Daily Market Outlook by Kate Curtis from Trader's Way

Commercial Content Analysts
21

USD

The U.S. dollar continued to suffer losses against most of its major counterparts, except for the Japanese yen, as the weak March NFP figure dashed hopes of earlier than expected monetary policy tightening from the Federal Reserve. There were no major market-moving releases from the U.S. yesterday but some minor reports did highlight the ongoing slowdown. The NFIB small business index revealed that activity slowed down in March as the reading fell from 90.8 to 89.5. Today, the U.S. will release the minutes of the latest FOMC meeting but these aren’t likely to have a material impact on price action as the meeting was conducted prior to the dismal NFP release. Also due today are the Federal budget balance and the crude oil inventories.

EUR

The euro rallied against both the U.S. dollar and the Japanese yen in yesterday’s trading, despite the lack of top-tier data from the euro zone. German trade balance came in stronger than expected while the French trade balance missed expectations. For today, France and Italy will print their industrial production data and stronger than expected figures could provide support for the euro.

GBP

Data from the U.K. came in mixed yesterday as the manufacturing and industrial production figures both exceeded the consensus while the trade balance came in worse than expected. Manufacturing is up by 0.8%, twice the estimated 0.4% growth, while industrial production grew by 1.0%. The trade deficit widened from 8.2 billion GBP to 9.4 billion GBP, larger than the estimated 8.7 billion GBP shortfall. There are no reports due from the U.K. today which suggests quiet trading among pound pairs unless there’s a significant change in market sentiment.

CHF

Swiss data came in weaker than expected yesterday as the CPI and retail sales figures both missed forecasts. The Swiss CPI posted a 0.2% uptick, lower than the projected 0.3% increase and the previous month’s 0.3% rise, while retail sales grew by 2.4% and not the 2.9% jump that was expected. There are no reports on Switzerland’s schedule for today as USD/CHF and EUR/CHF may stay in consolidation.

JPY

Yen bears seem to have run out of steam as most yen pairs consolidated around significant inflection points yesterday. However, bias for the yen is still very bearish as the BOJ’s decision to implement aggressive easing measures is likely to have a long-term effect on yen pairs. There are no major reports on the yen’s schedule for today but do keep an eye out for the next set of reports due in tomorrow’s early Asian session. Core machinery orders and M2 money stock figures are up for release then.

Commodity Currencies (AUD, CAD, NZD)

Weaker than expected data from China might weigh on the Australian dollar in the near term as China printed weak CPI and trade balance. Annual inflation is at 2.1%, lower than the estimated 2.5% increase and the previous 3.2% reading. The trade balance posted a surprise deficit of 0.9 billion USD instead of the expected 15.2 billion USD surplus. Meanwhile, Canadian housing data came in mixed with housing starts rising more than expected and building permits coming in short. New Zealand will be releasing its Business NZ manufacturing index in tomorrow’s Asian session so watch out for NZD/USD action around then.

By Kate Curtis from Trader’s Way

22

USD

The U.S. dollar had quite a topsy-turvy ride at the start of the U.S. session when the FOMC meeting minutes were suddenly released early. However, price action soon settled down when the minutes revealed nothing special in particular. Fed officials still remained divided on the issue of tapering off asset purchases as many believe that the U.S. is still on shaky ground. On top of that, most traders disregarded the report as the remarks were made prior to the dismal March NFP release. For today, only the initial jobless claims report is due from the U.S. economy and the figure is projected to come in at 362K, lower than the previous week’s 385K.

EUR

The euro let go of some of its recent gains against the U.S. dollar as the 1.3100 major psychological level held as resistance in yesterday’s trading. Euro zone data came in mixed with French industrial production coming in strong and Italian industrial production posting a weaker than expected reading. Only minor reports are on tap from the euro zone again today as the ECB monthly bulletin might be the most relevant report for the day.

GBP

The pound fought to stay above the 1.5300 handle against the U.S. dollar despite the lack of market-moving reports yesterday. For today, the U.K. schedule is still empty, which suggests we could see more consolidation for GBP/USD.

CHF

Just like its other European counterparts, the Swissy had an empty economic schedule yesterday which kept USD/CHF and EUR/CHF stuck in their respective ranges. There are no reports due from Switzerland again today which suggests we could see more sideways movement from franc pairs.

JPY

After a few moments of consolidation, the Japanese yen resumed selling off against its major counterparts, particularly after the FOMC meeting minutes were released. Japanese core machinery orders came in stronger than expected as it showed a 7.5% increase, but this wasn’t enough to support the Japanese yen. There are no other reports due from Japan for the rest of today’s trading sessions, leaving yen pairs to rally on the BOJ’s recent easing efforts.

Commodity Currencies (AUD, CAD, NZD)

The Australian dollar sold off a few hours into the Asian session when Australia printed a very weak jobs report. Hiring is down by 36.1K, worse than the estimated 6.7K drop, bringing the jobless rate up from 5.4% to 5.6% for March. However, Chinese new loans and M2 money supply came in strong, providing some support for the commodity currencies. No other reports are due from Australia, Canada, and New Zealand for the rest of the day, which suggests quiet trading for the comdolls today.

