Forex Technical and Fundamental Analysis for September 29, 2011

EUR/USD Technical Analysis for September 29, 2011

 

 

The EUR/USD pair rose on Wednesday, but fell later in the day as traders sold off risk. The Euro still have massive uncertainty surrounding its prospects, so buying it doesn’t appeal to many. The market is massively bearish, and it seems that 1.35 is an area that needs to be “given” in order to continue to the downside. The fundamentals are screaming for safety trades at this point, and all rallies have been selling opportunities. We are selling the EUR/USD every time it rallies, and would be interested in selling a break of the Monday lows. We don’t buy at all.

EUR/USD Daily Fundamental Analysis for September 29, 2011

The EUR/USD continued to fluctuate and the euro was mainly biased to the upside yet we can see the relief rally starting to lose momentum.

Investors are starting to worry about the mixed comments from leaders that show they are still not united on certain measures to contain the crisis and expand the firepower of the EFSF as expected earlier this week.

Nevertheless, the euro is still better off now than it was a week ago as the jitters over Greek default certainly eased and also the progress in Europe is still seen. Papandreou gained the vote from parliament on the property tax and now Greece, Ireland, Italy, Spain, France, Belgium, Luxembourg, and Slovenia managed to pass the decision through their parliaments to expand the power of the EFSF.

On Tuesday the focus turns to Germany as the parliament now votes on the expanded power of the facility and although it is highly expected to pass the debate is still important and investors are jittery as Merkel loses support behind her.

As for the data eyes will be on the German September labour data at 07:55 GMT where the unemployment change is expected with a drop of 10 thousand following the drop of 8 thousand and unemployment to hold at 7.0%.

The euro area September Confidence data is due at 09:00 GMT where the Business Climate indicator is expected to slump to -0.11 from 0.7; the economic confidence to fall to 96.0 from 98.3; the industrial confidence is to slow to -4.7 from -2.9 and the services confidence to slow to 2.0 from 3.7. The final consumer confidence estimate is expected unrevised at -18.9.

The final second quarter GDP revision is due at 12:30 GMT where the annualized GDP is expected with an upside revision to 1.2% from 1.0%. Personal Consumption is expected steady at 0.4% and the Core PCE also expected steady at 2.2%.

Also due at 12:30 will be the weekly jobless claims for the week ending September 23 after last week rising by 423 thousand.

At 14:00 GMT we have the pending home sales for August which are expected with 2.1% drop after 1.3% decline in July.

AUD/USD Technical Analysis for September 29, 2011

 

AUD/USD fell hard on Wednesday as traders sold off risk in later hours of the session. The pair still has significant support in the 0.97 area, and it appears that it is going to be tested soon. The breaking of the Monday hammer to the downside would be a massive sell signal as it shows not only a breaking of the parity level, but the entire support base that this pair enjoys. If that happens – selling the AUD/USD will suddenly be a long-term trade. Buying isn’t advised until we can close well above parity at this point, which looks unlikely given the failure on Wednesday.

AUD/USD Daily Fundamental Analysis for September 29, 2011

Aussie found some support to incline against the US dollar with the European leaders working to contain the region’s debt crisis and considering introduce more measures to contain the mountain woes, increasing demand for higher yielding investments.

On the other hand, Australian dollar rebounded on eased equity selloff and the commodities rebound which also supported the recovery against the dollar that lost some of the upside momentum.

Aussie advanced against its U.S. counterpart by the most in nearly three weeks as stocks rallied around the world, supporting demand for higher-yielding assets.

On Thursday, the U.S. economy will release the annualized Gross Domestic Product for the second quarter at 12:30 GMT, where the U.S. economy is expected to grow by 1.2% revised from 1.0%.

The Personal Consumption for the second quarter is expected steady at 0.4%, while the U.S. Core Personal Consumption Expenditure for the second quarter is expected unrevised at 2.2%.

At 12:30 GMT, U.S. economy will issue its weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance increased 423 thousand last week.

At 14:00 GMT the U.S. economy will release the Pending Home Sales for August, where it is expected with a drop of 2.1% following 1.3% decline in July.

