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Daily Market Outlook by Kate Curtis from Trader's Way

Forex Analysis by Kate Curtis of Trader's Way . Kate Curtis updates the outlook and analysis daily in this sub-forum.
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Forex Major Currencies Outlook (July 1, 2013)

Postby katetrades » Mon Jul 01, 2013 6:06 am

USD

The US dollar has a lot of major reports in line for the week, with the ISM manufacturing PMI, ISM non-manufacturing PMI, and NFP report due. Last week, dollar demand was strong as most of the data came in stronger than expected. Another round of upbeat figures from the US would mean that the Fed is moving closer to tapering its bond purchases and that the US economy could stay on its feet even with less stimulus. The ISM manufacturing PMI on tap for today is slated to show an improvement from 49.0 to 50.6, showing that the sector rebounded back to expansion for June.

EUR

The euro tested the 1.3000 handle against the dollar last week, and today’s top-tier data could determine if the pair will bounce or break. Only medium-tier reports such as Italian PMI and CPI estimate are due from the euro zone today, which suggests that EUR/USD performance could be more impacted by US data. However, significantly weak data from the euro zone could trigger an early break below the 1.3000 mark.

GBP

The pound could have a chance to rebound against the dollar today as the UK will print its manufacturing PMI. The figure is projected to hold steady at 51.3 but an upside surprise could lift the pound against its counterparts. Data from the UK has been more or less strong recently, which could increase the odds for better than expected results.

CHF

The Swiss franc weakened against the Greenback on Friday, mostly because of the strong dollar bias. The SVME PMI is due from Switzerland today and the report could print an improvement from 52.2 to 52.5, indicating that the manufacturing sector posted a stronger expansion. A weaker than expected result could worsen the ongoing franc selloff.

JPY

The yen had a mixed performance on Friday, as it weakened against the dollar and strengthened against the Aussie. It managed to consolidate against the euro and the pound. Data from Japan has been mostly stronger than expected, save for the household spending report, which showed a 1.6% decline. The Tankan figures released earlier today came in strong, posting an improvement for both manufacturing and non-manufacturing sectors.

Commodity Currencies (AUD, CAD, NZD)

The comdolls edged slowly lower on Friday, as though the recent selloffs were starting to get exhausted. China printed its HSBC final manufacturing PMI and official government PMI for June and both came in line with expectations. The government PMI fell from 50.8 to 50.1 while the HSBC figure was revised slightly down from 48.3 to 48.2. Canadian banks are on a holiday and there are no other reports due from the comdoll economies for the rest of the day.

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Forex Major Currencies Outlook (July 2, 2013)

Postby katetrades » Tue Jul 02, 2013 6:27 am

USD

The dollar was off to a good start for the week, as risk aversion remained in the markets for most of the Asian session. However, the U.S. ISM manufacturing PMI failed to impress market participants as it clocked in at 50.9. This was only slightly higher than expectations of a 50.6 reading, an improvement over the 49.0 figure last May. There are no major reports from the U.S. today, only the medium-tier factory orders data and speeches by a couple of Fed officials. Dudley has downplayed the Fed’s stimulus taper plan last week and could dish out similar remarks again today, which could lead to dollar selling.

EUR

The euro was able to gain strength against the dollar in yesterday’s trading, as it climbed from the 1.3000 area until the 1.3050 level. Data from the euro zone came in stronger than expected, as Italian manufacturing PMI came in better than expected and so did the euro zone jobless rate. For today, only the Spanish unemployment change is expected from the euro zone, and it could show another round of improvements in the labor sector. If that’s the case, the euro could continue to draw support.

GBP

The pound was off to a good start but returned most of its gains, even though the U.K. manufacturing PMI came in better than expected. The figure improved from 51.5 to 52.5 instead of dipping to the expected 51.3 reading. Net lending to individuals fell short at 1.0B instead of climbing from 1.3B to 1.4B. For today, the construction sector will release its PMI figure and possibly print an improvement from 50.8 to 51.3. Aside from that, MPC member Tucker is set to give a speech and the 10-year bond auction will be conducted in the UK.

