By FX Empire.com
Economic Events: (GMT)
Please check the daily forecast for details on all economic events.
Major Economic Events of the Week
|
Feb. 14 |
10:00 |
EUR |
German ZEW Economic Sentiment |
|
13:30 |
USD |
Core Retail Sales (MoM) |
|
|
13:30 |
USD |
Retail Sales (MoM) |
|
|
Feb. 15 |
07:00 |
EUR |
German GDP (QoQ) |
|
09:30 |
GBP |
Claimant Count Change |
|
|
10:30 |
GBP |
BoE Inflation Report |
|
|
10:30 |
GBP |
BoE Gov King Speaks |
|
|
19:00 |
USD |
FOMC Meeting Minutes |
|
|
Feb. 16 |
13:30 |
USD |
Initial Jobless Claims |
|
Feb. 17 |
09:00 |
EUR |
German Ifo Business Climate Index |
|
09:30 |
GBP |
Retail Sales (MoM) |
|
|
12:00 |
Core CPI (MoM) |
||
|
13:30 |
USD |
Core CPI (MoM) |
|
|
13:30 |
USD |
CPI (MoM) |
Historical:
Highest: 1.5091 USD on 03 Dec 2009.
Average: 1.3709 USD over this period.
Lowest: 1.19 USD on 07 Jun 2010.
EUR/USD Weekly Fundamental Analysis February 13-17, 2012, Forecast
Rules:
Out of the major currency pairs the most popular and easy to trade currency pair is the EUR/USD. It has become so popular with traders these days that even when there is no visible trade to be had it is yet traded as a matter of habit. This is of course something that should be avoided and any investor who trades this currency pair wisely can do so successfully with sizable profits at the end of the day.
The first thing with trading currencies is to realize that the EUR/USD is made up of two separate currencies although considered to be one unit when taken as a pair. The weaknesses and strengths of each currency have to be taken into consideration when trading the unit as it influences the final outcome. Another factor that is often overlooked by traders or investors is that the weakening of one currency along with the strengthening of the other currency in the pair results in the generation of pips. It is according to this that entry and exit from the Forex market has to be done in order to maintain profitability.
Trading comprises of careful market studying, strategizing, planning and executing the plan in a timely manner. This is entirely different to scalping which is resorted to by many a trader on a regular basis. These traders are often clueless as to the market situation and just use this as a type of defense mechanism to compensate for the general lack of information and knowledge. The EUR/USD is a currency pair that certainly offers a lot of currencies trading opportunities if handled correctly.
Characteristics
Average broker spread: 2-3 pips
Daily range average: 90-100 pips
Best time to trade: Euro Session (0700 GMT – 1700 GMT)
some factors affecting the EUR/USD rate:
- The interest rate differential between the European Bank(ECB) and the Federal Reserve(FED)
- Dollar strength drives EUR/USD lower
- FED intervention to weaken the dollar the sends EUR/USD higher
Trading the EUR/USD
Trading Experience: New and Advanced currency traders
Trading Style: Day trading and Swing trading
1) Applying Technical Analysis and/or Analyzing Fundamental News from the Euro and US zone to make EUR/USD trading decisions. Breaking strong psychological levels (1.3000, 1.2000,..) and/or surprising economic news releases can make the EUR/USD move a lot in one direction without much retracements.
2) Since the EUR/USD pair tends to be negatively correlated to the USD/CHF, it is always a good idea to compare both EUR/USD and USD/CHF charts in order to predict future moves, if USD/CHF breaks above an important resistance level and EUR/USD didn’t break support level yet, the EUR/USD is very likely to break below support level.
Analysis and Recommendation:
The EUR/USD soared this week to break 1.33 and is down trading at 1.3198 at this writing
This past week was an amusement park ride for the markets. The Euro/USD hardly reacted to economic data or reports. Everything was overshadowed by the news, rumors, actions and statement by the Greeks, Germans and French in regards to the Greek bailout package and agreements.
As last week ended and this week begins we are right where we started last week.
The euro is trading at 1.3198 down from the close on Friday, down after passing the 1.33 mark and holding.
