Forex Technical and Fundamental Analysis for November 17, 2011

EUR/USD Technical Analysis for November 17, 2011

EUR/USD finally broke below the 1.35 level on Wednesday as traders continue to worry about the debt crisis which seems to be getting worse each day in Europe. The Italian 10 year bonds started to fall in yield to just above 7%, but only because of the buying by the ECB. In fact, it seems the only buyer is the ECB presently. Spanish bonds are selling off, as well as French and Dutch. The EU is quickly seeing the effects of financial contagion. The Euro has to be thought of as toxic now, and any rally should be a selling opportunity at this point. As long as we can stay below 1.35, this market should fall much farther.

EUR/USD Forecast Nov. 17th, 2011, Technical Analysis

EUR/USD Forecast Nov. 17th, 2011, Technical Analysis

EUR/USD Fundamental Analysis for November 17, 2011

The EUR/USD continued the choppy trading on Wednesday with the clear mixed sentiment, cautious trading and prevailing fear over the outlook for the area with the risk of the crisis spreading and deepening. The pair was trending mostly lower and only rose on temporary relief gains on news the ECB is buying heavily Italian bonds along with Spanish bonds to help calm the market and bring yields lower as they continued to soar. The news temporary supported the euro and the market in general and also brought the yields lower, yet soon after the market returned to its agonized state and the fears remained evident. The market did not accept the Italian new cabinet with enthusiasm and did not have any effect on the market, even with expectations that it has the large backing in both houses of parliament. The main factor in the new cabinet is that Prime Minster Mario Monti will also be acting finance minister and that assures how technocratic the government is! We still see heavy headwinds for the pair into the rest of the week with the focus on the euro area and no concrete steps that are calming the market with the alarm now ticking for France! On Thursday the market will remain tensed with French and Spanish bond auctions which investors will tune to closely. The U.S. data will start at 13:30 GMT with the housing starts for October which is expected to drop to 610 thousand from 658 thousand and Building Permits on the other hand to rise to 600 thousand from 594 thousand. At the same time we have the weekly jobless claims for the week ending November 11 after last week they unexpectedly declined to 390 thousand. The data will end with the Philadelphia Fed Index for November at 15:00 GMT which is expected to improve to 10.0 from 8.7.

USD/JPY Technical Analysis for November 17, 2011

The USD/JPY pair fell slightly during the session on Wednesday, but only slightly so. The Bank of Japan is still supporting this pair, and as long as they do – the selloff will be slow. The pair cannot be bought, and quite frankly – cannot be sold at this point either. Because of this, we feel waiting until much lower levels to buy could be the next trade, as we would be getting in line to be there when the Bank of Japan intervenes yet again. In the mean time, there is no trade.

USD/JPY Forecast Nov. 17th, 2011, Technical Analysis

USD/JPY Forecast Nov. 17th, 2011, Technical Analysis

USD/JPY Fundamental Analysis for November 17, 2011

The USD/JPY pair was little changed early Wednesday, even after the Bank of Japan kept the overnight rate steady between 0.0% and 0.10%. The BOJ also kept the Asset-Purchase Fund unchanged at 20 trillion yen and the Credit-Loan program at 35 trillion yen. On the other hand, the Japanese yen soared against the euro and the British pound after the BOJ lowered the Japanese economic assessment, which increased fears regarding the outlook for the Japanese economy. The greenback soared to its highest level in five weeks against the euro, which prevent the dollar from losing more ground against the Japanese currency. On Thursday the U.S. data will start at 13:30 GMT with the housing starts for October which is expected to drop to 610 thousand from 658 thousand and Building Permits on the other hand to rise to 600 thousand from 594 thousand. At the same time we have the weekly jobless claims for the week ending November 11 after last week they unexpectedly declined to 390 thousand. The data will end with the Philadelphia Fed Index for November at 15:00 GMT which is expected to improve to 10.0 from 8.7.