EUR/CHF Technical Analysis for September 29, 2011

 

EUR/CHF continues to dawdle around the current level as the Swiss National Bank is effectively protecting against the downward pressure in this market. The pair cannot be sold because of this, so buying is our only choice. However, we have issues buying the Euro at all because of the issues that are currently having a negative effect on the economy in the EU. Until Europe gets the solution to the debt crisis – we can’t buy this pair.

EUR/CHF Daily Fundamental Analysis for September 29, 2011

The EUR/CHf is holding the gains and was biased to the upside most of the session on Wednesday as eased debt woes helped the euro sustain the gains and attempt to move to the upside.

Still, the trading range for the pair remains very tight and limited as it lost the appeal it had on the SNB intervention and with the debt crisis still predominant amid also recessionary woes the euro is also not that favoured for excessive gains compared to the haven appeal that the franc enjoys.

Continued positive updates from the euro area helped the gains with the parliaments passing the EFSF expanded measures and Greece moving closer to attain the bailout funds which is diminishing fears of default.

Papandreou gained the vote from parliament on the property tax and now Greece, Ireland, Italy, Spain, France, Belgium, Luxembourg, and Slovenia managed to pass the decision through their parliaments to expand the power of the EFSF.

On Tuesday the focus turns to Germany as the parliament now votes on the expanded power of the facility and although it is highly expected to pass the debate is still important and investors are jittery as Merkel loses support behind her.

As for the data eyes will be on the German September labour data at 07:55 GMT where the unemployment change is expected with a drop of 10 thousand following the drop of 8 thousand and unemployment to hold at 7.0%.

The euro area September Confidence data is due at 09:00 GMT where the Business Climate indicator is expected to slump to -0.11 from 0.7; the economic confidence to fall to 96.0 from 98.3; the industrial confidence is to slow to -4.7 from -2.9 and the services confidence to slow to 2.0 from 3.7. The final consumer confidence estimate is expected unrevised at -18.9.

NZD/USD Technical Analysis for September 29, 2011

 

NZD/USD fell hard on Wednesday as traders sold off commodities in general. The Kiwi really suffers when the commodities lose, and the session wasn’t any different. The Monday hammer serves as a sell point now, as a breaking of the lows from that session would be massively bearish at this point. The pair could consolidate between 0.76 and 0.80, so we are waiting to see that happen before we sell. We cannot be buyers at this point as the global economic growth outlook is so bleak at this point in time, suggesting that demand for commodities will fall in the near future.

NZD/USD Daily Fundamental Analysis for September 29, 2011

The New Zealand dollar soared against the US counterpart to the highest level in more than three days after Asian stock markets rebounded on optimism European leaders will take decisive actions to tackle the regional debt crisis that spurred demand for higher yielding currencies such as Kiwi.

The New Zealand currency (Kiwi) advanced for a second day in a row against the greenback after commodities rallied, adding that the nation’s exports will record more gains and supporting the demand for the south pacific currency.

Kiwi soared against the American counterpart as global stock markets rallied on optimism the ECB will also take action to ease the market strain.

On Thursday, the New Zealand economy won’t release any fundamental data, but the U.S. economy will release the annualized Gross Domestic Product for the second quarter at 12:30 GMT, where the U.S. economy is expected to grow by 1.2% revised from 1.0%.

The Personal Consumption for the second quarter is expected steady at 0.4%, while the U.S. Core Personal Consumption Expenditure for the second quarter is expected unrevised at 2.2%.

At 12:30 GMT, U.S. economy will issue its weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance increased 423 thousand last week.

At 14:00 GMT the U.S. economy will release the Pending Home Sales for August, where it is expected with a drop of 2.1% following 1.3% decline in July.

USD/JPY Technical Analysis for September 29, 2011

 

USD/JPY continued to bounce around in the 100-pip range we have been watching on Wednesday. The pair is being watched by the Bank of Japan, and it should be obvious and well-known by now that they are willing to intervene if the market falls too far. Because of this, the 76 handle has been a floor lately, and we continue to like to buy scalping opportunities at that level, or at least as close as we can get to it. We think this pair will be range bound for the foreseeable future at this point.

