Today’s Economic Events And The Age Old Game of Technical Indicators

 
on November 14 2012 7:09 AM

USD/CHF has been continuously failing for past 4 days at or below 200-day Moving Average resistance. Out of these 4 days, 3 days made us witness the classical example of 200-day moving average power when the currency pair failed just after touching that level.

Similar pattern has been with EUR/USD where the pair kept on finding support at it’s 200-day moving average for past 2 days.

Today is a day of some important economic events. Before  going to what is on plate today, the current daily chart of both the currency pairs are as follows:

USD/CHF Failing At 200 Day Moving Average

USD/CHF failing at  200 day moving average resistance

EUR/USD Gaining At 200 Day Moving Average

EUR/USD gaining at  200 day moving average support

Today’s Economic Events:

European Monetary Union and Switzerland:

  • Europe: Both year on year and month on month change in the Industrial Production will be released at 10:00 GMT today.
  • Switzerland: ZEW Survey report for expectations is scheduled to come out at the same time i.e. GMT 10:00 today.

U.S.A.:

  • Producer Price Index reports will be released at 13:30 GMT.
  • At the same time i.e. at GMT 13:30 we will also have Retail Sales reports.
  • At 15:00 GMT U.S. Census Bureau will release the data for monthly percentage change in business inventories with manufacturers, wholesalers and retailers. This report does not cause major moves but in an uncertain market  every report is important.
  • The most important event for today from U.S. is the FOMC (Federal Open Market Committee) meeting’s minutes of one of the 8 meetings held annually. market will be waiting for these minutes to see the reviews of current financial and economic conditions and monetary policies for the future economic growth and stability of prices. FOMC meeting minutes are due at GMT 19:00.

What to Expect From These Currency Pairs with Strong Negative Correlation:

The way 200-day EMA has been proving to be a resistance for USD/CHF and support for EUR USD during recent days, calls for some consolidation. Overall any consolidation for USD CHF up to 0.9500/0.9410 would be natural. Similarly EUR/USD may consolidate towards 1.2790 or even 1.2835/1.2840.

For both these currency pairs such consolidations may be taken as normal with the expectation of another fall. However any decisive breaks of these levels may change the short-term outlook for some time.

Today especially FOMC meeting may cause some increased volatility.

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