EUR/USD Technical Analysis for April 27, 2012

The EUR/USD pair tried to gain overall during the session on Thursday, but was repelled by the end of the session to form a bearish candle. The S&P downgrade of Spain by two notches certainly wouldn’t have helped, and as a result this pair looks as if it will indeed fail at what we think is the top of the descending triangle on this chart. With this being said, we are selling on a move below the 1.32 level for more than a couple of hours. Buying isn’t a thought for us at the moment.

EUR/USD Fundamental Analysis for April 27, 2012

Analysis and Recommendations:

The EUR/USD is trading at 1.3212 falling after the eco data releases today. The shared currency rose to $1.3263 before the European Commission said its April economic sentiment indicator for the 17-nation euro area fell to 92.8 from a reading of 94.5 the previous month. Economists had forecast a reading of 94.2.

The debt crisis has severely crippled financial integration in both the funding and lending markets in the euro zone, the European Central Bank said Thursday. The ECB said financial market integration has slowed since 2007, in particular since 2011

Across the Atlantic:

A softer tone for the dollar was set Wednesday after the Federal Reserve kept interest rates on hold and Fed Chairman Ben Bernanke said he remained willing to buy more bonds should the economy need help.

What’s more, a string of recent data suggesting some softening in the economy has raised concerns about whether the recovery will accelerate in the months ahead. A downturn in Europe could hurt U.S. exports, for instance, and higher gas prices could act as a drag.

The number of Americans who filed requests for jobless benefits was virtually unchanged last week at 388,000, the U.S. Labor Department said Thursday, keeping claims near their highest level of 2012. Claims from two weeks ago were revised up.

An index of pending home sales climbed 4.1% in March to reach the highest level since April 2010, the National Association of Realtors said Thursday. The index rose to 101.4 in March from an upwardly revised 97.4 in February, which represents a 12.8% gain from March 2011. February’s pending home sales index was initially reported to be 96.5. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing. Sales of existing homes during the first quarter were the strongest in five years

Economic Data for April 26, 2012 actual v. forecast

Economic Events scheduled for April 27, 2012 that affect the European and American Markets

06:00 EUR Gfk Consumer Confidence Survey

The GfK Consumer Confidence is a leading index that measures the level of consumer confidence in economic activity. A high level of consumer confidence stimulates economic expansion while a low level drives to economic downturn

TBD GBP Nationwide Housing Prices

The Nationwide Housing Prices shows the value of the houses prices in UK and indicate current movements in the housing market that is considered as a sensitive factor to the UK’s economy.

TBD GBP Nationwide Housing Prices

The Nationwide Housing Prices shows the value of the houses prices in UK and indicate current movements in the housing market that is considered as a sensitive factor to the UK’s economy.

09:00 CHF KOF Leading Indicator

The KOF Swiss Leading Indicator is released by the Swiss Institute for Business Cycle Research and it’s a joint survey with leading indicator which measures future trends of the overall economic activity. It captures the movement of GDP growth and the economic trend in Switzerland

12:30 USD Gross Domestic Product Annualized

The Gross Domestic Product annualized released by the US Bureau of Economic Analysis shows the monetary value of all the goods, services and structures produced within a country in a given period of time. It is a gross measure of market activity because it indicates the pace at which a country’s economy is growing or decreasing.

12:30 USD Gross Domestic Purchases Price Index

The GDP Price Index released by the Bureau of Economic Analysis, Department of Commerce gauges the change in the prices of goods and services. Changes in the GDP price index are followed as an indicator of inflationary pressure that may anticipate interest rates to rise.

12:30 USD Real Personal Consumption Expenditures

The Real Personal Consumption Expenditure released by the US Bureau of Economic Analysis is an average of the amount of money the consumers spend in a month on durable goods, consumer products, and services.. It is considered as an important indicator of inflation.

13:55 USD Reuters/Michigan Consumer Sentiment Index

The Reuters/Michigan Consumer Sentiment Index released by the Reuters/University of Michigan is a survey of personal consumer confidence in economic activity. It shows a picture of whether or not consumers are willing to spend money

Government Bond Auctions (this week)

Apr 27 09:10 Italy BTP/CCTeu auction

Apr 27 09:10 Italy Eur 1.5-2.5bn 4.75% May 2017 & Eur 1.5-2.5bn 5.5% Sep 2022 & Eur

0.75-1.25bn 3.75% Apr 2016 & 4.25% Feb 2019 BTPs

May 01 09:30 UK Auctions 4.5% 2042 Conventional Gilt

May 02 09:10 Sweden Nominal bond auction

May 02 09:30 Portugal Eur 1.25-1.5bn new Nov 2012 & new May 2013 T-bills

May 02 13:00 US Announces details of 3Y Notes on May 08, 10Y Notes on May 09 & 30Y Bonds on May 10

May 02 14:30 Sweden Details T-bill auction on May 09

May 03 08:30 Spain Bono auction

May 03 08:50 France OAT auction

USD/JPY Technical Analysis for April 27, 2012

The USD/JPY pair is without a doubt one of the most interesting pairs at the moment. In this market you have a matchup of two central banks that seem dead set on killing off their currencies. After all, the Bank of Japan is in hyper easing mode, and the Federal Reserve seems to think that managing an “orderly decline” in the value of the Dollar is one of their mandates.

The Friday session will see an important inflection point in this pair as the Bank of Japan is expected to announce some kind of easing. The higher Yen value is absolutely decimating the exporter’s profits, which is by far the most important part of the Japanese economy, and as such the Bank of Japan is desperate to devalue their currency if at all possible.

The meeting is expected to produce some kind of expansion to the bond buyback program that the central cranked up recently. Simply put, this allows the central bank to buy Japanese Government Bonds to replace the lackluster demand by the Japanese public. The public has long been buyers of the bonds as they prepared for retirement. However, much like the United States, the Japanese had a massive baby boom after World War II, and as a result the largest group of people in the country is now facing retirement. They won’t be buying these bonds. The Bank of Japan is buying the bonds because they have to. Also, this has the added benefit of essentially creating Yen out of thin air, so of course it will have an effect on the value of them as the supply and demand curve gets out of whack. Estimates are for the central bank to announce an expansion of 5 Trillion Yen in this program. Needless to say, anything larger than that would be detrimental to the value of the Yen.

The recent action has been centered on a downward channel in this pair, and the bears have been pushing prices down through it. The move has brought out calls for a falling market, and the bears are starting to make a lot of noise in the press. However, the 80 level is just below, and this is a massively strong support level that has history to back it up.

With this in mind, we like the idea of buying, but we need to see a couple of things come into play first. For example, a break above the top of the downtrend channel would be a massive buy signal for us as we think the uptrend will continue if this happens. Of course, there are other things that could help as well, such as the 50% Fibonacci level just above the 80 level, and the 200 day exponential moving average just below it. All of these areas could provide the support we are looking for. We are buying on supportive candles at any one of these junctions or the aforementioned breakout as all would show the continuation of the massive breakout that has occurred. We don’t see a selling opportunity at the moment.

USD/JPY Fundamental Analysis for April 27, 2012

Analysis and Recommendation: (close of Asian session)

GBP/USD Technical Analysis for April 27, 2012

The GBP/USD pair rose again during the Thursday session as the breakout continues. However, by the end of the session we saw a doji, and the last couple of days are starting to look a bit exhausted, and this keeps us from buying at the current levels. However, the market isn’t one that we like selling – even if it needs to see a pullback. Rather, we like buying this pair on the pullback, and the 1.60 and 1.61 levels both could give you an opportunity to buy on signs of support. The 1.59 level is our “line in the sand” and as long as we are above it, we are buying only.

GBP/USD Fundamental Analysis for April 27, 2012

Analysis and Recommendations:

The GBP/USD is currently exchanging at 1.6180 as the pound continues to surprise investors remaining stronger than expected. A bit of good news could push the pair over the 1.62 price.

The U.K. public’s expectations for inflation in the coming year rose in April, presenting the Bank of England with an awkward policy dilemma for the recession-hit economy, a monthly survey by Citi Inc.

A softer tone for the dollar was set Wednesday after the Federal Reserve kept interest rates on hold and Fed Chairman Ben Bernanke said he remained willing to buy more bonds should the economy need help.

What’s more, a string of recent data suggesting some softening in the economy has raised concerns about whether the recovery will accelerate in the months ahead. A downturn in Europe could hurt U.S. exports, for instance, and higher gas prices could act as a drag.

The number of Americans who filed requests for jobless benefits was virtually unchanged last week at 388,000, the U.S. Labor Department said, keeping claims near their highest level of 2012. Claims from two weeks ago were revised up.

An index of pending home sales climbed 4.1% in March to reach the highest level since April 2010, the National Association of Realtors said Thursday. The index rose to 101.4 in March from an upwardly revised 97.4 in February, which represents a 12.8% gain from March 2011. February’s pending home sales index was initially reported to be 96.5. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing. Sales of existing homes during the first quarter were the strongest in five years

Economic Data for April 26, 2012 actual v. forecast

Economic Events scheduled for April 27, 2012 that affect the European and American Markets

06:00 EUR Gfk Consumer Confidence Survey

The GfK Consumer Confidence is a leading index that measures the level of consumer confidence in economic activity. A high level of consumer confidence stimulates economic expansion while a low level drives to economic downturn

TBD GBP Nationwide Housing Prices

The Nationwide Housing Prices shows the value of the houses prices in UK and indicate current movements in the housing market that is considered as a sensitive factor to the UK’s economy.

TBD GBP Nationwide Housing Prices

The Nationwide Housing Prices shows the value of the houses prices in UK and indicate current movements in the housing market that is considered as a sensitive factor to the UK’s economy.

09:00 CHF KOF Leading Indicator

The KOF Swiss Leading Indicator is released by the Swiss Institute for Business Cycle Research and it’s a joint survey with leading indicator which measures future trends of the overall economic activity. It captures the movement of GDP growth and the economic trend in Switzerland

12:30 USD Gross Domestic Product Annualized

The Gross Domestic Product annualized released by the US Bureau of Economic Analysis shows the monetary value of all the goods, services and structures produced within a country in a given period of time. It is a gross measure of market activity because it indicates the pace at which a country’s economy is growing or decreasing.

12:30 USD Gross Domestic Purchases Price Index

The GDP Price Index released by the Bureau of Economic Analysis, Department of Commerce gauges the change in the prices of goods and services. Changes in the GDP price index are followed as an indicator of inflationary pressure that may anticipate interest rates to rise.

12:30 USD Real Personal Consumption Expenditures

The Real Personal Consumption Expenditure released by the US Bureau of Economic Analysis is an average of the amount of money the consumers spend in a month on durable goods, consumer products, and services.. It is considered as an important indicator of inflation.