GBP/USD Technical Analysis for November 17, 2011

The GBP/USD pair has fallen again on Wednesday as the Bank of England reiterated fears of a weak economy, and the EU situation affecting the UK. Europe is good for 30% of the United Kingdom’s exports, and the UK banks are heavily exposed to EU debt and banks as well. Because of this, there is talk of another round of quantitative easing in the UK, and the Pound should get hit for this. With this in mind, we have switched to a short position as the 1.58 level gave way. We think the 1.55 is the next area this pair will head to, and perhaps even lower to the 1.50 before it is all said and done. Also of note is support at the 1.53 level. We are selling rallies and will not buy the Pound at this point.

GBP/USD Forecast Nov. 17th, 2011, Technical Analysis

GBP/USD Forecast Nov. 17th, 2011, Technical Analysis

GBP/USD Fundamental Analysis for November 17, 2011

The pair fell for the third day amid tensions from the euro area and worse than expected data from the U.K. Worries are still persisting from the euro area, especially after the European Commission President Jose Barroso said the euro zone is facing a “truly systemic crisis.” The announcement reignited fears after the tensions have eased following the intervention by the ECB, which bought Italian and Spanish bonds, according to people familiar with trading who declined to be identified. Italian 10-year bond yield retreated below 7%, while their Spanish counterpart fell to 6.23%. Thus, the political changes in Italy and Greece did not manage to calm down markets. In the U.K., the pound fell after U.K. unemployment climbed to the highest level in 15 years to 8.3% in the three months ended September, exceeding both analysts’ forecasts and the previous readings of 8.1% and 8.2%, where the number of youth (from 16 to 24 years old) increased by 67,000 to 1.02 million. The data added to concern more pressure on officials to boost the stimulus further after adding 75 billion pounds in October, especially as inflation rate slowed down to 5.0% in October. In the inflation report, the BoE said growth outlook is now weaker and inflation will fall sharply over 2012, highlighting that the outlook for both growth and inflation is likely to depend on the latest developments in the euro zone. On Thursday, at 08:30 GMT, the UK will release retail sales for Oct.; analysts are predicting a decline of 0.2% in the reading with auto fuel from the 0.6% advance recorded a month earlier. For the US, eyes will be on a batch of US data including housing data with the release housing starts and building permits for Oct. at 13:30 GMT as it will provide evidence about the status of the housing market that triggered the 2008 crisis. Housing starts are predicted to retreat to 610,000 from 658,000 a month earlier, while building permits is set to soar to 600,000 from 594,000. At the same time the US, initial jobless claims for the week ending Nov. 11 and continuing claims for the week ended Nov. 4 will be available. Thereafter, particularly at 15:00 GMT, Philadelphia Fed will be out. Data from both economies are expected to affect the pair’s movements, yet the main focus remains on the latest developments from the 17 nations using the common currency.

USD/CHF Technical Analysis for November 17, 2011

The USD/CHF pair had a back and forth session on Wednesday essentially ending the session at unchanged. The pair has been grinding higher lately as a run to the Dollar continues. The Swiss National Bank is presently working against a higher Franc, so the correct direction is up in this pair. The breaking of 0.93 sends this pair much higher with the first target at 0.95, and a longer-term target at parity.

USD/CHF Forecast Nov. 17th, 2011, Technical Analysis

USD/CHF Forecast Nov. 17th, 2011, Technical Analysis

USD/CHF Fundamental Analysis for November 17, 2011

The pair advanced for the third day as risk aversion in markets boosted demand on the dollar as a safe haven amid speculations the Swiss National Bank may intervene to halt the franc’s appreciation. The dollar rose to one-month high versus the franc as the tensions stemming from the euro area triggered safety demand on the dollar, noting that interventions from the SNB and BoJ made the greenback the most attractive refuge. Worries are still persisting from the euro area, especially after the European Commission President Jose Barroso said the euro zone is facing a “truly systemic crisis.” The announcement reignited fears after the tensions have eased following the intervention by the ECB, which bought Italian and Spanish bonds, according to people familiar with trading who declined to be identified. Italian 10-year bond yield retreated below 7%, while their Spanish counterpart fell to 6.23%. Thus, the political changes in Italy and Greece did not manage to calm down markets. Now, expectations increased the SNB will strengthen its intervention to raise the franc cap against the euro to 1.25 instead of the current 1.20 on predicted devaluation in the euro amidst the ongoing tensions in the euro region. On Thursday, at 10:00 GMT, the Swiss economy will release Credit Suisse Zew survey (expectations) for the month of Nov. For the US, eyes will be on a batch of US data including housing data with the release housing starts and building permits for Oct. at 13:30 GMT as it will provide evidence about the status of the housing market that triggered the 2008 crisis. Housing starts are predicted to retreat to 610,000 from 658,000 a month earlier, while building permits is set to soar to 600,000 from 594,000. At the same time the US, initial jobless claims for the week ending Nov. 11 and continuing claims for the week ended Nov. 4 will be available. Thereafter, particularly at 15:00 GMT, Philadelphia Fed will be out. The data is expected to affect the pair’s movements, yet the main focus remains on the latest developments from the 17 nations using the common currency.

EUR/CHF Technical Analysis for November 17, 2011

The EUR/CHF pair has sat still again on Wednesday as the market is essentially frozen. The pair is being supported by the Swiss National Bank and now has a “floor” of 1.20 as stated by the SNB. With this being said, the Euro could rise to astonishing heights if the debt crisis could be solved. Unfortunately, the EU just doesn’t seem to be up to the task at this point. The pair cannot fall too far, with the floor being put in. Because of this, we aren’t interested in trading this pair at the moment.

EUR/CHF Forecast Nov. 17, 2011, Technical Analysis

EUR/CHF Forecast Nov. 17, 2011, Technical Analysis

EUR/CHF Fundamental Analysis for November 17, 2011

The EUR/CHF was trading within a tight range on Wednesday with high volatility and fluctuations though holding marginally above 1.23 areas. The pair lacks the major momentum to move where the euro softness is not reflected on the pair from expectations the SNB might move again to shelter its economy and halt the franc gains by raising the set floor. The market continued to fluctuate heavily on Wednesday with the focus on the euro area debt crisis. Slight and temporary relief was seen from news that the ECB is heavily buying bonds in the market yet the effect did not last long with yields returning to rise and the euro resuming the losses with the dollar still the strongest across the board. Investors fear the spread of the crisis and fear contagion with Italy now at risk and pressuring Spain and France with the rising borrowing costs. On Thursday the volatility will be seen where the lack of euro area data will not affect the movement as the focus is on the debt crisis and the auction from France and Spain especially amid rising borrowing costs and after Tuesday’s auction from Spain to many was disappointing and below the maximum target although it was met with strong demand and still in the upper half of the target range/ Also the data from Switzerland has the capacity to affect the franc as the worsening outlook for the economy keeps fueling more expectations for SNB movement which might support the pair higher. The Credit Suisse Zew Survey for November is due at 10:00 GMT and the expectations index might have dropped further from the previous month’s -54.4.

AUD/USD Technical Analysis for November 17, 2011

The AUD/USDpair fell again on Wednesday as traders sell off risky assets. The pair is presently supported at the parity level, and that will be the key to our next trade in this pair. At present levels, we have no trade, but would be interested in buying on supportive candles at parity, or selling if we close below that level. Until then, we are sitting tight in this pair. Even with a pop higher, we think that the 1.05 level is the top of the market for a while.

AUD/USD Forecast Nov. 17th, 2011, Technical Analysis

AUD/USD Forecast Nov. 17th, 2011, Technical Analysis

AUD/USD Fundamental Analysis for November 17, 2011

The AUD/USD pair dropped for the third consecutive day after the greenback soared to its highest level in five weeks against the euro, where risk aversion returned to control the financial market. The Australian dollar lost momentum against most of its major counterparts, as risk aversion pushed investors to abandon higher yielding currencies such as the Aussie. Nevertheless, we started to see signs of support into the rest of the day as the news of the ECB buying bonds eased some of the pressure off the market. On Thursday the U.S. data will start at 13:30 GMT with the housing starts for October which is expected to drop to 610 thousand from 658 thousand and Building Permits on the other hand to rise to 600 thousand from 594 thousand. At the same time we have the weekly jobless claims for the week ending November 11 after last week they unexpectedly declined to 390 thousand. The data will end with the Philadelphia Fed Index for November at 15:00 GMT which is expected to improve to 10.0 from 8.7.

USD/CAD Technical Analysis for November 17, 2011

The USD/CAD pair had a wild day during the Wednesday session as various factors continue to push and pull at it. The oil marketsbroke well above the $100 level, which is very bullish for the Canadian dollar. However, the possible downgrading of US banks as a result of exposure to EU banks by Fitch has spooked the markets into buying the Dollar for its “safe haven” status. At the end of the day, a long-legged doji was formed. The 1.03 held as resistance, but if it gives – this pair could go much farther. The parity level should be supportive, and probably so down to the 0.99 level. The pair remains range bound at the moment, and as such – we trade it as a scalper’s pair and only aim for a few dozen pips at a time.

USD/CAD Forecast Nov. 17th, 2011, Technical Analysis

USD/CAD Forecast Nov. 17th, 2011, Technical Analysis

USD/CAD Fundamental Analysis for November 17, 2011

The USD/CAD pair extended its gains on Wednesday, as fears persisted around global markets over the outlook of the European debt crisis, as yields on European bonds continued to rise, despite the ECB effort to ease tensions by purchasing Italian, Spanish, and Portuguese bonds. Meanwhile, inflationary figures from the United States signaled price pressures eased in October, where the CPI declined by 0.1% in October below forecasts, while Core CPI rose by 0.1% in line with forecasts. Meanwhile, the better than expected expansion in U.S. industrial production failed to restore confidence in markets, as traders remained focused on European debt crisis. Traders continued to target lower yielding assets, which provided the U.S. dollar with more bullish momentum to extend its gains against the Loonie, which pushed the USD/CAD pair to the upside. Traders will continue to monitor the developments from Europe regarding the debt crisis, where rising yields inEuropesuggest investors are concerned amid the uncertainty that is surrounding the outlook of the EU debt crisis. Moreover, traders will be eyeing data from theU.S.housing market represented by the housing starts and building permits, in addition to the weekly jobless claims, and the Philadelphia Fed index. The USD/CAD pair should still be able to rise if concerns fromEuropecontinue to dominate global markets, but we still expect volatility to continue to dominate trading, and that should also lead to high levels of fluctuations for the USD/CAD pair. Thursday November 17: The U.S. data will start at 13:30 GMT with the housing starts for October which is expected to drop to 610 thousand from 658 thousand and Building Permits on the other hand to rise to 600 thousand from 594 thousand. At the same time we have the weekly jobless claims for the week ending November 11 after last week they unexpectedly declined to 390 thousand. The data will end with the Philadelphia Fed Index for November at 15:00 GMT which is expected to improve to 10.0 from 8.7.

NZD/USD Technical Analysis for November 17, 2011

NZD/USDfell again on Wednesday as traders continue to shrug off risk assets, of which the Kiwi is very much tied to. The pair seems like it is making a beeline to the 0.75 level, and could see it in short order. The pair should be sold on rallies, and if the 0.75 level gets broken through, we could see a massive move down at this point. We are not willing to buy the Kiwi at all anymore, at least until the debt issues worldwide are taken care of.

NZD/USD Forecast Nov. 17th, 2011, Technical Analysis

NZD/USD Forecast Nov. 17th, 2011, Technical Analysis

NZD/USD Fundamental Analysis for November 17, 2011

The NZD/USD pair dropped to its lowest level in six weeks, as risk aversion pushed investors to abandon higher-yielding currencies which pushed the Kiwi to the downside. The US dollar gained against most of its major counterparts due to the pessimistic sentiment in the financial market as the EU debt crisis fuelled fears regarding the global economy outlook. We started to see some signs of relief after news that the ECB is buying bonds yet overall the tension remains evident on markets. On Thursday at 21:45 GMT (Wednesday), the N.Z. economy will release the Producer Prices- Inputs for the third quarter, where it had a prior reading of 0.9%, while the Producer Prices- Outputs had a previous reading of 1.4%. The U.S. data will start at 13:30 GMT with the housing starts for October which is expected to drop to 610 thousand from 658 thousand and Building Permits on the other hand to rise to 600 thousand from 594 thousand. At the same time we have the weekly jobless claims for the week ending November 11 after last week they unexpectedly declined to 390 thousand. The data will end with the Philadelphia Fed Index for November at 15:00 GMT which is expected to improve to 10.0 from 8.7.

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