Forex Technical And Fundamental Analysis For July 12, 2011

EUR/USD Technical Analysis for July 12, 2011

EUR/USD fell extremely hard on Monday , and even broke through a triangle that many traders have been watching. However, there is a massive support area at 1.40 that is proving to be a bit tough at this point. If 1.40 gives way – look out below. The 200 day moving average is at this level as well, and a lot of traders use that as a barometer on how to place trades. Because of this, even though we are very bearish on the EUR/USD, we hesitate to sell at this level. Rallies could be sold though.

EUR/USD Fundamental Analysis for July 12, 2011

The euro started the week under heavy downside pressure which sent the EUR/USD sharply to the downside on the worsening outlook for the debt crisis as the euro area finance chiefs met in Brussels in an attempt to find a suitable solution to the crisis.

Monday’s trading was all about the jitters and deepening fears over the worsening crisis, where the Financial Times said that the ministers might allow Greece to default on some of its bonds and abandon the French proposal for the private sector participation assuring to the market that a swift solution to the crisis is far from reached.

On Tuesday, the meetings will continue and the focus will be about the late comments from the meeting in Brussels and whether the end of Monday’s meeting will have any upbeat news on the euro, where the only support for temporary relief will be a clear dismissal of the reports and that disorderly default will be avoided.

The euro area is not scheduled to release new fundamentals yet the focus will be on the second day of meetings in Brussels for the EU finance ministers that will continue to discuss major financial issues and most importantly the debt crisis and Greek aid.

Germany though will release the final estimate for the June CPI due at 09:00 GMT, while the index is expected to rise 0.1% on the month and 2.3% on the year and in EU harmonized terms expected flat on the month and with 2.4% gain on the year.

From the United States the week will start with the May trade figures at 12:30 GMT, where the deficit is expected to have widened to $44.1 billion from $43.7 billion.

Also on Tuesday will be the minutes of the last FOMC meeting on June 21&22 at 18:00 GMT. Comments from the Feds about the weak economy or signals for more monetary easing and support to the economy will be the main mover on the market, yet in general, the minutes are not expected to add anything new to what Bernanke already said.

USD/JPY Technical Analysis for July 12, 2011

The USD/JPY fell on Monday, retesting the 80 level again. As has been the case for a while now, that level held as buyers came in to give support. The current range of 80-82 seems to be the entire market for the pair, and since we are near the bottom, we think that buying for a scalp could be done at these levels, but it has to be said any trade you take now would be of a very short-term nature.

USD/JPY Fundamental Analysis for July 12, 2011

The USD/JPY pair is trading in a narrow rang with the beginning of the week, after it recorded its biggest daily decline in six weeks. The safe-haven currencies become the biggest winners in the foreign exchange market after the disappointing US NFPs and rising debt woes.

The Japanese yen kept its gains against its major counterparts early Monday, where it traded near its highest level in a week against the euro. The high-yielding currencies witnessed heavy sell-off last week and extended into Monday, due to lack of confidence in the global outlook and fears over the EU debt crisis with rising contagion threats.

At the end of last week, the U.S. economy released the non-farm payrolls for June, where the disappointing numbers confirmed the market sentiment and increased fears over slowing growth that drove investors to haven assets including the yen, yet the dollar’s strength on Monday still affected the pair to the upside.

On Tuesday at 23:50 GMT (Monday), Japan will issue the Tertiary Industry Index for May where the previous reading was 2.6% and is expected to come at 0.7%.

The BOJ will announce its interest rate decision after the two-day meeting, where it’s expected to keep rate steady near zero, while markets will focus on the bank statement.

At 12:30 GMT, the U.S. economy will release the trade balance for May, the previous reading showed a deficit of $43.7 billion which is expected to widened to $44.1 billion.

The Fed will release the minutes from June 21-22 FOMC meeting, which will grab investors’ attention and increase pressure on the pair.