13:55 USD Reuters/Michigan Consumer Sentiment Index

The Reuters/Michigan Consumer Sentiment Index released by the Reuters/University of Michigan is a survey of personal consumer confidence in economic activity. It shows a picture of whether or not consumers are willing to spend money

Government Bond Auctions (this week)

Apr 27 09:10 Italy BTP/CCTeu auction

Apr 27 09:10 Italy Eur 1.5-2.5bn 4.75% May 2017 & Eur 1.5-2.5bn 5.5% Sep 2022 & Eur

0.75-1.25bn 3.75% Apr 2016 & 4.25% Feb 2019 BTPs

May 01 09:30 UK Auctions 4.5% 2042 Conventional Gilt

May 02 09:10 Sweden Nominal bond auction

May 02 09:30 Portugal Eur 1.25-1.5bn new Nov 2012 & new May 2013 T-bills

May 02 13:00 US Announces details of 3Y Notes on May 08, 10Y Notes on May 09 & 30Y

Bonds on May 10

May 02 14:30 Sweden Details T-bill auction on May 09

May 03 08:30 Spain Bono auction

May 03 08:50 France OAT auction

EUR/GBP Technical Analysis for April 27, 2012

The EUR/GBP pair fell again on the Thursday session as the Euro continues to show weakness against the Pound. The Pound in general is stronger overall, and as a result it shouldn’t be such a surprise that this pair is weak overall. The recent moves have all been downward, and as a result we only sell this pair right now.

Adding to the mix is the S&P downgrade of Spain by two notches on Thursday, and this should only add to the bearishness to the Euro currency overall. The United Kingdom just fell into a recession, but only the garden variety, not the potential debt bomb that Europe now is. Because of this, the Pound will certainly be thought of as a safer currency than the Euro at the moment. Plus, the swap is positive when you are short of this pair.

The 0.81 level continues to be the support area, and we think that once we get a daily close below that mark, we can add to our already short position. The pair looks as if it wants to go down to the 0.80 level before it is all said and done, and this is a natural level in the pair over time as it is revisited time and time again. We think this is the natural course of things, to fall lower and to that level, but it is going to take time.

The move lower will take patience as the pair typically doesn’t move as quick as others, but the pip value is larger, so it doesn’t need to in order to be profitable. The shooting star for the Wednesday session suggested that the 0.8225 level is now significant resistance in this pair, and we think that as long as we stay below that level, it is likely that we will break down before too long. The breaking below of the 0.81 level has us selling again, and holding until we see 0.80 going forward. The buying of this pair simply isn’t possible, as the Euro is far too dangerous at the moment.

EUR/GBP Fundamental Analysis for April 27, 2012

Analysis and Recommendations:

EUR/CHF Technical Analysis for April 27, 2012

The EUR/CHF sat still during the Thursday session as the Swiss National Bank continues to fight the bears in this pair. The 1.20 level looks mightily supportive at the moment, and because of this we don’t sell. After all, this is the level that the SNB has openly stated that they were going to defend, and because of this we can only buy this pair if we do anything at all. In fact, this is a positive swap pair, so some traders are simply buying and collecting the small swap every day. If the pair falls below the 1.20 level, intervention is almost guaranteed at that point, this of course would drive the pair much, much higher. Because of this, we have a small position on at the moment.

EUR/CHF Fundamental Analysis for April 27, 2012

Analysis and Recommendations:

The EUR/CHF ended the day at 1.2013 continuing its battle of the bears vs. the SNB. These two have been locked in a private battle since the beginning of the month. The bears continue to try to violate the floor set by the SNB.

The debt crisis has severely crippled financial integration in both the funding and lending markets in the euro zone, the European Central Bank said. The ECB said financial market integration has slowed since 2007, in particular since 2011.

The European Commission said its economic sentiment indicator fell more than expected in April to 92.8 from a reading of 94.5 the previous month. The reading is the lowest since December. Economists had forecast a reading of 94.2

Economic Data for April 26, 2012 actual v. forecast

Economic Events scheduled for April 27, 2012 that affect the European and American Markets

06:00 EUR Gfk Consumer Confidence Survey

The GfK Consumer Confidence is a leading index that measures the level of consumer confidence in economic activity. A high level of consumer confidence stimulates economic expansion while a low level drives to economic downturn

TBD GBP Nationwide Housing Prices

The Nationwide Housing Prices shows the value of the houses prices in UK and indicate current movements in the housing market that is considered as a sensitive factor to the UK’s economy.

TBD GBP Nationwide Housing Prices

The Nationwide Housing Prices shows the value of the houses prices in UK and indicate current movements in the housing market that is considered as a sensitive factor to the UK’s economy.

09:00 CHF KOF Leading Indicator

The KOF Swiss Leading Indicator is released by the Swiss Institute for Business Cycle Research and it’s a joint survey with leading indicator which measures future trends of the overall economic activity. It captures the movement of GDP growth and the economic trend in Switzerland

12:30 USD Gross Domestic Product Annualized

The Gross Domestic Product annualized released by the US Bureau of Economic Analysis shows the monetary value of all the goods, services and structures produced within a country in a given period of time. It is a gross measure of market activity because it indicates the pace at which a country’s economy is growing or decreasing.

12:30 USD Gross Domestic Purchases Price Index

The GDP Price Index released by the Bureau of Economic Analysis, Department of Commerce gauges the change in the prices of goods and services. Changes in the GDP price index are followed as an indicator of inflationary pressure that may anticipate interest rates to rise.

12:30 USD Real Personal Consumption Expenditures

The Real Personal Consumption Expenditure released by the US Bureau of Economic Analysis is an average of the amount of money the consumers spend in a month on durable goods, consumer products, and services.. It is considered as an important indicator of inflation.

13:55 USD Reuters/Michigan Consumer Sentiment Index

The Reuters/Michigan Consumer Sentiment Index released by the Reuters/University of Michigan is a survey of personal consumer confidence in economic activity. It shows a picture of whether or not consumers are willing to spend money

Government Bond Auctions (this week)

Apr 27 09:10 Italy BTP/CCTeu auction

Apr 27 09:10 Italy Eur 1.5-2.5bn 4.75% May 2017 & Eur 1.5-2.5bn 5.5% Sep 2022 & Eur

0.75-1.25bn 3.75% Apr 2016 & 4.25% Feb 2019 BTPs

May 01 09:30 UK Auctions 4.5% 2042 Conventional Gilt

May 02 09:10 Sweden Nominal bond auction

May 02 09:30 Portugal Eur 1.25-1.5bn new Nov 2012 & new May 2013 T-bills

May 02 13:00 US Announces details of 3Y Notes on May 08, 10Y Notes on May 09 & 30Y

Bonds on May 10

May 02 14:30 Sweden Details T-bill auction on May 09

May 03 08:30 Spain Bono auction

May 03 08:50 France OAT auction

AUD/USD Technical Analysis for April 27, 2012

The AUD/USD pair rose on Thursday in order to reach the 200 day exponential moving average. The indicator is often used by trend traders, and as such will often act as dynamic support and resistance. Because of this, we are weary of buying at this point, but certainly aren’t ready to sell as the pair looks to be trying to form a base off of 50% Fibonacci level. The pair looks stronger recently, but we are going to wait until we close at or above 1.0450 in order to buy as it would show that the pair has cleared a few hurdles. With that being said, we don’t sell the Aussie at the moment regardless. We are waiting to go long, and will once the conditions are met.

AUD/USD Fundamental Analysis for April 27, 2012

Analysis and Recommendation: (close of Asian session)

USD/CAD Technical Analysis for April 27, 2012

The USD/CAD pair bounced hard on Thursday as the 0.98 handle came into the mix in order to give the pair a lift. The recent consolidation did in fact breakdown in order to test the handle, but we warned you previously that the handle would more than likely be the real support behind the range. With this being said, the pair looks as if it is looking to reenter the previous consolidation area between 0.9850 and 1.01 or so.

We like buying a break of the top of the Thursday range, but only for a short term trade. After all, this overall trend is lower, but this looks like a good short term opportunity. Selling will be our strategy if the pair closes below the 0.908 handle on the daily chart.

USD/CAD Fundamental Analysis for April 27, 2012

Analysis and Recommendations:

The USD/CAD fell climbed today to trade at 0.9835.

A softer tone for the dollar was set Wednesday after the Federal Reserve kept interest rates on hold and Fed Chairman Ben Bernanke said he remained willing to buy more bonds should the economy need help.

What’s more, a string of recent data suggesting some softening in the economy has raised concerns about whether the recovery will accelerate in the months ahead. A downturn in Europe could hurt U.S. exports, for instance, and higher gas prices could act as a drag.

The number of Americans who filed requests for jobless benefits was virtually unchanged last week at 388,000, the U.S. Labor Department said Thursday, keeping claims near their highest level of 2012. Claims from two weeks ago were revised up.

An index of pending home sales climbed 4.1% in March to reach the highest level since April 2010, the National Association of Realtors said Thursday. The index rose to 101.4 in March from an upwardly revised 97.4 in February, which represents a 12.8% gain from March 2011. February’s pending home sales index was initially reported to be 96.5. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing. Sales of existing homes during the first quarter were the strongest in five years

Economic Data for April 26, 2012 actual v. forecast

Economic Events scheduled for April 27, 2012 that affect the European and American Markets

06:00 EUR Gfk Consumer Confidence Survey

The GfK Consumer Confidence is a leading index that measures the level of consumer confidence in economic activity. A high level of consumer confidence stimulates economic expansion while a low level drives to economic downturn

TBD GBP Nationwide Housing Prices

The Nationwide Housing Prices shows the value of the houses prices in UK and indicate current movements in the housing market that is considered as a sensitive factor to the UK’s economy.

TBD GBP Nationwide Housing Prices

The Nationwide Housing Prices shows the value of the houses prices in UK and indicate current movements in the housing market that is considered as a sensitive factor to the UK’s economy.

09:00 CHF KOF Leading Indicator

The KOF Swiss Leading Indicator is released by the Swiss Institute for Business Cycle Research and it’s a joint survey with leading indicator which measures future trends of the overall economic activity. It captures the movement of GDP growth and the economic trend in Switzerland

12:30 USD Gross Domestic Product Annualized

The Gross Domestic Product annualized released by the US Bureau of Economic Analysis shows the monetary value of all the goods, services and structures produced within a country in a given period of time. It is a gross measure of market activity because it indicates the pace at which a country’s economy is growing or decreasing.

12:30 USD Gross Domestic Purchases Price Index

The GDP Price Index released by the Bureau of Economic Analysis, Department of Commerce gauges the change in the prices of goods and services. Changes in the GDP price index are followed as an indicator of inflationary pressure that may anticipate interest rates to rise.

12:30 USD Real Personal Consumption Expenditures

The Real Personal Consumption Expenditure released by the US Bureau of Economic Analysis is an average of the amount of money the consumers spend in a month on durable goods, consumer products, and services.. It is considered as an important indicator of inflation.

13:55 USD Reuters/Michigan Consumer Sentiment Index

The Reuters/Michigan Consumer Sentiment Index released by the Reuters/University of Michigan is a survey of personal consumer confidence in economic activity. It shows a picture of whether or not consumers are willing to spend money

Government Bond Auctions (this week)

Apr 27 09:10 Italy BTP/CCTeu auction

Apr 27 09:10 Italy Eur 1.5-2.5bn 4.75% May 2017 & Eur 1.5-2.5bn 5.5% Sep 2022 & Eur

0.75-1.25bn 3.75% Apr 2016 & 4.25% Feb 2019 BTPs

May 01 09:30 UK Auctions 4.5% 2042 Conventional Gilt

May 02 09:10 Sweden Nominal bond auction

May 02 09:30 Portugal Eur 1.25-1.5bn new Nov 2012 & new May 2013 T-bills

May 02 13:00 US Announces details of 3Y Notes on May 08, 10Y Notes on May 09 & 30Y

Bonds on May 10

May 02 14:30 Sweden Details T-bill auction on May 09

May 03 08:30 Spain Bono auction

May 03 08:50 France OAT auction

NZD/USD Technical Analysis for April 27, 2012

The NZD/USD pair rose during most of the session on Thursday, only to turn back around and fall to form a shooting star. While this candle isn’t at the top of the range like bears would like to see, it does suggest that the pair is running into trouble going forward. However, there are plenty of levels below that could be supportive, and as a result we aren’t selling it. Simply put, this pair should continue to chop around at best, and we are going to avoid it for a few days until we get clarity in the pair.

