Many American figures are due today, so lots of action is awaiting us. Will the dollar continue to weaken? Let’s see what’s up for today.

EUR/USD hasn’t broken the critical 1.3850 level. I still claim that the current rise is temporary before the fall. GBP/USD made it above the critical line of 1.5350, but has a hard time holding to its gains. OK, let’s start the review:

After the Bank of Japan introduces more easing measures, it will publish the BOJ Monthly Report which might provide more overview on the Japanese economy.

In Europe, the Current Account is expected to rise from 1.9 to 2.9 billion. While this is good news for the Euro, it will probably not take it over the top – over 1.3850. Later in Europe, Trade Balance is predicted to show a smaller surplus – 5.1 billion.

For more, read the EUR/USD forecast and Casey Stubbs’ latest analysis.

In Switzerland, quarterly industrial production is expected to rise by 5.1%, after a 3.4% rise last time. This will probably boost the Swissy. Later, the Swiss ZEW Economic Expectations figure is expected to stay around last month’s number – 52.5 points.

In Britain, Public Sector Net Borrowing is expected to jump from 4.3 to 14.6 billion, weighing on the Pound. Later, CBI Industrial Order Expectations are predicted to edge up from -36 to -33 points,

External BOE MPC Member Andrew Sentance will make a public appearance and could also move the Pound. For more, read the GBP/USD forecast.

Canadian Foreign Securities Purchases were better than expected in previous months, with over 11 billion last month. This shows confidence in the Canadian economy. They’re now predicted to drop to 7.75 billion.

The Canadian dollar is slowly getting closer to parity. For more on the loonie, read the USD/CAD forecast.

Many US figures

After producer prices fell and erased a significant portion of last month’s rises, consumer prices aren’t expected to pick up. Both CPI and Core CPI are expected to rise by 0.1% after small moves last month. A significant rise is necessary for a rate hike.

Unemployment Claims are dropping steadily since they reached a peak of 496K. Another drop, from 462K to 456K is predicted. The Philly Fed Manufacturing Index is now expected to remain unchanged at 17.6. Whatever number is printed, the markets will shake around this event as well.

Also in the US, Current Account will probably show a deficit of 120 billion, more than last month’s figure. The CB Leading Index is expected to rise by 0.1%, less than last month’s rise of 0.3%.

That’s it for today. Happy forex trading!

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The number of unemployed Brits fell dramatically – this unexpected improvement sent the Pound higher, sent the Pound above a major resistance line. Will this hold? A big test for GBP/USD – it could mark a long term turnaround.

Claimant Count Change is the earliest and most important employment indicator in Britain. It reflects the number of unemployed people in the UK. After two months of drops, last month’s figure showed a big rise of 23,500 in the number of unemployed people. So, the first surprise for today was that last month’s number was revised to a rise of only 5,300. This is far better. And the big surprise is with the fresh figures:

A drop of 32,300 people was reported in February. This is the biggest drop in unemployment since 1997, and a huge surprise. The unemployment rate (for January) remained unchanged at 7.8%, as expected.

GBP/USD leaps

The British Pound already enjoyed the US dollar’s weakness to rise above 1.5220. As aforementioned, the big hurdle was 1.5350. And this line was just broken! GBP/USD now trades at 1.5360. It’s important to stress that this move needs to be confirmed. A breach of 10 pips is still limited, and it’s too early. We’ll see how the Pound trades through the New York session, which opens earlier due to early DST.

If this break is confirmed, it’s a significant move for GBP/USD. 1.5350 was an important support and resistance line in the past, and also held the Pound back in mid-February. After this line was broken to the downside, GBP/USD collapsed very quickly down to 1.4780.

Long term change?

These great and very surprising employment figures could mean a full recovery, and a shift in the long-term bearish trend.

The next line of resistance is 1.5520, a place where the Pound struggled before falling down. Higher, 1.5833 is a major resistance line that limited the pair’s attempts to rise. It also served as a support line beforehand.

If the break isn’t confirmed, 1.5220 serves as initial support, followed by 1.4870 and then 1.4770. Also note the round number of 1.50, but in the recent days it hasn’t been a significant line.

