected. The rate continued higher on Tuesday after the Euro gained on surprisingly good results from bond auctions in Ireland and Spain. Also out on Tuesday was Eurozone ZEW Economic Sentiment which improved considerably by showing a reading of 15.8 versus a consensus of 10.6, while the German ZEW Economic Sentiment indicator came out at 14.0 — considerably worse than the consensus of 20.9. In addition, the Eurozone Current Account showed a decline of -4.6B versus a lesser decline of -3.7B expected, and with the previous number revised significantly lower from -5.8B to -7.4B. The U.S. releases on Tuesday included Building Permits which came out at 0.57M and PPI that printed at 0.2% month on month — in line with expectations — while Core PPI rose by 0.3% to just edge the 0.2% expected number. Also, Housing Starts came out at 0.55M versus the 0.57M expected. On Wednesday, EUR/USD made its weekly high of 1.2962 before beginning to decline in the absence of any significant economic data out of the Eurozone with only U.S. Crude Oil Inventories declining by -0.8M versus a consensus of -1.1M and significantly higher than the previous reading of -3.0M. The rate continued its decline on Thursday despite U.S. Initial Jobless Claims reaching the psychological 500K level. This number was considerably worse than the 478K expected, although the previous number was revised slightly upward from 484K to 488K. In addition, the Philly Fed Manufacturing Index showed a decline of -7.7 that was significantly lower than the increase of +7.1 expected for the survey. Also out on Thursday was German PPI which showed an increase of 0.5% month on month versus an expected increase of only 0.2%. The rate then made its weekly low of 1.2662 on Friday before rising somewhat to close the week at 1.2708, showing a loss of only 0.3% overall on the week.


USD/JPY lost some ground last week, although it traded in a narrow range most of the week. The pair started the week by trading off of its weekly high of 86.23 seen on Monday as U.S. Treasury yields fell sharply and despite a disappointing Japanese GDP number which rose a mere 0.1% quarter on quarter, versus an expected 0.6% rise. In addition, the Japanese Preliminary GDP Price Index declined -1.8% — as was expected — although the previous reading was revised upward from -3.0% to -2.8%. Also, Japanese Tertiary Industry Activity declined by -0.1% versus an expected flat reading. On Tuesday, the rate traded higher as Japan’s former top currency official — Eisuke Sakakibara aka “Mr. Yen” — stated, “Without the support of the United States, intervention on the part of the Japanese government wouldn’t be effective.” He went on to comment that, "we shouldn''t be too much worried about the Yen being 85 or 80 at this moment." Nevertheless, others in Japan seem to disagree, perhaps thinking that forex market intervention is necessary to show speculators that the Japanese government will not tolerate current strong Yen levels. The pair continued to trade in a range on Wednesday and Thursday in the absence of any significant economic data out of Japan. The forex market also was concerned about possible intervention by the BOJ if the August 11th low of 84.73 was breached. The pair made its weekly low of 84.88 on Thursday before rallying to 85.90 on Friday. The Yen weakened despite news that Japanese All Industries Activity increased by 0.1% month on month versus an expected decline of -0.2%, with the previous number revised to 0.1% from 0.2%. USD/JPY then went on to close the week at 85.63, showing a loss of 0.7% overall from the previous weekly close.

GBP/USD started last week out on a solid note, with Cable trading off of its weekly high of 1.5700 seen on Monday. Sterling was hurt by news that the U.K. Rightmove HPI declined by -1.7% month on month, versus a previous reading of -0.6%. The rate then came under further pressure on Tuesday as U.K. Core CPI rose 2.6% year on year versus a consensus of a 3.0% rise, while U.K. CPI dropped to 3.1% year on year from 3.2% — in line with expectations. The rate then rallied sharply, trading up to the 1.5623 level on Wednesday, as the BOE released its minutes for the August MPC meeting. In them, it was revealed that Andrew Sentance continued being the only dissenting vote as he voted for a 25 bps rate hike, while the other eight members voted to leave the BOE’s benchmark Bank Rate unchanged at 0.50% and maintain the Asset Purchase program at £200B. On Thursday, GBP/USD edged up slightly as U.K. Retail Sales increased by 1.1% — considerably better than the consensus of a 0.4% increase. In addition, U.K. Public Sector Net Borrowing rose by only 3.2B versus the 5.2B expected, while the previous was revised downward from 14.5B to 13.9B. Also on Thursday, Preliminary Mortgages held steady at 47K — as was widely expected and Cable benefited from Dollar weakness after disappointing U.S. Initial Jobless claims were released The rate then went on to make its weekly low of 1.5462 on Friday before rallying on short covering to close at 1.5530 — showing a loss of 0.4% on the week.

AUD/USD consolidated last week as it traded in a tight range. The pair started the week out on a positive note despite news that Australian New Motor Vehicle Sales declined by -2.6%. This compared with the previous reading of a decline of -1.2% that was revised downward to -1.4%. On Tuesday, the rate made its weekly high of 0.9077 as the RBA released the minutes for its August meeting. In them, the Australian central bank reiterated that, “Developments over the latest month had not materially changed the Board’s assessment.” Also, the bank stated that it was, “comfortable with the existing level of interest rates, particularly in an environment where there was a significant degree of market volatility.” As a result, the RBA had decided to leave its benchmark Cash Rate unchanged at 4.5%. AUD/USD then ran into resistance on Wednesday as the Australian Wage Price Index rose by a mere 0.8% on the quarter, versus a consensus of a 0.9% rise. In addition, the MI Leading Index showed a flat reading month on month. This compared with a previous reading of a 0.2% increase that was revised upward to 0.3%. The rate continued dropping on Thursday as the prospects for a hung Parliament in Friday’s Australian elections became more and more likely. AUD/USD then went on to make its weekly low of 0.8840 on Friday before rallying on short covering to close the week at 0.8921, a mere 3 pips lower than the previous weekly close and virtually unchanged on the week.

USD/CAD saw volatile trading last week. The rate started the week out on a positive note on Monday by trading up to 1.0461 before retreating sharply on Tuesday’s news that Canadian Manufacturing Sales had increased by 0.1% month on month, significantly better than the expected decline of -0.4%. In addition, Canadian Foreign Securities Purchases increased by 5.39B versus an expected 9.42B rise. Nevertheless, the rate continued heading south on Wednesday, spurred by news that BHP Billiton had made an unsolicited bid of C$39 Billion for Saskatchewan’s Potash Corporation. Potash’s management turned the offer down, saying they believe the offer undervalues the company. USD/CAD then turned around and began rallying after making its weekly low of 1.0244 on Thursday as the Canadian Leading Index showed an increase of only 0.4% versus 0.7% expected, with the previous number revised downward from 1.0% to 0.7%. Also adding to the rally were Canadian Wholesale Sales which declined by -0.3% versus an expected increase of 0.4%. The rally in USD/CAD continued into Friday with the rate making its weekly high of 1.0511 as Canadian Core CPI showed a decline of 0.1% month on month, versus an expected increase of 0.1%. Nevertheless, the Canadian CPI number had increased 0.5% month on month, versus an expected flat reading. The rate then sold off on profit taking to close the week at 1.0484, and showing a gain of 0.7% from the previous weekly close.

NZD/USD began the week on a soft note despite the previous week’s positive New Zealand Retail Sales number. The pair traded off of its weekly low of 0.6994 made on Monday in the absence of any significant economic numbers out of New Zealand. The rate then began rallying sharply on Tuesday as the U.S. Dollar made its weekly low against the Japanese Yen and risk appetite began to increase in the markets. NZD/USD continued rallying as the New Zealand PPI Input number showed an increase of 1.4% quarter on quarter, significantly higher than the consensus of 0.6%. In addition, PPI Output increased by 1.1%, versus a consensus of a 0.7% increase. These higher than expected producer price numbers seemingly increased the risk of an upcoming interest rate hike by the RNBZ, and this sentiment benefited the Kiwi. On Thursday, NZD/USD gave back its previous gains, despite news that New Zealand Visitor Arrivals had increased by 1.4% month on month, versus a previous reading of 0.3% that was revised upward to 0.7%. Also, New Zealand Credit Card Spending had increased by 2.7% year on year, versus a previous higher reading of 4.4%. NZD/USD continued heading south on Friday, eventually making a low of 0.7000 before rallying up to close the week at 0.7069, and showing an overall gain of 0.3% versus the former weekly close.

The Week Ahead

AUD: The coming week of economic data for Australia is roughly as quiet as last week, and its releases feature the important Private Capital Expenditure data due out on Thursday. Monday and Tuesday have nothing notable scheduled for release, so Wednesday starts the week with Construction Work Done (3.1% q/q). Thursday then offers the highlighted Private Capital Expenditure data (2.4% q/q), as well as the CB Leading Index (last 0.3% m/m). The influential Economic Symposium will be held in Jackson Hole, Wyoming on Thursday through Saturday. Other than that, Friday has nothing of note scheduled. Technically, AUD/USD rose initially last week to a mid-week high of 0.9077 before selling off sharply to 0.8840 and then bouncing to close at 0.8921. Last week’s price action remained within AUD/USD’s overall up channel that has a rising lower trend line now drawn at 0.8712. Nevertheless, the charts also show a possible head and shoulders top formation with a top at 0.9220 and a measured move of ~315 pips that could result in further downside for AUD/USD this coming week. Resistance is seen just above the psychological 0.9000 level in the 0.9016/77 region, at 0.9163 and at 0.9220. Support is indicated at 0.8840/57, at 0.8737 and at 0.8632.

To view a live chart follow the link:

CAD: The coming week of economic data due out in Canada is about as active as the previous week and features the important Canadian Retail Sales data due out on Tuesday. Monday starts the week on a peaceful note with nothing significant scheduled for release, while Tuesday offers the highlighted Core Retail Sales (0.1% m/m) and Retail Sales (0.4% m/m) data, as well as a speech by BOC Governing Council Member John Murray in Kingston. Wednesday has Corporate Profits (last 4.8% q/q), and the start of the Economic Symposium that also runs on Friday and Saturday in Jackson Hole, Wyoming. Technically, USD/CAD sold off until the middle of last week as far as 1.0244 before rallying sharply as high as 1.0511 before closing the week a bit lower at 1.0484. This closing level was just one tick above the level of the upper declining trend line that is now drawn at 1.0483 of the rate’s recent apparent descending triangular consolidation pattern. The chart for USD/CAD now shows resistance at 1.0511, 1.0584 and 1.0676. Support for the rate shows up at 1.0378, in the 1.0201/1.0244 region, and in the 1.0104/79 region ahead of key psychological support seen at the 1.0000 parity level.

To view a live chart follow the link:

EUR: The upcoming economic data week in the Eurozone heats up considerably from the previous week, and features important data like Wednesday’s German Ifo Business Climate survey. Monday starts the week out on a very active note with French Flash Manufacturing PMI (53.3), French Flash Services PMI (60.7), German Flash Manufacturing PMI (60.9), German Flash Services PMI (56.3), EZ Flash Manufacturing PMI (56.3), EZ Flash Services PMI (55.6) and EZ Consumer Confidence (-13). Tuesday follows with German Final GDP (2.2% q/q), Industrial New Orders (1.6% m/m) and the Belgium NBB Business Climate survey (-6.1). Wednesday features the highlighted German Ifo Business Climate survey (105.8), while Thursday has the GfK German Consumer Climate survey (4.1), M3 Money Supply (0.4% y/y), Private Loans (0.4% y/y), and the start of the Economic Symposium in Jackson Hole Wyoming that runs through Saturday. Friday offers German Import Prices (0.5% m/m), German Preliminary CPI (0.2% m/m) and the second day of the Jackson Hole Symposium. Saturday ends the active week with the final day of the Jackson Hole Symposium. Technically, EUR/USD consolidated early last week, but then continued its downward move to reach a weekly low on Friday of 1.2662 before closing a bit higher at 1.2708. The rate also sustained its downside break of a recent medium term up channel. Support for EUR/USD shows at 1.2662, in the 1.2480/1.2522 region and below that at 1.2151. Resistance to the topside is seen at 1.2733, at 1.2921 and in the 1.30007/28 region.

To view a live chart follow the link:

GBP: The week of upcoming economic data releases in the United Kingdom remains roughly as active as last week, and features Friday’s Revised GDP release. Monday starts the week off on a quiet note, with nothing significant scheduled for release, while Tuesday has just BBA Mortgage Approvals (36.3K) due out. Wednesday has no notable data releases scheduled, while Thursday August 26th through August 31st could see the release of the important Nationwide HPI (-0.3% m/m) data. Also out on Thursday is CBI Realized Sales (25), and the first day of the influential Economic Symposium in Jackson Hole, Wyoming that will run until Saturday. Friday features the highlighted Revised U.K GDP data (1.1% q/q), Preliminary Business Investment (2.3% q/q), the Index of Services (0.7% 3m/3m) and the second day of the Jackson Hole Symposium. Saturday has a speech by BOE Deputy Governor and MPC Member Charles Bean scheduled at the last day of the Economic Symposium in Jackson Hole. Technically, GBP/USD broke its former upward moving channel to the downside last week and traded as low as 1.5462 on Friday. The rate then bounced slightly to close at 1.5530 — just above its 200 day Moving Average at 1.5488. Resistance to the topside for GBP/USD shows in the 1.5669/1.5711 region, at 1.5817 and at 1.5996, just below the psychological 1.6000 level. Support is indicated at 1.5496/1.5507 region, right around the psychological 1.5500 level, and then below that at 1.5441 and at 1.5227.

To view a live chart follow the link:

JPY: The coming week of economic data releases in Japan is somewhat more active than the previous week, and features important Japanese CPI inflation data due out on Friday. Monday and Tuesday are quiet, so Wednesday starts the week off with the Japanese Trade Balance (0.47T) and CSPI (-0.9% y/y). Thursday sees the start of the Jackson Hole Economic Symposium that runs until Saturday. Friday has the highlighted Tokyo Core CPI (-1.2% y/y) and National Core CPI (-1.1% y/y) due out, as well as Japanese Household Spending (1.5% y/y) and the Japanese Unemployment Rate (5.3%). Saturday ends the week with the last day of the Jackson Hole Symposium. Technically, USD/JPY sold off initially last Monday but failed to make a new low. The rate then consolidated the rest of the week and closed at 85.53. Resistance for USD/JPY shows up at 85.90, at 86.35, and in the 86.96/87.01 region. Initial support is seen at 85.17, followed up by strong support in the 84.71/88 region, as well as at the major 79.75 support level.

To view a live chart follow the link:

NZD: The coming week of economic data releases in New Zealand again has little to offer, but the week does feature the important New Zealand Inflation Expectations data (last 2.8% q/q) due out on Tuesday that may well influence the RBNZ’s next interest rate decision. All other days have nothing of note scheduled for release, although Thursday marks the beginning of the Economic Symposium to be held in Jackson Hole, Wyoming that also runs on Friday and Saturday. Technically, after breaking rising trend line support the previous week, NZD/USD failed to recover above that line last week and instead made a new recent low at 0.6994 last Monday. Nevertheless, the rate managed to stage a short-lived rally up to 0.7189 mid-week before falling again to the psychological 0.7000 level last Friday. Failing to penetrate there, NZD/USD then bounced somewhat to close the week at 0.7069, thereby forming a bullish Dragonfly Doji candlestick on its chart. Support for NZD/USD is now seen on the charts in the 0.6994/0.7000 region — right around the key psychological 0.7000 level, as well as at 0.6985, in the 0.6793/0.6823 region and at 0.6571. Resistance shows up in the 0.7080/0.7103 and the 0.7180/89 regions, and above those congestion regions at the 0.7264 level.

To view a live chart follow the link:

USD: The economic data week coming up in the United States is quite active again. In terms of data, it features the important housing data to be released throughout the week, as well as Preliminary GDP due out on Friday. Monday starts the week off with testimony by FOMC Member Hoenig in Kansas before the House Oversight and Investigations Committee. Tuesday offers Existing Home Sales (4.66M) and the Richmond Manufacturing Index (14). On Wednesday, look for Core Durable Goods Orders (-0.6% m/m), Durable Goods Orders (3.0% m/m), New Home Sales (335K) and HPI (0.1% m/m). Thursday has scheduled Initial Jobless Claims (486K) and Mortgage Delinquencies (last 10.06%), as well as the start of the Economic Symposium held in Jackson Hole, Wyoming that will run through Saturday. This influential event is attended by central bankers, academics, finance ministers and financial market participants who come from around the globe. The meetings are closed, but finance officials may talk with reporters during the event and their comments can cause market volatility. Friday has the highlighted Preliminary GDP (1.5% q/q) and Preliminary GDP Price Index (1.8% q/q), as well as the Revised University of Michigan Consumer Sentiment survey (69.9), Revised University of Michigan Inflation Expectations (2.7%) and an important speech by Federal Reserve Chairman Ben Bernanke at the Economic Symposium in Jackson Hole. Saturday ends the busy week with the final day of the Jackson Hole Symposium.

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]]> Weekly Market Watch - Monday, 16 Aug 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=13990 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=13990 Mon, 16 Aug 2010 04:53:54:660 GMT Last Week Recap

EUR/USD began last week on a positive note, making its weekly high of 1.3307 on Monday on the back of the previous week’s dismal U.S. Non-Farm Payrolls. Nevertheless, the rate then began to decline despite the German Trade Balance which came out at a surplus of 12.3B in line with the 12.4B expected, and considerably higher than the previous 10.6B. Also, the Eurozone Sentix Investor Confidence index improved considerably, with a reading of 8.5 versus an expected reading of 2.1 and significantly better than the previous reading which showed a negative -1.3. On Tuesday, the rate began to rally as the FOMC came out stating that the Federal Reserve was planning on reinvesting principal payments from agency debt and mortgage backed securities into Treasury securities. The central bank also intends to roll over their holdings of Treasury securities until they mature. In addition, the FOMC kept the benchmark Fed Funds Rate unchanged at 0.25%. Nevertheless, EUR/USD began selling off as German Final CPI came in at 0.3% month on month, just edging the consensus of 0.2%, while French Industrial Production declined by a large -1.7% month on month, versus a consensus of –only 0.1%. EUR/USD continued getting hit on Wednesday, despite the U.S. Trade Deficit expanding to -49.9B versus an expected -42.0B, while the U.S. Federal Budget Deficit grew to -165.0B versus an expected -168.2B. On Thursday, the rate continued its decline as the ECB released its Monthly Bulletin. In its editorial, the report stated, “The available economic data and survey-based indicators suggest a strengthening in economic activity in the second quarter of 2010, and the available data for the third quarter are better than expected. Looking further ahead, and taking into account a number of temporary factors, the Governing Council continue to expect the euro area economy to grow at a moderate and still uneven pace, in an environment of uncertainty.” Perhaps as a result of this uncertainty, the rate continued heading south despite U.S. Initial Jobless Claims going back over 484K. Adding to the decline was Eurozone Industrial Production which declined by -0.1% — considerably worse than the +0.7% increase expected. EUR/USD then made its weekly low of 1.2751 on Friday, despite German Preliminary GDP which grew by 2.2% in the last quarter versus a consensus of only 1.3%, while Flash Eurozone GDP increased by 1.0% quarter on quarter, versus a 0.7% consensus. In addition, U.S. Retail Sales came out slightly lower than expected at 0.4%, versus a consensus of 0.5%, and U.S. CPI increased by 0.3% month on month versus a 0.2% consensus. Also on Friday, the University of Michigan Consumer Sentiment survey came out at 69.6, just edging the consensus of 69.4 and considerably better than the previous 67.8 number that was revised up from 66.5. EUR/USD then went on to close at 1.2752, down an impressive 4.2% on the week overall.

USD/JPY had an eventful time last week, beginning with the rate rallying on Monday as Japanese Bank Lending declined by -1.8% year on year versus a previous decline of -2.0%. Also, the Japanese Current Account showed a surplus of ¥1.36T versus an expected ¥1.44T surplus. Later on Monday, the BOJ left its benchmark Overnight Call Rate at 0.10%, as was widely expected. In its associated statement made after the rate decision release, the BOJ said that it now expects a moderate recovery as a result of “improvement in overseas economic conditions” and that the severity of the Japanese employment and income situation “has eased somewhat." The bank continued addressing the deflation issue by noting that, “based on the assumption that medium to long-term inflation expectations remain stable, the year-on-year rate of decline in the CPI is expected to slow as the aggregate supply and demand balance gradually improves”. USD/JPY then began to drop precipitously on Tuesday as the U.S. FOMC divulged their plans for reinvesting agency debt interest payments and kept the Fed Funds rate steady at 0.25%. Also on Tuesday, Japanese Preliminary Machine Tool Orders rose to 144.8% year on year versus a previous number of 143.8% that was revised upward from 138.8%, while Japanese Core Machine Orders rose by only 1.6% month on month, significantly lower than the 5.6% expected. Also on Wednesday, BOJ Governor Shirakawa stated that the central bank was “well aware” of the rising Yen and that the bank would have to “assess the currency’s effect on the economy in a well-balanced manner.” The rate then made its weekly and a 15-year low of 84.71 after the U.S. Trade Balance showed the deficit had widened by $7.9B to $49.9B. The low in the Greenback was also partly due to disappointing numbers out from China, which showed slowing growth that would adversely affect the world economy. USD/JPY then rebounded strongly after rumours of intervention by the BOJ. On Thursday, the pair consolidated, rising to as high as 85.97 on the back of the release of Japanese Revised Industrial Production which declined by only -1.1% versus a consensus of a -1.5% decline. The pair then continued rallying into Friday despite negative numbers out of the United States to close the week at 86.27, up 1% from the previous weekly close.

GBP/USD lost considerable ground last week as the Greenback strengthened across the board. Cable started the week by trading off of its weekly high of 1.5995 seen on Monday as the U.K. RICS House Price Balance declined by -8% — considerably worse than the rise of 5% expected, and with the previous number revised downward from 9% to 8%. The rate continued heading south on Tuesday as U.K. Nationwide Consumer Confidence printed at 56 versus a 60 consensus, and considerably lower than the previous number of 63. Also out on Tuesday was the U.K. Trade Balance which showed a deficit of -7.4B — slightly better than the -7.7B expected. The rate continued in free fall on Wednesday as the U.K. Claimant Count Change showed a disappointing decline of -3.8K versus a consensus of a decline of -17K, and with the previous number revised downward from -20.8K to -15.9K. Also, the U.K. Average Earnings Index grew by 1.3% 3m/y versus an expected 1.1% rise, while the U.K. Unemployment Rate held steady at 7.8%. On Thursday, Cable hit its weekly low of 1.5559, despite negative U.S. Initial Jobless Claims and in the absence of any economic data from the United Kingdom. GBP/USD then went on to consolidate on Friday, ending the week at 1.5590, down 2.4% from the previous weekly close.

AUD/USD lost considerable ground last week, with the decline spurred by disappointing numbers out from China indicating a significant slowdown in the world economy, along with increased risk aversion in the currency markets. The week began with the rate trading off of its weekly high of 0.9204 on Monday as Australian ANZ Job Advertisements increased by 1.3% month on month, versus a previous reading of 2.8%. Also, Australian Home Loans decreased by -3.9% month on month, versus an expected decline of -2.1%. Nevertheless, the previous number was revised significantly higher from 1.9% to 3.0%, giving an overall neutral result. AUD/USD nevertheless continued tanking on Tuesday as NAB Business Confidence came out with a reading of 2 versus a previous reading of 4. The pair continued its decline on Wednesday, despite the FOMC announcement that it would reinvest agency loan repayment funds into long term treasuries. Also on Wednesday, the Westpac Consumer Sentiment indicator printed at a disappointing 5.4% versus a previous reading of 11.1%. On Thursday, the rate attempted to rally but failed despite the Australian Employment Change came out at +23.5K versus an expected 21.1K increase, although the previous number was significantly revised from 45.9K down to 37.4K. Also, the Australian Unemployment rate increased to 5.3% from 5.1%, which drove the rate to its weekly low of 0.8912. The rate consolidated somewhat on Friday after the release of rather negative U.S. numbers to close the week at 0.8924, a loss of 2.9% overall on the week.

USD/CAD gained ground last week on increased risk aversion and the overall strength seen in the Greenback. The rate started the week by trading off of its weekly low of 1.0253 seen on Monday after the previous Friday’s dismal Canadian (and U.S.) employment data. The pair continued rallying on Tuesday, despite Canadian Housing Starts showing an increase to 189K versus a consensus of 186K, with the previous number revised upward from 189K to 192K. Also, Canadian NHPI increased by just 0.1% versus an expected increase of 0.3% expected. USD/CAD continued its run higher on Wednesday as news of slowing growth in China sent currency traders to the safety of the Greenback. Also, the Canadian Trade Balance showed a deficit of -1.1B — considerably wider than the -0.1B deficit expected. The rate made its weekly high of 1.0490 on Thursday before selling off after a negative U.S. Initial Jobless Claims number was released. On Friday, USD/CAD declined somewhat before trading higher to close the week at 1.0411, showing a gain of 1.3% overall.

NZD/USD got hit especially hard last week — along with the other commodity dollars and the Euro. The rate started the week by trading off of its weekly high of 0.7338 seen on Monday. In the absence of any significant economic data, the rate tracked the AUD/USD rate’s decline and continued trading lower into Wednesday. The rate also continued heading south on Thursday as Business NZ Manufacturing Index printed at 49.9 versus a previous reading of 55.9 that was revised downward from 56.2. Also, New Zealand FPI showed a reading of 1.6%, versus a previous reading of 1.3%. The rate continued getting slammed despite New Zealand Retail Sales increasing by 0.9% versus an expected 0.5% rise and news that New Zealand Core Retail Sales had increased by an impressive 1.5% month on month versus an expected increase of only 0.6%. The rate then made its weekly low of 0.7049 on Friday before closing the week just a tick higher at 0.7050, down a whopping 3.9% from the previous week’s close.

The Week Ahead

AUD: The coming week of economic data for Australia is roughly as busy as last week, and has some important data due out. Releases feature the key RBA Monetary Policy Meeting Minutes scheduled to be released on Tuesday, as well as an Australian Parliamentary Election scheduled for Saturday. Monday starts the week with the release of New Motor Vehicle Sales (last 1.2% m/m), while Tuesday offers the highlighted RBA Monetary Policy Meeting Minutes, as well as a speech by RBA Governor Stevens in Crawley. Wednesday has the MI Leading Index (last 0.2% m/m) and the Wage Price Index (0.9% q/q) scheduled for release, while Thursday is quiet. Friday offers a speech by RBA Deputy Governor Battellino in Redcliffe, while Saturday ends the week with the Australian Parliamentary Election in which voters will select the 150 members of the Australian Lower House. The election results will determine which party will hold the ruling majority and hence who will be the Prime Minister. Polls indicate the election is too close to call, with the primary candidates being incumbent Labour Party Prime Minister Julia Gillard and Tony Abbott who heads the Liberal-National coalition. Technically, AUD/USD reversed recent gains considerably last week, trading as low as 0.8912 on Thursday before closing the week slightly higher at 0.8924 — still within its rising channel. The charts show resistance in the 0.9033/68 region, at 0.9220 and in the 0.9323/0.9388 region just below the major 0.9405 high. Support is indicated in the 0.8895/8912 region, at 0.8737 and at 0.8632.

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CAD: The coming week of economic data due out in Canada is a bit more active than the previous week and features the important Canadian CPI inflation data due out on Friday. Monday starts the week on a peaceful note with nothing significant scheduled for release, while Tuesday offers Foreign Securities Purchases (10.32B) and Manufacturing Sales (-0.4% m/m). Wednesday is quiet, but Thursday has the Leading Index (0.7% m/m), Wholesale Sales (0.4% m/m) and the BOC Review scheduled for release. Friday has the highlighted Canadian Core CPI (0.1% m/m) and CPI (0.0%m/m) data that will be closely watched. Technically, USD/CAD continued to reverse sharply higher off the 1.0104 low seen the previous week, trading up as far as 1.0490 on Thursday and re-entering its recent consolidation pattern before closing the week at 1.0411. The rate’s most recent high still falls below a declining trend line now drawn at 1.0504. The chart for USD/CAD now shows resistance at 1.0490, 1.0584 and 1.0676. Support for the rate shows up at 1.0319, in the 1.0201/75 region, and in the 1.0104/79 region ahead of key psychological support seen at the 1.0000 parity level.

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EUR: The upcoming economic data week in the Eurozone calms down somewhat from the previous week, but still features some important data like Tuesday’s ZEW Economic Sentiment surveys for Germany and the Eurozone. Monday starts the week out with EZ CPI (1.7% y/y) and Core CPI (1.0% y/y). Tuesday has the highlighted German ZEW Economic Sentiment survey (20.9) and the EZ ZEW Economic Sentiment survey (10.6), as well as the EZ Current Account (-3.7B). Nothing notable is scheduled for release on Wednesday, while Thursday ends the week with the release of German PPI (0.2%m/m). Technically, EUR/USD traded mostly lower last week, making its weekly low on Friday at 1.2751 before closing just a tick higher and breaking its recent up channel to the downside in the process. Support for EUR/USD shows at 1.2732, in the 1.2480/1.2522 region and below that at 1.2151. Resistance to the topside is seen in the 1.30007/28 region, at 1.3261 and at 1.3333.

To view a live chart follow the link:

GBP: The week of upcoming economic data releases in the United Kingdom remains roughly as active as last week, and features Wednesday’s MPC Meeting Minutes in which a dissenting vote to raise rates may again be cast. Monday starts the week off on a quiet note, with nothing significant scheduled for release other than the Rightmove HPI (last -0.6% m/m). Tuesday has the important CPI (3.1% y/y) and Core CPI (3.0% y/y) release, as well as RPI (5.0% y/y) and the tentatively scheduled BOE Inflation Letter that will be closely watched. Wednesday offers the highlighted MPC Meeting Minutes in which the vote is expected to be 1-0-8, where the first number represents those who voted to hike rates, the second those who voted to soften rates and the third those who voted to maintain rates steady. On Thursday, look for the important U.K. Retail Sales data (0.4% m/m), in addition to Preliminary Mortgage Approvals (47K), Public Sector Net Borrowing (5.1B), Preliminary M4 Money Supply (0.2% m/m) and CBI Industrial Order Expectations (-14). This closes the week since Friday is quiet. Technically, GBP/USD failed to make a new high early last week ahead of the psychological 1.6000 level, only getting up as far as 1.5995 before trading sharply lower to 1.5559 on Thursday and closing at 1.5590. The rate is trading just above important rising channel lower trend line support now drawn at 1.5546. Resistance to the topside for GBP/USD shows at 1.5996, just below the psychological 1.6000 level, as well as at 1.6274 and 1.6456. Support is indicated at 1.5559 — just above the psychological 1.5500 level — and then below that in the 1.5441/70 region and at 1.5227.

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JPY: The coming week of economic data releases in Japan calms down considerably versus the previous week, and features the Japanese Preliminary GDP data due out on Monday. Monday starts the week out with the highlighted Preliminary GDP data (0.6% q/q), plus the Preliminary GDP Price Index (-1.8% y/y) and Tertiary Industry Activity (0.0% m/m). Tuesday and Wednesday have nothing notable scheduled for release, while Thursday just has All Industries Activity (-0.2% m/m) due out to end the week since Friday is quiet. Technically, USD/JPY corrected somewhat higher last week after bouncing sharply off the 84.71 level — a new long term low level not seen for over 15 years. The rate then traded as high as 86.35 on Friday before closing nearby at 86.27. The rate may soon test declining trend line resistance now drawn at 86.47. Resistance for USD/JPY shows up at 86.35, at 87.01 and at 88.10. Initial support is seen at 85.94, followed up by strong support in the 84.71/85.00 region, as well as at the major 79.75 support level.

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NZD: The coming week of economic data releases in New Zealand again has rather few numbers due out, but the week does feature the important New Zealand Producer Price Index or PPI number scheduled for release on Thursday. Monday, Tuesday and Wednesday have nothing significant due out, so Thursday starts the week with the highlighted release of New Zealand PPI Input (last 1.3% q/q) and PPI Output (last 1.8% q/q). Friday ends the week with Visitor Arrivals (last 0.3% m/m) and Credit Card Spending (last 4.5% y/y). Technically, NZD/USD broke the lower trend line of its recent upward channel last week, trading as low as 0.7049 on Friday before closing just a tick higher at 0.7050. Support for NZD/USD is now seen on the charts in the 0.7027/49 region — just ahead of the key psychological 0.7000 level — in the 0.6793/0.6823 region and at 0.6571. Resistance shows up in the 0.7180/90 region, at 0.7302 and at 0.7394.

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USD: The economic data week coming up in the United States is quite active again. It features important housing market releases such as Building Permits due out on Tuesday. Monday starts the week off with the Empire State Manufacturing Index (8.1), TIC Long-Term Purchases ( 36.3B), and the NAHB Housing Market Index (15). Mortgage Delinquencies (last 10.06%) is also tentatively scheduled from August 16th to the 27th. On Tuesday, the highlighted Building Permits (0.58M) data is due out, as well as the important PPI (0.2%m/m) and Core PPI (0.2% m/m) numbers. Also scheduled for Tuesday are Housing Starts (0.57M), the Capacity Utilization Rate (74.6%), Industrial Production (0.5% m/m) and a speech by U.S. Treasury Secretary Geithner in Washington, D.C. Wednesday offers just Crude Oil Inventories (last -3.0M), as well as the tentatively scheduled Loan Officer Survey. Thursday then ends the week with Initial Jobless Claims (479K), the Philly Fed Manufacturing Index (7.2), the CB Leading Index (0.2% m/m), Natural Gas Storage (last 37B) and a speech by FOMC Member Bullard in Arkansas.

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]]> Weekly Market Watch - Monday, 09 Aug 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=13708 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=13708 Sun, 08 Aug 2010 22:51:23:820 GMT Last Week Recap

EUR/USD rallied considerably as the Greenback got slammed again last week. The rate started its ascent early in the week, trading off of its weekly low of 1.3054 seen on Monday as U.S. ISM Manufacturing PMI showed some improvement at 55.5 versus a consensus of 54.2 while Eurozone Final Manufacturing PMI came out at 56.7, in line with the 56.5 expected. The rate continued improving on Tuesday as Eurozone PPI increased by 0.3% versus the 0.4% expected, while U.S. Pending Home Sales declined by -2.6% month on month, considerably worse than the expected rise of 0.5% expected. Also, U.S. Factory Orders dropped a very disappointing -1.2% month on month versus an expected decline of only -0.2%. On Wednesday, the rate paused as Eurozone Retail Sales came in flat, as was widely expected, with the previous reading revised upward to 0.4% from 0.2%. Also on Wednesday, U.S. ISM Non Manufacturing PMI improved to 54.3, just edging the consensus of 54.2, while the ADP Non-Farm Employment Change showed an increase of 54.3 versus an expected 53.2. On Thursday, the rate resumed its upward bias as the ECB kept the Minimum Bid Rate at 1.00%, as was widely expected. In his statement made after the rate announcement, ECB Chief Trichet noted that, “we continue to expect the euro area economy to grow at a moderate and still uneven pace, in an environment of uncertainty. Our monetary analysis confirms that inflationary pressures over the medium term remain contained, as suggested by weak money and credit growth.” Also on Thursday, the E.U. and the IMF stated that Greece had “made a strong start” by repaying the first instalment of its bailout package ahead of schedule. In addition, U.S. Initial Jobless Claims rose back up to 479K versus a consensus of 456K. EUR/USD then made its weekly high of 1.3333 on Friday despite German Industrial Production dropping -0.6% month on month versus an increase of 0.8% expected. Also out on Friday was the U.S. key Non-Farm Payrolls number which declined by -131K — considerably worse than the -63K expected decline. Also disappointing to the market was that the previous number was revised significantly downward from -125K to -221K. Nevertheless, the U.S. Unemployment Rate contracted by 0.1% to 9.5%, versus a market consensus of 9.6%. EUR/USD then went on to close at 1.3291, up 2% for the week.


USD/JPY declined significantly last week as the Greenback weakened across the board. The pair started the week by trading off of its weekly high of 86.86 seen on Monday as Japanese Average Cash Earnings came out showing an increase of 1.5% year on year — considerably better than the 0.7% increase expected — and with the previous number revised upward from a decline of -0.2% to an increase of 0.1%. The rate then bounced back somewhat on Tuesday, despite disappointing U.S. Pending Home Sales and Factory Orders and also in spite of the Japanese Monetary Base expanding by 6.1% versus an expected rise of only 3.7%. The pair nevertheless resumed heading south on Thursday as U.S. Initial Jobless Claims returned to their three month highs. The rate then made its weekly low of 85.00 on Friday after the dismal U.S. Non-Farm Payrolls number, before trading higher on short covering to close the week at 85.37, down 1.2% overall for the week.

GBP/USD traded higher last week as the U.S. Dollar continued getting pummelled. Cable started the week on a positive note by rallying off of its weekly low of 1.5694 seen on Monday as U.K. Manufacturing PMI printed at 57.3 — just edging the consensus of 57.1. On Tuesday, the rate took a breather as U.K. Construction PMI came out at 54.1, considerably worse than the 58.2 consensus. The Cable rally resumed on Thursday however, with the BOE leaving its benchmark Official Bank Rate unchanged at 0.50% and its Asset Purchase Facility at 200B, as was widely expected. The BOE now looks to August 11th when the latest U.K. inflation report is scheduled, and the minutes of the last meeting will come out on August 18th. Cable was also assisted by disappointing U.S. Initial Jobless Claims which had risen to 479K, a three month high. GBP/USD then went on to make its weekly high of 1.5996 on Friday after the poor U.S. Non-Farm Payrolls number, before closing the week at 1.5964 to show a gain of 1.7% on the week.

AUD/USD rose again last week as growing risk appetite, U.S. Dollar weakness and stronger commodities again made the commodity dollars shine. The week began with the rate trading off of its weekly low of 0.9045 seen Monday after the Australian AIG Manufacturing Index printed at 54.4 versus a previous reading of 52.9. Also, the Australian MI Inflation Gauge increased by only 0.1% month on month, versus a previous reading of 0.3%, and Australian HIA New Home Sales declined -5.1% month on month, versus a previous decline of -6.4%. AUD/USD nevertheless continued trading moderately higher on Tuesday, despite a disappointing Australian Building Approvals release which showed the number declining by -3.3% month on month, versus an expected increase of 2.1%. In addition, Australian Retail Sales increased by only 0.2% month on month versus a consensus of a higher 0.4% increase. The rate then began trading higher after the RBA left its benchmark Cash Rate unchanged at 4.5%, as was widely expected. The central bank seems comfortable with rates where they are and kept its economic outlook largely unchanged. On Wednesday, the Australian AIG Services Index came out at 46.6 versus a previous reading of 48.8. Also, the Australian Trade Balance showed a surplus of 3.54B, considerably higher than the 1.81B expected, and with the previous number revised upward from 1.65B to 1.83B. In addition, Australian HPI came out showing an increase of 3.1% versus the 2.0% number expected, although the previous number was revised downward from 4.8% to 4.2% thereby negating some of the improvement. The rate continued still higher on Thursday as the Australian AIG Construction Index printed lower at 43.3 versus a previous reading of 46.4. On Friday, AUD/USD made its weekly high of 0.9220 as a disappointing U.S. Non-Farm payroll number weakened the U.S. Dollar in general. The rate then went on to close the week at 0.9187, showing an overall gain of 1.5% for the week.

USD/CAD had a volatile last week, with the market trading both ways and ending up almost where it started. The week began quietly enough as Canada celebrated its Civic Bank Holiday on Monday. The rate initially traded lower on the back of weak U.S. economic numbers and continued trading lower into the release of Canadian economic numbers out on Thursday. This data saw Canadian Building Permits rise 6.5%, an impressive gain well above the consensus of a 1.2% increase, while the previous number was revised upwards from a decline of -10.8% to -8.2%. This strengthened the Loonie, sending the rate to its weekly low of 1.0104 before it then began to rally sharply. On Friday, the rate continued moving higher as the Canadian Employment Change showed a decline of -9.3K — significantly worse than the expected increase of 13.7K — while the Unemployment Rate increased to 8.0% versus an expected 7.9%. Also on Friday, the Ivey PMI came out at 54.0, slightly below the market’s consensus of 55.9. USD/CAD then went on to close at 1.0275, down just -0.1% for the week.

NZD/USD gained ground last week as the commodity currencies generally benefitted from renewed risk appetite in the forex market and higher rates. The week began with the rate trading higher initially on the back of New Zealand ANZ Commodity Prices which declined by -0.8% versus a previous drop of -1.6% that was revised downward from -1.2%. Also, the important New Zealand Labour Cost Index gained 0.4% quarter on quarter, as was widely expected. On Tuesday, the rate made its weekly low of 0.7244 despite soft U.S. Pending Home Sales and weak Factory Orders. The pair then resumed its rally on Wednesday to make its weekly high of 0.7353 before coming off sharply after the New Zealand Employment Report out on Thursday. The report disappointed the market as the Employment Change dropped by -0.3% versus a forecast rise of +0.5%, and the New Zealand Unemployment Rate rose by a large +0.8% on the month to 6.8%, versus the lower 6.3% number expected. The rate then rallied again on weak U.S. employment numbers to close on Friday at 0.7331, up 1.0% on the week overall.

The Week Ahead

AUD: The coming week of economic data for Australia is calmer than last, but still has some important data due out. Releases feature the key Australian Employment Report scheduled for release on Thursday. Monday starts the week with the release of important ANZ Job Advertisements (last 2.7% m/m) and Home Loans (-2.1% m/m) numbers. Tuesday offers the NAB Business Confidence survey (last 4), while Wednesday has the Westpac Consumer Sentiment survey (last 11.1%). Thursday features the weekly Employment Report highlight, with the Employment Change expected at 20.1K and the Australian Unemployment Rate to remain unchanged at 5.1%. Also out on Thursday is MI Inflation Expectations (3.3%) which ends the week since Friday is quiet. Technically, AUD/USD opened last week on a firm note before consolidating gains and eventually making a new recent high at 0.9220 on Friday, besting the previous week’s 0.9068 high and closing the week at 0.9187. The charts show resistance at 0.9220, in the 0.9323/0.9388 region and at the major 0.9405 high. Support is indicated at 0.9068, 0.8965, and in the 0.8895/0.8905 region.

To view a live chart follow the link:

CAD: The coming week of economic data due out in Canada is about as active as the previous week and features the important Canadian Trade Balance number due out on Wednesday. Monday starts the week on a peaceful note with nothing significant scheduled for release, while Tuesday offers important Canadian Housing Starts data (185K) and the NHPI (0.3% m/m). Wednesday is the weekly highlight, featuring the Canadian Trade Balance (0.4B). Thursday has nothing notable due out, while Friday ends the week with just New Motor Vehicle Sales (2.1% m/m) scheduled for release. Technically, USD/CAD managed to make a new recent low early last week at 1.0104 last Thursday before bouncing sharply higher to 1.0302 before closing the week at 1.0275. In doing so, the rate apparently broke its recent triangular consolidation pattern to the downside. The chart for USD/CAD now shows resistance at 1.0302, 1.0374/93 and at 1.0428. Support for the rate shows up in the 1.0201/62 region, and in the 1.0104/79 region ahead of key psychological support seen at the 1.0000 parity level.

To view a live chart follow the link:

EUR: The upcoming economic data week in the Eurozone is about as active as the previous week, and features the German Preliminary GDP report due out on Friday. Monday starts the week out with the German Trade Balance (12.4B) and Sentix Investor Confidence (2.4). Tuesday offers German Final CPI (0.2% m/m), German WPI (0.3% m/m) and French Industrial Production (-0.1% m/m). Wednesday has nothing of note scheduled for release, while Thursday has the ECB Monthly Bulletin, EZ Industrial Production (0.7% m/m) and the Italian Trade Balance (-1.41B) due out. Friday ends the week with the highlighted German Preliminary GDP data (1.3% q/q), as well as French Preliminary Non-Farm Payrolls (0.3% q/q), French CPI (-0.4% m/m), French Preliminary GDP (0.4% q/q), the EZ Flash GDP (0.7% q/q), and the EZ Trade Balance (-2.3B). Technically, EUR/USD traded mostly higher last week, making a new recent high at 1.3333 on Friday. EUR/USD eventually closed the week slightly lower at 1.3291. Support for EUR/USD shows in the 1.3118/33 and 1.2952/80 regions and below that at 1.2793. Resistance to the topside is seen near current levels at 1.3333, as well as in the 1.3361/1.3415 and 1.3678/91 regions.

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GBP: The week of upcoming economic data releases in the United Kingdom calms down slightly from last week, and features Wednesday’s U.K. jobs data and BOE Inflation report. Monday starts the week off on a quiet note, with nothing significant scheduled for release, while Tuesday has the BRC Retail Sales Monitor (last 1.2% y/y), the RICS House Price Balance (5%), the U.K. Trade Balance (-7.7B), the DCLG HPI (11.9% y/y) and the CB Leading Index (last 0.3% m/m). Wednesday has the highlighted U.K. jobs data with the Claimant Count Change (-17.4K), U.K. Unemployment Rate (7.8%) and the Average Earnings Index (1.1% 3m/y) due out, as well as Nationwide Consumer Confidence (60). In addition, BOE Governor King will hold a closely watched press conference about the simultaneous release of the important BOE Inflation Report. That ends the week since Thursday and Friday are quiet. Technically, GBP/USD traded higher early last week before consolidating gains mid week. The rate then saw a new recent high on Friday of 1.5996 — besting the recent 1.5720 high seen the previous week — and closing the week just lower at 1.5964. Resistance to the topside for GBP/USD shows at 1.5996, just below the psychological 1.6000 level, as well as at 1.6274 and 1.6456. Support is indicated at 1.5817, in the 1.5544/51 region just above the psychological 1.5500 level, then below that in the 1.5441/70 region

To view a live chart follow the link:

JPY: The coming week of economic data releases in Japan heats up considerably versus the previous week, and features the Japanese Rate Decision due out on Tuesday. Monday starts the week out on an active note with the release of Japanese Bank Lending (last -2.0% y/y), the Japanese Current Account (1.44T), M2 Money Stock (2.9% y/y) and the Economy Watchers Sentiment survey (48.0). Tuesday has tentatively scheduled the highlighted BOJ Monetary Policy Statement and associated Press Conference in which the central bank is widely expected to keep its benchmark Overnight Call Rate unchanged at 0.10%. Also scheduled for Tuesday is Japanese Preliminary Machine Tool Orders (last 143.8% y/y). Wednesday offers Core Machinery Orders (5.6% m/m), the Corporate Goods Price Index or CGPI (0.0% y/y), as well as the important BOJ Monthly Report. On Thursday, look for Revised Industrial Production (-1.5% m/m) and Japanese Household Confidence (44.2). Friday ends the busy week with the closely watched Monetary Policy Meeting Minutes from the BOJ. Technically, USD/JPY made further progress to the downside last week, falling to a new recent low at 85.00 on Friday before bouncing slightly to close the week at 85.37. Resistance for USD/JPY shows up in the 86.16/86 region, at 87.71 and 88.10, as well as at the psychological 90.00 level. Initial support shows up at 85.00, as well as at the major 84.80 and 79.75 support levels.

To view a live chart follow the link:

NZD: The coming week of economic data releases in New Zealand again has rather few numbers due out, but the week does feature the important New Zealand Retail Sales numbers scheduled for Friday. Monday, Tuesday and Wednesday have nothing significant due out, so Thursday starts the week with the release of the Business NZ Manufacturing Index (last 56.2) and the Food Price Index or FPI (last 1.3%). Friday then ends the week with the highlighted New Zealand Retail Sales numbers (0.6% m/m) and Core Retail Sales (0.6% m/m). Technically, NZD/USD consolidated last week within the 0.7244 to 0.7353 range, failing to make a new high above the previous week’s 0.7394 peak before closing the week at 0.7325. Support for NZD/USD is now seen on the charts at 0.7244, 0.7190 and 0.7095, just ahead of the key psychological 0.7000 level. Resistance shows up at 0.7353, 0.7394 and 0.7440.

To view a live chart follow the link:

USD: The economic data week coming up in the United States is again very active, and features the important FOMC Rate Decision to be announced on Tuesday. Monday starts the week off with just the tentatively scheduled Loan Officer Survey. Tuesday has the highlighted FOMC Rate Decision Statement in which the central bank’s monetary policy committee is expected to keep the benchmark Federal Funds Rate unchanged at less than 0.25%. Tuesday also offers Preliminary Nonfarm Productivity (0.3% q/q), Preliminary Unit Labor Costs (1.5% q/q), the IBD/TIPP Economic Optimism survey (45.6) and Wholesale Inventories (0.5% m/m). Wednesday has the important U.S. Trade Balance (-42.0B) scheduled, as well as the Federal Budget Balance (-167.6B). On Thursday, look for Initial Jobless Claims (465K) and Import Prices (0.4% m/m), as well as a speech by FOMC Member Duke in Chicago. Friday ends the week with the release of important inflation and sales data, with Core CPI (0.1% m/m), CPI (0.2% m/m), Core Retail Sales (0.3% m/m) and Retail Sales (0.5% m/m) scheduled, as well as Business Inventories (0.3% m/m). In addition, Friday will see the release of the closely watched Preliminary University of Michigan Consumer Sentiment survey (69.4) and Preliminary University of Michigan Inflation Expectations (last 2.7%). A speech by FOMC Member Hoenig in Nebraska ends the busy week.

