Thursday February 22
2:00 EUR Germany GDP q/q (r) 0.9% 0.9% 0.8%r
3:15 CHF Employment Level http://www.forexfactory.com/images/m...act_medium.gif 3.70M 3.70M
4:00 EUR Italian Retail Sales m/m http://www.forexfactory.com/images/m...act_medium.gif 0.0% 0.1% 0.3%
4:30 GBP Business Investment q/q http://www.forexfactory.com/images/m...act_medium.gif 3.3% 1.3% 3.1%
5:00 EUR Industrial New Orders m/m http://www.forexfactory.com/images/m...act_medium.gif 2.8% 0.2% 1.1%r
8:30 USD Unemployment Claims 332K 320K 359Kr
8:30 CAD Corporate Profits q/q http://www.forexfactory.com/images/m...act_medium.gif 1.5% 2.7% 3.5%r
10:30 USD Crude Oil Inventories 3.7M -0.6M
18:00 AUD Leading Index m/m 0.2% 0.2%
18:50 JPY All Industries Activity Index m/m 0.0% 0.0% -0.2%
18:50 JPY CSPI m/m 0.6% 0.2% 0.2%
The EURUSD dropped through the 1.3100 level for the first time this week as the internals of the German GDP data painted a far bleaker picture than the rosy headline number. Just as expected, the final measure of German GDP registered an impressive increase of 3.7%, however after traders looked at the individual components of the release their mood soured and they quickly sold the EUR/USD as a result The overwhelming majority of growth came from the export sector which expanded at 6.0% rate versus 4.5% expected. On the other hand, Government Spending actually compressed by -0.1% versus 0.2% and more troubling still Domestic demand declined by -1.3% versus a 0.5% projected increase. The highly unbalanced nature of the release suggested that the ECB may have to pause after the expected 25bp hike in March. With the recent strength of the EURUSD coming from the assumption that ECB will continue to ratchet rates higher throughout 2007, this sudden reassessment of the situation took the wind our of the latest rally as market players curbed their bullishness.
After a very quiet start to the month last week’s blizzard of data finally created some action in the currency market. Unfortunately for greenback bulls, the majority of data was dollar negative and the USD buckled as the result. For the week the GBPUSD gained 170 pips as the US economic condition clearly deteriorated. Specifically US Trade deficit widened to -$61B while the TICS inflows shrank to a miniscule $15B. No matter how you sliced it the balance sheet news was horrid. Some analysts noted that “If the US investor falls in love with foreign equities, the way the US consumer has fallen in love with foreign cars,” the structural problems for the dollar may only be beginning. The rest of the data was hardly inspiring as well with Retail Sales printing weaker than expected and weekly jobless claims jumping a very hefty 43k more than forecast. In short the news suggests that US economy is slowing rapidly and if that trend persists dollars woes may only be beginning.
2:00 EUR Germany GDP q/q (r) 0.9% 0.9% 0.8%r
3:15 CHF Employment Level http://www.forexfactory.com/images/m...act_medium.gif 3.70M 3.70M
4:00 EUR Italian Retail Sales m/m http://www.forexfactory.com/images/m...act_medium.gif 0.0% 0.1% 0.3%
4:30 GBP Business Investment q/q http://www.forexfactory.com/images/m...act_medium.gif 3.3% 1.3% 3.1%
5:00 EUR Industrial New Orders m/m http://www.forexfactory.com/images/m...act_medium.gif 2.8% 0.2% 1.1%r
8:30 USD Unemployment Claims 332K 320K 359Kr
8:30 CAD Corporate Profits q/q http://www.forexfactory.com/images/m...act_medium.gif 1.5% 2.7% 3.5%r
10:30 USD Crude Oil Inventories 3.7M -0.6M
18:00 AUD Leading Index m/m 0.2% 0.2%
18:50 JPY All Industries Activity Index m/m 0.0% 0.0% -0.2%
18:50 JPY CSPI m/m 0.6% 0.2% 0.2%
The EURUSD dropped through the 1.3100 level for the first time this week as the internals of the German GDP data painted a far bleaker picture than the rosy headline number. Just as expected, the final measure of German GDP registered an impressive increase of 3.7%, however after traders looked at the individual components of the release their mood soured and they quickly sold the EUR/USD as a result The overwhelming majority of growth came from the export sector which expanded at 6.0% rate versus 4.5% expected. On the other hand, Government Spending actually compressed by -0.1% versus 0.2% and more troubling still Domestic demand declined by -1.3% versus a 0.5% projected increase. The highly unbalanced nature of the release suggested that the ECB may have to pause after the expected 25bp hike in March. With the recent strength of the EURUSD coming from the assumption that ECB will continue to ratchet rates higher throughout 2007, this sudden reassessment of the situation took the wind our of the latest rally as market players curbed their bullishness.
After a very quiet start to the month last week’s blizzard of data finally created some action in the currency market. Unfortunately for greenback bulls, the majority of data was dollar negative and the USD buckled as the result. For the week the GBPUSD gained 170 pips as the US economic condition clearly deteriorated. Specifically US Trade deficit widened to -$61B while the TICS inflows shrank to a miniscule $15B. No matter how you sliced it the balance sheet news was horrid. Some analysts noted that “If the US investor falls in love with foreign equities, the way the US consumer has fallen in love with foreign cars,” the structural problems for the dollar may only be beginning. The rest of the data was hardly inspiring as well with Retail Sales printing weaker than expected and weekly jobless claims jumping a very hefty 43k more than forecast. In short the news suggests that US economy is slowing rapidly and if that trend persists dollars woes may only be beginning.
Attached Image
Itme, that one was a bull's eye! 
I am getting smarter and cooler as I gain experience and familiarity with more things. Part of my recent strategy is to focus on fewer currency pairs, in order to improve my familiarity with their idiosyncratic behavior, and be able to give them more time. Studying dozens of pairs looking for swing trade opportunities gives many more trade chances, but the quality of analysis suffers due to time constraints. Also, lack of familiarity causes errors - either catastrophic system failures, or minor errors in the details such as premature entries, incorrect stops, just missed entries, etc. where we ALMOST win, but lose nevertheless by a few pips. In this game, almost is not good enough. A win is a win, and a loss a loss. We get no points for being 98% correct.
