Forex Crunch GBP/JPY Outlook – June 21-25

GBP/JPY Outlook – June 21-25
EUR/USD Outlook – June 21-25
GBP/USD Outlook – June 21-25
AUD/USD Outlook – June 21-25
NZD/USD Outlook – June 21-25
USD/CAD Outlook – June 21-25

Posted: 20 Jun 2010 04:12 AM PDT

The Chinese government finally made its move and promised to let the Chinese yuan trade more freely – appreciate against the dollar. This announcement on the weekend will have a positive impact on the Japanese yen across the board. The most interesting cross is GBP/JPY. Here’s an update on the situation and on the technical levels of the Geppy.

The move

After almost two years of having a fixed value, the Chinese central bank finally gave in to American pressures and announced that its currency could partially float. A maximum daily fluctuation rate of 0.5% will be allowed, and will be closely watched by the government.

There will be no one-time revaluation of the yuan. The Chinese emphasized that the changes will be gradual. The US has pressured China for a very long time, as the cheap Chinese imports into the US hurt the competitiveness of the American industry. The announcement comes just a few days before the G20 summit.

Apart from the competition with the US, the low value of the Chinese yuan hurt the other Asian nations, with Japan suffering the most. Now, Japan’s exports will be more competitive, helping the Japanese economy and pushing the Japanese yen higher.

Why GBP/JPY?

The Geppy, or dragon, isn’t only an exciting and popular cross. This week features the release of the British emergency budget in the UK, which is highly anticipated and could be Pound-negative.

This special event joins other regular releases in the UK. Read more about the events and the technical levels of GBP/USD in the British Pound forecast.

GBP JPY Techincals

The lines appear on the graph above. After May’s mess, the Geppy recovered and hit resistance at 136. The past week saw range trading between 132.50 and 136. The initial support line is 132.50 which held the pair in February and also in recent weeks.

Below, 130.40 is the lowest level in the past month, and with its proximity to the round number of 130, it becomes a strong line of support. The next line is rather close: 129.05, which was a minor support line during May and also worked as such back in January 2009.

Even lower, we already reach the year-to-date low of 126.71, which is a very strong line of support, but it’s also followed by a very near line – 125.30, a line where the Pound bounced from in February 2009.

The ultimate and far level of support is at 118.90, which was reached on January 23rd 2009, and serves as the lowest level in all times. This will probably not be approached this week.

If the British Pound enjoys positive news and the impact of the Chinese statement will be small, the pair will meet initial resistance at 136. This is followed by 138.25 which was a support line in February and also worked as a pivotal line before May’s crisis.

Higher, 139.40 is the next line of resistance, after it worked as a support line in during April’s range trading. The high line of that range is 146, which looks far at the moment.

All in all, the direction for this pair seems to be down. Also EUR/JPY, CHF/JPY and also the major pair USD/JPY look to fall.

Is there interest in outlook for these pairs as well?

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EUR/USD Outlook – June 21-25

Posted: 19 Jun 2010 11:38 AM PDT

The upcoming week features major German surveys as well as many other indicators. Here’s an outlook for the main European events and an updated technical analysis for EUR/USD.

EUR/USD chart with resistance and support lines on it. Click to enlarge:

Spanish problems caused great worries in the past week, with rumors of a bailout package being cooked in Brussels. The debt issues will continue accompanying us, but many indicators will have an impact as well. Let’s begin:

Jean Claude Trichet talks: Starts testifying in the European parliament on Monday at 16:30 GMT. The head of the ECB will have a chance to lay out his prospects for the Euro-zone, discussing a possibility of recession and maybe future moves on the rates.
German Ifo Business Climate: Published on Tuesday at 8:00 GMT. This very wide survey of 7000 businesses was usually better than other European indicators, rising steadily month after month. But also this index stalled last month. From 101.5 points, this indicator will probably drop to 101.2 this time.
Current Account: Published on Tuesday at 9:00 GMT. The overall balance of money, services and goods surprised by turning positive last month – a surplus of 1.7 billion was reported last month, after two months of deficits. Despite lagging after the trade balance release, it still helped the Euro. A smaller surplus is predicted this time – 1.3 billion euros.
Consumer Confidence: Published on Tuesday at 14:00 GMT. This official European survey of 2300 consumers showed growing pessimism in the old continent, with the index falling to -18. The upcoming figure relates to the month of May that was awful, so a lower result will probably be seen now.
German GfK Consumer Climate: Published on Wednesday at 6:00 GMT. Complementing the survey from Tuesday, this unofficial survey has followed the same trend – it dropped last month as well. Consumers are expected to be less confident now as well, with the indicator dropping from 3.5 points to 3.3 points.
Flash PMI: Published on Wednesday, starting in France at 7:00 GMT, then in Germany at 7:30 and finally for the whole Euro-zone at 8:00 GMT. All the purchasing managers’ indices have been positive for several months, with the French services sector being the strongest at 61.4. And now, all of them are expected to remain positive, above 50 (which means economic expansion) but drop. May wasn’t an optimistic month in Europe.
NBB Business Climate: Published on Wednesday at 13:00 GMT. At the heart of the European Union, in Belgium, 6000 businesses are asked about their level of confidence. This indicator already made a big drop last month by unexpectedly falling from -2.4 to -4.9. Another drop to -5.1 points is expected now. Note that the negative numbers mean pessimism.
French Consumer Spending: Published on Thursday at 6:45 GMT. Europe’s second largest economy saw a squeeze of 1.2% in consumer spending last month – quite a big drop. A correction is expected this time, with a rise of 0.3%.
Industrial New Orders: Published on Thursday at 9:00 GMT. This figure stood out last month, with a huge leap of 5.7%. The forecast for this release is optimistic as well – another rise of 1.6%. A drop cannot be ruled out.

EUR/USD Technical Analysis

The Euro had a fantastic week. It first broke the important 1.2150 line from which it fell to the deep lows. It then continued and traded between 1.2250 (a new line that didn’t appear last week) and 1.2330, also known as the Lehman level, before breaking above it and closing at 1.2388.

Looking up, the next line of resistance is 1.2460, which was a peak a few days ago. This is followed by 1.2520, a line that stopped the Euro during its fall. The swing high of 1.2670 is the next line.

A great recovery of the Euro will meet resistance at 1.2880, which was a support line one year ago. There are more lines on the chart, but they’re quite far at the moment.

Looking down, 1.2330 provides minor support, and so does 1.2250. 1.2150 is already a stronger support line, as it worked as a distinctive pivotal line.

Lower, 1.20 is a round number eyed by politicians and provides strong support, and its followed by the year-to-date low of 1.1876.

I turn neutral on EUR/USD.

The past two weeks of strong rises on short covering cannot be ignored. The Euro fell strongly and is now stabilizing. Still, the European debt problems, especially in the fourth largest economy, Spain, continue to loom over the old continent. As the scenario of a double dip recession becomes real, the Euro will resume falling. In the meantime, range trading is more probable.

This pair receives great reviews. Here are my picks:

James Chen updates on the bullish run and marks the key upside resistance at 1.2460.
Casey Stubbs updates on the last trades in EUR/USD.
Marco Hague discusses this week’s soft dollar on Forex TV.
TheGeekKnows reviews the week and looks forward.

Further reading:

For a broad view of all the week’s major events worldwide, read the forex weekly outlook.
For EUR/USD, check out the Euro/Dollar Forecast.
For the Australian dollar (Aussie), check out the AUD/USD forecast.
For the New Zealand dollar (kiwi), read the NZD/USD forecast.
For USD/CAD (loonie), check out the Canadian dollar forecast.

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AUD/USD Outlook – June 21-25

Posted: 19 Jun 2010 09:38 AM PDT

The Aussie enjoyed a positive week and began struggling with higher barriers. Here’s an outlook for the events that will move the Aussie and an updated technical analysis for AUD/USD.