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]]> Weekly Market Watch - Monday, 02 Aug 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=13502 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=13502 Sun, 01 Aug 2010 22:16:43:593 GMT Last Week Recap

EUR/USD ended higher last week, although the pair began the week by making its weekly low of 1.2876 on Monday. EUR/USD then reversed and began rallying despite U.S. New Home Sales coming in above expectations at 330k, versus a consensus of 317K and with the previous number revised downward from 300K to 267K. The rate continued rallying on Tuesday, reaching a high of 1.3045 as GfK German Consumer Climate increased to 3.9 versus an expected reading of 3.6, while German Import Prices increased by 0.9% versus a 0.7% rise expected. EUR/USD also benefited from a strong European equity market fuelled by favourable earnings reports from Deutsche Bank and UBS AG. The rate then sold off as the S&P/CS Composite-20 HPI rose 4.6% year on year, versus a rise of 3.9% expected. Nevertheless, CB Consumer Confidence, also out on Tuesday, printed at 50.4 versus an expected reading of 51.3, although the previous number was revised upward to 54.3 from 52.9 to neutralise the effect. On Wednesday, the rate consolidated, with weaker U.S. Durable Goods Orders dropping by -0.1% month on month, versus an increase of 0.9% expected. Also released on Wednesday was the Fed’s important Beige Book report which reiterated the position of the Fed in keeping U.S. interest rates at record low levels. The Fed’s monetary policymakers also expressed continued concern over the heath of the U.S. economy. The pair then began rallying on Thursday on positive employment numbers from Germany which showed that German Unemployment had declined to 7.6% in July, with the Employment Change figure declining by -20K versus a consensus of -18K. German Unemployment is now at its lowest level since November of 2008. Also on Thursday, Eurozone Economic Confidence rose to a two year high, printing at 101.3 versus an expected reading of 99, which sent the rate to its weekly high of 1.3106. EUR/USD then softened somewhat on Friday as Eurozone CPI Flash Estimate came out slightly lower than expectations at 1.7%, versus the 1.8% number expected. Also, German Retail Sales came out at -0.9%, considerably lower than the expected flat reading, although the previous number was revised upwards considerably from 0.4% to 3.0%. Also on Friday, the Chicago PMI came out at 62.3, versus an expected reading of 56.3, and the University of Michigan Consumer Sentiment survey was slightly higher than the consensus at 67.8 versus the 67.3 expected. Nevertheless, the highlight for Friday was the U.S. GDP number which came out at 2.4% versus the market consensus of 2.5%, along with significant downwards revisions for the past three years. The pair then went on to close the week at 1.3030, an increase of 0.9%.


USD/JPY started the week on a soft note Monday as the Japanese Trade Balance came out showing a surplus of 0.46T versus a surplus of 0.54T expected, with the previous number revised downward to 0.32T from 0.42T. The rate then rallied sharply on Tuesday despite lower than expected U.S. Durable Goods Orders and a decline in the U.S. CB Consumer Confidence indicator. On Wednesday, the rate made its weekly high of 88.10 before declining sharply after the release of the less optimistic U.S. Fed Beige Book report. The pair continued its decline on Thursday as Japanese Household Spending increased by 0.5% year on year versus an expected decline of -0.8%, while Japanese Retail Sales came out in line with expectations at 3.2%. Also on Thursday, Tokyo Core CPI dropped -1.3% year on year, just slightly below the consensus of a decline of -1.2%. Nevertheless, the Japanese Unemployment Rate edged up a notch to 5.3% from 5.2%, while Preliminary Industrial Production dropped by -1.5% versus an increase of 0.2% expected. USD/JPY then went on to make its weekly low of 85.94 on Friday after a weaker than expected U.S. GDP release and despite Japanese Housing Starts showing an increase of just 0.6% — considerably lower than the expected increase of 1.7%. The pair then went on to rally on position squaring to close the week at 86.38, down 1.1% overall.

GBP/USD started the week off on a soft note, making its weekly low of 1.5408 on Monday before rallying sharply. Cable began picking up steam on Tuesday after U.K. CBI Realized Sales came out at an impressive reading of 33 in July — versus a reading of just 2 expected — hitting the highest level seen since May of 2007. The rate then took a breather on Wednesday despite weaker than expected U.S. Durable Goods Orders. The rate was also pressured by comments from BOE Governor King to the U.K. Parliament’s Treasury Committee. In his statement, he stressed that a sustained recovery was not yet guaranteed in the U.K. and that despite last week’s stronger than expected U.K. GDP report, he believes that an “appropriate degree” of stimulus would still be needed. In addition, he commented that the challenge for the U.K.’s economy was in rebalancing itself away from consumption and more towards raising the national savings rate and increasing exports. On Thursday, GBP/USD continued its rally despite U.K. Nationwide HPI dropping by -0.5% month on month, versus a decline of -0.2% expected. Also, Net Lending to Individuals rose by only 0.6B month on month, versus an expected 1.3B increase, with the previous number revised downward to 1.1B from 1.5B. In addition, U.K. GfK Consumer Confidence, declined from -19 to -22 in July, versus a market consensus of -21. GBP/USD then made its weekly high of 1.5720 as disappointing U.S. GDP data weighed on the Greenback. The pair then sold off to end the week at 1.5689, up 1.7%.

AUD/USD gained ground again last week as increased risk appetite continued favouring the Aussie. The pair began the week on a firm note on Monday despite Australian PPI which rose by just 0.3% quarter on quarter versus a rise of 1.2% expected. On Tuesday, the pair made its weekly high of 0.9067 as the Australian Conference Board Leading Index rose from 0.1% to 0.3% quarter on quarter. Nevertheless, Wednesday saw the rate begin to drop precipitously, partly as a result of Australian CPI coming out with just a +0.6% rise quarter on quarter, considerably lower than the increase of 1.0% expected. In addition, the Trimmed Mean CPI increased only 0.5% versus a 0.8% increase expected. The lower than expected inflation reading potentially did away with any expectations the RBA would hike the key Cash Rate at their meeting this coming week. The rate then made its weekly low of 0.8905 on Thursday before rallying to 0.9041. This rally continued into Friday despite Australian Private Sector Credit which increased by only 0.2% month on month versus a consensus of a rise of 0.4%. The pair then made its weekly high of 0.9068 before trading down on profit taking to close at 0.9045, showing an overall gain of 0.8% for the week.

USD/CAD traded with increased volatility last week in the absence of any substantial economic releases for Canada. The rate traded lower on Monday despite positive U.S. housing data with encouraging New Home Sales data. The pair then made its weekly low of 1.0254 on Tuesday as a disappointing U.S. CB Consumer Confidence number weighed on the Greenback. USD/CAD then staged a dramatic turnaround, rallying up to its weekly high of 1.0393 later in the same session. On Wednesday, the pair consolidated above the 1.0300 level before beginning to decline. Thursday saw the rate continue its descent despite the Canadian Raw Materials Price Index declining -0.3% month on month versus an expected increase of 1.1%. Also, the Industrial Product Price Index or IPPI unexpectedly declined by -0.9% versus a rise of 0.3% expected. The rate continued declining on Friday as Canadian GDP increased by 0.1%, as was widely expected. USD/CAD then traded as low as 1.0262 before trading higher on short covering to close the week at 1.0281, showing a decline of 0.7% on the week.

NZD/USD began the week on a firm note despite encouraging U.S. New Home Sales numbers released on Monday. The rate made its weekly high of 0.7394 on Tuesday — the highest the rate has seen since January — before heading south on the back of NBNZ Business Confidence coming out at 27.9 versus a much higher previous reading of 40.2, and indicating eroding confidence in the N.Z. business sector. NZD/USD continued declining on Wednesday, but managed to hold above the key 0.7250 level. In addition, the RBNZ raised its benchmark Official Cash Rate by 25 bps to 3.00% on Wednesday, as was widely anticipated. In his statement made after the rate increase announcement, RBNZ Governor Bollard reiterated, “the pace and extent of further OCR increases is likely to be more moderate than was projected in the June Statement. Our policy assessment will be continually reviewed in light of economic and financial market developments.” The rate subsequently headed south as the market’s expectations of future rate hikes by the RBNZ were dashed. Wednesday also saw the release of the New Zealand Trade Balance which contracted to 276M versus the consensus of 359M. This was considerably lower than the previous number of 768M, which was also revised downwards from 861M. The pair continued heading south on Thursday, eventually trading as low as 0.7200 as N.Z. Building Consents increased by 3.5% month on month, considerably better than the previous decline of -9.5%. The pair then made its weekly low of 0.7190 on Friday before trading up on short covering to close at 0.7254, showing an overall loss of 0.2% for the week.

The Week Ahead

AUD: The coming week of economic data for Australia is rather more active than the previous week, featuring the RBA’s key Rate Decision and associated Rate Statement scheduled for Tuesday. Monday starts the week with the release of the AIG Manufacturing Index (last 52.9), the MI Inflation Gauge (0.3% m/m), Commodity Prices (43.0% y/y) and the tentatively scheduled HIA New Home Sales data (-6.4% m/m). On Tuesday, look for the important ANZ Job Advertisements (last 2.7% m/m), as well as Building Approvals (2.1% m/m) and Australian Retail Sales (0.4% m/m). Also due out on Tuesday is the weekly highlight of the RBA’s Rate Statement and Rate Decision announcement in which the central bank is expected to keep its benchmark Cash Rate unchanged at 4.50%. Wednesday offers the AIG Services Index (last 48.8), the important Australian Trade Balance (1.81B) and the HPI (2.2% q/q). Thursday has nothing of note due out, while Friday closes the week with the AIG Construction Index (last 46.4) and the closely watched RBA Monetary Policy Statement. Technically, AUD/USD consolidated last week within a 0.8905 to 0.9068 range after making a yet another new high within its recent corrective upwards trend at 0.9068. AUD/USD closed last Friday at 0.9045, just under resistance for AUD/USD at 0.9068. The charts also show resistance at 0.9077, 0.9134 and in the 0.9323/0.9388 region. Support is indicated at 0.8895/0.8905, 0.8737 and 0.8632.

To view a live chart follow the link:

CAD: The coming week of economic data due out in Canada heats up somewhat from the previous week and features the important Canadian Employment report due out on Friday. Monday starts the week on a peaceful note as the Civic Day Bank Holiday is observed in Canada, while Tuesday and Wednesday have nothing notable due out. Economic data releases begin on Thursday with the closely watched Building Permits data (0.6% m/m) due out. Friday offers the weekly highlight of the Canadian Employment Report, with the Employment Change (10.3K) and the Canadian Unemployment Rate (7.9%) due out. Also out on Friday to end the week is Ivey PMI (56.3). Technically, USD/CAD managed to make a new low early last week at 1.0254 before consolidating the rest of the week within a 1.0254 to 1.0393 range as it continues to trade within what seems to be a broader triangle pattern. With the rate having closed at 1.0281 last Friday, the chart for USD/CAD shows resistance at 1.0297, 1.0374/93 and at 1.0428. Support for the rate shows up in the 1.0254/62 region, at 1.0222 and in the 1.0137/79 region.

To view a live chart follow the link:

EUR: The upcoming economic data week in the Eurozone is about as active as the previous week, and features the European Central Bank’s Rate Statement and Decision due to be announced on Thursday. Monday starts the week out with just EZ Final Manufacturing PMI (56.5), while Tuesday only has PPI (0.4% m/m) due out and Wednesday offers EZ Final Services PMI (56.0) and EZ Retail Sales (0.0% m/m). Thursday is the weekly highlight with the featured ECB Rate Decision in which the central bank is expected to keep its benchmark Minimum Bid Rate unchanged at 1.00%. The associated ECB Press Conference may also provide some interesting economic news. Also due out on Thursday is German Factory Orders (1.5% m/m). Friday ends the week with the French Government Budget Balance (last -67.9B), the French Trade Balance (-4.6B), Italian Industrial Production (0.3% m/m), Italian Preliminary GDP (0.4% q/q), and German Industrial Production (0.9% m/m). Technically, EUR/USD traded mostly higher last week, making a new recent high at 1.3106 on Thursday. EUR/USD eventually closed the week at 1.3030 on Friday. Support for EUR/USD shows in the 1.2952/80 region, at 1.2793, in the 1.2682/1.2732 region. Resistance to the topside is seen near current levels at 1.3046, in the 1.3106/14 region and at 1.3288.

To view a live chart follow the link:

GBP: The week of upcoming economic data releases in the United Kingdom heats up considerably, and features Monetary Policy Committee’s Rate Decision and associated Rate Statement due out on Thursday. Monday starts the week off with the possible release of the important Halifax HPI (-0.4% m/m) that may come out as late as August 7th, as well as Manufacturing PMI (57.1). Tuesday offers just Construction PMI (58.2), while Wednesday has the tentatively scheduled Nationwide Consumer Confidence (60) survey, plus the BRC Shop Price Index (last 1.5% y/y) and the important Services PMI data (54.6). On Thursday, look out for the weekly highlight of the MPC’s Rate Decision in which the committee is expected to keep the benchmark Official Bank Rate unchanged at 0.5% and the Asset Purchase Facility unchanged at 200Billion. The associated MPC Rate Statement may provide some important information about the committee’s decision. Friday closes the week with Manufacturing Production (0.5% m/m), PPI Input (-0.4% m/m), PPI Output (0.1% m/m), Industrial Production (0.3% m/m) and the tentatively scheduled NIESR GDP Estimate (last 0.7%). Technically, GBP/USD traded consistently higher last week as bullish sentiment returned after the previous Friday’s spike. The rate saw a high on Friday of 1.5720, besting the recent 1.5470 high seen on July 15th. After closing last Friday at 1.5689, resistance to the topside for GBP/USD shows in the 1.5706/1.5720 and 1.5814/1.5832 regions, and above the psychological 1.6000 level in the 1.6068/1.6125 region. Support is indicated in the 1.5544/51 region just ahead of the psychological 1.5500 level, then below that at 1.5441 and at 1.5347.

To view a live chart follow the link:

JPY: The coming week of economic data releases in Japan has considerably less to offer versus the previous week, but features Japanese Average Cash Earnings due out on Monday. Monday starts the week out with the highlighted release of Japanese Average Cash Earnings data (0.7% y/y), while Tuesday just has the Japanese Monetary Base (3.7% y/y) due out. Wednesday and Thursday have nothing notable scheduled for release, and Friday ends the quiet week with the release of Japanese Leading Indicators (98.9%). Technically, USD/JPY came off its weekly high of 88.10 to make a new recent low at 85.94 last week beyond the 86.25 level seen two weeks prior. The rate then bounced correctively higher to close at 86.38 on Friday. Resistance for USD/JPY shows at 86.71, 87.44, and 88.10, as well as at the psychological 90.00 level. Support is indicated in the 86.25/33 region, at 85.94 and at 84.80.

To view a live chart follow the link:

NZD: The coming week of economic data releases in New Zealand again has rather few numbers due out, but the week does feature the important New Zealand Employment report scheduled for Thursday. Monday starts the week with the release of ANZ Commodity Prices (last -1.2%). Tuesday offers the important Labor Cost Index (0.4% q/q), and Wednesday has nothing of note scheduled for release. Thursday should be the weekly highlight with the New Zealand Employment Report due for release in which the Employment Change (0.5% q/q) and New Zealand Unemployment Rate (6.2%) will be closely watched. This ends the week since Friday is quiet. Technically, NZD/USD showed initial strength early last week that took the rate to a new recent high at 0.7394, before then trading sharply softer. It bottomed out at 0.7190 before bouncing slightly to close the week at 0.7254. Support for NZD/USD is now seen on the charts at 0.7190/0.7232, 0.7095 and 0.7027, just ahead of the psychological 0.7000 level. Resistance shows up in the 0.7285/0.7324 region, at 0.7394 and at 0.7440.

To view a live chart follow the link:

USD: The economic data week coming up in the United States heats up considerably from the previous week, and features the very important U.S. Employment Data due out on Friday. Monday starts the week off with ISM Manufacturing PMI (54.3), Construction Spending (-0.4% m/m) and ISM Manufacturing Prices (55.3), as well as speeches by Federal Reserve Chairman Bernanke in Charleston and FOMC Member and U.S. Treasury Secretary Tim Geithner in New York. Tuesday offers the Core PCE Price Index (0.2% m/m), Personal Spending (0.1% m/m), Personal Income (0.2% m/m), Pending Home Sales (0.9% m/m), Factory Orders (0.0% m/m) and Total Vehicle Sales (11.6M). Wednesday starts the employment data releases with Challenger Job Cuts (last -47.1% y/y) and the ADP Non-Farm Employment Change (36K), plus other data including ISM Non-Manufacturing PMI (53.3). Thursday just has Initial Jobless Claims (456K), while Friday is the weekly highlight, featuring the very important Non-Farm Payrolls Change (-75K), the U.S. Unemployment Rate (9.6%), Average Hourly Earnings (0.1% m/m), Consumer Credit (-5.4B m/m). That ends the week.

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]]> Weekly Market Watch - Monday, 26 Jul 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=13242 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=13242 Sun, 25 Jul 2010 22:27:02:790 GMT Last Week Recap

EUR: EUR/USD started last week on a positive note, trading higher on Monday despite the Eurozone Current Account showing a deficit of -5.8B, considerably more than the -3.0B deficit expected. The rate rose even after Moody’s downgraded Ireland’s sovereign debt to Aa2 from Aa1. Also, the E.U. and the IMF suspended talks with Hungary making it imperative that the Hungarians cut their budget deficit before accessing further bailout funds. On Tuesday, the pair made its weekly high of 1.3028 after German PPI increased 0.6% month on month, versus an expected increase of 0.2%. Also on Tuesday, U.S. Housing Starts came out at the lowest level seen since October at 0.55M versus the 0.58M expected, while U.S. Building Permits came out in line with expectations at 0.59M. Nevertheless, the rate was unable to sustain gains above the 1.3000 level and promptly declined after disappointing results from a debt auction of three month bills in Hungary. The rate continued heading south on Wednesday, making its weekly low of 1.2732 as another European debt auction — this time in Portugal — failed to meet expectations. EUR/USD then reversed and started rallying on Wednesday after Ben Bernanke, Chairman of the U.S. Federal Reserve, stated in Congressional testimony that, “Even as the Federal Reserve continues prudent planning for the ultimate withdrawal of monetary policy accommodation, we also recognize that the economic outlook remains unusually uncertain.” The “unusually uncertain” comment sent U.S. equity markets down one percent immediately afterwards. The Greenback continued declining on Thursday as Eurozone economic releases gave positive indications for the European economy. The releases included German, French and Eurozone Services and Manufacturing PMI, which all showed better than expected results, while Eurozone Industrial New Orders rose by 3.8%, considerably better than the decline of -0.1% expected. Also on Thursday, U.S. Existing Home Sales increased to 5.37M versus the 5.18M expected. Nevertheless, U.S. Initial Jobless Claims came out higher than expected at 464K versus the 449K anticipated. On Friday, the rate continued higher as German Ifo Business Climate came out at 106.2, considerably higher than the 101.5 expected. The upside for the Euro was limited despite the results of the stress tests for 91 European banks conducted by the Committee of European Banking Supervisors or CEBS being better than expected. The results of the “stress tests” indicated that only seven banks failed – five in Spain, one in Germany and one in Greece. The market’s consensus was for up to 20 percent of the banks to fail, and this divergence led some observers to question whether perhaps the tests may not have been rigorous enough. EUR/USD finished the week by closing on Friday at 1.2914, down -0.1%.


JPY: USD/JPY traded higher last week despite a lack of important economic releases out of Japan, other than the BOJ’s Monetary Policy Meeting Minutes. The pair began the week on a positive note, making its weekly high of 87.56 on Tuesday despite disappointing U.S. Housing Starts. The rate then headed south after the Tuesday release of the BOJ’s Monetary Policy Meeting Minutes which reiterated the position of the central bank in keeping its benchmark rates low at 0.1%. In addition, the minutes indicated some improvement in the Japanese economy by noting that, “Japan''s economy shows further signs of a moderate recovery, induced by improvement in overseas economic conditions. Exports and production have been increasing mainly against a backdrop of high growth in emerging economies. In these circumstances, business fixed investment is showing signs of picking up.” On Thursday, the pair made its weekly low of 86.33 on the back of news that the Japanese All Industries Activity had increased by 0.2% month on month, versus an expected decline of -0.4%. The rate then rallied on Friday as U.S. HPI and Existing Home Sales came out with better than expected results. The pair went on to close the week at 87.35, showing an overall gain of 0.8%.

GBP: GBP/USD started last week off on a soft note Monday, with the U.K. Rightmove HPI declining by -0.6% versus an unrevised increase of +0.3% seen for the previous reading. The rate then began firming on Tuesday, despite U.K. CBI Industrial Order Expectations printing at -16, considerably better than the -24 expected. Also, U.K. Public Sector Borrowing expanded to 14.5B versus a consensus of 13.2B, with the previous number revised upward to 17.1B from 16B, while Preliminary Mortgage Approvals declined to 48K versus a consensus of 52K. Cable then made its weekly low of 1.5123 on Wednesday after the BOE released their June Monetary Policy Committee Meeting Minutes. In the minutes, the BOE revealed that MPC member Andrew Sentance had repeated his dissenting vote against raising rates in July for the second consecutive month. Adding to Cable’s decline was MPC member Posen comments that, "more than 50% likelihood in my estimation the right next move will be to loosen rather than to tighten". Cable began trading higher on Thursday as U.K. Retail Sales showed a 0.7% increase month on month versus an increase of 0.5% expected with the previous number revised upward to 0.8%from 0.6%. On Friday, the pair shot up on news that U.K. GDP had increased by 1.1% quarter on quarter, which was considerably better than the 0.6% expected. GBP/USD then made its weekly high of 1.5448 before selling off on profit taking to close the week at 1.5421, up 0.8%.

AUD: AUD/USD gained considerably last week as the Aussie benefited from renewed risk appetite in the currency market. The rate began the week on a soft note by trading off of its weekly low of 0.8632 seen on Monday before rallying ahead of the RBA’s Monetary Policy Meeting Minutes for June that came out on Tuesday. The minutes noted that, “headline inflation is expected to rise” in Australia, and added that, “the important question for the board at the next meeting would be whether the new information materially changed the medium term outlook for inflation”. The statements fueled speculation that the RBA might be ready to hike rates again, possibly as soon as the next RBA Monetary Policy meeting on August 3rd. AUD/USD then lost some ground on Wednesday despite a report that the Westpac Bank-Melbourne Institute Leading Index of economic activity had risen 0.2% in May, an improvement from the previous flat reading. The rate then continued rallying on Thursday after U.S. Dollar sold off on the “unusually uncertain” comments by U.S. Fed Chairman Ben Bernanke and despite a significant drop in the NAB Quarterly Business Confidence indicator which printed at 3 versus a much higher previous reading of 17, thereby indicating that Australia’s business sector is losing confidence. Despite that negative number, AUD/USD continued rallying into Friday as Australian Import Prices showed an increase of 1.9%, versus a consensus of only 1.0%. The pair made its weekly high of 0.8970 before closing at 0.8969, an impressive gain of 3.1% for the week.

CAD: USD/CAD declined significantly last week, giving back all of the previous week’s gains in the process. The week began with the rate declining as Canadian Foreign Securities Purchases showed a whopping rise to 23.16B from 12.36B, considerably better than the expected 8.05B. The number indicates the increased interest of foreign investors in buying Canadian securities. The rate continued south on Tuesday as the BOC released its Rate Decision for July in which the BOC announced it was raising its benchmark Overnight Rate to 0.75% as was widely anticipated. The BOC also raised the Discount Rate by 25bps to 0.50% and the Bank Rate by 25bps to 1%. The central bank’s statement accompanying the rate hike announcement noted that there was "considerable uncertainty surrounding the outlook" and that any additional cuts to monetary stimulus “would have to be weighed carefully against domestic and global economic developments." USD/CAD rose somewhat on Wednesday after Canadian Wholesale Sales came out with a decline of -0.1%, considerably lower than the expected rise of 0.4%. On Thursday, the rate resumed its southward direction despite Canadian Core Retail Sales falling by -0.1% month on month versus a rise of 0.5% expected, and Retail Sales dropping by -0.2% month on month versus an expected rise of +0.5%. Also on Thursday, the BOC Monetary Policy Report revised the central bank’s Canadian GDP estimates for growth downward to 3.5% from 3.7% in 2010 and to 2.9% from 3.1% in 2011. On Friday, the rate continued declining, eventually making its weekly low of 1.0345 despite news that Canadian Core CPI dropped by -0.1% month on month, versus an expected increase of 0.1%, while CPI also declined by -0.1% versus an expected flat reading. USD/CAD then went on to close the week at 1.0358, down 1.8% overall.

NZD: NZD/USD benefited considerably from the renewed risk appetite and firmer commodities prices last week, trading off of its weekly low of 0.7027 seen Monday after gapping lower on the open. NZD/USD then started rallying with no significant economic numbers being released in New Zealand. On Tuesday, the rate rallied sharply, although it then paused on Wednesday with New Zealand Credit Card Spending increasing by 4.5% year on year versus a previous reading of 3.4%. Also, New Zealand Visitor Arrivals increased by only 0.3% month on month versus a previous reading of 1.1% that was revised upward from 1.0%. On Thursday, NZD/USD shot up as the Greenback was pressured by U.S. Fed Chairman Bernanke’s testimony regarding the uncertain outlook for the U.S. economy. The pair then made its weekly high of 0.7288 on Friday before trading lower to close at 0.7269, up 2.2% on the week.

The Week Ahead

AUD: The coming week of economic data for Australia is rather quiet, but has some significant releases due out, featuring the Australian CPI inflation data due out on Wednesday. Monday starts the week with the release of Australian PPI (1.5% q/q), while Tuesday offers the CB Leading Index (last 0.1% m/m). Wednesday has the highlighted Australian CPI (1.0% q/q) data scheduled for release, along with the Trimmed Mean CPI (0.8% q/q). Thursday is quiet, but on Friday look for Private Sector Credit (0.4% m/m) to end the week. Technically, AUD/USD rose initially last week to make yet another a new high within its recent corrective upwards trend at 0.8970. In doing so, it convincingly bested the 0.8870 high seen on July 14th, as well as the key 61.8% Fibonacci Retracement level at 0.8883 of the down move from 0.9388 to 0.8066. The chart for AUD/USD shows resistance at 0.9077, 0.9134 and in the 0.9323/0.9388 region. Support is indicated at 0.8895, 0.8737 and 0.8632.

To view a live chart follow the link:

CAD: The coming week of economic data due out in Canada calms down significantly, and features the Canadian GDP number due out on Friday. Monday, Tuesday and Wednesday have nothing notable due out, so Thursday starts the week out with the release of the Raw Materials Price Index or RMPI (1.1% m/m) and the Industrial Product Price Index or IPPI (0.6% m/m). Friday offers just the highlighted Canadian GDP release (0.1%) to end the week. Technically, USD/CAD traded lower overall last week, making first a lower high at 1.0584 before making a higher low at 1.0345 as the rate continues to show clear signs of consolidating within a large symmetrical triangle pattern. The chart for USD/CAD shows resistance at 1.0428, in the 1.0579/84 region and at 1.0604. Support for the rate shows up at 1.0345, in the 1.0275/1.0357 region and at 1.0179.

To view a live chart follow the link:

EUR: The economic data week coming up in the Eurozone is somewhat less active than last, and features the Eurozone Employment Report due out on Friday. Monday starts the week out on a quiet note with nothing significant scheduled for release in the Eurozone. Tuesday has GfK German Consumer Climate (3.6), German Import Prices (0.4% m/m), M3 Money Supply (-0.1% y/y) and Private Loans (0.3% y/y). Wednesday offers German Preliminary CPI (0.3% m/m), while Thursday has the German Unemployment Change (-17K). Friday ends the week with some important data, including the highlighted Eurozone Unemployment Rate (10.0%), as well as German Retail Sales (0.0% m/m), CPI Flash Estimate (1.8% y/y), Italian Preliminary CPI (0.2% m/m) and the Italian Monthly Unemployment Rate (8.8%). Technically, EUR/USD traded correctively lower last week after making a new recent high at 1.3028 on Tuesday, bottoming out at 1.2732 before bouncing back to 1.2965. The rate traded sideways overall and now appears to be forming a symmetrical triangle on the short term charts. Support for EUR/USD shows at 1.2793, in the 1.2682/1.2732 region, and at 1.2522. Resistance to the topside is seen at 1.2965, 1.3007 and 1.3093.

To view a live chart follow the link:

GBP: The week of upcoming economic data releases in the United Kingdom calms considerably, and features the Nationwide House Price Index (HPI) due out on Thursday. Monday starts the week off on a quiet note, with nothing significant scheduled for release. Tuesday has CBI Realized Sales (-3), while Wednesday has scheduled important testimony by BOE Governor King, along with MPC Members Andrew Sentence, Charles Bean, David Miles, and Paul Fisher, on the topics of financial stability and monetary policy before the Treasury Select Committee in London. On Thursday, look for the highlighted Nationwide HPI (-0.4% m/m) data, as well as Net Lending to Individuals (1.3B m/m), Final Mortgage Approvals (48K) and GfK Consumer Confidence (-21). This ends the week since Friday has nothing notable due out. Technically, GBP/USD consolidated above 1.5123 in the early part of last week before spiking sharply higher on Friday to a high of 1.5448, just shy of the previous week’s 1.5470 high. Resistance to the topside for GBP/USD shows in the 1.5448 to 1.5521 region (right around the psychological 1.5500 level), as well as in the 1.5574/ 1.5579 region and above that at 1.5764. Support is indicated at 1.5347, in the 1.5250/94 region and below that at 1.5123.

To view a live chart follow the link:

JPY: The coming week of economic data releases in Japan has considerably more to offer than the previous week, featuring the Japanese CPI inflation data and Employment Report that are both due out on Friday. Monday starts the week out with the release of the Japanese Trade Balance (0.54T), while Tuesday offers just the Corporate Services Price Index or CSPI (-0.9% y/y). Wednesday has nothing notable due out, while Thursday has the important Retail Sales data (3.3% y/y). Friday is especially busy in Japan, offering Manufacturing PMI (last 53.9), Household Spending (-0.7% y/y), Tokyo Core CPI (-1.2% y/y), National Core CPI (-1.0% y/y), the Japanese Unemployment Rate (5.2%), Preliminary Industrial Production (0.2% m/m) and Housing Starts (1.7% y/y). Technically, USD/JPY failed to make a new low last week beyond the 86.25 level seen the previous week, only trading as far down as 86.33 before bouncing correctively higher to close at 87.35. Resistance for USD/JPY shows in the 86.96/87.35 and 89.09/14 regions and at 90.18, just above the psychological 90.00 level. Support is indicated at 86.73, in the 86.25/33 region and at 84.80.

To view a live chart follow the link:

NZD: The coming week of economic data releases in New Zealand is against rather peaceful, but features the very important RBNZ Rate Decision on Thursday in which a rate hike is anticipated. Monday and Tuesday have nothing notable scheduled for release, so Wednesday starts the week out with NBNZ Business Confidence (last 40.2). Thursday offers the highlighted Official Cash Rate Announcement by the RBNZ in which the central bank is widely expected to hike its benchmark interest rate by 25 bps to 3.00%. Also due out is the associated RBNZ Rate Statement that should give some insight into the decision, as well as the New Zealand Trade Balance (369M). Friday ends the week with Building Consents (-9.6% m/m). Technically, despite gapping lower at last week’s open, NZD/USD filled the gap and recovered from its 0.7027 low seen early last week to trade as high as 0.7288, just under its previous recent 0.7302 high. Support for NZD/USD is now seen on the charts at 0.7225, 0.7095 and 0.7027, just ahead of the psychological 0.7000 level. Resistance shows up in the 0.7288/0.7324 region, at 0.7440 and at 0.7522.

To view a live chart follow the link:

USD: The economic data week coming up in the United States calms down considerably compared with the previous week, but it still features important Advance GDP data due out on Friday. Monday starts the week off with just New Home Sales (317K), followed on Tuesday by the S&P/CS Composite-20 HPI (3.8% y/y), the important CB Consumer Confidence index (51.5) and the Richmond Manufacturing Index (20). On Wednesday, look for Core Durable Goods Orders (0.6% m/m), Durable Goods Orders (0.9% m/m), and the important Fed Beige Book. Thursday offers just Initial Jobless Claims (456K), while Friday ends the week on a very active note with the highlighted Advance GDP data (2.5% q/q), as well as the Advance GDP Price Index (1.1% q/q), the Employment Cost Index (0.5% q/q), Chicago PMI (56.1), Revised University of Michigan Consumer Sentiment survey (67.5) and Inflation Expectations (last 2.9%).

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]]> Weekly Market Watch - Monday, 19 Jul 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=12940 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=12940 Mon, 19 Jul 2010 00:49:28:453 GMT Last Week Recap

EUR/USD continued gaining ground last week, starting its rally off on Monday as the Chinese and German governments represented signed cooperation agreements worth more than $4.4 billion. After making its weekly low of 1.2522 on Tuesday, the rate then rallied sharply despite German ZEW Economic Sentiment which came out at a disappointing 21.2 versus a consensus of 25.2 and Eurozone ZEW Economic Sentiment which also came out lower than expected at 10.7 versus a 16.8 consensus. Also on Tuesday, the Eurozone Trade Balance showed a deficit of -42.3B versus the -39.3B expected, while the U.S. Budget Deficit showed a slight improvement with a -68.4B deficit versus -70.0B expected. The pair continued rallying on Wednesday as the rate benefited considerably from successful bond auctions in France and Spain. Also on Wednesday, Eurozone CPI and Core CPI showed a 1.4% and 0.9% increase respectively, as was widely anticipated. In addition, U.S. Retail Sales came out at a disappointing -0.5% month on month, versus an expected decline of -0.2%, while U.S. Core Retail Sales showed a decline of 0.1%, as was widely expected. The rate then resumed its rally as dovish comments from the U.S. Fed’s FOMC meeting minutes for June released late on Wednesday saw the Greenback weaken sharply versus the Euro. Also hurting the Dollar was a weaker than expected U.S. Philadelphia Fed Manufacturing Index which came out at 5.1 on Thursday versus a consensus of 10.2. EUR/USD even managed to improve despite Moody’s downgrading Portugal’s sovereign bond ratings by two notches from Aa2 to A1, perhaps because an auction of Greek six month T-bills went well. On Friday, the rate made its weekly high of 1.3007, despite the Eurozone Trade Balance showing a deficit of -3.0B that was considerably worse than the consensus of a surplus of 0.8B. Also on Friday, U.S. Core CPI rose by 0.2% month on month versus a 0.1% consensus and the University of Michigan Consumer Sentiment came out at a dismal 66.5 versus an expected reading of 74.2. EUR/USD then sold off to close at 1.2926, up 2.2% on the week.

USD/JPY started last week on a positive note Monday as the pair made its weekly high of 89.14. On Tuesday, Japanese Household Confidence printed at 43.5 versus an expected reading of 42.2, while Japanese Revised Industrial Production showed an increase of 0.1% versus an expected decline of -0.1%. Although the rate managed to close higher on Tuesday, it soon began declining as risk aversion again took hold of the markets. USD/JPY sold off sharply on Wednesday after the BOJ left its Overnight Call Rate unchanged at 0.10%, as was widely expected. In the central bank’s statement released after the rate announcement, it confirmed a more bullish outlook for the Japanese economy by stating that, “Corporate profits and business sentiment have been improving, and business fixed investment is showing signs of picking up.” The rate continued heading south on Thursday, despite Japanese Tertiary Business Activity declining -0.9% month on month versus an expected decline of -0.7%. On Friday, the rate made its weekly low of 86.25 as news broke that the ruling Democratic Party of Japan, Prime Minister Naoto Kan’s party, was defeated in the upper house of the Japanese Parliament. Along with their smaller coalition partner — the People''s New Party — the Democratic Party took just 109 seats versus the 122 they needed for a majority, thereby raising the possibility of an expansion of the coalition. The Yen then weakened as short covering sent USD/JPY higher to close the week at 86.65, down 2.3% from the previous weekly close.

Although making a fresh high, GBP/USD started showing some overall weakness last week as economic releases in the United Kingdom came out decidedly negative, and speculation increased that cuts in the U.K.’s budget would adversely affect the country’s economic recovery. The data release week began on Monday as U.K. Services PMI printed at 54.4 versus a 55.1 consensus. On Tuesday, Sterling strengthened as stocks in Europe soared with the FTSE up 2.4%. The rate continued improving on Wednesday, with no major releases out for the United Kingdom. On Thursday, GBP/USD made its weekly high of 1.5241 as the BOE left its benchmark Official Bank Rate unchanged at 0.50% and the Asset Purchase Facility unchanged at £200B, as was widely expected. Nevertheless, the rate then reversed, with U.K. Halifax HPI declining by -0.6% month on month versus an expected increase of 0.6%, as well as U.K. Manufacturing Production coming in at 0.3%, slightly lower than the 0.4% expected and with the previous number revised downward from -0.4% to -0.8%. Cable then made its weekly low of 1.5049 on Friday as U.K. PPI input showed a decline of -0.2% and PPI output showed a drop of -0.3% month on month, considerably lower than the expected increases of 0.1% for both. Also on Friday, the U.K. Trade Balance showed a deficit of -8.1B versus a consensus of 7.1B, which brought the rate to close at 1.5063, down 0.9% on the week.

AUD/USD consolidated last week after the previous week’s impressive 4% run-up. The rate began the week moving lower despite Australian Home Loans rising 1.9% —considerably better than the 0.7% expected — and with the previous number being revised upward to -1.5% from -1.8%. Nevertheless, the Australian NAB Business Confidence Index moved down a notch with a reading of 4 versus a previous reading of 5. The rate then rallied despite a report of a drop in imports of copper and iron ore from China, Australia’s largest trading partner. On Tuesday, the rate continued higher, making its weekly high of 0.8870 ahead of the Westpac Consumer Sentiment Indicator which printed at 11.1% — the highest level seen in three months — versus a previous reading of -5.7%. The pair continued rallying into Wednesday as Australian New Motor Vehicle Sales showed a decline of only -1.2% month on month, versus a previous reading of -3.9% that was revised downwards from -3.2%. Contributing to the strength in AUD/USD was the U.S. FOMC’s dovish meeting minutes that prompted a selloff in the Greenback. The rate then declined notably on Thursday as renewed concerns of a global slowdown were triggered by Chinese Q2 GDP which came out at 10.3% versus the 10.5% expected and down from the 11.9% seen in the first quarter. The rate then sold off sharply on Friday, making its weekly low of 0.8681 before rising slightly to close at 0.8695, down 0.9% for the week.

USD/CAD retraced some of its impressive gains made the previous week as the Greenback saw strength against most of the commodity currencies on growing risk aversion. The rate began the week by trading higher on Monday as the BOC Business Outlook Survey revealed that its indicators were at historic lows since the survey began in 1997. Firms surveyed expect growth to decrease over the next twelve months. On Tuesday, the rate dropped as the Canadian Trade Balance showed a deficit of -0.5B versus an expectation of a flat reading. Nevertheless, USD/CAD then began rising sharply on Thursday as Canadian Manufacturing Sales improved to 0.4%, just higher than the consensus of a 0.3% rise, and with a previous reading revised upwards from 0.2% to 0.4%. Also on Thursday, Canadian New Vehicle Sales showed a favorable rise of 0.2% versus an expected decline of -0.1%. On Friday, the rate made its weekly high of 1.0556 before selling off slightly to close the week at 1.0545, up 2% on the week.

NZD/USD started off last week with a positive tone, initially trading higher from its weekly low of 0.7055 seen on Monday in spite of strength seen in the U.S. Dollar versus the other majors. The rate continued rising on Tuesday as New Zealand FPI expanded by an impressive 1.3% month on month versus a previous reading of a decline of -0.7%. On Wednesday, the Kiwi continued higher for the seventh consecutive day of improvement in the NZD/USD rate. It even rose despite softer New Zealand Retail Sales which came out at 0.4% month on month versus a consensus of 0.6%, while Core Retail Sales showed a decline of -0.2% versus the increase of 0.6% that was expected. On Thursday, the Kiwi made its weekly high of 0.7302 as the U.S. Fed’s FOMC minutes were interpreted as dovish after admitting that the U.S. economy might not stabilize for years. Also, New Zealand’s Business NZ Manufacturing Index printed at 56.2 versus its previous reading of 54.0 that was revised downward from 54.5. On Friday, the pair gave back all of its weekly gains as New Zealand CPI showed an increase of just 0.3% versus a consensus of 0.5%. This brought the pair down to 0.7109, a mere five pips higher than the previous week’s close and virtually unchanged at up 0.1%.

The Week Ahead

AUD: The coming week of economic data for Australia has some significant releases due out, featuring the RBA’s Monetary Policy Meeting Minutes scheduled for release on Tuesday. Monday is quiet, so Tuesday starts the week with the release of the highlighted Monetary Policy Meeting Minutes from the RBA, in addition to a speech by RBA Governor Stevens scheduled in Sydney. Wednesday offers the important MI Leading Index (last 0.0% m/m), as well as the tentatively scheduled NAB Quarterly Business Confidence survey (last 17). Thursday has nothing of note due out, and Friday ends the week with Import Prices (1.0% q/q). Technically, AUD/USD rose initially last week to make a new high within its recent corrective upwards trend at 0.8870, before trading off sharply to 0.8681. Resistance for AUD/USD shows on the chart at 0.8858/70, 0.9077 and 0.9388. Support is indicated at 0.8681/82, 0.8565 and 0.8315/16.

To view a live chart follow the link:

CAD: The coming week of economic data due out in Canada warms significantly, and features Tuesday’s BOC Rate Decision announcement in which a rate hike is widely anticipated. Monday starts the busy week out with the release of Foreign Securities Purchases (8.05B), followed on Tuesday by the highlighted BOC Rate Statement in which the central bank is widely expected to hike its benchmark Overnight Rate by 25 basis points to 0.75% from 0.50%. Wednesday offers just Wholesale Sales (0.3% m/m), while Thursday has plenty of key data due out including Core Retail Sales (0.5% m/m), Retail Sales (0.5% m/m), as well as the important BOC Monetary Policy Report and associated BOC Press Conference. Friday ends the week with key Core CPI (0.1% m/m) and CPI (-0.2% m/m) data scheduled for release. Technically, USD/CAD made a new recent low at 1.0275 early last week before bouncing sharply as high as 1.0556. Having closed last Friday at 1.0545, the chart for USD/CAD now shows support at 1.0441, in the 1.0275/1.0357 region and at 1.0179. Resistance shows up at 1.0556, 1.0604 and 1.0676.

To view a live chart follow the link:

EUR: The economic data week coming up in the Eurozone is moderately active, featuring the German Ifo Business Climate survey on Friday. Monday starts the week out with the EZ Current Account (-3.0B), while Tuesday has German PPI (0.2% m/m). Wednesday has nothing of note, but Thursday offers French Flash Manufacturing PMI (54.1), French Flash Services PMI (60.0), German Flash Manufacturing PMI (58.0), German Flash Services PMI (54.6), EZ Flash Manufacturing PMI (55.2), EZ Flash Services PMI (55.0), Industrial New Orders (-0.1% m/m) and EZ Consumer Confidence (-17). Friday ends the week with the highlighted German Ifo Business Climate survey (101.5), as well as French Consumer Spending (0.3% m/m), Italian Retail Sales (0.2% m/m) and Belgium NBB Business Climate (-7.9). Technically, EUR/USD traded higher overall last week to make a fresh recent peak at 1.3007 within the second leg of its corrective upward move off of the key 1.1876 low seen on June 7th. Support for EUR/USD shows at 1.2889, 1.2777 and 1.2682. Resistance to the topside is seen at 1.2954, 1.3007 and 1.3093.

To view a live chart follow the link:

GBP: The week of upcoming economic data releases in the United Kingdom warms considerably, and features the MPC Meeting minutes due out on Wednesday. Monday starts the action with the release of the Rightmove HPI (last 0.3%m/m), and Tuesday is active with Preliminary Mortgage Approvals (52K), Public Sector Net Borrowing (13.2B), Preliminary M4 Money Supply (-0.1% m/m) and CBI Industrial Order Expectations (-25). Wednesday offers the highlighted MPC Meeting Minutes (vote: 1-0-7) that may shed some light onto the dissenting vote by MPC Member Andrew Sentance. Thursday just has the important Retail Sales (0.5% m/m) data due out, while Friday ends the week with the key Preliminary GDP (0.6% q/q) number, as well as BBA Mortgage Approvals (37.0K) and the Index of Services (0.7% 3m/3m). Technically, GBP/USD continued trading upward for most of last week, making yet another new high within its short term corrective rising channel at 1.5470 before trading off to close the week at 1.5298. Resistance to the topside for GBP/USD shows in the 1.5470 to 1.5521 region (just above the psychological 1.5500 level) and the 1.5574 to 1.5579 region, as well as above that at 1.5764. Support is indicated at 1.5277, 1.4947/64 and at 1.4872.

To view a live chart follow the link:

JPY: The coming week of economic data releases in Japan has little of note, but does feature the BOJ Monetary Policy Meeting Minutes due out on Wednesday. Monday starts the peaceful week on a quiet note with a Japanese Bank Holiday for Marine Day scheduled, while Tuesday has nothing significant due out. Wednesday offers the weekly highlight as the BOJ’s Monetary Policy Meeting Minutes are scheduled for release. Thursday just has the All Industries Activity (-0.4% m/m) data due out to end the week since Friday has nothing of note scheduled. Technically, USD/JPY resumed its downward slide last week, making a fresh low at 86.25 after failing to overcome selling pressure in the 89.09/14 region. After closing at 86.65 on Friday, resistance for USD/JPY shows at 86.96/87.01, 89.09/14 and 90.18, just above the psychological 90.00 level. Support is indicated at 86.25, 85.86 and 84.80.

To view a live chart follow the link:

NZD: The coming week of economic data releases in New Zealand is especially quiet, with only Visitor Arrivals (1.0% m/m) and Credit Card Spending (3.4%y/y) due out on Wednesday. Technically, NZD/USD climbed to a new recent high of 0.7302 early last week, exceeding its previous June 23rd high of 0.7158 and peaking just shy of a 100% retracement to the significant 0.7324 high last seen on April 30th. With the rate closing last Friday at 0.7109, support for NZD/USD is now seen on the charts at 0.7025, just ahead of the psychological 0.7000 level, and then below that at 0.6885 and 0.6793. Resistance shows in the 0.7158/93 and 0.7302/24 regions, and above there at 0.7440.

To view a live chart follow the link:

USD: The economic data week coming up in the United States calms down considerably compared with the previous week, but it still features important housing market data that includes Building Permits due out on Tuesday and Existing Home Sales that is scheduled for release on Thursday. Monday starts the week off with a speech by FOMC Member Duke scheduled in Virginia, as well as the release of the NAHB Housing Market Index (16). Tuesday offers the highlighted Building Permits (0.57M) data, as well as Housing Starts (0.58M) and testimony by FOMC Member Tarullo on Financial Regulation before the Senate Banking Committee, in Washington, D.C. Wednesday features important testimony by Federal Reserve Chairman Ben Bernanke on the semi-annual monetary policy report before the Senate Banking Committee, in Washington, D.C. Thursday is especially active with Initial Jobless Claims (453K), the highlighted Existing Home Sales (5.15M) data, the CB Leading Index (-0.3% m/m), the HPI (-0.3% m/m), plus more testimony by Fed Chairman Bernanke on the monetary policy report, this time before the House Financial Services Committee, in Washington, D.C. That concludes the week since nothing of note is due out on Friday.

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]]> Weekly Market Watch - Monday, 12 Jul 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=12688 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=12688 Sun, 11 Jul 2010 23:54:20:423 GMT Last Week Recap

EUR/USD began last week trading on relatively light volume due to the U.S. Independence Day Bank Holiday on Monday, although Eurozone Retail Sales out that day increased by 0.2% month on month, edging the 0.1% expected, with the previous number revised upwards to a decline of -0.9% from -1.2%. On Tuesday, the rate rallied off of its weekly low of 1.2480 as European stock and bond markets soared. In addition, U.S. ISM Manufacturing PMI came out weaker than expected, with a reading of 53.8 versus 55.1. On Wednesday, EUR/USD remained firm on news that Eurozone first quarter GDP increased by 0.2% quarter on quarter and 0.6% year on year, although German Factory Orders showed a -0.5% decline versus an increase of 0.5% expected. Also, the U.S. Dollar reacted negatively to an announcement by the Chinese State Administration of Foreign Exchange or SAFE, which urged the United States to “genuinely take measures to protect investors’ interests and confidence as a responsible big nation.” The agency also reiterated that gold would not make up a chief component of its foreign exchange reserves, causing the metal to trade below the $1,195 level. On Thursday, the rate rallied above 1.2700, a level not seen for seven weeks after the ECB left its benchmark Minimum Bid Rate unchanged at 1 percent, as was widely anticipated. In a statement coming after the rate release in Frankfurt, ECB President Trichet said, "Looking ahead, we expect the euro-area economy to grow at a moderate and still uneven pace in an environment of high uncertainty." The rate continued rising despite U.S. Initial Jobless Claims which showed an improvement with 454K claims versus an expected 461K, 20,000 jobs better than the 475K claims seen the previous week. On Friday, the pair made its weekly high of 1.2722 in the absence of any major economic release, selling off as traders squared positions to close at 1.2549, a weekly gain of 0.7%.

USD/JPY rallied last week after the previous week’s drop to the 87.00 level. The pair began the week trading higher, with no major releases on Monday and the United States markets off for the 4th of July holiday. On Tuesday, the pair softened somewhat, with Japanese Leading Indicators printing at 98.7% versus a 99.7% consensus. The pair then made its weekly low of 87.01 on Wednesday, testing last week’s lows, before rallying sharply as Japanese Core Machinery Orders declined -9.1% month on month, considerably worse than the -3.0% decline expected. Also, the Japanese Current Account showed a surplus of ¥0.90T versus a consensus of ¥1.12T, and the Japanese M2 Money Stock came out slightly lower than expectations at 2.9% year on year, versus 3.1% expected. USD/JPY continued higher on Thursday as Japanese Preliminary Machine Tool Orders came out at 138.8% year on year, versus a previous reading of 192.5% revised upwards from 191.8%. The rate then went on to make its weekly high of 88.69 before ending the week by closing at 88.63, up 1.0% for the week.

