Forex Technical and Fundamental Analysis for October 3, 2011

EUR/USD Technical Analysis for October 3, 2011

EUR/USDfell hard on Friday as the markets continue to punish the EU for not getting a solution to the debt crisis finalised quickly enough. The 1.3350 area below is the last stand for the EUR/USD uptrend, and it seems that it is only a matter of time before that area gives way. If we get a break of that area, we will more than likely see the 1.30 handle in short order. If the pair rallies, we are simply waiting to sell as they fade. We cannot buy this pair at all as the trend is so strong to the downside.

EUR/USD Daily Fundamental Analysis for October 3, 2011

Monday marks the start of a critical week for the EUR/USD with eyes still on the debt crisis and the outlook for the global economy which is still clearly weaker than expected. Investors start the week speculating the next move from the ECB on Thursday and how crippled is theU.S.economy according to the jobs figures that are due on Friday. Those expectations will define the sentiment for this week especially as investors remain wary over the pace of slowing growth and the heightened risk of recession. Germanystarts the day at 07:55 GMT with the final PMI Manufacturing estimate which is expected unrevised contraction at 50.0. The euro area is set to release the final PMI Manufacturing estimate at 08:00 GMT which is expected with an unrevised contraction at 48.4. The United States will start the week with the ISM Manufacturing for September at 14:00 GMT and expected to slow slightly to 50.5 from 50.6. Construction Spending for August is also due at 14:00 GMT and expected with 0.2% drop following a drop of 1.3%.

AUD/USD Technical Analysis for October 3, 2011

AUD/USDcontinued its fall on Friday as traders are selling off anything risk related at this point. The Aussie is especially sensitive to the global economy, and as there are concerns about China slowing down – the AUD is going to get sold off. We are sellers of the Aussie at this point, and will only sell. Rallies are to be sold, and a break of the 0.9550 area would signal another large leg down in this pair.

AUD/USD Daily Fundamental Analysis for October 3, 2011

The AUD/USD pair retreated last week to reach its lowest level in nine months as the US dollar continued to control the FX market, as worries regarding the global economy drove investors to sell higher yielding currencies. The expectations remain bearish for the AUD/USD pair as the current EU debt crisis and the slowdown in the U.S. economy fuel fears among investors and drive them to sell-off higher-yielding and risky assets. On Monday at 22:30 GMT (Sunday), the Australian economy will release the AiG Performance of Manufacturing Index for September, where the previous reading was 43.3. The U.S. economy will release the Construction Spending for August at 14:00 GMT, where it is expected with a drop of 0.2% after -1.3%. The ISM Manufacturing Survey for September will be released at 14:00 GMT with a previous reading of 50.6 and expected to slow to 50.3.

EUR/CHF Technical Analysis for October 3, 2011

EUR/CHFfell on Friday as the markets around the world sold off. The Euro is in real danger of falling apart against many currencies as the problems there continue. However, we feel that the EUR/CHF pair will be the wrong play as the Swiss National Bank has put in a “floor” at 1.20 in the market. Because of this, we really cannot sell this pair, and we certainly cannot buy it until Europe gets a solution to the debt crisis finalised. At that point, it could be a long-term buy…..but until then our hands are tied.

EUR/CHF Daily Fundamental Analysis for October 3, 2011

The EUR/CHF remains confined within a tight trading range as the pair lost its appeal and continue to hover around the same areas hoping that the data this week will offer support for the pair to move. Investors await critical data this week from the euro area and eyes are on the finance chiefs meeting to discuss the progress made on the debt negotiations and also focus on the European Central Bank and the decision due on Thursday where the expectations will set the tone for this week. On Monday Switzerland will start the week at 07:15 GMT with the Retail Sales for August after it was reported with an annual rise of 1.9% the previous month. At 07:30 GMT the Swiss PMI Manufacturing for September is due and expected to fall back to 50.0 from 51.7 the previous month. The euro area is set to release the final PMI Manufacturing estimate at 08:00 GMT which is expected with an unrevised contraction at 48.4.

NZD/USD Technical Analysis for October 3, 2011

NZD/USD fell on Friday as investors around the world are dumping risky assets, including commodities. The futures markets all got hit, and as a result the Kiwi got sold off. We are selling this pair only now, and waiting for a rally to fade, or perhaps a breaking of the lows to get short as well. Buying simply would be far too dangerous at this point in time, as there are far too many economic dangers out there now.

NZD/USD Daily Fundamental Analysis for October 3, 2011

New Zealand currency, nicknamed Kiwi, ended with a monthly decline against both the dollar and the yen as fears increased that global economic growth will slow. Risk aversion controlled the FX market and drove investors to shift their trading to lower-yielding currencies such as the US dollar. Kiwi lost more momentum on expectations that the EU debt crisis and the slowdown in the U.S. economy will affect global growth negatively. On Monday at 00:00 GMT, the New Zealand economy will release the ANZ Commodity Price Index for September, where it had a previous reading of –1.2%. The U.S. economy will release the Construction Spending for August at 14:00 GMT, where it is expected with a drop of 0.2% after -1.3%. The ISM Manufacturing Survey for September will be released at 14:00 GMT with a previous reading of 50.6 and expected to slow to 50.3.