USD/JPY Daily Fundamental Analysis for September 29, 2011

The USD/JPY pair dropped early Wednesday within the same trading range that anchors its movements for the past eight days. The U.S. economy is poised for disappointing data this week, giving the Japanese yen the chance to soar against the dollar.

On the other hand, the Japanese currency advanced against the European’s currencies, as the ongoing debt crisis has fuelled fears about the global growth outlook, giving investors another reason to abandon higher yielding assets and shift to the yen.

On Thursday at 23:50 GMT (Wednesday), Japan will issue the annual retail trade for August, where the previous reading was 0.7% and expected to come at –0.8%. The seasonally adjusted retail trade is expected to come at 0.2% from the previous – 0.3%.

The U.S. economy will release the annualized Gross Domestic Product for the second quarter at 12:30 GMT, where the U.S. economy is expected to grow by 1.2% revised from 1.0%.

The Personal Consumption for the second quarter is expected steady at 0.4%, while the U.S. Core Personal Consumption Expenditure for the second quarter is expected unrevised at 2.2%.

At 12:30 GMT, U.S. economy will issue its weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance increased 423 thousand last week.

At 14:00 GMT the U.S. economy will release the Pending Home Sales for August, where it is expected with a drop of 2.1% following 1.3% decline in July.

GBP/USD Technical Analysis for September 29, 2011

 

GBP/USD had a slightly bearish day on Wednesday, but it should be noted a lot of those losses came late in the session again. This shows that rallies cannot be trusted, and they are simply providing selling opportunities at this point. Because of this, we sell rallies, and we do not buy this market. The pair is bearish, and the recent downdraft isn’t the kind of violent and sudden move that happens in a vacuum. Because of this – selling is the order of the day.

USD/CAD Technical Analysis for September 29, 2011

 

USD/CAD rose drastically on Wednesday as traders sold off the oil markets. The 1.03 area was the most recent high in this pair, and proved to be resistive. Because of this, we want to buy – but must see a new high at this point. The pair seems intent on running higher, and looks very healthy at this point. However, there is no point in going long until we get confirmation as the totality of the move could see 1.10 before it is all said and done. We don’t sell this pair unless the oil markets break above the $90 mark in the Light Sweet Crude markets.

USD/CAD Daily Fundamental Analysis for September 29, 2011

The USD/CAD pair gained back on Wednesday, as traders remained cautious after the huge swings that dominated markets over the past few sessions, while falling commodity prices put negative pressure on the Canadian dollar and allowed the USD/CAD pair to rise.

Traders will be following the GDP report closely on Thursday, where the United States will release the final GDP estimate for the second quarter and expectations show that the U.S. economy continued to expand although at a slow pace. Overall, we still expect the USD/CAD pair to rise over the coming period, since conditions in markets haven’t stabilised yet.

Thursday September 29:

Canada will release the industrial product price index for the month of August at 12:30 GMT, where industrial product prices are expected to drop by 0.3% in line with the prior drop back in July, while raw material prices are expected to drop by 1.3% in August, compared with the prior drop of 1.2%.

The final second quarter GDP revision is due at 12:30 GMT where the annualized GDP is expected with an upside revision to 1.2% from 1.0%. Personal Consumption is expected steady at 0.4% and the Core PCE also expected steady at 2.2%.

Also due at 12:30 will be the weekly jobless claims for the week ending September 23, which are expected to ease to 420 thousand after rising by 423 thousand in the previous week.

At 14:00 GMT we have the pending home sales for August which are expected with 2.1% drop after 1.3% decline in July.

USD/CHF Technical Analysis for September 29, 2011

 

The USD/CHF pair rose on Wednesday, as the Dollar was bought in general during the session. The market is in a “safety trade” mode, and the CHF is no longer considered a decent proxy for safety as the Swiss National Bank is willing to devalue the currency by any means necessary. We like buying this pair on dips, as there seems to be a never-ending supply of bad news that sends traders looking for safety. We cannot sell – we don’t fight central banks.

 

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