Despite Cable making a new recent high last week, the rate began showing increasing signs of weakness reflected in the economic numbers coming out of the United Kingdom, which did not inspire optimism. In addition, speculation increased that cuts in the U.K.’s budget would adversely affect the country’s economic recovery. The data release week began on Monday as U.K. Services PMI printed at 54.4 versus a 55.1 consensus. On Tuesday, Sterling strengthened as stocks in Europe soared with the FTSE up 2.4%. The rate continued improving on Wednesday, with no major releases out for the United Kingdom. On Thursday, GBP/USD made its weekly high of 1.5241 as the BOE left its benchmark Official Bank Rate unchanged at 0.50% and the Asset Purchase Facility unchanged at £200B, as was widely expected. Nevertheless, the rate then reversed, with U.K. Halifax HPI declining by -0.6% month on month versus an expected increase of 0.6%, as well as U.K. Manufacturing Production coming in at 0.3%, slightly lower than the 0.4% expected and with the previous number revised downward from -0.4% to -0.8%. Cable then made its weekly low of 1.5049 on Friday as U.K. PPI input showed a decline of -0.2% and PPI output showed a drop of -0.3% month on month, considerably lower than the expected increases of 0.1% for both. Also on Friday, the U.K. Trade Balance showed a deficit of -8.1B versus a consensus of 7.1B, which brought the rate to close at 1.5063, down 0.9% on the week.

AUD/USD soared last week, with risk appetite overtaking the currency markets. The rate began the week trading lower on Monday as Australian ANZ Job Advertisements came out at 2.7%, and with the previous number revised downward from 4.3% to 2.7%. Also, the Australian Trade Balance showed a surplus of 1.65B versus an expected 0.53B — primarily due to trade with China — while the previous number was also revised upward from 0.13B to 1.12B. The rate then began picking up steam on Tuesday as the RBA decided to leave the benchmark Cash Rate unchanged at 4.5%, as was widely expected. AUD/USD extended its gains on Wednesday as the Australian Employment Change showed an increase of 45.9K jobs versus an expected 15.3K and the Unemployment rate contracted to 5.1% versus an expected 5.2%. On Thursday, the rate made its weekly high of 0.8790 as risk appetite and higher commodity prices contributed to the rally. On Friday, AUD/USD sold off somewhat on position squaring to close the week at 0.8772, up an impressive 4.0% on the week.

USD/CAD declined substantially last week as increasing risk appetite weighed on the Greenback. The pair started the week on a positive note during Monday’s U.S. Bank Holiday, but it soon began selling off on Tuesday after making its weekly high of 1.0616. Canadian Building Permits showed a decline of -10.8%, considerably worse than the -1.3% expected. The pair continued its decline on Wednesday, with the fall exacerbated by Canadian Ivey PMI coming out at 58.9 versus a consensus of 64.1. On Thursday, the rate continued dropping even though Canadian NHPI showed an increase of 0.3%, as was widely expected. The rate made its weekly low of 1.0294 on Friday after Canadian Employment Change showed the Canadian economy had added an impressive 93.2K jobs in June, versus an expected 17.9K, which brings the total jobs added in Canada since July of 2009 to 400K. USD/CAD went on to close on Friday at 1.0334, down 2.8% for the week.

NZD/USD gained considerable ground last week, joining the Aussie and the Loonie in the risk appetite driven rally against the Greenback. With the exception of Monday’s New Zealand’s NZIER Business Confidence number, which came out at 18, versus a previous reading of 22, the Kiwi had no other major economic releases last week. Nevertheless, firming commodity prices along with risk aversion made every day a winner for NZD/USD which gained consistently every day last week. Trading pretty much in tandem with the Australian Dollar, the Kiwi started the week out making its weekly low of 0.6823 against the Greenback on Tuesday. It then subsequently rallying each day until it made its weekly high of 0.7112 on Friday, before selling off somewhat and closing at 0.7104, up an even 3.0% for the week.

The Week Ahead

AUD: Australia’s upcoming economic data releases start on Monday with the highlighted Australian Home Loans data (0.1% m/m), followed on Tuesday by the NAB Business Confidence index (last 5). Wednesday offers the Westpac Consumer Sentiment survey (last -5.7%), as well as a speech by RBA Governor Stevens in Sydney. Thursday has the MI Inflation Expectations (last 3.4%) and New Motor Vehicle Sales (last -3.2% m/m), while Friday ends the week with the NAB Quarterly Business Confidence index (last 17). Technically, AUD/USD saw another strong rally last week, with the rate trading off of its low of 0.8316 seen early in the week to as high as 0.8790 before closing near that level at 0.8772. Resistance for AUD/USD shows on the chart at 0.8858, 0.9077 and 0.9388. Support is indicated at 0.8550, 0.8315, and 0.8066.

To view a live chart follow the link:

CAD: The economic data week scheduled in Canada remains quite sparse. Monday starts the week out with the BOC Business Outlook Survey, followed on Tuesday by the highlighted Canadian Trade Balance (0.4B) number. Wednesday is quiet, but on Thursday look for Manufacturing Sales (0.4% m/m) and New Motor Vehicle Sales (5.2% m/m). Friday ends the week with the Leading Index (0.5% m/m). Technically, USD/CAD made another intermediate high last week at 1.0676 before coming off sharply, as the rate shows increasing signs of entering a consolidation period within a symmetrical triangle pattern. The chart for USD/CAD shows support at 1.0294/1.0319, at 1.0179 and 1.0137. Resistance shows up at 1.0453/74, 1.0604 and 1.0676.

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EUR: The economic data week in the Eurozone is moderately active, although Monday is quiet, so Tuesday starts the week out with German WPI (0.4% m/m), French CPI (0.1% m/m), as well as the highlighted German ZEW Economic Sentiment index (25.2) and the EZ ZEW Economic Sentiment index (16.8). Wednesday is the National or Bastille Day Bank Holiday in France, and will also see the release of EZ CPI (1.4% y/y), Core CPI (0.9% y/y) and Industrial Production (1.2% m/m). Thursday has the important ECB Monthly Bulletin, while Friday closes the week with the Italian Trade Balance (-0.75B) and the EZ Trade Balance (1.4B). Technically, EUR/USD traded higher overall last week to a fresh recent high at 1.2722 within the second leg of its corrective upward move off of the key 1.1881 low seen on June 7th. Nevertheless, the rate could not sustain those levels and came off to 1.2608 before closing the week at 1.2639. Support for EUR/USD shows at 1.2608, 1.2480 and 1.2397 ahead of the key psychological 1.2000 level. Resistance to the topside is seen at 1.2722, 1.3093 and 1.3114.

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GBP: Some key economic data releases are coming up in the United Kingdom this week. Monday starts the action with the important Final U.K. GDP number (0.3% q/q), as well as the Current Account (-4.3B) and Index of Services (0.4% 3m/3m). Tuesday has scheduled the BRC Retail Sales Monitor (0.8% y/y), the RICS House Price Balance (20%), and the important U.K. CPI data (3.2% y/y) and Core CPI (2.7% y/y), as well as the DCLG HPI (10.3% y/y), the RPI (4.9% y/y), the CB Leading Index (last 0.6% m/m) and a speech by MPC Member Sentance in Reading. Wednesday offers Nationwide Consumer Confidence (64), and the highlighted U.K. Employment report featuring the Claimant Count Change (-20.2K), Average Earnings Index (3.1% 3m/y) and the U.K. Unemployment Rate (7.9%). Thursday has a speech by MPC Member Miles in Bristol scheduled, along with Housing Equity Withdrawal (-3.1B q/q) being due for release. This ends the active week since Friday is quiet. Technically, GBP/USD continued trading upward early last week, making yet another new high within its short term corrective rising channel at 1.5240, where the lower trend line of this pattern now provides rising support for the rate at 1.5045. Resistance to the topside for GBP/USD shows at 1.5240, 1.5390 and 1.5497, just ahead of the psychological 1.5500 level. Support is indicated at 1.5049, 1.4855/72, and 1.4686.

To view a live chart follow the link:

JPY: Japan’s upcoming economic data week contains some important releases. Monday starts out the week with CGPI (0.6% y/y), while Tuesday has Revised Industrial Production (-0.1% m/m) and Household Confidence (42.4). Wednesday has nothing of note due out, but look out for the tentatively scheduled but highlighted Monetary Policy Statement and associated BOJ Press Conference on Thursday. In it, the BOJ is widely expected to leave its benchmark Overnight Call Rate unchanged at 0.10%. Friday ends the week with the expected release of Tertiary Industry Activity (-0.7% m/m) and the important BOJ Monthly Report. Technically, USD/JPY corrected some of its recent losses last week by trading up to as high as 88.69 after forming what could be considered a double bottom pattern on the short term charts in the 86.96/87.05 support region. Resistance for USD/JPY shows at 88.69/75, 89.76 and 91.47, as well as at the psychological 90.00 level. Support is indicated at 87.97, 86.96/87.01 and 84.80.

To view a live chart follow the link:

NZD: Upcoming economic data releases in New Zealand heat up this week, although Monday is quiet, so Tuesday starts the week out with FPI (last -0.7% m/m). Wednesday has the important Retail Sales (0.6% m/m) and Core Retail Sales (0.6% m/m) numbers due out. Thursday offers the Business NZ Manufacturing Index (last 54.5), while Friday has the highlighted New Zealand CPI report (0.5% q/q) scheduled for release to end the week. Technically, NZD/USD rose sharply last week from a low point of 0.6823 up to as high as 0.7112 to close the week at 0.7104, although a period of consolidation may now follow. Support for NZD/USD is now seen on the charts at 0.7025, just ahead of the psychological 0.7000 level, and then below that at 0.6885 and 0.6793. Resistance shows at 0.7112, 0.7158 and 0.7324.

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USD: The economic data week coming up in the United States heats up considerably. Monday starts the action with speeches by Fed Chairman Bernanke and FOMC Member Duke at a conference held in Washington, D.C. Tuesday has the highlighted U.S. Trade Balance (-39.4B) and Federal Budget Balance (-81.6B), as well as IBD/TIPP Economic Optimism (47.9). Wednesday offers Core Retail Sales (-0.1% m/m), Retail Sales (-0.1% m/m), Import Prices (-0.1% m/m), Business Inventories (0.4% m/m), and the important FOMC Meeting Minutes. Thursday is especially active and has PPI (-0.2% m/m), Core PPI (0.1% m/m), Initial Jobless Claims (453K), the Empire State Manufacturing Index (18.9), the Capacity Utilization Rate (74.2%) and Industrial Production (0.0% m/m), as well as the important Fed Governor Nomination Hearings and the Philly Fed Manufacturing Index (11.4). Friday closes the busy week with Core CPI (0.1% m/m), CPI (0.1% m/m), and TIC Long-Term Purchases (73.7B), in addition to the Preliminary University of Michigan Consumer Sentiment index (74.1) and Inflation Expectations (2.8%).

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]]> Weekly Market Watch - Monday, 05 Jul 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=12358 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=12358 Mon, 05 Jul 2010 00:07:46:610 GMT Last Week Recap

EUR/USD began the week by trading lower after the G20 summit ended last Sunday in Toronto. G20 members pledged to bring down fiscal budgets in order to pull the world out of the economic crisis. U.S Personal Spending was up 0.2% month on month, slightly better than the 0.1% expected, and the U.S. Core PCE Price Index was also slightly better than expected at 0.2% versus a 0.1% consensus. On Tuesday, the rate made its weekly low of 1.2151 as European stocks posted losses of up to 2% and the Euro Libor rate rose to a nine-month high of over 0.76%. Also on Tuesday, U.S. CB Consumer Confidence dropped to 52.9, considerably worse than the expected figure of 62.8 and with the previous release adjusted downward from 63.3 to 62.7. This data sent the U.S. stock market down to close 2.65% lower on the DJIA. Also weighing on the market was the approaching July 1st bank loan repayments to the ECB of €442 billion. On Wednesday, the rate turned around and started heading north as the demand for short term funds from the ECB turned out to be lower than expected. The central bank loaned out €132 billion to banks across Europe, much less than the €250 billion some were expecting to be needed. Also benefiting the rate was U.S. ADP Non-Farm Employment Change, which came out at a dismal 13K new jobs added versus an expected number of 59K. The rate traded lower after that important data. On Thursday, EUR/USD resumed trading higher on weaker U.S. data which showed Initial Jobless Claims rising to 472K versus an expected 454K and Pending Home Sales were off by a whopping -30.0% month on month, versus an expected drop of only -7.4%, as the surge driven by the Homebuyers’ Tax Credit ended. Adding fuel to the Euro rally, the ECB provided a six day funding extension for banks which had participated in the 12 month, €442 billion program. The ECB granted 78 banks €111.2 billion in funds for six days. On Friday, EUR/USD made its weekly high of 1.2611 as the big U.S. Non-Farm Payrolls number showed a decline of -125K, versus an expected drop of -106K, while the Unemployment Rate improved considerably to 9.5% versus a consensus of 9.8%. In addition, the Eurozone Unemployment rate held steady at 10%. The pair sold off after making its weekly high before settling at 1.2549 to close the week, up 1.3% from the previous weekly close.

USD/JPY lost considerable ground last week. The rate started out on a positive note by trading up to its weekly high of 89.47 on Monday after Japanese Retail Sales rose only 2.8% year on year versus an expected rise of 4.7%. Also, the Japanese Unemployment Rate edged up to 5.2% versus the 5.0% expected, while Household Spending dropped to -0.7% versus an expected rise of 0.1%. Nevertheless, the Yen began strengthening as the rate fell on Tuesday after Japanese Average Cash Earnings dropped -0.2% year on year versus an expected rise of 0.9%. The rate continued dropping on Wednesday, despite Japanese Housing Starts which fell -4.6% year on year and was considerably worse than the rise of 5.1% expected. Also out on Wednesday, the important Tankan Manufacturing Index showed a reading of 1 versus a consensus of a -3 reading and was considerably better than the previous reading of -14, while the Tankan Non-Manufacturing Index showed a reading of -5 versus a -8 consensus. On Thursday, USD/JPY continued lower as risk aversion drove world stock markets lower, with weak economic numbers coming from the U.S. adding to the sell-off. USD/JPY even broke below the key 87.95 level to hit Friday’s weekly low of 86.96 before rallying back on short covering to close the week at 87.78, down an impressive 2.3% on the week.

Cable finished up slightly after a volatile week. The rate started the week off on a positive note as Monday had no economic releases in the U.K and the G20 summit ended in Toronto. The rate then began weakening on Tuesday, despite U.K. Net Lending to Individuals improving to 1.5B month on month versus a consensus of a 0.9B increase and with the previous number revised upward from 0.4B to 0.9B. Also Tuesday, GfK Consumer Confidence came in slightly lower at -19 versus a consensus of -20. The rate continued its decline on Wednesday as U.K. Nationwide HPI showed an increase of only 0.1% month on month, versus an expected increase of 0.3%. On Thursday, Cable made its weekly low after U.K. Manufacturing PMI came out at 57.5, as was widely expected, and despite negative employment and housing data out of the U.S. The pair then rallied sharply, trading up to 1.5187 before backing off. On Friday, GBP/USD made its weekly high of 1.5227 — the highest level seen in Cable since May — as more negative economic data came out of the United States, and U.K. Construction PMI came out at 58.4 in line with expectations. The pair sold off somewhat on position squaring to close at 1.5194, up 0.9% on the week.

AUD/USD came off dramatically last week as commodities weakened. Trading off of its weekly high of 0.8775 seen on Monday, the rate began getting pummelled on Tuesday as Australian HIA New Home Sales showed a drop of -6.4% versus a previous reading of an increase of 6.2%, while Australian Private Sector Credit edged up to 0.5% versus a consensus of a 0.4% increase. On Wednesday, AUD/USD continued under pressure as worries about the ECB’s bank repayment scheduled for Thursday gave the market a severe case of risk aversion. Also, Australian Building Approvals out on Wednesday dropped -6.6% month on month versus the flat number expected. Nevertheless, the previous number was revised upward from -14.8% to -11.4%. Also fuelling the sell off was a drop in Chinese Manufacturing PMI which indicated a slowdown in the Chinese economy. On Thursday, the rate came back somewhat after making its weekly low of 0.8315, after Australian Commodity Prices came out at 43.0% year on year versus a previous reading of 43.6%. The rate then rallied on Friday only to come back down and settle at 0.8425, down an eye catching 3.9% on the week.

USD/CAD gained considerably last week as weaker commodities prices and risk aversion hit the Loonie hard. The rate began the week by trading higher from its weekly low of 1.0319 made on Monday as U.S. Personal Spending was up 0.2% month on month. The rate then rose sharply on Tuesday after the Canadian Raw Materials Price Index (RMPI) showed a decline of -7.2%, much lower than the expected drop of -0.3% expected. On Wednesday, USD/CAD continued rallying as Canadian GDP came out flat month on month, slightly worse than the 0.2% growth expected. The rate then made its weekly high of 1.0672 on Thursday, a Canadian bank holiday, before backing off somewhat. On Friday, the pair consolidated before closing at 1.0622, up 2.5% on the week.

NZD/USD got hit hard along with the other commodity currencies last week, initially trading off of its weekly high of 0.7154 seen on Monday. The rate then began selling off sharply as NBNZ Business Confidence showed a reading of 40.2 versus a previous reading of 48.2, while May Building Consents showed a large -9.6% decline versus a previous reading of an 8.5% increase. The rate continued selling off sharply on Tuesday as risk aversion and worries about European sovereign debt triggered more Kiwi selling. Wednesday saw the rate drop even further as ANZ Commodity Prices showed a decline of -1.2% versus a previous reading of a 2.8% increase that was revised upward from 2.5%. The rate then made its weekly low of 0.6793 on Thursday before rallying sharply on weaker U.S. economic data and ahead of the key U.S. Non-Farm Payroll numbers due out on Friday. The rate then managed to rally back over 0.6950 on Friday, only to sell off and close at 0.6891, down a whopping 3.6% for the week.

The Week Ahead

AUD: The Australian economic calendar for the coming week heats up considerably, with the featured RBA Rate Decision Statement due out on Tuesday and the Employment Report on Friday. Monday starts the week with the AIG Services Index (last 47.5), the MI Inflation Gauge (last 0.5% m/m) and ANZ Job Advertisements (last 4.3% m/m). Tuesday has the Australian Trade Balance (0.55B), as well as the highlighted RBA Cash Rate announcement and associated Rate Statement in which the central bank is widely expected to leave its benchmark rate unchanged at 4.50%. On Wednesday, look for the AIG Construction Index (last 53.2). Thursday ends the week with the important Australian Employment Report. The Employment Change is expected at 15.3K and the Australian Unemployment Rate is expected to be unchanged at 5.2%. Friday has nothing of note due out. Technically, AUD/USD sold off sharply last week, trading as low as 0.8315 before correcting higher to 0.8509. The key 61.8% Fibonacci retracement level of the up move from 0.8066 to 0.8858 comes in at 0.8369 and bears watching. Resistance for AUD/USD shows on the chart at 0.8509, 0.8565/95 and 0.8775/80. Support is indicated at 0.8402, 0.8315 and 0.8275/81.

To view a live chart follow the link:

CAD: The upcoming week of Canadian economic releases is again rather quiet, but it features important data including the Canadian employment report due out on Friday. Monday is quiet, but Tuesday has Building Permits (-0.4% m/m). Wednesday has the important Ivey PMI (64.2) scheduled, while Thursday has NHPI (0.3% m/m) due out. Friday has the highlighted Canadian Employment Report, with the Employment Change expected at 20.3K, and the Canadian Unemployment Rate at 8.1%. Housing Starts (194K) are also out on Friday to end the week. Technically, USD/CAD continued its impulsive rally off of the 1.0137 low last week to reach as high as 1.0672. Resistance in USD/CAD is seen in at 1.0672/78, 1/0743/48 and 1.0853. Support shows at 1.0554, 1.0468 and 1.03019.

To view a live chart follow the link:

EUR: The Eurozone’s upcoming economic data week is also less active than the previous week, and features the ECB’s rate decision and press conference on Thursday. On Monday, look for Final Services PMI (55.4), Sentix Investor Confidence (-4.1) and Retail Sales (-0.1% m/m). Tuesday has little of note, but Wednesday has the French Trade Balance (-3.9B), Final GDP (0.2% q/q) and German Factory Orders (0.5% m/m). On Wednesday, watch out for the highlighted Minimum Bid Rate announcement and associated ECB press conference in which the central bank is widely expected to leave its benchmark interest rate unchanged at 1.0%. Also out on Wednesday, are the German Trade Balance (13.4B), the French Government’s Budget Balance (last -56.2B) and German Industrial Production (0.8% m/m). Friday ends the week with German Final CPI (0.1% m/m), French Industrial Production (0.3% m/m) and Italian Industrial Production (0.8% m/m). Technically, EUR/USD traded substantially higher again last week in a corrective rally that broke the psychological 1.2500 level to go as high as 1.2611, followed by a brief set back to 1.2528. Support for EUR/USD shows at 1.2528, 1.2482, and 1.2397. Resistance to the topside is seen at 1.2611, 1.2671 and 1.3093.

To view a live chart follow the link:

GBP: The upcoming week of U.K. economic data releases has some very interesting numbers due out, featuring the MPC’s rate decision on Thursday. Monday starts the action off with the Halifax HPI (0.6% m/m) and Services PMI (55.2). Tuesday is quiet, but Wednesday has the Nationwide Consumer Confidence (64) tentatively scheduled, as well as the BRC Shop Price Index (last 1.8%). Thursday features the BOE’s rate decision with the associated MPC rate statement that is expected to leave the benchmark Official Bank Rate and Asset Purchase facility unchanged at 0.5% and 200B respectively. Also out on Thursday are Manufacturing Production (0.5% m/m), Industrial Production (0.4% m/m), and the tentatively scheduled NIESR GDP Estimate (last 0.6%). Friday ends this important week with PPI Input (0.2% m/m), the U.K. Trade Balance (-7.1B) and PPI Output (0.1% m/m). Technically, GBP/USD again persisted in strengthening last week, trading as high as 1.5227, with the 100% retracement of the move from 1.5521 down to 1.4229 at 1.5521 now beckoning. Resistance to the topside for GBP/USD shows at 1.5227, 1.5390 and in the 1.5497/1.5521 region. Support is indicated at 1.5127, in the 1.4855/72 region, and at 1.4686.

To view a live chart follow the link:

JPY: The economic data schedule in Japan this week offers little to inspire the market, but does feature Core Machinery Orders due out on Thursday. Monday is quiet, so Tuesday starts the week with Leading Indicators (99.7%). Wednesday has nothing of note scheduled, but Thursday is active and has the highlighted Core Machinery Orders (-2.9% m/m) scheduled for release, along with Bank Lending (last -2.0% y/y), the Japanese Current Account (1.12T), M2 Money Stock (3.1% y/y), the Economy Watchers Sentiment index (48.3), Preliminary Machine Tool Orders (last 192.5%y/y). That wraps up the week since Friday is quiet. Technically, USD/JPY continued trading lower last week to 86.96, after breaking its former triangular consolidation to the downside set up an 83.81 target. Resistance for USD/JPY shows at 88.23, 88.75 and 89.76. Support is indicated at 87.11/32, 86.96 and 84.80.

To view a live chart follow the link:

NZD: The next week of economic data releases in New Zealand is exceptionally quiet. The only data out of note is the important NZIER Business Confidence index (last 22) to be released on Tuesday which both starts and ends the otherwise peaceful week. Technically, NZD/USD fell sharply last week, again falling and closing the week below its 200-Day MA now at 0.7122 and reaching down as far as 0.6793 before bouncing up to 0.6970. Resistance for NZD/USD shows at 0.6953/70, 0.6993 and 0.7154. Support for NZD/USD is seen at 0.6839, 0.6793 and 0.6560/71.

To view a live chart follow the link:

USD: The upcoming U.S. economic calendar calms down considerably, and features the ISM Non-Manufacturing Purchasing Managers’ Index or PMI out on Tuesday. The week starts quietly with the Independence Day Bank Holiday celebrated in the United States on Monday. Tuesday then has the highlighted ISM Non-Manufacturing PMI (55.2). Wednesday offers little of note, but Thursday has the important Initial Jobless Claims (461K) and Consumer Credit (-1.9B m/m). Friday ends the week with Wholesale Inventories (0.4% m/m).

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]]> Weekly Market Watch - Monday, 28 Jun 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=12063 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=12063 Sun, 27 Jun 2010 22:27:14:907 GMT Last Week Recap

EUR/USD started the week on a positive note by trading off of its weekly high of 1.2467 made on Monday after the People’s Bank of China decided to loosen the 23 month old peg of the Remnimbi, also known as the Yuan, to the USD. On Tuesday, the rate started slipping despite positive German IFO Business Climate which showed a slightly better than expected 101.8 reading versus a consensus of 101.2. Also, U.S. Existing Home Sales came out at a disappointing 5.66M versus the 6.17M expected. On Wednesday, EUR/USD made its weekly low of 1.2207 before turning around and rising after dovish comments made by the U.S. Fed’s FOMC, which kept the Federal Funds Rate at 0.25% and repeated words such as “extended period” and “exceptionally low” in its statement which put pressure on the U.S. Dollar. In addition, disappointing U.S. New Home Sales numbers came out at 300K, much worse than the expected number of 424K. Also on Wednesday, GfK German Consumer Climate showed a slight improvement at 3.5 versus a 3.3 consensus. The rate continued trading higher on Thursday as new highs were made in Greek 5-year sovereign CDSs and U.S. Core Durable Goods came in slightly lower than expected at 0.9% versus the 1.1% expected. Also, Unemployment claims were slightly improved at 457K versus 461K. U.S. Durable Goods Orders were more or less as expected at -1.1% with a -1.2% consensus. The rate continued inching higher on Friday as Final U.S. GDP came out at 2.7% quarter on quarter, versus an expected 3.0%, while the Final GDP Price Index was at 1.1% Q/Q versus a 1.0% consensus. The rate went on to close at 1.2373, down just 11 pips on the week and virtually unchanged. Friday was the first day of G8 meetings held in Toronto ahead of the G20 Summit meetings on Saturday and Sunday which sparked violent clashes between protesters and police. On Sunday, Toronto police arrested over 500 demonstrators after a group of youths dressed in black ran amok smashing windows and torching police vehicles. The world’s leaders are discussing economic development, peace and security matters over the weekend, as well as the key fiscal deficit issue.


USD/JPY continued trading lower last week as the Yen benefited from risk aversion in the currency market, with the U.S. Dollar playing second fiddle to the Yen as more traders bought the Yen instead of the Greenback due to dovish FOMC comments and disappointing housing numbers. The rate began the week trading off of its weekly high of 91.47 made after the People’s Bank of China announced it would loosen the Yuan’s peg to the U.S. Dollar and then failed to intervene as the Yuan rallied. USD/JPY closed higher on Monday after Japanese All Industries Activity came out at 1.8% versus a 2.1% expected number. The rate continued weakening on Tuesday after disappointing U.S. Home Sales data. On Wednesday, USD/JPY continued dropping with dovish statements on interest rates from the U.S. Fed and despite the Japanese Trade Balance showing a surplus of only ¥0.42T versus a consensus of a ¥0.64T surplus. In addition, the previous number was revised downward from ¥0.73T to ¥0.51T. On Thursday, the pair continued trading downward as Japanese Tokyo Core CPI showed a drop of -1.3% year on year, versus a consensus of a -1.5% drop, and National Core CPI declined -1.2% year on year versus the 1.3% decline expected. The rate continued lower, eventually making its weekly low of 89.21 on Friday before closing at 89.26, down 1.6% for the week.

Cable continued its rally as the Greenback sold off notably last week. The rate started the week on a soft note after the Chancellor of the Exchequer George Osborne stated that as “a rule of thumb” the imminent emergency budget cuts would involve 80% in budget spending cuts and a 20% tax increase. On Tuesday, the U.K. annual budget was released which Osborne called “the emergency budget and unavoidable”. The budget was well received by the forex market, with Cable rallying after making its weekly low of 1.4684. The rate continued rallying on Wednesday as the MPC Minutes showed a 1-0-7 result for the vote on interest rates versus a consensus of 0-0-9. This result reflects the fact that one member, Andrew Sentence, voted for an increase in the BOE’s benchmark Official Bank Rate to 0.75% at the MPC’s June meeting based on his concerns over U.K. inflation. Also on Wednesday, the U.K. CBI Realized Sales showed a reading of -5, much better than the expected reading of -17. On Thursday, Cable paused somewhat, but the rate then continued its upward trend on Friday after disappointing U.S. GDP numbers to make its weekly high of 1.5067 before backing off slightly to close at 1.5059, up 1.6% for the week.

AUD/USD started last week by gapping higher on Monday’s open as the Chinese announced they would loosen the Yuan’s peg to the U.S. Dollar and paved the way for a reform of their currency policy. The pair nevertheless traded off of its five week high of 0.8858 made on Monday to trend lower the rest of the week. Economic news in Australia began with New Motor Vehicle Sales, which showed a decline of -3.2% month on month. This compares to a previous reading of an increase of 8.4 % that was revised upward to 9.0%. The rate continued trading lower on Tuesday, despite weak housing data out of the United States. On Wednesday, the pair paused somewhat as the Australian CB Leading Index expanded by only 0.1% month on month, against a previous reading that showed an increase of 0.3%. On Thursday, AUD/USD resumed its downward bias after the Yuan fell back on prospects that the PBOC might limit the Yuan’s post-announcement gains. Also, commodity prices fell most of the week, putting additional pressure on the rate. AUD/USD then rallied sharply after making its weekly low of 0.8595 on Friday after the important announcement of the forced resignation of Labor Prime Minister Kevin Rudd who was replaced with Australia’s first female Prime Minister Julia Gillard, Rudd’s deputy. After the internal revolt that installed her as PM after Rudd faced criticism over supporting a controversial mining tax, Gillard stated, “I will lead a strong and responsible government that will take control of our future.” The pair then went on to close at 0.8750, up 0.6% on the week.

NZD/USD strengthened considerably last week, starting the week out by gapping higher after the Chinese decision to loosen the Yuan’s peg to the U.S. Dollar. The rate then sold off, despite New Zealand Visitor Arrivals showing a -1.0% decrease versus a previous reading of a decrease of -1.8%. Also, N.Z. Credit Card Spending increased by 3.4% year on year, although the previous reading was revised downward from 1.9% to 0.7%. On Tuesday, the rate softened somewhat despite the New Zealand Current Account showing a surplus of 0.18B, considerably better than the consensus of -0.30B deficit, with the previous deficit revised upward from -3.57B to -3.41B. This brought the New Zealand Current Account to its highest point in two years. On Wednesday, the Kiwi rallied sharply, making a five week and weekly high of 0.7158 after the announcement that New Zealand GDP grew at a slightly better than expected rate of 0.6% versus a 0.5% consensus. On Thursday, the pair retreated somewhat after the New Zealand Trade Balance showed a surplus of 814M versus a consensus of a slightly higher 845M surplus, with an upward revision to the previous number from 656M to 665M. After making its weekly low of 0.6888, the rate then rallied sharply on Friday to close at 0.7139, up 1.3% on the week.

The Week Ahead

AUD: The Australian economic calendar for the coming week is relatively quiet, but still has some key data scheduled featuring Retail Sales numbers due out on Thursday. The week starts with the G20 Summit in Toronto, but Monday and Tuesday have nothing of note scheduled with respect to economic data. Wednesday has HIA New Home Sales (last 6.2% m/m) tentatively scheduled, as well as Private Sector Credit (0.4% m/m). Thursday is the week’s highlight with the key Retail Sales report (0.3% m/m) and Building Approvals (0.0% m/m), in addition to Commodity Prices (last 43.8% y/y) and the AIG Manufacturing Index (last 56.3) to end the week since Friday is quiet. Technically, AUD/USD rallied almost to its 61,8% retracement level at 0.8883 by trading up to 0.8858, before moving lower to 0.8595 to fill last week’s opening gap. Resistance for AUD/USD shows on the chart at 0.8780, 0.8858 and 0.9025. Support is indicated at 0.8660, 0.8581/95, 0.8505 and 0.8425.

To view a live chart follow the link:

CAD: The upcoming week of Canadian economic releases is again rather quiet. Nevertheless, it does have the important Canadian GDP data due out on Wednesday. Sunday features the final day of the G20 Summit Meetings that are being held in Toronto, Canada, but Monday is quiet. Tuesday has the RMPI (last 1.7% m/m) and IPPI (last 0.3% m/m) data. Wednesday is the weekly highlight with the Canadian GDP (0.2% m/m) release scheduled to close the week since Thursday is a Bank Holiday in Canada and Friday is quiet. Technically, USD/CAD rallied impulsively off the 1.0137 low made in last week’s early trading to reach as high as 1.0468. Resistance in USD/CAD is seen in at 1.0458/68, 1.0570 and 1.0678. Support shows at 1.0339, 1.0222, 1.1037 and the key psychological 1.0000 parity level.

To view a live chart follow the link:

EUR: The Eurozone’s upcoming economic data week is less active than the previous week, and features the conclusion of the G20 Meetings in Toronto on Sunday in which fiscal deficits are a key agenda item. Monday has German Preliminary CPI (0.1% m/m), the M3 Money Supply (0.2% y/y) and Private Loans (0.2% y/y) scheduled for release, but Tuesday has nothing of note due out. On Wednesday, expect the German Unemployment Change (-23K), CPI Flash Estimate (1.5% y/y), Italian Preliminary CPI (0.2% m/m), and a speech by ECB President Trichet in Rome. On Thursday, look for Final Manufacturing PMI (55.6), while Friday closes the week with the Eurozone Unemployment Rate (10.1%), the Italian Monthly Unemployment Rate (8.9%) and EZ PPI (0.3% m/m). Technically, EUR/USD traded marginally higher again early last week in a corrective rally that went as high as 1.2467, followed by a brief set back to 1.2207. Support for EUR/USD shows at 1.2207, 1.2168, 1.1881, and at the psychological 1.2000 level. Resistance to the topside is seen at 1.2388, 1.2452/67 and 1.2671.

To view a live chart follow the link:

GBP: The upcoming week of U.K. economic data releases has some interesting numbers due out, featuring Final GDP on Wednesday. Sunday has the last day of the G20 meetings, and Monday has nothing of note due out. Accordingly, Tuesday starts the data week off with Net Lending to Individuals (0.9B m/m) and Final Mortgage Approvals. Wednesday is the weekly highlight, offering GfK Consumer Confidence (-20), Nationwide HPI (0.3% m/m), Final GDP (0.3% q/q), the U.K. Current Account (-3.7B) and Revised Business Investment (6.1% q/q). Thursday has Manufacturing PMI (57.6), the BOE Credit Conditions Survey, and the Index of Services (0.3% 3m/3m). Friday closes the week with just Construction PMI (58.6). Technically, GBP/USD again persisted in ticking higher last week, trading in a probable corrective C-wave as high as 1.5067, with the 1:1.618 Fibonacci projection level at 1.5185 now beckoning. Resistance to the topside for GBP/USD shows at 1.5125, 1.5318/90 and 1.5464. Support is indicated at 1.5010, 1.4935 and 1.4855.

To view a live chart follow the link:

JPY: The economic data schedule heats up a bit in Japan this week, and features the key Tankan Report on Thursday. The G20 Meetings in Toronto start the week, and Monday just offers Retail Sales (4.7% y/y) in terms of economic data. Tuesday has Household Spending (0.4% y/y), the Japanese Unemployment Rate (5.0%) and Preliminary Industrial Production (0.1% m/m) due out. Wednesday offers Manufacturing PMI (last 54.7), Average Cash Earnings (0.9% y/y) and Housing Starts (5.1% y/y). Thursday is the weekly highlight, featuring the key Tankan Report containing the Tankan Manufacturing Index (-3), and the Tankan Non-Manufacturing Index (-8). Friday ends the week with the Japanese Monetary Base (3.8% y/y). Technically, USD/JPY continued trading lower after breaking its triangular consolidation to the downside to target 83.81. Resistance for USD/JPY shows at 89.76, 91.47 and in the 91.81/92.10 region. Support is indicated at 89.21, 88.95 and at 87.95.

To view a live chart follow the link:

NZD: The next week of economic data releases in New Zealand remains rather quiet once again. Nevertheless, the week does feature Monday’s key NBNZ Business Confidence index (last 48.2), as well as the tail end of the G20 Summit in Toronto. Tuesday has Building Consents (8.5% m/m), Wednesday is quiet, and Thursday ends the peaceful week with ANZ Commodity Prices (last 2.5% m/m). Technically, NZD/USD range traded last week between 0.6993 and 0.7158 after filling last week’s opening gap. The rate also managed to close the week above its 200-day MA now at 0.7127. Resistance for NZD/USD shows at 0.7158, 0.7295/0.7324 and at 0.7440. Support for NZD/USD is seen at 0.6993/0.7025, 0.6884 and 0.6560/71.

To view a live chart follow the link:

USD: The upcoming U.S. economic calendar has yet another active week planned, and features the key U.S. Employment report including Non-Farm Payrolls and the Unemployment Rate on Friday. Sunday starts the week with the second day of the G20 Meetings in Toronto. Monday has the Core PCE Price Index (0.1% m/m), Personal Spending (0.1% m/m), and Personal Income (0.5% m/m), plus a speech by FOMC Member Warsh in Atlanta. Tuesday has the S&P/CS Composite-20 HPI (3.5% y/y) and CB Consumer Confidence (62.6) due out, while Wednesday has the important ADP Non-Farm Employment Change (58K) that may give a preview of Friday’s numbers. Also on Wednesday, FOMC Member Duke speaks in Columbus and Chicago PMI (59.2) is scheduled for release, along with the tentatively scheduled biannual Treasury Currency Report that may highlight countries deemed currency manipulators by the U.S. Treasury. On Thursday, Challenger Job Cuts (last -65.1%), Initial Jobless Claims (456K), ISM Manufacturing PMI (58.9), Pending Home Sales (-4.5% m/m), Construction Spending (-0.6% m/m) and ISM Manufacturing Prices (72.2) are all scheduled for release. Friday will be the week’s undisputed highlight featuring the key Non-Farm Payrolls number (-103K) and the U.S. Unemployment Rate (9.8%), along with Average Hourly Earnings (0.1% m/m) and Factory Orders (-0.5% m/m) to end the busy week.

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]]> Weekly Market Watch - Monday, 21 Jun 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=11717 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=11717 Sun, 20 Jun 2010 23:39:10:813 GMT Last Week Recap

EUR/USD continued its ascent last week as European bond sales and equity markets showed solidity. The week began positively as the pair traded off of its weekly low of 1.2108 on Monday after European stocks strengthened and Eurozone Industrial Production edged up 0.8%versus the 0.7% expected. EUR/USD continued trading higher on Tuesday after the Spanish bond issue was well received, thereby allowing Spain to raise €5.2 B. This news offset the disappointing German ZEW Economic Sentiment reading which came out at 28.7, considerably lower than the 48.7 consensus. Also, U.S. TIC Long Term Purchases showed a buoyant 83.0B worth of purchases versus an expected 77.3B. On Wednesday, EUR/USD paused as Eurozone CPI and Core CPI came out in line with expectations at 1.6% and 0.8% respectively. Also, U.S. housing numbers disappointed the market as Building Permits came out at 0.57M versus a consensus of 0.63M and Housing Starts came in at 0.59M versus a 0.65M consensus. Nevertheless, U.S. PPI showed a lower -0.3% month on month fall versus the -0.5% fall expected, with Core PPI coming out at 0.2% versus the 0.1% consensus. Also, Industrial Production rose 1.2% versus a 0.9% expected rise. On Thursday, the Euro continued rising against the Greenback after another positive bond sale in Spain relieved markets, at least for now. In addition, U.S. Core CPI came out at 0.1%, as was widely expected, and Initial Jobless Claims rose to 472K versus the 452K expected, while the Philly Fed Manufacturing Index came in at a disappointing 8.0 and considerably worse than the 21.1 number anticipated. On Friday, EUR/USD made its weekly high of 1.2416 before selling off on profit taking to settle at 1.2384, up 2.2% on the week. Over the weekend, a story in the U.K. Daily Telegraph reported that France and Germany were considering a “super-euro” in addition to the current currency for the stronger nations which would include France, Germany, Holland, Austria, Denmark and Finland, excluding all other members. The plan for the two-tiered Euro system was referred to as “Plan B”.


USD/JPY headed lower last week as the Greenback continued under pressure. The pair traded off of its weekly high of 92.10 seen on Monday as the Japanese BSI Manufacturing Index came out 10.0, better than the expected 7.8 consensus. Also, the BOJ decided to leave its Overnight Call Right unchanged at 0.1%, as was widely expected. The rate continued lower on Tuesday as the BOJ announced a ¥3T loan scheme designed to promote growth in the Japanese economy and to fight deflation. In the plan, participating banks will be able to borrow up to ¥150b against collateral at the 0.10% rate. The loans will be made to support 18 industry sectors. The rate continued dropping on Wednesday and Thursday after disappointing U.S. housing and jobless claims data came out. Also on Thursday, the BOJ released its monthly report noting that, “Japan''s economy shows further signs of a moderate recovery, induced by improvement in overseas economic conditions.” The report also anticipated that the recovery in the Japanese economy would continue at a moderate pace and that, “The uptrend in exports and production is expected to continue, reflecting continued improvement in overseas economic conditions.” USD/JPY continued lower on Friday, making its weekly low of 90.42 before trading higher to close at 90.68, off 1% for the week.

Cable extended its gains last week as the Greenback continued its corrective decline. The rate started out trading off of its weekly low of 1.4521 seen on Monday as the U.K. RICS House Price Balance came out at 22%, better than the anticipated 16% consensus. Also, the Confederation of British Industry raised its estimate for U.K. GDP to 1.3% from 1.0%. On Tuesday, the rate continued higher as U.K. CPI showed a 3.4% increase year on year, slightly less than the 3.5% consensus. Core CPI also came out slightly below estimates at 2.9% versus the 3.0% expected. Nevertheless, U.K. Consumer Confidence dropped to 65 versus an expected reading of 74, showing consumer sentiment was weakening in Britain. Cable nevertheless continued climbing on Wednesday, buoyed by the U.K. Claimant Count Change which showed a better than expected decrease of -30.9K versus a consensus of -23.2K, with the previous number revised downward from -27.0K to -32.0K. U.K. Unemployment also edged down to 7.9% versus the consensus that was anticipating 8.0%. The pair saw very little change on Thursday, despite positive U.K. Retail Sales showing a 0.6% increase, much better than the 0.1% expected. Nevertheless, CBI Industrial Order Expectations decreased by -23 versus a consensus of a -15 decrease. Cable then went on to make its weekly high of 1.4885 on Friday as Preliminary Mortgage Approvals were up by 51K versus a 49K consensus and Public Sector Net Borrowing decreased to 16.0B versus a 18.2B consensus. The rate then sold off on profit taking to close on Friday at 1.4820, up 1.8% for the week.

AUD/USD benefited from continuing risk appetite and rallied notably last week. The week started with a Bank Holiday in Australia on Monday. In the RBA’s minutes of their June monetary policy meeting out last Tuesday, the central bank remarked on the European situation, stating that it had “deteriorated significantly” and that this would weigh on global growth. Regarding the more than 7% drop in the Australian Dollar recently, the bank seemed unconcerned, stating, “Taking a longer perspective, the Australian dollar remained well above its post-float average, both against the US dollar and in trade-weighted terms.” The RBA left rates unchanged at the meeting and is now expected to leave rates unchanged until after the Australian Inflation Report due out on July 28th. AUD/USD made its weekly low on Tuesday as Australian Housing Starts showed a disappointing 4.3% increase versus an expected increase of 7.1%. Nevertheless, the previous number was revised upward from 15.1% to 16.8%. The rate continued trading higher the rest of the week, making its weekly high of 0.8728 on Friday before settling at 0.8718, up an impressive 2.4% for the week. Both the NZD and the AUD gapped higher at the open this morning due in part to an announcement by the Chinese central bank that China was loosening the Yuan’s peg to the U.S. Dollar. The peg has kept the Yuan at 6.83 to the Dollar for almost two years and allowing the currency to float will directly affect Australia because China is the biggest buyer of its exports.

The Loonie came back last week, as USD/CAD traded lower after risk appetite again returned to the markets. The week started off on a positive note as the rate initially climbed on Monday. The rate continued higher on Tuesday, making its weekly high of 1.0360 despite Canadian Labor Productivity coming out at 0.7% versus a 1.4% consensus, and Canadian Manufacturing Sales printing at 0.2% versus a 0.3% consensus. The pair then headed south, trading lower on Wednesday. On Thursday, USD/CAD gained ground as Canadian Wholesale Sales came out showing a disappointing decrease of -0.3% versus an expected increase of 0.4%. Nevertheless, the previous number was revised upward from 1.2% to 1.4%. USD/CAD then made its weekly low of 1.0204 on Friday after gold made a new all time high by trading up to $1263.70 per ounce. Also, Canadian Foreign Securities Purchases came out at 12.36B, which was five times the expected number of 2.87B and the Canadian Leading Index showed an increase of 0.9% month on month, close to the market consensus of 0.8%. USD/CAD then went on to close on Friday at 1.0216, down 1% on the week.

The Kiwi rose considerably last week, with the prevailing risk appetite driving up the currency, as well as move by China to loosen the Yuan’s peg to the U.S. Dollar that caused NZD/USD to gap higher on this morning’s open. The rate started the week on a positive note by trading off of its weekly low of 0.6888 seen on Monday after New Zealand Retail Sales showed a -0.3% decline month on month versus a consensus of a -0.2% decline. Also, Core Retail Sales came out showing a -0.2% decline month on month, somewhat better than the -0.4% consensus. The rate continued higher on Tuesday as Westpac Consumer Sentiment came out at 119.3 versus a previous reading of 114.7. The rate continued rallying for most of the rest of the week, making its weekly high of 0.7073 on Friday before settling at 0.7065, up an impressive 2.4% for the week.

The Week Ahead

AUD: The Australian economic calendar for the coming week has little of note scheduled, with the likely highlight being the CB Leading Index on Thursday. Monday has New Motor Vehicle Sales (last 8.4% m/m), and Tuesday and Wednesday have nothing notable scheduled. Thursday has the featured CB Leading Index (last 0.3% m/m) to end the week since Friday is quiet. Technically, AUD/USD gapped up sharply over the weekend, with the gap extending from the Friday close at 0.8698 to the Monday open at 0.8817. This has taken the rate beyond the 50% retracement of the downward move from 0.9388 to 0.8066 at 0.8727, with the 61.8% level at 0.8883 now targeted. Resistance for AUD/USD shows on the chart at the 0.9025, 0.9077 and 0.9135 levels. Support is indicated at 0.8709, 0.8550 and 0.8275.

To view a live chart follow the link:

CAD: The upcoming week of Canadian economic releases is notably quiet. Nevertheless, it does have the important CPI data (0.0% and 0.3% Core m/m) due out on Tuesday and Retail Sales (last 2.1% and 1.7% Core m/m) scheduled for release on Wednesday to close out the week. Technically, USD/CAD traded in a rather tight 1.0222 to 1.0330 range last week, but has just broken that range to the downside to target 1.0114. Resistance in USD/CAD is seen in at 1.0336, 1.0460 and 1.0570. Support shows at 1.0147, at 1.0099 and just ahead of the key psychological 1.0000 parity level at 1.0011.

To view a live chart follow the link:

EUR: The Eurozone’s upcoming economic data week heats up somewhat, and features the important German Ifo Business Climate Report on Tuesday. Monday starts the week with important testimony by ECB President Trichet on economic and monetary affairs before the European Parliament in Brussels. On Tuesday, watch for the highlighted German Ifo Business Climate report (101.2), as well as the EZ Current Account (1.3B) and EZ Consumer Confidence (-19). Wednesday offers the GfK German Consumer Climate index (3.3), French Flash Manufacturing PMI (55.3) and Services PMI (61.2), German Flash Manufacturing PMI (58.3) and Services PMI (54.5), EZ Flash Manufacturing PMI (55.5) and Services PMI (56.2), and the Belgium NBB Business Climate index (-5.1). Thursday has French Consumer Spending (0.3% m/m), Italian Retail Sales (-0.1% m/m), Industrial New Orders (1.6% m/m) and the Italian Quarterly Unemployment Rate (8.6%). Friday ends the week with German Import Prices (0.1% m/m). Technically, EUR/USD traded continued trading higher last week after RSI/Price divergence indicated a reversal was likely after the 1.1876 June 7th low. The rate is supported by an upward sloping channel bottom trend line now drawn at 1.2342. Support for EUR/USD shows at 1.2353, 1.2241 and 1.2168, as well as at the psychological 1.2000 level. Resistance to the topside is seen at 1.2452/64, at 1.2671 and at 1.3093.

To view a live chart follow the link:

GBP: : The upcoming week of U.K. economic data releases calms down considerably, and features the Emergency Budget release on Tuesday. Monday starts the week off with the Rightmove HPI (last 0.7% m/m), while Tuesday has the important Annual Budget Release that may cause quite a stir in the markets. Wednesday features the key MPC Meeting Minutes (0-0-9 vote expected), plus BBA Mortgage Approvals (37.3K) and CBI Realized Sales (-17) to close out the week since Thursday and Friday are quiet. Technically, GBP/USD continued ticking higher last week, moving within what looks like a corrective C-wave. Projecting the previous A-wave move from 1.4249 to 1.4768 off of the B-wave low at 1.4345 yields Fibo objectives at 1:1 = 1.4864 and 1:1.618 = 1.5185. Resistance to the topside for GBP/USD shows in the psychological 1.5000 level, at 1.5052, and at 1.5125. Support is indicated at 1.4644, in the 1.4438/53 region and at 1.4345.