The Greek Finance Minister was sent packing back to Greece. The original news stated that the EU was demanding final legislation of the austerity measures before they would consider the approval of the bailout and that they did not want promises. Further news seemed to indicate that the political agreements were short, even with the ECB’s added contributions and agreements to reduce their asset valued.
Most recent reports said that Germany made it clear that Greece missed its debt target and must increase its austerity measures to qualify for the second economic bailout package.
German Finance Minister, Wolfgang Schaeuble stated that Greece is missing its debt cutting targets.
Schaeuble explained that two people who spoke on conditions of anonymity, who attended the Brussels meeting, stated that Greece’s austerity plan would leave its debt as high as 136% of gross domestic product by 2020.
The German Finance Ministry went on to state, “The Greek offer is not sufficient and they have to go away to come back with a revised plan.”
This should depress the euro farther and give added strength to the USD.
All eyes will be on the Federal Reserve officials to determine if the current policy is viable given the strong recent jobs reports, many Fed watchers are skeptical that the current stated policy to keep interest rates low until 2014 will in fact come to pass. Speeches Tuesday by Philadelphia Fed President and Atlanta Fed President may give insight if there is any concern within the Federal Reserve about the stated policy.
The Federal Open Market Committee also releases minutes of its Jan. 26 meeting on Wednesday, and Fed Chairman Ben Bernanke will speak at the Federal Deposit Insurance Corp. conference on community banking Thursday. (Watch gold)
Retail sales figures are due Tuesday, housing starts and Philadelphia Fed index data Thursday and consumer price index figures Friday. It will be a busy week for the USD.
This coming week, investors will be watching, Greece carefully, but many observers, think that a default has already been factored in the markets and that all the banks have been secured and alternative arrangements made. The problem comes about with contagion, and the future of other countries needing bailout. Ireland has already stated that based on successful negotiations with the Greeks that they want to go back to the table and renegotiate their bailout arrangements, not looking for more funding but they want the same interest and arrangements made with the Greeks.
The USD should remain up this week and should continue off the back of the unemployment reports last week, but with the Fed Chairman speaking, you never know exactly what will happen. This week keep an eye on Greece and an ear on the Fed.
This past week was an amusement park ride for the markets. The Euro/USD hardly reacted to economic data or reports. Everything was overshadowed by the news, rumors, actions and statement by the Greeks, Germans and French in regards to the Greek bailout package and agreements.
As last week ended and this week begins we are right where we started last week.
The euro is trading at 1.3198 down from the close on Friday, down after passing the 1.33 mark and holding.
The Greek Finance Minister was sent packing back to Greece. The original news stated that the EU was demanding final legislation of the austerity measures before they would consider the approval of the bailout and that they did not want promises. Further news seemed to indicate that the political agreements were short, even with the ECB’s added contributions and agreements to reduce their asset valued.
Most recent reports said that Germany made it clear that Greece missed its debt target and must increase its austerity measures to qualify for the second economic bailout package.
German Finance Minister, Wolfgang Schaeuble stated that Greece is missing its debt cutting targets.
Schaeuble explained that two people who spoke on conditions of anonymity, who attended the Brussels meeting, stated that Greece’s austerity plan would leave its debt as high as 136% of gross domestic product by 2020.
The German Finance Ministry went on to state, “The Greek offer is not sufficient and they have to go away to come back with a revised plan.”
This should depress the euro farther and give added strength to the USD.
All eyes will be on the Federal Reserve officials to determine if the current policy is viable given the strong recent jobs reports, many Fed watchers are skeptical that the current stated policy to keep interest rates low until 2014 will in fact come to pass. Speeches Tuesday by Philadelphia Fed President and Atlanta Fed President may give insight if there is any concern within the Federal Reserve about the stated policy.
The Federal Open Market Committee also releases minutes of its Jan. 26 meeting on Wednesday, and Fed Chairman Ben Bernanke will speak at the Federal Deposit Insurance Corp. conference on community banking Thursday. (Watch gold)
Retail sales figures are due Tuesday, housing starts and Philadelphia Fed index data Thursday and consumer price index figures Friday. It will be a busy week for the USD.
