Forex Technical and Fundamental Analysis for October 10, 2011

EUR/USD Technical Analysis for October 10, 2011

EUR/USDoriginally rose during the session on Friday as the Non-Farm Payroll numbers came out stronger than expected. However, with the ratings agencies cutting the ratings of Spain and Italy, the markets sold off later in the session. The pair managed to retest the 1.35 level, but failed and printed a shooting star. This is a very bearish sign, and we are more than willing to sell on a break of the Friday low.

EUR/USD Daily Fundamental Analysis for October 10, 2011

The EUR/USD ended last week with gains as the jitters started to ease over the debt crisis and recession, supporting the pair to recover some of the previous losses. The measures adopted by the ECB showed readiness for action from the bank and the support to the banking sector amid this rough period and rising debt woes, while the U.S. jobs report was stronger than expected and also helped ease recession fears in the market. Still, the overall focus remains on Greece and the risk of default and also on the EU leaders that still did not provide concrete measures to contain the crisis or even agree on the means to shelter banks from another financial meltdown and also halt the contagion risk that is threatening other nations. On Monday all eyes will be on the meeting between Merkel and Sarkozy and what they had to say on Sunday and its impact on the market. Germany is opposing the use of the EFSF to support banks and standing against leveraging the EFSF whileFrancewith its high baking sector exposure to peripheral debt is willing to go the extra mile to secure Greece and its banking sector to not risk losing its top notch credit rating. The comments from the meeting will be the corner stone for speculating the measures that might be adopted by the leaders in their coming summit and accordingly will influence the pair’s movement. German trade figures are due at 06:00 GMT for August. Exports are expected with 1.3% rebound after 1.8% drop and Imports are expected to rise by 0.6% after 0.3% drop. Nevertheless, the trade surplus is expected to narrow to 8.2 billion from 10.4 billion and the current account surplus to shrink to 5.1 billion from 7.5 billion.

AUD/USD Technical Analysis for October 10, 2011

AUD/USD rose on the session for Friday as the trading world celebrated the better than expected Non-Farm Payroll report out of America. However, the downgrade of both Spain and Italy later in the day put a damper on the rise in equity markets. With the Aussie being so risk-sensitive, this pair rose strongly, only to fall and form a massive shooting star right in the middle of a cluster of orders that are serving as resistance. The result is a bearish pattern that calls for selling on a break of the Friday lows. With the global economy on pins and needles, it isn’t hard to imagine bad news coming out and triggering the continuation of a down move in this pair.

AUD/USD Daily Fundamental Analysis for October 10, 2011

The AUD/USD pair was able to end last week with gains, as the Aussie covered its previous losses against the greenback after the optimistic tone reflected in the RBA statement. The RBA’s Governor Glenn Stevens indicated that the bank is ready to lower the interest rate during the upcoming period, as inflation pressure retreated which gives the policy makers the opportunity to support the economic recovery. The Australian dollar witnessed some improvement against major currencies after the RBA’s statement that showed the economy has many resources and the ability to face the global financial crisis with low unemployment, a strong banking system and large investments, increasing demand for Aussie. On Monday at 00:30 GMT Australia will start the week with the ANZ job advertisement for September that dropped by 0.6% in August.

EUR/CHF Technical Analysis for October 10, 2011

The EUR/CHF pair rose again on Friday and the pair is even pressing the top of the Thursday shooting star. The pair looks bullish, and we cannot sell because of the Swiss National Bank and it’s “line in the sand” at the 1.20 level. We like buying, but have a hard time getting overly bullish until the EU gets its collective act together. However, there is no way to sell this pair – so we are alright with buying dips at this point.

EUR/CHF Daily Fundamental Analysis for October 10, 2011

The EUR/CHF ended last week with gains and set to start a new week with a light load of fundamentals and continued focus on the developments in the euro area and steps taken to contain the crisis. On Monday all eyes will be on the meeting between Merkel and Sarkozy and what they had to say on Sunday and its impact on the market.Germanyis opposing the use of the EFSF to support banks and standing against leveraging the EFSF while France with its high baking sector exposure to peripheral debt is willing to go the extra mile to secure Greece and its banking sector to not risk losing its top notch credit rating. The comments from the meeting will be the corner stone for speculating the measures that might be adopted by the leaders in their coming summit and accordingly will influence the pair’s movement. The EUR/CHF moved to the upside last week and some relief might be seen though the downside movement will remain limited with the SNB’s readiness to defend its set floor for the pair and after last week it was confirmed with the rise in foreign reserves to a record. The lack of major data from both nations will keep the movement limited with eyes on the developments in the debt crisis and how the leaders are going to act to contain the contagion risk especially with rising international calls for action as the debt crisis threatens the global economic stability.

NZD/USD Technical Analysis for October 10, 2011

NZD/USDrose on Friday, and even pierced the 0.78 level at one point. The pair then fell later in the session, and formed a shooting star in the middle of the cluster of orders we discussed yesterday. The pair has failed to push though that area, and the shooting star shows just how much trouble the pair is having in gaining in this market. With the Kiwi dollar being so sensitive to global risk, we still like selling as there are so many headwinds to the global economy out there. With this in mind, we see the sell signal as being a breaking of the Friday low with an understanding that the 0.75 level will be supportive. If we break the 0.75 level – this pair falls much farther.