To view a live chart follow the link:

JPY: The economic data schedule quiets down considerably in Japan this week, but does feature important CPI data due out on Friday. Monday starts the week with the All Industries Activity (2.1% m/m), and Tuesday is quiet. Wednesday just has a speech by BOJ Gov Shirakawa scheduled in Tokyo, while Thursday has the Japanese Trade Balance (0.64T) and CSPI (-1.0% y/y) due out. Friday ends the week with the important Tokyo Core CPI (-1.5% y/y) and National Core CPI (-1.3% y/y) numbers. Technically, USD/JPY broke its triangular consolidation late last week to the downside, now targeting 83.81. Resistance for USD/JPY shows at 90.83, in the 91.81/92.10 region and at 92.87. Support is indicated just ahead of the psychological 90.00 level at 90.18, at 88.95 and at 87.95.

To view a live chart follow the link:

NZD: The next week of economic data releases in New Zealand remains rather quiet, but does feature Thursdays’ GDP number. Monday starts the week with Visitor Arrivals (last -1.8% m/m), and Tuesday has Credit Card Spending (1.9% y/y) due out. Wednesday has the important N.Z. Current Account data (-0.32B), while Thursday has the highlighted N.Z. GDP number (0.5% q/q) scheduled for release. Friday has the Trade Balance (767M) to close out the week. Technically, NZD/USD gapped upward over the weekend after staging a convincing rally last week. The gap extended from the Friday close seen at 0.7048 to the Monday open at 0.7133. This move has also taken the rate just above its 200-day MA now at 0.7127. Resistance for NZD/USD shows at 0.7295, 0.7324 and at 0.7440. Support for NZD/USD is seen at 0.7017, 0.6929 and 0.6884.

To view a live chart follow the link:

USD: The upcoming U.S. economic calendar has another busy week scheduled, featuring the FOMC’s statement and Rate Decision on Wednesday. Monday is quiet, but Tuesday has the important Existing Home Sales report (6.23M) due out, plus HPI (0.2% m/m), the Richmond Manufacturing Index (21), and testimony by U.S. Treasury Secretary Geithner before the Congressional Oversight Panel in Washington D.C. Wednesday has New Home Sales (435K), Crude Oil Inventories (last 1.7M), and the key FOMC Statement and Fed Funds Rate Decision in which the benchmark rate is expected to remain unchanged at <0.25%. On Thursday, look for Durable Goods Orders (-1.0% and 1.1% Core m/m) and Initial Jobless Claims (461K), while Friday has Final GDP (3.0% q/q) and the Final GDP Price Index (1.0% q/q), plus the Revised UofM Consumer Sentiment (75.5) and UofM Inflation Expectations (last 2.7%) numbers to end the week.

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]]> Weekly Market Watch - Monday, 14 Jun 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=11480 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=11480 Sun, 13 Jun 2010 23:24:04:027 GMT Last Week Recap

EUR: EUR/USD showed signs of recovering last week after several weeks of declines, as risk appetite finally returned to the markets. The rate started the week by trading off of its weekly low of 1.1875 on Monday as German Factory Orders showed an impressive 2.8% increase versus an expected decline of -0.1%. Also on Monday, Fed Chairman Ben Bernanke commented that “European leadership is strongly committed to doing whatever is necessary to preserve the Euro, preserve the Eurozone, preserve the European project, and avoid financial problems that would certainly arise.” Commenting about the trillion dollar consolidation package for the Euro, he noted that it was “a lot of money”, but indicated that it would help protect Greece, Spain and Portugal for many years. EUR/USD continued trading higher after the ECB kept its benchmark Minimum Bid Rate at 1.00% on Thursday, as was widely expected. In a statement made after the rate announcement, ECB President Trichet noted that the Eurozone economy was growing at a moderate pace in an "environment of continued tensions in some financial market segments and of unusually high uncertainty." Trichet also admitted the ECB was buying short-term bonds but did not elaborate on the E.U.’s bond purchasing program. Germany’s key Constitutional Court decision on Thursday to allow Germany to participate in the Eurozone bailout also helped the rate considerably. Also out on Thursday was the U.S. Trade Balance which showed the deficit was slightly better than expectations at -40.3B, versus a -40.8B consensus, but still the highest level in 18 months. Also, U.S. Initial Jobless Claims showed 456K new claims, just slightly higher than the consensus of 447K. On Friday, the rate made its weekly high of 1.2152 as weaker U.S. Retail Sales showed a disappointing -1.2% decline month on month versus an expected rise of 0.2%, while Core Retail Sales showed a large decline of 1.1% M/M, versus an expected rise of 0.1%. Nevertheless, both previous numbers were revised upwards somewhat from 0.4% to 0.6%. EUR/USD then traded lower on profit taking to close the week at 1.2108, up 1.1% from the previous weekly close.


USD/JPY traded in a limited range last week, selling off of its weekly high of 92.07 made Monday as Japanese M2 Money Stock showed an increase of 3.1% year on year, versus a consensus of a 2.8% rise. Also on Monday, the Japanese Current Account came out at 1.38T versus a consensus of 1.42T. The rate then made its weekly low of 90.83 on Tuesday, despite the fact that Japanese Leading Indicators came out below expectations at 101.7% versus a consensus of 102.8%, and with a downward revision of the previous number of 102.8% to 101.9%. Also on Tuesday, Japanese Core Machinery Orders came out much better than expected at 4.0% month on month versus the market consensus of only a 1.2% increase. On Wednesday, Japanese GDP came out slightly better than expected at 1.2% versus the consensus among analysts of a 1.1% increase. Thursday then saw USD/JPY improve somewhat as Japanese Household Confidence showed an increase of 42.8 versus a 42.3 consensus. On Friday, Naoto Kan, Japan’s new Prime Minister, addressed the Japanese Parliament in his first policy speech and warned that the country risked default on its borrowing if it failed to adjust its massive public debt. He went on to comment on Japan’s public debt, which is now twice the size of Japanese GDP, and becoming a top priority due to the financial market’s current preoccupation with sovereign debt. He noted that, "We cannot sustain public finance that overly relies on issuing bonds," adding that, "As we can see in the Eurozone confusion that started from Greece, there is a risk of default if the growing public debt is neglected and if trust is lost in the bond market." USD/JPY went on to close at 91.67, down just 2 pips for the week, and virtually unchanged from its previous weekly close.

Cable began the week on a positive note on Monday as U.K. Chancellor o George Osborne said an Emergency Budget will be released on June 22nd by the new Conservative-Lib Dem coalition government containing significant plans to cut public spending. Also on Monday, the U.K. BRC Retail Sales Monitor showed an improvement of 0.8% year on year versus a previous reading of -2.3%. On Tuesday, Cable made its weekly low of 1.4345 after Fitch ratings expressed concerns about the current level of U.K. debt, although the agency did not yet downgrade the U.K.’s coveted AAA credit rating. Prime Minister David Cameron assured the markets that his government’s Emergency Budget would be able to tackle the country’s debt problem. Also on Tuesday, the BRC Shop Price Index showed an expansion of 1.8% Y/Y, just below its previous reading of 2.0%. Cable then began inching up on Wednesday despite the U.K. Trade Balance showing a deficit of -7.3B versus a -7.0 consensus, with the previous number revised upward from -7.5B to -7.3B. On Thursday, the BOE left its benchmark Official Bank Rate unchanged at 0.5% and its Asset Purchase Facility at 200B, as was widely expected. Friday then saw GBP/USD make its weekly high of 1.4757, as PPI Input showed a -0.6% month on month decrease, versus a consensus of a -0.9% decrease, and Manufacturing Production showed a decline of -0.4% month on month, considerably worse than the 0.6% increase expected. Cable then sold off on profit taking to close the week at 1.4526, up just 0.4%.

AUD/USD gained considerably last week as renewed risk appetite took hold of the market. The rate started the week on a negative note, despite Australian ANZ Job Advertisements showing an increase of 4.3% month on month, versus its previous reading of -1.2%, indicating that Australian employers remain optimistic despite the recent RBA interest rate hikes. Furthermore, AUD/USD then made its weekly low of 0.8081 on Tuesday as Australian Home Loans showed a decline of 1.8% month on month, similar to the consensus of -1.9%, and despite the fact that the previous number was revised upward from -3.4% to -2.9%. On Wednesday, the rate reversed to trade higher after RBA Governor Stevens stated that the effects of the European debt crisis would not be as profound on Australia since exports to those countries were “quite small”, with Europe currently taking in only 5% of Australian exports. Also on Wednesday, the Australian Unemployment Rate improved to 5.2%, versus a market consensus of 5.4%, and the Australian economy added 26.9K new jobs, versus expectations for only 20.1K. AUD/USD then went on to make its weekly high of 0.8508 on Thursday as the Chinese released news that their exports had risen by 48.5% in May. Also, the import number they released of a 48.3% rise helped propel the Aussie higher since the bulk of Australian exports go to China. The rate went on to close on Friday at 0.8502, showing an impressive gain of 3.3% for the week.

USD/CAD began last week on by trading sharply off of its weekly high of 1.0678 seen on Monday as BOC Governor Mark Carney made comments to the effect that radical reforms are needed to fix the global financial system in a speech to securities regulators. The rate sold off on Tuesday, as the Loonie strengthened despite Canadian Housing Starts coming out at 189K, lower than the consensus of 203K expected. The rate continued its slide on Wednesday on the back of positive trade numbers out of China and a rise of $2 per barrel in crude oil. USD/CAD then made its weekly low of 1.0285 on Thursday after the Canadian Trade Balance showed a surplus of only 0.2B, versus a market consensus looking for 0.7B. The rate recovered somewhat on Friday, as Canadian Capacity Utilization came out slightly higher at 74.2%, versus the 73.4% expected, and with the previous reading of 70.9% revised upward to 71.3%. USD/CAD went on to close on Friday at 1.0336, down an impressive 2.6% for the week.

NZD/USD rose considerably last week as risk appetite returned to the markets and generally favoured the Kiwi. The week started off quietly with a Bank Holiday on Monday in New Zealand, and the market then saw the rate trade off of its weekly low of 0.6571 made on Tuesday as New Zealand equities dropped 2% in the first quarter hour of trading. Nevertheless, the rate came back strong by rallying sharply on Wednesday after the RBNZ raised its benchmark Official Cash Rate by 0.25 bps from 2.50% to 2.75%, making their first rate hike seen since July of 2007. The NZD/USD rally gained momentum after Central Bank Governor Alan Bollard noted in his accompanying statement said that “further removal of stimulus will be reviewed in light of economic and financial market developments.” Also on Wednesday, the New Zealand Overseas Trade Index showed a 5.9% increase Q/Q versus a consensus of a 1.9% increase. The rate continued rallying into the end of the week, making its weekly high of 0.6909 on Friday before closing the week just a tiny bit lower at 0.6907, up an impressive 3% on the week.

The Week Ahead

AUD: The Australian economic calendar for the coming week calms down considerably, featuring the RBA’s Monetary Policy Meeting Minutes due out on Tuesday. Monday is quiet as Australia enjoys a Bank Holiday, while Tuesday has the key RBA Monetary Policy Meeting Minutes, as well as RBA Deputy Governor Battellino Speaking in Sydney. Wednesday has the MI Leading Index (last 0.9% m/m) and Housing Starts (7.1% q/q) to end the week since Thursday and Friday are quiet. Technically, AUD/USD had a volatile last week, initially falling sharply to a low of 0.8081 on Tuesday before rallying as high as 0.8508 on Thursday to close the week higher at 0.8502. The rate may well edge a bit higher earlier in the week before a fresh selloff materializes toward next weekend, as the Aussie continues to trade below its 200-day MA that has now levelled out at 0.8976. Resistance for AUD/USD shows on the chart in the 0.8508/77 region, plus at 0.8709 and 0.9077. Support is indicated at 0.8425 and 0.8256, as well as in the 0.8066/71 region, and at the psychological 0.8000 level.

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CAD: The upcoming week of Canadian economic releases is moderately active, featuring the Leading Index on Friday. Monday starts the week with New Motor Vehicle Sales (-4.7% m/m) and Labour Productivity (1.4% q/q), Manufacturing Sales (0.3% m/m), but Tuesday is quiet. Wednesday just has BOC Gov Carney Speaking in Charlottetown, while Thursday has Wholesale Sales (0.4% m/m), and Friday has BOC Gov Carney Speaking in St. John’s ahead of the release of Foreign Securities Purchases (4.87B) and the highlighted Leading Index (0.8% m/m) to close out the week. Technically, USD/CAD again experienced considerable volatility last week, initially trading up to 1.0678, before selling off to a low of 1.0285 on Thursday. The decline brought the rate to close the week at 1.0336, below its 200-day Moving Average, now 1.0455 as the downside has again reasserted itself that is now expected to continue into the coming week. Resistance in USD/CAD is seen in at 1.0387, 1.0451 and 1.0678. Support shows near current levels at 1.0332, in the 1.0245/85 region, as well as at the key psychological 1.0000 parity level.

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EUR: The Eurozone’s upcoming economic data week is relatively quiet, but does feature the important ZEW Economic Sentiment reports on Tuesday. Monday starts the week with EZ Industrial Production (0.7% m/m), and Tuesday has the Italian Trade Balance (-1.03B), the German and EZ ZEW Economic Sentiment indexes (48.7 and 41.2), EZ Employment Change (-0.2% q/q) and the EZ Trade Balance (1.7B). Wednesday has EZ CPI (1.6% and 0.8% Core y/y), while Thursday has the ECB Monthly Bulletin, plus Buba President Weber Speaking in Frankfurt. Friday ends the week with German PPI (0.2% m/m). Technically, EUR/USD made yet another fresh low within its recent medium-term downtrend last Monday at 1.1876, just barely sending its 14-day RSI into oversold territory at 29. Nevertheless, this was less than the 21 RSI level seen at the May 19th 1.2119 low, and this divergence warned that the recent downtrend in EUR/USD was losing steam. The rate then reversed to make its weekly high on Friday at 1.2152 before closing the week at 1.2093, above its psychological 1.2000 level, but still well below its 200-day MA that is now at 1.3941 and falling. Support for EUR/USD shows at 1.2045, 1.1956 and 1.1876, as well as at the psychological 1.2000 level. Resistance to the topside is seen in the 1.2143/52 region, as well as at 1.2215 and 1.2326

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GBP: The upcoming week of U.K. economic data releases includes some key data, featuring the Inflation Report Hearings on Tuesday. Monday starts the week with the BOE Quarterly Bulletin, plus MPC Member Posen Speaking in New York. Tuesday has the RICS House Price Balance (16%), CPI (3.5% and 3.0% Core y/y), the DCLG HPI (10.3% y/y), the CB Leading Index (last 1.0% m/m) and RPI (5.0% y/y), as well as key Inflation Report Hearings before Parliament’s Treasury Committee. Wednesday offers Nationwide Consumer Confidence (74), Claimant Count Change (-25.3K), the Average Earnings Index (4.4% 3m/y), the U.K. Unemployment Rate (8.0%), and BOE Gov King Speaking in London. Thursday just has Retail Sales (0.1% m/m) and CBI Industrial Order Expectations (-15), while Friday finishes the week off with Preliminary Mortgage Approvals (49K), Public Sector Net Borrowing ( 18.3B), and the Preliminary M4 Money Supply (0.2% m/m) data. Technically, GBP/USD sold off initially last week to 1.4345 on Tuesday, then corrected higher to trade as far up as 1.4757 on Friday, before closing sharply lower at 1.4526. The medium term outlook for Cable remains bearish while the rate trades below its 200-day Moving Average now at 1.5733 and falling. Resistance to the topside for GBP/USD shows in the 1.4610/38 and 1.4757/68 regions, as well as at the psychological 1.5000 level. Support is indicated in the 1.4438/53 region, at 1.4345 and in the 1.4229/58 region.

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JPY: The economic data schedule has some key releases due out in Japan this week, featuring the Japanese Rate Decision tentatively scheduled for Tuesday. Monday starts the week with the BSI Manufacturing Index (7.8) and Revised Industrial Production (1.4% m/m), while Tuesday tentatively features the BOJ’s Monetary Policy Statement and press conference in which the central bank is widely expected to leave its benchmark Overnight Call Rate unchanged at 0.10%. Wednesday offers Tertiary Industry Activity (2.5% m/m), and the BOJ Monthly Report. Thursday is quiet, but Friday closes the week with the BOJ’s Monetary Policy Meeting Minutes. Technically, USD/JPY continued to trade within its broad 87.95-94.97 trading range last week, only trading as far up as 92.07 on Monday before hitting a low of 90.83 on Tuesday. USD/JPY closed toward the upper side of that trading range at 91.67, virtually unchanged from the previous week, and above its 200 day MA that is now at 90.92 and slightly downward sloping. Volatility in USD/JPY may well rise next week upon the breakout of this apparent triangular consolidation pattern. Expect Resistance for USD/JPY shows at 92.87, 93.63 and 94.97, while support is indicated at 91.41 and in the 90.53/83 and 88.95/25 regions, as well as at the psychological 90.00 level

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NZD: The next week of economic data due out in New Zealand has nothing notable scheduled other than the important Retail Sales report due out on Monday (-0.2% and -0.4% Core m/m). Technically, NZD/USD traded correctively higher from its Tuesday 0.6571 low to close near its 0.6909 high at 0.6907 last week. Nevertheless, the rate still remains below its 200-day MA that now comes in at 0.7123 and has flattened out. Hence, selling into rallies is again preferred for this coming week. Resistance for NZD/USD shows at 0.6909, at the psychological 0.7000 level and at 0.7039. Support for NZD/USD is seen at 0.6801, 0.6651 and 0.6571.

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USD: The upcoming U.S. economic calendar has a busy week scheduled, featuring PPI and CPI inflation numbers due out on Wednesday and Thursday respectively. Monday starts the action with FOMC Member Bullard speaking in Tokyo, followed on Tuesday by a speech in Hong Kong, as well as the Empire State Manufacturing Index (20.1), Import Prices (-1.1% m/m), TIC Long-Term Purchases (77.3B), and the tentatively-scheduled NAHB Housing Market Index (22). Wednesday has Building Permits (0.63M), PPI (-0.5% and 0.1% Core m/m), Housing Starts (0.65M), the Capacity Utilization Rate (74.6%), Industrial Production (0.9%m/m), and Fed Chairman Bernanke Speaking in New York. On Thursday, look for CPI (-0.2% and 0.1% Core m/m), Initial Jobless Claims (454K), the Current Account (-120B), the Philly Fed Manufacturing Index (21.3), and the CB Leading Index (0.4% m/m) to finish the week since Friday is quiet.

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]]> Weekly Market Watch - Monday, 07 Jun 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=11183 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=11183 Sun, 06 Jun 2010 22:24:14:870 GMT Last Week Recap

EUR/USD continued its decline last week, as sovereign debt problems in Eastern Europe — notably Hungary — began weighing on the rate. Despite Hungary not being part of the European Union, comments on Tuesday by a spokesman for newly elected Hungarian Prime Minister Orban said that the Hungarian economy is in a grave situation and that default might be a possibility. Furthermore, at the G20 meeting in Seoul Korea this past weekend, IMF Director Strauss-Kahn commented he was “surprised” at the comments by the new Hungarian government leader. This news adversely affected EUR/USD, bringing the rate off of its weekly high of 1.2340 on Tuesday as European Unemployment came out at 10.1%, as was widely expected. Also, U.S. ISM Manufacturing PMI came out slightly better than expected at 59.7 versus a 59.3 consensus. On Wednesday, EUR/USD came under renewed pressure, as the Iranian central bank announced it would sell €45B from its reserves to buy gold and U.S. Dollars, making a complete turnaround on their previous policy towards reducing their U.S. Dollar exposure due to friction with the United States. The sale, which began last week, should be completed by the end of the summer, with September 22nd being the target date for completion of this huge reserve adjustment. Thursday saw the rate continue to decline on disappointing European Retail Sales numbers which showed a decline of -1.2% M/M versus an expected rise of 0.1%. On Friday, the rate made its weekly low of 1.1955— a low point not seen since early 2006 — which came despite U.S. Non-Farm Payroll numbers showing a disappointing increase of just 431K versus an expected 521K rise. The U.S. Unemployment Rate also came out slightly better that expected at 9.7% versus a 9.8% consensus. EUR/USD went on to close on Friday at 1.1967, down 2.5% for the week.


USD/JPY began the week by trading lower, as mixed Japanese economic numbers released on Monday showed Japanese Average Cash Earnings increased by 1.5% year on year, better than the consensus of 0.9% expected. Nevertheless, Preliminary Industrial Production was up only 1.3%, versus expectations for a considerably more buoyant 2.6%, although the previous number was revised up to 1.2% from 0.3%. Trading off of its weekly low of 91.51 seen on Tuesday, the rate then began rising as Japanese Prime Minister Yukio Hatoyama resigned after only eight months in office which weakened the Yen considerably. The resignation came about due to disagreement regarding the U.S. Army base in Okinawa. His successor is Finance Minister Naoto Kan who has been a consistent advocate for a weaker Yen. On Wednesday, Japanese Capital Spending showed a decrease of -11.5% for the quarter versus a consensus of -9.5%, adding fuel to the Yen’s decline versus the Greenback. USD/JPY continued higher, making its weekly high of 92.86 on Friday as Finance Minister Naoto Kan was confirmed as Japan’s new Prime Minister. The rate then retreated on profit taking to close at 91.82, up 1% for the week.

GBP/USD began the week by trading off of its weekly low of 1.4360 made Monday, as both the U.S. and the U.K. markets observed bank holidays. Over the weekend, Coalition Cabinet Member and Treasury Minister David Laws resigned over his claims for rent payments to rent a spare room in his gay partner’s flat that cost taxpayers over £40.000. On Tuesday, U.K. Manufacturing PMI was released at 58.0, in line with expectations. On Wednesday, Cable rallied significantly to make its weekly high of 1.4767 as the U.K.’s Prudential PLC’s $30.375B bid to buy the Asian Subsidiary of AIG International fell through, driving Cable higher since that large pending transaction was no longer weighting on the rate. Also on Wednesday, Nationwide HPI came out at 0.5% M/M, as was widely expected, and Final Mortgage Approvals came out slightly better at 50K versus the 49K expected. Friday saw Cable decline, as the Halifax HPI dropped 0.4% M/M, versus a consensus of a 0.3% rise, thereby bringing the rate down to close at 1.4450. This was only 7 pips below the previous weekly close, leaving GBP/USD virtually unchanged on the week.

AUD/USD began the week on a soft note as Monday’s Australian Private Sector Credit rose only 0.2% M/M versus a 0.5% consensus, while Australian Building Approvals showed a decline of -14.8% M/M — considerably worse than the expected -5.2% decline. The rate continued heading south on Tuesday, as increasing risk aversion continued putting pressure on the rate. On Tuesday, Australian GDP came out at 0.5% Q/Q, slightly worse than the 0.6% expected, although the previous reading was revised upward to 1.1% from 0.9% neutralising its effect. Also on Tuesday, the RBA announced it would leave the key Cash Rate unchanged at 4.5%, as was widely expected. RBA Governor Glen Stevens concluded in his accompanying statement that the central bank considers its current rates as “appropriate for the near-term.” Governor Stevens also noted that investors were taking a “good deal more caution” in the markets due to the European sovereign debt crisis. On Wednesday, the Australian Trade Balance showed a surplus of 0.13B, much better than the expected deficit of 0.62B, and the first positive reading for over a year. The rate then made its weekly high of 0.8521 on Thursday, before selling off sharply on news that Xstrata had halted spending money on two major mining concerns in protest over the controversial new Australian mining “super tax”. The rate continued declining on Friday, making its weekly low of 0.8211 before rallying slightly to close at 0.8229, down 3% for the week.

USD/CAD started the week on a soft note, ticking lower during the U.S. Memorial Day holiday on Monday. Nevertheless, Canadian GDP out Monday showed a 0.6% rise M/M versus a 0.5% consensus, although a downward revision of 0.1% to the previous month neutralised its effect. Also on Monday, the Canadian Raw Materials Price Index or RMPI showed a 1.7% increase M/M, versus a 1.3% expected increase. The rate made its weekly low of 1.0332 on Tuesday, as the BOC announced an expected 25 bp hike in its benchmark Overnight Rate to 0.50%, its first tightening move seen since July of 2007. The BOC also raised the Bank Rate a corresponding amount to 0.75% while keeping the Deposit Rate 0.25%. The BOC’s statement noted that this move re-established “the normal operating band of 50 basis points for the overnight rate.” While the BOC rate hike initially strengthened the Loonie, the accompanying statement cited an “uneven global recovery” and noted “considerable uncertainty” in its outlook that may preclude “any further reduction in monetary stimulus”. USD/CAD then started rallying, making its weekly high on Friday despite weak U.S. employment data versus the relatively positive Canadian employment numbers. The Canadian Employment Change showed the Canadian economy adding 24.7K jobs, versus an expected 16.8K. Also, Canadian Building Permits showed an impressive increase of 5.4% versus an expected decline of -1.8%, and the Ivey PMI came out better than expected at 62.7, versus a consensus of 59.8. USD/CAD made its weekly high of 1.0627 on Friday, before closing at 1.0625, up 1% for the week.

NZD/USD traded in a limited range last week, starting out on a positive note despite NBNZ Business Confidence coming out at just 48.2 versus a previous reading of 49.5. On Tuesday, NZD/USD began trading lower as ANZ Commodity Prices showed an increase of only 2.5% versus a previous reading of 4.9% revised upward to 5.4%. The rate continued declining Wednesday as risk aversion continued weighing on the Kiwi. On Thursday, the rate turned around and made its weekly high of 0.6898 on expectations of an RBNZ rate hike to 2.75% from 2.5% after the bank''s meeting next week. Nevertheless, despite the overall positive recent set of economic data releases, global economic uncertainty continues affecting New Zealand’s monetary policy, prompting some observers to call for New Zealand interest rates to be kept on hold. NZD/USD then fell to its weekly low of 0.6680 on Friday before recovering somewhat to close at 0.6703, down 1.2% on the week.

The Week Ahead

AUD: The Australian economic calendar for the coming week has some important data due out, featuring the Australian Employment data on Thursday. Monday starts the week out with the AIG Construction Index (last 55.8) and ANZ Job Advertisements (last -1.2%), and Tuesday is quiet. Wednesday offers the Westpac Consumer Sentiment index (last -7.0%), Home Loans (-1.9% m/m), and NAB Business Confidence (last 13). Thursday has MI Inflation Expectations (last 3.6%) and the featured Australian Employment report containing the Employment Change (16.1K) and Unemployment Rate (5.4%) releases. Thursday also offers the RBA Bulletin and a speech by RBA Governor Stevens in Castle Hill to close out the week since Friday is quiet. Technically, AUD/USD had a volatile last week — on balance falling sharply to 0.8212 from where it barely managed to close the week higher at 0.8219. The rate may well see another test of the recent 0.8066 low this coming week as the Aussie continues to trade below its 200-day MA that has now leveled out at 0.8977. Resistance for AUD/USD shows on the chart in the 0.8521/77 region, plus at 0.8709 and 0.9077. Support is indicated in the 0.8186/12 and 0.8066/71 regions, and at the psychological 0.8000 level.

To view a live chart follow the link:

CAD: The upcoming week of Canadian economic releases calms down considerably, featuring the Canadian Trade Balance report on Thursday. Monday starts the week with a speech by BOC Governor Carney in Montreal. Tuesday has Canadian Housing Starts (206K), while Wednesday is quiet. Thursday features the Canadian Trade Balance (0.7B), plus another speech by BOC Governor Carney in Montreal and the NHPI (0.3% m/m). Friday closes the week with the Capacity Utilization Rate (73.4%). Technically, USD/CAD also experienced considerable volatility last week, initially trading down to 1.0332 after bearish price divergence appeared on the 14-day RSI. The rate then staged a strong rally above its 200-day Moving Average, now at 1.0468, to 1.0624 and closed just lower at 1.0604 to provide yet another potential selling opportunity in USD/CAD. Resistance in USD/CAD is seen in at 1.0624, 1.0742/8 and 1.0853/68. Support shows at 1.0442, 1.0332 and 1.0245, as well as at the key psychological 1.0000 parity level.

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EUR: The Eurozone’s upcoming economic data week calms down somewhat, but does feature the important ECB rate decision on Thursday. Monday starts the week with the Sentix Investor Confidence Index (-5.2) and German Factory Orders (-0.1% m/m). Tuesday has the German Trade Balance report (14.2B), the French Government’s Budget Balance (-28.9B), the French Trade Balance (-4.3B) and German Industrial Production (0.7% m/m). Wednesday has nothing of note, but Thursday features the ECB’s rate statement and decision in which the central bank is expected to keep its benchmark Minimum Bid Rate unchanged at 1.0%. Also coming out on Thursday are German Final CPI (0.1% m/m), French Industrial Production (0.7% m/m), French Final Non-Farm Payrolls (-0.1% q/q) and Italian Industrial Production (0.4% m/m). Friday just has German WPI (1.3% m/m) to end the week. Technically, EUR/USD made another fresh low within its recent medium-term downtrend at 1.1955, sending its 14-day RSI into oversold territory. The rate also closed the week below its psychological 1.2000 level and broke the lower line of a descending triangle on rising volume to set up a 1.1568 target. Support for EUR/USD shows at 1.1955, 1.1825 and 1.1660. Resistance to the topside is seen at the psychological 1.2000 level, as well as at 1.2143 and 1.2452.

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GBP: The upcoming week of U.K. economic data releases is less active, but has some key data due out nevertheless, featuring the MPC’s rate decision on Thursday. Monday is quiet, and Tuesday just has the BRC Retail Sales Monitor (last -2.3% y/y). Wednesday offers the Nationwide Consumer Confidence index (78), the BRC Shop Price Index (last 2.0% y/y), and the U.K. Trade Balance report (-7.0B). Thursday features the BOE’s Asset Purchase Facility announcement (unchanged at 200B), plus the tentatively scheduled MPC Rate Statement in which the committee is expected to leave the Official Bank Rate unchanged at (0.50%). Friday closes the week with Manufacturing Production (0.6% m/m), PPI (-0.1% Input and 0.6% Output m/m), Industrial Production (0.5% m/m) and the tentatively scheduled NIESR GDP Estimate (last 0.5%). Technically, GBP/USD continued correcting higher last week as the rate managed to trade as high as 1.4768 before softening to 1.4453. The downside may prevail this week for Cable, so look to sell corrective rallies for new lows below 1.4229. Resistance to the topside for GBP/USD shows at 1.4520/27, 1.4610/38 and 1.4769, as well as at the psychological 1.5000 level. Support is indicated at 1.4438/53, 1.4229/58 and 1.4040.

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JPY: The economic data schedule is again rather quiet in Japan this week, featuring the Japanese Final GDP number on Thursday. Monday is quiet, but Tuesday has Bank Lending (last -1.8% y/y), the Japanese Current Account (1.42T), M2 Money Stock (2.8% y/y), the Economy Watchers Sentiment index (50.8) and Leading Indicators (102.8%). On Wednesday, look for Core Machinery Orders (1.2% m/m) and Preliminary Machine Tool Orders (last 220.9% y/y). Thursday features the Final Japanese GDP number (1.1% q/q), plus the CGPI (0.3% y/y), the Final GDP Price Index (-3.0% y/y), and Household Confidence (42.3) to close out the week since Friday is quiet. Technically, USD/JPY continued to trade within its broad 87.95-94.97 consolidation band last week, only trading as far down as 90.53 before rallying up to 92.87. The upside seems more likely to prevail over the coming week, especially since the rate has managed a weekly close above its 200 day MA that is now at 90.96 and gradually sloping downward. Resistance for USD/JPY shows at 92.87, 93.63 and 94.97, while support is indicated at 91.41, 88.95/25 and 87.95.

To view a live chart follow the link:

NZD: The next week of economic data due out in New Zealand heats up a bit, featuring the important RNBZ rate decision on Thursday. Monday starts the week on a peaceful note with a Bank Holiday in New Zealand, followed on Tuesday by Manufacturing Sales (last 0.7% q/q). Wednesday is quiet, but Thursday features the RNBZ Rate Decision and associated Press Conference and Monetary Policy Statement in which the central bank is widely expected to hike its Official Cash Rate by 25 bps to 2.75%. If so, this would be the RNBZ’s first rate rise seen since July of 2007. Thursday will also see the release of the Business NZ Manufacturing Index (last 58.9) and the Overseas Trade Index (1.9% q/q), while Friday closes the week with just FPI (last -0.5% m/m). Technically, NZD/USD corrected as high as 0.6898 last week, but saw resumed selling pressure that took the rate down to 0.6681. Also, NZD/USD remains firmly below its 200-day MA that now comes in at 0.7126 and has flattened out. Selling rallies is again preferred for this coming week. Resistance for NZD/USD shows in the 0.6861/98 region, plus at 0.7039 and the psychological 0.7000 level. Support for NZD/USD is seen at 0.6681, 0.6603/18 and 0.6560.

To view a live chart follow the link:

USD: The U.S. economic calendar has some key data due out this coming week, featuring Thursday’s Trade Balance report. Monday starts the action with Consumer Credit (1.1B m/m), and Tuesday has an important speech by Fed Chairman Bernanke scheduled in Washington D.C., as well as a speech by FOMC member Duke in Hollywood and the IBD/TIPP Economic Optimism index (49.3). Wednesday has a speech by FOMC Member Hoenig in Kansas City and key testimony by Fed Chairman Bernanke before the House Budget Committee, in Washington D.C. schedule, plus Wholesale Inventories (0.6% m/m), the Fed’s Beige Book, and yet another speech by Fed Chairman Bernanke, this time in Richmond. Thursday features the important Trade Balance report (-40.8B), as well as Unemployment Claims (447K), and the Federal Budget Balance (-138.6B). Friday end the week with Retail Sales (0.2% and 0.1% Core m/m), the Preliminary U of M Consumer Sentiment index (74.7) and Inflation Expectations (last 3.2%), and Business Inventories (0.6% m/m).

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]]> Weekly Market Watch - Monday, 31 May 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=10849 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=10849 Sun, 30 May 2010 22:55:44:243 GMT Last Week Recap

EUR/USD began last week by trading off of its weekly high of 1.2563 seen on Monday, as Germany and France both enjoyed bank holidays on Monday. The Greenback began strengthening versus the Euro as Monday’s U.S. Existing Home Sales showed a modest improvement at 5.77M versus the 5.62M consensus. Nevertheless, with Greek sovereign debt concerns still a major force in the market, the rate continued sliding on Tuesday as Britain, Italy, Portugal, Spain and other members of the E.U. announced plans to cut billions of Euros in spending to help narrow their budget deficits as European stocks lost almost 3%. Also on Tuesday, Eurozone Industrial New Orders were up an impressive 5.2% versus a 2.2% consensus, and the previous number was revised upwards to 1.9% versus 1.5%. Also, U.S. CB Consumer Confidence rose to 63.3 versus a 59.1 consensus. EUR/USD continued sliding on Wednesday after U.S. Durable Goods Orders showed a 2.9% increase M/M versus a 1.4% consensus and a previous number revised upwards from -1.3% to 0.0%. Core Durable Goods showed a decrease of -1.0% versus an increase of 0.5% expected, although the revised previous number was much better at 4.8% versus the 2.8% original print. Also on Wednesday, New Home Sales in the United States rose to 504K, versus a consensus of a 425K increase, with the previous number also revised upwards from 411K to 439K. On Thursday, the rate made its weekly low of 1.2153, but then managed a rally to 1.2359 after U.S. Preliminary GDP came out at a disappointing 3.0% Q/Q versus a 3.5% consensus, and U.S. Unemployment Claims came out at 460k versus the lower 450K consensus. The rate then resumed its downtrend as Fitch Ratings downgraded Spain’s debt from AAA to AA+, assigning the country a “stable” outlook. EUR/USD went on to close Friday at 1.2268, down 2.5% on the week.

USD/JPY gained ground last week, as Japanese economic numbers indicated the economy in Japan continues to make a moderate recovery at best, with deflation still a major concern. The rate began last week by moving higher as Japanese All Industries Activity out on Monday showed a decrease of -0.8% versus a 0.6% rise consensus. On Tuesday, Japanese CSPI data showed consumer prices had fallen for the 13th straight month, down -1.1% Y/Y, with the previous number revised slightly downward from -1.1% to -1.2%. In a statement after the release, BOJ Governor Shirakawa said, "I think that a primary mandate for a central bank should be to achieve a stable financial environment." He also added, "When a central bank feels constrained by short-term developments too much, that is more likely to amplify microeconomic fluctuations." On Wednesday, the Japanese Trade Balance came out with a surplus of 0.73T, versus a 0.69T consensus, with the previous number adjusted higher from 0.67T to 0.77T. The rate then continued climbing on Thursday, as Japanese Household Spending showed a decline of -0.7% versus a consensus of a 2.5% rise. Tokyo CPI came out slightly worse at -1.6% Y/Y versus a -1.5% consensus, while the Japanese Unemployment Rate rose slightly to 5.1% versus a 5% consensus. On the more positive side, Japanese Retail Sales rose an impressive 4.9% Y/Y versus a 3.7% market consensus. USD/JPY went on to close on Friday at 90.88, up 1% for the week.

GBP/USD had a relatively quiet week, with Cable finally taking a breather after the past two weeks of volatility. The rate started the week by trending lower, making its weekly low of 1.4258 on Tuesday as U.K. Revised GDP came out at 0.3% Q/Q, in line with expectations. The rate continued trending lower Wednesday, as U.K. BBA Mortgage Approvals came out at a disappointing 35.7K versus a consensus of 37.6K. On Thursday, Cable staged a corrective rally on the back of weaker U.S. economic data and despite U.K. CBI Realized Sales index showing a decline of -18 without any compensating revision. This was the lowest level for that index seen since March of 2009 and was much worse than the expected +13 increase. Also on Thursday, the U.K. GfK Consumer Confidence showed a decrease of -18 versus a market consensus of -15. On Friday, Cable made its weekly high of 1.4610 before selling off to close the week at 1.4457, down a mere 0.2% from the previous weekly close.

AUD/USD recovered somewhat after last week’s huge drop of over 6%, initially starting the week by trading lower. This was despite Australian New Motor Vehicle Sales improving by a notable 8.4% M/M versus a previous reading of -2.8%, which was slightly revised down from -2.7%. The pair then made its weekly low of 0.8066 on Tuesday after Australian Construction Work Done showed a disappointing increase of just 1.9% Q/Q, substantially lower than the 4.1% increase expected, and with the previous number revised sharply downward from 2.6% to -0.2%. The pair continued trading lower on Wednesday, as Australian Private Capital Expenditures showed a decline of -0.2%, considerably worse than the 2.1% increase expected, although the previous number was revised upward to 6.1% versus a previous reading of 5.5%. On Thursday, AUD/USD gained on weaker U.S. GDP and Employment data, leading the rate up to the pair’s weekly high of 0.8550 on Friday before it sold off on profit taking to close the week at 0.8473, up 1.9% from the prior week’s close.

USD/CAD had a relatively quiet past week, starting with Monday’s Canadian bank holiday and despite making its weekly high of 1.0853 on Tuesday. The rate then sold off sharply, favoring the Loonie as traders increasingly priced in a BOC move to hike rates by 25 bps next week. On Wednesday, the Organization for Economic Cooperation and Development or OECD, urged the BOC to remove policy accommodations. This brought the rate down to 1.0479 on Thursday. USD/CAD then fell further to make its weekly low of 1.0444 seen on Friday after the Canadian Current Account came out at -7.8B, slightly better than the expected -8.5B, although the previous reading of -9.8B was revised downward to -10.2B. USD/CAD went on to close the week at 1.0516, down 0.7%.

NZD/USD started last week on a soft note, as Monday’s New Zealand Inflation Expectations data showed a 2.8% increase Q/Q, slightly better than the previous 2.7% number. The pair then sold off further on Tuesday to make its weekly low of 0.6560 before rallying back to 0.6700. On Wednesday, the New Zealand Trade Balance showed an impressive surplus of 656M, versus an expected number of 455M and the previous number being revised upwards from 567M to 590M. This propelled the rate up to the 0.6835 level on Thursday. The rate then made its weekly high of 0.6861 on Friday, as New Zealand Business Consents showed an 8.5% increase M/M versus a previous reading of 0.1% that had been revised upwards from a previous reading of -0.4%. NZD/USD went on to close the week at 0.6785, up just 0.1% and virtually unchanged on the week.

The Week Ahead

AUD: The Australian economic calendar for the coming week has plenty to watch, featuring the RBA’s rate decision on Tuesday. Monday starts the busy week with the MI Inflation Gauge (last 0.4% m/m), Australian Current Account (-16.4B), Private Sector Credit (0.5% m/m) and Company Operating Profits (3.1% q/q), plus the tentatively scheduled HIA New Home Sales report (last 0.9% m/m). Tuesday has the AIG Manufacturing Index (last 59.8), Building Approvals (-4.9% m/m), Retail Sales (0.3% m/m) and Commodity Prices (29.4% y/y), plus the key RBA Rate Statement and Cash Rate announcement in which the central bank is expected to leave its benchmark rate unchanged at 4.5%. Wednesday has the important GDP data (0.6% q/q), while Thursday offers the AIG Services Index (last 52.3), the Australian Trade Balance (-0.77B). Friday and Saturday feature the G20 meetings in Seoul to close out the week. Technically, AUD/USD again fell sharply to barely make a fresh low at 0.8066 last week, before rallying correctively to 0.8550. These levels look like short-term selling opportunities for another test of the recent 0.8066 low as the Aussie continues to trade below its 200-day MA that has now levelled out at 0.8975. Resistance for AUD/USD shows on the chart at 0.8550/77, 0.8709 and 0.9025. Support is indicated at 0.8186/01, 0.8066/71, and at the psychological 0.8000 level.

To view a live chart follow the link:

CAD: The upcoming week of Canadian economic releases heats up considerably, featuring the BOC’s rate decision on Tuesday. Monday starts the week with Canadian GDP (0.5% m/m), RMPI (1.1% m/m) and IPPI (-0.3% m/m). Tuesday has the highlighted BOC Rate Statement and the central bank is widely expected to hike its benchmark Overnight Rate to 0.50% from its current 0.25% level. Wednesday and Thursday have little of note, but Friday has the important Canadian Employment Change (20.7K) and Unemployment Rate (8.0%), plus Building Permits (-1.6% m/m), Ivey PMI (59.6) and the start of the G20 Meetings in Seoul that will run through Saturday. Technically, USD/CAD made another sharp corrective rally last week that extended as far up as 1.0853 before the downside again began to reassert itself with that latter direction likely to prevail over the coming week. The rate now trades just above its 200-day MA that is now at 1.0478 and sloping slightly downward. Resistance in USD/CAD is seen in at 1.0532, 1.0742/8 and 1.0853/68. Support shows at 1.0442, 1.0245 and 1.0109, as well as at the key psychological 1.0000 parity level.

To view a live chart follow the link:

EUR: The Eurozone’s upcoming economic data week warms up this coming week, and features the G20 meetings on Friday and Saturday at which the European crisis will be discussed as a major agenda item. Monday has an important speech by ECB President Trichet scheduled in Seoul via satellite, as well as EZ M3 Money Supply (-0.2% y/y), Private Loans (-0.2% y/y), CPI Flash Estimate (1.7% y/y) and Italian Prelim CPI (0.3% m/m). On Tuesday, Buba President Weber will speak in Frankfurt, followed by German Retail Sales (0.7% m/m), German Unemployment Change (-17K), EZ Final Manufacturing PMI (55.9), the Italian Monthly Unemployment Rate (8.9%), and the EZ Unemployment Rate (10.1%). Wednesday offers EZ PPI (0.7% m/m), while Thursday has EZ Final Services PMI (56.0) and Retail Sales (0.1% m/m). Friday will be the first day of the key G20 Meetings and also offers EZ Revised GDP (0.2% q/q). The G20 Meetings continue on Saturday to end the week. Technically, EUR/USD failed to make another fresh low within its recent medium-term downtrend, only trading as low as 1.2153 last week before recovering considerably to 1.2452. This argues for further upside potential this week to the 1.2671 area. Support for EUR/USD shows at 1.2203, 1.2143/53 and at the psychological 1.2000 level. Resistance to the topside is seen at 1.2387/93, 1.2452 and 1.2671.

To view a live chart follow the link:

GBP: The upcoming week of U.K. economic data releases is relatively quiet but has some key data due out nevertheless, featuring HPI and PMI data on Tuesday. Monday starts the week out on a peaceful note with a U.K. Bank Holiday, while Tuesday has the Halifax HPI (0.3% m/m) and Manufacturing PMI (57.8) data. Wednesday offers Construction PMI (58.3), Net Lending to Individuals (1.1B m/m), and Final Mortgage Approvals (50K). Thursday has Nationwide HPI (0.5% m/m) and Services PMI (55.6), while Friday sees the start of the G20 Meetings that run through Saturday in Seoul. Technically, GBP/USD continued consolidating recent losses last week as the rate traded in a 1.4258 to 1.4610 range and failed to make a new low within its recent downward move. Nevertheless, the downside may well resume this week for Cable, so look to sell these corrective rallies for new lows below 1.4229. Resistance to the topside for GBP/USD shows at 1.4520/27, 1.4610/38 and 1.4916, as well as at the psychological 1.5000 level. Support is indicated at 1.4229/58, 1.4040 and 1.3502.

To view a live chart follow the link:

JPY: The economic data schedule is less active in Japan this week, featuring the G20 meetings next weekend. Monday starts the week off with Manufacturing PMI (last 53.5), Prelim Industrial Production (2.6% m/m), Average Cash Earnings (0.9% y/y) and Housing Starts (6.6% y/y), plus a tentatively scheduled speech by BOJ Governor Shirakawa in Tokyo. Tuesday is quiet, but Wednesday offers the Monetary Base data (2.8% y/y). Thursday has Capital Spending (-9.5% q/y), while Friday has the G20 Meetings that run through Saturday. Technically, USD/JPY continued to trade within its broad 87.95-94.97 consolidation band last week, only trading as far down as 89.25 before rallying up to 91.40. The upside seems more likely to prevail over the coming week, although the rate is struggling somewhat as it trades just below its 200 day MA that is now at 91.02 and sloping downward. Resistance for USD/JPY shows at 91.40, 93.63 and 94.97, while support is indicated at 89.80, 89.25 and 88.95.

To view a live chart follow the link:

NZD: The next week of economic data due out in New Zealand has little of note scheduled for release, but does feature NBNZ Business Confidence (last 49.5) on Monday. Tuesday is quiet, but Wednesday has ANZ Commodity Prices (last 4.9% m/m) due out. Thursday is also quiet, but Friday sees the start of the G20 meetings that run through Saturday in Seoul. Technically, NZD/USD made a new recent low at 0.6560 last week, continuing to experience selling pressure after having broken below its 200-day MA that now comes in at 0.7126 and has flattened out. Nevertheless, the rate finally managed to stage a corrective rally as high as 0.6861, which seems to present a short-term selling opportunity for the coming week. Support for NZD/USD is seen at 0.6741, 0.6603/18 and 0.6560. Resistance shows at 0.6817, 0.6861/75 and 0.7039, plus at the psychological 0.7000 level.

To view a live chart follow the link:

USD: The U.S. economic calendar has some very important data due out this coming week, featuring Friday’s Employment report and the weekend G20 Meetings. Monday is relatively quiet due to the Memorial Day Bank Holiday in the United States, but also has a speech by Fed Chairman Bernanke scheduled in Seoul, Korea. Tuesday has ISM Manufacturing PMI (59.6), ISM Manufacturing Prices (73.9) and Construction Spending (0.1% m/m). Wednesday just offers Challenger Job Cuts (last -71.1% y/y), while Thursday has Pending Home Sales (4.8% m/m), Total Vehicle Sales (11.4M), ADP Non-Farm Employment Change (56K), Initial Jobless Claims (451K), Revised Nonfarm Productivity (3.5% q/q), Revised Unit Labor Costs (-1.6% q/q), ISM Non-Manufacturing PMI (55.9) and Factory Orders (1.1% m/m), as well as speeches by Fed Chairman Bernanke in Detroit, FOMC Member Rosengren in Springfield, and FOMC Member Hoenig in Bartlesville. Friday will be the week’s highlight with the first day of the G20 Meetings in Seoul, in addition to the key Non-Farm Payrolls (465K), and Unemployment Rate (9.8%) data, plus Average Hourly Earnings (0.1% m/m). Saturday ends the week with the second day of G20 meetings.

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]]> Weekly Market Watch - Monday, 24 May 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=10552 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=10552 Sun, 23 May 2010 22:57:34:990 GMT Last Week Recap

EUR: EUR/USD had one of the most volatile weeks in recent memory last week, as risk aversion returned to the markets in full force. The pair started the week out on a relatively neutral note, as U.S. TIC Long-Term Purchases showed an increase of 140.5B, much better than the expected 50.5B consensus, and thereby indicating a strong foreign demand for U.S. securities. EUR/USD then ran into trouble on Tuesday as the German financial-services regulator BaFin banned naked short selling of Eurozone government debt traded on German exchanges, of the ten most important German financial sector stocks and of Credit Default Swaps to help stabilize the Euro and German markets. Nevertheless, a spokesperson for the U.K’s Financial Services Authority said the surprise ban’s scope was limited to: "German participants or business taking place inside Germany. However, it does not cover branches of German institutions outside Germany or in the UK." Also on Tuesday, Eurozone ZEW Economic Sentiment came out at a disappointing 37.6 versus a consensus of 44.2, and Eurozone Building Permits also came out at 0.61M versus a consensus of 1.7B, with an upward revision to the previous number of 1.8B to 3.4B. These factors sent EUR/USD sharply lower on Tuesday and continuing into Wednesday, as the rate fell to its weekly low of 1.2143 — a level not seen since 2006 as rumours also spread that Greece was preparing to leave the European Union. Also on Wednesday, U.S. Core CPI was slightly lower than expected at 0.0% M/M, versus a 0.1% number expected. EUR/USD then traded higher off of its weekly low and rallied considerably as the Swiss National Bank intervened in the markets to buy EUR/CHF. This brought EUR/USD back considerably higher on Thursday, aided by an unexpected expansion in U.S. Unemployment Claims, with 471K new jobless claims seen versus a consensus of 439K. The rate then continued trading higher on Friday, making its weekly high of 1.2671 after the German Parliament approved a €750B joint European-IMF bailout package to provide standby funds to defend the Eurozone, its currency and its hard-hit financial markets, with a special focus on stabilizing the European bond market. The rate then sold off somewhat on position-squaring to close the week at 1.2571, up 1.7% from the previous weekly close.


