Forex Technical And Fundamental Analysis For July 15, 2011

EUR/USD fell on Thursday, retesting the 1.4250 minor support area. With the European bank stress tests coming out today, this pair will certainly be very volatile. The fact that the results come out in the middle of US trading, you would be best advised to step back and let the announcement and reactions happen before placing any orders.

EUR/USD Fundamental Analysis for July 15, 2011

The EUR/USD continued the fluctuations on Thursday with the upside bias evident on the correction and anti-dollar sentiment which helped the euro continue to the upside despite the prevailing debt problems.

The euro gained despite Fitch’s move on Greece where it cut the status again to the lowest in the world, which was of little effect since it was no new surprise and followed other agencies. The debt woes have transferred to the United States after Moody’s warned that the delay in raising the debt ceiling will cost the U.S. its top credit rating.

The warning and Bernanke’s readiness to act to expand the stimulus kept the dollar pressure and helped the euro move higher, which surely was not supported by drastic change in the fundamentals where investors have only started to unwind some of their pessimism .

On Friday, we expect the volatility to return and the debt crisis and financial stability to be centre stage again as the market awaits the EBA stress test results after the stocks market close and that will keep the volatility even if investors still believe that the test was still inadequate and weak considering the eminent threat of default and after last year’s test proved its weakness.

In other news, the euro area Trade Balance for May is due at 09:00 GMT after the reported April deficit of 2.9 billion euro in seasonally adjusted terms and 4.1 billion euros deficit in non adjusted terms.

The U.S. economy will also end the week on a high note with heavy data starting at 12:30 GMT with the Consumer Price Index for June. The index is expected with 0.1% drop following 0.2% rise and to hold at 3.6% on the year, yet core inflation is expected to rise 0.2% on the month following 0.3% and tick slightly higher to 1.6% on the year following 1.5%.

At 12:30 GMT as well the Empire Manufacturing Index for July is expected with a strong rebound to 4.75 from -7.79. Industrial Production for June is due at 13:15 GMT and expected with 0.4% increase following 0.1% and capacity utilization to rise to 77.0% from 76.7%.

Finally University of Michigan will end the day at 13:55 GMT and the preliminary July reading is expected with improvement to 72.5 from 71.5.

USD/JPY Technical Analysis for July 15, 2011

The USD/JPY pair rose on Thursday as traders heard remarks out of the Bank of Japan suggesting that the current exchange rate does not reflect fundamentals. The BoJ has a long history of intervention, and as such – traders will bail out of short positions rather quickly when there are threats of the bank stepping in. The truth is that it is only talk at this point, but the real question becomes why bother fighting the BoJ? The risk simply isn’t worth it in this pair.

USD/JPY Fundamental Analysis for July 15, 2011

The USD/JPY pair advanced early Thursday from its lowest level in four months, as the Japanese yen traders are worried from another intervention from the BOJ in the currency market.

The market sentiment returned to focus on the safe haven investment, after Moody’s Investors Service said it may downgrade US debt rating, deepening the gloomy outlook for the U.S. economy.

On the other hand, the Japanese currency was able to keep its gains against other majors, on the fact that the current market sentiment remains cautious about the EU debt crisis and the uncertainty associated with the U.S. economy.

On Friday, the U.S. economy is to release the consumer price index for June at 12:30 GMT , which is expected to drop by 0.1% following the previous rise of 0.2%. The annual consumer price index for June is expected to come at 3.6% in line with the previous.

At 12:30 GMT, the U.S. will release the Empire manufacturing survey for July, and the expectations refer to 4.0 from the previous – 7.79.

The industrial production for June is due at 13:15 GMT, where the previous reading was 0.1% and expected to come at 0.4%. As for the capacity utilization for June; it’s expected to come at 77.0% from the previous 76.7%.

The U.S. economy will also release the University of Michigan Survey of consumer confidence for July, where the preliminary reading is expected to come at 72.5 from the previous 71.5.

GBP/USD Technical Analysis for July 15, 2011

 

The GBP/USD fell on Thursday , but just barely. We still think this pair is bearish, and like the idea of selling rallies. However – we have no bearish candles to work with at the moment, so we will sit still. Look for weakness at higher levels before selling.