NZD/USD Fundamental Analysis for April 27, 2012

Analysis and Recommendation: (close of the Asian session)

EUR/USD Technical Analysis for April 26, 2012

The EUR/USD pair had a back and forth session on Wednesday as the Federal Reserve has essentially taken the easy way out for the meeting. In other words, the statement said little about the possibility of quantitative easing, and then Dr. Bernanke mentioned the possibility of easing if needed a couple of times during the news conference afterwards. In other words, the markets are more than likely confused.

With this in mind, the meeting has come and gone, and the reaction hasn’t been all that telling. Because of this, we can only put any thoughts of the meeting behind us and look at the charts. As you undoubtedly know by now, our overall feeling is that the Euro will be lower over time. However, with the recent action it is obvious that the move won’t be easy for the sellers.

The 1.30 level is still the most important one, and a break down below that level sends this market much lower. Of course, there will need to be a daily close below it to confirm the move, but in the long run it will be seen as a significant breakdown. On the upside, there is a downtrend line that has formed lately, and if it holds it could be the top of a descending triangle, with a bottom at the aforementioned 1.30 level. Because of this, we are willing to sell any weakness at the line as well which is currently at about the 1.3250 area – an area that has caused reactions more than once lately.

The 200 day EMA is still sloping down, and this will certainly have the longer term trend traders looking for shorts as well. The buying of this pair isn’t a comfortable position until we close well above the 1.35 level, as it shows that the momentum has picked up to the buy side. In the meantime, we are more interested in fading rallies – especially at the downtrend line of the potential triangle. Of course, any daily close below the 1.30 mark will have us selling as well, and more than likely adding along the way as we run towards the 1.26 level.

EUR/USD Fundamental Analysis for April 26, 2012

Analysis and Recommendations:

The EUR/USD is trading at 1.3217 as the euro continues to place pressure on the greenback.

As markets wait for the FOMC statement today and worry about the political situation in France keep investors guessing.

More disappointing numbers were released in the US today, questioning the strength of the US recovery.

Durable Goods orders for U.S. goods sank 4.2% in March, largely because of fewer booking for commercial aircraft, the Commerce Department reported Wednesday. Economists had expected orders to fall by 2.9%. Investors are worried that we are seeing another spring stall of the economy, which is the same that has happened for 3 years now.

In Europe there was little in the way of economic news, but there was lots of press today.

The European Central Bank is confident the wider economy will eventually benefit from its cheap three-year loans to euro-zone banks. Banks tapped the ECB for over EUR1 trillion in two refinancing operations in December and February.

A top European Central Bank official criticized the International Monetary Fund for using dire language to talk about the euro debt crisis in a report on financial stability and the world economy.

It’s too early to consider an exit from the European Central Bank’s accommodative monetary policy measures amid an unsettled economic backdrop, ECB President Mario Draghi told a European Parliament committee.

Economic Data April 25, 2012 actual v. forecast

Economic Events scheduled for April 26, 2012 that affect the European and American Markets

TBD EUR Consumer Price Index (YoY) (Apr)
The Germany consumer price index released by the Statistiches Bundesamt Deutschland measures the average price change for all goods and services purchased by households for consumption purposes. CPI is the main indicator to measure inflation and changes in purchasing trends.

TBD EUR Consumer Price Index (MoM) (Apr)

The Germany consumer price index released by the Statistiches Bundesamt Deutschland measures the average price change for all goods and services purchased by households for consumption purposes. CPI is the main indicator to measure inflation and changes in purchasing trends

06:00 EUR Retail Sales (MoM) (Mar)

The Retail Sales released by the Statistiches Bundesamt Deutschland is a measure of changes in sales of the German retail sector. It shows the performance of the retail sector in the short term. Percent changes reflect the rate of changes of such sales. The changes are widely followed as an indicator of consumer spending

06:00 EUR Retail Sales (YoY) (Mar)

The Retail Sales released by the Statistiches Bundesamt Deutschland is a measure of changes in sales of the German retail sector. It shows the performance of the retail sector in the short term. Percent changes reflect the rate of changes of such sales. The changes are widely followed as an indicator of consumer spending.

08:30 GBP BBA Mortgage Approvals (Mar)

The Mortgage Approvals published by the British Bankers’ Association (BBA)measure the number of home loans issued by the BBA during the previous quarter. It is considered as a leading indicator of the UK Housing Market. A Mortgage growth represents a healthy housing market that stimulates the overall UK economy

09:00 EUR Consumer Confidence (Apr)

The Consumer Confidence released by the European Commission is a leading index that measures the level of consumer confidence in economic activity. A high level of consumer confidence stimulates economic expansion while a low level drives to economic downturn.

09:00 EUR Economic Confidence (Apr)

The Euro Zone Economic Confidence released by the European Commission is a survey of consumers confidence in economic activity. It indicates the trend of the overall Euro Zone economy.

09:00 EUR Industrial Confidence (Apr)

The Industrial Confidence released by the European Commission is an index that measures the level of industrial executives confidence in economic activity. The survey asks about orders and buildup of inventories. A high level of industrial confidence stimulates economic expansion while a low level drives to economic downturn.

23:01 GBP Gfk Consumer Confidence (Apr)

The GfK Group Consumer Confidence is a leading index that measures the level of consumer confidence in economic activity. A high level of consumer confidence stimulates economic expansion while a low level drives to economic downturn

Government Bond Auctions (this week)

Apr 26 00:30 Japan Auctions 2Y JGBs

Apr 26 09:10 Italy BOT auction

Apr 26 14:30 Sweden Details I/L bond auction on May 03

Apr 26 17:00 US Auctions 7Y Notes

Apr 27 09:10 Italy BTP/CCTeu auction

USD/JPY Technical Analysis for April 26, 2012

The USD/JPY pair had an eventful day during the session on Wednesday, only to end up essentially unchanged. The pair is currently right on the edge of a downtrend channel, and the piercing of it certainly would have a lot of traders excited. However, by the end of the day we had pulled back to form a doji.

With this candlestick, there is an obvious buy signal if we break the top of the range. On a brake lower, we simply see far too much in the way of support all the way down to the 80 handle, and as a result we aren’t selling. Also, later this week we could see the Bank of Japan increase its easing in the form of an expansion of the bond buyback program, and this in turn should weaken the Yen overall. Because of this – we are only buying on that aforementioned break higher.

USD/JPY Fundamental Analysis for April 26, 2012

Analysis and Recommendation: (close of Asian session)

GBP/USD Technical Analysis for April 26, 2012

The GBP/USD pair fell for the first half of Wednesday, but bounced again to produce a hammer. This is especially impressive as the UK officially went into recession during the session as well! Because of the resilience in this pair, we believe the bullishness should continue, and as a result will only buy it. In fact, on pullbacks this pair looks very attractive until we break below the 1.59 handle. In the meantime, we still expect the 1.65 level – even if it doesn’t make much sense to us, but the charts say it – so we listen.

GBP/USD Fundamental Analysis for April 26, 2012

Analysis and Recommendations:

The GBP/USD is currently down slightly to 1.6125, but continues to hold above the 1.60 price level.

The British economy shrank for a second consecutive quarter in the first three months of 2012, meeting a widely-used definition of recession, according to data released Wednesday by the U.K. Office for National Statistics. The UK economy contracted for a second consecutive quarter to meet the widely-used definition of recession.

The main event will be FOMC rate decision and statement out later today in the US.

In the US today, orders for long-lasting U.S. goods sank 4.2% in March, largely because of fewer booking for commercial aircraft, the Commerce Department reported Wednesday. Economists had expected orders to fall by 2.9%.

Investors are beginning to wonder if the US economy has hit the spring stall again this year.

Economic Data April 25, 2012 actual v. forecast

Economic Events scheduled for April 26, 2012 that affect the European and American Markets

TBD EUR Consumer Price Index (YoY) (Apr)

The Germany consumer price index released by the Statistiches Bundesamt Deutschland measures the average price change for all goods and services purchased by households for consumption purposes. CPI is the main indicator to measure inflation and changes in purchasing trends.

TBD EUR Consumer Price Index (MoM) (Apr)

The Germany consumer price index released by the Statistiches Bundesamt Deutschland measures the average price change for all goods and services purchased by households for consumption purposes. CPI is the main indicator to measure inflation and changes in purchasing trends

06:00 EUR Retail Sales (MoM) (Mar)

The Retail Sales released by the Statistiches Bundesamt Deutschland is a measure of changes in sales of the German retail sector. It shows the performance of the retail sector in the short term. Percent changes reflect the rate of changes of such sales. The changes are widely followed as an indicator of consumer spending

06:00 EUR Retail Sales (YoY) (Mar)

The Retail Sales released by the Statistiches Bundesamt Deutschland is a measure of changes in sales of the German retail sector. It shows the performance of the retail sector in the short term. Percent changes reflect the rate of changes of such sales. The changes are widely followed as an indicator of consumer spending.

08:30 GBP BBA Mortgage Approvals (Mar)

The Mortgage Approvals published by the British Bankers’ Association (BBA)measure the number of home loans issued by the BBA during the previous quarter. It is considered as a leading indicator of the UK Housing Market. A Mortgage growth represents a healthy housing market that stimulates the overall UK economy

09:00 EUR Consumer Confidence (Apr)

The Consumer Confidence released by the European Commission is a leading index that measures the level of consumer confidence in economic activity. A high level of consumer confidence stimulates economic expansion while a low level drives to economic downturn.

09:00 EUR Economic Confidence (Apr)

The Euro Zone Economic Confidence released by the European Commission is a survey of consumers confidence in economic activity. It indicates the trend of the overall Euro Zone economy.

09:00 EUR Industrial Confidence (Apr)

The Industrial Confidence released by the European Commission is an index that measures the level of industrial executives confidence in economic activity. The survey asks about orders and buildup of inventories. A high level of industrial confidence stimulates economic expansion while a low level drives to economic downturn.

23:01 GBP Gfk Consumer Confidence (Apr)

The GfK Group Consumer Confidence is a leading index that measures the level of consumer confidence in economic activity. A high level of consumer confidence stimulates economic expansion while a low level drives to economic downturn

Government Bond Auctions (this week)

Apr 26 00:30 Japan Auctions 2Y JGBs

Apr 26 09:10 Italy BOT auction

Apr 26 14:30 Sweden Details I/L bond auction on May 03

Apr 26 17:00 US Auctions 7Y Notes

Apr 27 09:10 Italy BTP/CCTeu auction

EUR/GBP Technical Analysis for April 26, 2012

The EUR/GBP pair is a great barometer of Euro and Pound strength, as it completely avoids the noise associated with adding the US dollar to the mix. While many traders will quote the Euro in Dollar terms – and they probably should – most don’t bother to look at this pair, and that can be a big mistake.

For example, the Wednesday session had the Euro and Pound both gaining marginally against the Dollar. However, in the EUR/GBP pair, we can see the Euro tried to rally but only failed. This is especially significant as the UK officially entered a recession during the session with a negative GDP number. However, in the end it doesn’t matter as the problems in the European Union continue to cause much more concern that a recession in the United Kingdom.