GBP/USD Technical Analysis for July 12, 2011

The GBP/USD pair fell on Monday, and even pierced below the 1.59 level we have been watching. However, it looks as if we may close slightly above that area. If we can get a close below 1.59 – that might be our long-term sell signal. However, it should be noted that there can and will be several bumps in the road along the way.

GBP/USD Fundamental Analysis for July 12, 2011

The GBP/USD started the week on Monday with heavy losses as the bearishness dominated the pair’s movement on risk aversion which powered the dollar and intensified the weakness for sterling.

The royal currency is already hammered by its own weakness, from the faltering recovery and the rise in inflation which continues to worsen the outlook for the economy with the inability of policy makers to take action. We can also see that the deepening debt crisis has more downside pressures on Ireland with the contagion risk rising and the high exposure for UK banks to Ireland debt in particular and also to Spanish debt which if the crisis worsened will eventually affect the financial stability in the kingdom deeply and might drive the nation back into recession.

The weak data expected this week start on Tuesday with the focus on rising inflation amid the faltering recovery which will keep the downside pressure evident on sterling. Slight upside relief might be expected if the trade deficit shrinks in line with expectations or even more, yet all in all the negativity in the market will be evident with the focus still on the debt crisis and the market will react to the finance ministers decisions on Greece.

The week in the United Kingdom will start with trade figures at 08:30 GMT. The Visible trade balance is expected with a smaller deficit in May of 7336 million pounds from 7389 million pounds, while the total trade deficit is expected to shrink slightly to 2700 million pounds from 2762 million pounds.

Critical CPI data is also due for release at 08:30 GMT. The CPI is expected with 0.3% rise in June following 0.2% and to hold at 4.5% on the year. Core CPI on the year also expected steady at 3.3%.

The Retail Price Index is expected with a stable monthly gain of 0.3% in line with the previous and to hold at 5.2% on the year, and excluding mortgages to also hold on the annual 5.3% gain.

From the United States the week will start with the May trade figures at 12:30 GMT, where the deficit is expected to have widened to $44.1 billion from $43.7 billion.

Also on Tuesday will be the minutes of the last FOMC meeting on June 21&22 at 18:00 GMT. Comments from the Feds about the weak economy or signals for more monetary easing and support to the economy will be the main mover on the market, yet in general, the minutes are not expected to add anything new to what Bernanke already said.

AUD/USD Technical Analysis for July 12, 2011

The AUD/USD pair fell hard on Monday, as the USD gained steam against almost all currencies. The markets sold off in general, and risk was shunned by almost all traders as the markets worry about contagion from European debt issues . The pair is still in a bullish uptrend though, and as such – we like buying, but we need a supportive candle first.

AUD/USD Fundamental Analysis for July 12, 2011

The AUD/USD pair dropped with the beginning of the week, as the US dollar dominated the currency market due to risk aversion. The sell-off in the high yielding currencies helped the dollar to control the AUD/USD pair’s movement .

The disappointing employment data from the U.S. economy increased fears in the financial market, which pushed investors to abandon risky assets where the dollar benefited to record more gains against its major counter parts.

On the other hand,Chinese inflation increased to 6.4% during June, despite the Chinese government and PBoC’s measures to contain inflation. The expectations refer to more tightening in the Chinese monetary policy, which will hurt the China’s major row material suppliers like Australia.

The Reserve Bank of Australian (RBA) has held the rates unchanged at 4.75% for the seventh consecutive month, putting downside pressure on the Australian dollar (Aussie).

On Tuesday, the Australian economy will release the NAB Business Confidence for June at 00:30 GMT, where the previous reading was 6. On the other hand, the NAB Business Conditions was 1.0 the previous month.

At 12:30 GMT, the U.S. economy will release the trade balance for May, the previous reading showed a deficit of $43.7 billion which is expected to widened to $44.1 billion.

The Fed will release the minutes from June 21-22 FOMC meeting, which will grab investors’ attention and increase pressure on the AUD/USD pair.