JPY: USD/JPY started last week on a positive note, after Japanese Core Machinery Orders increased 5.4% M/M versus a 5.8% consensus and the previous reading of -5.4% was revised substantially upward to -3.8%. The rate then began heading south on Tuesday, with the Yen benefitting relative to the Greenback as risk aversion again took hold of the market with the short selling ban by Germany’s BaFin. On Wednesday, Japanese Preliminary GDP showed a disappointing increase of only 1.2% Q/Q versus an expected 1.4%, and the previous number was revised downward from 1.1% to 1.0%. The Preliminary GDP Price Index showed a -3.0% drop Y/Y versus a consensus of -2.9%, although the previous reading of -3.0% was revised upward to -2.7%. Also, Revised Industrial Production came out at a much better reading of 1.2% M/M versus a consensus of just 0.4%. The rate resumed its slide on Thursday, making its weekly low of 88.96 as the BOJ left the Overnight Call Rate unchanged at 0.10%, as was widely expected. The rate firmed somewhat on Friday after the BOJ announced a bank lending support plan which would give banks access to loans at a 0.10% rate equal to the Overnight Call Rate. Nevertheless, banks participating in the plan must submit the details of their "approaches to carry out lending and investment for strengthening the foundations for economic growth," the BOJ said in its statement after the rate decision. Also, in reference to the renewed volatility in the currency market, the central bank stated that, "Attention should be paid to the effect of developments regarding fiscal conditions in some European economies on international finance and global economy." USD/JPY went on to close at 89.95 on Friday, down 2.8% for the week.

GBP: Pressure on GBP/USD abated last week as the United Kingdom’s political situation seemed to solidify somewhat. Cable started the week by coming off of its weekly high of 1.4545 on Monday after the U.K. Rightmove HPI showed a disappointing reading of 0.7% versus a previous reading of 2.6%. The rate fell further on Tuesday after U.K. CPI came out higher than expected at 3.7% Y/Y versus a 3.5% consensus, while Core CPI came out at 3.1% Y/Y versus a 2.9% consensus. Also on Tuesday, RPI came out at 5.3% versus a 4.8% consensus. Furthermore, BOE Governor Mervyn King wrote in a letter to newly-appointed Chancellor of the Exchequer George Osborne that he expected the inflation rate to fall back to the two percent government target within the year. Mervyn wrote, "Inflation has been somewhat higher than expected over the past year and the Committee (which sets rates) is conscious that the pace and extent of the prospective fall in inflation are highly uncertain." Cable then rose steadily after making its weekly low of 1.4228 on Thursday, with Friday seeing mixed economic numbers released in Britain. Specifically, U.K. Public Sector Net Borrowing came out at 10.0B versus an 11.1B consensus, and Preliminary Business Investments rose 6.0%, much better than the expected decline of -0.5%, with the previous number of -5.8% revised upward to -4.3%. Cable then proceeded to end the week in an orderly fashion by firming to a close of 1.4457, down just 0.5% from the previous week’s closing rate.

AUD: AUD/USD got hit especially hard last week, thanks to a synergistic combination of factors. The notable slide was sparked off by the proliferation of risk aversion in the markets, combined with confirmation that the RBA is putting rate rises on hold, negative economic numbers coming out of Australia and weakening commodities prices. The rate began selling off sharply on Monday after trading at its weekly high of 0.8860 as the RBA minutes from the May meeting that raised rates to 4.5% indicated that the market should not expect another rate hike anytime soon. The rate continued its decline on Tuesday, as Westpac Consumer Sentiment showed a drop of -7.0% versus a previous release of -1.0%. The Wage Price Index came out as expected at 0.9% Q/Q. AUD/USD continued selling off on Wednesday, as Australian MI Inflation Expectations showed a reading of 3.6% versus a previous reading of 4.1%. The rate persisted in falling on Thursday, eventually making its weekly low of 0.8070 on Friday before turning sharply around and trading up on short-covering ahead of the weekend to close at 0.8322, but still down a whopping 6.4% on the week.

CAD: USD/CAD gained last week on the back of softer commodity prices and despite positive economic numbers seen coming out of Canada. The week started quietly, with the rate making its weekly low of 1.0244 on Tuesday after Canadian Foreign Securities Purchases showed a decline of -0.62B that was considerably worse than the consensus of a 6.42B rise. On Wednesday, the rate began climbing despite Canadian Wholesale Sales showing an increase of 1.4% M/M versus a consensus of 0.3%. The rate also continued its upward trend on Thursday in spite of the Canadian Leading Index showing a 0.9% increase M/M versus a 0.7 consensus. USD/CAD then finally sold off after making its weekly high of 1.0749 on Friday as Canadian Core Retail Sales showed an impressive increase of 1.7% M/M versus a 0.5% consensus, and Retail Sales showed a 2.1% increase M/M versus an expected 0.2% increase. The rate then sold off considerably to close at 1.0593 on Friday, up an overall 2.2% for the week.

NZD: NZD/USD was also hit hard last week, along with the other commodity currencies. Trading off of its weekly high of 0.7078 on Monday despite favorable New Zealand PPI Input showing a 1.3% increase Q/Q versus a 0.5% expected. PPI Output also increased by 1.8% versus a 0.5% consensus. The rate nevertheless continued heading south, eventually making a weekly low of 0.6618 on Thursday as New Zealand Visitor Arrivals showed a disappointing drop of -1.8%, with the previous reading of a 1.1% increase being revised downward to 0.8%. NZD/USD then rallied back on Friday on short-covering to close at 0.6780, down an impressive 4.1% for the week.

The Week Ahead

AUD: The Australian economic calendar for the coming week has little of note, but features Thursday’s Private Capital Expenditure number. Monday starts the week with New Motor Vehicle Sales (last -2.7%), and Tuesday is quiet, but Wednesday offers the MI Leading Index (last 0.5% m/m) and Construction Work Done (4.1% q/q). Thursday has the CB Leading Index (last -0.3% m/m), followed by the key Private Capital Expenditure (2.6% q/q) data. Technically, AUD/USD fell sharply below its 200-day MA last week, making a new recent low at 0.8071 as it traded through the 38.2% retracement of the move from 0.6009 to 0.9405 at 0.8108 and toward the 1:1.618 projection ratio target of the move from 0.9405 to 0.8577 at 0.8048. Resistance for AUD/USD shows on the chart at 0.8365, 0.8577 and 0.8709. Support is indicated at 0.8186, 0.8071, and at the psychological 0.8000 level.

To view a live chart follow the link:

CAD: The upcoming week of Canadian economic releases has rather little to offer, but features the Current Account data on Friday. Monday starts the week with a Bank Holiday in Canada, and Tuesday and Wednesday are quiet. Thursday offers Corporate Profits (last 7.9% q/q), while Friday ends the week with the featured Current Account data (-9.0B). Technically, USD/CAD made another sharp corrective rally last week that extended as far up as 1.0748 and does not appear to be over yet, especially since it bested the rate’s 200-day MA. Resistance in USD/CAD is seen in at 1.0748, 1.0771 and 1.0868. Support shows at 1.0549, 1.0402 and 1.0245, as well as at the key psychological 1.0000 parity level.

To view a live chart follow the link:

EUR: The Eurozone’s upcoming economic data week has relatively little of note due out, and features French and German Bank Holidays on Monday. Tuesday has Italian Retail Sales (0.1% m/m) and E.Z. Industrial New Orders (2.3% m/m), while Wednesday offers GfK German Consumer Climate (3.7), French Consumer Spending (-0.5% m/m) and Belgium NBB Business Climate (-2.1). Thursday has German Preliminary CPI (0.1% m/m) due out, and Friday closes the week with German Import Prices (1.5% m/m). Technically, EUR/USD made yet another fresh low within its recent medium-term downtrend at 1.2143 last week before recovering considerably to 1.2671. Support for EUR/USD shows at 1.2521, 1.2334/58, 1.21421, and at the psychological 1.2000 level. Resistance to the topside is seen at 1.2671, 1.2739 and 1.3093.

To view a live chart follow the link:

GBP: The upcoming week of U.K. economic data releases is relatively quiet but has some key data due out, featuring Tuesday’s GDP data. Monday starts the week out with a speech by MPC Member Posen in London, followed on Tuesday with Revised GDP (0.3% q/q), BBA Mortgage Approvals (38.3K) and the Index of Services (0.2% 3m/3m). Look for Nationwide HPI (0.5% m/m) on Wednesday, then CBI Realized Sales on Thursday. Friday closes the week with GfK Consumer Confidence (-15). Technically, GBP/USD consolidated recent losses last week as the rate traded in a 1.4520 to 1.4229 range and barely made a new recent low at 1.4229. Resistance to the topside for GBP/USD shows at 1.4520, 1.4629/38 and 1.4916, as well as at the psychological 1.5000 level. Support is indicated at 1.4229/49, 1.4040 and

To view a live chart follow the link:

JPY: The economic data schedule is moderately active in Japan this week, featuring Wednesday’s Monetary Policy Meeting Minutes. Monday starts the action with All Industries Activity (-0.6% m/m), followed by the BOJ’s Monthly Report. Tuesday is quiet, but Wednesday has the key Monetary Policy Meeting Minutes due out, along with CSPI (last -1.1%y/y) and a tentatively-scheduled speech by BOJ Governor Shirakawa in Tokyo. Thursday has the Trade Balance (0.69T) scheduled, followed with a very busy Friday that offers Household Spending (2.5% y/y), Tokyo Core CPI (-1.5% y/y), National Core CPI (-1.3% y/y), the Japanese Unemployment Rate (5.0%) and Retail Sales 3.7% y/y. Technically, USD/JPY saw further losses materialize last week down to 0.8895, as the rate again dipped below its 200-day MA at 91.13 that is now slightly downward-sloping. Resistance for USD/JPY shows at 90.47, 91.75 and the 92.95/93.07 region, while support is indicated at 89.22, 88.95 and 87.95.

To view a live chart follow the link:

NZD: The next week of economic data due out in New Zealand also has little of note, but does feature Tuesday’s Inflation Expectations. Monday is quiet, while Tuesday has the closely-watched RBNZ Inflation Expectations report (last 2.7% q/q). Wednesday is also quiet, but Thursday offers the Trade Balance (455m), and Friday closes the week with Building Consents (last -0.4% m/m). Technically, NZD/USD maintained its close below its 200-day Moving Average and fell sharply last week to reach a new recent low at 0.6618. Support for NZD/USD is seen at 0.6618, 0.6475 and 0.6193. Resistance shows at 0.6817, 0.6875 and 0.7039, plus at the 0.7000 psychological level.

To view a live chart follow the link:

USD: The U.S. economic calendar has some moderately important data due out this coming week, featuring Thursday’s Preliminary GDP data. The action starts on Sunday with a speech by FOMC Member Pianalto in Ada, Ohio, followed on Monday by Existing Home Sales (5.61M). Tuesday offers the S&P/CS Composite-20 HPI (2.5% y/y), the important CB Consumer Confidence report (59.1), HPI (0.0% m/m), the Richmond Manufacturing Index (25), and a speech by FOMC Member Bullard in London. Wednesday starts with a speech by Fed Chairman Bernanke in Tokyo, followed by Durable Goods Orders (1.4% and 0.5% Core m/m), New Home Sales (420K) and Crude Oil Inventories (0.2M). Thursday has FOMC Member Bullard speaking in Stockholm, followed by the featured Preliminary GDP (3.5% q/q) and GDP Price Index (0.9% q/q) data and Unemployment Claims (446K). On Friday, look for the Core PCE Price Index (0.1% m/m), Personal Income (0.5% m/m), Personal Spending (0.3% m/m), Chicago PMI (62.2), Revised U of M Consumer Sentiment (73.4), Revised U of M Inflation Expectations (last 3.1%).

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]]> Weekly Market Watch - Monday, 17 May 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=10215 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=10215 Sun, 16 May 2010 22:51:01:187 GMT Last Week Recap

EUR/USD sold off dramatically last week, as the Big Fat Greek bailout continues to cause havoc for the Eurozone. Rumours of the pending dissolution of the European Monetary Union, including talk of Germany readopting the Deutschemark, added even more fuel to the Euro’s sell off. Nevertheless, the rate had started the week out on a positive note, making its weekly high of 1.3094 on Monday. Despite that, the rate continued heading consistently south, as Eurozone sovereign debt concerns continued putting pressure on the rate, with the increasing possibility that European countries other than Greece may also be unable to meet their debt obligations. In an interview to appear next week in German weekly Der Spiegel, ECB President Jean Claude Trichet stated, "We have experienced and we are experiencing really dramatic times." He went on to add that the Eurozone, "is in its most difficult situation since World War II or perhaps even since World War I." Wednesday saw the Euro fall on rumours of a possible German withdrawal from the Euro. Also on Wednesday, the U.S. Trade Balance showed a deficit of 40.4B, in line with the 40.0B consensus, and a minor upward revision to the previous number from -39.7B to -39.4B. On Thursday, U.S. Unemployment Claims came out at 444K, versus a 440K consensus, with the previous number of 444K revised slightly upwards to 448K. EUR/USD made its weekly low of 1.2353 on Friday, as U.S. Core Retail Sales showed a 0.4% increase, versus a consensus of 0.5%, and a large upward revision to the previous number from 0.6% to 1.2%. Retail Sales were up 0.4%, versus the 0.3% consensus, with the previous number being revised substantially upwards from 1.6% to 2.1%. Also, University of Michigan Consumer Sentiment came out at 73.3, in line with the 73.5 consensus, and with the previous number revised upwards to 72.2 from 69.5. The rate then rose slightly to settle at 1.2357, down an impressive 3.2% for the week.

Trading in USD/JPY calmed down considerably last week, with the rate trading off of its weekly low of 91.52 on Monday as the BOJ kept interest rates at 0.1% and increased lending by ¥20 trillion. In its statement on monetary policy, the BOJ stated that “Japan''s economy is picking up mainly due to various policy measures taken at home and abroad, although there is not yet sufficient momentum to support a self-sustaining recovery in domestic private demand.” In referring to Japanese interest rates, the bank added, “The bank will continue to aim to maintain the extremely accommodative environment.” On Wednesday, Japanese Leading Indicators came out at 102.8% versus a 99.3% consensus and the previous number of 97.9% revised upward to 98.4%. Also on Wednesday, the Japanese Current Account was released showing a surplus of ¥1.77T versus a consensus of ¥1.49T with the previous number revised downward from ¥1.12T to ¥1.07T. The rate made its weekly high of 93.63 on Thursday despite the Japanese Economy Watchers Sentiment indicator rising to 49.8 versus a 47.8 consensus. USD/JPY then sold off and went on to close Friday at 92.45, up 1.0% for the week.

GBP/USD persisted in moving lower last week, selling off from its weekly high seen on Monday of 1.5053. Nevertheless, Tuesday saw the rate trade back up to 1.5042 after Gordon Brown resigned as Prime Minister. The move by Brown was meant to assist the Labour Party in negotiations with the Liberal Democrats to form a coalition after the previous week’s elections had resulted in a hung parliament in the United Kingdom. However, the Conservative’s David Cameron managed to form a new government with the Lib Dems instead, which put the Conservative Party in power in the Britain for the first time since 1997. Also on Tuesday, U.K. Manufacturing Production came out at 2.3%, much better than the expected 0.3% consensus with the previous number also revised upward from 1.3% to 1.4%. The rate then began to soften on Wednesday due in part by BOE Governor King’s dovish remarks that despite the BOE keeping the policy rate unchanged at 0.5% and the Asset Purchase Program at £200B, the Bank is still prepared to expand purchases if necessary. Cable continued sliding despite more positive U.K. Employment numbers showing the Claimant Count Change had declined to -27.1K versus a -20.1K consensus and the Unemployment Rate held steady at 8.0%, as was widely expected. On Thursday, GBP/USD continued dropping, with the U.K. Trade Balance showing the deficit had widened to -7.5B versus a -6.5B consensus. Cable then made its weekly low of 1.4493 on Friday amid concerns over the level of U.K. debt which is currently at 11.8% of GDP. To put this in perspective, Greece’s debt level is just slightly higher at 12.5% of GDP. Cable then rallied somewhat on position squaring to close the week at 1.4529, down 1.8%.

The Aussie range traded against the Greenback for most of last week, making its weekly high on Monday at 0.9077 after ANZ Job Advertisements showed a decrease of -1.2% month to month versus a previous reading of an increase of 1.8%. Also, NAB Business Confidence showed a reading of 13 versus a previous reading of 16. On Wednesday, Australian Employment data improved, with Employment Change showing that jobs had increased to 33.7K versus a consensus of 22.6K. The previous number was also revised upward from 19.6K to 27.7K, while Australian Unemployment rose slightly to 5.4% versus a consensus centred on 5.3%. On Thursday, the rate went back up to 0.9024 before dropping considerably to make its weekly low at 0.8849 on Friday led by renewed risk aversion and despite gold making a new all-time high 1249.28. AUD/USD closed the week at 0.8856, down 21 pips from the previous week’s close and virtually unchanged.

Last week began on a positive note for USD/CAD, as it made its weekly high of 1.0410 on Monday after Canadian Housing Starts came in at 202K. This was roughly in line with market expectations, and the previous number saw an upward revision to 199K from 197K. The rate nevertheless fell from that high point as the Canadian Trade Balance that came out on Wednesday showed a surplus of only 0.3B versus a consensus of 1.6B, with the previous number being revised down to 1.2B from 1.4B. Also on Wednesday, the NHPI showed a 0.3% expansion M/M versus a 0.4% expected. The rate made its weekly low of 1.0109 on Thursday, as oil and other commodities except gold started to sell off. On Friday, USD/CAD rallied back as Canadian Manufacturing Sales came out up 1.2% M/M versus a 1.1% consensus and New Motor Sales were down -4.2% versus a -3.9% consensus. USD/CAD then went on to close at 1.0355, down 0.7% for the week.

The Kiwi started off last week with some volatile price action against the Greenback, trading on Monday at both its weekly high of 0.7295 and its weekly low of 0.7056. Monday’s New Zealand Credit Card Spending showed a notable decline of -1.7% M/M versus a 2.1% increase for the previous reading. The drop was the largest decline seen since November 2008. This started the rate heading south, which was compounded by renewed risk aversion in the currency market. On Thursday, N.Z. Retail Sales showed a disappointing expansion of just 0.50% versus a consensus of a 1.20% expansion, with a previous reading of -0.6%. Core Retail Sales ex-auto showed a 1.1% increase versus a consensus of 1.5%. NZD/USD continued trading lower on Friday, eventually closing just one pip above its weekly low at 0.7057, down 1% for the week.

The Week Ahead

AUD: The Australian economic calendar for the coming week has little of note, but features Tuesday’s RBA’s Monetary Policy Meeting Minutes. Monday is quiet, Tuesday features the RBA minutes, and Wednesday has a speech by RBA Assistant Governor Edey in Sydney, plus Westpac Consumer Sentiment (last -1.0%) and the Wage Price Index (0.9% q/q). Thursday offers MI Inflation Expectations (last 4.1%) to close out the week since Friday has nothing of note scheduled. Technically, AUD/USD consolidated the previous week’s losses last week, but only managed to get down to 0.8850 and so did not exceed the previous 0.8709 low. Resistance for AUD/USD shows on the chart at 0.8973, 0.9001/25, and 0.9077. Support is indicated at 0.8802/50, 0.8709 and 0.8577.

To view a live chart follow the link:

CAD: The upcoming week of Canadian economic releases has rather little to offer, but features Friday’s CPI and Retail Sales data. Monday is quiet, and Tuesday just has Foreign Securities Purchases (7.34B), while Wednesday offers Wholesale Sales (0.3% m/m). Thursday has the Leading Index (0.7% m/m), followed on Friday by the key CPI (0.3% and 0.3% Core m/m) and Retail Sales (0.2% and 0.5% Core m/m) releases. Technically, USD/CAD consolidated last week after correcting lower from a sharp corrective rally seen the previous week that extended as far up as 1.0742. Resistance in USD/CAD is seen in at 1.0376, 1.0445 and 1.0557. Support shows at 1.0210, 1.0099/09, 0.9929, as well as at the key psychological 1.0000 parity level.

To view a live chart follow the link:

EUR: The Eurozone’s upcoming economic data week increases in activity from the previous week, and features the PMI data set due out on Friday. Monday is quiet, but Tuesday offers the French Prelim Non-Farm Payrolls (0.1% q/q), German ZEW Economic Sentiment (47.2), EZ CPI (1.5% and 0.9% Core y/y) and EZ ZEW Economic Sentiment (44.2). On Wednesday, look for a speech by ECB President Trichet in Frankfurt. Thursday just has German PPI (0.6% m/m), while Friday features French Flash Manufacturing PMI (56.8), French Flash Services PMI (59.0), German Flash Manufacturing PMI (61.6), German Flash Services PMI (55.6), German Ifo Business Climate (101.9), EZ Current Account (-3.8B), EZ Flash Manufacturing PMI (57.7) and EZ Flash Services PMI (55.5). Technically, EUR/USD made yet another fresh low within its recent medium-term downtrend at 1.2358 last week, almost reaching the 1.2330 low of Oct 28th, 2008. Support for EUR/USD shows at 1.2358, 1.2334, 1.2209, and the psychological 1.2000 level. Resistance to the topside is seen at 1.2521, 1.2739 and 1.3093.

To view a live chart follow the link:

GBP: The upcoming week of U.K. economic data releases has some key data due out, featuring Wednesday’s MPC Meeting Minutes. Monday starts the week with Rightmove HPI (last 2.6% m/m), followed on Tuesday by CPI (3.5% and 2.9% Core y/y), RPI (4.8% y/y), CBI Industrial Order Expectations (last -33), and the tentatively-scheduled BOE Inflation Letter. Wednesday offers the key MPC Meeting Minutes (0-0-9 vote expected), while Thursday has Retail Sales (0.3% m/m). Friday closes the week with Public Sector Net Borrowing (11.2B), Preliminary Business Investment (last -4.3% q/q) and Preliminary Mortgage Approvals (last 49K). Technically, GBP/USD resumed its downwards trend last week, but failed to make a new low beyond the previous week’s 1.4474 low by only trading down to 1.4495. Nevertheless, a new low is still expected. Resistance to the topside for GBP/USD shows at 1.4629/38, 1.4916 and 1.5052, as well as at the key psychological 1.5000 level. Support is indicated at 1.4474/06, 1.4040 and 1.3502.

To view a live chart follow the link:

JPY: The economic data schedule heats up in Japan this week, featuring Friday’s BOJ’s Rate Decision. Monday starts the week off with Core Machinery Orders (6.0% m/m) and CGPI (-0.2% y/y), followed on Tuesday by Tertiary Industry Activity (-1.3% m/m) and Household Confidence (42.2). Wednesday offers Revised Industrial Production (0.4% m/m), while Thursday has the important Preliminary GDP (1.4% q/q) and GDP Price Index (-2.9% y/y). Friday end the week with the key tentatively-scheduled BOJ Monetary Policy Statement, the Overnight Call Rate Announcement (0.10%) and the associated BOJ Press Conference. Technically, USD/JPY consolidated last week, just above its 200-day Moving Average that now comes in at 91.27 and is slightly downward-sloping. Resistance for USD/JPY shows at 93.07, 93.63 and 94.97, while support is indicated at 91.79, 90.83 and 87.95, plus at the psychological 90.00 level.

To view a live chart follow the link:

NZD: The next week of economic data due out in New Zealand also has little of note, but does feature Thursday’s Annual Budget. Monday is quiet, but Tuesday has PPI Input (last 0.3%), and PPI Output (last -0.4%q/q). Wednesday offers the important RBNZ Financial Stability Report, while Thursday has the important Annual Budget Release. Friday closes the week with Visitor Arrivals (last 1.1% m/m) and Credit Card Spending (last 6.3% y/y). Technically, NZD/USD closed at 0.7065 last week, below its 200-day Moving Average that now comes in at 0.7141, although the key medium-term indicator continues to slope higher as it lags the price action. Support for NZD/USD is seen at 0.7037, 0.7007 and 0.6963/70, plus at the key psychological 0.7000 level. Resistance shows at 0.7150/98, 0.7295 and 0.7324.

To view a live chart follow the link:

USD: The U.S. economic calendar has some moderately important data this coming week, featuring Wednesday’s FOMC Meeting Minutes. Monday opens the week with the Empire State Manufacturing Index (30.2) and TIC Long-Term Purchases (50.5B). On Tuesday, look for Building Permits (0.68M), PPI (0.1% and 0.2% Core m/m), Housing Starts (0.66M), plus a speech by FOMC Member Pianalto in Pittsburgh. Wednesday offers CPI (0.2% and 0.1% m/m) and the FOMC Meeting Minutes. Thursday’s releases include Unemployment Claims (439K) and the Philly Fed Manufacturing Index (21.9) to close out the week since Friday is quiet.

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]]> Weekly Market Watch - Monday, 10 May 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=9972 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=9972 Sun, 09 May 2010 23:30:39:923 GMT Last Week Recap

EUR: EUR/USD was hit hard last week amid rioting over the Greek government’s proposed austerity measures after the E.U. and I.M.F. announced a joint €110 billion relief package. EUR/USD began selling off early in the week, trading off of its weekly high of 1.3361 on Monday as the market assessed the recent credit agency downgrades to the debt of Greece and other Eurozone countries. This has already started to adversely affect bond markets in the debt-laden nations of Portugal, Ireland and Spain. Since Greece now appears to be just the tip of the iceberg, U.S. markets began to react adversely to the European debt situation as well. If the Eurozone is already having difficulty managing the relatively small Greek situation, if the larger members of the Eurozone which are already in trouble such as Spain and Italy need assistance, the E.U. might run into far greater problems, despite the improving economic situation in the Eurozone. EUR/USD traded down to its weekly and 14-month low of 1.2509 on Thursday along with most other currencies as the U.S. stock market dropped almost 1,000 points before recovering and closing down 347 points. EUR/USD traded higher on Friday on mixed U.S. employment numbers, with U.S. Non-Farm Payrolls coming out at 290K, much better than the expected 198K and with a notable upward revision to the previous month from 162K to 230K. Nevertheless, the U.S. Unemployment Rate increased to 9.9% versus a consensus of 9.7%. Also, encouraging economic numbers out of Germany showed Industrial Production expanded an impressive 4.0% versus the 1.5% expected, although the previous number saw a minor downward revision from 0.0% growth to -0.2%. EUR/USD finished the week by closing at 1.2750, down an impressive 4.25% on the week and ahead of the Saturday G7 satellite conference called to discuss the Greek debt crisis after it apparently sparked the global decline in stocks.


JPY: USD/JPY was uncharacteristically volatile last week, despite Bank Holidays in Japan on Monday, Tuesday and Wednesday. The rate traded off of its weekly high of 94.97 on Wednesday, moving lower as the Yen benefitted considerably from safe-haven buying. On Thursday, USD/JPY took a nose-dive from the 94.00 level down to the rate’s weekly low of 87.93, a 5% move intra-day, as a flight to quality ensued as the U.S. stock market plunged. Nevertheless, the rate recovered dramatically after the BOJ decided to inject $22 billion of liquidity into the market to stem the strength in the Yen. Also on Thursday, the Japanese Monetary Base showed an increase of 2.9% month-on-month beating the 2.4% consensus. Friday saw USD/JPY recover considerably on position-squaring with the rate shooting up to 93.20 before selling off to close the week at 91.56, down 2.5%.

GBP: Cable continued in its downtrend last week, trading off of its weekly high of 1.5242 on Monday which was a U.K. Bank Holiday, as the likelihood of a hung parliament became more apparent. The rate declined further on Tuesday, despite a positive U.K. Manufacturing PMI number which came out at 58.0, just beating the 57.5 consensus. On Wednesday, U.K. Construction PMI also showed a better-than-expected 58.2 versus a 53.5 consensus. Despite the positive economic numbers, the U.K. General Election loomed over Cable on Thursday, when the rate dropped from 1.5145 to 1.4703 as Brits went to the polls to help choose their next government. As all hope for a majority party in Parliament faded with Friday’s results, GBP/USD made its weekly low and a level not seen since April of 2009 at 1.4475. The rate then recovered dramatically after speculation grew that the Conservatives and Liberal Democrats may attempt to form a coalition for a new government, despite some understandable scepticism about the long-term stability prospects for collaboration between the respectively right and left wing parties. This brought the rate up to close at 1.4796, down an impressive 3.1% for the week.

AUD: AUD/USD traded higher early in the week with the Australian HPI showing a 4.8% increase Q/Q much better than the consensus of 3.2%. The rate started heading south on Tuesday despite Aussie Building Approvals which showed a whopping 15.3% increase M/M versus a consensus of a 0.9% rise, and the previous number revised upwards to -2.7% from -3.3%. The rate continued to decline even with the RBA’s hike of the Cash Rate by 25 bps to 4.5% from 4.25%. AUD/USD then made its weekly low on Thursday, dropping to 0.8697 as risk aversion permeated the markets and traders bought USD and JPY. The rate then recovered somewhat on Friday trading up to 0.8937 before settling at 0.8877, down an impressive 4.1% on the week.

CAD: USD/CAD had a dramatic run up last week as a combination of risk aversion, lower oil prices and sovereign debt concerns drove the rate higher, USD/CAD made its weekly low of 1.0100 on Monday. The rate gathered steam on Tuesday as buyers of USD and JPY began to dominate world markets. The rate continued trading higher making its weekly high of 1.0740 on Thursday despite positive economic numbers out of Canada. Canadian Building Permits showed a 12.2% growth M/M which was much better than the expected increase of 0.6%, nevertheless, the previous number was revised upward from -0.5% to -0.7%. USD/CAD then lost considerable ground on Friday as Canadian Unemployment Change showed an increase of 108.7K jobs versus a consensus of a 24.3K increase and Canadian Unemployment dropping to 8.1% versus an 8.2% consensus. USD/CAD then went on to close at 1.0429, up 2.4% on the week.

NZD: NZD/USD began the week trading off of its weekly high of 0.7321 on Monday with ANZ commodity prices showing an increase of 4.9% versus a previous reading of a 1.8% increase. The rate then began losing ground on Tuesday as risk aversion began permeating markets because of the civil unrest in Greece. NZD/USD continued its decline on Thursday despite encouraging Employment numbers with Employment Change showing a 1.0% increase versus a 0.3% consensus and the Unemployment Rate dropping to 6.0% considerably better than the 7.3% expected. The rate made its weekly low of 0.7003 trading up to close at 0.7103 Thursday. On Friday, NZD/USD recovered somewhat to close at 0.7134, down 1.8% on the week.

The Week Ahead

AUD: The upcoming Australian economic calendar has some key data due out, featuring the Aussie Employment report on Thursday. Monday has ANZ Job Advertisements (last 1.8% m/m), NAB Business Confidence (last 16), while Tuesday has the Australian government’s Annual Budget Release. On Wednesday, look for Home Loans (-2.9% m/m), while Thursday has a speech by RBA Assistant Governor Lowe scheduled in Sydney, ahead of the key Aussie Employment Change (22.6K), and Unemployment Rate (5.3%) to close out the week. Technically, AUD/USD came off sharply last week to trade as low as 0.8709. While the rate subsequently recovered to 0.8930, the fall has now effectively neutralized the previous bullish outlook for AUD/USD after breaking a key medium-term upwards channel that has contained price action since late 2008 which currently has its lower trend line drawn at 0.9200. Resistance for AUD/USD shows on the chart at 0.8937, 0.9134, 0.9323 and at the psychological 0.9500 level. Support is indicated at 0.8799, 0.8709 and 0.8577.

To view a live chart follow the link:

CAD: The next Canadian economic data week is again rather sparse, but features the Canadian Trade Balance on Wednesday. Monday has the key Housing Starts data (201K) and Tuesday has nothing of note, but Wednesday offers the Canadian Trade Balance (1.7B) and NHPI (0.4% m/m). Thursday has a speech by Governing Council Member Duguay scheduled in Ottawa, while Friday has Manufacturing Sales (1.1% m/m), New Motor Vehicle Sales (-3.9% m/m), and a speech by Governing Council Member Murray in Ottawa. Technically, USD/CAD showed a sharp corrective rally last week after breaking out of its triangular consolidation pattern to the upside. Resistance in USD/CAD is seen in at 1.0569, 1.0678 and 1.0742. Support shows at 1.0333, 1.0099 and 1.0011/14, as well as at the key psychological 1.0000 parity level

To view a live chart follow the link:

EUR: The coming week of economic data in the Eurozone has little noteworthy releases other than the Eurozone GDP number out on Wednesday. Monday begins the week with the German Trade Balance (14.4B), French Industrial Production (0.3% m/m), Italian Industrial Production (1.2% m/m) and Sentix Investor Confidence (1.6). Tuesday, has German Final CPI (-0.1% m/m) and German WPI (0.3% m/m). Wednesday should be the weekly highlight with German Preliminary GDP 0.0% q/q, French CPI (0.2% m/m), French Preliminary GDP (0.3% q/q), Italian Preliminary GDP (0.3% q/q), E.Z. Flash GDP (0.1% q/q) and E.Z. Industrial Production (1.2% m/m). On Thursday, Germany and France take a Bank Holiday, with only the ECB’s Monthly Bulletin due out to close the week since Friday is quiet. Technically, EUR/USD made a 14-month low within its recent medium-term downtrend at 1.2521 last week, and the short-term downward move is now confirmed by the 14-day RSI. Support for EUR/USD shows at 1.2607, 1.2521 and 1.2456. Resistance to the topside is seen at 1.2797, 1.2996 and 1.3213.

To view a live chart follow the link:

GBP: The coming economic data week in the United Kingdom heats up and features the key BOE Rate Announcement and Inflation Report, as well as possible volatility surrounding the future of the U.K. government after last week’s general election resulted in a hung parliament. The action starts on Monday with announcements about the Asset Purchase Facility (200B) and the Official Bank Rate (unchanged at 0.50%), with the MPC Rate Statement tentatively scheduled. Tuesday has the BRC Retail Sales Monitor (last 4.4%y/y), the RICS House Price Balance (12%), Manufacturing Production (0.3% m/m), Industrial Production (0.3% m/m) and the tentatively-scheduled NIESR GDP Estimate (last 0.4%). Wednesday offers Claimant Count Change (-20.1K), Average Earnings Index (2.2% 3m/y), the U.K. Unemployment Rate (8.0%), and a press conference by BOE Governor King about the BOE’s Inflation Report due to be released the same day. Thursday has Nationwide Consumer Confidence (74), the U.K. Trade Balance (-6.5B) and the DCLG HPI (8.9% y/y). Friday closes out the week with the CB Leading Index (last 0.6%m/m). Technically, GBP/USD resumed its down trend last week, trading to a new recent low at 1.4474. Resistance to the topside for GBP/USD shows at 1.4916, 1.5125 and 1.5390, as well as at the key psychological 1.5000 level. Support is indicated at 1.4711, 1.4595 and 1.4474.

To view a live chart follow the link:

JPY: Another rather peaceful economic data week is scheduled for Japan that features the BOJ’s Monetary Policy Meeting Minutes on Monday. Tuesday has nothing of note, but Wednesday has Leading Indicators (99.3%). Thursday offers Bank Lending (last -1.8% y/y), the Current Account (1.49T), M2 Money Stock (2.5% y/y), the Economy Watchers Sentiment index (47.8) and Preliminary Machine Tool Orders (last 262.2% y/y) to close out the week since Friday is quiet. Technically, USD/JPY experienced a dramatic collapse last week, trading as low as 87.95 before recovering to close the week at 91.38, just over its 200-day Moving Average at 91.33. Resistance for USD/JPY shows at 94.38/78, 96.97 and 97.77, while support is indicated at 92.80, 91.58 and 89.62/82, plus at the psychological 90.00 level.

To view a live chart follow the link:

NZD: The coming week of New Zealand economic data releases is again sparse, featuring Retail Sales data on Friday. Monday, Tuesday and Wednesday have nothing of note scheduled, but Thursday has the Business NZ Manufacturing Index (last 56.3) and FPI (last 0.2%m/m). Friday should be the highlight with Retail Sales (1.2% and 1.5% Core m/m) to close out the week. NZD/USD’s breach of a major medium-term declining trend line now drawn at 0.7184 proved short-lived last week, as a sharp decline took the rate back below this line to make a low of 0.7007. Support for NZD/USD is seen at 0.7067, 0.7007 and 0.6963/70, plus at the key psychological 0.7000 level. Resistance shows at 0.7165, 0.7275 and 0.7324.

To view a live chart follow the link:

USD: Next week’s U.S. economic calendar features the U.S. Trade Balance on Wednesday. Monday is quiet, but Tuesday has the IBD/TIPP Economic Optimism index (48.9) and Wholesale Inventories (0.5% m/m). Wednesday has the Trade Balance (-39.9B), speeches by FOMC Members Rosengren in Atlanta and Bullard in Nashville, plus the Federal Budget Balance (-21.5B). Thursday offers Initial Jobless Claims (440K), Import Prices (0.8% m/m), plus speeches by FOMC Member Kohn in Ottawa and Fed Chairman Bernanke in Philadelphia. Friday ends the week with Retail Sales (0.3% and 0.5% Core m/m), the Capacity Utilization Rate (73.8%), Industrial Production (0.6% m/m), the Preliminary U. of M. Consumer Sentiment index (73.5) and Inflation Expectations (2.9%), and Business Inventories (0.4% m/m).

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]]> Weekly Market Watch - Monday, 03 May 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=9591 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=9591 Sun, 02 May 2010 23:20:04:300 GMT Last Week Recap

EUR: EUR/USD lost more ground last week as the Greek sovereign debt situation appears to be only the beginning as more European nations, such as Portugal and Spain, show signs of financial trouble. The Euro demonstrated some initial strength against the dollar early in the week, with the rate making its weekly high of 1.3415 as the IMF stated it would increase its aid package to Greece to €15B from €10B on Tuesday. Germany also said it could approve loan aid for Greece as early as May 7th, ahead of Greece’s May 19th deadline to meet its debt obligations. Nevertheless, Greece’s debt was downgraded to junk status by S&P, with Portugal’s debt also lowered two notches. This increased concerns that Spain and Italy might be next in line for debt downgrades. This debt uncertainty brought EUR/USD to its weekly low of 1.3113 seen on Wednesday, as European Finance Ministers, ECB President Trichet and German Chancellor Merkel met with IMF chief Strauss-Kahn in Berlin to discuss the situation. The rate then showed signs of recovery on Thursday as the German Unemployment Change number showed an impressive decline in unemployment of -68K, considerably better than the -11K expected, and with the previous number revised to -42K from -31K, also an improvement. EUR/USD continued to improve on Friday as Eurozone CPI Flash Estimate came out at 1.5% Y/Y slightly better than the 1.4% consensus and on short-covering ahead of the weekend. The Dollar fell despite even Friday’s Durable Goods Orders which showed an impressive rise in the core number of 2.8%, versus the consensus of 0.7% and the previous 1.7% print was revised upwards from an initial 0.9%. Nevertheless, this improvement was partly offset by the fall in non-core Durable Goods Orders of -1.3% versus the 0.2% rise expected, although the previous month was revised upward to 1.1% from its original 0.5% print. EUR/USD went on to close at 1.3293, down 0.7% for the week. On Sunday, amid rising social unrest, Greece accepted a €100B bailout from the E.U. and the I.M.F. to prevent default.

JPY: USD/JPY consolidated much of last week, with the Yen initially strengthening against the U.S. Dollar early in the week. The pair made its weekly low of 92.80 on Tuesday as Japanese Retail Sales showed an improvement of 4.7% Y/Y versus a consensus of 3.7%. Wednesday was a Japanese Bank Holiday, although the rate nevertheless began climbing as mixed U.S. economic numbers were released. Thursday showed an improvement in Household Spending which increased by 4.4%, much better than the 0.7% consensus. Also, Tokyo Core CPI showed a -1.9% Y/Y fall, more or less in line with the -2.0% consensus, while National Core CPI remained unchanged at -1.2%. Also on Thursday, Japanese Unemployment came out slightly worse at 5.0% versus the 4.9% expected, and Average Cash Earnings increased by 0.8% Y/Y, considerably better than the expected drop of 0.2%. In addition, the previous number was revised slightly upwards to -0.6% from -0.7%. Also out on Thursday were Japanese Preliminary Industrial Production numbers which showed a disappointing increase of just 0.3% M/M versus a 0.9% consensus, although the previous number was revised upwards from -0.9% to -0.6%. USD/JPY made its weekly high of 94.57 on Friday as Japanese Housing Starts showed a decline of -2.4%, much better than the expected -5.6% drop and the BOJ left its Overnight Call Rate unchanged at 0.10%. The rate then retreated on position squaring ahead of the weekend to close at 93.83, just 12 pips lower and virtually unchanged on the week.

GBP: GBP/USD had a volatile week, with the increasing likelihood of a hung parliament in the upcoming General Parliamentary Election on May 6th weighing on the Pound. The pair initially traded off of its weekly high of 1.5496 made on Monday as increased election concerns weakened Sterling. The pair continued losing steam on Tuesday as U.K. BBA Mortgage Approvals came out at a disappointing 34.9K versus a 39.3K consensus, with the previous number revised downward from 35.3K to 33.4K. Also on Tuesday, U.K. CBI Realized Sales came out at a poor 13 versus an expected 16 consensus. Cable then made its weekly low as opinion polls in the U.K. made both the major Tory and Labour parties cringe as the Liberal Democrat party showed a lead for the first time in 104 years. The rate then recovered on Thursday, as U.K. Nationwide HPI showed an impressive 1.0% improvement versus a consensus of a 0.4% increase, with the previous number revised upward from 0.7% to 1.0%. Nevertheless, GfK Consumer Confidence showed a drop of -16 versus the expected fall of -14. Cable then resumed its decline on Friday, closing the week at 1.5264, down 0.7% versus the previous weekly close.

AUD: AUD/USD also consolidated most of last week, initially trading softer on Monday despite a positive Australian PPI number showing a 1.0% rise Q/Q versus a consensus of 0.7%. The pair then made its weekly low of 0.9134 on Tuesday, as CPI remained unchanged at 0.9% Q/Q. Also, the Trimmed Mean CPI rose 0.8%, slightly better than the 0.7% expected, with the previous number revised downward from 0.6% to 0.5%. In addition, at a breakfast in Western Sydney on Tuesday, RBA Assistant Governor Debelle dismissed the Greek debt situation having any impact on Australia stating that, "so far, it hasn''t had any affect at all actually." The rate recovered somewhat on Wednesday, with Australia’s CB Leading Index showing an expected -0.3% decline. AUD/USD continued rallying on Thursday, as Australian Private Sector Credit showed a 0.5% M/M increase which was slightly better than the 0.4% expected. Also on Thursday, HIA New Home Sales came out at 0.9% M/M versus a previous reading of -5.2%. AUD/USD then went on to make its weekly high of 93.22 on Friday before backing off on position squaring to close the week at 0.9241, down 0.4% for the week.

CAD: USD/CAD firmed considerably last week, rising from its weekly low of 0.9969 seen on Monday to reach 1.0171 on Tuesday before making its weekly high of 1.0195 on Wednesday. The pair then lost some steam on Thursday as stronger commodities prices helped the Loonie recover. Nevertheless, comments by BOC Governor Carney before the Canadian Parliament on Thursday to the effect that a strong CAD might impact inflation and monetary policy hampered any further gains in the Loonie. In addition, Carney stated that the BOC was ready to intervene in the case of a strong CAD because it would adversely affect Canadian exports. On Friday, USD/CAD recovered dramatically after Canadian GDP came out at a disappointing 0.3% M/M versus a 0.5% consensus. In addition, the Canadian RMPI number came out at 0.8% M/M versus a 0.9% consensus and IPPI showed a decline of -0.4%, considerably worse than the 0.2% increase expected. Nevertheless, the previous reading was revised upward slightly to 0.1% from 0.0%. USD/CAD then went on to close on Friday at 1.0176, up an impressive 1.9% on the week.

NZD: NZD/USD

The Week Ahead

AUD: The Australian economic calendar gets more active next week, featuring the RBA Cash Rate announcement on Tuesday. Monday offers the AIG Manufacturing Index (last 50.2), the MI Inflation Gauge (last 0.5%M/M), HPI (3.2% Q/Q) and Commodity Prices (last 1.4% Y/Y). Tuesday will be the weekly highlight with the RBA’s Cash Rate announcement in which the central bank is expected to raise its benchmark rate another 25bps to 4.50%. The RBA’s key Rate Statement accompanies the rate announcement. Wednesday offers the AIG Services Index (last 48.4) and Building Approvals (0.9% M/M), while Thursday has the important Retail Sales (0.8% M/M) and Trade Balance (-2.02B) data scheduled for release. Friday ends the week with the AIG Construction Index (last 48.7) and the important quarterly RBA Monetary Policy Statement on economic conditions and inflation prospects. Technically, AUD/USD saw some corrective consolidation last week, this time within the 0.9134 to 0.9323 range. Resistance for AUD/USD shows on the chart at 0.9286, 0.9311/37, 0.9388, 0.9405, and at the psychological 0.9500 level. Support is indicated at 0.9222, 0.9156, 0.9134, and at the psychological 0.9000 level.

To view a live chart follow the link:

CAD: Next week is rather sparse in terms of Canadian economic data, but some key data is due out including the Canadian employment report on Friday. Monday, Tuesday and Wednesday have nothing of note scheduled, but Thursday has the key Building Permits (0.4% M/M) and Ivey PMI (59.3) scheduled for release. Friday looks like the highlight with a speech by Governing Council Member Murray in Edmonton, followed by the key Employment Change (20.3K) and Canadian Unemployment Rate (8.2%) numbers. Technically, USD/CAD failed to make a new low below 0.9929 last week, and again staged a sharp corrective rally. Resistance in USD/CAD is seen in at 1.0176, 1.0195, 1.0214, and in the 1.0301/1.0368 region. Support shows in the 1.0011/14 and 0.9929/51 and 0.9818/23 regions, and also at the key psychological 1.0000 parity level.

To view a live chart follow the link:

EUR: The Eurozone’s upcoming economic data week features the ECB rate decision on Thursday. Monday starts the week with Final Manufacturing PMI (57.5) and a speech by Buba President Weber in Frankfurt. On Tuesday, look for German Retail Sales (0.0% M/M) and E.Z. PPI (0.9% M/M). Wednesday offers Final Services PMI (55.6), Retail Sales (0.1% M/M) and another speech by Weber, this time in Stuttgart. Thursday has German Factory Orders (1.4% M/M), and the ECB’s Minimum Bid Rate announcement in which the central bank is expected to leave rates unchanged at 1.00%. The associated ECB Press Conference will follow. Friday closes the week with the French Government Budget Balance (-21.8B), the French Trade Balance (-3.7B) and German Industrial Production (1.5%M/M). Technically, EUR/USD made another fresh low within its recent medium-term downtrend at 1.3114 last week, and while the short-term downward move is confirmed by the RSIs, the medium-term lows in EUR/USD show increasing divergence versus the indicator and this bears watching as a possible trend reversal indication. Support for EUR/USD shows at 1.3267/82, 1.3114 and the psychological 1.3000 level. Resistance to the topside is seen at 1.3415, 1.3591 and 1.3691.

To view a live chart follow the link:

GBP: Although the next week in the U.K. begins peacefully with a Bank Holiday on Monday, it features the very important U.K. General Election on Thursday. Tuesday has the important Halifax HPI (0.6% M/M), Manufacturing PMI (57.5), Net Lending to Individuals (2.0B M/M) and Final Mortgage Approvals (50K). On Wednesday, look for Nationwide Consumer Confidence (80), the BRC Shop Price Index (1.2% Y/Y) and Construction PMI (53.5). Thursday will be the undisputed weekly highlight, offering Services PMI (57.1) and the U.K.’s Parliamentary General Election which may make trading in Cable very volatile, especially if the outcome indicates a hung parliament where no party has a sufficient majority in Parliament. In this case, an as-yet untested Labour/Liberal Democrat alliance may end up taking power. Friday closes the week with PPI Input (1.0% M/M) and Output (0.6% M/M). Technically, GBP/USD resumed its down trend last week, trading as low as 1.5125. Resistance to the topside for GBP/USD shows at 1.5337, 1.5484/97 and 1.5521, while support is indicated at 1.5127/41, at the key psychological 1.5000 level and in the 1.4782/97 region

To view a live chart follow the link:

JPY: A remarkably calm upcoming economic data week is scheduled for Japan, starting with Bank Holidays on Monday, Tuesday and Wednesday. Thursday also has nothing of note scheduled, while Friday just has the Monetary Base (2.4%Y/Y) to end the week. Technically, USD/JPY made further progress in its recent rally last week, but has thus far not seen bested the 94.78 high made on April 5th as it approaches the key 61.8% retracement level of the down move from 101.43 to 84.8 at 95.05. Resistance for USD/JPY shows at 94.38/78, 96.97 and 97.77, while support is indicated at 92.80, 91.58 and 89.62/82, plus at the psychological 90.00 level.

To view a live chart follow the link:

NZD: The upcoming New Zealand economic data week is again thin, but features key N.Z. employment data on Thursday. Monday starts things off with ANZ Commodity Prices (last 1.8% M/M), and Tuesday has the important N.Z. Labour Cost Index (0.4% Q/Q). Wednesday has nothing of note, but Thursday is the weekly highlight with the key N. Z. Employment Change (0.3% Q/Q) and Unemployment Rate (7.3%) numbers to close out the week. Technically, NZD/USD traded notably higher last week as the rate exceeded a major medium-term declining trend line now drawn at 0.7184. Support for NZD/USD is seen at 0.7052, 0.6963/70, 0.6806/49, plus at the key psychological 0.7000 level. Resistance shows at 0.7324, 0.7440 and 0.7522.