The candle for the session ended up being a shooting star at the bottom of the most recent downtrend, and this is a weak signal in our opinion. We like this formation because it signals that there was an attempt to rally – but it completely failed. You will also have to notice that the top of the shooting star failed right at the start of the first area of clusters, and therefore shows there was no real conviction by the buyers. In this sense, this is a very obvious and ominous signs for the market in our opinion.

With this being said, the 0.8150 level seems to be the support level that the market is trying to break below. With the recent action, it is hard to think that it isn’t just a matter of time, and that the market wants to continue towards our 0.80 target going forward. The breaking of the bottom of the Wednesday session lows would signal a quickening of the sell orders, and should see this market falling even further. It is that move that we are going to use in order to start selling this pair. As for the upside, it must be said that a break of the top of the Wednesday session candle would be a bullish sign. However, it would also be countertrend, and as such we still prefer selling in general.

EUR/GBP Fundamental Analysis for April 26, 2012

Analysis and Recommendations:

EUR/CHF Technical Analysis for April 26, 2012

The EUR/CHF continued to do nothing on Wednesday as the 1.20 level is still being enforced by the Swiss National Bank. The SNB has publically stated that it was the “minimum acceptable exchange rate” for this pair, and as a result the markets avoid trying to break it down. Having said that, it is interesting that the market hasn’t been able to bounce either. I make one wonder how low this pair really would be if it were allowed to be traded freely. Having said this, we can only buy this pair, but it should be noted that the trade would take massive amounts of patience. It does pay positive swap though, so there is a way to make money going long if you are willing to park money in this market and forget about it.

EUR/CHF Fundamental Analysis for April 26, 2012

Analysis and Recommendations:

The EUR/CHF continues its private battle as the Franc and the Euro are locked in a dire combat. The pair held as 1.2016, remaining in the tight channel they have held for close to two weeks, since the pair fell briefly below the SNB floor on April 5^th.

There is little in the way of supportive eco data for the Swissie and it seems nothing from the eurozone is effecting the euro.

Economic Data April 25, 2012 actual v. forecast

Economic Events scheduled for April 26, 2012 that affect the European and American Markets

TBD EUR Consumer Price Index (YoY) (Apr)

The Germany consumer price index released by the Statistiches Bundesamt Deutschland measures the average price change for all goods and services purchased by households for consumption purposes. CPI is the main indicator to measure inflation and changes in purchasing trends.

TBD EUR Consumer Price Index (MoM) (Apr)

The Germany consumer price index released by the Statistiches Bundesamt Deutschland measures the average price change for all goods and services purchased by households for consumption purposes. CPI is the main indicator to measure inflation and changes in purchasing trends

06:00 EUR Retail Sales (MoM) (Mar)

The Retail Sales released by the Statistiches Bundesamt Deutschland is a measure of changes in sales of the German retail sector. It shows the performance of the retail sector in the short term. Percent changes reflect the rate of changes of such sales. The changes are widely followed as an indicator of consumer spending

06:00 EUR Retail Sales (YoY) (Mar)

The Retail Sales released by the Statistiches Bundesamt Deutschland is a measure of changes in sales of the German retail sector. It shows the performance of the retail sector in the short term. Percent changes reflect the rate of changes of such sales. The changes are widely followed as an indicator of consumer spending.

08:30 GBP BBA Mortgage Approvals (Mar)

The Mortgage Approvals published by the British Bankers’ Association (BBA)measure the number of home loans issued by the BBA during the previous quarter. It is considered as a leading indicator of the UK Housing Market. A Mortgage growth represents a healthy housing market that stimulates the overall UK economy

09:00 EUR Consumer Confidence (Apr)

The Consumer Confidence released by the European Commission is a leading index that measures the level of consumer confidence in economic activity. A high level of consumer confidence stimulates economic expansion while a low level drives to economic downturn.

09:00 EUR Economic Confidence (Apr)

The Euro Zone Economic Confidence released by the European Commission is a survey of consumers confidence in economic activity. It indicates the trend of the overall Euro Zone economy.

09:00 EUR Industrial Confidence (Apr)

The Industrial Confidence released by the European Commission is an index that measures the level of industrial executives confidence in economic activity. The survey asks about orders and buildup of inventories. A high level of industrial confidence stimulates economic expansion while a low level drives to economic downturn.

23:01 GBP Gfk Consumer Confidence (Apr)

The GfK Group Consumer Confidence is a leading index that measures the level of consumer confidence in economic activity. A high level of consumer confidence stimulates economic expansion while a low level drives to economic downturn

Government Bond Auctions (this week)

Apr 26 00:30 Japan Auctions 2Y JGBs

Apr 26 09:10 Italy BOT auction

Apr 26 14:30 Sweden Details I/L bond auction on May 03

Apr 26 17:00 US Auctions 7Y Notes

Apr 27 09:10 Italy BTP/CCTeu auction

AUD/USD Technical Analysis for April 26, 2012

The AUD/USD pair rose during the session on Wednesday as the markets priced in more “risk on” to the global trade. The pair had formed a hammer on Tuesday, and we suggested that the pair could be ready to make a move higher. However, we also warned that the 200 day exponential moving average is just above, and floating around the 1.04 level. It should also be noted that there is an expectation that the Reserve Bank of Australia is getting ready to cut rate in the summer, and this would weigh on the Aussie on the whole. However, if we get that bounce to a daily close above the 200 day EMA – we are buyers. We don’t sell at the moment, as we see too many potential support levels below.

AUD/USD Fundamental Analysis for April 26, 2012

Analysis and Recommendation: (close of Asian session)

The AUD/USD is trading at 1.0311. Financial markets in Australia are closed today for a local holiday.

USD/CAD Technical Analysis for April 26, 2012

The USD/CAD pair fell somewhat significantly during the Wednesday session as the markets continue to look for yield. However, the pair is still above the 0.98 handle, and it is below there that we feel comfortable selling as the market will often react at these large handles. With this being said, the pair is looking more and more bearish, and if we get a close below the 0.98 level on the daily chart, we would be selling at that point. As for buying, we would need to see a supportive candle that led us to believe that we were reentering the consolidation area again.

USD/CAD Fundamental Analysis for April 26, 2012

The USD/CAD fell to 0.9836 as the greenback fell against most of its trading partners today.

With the FOMC rate decision and statement due later today, many investors have been positioning themselves on expectations from the Fed.

Others are beginning to worry about the stall in the US recovery after a slew of lackluster and negative eco data. Compounded today, by the Durable Goods report which showed orders for U.S. goods sank 4.2% in March, largely because of fewer booking for commercial aircraft, the Commerce Department reported Wednesday. Economists had expected orders to fall by 2.9%

There was no eco data in Canada today. Oil prices climbed again in today’s session which is a positive for the Canadian economy, but is also forcing President Obama to take drastic action.

Economic Data April 25, 2012 actual v. forecast

Economic Events scheduled for April 26, 2012 that affect the European and American Markets

TBD EUR Consumer Price Index (YoY) (Apr)
The Germany consumer price index released by the Statistiches Bundesamt Deutschland measures the average price change for all goods and services purchased by households for consumption purposes. CPI is the main indicator to measure inflation and changes in purchasing trends.

TBD EUR Consumer Price Index (MoM) (Apr)

The Germany consumer price index released by the Statistiches Bundesamt Deutschland measures the average price change for all goods and services purchased by households for consumption purposes. CPI is the main indicator to measure inflation and changes in purchasing trends

06:00 EUR Retail Sales (MoM) (Mar)

The Retail Sales released by the Statistiches Bundesamt Deutschland is a measure of changes in sales of the German retail sector. It shows the performance of the retail sector in the short term. Percent changes reflect the rate of changes of such sales. The changes are widely followed as an indicator of consumer spending

06:00 EUR Retail Sales (YoY) (Mar)

The Retail Sales released by the Statistiches Bundesamt Deutschland is a measure of changes in sales of the German retail sector. It shows the performance of the retail sector in the short term. Percent changes reflect the rate of changes of such sales. The changes are widely followed as an indicator of consumer spending.

08:30 GBP BBA Mortgage Approvals (Mar)

The Mortgage Approvals published by the British Bankers’ Association (BBA)measure the number of home loans issued by the BBA during the previous quarter. It is considered as a leading indicator of the UK Housing Market. A Mortgage growth represents a healthy housing market that stimulates the overall UK economy

09:00 EUR Consumer Confidence (Apr)

The Consumer Confidence released by the European Commission is a leading index that measures the level of consumer confidence in economic activity. A high level of consumer confidence stimulates economic expansion while a low level drives to economic downturn.

09:00 EUR Economic Confidence (Apr)

The Euro Zone Economic Confidence released by the European Commission is a survey of consumers confidence in economic activity. It indicates the trend of the overall Euro Zone economy.

09:00 EUR Industrial Confidence (Apr)

The Industrial Confidence released by the European Commission is an index that measures the level of industrial executives confidence in economic activity. The survey asks about orders and buildup of inventories. A high level of industrial confidence stimulates economic expansion while a low level drives to economic downturn.

23:01 GBP Gfk Consumer Confidence (Apr)

The GfK Group Consumer Confidence is a leading index that measures the level of consumer confidence in economic activity. A high level of consumer confidence stimulates economic expansion while a low level drives to economic downturn

Government Bond Auctions (this week)

Apr 26 00:30 Japan Auctions 2Y JGBs

Apr 26 09:10 Italy BOT auction

Apr 26 14:30 Sweden Details I/L bond auction on May 03

Apr 26 17:00 US Auctions 7Y Notes

Apr 27 09:10 Italy BTP/CCTeu auction

NZD/USD Technical Analysis for April 26, 2012

The NZD/USD pair bounced off of the 200 day exponential moving average yet again on Wednesday. The resulting candle looks very much like a hammer, and as a result we think it is a sign of tentative support. The fact that the moving average and the 38.2% Fibonacci retracement levels are right below – we figure the upside is the easier move for this pair. We would be interested in buying on a move above the Wednesday highs, but don’t expect fireworks, rather just a simple move back to the top of the consolidation area near the 0.8250 level. Selling isn’t a thought until we are much lower.

NZD/USD Fundamental Analysis for April 26, 2012

Analysis and Recommendation: (close of the Asian session)

The NZD/USD is trading at 0.8112, as investors wait for the rate decision from the RNZ. And also word from the US FOMC rate decision, which will most likely overshadow anything from New Zealand.

It is a holiday today and financial markets are closed.

New Zealanders and New Zealand businesses are continuing to pay down debt as worries continue about their economic outlook, KPMG’s Financial Institutions Performance Survey released Tuesday indicates.

Economic Reports for April 24, 2012 actual v. forecast

Economic Events scheduled for April 26, 2012 that affect the NZD, AUD, JPY and CNY

00:00 AUD Conference Board Australia Leading Index (Feb) 0.2%

The Conference Board Australia leading Index released by the Conference Board measures future trends of the overall economic activity including employment, average manufacturing workweek, initial claims, permits for new housing construction, stock prices and yield curve. It forecasts short to mid-term growth in the Australian economy.

04:30 JPY All Industry Activity Index (MoM) (Feb) -0.2% -1%

The All Industry Activity Index released by the Ministry of Economy, Trade and Industry captures the monthly change in overall production by all industries of the Japanese economy. The index indicates the Japanese GDP and the overall growth figures, providing insight into current levels of Japanese economic expansion.

