Forex Technical and Fundamental Analysis for Nov 7, 2011

EUR/USD Technical Analysis for Nov 7, 2011

EUR/USDfell during the Friday session, but closed the day on a positive note as traders covered shorts in this pair. The Greeks are voting on the confidence in their Prime Minister, and now the Italians are under the microscope. The headline risks are palpable this weekend, and as such – it makes sense that a lot of people exited the market at the close. The technical levels to watch are 1.40 and 1.37. If we can break above 1.40 – the EUR/USD suddenly becomes a buy. Of course, if we break lower, and clear the 1.37 level – the pair should continue to fall to 1.35 before it is all said and done.

EUR/USD Fundamental Analysis for Nov 7, 2011

The EUR/USD will start a new week of volatility and uncertainty, especially after last week’s surprises and the pending fate of the Greek government and Papandreou which will continue to develop over the weekend. The final results of a confidence motion in the Greek parliament will take effect on Monday as they are due after the market close. The survival of the government and the parties’ agreement are the key issues to see the bailout package approved and prevent political vacuum or a return to referendum. Therefore the outlook is uncertain until we know the fate of Greece and Papandreou and agreement to move the bailout is the most important for markets to open positively while continued political chaos in debt-laden Greece will surely pressure markets further. The euro area will start the week at 10:00 GMT with the retail sales index for September, which is expected to expand by 0.1% from the previous drop of 0.3% over monthly basis. In addition, the annual retail sales index is expected to drop by 0.3% from the prior drop of 1.0%. Germany will join the session at 11:00 GMT with the industrial production annual and monthly index, where the non-seasonally adjusted annual index could have retreated to 7.2% from 7.7%, while the seasonally adjusted monthly index is projected to drop by 0.6% from the previous drop of 1.0%. At 20:00 GMT the United States is expected to release the consumer credit figure for September, which could have improved to $5.100 billion from -$9.501 billion.

USD/JPY Technical Analysis for Nov 7, 2011

The USD/JPY pairrose a bit during a very volatile session on Friday. However, the decided direction of this pair is down, and nobody expects that to change. A couple of failed interventions are all that the Bank of Japan has to show for its efforts, and as a result, traders are quite content in letting the market get bounced, and then selling again. It is in this frame of reference that we are selling. Granted, it could be a very slow grind lower – but it is a trade we are very willing to put out there. A break above 80 would be what it would take in order for the move to be negated in our opinion.

USD/JPY Fundamental Analysis for Nov 7, 2011

The USD/JPY pair ended last week with gains after the BOJ intervened in the FX market and sold the yen, in order to push the currency down against the dollar to save Japanese exporters from further losses. On the other hand, the Japanese officials indicated that the door remains open for more intervention until the currency reflects the real economic situation. While other major currencies used this current weakness in the yen to record more gains against the currency. On Monday at 04:00 GMT, Japan will issue the Coincident Index for September, where the preliminary reading is expected to come at 92.8 from the previous reading of 107.6. The U.S. economy will release the Consumer Credit for September at 19:00 GMT, where it’s expected to come at $5.00 billion from the previous reading of – $9.501 billion.

GBP/USD Technical Analysis for Nov 7, 2011

GBP/USDfell on Friday, but managed to pop back above the 1.60 support level again. The later ours saw the surge, and this appears as a sign that the pair wants to jump above. The area of 1.60 certainly is a magnet, but we would prefer to see this pair move above the highs in order to get long again. If you want to go short, we suggest waiting until we hit the 1.58 level. Between now and then, the area we are in looks to be choppy short-term consolidation.

GBP/USD Fundamental Analysis for Nov 7, 2011

Both economies lack economic fundamentals which propose that there would be calm trading on the pair which is predicted to follow the general trend in market as it will not able to get direction from data.

The main focus will remain on the euro area to see the latest development from Greece and other highly indebted nations in the region.