To view a live chart follow the link:

USD: Another important week is scheduled on the U.S. economic calendar that features the U.S. employment report on Friday. The U.S. data releases start on Monday with the Core PCE Price Index (0.0% M/M), Personal Spending (0.7% M/M) and Income (0.4% M/M), ISM Manufacturing PMI (60.0), Construction Spending (-0.4% M/M), and ISM Manufacturing Prices (72.9). On Tuesday, look for Pending Home Sales (3.3% M/M) and Factory Orders (0.1% M/M). Wednesday offers Challenger Job Cuts (last -55% Y/Y) and the ADP Non-Farm Employment Change (29K) that may give a clue about Friday’s numbers, a speech by FOMC Member Rosengren in Boston and ISM Non-Manufacturing PMI (56.2). FOMC Member Rosengren speaks again in New York on Thursday, followed by Unemployment Claims (442K), Prelim Nonfarm Productivity (2.4% Q/Q), Prelim Unit Labor Costs (-0.4% Q/Q), and a speech by Fed Chairman Bernanke in Chicago. Friday will be the weekly highlight with the key Non-Farm Payrolls (183K) and U.S. Unemployment Rate (9.7%) numbers, followed by Average Hourly Earnings (0.2% M/M) and Consumer Credit (-2.2B M/M). Saturday ends the week with another speech by Bernanke, this time in Columbia.

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]]> Weekly Market Watch - Wednesday, 28 Apr 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=9279 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=9279 Tue, 27 Apr 2010 22:12:08:003 GMT Last Week Recap

EUR/USD weakened last week as the Greek sovereign debt situation continues to put downward pressure on the pair. Nevertheless, the Euro showed some strength against the U.S. Dollar early in the week, as the rate made its weekly high of 1.3521 on Tuesday on the back of higher-than-expected PPI numbers from Germany which came out at 0.7% versus the 0.5% expected. Also, the German ZEW Economic Sentiment showed a much better-than-expected reading of 53.0 versus a 45.2 consensus. EUR/USD then resumed its decline despite positive PMI numbers out of France and Germany on Thursday that showed the French Flash Services PMI came in at 57.8 versus a 54.3 consensus and the German Flash Manufacturing PMI was at 61.3 versus 60.2 expected. Also on Thursday, I.M.F. Managing Director Dominique Strauss-Kahn stated that the Greek situation was very serious and that, "There is no single way, no silver bullet to solve it in an easy manner." The statements came ahead of the bi-annual IMF meetings which are taking place this weekend in Washington D.C. Moody’s also downgraded Greek debt a notch from A2 to A3 and warned that further downgrades were possible. At the G-20 meeting on Friday, Finance Ministers and Central Bank Governors credited massive stimulus programs with bringing the global economy out of the severe recession and discussed proposed new taxes on banks to avoid saddling taxpayers with further bailout costs. The pair then went on to make its weekly low of 1.3200 on Friday, the lowest seen since May of 2009 despite German IFO Business Climate coming out considerably better-than-expected at 101.6 versus a consensus of 98.8. This sell-off came primarily on the back of Friday’s U.S. Durable Goods Orders showing an impressive rise in the core number of 2.8%, versus the consensus of 0.7% and the previous 1.7% print that was revised upwards from an initial 0.9%. Nevertheless, the rate then recovered dramatically after Greece announced it was ready to request the activation of the €45B joint rescue plan by the E.U. and the I.M.F., and went on to close at 1.3382, down 0.9% for the week.
The Yen weakened against the Greenback last week, as the rate traded off of its Monday low of 91.58 and despite a positive Japanese Household Confidence reading of 40.9, slightly better than the 40.2 consensus. The rate continued rising despite Japanese Trade Balance numbers out on Thursday which showed a ¥0.67T surplus that was slightly better than the ¥0.66T consensus. On Friday, BOJ Governor Shirakawa stated it was not appropriate to use the foreign exchange markets to narrow the trade deficit, referring to the political pressure to weaken the Yen. USD/JPY then made its weekly high of 94.31 on Friday before retreating on position-squaring to close the week at 93.95, up 1.9%.

GBP/USD experienced volatile trading last week, making its weekly low of 1.5190 on Monday as the U.K. election set for May 6th increasingly points to a hung Parliament. Nevertheless, the rate picked up on Tuesday as higher U.K. CPI figures showed a 3.4% increase year-on-year increase versus a 3.2% consensus and the Core CPI reading was higher at 3.0% year-on-year versus a 2.8% consensus. Also, a better-than-expected RPI number showed a 4.4% increase year-on-year versus a 4.1% consensus. Cable then continued showing strength on Wednesday as the Claimant Count Change unemployment number showed a much better-than-expected drop of -32.9K versus a consensus of -7.6K, and the previous number also improved from -32.3K to -40.1K. Nevertheless, the U.K. headline Unemployment Rate increased to 8.0% versus a consensus of 7.8%. On Thursday, GBP/USD made its weekly high of 1.5471, despite U.K. Retail Sales showing just a 0.4% increase month-on-month versus a 0.7% consensus, although the previous number was revised upward from 2.1% to 2.5%, thereby neutralizing the effect. GBP/USD gave back some of its gains on Friday as U.K. Preliminary GDP showed a 0.2% increase month-on-month versus a consensus of a 0.4% increase. Cable went on to close at 1.5374, a mere 17 pips higher than the previous weekly close.

AUD/USD range traded last week, with the pair trading higher off of its weekly low of 0.9156 made on Monday. The pair rallied on Tuesday as the RBA minutes stated that the RBA had raised the Cash Rate to counter inflationary pressures sparked by the Australian mining boom. The minutes also noted that, “Developments in commodity markets meant that the increase in the terms of trade through 2010 was likely to be substantially larger than forecast.” In addition, the RBA pointed out that, “The increases in coal and iron ore prices, along with the developments in the LNG sector, were also contributing to a strong outlook for investment in the resources sector.” AUD/USD then headed south on Wednesday, despite Australia’s Leading Index showing a 0.5% rise against a previous reading of 0.4% which was also revised upward from 0.2%. The rate dropped further on Friday before recovering after RBA Governor Stevens suggested that Australian 2010 GDP growth would be slightly better than in 2009, that interest rates would have to be adjusted in a “timely manner” and that policy options would remain open. In clarifying his statements, Stevens said that the intended “normalization” of rates referred to borrowing rates and not to the RBA’s benchmark Cash Rate. AUD/USD went on to close at 0.9276, up a mere 0.3% for the week.

USD/CAD saw some uncharacteristic volatility this past week, initially trading lower off of its weekly high of 1.0214 made on Monday. The Loonie then strengthened considerably against the Dollar on Wednesday, as USD/CAD weakened to make its weekly low of 0.9928 after the BOC signalled it would most likely hike rates as soon as June. Nevertheless, the BOC decided to keep its Overnight Rate unchanged at 0.25%, as expected, but also stated that in light of the economic recovery, the need for “extraordinary policy is now passing, and it is appropriate to begin to lessen the degree of monetary stimulus”. Also, the BOC revised its GDP outlook to a 3.7% 2010 rise, and 3.1% for 2011, with inflation expected to range between 1.7 and 1.9% over the coming year and a half. On Thursday, Canadian Wholesale Sales dropped a disappointing -1.2% month-on-month, considerably worse than the 1.0% increase expected. USD/CAD nevertheless continued trading under parity on Friday as Canadian Core CPI showed a drop of -0.2% month-on-month versus a forecasted rise of 0.1%. USD/CAD went on to close at 0.9987, down an impressive 1.4% for the week.

NZD/USD range-traded last week, with the pair starting out on a positive note early in the week. The rate then began declining on Tuesday as New Zealand CPI numbers indicated a slightly lower reading of 0.4% Q/Q versus a 0.6% forecast. The rate continued declining, making its weekly low of 0.7069 on Thursday. NZD/USD nevertheless managed to rally on Friday after Visitor Arrivals increased an impressive 1.1% M/M fr

The Week Ahead

AUD: The Australian economic calendar gets busier after the bank holiday in Australia on Monday. Tuesday has PPI (0.7% Q/Q), plus the tentatively-scheduled NAB Quarterly Business Confidence index (18). Wednesday has a speech by RBA Assistant Governor Debelle scheduled in Sydney, plus key CPI (0.9% and 0.7% Trimmed Mean Q/Q) data. On Thursday, look for the CB Leading Index (last -0.2% M/M), and on Friday HIA New Home Sales (last -5.2% M/M) is tentatively-scheduled, while Private Sector Credit (0.4% M/M) closes out the week. Technically, AUD/USD saw some consolidation last week within the 0.9173 to 0.9336 range last week as its 14-day RSI trades firmly in neutral territory at 54. Resistance for AUD/USD shows on the chart at 0.9286, 0.9301, 0.9388, 0.9405, and at the psychological 0.9500 level. Support is indicated at 0.9222, 0.9170, 0.9130, and at the psychological 0.9000 level.

To view a live chart follow the link:

CAD: The forthcoming week of Canadian economic data releases is quite peaceful, but has some key speeches scheduled. Monday has nothing of note, but Tuesday features testimony by BOC Governor Carney before the House of Commons Standing Committee on Finance in Ottawa. Wednesday is also quiet, but Carney testifies again on Thursday, this time before the Senate Committee on Banking, Trade and Commerce in Ottawa. Friday features key data including Canadian GDP (0.5% M/M), RMPI (0.6% M/M) and IPPI (0.3%M/M). Technically, USD/CAD made a new recent low at 0.9929 last week, but against rallied correctively off of it. Resistance in USD/CAD is seen in at 1.0063, 1.0162, 1.0214, and in the 1.0301/1.0368 region. Support shows in the 0.9929/51 region, at 0.9990, in the 0.9818/23 region and also at the key psychological 1.0000 parity level.

To view a live chart follow the link:

EUR: The upcoming Eurozone economic data week offers some key employment data, and starts off on Monday with a speech by ECB President Trichet in New York. Tuesday has GfK German Consumer Climate (3.4), German Import Prices (1.2%M/M), and two more speech by ECB President Trichet in Chicago and Evanston. On Wednesday, look for German Preliminary CPI (0.1% M/M), while Thursday offers the German Unemployment Change (-11K), E.Z. M3 Money Supply (-0.1% Y/Y), Private Loans (-0.1% Y/Y) and another speech by ECB President Trichet, this time in Munich. Friday closes the week with German Retail Sales (-0.2% M/M), E.Z. CPI Flash Estimate (1.4% Y/Y), E.Z. Unemployment Rate (10.0%), Italian Preliminary CPI (0.2% M/M) and the Italian Monthly Unemployment Rate (8.6%). Technically, EUR/USD made a fresh low within its recent medium-term downtrend at 1.3201 last week, even trading briefly outside of its lower Bollinger Band. The rate has since corrected higher, with the 14-day RSI now in neutral territory at 43. Support for EUR/USD shows at 1.3267/82, 1.3201 and the psychological 1.3000 level. Resistance to the topside is seen at 1.3528/38, 1.3691 and in the 1.3773/1.3839 congestion region.

To view a live chart follow the link:

GBP: The next economic data week in the United Kingdom calms down considerably. Monday has nothing of note due out, while Tuesday has BBA Mortgage Approvals (39.3K) and CBI Realized Sales (16). Wednesday is quiet, but Thursday has the Nationwide HPI (0.4% M/M), and GfK Consumer Confidence (-14) to close the week. Technically, GBP/USD resumed its down trend last week, trading as low as 1.5191 after probably completing the final C-wave of a larger fourth wave correction at 1.5521. Resistance shows at 1.5337 1.5484 and 1.5522 while support is indicated at 1.5127/40, at the key psychological 1.5000 level and in the 1.4782/97 region.

To view a live chart follow the link:

JPY: A substantially busier upcoming economic data week is scheduled for Japan. Monday just has CSPI (-1.3% Y/Y), and Tuesday is quiet, but Wednesday has Retail Sales (3.7% Y/Y) due out. Thursday is a Bank Holiday in Japan, and Friday is exceptionally active with Household Spending (0.7% Y/Y), Tokyo Core CPI (-2.0% Y/Y), National Core CPI (-1.2% Y/Y), the Japanese Unemployment Rate (4.9%), Preliminary Industrial Production (0.9% M/M), Average Cash Earnings (-0.2% Y/Y), Housing Starts (-5.6%Y/Y) and the BOJ’s Outlook Report. Tentatively-scheduled for Friday is the BOJ’s key Monetary Policy Statement, Overnight Call Rate announcement (expected unchanged at 0.10%) and the accompanying BOJ Press Conference. Technically, USD/JPY continued its recent rally last week, but has thus far not seen bested the 94.78 high made on April 5th. Resistance for USD/JPY shows at 94.38/78, 96.97 and 97.77, while support is indicated at 93.77, 91.58 and 89.62/82, plus at the psychological 90.00 level.

To view a live chart follow the link:

NZD: The New Zealand economic data release week is quite sparse, but relevant nevertheless. Monday and Tuesday have little of note, but Wednesday offers the NBNZ Business Confidence index (last 42.5). Thursday has the key N.Z. Official Cash Rate (unchanged at 2.50%) plus the RBNZ Rate Statement, and the N.Z. Trade Balance (372M). Friday closes the week with Building Consents (last 5.9% M/M). Technically, NZD/USD traded mildly higher last week as the rate bumps along just above its 200-day Moving Average that continues to slope higher and now comes in at 0.7079. Support for NZD/USD is seen at 0.7052, 0.6963/70, 0.6806/49, plus at the key psychological 0.7000 level. Resistance shows in the 0.7177/93 and 0.7291/0.7317 regions, and at 0.7440.

To view a live chart follow the link:

USD: Another important economic data week is forthcoming in the United States after the bi-annual IMF Meeting in Washington D.C. concludes on Sunday. The U.S. data releases start on Tuesday with the S&P/CS Composite-20 HPI (1.4%Y/Y), CB Consumer Confidence (53.7), and testimony by Fed Chairman Bernanke in Washington D.C. before the National Commission on Fiscal Responsibility and Reform and the Richmond Manufacturing Index (7). On Wednesday, the key FOMC Statement and Fed Funds Rate announcement is expected to leave the rate unchanged at <0.25%. Thursday has Initial Jobless Claims (442K), while Friday features Advance GDP (3.4% and 0.9% Price Index Q/Q), the Employment Cost Index (0.6% Q/Q), Chicago PMI (60.0), Revised UofM Consumer Sentiment (71.2) and Revised UofM Inflation Expectations (last 2.9%). Saturday has a speech by FOMC Member Duke scheduled in Philadelphia.

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]]> Weekly Market Watch - Monday, 19 Apr 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=8940 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=8940 Sun, 18 Apr 2010 22:42:47:917 GMT Last Week Recap

EUR/USD began the week on a positive note, gapping higher and even hitting a three week high of 1.3690 on Monday after the E.U. defined the framework for talks on non-concessional loans and a joint multi-year program with the I.M.F. for a Greek rescue package. The package would cost the E.U. €30B in addition to $10B in I.M.F. funding. The pair then retreated on profit taking, but resumed trading higher on a slightly wider-than-expected U.S. Trade Deficit of -$39.7B versus a -$38.5B consensus, and a slightly positive revision to the previous figure from -$37.3B to -$37.0B. On Wednesday, the pair continued strong as mixed U.S. CPI data was released with Core CPI showing a 0.0% increase month on month, with a 0.1% rise expected. In addition, U.S. Retail Sales exhibited an increase of 1.6% M/M versus a 1.1% increase consensus, with the core figure showing a 0.6% M/M increase versus a consensus of 0.5%. Also, Fed Chairman Ben Bernanke stated in testimony before Congress that "Addressing the country''s fiscal problems will require difficult choices, but postponing them will only make them more difficult," citing the enormous U.S. budget deficits. On Thursday, EUR/USD began giving back gains made early in the week, despite a disappointing U.S. Jobless Claims number which came in at 484K, versus an expected 439K. U.S. Industrial Production also increased by just 0.1% versus a consensus of a 0.6% rise, although the previous number was revised upwards from 0.1% to 0.3%. Also on Thursday, the E.U. Economy Commissioner Olli Rehn told a conference in relation to the Greek situation that "Default is not an issue. There will be no default." On Friday, the SEC announced it would charge Goldman Sachs with fraud and the pair made its weekly low of 1.3471 on the back of positive U.S. Housing Starts numbers which showed a 0.63M increase versus a consensus of 0.60M, with an upward revision of the previous number to 0.62M from 0.58M. Building Permits also showed an increase of 0.69M versus a 0.63M consensus, with an upward revision of the previous number of 0.64M from 0.61M. Also on Friday, the Eurozone Trade Balance showed a better-than-expected increase of 3.3B versus a consensus of 3.1B, with an upward revision of the previous reading of 1.9B from 1.8B. The pair then went on to close the week at 1.3501, a mere three pips higher than the previous week’s close and virtually unchanged.

USD/JPY lost ground last week, trading in a narrow range at the beginning of the week. It then rose to make its weekly high of 93.71 on Wednesday, despite comments by BOJ Governor Shirakawa made to a meeting of Japanese trust banks that, "The Japanese economy is continuing to pick up thanks to improvements in overseas economies and various stimulus measures, and is showing clearer signs of a sustainable recovery." The pair then traded lower on Thursday as Japanese Revised Industrial Production showed a better-than-expected -0.6% decline month-on-month versus a consensus of -0.9%. USD/JPY then went on to make its weekly low of 91.88 on Friday before trading up to close at 92.14 on Friday, showing an overall 1.1% drop on the week.

GBP/USD had a volatile week as rumours of a hung parliament in the upcoming general election on May 6th swirled and despite little economic news coming out of the United Kingdom. On Monday, the U.K. RICS House Price Index came out at a considerably lower-than-expected 9% versus a consensus of 18%. Nevertheless, the previous number was revised upward to 18% from 17%. The rate made its weekly low of 1.5334 on Tuesday, despite the U.K. Trade Balance coming out at a narrower-than-expected -6.2B versus an expectation of -7.3B, with a slightly worse revision of the previous reading from -8.0B to -8.1B. The rate then recovered somewhat to make its weekly high of 1.5522 on Thursday before selling off on Friday as statements made by U.K. conservative party leader David Cameron indicated the possibility of a hung parliament. Cable then went on to close the week at 1.5360, a mere seven pips lower than the previous weekly close

AUD/USD began the week on a positive note, trading off of its weekly high of 0.9387 on Monday after Australian Home Loans showed a surprising decline of -1.8% versus a consensus of -0.9%, although the previous reading was revised to an improved -7.3% versus -7.9%. The rate then made its weekly low of 0.9222, as Westpac Consumer Sentiment out on Tuesday showed a weaker -1.0% decline versus a previous reading of -0.2%. The pair then strengthened despite Wednesday’s release of MI Inflation Expectations of 4.1% versus a previous lower 3.2% reading. AUD/USD sold off on Friday after strong housing numbers out of the United States to close at 0.9244, down 0.9% on the week.

USD/CAD started the week out on a negative note, and Canadian Housing Starts showed a slightly-less-than-expected increase of 197K, versus a consensus of 201K, that was neutralised by the previous number being revised upwards from 197K to 200K. On Tuesday, USD/CAD continued to decline, as the Canadian Trade Balance showed a much better-than-expected increase of 1.4B versus a consensus of just 0.7B. USD/CAD then closed below parity on a daily basis after making a 22-month low and its weekly low of 0.9952 on Wednesday. The rate then strengthened considerably on Thursday, and on Friday, the pair made its weekly high of 1.0162 on positive U.S. housing numbers and a disappointing Canadian Manufacturing Sales release showing a 0.1% increase versus a 1.0% consensus with the previous number revised downward from 2.4% to 1.8%. USD/CAD then sold off slightly to close Friday at 1.0126, up 1.0% for the week.

NZD/USD traded off of its weekly high of 0.7192 on Monday, as the market became more risk averse which benefited the U.S. Dollar. The rate continued heading south as New Zealand Retail Sales figures showed a considerably lower-than-expected decline of -0.6% month-on-month versus a consensus of a rise of 0.2%, with the previous reading revised down from 0.8% to 0.7%. Also, Core Retail Sales showed a decline of -0.9% versus an expected rise of 0.3%. On Wednesday, the Business NZ Manufacturing Index improved to 56.3, versus a previous reading of 53.6 that was revised from 53.3. The rate nevertheless continued declining, making its weekly low of 0.7063 on Friday before trading higher to close at 0.7080, off 1.1% for the week.

The Week Ahead

AUD: The upcoming Australian economic calendar is light but offers some very important economic data this week. Tuesday starts the week off with the key RBA Monetary Policy Meeting Minutes, and Wednesday offers the MI Leading Index (last 0.2% M/M), and the NAB Quarterly Business Confidence index (last 18). Thursday has New Motor Vehicle Sales (last -1.9% M/M) and Friday closes out the week with Import Prices (-1.5% Q/Q) and a speech by RBA Governor Stevens in Toowoomba. Technically, AUD/USD has returned to test its broken declining medium-term trend line now drawn at 0.9235, and since its outlook remains bullish this may present a chance to buy. Resistance for AUD/USD shows on the chart at 0.9388, 0.9405 and the psychological 0.9500 level, while support is indicated at 0.9223, 0.9130 and the psychological 0.9000 level

To view a live chart follow the link:

CAD: The next Canadian economic data week is considerably busier than usual and has some very important numbers due out. Monday starts the action with Foreign Securities Purchases (7.29B), and Tuesday offers the key BOC Rate Statement with the Overnight Rate expected to remain unchanged at 0.25%. Wednesday offers Wholesale Sales (1.3% M/M) and Thursday has the Leading Index (0.8% M/M), the important BOC Monetary Policy Report and its associated BOC Press Conference. Friday ends the week with CPI (0.2% and 0.1% Core M/M) and Retail Sales (1.1% and 0.9% Core M/M). Technically, USD/CAD made a new recent low at 0.9951, but rallied sharply to correct an oversold situation. Its outlook remains bearish, so selling USD/CAD on rallies is preferred. Resistance in USD/CAD is seen in at 1.0162, in the 1.0301/1.0368 region and at 1.0592. Support shows in the 0.9951/90 and 0.9818/23 regions, as well as at the key psychological 1.0000 parity level.

To view a live chart follow the link:

EUR: The coming economic data week in the Eurozone heats up a bit, starting on Tuesday with German PPI (0.5%M/M), EZ Current Account (-5.3B), the German ZEW Economic Sentiment index (38.9) and a speech by Buba President Weber in Mannheim. Wednesday is quiet, but Thursday has the Flash PMI numbers (French 56.8 and 54.4 German 60.2 and 55.2 and EZ 56.8 and 54.5 for Manufacturing and Services), plus a speech by ECB President Trichet in Frankfurt. Friday offers French Consumer Spending (0.3%M/M), German Ifo Business Climate (98.9), Italian Retail Sales (0.3%M/M), and the Belgian NBB Business Climate index (-2.5). Technically EUR/USD broke its medium-term downtrend channel and almost met its 1:1 Fibonacci projection target at 1.3606 by trading as high as 1.3591 last week. Support for EUR/USD shows at 1.3341, 1.3267/82 and the psychological 1.3000 level. Resistance to the topside is seen at 1.3528/38, 1.3591 and in the 1.3773/1.3839 congestion region.

To view a live chart follow the link:

GBP: The coming economic data week gets busier in the United Kingdom. Monday starts things off with the Rightmove HPI (last 0.1%M/M), and Tuesday has CPI (3.2% and 2.6% Core Y/Y), RPI (4.1% Y/Y). Wednesday has Claimant Count Change (-5.7K), MPC Meeting Minutes (vote expected 0-0-9), Average Earnings Index (2.5%3m/y), and the key U.K. Unemployment Rate (7.8%). On Thursday, look for Public Sector Net Borrowing (24.2B), Retail Sales (0.7% M/M), Prelim. Mortgage Approvals (51K), Prelim. M4 Money Supply (0.3% M/M) and CBI Industrial Order Expectations (-31). Friday ends the week with Preliminary GDP (0.4% Q/Q) and the Index of Services (0.6% 3m/3m). Technically, GBP/USD maintained its corrective gains last week. Nevertheless, bearish sentiment prevails so selling rallies is preferred. Resistance shows at 1.5337 1.5484 and 1.5522 while support is indicated at 1.5127/40, at the key psychological 1.5000 level and in the 1.4782/97 region.

To view a live chart follow the link:

JPY: Another rather light economic data schedule is anticipated for Japan next week. Monday has Household Confidence (40.2), Tuesday offers Tertiary Industry Activity (-0.9% M/M), and Wednesday is quiet. Look for the Japanese Trade Balance (0.66T) on Thursday, followed on Friday by a tentatively-scheduled speech by BOJ Gov Shirakawa in New York and All Industries Activity (-1.3% M/M). Technically, USD/JPY corrected its recnt rally last week. Resistance for USD/JPY shows at 92.94, 93.77, 94.78 and while support is indicated at 92.11 and 89.62/82, plus the psychological 90.00 level.

To view a live chart follow the link:

NZD: The coming week of New Zealand economic data releases is again rather sparse. Tuesday starts things off with CPI (0.6% Q/Q) and FPI (last -1.3% M/M), but Wednesday and Thursday have nothing of note due out. Friday has Visitor Arrivals (last -1.9% M/M) and Credit Card Spending (last 1.1% Y/Y) to close out the week. Technically, NZD/USD came off last week ahead of declining trend line resistance, now drawn at 0.7720, to test its inclining 200-day MA at 0.7060 which should present a buying opportunity. Support for NZD/USD is seen at 0.7064, 0.7006 and 0.6963, plus at the key psychological 0.7000 level. Resistance shows in the 0.7154/93 and 0.7291/0.7317 regions, and at 0.7440.

To view a live chart follow the link:

USD: The U.S. economic calendar is busy again next week, with some important data due out, in addition to the key G20 Meetings scheduled for April 22-23 ahead of the bi-annual IMF Meetings to be held on April 24-25 both in Washington D.C. The action starts on Monday with a speech by Fed Chairman Bernanke via satellite to Chicago, followed by the CB Leading Index (1.0%M/M) and a speech by FOMC Member Duke in Alexandria. Tuesday has nothing of note, and Wednesday just has Crude Oil Inventories, but Thursday is busy with PPI (0.4% and 0.1% Core M/M), Jobless Claims (449K), Existing Home Sales (5.28M), and HPI (-0.1%M/M). Friday offers a speech by FOMC Member Kohn in Frankfurt, plus Durable Goods Orders (0.2% and 0.7% Core M/M), New Home Sales (323K).

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]]> Weekly Market Watch - Monday, 12 Apr 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=8641 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=8641 Sun, 11 Apr 2010 22:45:11:650 GMT Last Week Recap

EUR: EUR/USD had a volatile week as the Greek credit drama took centre stage again. The pair sold off sharply from its weekly high of 1.3497 at the beginning of the week as Greek bond yields soared to 7.36% and the risk of a default on Greek debt seemed more likely. Also, the FOMC minutes released on Tuesday clarified the meaning of “extended period” which was the wording used to describe how long the U.S. would keep interest rates low stating, "a number of members noted that the Committee''s expectation for policy was explicitly contingent on the evolution of the economy rather than on the passage of any fixed amount of calendar time". EUR/USD then made its weekly low of 1.3282 on Thursday as the ECB kept rates unchanged at 1.00%. Also, German Industrial Production disappointed the market by coming out at 0.0% versus a 0.7% expected rise. The previous reading was also revised downward from a rise of 0.6% to a 0.1% decline. Also on Thursday, U.S. Initial Jobless claims came out at a worse-than-expected at 460K versus a consensus of 433K, and the previous number was revised slightly upward from 439K to 442K. In addition, Fed Chairman Ben Bernanke commented in a speech in Dallas that, "We are far from being out of the woods," referring to the U.S. economic recovery.
EUR/USD made a dramatic comeback on Friday after comments by ECB President Trichet assuring markets that no immediate risk of a Greek default existed and fears of an imminent bank run in Greece subsided. The rate closed at 1.3493 on Friday, a mere 3 pips higher on the week and virtually unchanged. After the close, Germany agreed to a bailout of Greek debt at below market interest rates with the IMF also participating in which Greece may receive loans of between 20 to 25 Billion Euros at a rate of around 5%.
JPY: USD/JPY corrected lower last week, trading off of its weekly high of 94.78 made on Monday. The rate continued south on Tuesday as the BOJ left the Overnight Call rate unchanged at 0.10%. Governor Shirakawa stated at a press conference on Wednesday that, “We have confirmed that the economy is currently picking up steadily and on top of that, we are seeing some signs of future progress.” He added that the Japanese economy was “picking up” and that the BOJ had “advanced our economic assessment by one step because the economy’s pickup is becoming more self-sustained and concerns about a double dip have pretty much gone.” USD/JPY went on to make its weekly low of 92.82 on Thursday before trading higher on position-squaring to close on Friday at 93.16, down 1.5%.

GBP: GBP/USD recovered last week, trading off of its weekly low of 1.5127 on Tuesday as a date of May 6th was announced for elections. Also, U.K. Construction PMI came out at a better-than-expected 53.1 versus a consensus of 48.8. On Wednesday, Services PMI disappointed the market somewhat by coming out at 56.5 versus a 58.1 consensus. Thursday saw the BOE keep its Official Bank Rate unchanged at 0.5% and an announcement its MPC had voted to maintain asset purchases stable at 200B pounds. Cable continued improving, eventually making its weekly high of 1.5390 on Friday as U.K. PPI Input numbers showed a much better-than-expected 3.6% improvement month on month versus a consensus of just 1.3% along with an upwardly-revised previous number of 0.6% versus an original reading of 0.1%. PPI output was also better-than-expected at 0.9% M/M versus a 0.4% consensus. Cable went on to close on Friday at 1.5374, up 1.1% on the week.

AUD: AUD/USD gained considerably last week after the RBA again raised its key Cash Rate by 25 basis points to 4.25% on Tuesday. AUD/USD continued its ascent on Wednesday, despite uninspiring Australian jobs data for April showing a stable Unemployment Rate of 5.3%. Also, the Australian economy added only 19.6K jobs versus a 20.1K consensus with a downward revision of -4.7K to the previous month. In addition, the Aussie benefited from rising gold prices, as the precious metal hit $1,164.65 an ounce on Friday, a level not seen since December of 2009. AUD/USD also made its weekly high of 0.9341 on Friday before settling at 0.9330, up 1.5% for the week.

CAD: USD/CAD fell considerably last week even declining below the key 1.0000 parity level, as rising gold and oil prices added strength to the Loonie against its southern neighbour. The rate made its weekly low of 0.9975 on Wednesday, dipping below parity for the first time since July of 2008. Also on Wednesday, the Canadian Ivey PMI came out at a better-than-expected 57.8 reading versus a consensus of 55.1. Nevertheless, the rate corrected higher on Thursday to reach its weekly high of 1.0103, before softening into Friday’s close. USD/CAD ended the week at 1.0037, down 0.7% from its previous weekly close.

NZD: NZD/USD ended higher last week, despite falling initially to hit a low of 0.6963 on Tuesday after the NZIER Business Confidence Index came out at a disappointing reading of 22, versus a previous reading of 31. Also, ANZ Commodity Prices showed an increase of just 1.8% versus a previous reading of 3.8%. The rate then recovered dramatically in technical trading to break a key declining trend line at 0.7084 which led the rate to its weekly high of 0.7172 on Friday before NZD/USD corrected somewhat on position-squaring to close at 0.7149, up 1.3% for the week.

The Week Ahead

AUD: The upcoming Australian economic calendar is light but offers some very important economic data this week. Monday starts the week off with the key Home Loans (-0.9%M/M) data. Tuesday offers NAB Business Confidence (last 19), while Wednesday has the Westpac Consumer Sentiment (last 0.2%) and Thursday has MI Inflation Expectations (last 3.2%) to end the week. In terms of its technicals, AUD/USD broke above its declining medium-term trend line now drawn at 0.9219 last week, and so its outlook remains bullish. Resistance for AUD/USD shows on the chart at 0.9341, 0.9405 and the psychological 0.9500 level, while support is indicated at 0.9223, 0.9164 and the psychological 0.9000 level.

To view a live chart follow the link:

CAD: The next Canadian economic data week has some very important numbers due out. Monday starts the action with Housing Starts (201K) and the key BOC Business Outlook Survey. Tuesday has the Canadian Trade Balance (0.8B) due out, plus the NHPI (0.5%M/M). Wednesday and Thursday have nothing of note, but Friday offers Manufacturing Sales (1.0%M/M) and New Motor Vehicle Sales (7.1%M/M) to end the week. Technically, USD/CAD made a new low within its recent downtrend at 0.9975 as it trade below parity last week, and its outlook remains bearish so selling USD/CAD on corrective rallies ahead of the key declining trend line now drawn at 1.0374 would be indicated. Resistance in USD/CAD is seen in the 1.0081/1.0127 and 1.0301/ 1.0368 regions, and then at 1.0592. Support shows up in the 0.9975/90 and 0.9818/23 regions, as well as at the key psychological 1.0000 parity level.

To view a live chart follow the link:

EUR: The coming economic data week in the Eurozone is considerably lighter, starting on Monday with Italian Industrial Production (0.4%M/M), followed on Tuesday by German Final CPI (0.5%M/M), German WPI (0.2%M/M) and French CPI (0.5%M/M). Wednesday just has EZ Industrial Production (0.3%M/M), while Thursday features the ECM Monthly Bulletin, as well as the Italian Trade Balance (-2.37B) and a dual release of the Eurozone Trade Balance for Jan and Feb (3.1B and 5.1B). Friday closes the week with EZ CPI (1.5% and 0.9% Core Y/Y). On the technical front, EUR/USD looks poised to break its medium-term down trend channel this week, with the upper line now drawn at 1.3507 as it corrects it recent fall from 1.5144 to 1.3267. Key Fibonacci projection targets for this correction come in at 1.3606 for the 1:1 and 1.3806 for the 1:1.618. Support for EUR/USD shows at 1.3341, 1.3267/82 and the psychological 1.3000 level. Resistance to the topside is seen at 1.3528/38, 1.3591 and in the 1.3773 to 1.3839 congestion region.

To view a live chart follow the link:

GBP: The coming economic data week is also light in the United Kingdom. Monday starts things off with the CB Leading Index (last 0.8%M/M), BRC Retail Sales Monitor (last 2.2%Y/Y) and the RICS House Price Balance (1.7%). Tuesday offers the U.K. Trade Balance (-7.3B) and the DCLG HPI (7.9%Y/Y). Wednesday ends the week with Nationwide Consumer Confidence (81). On the technical side, GBP/USD continued traded correctively higher last week, even besting its previous reaction high of 1.5380 by trading up to 1.5390 as it reached its key 1:1 Fibonacci projection target. Nevertheless, the bearish outlook for GBP/USD prevails so these rallies appear to present selling opportunities. Resistance for GBP/USD shows near present levels at 1.5390, and then at 1.5574 and 1.5814, while support is indicated at 1.5127/40, at the key psychological 1.5000 level and in the 1.4782/97 region.

To view a live chart follow the link:

JPY: A rather light economic data schedule is anticipated for Japan next week. Monday features the BOJ’s Monetary Policy Meeting Minutes, plus Bank Lending (last -1.5%Y/Y) and the M2 Money Stock (2.7%Y/Y). Tuesday has CGPI (-1.1%Y/Y), while Wednesday has a speech by BOJ Governor Shirakawa scheduled in Tokyo. Thursday has Revised Industrial Production (-0.9%M/M). With respect to the technical picture, USD/JPY corrected its overbought condition last week, still remaining above the several key downwards-slanting trend lines that it broke above the week before last and confirming its medium-term bullish outlook. Resistance for USD/JPY shows at 93.77, 94.26 and 94.78, while support is indicated at 92.82, 92.11 and 89.62/82, plus the psychological 90.00 level.

To view a live chart follow the link:

NZD: The coming week of New Zealand economic data releases is again sparse. Monday and Tuesday offer nothing notable, but Wednesday has the key Retail Sales (0.3% and 0.4% Core M/M) data. Thursday just has the Business NZ Manufacturing Index (last 53.3) to end the week. From a technical perspective, NZD/USD spiked sharply higher last week and broke above a key declining medium-term trend line now drawn at 0.7083. As a result, the medium-term outlook for the Kiwi remains bullish and so buying on dips ahead of that trend line is preferred. Support for NZD/USD is seen at 0.7064, 0.7006 and 0.6963, plus at the key psychological 0.7000 level. Resistance to the topside shows at 0.7172/7, in the 0.7291/0.7317 region, and then at 0.7440.

To view a live chart follow the link:

USD: The U.S. economic calendar is especially busy next week, with some key data due out and important policymaker speeches scheduled. The action starts on Monday with the Federal Budget Balance (-155B), followed on Tuesday by the U.S. Trade Balance (-38.4B), Import Prices (0.9%M/M), and a speech by Fed Chairman Bernanke in Washington D.C. On Wednesday, look for CPI (0.2% and 0.1% Core M/M), Retail Sales (1.0% and 0.5% Core M/M), the Fed’s Beige Book, Business Inventories (0.2%), in addition to a speech by FOMC Member Pianalto in New York and testimony in Washington D.C. by Bernanke before the Joint Economic Committee of Congress. Thursday features Jobless Claims (439K), the Empire State Manufacturing Index (24.0), TIC Long-term Purchases (20.3B), Capacity Utilization (73.3%), Industrial Production (0.5%M/M), the Philly Fed Manufacturing Index (19.7) and a speech by FOMC Member Bullard in New York. Friday closes the week with Building Permits (0.63B), Housing Starts (0.60M), the Preliminary UofM Consumer Sentiment report (74.7), and speeches by FOMC Members Warsh and Hoenig in New York.

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]]> Weekly Market Watch - Tuesday, 06 Apr 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=8166 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=8166 Mon, 05 Apr 2010 23:56:23:397 GMT Last Week Recap

EUR/USD had a mixed week overall, with the rate starting out on a positive note Monday as German Preliminary CPI showed a favourable 0.5% increase versus a consensus of 0.3%. Nevertheless, EUR/USD weakened Tuesday on comments from IMF Director Dominique Strauss-Kahn who stated that any Greek debt relief from the IMF would “be an IMF program decided by the IMF as it happens with each and every country.” He added that, “The IMF will define the conditionality, as we do with any country.” The rate then weakened further, eventually making its weekly low of 1.3383 on Wednesday despite a positive German Unemployment Change report showing a drop in unemployment of 31K versus a rise of 10K expected, plus a downward revision of 8K for the previous month. Also, the Eurozone CPI Flash Estimate rose 1.5% Y/Y versus a 1.1% market consensus. Furthermore, U.S. ADP Non-Farm employment showed a disappointing drop of -23K on Wednesday versus an increase of 40K expected and Chicago PMI also showing a lower-than-expected value of 58.8 versus a 61.5 consensus. On Thursday, the rate made its weekly high of 1.3590 before selling off on negative German Retail Sales numbers which showed a decline of 0.4% versus a 0.0% consensus number. Also on Thursday, U.S. ISM Manufacturing came out at a much better-than-expected 75.0 versus a consensus of 67.2, and the strongest reading the index has shown since July of 2004. Friday was a bank holiday in many of the Eurozone countries; however, U.S. Non-Farm Payrolls came out at 162K versus a 185K consensus. This was still the highest the number has been in three years, despite the U.S. Unemployment Rate staying steady at 9.7%. EUR/USD settled on Friday at 1.3501, up 0.6% for the week.

USD/JPY continued its upward trend last week, as it traded off its weekly low of 91.99 on Monday despite Japanese Retail Sales showing an impressive gain of 4.2% versus a consensus of 1.7% while Japanese Unemployment held steady at 4.9%, as was widely- expected. On Wednesday, Japanese Housing Starts showed a considerably worse-than-expected drop of -9.3% Y/Y versus a consensus of -0.8% and a previous reading of -8.1%. USD/JPY subsequently continued strengthening despite Thursday’s Tankan Non-Manufacturing Index coming out better-than-expected at -14 versus a -17 consensus. Speculation grew that these favourable Tankan sentiment index results and other evidence that the Japanese export-led recovery seems to be exceeding BOJ expectations may bring the central bank to acknowledge the increasing strength of the Japanese economy and delay liquidity injections. Nevertheless, USD/JPY continued strengthening, eventually making its weekly high of 94.68 on Friday before closing the week at 94.57, up an impressive 2.2% from the previous weekly close.

GBP/USD showed considerable strength last week as it traded off of its weekly low of 1.4889 on Monday after U.K. Net Lending to Individuals showed an increase of 2.1B M/M versus a 1.8B consensus. Cable continued strengthening with more positive numbers for the U.K. on Tuesday with Nationwide HPI showing a 0.7% increase versus a 0.2% consensus. In addition, U.K. Final GDP was slightly better-than-expected at 0.4% Q/Q, versus a 0.3% consensus, but the Current Account figure was Tuesday’s highlight with a much-better-than-expected decline of 1.7B versus an expected decline of 4.6B. On Thursday, Cable made its weekly high of 1.5296 as U.K. Manufacturing PMI came out at a better-than-expected 57.2 figure versus the 56.8 expected. While Cable showed some strength last week, the market ended the week nervously awaiting the imminent announcement from Prime Minister Gordon Brown of the date for the upcoming U.K. general election. This could come as early as April 6th. GBP/USD went on to close at 1.5199 on Friday, up an impressive 2.0% for the week.

AUD/USD gained considerably last week, as it traded off of its weekly low of 0.9017 made on Monday after RBA Governor Glen Stevens said that housing prices are “getting quite high” and that interest rates would have to return to “normal” levels. The rate climbed on these hawkish comments despite HIA New Home Sales showing a 5.2% decline month-on-month versus a previous reading of an increase of 9.5%. On Tuesday, AUD/USD continued higher in spite of a disappointing Building Approvals release which declined 3.3% M/M versus the consensus of a 2.1% drop, although the previous month’s reading was upwardly-revised from -7.0% to -5.5% which neutralised the effect of the present month’s decline. Also, Australian Retail Sales came out at a very disappointing -1.4% versus a consensus expectation of a 0.3% increase. AUD/USD then declined on Wednesday after the Australian Trade Balance widened to -1.92B versus a -1.34B consensus. The rate then recovered to make its weekly high of 0.9215 on Thursday as Australian Commodity Prices showed a 1.4% increase year-on-year, and the previous reading of -9.7% was revised upwards to -7.0%. The rate then softened into Friday’s close at 0.9185, up 1.6% for the week.

USD/CAD started the week on a firm note, but traded off of its weekly high of 1.0269 made on Monday after BOC Deputy Governor Jenkins stated in a speech in Toronto that Canadian exporters were going through a “significant restructuring” caused in part by the effects of a stronger Canadian Dollar. He added that, “Canada’s export sector has had to adapt to a strong Canadian dollar, intense competition from emerging-market economies and the shift in the relative weight in global demand from advanced economies to emerging-market economies”. Despite these official concerns about a strong Loonie, USD/CAD continued its decline on Tuesday as Statistics Canada released its Raw Materials Producer Index which showed a 0.4% gain versus a consensus of a decline of 1.0%, with the previous reading revised from 3.3% to 3.4%. On Wednesday, Canadian GDP showed a slightly-better-than-expected gain of 0.6% versus a consensus of 0.5% M/M, with the previous reading revised down to 0.5% from 0.6%. USD/CAD eventually made its weekly low of 1.0065 on Thursday before rising on Friday on short-covering to close at 1.0103, down 1.5% on the week.

NZD/USD traded in a fairly narrow range as very little fundamental news came out of New Zealand last week. The rate initially came off of its weekly low of 0.7031 on Monday as N.Z. Building Consents showed an impressive increase of 5.9% M/M versus a previous reading of -2.8%. On Tuesday, NZD/USD made its weekly high of 0.7130 despite the NBNZ Business Confidence number coming out at 42.5 versus its previous reading of 50.1. The rate then declined into Thursday to make a couple of lows in the 0.7033 region before recovering slightly to end last Friday at 0.7049, up just 11 pips for the week.

The Week Ahead

AUD: The upcoming Australian economic calendar offers some very important economic data this week. The clocks shift forward for Daylights Savings Time on Sunday in Australia, and Monday is a Bank Holiday, so Tuesday starts the week off with the key ANZ Job Advertisements (last 19.1%) and the highlighted RBA Statement in which the central bank is expected to raise its benchmark Cash Rate 25 bps to 4.25%. Wednesday has the AIG Services Index (last 48.3), and Thursday features the key Australian Employment Report with the Employment Change expected at +20.2K and the Unemployment Rate at 5.3%. Friday just has the AIG Construction Index (52.8 last) to close out the week. In terms of its technicals, AUD/USD traded higher last week to take another crack at its declining medium-term trend line now drawn at 0.9232. Still, the rate remains supported by its 200-day rising MA that now comes in at 0.8802, in addition to a shorter-term trend line drawn at 0.9057 and a long-term trend line drawn at 0.8954. This convergence of trend lines indicates that AUD/USD may be at a significant crossroads for its future direction, although since its 14-day RSI remains in neutral territory at 57 and the rate is trading in the middle of its upper Bollinger Band, those indicators provide little sense of which direction the break might come. Overall, this technical picture argues for some initial consolidation in AUD/USD next week, followed by a sharp move which could come in either direction, although probably to the upside. Resistance for AUD/USD shows on the chart at 0.9251, 0.9328 and 0.9405 while support is indicated at 0.9130, 0.9000 and 0.8977.

To view a live chart follow the link:

CAD: The next Canadian economic data week looks rather light, although some very important data is due out. Monday is a Bank Holiday in Canada, and Tuesday has nothing of note, but Wednesday has key Building Permits (2.1%M/M), Ivey PMI (55.1) and a speech by Governing Council Member Murray in Washington D.C. scheduled. Thursday is quiet, but Friday is the weekly highlight with the Canadian Employment Report, with market expectations centred on an Employment Change of +25.2K and an Unemployment Rate of 8.2%. Technically, USD/CAD traded lower most of last week down to 1.0065, just above its recent 1.0060 low. If future price action is upwards, this could indicate a potential double bottom formation on the daily charts with a neckline at the 1.0301 reaction high. If downwards, then a break of 1.0060 should lead to a test of “parity” or the key psychological 1.0000 support level. Furthermore, USD/CAD’s 14-day RSI is at 34 and rising, and the rate has just recovered above its lower Bollinger Band which could spark a corrective bounce. Nevertheless, with USD/CAD trading well below its downward-sloping 200-day MA currently at 1.0661, the outlook for USD/CAD remains bearish in the medium-term. As a result, selling USD/CAD on corrective rallies ahead of the key declining trend line now drawn at 1.0417 would be indicated. Resistance in USD/CAD is seen at 1.0127, in the 1.0301 to 1.0368 region, and then at 1.0592 and 1.0779. Support shows up at 1.0060/65, in the 0.9973/90 and 0.9818/23 regions, as well as at the key psychological 1.0000 parity level.

To view a live chart follow the link:

EUR: The coming economic data week in the Eurozone starts with Bank Holidays on Monday in France, Germany and Italy. Tuesday has the Sentix Investor Confidence index (-5.9), and Wednesday has Final Services PMI (55.5), Final GDP (0.1%Q/Q) and PPI (0.2%M/M) for the Eurozone, plus German Factory Orders (-0.9%M/M) due out. Thursday features the French Government Budget Balance (last -9.2B) and Trade Balance (-3.5B), followed by E.Z. Retail Sales (0.0%M/M), German Industrial Production (0.7%M/M) and the key ECB Rate Announcement and Press Conference in which the Minimum Bid Rate is expected to remain unchanged at 1.0%. Friday offers the German Trade Balance (11.5B) and French Industrial Production (0.4%M/M), and ECB President Trichet will speak on Friday in Milan and on Saturday in Parma, Italy. On the technical front, the prevailing downtrend in EUR/USD took a breather last week, as the rate failed to make a new low and corrected as high as 1.3591. Nevertheless, the declining medium-term trend line now drawn at 1.3587 should cap the upside, although a confirmed break there would target 1.3817 and possibly as high as 1.4200. On the downside, 1.3267 remains the level to beat. The outlook for the medium-term remaining bearish as EUR/USD trades well under its downward-sloping 200-day MA now at 1.4293. Also the rate’s 14-day RSI has recovered back to neutral territory and is now at 46. Also, EUR/USD has now moved back above the key 61.8% retracement level of its up move from 1.2330 to 1.5144 at 1.3405. Support for EUR/USD shows at 1.3460, 1.3384 and 1.3267 ahead of the psychological 1.3000 level. Resistance to the topside is seen at 1.3537, 1.3569/91 and in the 1.3773 to 1.3839 congestion region.

To view a live chart follow the link:

GBP: The coming economic data week has some key information due out in the United Kingdom, along with the imminent risk of a U.K. election date announcement by Prime Minister Brown. The market currently expects the election on May 6th, and Sterling could sell off sharply if a hung parliament looks likely. The data week starts with a U.K. Bank Holiday on Monday, on Tuesday by the important Halifax HPI (0.6%M/M), Construction PMI (48.8) and Housing Equity Withdrawal (-2.9B). Wednesday has Nationwide Consumer Confidence (81), the BRC Shop Price Index (last 1.7%), Services PMI (58.2) and Index of Services (0.8%3M/3M), while Thursday looks like the weekly highlight with Manufacturing Production (0.7%M/M), Industrial Production (0.5%M/M) and the tentatively-scheduled NIESR GDP estimate, plus the key MPC Rate Statement in which the MPC is expected to keep the Official Bank Rate and the Asset Purchase Facility unchanged at 0.50% and 200B respectively. Friday just has PPI (1.2% Input and 0.4% Output M/M) to end the week. On the technical side, GBP/USD traded correctively higher last week, holding above its recent March 1st low at 1.4782 and its March 25th low of 1.4797. The rate also exceeded a declining trend line in place since Jan 19th and now drawn at 1.5080. This now sets up a potential double bottom formation on the daily charts with a neckline at 1.5380 where a confirmed break would set up a target in the 1.5950 region, just below a major declining trend line now drawn at 1.5982. Nevertheless, the bearish outlook for GBP/USD prevails since the rate remains under its 200-day MA, which is currently at 1.6122 and sloping downwards. Furthermore, the rate’s 14-day RSI is in neutral territory at 54, so a risk exists of more corrective upside for Cable next week before its prevailing downwards trend attempts to reassert itself. Resistance for GBP/USD shows at 1.5297, 1.5380 and 1.5574, while support is indicated at 1.5042, 1.4930, 1.4797 and the key psychological 1.5000 level.