23:30 JPY National Consumer Price Index (YoY) (Mar) 0.3%

The National Consumer Price Index is released by the Statistics Bureau and it’s a measure of price movements obtained by comparison of the retail prices of a representative shopping basket of goods and services. CPI is the most significant way to measure changes in purchasing trends. The purchase power of JPY is dragged down by inflation.

23:30 JPY Overall Household Spending (YoY) (Mar) 4.2% 2.3%

The Overall Household Spending released by the Ministry of Internal Affairs and Communications is an indicator that measures the total expenditure by households. The level of spending can be used as an indicator of consumer optimism. It is also considered as a measure of economic growth.

23:30 JPY Unemployment Rate (Mar) 4.5% 4.5%

The Unemployment Rate which comes from the Ministry of Health, Labor and welfare and it’s published by the Japan Statistics Bureau, is a measure of the percentage of unemployed in Japan. A high percentage indicates weakness in the labor market which influences the strength and direction of the Japanese economy.

23:50 JPY Industrial Production (YoY) (Mar) 1.5%

The Industrial Production released by the Ministry of Economy, Trade and Industry measures outputs of the Japanese factories and mines. Changes in industrial production are widely followed as a major indicator of strength in the manufacturing sector.

23:50 JPY Retail Trade (YoY) (Mar) 11.5% 3.5%

The Retail Trade released by the Ministry of Economy, Trade and Industry captures the aggregate sales made through a business location (usually a store) in which the principal activity is the sale of merchandise and related services to the general public, for household or personal consumption. Consumer spending is a key important indicator for the Japanese economy.

23:50 JPY Large Retailer’s Sales (Mar) 0.2%

The Large Retailers’ Sales released by the Ministry of Economy, Trade and Industry” captures the total value of goods sold in large stores, chain convenience stores, and supermarkets. It indicates the level of consumption and consumer confidence. A high level of Large Retailers´ Sales stimulates economic expansion while a low level drives to economic downturn.

Government Bond Auctions (this week)

Apr 26 00:30 Japan Auctions 2Y JGBs

Apr 26 09:10 Italy BOT auction

Apr 26 14:30 Sweden Details I/L bond auction on May 03

Apr 26 17:00 US Auctions 7Y Notes

Apr 27 09:10 Italy BTP/CCTeu auction

EUR/USD Technical Analysis for April 24, 2012

The EUR/USD pair fell most of the session on Monday, but the Americans came in and gave it a lift yet again. The resulting candle looks somewhat like a hammer, but it far too long in the body to be considered as one. None the less, the underlying psychology is the same as the buyers were willing to come back and buy this pair up later in the session.

The European Union has plenty of concerns, and the resilience of this pair is truly remarkable truth be known. The area has several countries that are now paying very high interest rates to bond holders and social unrest aren’t exactly an uncommon thing these days. There are a lot of political headwinds as well, and this has all spread to the core countries now – an ominous sign indeed.

With this being said, it seems that the pair just won’t fall for any real length of time. This suggests to us that once the now well-known and obvious support level at 1.30 gives way, this pair will absolutely crumble. The buyers aren’t exactly known, but there are reports of Asian central banks as well as the Brazilian central bank getting involved in this pair as they diversify away from the US dollar. As the Euro falls – so does their massive bank reserves.

The downtrend line that has formed signals what could be a descending triangle. If this level gives way to the upside, this pair will climb higher. However, we think that the downtrend line will continue to hold prices lower, and we think that the descending triangle should continue and signal that the sellers are finally starting to take a bit better control of the situation. With this in mind, we are only selling this pair until the daily close above the downtrend line.

With the 200 day EMA just above the top of the potential triangle, this looks as if the market will continue to struggle higher, but the longer-term should see lower prices. We are selling rallies on signs of weakness, especially is we see the top of the triangle hold as resistance. 

EUR/USD Fundamental Analysis for April 24, 2012

Analysis and Recommendations:

The EUR/USD fell today to trade at 1.3125 after powering up to the 1.32 level on the back of the German ifo data, the euro was unable to sustain. It was a weekend of negative news, including the elections in France which is now down to a runoff between Hollande the favorite and Sarkozy the current with Sarkozy in the rear. This change could shift the entire view of the EU and France.

French election results overnight confirmed that Nicolas Sarkozy and Francois Hollande will face one another in the final runoff election on May 6. Scotia’s European economics team notes that the market consequences of the results (albeit not unexpected) are likely to be not great. Mr Hollande has said that he wants to renegotiate the fiscal compact that was agreed by Mr Sarkozy. In particular, Hollande wants to create more pro-growth measures.  For France specifically, the underlying thrust (i.e. pace of tightening) of the domestic fiscal policy plans under Hollande would not be that different to Sarkozy. However, the emphasis is likely to be more dependent on tax hikes than spending cuts. 

Dutch Prime Minister Mark Rutte will tender his resignation to Queen Beatrix on Monday, setting the stage for elections, after the weekend collapse of budget talks, news reports said. 

Business activity across the 17-nation euro zone contracted at a faster-than-expected pace in April, according to the preliminary purchasing managers’ index, or PMI, readings released Monday by data firm Markit. Manufacturing PMI fell to 46.0

French, Dutch, Spanish and Italian government bonds fell Monday, pushing up yields, while German government bonds rallied on safe-haven.

PMI data release for Germany and the eurozone was a mixed bag of over and under forecast numbers.

The greenback is beginning to see traders position themselves ahead of the FOMC meeting this week, which could have huge effects on the USD.

Economic Data for April 23, 2012 actual v. forecast

Economic Events scheduled for April 24, 2012 that affect the European and American Markets

07:00     EUR       Finnish Unemployment Rate                                                                     7.40%   

The unemployment rate represents the number of unemployed persons expressed as a percentage of the labor force. The unemployment rate for a particular age/sex group is the number of unemployed in that group expressed as a percentage of the labor force for that group. 

 10:00    EUR        Industrial New Orders (MoM)                                   -0.5%                     -2.3%

Industrial New Orders measures the change in the total value of new purchase orders placed with manufacturers. It is a leading indicator of production. A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.

15:00     USD       CB Consumer Confidence                                            70.3                        70.8

Conference Board (CB) Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. Higher readings point to higher consumer optimism. 

15:00     USD       New Home Sales                                                             320K                      313K     

New Home Sales measures the annualized number of new single-family homes that were sold during the previous month. This report tends to have more impact when it’s released ahead of Existing Home Sales because the reports are tightly correlated

Government Bond Auctions (this week)

Apr 24  00:30  Japan  Auctions 20Y JGBs

Apr 24  08:30  Holland  Eur 1.5-2.5bn Jul 2014 & Jan 2037 DSL auction

Apr 24  08:30  Spain  3 & 6M T-bill auction

Apr 24  09:10  Italy   Auctions CTZ/BTPei

Apr 24  14:30  UK  Details Conventional Gilt auction on May 01 & I/L auction on May 03

Apr 24  17:00  US  Auctions 2Y Notes

Apr 25  09:10  Sweden  Auctions T-bills

Apr 25  09:30  Germany  Eur 3.0bn new Jul 2044 Bund

Apr 25  14:30  Sweden  Details nominal bond auction on May 02

Apr 25  17:00  US  Auctions 5Y Notes

Apr 26  00:30  Japan  Auctions 2Y JGBs

Apr 26  09:10  Italy   BOT auction

Apr 26  14:30  Sweden  Details I/L bond auction on May 03

Apr 26  17:00  US  Auctions 7Y Notes

Apr 27  09:10  Italy   BTP/CCTeu auction

USD/JPY Technical Analysis for April 24, 2012

The USD/JPY pair fell during the Monday session in order to test the 81 handle. The pair has been breaking out of a longer-term downtrend over the last few months, and as long as the 80 level holds as support – this is how we see this pair overall. Because of this, we like buying dips down at this level as the pair should continue to rise over time. 

The Bank of Japan is expected to announce an expansion of their asset buyback program this week, and because of this there is a real possible catalyst to this pair rising over time. Also, the Federal Reserve has a meeting on Tuesday and Wednesday that could or could not mention easing in the announcement. However, the Fed has shown lately that they are holding on easing, and this should continue to push this pair higher over time as well. 

USD/JPY Fundamental Analysis for April 24, 2012

Analysis and Recommendation: (close of Asian session)

The USD/JPY  traded at the end of Monday’s session at 81.3375 gains may be limited as market participants are unlikely to take any aggressive action ahead of Friday’s much-awaited Bank of Japan meeting as well as several economic data releases.  The central bank is to hold a policy meeting on Friday amid high hopes for further monetary easing.

Lackluster results on Chinese manufacturing also affected the strength of the yen today.

China’s manufacturing activity contracted further in April, although the sector improved from levels seen in March, a preliminary reading from HSBC showed Monday. HSBC’s so-called “flash” Purchasing Managers’ Index rose to 49.1 in April, compared with a final reading of 48.3 in March. A reading below 50 shows contraction, while one above 50 indicates an expansion. The improvement in factory conditions in April suggests that the earlier easing measures have started to work and hence should ease concerns of a sharp growth slowdown.

Eco data for Monday April 23, 2012 actual v. forecast that affect the ANZ, JPY, NZD and CNY

Economic Events scheduled for April 24, 2012 that affect the NZD, AUD, JPY and CNY

02:30     AUD      CPI (QoQ)                                                                                                            0.6%       

The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.

02:30     AUD      Trimmed Mean CPI (QoQ)                                           0.6%                      0.6%

The Trimmed Mean Consumer Price Index (CPI) measures the change in the price of goods and services purchased by consumers, excluding the most volatile 30% of items. This data helps illustrate underlying inflation trends. A higher than expected reading should be taken as positive/bullish for the AUD, while a lower than expected reading should be taken as negative/bearish for the AUD.

15:00     USD       CB Consumer Confidence                                            70.3                        70.8

Conference Board (CB) Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. Higher readings point to higher consumer optimism.

15:00     USD       New Home Sales                                                             320K                      313K     

New Home Sales measures the annualized number of new single-family homes that were sold during the previous month. This report tends to have more impact when it’s released ahead of Existing Home Sales because the reports are tightly correlated

Government Bond Auctions (this week)

Apr 24  00:30  Japan  Auctions 20Y JGBs

Apr 24  08:30  Holland  Eur 1.5-2.5bn Jul 2014 & Jan 2037 DSL auction

Apr 24  08:30  Spain  3 & 6M T-bill auction

Apr 24  09:10  Italy   Auctions CTZ/BTPei

Apr 24  14:30  UK  Details Conventional Gilt auction on May 01 & I/L auction on May 03

Apr 24  17:00  US  Auctions 2Y Notes

Apr 25  09:10  Sweden  Auctions T-bills

Apr 25  09:30  Germany  Eur 3.0bn new Jul 2044 Bund

Apr 25  14:30  Sweden  Details nominal bond auction on May 02

Apr 25  17:00  US  Auctions 5Y Notes

Apr 26  00:30  Japan  Auctions 2Y JGBs

Apr 26  09:10  Italy   BOT auction

Apr 26  14:30  Sweden  Details I/L bond auction on May 03

Apr 26  17:00  US  Auctions 7Y Notes

Apr 27  09:10  Italy   BTP/CCTeu auction

GBP/USD Technical Analysis for April 24, 2012

The GBP/USD pair has been racing higher lately, and the Monday session first looked as if it was going to be the pullback most traders would have needed. However, the fall was very short-lived, and it formed a hammer at the top of the market.