NZD/USD Daily Fundamental Analysis for October 10, 2011

The NZD/USD pair advanced last week as the Kiwi was able to cover some of its previous losses against the dollar, where the NZ dollar rebounded from its lowest level in more than six months against greenback. The New Zealand dollar is starting to recover as the economy is benefiting from demand from developing nations, where demand for raw materials is increasing, especially from China. The current developments in the financial market and the negative effect of the EU debt crisis could bring losses once again to the NZD/USD pair, as risk aversion will force investors to abandon higher-yielding currencies and focus on safe haven such as the US dollar and yen. Both economies will not release any fundamentals; which will drive the pair to move according on the market sentiment.

USD/JPY Technical Analysis for October 10, 2011

USD/JPYcontinues to sit in its tight range as the trading world isn’t ready to buy this pair with any great conviction, but the Bank of Japan isn’t willing to let them sell it either. The result is a 100 pip range, and a scalper’s delight. We are still recommending buying at lower levels, somewhere around the 76 handle, but only hanging on to the pair for about 50 pips in gains. There are now no real ways to play this pair for any great length of time as it is so tight at the moment.

USD/JPY Daily Fundamental Analysis for October 10, 2011

The USD/JPY pair dropped last week on fears regarding the global economic outlook as still with the slight improvement in the sentiment the yen remained a favourite and gained against a weakening greenback. Expectations signal for further losses for the USD/JPY pair during the coming period, as jitters are spread all over the financial market, increasing demand for the Japanese yen as a safe haven which keeps the bias to the downside for the pair. The Bank of Japan did not change its monetary policy in October, as they mentioned that the Japanese recovery returned to normal but the sluggish global economy and the EU debt crisis still have a negative effect on the economy. Both economies will not release any fundamentals; which will drive the pair to move according on the market sentiment.

GBP/USD Technical Analysis for October 10, 2011

GBP/USDrose on Friday as the Non-Farm Payroll report came out better than expected. This pushed the “risk on” trade forward, and the cable gained as a result. Also, the technical set up from the Thursday session (a hammer) got triggered, and pushed more buyers into the market. The late US session trading saw a bit of a fade, but in general: it looks like cable is trying to base at these levels. The pair looks like it is going to fight the downdraft at the 1.53 level. Although this pair looks bearish overall, we think that there are much simpler trends to follow at this point such as the AUD/USD, EUR/USD, and NZD/USD pairs.

GBP/USD Daily Fundamental Analysis for October 10, 2011

The GBP/USD pair may face downside pressure in the coming period as the announced expansion in the APF by 75 billion pounds will increase the supply of the sterling in the market. Also, further deterioration in the data or rise in inflation may also affect the pound negatively. Last week, hopes that European officials are exerting more effort to contain the debt crisis and the upbeat U.S. data, especially the non-farm payrolls report, enhanced demand on high-yielding currencies, where this week, little attention may be given to fundamentals where the main focus will probably remain the latest developments from the euro area to see whether any new measures will be introduced to ease the effect of the debt crisis. Hence, the progress by European officials to ease tensions in markets will be one of the key determinants of the pair’s movements in the coming period as it meanwhile dominates the market sentiment.

USD/CAD Technical Analysis for October 10, 2011

USD/CADfell on Friday, but managed to bounce in the later hours as the pair retested the 1.03 level. We mentioned that this area could be a place to see support and a potential bounce, and the resulting daily candle is a hammer – a bullish sign. Because of this, we like buying this pair on a break of the high from the Friday session. We know the 1.0650 – 1.07 level is massive resistance, but if it gives way – this pair skyrockets. We are not interested in selling at this point.

USD/CAD Daily Fundamental Analysis for October 10, 2011

The USD/CAD pair fell on Friday, as traders were optimistic after the Canadian jobs report showed employers added nearly 61 thousand jobs in September, while unemployment fell unexpectedly to 7.1% from 7.3%. Moreover, the U.S. jobs report showed employers added 103,000 jobs in September better than median estimates of 60 thousand jobs added, and unemployment remained unchanged at 9.1% in line with projections. The better than expected jobs report both Canada and the United States boosted demand for higher yielding assets, especially the Canadian dollar, which rose strongly against the U.S. dollar, putting the USD/CAD pair under pressure. Nonetheless, we maintain our bullish projection for the USD/CAD pair, as we expect the pair to extend its gains over the coming period on rising pessimism over the outlook for growth and mounting fears from the EU debt crisis, although we expect to witness high levels of volatility as well. Monday October 10: We don’t have any fundamentals from Canada or the United States on Monday, where Americans celebrate Columbus Day though markets will be open.

USD/CHF Technical Analysis for October 10, 2011

USD/CHFrose on Friday, and the Dollar is starting to look more and more strong. The Franc is no longer able to be used as a safe haven, and with the downgrades of both Spain and Italy during the Friday session, it makes sense that the USD rose in value. The breaking of the Thursday shooting star is a place we would be interested in buying this pair. We are not selling since the Swiss National Bank is actively working against the appreciation of the Franc.

USD/CHF Daily Fundamental Analysis for October 10, 2011

The USD/CHF pair may continue its rise this week amidst rising speculations the SNB would continue to curb the franc’s advance, where a report released last week showed that the SNB reserves jumped to 282.4 billion francs at the end of September compared with 253.4 billion francs a month before, noting that the oversupply of the franc by the SNB caused it to depreciate to fall from record high against the dollar. This week, little attention may be given to fundamentals where the main focus will probably remain the latest developments from the euro area to see whether any new measures will be introduced to ease the effect of the debt crisis.

 

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