No New QE

At the same time, the meeting minutes from the last rate decision were released. The meeting minutes showed that all 9 members of the MPC voted to leave the Quantitative Easing program unchanged at 200 billion pounds. The money already ran out of this program, that spills pounds into the markets, and hurts the Pound.

Mervyn King didn’t rule out injecting fresh money into the program, but time passes by and this doesn’t happen. This recovery in jobs makes the chance of this happening very slim.

I’ll keep following the moves of Pound.

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The British Pound enjoyed the mild FOMC Statement in the US to break above a minor resistance line and approach a much bigger one. Events ahead will probably stop it. Update.

GBP/USD broke last week’s high of 1.5220 and is now trading above 1.5250. This is the highest level in two and a half weeks, the highest in March so far. 1.5220 is a small technical barrier. A bigger hurdle is ahead:

The big hurdle is 1.5350. This line worked as a resistance and support line in May 2009, and supported the pair in mid February, before it made a big collapse downwards. Around 1.5350 there could be many stop orders that will slow the Pound’s movement and possibly send it back down.

As aforementioned, the Pound is enjoying the unchanged statement from the Federal Reserve. The FOMC repeated the wording that the interest rate will probably remain low for an extended period of time. Yet again, Thomas Hoeing, one of the members, voted to remove this morning. He remained the only one. So, the dollar bulls retreated again, and this is what pushes the Pound higher.

Britain is expecting two major releases. Employment figures consist of the Claimant Count Charge that disappointed with a rise last month. Another rise in the number of unemployed people is expected now. The second event is the MPC Meeting Minutes, which will show what the bankers think about future policy, especially regarding the QE program. These two events could sent the Pound back down.

Below 1.5220, the next serious line of support appears at 1.4870, followed by 1.4770, which supported the Pound when it collapsed. Above 1.5350, 1.5520 is a minor line, followed by 1.5833.

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Another busy day expects forex traders: a rate decision in Japan, employment figures in Britain and Ben Bernanke for dessert are among the events today. Let’s see what’s on the menu.

The most popular pair, EUR/USD, recently enjoyed some gains, but didn’t breach significant technical levels. I see it as a rise before the fall. What do you think? Anyway, let’s start the review:

Japan provides a strong start to the day with a rate decision. The Overnight Call Rate isn’t expected to move from 0.1%. It will be interesting to see how the Monetary Policy Statement will be: the wording will shake the yen. Afterwards, the BOJ will hold a press conference, and this will also shake the yen.

At the end of the day, Japan’s BSI Manufacturing Index is expected to rise to 15.3 points.

Busy day in Britain today: the Claimant Count Change is expected to show a rise of 8,700 jobs after a disappointing rise of 23,500 jobs last time. The Unemployment Rate, which relates to the month of January, is expected to remain unchanged at 7.8%.

At the same time, the MPC Meeting Minutes will be released. They’re expected to show if any of the bankers voted to expand the Quantitative Easing program, after 200 billion pounds were used.

For the Pound’s technical levels, read the GBP/USD forecast.

In Europe, the only event due today is a speech by Axel Weber, the leading candidate to replace Trichet as the president of the ECB. For more on the Euro, read the EUR/USD forecast and Casey Stubbs’ latest analysis.

In Canada, Wholesale Sales are expected to rise by 0.6%, following a rise of 0.7% last month. The Canadian dollar holds on to its gains at the moment. For more, read the USD/CAD forecast.

In the US, producer prices will move the dollar. After a jump of 1.4%, PPI is expected to drop by 0.2% this time, indicating that no inflation is in the horizon. Also Core PPI is predicted to remain mild – a small rise of 0.1%.

One day after the rate decision, Ben Bernanke testify alongside Paul Volcker, a former head of the Federal Reserve, about the the central bank’s powers and the meaning for monetary policy. While the agenda isn’t rates, Bernanke can always shake the markets.

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Looking at the hourly charts, EUR/USD is trading in an uptrend channel since the end of February. The near past tells us that the drop is near. The charts can speak for themselves.

EUR/USD bounced off the bottom line of 1.3423 three times at the end of February and the beginning of March. This line was significant for the Euro in the past, back in the spring of 2009.