This candle could be a continuation hammer, showing strength if it breaks higher. However, if the market breaks below the bottom of the hammer, this would be what is called a “hanging man”, and this is very bearish. Because of this, the analysis is simple: we are buying on a break of the top of the session, and selling on a break of the lows.

GBP/USD Fundamental Analysis for April 24, 2012

Analysis and Recommendations:

The GBP/USD is currently exchanging at 1.6103. The pound has been able to sustain the 1.61 price now since late last week, after having a difficult breaking through the 1.60 level the sterling has been able to maintain.

The GBP/USD was the standout performer of last week as strong economic data, including a shift in a key BOE policymaker’s outlook, pushed the pair up over 300 pips. Cable has been one the strongest pairs over the past few days as it has benefited both from safe heaven flows and better than expected economic data.  With the summer Olympics coming up, we could see another boost to spending.

U.K. banks will present a mixed picture when they publish first-quarter results in the coming weeks, as those with a greater international presence continue to muscle ahead of more domestic focused rivals, analysts say.

The dollar has been stronger in today’s session against most of the majors except in this pair. With the FOMC two day meeting starting on Tuesday, it could be crazy for the USD and its partners.

There is a clear division among the FOMC policy makers on when the Fed should start tightening monetary policy. Some policy makers have called for an exit and rate hikes as early as this year, while a couple of committee members felt that policy accommodation should continue until 2016. With some of the recent U.S. economic data beginning to show signs of weakness and forecasts predicting slower economic growth, it would not be surprising to see the Fed maintaining a dovish stance and expressing a cautious outlook on the economy and the labor market, but stopping short of announcing another round of quantitative easing at this meeting.

However, QE3 will not be completely out of the picture and will remain as a viable option, especially if the occasional soft spots in the U.S. economic data become a persistent trend of deteriorating economic conditions lasting for at least a couple of months. Although additional quantitative easing may not come until the second half of the year or simply not at all, the future fate of the U.S. dollar will continue to depend on QE3 expectations and the Fed’s next move.

Economic Data for April 23, 2012 actual v. forecast

Economic Events scheduled for April 24, 2012 that affect the European and American Markets

07:00     EUR       Finnish Unemployment Rate                                                                     7.40%   

The unemployment rate represents the number of unemployed persons expressed as a percentage of the labor force. The unemployment rate for a particular age/sex group is the number of unemployed in that group expressed as a percentage of the labor force for that group. 

 10:00    EUR        Industrial New Orders (MoM)                                   -0.5%                     -2.3%

Industrial New Orders measures the change in the total value of new purchase orders placed with manufacturers. It is a leading indicator of production. A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.

15:00     USD       CB Consumer Confidence                                            70.3                        70.8

Conference Board (CB) Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. Higher readings point to higher consumer optimism. 

15:00     USD       New Home Sales                                                             320K                      313K     

New Home Sales measures the annualized number of new single-family homes that were sold during the previous month. This report tends to have more impact when it’s released ahead of Existing Home Sales because the reports are tightly correlated

Government Bond Auctions (this week)

Apr 24  00:30  Japan  Auctions 20Y JGBs

Apr 24  08:30  Holland  Eur 1.5-2.5bn Jul 2014 & Jan 2037 DSL auction

Apr 24  08:30  Spain  3 & 6M T-bill auction

Apr 24  09:10  Italy   Auctions CTZ/BTPei

Apr 24  14:30  UK  Details Conventional Gilt auction on May 01 & I/L auction on May 03

Apr 24  17:00  US  Auctions 2Y Notes

Apr 25  09:10  Sweden  Auctions T-bills

Apr 25  09:30  Germany  Eur 3.0bn new Jul 2044 Bund

Apr 25  14:30  Sweden  Details nominal bond auction on May 02

Apr 25  17:00  US  Auctions 5Y Notes

Apr 26  00:30  Japan  Auctions 2Y JGBs

Apr 26  09:10  Italy   BOT auction

Apr 26  14:30  Sweden  Details I/L bond auction on May 03

Apr 26  17:00  US  Auctions 7Y Notes

Apr 27  09:10  Italy   BTP/CCTeu auction

EUR/GBP Technical Analysis for April 24, 2012

The EUR/GBP pair fell on Monday, breaking through the lows and a hammer made last week. The pair is certainly in a downtrend, and the troubles in the European Union will more than likely continue to weigh upon the pair. The British Pound had a strong day in general, and as such this move shouldn’t have been a surprise. The pair should continue to sell off over time, and as a result we are currently selling it aggressively. The breaking below of the hammers of last week suggests that we are going much lower. We sell rallies, and new lows – aiming for the 80 handle. 

EUR/GBP Fundamental Analysis for April 24, 2012

Analysis and Recommendations:

The EUR/GBP is holding at 0.8151. EUR/GBP basically held a sideways trading pattern roughly between 0.8145 and 0.8205. The pair was changing hands in the middle of that range at the start of trading in Europe. A decent German IFO report pushed EUR/GBP for a test of the 0.82 big figures. Mid morning, the UK retail sales came out much stronger than expected. There were exceptional factors, but the report was strong overall. EUR/GBP reversed the post-IFO gains, but a real test of Thursday’s low didn’t occur. Later in the session, the euro found a better bid overall and EUR/GBP joined this move. The pair revised the 0.8200 area after the close of the European markets, but failed to sustain above that level. EUR/GBP closed the week at 0.8197, compared to 0.8184 on Thursday. 

Later this week, markets will look out for the first estimate of the Q1 UK GDP. Will the UK avoid a technical recession (two consecutive negative quarters). This is somewhat of a symbolic issue, but a reasonably good figure will confirm the assessment in the market that the BoE will not raise the amount of asset purchases at the May meeting. After the Minutes of the Previous BoE meeting and decent eco data of late, an ‘on hold’ status of the BoE shouldn’t be a surprise for markets anymore. So, the rally of sterling against the euro might slow going into the BoE meeting.  

The euro was pressured throughout the day with just a lot of negative problems in the eurozone, beginning with French elections and the announcement that Dutch Prime Minister Mark Rutte will tender his resignation to Queen Beatrix on Monday, setting the stage for elections, after the weekend collapse of budget talks, news reports said. 

 Business activity across the 17-nation euro zone contracted at a faster-than-expected pace in April, according to the preliminary purchasing managers’ index, or PMI, readings released Monday by data firm Markit. Manufacturing PMI fell to 46.0

French, Dutch, Spanish and Italian government bonds fell Monday, pushing up yields, while German government bonds rallied on safe-haven

Economic Data for April 23, 2012 actual v. forecast

Economic Events scheduled for April 24, 2012 that affect the European and American Markets

07:00     EUR       Finnish Unemployment Rate                                                                     7.40%   

The unemployment rate represents the number of unemployed persons expressed as a percentage of the labor force. The unemployment rate for a particular age/sex group is the number of unemployed in that group expressed as a percentage of the labor force for that group. 

 10:00    EUR        Industrial New Orders (MoM)                                   -0.5%                     -2.3%

Industrial New Orders measures the change in the total value of new purchase orders placed with manufacturers. It is a leading indicator of production. A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.

15:00     USD       CB Consumer Confidence                                            70.3                        70.8

Conference Board (CB) Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. Higher readings point to higher consumer optimism. 

15:00     USD       New Home Sales                                                             320K                      313K     

New Home Sales measures the annualized number of new single-family homes that were sold during the previous month. This report tends to have more impact when it’s released ahead of Existing Home Sales because the reports are tightly correlated

Government Bond Auctions (this week)

Apr 24  00:30  Japan  Auctions 20Y JGBs

Apr 24  08:30  Holland  Eur 1.5-2.5bn Jul 2014 & Jan 2037 DSL auction

Apr 24  08:30  Spain  3 & 6M T-bill auction

Apr 24  09:10  Italy   Auctions CTZ/BTPei

Apr 24  14:30  UK  Details Conventional Gilt auction on May 01 & I/L auction on May 03

Apr 24  17:00  US  Auctions 2Y Notes

Apr 25  09:10  Sweden  Auctions T-bills

Apr 25  09:30  Germany  Eur 3.0bn new Jul 2044 Bund

Apr 25  14:30  Sweden  Details nominal bond auction on May 02

Apr 25  17:00  US  Auctions 5Y Notes

Apr 26  00:30  Japan  Auctions 2Y JGBs

Apr 26  09:10  Italy   BOT auction

Apr 26  14:30  Sweden  Details I/L bond auction on May 03

Apr 26  17:00  US  Auctions 7Y Notes

Apr 27  09:10  Italy   BTP/CCTeu auction

EUR/CHF Technical Analysis for April 24, 2012

The EUR/CHF pair continued to hover above the 1.20 level on Monday, barely moving as is the norm lately. The pair is being lifted by the Swiss National Bank and its 1.20 “minimum acceptable exchange rate”. The area will continue to be defended, and if the market manages to fall below that mark, intervention could follow in short order. Because of this, you obviously cannot sell at this point, but if you are willing to be very patient – this pair pays a positive swap if you are long of it. Also, if the pair breaks below that level – the central bank could send you up the charts very quickly. 

EUR/CHF Fundamental Analysis for April 24, 2012

Analysis and Recommendations:

The EUR/CHF continues to hold within a tight range. The pair at presently at 1.2016 remaining between the 1.2012 and the 1.2025 channel they have been in for days. With the SNB floor set at 1.20 and the bears trying to push it below, this is a battle pays no attention to the markets or other eco data.

With little in the way of economic data due this week for the EU and Switzerland, they will remain in this stream for the rest of the week.

Economic Data for April 23, 2012 actual v. forecast

Economic Events scheduled for April 24, 2012 that affect the European and American Markets

07:00     EUR       Finnish Unemployment Rate                                                                     7.40%   

The unemployment rate represents the number of unemployed persons expressed as a percentage of the labor force. The unemployment rate for a particular age/sex group is the number of unemployed in that group expressed as a percentage of the labor force for that group. 

 10:00    EUR        Industrial New Orders (MoM)                                   -0.5%                     -2.3%

Industrial New Orders measures the change in the total value of new purchase orders placed with manufacturers. It is a leading indicator of production. A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.

15:00     USD       CB Consumer Confidence                                            70.3                        70.8

Conference Board (CB) Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. Higher readings point to higher consumer optimism. 

15:00     USD       New Home Sales                                                             320K                      313K     

New Home Sales measures the annualized number of new single-family homes that were sold during the previous month. This report tends to have more impact when it’s released ahead of Existing Home Sales because the reports are tightly correlated

Government Bond Auctions (this week)

Apr 24  00:30  Japan  Auctions 20Y JGBs

Apr 24  08:30  Holland  Eur 1.5-2.5bn Jul 2014 & Jan 2037 DSL auction

Apr 24  08:30  Spain  3 & 6M T-bill auction

Apr 24  09:10  Italy   Auctions CTZ/BTPei

Apr 24  14:30  UK  Details Conventional Gilt auction on May 01 & I/L auction on May 03

Apr 24  17:00  US  Auctions 2Y Notes

Apr 25  09:10  Sweden  Auctions T-bills

Apr 25  09:30  Germany  Eur 3.0bn new Jul 2044 Bund

Apr 25  14:30  Sweden  Details nominal bond auction on May 02

Apr 25  17:00  US  Auctions 5Y Notes

Apr 26  00:30  Japan  Auctions 2Y JGBs

Apr 26  09:10  Italy   BOT auction

Apr 26  14:30  Sweden  Details I/L bond auction on May 03

Apr 26  17:00  US  Auctions 7Y Notes

Apr 27  09:10  Italy   BTP/CCTeu auction

AUD/USD Technical Analysis for April 24, 2012

The AUD/USD continues to looks weak overall as the slump on Monday indicates. The pair is currently suffering by less than stellar economic numbers out of Australia, and the stronger than usual US dollar. However, it should be noted that the Kiwi looks stronger than the Aussie, so this could be more of an anti-Australia play than a “risk aversion” play. The Reserve Bank of Australia is expected to cut rates soon, and the market looks as if it is pricing this in. Because of this, we aren’t as keen on the Aussie as we once were, but aren’t ready to sell until we see a fresh low. A daily close well above the 200 day EMA could change our minds however, and have us buying again.