To view a live chart follow the link:

JPY: A moderately active economic data schedule is anticipated for Japan next week. Monday is quiet, and Tuesday just offers Leading Indicators (97.9%), but the key Japanese Monetary Policy Statement and BOJ Press Conference is tentatively scheduled for Wednesday, with the central bank expected to keep the Overnight Call Rate unchanged at 0.10%. Thursday then closes the week with Core Machinery Orders (3.8%M/M), the Current Account (1.25T), the BOJ’s Monthly Report, the Economy Watchers’ Sentiment Index (45.2) and Preliminary Machine Tool Orders (last 271.4%Y/Y) since Friday is quiet. With respect to the technical picture, USD/JPY continued to trade higher last week and even broke its previous Jan 8th 93.77 high to reach up to 94.68 after having previously exceeded several key downwards-slanting trend lines. The rate also close the week above its 200-day MA which has now flattened out at 91.48, as well as its Ichimoku cloud, so the medium-term bullish outlook for USD/JPY now looks confirmed. Nevertheless, USD/JPY is trading outside its upper Bollinger Band and its 14-day RSI is well into overbought territory at 77, so a pullback might still provide a buying opportunity. Resistance for USD/JPY shows at 94.68, 97.77 and 98.88, while support is indicated at 92.11, 89.62/82, and 88.12, plus the psychological 90.00 level.

To view a live chart follow the link:

NZD: The coming week of New Zealand economic data releases is again sparse. The clocks shift forward for Daylights Savings Time on Sunday in New Zealand, and Monday is a Bank Holiday. Accordingly, Tuesday starts and ends the week with the key NZIER Business Confidence index (31) and ANZ Commodity Prices (last 3.8%M/M) since Wednesday, Thursday and Friday have little of note scheduled. From a technical perspective, NZD/USD fell sharply early last week before consolidating at lower levels as a possible symmetrical triangle pattern begins to form on the hourly charts. The rate still managed to close the week above its still-rising 200-day MA now at 0.7024 and a short-term uptrend line now drawn at 0.6897. Accordingly, the medium-term outlook for the Kiwi remains bullish for now, and although NZD/USD currently trades in neutral territory on the 14-day RSI at 50, the preference for the coming week is to continue to look for opportunities to buy NZD/USD on dips above 0.7000 for an anticipate break of the current consolidation to the upside. Support for NZD/USD is seen at 0.6960/93, 0.6846/86 and 0.6806/16 and the key psychological 0.7000 level, while resistance to the topside shows in the 0.7130/77 and 0.7291/0.7317 regions, and then at 0.7440.

To view a live chart follow the link:

USD: The U.S. economic calendar is less significant on the data front, but includes plenty of speeches by key monetary policymakers. The action starts on Monday with ISM Non-Manufacturing PMI (54.2) and Pending Home Sales (-0.6%M/M), followed on Tuesday by the FOMC Meeting Minutes. Wednesday features speeches by FOMC Member Dudley in New York, Fed Chairman Bernanke in Dallas, and FOMC Member Hoenig in Santa Fe, plus Consumer Credit (1.4B). Thursday has Initial Jobless Claims (433K), plus speeches by FOMC Members Duke in Washington D.C., Tarullo in New York, and Kohn in San Francisco. Fed Chair Bernanke will make another speech on Friday that will be followed by the release of Wholesale Inventories (0.4%M/M).

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]]> Weekly Market Watch - Monday, 29 Mar 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=7961 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=7961 Sun, 28 Mar 2010 23:11:06:470 GMT Last Week Recap

EUR: EUR/USD started the week off by inching higher on Monday after ECB President Trichet spoke against offering low interest-rate loans to shore up the Greek economy. The rate then made its weekly high of 1.3569 on Tuesday after the National Bank of Belgium released a better-than-expected Business Climate report with a reading of -3.6 versus the -4.1 expected. The pair then resumed its downward direction Wednesday despite the announcement of better-than-expected Eurozone Manufacturing and Services Purchasing Manager’s Indexes of 56.3 and 53.7 respectively. U.S. Durable Goods orders also showed an increase, with Core Durable Goods M/M showing a 0.9% increase versus a 0.6% consensus. On Thursday, the Euro came off its low of 1.3267, a level not seen since May of 2009, after France and Germany agreed in a summit in Brussels to a joint Eurozone/IMF bailout program for Greece and other EU members in financial difficulty. ECB President Trichet stated afterwards that he was “happy” that a solution had been found, although he somewhat reversed his previous comment that an IMF bailout would be “very, very bad” and “inappropriate” for an E.U. country. The rate continued trading higher on Friday on a combination of position-squaring and disappointing news that U.S. fourth quarter GDP had expanded by a worse-than-expected 5.6%, versus a consensus of a 5.9% expansion. EUR/USD went on to close at 1.3407, showing a net loss of 0.9% on the week.

JPY: USD/JPY gained considerably last week, trading off of its weekly low of 89.82 made on Monday, after the BOJ released minutes of its February meeting where policymakers decided to keep interest rates unchanged at 0.10%. Japanese policymakers affirmed in the minutes that “the economy is picking up.” On Tuesday, the Japanese Trade Balance showed a surplus of ¥651B versus a ¥555B consensus which was a four-month high. Nevertheless, on an adjusted basis, the Trade Balance was ¥471B versus a ¥389B consensus which was a four-month low. Nevertheless, USD/JPY continued rising, making its weekly high of 92.95 on Thursday as Tokyo Core CPI Y/Y numbers showed a slightly lower-than-expected -1.8% reading versus a consensus of -1.7%, but still making a seven-month high. Also on Thursday, Japan’s Finance Minister Kan asked for additional measures to address Japanese deflation, but he noted that deflation was slowing and denied rumours that additional measures would be taken to support the Japanese economy. USD/JPY initially rose in response to increased expectations that the BOJ would continue monetary easing to help cope with deflation, but fell on Friday due to position-squaring and a disappointing U.S. GDP release to close at 92.50, up an impressive 2.1% for the week.

GBP: GBP/USD started the week on a positive note as Cable made a weekly high of 1.5110 on Tuesday after BBA Mortgage Approvals showed a slightly better-than-expected number of 35.3K versus a consensus of 34.3K; however, this was offset by U.K. Core CPI coming in slightly under expectations at 2.9%Y/Y, versus a 3.0% consensus. The rate then resumed its slide on Wednesday, as the U.K. Annual Budget Release failed to reassure markets that the Labour Party would improve the U.K.’s fiscal outlook. Also, U.K. Chancellor Darling said in a speech following the Budget release that government borrowing for the 2009-10 financial year will be £167B, down from the current £178B estimate, and that U.K government borrowing for the 2010-11 financial year will be at a £163B level, down from the current £176B estimate. Despite these planned spending improvements, Cable went on to make its weekly low of 1.4797 on Thursday amid increased worries that the U.K.’s AAA debt rating would be difficult to maintain. GBP/USD recovered somewhat on Friday due to short-covering to close at 1.4894, off 0.8% from the previous weekly close.

AUD: AUD/USD started last week by edging higher and made its weekly high of 0.9196 on Tuesday. The rate then started declining on Wednesday, despite the RBA’s Assistant Governor Lowe’s hawkish comments anticipating further Australian interest rate hikes and warning that a delay would be costly. Lowe also said that the Australian currency would remain above the average seen during the last decade over the next few years and that regional economies would outperform those of Western nations. Nevertheless, AUD/USD continued losing ground on Friday, eventually making its weekly low of 0.9000. The rate then bounced a bit on position-squaring to close the week at 0.9036, down 1.3% from the preceding week’s close

CAD: USD/CAD started last week by trading off of its weekly low of 1.0145 made on Monday. On Tuesday, the Canadian Leading Index showed a slightly lower-than-expected rise of 0.8% month-on-month versus a 0.9% consensus. In a speech on Wednesday, BOC Governor Carney said that he was open to possible rate hikes as early as June 1st and that the Canadian economy was experiencing a faster-than-expected recovery. He also said that maintaining low interest rates was conditional; thereby adding to speculation that Canada may hike rates before the U.S. Fed. Despite those hawkish comments, the Loonie softened as USD/CAD made its weekly high of 1.0301 on Friday before selling off on profit-taking to close at 1.0259, up 0.9% for the week.

NZD: NZD/USD initially fell last Monday, dipping briefly below 0.7000, but then rebounded into Tuesday, when it consolidated at higher levels. Wednesday saw the rate fall again to its weekly low of 0.6993 on news that the N.Z. Current Account had widened to -3.57B, substantially more that the 1.64B deficit expected. On Thursday, it was announced that the N.Z. GDP for Q4 increased for the first time since the middle of 2008, showing a 0.8%Q/Q rise. The Kiwi initially strengthened to its weekly high of 0.7099 after that report, but the rate came off again to 0.7013 after N.Z. Finance Minister English made comments indicating that the New Zealand economy was still challenged by problematic imbalances. NZD/USD then firmed somewhat into the Friday close, ending the week at 0.7038 and down 0.6%.

The Week Ahead

AUD: The upcoming Australian economic calendar offers some important economic data this week. Monday starts the week off with the tentatively-scheduled HIA New Homes Sales (last 9.5%) data. Tuesday has a speech by RBA Assistant Governor Debelle in Sydney. Wednesday looks like the weekly highlight with Building Approvals (2.2%M/M), Retail Sales (0.3%M/M) and Private Sector Credit (0.4%M/M) scheduled. Thursday is also important with the AIG Manufacturing Index (last 53.8), MI Inflation Gauge (0.1%M/M), the key Australian Trade Balance (-1.37B) and Commodity Prices (last -9.7%Y/Y). Friday is the Good Friday bank holiday in Australia. In terms of its technicals, AUD/USD again came off last week, continuing to decline after making its recent 0.9251 high to trade as low as 0.9001, just ahead of its psychological 0.9000 level as it retraces the move from 0.8799 to 0.9251. The key 61.8% Fibonacci Retracement level at 0.8972 bears watching because a break below that level could lead to another test of 0.8799. Nevertheless, AUD/USD is still holding above its 200-day MA, which currently comes in at 0.8772 and is still rising, thereby signifying the medium-term outlook remains bullish. Support for the rate now comes from a medium-term upwards-slanting trend line now drawn at 0.8905, as well as its lower Bollinger Band, while resistance shows from a shorter-term down trend line at 0.9239. Also, the recent pullback has brought AUD/USD’s 14-day RSI back into neutral territory at 49. Overall, while initial activity for AUD/USD may be correctively lower, the upside may again reassert itself later in the coming week. Resistance for AUD/USD shows on the chart at 0.9116/22, 0.9197, and 0.9251, while support is indicated at 0.8977, 0.8878 and 0.8799, plus the psychological 0.9000 level.

To view a live chart follow the link:

CAD: The next Canadian economic data week has rather little scheduled, although some important data is due out. Monday has a speech by Governing Council Member Jenkins scheduled in Toronto, while Tuesday just has the Raw Materials and Industrial Produces Price Indexes (-1.0% and 0.0%M/M). Thursday looks like the highlight with Canadian GDP (0.5%) scheduled for release. Friday is the Good Friday bank holiday in Canada. Technically, USD/CAD again moved correctively higher last week, trading as high as 1.0301, after failing to exceed its recent 1.0060 low that comes in just above “parity” or the key psychological 1.0000 support level. USD/CAD’s 14-day RSI is at 48 and has now recovered nicely from oversold territory. Also, with USD/CAD trading well below its downward-sloping 200-day MA currently at 1.0735, the outlook remains bearish in the medium-term. As a result, selling USD/CAD on such corrective rallies ahead of the key declining trend line now at 1.0570 would be indicated since the Loonie seems set to take a shot at parity with the Greenback. Resistance in USD/CAD is seen in the 1.0301 to 1.0368 region, and then at 1.0592 and 1.0779. Support shows up at 1.0159/69, 1.0060 and in the 0.9973/90 region, as well as at the key psychological 1.0000 level.

To view a live chart follow the link:

EUR: The coming economic data week is less active in the Eurozone and starts with a shift to Daylights Savings Time on Sunday. Monday has German Preliminary CPI (0.3%M/M) and E.Z. Consumer Confidence (-17) due out, while Tuesday just has German Import Prices (0.5%M/M). Wednesday looks like the highlight with the German Unemployment Change (10K), the E.Z. CPI Flash Estimate (1.1%Y/Y), the E.Z. Unemployment Rate (10%), Italian Preliminary CPI (0.2%M/M) and the Italian Monthly Unemployment Rate (8.6%). Thursday just has German Retail Sales (0.1%M/M) and E.Z. Final Manufacturing PMI (56.3M/M), and Friday is the Good Friday bank holiday in France, Germany and Italy. On the technical front, the prevailing downtrend in EUR/USD seems to have resumed in earnest last week, as the rate made a new low within it at 1.3267, a rate not seen since last May. The declining trend line now drawn at 1.3700 should cap the upside this week. The outlook for the medium-term remaining bearish as EUR/USD trades well under its downward-sloping 200-day MA now at 1.4305, also its 14-day RSI has recovered back to neutral territory and is now at 40. Also, the rate has broken below the key 61.8% retracement level of its up move from 1.2330 to 1.5144 at 1.3405. Support for EUR/USD shows at 1.3267, 1.2965 and 1.2884, as well as at the psychological 1.3000 level. Resistance to the topside can be found near present levels at 1.3437/44, at 1.3569 and in the 1.3773 to 1.3839 congestion region.

To view a live chart follow the link:

GBP: The coming economic data week has some key numbers due out in the United Kingdom, along with the risk of a U.K. election date announcement which market rumours currently have pegged around the date of May 6th. The week starts with a shift to Daylights Savings Time on Sunday, followed on Monday by Net Lending to Individuals (1.8BM/M), Final Mortgage Approvals (48K) and a speech by MPC Member Dale in Surrey. Tuesday looks like the highlight with the important National House Price Index (0.2%M/M), the Current Account (-4.6B), Final GDP (0.3%Q/Q) and testimony in London by Chancellor of the Exchequer Darling on the 2010 budget before the Treasury Select Committee. Wednesday just has GfK Consumer Confidence, but Thursday has Halifax HPI (last -1.5%M/M), Manufacturing PMI (56.8), and the quarterly BOE Credit Conditions Survey. Friday is the Good Friday bank holiday in the United Kingdom. On the technical side, GBP/USD held above its recent March 1st low at 1.4782 last week, despite trading down as low as 1.4797. Nevertheless, the downside for GBP/USD prevails as it has now closed a week below its key psychological 1.5000 level. Also, the rate remains under its 200-day MA, which is currently at 1.6147 and sloping downwards, so the medium-term bearish outlook remains intact for GBP/USD. Furthermore, the rate’s 14-day RSI is at 39 and so not yet in oversold territory. Overall, the downside looks likely to predominate over the coming week, with the declining trend line drawn at 1.5196 likely to cap the upside as the rate makes another push lower to see if it can exceed its 1.4782 low this time. Resistance for GBP/USD shows at 1.5011, 1.5111 and 1.5380, while support is indicated at 1.4853, 1.4782/97 and 1.4396.

To view a live chart follow the link:

JPY: A more active economic data schedule is anticipated for Japan next week. Monday offers Retail Sales (1.7%Y/Y), while Tuesday has Household Spending (1.5%Y/Y), the Unemployment Rate (4.9%) and Preliminary Industrial Production (-0.4%M/M). On Wednesday, look for Manufacturing PMI (last 52.5), Average Cash Earnings (0.0%Y/Y) and Housing Starts (-0.8%Y/Y). Thursday should be the weekly highlight with the Tankan Manufacturing and Non-Manufacturing Index (-14 and -17) and a speech by BOJ Governor Shirakawa scheduled in Tokyo. Friday only offers the Monetary Base (2.3%Y/Y) to close out the week. With respect to the technical picture, USD/JPY broke sharply out of its recent consolidation to the upside last week to make a high at 92.84, a level not seen since last January. Furthermore, the rate broke above its previous 92.12 high, broke over its key downwards-slanting trend line now drawn at 90.79 and even exceeded its still-declining 200-day MA which now comes in at 91.56 on its weekly close, so the medium-term outlook has now turned bullish for USD/JPY. Nevertheless, USD/JPY is trading outside its upper Bollinger Band and its 14-day RSI is edging toward overbought territory at 63, so a pullback might present a buying opportunity. Resistance for USD/JPY shows at 92.94, 93.77 and 97.77, while support is indicated at 91.07, 89.47/75 and 88.12, plus the psychological 90.00 level.

To view a live chart follow the link:

NZD: The coming week of New Zealand economic data releases is sparse, but has some significance nevertheless. Monday is quiet, but Tuesday has N.Z. Building Consents (last -2.8%) scheduled for release. Wednesday has the important NBNZ Business Confidence (last 50.1) due out. Thursdays has nothing of note scheduled, and Friday is the Good Friday bank holiday in New Zealand. From a technical perspective, NZD/USD traded correctively lower down to 0.6993 last week, but still managed to close the week above its still-rising 200-day MA now at 0.7006 and a short-term uptrend line now drawn at 0.6891. Also, with a potential Head and Shoulders pattern forming on the hourly charts with a mildly upwards-slanting neckline now at 0.7003, a confirmed break below the 0.6993 level could see 0.6891, and a break there could prompt an even more significant reversal to ensue. Nevertheless, the medium-term outlook for the Kiwi remains bullish for now and since NZD/USD currently trades in neutral territory on the 14-day RSI at 52, the preference for the coming week is to continue to look for opportunities to buy NZD/USD on dips. Support for NZD/USD is seen at 0.6960/93, 0.6846/86 and 0.6806/16, while resistance to the topside shows in the 0.7048/99, 0.7149/77 and 0.7291/0.7317 regions.

To view a live chart follow the link:

USD: The U.S. economic calendar has some key data due out next week, including the all-important employment numbers. The action starts on Monday with the Core PCE Price Index (0.1%M/M), Personal Spending and Income (0.4% and 0.1%M/M), plus a speech by Treasury Secretary Geithner scheduled in Washington, D.C. Look for the S&P/CS Composite-20 House Price Index (-0.5%) and CB Consumer Confidence (50.2) Existing Home Sales (5.01M) on Tuesday, followed on Wednesday with the important ADP Non-Farm Employment Change (38K) report, as well as Chicago PMI (61.5), Factory Orders (0.5%) and a speech by FOMC Member Duke in Scottsdale, AZ. Thursday features Initial Jobless Claims (440K), ISM Manufacturing PMI and Prices (57.0 and 67.3), plus speeches by FOMC Members Bullard and Dudley in St. Louis, MO and Lexington, KY respectively. Friday will be the weekly highlight due to the scheduled release of Non-Farm Payrolls (179K) and the U.S. Unemployment Rate (9.7%), plus Average Hourly Earnings (0.2%M/M).

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]]> Weekly Market Watch - Monday, 22 Mar 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=7743 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=7743 Sun, 21 Mar 2010 21:58:06:850 GMT Last Week Recap

EUR/USD plummeted last week as uncertainty about Greek sovereign debt returned to the spotlight. The week started as Eurozone nations announced a rescue plan to support the Euro in case Greece defaults on its debt. Also, an emergency loan strategy was drawn up to calm European bond markets in the event that the Greek €4.8B tax increase and wage cut plan fails to prevent a default. In a statement made at a meeting Tuesday of finance ministers from the 16 E.U. countries, the ministers affirmed: “The objective would not be to provide financing at average Eurozone interest rates, but to safeguard financial stability in the Euro area as a whole.” EUR/USD then made its weekly high of 1.3737 on Wednesday after S&P affirmed Greece’s BBB+ credit rating and took them off credit watch. Nevertheless, the credit agency’s ratings outlook on Greece went from stable to negative. The Euro continued deteriorating relative to the Dollar after the U.S. FOMC left the Fed Funds rate unchanged at 0-0.25% on Thursday, as was widely-expected. Still, rumours about the Fed possibly raising the Discount Rate in a surprise move before their April meeting also weighed on the pair. EUR/USD went on to make its weekly low of 1.3502 on Friday before closing at 1.3529, down 1.8% for the week.

USD/JPY traded in a very narrow range last week. The week began uneventfully until the Bank of Japan issued its Statement on Monetary Policy on Wednesday. The BOJ decided to keep its key policy interest rate unchanged at 0.1% and to double its 3-month funding operation to ¥20T from ¥10T in an effort to fight deflation. After these announcements on Thursday, USD/JPY made both its weekly high of 90.79 and its weekly low of 89.74. The rate then consolidated to close at 90.52, a mere half a pip lower than the closing price the previous week and virtually unchanged.

GBP/USD started the week on a mixed note, with Cable trading off of its weekly low of 1.4974 seen on Tuesday as the DCLG Housing Price Index showed a considerably better-than-expected rise of 6.2% versus a consensus of 3.6%. The rate then made its weekly high of 1.5379 on Wednesday as the Claimant Count Change showed a significant drop of 32.3K, versus the 8.2K rise expected. Nevertheless, the overall Unemployment Rate remained unchanged at 7.8%, in line with market expectations. On Thursday, Cable began softening as MPC member Sentance made statements suggesting that the United Kingdom was in a double-dip recession and that weakness in the economy could make the BOE expand quantitative easing. GBP/USD continued weakening on Friday, ending the week at 1.5011, down 1.3% on the week.

AUD/USD traded in a narrow range last week which began with the RBA’s March policy meeting minutes released on Monday. In them, the RBA reiterated that it was appropriate for rates to move towards normal “gradually,” with economic data signalling strength in the Australian economy. The RBA also indicated that consumer spending had “held up”, despite a mixed set of spending data out in February. On Tuesday, Australian Housing Starts showed an impressive increase of 15.1% versus the market consensus of a lower 6.4% rise. The rate made its weekly high of 0.9250 on Wednesday, but traded lower the rest of the week as rumours of a U.S. Fed Discount rate hike buzzed around the market. AUD/USD went on to close at 0.9154 on Friday, a mere 4 pips higher on the week and virtually unchanged.

USD/CAD started last week by making its weekly high of 1.0230 on Monday. The rate then traded off and continued weakening on Tuesday as Canadian Manufacturing Sales showed a better-than-expected increase of 2.4% M/M that impressed the market which was expecting a mere 0.7% rise. The Loonie kept strengthening on Wednesday as Canadian Wholesale Sales rose 3.0% M/M versus a 0.6% consensus. Thursday saw more good news for the Loonie as Canadian Foreign Securities Purchases increased by an impressive 11.83B M/M versus the 7.75B expected. The rate made its weekly low of 1.0060 on Friday as Canadian Core CPI came out at 0.7% versus an expected 0.3%. USD/CAD then rebounded sharply on short-covering as traders squared positions before the weekend to close on Friday at 1.0164, just 24 pips lower than the previous week’s close.

NZD/USD had a volatile week despite very little fundamental news coming out of New Zealand. The rate initially traded off of its weekly low of 0.6985 made on Monday and continued improving despite news that the Westpac Consumer Sentiment index came in at 114.7 versus a previous reading of 116.9. The pair then made its weekly high of 0.7176 on Wednesday, before trading lower on Thursday as Visitor Arrivals in New Zealand showed a decrease of 1.9% from the previous number of -2.3% that was revised upward slightly from -2.4%. The pair then dropped sharply on Friday as position-squaring brought the rate to close at 0.7079, up 1% on the week.

The Week Ahead

AUD: The upcoming Australian economic calendar is rather light this week, but contains some important elements. Monday starts the week off with New Motor Vehicle Sales (last -3.4%M/M), and Tuesday and Wednesday have nothing of note scheduled. Thursday offers a speech by RBA Assistant Governor Lowe in Sydney, followed by the RBA’s biannual Financial Stability Review that could provide some insight into its monetary policy plans. Friday has a speech by RBA Governor Stevens in Sydney, plus the CB Leading Index (last 0.6%M/M) to end the week. In terms of its technicals, AUD/USD again showed good strength last week, trading to a new recent high at 0.9251 before retracing to 0.9127. Also, the rate is holding nicely above its 200-day MA, which currently comes in at 0.8745 and is still rising, thereby signifying the medium-term outlook remains bullish. Support now comes from a short-term upwards-slanting trend line now drawn at 0.9053. Also, the pullback to 0.9127 brought AUD/USD’s 14-day RSI back toward neutral territory at 58. Accordingly, the upside may again predominate over the coming week with AUD/USD looking a better buy on dips above 0.9053 since it may still head back up to test its previous high Jan 14th at 0.9328. Resistance for AUD/USD shows on the chart at 0.9192, 0.9251, and 0.9321/28, while support is indicated at 0.9127, 0.9094 and 0.8799.

To view a live chart follow the link:

CAD: The next Canadian economic data week has little of note scheduled. Tuesday has the only data release with the Leading Index (last 1.0%) due out, while Wednesday just has a speech by BOC Governor Carney at the Canadian Association for Business Economics scheduled in Ottawa, Canada. Technically, USD/CAD continued its recent slide last week, falling to a new low at 1.0060 that comes in just above the key psychological 1.0000 level and which marks the rate’s lowest level seen since July of 2008. USD/CAD’s 14-day RSI has now recovered somewhat from oversold territory at 35, and the 14-day momentum oscillator continues to confirm the new low. Also, with USD/CAD trading well below its downward-sloping 200-day MA currently at 1.0724, the outlook remains bearish in the medium-term, so selling USD/CAD on rallies would also be indicated from that perspective as the Loonie seems set to take a shot at parity with the Greenback. Resistance in USD/CAD comes in at 1.0223, 1.0290/1.0320 and 1.0357/68, while support shows at 1.0060, in the 0.9973/90 region, at 0.9818, and at the key psychological 1.0000 level.

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EUR: The coming economic data week is also moderately active in the Eurozone. Although Monday is quiet, and Tuesday just has the Belgium NBB Business Climate report (-4.1), Wednesday is especially busy starting with the French, German and Eurozone Flash Manufacturing and Services PMI (55.0 and 54.9 French, 57.0 and 52.2 German, 54.2 and 52.0 EZ), in addition to the German Ifo Business Climate index (95.8), the Italian Quarterly Unemployment Rate (7.9%) and EZ Industrial New Orders (2.1%M/M). Thursday has Gfk German Consumer Climate (3.1), French Consumer Spending (0.3%M/M), EZ M3 Money Supply (-0.1%Y/Y), Italian Retail Sales (0.2%M/M), and EZ Private Loans (-0.4%M/M) due out, while Friday just has a speech scheduled by ECB President Trichet in Muenster, Germany. On the technical front, the recent upward correction to EUR/USD’s overall slide seems to have run its course up to 1.3817. The recent Mar 2nd low at 1.3437 now becomes the level to beat as the downside resumes below the declining trend line now drawn at 1.3782 which should cap the upside this week. The outlook for the medium-term remaining bearish as EUR/USD trades well under its downward-sloping 200-day MA now at 1.4317, and its 14-day RSI remains within neutral territory at 41. Support for EUR/USD shows at 1.3503, 1.3437/60 and 1.2965 in addition to the psychological 1.3000 level. Resistance to the topside can be found at 1.3626, in the 1.3773 to 1.3839 congestion region and at 1.4026.

To view a live chart follow the link:

GBP: The upcoming economic data is not that active in terms of economic data releases, but nevertheless offers some key data. Also, rumours continue to focus on May 6th as the most likely date for the next U.K. elections, which must occur before June 3rd. Monday has nothing due out, but Tuesday looks active with CPI (3.1% and 3.0% Core Y/Y), BBA Mortgage Approvals (34.3K), RPI (3.7%Y/Y) and CB Realized Sales (20). Wednesday has the key Annual Budget Release scheduled by the HM Treasury, so expect that item to be closely watched for projected U.K. government spending and borrowing levels. Thursday has the important U.K. Retail Sales number (0.6%M/M) due out, while Friday just has Revised Business Investment (-5.6%Q/Q) scheduled. On the technical side, GBP/USD held its recent low at 1.4782 last week, trading as high as 1.5380 as the rate corrected higher. Nevertheless, GBP/USD has since come sharply off, even briefly pushing below the psychological 1.5000 level to hit 1.4987. Also, the rate remains firmly below its 200-day MA, which is currently at 1.6191 and sloping downwards, so the medium-term bearish outlook remains intact for GBP/USD. Also, the rate’s 14-day RSI is at 39 and not yet in oversold territory. Overall, the downside looks likely to predominate over the coming week, with the declining trend line drawn at 1.5317 likely to cap the upside as the rate makes another push lower towards the March 1st low at 1.4782. Resistance for GBP/USD shows at 1.5194/1.5216, 1.5322 and 1.5380, while support is indicated at 1.4977, 1.4871 and 1.4782, in addition to the key psychological 1.5000 level.

To view a live chart follow the link:

JPY: A relatively quiet economic data schedule is anticipated for Japan next week. Monday is a bank holiday, while Tuesday just has the BOJ’s Monetary Policy Meeting Minutes due for release. Wednesday only has the Japanese Trade Balance numbers (0.41T), and Thursday just has the CSPI or Corporate Services Price Index (-1.1%Y/Y) scheduled. Friday offers Japanese CPI (-1.7% Tokyo Core and -1.2% National Core Y/Y) to end the week. With respect to the technical picture, USD/JPY consolidated recent gains for most of last week. The rate failed to exceed the previous week’s 91.07 high and also kept below its key downwards-slanting trend line now drawn at 91.05. Furthermore, its declining 200-day MA now comes in at 91.68, so the upside should continue to challenge the rate, although a confirmed break of that key MA would likely see USD/JPY trade considerably higher. Also, USD/JPY’s 14-day RSI is in neutral territory at 53, and the rate is consolidating near the centre of its Bollinger bands, so some directional guidance is required. This could come on a break of either the 88.12 or 92.14 recent reversal points, which could significantly increase volatility. Resistance for USD/JPY shows at 91.07/37, in the 92.03/14 region and 93.77, while support is indicated at 90.16, 89.47/75, 88.73/81 and 88.12.

To view a live chart follow the link:

NZD: The coming week of New Zealand economic data releases is sparse but significant. Monday and Tuesday have nothing of note scheduled, but Wednesday has the important quarterly Current Account (-1.59B) data due out. Thursdays offers the key N.Z. GDP (0.8%Q/Q) number, while Friday has the New Zealand Trade Balance (242M) scheduled to end the week. From a technical perspective, NZD/USD made a new recent high last week at 0.7177 that was confirmed by the 14-day momentum oscillator. The rate has since corrected down to 0.7063, just ahead of a short-term uptrend line now drawn at 0.7056 where a break could prompt a significant reversal. Nevertheless, NZD/USD managed to close the week above its still-rising 200-day MA now at 0.6985, so the medium-term outlook for the Kiwi remains bullish for now. Also, NZD/USD currently trades in neutral territory on the 14-day RSI at 55, so odds tend to favour Kiwi strength next week. Support for NZD/USD is seen at 0.6960/85, 0.6846/86 and 0.6806/16, while resistance to the topside shows in the 0.7048/96, 0.7149/77 and 0.7291/0.7317 regions.

To view a live chart follow the link:

USD: The U.S. economic calendar is quite busy next week and includes a particularly large number of policymaker speeches. The action starts on Monday with Treasury Secretary Geithner scheduled to speak in Washington, D.C. Look for Existing Home Sales (5.01M) on Tuesday, along with the FHFA’s HPI (-0.9%M/M) and the Richmond Manufacturing Index (3). Wednesday offers Durable Goods Orders (0.6% and 0.9% Core M/M) and New Home Sales (316K), plus a speech by FOMC Member Hoenig in Washington, D.C. Thursday starts with a speech by FOMC Member Kohn in Davidson, NC, followed by Jobless Claims (453K), a speech by FOMC Member Pianalto in Bonita Springs, FL and key testimony by Fed Chair Bernanke before the House Financial Services Committee in Washington, D.C. Friday is also busy with Final GDP (5.9% and 0.4% Price Index Q/Q) and the Revised Univ. of Mich. Consumer Sentiment report (73.1). Also on Friday, FOMC Member Warsh will give a speech in New York, and FOMC Members Bullard and Tarullo will be speaking at the International Research Forum on Monetary Policy in Washington, D.C.

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]]> Weekly Market Watch - Monday, 15 Mar 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=7194 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=7194 Sun, 14 Mar 2010 23:42:36:813 GMT Last Week Recap

EUR/USD rose considerably last week on positive numbers out from the Eurozone, trading off of its weekly low of 1.3536 on Tuesday as French Trade Balance numbers showed a better-than-expected deficit of €3.68B versus a consensus of €3.8B. On Wednesday, German trade numbers showed the Trade Deficit had shrunk to €8.0B, with imports rising 6% and exports declining by 6.3% to bring the German Trade Deficit to its lowest point in ten years. The rate continued improving, as U.S. Jobless Claims out on Thursday at 462K was slightly worse than the market’s consensus of 456K. Also, the U.S. Trade Balance showed a deficit of $37.3B, versus the $40.9B expected. The rate continued its rally to make its weekly high of 1.3795 on Friday, despite encouraging U.S. Retail Sales numbers which showed that Core Retail Sales expanded by 0.8% versus a consensus of 0.1%. Also on Friday, ECB President Trichet stated at Stanford University in California that, "A delayed exit from extraordinary liquidity support would distort market behaviour and misallocate credit." He said this in reference to the lessons learned from the economic crisis, and went on to add that, "We do not wish to breed dependency." EUR/USD then sold off on profit-taking to close the week at 1.3766, up 1% from the previous weekly close.

USD/JPY traded lower at the beginning of last week to make its weekly low of 89.61 on Tuesday, as Japanese Leading Indicators showed a 97.1% level versus the 96.9% expected. The rate then began a sharp move higher as risk appetite returned to the markets amid reports out on Wednesday from China that trade exports had risen 45.7% in February, and imports had also risen 44.7%, both higher than expected. Also on Wednesday, a Reuters report hinted that inside sources say the BOJ is leaning toward easing monetary policy next week. The rate continued improving as BOJ Governor Shirakawa made comments to the effect that he believed easing monetary policy could eventually affect the Yen rate but that there was no clear relationship between short-term prices and foreign exchange rates. The pair continued rallying, making a high of 91.07 on Friday before backing off on position-squaring to close the week at 90.53, up just 0.3% from the end of the previous week.

GBP/USD began last week by trading lower initially as it made its weekly low of 1.4871 on Wednesday after U.K. Trade Balance numbers out on Tuesday showed a deficit of £8.0B versus a consensus of a £6.9B deficit. The rate then recovered the rest of the week after statements from U.K. Prime Minister Brown made on Wednesday in London announced that the U.K. government’s budget would be published in two weeks on March 24th, thereby setting the stage for the national election widely rumoured for May 6th. In his speech, Brown stated: "We dare not risk the recovery… for our task above all else is to preserve and expand the jobs, and lift the standards of life of the British people. We are weathering the storm, now is no time to turn back." GBP/USD then made its weekly high of 1.5216 on Friday, before backing off to close at 1.5202, ending the week just 0.5% higher.

AUD/USD started off on a soft note last week, with the rate hitting its weekly low of 0.9054 on Tuesday as Australian Home Loans showed a steep decline of 7.9% on the month, versus a consensus of a 2.1% increase. In addition, the previous 5.1% decline for the number was revised upwards from a 5.5% fall. AUD/USD then began heading upwards on Wednesday as the Australian Unemployment Rate came out unchanged at 5.3%, as was widely expected, but oil and gold prices gained. The rate continued higher, making its weekly high of 0.9192 on Friday before selling off to close at 0.9150, up 0.8% on the week.

The USD/CAD rate was more volatile than usual last week. Canadian Housing Starts came out on Monday and showed an increase of 197K versus a consensus of 188K. USD/CAD then climbed to make its weekly high of 1.0320 on Thursday, although it subsequently sold off after Canada’s Trade Balance showed a $0.8B expansion versus a consensus of $0.3B. Also, a slightly better-than-expected Canadian Capacity Utilization Rate of 70.9% came out versus a 70.0% consensus. Nevertheless, the rate continued dropping, eventually making its weekly low of 1.0153 before position-squaring brought the rate back up to close at 1.0188, showing a 1% drop on the week overall.

NZD/USD traded in a narrow range last week, trading off of its weekly low of 0.6930 seen on Monday. The rate gained further strength on Tuesday as the N.Z. Overseas Trade Index showed a 5.7% gain Q/Q, considerably higher than the consensus of 1.2%. The rate then made its weekly high of 0.7096 on Wednesday as the RBNZ left its Official Cash Rate unchanged at 2.5%, as was widely-expected. The pair then dropped on Thursday as New Zealand Retail Sales showed a month-on-month increase of 0.8%, versus the 0.4% expected. Nevertheless, the previous month’s number was revised downwards from 0.0% to a drop of 0.4%, effectively nullifying the headline number’s improvement. The rate went on to close at 0.7010 on Friday, showing a total gain of 0.6% for the week.

The Week Ahead

AUD: The upcoming Australian economic calendar is fairly light this week. Things start on Monday with a speech by RBA Assistant Governor Edey in Sydney. Tuesday has the key RBA Monetary Policy Meeting Minutes that may shed some light on the recent rate rise and future prospects. Look for the MI Leading Index (last 0.5%M/M), plus Housing Starts (6.7%Q/Q) and the OPEC meetings on Wednesday. Thursday just has a speech by RBA Assistant Governor Debelle scheduled in Melbourne to close out the week since Friday is quiet. In terms of its technicals, AUD/USD showed some encouraging strength last week, trading as high as 0.9193, and indicating good signs of resuming its upwards trend. Also, the rate is staying comfortably above its 200-day MA, which currently comes in at 0.8714 and is still rising, thereby signifying the medium-term outlook remains bullish. Support now comes from a short-term upwards-slanting trend line now drawn at 0.8972. Also, the 14-day RSI is still in neutral territory at 62, so the upside appears more likely to predominate over the coming week as this rally plays out that may ultimately lead AUD/USD back to test its previous high Jan 14th at 0.9328. Resistance for AUD/USD shows on the chart at 0.9191, 0.9321/28 and 0.9405, while support is indicated at 0.9054, 0.8785/99 and 0.8709.

To view a live chart follow the link:

CAD: The Canadian economic data week coming up has some interesting releases due out, beginning with a clock shift to Daylights Savings Time on Sunday. Monday has New Motor Vehicle Sales (0%M/M), while Tuesday offers Labor Productivity (0.7%Q/Q) and Manufacturing Sales (0.7%M/M). Wednesday has the OPEC Meetings, plus Wholesale Sales (0.6%M/M), while Thursday has Foreign Security Purchases (7.53B). Friday looks like the weekly highlight with CPI (0.4% and 0.3% Core M/M) and Retail Sales (0.6% and 0.5% Core M/M) to close out the week. Technically, USD/CAD’s continued fall last week took it to a new low at 1.0153 on Mar 12th. This appears to have broken, or at least extended to this new level, the lower part of the trading range for USD/CAD. Furthermore, USD/CAD’s 14-day RSI is heading toward oversold territory now at 34 and falling. The rate is also trading near its lower daily Bollinger Band now at 1.0153. This indicates that a bounce from current levels may be forthcoming to send USD/CAD back into its trading range, now delimited by 1.0153 to 1.0779, with 1.0466 now being the pivot. Nevertheless, since USD/CAD is trading well below its downward-sloping 200-day MA currently at 1.0747 and the momentum oscillator continues to confirm the downward move, the outlook remains bearish in the medium-term, so selling USD/CAD on rallies would be indicated from that perspective. Resistance in USD/CAD comes in at 1.0290/1.0320, 1.0357/68 and 1.0441, while support shows at 1.0153, in the 0.9973/90 region, and at the key psychological 1.0000 level.

To view a live chart follow the link:

EUR: The coming economic data week is moderately active in the Eurozone too. Monday offers the EZ Employment Change (last -0.5%Q/), whiel Tuesday has French CPI (0.4%M/M), the important German and Eurozone ZEW Economic Sentiment index (43.5 and 40.1) and EZ CPI (0.9% 0.8% Core Y/Y). Wednesday just has a speech by Buba President Weber scheduled in Bonn plus the OPEC Meetings, while Thursday has the EZ Current Account (2.9B) and the Italian and EZ Trade Balances (-0.19B and 5.1B). Look for German PPI (0.1%M/M) and a speech by ECB President Trichet in Brussels on Friday. On the technical front, the expected correction to EUR/USD’s recent slide has begun to materialize, going as high as 1.3796 and leaving the recent Mar 2nd low at 1.3437 as the level to shoot for if another downside move begins. The declining trend line now at 1.3718 has also been exceeded, and while this may be temporary, momentum oscillators do continue to confirm the upward correction. Nevertheless, the outlook for the medium-term remains bearish as EUR/USD trades well under its downward-sloping 200-day MA now at 1.4326, and while its 14-day RSI is now firmly in neutral territory at 48, the rate is trading outside of its upper Bollinger band at 1.3752, suggesting some initial downside may be warranted earlier in the week. Support for EUR/USD shows at 1.3727, 1.3530/44 and 1.3437/60, while resistance to the topside can be found in the 1.3773 to 1.3839 congestion region, at 1.4026 and at 1.4194.

To view a live chart follow the link:

GBP: The upcoming economic data week looks fairly important for the United Kingdom. Also, rumours of a near-term election date announcement persist centred around Thursday, May 6th due to the scheduled budget date of March 24th permitting both national and local polls. The U.K. calendar starts early on Sunday with the Rightmove HPI (last 3.2%M/M) and the BOE’s Quarterly Bulletin. Monday is quiet, but Tuesday has the DCLG HPI (3.6%Y/Y), the CB Leading Index (last 0.4%M/M) and a speech by MPC Member Bean in London. Wednesday looks like the weekly highlight with the OPEC Meetings, the key U.K. Employment report including the Claimant Count Change (8.4K) and Unemployment Rate (7.8%), plus the MPC Meeting Minutes (0-0-9) and Average Earning Index (1.7%3m/Y) all scheduled. Thursday has Public Sector Net Borrowing (14.6B), Preliminary M4 Money Supply (0.8%M/M), CBI Industrial Order Expectations (-33), and a speech by MPC Member Sentence in London. A speech by MPC member Tucker in Brussels is the only item scheduled on Friday. On the technical side, GBP/USD held its recent low at 1.4782 last week, trading as high as 1.5216. The rate continues to correct higher above the 61.8% retracement level of the upwards move from 1.3502 to 1.7041 at 1.4854. Nevertheless, GBP/USD remains firmly below its 200-day MA, which is currently at 1.6215 and sloping downwards, so the medium-term bearish outlook remains intact for GBP/USD. Also, the rate’s 14-day RSI is at 35 and has now recovered from oversold territory. Overall, while some further upside corrective activity appears probable in the near term, the declining trend line drawn at 1.5263 would likely present a selling opportunity. Resistance for GBP/USD shows at 1.5216/65, 1.5322 and 1.5574, while support is indicated at 1.5122, 1.5025, 1.4934/45 and 1.4871, in addition to the key psychological 1.5000 level.

To view a live chart follow the link:

JPY: A considerably more important economic data schedule is expected in Japan next week. Monday just offers Household Confidence (40.6), and Tuesday is quiet, but Wednesday looks like the weekly highlight with Tertiary Industry Activity (1.3%M/M), the OPEC meetings and the tentatively-scheduled key Monetary Policy Statement in which the BOJ is widely expected to leave its benchmark Overnight Call Rate unchanged at 0.10%, although rumours of another ease in BOJ Policy spread last week. A BOJ Press Conference should follow. Thursday has the BSI Manufacturing Index (15.3) and the BOJ’s Monthly Report, while Friday closes the week with the METI’s All Industries Activity (1.6%M/M) release. With respect to the technical picture, USD/JPY held onto its gains of the previous week and traded as high as 91.07, but the rate has still kept below its key downwards-slanting trend line now drawn at 91.32. It also failed to break above its 200-day MA which is still declining and now comes in at 91.90, so the upside looks challenging for the coming week, although a confirmed break of that region would probably send USD/JPY considerably higher. Also, USD/JPY’s 14-day RSI is in neutral territory at 53.6 and the rate is trading near the centre of its Bollinger bands, so some directional guidance is required which would come on a break of either the 88.12 or 92.14 recent reversal points. Resistance for USD/JPY shows at 91.07/37, in the 92.03/14 region and 93.77, while support is indicated at 90.16, 89.47/62, 88.73/81 and 88.12.

To view a live chart follow the link:

NZD: The coming week of economic data releases is very quiet gets busier in New Zealand, with nothing due out until the OPEC Meetings on Wednesday. Thursday has the Westpac Consumer Sentiment index (last 116.9) due out, while Friday has Visitor Arrivals (last -2.4%M/M) and Credit Card Spending (last 2.6%Y/Y) to end the week. From a technical perspective, NZD/USD continued improving somewhat last week, trading just below its key psychological level at 0.7000 to a 0.7096 high just under the 0.7118 1:1 projection level of the move from 0.6806 to 0.7078 projected off the 0.6846 low. The 1:1.618 projection level comes in at 0.7286. The rate managed to close the week at 0.7011, just above its still-rising 200-day MA now at 0.6968. This MA is of interest since a weekly close below it could provoke longer-term selling in NZD/USD, and would reverse the medium-term outlook from bullish to bearish. Also, NZD/USD now trades in neutral territory on the 14-day RSI at 50, leaving little to suggest in terms of direction as the rate looks bounded by mildly rising trend lines currently drawn at 0.6858 and 0.7108. Nevertheless, a potential head and shoulders top formation seen on the hourly charts with a neckline at 0.6963 and a peak at 0.7096 might be of interest. Support for NZD/USD is seen at 0.6960/62, 0.6846/86 and 0.6806/16, while resistance to the topside shows in the 0.7048/96 region, at 0.7149 and in the 0.7291/7317 region.

To view a live chart follow the link:

USD: The U.S. economic calendar is quite busy next week, and Daylight Savings Time begins on Sunday in the United States. Monday has the Empire State Manufacturing Index (21.9), TIC Long-term Purchases (50.3B), Capacity Utilization (72.7%) and Industrial Production (0.1%M/M) due out. Tuesday then looks like the weekly highlight with Building Permits (0.61M), Housing Starts (0.57M), Import Prices (-0.1%M/M), plus the Fed’s key policy announcement starting with the FOMC Statement. The benchmark Fed Funds rate is not expected to increase from its current 0.25% level. Wednesday features the OPEC meetings, PPI (0.2% and 0.1% Cored M/M) and Crude Oil Inventories (last 1.4M). Thursday begins with a speech by FOMC Member Duke in Washington, D.C., followed by CPI (0.1% and 0.1% Core M/M), Current Account (-120B), a speech by FOMC Member Hoenig in Washington, D.C., the Philly Fed Manufacturing Index (17.2). Friday is quiet, but Fed Chair Bernanke is scheduled to speak in Kissimmee on Saturday.

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]]> Weekly Market Watch - Monday, 08 Mar 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=6711 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=6711 Sun, 07 Mar 2010 20:59:11:990 GMT Last Week Recap

The week for EUR/USD began with Eurozone Employment out on Monday which showed that the E.Z. Unemployment Rate had improved to 9.9% versus the 10.1% consensus. Also out on Monday, U.S. Personal Spending showed a rise of 0.5% M/M, slightly better than the 0.4% increase expected, and U.S. ISM Manufacturing PMI showed a slightly worse-than-expected 56.5 level versus the 57.7 consensus. U.S. Construction Spending came out right on target, dropping 0.6%. EUR/USD then declined substantially, making a nine-and-a-half month low of 1.3437 on Tuesday as the market expected Greece to fail in its efforts to shore up its budget deficit. Nevertheless, Greek Deputy Citizen Protection Minister Vougias announced on Wednesday that the Greek Cabinet had agreed to increased austerity measures totalling €4.8B, which sent EUR/USD to its weekly high of 1.3735. On Thursday, the European Commission stated that the Greek measures would be sufficient for 2010. After the ECB held a general council meeting, the central bank announced it would continue weekly refinancing operations and one-month auctions with full allotments until October 12th of 2010 when the bank expects to change to fixed allotments. In addition, the bank said it would not raise interest rates until November 2010, at the earliest. Also on Thursday, U.S. Jobless Claims showed 469K new claims, versus a consensus of 472K. Friday’s U.S. Non-Farm Payrolls data came out better-than-expected at -36K versus a consensus of -56K, along with the U.S. Unemployment Rate which remained unchanged at 9.7%, versus a 9.8% consensus. This data prompted EUR/USD to ease toward its weekly close at 1.3623, only six pips lower than the previous week, and essentially unchanged for the third straight week.

USD/JPY was up considerably last week after the Japanese Unemployment Rate released Tuesday showed an unexpected drop of 4.9% versus a consensus of 5.1% which was considerably lower than the 5.8% number out for December. On Thursday, USD/JPY made its weekly low of 88.12 as Japanese Capital Spending figures came out at -17.8%, versus a market consensus of -18.1%. Nevertheless, the rate went on to recover substantially on Friday, making its weekly high of 90.57 as reports of the BOJ taking further easing measures and U.S. Non-Farm Payrolls data fuelled the rally. USD/JPY then backed off a bit on profit-taking to close the week at 90.25, up 1.5% from the previous weekly close.

