More Unemployed Brits – Pound Vulnerable

A rise in the number of unemployed people was reported at he fresh Claimant Count Change release. This disappointment makes GBP/USD more vulnerable than other currencies.

Britain’s earliest report on the job market disappointed – instead of a decrease of 4300 unemployed people, Britain “gained” 2300 new ones. Also last month’s figure was revised to the downside. The unemployment rate remained at 7.8% as expected, but this is a rather “old’ figure – relates to July. This undermines the Pound:

GBP/USD fell from 1.5520 to 1.5480 immediately after the release, and is now struggling around 1.55. Further levels below: 1.5350, 1.5230 and 1.5120. Above – 1.5720, 1.5833 and 1.60.

The Pound had two chances of rising yesterday, but the gains were limited – CPI came out stronger than expected, at 3.1% and didn’t slip back to the 1-3% government target. While this theoretically raises the chances of a rate hike, Britain’s vulnerable position will probably deter policymakers from acting. The Pound’s gains were limited.

Later yesterday, a bigger event rocked the markets – Goldman Sachs reiterated its prediction that the Federal Reserve will have to print one more trillion dollars in order to boost the economy. EUR/USD rose above 1.30, AUD/USD reached a two year high, th Swiss Franc became stronger than the dollar, and other currencies rocked as well.

The British Pound also gained, but the gains were limited.

Later today, Mervyn King will speak at the Trades Union Congress, in Manchester. The governor of the BoE usually brings the Pound down by expressing concern about the economy and/or dismissing inflation.

With these weak unemployment figures, the Pound is vulnerable to King’s words.

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EUR/USD Sep. 15- Slipping After the Goldman Move

EUR/USD shot up on Goldman’s speculation about more dollar printing. After conquering 1.30, it slipped back down. Today’s events can supply lots of action. Here is a quick update on fundamentals, technicals, and community trends.

EUR/USD flirting with 1.30. Click to enlarge.

EUR/USD Technicals

Asian session:  EUR/USD slipped lower during Asian session.Current Range is between 1.2920 to 1.30.Further levels: Below,  1.2840, 1.2770, 1.2610, 1.2460, 1.2330 and 1.2150. Above   1.30, 1.3110, 1.3267 and 1.3430.EUR/USD is now between 50% and 61.8% Fibonacci retracement of the drop from 1.3334 to 1.2591.

EUR/USD Fundamentals

All times are GMT. Most important events emphasized.

9:00 CPI. Exp. +1.6%.9:00 Core CPI. Exp. +0.9%.12:30 US Empire State Manufacturing Index. Exp. +8.7.12:30 US Import Prices. Exp. +0.2%.13:15 US Industrial Production. Exp. +0.3%.13:15 US Capacity Utilization Rate. Exp. 75.1%.

EUR/USD Sentiment

Basel II banking accord still positively impacts the Euro. On the other hand, the debt issues never went away, and they are weighing on the common currency.Market is drifting between “risk on” and “risk off” with a tendency to “risk on”. With “risk off”, good US figures boost the dollar and bad ones hurt it. When risk is on, bad US figures boost the dollar. In recent days, we’ve seen more normal behavior.Japanese massive intervention to weaken the yen may indirectly shake EUR/USD – weakening it.1.2660 is a stronghold on the downside, 1.3110 on the upside.Currensee Community: 53% are Short, 47% are long, down from 56:44 yesterday. Are the tables turning in favor of the Euro? These are 998 open positions in real accounts trading this pair at the moment.

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Forex Daily Outlook – September 15 2010

Very interesting and hectic day anticipated us today: Empire State Manufacturing Index, Survey in the US, (BOC) Deputy Governor Timothy Lane speaks in Canada, BOE) Governor Mervyn King speaks in the UK, Official Cash Rate in New Zealand and much more. Let’s see what awaits us today

In the US Industrial Production, the main gauge of industrial activity measuring the output of factories, mines and utilities. Manufacturing activity, which has been a leader of the US economic recovery, is forecasted to show a smaller rise in industrial output by 0.2%, compared with the 1.0% increase in the previous month.

Later in the US, Empire State Manufacturing Index, Survey of about 200 manufacturers in New York State which asks respondents to rate the relative level of general business conditions.  Is forecasted to show a rise of 1.6 points from the previous month and it’s indicates improving conditions.

More in the US, Import Prices, monthly earliest government-released inflation data that measures the change in the price of imported goods and services purchased domestically, 0.2% similar to last month and It contributes to inflation for businesses and consumers, especially those who rely heavily on imported goods and services.

Also in the US, Capacity Utilization Rate, a monthly leading indicator of consumer inflation – when producers are nearing full capacity they respond by raising prices, and the higher costs are usually passed on to the consumer forecasted to rise by 0.3%.

Finally in the US, Crude Oil Inventories, US indicator that affects the loonie due to Canada’s sizable energy sector, and measures the change in crude oil barrels number held in inventory by commercial firms during the past week. Forecast a reduction by 0.7% and influences the price of petroleum products which affects inflation.

