Forex Technical and Fundamental Analysis for September 05, 2011

EUR/USD Technical Analysis for September 05, 2011

EUR/USDfell hard on Friday, as the Non-Farm Payroll number disappointed. The pair looks very, very weak at this point, but the range has been established between 1.40 and 1.45 – and as we are getting fairly close to the lower area, we are looking for a bounce. The bounce or rally is what we want to sell. In the mean time there is an ECN meeting in the middle of next week, and that could keep this pair quiet until then.

EUR/USD Daily Fundamental Analysis for September 05, 2011

The EUR/USD ended a volatile and bearish week as the euro continued to count the losses with the worsening outlook. This week the focus will be on the weak sentiment and worsening outlook with choppy trading expected after the unexpected weak jobs report from the United States. The market will continue to react to the figures and assess the sentiment based on expectations for the Fed decision with the absence of the U.S. markets for labour Day likely to add more volatility and mixed trading. Germany will report the final August revision for the Services PMI at 07:55 GMT and expected to hold steady at 50.4. The week will start with the final revision for the August PMI Services at 08:00 GMT which is expected unrevised at 51.5 as for the Composite PMI it is expected with downside revision after the manufacturing contraction to 50.9 from 51.1. The retail sales for July will follow at 09:00 GMT which are expected flat on the month following 0.9% increase and on the year to drop by 0.8% following 0.4% drop. U.S. markets will be absent on Monday celebrating labour Day.

AUD/USD Technical Analysis for September 05, 2011

AUD/USD fell on Friday after a weak US jobs number. The pair is a “risk on” trade typically, so this was no real surprise. However, the trend is certainly up, and we fell that the 1.05 area should hold as support in the interim. The pair could pullback from here, but as long as we are staying above the 1.05 level, we buy pullbacks as opportunities to own the Aussie on the cheap. We don’t sell until the pair reaches parity, and that is a long way below.

AUD/USD Daily Fundamental Analysis for September 05, 2011

The Australian dollar has inclined against the US dollar and other majors currencies last week as the expectations indicated that the Reserve Bank of Australian won’t cut the interest rates during the next meeting. Moreover, the Australian dollar inclined after a cheerful data from Asia that reduced some concern about the global economic recovery yet haven demand might return with the start of the week following Friday’s abysmal U.S. jobs report. The Australian economy will start the week with the AiG performance of services index for August at 23:30 GMT (Sunday) after recording 48.8 during July. The AUD ANZ job advertisements index for August is due at 01:30 GMT, while the prior reading dropped by 0.7%. Investors will continue to price the unexpected weak jobs number from the United States as trading will be choppy and volatile with the absence of U.S. markets for labour Day.

EUR/CHF Technical Analysis for September 05, 2011

EUR/CHFfell hard on Friday, but managed a wicked bounce from the 1.10 level. The pair has fallen quite significantly over the last few days, as it started the week by rising to the 1.20 level, only to fall as low as 1.10 at one point. The resulting Friday candle was a large hammer, so we would suspect there could be a bounce from here. If we break the 1.10 area, which of course is the bottom of the hammer – we will fall much lower. We prefer selling this pair until we can close above the 1.20 level. The gap from a couple of weeks ago was filled on Friday, and this can often signal support as well. Because of this, we aren’t as interested in this pair as we once were.

EUR/CHF Daily Fundamental Analysis for September 05, 2011

Swissy ended last week with strong gains versus the euro as the EUR/CHF returned to the strong bearishness with the dire outlook for the euro area. Haven demand is supporting Swissy and we expect choppy trading with the start of the week as investors assess the outlook for the worsening global economy especially after the U.S. economy’s labour market unexpectedly stagnated in August with no added jobs opposed to the expected 68 thousand. Eyes will be on the sentiment mainly especially with the absence of U.S. markets that will also increase the volatility. The week will start with the final revision for the August PMI Services at 08:00 GMT which is expected unrevised at 51.5 as for the Composite PMI it is expected with downside revision after the manufacturing contraction to 50.9 from 51.1. The retail sales for July will follow at 09:00 GMT which are expected flat on the month following 0.9% increase and on the year to drop by 0.8% following 0.4% drop.

NZD/USD Technical Analysis for September 05, 2011

NZD/USDfell back through the 0.85 level as the Non-Farm Payroll numbers came out in the US, and showed that there were no jobs added in August. The 0.84 level held as support, and appears to have caused a minor bounce. We feel this level should continue to keep this pair aloft for a while, and we could see consolidation between the 0.84 and 0.86 levels for the foreseeable future in this pair. A break below 0.84 doesn’t get us selling – it only gets us anticipating the opportunity to buy the Kiwi dollar at the 0.8000 level below.