AUD/USD Fundamental Analysis for April 24, 2012

Analysis and Recommendation: (close of Asian session)

The AUD/USD dropped a third of a US cent after the release of weaker than expected producer price index (PPI) data.

The Aussie was trading at 103.28, down from 103.62 T just before the data’s release.

The Australian dollar ended Friday at 103.38 US cents.

The PPI index fell 0.3 per cent in the March quarter, the Australian Bureau of Statistics (ABS) said on Monday, which was below market forecasts of a rise of 0.5 per cent in the quarter.

The PPI is a measure of inflation and can influence expectations for the more closely-watched March quarter consumer price index (CPI), due out on Tuesday.

The CPI figures are seen as crucial for the RBA’s interest rate decision at its May board meeting after the bank’s governor, Glenn Stevens, indicated a cut in the cash rate was likely if inflation was not too high.

Lackluster results from China also helped depress the Australian dollar in today’s trading

China’s manufacturing activity contracted further in April, although the sector improved from levels seen in March, a preliminary reading from HSBC showed Monday. HSBC’s so-called “flash” Purchasing Managers’ Index rose to 49.1 in April, compared with a final reading of 48.3 in March. A reading below 50 shows contraction, while one above 50 indicates an expansion. The improvement in factory conditions in April suggests that the earlier easing measures have started to work and hence should ease concerns of a sharp growth slowdown.

Eco data for Monday April 23, 2012 actual v. forecast that affect the ANZ, JPY, NZD and CNY

Economic Events scheduled for April 24, 2012 that affect the NZD, AUD, JPY and CNY

02:30     AUD      CPI (QoQ)                                                                                                            0.6%       

The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.

02:30     AUD      Trimmed Mean CPI (QoQ)                                           0.6%                      0.6%

The Trimmed Mean Consumer Price Index (CPI) measures the change in the price of goods and services purchased by consumers, excluding the most volatile 30% of items. This data helps illustrate underlying inflation trends. A higher than expected reading should be taken as positive/bullish for the AUD, while a lower than expected reading should be taken as negative/bearish for the AUD.

15:00     USD       CB Consumer Confidence                                            70.3                        70.8

Conference Board (CB) Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. Higher readings point to higher consumer optimism.

15:00     USD       New Home Sales                                                             320K                      313K     

New Home Sales measures the annualized number of new single-family homes that were sold during the previous month. This report tends to have more impact when it’s released ahead of Existing Home Sales because the reports are tightly correlated

Government Bond Auctions (this week)

Apr 24  00:30  Japan  Auctions 20Y JGBs

Apr 24  08:30  Holland  Eur 1.5-2.5bn Jul 2014 & Jan 2037 DSL auction

Apr 24  08:30  Spain  3 & 6M T-bill auction

Apr 24  09:10  Italy   Auctions CTZ/BTPei

Apr 24  14:30  UK  Details Conventional Gilt auction on May 01 & I/L auction on May 03

Apr 24  17:00  US  Auctions 2Y Notes

Apr 25  09:10  Sweden  Auctions T-bills

Apr 25  09:30  Germany  Eur 3.0bn new Jul 2044 Bund

Apr 25  14:30  Sweden  Details nominal bond auction on May 02

Apr 25  17:00  US  Auctions 5Y Notes

Apr 26  00:30  Japan  Auctions 2Y JGBs

Apr 26  09:10  Italy   BOT auction

Apr 26  14:30  Sweden  Details I/L bond auction on May 03

Apr 26  17:00  US  Auctions 7Y Notes

Apr 27  09:10  Italy   BTP/CCTeu auction

USD/CAD Technical Analysis for April 24, 2012

The USD/CAD pair rose for much of the session on Monday, only to turn around and form a wicked looking shooting star. The action suggests that we are going to continue to drift around in this consolidation zone, but the bearish pressure seems to be picking up. The resistance runs all the way to the 1.01 level, and the 200 day EMA is just above as well.

In order to consider this pair broken down, we need to see a close sub-0.98 to be comfortable selling. In the mean time, playing the market as a scalper could be the way to go if you feel the need to be involved. For us, we are comfortable waiting for the breakout, no matter which direction it happens. 

USD/CAD Fundamental Analysis for April 24, 2012

Analysis and Recommendations:

The USD/CAD are trading at 0.9971 as the USD powered up in today’s session as investors prepared for Tuesday’s FOMC meeting. With hopes of monetary easing the USD has been gaining strength against most of its partners.

Canada wholesale sales for February will be released today above forecast, and markets are anticipating contraction of -0.2% of GDP after weak -1% reading in March. Wholesale trade accounted for roughly 5.5% of GDP in January 2012, so marginal changes in the extent of wholesale trade will not materially impact Canada monthly GDP, which is due for release next week. Although this was a fairly large difference and could affect the GDP

Economic Data for April 23, 2012 actual v. forecast

Economic Events scheduled for April 24, 2012 that affect the Canadian and American Markets

13:30     CAD       Core Retail Sales (MoM)                                              1.0%                      -0.5%    

Core Retail Sales measures the change in the total value of sales at the retail level in Canada, excluding automobiles. It is an important indicator of consumer spending and is also considered a pace indicator for the Canadian economy.

 13:30    CAD       Retail Sales (MoM)                                                                                         0.5%     

Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity. 
A higher than expected reading should be taken as positive/bullish for the CAD, while a lower than expected reading should be taken as negative/bearish for the CAD.

 15:00    USD       CB Consumer Confidence                                            70.3                        70.8

Conference Board (CB) Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. Higher readings point to higher consumer optimism. 

15:00     USD       New Home Sales                                                             320K                      313K     

New Home Sales measures the annualized number of new single-family homes that were sold during the previous month. This report tends to have more impact when it’s released ahead of Existing Home Sales because the reports are tightly correlated

NZD/USD Technical Analysis for April 24, 2012

The NZD/USD pair fell most of the session on Monday, but bounced in which it managed to form a hammer-like candle. The bounce came off of the 200 day exponential moving average, which to us suggests that the longer-term market outlook for this pair is higher. This EMA attracts a lot of trend traders, and that group will often leave their money in the markets meaning that the participants are buying with conviction.

The recent consolidation should continue in our opinion, and a break above the top of the Monday session highs has us buying for a small bounce to the 0.83 level. The selling of this pair isn’t possible until we get below the 200 day EMA, the 50% Fibonacci level, and the 0.80 handle. 

NZD/USD Fundamental Analysis for April 24, 2012

Analysis and Recommendation: (close of the Asian session)

The NZD/USD  pared offshore trading gains at the open of local trading as investors digested news the International Monetary Fund will commit $US430 billion in fresh money to protect the world economy against Europe’s ongoing debt crisis.

The New Zealand dollar fell to 81.73 US cents at 8am from 81.87 cents at the close of trading in New York on Friday, although it remains above its 81.30 cents local close on Friday at 5pm.

Finance ministers of the Group of 20 nations have been at their annual meeting with the World Bank and IMF in Washington DC, discussing ways to get on top of Europe’s woes.

Chinese data was a bit bothersome for the kiwi.

China’s manufacturing activity contracted further in April, although the sector improved from levels seen in March, a preliminary reading from HSBC showed Monday. HSBC’s so-called “flash” Purchasing Managers’ Index rose to 49.1 in April, compared with a final reading of 48.3 in March. A reading below 50 shows contraction, while one above 50 indicates an expansion. The improvement in factory conditions in April suggests that the earlier easing measures have started to work and hence should ease concerns of a sharp growth slowdown.

Economic Events scheduled for April 24, 2012 that affect the NZD, AUD, and JPY

02:30     AUD      CPI (QoQ)                                                                                                            0.6%       

The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.

02:30     AUD      Trimmed Mean CPI (QoQ)                                           0.6%                      0.6%

The Trimmed Mean Consumer Price Index (CPI) measures the change in the price of goods and services purchased by consumers, excluding the most volatile 30% of items. This data helps illustrate underlying inflation trends. A higher than expected reading should be taken as positive/bullish for the AUD, while a lower than expected reading should be taken as negative/bearish for the AUD.

15:00     USD       CB Consumer Confidence                                            70.3                        70.8

Conference Board (CB) Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. Higher readings point to higher consumer optimism.

15:00     USD       New Home Sales                                                             320K                      313K     

New Home Sales measures the annualized number of new single-family homes that were sold during the previous month. This report tends to have more impact when it’s released ahead of Existing Home Sales because the reports are tightly correlated

Government Bond Auctions (this week)

Apr 24  00:30  Japan  Auctions 20Y JGBs

Apr 24  08:30  Holland  Eur 1.5-2.5bn Jul 2014 & Jan 2037 DSL auction

Apr 24  08:30  Spain  3 & 6M T-bill auction

Apr 24  09:10  Italy   Auctions CTZ/BTPei

Apr 24  14:30  UK  Details Conventional Gilt auction on May 01 & I/L auction on May 03

Apr 24  17:00  US  Auctions 2Y Notes

Apr 25  09:10  Sweden  Auctions T-bills

Apr 25  09:30  Germany  Eur 3.0bn new Jul 2044 Bund

Apr 25  14:30  Sweden  Details nominal bond auction on May 02

Apr 25  17:00  US  Auctions 5Y Notes

Apr 26  00:30  Japan  Auctions 2Y JGBs

Apr 26  09:10  Italy   BOT auction

Apr 26  14:30  Sweden  Details I/L bond auction on May 03

Apr 26  17:00  US  Auctions 7Y Notes

Apr 27  09:10  Italy   BTP/CCTeu auction

EUR/USD Technical Analysis for April 20, 2012

The EUR/USD pair had an important day on Thursday as the Spanish auctioned off their two and ten year bonds to a reasonable amount of demand, albeit on higher rates than the last sale. Because of this, the Euro will have been somewhat weighed upon, but the fact that the bond markets weren’t quite as scary as they could have been, this pair didn’t have much downward momentum.

The pair has been bouncing off of the 1.30 level for some time now, and the action on Thursday seems to suggest that the pair will continue to bounce from this level for the foreseeable future. The entire world seems to think that the Euro is going to fall through the level, and this may be the reason that the market simply can’t fall – there is more pain to be delivered to the bear of the Euro than the bulls.

Truth is though, the pair is without a doubt bearish overall, and as a result we aren’t willing to buy the market but would rather sell it from higher levels. The pair looks like it is range bound between the 1.30 and 1.35 levels, and because of this we are looking for weak action at higher levels to sell, and would also sell a daily close below the 1.30 level as it would show a real change of momentum in this pair. Until one of these actions happen, we are choosing to stay out of this market as it has been so choppy as of late, and as a result has been very destructive to many accounts out there.

