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Psychology Of Jobless Data Awaits

Discussion in 'Forex Daily News & Outlook' started by mercaforex, Nov 6, 2009.

  1. mercaforex

    mercaforex New Member

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    By Mercaforex

    USD:
    The USD performed a delicate balancing act on Thursday as it traded to the weaker side of its range against both the EUR and GBP. The greenback has traversed rather treacherous waters the past two days and this has had a lot to do with the Fed and Wall Street. Both the S&P and Dow Jones Indexes turned in strong performances yesterday. All of this essentially sets the table for today’s Non Farm Employment Change numbers which are expected to turn in a good outcome. The estimate is calling for a jobless figure of minus -173K, which would be a vast improvement on last month’s decline of -263K. Also in the sights of investors will be the official U.S. Unemployment Rate that carries a forecast of 9.9%. The figures today will have a large psychological affect on equities and the currency markets.
    U.S. consumers are the bread and butter of the American economy. Today’s reports could impact the way in which the public spends its money before we go into the critical shopping month of December. Financial difficulties will continue to be on the tips of all within the States until the public feels job security. The GDP of the U.S. consists of more than two/thirds from consumers. The Non Farm Employment Change number forecasted today has a big hurdle to jump in order to achieve the anticipated target. If the result meets expectations we could see Wall Street get another boost in trading going into the weekend with the hope that sustained growth may be part of the calendar year for 2010. If the numbers disappoint investors it could set off a firestorm. Yesterday’s weekly Unemployment Claims statistics did turn in an improvement and this helped solidify today’s jobless estimates. The question everyone wants to see answered now is if there will be more good news today. The USD has been taken lower on a consistent basis as Wall Street has done better, today’s trading should mirror risk appetite.

    EUR:
    The EUR continued to bounce around its highs against the USD on Thursday. The ECB basically played the same theme that other central banks are playing by saying that the economy is improving and that gradually they believe that the ‘emergency policies’ that they have undertaken will be able to be eased over time. The European Retail Sales were also released yesterday and they had a negative outcome of minus -0.7% compared to the expected climb of 0.3%, the number was also worse than the previous result. However the EUR continued to perform remarkably well and once again investors will have to ask why. Today Germany Factory Orders figures will be published and the projection is calling for a gain of 1.0%. Going into the weekend traders will likely continue to watch international bourses, and certainly they will be attentive to the jobless numbers coming from across the Atlantic today.
    GBP:
    Another day of positive trading greeted the Sterling . The Bank of England surprised absolutely no one as it joined the chorus and proclaimed that some improvements in the economy can be seen and that they stand at the ready to manipulate monetary policy as stability turns into real growth. The Manufacturing Production data was released from the U.K. Thursday and it did show a better number of 1.7%, which was above the expectations. Today the U.K. will publish its PPI Input data and investors who are still paying attention to fundament numbers will look to see if the results can prove better than a stagnant or deflationary total. The estimate for the PPI Input is a gain of 1.6%. The Sterling like the EUR has shown the ability to do rather well in the midst of heightened optimism. The GBP has provided traders with a vast range the past two months and with today’s economic risk event unfolding in the States, we could see further volatility in the Sterling.
    JPY:
    A rather consolidated day of trading followed the JPY against the USD yesterday as international bourses including the Asian markets climbed. The JPY has been in a tight ranger versus the USD for a while now and this might continue if we see bourses performing well and a groundswell of investors continuing to look for riskier assets. Gold traded above the 1090.00 USD mark on Thursday and at these record heights is raising quite a few eyebrows.

    War! Between Sellers And Buyers. The SPX Continues To Show Strength

    SPX/USD:
    The American Equity market seems to be at war. A war similar to the epic grandeur of the ever popular conflict between Good and Evil, whereas here our two dominant forces are buyers and sellers! Well yesterday’s trading had the buyers win the battle. They arrived ready for a fight. With a strong show of force throughout the day they brought this market back up to 1066, and finished up strong. At the sake of repeating myself once again, the strength of this market continues to intrigue me. Each round of selling is met by hungry buyers who seem to completely absorb every contract sold. It looking like this market will push higher, but today is a tricky day as the all mighty Non Farm Payrolls comes out later today so make sure you are aware of the results before beginning your trading day. Support 1052.4, 1045.5, 1029.4, 1019.6, 1009.1, 992.25 Resistance 1066.4, 1073.2, 1081.5, 1086.2, 1095.8, 1101.4, 1132.2, 1153.8
    XAU/USD:
    We formed an inside candle on the 5th of November. This commodity continues to strive higher, and will probably break through its highs once again today. The only thing that could really slow this stampede higher, however temporary that might be, would be an otherwise irrelevant bit of fundamental data (Non Farm!). However, since we are technical analysts, we can only see this market for what it is: A market with a powerful momentum, which has little in its way. Take a look at the one hour chart. Great consolidation with some really good support levels as well. Place your stops below 1087.65, but if you need something tighter 1091.40 could do it. Be cautious as that is relatively tight, and you might get taken out of the market considering what might develop into quite a volatile day of trading. Support 1092.87, 1087.65, 1082.46, 1078.37, 1070.6, 1066.1, 1051.3, 1046.7 Resistance 1097.53. 1100….
    GBP/USD:
    An early attempt to trade lower was squashed on the back of the weaker greenback, strong gold prices and good support level at around 1.6466. This trading channel has made trading the sterling very exciting over the last few months. In essence we are just looking for good entry and exit points. This market is looking relatively strong, and I am hesitant to start selling at 1.6636 because it looks like it is accumulating to break over that level. And yet, resistance is name resistance for a reason, so I will be looking for a long entry if the market pushes back down after testing that level. A good quickie trade would be to sell resistance, and try and make 90 or so pips with a small risk of about 21 pips. Support 1.6466, 1.6249, 1.6119, 1.5776 Resistance 1.6636, 1.6741, 1.7042
    XAG/USD:
    With the Silver and Gold daily charts showing similar candles, we can only expect silver to follow through in the same way that gold will. Breaking resistance of 17.60 should see us testing 18.09 and 19.46 before we begin the final climb up to 21.34. I am suggesting getting long this market. However, I would be hesitant entering just yet. Entry should be anywhere between 17.50, to 17.32 with a stop below 17.17. The silver market is very volatile and wild swings do happen, so stop placement is vital. Support 17.50, 17.32, 17.22, 16.77, 16.07, 15.53, 14.73 Resistance 17.77, 17.94, 18.09, 19.46, 21.34
     
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