By Kate Curtis from Trader’s Way

23

USD

The U.S. dollar could be in for another sharp selloff during today’s U.S. session as the retail sales report is set for release. Remember that the jobs data for March came in significantly weaker than expected at 88K versus the projected 198K reading, which suggests that consumer spending could also disappoint. March retail sales are projected to stay flat while the core figure could show a 0.1% downtick, lower than the previous month’s 1.0% increase. Also due during today’s New York session is the preliminary consumer sentiment report from the University of Michigan, which is also expected to show a slight decline.

EUR

The euro continued to gain against the U.S. dollar in yesterday’s trading as dollar weakness propped the shared currency higher. Only minor reports, namely the German WPI and euro zone industrial production, are due from the region today and these aren’t likely to have a material impact on euro movement.

GBP

The pound packed on more gains against the Greenback, with GBP/USD climbing to the 1.5400 major psychological level. There were no major reports released from the U.K. recently and none are due today, suggesting that pound pairs could continue to take advantage of dollar and yen weakness.

CHF

USD/CHF suffered another strong selloff, this time to the 0.9280 levels, as dollar weakness ensued. There were no reports released from Switzerland then and none are due today, which means that USD/CHF could react solely to the U.S. retail sales in the New York session.

JPY

The Japanese yen fought to hold on to its current levels against its major counterparts as the tertiary industry activity index provided a bit of support. The figure posted a 1.1% increase for February, better than the estimated 0.8% uptick. USD/JPY is stalling at the 99.50 area during the Asian session but we could see more action once the U.S. retail sales are printed.

Commodity Currencies (AUD, CAD, NZD)

The comdolls had a strong start during yesterday’s Asian sessions as traders sought to take advantage of the carry opportunities between the higher-yielding commodity currencies and the lower-yielding yen and dollar. However, these gains were reversed later on as traders took profits off significant inflection points. There are no major releases from their economies later today as comdoll pairs could be affected heavily by the U.S. retail sales release.

By Kate Curtis from Trader’s Way

24

USD

As expected, the U.S. retail sales data printed bleak figures and triggered a dollar selloff. The headline figure showed a 0.4% decline instead of the flat reading expected while the core figure also printed a 0.4% drop, worse than the estimated 0.1% decrease. On top of that, the consumer sentiment figure measured by the University of Michigan printed a downturn in confidence as the actual figure slipped from 78.6 to 72.3 in April. Producer price inflation reports from the U.S. also missed expectations. Only the Empire State manufacturing index is due from the U.S. today and another round of weak figures could push the dollar lower. The reading is expected to dip from 9.2 to 7.2 in April, reflecting a slowdown in manufacturing.

EUR

Cyprus is currently undergoing additional challenges with its bailout package as a recently released debt sustainability report showed that the country needs to find an additional 6 billion EUR to weather the potential effects of the ongoing fiscal tightening on economic growth. With no other report due on the euro zone schedule today, markets could stay focused on the updates on Cyprus’ debt situation and possibly sell the euro off if the country shows little to no progress in securing additional funds. The EU and IMF have already said that they’re not willing to provide extra cash, which means that Cyprus is running out of options.

GBP

The U.K. economic calendar is empty for today as pound traders could brace themselves for the release of British claimant count change data and retail sales later on. At the moment, the pound is benefitting from dollar and yen weakness but fundamentals in the U.K. remain very weak and this could be reflected by this week’s set of economic data.

CHF

There was hardly any movement from franc pairs lately as USD/CHF and EUR/CHF have simply been reacting to U.S. and euro zone reports. There are no reports on Switzerland’s schedule for today, which suggests quiet trading for these pairs.

JPY

The Japanese yen has managed to recover some of its previous losses against its major counterparts as the Japanese economy has shown signs of improvement last week. Core machinery orders and tertiary industry activity index have both surprised to the upside and contributed to yen support. The industrial production report also surprised to the upside and boosted the yen in today’s Asian session. Japan is set to print a few more medium-tier reports within the week and more improvements could keep the yen selloff at bay.

Commodity Currencies (AUD, CAD, NZD)

Weak Chinese data have been weighing on the commodity currencies recently as China’s CPI and trade balance have disappointed last week. Earlier today, the Chinese GDP also came in below the consensus, which inspired a massive Aussie selloff. No reports are due from the comdoll economies today, which suggests that the worse than expected Chinese figures could keep their rallies capped.

By Kate Curtis from Trader’s Way

25

USD

The U.S. dollar regained ground against most of its counterparts on Monday even though they printed weak economic data. The Empire State manufacturing index fell from 9.2 to 3.1 this month, worse than the estimated 7.2 reading, while the TIC long-term purchases report showed a surprise negative reading of -17.8 billion USD instead of the expected growth from 25.7 billion USD to 41.3 billion USD. Lastly, the NAHB housing market index also disappointed as it dropped from 44 to 42 instead of rising to 45. The U.S. is scheduled to print building permits and housing starts, along with CPI data, during today’s U.S. session. Also on tap are the industrial production and capacity utilization numbers. It is unclear if it’s still fundamentals or risk sentiment that’s driving price action these days but the odds are that weaker than expected U.S. figures might drag the dollar lower again.