The hammer from the Wednesday session suggested support, and the lows on Thursday couldn’t break below the lows form that session – suggesting that the support is still there. Even though there are hundreds of reasons not to own the Euro, it is obvious that someone out there with a love of money has decided that the Euro needs to be protected. With all of this in mind, we are going to either sell the breakdown confirmation below 1.30, or we are selling the first weak candle at higher levels.

EUR/USD Fundamental Analysis for April 20, 2012

Analysis and Recommendations:

The EUR/USD traded up today after the Spanish Bond non event auction. The euro was trading at 1.3137 and has remained fairly close to that price all day.

“Dark clouds” have gathered over a “timid” global economic recovery, said IMF Managing Director Christine Lagarde on Thursday. “There is a fragile situation with still high risks,” Lagarde said at a press conference at the start of the IMF/World Bank Summit.

The European Union has no plans to activate its bailout funds to recapitalize Spanish banks, a European Commission spokesman said Thursday in Brussels, according to news reports. “There is no plan to activate the EFSF”.

France sold 7.97 billion euros ($10.5 billion) of government bonds Thursday, news reports said, near the top end of its planned range of 7 billion to 8 billion euros. France’s debt agency sold 3.55 billion euros of 2014 notes at a yield of 0.85%, while a sale of 2.7 billion euros of 2017 notes produced a yield of 1.83%, reports said. A sale of 1.73 billion euros of April 2015 bonds produced a 1.06% yield.

Traders and analysts said unspecified rumors of a possible downgrade of France’s sovereign debt rating triggered a sharp selloff in French government bonds and added to losses for peripheral euro-zone bonds Thursday morning.

The Spanish Treasury on Thursday sold €2.54 billion ($3.33 billion) in bonds dated 2014 and 2022, which was more than expected, but its borrowing costs rose. The Treasury had been targeting a range of €1.5 billion to €2.5 billion for the auction. The yield on the 10-year auction rose to 5.74% from 5.403% at a prior auction of similar paper in January. For the auction of two-year paper, the yield rose to 3.46% from a prior 2.069%

The USD was under pressure all morning as eco release after release held disappointing numbers.

The number of Americans who filed requests for jobless benefits totaled 386,000 last week, keeping claims at a four-month high, the U.S. Labor Department said Thursday. Claims from two weeks ago were revised up to 388,000 from an initial reading of 380,000. Economists had projected claims would drop to a seasonally adjusted 374,000 in the week ended April 14, so the number is likely to disappoint investors. The average of new claims over the past four weeks, meanwhile, rose by 5,500 to 374,750, the highest level since late January. Continuing claims increased by 26,000 to a seasonally adjusted 3.3 million in the week ended April 7, the Labor Department said.

Sales of existing homes fell 2.6% in March, the second monthly drop though the sales pace in the first quarter was the best in five years, according to data released Thursday. The National Association of Realtors said.

A gradual improvement in U.S. economic growth is expected past the summer, the Conference Board said Thursday as it reported that its index of leading economic indicators increased 0.3% in March, led by the interest rate spread.

Manufacturing activity in the Philadelphia region grew at a slower pace in April, the Philadelphia Federal Reserve reported Thursday. The bank’s business condition index fell to 8.5 from 12.5 in March.

Economic Data for April 19, 2012 actual v. forecast

Economic Events scheduled for April 20, 2012 that affect the European and American Markets

06:00:00 EUR Producer Price Index (MoM) 0.40% 0.40%

The Producer Price Index released by the Statistisches Bundesamt Deutschland measures the average changes in prices in the German primary markets. Changes in the PPI are widely followed as an indicator of commodity inflation. Generally speaking, a high reading is seen as positive (or bullish) for the EUR, whereas a low reading is seen as negative (or bearish).

06:00:00 EUR Producer Price Index (YoY) 3.10% 3.20%

The Producer Price Index released by the Statistisches Bundesamt Deutschland measures the average changes in prices in the German primary markets. Changes in the PPI are widely followed as an indicator of commodity inflation. Generally speaking, a high reading is seen as positive (or bullish) for the EUR, whereas a low reading is seen as negative (or bearish).

08:00:00 EUR IFO – Expectations 102.5 102.7

The IFO Expectations released by the CESifo Group is closely watched as an early indicator of current conditions and business expectations for the next six months, where firms rate the future outlook as better, same, or worse. An optimistic view of those 7,000 business leaders and senior managers is considered as positive, or bullish for the EUR, whereas a pessimistic view is considered as negative, or bearish.

08:00:00 EUR IFO – Business Climate 109.5 109.8

This German business sentiment index released by the CESifo Group is closely watched as an early indicator of current conditions and business expectations in Germany. The Institute surveys more than 7,000 enterprises on their assessment of the business situation and their short-term planning. The positive economic growth anticipates bullish movements for the EUR, while a low reading is seen as negative (or bearish).

08:00:00 EUR IFO – Current Assessment 117 117.4

The IFO Current Assessment released by the CESifo Group is closely watched as an indicator of current conditions and business expectations in Germany. The Institute surveys more than 7,000 enterprises on their assessment of the business situation and their short-term planning. The positive economic growth anticipates bullish movements for the EUR, while a low reading is seen as negative (or bearish).

08:30:00 GBP Retail Sales (YoY) 1.40% 1.00%

The retail Sales released by the National Statistics measures the total receipts of retail stores. Monthly percent changes reflect the rate of changes of such sales. Changes in Retail Sales are widely followed as an indicator of consumer spending. Generally speaking, a high reading is seen as positive, or bullish for the GBP, while a low reading is seen as negative or bearish.

08:30:00 GBP Retail Sales ex-Fuel (YoY) 1.40% 1.00%

The Retail Sales ex-fuel released by the National Statistics is a measure of changes in sales of the British retail sector excluding fuel. It shows the performance of the retail sector in the short term. Percent changes reflect the rate of changes of such sales. The changes are widely followed as an indicator of consumer spending. A high reading is seen as positive (or bullish) for the Pound, while a low reading is seen as negative (or bearish).

13:00:00 G20 Meeting

The G20 meeting is a gathering of finance ministers and central bank governors from systematically important industrialized and emerging economies to discuss key issues in the global economy. Traders should pay close attention to this event as it might bring a new dimension to the markets.

Government Bond Auction Schedule:

Apr 20 15:30 Italy Details CTZ/BTPei on Apr 24 & BOT on Apr 26

Apr 23-27 n/a UK Re-opened 3.75% 2052 Conventional Gilt syndication (further details tba)

Apr 23 09:30 Germany Eur 3.0bn new Apr 2013 (12M) Bubill

Apr 23 10:00 Belgium OLO Auction cancelled

Apr 23 15:30 Italy Details BTP/CCTeu on Apr 27

Apr 24 00:30 Japan Auctions 20Y JGBs

Apr 24 08:30 Holland Eur 1.5-2.5bn Jul 2014 & Jan 2037 DSL auction

Apr 24 08:30 Spain 3 & 6M T-bill auction

Apr 24 09:10 Italy Auctions CTZ/BTPei

Apr 24 14:30 UK Details Conventional Gilt auction on May 01 & I/L auction on May 03

Apr 24 17:00 US Auctions 2Y Notes

Apr 25 09:10 Sweden Auctions T-bills

Apr 25 09:30 Germany Eur 3.0bn new Jul 2044 Bund

Apr 25 14:30 Sweden Details nominal bond auction on May 02

Apr 25 17:00 US Auctions 5Y Notes

Apr 26 00:30 Japan Auctions 2Y JGBs

Apr 26 09:10 Italy BOT auction

Apr 26 14:30 Sweden Details I/L bond auction on May 03

Apr 26 17:00 US Auctions 7Y Notes

Apr 27 09:10 Italy BTP/CCTeu auction

USD/JPY Technical Analysis for April 20, 2012

The USD/JPY pair rose during the Thursday session as the uptrend continues to push the pair higher. The candle has broken above the shooting star shaped candle on Wednesday, and this looks like a breach of minor resistance. The pair has recently broken out over the 80 handle, and this latest pop shows that the breakout should be considered to be real, and that the path of least resistance is probably going to be to the upside. The selling of this market can’t be done until we break well below the 80 handle, and to be honest – that might be difficult as well as the Bank of Japan will probably act.

USD/JPY Fundamental Analysis for April 20, 2012

Analysis and Recommendation: (close of Asian session)

GBP/USD Technical Analysis for April 20, 2012

The GBP/USD pair had a positive day on the session for Thursday as the Pound continues to gain after the Bank of England has suggested that the economy will not require further easing. The 1.60 level has been broken, and the highs were as well. Because of this, the pair looks as if it is trying to break out yet again.

The pair is risk sensitive, which makes this move even more impressive as the stock markets tanked for the session, while this pair shot straight up. The 200 day EMA has held as support, and the 1.60 should now act as support as well. The levels that the market is approaching have a lot of “noise” in them, so the move higher will more than likely be a choppy affair, not a straight shot higher.

The next logical step is to try and find the 1.65 level as it is the next major round figure, and the markets are certainly showing signs of real momentum as it grinds higher against a massive downtrend over the last several years. On top of all of this, the pair pays a positive swap, and with the Federal Reserve very unlikely to raise rates anytime soon, it should continue to.

Many traders that are reading this analysis will not have been around back when carry trading was common, and this was one of the better pairs at one point to buy as that was something most traders did. The simple idea is that over time, the currency that pays a positive swap will continue to rise over time against the weaker one. When you have this working in your favor, there is enough time gone by you can buffer any potential losses by the interest you have been collecting. It is through this type of trading that people we were able to hang onto some of these positions for months and even years.

With all of this in mind, we are looking to buy on pullbacks and hanging on as long as we can stay above the 1.59 level. Selling isn’t even a thought at the moment.

GBP/USD Fundamental Analysis for April 20, 2012

Analysis and Recommendations:

The GBP/USD is currently trading at 1.6057 as the GBP continues to move up showing some strength. Austerity measures for the UK have been rather harsh and numbers for a while were quiet negative, but it seems that David Cameron’s actions are starting to show some success. It seems almost the opposite in the US.

The Society of Motor Manufacturers and Traders, or SMMT, said Thursday car manufacturing rose 0.3% in March to 135,456 units, and is up 12.3% over the first quarter of 2012. Car manufacturing for first quarter was up 12.3% to 401,134 units.

The USD was under pressure all morning as eco release after release held disappointing numbers.

The number of Americans who filed requests for jobless benefits totaled 386,000 last week, keeping claims at a four-month high, the U.S. Labor Department said Thursday. Claims from two weeks ago were revised up to 388,000 from an initial reading of 380,000. Economists had projected claims would drop to a seasonally adjusted 374,000 in the week ended April 14, so the number is likely to disappoint investors. The average of new claims over the past four weeks, meanwhile, rose by 5,500 to 374,750, the highest level since late January. Continuing claims increased by 26,000 to a seasonally adjusted 3.3 million in the week ended April 7, the Labor Department said.

Sales of existing homes fell 2.6% in March, the second monthly drop though the sales pace in the first quarter was the best in five years, according to data released Thursday. The National Association of Realtors said.

A gradual improvement in U.S. economic growth is expected past the summer, the Conference Board said Thursday as it reported that its index of leading economic indicators increased 0.3% in March, led by the interest rate spread.

Manufacturing activity in the Philadelphia region grew at a slower pace in April, the Philadelphia Federal Reserve reported Thursday. The bank’s business condition index fell to 8.5 from 12.5 in March.

Economic Data for April 19, 2012 actual v. forecast