This week, the main focus will be the BoE rate decision along with other important data from the U.K. while the U.S. does not have highly relevant release.

Last week, U.K. PMI manufacturing which showed a contraction of 47.4 in October from the expansion of 51.1 recorded in September and services gauge to 51.3 from 52.9.

The Fed lowered growth forecasts and raised estimates for unemployment last week, whilst revealing that purchasing mortgage-backed securities is a valid option for the Fed to boost the slackening recovery.

The outlook for both economies is clouded with uncertainty, thus there might be some interventions from both central banks to bolster the weakening recovery.

USD/CHF Technical Analysis for Nov 7, 2011

USD/CHF rose during the Friday session as traders continued the bearish tone of the markets late in the week. The pair used to fall in a “risk off” environment, but that was before the Swiss National Bank started devaluing the Franc. The pair now works in reverse, as the Dollar is the last safe haven. When times are tough or fearful, this pair will now rise. We like buying this pair now on dips as it should continue to rise over time. We see 0.9000 as resistive, and will have to overcome that area in order to happily buy this pair.

USD/CHF Fundamental Analysis for Nov 7, 2011

As of 06:45 GMT, the Swiss economy will release unemployment for the month of Oct. followed by CPI, specifically at 08:15 GMT, for the same month, while the United States lacks fundamentals.

The Swiss data is expected to have an impact on the pair’s movements as investors are carefully watching fundamentals from the Swiss economy, especially as data released last week showed deepening contraction in manufacturing to 46.9 in Oct. from 48.2 in Sep.

Recently, there has been mounting pressure on the SNB to continue its battle to curb the franc’s appreciation through raising the franc’s cap against the euro to 1.40 from the current 1.20, especially as recent earnings reports by some Swiss companies showed that they were affected by the franc‘s runaway.

Last week, the Fed lowered growth forecasts and raised estimates for unemployment, whilst revealing that purchasing mortgage-backed securities is a valid option for the Fed to boost the slackening recovery.

However, the main focus will remain on the euro area to see the latest development from Greece and other highly indebted nations in the region.

EUR/CHF Technical Analysis for Nov 7, 2011

The EUR/CHF pairactually rose on Friday for the first time in several sessions. The pair was getting closer to the 1.20 “floor” in the market, so a bounce had to have been coming before too long. With that in mind, we do like buying this pair, but only on bullish action. We can’t sell, but the EU simply MUST get their act together for us to buy this pair, but when we do – it will be a long-term trade.

EUR/CHF Fundamental Analysis for Nov 7, 2011

The EUR/CHF will start a new week on Monday with focus on the Swiss economic data that might signal the coming move from the SNB. The pair clearly lacks momentum to change course and is only affected by any expectation of chance for the SNB to intervene or expand its monetary loosening to support the economy. last week comments from SNB board member Jean-Pierre Danthine said the SNB did not take the 1.20 floor decision lightly and will take further measures if the economic outlook and deflationary risks so require. According to the comments the data today can affect the pair’s movement especially the CPI data. Rising deflationary threats might signal to markets that the SNB will likely take more action which will push the pair more to the upside. Developments in the euro area are not affecting the pair as investors are surely not betting on the euro against a have franc yet the news from Greece and the final fate of the government that will take place over the weekend will also affect the pair. As of 06:45 GMT, the Swiss economy will release unemployment for the month of Oct. followed by CPI, specifically at 08:15 GMT, for the same month, while the United States lacks fundamentals.

AUD/USD Technical Analysis for Nov 7, 2011

AUD/USDhad an initially weak session on Friday, but bounced in later hours as the Americans went hunting for values. The pair looks like it is finding support in the form of 1.03, and as such could make another attempt at the 1.05 level. The price action suggests we could see tight and range bound trading between the 1.03 and 1.05 levels in the near-term. Because of this, we are looking for scalping set ups more than anything else, and the trend is up – so we prefer longs near this area for about 50 pips at a time.