EUR

Only the euro zone trade balance was printed from the 17-nation bloc yesterday and the report came in stronger than expected with a 12.0 billion EUR surplus instead of the projected 9.9 billion EUR reading. This was enough to boost the euro in yesterday’s trading but today’s reports might erase those gains if the actual figures disappoint. Germany will print its ZEW economic expectations figure, which is slated to drop from 48.5 to 41.5 in April. Euro zone CPI is also on tap for today but this isn’t likely to have a huge impact on euro price action as no changes are expected from the headline figure of 1.7% and the core figure of 1.3%. Keep close tabs on the debt and bailout situation in Cyprus as positive developments could provide support for the euro.

GBP

The pound lost ground to the yen and dollar in yesterday’s trading despite the lack of data from the United Kingdom. For today only the CPI reports are due from the U.K. and this should provide an indication of whether the BOE has room to ease further or not. If the actual figure comes in below or beyond the government’s target, which is unlikely, the BOE will have to submit an inflation letter to the Chancellor explaining why. Weaker than expected data could still trigger a pound selloff though.

CHF

No major reports due from Switzerland today as USD/CHF and EUR/CHF remain stuck in tight ranges. U.S. reports or euro zone updates could move these pairs a little more though but unless we see significantly worse or better data, these pairs could be in consolidation for a longer while.

JPY

The Japanese yen rallied against its counterparts on Monday as risk aversion popped back in the markets and traders started liquidating their recent yen shorts. USD/JPY eased back to the 96.00 area before rebounding but it remains to be seen whether the bounce would last or not. There are no major reports due from Japan for the rest of the day.

Commodity Currencies (AUD, CAD, NZD)

Commodity currencies continued to selloff on Monday as risk aversion started to take its toll on the higher-yielding assets. On top of that, prices of precious metals have slumped, with gold falling to its two-year lows. Canada will release manufacturing sales and foreign securities purchases data in today’s New York session, as worse than expected data might trigger a Loonie selloff. No other reports are due from the comdoll economies for the rest of the day.

By Kate Curtis from Trader’s Way

26

USD

The U.S. dollar seems to be benefitting from the risk rallies these days as most major economies have been showing signs of a slowdown. For now, it appears that weak U.S. data is still positive for the U.S. dollar as the risk off environment boosts the lower-yielding Greenback. Only the U.S. existing home sales is due for today and the reading is projected to rise from 4.98M to 5.02M in March.

EUR

Political uncertainty in Italy has been weighing on the euro for the past few trading days as the country still hasn’t formed a unified government. This stalemate could be negative for their economy as it would delay the passage of important laws, particularly those concerning fiscal austerity. Euro zone economic confidence data is set for release in today’s London session and the report is projected to show a stable reading of -24, which would still reflect pessimism.

GBP

The pound has retreated against the Greenback on Friday as the risk off trading environment kept GBP/USD’s rallies in check. In fact, a potential reversal is underway as a head and shoulders pattern formed on the 4-hour time frame. Only the speech by monetary policy committee member Paul Tucker is due today and this could weigh on the pound if he talks about openness to further asset purchases. Be wary of early pricing in of expectations for the UK’s Q1 GDP report due Thursday as this would confirm if the UK has entered a triple-dip recession or not.

CHF

No major reports are due from Switzerland today as USD/CHF could simply react to US data while EUR/CHF could be sensitive to the goings-on in Europe, particularly to Italy’s political situation.

JPY

There are no reports scheduled for release from Japan as traders could simply focus on risk sentiment this week. Bear in mind though that the BOJ will make its interest rate decision later on this week and traders might wish to unload their recent yen positions before the actual event.

Commodity Currencies (AUD, CAD, NZD)

There are no reports due from any of the comdoll economies for today as the pairs could simply react to risk sentiment. Commodity prices have been sliding lately as risk aversion has been moving the markets mostly for the past week. For now, weak Chinese data has been weighing on the Australian dollar, along with the drop in gold prices.

By Kate Curtis fromTrader’s Way

27

USD

The U.S. dollar reigned supreme against most of its counterparts, particularly the euro and the Australian dollar, as risk aversion stayed in the markets in yesterday’s trading sessions. Even the U.S. printed weaker than expected medium-tier data with the Richmond Fed manufacturing index and flash manufacturing PMI for the country both fell short of consensus. The U.S. will release durable goods orders data later today and more disappointments could lead to more safe-haven rallies.

EUR

PMI reports from the euro zone were generally mixed as France printed higher than expected manufacturing and services numbers while Germany’s mixed expectations. The region’s overall manufacturing and services PMIs remained below the 50.0 level, which meant that the industries contracted during the period. For today, only the German Ifo business climate report is on tap and a decline is expected, which might keep weighing the euro down.