GBP/USD Fundamental Analysis for July 15, 2011

 

The lack of fundamentals from the United Kingdom left the pair subject to the sentiment and the dollar which accordingly biased the GBP/USD mainly to the upside.

The dollar was generally the talk of the town on Thursday after Bernanke triggered the strong weakness with hints for the possibility to expand the stimulus to support the economy shall the weakness continue to broaden.

More downside pressure on the dollar was from Moody’s downgrade warning to the United States shall they fail to reach the decision to raise the debt ceiling in time which will subject the nation to lose its top rating.

Volatility remains evident and on Friday we expect the jitters to dominate the scene especially as the European continent focus on the release of the stress test results after the stock markets closing, and the lack of major data from Europe will intensify the fluctuations.

From the United States, the economy will also end the week on a high note with heavy data starting at 12:30 GMT with the Consumer Price Index for June. The index is expected with 0.1% drop following 0.2% rise and to hold at 3.6% on the year, yet core inflation is expected to rise 0.2% on the month following 0.3% and tick slightly higher to 1.6% on the year following 1.5%.

At 12:30 GMT as well the Empire Manufacturing Index for July is expected with a strong rebound to 4.75 from -7.79. Industrial Production for June is due at 13:15 GMT and expected with 0.4% increase following 0.1% and capacity utilization to rise to 77.0% from 76.7%.

Finally University of Michigan will end the day at 13:55 GMT and the preliminary July reading is expected with improvement to 72.5 from 71.5.

AUD/USD Technical Analysis for July 15, 2011

The AUD/USD pair fell today , and the 1.08 level has held as resistance. Although this is bearish action, the trend is very clearly up against the Dollar, and we feel that the trend will continue. We like the idea of buying on dips, and believe that the market should find support at 1.07, 1.05, and 1.02 levels.

AUD/USD Fundamental Analysis for July 15, 2011

 

The AUD/USD pair dropped early Thursday from its highest level in two weeks, as the greenback returned to climb against its major counterparts as a safe haven. On the other hand, the Aussie lost its momentum after the Australian confidence collapsed to its lowest level since 2009.

The US dollar gained against the high yielding currencies, after Moody’s Investors Service warned it may downgrade the US rating. Investors’ confidence faded due to the gloomy outlook for the U.S. economy, pushing them to abandon the risky assets and shift to the dollar once again.

The U.S. economy is to release the consumer price index for June at 12:30 GMT, which is expected to drop by 0.1% following the previous rise of 0.2%. The annual consumer price index for June is expected to come at 3.6% in line with the previous.

At 12:30 GMT, the U.S. will release the Empire manufacturing survey for July, and the expectations refer to 4.0 from the previous – 7.79.

The industrial production for June is due at 13:15 GMT, where the previous reading was 0.1% and expected to come at 0.4%. As for the capacity utilization for June; it’s expected to come at 77.0% from the previous 76.7%.

The U.S. economy will also release the University of Michigan Survey of consumer confidence for July, where the preliminary reading is expected to come at 72.5 from the previous 71.5.

NZD/USD Technical Analysis for July 15, 2011

NZD/USD fell on Thursday , but is still well above the previous resistance area in the 0.83 level. The pair is obviously bullish, and selling is foolish at this point. We like buying on dips, and this latest downward move should prove to be just that – a buying opportunity.

NZD/USD Fundamental Analysis for July 15, 2011The New Zealand currency succeed to compensate its losses against the US dollar , when it recorded a new multi decade high versus the greenback as the New Zealand economic growth expanded in the first quarter more than double expectations, where the cheerful first quarter for the New Zealand was strongly supportive for the nation’s currency.

Moreover, business confidence rebounded in the second quarter from a two-year low in the first three months of the year, increasing the investors’ confidence in the New Zealand economy amid the European debt crisis and the sluggish US economy.

On the other hand, the dollar dropped for a second day versus the Kiwi, the biggest two-day drop in three weeks, after Moody’s Investors Service put the U.S. rating under review for downgrade, damping demand for the American dollar, giving the chance for the Kiwi to incline.

Moreover, New Zealand economy has presented many fundamental data to confirm that the natural disasters have limited effect on the recovery now, which means that the industrial production cycle is on the right track.

