Weekly Fundamental Preparation of Currencies

eu 1hr pf...

eg 1hr pf.. built base at 0/8.. awkward looking upmove.. resistance at the 2/8..

Australia and New Zealand - Weekly Prospects business scoop


• After a quiet week for economic data in Australia last week, the data-flow picks up this week with February credit, retail sales, building approvals, and trade figures. It will be interesting, in particular, to gauge consumer behaviour in February ahead of the RBA meeting next week. There also are two potentially influential speeches to be delivered by RBA officials. The March Board minutes showed that the RBA’s rate decision earlier this month, when the RBA kept its powder dry, was a closer call than it appeared at the time. That, and deteriorating conditions offshore, mean we now believe the RBA will cut the cash rate 50bp on 7 April, compared to our previous “no change” call. With signs on improvement in financial markets and housing, though, the April decision also is likely to be a very close call. Last week, we lowered our forecast for the terminal cash rate 25bp to 2.5% on the assumption that the RBA also will cut the cash rate in May.

event - new zealand business confidence 0200 gmt tuesday
effects sentiment of new zealand directly and commodity/growth currencies indirectly.

the trend is down but i will avoid shorting as long as the base near the 2/8 holds up and will look to see if there's a move towards 3/8 and the downtrendline. edit would not long here will look to sell into strength if there's a setup as a long would be fighting the downtrend at this point.

most of the key news is out I reckon so they will probably try to attack key technical levels to test the trends. except for other correlations such as equities most currency data has been accounted for today i reckon. the dow is strongly down now and below 7500. this is a major level for the dow that i have been tracking. if 7500 doesn't hold and there's continued pessimism without any positive data it could be a trip lower to other historical levels for dow. however we can only look so far ahead and let the forces at work make their way.

lets not forget our key inflation factor. crude oil 1hr pf chart. in strong downtrend for the time being. just like the dow is retreating. the question is could crude oil find support at our 0/8 which is also a psychological level but crude can be very volatile since anything can manipulate it and send it soaring or tanking in a heartbeat. right now it's supporting disinterest do to the slowdown. dow weakness at this point will counter any crude strength i reckon.

more aggressive strategies welcome these are just my projections. feel free to post more aggressive or even opposite opinions or case scenarios.

Hey,england32 & guys/gals

Since there is some talk about the global currency,I wonder how real is this possibility in near future(3-5years). Or is it far-fetched to expect this to happen?
Would like to have your input on this.

thanks

looking at the last crude chart there has been no attempt to reverse or build any kind of a base for crude since it's fall from 55 area. will be interesting to see what happens next.

that's very uncertain to me as i have yet to research it extensively but i imagine the coming g20 meeting will be of major importance and us trade relations. the euro was supposed to be the answer to the unstable dollar so both usd and euro performance are a factor in this. if regulations are passed it might quell the global currency plan/plot.

hi all

Draft of G20 Communique of the meeting to take place on April 2nd in London England

An interesting and different thread - thanks for your time and effort - long may you continue....http://www.forexfactory.com/images/icons/icon7.gif

EUR/USD, GBP/USD and spot Gold fxstreet


Sellers have resurfaced and pushed the market lower to 1.4160.

Support is at these lower levels and it should not get through here without a struggle.


Buyers would only worry if 1.4140 is lost. A loss of this support would keep the market under pressure—leading it lower for 1.4080 then 1.4020. Again would expect buyer to re-enter the market at these lower levels.
If 1.4140 does hold you should see this come back with 1.4335 looking to entice. Buyers are covering to these higher levels. Sellers would be evident however so you should not get too optimistic unless the market is back above 1.4350.


(fxstreet technical view Neutral)

GBPUSD Analysis fxpros

Recent economic data and comments from Governor Mervyn Brown only helped the Dollar gain strength against the British pound last week. After breaking trend line resistance, the GBP/USD rallied higher to touch resistance of $1.47. Overall Dollar strength sent this pair down towards the end of the week. Currently trading around its 20 day moving average, this pair could find minor support which is expected to coincide with trend line support of $1.4321.

GBP/USD Bounces In The Short-Term Though The Longer Term Outlook Is Bearish dailymarkets


The GBPUSD last week closed one day above the 100 day MA for the first time since August 2008, but that was the extent of the break. As a result, the rest of the week was to the downside with 3 straight days of lower prices.
Today the price has continued the move to the downside, with the price reaching a low of 1.4110. Since the low, however, the price has moved back up above intraday resistance at the 100 bar MA on the 5 minute chart. The current moving average support level comes in at the 1.4173 level. The MA line is also flattening out at that level which could signal a short term low is indeed in place. Watch the level to see if it holds support. It becomes the key barometer for the trading activity in what is a slow morning so far in NY.
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...what i have to say..
the trend is down and unless broken must stay on the defensive for a continuation of the downtrend. currently there is support at 140.60 area. see last pf chart i posted. while trading above the 2/8 murrey line it could be possible for the pattern to test or trade towards the 3/8 on the hourly. however there is a notable downtrend in place and if trades below 2/8 the 1/8 level/area will be the next downside target. a reversal is conceivable also but the fundamentals suggest a bearish pound with the usd under the mircroscope. with the usd on the spotlight.. india/china in particular are not happy with past usd performance/stability or US financial institution stability. the g20 meeting could underscore these themes or could cause more volatility. 140.60 level is not an exact level so it could dip below and still find support. edited i use point and figure for support/resistance so it could vary but if pf hourly boxes start developing below 140.60 base i will consider the price action to support the current downtrend do to the base being broken and violation of the 2/8. moves to the upside to this point have not been inductive of a trend reversal so it's my policy to be better safe than sorry and play the odds. edited it's very judgemental what one considers a base but i think that a base has formed do to the box pattern on 1hr and continual support at that level all though the strength of the support is in question with a considerable downpattern of price action.