GBP

The CBI industrial orders expectations came in weaker than expected at -25 versus -14, triggering a pound selloff. For today, only the realized sales report is due and the figure is projected to rise from 0 to 7, but another disappointment could worsen the pound’s decline.

CHF

The Swiss trade balance came in better than expected yesterday yet the franc sold off heavily against the U.S. dollar when the euro zone PMI figures disappointed. For today, the UBS consumption indicator is set for release from Switzerland and another weak figure could push USD/CHF even higher. The reading landed at 1.26 last time and an improvement could allow the Swissy to recover.

JPY

Yen pairs have been trading carefully lately as traders await the BOJ interest rate decision tomorrow. Only the corporate services price index was released from Japan recently and the report chalked up a stronger than expected figure. It still printed a 0.2% decline, which was smaller than the estimated 0.4% drop, while the previous period’s reading was revised down to 0.0%. No other reports are due from Japan today.

Commodity Currencies (AUD, CAD, NZD)

The Australian dollar suffered a sharp selloff this morning after yesterday’s quick retracement when the quarterly CPI missed expectations. The report showed a mere 0.4% uptick instead of the projected 0.7% rise, which is still higher than the recent 0.2% increase. Meanwhile, Canada printed stronger than expected retail sales and core retail sales data, which allowed USD/CAD to stay around its current levels. The RBNZ kept rates on hold at 2.50% as expected.

By Kate Curtis from Trader’s Way

28

USD

The U.S. dollar lost a bit of ground to its major counterparts in yesterday’s trading as the U.S. durable goods orders data missed expectations. The headline figure showed a 5.7% drop, almost twice the estimated 2.9% decrease, while the core version of the report printed a 1.4% decline. This reveals that economic activity in the U.S. has been losing steam, and this may be a reason for the Fed to keep their current easing programs in place for much longer than expected. For today, there are no top-tier reports due from the U.S.

EUR

Germany’s Ifo business climate figure missed expectations for the current month as the reading fell from 106.7 to 104.4, lower than the estimated dip to 106.4. As it turns out, sentiment weakened because of the impact of cold weather on businesses in euro zone’s largest economy. Some say that this bleak report is grounds for potential rate cut talks when the ECB meets in the coming days, yet it didn’t trigger a long-lasting selloff for EUR/USD because of the rally in European equities yesterday. Markets seemed to pay more attention to the end of the political stalemate in Italy, which turned out to be positive for the shared currency.

GBP

Today is a big day for the pound pairs as the U.K. will release the much-awaited Q1 2013 GDP reading. The report is expected to show a 0.1% uptick following the previous 0.3% decline in economic growth, which would mean that the U.K. could narrowly escape a triple-dip recession. In this case, pound pairs could stage relief rallies as a positive GDP reading would reduce the need for further QE from the BOE. On the other hand, another negative reading would trigger a sharp selloff as it would put pressure on the BOE to ease further.

CHF

There are no reports due from Switzerland today, which suggests we’ll see quiet trading conditions for USD/CHF since there’s no major data from the U.S. as well.

JPY

Japan has no top-tier reports set for release today, which could mean that the yen could simply trade on risk sentiment for the rest of the day. Keep an eye out for potential profit taking prior to the next set of reports from Japan and the BOJ rate decision scheduled in tomorrow’s early Asian session.

Commodity Currencies (AUD, CAD, NZD)

Commodity currencies managed to recover against the U.S. dollar in yesterday’s trading as overall risk sentiment improved. Australian CPI came in weaker than expected at only 0.4% instead of the estimated 0.7% increase, but was still able to provide support for the Aussie. Both Australia and New Zealand have bank holidays today, which could mean quiet trading for AUD/USD and NZD/USD.

By Kate Curtis from Trader’s Way

30

USD

The U.S. dollar generally lost ground to most of its major counterparts in yesterday’s trading although it was able to limit its losses during the U.S. session. The initial jobless claims report came in stronger than expected at 339K for the previous week instead of the estimated 352K in first-time claimants. For today, the biggest market mover could be the U.S. GDP report for the first quarter of the year. Growth of 3.0% is expected to follow the previous 0.4% uptick and a strong figure could provide support for the dollar.

EUR

The euro managed to rally beyond the 1.3000 major psychological level in yesterday’s trading despite the recent weak data from the euro zone. Spanish unemployment reached 27.2% recently, higher than the estimated rise from 26.0% to 26.5%. There are no major reports due from the euro zone today as EUR/USD price action could be dependent on the U.S. GDP release.

GBP

The U.K. narrowly escaped a triple-dip recession for the first quarter of the year as the GDP reading showed a 0.3% expansion, enough to rebound from the last quarter’s 0.3% contraction. This triggered a sharp rally for pound pairs as it convinced traders that the BOE isn’t likely to ease further for now. No other reports are due from the U.K. today, leaving the pound on its current uptrend.

