Forex Technical and Fundamental Analysis for September 9, 2011

EUR/USD Technical Analysis for September 9, 2011

 

 

The EUR/USD pair fell hard on Thursday as ECB Chairman Trichet did his best to talk down expectations in the EU. The pair is now significantly below the 1.40 mark, and as such looks very, very weak. However, there is still the recent low of 1.3838 which has to be overcome for a long-term sell signal. Truth is though, it is very difficult to buy the Euro at all, so we are selling rallies, or a break down below that level in the 1.3838 area.

 

EUR/USD Daily Fundamental Analysis for September 9, 2011

The EUR/USD fluctuated heavily on Thursday with investors focused on the developments in the euro area and the ECB rate decision. Steady rates and dovish comments from Trichet kept the euro weak and subject to further losses versus the dollar.

The single currency extended the decline versus its major counterparts after Trichet played down inflation risks, saying the risks to the outlook are “balanced” dropping upside risks to inflation from growth pressures that are to the downside.

The bank revised lower their growth and inflation expectations which kept the downside pressure on the euro.

We still see the weakness for the euro evident with the bets rising that the growing downside pressure on growth and worsening debt crisis will force the ECB to reverse the monetary tightening and the two hikes delivered this year. This will likely keep the EUR/USD biased to the downside for the coming period.

On Friday the light fundamental load will give the market some room to adjust ahead of the meeting as investors assess the new ECB stance and also act on the speech from Obama to congress which is expected late on Thursday and will take full effect on the market on Friday.

Germany will end the week with the final revision for August inflation figures at 06:00 GMT as inflation is expected to remain unrevised in EU harmonized terms at -0.1% on the month and 2.4% on the year.

The United States will end with wholesale inventories for July at 14:00 GMT which is expected to tick higher to 0.8% from 0.6%.

AUD/USD Technical Analysis for September 9, 2011

 

 

The AUD/USD pair fell a bit on Thursday, but stayed above the 1.05 support level. As long as this pair does, it cannot be sold, and should be expected to stay somewhat afloat. The most likely scenario is sideways for the short-term, as there is a gap that was filled from the weekend that pushed prices back down and massive support at 1.05. With those two competing forces within about 125 pips of each other, this pair will more than likely do little. If we get below 1.05 – there is enough support below to keep us from selling.

 

AUD/USD Daily Fundamental Analysis for September 9, 2011

The Australian currency (Aussie) witnessed a decline against its all major counterparts , while it dropped sharply versus the US dollar after the nation reported that the unemployment unexpectedly rose in August, where the economy cut 9700 jobs for a second straight month.

Expectations indicate that the Reserve Bank of Australia will cut the interest rate in the upcoming period to revive the economic recovery; pushing investors shun the Australian dollar.

On the other hand, Australia’s economy is driven by a resource bonanza as China and India, two countries that account for more than a third of the world’s population, increase demand for minerals and energy.

On Friday, the U.S. economy will release the Wholesale Inventories for July at 14:00 GMT, where it’s expected to come at 0.80% from the previous reading of 0.6%.

EUR/CHF Technical Analysis for September 9, 2011

 

 

EUR/CHF rose again on Thursday, but lagged the USD/CHF pair. The EUR/CHF almost always moves in lockstep with the USD/CHF, and the fact it didn’t shows how weak the Euro really is at the moment. The market is at the 200-day moving average, and is struggling with it. The “peg” of 1.20 announced by the Swiss National Bank is only 150 pips below, and will more than likely hold. However, with all of the issues in Europe, you might be better off to look to other CHF-related pairs at the moment.

 

EUR/CHF Daily Fundamental Analysis for September 9, 2011

The EUR/CHF traded with volatility on Thursday with all eyes on the ECB and Trichet’s conference, where the fear of massive SNB intervention kept the pair biased to the upside ahead of the speech.

The euro maintained its strength against the franc after the ECB left rates steady as expected with the benchmark interest rate at 1.50%. Investors were anxious over the next step and what Trichet might say which fuelled the fluctuations for the pair.

The bearishness was limited for the pair and held above the 1.20 floor set by the SNB even after Trichet’s comments. The dovish turn from Trichet in saying the risks are “balanced” raised the bets that interest rates might be cut before the end of year.