In Canada, Bank of Canada (BOC) Deputy Governor Timothy Lane, deliver a speech titled “Promoting Canada’s Economic and Financial Well-Being in an Uncertain World” at the Board of Trade, in St. John’s. Can often be used to drop subtle clues regarding future monetary policy.

Finally in Canada, Manufacturing Sales, measures the change in the sales made by manufacturers total value has stabilized on 0.1%. It’s a leading indicator of economic health – manufacturers are quickly affected by market conditions, and changes in their sales can be an early signal of future activity such as spending, hiring, and investment.

For more on USD/CAD, read the Canadian dollar forecast.

In Europe Consumer Price Index (CPI), the main measure of inflation in the Euro-zone and the European Union’s equivalent to the CPI- Consumer Price Index.  Inflationary pressures in the Euro-zone are expected to remain subdued at 1.6% August, down from 1.7% in July. And the Core CPI is forecasted to rise by 0.8%.

For more on the Euro, read the EUR/USD forecast and Casey Stubbs’ latest analysis.

In Great Britain, Bank of England (BOE) Governor Mervyn King speaks at the Trades Union Congress, in Manchester and can influents on the subtle clues regarding future monetary policy.

Finally in Great Britain, Claimant Count Change is forecasted to show a rise by 0.3K and the number of unemployed people is an important signal of overall economic health

Read more about the Pound in the GBP/USD forecast.

In Australia, Westpac Consumer Sentiment, Monthly Survey of about 1,200 consumers which asks respondents to rate the relative level of past and future economic conditions, employment, and climate for major purchases has drooped down by 5.7%.

For more on the Aussie, read the AUD/USD forecast.

In New Zealand, Official Cash Rate, Interest rate at which banks lend balances held at the RBNZ to other banks, and Due to the uncertain outlook and the threat of a global economic slowdown, the Reserve Bank of New Zealand could decide that it would be prudent to keep the current 3.0% benchmark interest rate level unchanged at this meeting, while still leaving the door open to further rate hikes in the months ahead. 

More in New Zealand, Reserve Bank of New Zealand (RBNZ) Press Conference & Rate Statement which are among the primary tools of RBNZ to communicate with investors about monetary policy and covers in detail the factors that affected the most recent interest rate decision.

In Japan, Tertiary Industry Activity, a leading indicator of economic health that measures the change in the total value of services purchased by businesses, and it is forecasted to rise by 0.8%.

That’s it for today. Happy forex trading!

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Gold enjoys Goldman

Not only foreign currencies enjoyed Goldman Sachs’ speculation about the new trillion dollar printing scheme – also precious metals, rallied. Gold reached new uncharted levels and also silver advanced forward.

When there’s talk about printing more dollars to stimulate the economy, the dollar weakens as too many dollars make the currency worth less. But for some people, other paper currencies aren’t enough and there are more real “safe haven” assets:

Gold and silver had monetary value in ancient times, and times of trouble, they rise. The price of gold crossed the $1265 peak reached in mid-June and peaked at $1274.47 before easing just under $1270.

Silver gaining traction

Naturally, the focus is on gold, but also the price of silver is advancing. After flirting with the psychological $20 number in the past week, today’s news completed the break higher and it peaked at almost $20.50. It now trades at $20.43.

Silver still isn’t at an all-time high. The highest level was recorded on March 17th 2008 – $21.34. This level, now less than a dollar away, is the key level to watch. A break above this figure will open the road to more significant gains.

In times of trouble, “paper gold” or “paper silver” aren’t enough for worried people – they prefer real gold. 4 months ago, I reported about the launch of Gold ATMs – automatic vending machines that sell physical gold. A look through the German company’s website doesn’t show any progress since then. But maybe now they have a chance of extending their business.

The speculation of a one trillion quantitative easing scheme by the Federal Reserve in November might be addressed at the upcoming FOMC meeting next week. We’ll see if the economy is indeed doing so bad. According the recent Non-Farm Payrolls, there is hope.

The notion of the moment is that the dollar is worth less – against other currencies and against solid gold and silver. This notion won’t necessarily continue.

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Forex Daily Outlook – August 19 2010

Very busy day filled with interesting and varied news. Philly Fed Manufacturing Index in the US, James Bullard speaks in Arkansas, Retail Sales in Great Britain, , German PPI in Europe and more. Let’s see what awaits us today.

In the US, Unemployment Claims, The number of individuals who filed for unemployment insurance for the first time during the past week decreased by 5K, the nation’s earliest economic data, and the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions.

Later in the US, Philly Fed Manufacturing Index, monthly survey of about 250 manufacturers in the Philadelphia Federal Reserve district which asks respondents to rate the relative level of general business conditions; indicates improving conditions 7.2 points, It’s a leading indicator of economic health, changes in businesses sentiment can be an early signal of future economic activity such as spending, hiring, and investment.