CHF

The Swiss UBS consumption indicator printed a small increase from 1.24 to 1.25 for March, allowing the franc to recover from its losing streak against the Greenback. No other reports are scheduled from Switzerland today, which suggests that USD/CHF price action could be directed by the U.S. GDP figure later on.

JPY

Inflation is still weak in Japan, judging from the recent CPI figures that were released. The Tokyo core CPI showed a 0.3% drop while the national core CPI printed a 0.5% decline, which suggests that the BOJ could do more to ward off deflation. The BOJ rate statement is scheduled today and this could result in huge moves for the yen once again if the central bank emphasizes its stance on monetary policy.

Commodity Currencies (AUD, CAD, NZD)

The commodity currencies were able to bounce higher against the U.S. dollar in yesterday’s trading as risk appetite improved. New Zealand and Australian banks are on a holiday, which means that there are no major reports due from these economies. Canada’s schedule is empty as well, which suggests that AUD/USD, NZD/USD, and USD/CAD could be at the mercy of U.S. data.

By Kate Curtis from Trader’s Way

31

[B]USD[/B]

The U.S. dollar was outpaced by most of its major counterparts in yesterday’s trading when personal income and spending data disappointed. The core PCE price index, which is rumored to be the Fed’s preferred inflation measure, posted a flat reading instead of the estimated 0.1% uptick. For today, CB consumer confidence and Chicago PMI could be the main movers for U.S. dollar price action. The currency has been sensitive to fundamentals lately, which means that weak data could drive the dollar lower.

[B]EUR[/B]

EUR/USD has put up a strong fight to stay above the 1.3000 major psychological level as it took advantage of dollar weakness yesterday and jumped to 1.3100. There are several medium-tier reports on the euro zone’s schedule for today but none are expected to have a lasting impact on euro price action as traders are awaiting the ECB rate decision later on in the week. Further weakness from the U.S. economy could prop EUR/USD higher but the 1.3200 level should hold as resistance.

[B]GBP[/B]

Last week’s stronger than expected U.K. Q1 2013 GDP figure and this week’s weaker than expected U.S. economic data have boosted GBP/USD close to the 1.5600 major psychological level in yesterday’s trading. There are no major reports on the U.K.’s schedule for today, which suggests quiet trading for pound pairs. Take note though that U.S. figures could still push GBP/USD higher if they come in below expectations.

[B]CHF[/B]

There are no major reports due from Switzerland today, leaving USD/CHF vulnerable to U.S. data. Luckily for the franc, U.S. reports have disappointed lately so USD/CHF was able to edge lower. Continue to keep an eye out for U.S. reports due today if you’re trading this pair.

[B]JPY[/B]

Lack of liquidity kept the yen’s gains in check during yesterday’s trading as most pairs simply ranged. Today’s set of reports, however, triggered a slight selloff in the early Asian session as some figures disappointed. Industrial production and retail sales both missed expectations while housing starts and the jobless rate came out strong.

[B]Commodity Currencies (AUD, CAD, NZD)[/B]

Commodity currencies edged slightly higher against the U.S. dollar as the Loonie packed its fourth straight day of wins. However, the freshly released ANZ business confidence report from New Zealand posted a decline from 34.6 to 32.3 while the Australian private sector credit report fell short of consensus. Canada will release its monthly GDP report in today’s New York session and this should determine if the Canadian dollar could sustain its recent rallies.

[I]By Kate Curtis from Trader’s Way
[/I]

32

USD

The U.S. dollar initially had a positive reaction to stronger than expected NFP data but was soon weighed down when risk appetite boosted the higher-yielding currencies. The NFP figure came in at 165K, higher than the estimated 146K reading, while the previous figure was revised up from 88K to 138K. This pushed the jobless rate down from 7.6% to just 7.5% for April. For today, there are no major reports from the U.S. as the dollar could continue to lose ground on improved risk sentiment.

EUR

Although the ECB cut rates last week, EUR/USD still manages to keep its head above the 1.3000 major psychological level. Negative interest rates are currently the talk of the town and ECB President Draghi’s speech later today could set the record straight on what the central bank plans to do next in order to stimulate the euro zone economy. The improvement in risk appetite may have lifted the euro last Friday but the fact remains that the EU just downgraded their growth forecasts for the region.

GBP

Cable is having a tough time making any headway above the 1.5600 major psychological level as traders could start pricing in their expectations for this week’s BOE interest rate decision. No monetary policy changes are expected since the U.K. has actually posted some economic improvements in some sectors lately. British banks are on a holiday today, which suggests tight trading conditions for pound pairs.

JPY

Japanese banks are on a holiday today, which means that liquidity is low for yen pairs. The yen has been on a losing streak, thanks to the risk on market environment and it seems that the lower-yielding currency is poised for more losses if risk appetite keeps up.

CHF

The Swissy had quite a topsy turvy run on Friday as it lost ground to the U.S. dollar right after the NFP release then recovered its losses when risk appetite surged later on. From there, USD/CHF consolidated around the .9350 area for the rest of the day. With no reports due from Switzerland today and with Japanese and British banks on a holiday, Swiss pairs could continue to move sideways for the rest of the trading day.