USD/JPY Technical Analysis for October 3, 2011

USD/JPYrose on Friday as the markets around the world sold off. The USD/JPY is being lifted by the Bank of Japan, and as a result we haven’t been able to sell this pair for quite some time. The range between 76 and 78 seems to be the “boundaries” of the marketplace, and with the move upwards, we actually think we are getting closer to the top of the range than the bottom. We would be sellers of rallies, but only if they show some kind of resistive candle at this point.

USD/JPY Daily Fundamental Analysis for October 3, 2011

The USD/JPY pair advanced slightly last week amid the current volatility in the financial market, on the other hand investors still focus on the lower-yielding currencies as a safe haven which will increase the pressure on the pair. Expectations signal 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 will push the pair to the downside. On Monday at 23:50 GMT (Sunday), Japan will issue Tankan Large Manufacturers Index for the third quarter, where the previous reading was down by 9 while it’s expected to improve to 2. The Tankan Non-Manufacturing Index is expected to show a rise of 2 from the previous fall of 5, on the other hand the Tankan Large All Industry Capex for the third quarter is expected to come at 4.3% compare to the prior reading of 4.2%. The U.S. economy will release the Construction Spending for August at 14:00 GMT, where it is expected with a drop of 0.2% after -1.3%. The ISM Manufacturing Survey for September will be released at 14:00 GMT with a previous reading of 50.6 and expected to slow to 50.3.

GBP/USD Technical Analysis for October 3, 2011

GBP/USDhad a fairly neutral day on Friday as traders bought and sold the pound in various spurts during the day. The 1.55 area looks to be supportive, but the trend is down. We feel that eventually that area gives way, but until then, we are not trading this pair – unless it is to sell rallies. We won’t buy cable right now there are too many reasons to avoid the “risk on” trade.

GBP/USD Daily Fundamental Analysis for October 3, 2011

The week starts with the release of important manufacturing data from both economies. As of 08:30 GMT, PMI manufacturing is predicted to show further contraction to 48.8 in September from a prior of 49.0 in August. For the U.S., ISM manufacturing, due at 14:00 GMT, will be out with expectations referring to a decline to 50.5 in September from a prior of 50.6 in August. This week, the main focus will be on manufacturing and services data from major economies which will largely determine the extent of the slowdown in the last month of the third quarter. Thus, data from both economies will probably have an impact on the pair’s movements. With the dollar seen recently as a favourite safe haven, the pair may continue its major downside trend if data from major economies showed more sluggishness, where eyes will remain on the euro area to see the latest developments in the debt crisis saga.

USD/CAD Technical Analysis for October 3, 2011

The USD/CAD pair rose drastically on Friday as the oil markets sold off. The trend most certainly looks like it has changed in this pair, and with the Light Sweet Crude oil markets falling through the $80 mark – the CAD is being “offered” at this point. Oil will continue to dictate the direction for this pair, but that break down below $80 is significant, and this should continue to put upward pressure on this pair. At this point we are buying dips, and not selling at all.

USD/CAD Daily Fundamental Analysis for October 3, 2011

The USD/CAD pair rose on Friday, where rising risk aversion in markets led investors to shun risky assets and target lower yielding assets, which provided the U.S. dollar with strong momentum against the Canadian dollar, as the USD/CAD pair extended its gains after the U.S. income report showed personal income fell below expectations, while GDP data from Canada came in line with expectations, nonetheless, falling commodities prices weighed down on the CAD, and pushed the USD/CAD pair higher. Traders will be following the ISM manufacturing index, which is expected to show activities eased slightly in September. Overall, we still expect the USD/CAD pair to rise over the coming period, since conditions in markets haven’t stabilised yet, and that should continue to push investors to target lower yielding assets such as the USD, and shun higher yielding assets like the CAD. Monday October 03: TheUnited Stateswill start the week with the ISM Manufacturing for September at 14:00 GMT and expected to slow slightly to 50.5 from 50.6. Construction Spending for August is also due at 14:00 GMT and expected with 0.2% drop following a drop of 1.3%.

USD/CHF Technical Analysis for October 3, 2011

USD/CHFrose on Friday as the “safe haven” trade came back into vogue. The Franc is no longer a safe haven currency since the Swiss National Bank is working against the value of it, and the USD will by default become the preferred safety currency. The pair can only be bought at this point, and we think that a longer-term trade could be in the cards for this pair as a result. We buy on dips, and will not sell.

USD/CHF Daily Fundamental Analysis for October 3, 2011

The week starts with the release of important data from the Swiss economy; as of 07:15 GMT, retail sales for the year ending August will be available, followed by PMI manufacturing, due 15 minutes later, which is estimated to show a drop in the index to 50.0 in September from 51.7 recorded in August. Both readings are expected to be carefully watched and may have an effect on the pair’s movements, especially as the recent data showed a slowdown in the Swiss growth as the global slowdown, debt woes in the euro area and the franc’s appreciation affected growth prospects in the Alpine nation. For the U.S., the main highlight will be also on manufacturing data as ISM manufacturing, due at 14:00 GMT, will be out, with expectations referring to a decline to 50.5 in September from a prior of 50.6 in August. This week, the main focus will be on manufacturing and services data from major economies which will largely determine the extent of the slowdown in the last month of the third quarter. With the dollar seen recently as a favourite safe haven amid the latest several interventions by the SNB, the pair may continue its rise if data from major economies showed more sluggishness, where eyes will remain on the euro area to see the latest developments in the debt crisis saga.

 

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