EUR/USD Fundamental Analysis August 23, 2012, Forecast

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Analysis and Recommendations:

The EUR/USD is trading at 1.2468 holding pretty much to yesterday’s close after a surge of positive sentiment pushed the euro upwards.

Markets are trading with a risk-off tone, giving back some of the recent gains over the past few sessions following the release of weaker trade data from Japan and ahead of the release of minutes from the August 1 FOMC meeting.  Jean-Claude Juncker, head of the euro group, is meeting Greek PM Antonis Samaras in Athens today, kicking off four days of high level meetings among euro area politicians that include meetings between Germany’s Merkel, France’s Hollande, and Greece’s Samaras.  JPY and GBP are flat, as EUR is slightly weaker.  CAD is down roughly 0.3%, while some of the higher beta majors such as NOK, AUD, and SEK are down between 0.4% and 0.5%

In the US housing data released today showed that home sales were slightly less then the forecast but well improved over last month. Markets saw the report as fairly positive as the forecast was very enthusiastic and a reach.

FOMC minutes from the August 1st meeting are likely to be largely discounted by markets since they reflect the period of time before the US data began to turn. The statement released on August 1st included only minor changes from the June 20th statement and an added emphasis on the importance of incoming data. What could prove interesting is any reference to what policy tools from communication to asset purchases might be used in the future. However, we suspect that with substantial event risk beginning August 31st, when Chair Bernanke speaks in Jackson Hole, today’s minutes will quickly be forgotten. The minutes will not be released to close to the end of the trading day and are not expected to have a serious affect on the markets.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports

Economic Data August 23, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 22

 

JPY

 

 

 

Trade Balance 

-0.33T

 

-0.46T 

 

-0.32T 

  

 

 

CAD

 

 

 

Core Retail Sales (MoM) 

-0.4%

 

0.3% 

 

0.4% 

  

 

 

CAD

 

 

 

Retail Sales (MoM) 

-0.4%

 

0.1% 

 

0.2% 

  

 

 

USD

 

 

 

Existing Home Sales 

4.47M

 

4.52M 

 

4.37M 

 

 

  

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

Event 

Forecast

Previous

Aug 24

1:30pm

USD

Durable Goods Orders m/m

2.8%

-1.4%

 

2:00pm

EUR

Belgium NBB Business Climate

-10.8

1.3%

Government Bond Auctions

Date  Time  Country 

27/8  11:30  Germany 

28/8  10:30  Spain

28/8  11:00  Italy 

28/8  19:00  US 

29/8  11:00  Italy 

29/8  19:00  US 

30/8  05:35  Japan

30/8  11:00  Italy 

30/8  19:00  US

 

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About:FX Empire Analyst - Barry Norman

Barry produces a private Daily Market Review newsletter that is distributed around the globe to over 25,000 subscribers and recently published a book on Options Trading that is available from amazon.com

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