GBP/USD continued trending lower last week, after beginning the week on a volatile note as it traded off of its weekly high of 1.5237 on Monday before heading sharply lower. Sterling eventually traded to a 10-month low against the Dollar at 1.4778 the same day. The four-and-a-half big figure drop was attributed to a poll showing that neither party would gain a majority in the general election to be held later this year, resulting in a hung parliament unable to make key decisions. On Wednesday, the U.K. PMI Services Index showed its highest reading since January of 2007 at 58.4, versus a consensus of 55.0. On Thursday, the BOE announced it would hold interest rates and asset purchases unchanged, as was widely expected. In addition, the Halifax Housing Price Index disappointed the market by showing a large 1.5% decline M/M, versus a consensus of a 0.3% rise. Nevertheless, Cable managed to recover somewhat on Friday on position-squaring, closing at 1.5133, and down just 0.6% for the week.

AUD/USD started the week trading off of its Monday low of 0.8933 ahead of the RBA Monetary Policy decision on Tuesday in which RBA Governor Stevens announced the Central Bank would raise its key Cash Rate by 25 basis points to 4.0%. The move was somewhat unexpected in light of the RBA’s February decision to leave the rate unchanged but proved to be justified following Wednesday’s announcement of a 0.9% increase in Q4 GDP, taking the annual rate of economic growth to an impressive 2.7%. AUD/USD continued improving as the Australian Trade Balance came out on Thursday, showing a deficit of 1.18B versus a consensus deficit of 1.57B and at the narrowest level seen in seven months. The additional contraction in the trade deficit was attributed to shrinking imports, which fell 3% M/M while exports rose only 1% M/M. Nevertheless, exports to China and coal and iron ore exports declined from the previous month’s levels. AUD/USD went on to close at 0.9075 on Friday, up 1.4% on the week.

USD/CAD came off of its Monday weekly high of 1.0572 as the Loonie firmed after Canadian GDP showed a 0.6% growth versus a market consensus of a 0.4% contraction. Also, the Industrial Product Price Index or IPPI showed a 0.3% rise, lower than the 0.6% consensus, but the third consecutive monthly rise. Furthermore, the Raw Materials Price Index or RMPI showed a 3.3% rise versus a consensus of 2.1%, which set the tone for the rest of the week. Rising oil and gold prices also contributed to Loonie strength, sending USD/CAD to its weekly low of 1.0259 on Friday. The rate then traded higher on position-squaring to close at 1.0287, down an impressive 2.4% on the week.

Last week, NZD/USD traded in a narrow range after starting the week on a softer note. The ANZ Commodity Price Index rose 3.8%, considerably higher than the 0.4% number previously seen. Also, Visitor Arrivals showed a month-on-month decline of 2.4%, versus the preceding 8.0% rise. The rate traded lower after these numbers, eventually making a weekly low of 0.6849 on Thursday. The rate then improved on Friday to make its weekly high of 0.6975, before closing just lower at 0.6965. This was a mere 13 pips lower than the previous week’s close and essentially unchanged.

The Week Ahead

AUD: After the RBA’s somewhat surprising rate change announcement early last week, the Australian economic calendar again has some interesting news scheduled. The week starts on Tuesday with ANZ Job Advertisements (last -8.1%M/M) and the NAB Business Confidence Index (last 15) scheduled for release. Wednesday has Westpac Consumer Sentiment (last -2.6%) plus Home Loans (2.1%M/M). Thursday looks like the weekly highlight with the Australian Employment Report (13K Change, 5.3% Rate), MI Inflation Expectations (Last 3.2%) and the RBA’s Bulletin due out to finish the week since Friday is quiet. In terms of its technicals, AUD/USD consolidated most of last week comfortably above its 200-day MA which currently comes in at 0.8686 and is still rising, thereby indicating the medium-term outlook remains bullish. Support now comes from a short-term upwards-slanting trend line now at 0.8890. Also, the 14-day RSI is still in neutral territory at 57, so the upside appears more likely to predominate over the coming week as this rally plays out that may ultimately lead AUD/USD towards its Nov 16th 2009 high of 0.9405. Resistance for AUD/USD shows on the chart at 0.9092, 0.9191 and 0.9321/28, while support is indicated 0.8785/99, 0.8709 and 0.8577.

To view a live chart follow the link:

CAD: The Canadian economic data week coming up offers some important events, beginning on Monday with Canadian Housing Starts (186K). Tuesday and Wednesday have little of note, but Thursday will be important with the Canadian Trade Balance (0.4B), NHPI (0.5%M/M), Capacity Utilization (70.2%) and a speech by BOC Governor Carney at Carleton University in Ottawa scheduled. Nevertheless, Friday looks like the weekly highlight with the key Canadian Employment data scheduled for release (17.5K Change and 8.3% Rate). Technically, USD/CAD sharp fall last week entirely erased its previous week’s gains and made a new short-term low at 1.0259, just ahead of upwards slanting trend line support now at 1.0232 and the previous significant Jan 14th low at 1.0223. Furthermore, USD/CAD’s 14-day RSI is heading toward oversold territory at 38 and the rate is trading near its lower daily Bollinger Band. This indicates that a bounce from current levels may be forthcoming as the rate continues to trade a range between 1.0779 and 1.0223, with 1.0501 being the pivot. Nevertheless, since the rate is trading well below its downward-sloping 200-day MA currently at 1.0766, the outlook remains bearish in the medium-term, so selling USD/CAD on rallies approaching the slightly declining range upper trend line now at 1.0753 would be indicated from that perspective. Resistance in USD/CAD comes in at 1.0368/80, 1.0441 and 1.0572, while support shows in the 1.0223/59 region, at 1.0205, in the 0.9973/90 region, and at the key psychological 1.0000 level.

To view a live chart follow the link:

EUR: The coming economic data week calms down a bit in the Eurozone too. Monday offers German Industrial Production (1.1% M/M), Tuesday the French Trade Balance (-3.8B), and Wednesday the German Trade Balance (16.7B), Italian and French Industrial Production (0.7% and 0.3%M/M), plus a speech in Frankfurt by ECB President Trichet. Friday ends the week as German WPI (0.6%M/M) and Eurozone Industrial Production (0.8%M/M) are released, plus a Trichet speech in Stanford, California. On the technical front, EUR/USD just about succeeded in making a new nine-month low last week by trading down to 1.3437. Along with the previous recent lows seen at 1.3444, 1.3451 and 1.3460, this seems to be part of a potential bottoming formation on the daily charts which may provoke some initial range-trading above it before EUR/USD picks up enough steam to move correctively higher. Nevertheless, rallies should be resisted by the upper declining trend line now at 1.3843 and supported by the lower trend line currently at 1.3153. That lower level, in addition to the range bottom at 1.3437, could well limit the downside for the coming week. Furthermore, the outlook for the medium-term remains bearish as EUR/USD trades well under its downward-sloping 200-day MA now at 1.4337, also its formerly-oversold 14-day RSI is now at 44. Support for EUR/USD shows at 1.3530/51, 1.3423/60 and 1.3246, while resistance to the topside can be found in the 1.3683/91 region, at 1.3735 and in the 1.3788 to 1.3839 congestion region.

To view a live chart follow the link:

GBP: The upcoming economic data week looks fairly important for the United Kingdom. Also, circulating rumours of a near-term election date announcement abound, with the odds currently in favour of Thursday, May 6th. The U.K. calendar begins Monday with a speech in London by MPC Member Kate Barker, followed by the BRC Retail Sales Monitor (last -0.7%Y/Y) and the RICS House Price Balance (36%). Tuesday features the U.K. Trade Balance (-6.9B), and Wednesday looks important with Manufacturing Production (0.3%M/M), Industrial Production (0.2%M/M) and the NEISR GDP Estimate (last 0.4%). Look for Consumer Inflation Expectations (last 2.4%) on Thursday, followed on Friday by a speech from MPC Member and BOE Chief Economist Spencer Dale in Cambridge. On the technical side, GBP/USD made another new nine-month low at 1.4782 within its recent decline last week after sharply breaking the previous 1.5151 low. This approximately met the 1.618 Fibonacci projection target at 1.4767 of the move from 1.6876 to 1.5832 projected downwards from the 1.6456 reaction high. Furthermore, with the rate now keeping firmly below its 200-day MA, currently at 1.6240 and sloping downwards, the medium-term bearish outlook remains intact for GBP/USD. Nevertheless, the rate’s 14-day RSI has only just recovered from oversold territory and now comes in at 35, plus Cable is trading toward the lower of its daily Bollinger Bands which have widened due to recent volatility. As a result, some further correction of recent losses appears likely into the 1.5188-1.5322 range that would likely present a selling opportunity. Resistance for GBP/USD shows at 1.5165/80, 1.5265 and 1.5322, while support is indicated near current levels at 1.5129, and then below that at 1.4991, 1.4852 and the key 1.4782 low, in addition to the important psychological 1.5000 level.

To view a live chart follow the link:

JPY: Another rather mellow economic data week is expected in Japan. Monday just offers the Japanese Current Account (1.25T) and M2 Money Supply (2.8%Y/Y), Tuesday has Leading Indicators (96.9%), and Wednesday has Core Machinery Orders (-3.6%M/M) and CGPI (-1.4%Y/Y). Thursday looks like the highlight with Final Japanese GDP data (1.0%Q/Q and -2.9% Price Index Y/Y). Friday ends the week with Revised Industrial Production (2.5%M/M). With respect to the technical picture, USD/JPY saw a sharp upwards correction last week from the 88.12 low seen on Mar 4th, eventually trading as high as 90.58, but still keeping below its 200-day MA now at 92.01, as well as a major declining trend line at 92.12. Each of these latter levels could continue to cap the upside for the coming week, although a confirmed break of that region would probably send USD/JPY considerably higher. Also, USD/JPY’s 14-day RSI is in neutral territory at 53 and the rate is trading near the centre of its Bollinger bands, so some directional guidance is required which would come on a break of either 88.12 or 92.14. Resistance for USD/JPY shows at 90.58, 91.37 and in the 92.03/14 region, while support is indicated at 89.47, 88.73/81 and 88.12.

To view a live chart follow the link:

NZD: The coming week of economic data releases gets busier in New Zealand, starting on Monday with Manufacturing Sales (last 5.1%Q/Q). Tuesday has nothing of note, but Wednesday has the Overseas Trade Index (0.1%Q/Q) due out. Thursday will be the highlight featuring the RBNZ’s Official Cash Rate Announcement (expected to keep the rate unchanged at 2.50%) and the associated Press Conference and Rate Statement. Also look for the RBNZ’s Quarterly Monetary Policy Statement, in addition to the Business NZ Manufacturing Index (last 5r2) and the Food Price Index (last 2.1%M/M). Friday has the key Retail Sales data due out (0.3% and 0.6% Core M/M) to end the important week. From a technical perspective, NZD/USD traded just below its key psychological level at 0.7000 last week. This level also roughly coincides with the rate’s still-rising 200-day MA now at 0.6953 which the rate still managed to close the week above at 0.6969. NZD/USD now trades in neutral territory on the 14-day RSI at 48 and roughly in the centre of its daily Bollinger Bands, therefore recommending little in terms of short term direction. The upside break continues to be preferred, with potential targets in the 0.7250-0.7300 region near the major declining upper trend line resistance now at 0.7321. Support for NZD/USD is seen at 0.6846/52, 0.6806/16 and 0.6782, while resistance to the topside shows in the 0.6984/0.7016 and 0.7057/77 regions, and then at 0.7149.

To view a live chart follow the link:

USD: The U.S. economic calendar calms down somewhat next week, although key data due out may still give the market something to chew on. The week begins on Tuesday as the IBD/TIPP Economic Optimism Index (48.9) is due out. Wednesday offers the Federal Budget Balance (199.5B), and Thursday looks like the week’s highlight as the U.S. Trade Balance (-40.5B), Jobless Claims (453K), and a speech in London by FOMC Member Dudley are scheduled. Friday ends the week with key Retail Sales (-0.1% and 0.1% Core M/M), Preliminary University of Michigan Consumer Sentiment Index (74.0) and Business Inventories (0.2%) data due for release.

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]]> Weekly Market Watch - Monday, 01 Mar 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=6550 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=6550 Mon, 01 Mar 2010 01:55:04:153 GMT Last Week Recap

EUR/USD range-traded last week as risk appetite declined and U.S. economic data came out mixed. The pair began by trading higher upon the European Union’s disclosure of plans to help with Greece’s debt issues. Rumours that German lender KfW Group was thinking of purchasing 5 billion Euros in Greek bonds in a Euro 25 Billion E.U. aid package also spread. EUR/USD made its weekly high at 1.3691 Tuesday in advance of French CPI numbers showing a fall of 0.2% M/M against a 0.3% expectation, and January French Consumer Spending fell 2.7% against the 0.7% drop expected. On Wednesday, Q4 German GDP came out -2.4% Y/Y, in line with expectations, and later that day, Fed Chair Bernanke and the U.S. Treasury’s Geithner testified before congressional committees. In testimony, Bernanke confirmed that interest rates would stay low during an “extended period.” EUR/USD continued weakening despite that and Thursday’s U.S. Unemployment numbers which showed 496K new Jobless Claims were made against the 461K expected. Eventually, the rate made its weekly low at 1.3450 as S&P considered downgrading Greece’s debt further in the next month from +BBB. Also, Moody’s said it was considering downgrading Iceland’s debt yet again. EUR/USD then rallied on Friday after German CPI numbers showed a 0.2% M/M increase versus a 0.5% consensus. Also on Friday, U.S. Q4 GDP showed an annualized 5.9% against the market’s 5.6% consensus. Short-covering in EUR/USD finally brought the rate to close the week virtually-unchanged at 1.3529, ending only 19 pips higher than the previous week.

USD/JPY was down considerably last week, trading lower off of Monday’s weekly high of 91.88. The pair started selling off after the BOJ released the minutes of its January 25-26th policy board meeting. In the minutes, the central bank stated its intention to maintain public trust in its fiscal and monetary policy. On Wednesday, Japan’s Adjusted Merchandise Trade Balance for January was released showing it had risen to ¥728B versus the ¥510B expected. Also, the previous December figure of ¥520B was revised upwards to ¥660B, the highest reading seen since January 2008. Japanese Retail Sales for January also grew by 2.6% Y/Y, considerably better than the market consensus of a 0.1% drop. In addition, Industrial Production for January increased 2.5% M/M, versus an expectation of only a 1% rise. The surprisingly positive economic data out of Japan helped buoy the Yen as USD/JPY continued south to make a weekly low of 88.73 on Friday before trading higher on short-covering to close at 88.94, down a sizeable 3% on the week.

GBP/USD continued in a downward trend last week despite starting the week off on a positive note, making a weekly high of 1.5574 on Tuesday. The rate began trading lower as BOE Governor King stating before Parliament that it might be necessary to expand the quantitative easing program. King’s statement followed the release of BBA Mortgage Approvals which showed an increase of only 35.1K versus 45.3K expected. The rate continued weakening as MPC Posen of the BOE made dovish comments Wednesday, commenting to the effect that he expected U.K. inflation levels would remain subdued and that the BOE would expand its QE program if necessary. Cable continued downward to make a weekly low of 1.5150 on Friday, a level not seen since May of 2009. The rate then rallied into the close on position-squaring to end the week at 1.5224, down 1.6% for the wee

AUD/USD commenced last week with a more positive tone, after the rate had seen pressure previously due to Chinese restrictions on commercial banks extending credit for local governments. RBA Deputy Governor Battellino said on Tuesday that a strong AUD would help contain inflation, while RBA Deputy Governor Lowe spoke positively about the Australian economic outlook and said he anticipates interest rates will return to more common levels. Tuesday also saw Australia’s Wage Price Index rise 0.6% for Q4 against the market’s call for a 0.8% rise, and Construction Work Done was up 2.6% Q/Q compared to a 2.1% consensus. AUD/USD then traded to its weekly 0.9070 high on Wednesday, also reacting to U.S. Fed Chairman Bernanke’s comment to the effect that U.S. rates would say low for a considerable period. The pair then came off to eventually make its low of 0.8799 for the week on Thursday, as the market eased its expectations for an RBA rate rise at their next Mar 2nd meeting. AUD/USD then strengthened into Friday’s close to end at 0.8951, down only 0.4% from the preceding week’s close.

USD/CAD firmed last week as commodity prices fell and growing risk aversion favoured the Greenback against the Loonie in a very quiet week in terms of Canadian economic data. USD/CAD traded off its weekly low of 1.0369 seen on Monday, moving higher to eventually see a weekly high of 1.0679 Thursday, rising a significant 1.3% on that day alone. USD/CAD fell Friday on profit-taking, taking the rate down to its weekly close of 1.0530, up 1.5% for the week.

NZD/USD traded a narrow band last week, beginning the week near its weekly high of 0.7016. Monday saw New Zealand Inflation Expectations come out at 2.7% Q/Q, similar to the preceding 2.6% Q/Q number. The rate continued ranging, eventually hitting a weekly low point of 0.6975 on Friday, despite a Building Consents figure of -2.8%M/M showing an improvement over the -3.5% previous number. Friday’s N.Z. Trade Balance also came out showing a surplus of NZ$269M against the market’s call for a 99M deficit. This was a surprising eight-month high in the trade figure, and included the lowest imports component observed since Feb 2005. NZD/USD ended the week by closing at 0.6978, down 18 pips from the former week and almost unchanged.

The Week Ahead

AUD: The Australian economic data releases coming out this week look quite significant. Monday offers a talk in Melbourne by RBA Governor Stevens, followed by HIA New Homes Sales (last -4.6%), the Current Account (-17.3B) and Commodity Prices (last -11.7%Y/Y). Tuesday looks like the highlight with Building Approvals (0.6%M/M), Retail Sales (1.0%M/M) and the key RBA Rate Statement which is expected to leave the benchmark Cash Rate constant at 3.75%. Wednesday offers the AIG Services Index (last 47.2), as well as the key GDP (0.9%Q/Q) number. Thursday has the Aussie Trade Balance (-1.57B), and Friday the AIG Construction Index (57.7). With respect to the technical picture, AUD/USD traded comfortably above its still-rising 200-day MA, currently at 0.8656, indicating a bullish medium-term outlook for the pair. Its 14-day RSI is neutral at 51, so the market now awaits a clear direction for the short term. Resistance for AUD/USD is indicated at 0.8978, 0.9035/70 and 0.9145, and support shows up at 0.8856/78, 0.8785/99 and 0.8709.

To view a live chart follow the link:

CAD: Canada has an interesting upcoming data week that starts Monday with Canadian GDP (0.4%M/M), RMPI (1.9%M/M) and IPPI (0.6%M/M) due out. Tuesday has the key BOC’s Rate Statement where the Overnight Rate is expected to remain unchanged at 0.25%. Wednesday has nothing notable, and Thursday has Building Permits (1.1%M/M), the Ivey PMI (55.1), plus a possible peek at the Canadian Government’s Annual Budget to end the week. With respect to its technicals, USD/CAD had a strong upward move last week, convincingly exceeding its previous down channel. The rate’s 14-day RSI is neutral at 50, indicating range-trading between 1.0779 and 1.0223 with 1.0501 acting as the pivot. Still, with the rate trading significantly below its down-sloping 200-day MA, now at 1.0784, the medium-term outlook remains bearish. Accordingly, selling USD/CAD on rallies could be preferable on that basis. Resistance in USD/CAD shows at 1.0551, 1.0612 and 1.0673/78, while support comes in at 1.0510, 1.0368/87 and 1.0223/57.

To view a live chart follow the link:

EUR: The upcoming economic week in the Eurozone also offers some key data releases. The action starts Monday with the key Eurozone Unemployment Rate (10.1%), Final Manufacturing PMI (54.1) and German Import Prices (0.8%M/M). Tuesday offers the CPI Flash Estimate (1.0%Y/Y) and Eurozone PPI (0.6%M/M). Wednesday has German Retail Sales (-0.6%M/M), Final Services PMI (52) and Eurozone Retail Sales (-0.3%M/M) scheduled. On Thursday, the important ECB Press Conference is scheduled, although the market expects the bank to announce its minimum bid rate will remain unchanged at 1.0%. Eurozone GDP will also be revised (0.1%). Friday just has German Factory Orders (1.6%M/M) due out. On the technical front, EUR/USD did not make new lows last week, only trading down to 1.3451. Along with the low of 1.3444, this indicates up a possible double bottom price formation with a neckline at 1.3691, and a confirmed break would set up a 1.3935 target. Still, the medium-term outlook is bearish provided EUR/USD trades under its 200-day MA now at 1.4345. Also, the 14-day RSI, now at 40, has been recovering from being oversold, and the lower trend line in this decline, now at 1.3300, could provide support this week. Support for EUR/USD shows at 1.3550, 1.3423/51 and 1.3246, while resistance is found at 1.3683/91, in 1.3788 to 1.3839 congestion area and at 1.4026.

To view a live chart follow the link:

GBP: The upcoming week offers key economic data for the United Kingdom, and rumours of an announcement about the upcoming election date abound, with May 2010 possible. The calendar begins on Monday as the Halifax House Price Index is tentatively-scheduled, along with Manufacturing PMI (56.5), Net Lending to Individuals (0.7BM/M) and Mortgage Approvals (49K). Tuesday just has Construction PMI (48.9), and Wednesday has Nationwide Consumer Confidence (71) and Services PMI (55.0). Thursday could be the weekly highlight with the Monetary Policy Committee’s rate statement expected to leave the Official Bank Rate the same at 0.5%, with the BOE’s Asset Purchase Facility remaining at 200 Billion Pounds. Friday just offers the key PPI report (0.1% Input and 0.2% Output M/M) to end the week. Technically, GBP/USD continued falling last week, reaching 1.5151 that almost touches a bear flag measured-move target of 1.5130. As the rate trades well under its 200-day MA, now at 1.6264 and beginning to turn down, the bearish outlook for Cable remains solid. Still, its 14-day RSI has now become oversold territory at 28 and the rate is trading under its lower Bollinger Band, thus indicating some consolidation before more downside action. Resistance for GBP/USD comes in at 1.5322, 1.5474 and in the 1.5533/79 region. Support shows at 1.5151, 1.5058 and 1.4943, plus the psychological level at 1.5000.

To view a live chart follow the link:

JPY: Japan has a rather light upcoming economic data week that starts on Tuesday with Household Spending (2.6%Y/Y), the Japanese Unemployment Rate (5.1%) and the Monetary Base (4.8%Y/Y). Wednesday just has Average Cash Earnings (-1.2%Y/Y), and Thursday offers Capital Spending (-18.1%Q/Y) to end the week. On the technical front, the recent fall in USD/JPY broke a short-term up trend line at 89.74, keeping the rate nicely under its 200-day MA at 92.18, plus a significant down trend line now at 92.35. These upper levels should now cap the topside this week, but a confirmed break above could send USD/JPY quite a bit higher. The 14-day RSIs are still not oversold at 38, indicating possible further downside. Resistance comes in at 89.45, 90.35 and 91.37, while support is indicated at 88.73/81, 88.31/54 and 87.11/35.

To view a live chart follow the link:

NZD: The coming week is very quiet in New Zealand on the economic data front, only having Visitor Arrivals (last 8.5%M/M) plus ANZ Commodity Prices (last 0.4%M/M) scheduled for Monday. Nothing else seems on calendar until the subsequent week’s announcement of the RNBZ’s Official Cash Rate. From a technical perspective, NZD/USD traded around the 0.7000 key psychological support level last week which also coincides with the rate’s still-rising 200-day MA, currently at 0.6929. In addition, NZD/USD is on neutral territory at 47 with its 14-day RSI and centred inside its Bollinger Bands, leaving directional bias. Accordingly, range-trading between 0.6806 and 0.7078 seems likely. Nevertheless, a possible triangle pattern forming with converging lines currently at 0.7033 and 0.6849 looks to be in its fourth wave. This pattern may tighten price action even more, before its breakout happens, and the more probable upward direction targets the 0.7250-0.7300 area that would test a major upper down trend line now at 0.7330. In this picture, a fifth wave down move may allow buying on dips to 0.6900. Support for NZD/USD is seen at 0.6918/23, 0.6892/97 and 0.6846, while resistance shows at 0.7014, 0.7057/77, and 0.7149.

To view a live chart follow the link:

USD: Another busy U.S. economic data week is scheduled that may set the market moving. Monday has Personal Spending (0.4% and 0.1% Core M/M) and the ISM Manufacturing Purchasing Managers’ Index (57.9) scheduled, while Tuesday is quiet. Wednesday has ADP Non-Farm Employment Change (-9K), ISM Non-Manufacturing PMI (51), the Fed’s Beige Book, plus a speech in Philadelphia by the FOMC’s Rosen. Thursday has Unemployment Claims (474K), Pending Home Sales (1.6%M/M), Factory Orders (1.2%M/M), plus a talk in Minnesota by the FOMC’s Bullard. Friday provides the week’s highlight as the key Non-Farm Payrolls (-35K) and Unemployment Rate (9.8%) will be released, along with Average Hourly Earnings (0.2%M/M).

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]]> Weekly Market Watch - Monday, 22 Feb 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=6297 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=6297 Sun, 21 Feb 2010 23:09:58:463 GMT Last Week Recap

EUR/USD had a wide range last week as volatility expanded for the pair, despite little net change in level overall. Markets were closed on Monday in the U.S. for President’s Day and in China due the Chinese New Year. Also, risk appetite staged a comeback as world equities rallied early in the week. In Brussels on Monday, E.U. finance ministers convened and agreed to allow Greece until the 16th of March to reduce its current budget deficit from 12.7% of GDP to 8.7%. EUR/USD then made its weekly high of 1.3788 on Wednesday as U.S. Housing Starts and Building Permit numbers came out in line with expectations. Also, the Eurozone Trade Balance for December showed a surplus of €4.4B versus the €5.0B consensus, and the seasonally-adjusted Trade Balance came in at €7.0B versus the €3.9B consensus. Thursday’s U.S. PPI figures showed a surprising growth of 1.4% M/M versus 0.8% expected, and this stronger-than-expected PPI could have prompted the surprise move by the Federal Reserve to raise its benchmark Discount Rate by 25 bps to 0.75% at 4:30 PM EST. This sent the Greenback to new multi-month highs against several currencies on Friday, including the Euro, and pushed EUR/USD down to a low of 1.3444 that had not been seen since May of 2009. Nevertheless, the rate then recovered later in the day after U.S. CPI came in 0.2% (versus 0.3% expected), but the core CPI number was down 0.1% M/M versus the 0.2% the market was anticipating and the lowest level the index has shown since 1982. The rate then eventually closed at 1.3610 after a volatile week, only 20 pips lower and basically unchanged from the previous weekly close.

USD/JPY started the week on a soft note with the rate making its weekly low of 89.69 on Tuesday after Monday’s announcement that Japanese Q4 GDP data showed an improvement of 1.1% Q/Q, slightly better than the 1% expected, but the preliminary Japanese GDP Price Index showed a 3% drop which exceeded the market’s call of a 2.2% drop showing that significant deflationary pressure remains in Japan. Finance Minister Naoto Kan’s comments after the data came out indicated that the economy in Japan was showing signs of brightness after the worst economic downturn in Japan since 1945. In them, Kan stated, “Worries that the economy could suffer a double-dip have eased somewhat,” referring to the double dip recession. He also concluded that, “Downside risks exist, such as in the employment situation and overseas economies, so we can’t be optimistic.” USD/JPY made a weekly high of 92.13 on Friday, before ending the week at 91.50, up 1.7%.

GBP/USD was down considerably last week, trading off of its Wednesday high of 1.5813, as the United States announced a lower-than-expected Federal Budget Deficit of -$42.6B versus a consensus of -44.2B. Furthermore, the U.K. Claimant Count Change unexpectedly rose by 23.5K, versus a consensus of a drop of 14.6k. Adding to the employment number disappointment, U.K. Finance Minister Darling said on Thursday that a pre-budget report showed a deficit of 178 billion Pounds or 12.6% of GDP (a high number since troubled Greece’s budget deficit is almost the same at 12.7% of GDP). On Friday, GBP/USD continued deteriorating after late Thursday’s Fed Discount Rate move, ultimately making its weekly low of 1.5354, the lowest level seen for Cable since May of 2009. Also, U.K. Retail Sales came out down 1.8% M/M, against a consensus of a 0.5% drop. The rate then rallied on position-squaring to close the week at 1.5469, down 1.5% from the previous weekly close.

Last week saw AUD/USD bounce off its Monday low of 0.8846, just ahead of Tuesday’s scheduled release of the RBA’s minutes from its February 2nd meeting. The rate then traded to its weekly 0.9035 high on Wednesday after the market took the minutes to imply higher rates in future, although not necessarily at the RBA’s next meeting now scheduled for March 2nd. Many observers anticipated that the RBA would up its benchmark Cash Rate by 25 bps last February, but were disappointed as the bank saw a “stronger case” for leaving rates alone. Members also observed that inflation was within target levels and expected it would stay that way, given “a gradual further increase in the cash rate.” Also, a statement by RBA Assistant Governor Guy Debelle after the minutes’ release noted that: “These swings in the exchange rate have played an important role in buffering the economy from the turmoil in the global economy.” AUD/USD then traded off on profit-taking, eventually ending the week on Friday at 0.8986, up 1.2% from the previous weekly close.

USD/CAD fell somewhat last week, seemingly softened by rising commodity prices. The pair traded to a weekly high on Monday of 1.0531 in thin trading due to the U.S. bank holiday. USD/CAD then sold off for the rest of the week, despite Canada’s core CPI number coming in as anticipated on Thursday at 0.1% M/M. Also, the release of Canadian Retail Sales numbers on Friday was less than the market had anticipated at 0.4% versus the 0.6% expected, although the core release came out in line with expectations at 0.04%. Also disappointing was the Canadian Leading Index release which was up just 0.9% month-on-month, versus the anticipated rise of 1.1%. Nevertheless, USD/CAD continued falling Friday, eventually making a weekly low of 1.0386, before ending the week slightly higher at 1.0387, down 1% on the week.

NZD/USD began last week on a soft note, making a weekly low on Monday of 0.6949, just ahead of the New Zealand Producer Prices release that showed output had risen just 0.3% against the market’s consensus of 0.5%. The rate then resumed its upward trend, advancing partly because of improving oil and gold prices, in addition to greater risk appetite. NZD/USD traded to its weekly high on Wednesday of 0.7078 after the N.Z. PPI release. On Thursday, N.Z. Credit Card Spending numbers showed a 2.3% increase, stronger than the previous 1.8% increase. The rate closed on Friday at 0.6991, up 1.7% for the week.

The Week Ahead

AUD: The Australian economic data has some interesting items scheduled this coming week, beginning on Monday with New Motor Vehicle Sales (last 3.3%M/M). Tuesday offers a speech in Sydney by RBA Deputy Governor Battellino, while Wednesday has the CB Leading index (last 0.3%M/M), Construction Work Done (2.1%Q/Q) and the Wage Price Index (0.8%Q/Q) scheduled. On Thursday, Private Capital Expenditure data (1.5%Q/Q) is due out, and Friday has Private Sector Credit (0.2%M/M) scheduled. Technically, AUD/USD continued an upwards correction after bounced impressively off its 200-day MA, now below the rate at 0.8623 indicating a bullish medium-term outlook. Also, an upward-slanting trend line drawn under this recent move now provides support at 0.8880. Resistance for AUD/USD shows up at 0.9025/47, 0.9145 and 0.9278, while support comes in at 0.8886, 0.8785 and 0.8709.

To view a live chart follow the link:

CAD: Canada has a quiet upcoming economic data week scheduled, with Monday only offering Governing Council Member Jenkins in a panel discussion in Vancouver. Tuesday has nothing of note, and Wednesday only has Corporate Profits (last 7.9%) scheduled. Thursday also has nothing, but Friday offers the Currency Account (last -13.1B) scheduled, perhaps the weekly highlight. With respect to its technicals USD/CAD continued correcting its previous rally from 1.0223 to 1.0779 last week, making a new low of 1.0387 within its recent downward move. Provided that USD/CAD remains below the 61.8% Fibonacci retracement level at 1.0435, a full retracement down to 1.0223 now appears likely. Also, the rate’s outlook remains bearish while below its 200-day MA now at 1.0811. Resistance shows at 1.0495, 1.0528 and 1.0577, while support comes in at 1.0387, at 1.0312 and 1.0223/57.

To view a live chart follow the link:

EUR: The Eurozone also has some important data releases scheduled this week. The calendar starts with a bang on Tuesday, with French Consumer Spending (-0.6%M/M) and CPI (-0.3%M/M), plus German Ifo. Wednesday has the Gfk German Consumer Climate index (3.2), German Final GDP (0%Q/Q), Eurozone Industrial New Orders (-1.2%M/M) and French Jobseekers Change (10K) scheduled. Thursday may be the highlight with the German Unemployment Report (18K change, 8.2% rate) and Eurozone M3 Money Supply (0.2%Y/Y) data due out. On Friday, look for German Preliminary CPI (0.5%M/M, 1%Y/Y, and 1.2%Y/Y Core). On the technical front, EUR/USD again made a new 10-month low last week, this time at 1.3444, within its recent decline, and therefore keeping a bearish outlook as it trades considerably below its 200-day MA at 1.4346. Support for EUR/USD comes in at 1.3531, 1.3423/44 and 1.3246, while topside resistance shows at 1.3654, in the 1.3788 to 1.3839 region, and at 1.4026.

To view a live chart follow the link:

GBP: The coming week offers some key data on the economic front for the United Kingdom. The calendar begins on Tuesday with Inflation Report Hearings before the Treasury Committee, plus BBA Mortgage Approvals (43.3K) and a speech in London by MPC Member Tucker. Wednesday has a panel discussion including MPC Member Posen in London, but Thursday is busy with speeches by MPC Member Miles and BOE Governor King in London, plus Preliminary Business Investment (0.2%Q/Q) and CBI Realized Sales (-1). Friday offers Gfk Consumer Confidence (-17), the Nationwide House Price Index (0.4%M/M), Revised U.K. GDP (0.2%Q/Q) and the Index of Services (0.2%3M/3M). With respect to the technical picture, GBP/USD continued falling last week, breaking 1.5533/79 cluster support to make a new low in this move at 1.5354, which has not been seen since May of 2009. The outlook for the rate is bearish while trading below its 200-day MA, now at 1.5968. Resistance for GBP/USD shows at 1.5533/79, 1.5674, and 1.5814. Support comes in at 1.5354, 1.5058 and then at 1.4943, plus the psychological level of 1.5000.

To view a live chart follow the link:

JPY: The upcoming economic week in Japan seems rather active also, although Monday is quiet. Tuesday has the Minutes of the last BOJ Monetary Policy Meeting coming out, and Wednesday offers the Japanese Trade Balance (0.51T) plus the Corporate Services Price Index (-1.1%Y/Y). Thursday has nothing due out, but Friday could be the highlight with Manufacturing PMI (last 52.5), Tokyo and National Core CPI (-1.9% and -1.3%Y/Y), plus Preliminary Industrial Production (1.1%M/M), Retail Sales (-0.1%Y/Y) and Housing Starts (-11.6%Y/Y) scheduled for release. With respect to the technical picture, USD/JPY saw an upside break of converging trend lines around the psychological 90.00 level last week that yielded an expected rise in volatility. The outlook still remains bearish while the rate trades below its 200-day MA at 92.32; however, since the current up move to 92.14 has already exceeded the 61.8% retracement level of the preceding downwards move, this indicates that a 100% retrace back to 93.77 is now likely which will probably breach the 200-day MA and yield an extension higher. Resistance shows at 92.03/14, 93.77, and 95.05, while support shows at 91.26, 90.56 and 88.54.

To view a live chart follow the link:

NZD: The coming economic data week in New Zealand has key data scheduled, although nothing of note comes out until Wednesday’s Inflation Expectations (last 2.6%). Thursday has the important NBNZ Business Confidence index (last 38.5), but Friday looks like the highlight with Building Consents (last -2.4%M/M) and the N.Z. Trade Balance (last 2M) coming out. From a technical perspective, NZD/USD broke back above its region of key psychological support at 0.7000 last week and has since continued to hold above its rising 200-day MA at 0.6904, indication some consolidation between 0.6806 and 0.7078 may be likely this coming week. Initial support for NZD/USD comes in at 0.6929, 0.6892/97 and 0.6806/16, while Resistance shows up at 0.7060/77, 0.7149 and 0.7231.

To view a live chart follow the link:

USD: The coming economic data week in New Zealand has key data scheduled, although nothing of note comes out until Wednesday’s Inflation Expectations (last 2.6%). Thursday has the important NBNZ Business Confidence index (last 38.5), but Friday looks like the highlight with Building Consents (last -2.4%M/M) and the N.Z. Trade Balance (last 2M) coming out. From a technical perspective, NZD/USD broke back above its region of key psychological support at 0.7000 last week and has since continued to hold above its rising 200-day MA at 0.6904, indication some consolidation between 0.6806 and 0.7078 may be likely this coming week. Initial support for NZD/USD comes in at 0.6929, 0.6892/97 and 0.6806/16, while Resistance shows up at 0.7060/77, 0.7149 and 0.7231.

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]]> Weekly Market Watch - Monday, 15 Feb 2010 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=5971 http://www.singforex.com.sg/cgi-bin/weekly-market-watch.asp?id=5971 Mon, 15 Feb 2010 01:49:20:170 GMT Last Week Recap

EUR/USD continued falling last week on Greek sovereign debt worries, added to by increasing concerns over Portugal and Spain’s debt situation, leading the Euro to new medium-term lows versus the U.S. Dollar. The rate made its weekly high at 1.3838 early in the week on Tuesday, before trading lower as ECB President Trichet unexpectedly left a conference in Sydney, Australia a day early. EUR/USD continued its slide even as France and Germany took the lead in putting together a Greek bailout package. Although support for Greece was promised at the E.U. summit in Brussels on Tuesday, no firm bailout plans were yet announced. Thursday’s U.S. Jobless Claims release fell more than expected which strengthened the Dollar further. The rate then continued falling to make a weekly and nine-month low of 1.3531 last Friday upon U.S. Retail Sales numbers showing better-than-expected growth. Germany also released a somewhat disappointing Q4 GDP number showing 0.0% growth, compared with a consensus of a 0.2% rise. Of the four primary European countries, France’s economy posted the only Q4 gain of a modest 0.6%. Overall, Eurozone Q4 GDP expansion was a barely positive 0.1%, while the market was looking for 0.3%. EUR/USD then rallied slightly on position squaring to close the week at 1.3630, down 0.3%.

USD/JPY gained somewhat last week in relatively uneventful trading, with risk-adverse investor sentiment continuing to support the Yen as the rate firmed off its weekly 89.12 low seen on Monday. A bank holiday in Japan on Wednesday kept USD/JPY trading range-bound ahead of the influential U.S. Trade number which showed a deficit expansion of $40.2 billion against market expectations of $35.7 billion. Also, Thursday’s U.S. Jobless Claims of 440K fell below the 458K consensus, while Friday’s core U.S. Retail Sales showed growth of 0.6% versus 0.4% expected. USD/JPY made its weekly high of 90.39 after the announcement that the Japanese Household Confidence index rose to 39.4 versus a consensus of 38.2. USD/JPY then traded lower to close on Friday at 89.91, up 0.8% from the previous weekly close.

GBP/USD opened near its weekly low of 1.5532 on Monday and gained little support from the U.K. Trade report on Tuesday which showed a 3.55 billion Sterling deficit against the market’s call of 3.1 Billion. Cable nevertheless managed to rally to a weekly high of 1.5764 on Wednesday after the U.S. Trade deficit widened more than expected. The rate then traded down towards the weekend as BOE Governor King confirmed that the decision to pause the BOE’s asset purchase program was not yet definitive. The BOE also cut back its U.K. growth estimate and raised its short-term projection for inflation to a 3% Y/Y rate by late 2010, with prices to rise by over 3% in early 2010, if interest rates remain low at 0.5%. GBP/USD closed the week at 1.5697, up just 0.4% from the previous week.

AUD/USD benefited impressively last week from a rally in commodity prices combined with positive economic data out of Australia. The rate made its weekly low on Tuesday at 0.8610, but was supported by the Australian Unemployment Rate release on Thursday which was expected at 5.6% but came out at just 5.3%. New jobs also showed the largest monthly gain in Australia since December 2006, adding 52.7K jobs to the economy. This increased the chances of another RBA rate rise at their rate policy announcement on March 2nd, prompting AUD/USD to rally to its weekly 0.8913 high before pulling back when China’s central bank announced it was raising bank reserve requirements in the country. This brought the pair to end the week at 0.8874, up 2.2% from the previous close.

The Canadian Dollar was another beneficiary of higher commodity prices, pushing USD/CAD considerably lower last week. Also, Canadian Housing Starts grew slightly beyond expectations of 180K in January at 186K, according to last Monday’s announcement. The rate then made its weekly high at 1.0770 on Tuesday before Wednesday’s announcement of the Canadian trade balance which approximated market expectations at -0.2B. The rate then traded off to hit a low of 1.0477 on Thursday on the commodity rally, and ahead of Friday’s New Motor Vehicle Sales release which impressed the market at 2.6% against a 2.0% consensus. USD/CAD ended Friday trading at 1.0501, down 2.0% versus the previous week’s close.

Rising commodity prices also pressed NZD/USD higher last week, despite the previous week’s news of the N.Z. employment rate hitting 10-year highs of 7.3% which weighed on the rate early in the week. The pair made its 0.6815 weekly low on Wednesday, but then strengthened much of the rest of the week to make a high of 0.7023 on Friday. NZD/USD eventually came off its highs after the New Zealand Retail Sales number show no increase in the fourth quarter of 2009 when the market was expecting a 0.7% rise, and the core sales numbers fell even further to -1.8% against a 0.3% expected rise. Nevertheless, the pair managed to finish on Friday at 0.6970, up from the previous week’s close by 1.7%.

The Week Ahead

AUD: The economic calendar in Australia offers some interesting data this week, but releases will not begin until Tuesday as the key RBA Monetary Policy Meeting minutes will come out, along with NAB Business Confidence (last 8), and a speech by RBA Assistance Governor Debelle in Sydney is also scheduled. For Wednesday, the MI Leading Index (last 1.0%M/M) is due out, and Thursday offers a speech in Sydney by the RBA’s Assistant Governor Lowe in addition to the NAB Quarterly Business Confidence index (last 16). Friday ends the week as RBA Governor Stevens testifies in Canberra before the House of Representatives Standing Committee on Economics. On the technical front, AUD/USD has now moved out of oversold territory on the 14-day RSI and has bounced off its 200-day MA, currently at 0.8589, to start retracing the move down to 0.8577 from 0.9328, with the market now trading between the 50% Fibonacci level at 0.8953, and the 61.8% at 0.9041. Resistance shows on the chart at 0.8920, 0.9047 and 0.9145, and support is indicated at 0.8785, 0.8709 and 0.8613.

To view a live chart follow the link:

CAD: Canada has a more active upcoming data week scheduled than usual. The releases start on Tuesday with Manufacturing Sales (2.1%M/M), and Wednesday offers Wholesale Sales (0.6%M/M) plus a speech in Toronto by BOC Deputy Governor and Governing Council Member Longworth. The Consumer Price Index (0.3% and 0.1% Core M/M), the BOC review and Foreign Securities Purchases (7.56B) are schedule for release on Thursday, and Friday has the highlighted Retail Sales (1.1% and 0.4% core M/M) number and the Leading Index (0.6%M/M) due out. From a technical perspective, USD/CAD has started correcting its rally from the low of 1.0223 seen on Jan 14th to the Feb 5th high of 1.0779 that traded last week. The recent corrective move has already exceeded the 50% Fibonacci retracement level at 1.0501, now putting the 61.8% level at 1.0435 into play, but which has held thus far. Nevertheless, the 14-day RSI remains neutral, so an eventual test there looks likely, and a break would target the 76.4% at 1.0354. Also, with USD/CAD’s 200-day MA offering resistance at 1.0841, the upside may prove challenging. With USD/CAD now trading at 1.0513, resistance shows at 1.0609, 1.0706 and 1.0779, while support is indicated in the 1.0462/78 region, and also at 1.0438 and 1.0312.

To view a live chart follow the link:

EUR: The Eurozone upcoming week looks more active when it comes to economic releases. The schedule begins on Monday with the E.U. Finance Ministers’ meeting that will be closely watched. On Tuesday, the ZEW Economic Sentiment indexes (42.5 German, 42.6 Eurozone) are due out, and Wednesday has the E.U. Trade Balance (4.2B). Thursday has Eurozone Consumer Confidence (-16), and Friday is especially busy starting with the German Producer Price Index (0.4%M/M), the Flash Purchasing Manager’s Indexes (French Manufacturing 55. 3 and Services 56.4, German Manufacturing 54.1 and Services 55.2, Eurozone Manufacturing 52.8 and Services 52.6), plus the Eurozone Current Account (-0.6B) due for release. On the technical front, EUR/USD made a 9-month low last week within its recent down trend at 1.3531. The medium-term outlook remains distinctly bearish, as the rate trades considerably below its 200-day Moving Average which now falls at 1.4343. Despite that, the 14-day RSI is in oversold territory at 28, so some consolidation can be expected. Also, the 1:1 wave equality target of the fall from 1.5144 to 1.4217 projected off the following reaction high of 1.4579 has now been achieved at 1.3652. Nevertheless, due to the momentum of this downward move, additional extensions lower cannot be ruled out. If seen, they would target Fibonacci projections at 1:1.236 = 1.3433, 1:1.382 = 1.3298, 1:1.5000= 1.3189 and 1:1.618 at 1.3079. Now trading at 1.3616, support for EUR/USD is seen at 1.3531, 1.3423 and 1.3246, and resistance shows at 1.3696, 1.3801/52 and 1.4026.

To view a live chart follow the link:

GBP: The upcoming week’s schedule offers some important economic data from the United Kingdom. The calendar begins with Monday’s release of the Rightmove House Price Index (last 0.4%M/M), continuing on Tuesday with the Consumer Price Index (3.2% core and 3.6% Y/Y), as well as possibly the BOE Inflation Letter. Wednesday looks like the highlight as the Claimant Count Change (-14.6K) jobs number will be followed by the MPC’s Monetary Policy Meeting Minutes. The vote is expected to be 0-0-9 in opposition to a policy change, and the U.K. employment rate (7.8%). On Thursday, the market will be watching Public Sector Net Borrowing (-2.4B) and CBI Industrial Order Expectations (-35). Also notable will be a speech in London by BOE Director and MPC Member Fischer. Friday has the Retail Sales (-0.5%) number to close out the week. Technically, GBP/USD has now fallen convincingly below the rate’s 200-day MA, now at 1.6248 turning its long-term outlook bearish. Also, Sterling’s recent fall broke the key 1.5801 and 1.5706 lows that defined the lower level of its recent trading range and provoked further selling pressure. The 14-day RSI has improved from its former oversold condition, as the rate continues to consolidate losses, perhaps forming a bearish pennant pattern. Also, the current move down from the Jan 19th 1.6456 high is heading toward wave equality with the previous move down to 1.5832 from 1.6876. The equality target falls at 1.5414, so another push downwards to that objective seems likely, and it breaks, the 1:1.236 Fibonacci extension target is 1.5166. Resistance can bee seen in the region of 1.5740/64, at 1.5849 and at 1.6068. Good support is indicated around the 1.5533/79 region, at 1.5372 and at 1.5058.

To view a live chart follow the link:

JPY: The next economic week in Japan heats up a bit, with some important data due out. Monday kicks the week off with Preliminary GDP (1%Q/Q) plus the Price Index (-2.2%). Tuesday has nothing of note due out, while Wednesday has the Tertiary Industry Activity Index (-0.2%). Thursday seems likely to be the highlight with the Monetary Policy Statement and associated BOJ Press Conference. The market expects the central bank to leave its Overnight Call Rate the same at 0.10%. Friday ends the data week as the All Industries Activity index (0.3%) and the BOJ’s Monthly Report come out. With respect the technicals, USD/JPY has continued to retrace the up trend from 84.80 to 93.77 which has taken the rate down to 88.54, in the region of the 61.8% Fibonacci retracement of 88.23. Also, the rate now trades below its 200-day MA at 92.46, without being oversold on the RSI. In addition, resistance is now offered by the falling upper channel line, now drawn at 90.30, while the rate finds support from an inclining trend line now at 89.62. These converging lines point to a near-term increase in volatility upon USD/JPY breaking either one. Further resistance shows at 90.40, 91.26 and 91.86, and support comes in at 89.23/57, 88.54/81 and 87.35.

To view a live chart follow the link:

NZD: The forthcoming economic data week in New Zealand seems relatively peaceful again, and does not even begin until Tuesday with the Producer Price Index (Input 0.5% Q/Q and Output 0.4%Q/Q) that seems like the week’s highlight. All then looks quiet until Friday’s release of Credit Card Spending (last 1.8%Y/Y). In considering its technical picture, NZD/USD is holding below broken psychological support that now becomes resistance at 0.7000 while the rate gradually recovers from its oversold condition. Also worth noting is that its 200-day MA currently come in at 0.6878, and a weekly close below that level could trigger significant longer-term NZD/USD selling. The outlook in the short-term remains bearish as long as the rate stays below 0.7149, but a break there would neutralize. Support is noted at 0.6892/97 and 0.6806/16, and then below that at 0.6683. Resistance shows at 0.6966, in the region of 0.6993/0.7023 and at 0.7149.

To view a live chart follow the link:

USD: The forthcoming economic data week in New Zealand seems relatively peaceful again, and does not even begin until Tuesday with the Producer Price Index (Input 0.5% Q/Q and Output 0.4%Q/Q) that seems like the week’s highlight. All then looks quiet until Friday’s release of Credit Card Spending (last 1.8%Y/Y). In considering its technical picture, NZD/USD is holding below broken psychological support that now becomes resistance at 0.7000 while the rate gradually recovers from its oversold condition. Also worth noting is that its 200-day MA currently come in at 0.6878, and a weekly close below that level could trigger significant longer-term NZD/USD selling. The outlook in the short-term remains bearish as long as the rate stays below 0.7149, but a break there would neutralize. Support is noted at 0.6892/97 and 0.6806/16, and then below that at 0.6683. Resistance shows at 0.6966, in the region of 0.6993/0.7023 and at 0.7149.

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