CHF

The franc weakened in yesterday’s trading since the SVME PMI showed slower manufacturing activity in Switzerland. The reading slipped from 52.2 to 51.9 instead of improving to 52.5. There are no major reports due from Switzerland today which suggests that USD/CHF movement could be driven by US data.

JPY

USD/JPY edged higher in yesterday’s trading, moving closer to the 100.00 handle. Average cash earnings in Japan remained flat and missed the expectations of a 0.6% uptick. There are no reports due from Japan today, which suggests that yen pairs could be dependent on risk sentiment and currency-specific events.

Commodity Currencies (AUD, CAD, NZD)

Comdolls retreated in yesterday’s trading as risk aversion remained in the markets. The Australian dollar tested the .9250 level, but dropped right back below .9200 when the RBA decided to keep rates unchanged and mentioned that the Aussie is still relatively overvalued. There are no other releases due from the commodity-dependent economies today.

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Forex Major Currencies Outlook (July 3, 2013)

Postby katetrades » Wed Jul 03, 2013 7:29 am

USD

The US dollar made a stellar recovery against its major counterparts in yesterday’s trading, pushing EUR/USD below the 1.3000 handle and USD/JPY above the 100.00 mark. There were no major reports released from the US yesterday, as risk aversion was the main reason for the dollar’s climb. The US is set to print its ISM non-manufacturing PMI today and possibly show an improvement from 53.7 to 54.3. However, a weaker than expected figure could force the dollar to return some of its recent gains. Bear in mind that US traders will be off on a Fourth of July holiday tomorrow so we could witness some profit-taking for today.

EUR

The euro was sold off heavily yesterday when news a potential delay in Greece’s next batch of bailout funds could be delayed. Apparently, the country was unable to fulfill some of the requirements to secure the next tranche of aid. As for data, there have been no major reports released from the euro zone and only the medium-tier retail sales report is due today.

GBP

The pound was relatively one of the more resilient currencies in yesterday’s trading, although it still lost some ground to the US dollar. UK construction PMI improved from 50.8 to 51.0, slightly lower than the estimated 51.3 reading. Today, the UK will release its services PMI data and possibly show a dip from 54.9 to 54.6, reflecting weaker expansion in the industry.

CHF

The franc lost ground to the dollar, as USD/CHF climbed past the .9500 handle. There were no reports released from Switzerland for the past 24 hours and none are due today, suggesting that the franc could continue to be sensitive to US data or risk sentiment.

JPY

The yen saw a round of weakness yesterday, particularly to the US dollar. The Nikkei chalked up a 13% rebound recently, contributing to the yen’s selloff. As for reports, Japanese average cash earnings and monetary base both missed expectations. There are no reports due from Japan for the rest of the trading day.

Commodity Currencies (AUD, NZD, CAD)

Among the comdolls, the Aussie suffered the biggest losses in yesterday’s trading as AUD/USD slipped back below the .9200 handle. Earlier today, Australia printed weak retail sales of 0.1% instead of the expected 0.4% increase while the previous period’s figure was revised down to -0.1%. CAD and NZD simply consolidated around their current levels, but breakouts could be in sight for today as traders may book profits ahead of the Fourth of July holiday.

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Forex Major Currencies Outlook (July 4, 2013)

Postby katetrades » Thu Jul 04, 2013 6:24 am

USD

The US dollar lost to most of its major counterparts in yesterday’s trading, as some traders booked profits ahead of the Fourth of July holiday in the United States. EUR/USD rebounded back to the 1.3000 major psychological level while USD/JPY slipped back below the 100.00 mark. US ISM non-manufacturing PMI came in weaker than expected, showing only a 52.2 reading instead of the estimated improvement from 53.7 to 54.3. There are no reports due from the US today.

