Forex Crunch EUR/USD Sep. 27 – Consolidating After the Break

Forex Crunch EUR/USD Sep. 27 – Consolidating After the Break

EUR/USD Sep. 27 – Consolidating After the Break

Posted: 27 Sep 2010 01:04 AM PDT


EUR/USD starts the week with consolidation after a strong moves last week. Will it get ready for the next push on this light day? Here is a quick update on technicals, fundamentals, and community trends.

EUR/USD Forecast September 27

EUR/USD consolidating withing uptrend channel.

EUR/USD Technicals

  • Asian session:  EUR/USD consolidating in a narrow range – 1.3450 to 1.3480.
  • Current Range is between 1.3430 to 1.3500.
  • Further levels: Below,  1.3365, 1.3267, 1.3160, 1.3110, 1.3040 and 1.2920. Above  1.3530 (very close), 1.37, 1.3850, 1.40 and 1.42.
  • Wide uptrend channel: Uptrend resistance began on Sep. 8 and uptrend support on Sep. 13. Trading is characterized with many hours of consolidation, followed by a few hours of sharp rises.

EUR/USD Fundamentals

All times are GMT. Most important events emphasized.

  • 8:00 M3 Money Supply. Exp. +0.4%. Actual +1.1%. Euro positive.
  • 13:00 ECB President Jean-Claude Trichet testifies in the European parliament.

EUR/USD Sentiment

  • Debt issues never went away, but the market currently disregards Irish and Portuguese high spreads.
  • Dollar weakness is the name of the game in the markets. The Euro is enjoying it but might suffer from adjustments just before the week ends.
  • The important 1.3430 line was broken – bullish sign.
  • Currensee Community: 52% are long, 48% are short. These are 1049 open positions in real accounts trading this pair at the moment.

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Forex Daily Outlook – September 26 2010

Posted: 26 Sep 2010 03:00 PM PDT


We start the week with several interesting speeches (ECB) President Jean-Claude Trichet, deliver opening remarks testified before the Committee on Economic and Monetary Affairs of the European Parliament, and in Japan Governor Masaaki Shirakawa. L’ets see what awaits us today.

In Europe, European Central Bank (ECB) President Jean-Claude Trichet deliver opening remarks at the 13th Conference of the ECB-CFS Research Network on “Macro Prudential Regulation as an Approach to Contain Systemic Risk” in cooperation with the Center of Economic Policy and Research, in Frankfurt and also testified before the Committee on Economic and Monetary Affairs of the European Parliament, in Brussels, and volatility is often experienced during his speeches as traders attempt to decipher interest rate clues.

Also in Europe, M3 Money Supply shows a rise of 2% in the total quantity of domestic currency in circulation and deposited in banks. It’s positively correlated with interest rates – early in the economic cycle an increasing supply of money leads to additional spending and investment, and later in the cycle expanding money supply leads to inflation.

Finally in Europe, Private Loans increased by 0.3% and Borrowing and spending are positively correlated – consumers and businesses tend to seek credit when they are confident in their future financial position and feel comfortable spending money

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

In Japan, Bank of Japan (BOJ); Governor Masaaki Shirakawa deliver speeches at the Japan Society of Monetary Economics Autumn Meeting, in Kobe and  also at a meeting with business leaders, in Osaka; and volatility is sometimes experienced during his speeches as traders attempt to decipher interest rate clues.

More in Japan, Trade Balance, the Difference in value between imported and exported goods during the reported month decreased by 10T and Export demand and currency demand are directly linked because foreigners must buy the domestic currency to pay for the nation’s exports. Export demand also impacts production and prices at domestic manufacturers

That’s it for today. Happy forex trading!

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Forex Binary Options Setups – September 27 – October 1

Posted: 26 Sep 2010 12:00 PM PDT


Inflation figures from various countries, industrial output, job figures and other risk news forex events provide opportunities for binary options trading. Here are potential setups for forex this week.

Binary options can be used in forex trading as an alternative to a stop loss order, as a mechanism for false breakouts and more. Significant news events also provide setups for binary options:

Binary options can be used at StartOptions, a respected  provider which I’m working with.

The information for these news events is based on data already collected for the weekly outlooks, and the potential reactions to results which are significantly unexpected by the consensus of economists. Some events collide with each other and could offset each other. So, these events aren’t in the list.

Quick explanation:

  • CALL options – if the price closes at a higher level than the price you purchased at expiry time, you make 75%. If it closes below, you’re left with 10%.
  • PUT options – if the price closes under the price you purchased at expiry time, you make 75%. If it closes above, you’re left with 10%.

Let’s review the events. All times are GMT.