This coming week, investors will be watching, Greece carefully, but many observers, think that a default has already been factored in the markets and that all the banks have been secured and alternative arrangements made. The problem comes about with contagion, and the future of other countries needing bailout. Ireland has already stated that based on successful negotiations with the Greeks that they want to go back to the table and renegotiate their bailout arrangements, not looking for more funding but they want the same interest and arrangements made with the Greeks.
The USD should remain up this week and should continue off the back of the unemployment reports last week, but with the Fed Chairman speaking, you never know exactly what will happen. This week keep an eye on Greece and an ear on the Fed.
The Strength
1) Initial Jobless Claims fall to 358k, 12k less than expected and the 4 week average drops to 366k, the least since May ’08
2) Job Openings in monthly BLS data rise to match the highest since Sept ’08
3) MBA said avg 30 yr mortgage rate falls to new low of 4.05% and refi’s jump 9.4%
4) German Factory Orders in Dec rise a bit more than expected
5) China’s PPI moderates to a gain of just .7% y/o/y, the slowest rate since Nov ’09
6) Indonesia unexpectedly cuts rates to 5.75% while RBA and SK sit pat
The Weakness
1) Greece on brink, AGAIN, unemployment rate in Nov hits 20.9% from 18.2% in Oct
2) German exports in Dec, the main driver of their economy, falls 4.3% m/o/m vs an expected decline of just 1%, German IP falls 3% vs est of flat from Nov
3) Euros being redeposited with the ECB overnight remain around 500b, matching the amount borrowed under the LTRO
4) BoE votes for more QE, brings asset purchase program up to 325b pounds.
5) US inflation expectations in TIPS continue to drift higher
6) Feb UoM confidence moderates 2.5 pts after Jan jump of 5,
7) Avg gallon of gasoline at the pump rises to most since Sept.
Greece still unresolved with bigger problems.
|
Feb. 06 |
15:00 |
CAD |
Ivey PMI |
64.1 |
57.8 |
63.5 |
|
Feb. 07 |
03:30 |
AUD |
Interest Rate Decision |
4.25% |
4.00% |
4.25% |
|
03:30 |
AUD |
RBA Rate Statement |
||||
|
15:00 |
USD |
Fed Chairman Bernanke Testifies |
||||
|
Feb. 08 |
21:45 |
NZD |
Unemployment Rate |
6.3% |
6.5% |
6.6% |
|
Feb. 09 |
01:30 |
CNY |
Chinese CPI (YoY) |
4.5% |
4.0% |
4.1% |
|
12:00 |
GBP |
Interest Rate Decision |
0.50% |
0.50% |
0.50% |
|
|
12:45 |
EUR |
Interest Rate Decision |
1.00% |
1.00% |
1.00% |
|
|
13:30 |
USD |
Initial Jobless Claims |
358K |
370K |
373K |
|
|
13:30 |
EUR |
ECB Press Conference |
||||
|
Feb. 10 |
13:30 |
CAD |
Trade Balance |
2.7B |
0.7B |
1.2B |
|
13:30 |
USD |
Trade Balance |
-48.8B |
-48.4B |
-47.1B |
Sovereign Bond Auction Schedule Feb 13-17
Feb 13 10:10 Italy BOT auction
Feb 13 10:10 Norway T-bill auction
Feb 13 10:30 Germany Eur 4.0bn Aug 2012 Bubill
Feb 13 12:00 Norway Details bond auction on Feb 20
Feb 14 09:30 Netherlands Eur 3.0bn-4.0bn Jan 2017 DSL
Feb 14 09:30 Spain 12 & 18M T-bill auction
Feb 14 10:10 Greece 3M T-bill auction
Feb 14 10:10 Italy BTP/CCTeu auction
Feb 14 10:30 Belgium Auctions 3 & 12M T-bills
Feb 15 10:10 Sweden Auctions T-bills
Feb 15 10:30 Portugal Eur 1.5-1.75bn May & Aug T-bills
Feb 16 09:30 Spain Obligacion auction
Feb 16 10.30 UK Auctions 4.5% 2034 conventional Gilt
Feb 16 10:50 France BTA/OATi auction
Feb 16 16:00 US
Announces auctions of 2Y Notes on Feb 21, 5Y Notes on Feb
22 & 7Y Notes on Feb 23
Feb 16 18:00 US Auctions 30Y TIPS
Originally posted here