EUR

EUR/USD suffered a heavy selloff at the start of the trading day as brewing political trouble in Portugal weighed on the country’s bailout prospects and caused a spike in bond yields. However, EUR/USD managed to pull up to the 1.3000 handle towards the end of the day as traders closed their positions around the fresh lows. Euro zone data was mixed as retail sales showed a better than expected 1.0% increase while Italian PMI fell short of expectations. The ECB rate decision is on tap for today and, even though no monetary policy changes are expected, Draghi could emphasize their readiness to add stimulus if necessary.

GBP

The pound managed to end the day higher than the dollar and the euro, as the UK printed better than expected services PMI. The reading jumped from 54.9 to 56.9 instead of dipping to 54.6. The BOE rate decision is scheduled today and it will be Mark Carney’s first statement as BOE Governor. Market participants are interested in how the new Governor will approach monetary policy so this event could trigger a large reaction among pound pairs.

CHF

The franc managed to recoup some of its recent losses to the dollar, as USD/CHF slipped back below the .9500 handle. There were no reports released from Switzerland then, leaving USD/CHF sensitive to US data. There are no reports due from Switzerland again today and none are due from the US.

JPY

The yen regained ground against its major counterparts, as the Labor Ministry reported that there was no change in Japan’s average cash earnings. On top of that, the BOJ noted that the Japanese economy is starting to pick up pace. There are no other reports due from Japan today.

Commodity Currencies (AUD, CAD, NZD)

The comdolls had a weak start, as AUD sold off and fell below the .9100 handle. Australia printed weaker than expected building permits and retail sales, although its trade balance did come in strong. Canada’s trade balance also came in better than expected, allowing USD/CAD to hold on to its recent levels. There were no reports from New Zealand, leaving NZD/USD in consolidation.

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Forex Major Currencies Outlook (July 5, 2013)

Postby katetrades » Fri Jul 05, 2013 5:40 am

USD

The US dollar was one of the strongest performing currencies in yesterday’s trading as it posted huge gains against the pound and euro. US traders were off on a holiday celebrating the Fourth of July, which explains why there were no economic reports released from the US yesterday. For today, the US NFP report is due and a smaller increase in hiring is projected. Based on the results of the ADP report released earlier this week though, an upside surprise could be in the cards, which could continue to lift the dollar.

EUR

The euro suffered a heavy selloff in yesterday’s London and US sessions when ECB head Mario Draghi announced that interest rates would be kept low for an extended period of time. This triggered a sharp reaction from euro pairs, as the central bank opted to practice forward guidance in influencing longer-term interest rates. Only the German factory orders report is due today and it is expected to show a rebound of 1.3% from the previous 2.3% decline.

GBP

The pound was also under heavy selling pressure in the previous trading sessions when the BOE practiced forward guidance in saying that there will be no rate hike until mid-2015. This was a surprise, considering it was Mark Carney’s first statement as BOE head. There are no reports due from the UK today, which suggests that the pound could continue to sell off if there are no changes in market sentiment.

CHF

The franc was outpaced by the dollar but it managed to pack some gains against the euro. USD/CHF spiked to the .9580 area despite the lack of data from the US and Switzerland. Swiss foreign currency reserves data and CPI are due today. Higher foreign currency reserves could mean that the SNB is finding it more expensive to maintain its currency peg. Price levels are foreseen to drop by 0.1%, which could worsen the franc’s selloff.

JPY

The yen managed to gain against the pound and euro but it lost ground to the dollar, as USD/JPY spiked to the 100.40 area from 99.50. There were no reports released from Japan, but BOJ Governor Kuroda had a speech in which he said that their current easing efforts are starting to work out.

Commodity Currencies (AUD, CAD, NZD)

Comdolls struggled to hold on to their current levels, with AUD/USD holding on to the .9100 handle and USD/CAD staying around the 1.0500 mark despite the jump in volatility. NZD/USD is still stuck in its recent range between .7700 and .7830. There are no major reports due from Australia and New Zealand but Canada is set to print its jobs data and Ivey PMI. Joblessness could drop by 4.2K in June while the Ivey PMI is projected to dip from 63.1 to 59.6.