NZD/USD Daily Fundamental Analysis for September 05, 2011

New Zealand dollar rose for a second week against the greenback as Auckland-based Fonterra Cooperative Group Ltd., the world’s largest dairy exporter, maintained its forecast payout to farmers. The New Zealand dollar also advanced as equity gains boosted demand for the currencies of commodity exporters, along with the cheerful data from the Chinese economy, where China’ industrial production continued to accelerate, adding that New Zealand products will increase this period because the Chinese market is the largest market for New Zealand goods. On Monday, both countries won’t release any fundamentals on Monday leaving the movement on the back of the prevailing sentiment and affected by their performance mainly in the stock market. Investors will continue to price the unexpected weak jobs number from the United States as trading will be choppy and volatile with the absence of U.S. markets for labour Day.

USD/JPY Technical Analysis for September 05, 2011

USD/JPYfell initially on Friday, and retested the 76.50 area. This area is becoming more and more interesting to us as it looks like a floor for this pair at the moment. With Bank of Japan intervening both verbally and physically in the recent past, this pair looks like it is being held aloft in the 76.50 area. This could perhaps be some kind of clandestine intervention by the BoJ, something they have done in the past. Because of this, we like short-term plays on the long side from that level. Granted, it isn’t a longer-term play, but why not take 30 – 50 pips if the BoJ is willing to help you get them?

 USD/JPY Daily Fundamental Analysis for September 05, 2011

The USD/JPY pair fluctuated last week near its post-war levels, as the market sentiment returned to focus on the safe haven investments due to concerns over the global recovery outlook. The Japanese currency traded at its highest level against the dollar, where the weak economic data from world economies increased demand for the yen as a safe haven, opening the way for more expectations about a possible intervention from the BOJ in the FX market. Threats of another intervention from the Bank of Japan in the FX markets increased the pair’s volatility, even after the better than expected GDP for Japan which returned some hopes to the Japanese economy. Both countries won’t release any fundamentals on Monday leaving the movement on the back of the prevailing sentiment and affected by their performance mainly in the stock market. Investors will continue to price the unexpected weak jobs number from the United States as trading will be choppy and volatile with the absence of U.S. markets for labour Day.

GBP/USD Technical Analysis for September 05, 2011

The GBP/USD had a fairly quiet day on Friday as traders took a rest in this market after the Non-Farm Payroll number release. The 1.61 area looks like it is the start of a larger support are down to the 1.59 level. Because of this, we expect a little bit of a bounce, but this pair looks to be choppy in the near-term as far as we can tell. There are simply too many places where you can find minor support or resistance on this chart.

GBP/USD Daily Fundamental Analysis for September 05, 2011

As of 08:30 GMT, the U.K. economy will release PMI services for August, while, on the other hand, the U.S. economy lacks fundamentals. The news is expected to have an effect on the pair, especially if showed an ease in expansion as it will add to concerns that recovery is faltering as the nation’s largest sector is deteriorating, where the previous week U.K., manufacturing gauge recorded contraction of 49.0 in August, marking that the sector continued contraction for the second month. In addition, the general sentiment is expected to remain downbeat after the release of the grim non-farm payrolls report the previous week which showed that the economy did not add any jobs in August from the revised 85 thousands which was 117 thousands, while unemployment steadied at 9.1%. Yet, the main highlight of the week will be the BoE rate as investors are eager to see the decision of the bank after the deterioration seen, according to the latest released data.

USD/CAD Technical Analysis for September 05, 2011

USD/CAD rose on Friday as the Non-Farm Payroll report disappointed. The Canadian economy depends on exports to the US, so a weak US means a weak Canada. However, we are below some very serious resistance areas in this pair, and cannot go long until we close above the parity level on the daily chart. In the mean time, we can only sell rallies as they come.

USD/CHF Technical Analysis for September 05, 2011

USD/CHF fell hard on Friday as the Non-Farm Payroll number disappointed in the US. The pair fell as low as the 0.7720 area, but ended the day by forming a hammer. This shows that the pair may not be ready to fall to new lows just yet. The set up is fairly simple at this point: A breaking of the lows on Friday would be massively bearish. A move above the weekly trend line on our chart would be massively bullish. However, a breaking of that trend line must also be accompanied by a closing above the 0.83 level on the daily chart as well in order to clear massive resistance. If we can close above 0.85 – we would call for a trend change for the medium-term.

USD/CHF Daily Fundamental Analysis for September 05, 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 pair is expected to continue its downside direction as an effect to the gloomy non-farm payrolls report released last week which showed that the economy did not add any jobs in August from the revised 85,000 which was 117,000 while unemployment steadied at 9.1%. With the continuation of tensions due to the release of downbeat reports from major global economies, the pair is expected to move further to the downside.

 

About the FX Empire:
The FX Empire is dedicated to providing the most expert and timely technical and fundamental analyses to our readers. Coupling those with our Forex broker overviews and our Forex news updates assists our readers in making the best possible financial decisions for themselves. Our readers are among the best informed in the market, everyday.

Check out the latest Brokers Reviews by FX Empire: FXCM Review, FXDD Review.

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.