After going through a downtrend channel, it changed direction and EUR/USD showed bullish signs, but still within the range.. EUR/USD began trading in a clear channel, marked on the graph. There are three consecutive higher bottoms and two consecutive higher peaks.

But similar to the strong support line at 1.3423 that prevented a fall, there’s a strong resistance line from above, that should hold strong against this uptrend. This resistance line is at 1.3850. So, this uptrend will soon encounter a tough barrier.

If EUR/USD fails to breach this barrier, the uptrend support will close on the pair from the bottom, and it may suffer a big drop. Let’s see what happened in recent weeks, with this chart:

In this daily chart, we can easily see that the each time that the Euro edged up in an uptrend channel, it was followed by a big drop – a drop that broke below strong support lines. Are we going to see that kind of action now?

There are many major American releases this week that will shake the Euro more than European releases. The critical level is 1.3850 – if EUR/USD reaches this level and doesn’t break, the direction will probably be downhill.

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The week opened with dollar strength on a rather light calendar. Today is already very bust: major releases in Europe are followed by the rate decision in the US: will Bernanke send new signals? Here’s the daily outlook.

The strong volatility seen on Monday’s trading was also influenced by the different time difference between Europe and North America. This will accompany us for two more weeks.

Australia’s Monetary Policy Meeting Minutes are released at the beginning of the day. We’ll see how the members see the next decisions: more rate hikes? A pause?

On the other side of the day, the MI Leading Index will give an overview of the Australian’s economy. For more on the Aussie, read the AUD/USD forecast.

In Switzerland, the SECO Economic Forecasts might shake the currency after it strengthened significantly yesterday. An intervention by the central bank can happen anytime.

In Germany, the ZEW Economic Sentiment is expected to drop once again, from 45.1 to 43.5, continuing the trend in the past months. Also the all-European sentiment is released at the same time, but it’s considered less accurate than the German one.

At the same time, we’ll get a look at Europe’s inflation: CPI is expected to confirm the initial read of a year-over-year rise of 0.9%. Core CPI will probably be confirmed at 0.8%.

For more on the Euro, read the EUR/USD forecast, and Casey Stubbs’ latest analysis.

In Britain, CB Leading Index will probably edge up, following last month’s small rise. Later in Britain, MPC member Charles Bean will make a public appearance, the first out of a long list of speakers this week.

Read more on the Pound at the GBP/USD forecast.

In Canada, the quarterly Labor Productivity is expected to rise by 0.7% after a drop of 0.3% last quarter. Remember that a lower number is better for the currency.

Also in Canada, Manufacturing Sales are predicted to rise by 0.7%, less than last month’s 1.6% rise. For more on the loonie, struggling around 1.02, read the USD/CAD forecast.

In the US, Building Permits are expected tick down from 620K to 610K. Also in the same sector, Housing Starts are predicted to edge down as well – from 590K to 570K.

Import Prices are expected to drop by 0.1%, after jumping by 1.4% last month. Just before Ben Bernanke takes the stage, Treasury Secretary Timothy Geithner will speak as well – about the budget. This may move currencies as well.

At 18:15 GMT, an hour earlier than usual for Europeans, a new Federal Funds rate will be announced in the US. It isn’t expected to move from the rock bottom figure of 0.25%. As usual, every word of the FOMC Statement will be closely analyzed and will shake the markets before and after the release, possibly for many hours.

Ben Bernanke made a small move by raising the discount rate. Another member wants to remove the words “extended period of time” concerning the regular rate. Will we see a different statement this time?

Just before the end of the day, Japan’s Tertiary Industry Activity is due. It’s expected to rise by 1.3%, hours before the Japanese rate decision in the following day.

That’s it. Happy forex trading!

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After the dollar retreated last week, Monday opens with many US releases. TIC Long-Term Purchases will probably shake the market, among other events. Let’s see what’s up for today:

In Australia, a speech by Malcolm Edey, RBA assistant governor, can move the markets very early in the week. This speech comes a day before the meeting minutes from the latest decision are released.

For more on the Aussie, read the AUD/USD forecast.

In Britain, the Rightmove HPI is expected to show a moderate rise in house prices, possible pushing the Pound and helping its recovery. See more events in the GBP/USD forecast.