NZD/USD Technical Analysis for July 12, 2011

The NZD/USD pair fell on Monday, testing the 0.83 support level. The closing price will be just below that, but this pair has a large support area from 0.8250 to 0.83, and as such – we don’t consider it broken yet. We like the idea of buying this pair on dips, but we will need to see a supportive candle first.

NZD/USD Fundamental Analysis for July 12, 2011

The NZD/USD pair traded early Monday near its all time high, as the New Zealand dollar was able to keep its gains against the greenback even after the disappointing U.S. NFP reduced investors risk appetite.

The lower than expected employment numbers from the U.S. economy fuelled concerns about the global recovery, and opened the door for the dollar to dominate the currency market as a safe haven currency.

Risk aversion and jitters dominate the market with fears over the slowing global recovery led by slowing performance in the United States and China, while the worsening debt crisis in Europe is now the major fear as the EU finance ministers meet on Monday and Tuesday to try to contain the crisis.

At 12:30 GMT, the U.S. economy will release the trade balance for May, the previous reading showed a deficit of $43.7 billion which is expected to widened to $44.1 billion.

The Fed will release the minutes from June 21-22 FOMC meeting, which will grab investors’ attention and increase pressure on the

NZD/USD pairAUD/NZD Technical Analysis for July 12, 2011

 

The AUD/NZD pair fell and tested the 1.28 level on Monday, but failed to break down through it. The area is considered to be massive support, and by the end of the day – we had a hammer suggesting that the thought was correct. If we can get a break above the highs on Monday, this pair should drift higher, perhaps to 1.30 as we continue the range trading that has been going on in this pair.

AUD/NZD Fundamental Analysis for July 12, 2011

 

The AUD/NZD pair dropped sharply with the beginning of the week , reaching its lowest level in almost a month. The New Zealand currency was able to keep its gains against the greenback, which opened the way for the AUD/NZD pair to record more losses.

The Chinese inflation increased to 6.4% during June, despite the Chinese government and PBoC’s measures to anchor inflation. The expectations refer to more tightening in the Chinese monetary policy, which will hurt the China’s major row material suppliers.

On the other hand, the dovish sentiment from the RBA last week was able to decrease demand on the Aussie, as central bank is expected to keep the interest rate steady during the upcoming period to support the economy.

While the New Zealand economy is showing great signs of recovery from the earthquake that hit the country, as exports rose significantly, especially to Asian and China, the New Zealand dollar recorded a new multi decade high against the US dollar and to drove the AUD/NZD pair to the downside.

On Tuesday, the Australian economy will release the NAB Business Confidence for June at 00:30 GMT, where the previous reading was 6. On the other hand, the NAB Business Conditions was 1.0 the previous month.

USD/CAD Technical Analysis for July 12, 2011

 

USD/CAD rose on Monday as the oil markets fell to retest support areas. The pair is very sensitive to the price of oil, so it should not be a surprise that it would rise to retest the resistance area around the 0.97 level. The candle does look strong, and as such we are waiting to see if that level holds before shorting this pair again. The trend is most certainly down – so we don’t want to buy it anyway.

USD/CAD Fundamental Analysis for July 12, 2006

 

The USD/CAD pair extended its gains on Monday, as pessimism continued to dominate global financial markets, where traders were concerned over the outlook of the U.S. economy after the weak jobs report that was released on Friday, while concerns over the outlook of the European debt crisis continued to weigh down on confidence levels amid reports speculations Italy will be the next victim of the EU debt crisis. Moreover, crude oil prices fell on Monday amid concerns over the outlook for demand.

The USD/CAD pair rose strongly despite the better than expected housing starts from Canada, since rising risk aversion in markets pushed investors to target lower yielding assets, which benefited the U.S. dollar and pushed the USD/CAD pair to the upside.

It seems that pessimism will be the general theme in financial markets on Tuesday, unless a new development emerges regarding the European debt crisis , while the FOMC Minutes are not expected to change anything regarding the outlook of the U.S. economy.