As the president dropped the hawkish phrases from his speech and the bank revised lower the growth and inflation outlook the downside pressure is evident on the euro, yet also the franc assured its resilience to the move and accordingly the stability of the SNB’s policy and the risk it associated to investors in the market that shunned the pair.

We still see the pair more influence for by the intervention and remains biased to the upside as even the euro weakness and the fragile sentiment did not alter the direction and the upside movement and accordingly we expect the EUR/CHF to end the week on strong bullish terms and resume the upside movement in the coming period.

NZD/USD Technical Analysis for September 9, 2011

 

 

The NZD/USD pair rose, and then fell on Thursday as traders begin to ask even more questions about the global economy. The pair is extremely risk-sensitive, and will fall as more and more fear enters the marketplace. The pair is in a massive consolidation area, but a breaking of the lows on Thursday would have us selling, and aiming to get back down to the 0.81 level. If we get above the highs on Thursday, there is still resistance above until we get to 0.86 or so, keeping us on the sidelines.

 

NZD/USD Daily Fundamental Analysis for September 9, 2011

The NZD/USD pair lost ground after the Kiwi returned to its previous downward in light of the absence of economic news from New Zealand. Besides, the greenback strengthened against its major counterparts, driving the pair to the downside.

The U.S. dollar was able to gain more momentum against other majors as risk aversion and the unstable outlook for the U.S. economy increased demand for the greenback as a safe haven.

The New Zealand economy witnessed some improvement in the second three months after the natural disaster that hit the economy. Further, the European crisis with the sluggish US economy is still affecting the global economy at this time, and the New Zealand economy is one of the countries affected by this crisis.

However, the New Zealand dollar was able to show a strong performance due to the optimistic outlook for the New Zealand economy, but with the strong demand for safe haven currencies, the Kiwi lost ground against the dollar and the yen.

On Friday, the U.S. economy will release the Wholesale Inventories for July at 14:00 GMT, where it’s expected to come at 0.80% from the previous reading of 0.6%.

USD/JPY Technical Analysis for September 9, 2011

 

 

The USD/JPY pair fell a bit on Thursday, but managed to bounce off of the 77 level for the second day in a row. It appears that there is someone or something below offering support for this pair, and it looks as if it could be starting to base for a move upwards. If we get above the highs from Tuesday, we will then be long of the pair, holding on for at least 150 pips, markets willing. We don’t sell because of the central bank threatening intervention.

 

USD/JPY Daily Fundamental Analysis for September 9, 2011

The USD/JPY pair retreated early Thursday as the greenback strengthened against most of it major counterparts due to concerns over the outlook for the U.S. economy and the current slowdown in several economic sectors.

On the other hand, the Japanese yen has lost demand after BOJ disappointed expectations for further measures to be taken to increase liquidity and weaken the Japanese currency.

Furthermore, the yen and the US dollar are still the winning currencies between other majors, as risk aversion and the gloomy outlook for the global economy increased fears in the financial market and drove investors to shift their investments to safe haven currencies.

On Friday at 23:50 GMT (Thursday), Japan will release the final gross domestic product for the second quarter, where the contraction is expected to be revised deeper to 2.0% on the year from 1.3% and on the quarter to 0.5% contraction from 0.3% contraction previously reported.

Japan will issue the consumer confidence for August at 05:00 GMT, where the pervious reading was 37.0.

The U.S. economy will release the Wholesale Inventories for July at 14:00 GMT where it’s expected to come at 0.8% from the previous reading of 0.6%.

GBP/USD Technical Analysis for September 9, 2011

 

 

The GBP/USD pair rose on Thursday after the Bank of England had no mention of any new quantitative easing, pushing the value of the Pound upward. However, as the day wore on, it started to focus on the global growth story in general. The gloomy outlook pushes demand for the USD, and as such – the pair fell in later hours. The pair has formed a shooting star-shaped candle two days in a row, a very bearish sign. This could be foreshadowing a move lower, perhaps to 1.5850 or so – the July low. If it goes through that area – this pair falls for several handles. We don’t buy this pair, and if we break the lows of the previous two days, it might be worth selling a small position in this market.