AUD/USD chart with resistance and support lines on it. Click to enlarge:

The meeting minutes showed that the central bank is worried about European developments, but seems confident about the Australian economy. Indeed, the Aussie rose quite nicely in the past week, and took dips only on bad European news. OK, let’s start:

New Motor Vehicle Sales: Published on Monday at 1:30 GMT. With Australia’s great outback, vehicle sales are significant for the economy. Last month’s leap of 8.4% was strongly felt in the currency. A small drop is expected this time, as this indicator is quite volatile.
CB Leading Index: Published on Wednesday at 1:30 GMT. Most of the 7 economic indicators that build this indicator have already been released. Nevertheless, this still has an impact on the Aussie. After two months of drops, the leading index recovered last month and rose by 0.3%. Given the great improvement in employment, another rise can be expected now.

AUD/USD Technical Analysis

The Aussie made a significant breakout in the past week. After a struggle, it passed the critical 0.8567 resistance line and made a failed attempt for the next line – 0.8735, which was December’s low. The pair is currently bound between these two lines.

Note that some higher lines were added on last week’s outlook. Above 0.8735, 0.88 is the next resistance line, being a swing low a few months ago. Higher, 0.90, is a round number and also served as a support line.

Higher, also 0.9135 was a strong support line and now works as resistance. It’s followed by the minor resistance line of 0.9250 and then by a very strong line – 0.9327, which worked as a resistance line many times in the past. The year-to-date high of 0.9366 is the last line.

Looking down below 0.8567, 0.8360 provides support. This was a pivotal line in the past weeks. Lower, 0.8240 was also a significant line in recent weeks as well as last summer. It’s followed by the year-to-date low of 0.8066.

I remain bullish on the Aussie.

The Aussie has all the reasons to rise, with an excellent job market, a high interest rate, growing economy and now also record high levels of gold.

Further reading:

For a broad view of all the week’s major events worldwide, read the forex weekly outlook.
For EUR/USD, check out the Euro/Dollar Forecast.
For GBP/USD (cable), look into the British Pound forecast.
For the New Zealand dollar (kiwi), read the NZD/USD forecast.
For USD/CAD (loonie), check out the Canadian dollar forecast.

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NZD/USD Outlook – June 21-25

Posted: 19 Jun 2010 08:38 AM PDT

GDP is the key event in this week’s kiwi trading. Here’s an outlook for the events in New Zealand, and an updated technical analysis for NZD/USD, now in higher ground.

NZD/USD chart with resistance and support lines on it. Click to enlarge:

New Zealand saw another month of squeeze in retail sales. This doesn’t go hand in hand with other indicators that already led to a rate hike. The key economic indicator is published this week:

Credit Card Spending: Published on Tuesday at 3:00 GMT. This report by the central bank gives a good indicator on consumer spending and confidence. Spending increased in the past 6 months, hand in hand with the overall improvement. After a 1.9% rise last month, a smaller rise is predicted this time.
Current Account: Published on Tuesday at 22:45 GMT. Although being a lagging figure, released almost a full quarter after the end of the reported quarter, this indicator tends to shake the kiwi. The deficit in the overall value of money, services and income flows increased to 3.5 billion in Q4 of 2009. Q1 of 2010 is expected to see a smaller deficit, or maybe even a small surplus.
GDP: Published on Wednesday at 22:45 GMT. The economy in New Zealand is improving. Three quarters of growth will probably be followed by a fourth one. The growth rate accelerated to 0.8% in Q4, and is now predicted to be slightly lower, 0.5%, similar to Australia’s squeeze in its growth rate.
Trade Balance: Published on Thursday at 22:45 GMT. This complements Tuesday’s release of the current account, by providing the difference in the value of goods (only goods) in the previous month. Here, New Zealand enjoys a growing surplus in the past four months. Last month’s 656 million surplus will probably be followed by a higher number – 767 million.