weekly view - moderately bearish unless downtrend is broken

crude oil has broken through psychological level 50 and trading below 0/8.. if only i had access when that happened would have been a good short with boxes forming below those areas.
the -1/8 would be the likely next target area.

the dow also in bear mode trading below 0/8 and the critical 7500 area.
possible support coming in just below the area but stronger momentum it seems for the downside. i suspect we see lower to the -1/8 at 7344. note that the 1/8 and 2/8 near the top are a very far away and have a considerable bearing of the current bull market hopes.

thanks Islander. come back again

Pressure to cut interest rates mounts in eurozone theherald -uk
"What we are witnessing is no traditional recession but an uncertainty-driven recession," Kraemer said. "The global economy is in a state of shock brought about by uncertainty."
He said the recession will be followed, at best, by an anemic upward trend, which will keep government bond yields low and prevent equities recovering.
Kraemer's grim assessment of Germany's economic prospects was reinforced last week by a key gauge of German business sentiment. The Ifo business climate index fell in March to its lowest level since November 1982, a clear indication that the recession in Germany, one of the UK's biggest export markets, continues unabated.
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Joerg Kraemer, Commerzbank's chief economist, said last week that the economic slump that has gripped the world will deliver a heavy blow to export-oriented Germany, and he revised down the investment bank's outlook for the continent's biggest economy.
He jolted European financial markets after forecasting that in light of plunging export orders for German companies, gross domestic output in 2009 would drop not by 3% or 4%, as previously forecast, but by a massive 6% to 7%.
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The number of unemployed can be expected to grow by more than 1.5 million within a two-year period, Kraemer said, adding that by the end of 2010 Germany will be nearing the five-million mark. Currently, around 3.5 million Germans are registered as unemployed compared with about two million people in the UK, although that number is expected to rise to more than three million by 2010.

Eurozone to slash rate to record 1% bruenietimes


"Pressure on the ECB to adopt further unconventional policy measures in order to encourage banks to lend more is likely to grow," Capital Economics European economist Ben May said.

The US Federal Reserve, Bank of England and Bank of Japan have unveiled schemes costing hundreds of billions of dollars to buy government and corporate debt and high-risk, mortgage-backed securities.

Such policies are often known as quantitative easing, and amount to printing money, albeit electronically, to increase the flow of money and encourage economic activity.
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Eurozone business financing is handled by commercial banks on a much greater scale than elsewhere, and the ECB has focused on them by providing unlimited amounts of loans at its fixed benchmark rate for up to six months.

Many observers expect ECB president Jean-Claude Trichet to announce on Thursday a lengthening of that period, with UniCredit's Aurelio Maccario saying: "Our bet is that they will extend it until the one-year maturity."

The ECB might also hint at a readiness to begin buying corporate debt, but it is prohibited from buying government bonds directly, and even indirect purchases raise the delicate issue of which state's debt to buy.

"The ECB is likely to leave the door open for outright purchases of (corporate) securities in secondary markets: however nothing will probably be made official," Commerzbank analysts said in a research note.

The head of the International Monetary Fund Dominique Strauss-Kahn suggested Friday that the ECB might follow the lead of its counterparts down the path to unconventional policy.

The Euro Ahead of the ECB Policy Meeting forexdistrict

The Euro came under pressure Friday against the Dollar as traders looked ahead to key ECB monetary policy meeting. Data out of Europe continues to show clear indications that the recession may be deepening further resulting in a greater speculation that the ECB may become more proactive at next weeks meeting. Adding pressure to the downside, included technical factors, end of month profit taking (after an impressive run in EUR/USD), as well as comments from German Finance Minister, Peer Steinbrueck.


Steinbrueck warned that the Euro may be at risk if EU members do not uphold to the European Union's Stability and Growth Pact. Possible surging debt levels above 3% of each country's respective GDP could pose risks to the Euro's stability.


"If it is not taken seriously, I am telling you, the euro will have trouble one day in terms of its own credibility and stability," Steinbrueck told the parliament, according to Reuters.

When developing a theme we must some how develop a focal point for that theme. Just like finding an unknown object in space this can be a difficult task and the theme/focal point might change if we are off or the object changes path or we might be following the wrong object/theme. So with that said we have to decipher and filter a lot of information to build a proper focal point and work towards what's important - the final outcome. Just as in technical analysis we have to take clusters of information and dismiss the fluctuations to build a center point. In summery our starting point may change when developing a theme but it is necessary to weigh all the pertinent data and to either use it or omit it. Then a more complete and hopefully correct path can be taken. We might even be right about our theme and be wrong about the path when our theme develops - in otherwords decipher the outcome and/or importance wrong. Our job is to follow the economic activity, weigh it's importance, decipher it, and adjust when necessary if the something changes. It may be we change the starting point if the market dismisses data or we may just shift to become more focused on our theme which is most desired. That is why it is important to work through the data to arrive at a structured conclusion.

our weekly theme
(recited from data gathered and adjusted as needed)
-g20 scope and market reaction to outcome
-eurozone rate decision and the status of the global recession - any changes made during meeting
-degree of impact of recession per economy (in other words who's on the hot seat), projected data vs new influential data.
in particular an economy that has alot of data coming out or other event is going to be on the hot seat in that aspect.
-changes in upcomming events will be dependent on what the market expects vs the unexpected

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