Forex Technical and Fundamental Analysis for September 30, 2011

EUR/USD Technical Analysis for September 30, 2011

 EUR/USD rose again on Thursday, but as it has in the two previous sessions – gave up half of its gains. The pair looks weak at best, and the situation in the EU continues to be a drag on it. Even with the various governments approving the leveraged bailout fund one by one, the market simply doesn’t seem impressed. Because of this, we are selling any and all rallies in this pair. We don’t bother buying on support as we think the 1.35 level will eventually give way.

 

 

EUR/USD Daily Fundamental Analysis for September 30, 2011

The euro continued to enjoy the strength against the dollar as the good data from the euro area along with the improved sentiment helped the EUR/USD hold the upside bias.

The data from Germany that showed the ongoing expansion in the labour market with the drop in unemployment to 6.9% helped the euro retain the strength and offset the downbeat confidence figures from the euro area.

More support was seen from the passage of the EFSF expanded powers in Germany as the parliament approved the measures with a strong vote which was a good signal to markets that Merkel can still do more and fight back waning support.

The sentiment was also bolstered by good U.S. figures where the economy expanded more than expected in the second quarter by 1.3% on rising personal consumption which helped ease the jitters over the economic slowdown for now.

The week was a combination of mixed expectations and despite the volatility we can say that the market unwound the panic attack seen in the past week, yet with the end of the week on Friday some position settlement and end of the week trades will likely increase the fluctuations and might pressure the euro lower.

Germany will start with the retail sales for August at 06:00 GMT which is expected with 0.5% slump after it remained unchanged in July and on the year to drop 1.2% after -1.6%.

The euro area will release the flash CPI estimate for September at 09:00 GMT and expected to hold steady at 2.5%. Also at the same time, the unemployment rate for August is due and expected as well steady at 1.0%.

From the United States the week will end with the income report for August at 12:30. Personal income is expected with 0.1% rise after 0.3% while spending is expected to ease to 0.2% from 0.8%. The Core PCE is expected steady at 0.2% and on the year to rise 1.7% from 1.6%.

At 13:45 GMT the Chicago PMI for September is due and expected steady at 56.5.

AUD/USD Technical Analysis for September 30, 2011

 AUD/USD had a wild day as it soared initially, only to fall hard in the US session on Thursday. The pair then rebounded nicely at the close, and ended the day forming a shooting star-like candle. The bottom of the candle sits right at the 0.97 support level, and if that gives way – we would have a long-term sell signal in this pair. The pair has been sold off any time it has tried to rally, so because of this, we are sellers only. A daily close below the bottom of the Monday hammer has us aggressively short this pair.

 

AUD/USD Daily Fundamental Analysis for September 30, 2011

Australian currency declined against its major counterparts in early trading in Asia on Thursday as the negative outlook for the global economic growth during this period pressured higher yielding currencies; nevertheless the pair rebounded on eased European debt woes.

The current financial crisis needs time to cool as the European debt crunch has extended, and threatening a worse meltdown than the mortgage crisis 2008.

On Friday, at 01:30 GMT, Australia may present its yearly and monthly private sector credit (AUG) where in July it rose 0.2% and on the year increased 2.7%.

From the United States the week will end with the income report for August at 12:30. Personal income is expected with 0.1% rise after 0.3% while spending is expected to ease to 0.2% from 0.8%. The Core PCE is expected steady at 0.2% and on the year to rise 1.7% from 1.6%.

At 13:45 GMT the Chicago PMI for September is due and expected steady at 56.5.

EUR/CHF Technical Analysis for September 30, 2011

 EUR/CHF continued to sit still on Thursday. The pair is almost impossible to trade as selling isn’t going to be allowed by the Swiss National Bank. This SNB is quite willing to intervene if the market dips below 1.20, and the EU is too messy right now to own the Euro. Because of this, we think this pair is the long-term trade candidate, but only after the EU settles down.

 

EUR/CHF Daily Fundamental Analysis for September 30, 2011

The EUR/CHF continued to trade in a tight range yet with the prevailing upside bias after the SNB chairman reassured the commitment to the set floor for the pair.