On Friday, the U.S. economy is to release the consumer price index for June at 12:30 GMT, which is expected to drop by 0.1% following the previous rise of 0.2%. The annual consumer price index for June is expected to come at 3.6% in line with the previous.

At 12:30 GMT, the U.S. will release the Empire manufacturing survey for July, and the expectations refer to 4.0 from the previous – 7.79.

The industrial production for June is due at 13:15 GMT, where the previous reading was 0.1% and expected to come at 0.4%. As for the capacity utilization for June; it’s expected to come at 77.0% from the previous 76.7%.

The U.S. economy will also release the University of Michigan Survey of consumer confidence for July, where the preliminary reading is expected to come at 72.5 from the previous 71.5.

AUD/NZD Technical Analysis for July 15, 2011

The AUD/NZD pair rose on Thursday , but the move pales in comparison to the fall we saw on Wednesday. The pair is clearly below 1.28, and because of that – we are bearish at this point. The rally in the pair even retraced about half of the gain as well. Because of this, we are sellers at this level.

AUD/NZD Fundamental Analysis for July 15, 2011

The AUD/NZD pair traded near its lowest level in eight months, after the New Zealand dollar recorded a new all time high. The Australian dollar is still surfing against greenback, opening the way for Kiwi to control the pair’s movement.

The better than expected GDP during the first quarter for the New Zealand economy supported Kiwi, and prevent it from declining against greenback and other currencies, as the market sentiment returned to focus on the low yielding currencies.

The cheerful outlook for the New Zealand economy helped Kiwi to dominate the AUD/NZD pair’s movement during the last period, as the Reserve bank of Australia is still dovish which reduced demand for the Australian dollar.

Both countries won’t release any fundamentals on Friday leaving the movement on the back of the prevailing sentiment and affected by their performance mainly versus the dollar.

USD/CAD Technical Analysis for July 15, 2011

The USD/CAD pair rose on Thursday , but just slightly so. The pullback from the fall over the last couple of days makes sense, and it must also be said that the most recent lows are getting lower and lower. The trend is also to the downside as well, so it wouldn’t be a surprise to see this pair fall from here. If we see a rally, selling could be the way to go on weakness. If we see a break below 0.9550 – that could be a sell trigger too.

USD/CAD Fundamental Analysis for July 15, 2011The USD/CAD pair managed to rise back after dropping earlier on Thursday, where early on Thursday the USD/CAD pair fell as crude oil prices rose and the USD weakened after Moody’s announced it put U.S. debt outlook under negative outlook, which better than expected data from the U.S. also supported the CAD earlier, as investors’ risk appetite improved, nonetheless, fears from the European debt crisis pushed the USD/CAD pair back to the upside, as investors fear Italy could soon follow Greece and Portugal into fiscal trouble.

The pair’s outlook could change to the downside over the coming period, especially since markets will be stressing the possibilities of QE3, and that should put downside pressure on the USD and accordingly push the USD/CAD pair further to the downside. Nonetheless, we still believe that the European debt crisis could still weigh down on confidence, especially if new developments emerge, and that could lead the pair to rise back.

Friday July 15:

The U.S. economy will also end the week on a high note with heavy data starting at 12:30 GMT with the Consumer Price Index for June. The index is expected with 0.1% drop following 0.2% rise and to hold at 3.6% on the year, yet core inflation is expected to rise 0.2% on the month following 0.3% and tick slightly higher to 1.6% on the year following 1.5%.

At 12:30 GMT as well the Empire Manufacturing Index for July is expected with a strong rebound to 4.0 from -7.79. Industrial Production for June is due at 13:15 GMT and expected with 0.4% increase following 0.1% and capacity utilization to rise to 77.0% from 76.7$.

Finally University of Michigan will end the day at 13:55 GMT and the preliminary July reading is expected with improvement to 72.5 from 71.5.

USD/CHF Technical Analysis for July 15, 2011

The USD/CHF pair rose slightly on Wednesday , but the move was much smaller than the fall on Wednesday. The pair is most certainly in a downtrend for ages, and there is no reason to think it will change anytime soon. We like selling rallies in the USD/CHF pair.

