By FXEmpire.com

EUR/USD Fundamental Analysis March 28, 2012, Forecast

EUR/USD Fundamental Analysis March 28, 2012, Forecast

Analysis and Recommendations:

The EUR/USD declined slightly today to trade at 1.3338 after reaching the high of 1.3385. The USD recovered after yesterdays collapse on words from Fed Chairman Ben Bernanke. The euro climbed from the 1.3149 level to reach the mid 1.33’s during the address by the Fed Chief.

Today, the USD clawed back slightly even with poor economic results.

Home prices in the U.S. fell for the fifth month in a row in January to the lowest level since early 2003, a closely followed index showed on Tuesday. The S&P/Case-Shiller 20-city composite index fell 0.8%.

A gauge of U.S. consumer confidence declined in March due to lower employment expectations, while views on the present situation rose to the highest level since 2008, the Conference Board reported Tuesday. The consumer-confidence gauge fell to 70.2 in March from a February reading of 71.6. A prior estimate had pegged February’s confidence level at 70.8.

In Europe today, there was little in the way of economic support.

Euro-zone finance ministers meeting at the end of this week need to boost the firepower of the region’s rescue funds to at least 1 trillion euros ($1.34 trillion) in order to restore market confidence, Angel Gurria, secretary-general of the OECD.

The European Commission has authorized the restructuring of Banco Portugues de Neg?cios, which has benefited from state aid since it was nationalized in November 2008.

Spain’s government plans to increase power prices by between 5% and 7% at the beginning of April, Industry Minister Jose Manuel Soria revealed today.

Italy on Tuesday sold 3.82 billion euros ($5.1 billion)of zero-coupon and inflation-linked bonds as borrowing costs continued to decline. Italy’s Treasury said it sold 2.82 billion euros of 24-month zero-coupon bonds at a yield of 2.35%

French consumer confidence rose sharply and unexpectedly in March to a level not seen in over a year, national statistics bureau Insee said. Households became more confident about their financial outlook and the standard of living in France.

The USD is expected to show gains in Wednesday’s session now that the markets have had time to digest the Fed Chief’s comments.

Economic Data for March 27, 2012 actual v. forecast

Mar. 27

JPY

CSPI (YoY)

-0.6%

-0.4%

-0.4%

CHF

Consumption Indicator

0.87

0.93

EUR

German Import Price Index (MoM)

1.0%

1.0%

1.3%

EUR

GfK German Consumer Climate

5.9

6.2

6.0

EUR

French Consumer Confidence

87

83

82

EUR

Netherlands GDP (YoY)

-0.6%

-0.7%

-0.7%

HKD

Hong Kong Trade Balance

-45.8B

-15.0B

-8.9B

EUR

Italian 2-Year CTZ Auction

2.352%

3.013%

GBP

CBI Distributive Trades Survey

0

-4

-2

TRY

Turkish Interest Rate Decision

5.75%

5.75%

5.75%

HUF

Hungarian Interest Rate Decision

7.00%

7.00%

7.00%

USD

S&P/CS Home Price Indices Composite – 20 (YoY)

-3.8%

-3.8%

-4.1%

USD

CB Consumer Confidence

70.2

70.3

71.6

USD

Richmond Manufacturing Index

7

18

20

Economic Events March 28, 2012 Europe and America

06:30 EUR French GDP (QoQ) 0.2% 0.2%

Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health.

09:30 GBP Business Investment (QoQ) -5.4% -5.6%

Business Investment measures the change in the total inflation-adjusted value of capital expenditure made by companies in the private sector.

09:30 GBP Current Account -8.4B -15.2B

The Current Account index measures the difference in value between exported and imported goods, services and interest payments during the reported month. The goods portion is the same as the monthly Trade Balance figure. Because foreigners must buy the domestic currency to pay for the nation’s exports the data can have a sizable affect on the GBP.

09:30 GBP GDP (QoQ) -0.2% -0.2%

Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health.

T.B.D. EUR German CPI (MoM) 0.3% 0.7%

The German Consumer Price Index (CPI) measures the changes in the price of goods and services purchased by consumers.

13:30 USD Core Durable Goods Orders (MoM) 1.5% -3.0%

13:30 USD Durable Goods Orders (MoM) 3.0% -3.7%

Core Durable Goods Orders measures the change in the total value of new orders for long lasting manufactured goods, excluding transportation items. Because aircraft orders are very volatile, the core number gives a better gauge of ordering trends. A higher reading indicates increased manufacturing activity. Durable Goods Orders measures the change in the total value of new orders for long lasting manufactured goods, including transportation items.

Government Bond Auctions (this week)

Mar 28 09:10 Italy BOT auction

Mar 28 17:00 US Auctions 3Y Notes

Mar 29 09:10 Italy BTP/CCTeu auction

Mar 29 17:00 US Auctions 7Y Notes


Originally posted here