The pressures on the euro continue to ease which offered more support for the pair to move to the upside yet it clearly still lacks the strong upside momentum.

The data from Germany that showed the ongoing expansion in the labour market with the drop in unemployment to 6.9% helped the euro retain the strength and offset the downbeat confidence figures from the euro area.

More support was seen from the passage of the EFSF expanded powers in Germany as the parliament approved the measures with a strong vote which was a good signal to markets that Merkel can still do more and fight back waning support.

The franc also remained week after Thomas Jordan reiterated the commitment to prevent the excessive currency gains. Jordan said the SNB will use “all measures” to defend the franc though he declined to comment on whether they will raise the 1.20 floor set.

We still see the trading range very tight for the pair and it lacks the heavy volume with the SNB surely maintaining the pair’s exchange rate stability. On Friday we see little room for the pair to move and might be affected with the end of the week trading that might pressure the euro.

The euro area will release the flash CPI estimate for September at 09:00 GMT and expected to hold steady at 2.5%. Also at the same time, the unemployment rate for August is due and expected as well steady at 1.0%.

Switzerland will release the KOF Swiss Leading Indicators for September at 09:30 GMT where the index is expected with a drop to 1.40 from 1.61.

NZD/USD Technical Analysis for September 30, 2011

 NZD/USD had a large range on Thursday, eventually ending up down just slightly. However, it should be noted that it was the bullishness that gave way overall, and that we are approaching the bottom of the Monday candle that was so supportive this week. The hammer on Monday for us represents a massive area from which to sell this pair. The breaking of that level on a daily close gets us short for longer-term trading. We don’t buy this pair – there is simply too much global fear to buy a commodity currency at this point.

 

NZD/USD Daily Fundamental Analysis for September 30, 2011

New Zealand dollar (Kiwi) rose against the US dollar as Reserve Bank Governor Alan Bollard said policy makers are better positioned than many peers to weather any fallout from the European and U.S. fiscal crises.

On the contrary, the New Zealand currency pared its losses as Asian stocks gained on speculation German lawmakers will approve a measure to expand a bailout fund for Europe’s debt-stricken nations and as orders for U.S. capital goods unexpectedly climbed.

Moreover, the economic growth in New Zealand was flat in the second quarter along with increasing global risks that are threatening the nation’s exports, confirming that policy makers will keep interest rates at a low record until next year.

On Friday the U.S. economy’s week will end with the income report for August at 12:30. Personal income is expected with 0.1% rise after 0.3% while spending is expected to ease to 0.2% from 0.8%. The Core PCE is expected steady at 0.2% and on the year to rise 1.7% from 1.6%.

At 13:45 GMT the Chicago PMI for September is due and expected steady at 56.5.

USD/JPY Technical Analysis for September 30, 2011

 

USD/JPY continues to hover just below the 77 handle, and just above the 76. The pair actually touched 77 on Thursday, but failed to break out yet again. As we have been saying, this pair is well-suited at this point to be scalped, and not traded for anything more than a few dozen pips. We like buying as it gets closer to 76, but aren’t as keen selling in general, as the Bank of Japan is waiting to intervene if necessary to keep this pair afloat.

 

USD/JPY Daily Fundamental Analysis for September 30, 2011

The USD/JPY pair continued its downside movement within the tight trading range, as the greenback retreated early Thursday against other major currencies in a correctional movement after the strong gains recorded by the dollar during the past period.

The FOMC new stimulus program called “Operation Twist” did not drive the dollar down against other currencies, especially as policy makers also signaled that economic growth remained slow which increased fears across financial market, pushing investors to shift their investments to the safe haven currency which is the US dollar.

But on Thursday the major currencies bounced against the dollar, trying to cover some of its previous looses against the dollar especially with easing debt woes in Europe as parliaments approve the expansion of the EFSF powers.

On Friday at 23:30 GMT (Thursday), Japan will issue the annual Household Spending index for August, where it has a previous reading of –2.1% and the expectations refer to –2.8%.