USD/CHF Fundamental Analysis for July 15, 2011Swissy fluctuated heavily and generally remains strong versus the dollar yet swissy eased the gains on the unwinding on the euro pessimism which weakened swissy also versus the dollar and forced the USD/CHF to fluctuate heavily.

The euro rose versus its major counterparts after the heavy losses and the successful bond auction from Italy which met strong demand on high yields eased the jitters over the state of capital markets as they remain liquid and not frozen on the worsening debt crisis.

With the easing pessimism the market started the correction and swissy rebounded from the record versus the euro and the dollar yet generally was still supported by dollar weakness and prevailing haven demand.

The dollar was generally the talk of the town on Thursday after Bernanke triggered the strong weakness with hints for the possibility to expand the stimulus to support the economy shall the weakness continue to broaden.

More downside pressure on the dollar was from Moody’s downgrade warning to the United States shall they fail to reach the decision to raise the debt ceiling in time which will subject the nation to lose its top rating.

Volatility remains evident and on Friday we expect the jitters to dominate the scene especially as the European continent focus on the release of the stress test results after the stock markets closing, and the lack of major data from Europe will intensify the fluctuations.

From the United States, the economy will also end the week on a high note with heavy data starting at 12:30 GMT with the Consumer Price Index for June . The index is expected with 0.1% drop following 0.2% rise and to hold at 3.6% on the year, yet core inflation is expected to rise 0.2% on the month following 0.3% and tick slightly higher to 1.6% on the year following 1.5%.

At 12:30 GMT as well the Empire Manufacturing Index for July is expected with a strong rebound to 4.75 from -7.79. Industrial Production for June is due at 13:15 GMT and expected with 0.4% increase following 0.1% and capacity utilization to rise to 77.0% from 76.7%.

Finally University of Michigan will end the day at 13:55 GMT and the preliminary July reading is expected with improvement to 72.5 from 71.5.

EUR/JPY Technical Analysis for July 15, 2011

 

The EUR/JPY pair fell on Thursday , and remains well under the 113.50 level. Because of this, we are still more apt to sell rallies, and not buy this pair. Until we can break above the aforementioned level, we are sellers only. Of course if the USD/JPY pair melts down, that could be a trigger for intervention, and that would have us out of all Yen-related pairs.

EUR/GBP Technical Analysis for July 15, 2011

EUR/GBP fell on Thursday , testing the lowest part of the support area in the 0.88 level. The pair could be a sell if it drops below the 0.87 handle, and with the European bank stress tests coming out later in the day, bad results will almost certainly push this pair much lower. We are neutral until we see that breakdown, or other suggestive candle formations on the daily chart.

EUR/CHF Technical Analysis for July 15, 2011

EUR/CHF rose , and then fell on Thursday to form a shooting star. The buyers tried to push the pair higher, but failed. The pair looks extraordinarily weak, and because of this we are never to buy, only sell. A nice rally would be the opportunity to do so as selling down here is chasing the move.

GBP/JPY Technical Analysis for July 15, 2011

The GBP/JPY pair had a wild day on Thursday, finishing fairly flat. The pair looks like it is trying to find support at the 127.80 level or so, and could bounce back towards the 130 level. The closer we get to 130, the more we are interested in selling this pair on signs of weakness. The market has clearly given way in the terms of buying, and as such we are not willing to go against it.

GBP/CHF Technical Analysis for July 15, 2011

The GBP/CHF pair rose on Thursday, retesting the 1.32 area. The area served as resistance, and the pair fell from there. Although the day finished positively, the trend is certainly down, and the prudent trader will certainly sell only. The market is a sell only market, and we will sell all meaningful rallies and look at any rallies as an opportunity to sell more.

The definitive site about stocks,stock trading andstock news: StocksMansion.com.

About ForexMansion.com:

As one of the flagship sites of the international Finance Mansion Network, ForexMansion.com is devoted to empowering our readers. We provide technical analyses, fundamental analyses, forex news and more; keeping our readers the best informed in the industry.

More websites from the Finance Mansion Network: www.Best-Forex-Broker.com,www.BestForexDomains.com,www.BestForexStrategies.net and www.BestForexTradingSignals.com.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.