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Forex Major Currencies Outlook (July 8, 2013)

Postby katetrades » Mon Jul 08, 2013 6:48 am

USD

Better than expected jobs data boosted the dollar against its counterparts on Friday, as the NFP figure came in at 195K. This was higher than the estimated 163K reading while the previous month’s figure saw an upward revision to 195K. However, the jobless rate held steady at 7.6% instead of improving to 7.5% as more and more Americans returned to the labor force. For today, there are no major reports due from the US.

EUR

The euro sold off heavily on Friday, still weighed down by the dovish ECB rhetoric during the previous day. As Draghi said, euro zone interest rates will remain low for an extended period. It didn’t help that Portugal was still undergoing political trouble while Greece’s next set of bailout funds is at risk. The Troika will be evaluating whether Portugal met its requirements to secure the next batch of bailout funds today, and this could have a huge impact on the euro. Eurogroup meetings are also taking place today and Germany will be releasing its industrial production report.

GBP

The pound was one of the weakest currencies last week, as BOE Governor Carney clarified that there will be no rate cut in the next couple of years. There are no reports due from the UK today, as the downbeat monetary policy statement could continue to drag the pound lower.

CHF

The Swiss franc reached the .9650 minor psychological resistance against the dollar last Friday, as strong US NFP data boosted the Greenback. Switzerland will release its unemployment rate today and possibly show no change from the current 3.2% rate. An increase in joblessness though could push USD/CHF even higher.

JPY

The yen weakened against the dollar on Friday but managed to gain against the euro and pound. There were no major reports released from Japan then, but the country reported a 0.62 trillion JPY current account balance for May as expected. The Economy Watchers Sentiment index is due from Japan today, and a higher than expected figure could help keep the yen’s losses in check.

Commodity Currencies (AUD, CAD, NZD)

There were no major releases from Australia and New Zealand on Friday, but Canada was able to release its jobs data and Ivey PMI. Canada lost only 0.4K jobs in June, better than the estimated 4.2K decline while the jobless rate held steady at 7.1%. As for the Ivey PMI, the figure posted a sharp decline from 63.1 to 55.3 instead of just dipping to 59.6. Only the Canadian building permits is due from the comdoll economies for today.

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Forex Major Currencies Outlook (July 9, 2013)

Postby katetrades » Tue Jul 09, 2013 7:12 am

USD

The US dollar lost ground to most of its major counterparts in yesterday’s trading, as traders took profits off their positions from last week. EUR/USD rebounded off the 1.2800 area while USD/JPY dipped below the 101.00 mark. There were no reports released from the US yesterday and there are no big ones for today, as traders could position themselves early ahead of the FOMC meeting minutes release later on in the week.

EUR

The euro made a slight recovery against the US dollar while EUR/JPY moved mostly sideways below 130.00. The resolution of the conflict in Portugal, as the Prime Minister declared a cabinet reshuffle, and the approval of the bailout funds for Greece was enough to boost the euro even though data was weak. German industrial production showed a 1.0% decline instead of the estimated 0.5% dip while its trade balance showed a 14.1 billion EUR surplus, which is lower than the estimated 17.4 billion EUR surplus. There are no reports due from the euro zone today so keep tabs on updates regarding the ongoing ECOFIN meetings.

GBP

The pound rebounded from its previous lows against the dollar on Monday, as GBP/USD climbed back above 1.4900. There were no releases from the UK at the start of the week, but the country will be printing its manufacturing production and trade balance figures today. Manufacturing production could rebound by 0.5% after dipping by 0.2% in the previous month while the trade deficit is expected to widen from 8.2 billion GBP to 8.4 billion GBP.

CHF

USD/CHF gapped up over the weekend but the gap was quickly filled as the pair retreated on Monday. Swiss joblessness held steady at 3.2% and its retail sales report is due today. On an annualized basis, Swiss retail sales could see a 3.7% increase, better than the previous 3.3% figure. A better than expected reading could support the franc against the dollar and euro today.