Finally in the US, Federal Reserve Bank of St Louis President James Bullard speaks about the US economy at the John Q Hammond Center, in Arkansas. Affects the nation’s key interest rates and the future monetary policy.

In Canada, Leading Index, the level of a composite index based on 10 economic indicators increased by 6% and this index is designed to predict the direction of the economy.

More in Canada, Wholesale Sales, the total value of sales at the wholesale level increased by 5% and it’s a leading indicator of consumer spending – retailers generally order more goods from wholesalers when they expect consumer sales to increase.

For more on USD/CAD, read the Canadian dollar forecast.

in Europe, German Producer Price Index (PPI), the price of goods sold by manufacturers has decreased by 4% and It’s a leading indicator of consumer inflation – when manufacturers charge more for goods the higher costs are usually passed on to the consumer.

For more on the Euro, read the EUR/USD forecast and Casey Stubbs’ latest analysis.

In Great Britain, Retail Sales, the total value of inflation-adjusted sales at the retail level that Released monthly, has decreased by 3% and it’s the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

More in Great Britain, Prelim Mortgage Approvals, Number of new mortgages approved for home purchases during the previous month has decreased by 1K, and It’s a leading indicator of housing market demand – most home purchases are financed with a mortgage, so it provides an excellent gauge of how many qualified buyers are entering the market;

Later in Great Britain, Public Sector Net Borrowing, in value between spending and income for public corporations, the central government, and local governments during the previous month has decreased by 9.4B and indicates a budget deficit.

Finally in Britain, Confederation of British Industry (CBI) Industrial Order Expectations, Monthly Survey of about 550 manufacturers which asks respondents to rate the relative level of order volume expected during the next 3 months, indicates expectations are for lower volume on -14 points.

Read more about the Pound in the GBP/USD forecast.

In Switzerland, Trade Balance, the Difference in value between imported and exported goods during the reported month has increased by 0.09B and indicates that more goods were exported than imported.

More in Switzerland, Zentrum fur Europaische Wirtschaftsforschung (ZEW), Economic Expectations, ac Monthly Survey of institutional investors and analysts which asks respondents to rate the relative 6-month economic outlook for Switzerland indicates optimism of 2.2 points.

In New Zealand, Visitor Arrivals, the number of short-term overseas visitors who arrived in the country stabilizes on 3%. Tourism plays an important role in the economy – about 10% of the population is employed by the tourism industry, and a sizable portion of the nation’s GDP is indirectly related to tourism.

That’s it for today. Happy forex trading!

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GBP/USD Bounces Off Support Line on Meeting Minutes

The meeting minutes from the last meeting of the BoE showed that there’s still one member voting for a rate hike. This helped GBP/USD bounce off the support line, after it got very close to it. Update on the Pound.

Andrew Sentance continues to vote for a rate hike. He’s still the only member out of 9 that wants a rate hike, but his voice is heard. The Pound leaped from 1.5545 to 1.5610 immediately after the release, and the move isn’t over:

Update: As of 9:45 GMT, GBP/USD already reached 1.5660! Very strong move.

A continued move could send the pair back to 1.5720, an area it failed to break yesterday. Above, 1.5833 and 1.60 are the next levels of resistance.

Earlier this week, British inflation continuing falling, slowly returning to the target range. CPI still stands on 3.1%, but Core CPI fell sharply to an annual rate of 2.6%. Mervyn King, the governor of the BoE, expressed “surprise” from the higher inflation, but remained certain that it will fall. He reiterated his stance that the high prices are mostly the result of higher taxes.

The Pound struggled after this release, but later fully digested the news and dropped from the vicinity of the 1.5720 resistance line all the way to the other end of the spectrum – the 1.5520 support line. It opened the London session with an attempt to break lower and pushed forward after the MPC Meeting Minutes.

A new move downwards, would send the pair first to support at 1.5520, and then to 1.5470 and 1.5350.

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EUR/USD Aug. 18: Euro Gradually Sliding Down

Yesterday’s weak ZEW Economic Sentiment figure erased the optimism that came on the successful bond auctions. The result – no breakout. The pair now slips within the range. Will it threaten the support line?

EUR/USD Technicals

Asian session:  EUR/USD gradually slipped from 1.2890 to 1.2825.Current Range is narrower: 1.2800 to 1.2900. Significant support at 1.2722.Further levels: Below, 1.2611, 1.2460 and 1.2330. Above 1.2932, 1.30 and 1.3114.More: EUR/USD lost a two month uptrend channel and is now consolidating. It still hasn’t violated a lower uptrend channel.

EUR/USD Fundamentals

No major releases are due today. News about sovereign European debt could shake the currency, with possible headlines from Moody’s.

EUR/USD Sentiment

Market is in risk aversive mood. This means that bad US indicators are dollar positive.Today’s quiet day means that any technicals will play a bigger role.Currensee Community: 57% are Short, 43% are long. This is a small shift towards shorts – yesterday it was 56:44. These are 913 open positions in real accounts trading this pair at the moment.

Note – This is a new and still experimental section on Forex Crunch. It’s still in development.

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