 

GBP/USD Daily Fundamental Analysis for September 9, 2011

On Thursday, the pair continued its rise for the second day after the Bank of England (BoE) refused to respond for calls to expand the asset purchase program by 50 billion pounds. The BoE opted to leave both interest rate and APF quantity unchanged at 0.50% and 200 billion pounds to support the weak recovery, where policy makers considered that further increase in quantitative easing measure would trigger inflation to uncontrollable levels as the inflation meanwhile is already more than double of the bank’s 2% target.

Yet, the dollar advanced against majors except the pound before Obama delivers a speech late on Thursday, where he will present his plan for creating jobs and boosting growth, while Bernanke will give an outlook for the U.S. economy.

Data released on Thursday showed that U.S. initial jobless claims for the week ended September 3 inclined to 414,000 compared with the revised 412,000 a week before, providing further clues that the labour market is still fragile after the economy failed to create any jobs in August, according to the non-farm payrolls latest report.

The week ends with the release PPI figures for August, which may affect the pair’s movements as it gives some evidence about inflation before the release of CPI gauge.

In the U.S., a report of low relevance which is Wholesale inventories will be out at 14:00 GMT.

USD/CAD Technical Analysis for September 9, 2011

 

 

The USD/CAD pair rose on Thursday again, but still remains in the consolidation area that we have been stuck in for a few weeks now. The pair is held hostage by the oil markets, which naturally pullback in this “risk off” session we had on Thursday. The pair is still in a downtrend, and we feel selling is the only choice we have, but only on signs of weakness. If we get weak-behaving candles near the 0.99 level – we are more than willing to sell this pair. We won’t buy until we close above the parity level.

 

USD/CAD Daily Fundamental Analysis for September 9, 2011

The USD/CAD pair was slightly higher on Thursday after several economic reports were released from the United States and Canada, where the U.S. jobless claims rose above expectations, while the trade deficit in both countries narrowed.

U.S. President Obama will announce a new stimulus plan to support the labour market, where the specific details of Obama’s plan will be released before the Congress later on Thursday. Moreover, traders will be eyeing the jobs report from Canada on Friday, where the unemployment rate is expected to remain unchanged at 7.2%.

Friday September 09:

The focus on Friday will surely be on the infamous jobs report from Canada at 11:00 GMT, where the net change in employment is expected at 21.5 thousand in August, following 7.1 thousand added jobs in July. Unemployment is expected to remain unchanged at 7.2%.

At 12:15 GMT, the housing starts index will be released for the month of August, where housing starts are expected to ease to 200.0K, compared with the prior estimate of 205.1K in July.

The United States will end with wholesale inventories for July at 14:00 GMT which is expected to tick higher to 0.8% from 0.6%.

USD/CHF Technical Analysis for September 9, 2011

 

 

The USD/CHF pair continues to rise in value as the Swiss have made is absolutely certain that they are willing to print as many Francs as it takes to reverse the strength of the currency. The world is nervous, and looking for safe havens. Since the Swiss Franc is no longer able to be one of those, it makes sense that the market is buying the USD, pushing this pair higher. The 200-day moving average has been closed above on the session, and this is a bullish technical signal as well. Because of all of this information, we are buying the USD/CHF pair on pullbacks.

 

USD/CHF Daily Fundamental Analysis for September 9, 2011

On Thursday, the dollar continued its rise against the franc after taking a breather on Wednesday as speculations increased that the SNB is continuing its intervention to halt the franc’s rally following this week’s action which included setting a ceiling target for the franc against the euro at 1.20 while the bank vowed to “enforce this minimum rate with the utmost determination and is prepared to buy foreign currency in unlimited quantities.” Speculation rose that the SNB may be using currency options to reinforce its efforts to curb the franc’s runaway, pushing it further to the downside.

 

On the other hand, the dollar advanced before Obama’s speech where he will present his plan for creating jobs and boosting growth, while Bernanke will give an outlook for theU.S.economy. Initial jobless claims for the week ended September 3 showed an incline to 414,000 compared with the revised 412,000 a week before, providing further clues that the labour market is still fragile after the economy failed to create any jobs in August, according to the non-farm payrolls latest report.

 

The week ends with the release of a report of low relevance which is Wholesale inventories at 14:00 GMT, while the Swiss economy has not releases.

 

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