JPY

The yen may have gained against the dollar on Monday but it lost to its other major counterparts as Japan still showed some signs of weakness. Current account surplus fell from 0.85 trillion JPY to 0.62 trillion JPY as expected while bank lending accelerated from 1.8% to 1.9%. The Economy Watchers Sentiment index slipped from 55.7 to 53.0 instead of just dipping to 55.6. No reports are due from Japan today.

Commodity Currencies (AUD, CAD, NZD)

The comdoll bunch managed to recover against the Greenback on Monday, buoyed by a rebound in commodity prices. The ongoing conflict in Egypt is boosting oil prices, as the possibility of a spillover in other Middle East countries could limit the production and supply of oil. Meanwhile, Canada printed stronger than expected building permits while New Zealand showed an improvement in business confidence. Australian NAB business confidence also saw a return to neutral territory from a -1 reading previously.

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Forex Major Currencies Outlook (July 10, 2013)

Postby katetrades » Wed Jul 10, 2013 6:17 am

USD

Once again, the US dollar proved its strength against the euro and the pound. EUR/USD dipped to fresh lows around the 1.2775 area while GBP/USD fell below the 1.4900 handle. There were no major reports released from the US yesterday, as traders gear up for the release of the FOMC meeting minutes at 7:00 pm GMT today. Recall that the Fed announced its plans to reduce bond purchases at the end of the year, causing a huge dollar rally during their rate statement. The minutes of their policy meeting should shed light on the data that led them to this taper plan and if a lot of policymakers support the idea. If the minutes don’t contain much surprises, it could turn out to be a non-event for the dollar pairs.

EUR

The euro dropped to new lows against the dollar when euro zone debt concerns started popping up again. An ECB member said that the euro zone should be ready for more capital shortfalls, as the region could be in for more refinancing operations and a much longer period of low interest rates. Meanwhile, Italy suffered a downgrade from S&P, as the credit rating agency cited growth concerns. There are no major reports due from the euro zone today, which suggests that EUR/USD’s movement could be focused on the FOMC minutes.

GBP

The pound tumbled against the Greenback once more when British data disappointed. Manufacturing production fell by 0.8% in May, following the 0.2% decline seen last April. This was worse than the estimated 0.3% increase. Industrial production remained flat instead of climbing by 0.3% while the previous month’s figure was revised down to show a 0.1% decline. There are no reports due from the UK today, as traders could pay close attention to the FOMC minutes.

CHF

The franc lost ground to the dollar again as Swiss retail sales disappointed. Analysts predicted an increase from 3.3% to 3.7% but the actual figure showed a measly 1.8% annual increase for May. No reports are due from Switzerland today.

JPY

The yen had a mixed performance as it gained against the euro and pound but held steady against the dollar. Data from Japan has been mixed, as machine tool orders showed a 12.4% decline while tertiary industry activity showed a stronger than expected 1.2% increase. Consumer confidence came in worse though, as the reading fell from 45.7 to 44.3 instead of improving to 47.2.

Commodity Currencies (AUD, CAD, NZD)

The commodity currencies managed to score gains against the dollar, as AUD/USD climbed above the .9200 handle and NZD/USD broke out of its recent range. USD/CAD is holding steady above the 1.0500 handle, as the Loonie is supported by rising oil prices. Australian Westpac consumer confidence posted a 0.1% decline. New Zealand is set to print its Business NZ manufacturing index in the upcoming Asian session. No other reports are due from Canada and Australia.

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Forex Major Currencies Outlook (July 11, 2013)

Postby katetrades » Thu Jul 11, 2013 6:46 am

USD

The US dollar was sold off heavily in yesterday’s US session, as the minutes of the FOMC meeting showed that there was a lot of dissent surrounding the proposed stimulus taper schedule. Not all policymakers agree that the central bank should start reducing the level of its bond purchases by the end of the year, as improvements in the labor market are not that significant enough. USD/JPY fell back below the 100.00 level while EUR/USD climbed above the 1.3000 handle. The initial jobless claims release is the only event from the US today.

