60th edition of this week in review

There were two major reports released from the United States this week. While the news was mainly focused on the new credit card oversight laws beginning to kick into effect this week and the increasingly hostile argument over health care reform, a couple of major economic reports were released of interest to the markets. One of the major reports was the Empire Manufacturing report for August, which came in at a score of 12.08, a spectacular number compared to the 3.00 which had initially been predicted. This is a very bullish sign for the dollar, since the Empire manufacturing scale has 0 as a break even point, not 50 like some of the 100 point systems. A score of 12+ is pretty darn good.

Aside from the Empire Manufacturing report, the Philadelphia Fed Survey was also released. This also showed a strong amount of good news over the prediction, as the score of 4.2 was far above the predicted -2 which economists had expected. This report can work as confirmation of a likely bullish dollar trend if the manufacturing and production meets expectations.

North, short of Alaska

Canada released two major economic reports this week, as well. The consumer price index (CPI) reports for July were released. The month to month showed a drop of -0.3% in consumer prices, just a tad more than the -0.2% that had been predicted. This same difference is also reflected in the year to year numbers, which show a -0.9% contraction as opposed to the -0.8% initially predicted.

Over the pond to the Isles

Britain released several major economic reports this week. First, the consumer price index (CPI) reports were released for the month of July. Month on month prices actually remained steady at 0.0% as opposed to the -0.3% that had been expected. These numbers were reflected in the year to year as the CPI came in at 1.8% increase in inflation as opposed to 1.5%.

Britain also released a couple of retail sales reports for July. Month on month sales increased 0.4%, exactly what economists predicted, while year on year retail sales were higher than previously thought, coming in at a 3.3% increase instead of a 2.7%.

In addition to these four reports, the Bank of England also released its minutes for public review.

Onto the Mainland

There were a few interesting reports to come out of the European Union, as well. Fist of all, the Euro-Zone trade balance was released for the month of June and showed a trade surplus of 4.6 billion Euro. This was a pretty good number, and shows that EU products are still in high demand.

Second, there were a couple of ZEW surveys released. The Euro-Zone ZEW Survey for August showed an economic sentiment of 54.9, way above the 43.0 that had been predicted. The same can be seen in the German ZEW Survey which came in at 56.1, way above the 45.0 that had been predicted. Almost with a certainty last week’s news about Germany and France technically pulling out of recession for the month of July created this huge impact and explosion in economic optimism.

A Couple from the Swiss

The Swiss released two major economic reports this month. First, the official retail sales report is in for June. May’s report had brought the unpleasant surprise of an unexpected

-1.4% contraction, but June made up for at least a chunk of it with a 0.9% increase. In addition to the good news about recovering retail sales, the Swiss Trade Balance for July showed a trade surplus of 2.35 CHF. While Switzerland may have only released a couple of reports, they were at least good news.

Across the continent to Japan

Japan released their Gross Domestic Product Annualized report for the second quarter, coming out with a 3.7% growth as opposed to the 3.9% predicted, but it’s still a sign of possibly some positive growth beginning to take place.

A blip from the Aussies

The Federal Reserve Bank of Australia released the minutes from their meeting this week to the public, although there was little information of any surprise.

In Conclusion

There wasn’t a large amount of news this week, but by far and away the majority of it was relatively good news for a world economy that needs all the extra buffering and stability it can get to pull through the greatest financial shock in decades. Hopefully the news will continue to be good, and traders who do their homework will be able to profit on some of the upswings to come.

Thanks for reading and as always, good trading!

Market Sentiment

In this section, we will try to gain further insight into the Forex market. We will do this by looking at a poll of market participates and what I call global strength.

Currency Poll

Polls are used to measure the sentiment of market participants. The results are used as a contrarian indicator because they express optimism at market tops and pessimism at market bottoms. Therefore, a high percentage of votes can be used as an indication that the market will do the opposite.

Our poll is only concerned with how the four major pairs will close the next week: up, down, or even. The results are below.

Poll Results:

EUR/USD

Close Up: 53%

Close Down: 43%

Close Even: 4%

_______________

USD/JPY

Close UP: 49%

Close Down: 38%

Close Even: 13%

_______________

GBP/USD

Close UP: 49%

Close Down: 46%

Close Even: 5%

_______________

USD/CHF

Close UP: 44%

Close Down: 44%

Close Even: 11%

-

Global Strength

Global strength looks at the individual currencies to determine how they are doing globally on a year to date basis. My hope is that this will give you a view of the market typically not view, thereby; giving you an edge. We will look at the following currencies: USD, EUR, GBP, CHF, JPY, CAD, AUD, and the NZD. We will compare each currency separately and then we will compare them all together. The currencies are shown in number of pips up or down on a year to date basis across the pairs shown. (Note: Just click on the picture to view.)

USD

EUR

JPY

GBP

CHF

CAD

AUD

NZD

Global Strength

Accumulative Global Strength

Good trading,

Jason Fielder

[/hidepost]< ><–>

Will the USD/CHF reverse?

Here’s your free trading video for: August 23, 2009

Want To Receive More Free Forex Trading Videos?

Join our “Forex Impact Video Newsletter” and receive currency trading tips just like this every day to your inbox.
Just fill out the form below to subscribe:

In all serious, we hate spam as much as you do. Your information will not be used for any purpose other than to send you our free video newsletter.

Forex Profit Alert: August 23, 2009

There were no gap trades across the four major pairs when the market opened this week.

The USD/JPY has a short pending pivot trade and a long pending pivot trade. The EUR/USD has a pending short and long trade. The GBP/USD has a pending long trade. There is a pending long trade in the USD/CHF.  

There are no significant news announcements being released during this next session. Therefore, there are no mover trade’s for this next session.

Members login to view this content. (Not a member? Join today!)