Tuesday July 12:

At 12:30 GMT, Canada will release the International Merchandise Trade balance for May, where the trade deficit is expected to widen to 1.0 billion Canadian dollars from 0.9 Billion CAD in April.

From the United States the week will start with the May trade figures at 12:30 GMT, where the deficit is expected to have widened to $44.1 billion from $43.7 billion.

Also on Tuesday will be the minutes of the last FOMC meeting on June 21&22 at 18:00 GMT. Comments from the Feds about the weak economy or signals for more monetary easing and support to the economy will be the main mover on the market, yet in general, the minutes are not expected to add anything new to what Bernanke already said.

USD/CHF Technical Analysis for July 12, 2011

 

The USD/CHF pair fell on Monday but managed to form a hammer at the end of the session. The pair is currently stuck in consolidation between 0.8250 and 0.8550, and looks to remain so as there is a fight between which one of these safe haven currencies that traders want to own as the markets had a rough day in general on Monday.

 

USD/CHF Fundamental Analysis for July 12, 2011

 

The USD/CHF pair started the week with heavy fluctuations and volatility on prevailing jitters in the market and worsening sentiment which intensified risk aversion.

Investors remain worries about the worsening outlook for the global recovery and also worried about the state of debt laden nations with rising risk on contagion with fear that Italy might be the next victim to ask for aid.

On Tuesday, the market will continue to focus on the debt crisis and the developments in Europe which will keep haven demand in place and support swissy to the upside and offset the dollar’s strength. The focus will be on the late comments from the euro area finance ministers and whether they will indeed take the decision to allow Greece to default on some of its bonds and abandon the French proposal according to reports from the Financial Times.

Volatility will be the dominant sentiment on Tuesday and likely this week as investors see the outlook for the global economy and debt crisis worsening.

Switzerland will not release any fundamentals on Tuesday, while the United States will start with the May trade figures at 12:30 GMT, where the deficit is expected to have widened to $44.1 billion from $43.7 billion.

Also on Tuesday will be the minutes of the last FOMC meeting on June 21&22 at 18:00 GMT. Comments from the Feds about the weak economy or signals for more monetary easing and support to the economy will be the main mover on the market, yet in general, the minutes are not expected to add anything new to what Bernanke already said.

 

EUR/JPY Technical Analysis for July 12, 2011

The EUR/JPY broke through the all-important 113.50 support level on Monday, as the Euro lost ground against almost everything . The break is a serious one, and because of it – we think this pair goes much, much lower. Remember: The BoJ is concerned about the strength of the Yen against the Dollar primarily, and as long as that pair isn’t melting down, this one will more than likely be ignored until much, much lower levels than here.

 

EUR/GBP Technical Analysis for July 12, 2011

 

EUR/GBP fell on Monday , testing the 0.88 level – a favourite area for this pair. While the pair has been very bullish of late, this latest down move has wiped out a lot of the gains made. Because of this, we feel there is too much risk in this market at this time to risk our hard-earned trading capital by trying to time this market. Certainly a bounce could happen from here – but there is simply too much danger in this pair at the moment for us to get involved.

 

EUR/CHF Technical Analysis for July 12, 2011

 

The EUR/CHF pair fell hard on Monday, and has broken the absolute all-time lows on this latest move. The pair has been a sell-only pair for a few years now, and we continue to think that way. All rallies could be sold as long as we are below 1.23 for the meantime.

 

GBP/JPY Technical Analysis for July 12, 2011

 

The GBP/JPY has fallen much lower on Monday , and has broken cleanly below the 130 “zone” that we have been watching. The next serious support level is 125, so a drifting lower from here isn’t going to be out of the question. The GBP has been weak to mixed in trading, but the Yen has been strong. By selling under 130 – you are staying on the right side of the trade.

 

GBP/CHF Technical Analysis for July 12, 2011

 

GBP/CHF fell hard on Monday , breaking to new lows. This pair has been falling for years, and any attempt to buy it has been punished as the downtrend has been strong. Because of this, we still like selling rallies as they approach large psychological numbers.

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