EUR

The euro was able to stage a successful rebound against the dollar in yesterday’s trading, as the FOMC minutes turned out to be a bit of a surprise. As for data, medium-tier reports printed weaker than expected results, with the French industrial production report showing a 0.4% decline. Manufacturing production also posted a decline while their current account deficit widened. More medium-tier reports are due from the euro zone today but this might not be enough to derail EUR/USD from its recent rallies.

GBP

The pound recovered against the US dollar in yesterday’s trading, as the FOMC minutes disappointed the dollar bulls. There were no reports released from the UK and none are due for today. The only event on the UK schedule is the speech by MPC member Miles, and this should shed some light on whether he supports Carney’s pledge of keeping monetary policy loose for the foreseeable future.

CHF

The franc rallied against the Greenback in yesterday’s trading, pushing USD/CHF down by more than 300 pips. There were no reports printed from Switzerland then and none are due today, leaving USD/CHF vulnerable to dollar behavior.

JPY

The yen managed to pocket huge gains against the US dollar yesterday, eventually pushing USD/JPY down the 100.00 level and back to the 98.50 area of interest. Earlier today, the BOJ had its monetary policy announcement and Governor Kuroda made no changes to its current level of easing.

Commodity Currencies (AUD, NZD, CAD)

The commodity currencies outpaced the Greenback yesterday, with USD/CAD breaking below the 1.0500 barrier and AUD/USD climbing back above .9200. New Zealand’s manufacturing index showed a drop in industry activity but this wasn’t enough to derail the Kiwi’s rally against the dollar. Australia’s jobs report came in mixed, with a better than expected employment change reading of 10.3K but a worse than expected jobless rate of 5.7%. No other reports are due from the comdoll economies in the upcoming trading sessions.

By Kate Curtis from Trader's Way
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Forex Major Currencies Outlook (July 12, 2013)

Postby katetrades » Fri Jul 12, 2013 6:12 am

USD

The US dollar had a mixed performance in yesterday’s trading as it lost ground to the euro and pound, but managed to score gains against the Australian dollar and New Zealand dollar. There were no major reports released from the US yesterday, only the initial jobless claims which showed a higher than expected increase in first-time claimants. However, analysts noted that this might just be an effect of the Fourth of July holiday. For today, the PPI and UoM consumer sentiment figures are due, and upbeat figures could renew demand for the US dollar.

EUR

There were no red flags on the euro zone’s calendar in yesterday’s trading, allowing the euro to regain ground against the US dollar. There are no major reports again today, except perhaps for the euro zone industrial production release. This is expected to show a 0.2% downtick after increasing by 0.4% last month.

GBP

The pound was one of the better performing currencies in yesterday’s trading as it managed to make a strong recovery against the US dollar. There were no reports released from the UK, but the country is set to print its CB leading index today. A 0.2% increase was seen last time and another increase could help lift the pound higher against its counterparts.

CHF

The Swiss franc continued to gain against the Greenback in yesterday’s trading, despite the lack of data from Switzerland. The Swiss economic schedule is empty again for today, which suggests that the franc might be able to benefit from dollar weakness if it persists until the end of the week.

JPY

The yen was mostly stuck in consolidation for yesterday as there were no major reports released from Japan. The BOJ statement turned out to be a non-event as Kuroda didn’t announce anything special for their monetary policy. Only the revised industrial production report and BOJ monthly report are due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi suffered huge losses against the dollar in yesterday’s trading as weaknesses in China continued to dampen sentiment for commodity-dependent nations. Australia’s jobs report printed better than expected results of 10.3K instead of the mere 0.3K increase expected. However, its home loans report missed the mark and showed a 1.8% rise instead of the estimated 2.3% growth. No other reports are due from the comdoll economies today.

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