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Volume Will Start To Pick Up Today

Discussion in 'Forex Daily News & Outlook' started by mercaforex, Sep 8, 2009.

  1. mercaforex

    mercaforex New Member

    Jul 1, 2009
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    By Mercaforex

    The greenback floundered during the day as the U.S. celebrated its Labor Day holiday. The greenback moved in a tight range leaving most traders room to contemplate what will take place over the coming days. There is not much in the way of critical data on schedule from the States until Thursday. Today only the Consumer Credit figures are due. This does however bring up the subject of consumer spending. Back to school sales in the U.S. have reportedly been soft the past few weeks and this is seen as a critical sign regarding sentiment among shoppers before the onslaught of the Christmas holiday. If it turns out that back to school spending has been soft it usually follows that Christmas sales will be weak too.
    Another event investors may begin to focus on more is the coming climax in the healthcare debate which could cost Americans billions of dollars. President Obama is scheduled to give a national speech tomorrow and begin his last push for the healthcare program. What investors may ask is this, what are the actual costs for this type of program and what will its impact on the American economy will be? We are now entering an important trading period as traders return from their summer holidays and face an equities market that has turned in a positive performance the past few months. Many questions persist about the manner in which the economy will recover. While some believe that we will see real growth, others continue to think that until consumers return to the fore that that the recession will not go away easily. The USD has moved in a rather consolidated fashion the past week and the next few trading sessions should give us a real taste of what to expect in the coming weeks.

    The EUR traded in a quiet manner on Monday due to light volume because of the holiday across the Atlantic. The German Factory Orders data were released and came out better than expected producing a result of 3.5%, higher than the estimate of 2.0%. However the broad European Sentix Investor Confidence reading proved disappointing with a minus -14.6 reading compared to the forecast of negative -13.5. Today German Industrial Production numbers will be published and they are anticipated to show a 1.6% gain. The German economy is the biggest in Europe and investors will eye its economic data carefully. Tomorrow CPI statistics will come from Germany and this will provide good insight into the dynamics of inflation (or the lack of it) and how the government tries – if it must – to mold perceptions about the overall health and prospects for Europe’s engine. The EUR has found a fairly consistent range recently, but as investors start to fill their desks questions will begin to be resolved about fair market value.

    Sterling traded within a polite range on Monday not showing much direction as the American holiday had its effect. The BRC Retail Sales Monitor continued the rather laggard data from the U.K. when it produced a drop of -0.1%. Today the Manufacturing Production numbers will be published and they carry a forecasted gain of 0.3% and Industrial Production figures are on schedule also. Making its way forward too will be the Nationwide Consumer Confidence reading and is anticipated to have an outcome of 62, which would be an improvement over the previous month. Tomorrow the Trade Balance figures are on the calendar along with the Halifax HPI. All of this leads into the Bank of England MPC meeting regarding its interest rate on Thursday in which no change is expected, but a small statement may be forthcoming regarding the state of the economy. The GBP has consolidated the past few sessions and expect some movement in the Sterling and USD as volume increases within the marketplace. We could see the GBP come under some pressure if the equity markets turn cautious.

    The JPY traded in a tight range on Monday. The JPY has shown significant signs of strength the past two weeks gaining against the major currencies. The question many investors are now asking themselves is will the JPY continue to make new highs against the USD. Having been in a rather consolidated mode against the greenback for months, this recent run by the Japanese currency has many investors watching it. Gold continued to trade higher yesterday and appears to be approaching the 1000.00 USD mark without resistance. The JPY and Gold have proven two of the more dynamic market movers the past two weeks and continue to merit attention.
    Welcome Back Volume! Nice To See You Again.

    On Friday strength in the equity market was seen on the back of a weaker American Currency, and a low volume day. A 15 point push upwards brings us near resistance of 1018. However, Friday, and today’s trading should be taken with a grain of salt as we end the Labor Day Holiday weekend today. Volume will return to the market place and I expect to see a continuation of the down move. However, what I expect and what the market does can be two different things. At the time of writing, S&P futures are trading around 1025. Support 996.28, 991.97, 978.51, 1003.5, 1006, 1013.1 Resistance 1018, 1028.4, 1039.5

    Today we are expecting some more strength in the gold market. I like the way it consolidated for the last over the last couple of days, higher lows. I am expecting us to hold over $1000. At the time of writing we are showing serious strength and trading over $1006. Resistance 1012.4, 1032.30! Support 1006.2 997.35, 989.95, 984.6, 971.75, 961.72

    This market is acting surprisingly strong. The Head and Shoulders formation failed but I would claim that now it’s officially broken. At this rate I expect the GBP to test the higher extremities of the trading channel, before attempting to break up and strive for 1.7042 again. We have lots of important data coming out of Britain this week, so be cautious. Support 1.6322, 1.6113, 1.5982 Resistance 1.6442, 1.6586, 1.6743, 1.7042

    As we continue to trade higher in the Euro currency, I am on the lookout for an ascending triangle. It’s been developing for about 3 months now. If we near the 1.4449 area again that might be the other reaction high we are looking for. Watch this currency as it nears these levels, as we may continue to bounce within the triangle. However, if this formation holds we could see a move all the way up to the 1.50 area! Once again, I will remind everybody that everything can change on the turn of a dime. As we close out the summer and traders return to the marketplace it will be left up to them whether or not these moves will continue or if they do not believe these price levels to be a “fair market price” considering the world economic conditions.

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