Commodity currencies (AUD, NZD, CAD)

The commodity currencies were able to benefit from the rebound in risk last Friday, as strong U.S. jobs data renewed demand for higher-yielding currencies. This week, it remains to be seen whether these currencies could hold on to their gains and go for more since there are a bunch of red flags on their schedules. The Ivey PMI is set for release tonight while the RBA will make its interest rate decision in tomorrow’s Asian session. New Zealand quarterly jobs data is due later on this week.

By Kate Curtis from Trader’s Way

33

USD

The U.S. dollar bounced back on its feet in yesterday’s trading when risk aversion popped its head back in the markets. There were no major reports released from the U.S. but the new set of economic problems from a few major economies kept risk taking in check. Disappointing Chinese and Australian data, as well as Draghi’s remarks stating that the ECB was open to further easing, discouraged traders from parking their money in higher-yielding currencies. For today, there are no major reports due from the U.S. so the dollar could continue to trade on risk sentiment.

EUR

The euro started the week on a poor note as the shared currency slid back down against the U.S. dollar. As it turns out, ECB President Draghi said that the central bank is still considering further stimulus if necessary. This revived talks of negative interest rates since the ECB just slashed its benchmark rate to 0.50% last week. Only a few medium-tier reports are set for release from the euro zone today, starting with the French industrial production data and Germany factory orders. Weak data could continue to weigh on the euro for the rest of the trading day.

GBP

GBP/USD continues to tread carefully below the 1.5600 major psychological resistance level as though awaiting further economic clues. Unfortunately, there are no new pieces of data due from the U.K. in today’s trading sessions, which suggest that GBP/USD could continue to move sideways. Be mindful of potential changes in risk sentiment though as dollar pairs have been selling off during risk-off market environments.

CHF

Switzerland’s SECO consumer climate figure came in worse than expected as the reading landed at -5. Economists had expected a larger improvement from -6 to -3 for the past three months. However, the Swiss franc barely reacted to this report, probably because the unemployment rate held steady at 3.1%. No other reports are due from Switzerland for the rest of the day, which suggests that USD/CHF could either move sideways or be sensitive to market sentiment.

JPY

The Japanese yen regained a bit of ground against its major counterparts in yesterday’s trading as the lower-yielding currency trumped the higher-yielding ones in a risk-off market day. There are no major reports due from Japan for the rest of the day, which suggests further risk flows from the yen.

Commodity Currencies (AUD, CAD, NZD)

The RBA just cut their interest rates by 0.25% in today’s Asian session, pushing AUD/USD below the 1.0200 major psychological support level. This rate cut came as a surprise since Australian data hasn’t been as bad as those of other major economies. There are no reports due from Canada but New Zealand is set to print its RBNZ financial stability report in the late U.S. session.

By Kate Curtis from Trader’s Way

34

USD

The U.S. dollar’s rally gained legs against most of the other major currencies in yesterday’s trading when some economies once again showed signs of weakness. For one, Australia underwent a rate cut from the RBA while the RBNZ financial stability report highlighted the weaknesses in the New Zealand economy. European pairs also tumbled as risk appetite was down for the rest of the trading day. There were no major reports released from the U.S. and none are due for today. Watch out for a couple of speeches from top U.S. finance officers, namely Treasury Secretary Lew and FOMC member Stein.

EUR

It was a mixed day for the euro yesterday as France printed weaker than expected industrial production data while Germany posted stronger than estimated factory orders figures. French industrial production slipped by 0.9% while German factory orders jumped by 2.2%. For today, there are no reports due from the euro zone as French banks are on a holiday. With that, expect lower liquidity and possibly higher volatility in today’s London session.

GBP

After days of consolidating between 1.5550 and 1.5600, GBP/USD broke down and reached the 1.5450 support area. There were no major reports released from the U.K. then but expectations of dovishness from the BOE in their rate statement this week seems to be weighing on the pair as early as today. BRC retail sales posted a 2.2% decline, erasing the 1.9% gain seen in the previous month, while the Halifax HPI is set for release. Further weakness in the housing market could push GBP/USD even lower today.

CHF

Swiss reports were generally mixed yesterday as the SECO consumer climate figure disappointed while the foreign currency reserves of the SNB showed a bit of improvement. Reserves of foreign currencies declined for the month, as the central bank is having an easier time defending its EUR/CHF peg. However, the SECO consumer climate figure climbed from -6 to -5 only, instead of improving to -3. Swiss CPI is due later on today and another weak figure could drag the Swiss franc lower.

JPY

Yen pairs barely saw any action in yesterday’s trading as traders awaited more data from most major economies. The yen pairs that did budge moved to the downside as risk remained off. There are no reports due from the Japan lately so yen pairs could continue to trade on market sentiment, with a risk on environment causing losses for the lower-yielding yen.