AUD/USD Fundamental Analysis for Nov 7, 2011

The AUD/USD pair lost momentum last week and moved to the downside as the current situation in the EU and the RBA strategy encouraged investors to abandon Aussie. The latest updates from the EU debt crisis and Greece affected the pair’s movements negatively, and with the start of the week investors will still focus on the fate of the Greek government and a collapse of the government in a confidence vote will add more downside pressures while on the other hand political agreement to pass the new package will support the recovery in markets. On the other hand, the current outlook from the RBA on interest rates pressured the Aussie to lose ground against greenback and other major currencies, especially with the weak performance from the Australian economy. On Monday at 23:30 GMT (Sunday) the Australian economy will release the ANZ Job Advertisements for October, where the previous reading was down by 2.1%. The U.S. economy will release the Consumer Credit for September at 19:00 GMT, where it’s expected to come at $5.00 billion from the previous reading of – $9.501 billion.

USD/CAD Technical Analysis for Nov 7, 2011

USD/CADbounced on Friday as traders got rid of the “risk on” trade in droves. The bounce went straight to the 1.02 resistance level, and it looks like we could see consolidation at this point. The 1.03 above is going to be resistive, and we will need to see a break above that to buy this pair now. A pullback and support at parity could also get us buying too, especially if we form a hammer there. The pair looks likely to consolidate between 1.0000 and 1.0200 over the next few sessions, and even if we do break out to the upside, we need to see a daily close over the 1.03 level to buy. A daily close below parity is needed to sell at this point.

USD/CAD Fundamental Analysis for Nov 7, 2011

The USD/CAD pair rebounded to the upside on Friday, where the Canadian dollar weakened after the jobs report inCanadashowed employers shed 54 thousand jobs, while unemployment rose unexpectedly to 7.3%. Meanwhile, the U.S. jobs report showed employers added 80 thousand jobs in October slightly below expectations, but unemployment dropped unexpectedly to 9.0%. Moreover, jitters from Europe continued to dominate the global scene on Friday, where traders will still concerned that Greece could be heading into a disorderly default, and that possibility that the debt crisis could spread into other nations in the euro zone region, which put more negative pressure on the Canadian dollar to send the USD/CAD pair higher. Traders will continue to monitor the developments from Europe regarding the debt crisis, especially amid the lack of major economic data from Canada and the United States, but overall, we expect the USD/CAD pair to extend its gains over the coming period. Monday November 07: At 20:00 GMT the United States is expected to release the consumer credit figure for September, which could have improved to $5.100 billion from -$9.501 billion.

NZD/USD Technical Analysis for Nov 7, 2011

The NZD/USD pairfell on Friday, but managed a bounce later in the US session. The bounce makes us believe that the Kiwi could bounce back into the 0.78 – 0.82 levels. The area could continue to be consolidative, and if it is – this could be a good market for scalps. The Kiwi is highly sensitive to headline risk, so any bad news could send it much lower. If we can break below the 0.7780 or so, we think the pair can run to 0.75 and then perhaps 0.70 over the course of a couple of months. Buying isn’t easy until we clear 0.82 or so.

NZD/USD Fundamental Analysis for Nov 7, 2011

The NZD/USD pair retreated last week as the current EU debt crisis and the uncertainty regarding the New Zealand economy reduced demand for the Kiwi against the dollar. On the hand, the Chinese purchasing manager index (PMI) during October showed some weakness, which could reduce demand for New Zealand’s currency, where the Chinese market is the largest for NZ’s products. The greenback advanced against the Kiwi after the FOMC decision, where investors decided to give the US dollar another chance until the U.S. officials give a clear decision regarding the third round of quantitative easing. The U.S. economy will release the Consumer Credit for September at 19:00 GMT, where it’s expected to come at $5.00 billion from the previous reading of – $9.501 billion.

Collect your Forex Bonus No Deposit now!

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.