The Japanese Jobless rate for August will be released at 23:30 GMT, where it is expected to come at 4.7% in line with the previous reading.

The annual Japanese National Consumer Price Index for August is expected to come at 0.1% less than the previous reading of 0.2%, the National Consumer Price Index Ex-Fresh Food for August is expected to come at 0.1% the same as the prior reading.

The Japanese Industrial Production for August will be released at 23:50, where the preliminary reading is expected to come at 1.5% from the previous 0.4%, while the annual Industrial Production is expected to come at 1.1% from the prior –3.0%.

At 05:00 GMT, Japan will release the annual Construction Orders for August with a prior reading of 5.7%. The annualized Housing Starts for August is expected to come at 0.860 million up by 4.5% from the previous 0.955 million by 21.2%.

From the United States the week will end with the income report for August at 12:30. Personal income is expected with 0.1% rise after 0.3% while spending is expected to ease to 0.2% from 0.8%. The Core PCE is expected steady at 0.2% and on the year to rise 1.7% from 1.6%.

At 13:45 GMT the Chicago PMI for September is due and expected steady at 56.5.

GBP/USD Technical Analysis for September 30, 2011

 

GBP/USD rose on Thursday, but fell towards the later hours of the session. The result was a shooting star candle for the third day in a row. This shows just how hard it is to rally this pair for any significant amount of time. There simply is no real conviction to the upside in the end. Because of this, we still think selling the rallies is the way to go in the cable pair for the foreseeable future.

 

 

GBP/USD Daily Fundamental Analysis for September 30, 2011

USD/CAD Technical Analysis for September 30, 2011

 

USD/CAD rose above the highs placed on Monday to give another buy signal during the Thursday session. The resulting candle was a hammer at the top of a bullish run. This can be either supportive, or a “hanging man” if it gives way. The trade on something like this is quite simple really: Sell on a break of the bottom of the Thursday range as it would confirm a “hanging man”, and buy at the break of the top if it happens. We still think the oil markets look a bit weak, and the CAD is highly dependent on oil to gain.

 

USD/CAD Daily Fundamental Analysis for September 30, 2011

The USD/CAD pair fell on Thursday after strong data from the United States in addition to the German Parliament’s approval to expand the European Financial Stability Facility (EFSF) spread optimism across markets, boosting demand for higher yielding assets, which provided the Canadian dollar with strong momentum to push the USD/CAD pair to the downside.

Traders will be following the GDP report closely on Friday, where Canada will release the GDP estimate for July and expectations show that the Canadian economy continued to expand at a stronger pace compared to the previous report, while the U.S. will release the income report for August. Overall, we still expect the USD/CAD pair to rise over the coming period, since conditions in markets haven’t stabilised yet.

Friday September 30:

Canada will release the Gross Domestic Product estimate for the month of July at 12:30 GMT, where the Canadian economy is expected to have expanded by 0.3%, compared with the prior expansion of 0.2%, while the Canadian economy is expected to expand by an annualized 2.3%, compared with the prior expansion of 2.0%.

From the United States the week will end with the income report for August at 12:30. Personal income is expected with 0.1% rise after 0.3% while spending is expected to ease to 0.2% from 0.8%. The Core PCE is expected steady at 0.2% and on the year to rise 1.7% from 1.6%.

At 13:45 GMT the Chicago PMI for September is due and expected steady at 56.5.

At 13:55 GMT, the University of Michigan will release the final estimate for consumer confidence in September, which is expected to remain steady at 57.8.

USD/CHF Technical Analysis for September 30, 2011

 

USD/CHF fell a bit on Thursday as traders sold off the USD in Asia and Europe. However, during the US session we saw USD strength, and this gave the pair a little bit of a lift. The CHF is no longer a safe haven currency, so when times are troubling, this pair will wise. The SNB is willing to intervene if the Franc appreciates too quickly, so selling isn’t an option. We like buying this pair on dips at this point.

 

USD/CHF Daily Fundamental Analysis for September 30, 2011

 

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