Commodity Currencies (AUD, CAD, NZD)

The RBA’s surprise rate cut weighed on the Australian dollar and New Zealand dollar in yesterday’s trading but the Loonie seemed more resilient. The RBNZ’s financial stability report pinpointed the prevailing weaknesses in the economy, prompting market participants to think that the central bank might cut rates as well. Chinese trade balance came in strong earlier today, providing support for the comdolls, but the Kiwi’s fate could rest on the upcoming New Zealand jobs data release.

By Kate Curtis from Trader’s Way

35

USD

The Greenback weakened against most of its major currency counterparts in yesterday’s trading as risk appetite generally improved. There have been no major reports released from the U.S. lately, which explains why dollar pairs’ moves have been limited in the past few days. The only report due from the U.S. today is the initial jobless claims report, which could show a slight increase from the other week’s 324K to 333K for last week. A significantly higher than expected reading could undermine the recent recovery in the U.S. labor market, but a figure close to the consensus isn’t likely to result in huge dollar moves.

EUR

The euro got a boost from improved economic data from Germany as the country’s industrial production figure beat expectations. The report printed a 1.2% increase for March, much better than the estimated 0.1% decline, while the previous month’s figure was revised up to 0.6%. Only the ECB monthly bulletin is set for release from the euro zone today as French and German banks are on a holiday. With that, expect lower liquidity in the London session and possibly higher volatility.

GBP

It’s a big day for the pound pairs today as the BOE will be making its interest rate decision. No changes to its 0.50% interest rate and 375 billion GBP asset purchases are expected, so traders will be all eyes and ears on the accompanying speech by BOE Governor Mervyn King. If the central bank head decides to emphasize the recent improvements in the British economy, such as the strong PMI figures and the fact that the U.K. dodged a triple-dip recession, the pound could be in for some gains. Be wary though that the BOE might also join the currency intervention camp in order to retain its competitiveness in the global economy.

JPY

Only the leading indicators report will be printed by Japan today. A slight improvement from 97.6% to 97.7% is expected as the BOJ’s recent stimulus efforts might have already kicked in. Other than that, the yen’s price action could be mostly dictated by risk sentiment for the rest of the trading day.

CHF

The Swiss CPI missed expectations and fell flat in April, chalking up a 0.6% decline on an annual basis. Despite that, the Swiss franc managed to outpace the U.S. dollar in yesterday’s trading. There are no major reports due from Switzerland today so expect quiet trading among franc pairs or that USD/CHF will be swayed by dollar reports.

Commodity Currencies (AUD, CAD, NZD)

Both Australia and New Zealand enjoyed stronger than expected jobs data recently, with Australia printing a 50.1K increase in monthly hiring while New Zealand showed 1.7% employment growth for Q1 2013. What’s currently weighing on the Kiwi though is RBNZ head Graeme Wheeler’s admission that the central bank intervened in the forex market recently to curb Kiwi strength. As for the Canadian dollar, only the NHPI report is on tap for today and this isn’t likely to spur a huge reaction from USD/CAD.

By Kate Curtis from Trader’s Way

36

USD

The U.S. dollar gained a lot of ground against its major counterparts in yesterday’s trading, despite the lack of top-tier data from most major economies. EUR/USD is back to testing the 1.3000 major psychological support while USD/JPY finally breached the 100.00 barrier. Better than expected U.S. initial jobless claims may have sparked a stronger than usual reaction in the markets, as the actual figure landed at 323K, lower than the estimated 333K in first-time claimants. The G7 meetings are set to take place starting today so watch out for potential gaps over the weekend.

EUR

The ECB monthly bulletin was the only report on the euro zone’s agenda yesterday and the release didn’t contain any surprises. The euro sold off against the dollar, which benefitted from strong initial jobless claims figures, and rallied against the Japanese yen. German trade balance and Italian industrial production figures are set for release in today’s European session so watch out for these reports.

GBP

As expected, the Bank of England kept monetary policy unchanged in their latest rate decision. The central bank maintained interest rates at 0.50% and their asset purchase program at the current 375 billion GBP level. BOE Governor Mervyn King thought that there was no need to add stimulus for now as the British economy has shown signs of improvement and was able to avoid a recession for the first quarter of the year. UK manufacturing production came in stronger than expected and showed 1.7% growth, but this wasn’t enough to keep the pound afloat against the dollar in yesterday’s trading.

CHF

There were no reports released from Switzerland yesterday but the franc suffered a massive selloff against the U.S. dollar since the latter enjoyed a strong initial jobless claims report. There are no reports due from Switzerland today so USD/CHF could be sensitive to dollar flows once more.

JPY

The Japanese yen lost a lot of ground to the U.S. dollar lately with USD/JPY breaching the 100.00 mark and even reaching 101.00 in today’s Asian session. Japanese current account was weaker than expected at 0.34 trillion JPY versus the estimated 0.48 trillion JPY surplus. The Economy Watchers Sentiment figure is due from Japan later today.

