ECB, BoE and RBA are expected to cut rates. Non Farm Payrolls Friday
Last week’s Currency Trading Review
The Dollar gave up ground after being on of the main gainers during the recent credit crisis. Weighing on the USD was the FED rate cut to 1% from 1.5% on the back of the drastic market deterioration. The Stock market itself experienced a major rally over 900 points. Other data included Q3 GDP which shrank -0.3%. Also released, Core CPI which dropped to 2.4% in September. The Euro broke below back above 1.3000 briefly in the wake of US rate cuts before falling as sentiment towards the continent soured on relentlessly bad economic news. German IFO Business climate dropped to a 5 year low of 90.2 in October. The EUR/USD gained 0.9% closing at 1.2734, after opening the week at 1.2620. The Japanese Yen also wakened considerable as panic selling subsided and the Bank of Japan cuts rates for the first time in 7 years to 0.3% from 0.5%. USD/JPY jumped higher but was unable to break 100. The USD/JPY jumped 4.23% closing at 98.44 after opening at 94.28. The GBP bounced sharply with the Euro but settled fairly close to open. Nationwide house price showed a -14.6% Y/Y decline. The GBP/USD gained 0.97% closing at 1.6073 after opening at 1.5917. The AUD gained the most as players bought the beaten down battler back to more respectful levels and fear subsided. AUD/JPY jumped over 10% after bouncing off record lows. The AUD/USD closed up 6.88% at 0.6670 after opening at 0.6211.
For the week starting 03/11/08.
This Forex Trading Week Preview
In the States; Big data week around the world and the US is no exception. On Monday we have October Manufacturing ISM seen at 42 vs. 43.5. On Tuesday global attention will directed towards the 2008 Presidential election. On Wednesday October Non Manufacturing is expected at 48 vs. 50.2. ADP Employment report is forecast to show a -83K decline. On Thursday Weekly Jobless claims are seen at 480K. Preliminary Q3 Nonfarm Productivity is expected to fall to 1.0% vs. 4.2% previously. On Friday October Nonfarm Payrolls are expected at -178K vs. -159K previously. Also released Pending Homes Sales are seen -3.5% in September. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone; On Tuesday Eurozone PPI for September is expected at 8.0% vs. 8.5% Y/Y. On Wednesday Eurozone Service PMI is expected to be confirmed at 46.9 in October. On Thursday the ECB meets to discuss Interest rates and is expected to cut by 0.5% to 3.25%. On Friday we expect September Industrial Production to fall 0.9% vs. 3.4% previously. In the UK; On Wednesday September Industrial Production is expected at -0.3% vs. -0.6% previously. Also on Wednesday October PMI services seen at 44.7 vs. 46 previously. On Thursday the Bank Of England are expected to cut 0.5% to 4.0%. We will provide our previews and reviews of these data releases in the daily summary.
In Japan; very quiet data week with the BOJ minutes on Wednesday the highlight. We will provide our previews and reviews of these data releases in the daily summary.
In Australia; RBA decision on Tuesday will be highlight with market expecting a cut to 5.5% vs. 6.0% previously. On Thursday the October Unemployment report is expected to show a increase to 4.4% from 4.3%. The employment change is seen at -10K. We will provide our previews and reviews of these data releases in the daily summary.
Technical Analysis: Non Farm Payrolls Friday
Euro (EUR)
Euro – 1.2765 : Initial support at 1.2626 (Oct 29 low) followed by 1.2558 (76.4% retrace 1.2329 to 1.3298). Initial resistance is now located at 1.2924 (Oct 31 high) at followed by 1.3299 (38.2% retrace 1.4867 to 1.2329 and Oct 30 high).
Yen (JPY)
Yen – 98.45 : Initial support is located at 96.08 (Oct 29 low) followed by 94.28 (61.8^% retrace 90.92 to 99.71). Initial resistance is now at 99.13 (Oct 30 high) followed by 99.71 (Oct 29 high).
Pound Sterling (GBP)
Pound – 1.6100 : Initial support at 1.5970 (50% retrace 1.5267 to 1.6672) followed by 1.5804 (61.8% retrace 1.5267 to 1.6672). Initial resistance is now at 1.6486 (Oct 31 high) followed by 1.6672 (Oct 30 High).
Australian Dollar (AUD)
Australian Dollar – 0.6720 : Initial support at 0.6555 (Oct 31 low) followed by the 0.6338 (Oct 29 low). Initial resistance is now at 0.6825 (Oct 31 high) followed by 0.6893 (Oct 30 high).
Gold (XAU)
Gold – 728 : Initial support at 718 (61.8% retrace 777.90-682.41) followed by 707 (Oct 27 low). Initial resistance is now at 742.25 (Oct 31 high) followed by 777.5 (Oct 30 Level).
