Economic Events: (GMT)

Major Economic Reports due this week. Please refer to the daily reports for explaination and forecast

US Markets closed on Monday for Presidents Day Holiday

Feb. 21

00:30

 

AUD

 
 
 

Monetary Policy Meeting Minutes 

 

13:30

 

CAD

 
 
 

Core Retail Sales (MoM) 

Feb. 22

09:30

 

GBP

 
 
 

MPC Meeting Minutes 

 

15:00

 

USD

 
 
 

Existing Home Sales 

Feb. 23

09:00

 

EUR

 
 
 

German Ifo Business Climate Index 

 

13:30

 

USD

 
 
 

Initial Jobless Claims 

Feb. 24

07:00

 

EUR

 
 
 

German GDP (QoQ) 

 

09:30

 

GBP

 
 
 

GDP (QoQ) 

 

15:00

 

USD

 
 
 

New Home Sales 

EUR/USD

EUR/USD Weekly Fundamental Analysis February 20-24, 2012, Forecast

Historical:

Highest: 1.5091 USD on 03 Dec 2009.

Average: 1.3709 USD over this period.

Lowest: 1.19 USD on 07 Jun 2010.

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 is trading today at 1.3139 after seesawing all week, almost breaking the 1.33 mark and falling to below the 1.30 level. There was little in the way of economic data that influenced the pair. It was all on rumor, news and actions in Greece, between the off again on again deal in Greece.

Beginning the week with votes in Athens to problems between Germany and Greece, to comments and accusations hurdled between leaders. On to the ECB old bond new bond swap.. Finally ending on Friday with comments from Merkel and Monti that a deal could be in place on Monday. Today's news now says that the ECB bond swap is scheduled for March 8. No details on any side.. just innuendo and rumors.

Good luck figuring this one out. US markets are closed on Monday for the Presidents Day Holiday

Strength

  • Greek bailout and PSI deal looking more likely AGAIN, at least that's what markets think as Greek stocks rally 3.4% on week, European credit CDS narrower, European banks bounce and US stocks continue their march. Merkel and Monti assure the markets.
  • German ZEW investor confidence figure rises to best since April
  • Initial Jobless Claims fall to lowest since 2008 at 348k, well below estimates of 365k
  • Philly and NY manufacturers  surveys up but components mixed as headline #'s are not sum of parts
  • Housing starts continue to grow for multi-units (apt/condo)
  • NAHB home builder index up 4 pts, 3 pts better than expected and highest since May '07
  • India's wholesale inflation rises at slowest pace since Nov '09, leaves open room to cut rates
  • Australia central bank surprises with a hold on interest rates
  • UK announces new round of QE
  • Australia and NZ have positive economic reports
  • China reduces bank reserves
  • ECB deposit facility falls
  • Japanese exporters see some breathing room with weaker yen to lowest since July after BoJ embarks on even more QE

Weakness

  • Greek saga never ending, ECB wants special treatment old bond new bond swap
  • Euro zone GDP in Q4 contracts .3% q/o/q, although touch better than estimates of .4%
  • Portugal's unemployment rate rises to 14% in Q4 from 12.4%, the highest since at least '98
  • Singapore confirms Jan estimate of Q4 GDP contraction
  • Japanese economy shrinks more than expected in Q4, BoJ can't help itself with more QE
  • Chinese FDI in Jan falls .3%, 3rd month in a row of declines
  • US Jan Retail Sales ex auto's weaker than expected (but Dec revised up)
  • CPI rate of change a below estimate m/o/m, core rate rises to highest since Sept '08 y/o/y. Overall index at another record high.

Economic Highlights Feb 13-17 actual v. forecast

Feb. 14

 

JPY

 
 
 

Interest Rate Decision 

0.10%

 

0.10% 

 

0.10% 

 
 

 

 

JPY

 
 
 

BoJ Press Conference 

 

 
 
 
 
 
 

 

 

EUR

 
 
 

German ZEW Economic Sentiment 

5.4

 

-11.6 

 

-21.6 

 
 

 

 

GBP

 
 
 

BOE Inflation Letter 

 

 
 
 
 
 
 

 

 

USD

 
 
 

Core Retail Sales (MoM) 

0.7%

 

0.6% 

 

-0.5% 

 
 

 

 

USD

 
 
 

Retail Sales (MoM) 

0.4%

 

0.8% 

 

0.0% 

 
 

Feb. 15

 

EUR

 
 
 

German GDP (QoQ) 

-0.2%

 

-0.3% 

 

0.6% 

 
 

 

 

GBP

 
 
 

Claimant Count Change 

6.9K

 

3.2K 

 

1.9K 

 
 

 

 

GBP

 
 
 

BoE Inflation Report 

 

 
 
 
 
 
 

 

 

GBP

 
 
 

BoE Gov King Speaks 

 

 
 
 
 
 
 

 

 

USD

 
 
 

FOMC Meeting Minutes 

 

 
 
 
 
 
 

Feb. 16

 

USD

 
 
 

Initial Jobless Claims 

348K

 

364K 

 

361K 

 
 

 

 

USD

 
 
 

Fed Chairman Bernanke Speaks 

 

 
 
 
 
 
 

Feb. 17

 

GBP

 
 
 

Retail Sales (MoM) 

0.9%

 

-0.2% 

 

0.6% 

 
 

 

 

CAD

 
 
 

Core CPI (MoM) 

0.2%

 

0.1% 

 

-0.5% 

 
 

 

 

USD

 
 
 

Core CPI (MoM) 

0.2%

 

0.3% 

 

0.1% 

 
 

 

 

USD

 
 
 

CPI (MoM) 

0.2%

 

0.3% 

 

0.0% 

 
 

Sovereign Bond Auction Schedule

Feb 20-24 n/a  UK  0.375% 2062 I/L Gilt syndication

Feb 20  10:10  Norway  Nok 3bn 4.5% May 2019 DSL

Feb 20  10:10  Slovakia  Eur 0.15bn Apr 2014 & Eur 0.05bn Nov 2016 bonds

Feb 21  09:30  Spain  3 & 6M T-bill auction

Feb 21  15:30  UK  Details gilt auction on Mar 01

Feb 21  18:00  US  Auctions 2Y Notes

Feb 22  10:10  Sweden  Nominal bond auction

Feb 22  10:30  Germany  Eur 5.0bn Mar 2014 Schatz

Feb 22  16:30  Italy   Details CTZ/BTPei on Feb 24 & BOT on Feb 27

Feb 22  18:00  US  Auctions 5Y Notes

Feb 23  10:10  Sweden  Sek 0.75bn I/L bond auction

Feb 23  16:30  Italy   Details BTP/CCTeu on Feb 28

Feb 23  18:00  US  Auctions 7Y Notes

Feb 24  10:10  Italy   Auctions CTZ/BTP

EUR/USD Pivot Points (Time Frame: 1 Day)

 

Name S3 S2 S1 Pivot R1 R2 R3

Classic
1.3153
1.3163
1.3182
1.3192
1.3211
1.3221
1.3240

Fibonacci
1.3163
1.3174
1.3181
1.3192
1.3203
1.3210
1.3221

Camarilla
1.3193
1.3195
1.3198
1.3192
1.3203
1.3206
1.3208

Woodie's
-
1.3165
1.3186
1.3194
1.3215
1.3223
-

DeMark's
-
-
1.3216
1.3194
1.3187
-
-