Commodity Currencies (AUD, CAD, NZD)

Although Australian and New Zealand jobs data both came in strong yesterday, the Aussie and the Kiwi were no match to dollar strength. AUD/USD broke below the key 1.0200 support while NZD/USD retreated upon pulling back to the .8480 area. Canada is next to release its jobs report today and a 14.8K rebound in hiring is projected, which could keep the jobless rate steady at 7.2%.

By Kate Curtis from Trader’s Way

37

USD

The US dollar got a strong boost from the Fed’s announcement of their concrete plans to exit their open-ended asset purchase program. Although an actual date hasn’t been specified, the fact that the Fed is considering tightening monetary policy renewed demand for the dollar, especially since other major economies are considering loosening monetary policy in order to devalue their currencies and retain competitiveness in global trade. US data set for release this week, including the retail sales figures due today, could reinforce dollar strength as strong data could push the Fed closer to exiting their easing program. Slight declines are expected for the April retail sales report, but an upside surprise could be likely as the jobs report for the same month has turned out well.

EUR

EUR/USD finally made a strong break below the 1.3000 major psychological level on Friday as the US Federal Reserve talked about their stimulus exit plan. Data from the euro zone has been disappointing as German trade balance missed expectations while Italy posted weaker than expected industrial production. No euro zone reports are due for today.

GBP

GBP/USD suffered a strong selloff on Friday, although the pair’s uptrend still seems to be intact. The BOE is one of the more relatively upbeat central banks, providing a bit of support for the pound amidst the sudden surge in dollar buying. For the week, the UK claimant count change and the quarterly inflation report could dictate pound price action. BOE Governor King is also set to give a testimony later in the week, which could also affect GBP/USD’s movement.

CHF

The Swiss franc got sold off against the US dollar and the euro on Friday. For today, the Swiss retail sales report could determine the franc’s movement as the report is slated to show a mere 1.0% annual uptick for March. This is much lower than the previously reported 2.4% increase for February. A weaker than expected figure could worsen the franc’s selloff while a strong figure could keep the losses at bay.

JPY

USD/JPY finally breached the 100.00 major psychological barrier when the US Fed unveiled its plans to exit its stimulus program. Japanese trade deficit has also come in weaker than expected, worsening the yen’s selloff. There are no major reports due from Japan today so watch out for any changes in market sentiment when trading yen pairs.

Commodity Currencies (AUD, CAD, NZD)

Although some commodity currencies enjoyed upbeat jobs reports, they were still sold off when the US Fed talked about their plans to exit quantitative easing. AUD/USD broke below the key 1.0200 support while NZD/USD suffered sharp selloff to the .8300 area. Canadian hiring was weaker than expected in April, with only 12.5K in additional hiring, lower than the estimated 14.8K rise. For today, Australian data came in mixed with a strong 5.2% increase in home loans and a decline in NAB business confidence from 2 to -2.

By Kate Curtis from Trader’s Way

38

USD

Dollar strength is still in vogue today as the latest U.S. retail sales release somewhat came in line with consensus. The headline figure showed a 0.1% increase instead of the estimated 0.3% drop while the core version of the report printed a 0.1% downtick as expected. There are no major reports due from the U.S. today, which suggests quiet trading for most dollar pairs, but it would be helpful to keep your eyes and ears peeled for any comments from Fed officials regarding the schedule and scale of their planned withdrawal of stimulus. Any hints that the Fed is ready to wind down their bond purchases soon could send the dollar rallying once more.

EUR

The euro is still trying to hold on to the 1.3000 handle against the U.S. dollar, as today’s set of euro zone data could determine whether it’ll hold or break. Germany is set to print its ZEW economic expectations report in today’s European session and possibly show an improvement from 36.3 to 39.5, which could boost the euro. The region could see its ZEW figure improve from 24.9 to 27.3, also a potential boost to the euro.

GBP

The pound has sold off strongly against the U.S. dollar recently even though the BOE didn’t ease monetary policy last week. Traders are probably starting to price in their expectations for the claimant count change report due later on in the week and possibly expecting cautious comments from BOE Governor King. No reports are due from the U.K. today.

CHF

The Swissy lost a lot of ground to the U.S. dollar, which has enjoyed additional strength from the recent retail sales release. Swiss retail sales have disappointed with a 0.9% decline instead of the estimated 1.0% jump in consumer spending. For today, there are no major reports from Switzerland but the downbeat economic outlook is likely to keep dragging the franc lower.

JPY

The Japanese yen is slowly recovering against the U.S. dollar as USD/JPY appears to be having trouble breaking above 102.00. A potential retracement play could work, especially since Japan is set to print its preliminary GDP report later on this week. No reports are due from Japan today.

Commodity Currencies (AUD, CAD, NZD)

Commodity currencies seem to have stalled from their recent selloffs today as AUD/USD struggles to climb back to parity while NZD/USD found support around .8250. There are no major reports due from the comdoll economies for the week, except for the Canadian CPI release on Friday, so the behavior of the comdoll pairs could hinge on dollar demand.

By Kate Curtis from Trader’s Way

39

thank you very much

40

fantastic analysis

41

i think the market will go down