  1. Japanese Trade Balance: Sunday 23:50. Market expectations currently stand on 0.52 trillion yen. 0.70 or higher, PUT option on USD/JPY. 0.3 or lower, CALL option on USD/JPY.
  2. German GfK Consumer Climate: Tuesday, 6:00. Market expects 4.3 points. 5 points or higher, CALL option on EUR/USD. 3.3 or lower, PUT option on EUR/USD.
  3. British CBI Realized Sales: Tuesday, 10:00. Market expects 27 points. 38 points or higher, CALL option on GBP/USD. 17 points or less, PUT option on GBP/USD.
  4. US CB Consumer Confidence: Tuesday, 14:00. Market expects 52.5 points. 49.7 or lower, PUT option on USD/JPY. 55 or higher, CALL option on USD/JPY.
  5. New Zealand Trade Balance: Tuesday, 21:45. Market expects -74 million. Positive outcome, CALL option on NZD/USD. -250 or worse, PUT option on NZD/USD.
  6. Japanese Tankan Manufacturing Index: Tuesday, 23:50. Market expects +7 points. +16 or more, PUT option on USD/JPY. Negative score – CALL option on USD/JPY.
  7. Swiss KOF Economic Barometer: Wednesday, 9:30. Market expects 2.12 points. 2.35 or more, PUT option on USD/CHF. 1.98 or less, CALL option on USD/CHF.
  8. British GfK Consumer Confidence: Wednesday, 23:00. Market expects -19 points. -25 or worse, PUT option on GBP/USD. -14 or better, CALL option on GBP/USD.
  9. British Nationwide HPI: Thursday, 6:00. Market expects -0.2%. -1.1% or worse, PUT option on GBP/USD. +0.3% or higher, CALL option on GBP/USD.
  10. German Unemployment Change: Thursday, 7:55. Market expects -20K. -35K or less, CALL option on EUR/USD. Positive number, PUT option on EUR/USD.
  11. US Chicago PMI: Thursday, 13:45. Market expects 56 points. 60 or more, CALL option on USD/JPY. 51 or less, PUT option on USD/JPY.
  12. German Retail Sales: Friday, 6:00. Market expects +0.5%. Negative outcome, PUT option on EUR/USD. +1.4% or more, CALL option on EUR/USD.
  13. Swiss Retail Sales: Friday, 7:15. Market expects +3.2%. +5% or higher, PUT option on USD/CHF. +2.6% or less, CALL option on USD/CHF.
  14. US ISM Manufacturing PMI: Friday, 14:00. Market expects 54.6 points. 51 or less, PUT option on USD/JPY. 58 or more, CALL option on USD/JPY.

These expected market reactions and setups are general market commentary. This is by no means any type of investment advice.

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USD/CAD Outlook – September 27 October 1

Posted: 26 Sep 2010 07:00 AM PDT


GDP is the highlight in the upcoming week of the struggling loonie. Here’s an outlook for Canadian events, and an updated technical analysis for USD.CAD.

USD/CAD daily graph with support and resistance lines marked. Click to enlarge:

Canadian dollar forecast September October

In the past week, the Canadian dollar underperformed in comparison to the other important commodity currency – the Aussie.

  1. RMPI: Wednesday, 12:30. The Raw Materials Price Index is an important gauge for the commodity oriented Canadian economy. After two months of drops, this price index jumped by 1.8% and helped the loonie. Another small rise is expected now.
  2. GDP: Thursday, 12:30. GDP has  slowed down in Q2, after a great Q1. As Canadapublishes GDP on a monthly basis, we’ll get a peak into Q3 with this release for July. It’s expected to negative, with a drop of 0.1%. While this is a small drop, the impact of contraction may significantly weaken the loonie.
  3. Mark Carney talks: Thursday, 16:50. The governor of the BOC will speak in a conference in Windsor and might shed some light on the next policy steps, as well as his updated view on the economy. Carney usually moves the currency.

Let’s review the events. All times are GMT.

USD/CAD Technical Analysis

USD/CAD was range bound in the past week – between 1.02 and 1.0350 (both mentioned in last week’s outlook). Attempts to break out above or below were short lived, and the pair closed at 1.0238.

1.0350 capped the pair for another week in a row, and is becoming a very strong resistance line. The 1.04 line, immediately above, is a veteran resistance line, which has a minor role now.

Higher, 1.05 held the pair twice during August and is the next line of resistance. Above, the stubborn 1.0680 served as resistance in July and in August, for more than one day in each round.

Above, 1.0750 was a swing high during May and also the limit  of a long-term range in 2009. The last line for now is 1.0850, which was also a swing high in May.

Looking down, 1.02, which was the 2009 low, is a very strong support line. Below, 1.01 cushioned a drop in August.

The ultimate line of support is at parity, that got closer in the past week. The year-to-date low of 0.9930 serves as the last resistance line for now.

I’m now bullish on USD/CAD.

The Canadian economy is showing signs of weakening due to the lower interest rate and the slowdown in the US. A negative GDP this week can weaken the loonie, even if the greenback continues sliding around the world.

Further reading:

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