Swiss PPI is expected to rise by 0.2%, similar to last month’s rise. The Swiss National Bank doesn’t deny intervention, but has done less recently.

In Europe, the quarterly Employment Change figure is expected to drop again. As this is a late figure, the impact is limited. For more on the Euro, read the EUR/USD forecast and Casey Stubbs’ latest analysis.

Moving to the US, already after a shift to daylight savings time, the Empire State Manufacturing Index will start the day. It’s expected to drop from 24.9 to 21.9 points.

The more important event is the release of TIC Long-Term Purchases, which are predicted to drop to 37 billion. This number was better than expected last month and could surprise again, boosting the dollar.

Also n the US: Capacity Utilization Rate is expected to remain unchanged at 72.6% and Industrial Production will probably rise by0.1% after a 0.9% jump last time.

That’s it for today. Happy forex trading!

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In the US and Canada it’s already summer – at least according to their clocks – they’ve just moved to daylight saving time. European countries make this shift only in two weeks from now. This difference has an impact on forex trading. Let’s see how.

The London and New York sessions are the most intensive and usually the most volatile in the forex market. Both cities are major global financial centers. The London session is between 8:00 to 17:00 GMT and the New York session is between 13:00 to 22:00 GMT.

During four hours, between 13:00 to 17:00 GMT, the sessions overlap. The European afternoon / American morning is the busiest time. During these four hours, major figures are released in the US: most of them at 13:30 and 15:00 GMT.

After the shift of the clock in the US and Canada, as seen in Forex Factory’s calendar, the overlapping period is increased from 4 to 5 hours – from 12:00 to 17:00 GMT. This means that the major action will start earlier for Europeans / will end later for Americans. This extra hour of high volume and high volatility is of high importance for day traders. More action.

Special impact

This two week period of high volatility will probably have a stronger impact on one specific pair: GBP/USD. Most British economic indicators are released at 9:30 GMT. The DST shift makes the British releases significantly closer to the American ones, leaving less time for traders and analysts to digest and react to British news before American ones come in. This will probably lead to more volatility in GBP/USD.

European releases are scattered throughout the European morning, but there are cases in which important figures are released at 10:00 GMT, making them closer to American releases. The best example is this Tuesday, when the ZEW economic sentiment and European CPI are released at 10:00 GMT, and American Housing Starts and Building Permits are released at 12:30 GMT. This smaller gap between the releases, all of them of high importance, will provide more action than usual to EUR/USD.

Another currency to note in this context is the Canadian dollar. Also Canada’s clock was moved. In Canada, some publications are made earlier than in the US: at 12:00 GMT. Now it becomes 11:00 GMT. This Friday, Canadian CPI will be released at this time, close to European and British events, making the Canadian crosses more volatile.

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The dollar retreated in the past week on most fronts. Was it a temporary move? The upcoming week provides lots of American events, with Ben Bernanke’s rate decision being the highlight. Here’s an outlook for this week’s market-moving events.

In the forex industry, the proposed regulations by the CFTC are again in the news, as their decision is getting close. Also Introducing Brokers joined the fight against these proposals. We’ll probably hear more about it in the upcoming week. OK, let’s look at the market:

1. American TIC Long-Term Purchases: Published on Monday at 13:00 GMT. Treasury International Capital Long Term Purchases represent the difference between foreign investments in the US and US investments abroad, and actually shows foreign confidence in the US economy. The figure leaped to 126 billion two months ago, but was then cut to half. This time, it’s expected to stand at 38 billion.
2. German ZEW Economic Sentiment: Published on Tuesday at 10:00 GMT. This is a highly regarded survey that is a good indicator of the economy. It has fallen in the past months, hurting the Euro each time. A further drop from 45.1 to 43.3 points is expected this time.
3. Housing figures: Published on Tuesday at 12:30 GMT. The housing sector had a big “contribution” to the global crisis and is now showing a small recovery. Building Permits dropped to 620K last time, and are now expected to tick down to 619K. Also note a very related figure – Housing Starts, published at the same time. They’re expected to drop from 590K to 570K.
4. American rate decision: Published on Tuesday at 18:15 GMT. