Forex Technical And Fundamental Analysis For November 28, 2011

EUR/USD Technical Analysis for November 28, 2011

EUR/USD fell hard during the Friday session as the onslaught continued. The Euro simply has major issues now, with many starting to question its very existence in a few years. The markets are punishing the EU for failed debt auctions, and the close of the session was very close to the bottom of the daily range. With this in mind, the pair will have to break through the 1.31 level to continue downward, but at this point – that looks very possible. The pair could bounce, but that will only bring out more sellers at this point.

EUR/USD Fundamental Analysis for November 28, 2011

The EUR/USD will start a new hectic week on Monday with focus still on the debt crisis and the reaction to contain it ahead of a critical finance ministers meetings this week.

Investors still watch closely debt auctions and yields and any comments from officials especially after we saw some recovery to the end of the session on Friday on reports from Reuters that the EU will drop the private sector involvement in the permanent mechanism which spread hope in the market.

Germany will start this week at 07:00 GMT with the GFK consumer confidence survey for December, where the confidence is expected to slip slightly to 5.2 from 5.3.

The euro zone will join the session at 09:00 GMT with the M3 money supply for October, with expectations the seasonally-adjusted three-month average could have expanded by 3.1% from 2.6%, while the annual index could have improved 3.4% from 3.1%.

The United States will join the session at 13:00 GMT with the new home sales figures for October, with expectations that the number on new homes sales could retreat to 310 thousands from the previous 313 thousands, while the monthly new home sales index could have dropped by 1.0% from 2.3%.

During the day Germany will release the Consumer Price index second reading for November, where the monthly CPI index is expected to expand by 0.1% from the previous steady reading, while the annual CPI index could have slowed to 2.4% from the previous 2.5%.

Germany will also provide the CPI harmonised indexes for November in a second reading, with expectations the monthly index could have dropped 0.1% from the previous 0.1%, while the annual index is expected lower at 2.8% from 2.9%.

USD/JPY Technical Analysis for November 28, 2011

The strong rise in the USD/JPY on Friday was certainly impressive, and many traders would probably feel fairly good about buying this pair at the moment as the Dollar is quickly becoming the currency to own overall. However, the Yen is also considered a safety currency as well, and the 0.80 level above is going to continue to serve as massive resistance going forward. With this in mind, we look for rallies to sell until that level is overcome. We could see more runs to the USD in the short-term, and as a result, we think we can short from higher up if we are patient.

USD/JPY Fundamental Analysis for November 28, 2011

The USD/JPY pair advanced last week due to the dollar strength, while the Japanese yen was able to record more gains against other major currencies amid risk aversion that increase demand for safe haven currencies.

The Bank of Japan did not offer anything offer during its last meeting, while some of its members asked for more easing and to expand the central bank’s budget, the move which could indicate to us that another action will be taken from the BOJ.

At 15:00 GMT, the U.S. economy will release the Existing Home Sales for October, where it’s expected to come at 4.80 million down by 2.2% from the previous reading of 4.91 million which is down by 3.0%.

GBP/USD Technical Analysis for November 28, 2011

GBP/USD fell again on the Friday session after first attempting to rally above the 1.55 level. The pair is in a free fall at this point, although in the middle of a support zone. The 1.53 level is absolutely crucial to the upward bias to come back to this pair. If not, this pair falls much farther. The world’s economies are looking more and more like they are going to go back into recession, and with this in mind, the pair should continue to fall. The bounces in this pair should be treated with suspicion, and should provide selling opportunities. We won’t buy this pair as it is far too bearish at this point.

GBP/USD Fundamental Analysis for November 28, 2011

On Monday, while the British economy lacks fundamentals, the U.S. will release new home sales for Oct. at 15:00 GMT with expectations referring to a drop to 310,000 from 313,000 a month earlier.

The data will be carefully watched as it will give an indication about the status of the housing sector which triggered the 2008 financial crisis. However, the main focus will remain the latest developments from the euro area amid talks between European leaders about solving the crisis.

Recently, the pair is affected by the turbulences in European financial markets as well as expectations of seeing further stimulus by the BoE to boost growth.

Policy maker David Miles said Ben Broadbent said last week there was a chance the U.K. may experience another recession, while the latest growth and inflation forecasts by the BoE referred to a cut in both where they will largely depend on the latest developments in the euro region.

Later in the week, the main focus will be the infamous jobs report in the United States as well as housing, manufacturing and confidence data. On the other hand, the British economy will release less important data yet focus will be on PMI manufacturing and construction.

However, more attention will be n Nov. 29 as euro area leaders will meet to discuss the latest developments and decide whether Greece is eligible for the next tranche of last year’s 110-billion euro aid package.

USD/CHF Technical Analysis for November 28, 2011

The USD/CHF pair rose on Friday as traders continue to worry about debt issues in the EU, and run to the Dollar. The pair has made a new high, and as a result should move much higher. The breaking of the 0.93 signals a trend change to the upside longer-term if it sticks, and suggests we will see 0.95 and maybe even parity before too long. We like buying the dips as long as we are worrying about the EU – which could be some time. The Swiss will certainly cheer the market along as this pair rises too – so no worries there. Selling isn’t even a thought at this point.

USD/CHF Fundamental Analysis for November 28, 2011

While the Swiss economy lacks fundamentals, the U.S. will release new home sales for Oct. at 15:00 GMT with expectations referring to a drop to 310,000 from 313,000 a month earlier.

The data will be carefully watched as it will give an indication about the status of the housing sector which triggered the 2008 financial crisis. However, the main focus will remain the latest developments from the euro area amid talks between European leaders about solving the crisis.

Last week, UBS put the franc under pressure after it said “the Swiss economy slowed significantly in the second half of the year as the strong franc squeezed exporters’ profit margins,” while it predicts growth to slow further to 1% in the fourth quarter.

Still, there is mounting expectations the SNB would intervene to curb the franc’s appreciation.

This week, the main focus will be the infamous jobs report in the United States as well as housing, manufacturing and confidence data. On the flip side, the Swiss economy will release important data such as 3q GDP, retail sales and PMI manufacturing.

Nonetheless, more attention will be n Nov. 29 as euro area leaders will meet to discuss the latest developments and decide whether Greece is eligible for the next tranche of last year’s 110-billion euro aid package.

EUR/CHF Technical Analysis for November 28, 2011

EUR/CHF initially rose during the Friday session as traders reacted to rumours of an SNB announcement of a higher floor in this pair at 16GMT. The announcement never came, and the pair gave back much of its gains for the session. The candle for the day looks a bit like a shooting star, which is quite remarkable as it is a bearish sign – even with the Swiss National Bank sitting below. It looks like the Euro is in massive trouble at this point, but this will not be the pair to get involved in if it falls hard. We would buy on daily closes above 1.25, but don’t see that coming anytime soon.

EUR/CHF Fundamental Analysis for November 28, 2011

The EUR/CHF will start a new volatile week with focus on the SNB on Monday especially as investors on Friday to the end of the session drove the pair higher on expectations the SNB intervened and will raise the floor for the pair to 1.25.

Those expectations will be key to the movement on Monday especially if they materialise with key GDP figures from Switzerland due this week that might further stimulate the bank to move as growth slows.

Germany will start this week at 07:00 GMT with the GFK consumer confidence survey for December, where the confidence is expected to slip slightly to 5.2 from 5.3.

The euro zone will join the session at 09:00 GMT with the M3 money supply for October, with expectations the seasonally-adjusted three-month average could have expanded by 3.1% from 2.6%, while the annual index could have improved 3.4% from 3.1%.

During the day Germany will release the Consumer Price index second reading for November, where the monthly CPI index is expected to expand by 0.1% from the previous steady reading, while the annual CPI index could have slowed to 2.4% from the previous 2.5%.

Germany will also provide the CPI harmonised indexes for November in a second reading, with expectations the monthly index could have dropped 0.1% from the previous 0.1%, while the annual index is expected lower at 2.8% from 2.9%.

AUD/USD Technical Analysis for November 28, 2011

The AUD/USD pair attempted a rally on Friday only to fail and print a second shooting star in a row. Both of these are at the bottom of a fall, and this shows that the pair may continue its descent lower as the headlines continue to deteriorate in the EU. The run to the US Dollar will continue to fuel the push lower, and the commodities markets falling will help push it lower as well. We don’t but the riskier currencies at this point, including the Aussie.

AUD/USD Fundamental Analysis for November 28, 2011

The AUD/USD pair recorded more losses last week, as the US dollar dominated the currency market last week due to concerns over the global economic outlook amid the current uncertainty for major economies.

Aussie lost momentum after the Reserve Bank of Australia cut its interest rate and indicated that they will keep the rate at theses levels till the end of the year, which reduced demand for the Australian currency.

At 15:00 GMT, the U.S. economy will release the Existing Home Sales for October, where it’s expected to come at 4.80 million down by 2.2% from the previous reading of 4.91 million which is down by 3.0%.

USD/CAD Technical Analysis for November 28, 2011

The USD/CAD had a volatile day on Friday as traders first attempted to sell it off, only to turn around and buy it back. The markets nature suggests that the run to safety will continue, which means this pair should continue to rise. The resulting candle is a doji, which suggests that we could see a pullback, but the 1.03 level should continue to be a floor in this pair – meaning that buying the dips should be the way to go going forward.

 

USD/CAD Fundamental Analysis for November 28, 2011

The USD/CAD pair fell on Friday after a wave of optimism started to spread through European and U.S. markets amid reports EU officials are discussing more measures to ease the euro zone debt crisis, which overshadowed earlier pessimism that dominated markets after yields on Italian bonds soared after a bond auction, reflecting the ongoing concerns that the European debt crisis is worsening.

Traders will continue to monitor the developments from Europe regarding the debt crisis, where rising yields in Europe suggest investors are concerned amid the uncertainty that is surrounding the outlook of the EU debt crisis.

The USD/CAD pair should still be able to rise if concerns from Europe continue to dominate global markets, but we still expect volatility to continue to dominate trading, as uncertainty remains the dominant theme in markets, and that could also lead to high levels of fluctuations for the USD/CAD pair. But overall, we expect the pair to extend its gains over the coming period.

Monday November 28:

The United States will join the session at 13:00 GMT with the new home sales figures for October, with expectations that the number on new homes sales could retreat to 310 thousands from the previous 313 thousands, while the monthly new home sales index could have dropped by 1.0% from 2.3%.

NZD/USD Technical Analysis for November 28, 2011

The NZD/USD pair rose initially during the Friday session only to fall in the end. The resulting candle was a shooting star for the second day in a row, and suggests that lower prices are on the way. With the failure of the rally to hold, we have only become even more convinced that the pair heads lower. The 0.75 should continue to be massively resistant, and we like selling rallies and a break lower of the Friday lows at this point. Buying the Kiwi isn’t even a thought at this point.

NZD/USD Fundamental Analysis for November 28, 2011

The NZD/USD pair continued its free fall for the fourth straight week as investors abandoned higher yielding currencies and focus on the safe haven currencies such as the US dollar.

The NZD/USD pair is to record more losses during the upcoming period, as the current market sentiment in addition to the slowdown in top economies are increasing fears among traders and drive them to safe assets.

At 15:00 GMT, the U.S. economy will release the Existing Home Sales for October, where it’s expected to come at 4.80 million down by 2.2% from the previous reading of 4.91 million which is down by 3.0%.

 

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