NZD/USD Technical Analysis

The kiwi’s first attempt to break above the round 0.70 resistance line failed, and it bounced back to the 0.6910 support line. Near the end of the week, the pair succeeded and after a bounce around 0.7080, NZD/USD closed at 0.7045.

0.7080 provides initial resistance for the kiwi. This is a new line that didn’t appear last week. It was also a line of support back in September. Above, 0.72 is a strong line of resistance, serving as such many times in the past.

Even higher, 0.7325 was the peak in April, before the fall and also in November, and is now the next strong line of resistance. Higher, 0.7440 is the year-to-date high.

Looking down below 0.70, 0.6910 is still a minor line of support, followed by 0.68, which was the low level in February. Below, 0.6685 is the next minor support line, followed by the year-to-date low 0f 0.6560.

I remain bullish on the kiwi.

With the markets not worried about Europe, the kiwi, with its high interest rate, has lots of room to rise. The GDP release will be critical for the pair.

Further reading:

For a broad view of all the week’s major events worldwide, read the forex weekly outlook.
For EUR/USD, check out the Euro/Dollar Forecast.
For GBP/USD (cable), look into the British Pound forecast.
For the Australian dollar (Aussie), check out the AUD/USD forecast.
For USD/CAD (loonie), check out the Canadian dollar forecast.

Ready to connect with real Forex traders? Currensee is the first Forex trading social network.

USD/CAD Outlook – June 21-25

Posted: 19 Jun 2010 07:38 AM PDT

The loonie enjoyed risk appetite for a second week in a row. This week consists of key indicators for the next rate decision. Here’s an outlook for Canadian events and an updated technical analysis for USD/CAD, which is closer to parity once again.

USD/CAD chart with resistance and support lines on it. Click to enlarge:

The markets disregard the European trouble (with focus now on Spain again) and seek “risky” currencies. The Canadian dollar also enjoys the rising price of oil, and his its eyes on parity. Prices need to rise in other areas in order to push inflation. Let’s start:

CPI: Published on Tuesday at 11:00 GMT. A rise in the consumer price index is necessary for further rate hikes, after the BOC made its first move. Current inflation conditions are still tame. CPI rose by 0.3% last month after remaining unchanged beforehand, and Core CPI, which is also closely watched by the central bank, also rose by 0.3%. More modest rises are expected this time.
Retail Sales: Published on Wednesday at 12:30 GMT. This major consumer indicator made a surprising jump last month – 2.1% instead of 0.2% that was predicted. Also the core figure was a big surprise, jumping by 1.7%. Yet again, the expectations remain modest, with a rises of less than 1% predicted in both indicators.

USD/CAD Technical Analysis

The Canadian dollar continued the trend from last week, and after falling below 1.04, USD/CAD continued to fall gradually towards the next support line – 1.02, which it closed very close to, at 1.0210.

1.02 continues to be a dominant line – this was the 2009 low and also a line of resistance when the pair reached parity. A break below 1.02 will send the pair towards minor support at 1.01 (a line that was added on last week’s outlook).

Below 1.01 comes the ultimate support line – parity. USD/CAD parity was last seen in April but didn’t hold for too long. Lower, 0.98 is a minor line of support, followed by 0.97. A bigger surge in oil prices is necessary for the pair to approach these areas.

Looking up, the immediate resistance line is at 1.0560, which served as a line of support and resistance in recent weeks. Higher, 1.0750 was the high line of long time range, and was also tested about a month ago. It’s followed by 1.0850, which was a swing high before the pair went lower.

I remain bearish on USD/CAD.

As the fear factor leaves the markets, the Canadian dollar, with a growing economy, receives the strength it deserves. Next stop – parity.

Further reading:

For a broad view of all the week’s major events worldwide, read the forex weekly outlook.
For EUR/USD, check out the Euro/Dollar Forecast.
For GBP/USD (cable), look into the British Pound forecast.
For the Australian dollar (Aussie), check out the AUD/USD forecast.
For the New Zealand dollar (kiwi), read the NZD/USD forecast.
For USD/CAD (loonie), check out the Canadian dollar forecast.