FOREXYARD: Forex News Blog | |
- U.S Advanced GDP Report
- Dollar Eases Heading into Fed Meeting
- Is CAD/CHF Bullishness Coming to An End?
- USD May Fall After Unemployment Claims Today
| Posted: 28 Oct 2010 08:26 AM PDT
Tomorrow the advanced version of the U.S 3rd quarter GDP is expected to be released at 12:30 GMT. The GDP is the annualized change in the inflation-adjusted value of all goods and services produced by the economy. The GDP estimate is the first of three for the quarter, with the other releases scheduled in November and December when more information becomes available. Being the earliest, the Advance release tends to provide the most market volatility for the USD and its crosses. The GDP data will be the most watched economic report of the week. The expectation is for a slight recovery from the previous quarter, with an expectation of 2.1% growth, an improvement from the 1.7% of the previous quarter. The rise in growth for this quarter is largely attributed to higher consumer spending. The GDP data will likely join the slew of various economic indicators released this past week that showed improvement in the U.S economy. However, the release is still unlikely to brighten the gloomy long term outlook for the economy, marred by the persistently high unemployment rate. Economists continue to anticipate Nov. 2nd -3rd FOMC meeting will likely yield expansion of quantitative easing measures as the economic recovery, though showing signs of improvement, continues to be slower than expected. This outlook continues to weigh on the USD. While the greenback recovered this week from its record lows, particularly versus the ERU and JPY, aided by the slew of better than expected economic data released throughout the week, it is unable to maintain its gains and ultimately recedes most of them. With tomorrow's release the USD is expected to follow this week's trend. If the result of the GDP is as expected or higher the greenback will likely appreciate versus its rivals, possibly moving 50-100 pips. However, traders should be cautious of a possible downward correction as investors will likely be uneasy with a strong Dollar heading to next week's FOMC meeting minutes. |
| Dollar Eases Heading into Fed Meeting Posted: 28 Oct 2010 07:06 AM PDT
The dollar has been under pressure during the European trading session. Traders have been questioning the size of the bond purchases that the Federal Reserve may undertake in their meeting next week. Eyes are also on Europe as European leaders debate the next mechanism to rescue a failing EU state. The yen is stronger following the Bank of Japan's decision to hold interest rates steady. At lunch time during the European trading session, the EUR/USD was trading higher at 1.3850, up on the day from 1.3823. The GBP/USD was up sharply following better than expected CBI Sales. The Cable is trading at 1.5880, following an opening day price of 1.5802. The USD/JPY is down at 81.30. The pair opened the day at 81.53. The market has largely accepted the concept of renewed quantitative easing by the Fed. But economists and analysts debate whether the bond purchases will be finite or open ended. Questions also remain as to how the market will react to an announcement next Wednesday. Many believe the second round of quantitative easing has already been priced into the dollar given the sharp depreciation the dollar has experienced over the past 4-months. Traders are also focusing on the EU meeting in Brussels where German Chancellor Angela Merkel will present a new plan for a rescue mechanism in case of another debt crisis from emerging in Europe. The yen is strengthening following a decision by the Bank of Japan to hold interest rates steady at the their levels close to 0%. The BOJ moved up its next scheduled meeting by 10-days to address the market following the next meeting by the Federal Reserve. The USD/JPY may continue its sharp downtrend to its all-time low at 79.80. |
| Is CAD/CHF Bullishness Coming to An End? Posted: 28 Oct 2010 02:13 AM PDT
Over the course of the last week, the Canadian dollar has been making significant gains against the Swiss franc. Analysts attribute the gains to a combination of poor Swiss economic news and positive indicators out of the US and euro-zone that has increased risk taking. As we will demonstrate through a number of technical indicators, the franc may be turning a corner and the CAD/CHF pair could see a downward correction in the near future. We will be analyzing the daily chart for CAD/CHF provided by Forexyard. The technical indicators being used are the Bollinger Bands, Williams Percent Range and Stochastic Slow. 1. As seen in the chart, the cross is currently trading along the upper Bollinger Band, suggesting that a bearish correction may occur. In addition, the bands appear to be widening, which typically means a shift in direction is likely. 2. The Williams Percent Range is currently around the -15 level. Anything above -20 on this indicator typically means the pair is in overbought territory and a bearish correction is likely to occur. 3. Finally, a bearish cross has formed on the Stochastic Slow, meaning that downward pressure exists for the pair. Traders will want to pay close attention to this pair. Significant profits will likely be made by anyone who takes advantage of the impending correction.
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| USD May Fall After Unemployment Claims Today Posted: 27 Oct 2010 11:25 PM PDT
Forex traders will likely see another volatile trading day today, as a number of significant events are set to shake up the market. Large gains by the UK pound and US dollar in recent days will be tested, as both countries are scheduled to release important data. Trades will want to pay careful attention to the news, as fundamental data will likely shape the direction the markets take today. 10:00 GMT: GBP CBI Realized Sales Confederation of British Industry (CBI) Realized Sales is a monthly survey of about 160 retail and wholesale companies which asks respondents to rate the relative level of current sales volume. CBI’s index has been positive in the past 3 months, and has risen rapidly. The positive number means higher sales volume for retailers and wholesalers. Analysts are forecasting a figure of around 40 today, following last month’s result of 49. Should today’s figure come in as predicted, sterling may see a slight drop in afternoon trading against its main currency rivals. At the same time, a higher than forecasted figure is likely to help the pound in the short term. 12:30 GMT: USD Unemployment Claims Fewer US workers filed new claims for jobless benefits last week, but the net change over the past two weeks was not big enough to suggest any major improvement in the labor market. The U.S. jobs market remains weak even though the economy has been expanding at a steady pace for more than a year. Analysts are predicting today’s figure to come in at around 453K, slightly higher than last week’s result. Should their predictions prove to be true, the dollar may weaken slightly in the short term. An unexpectedly good unemployment number on the other hand, will likely help the dollar hold onto its recent gains. |
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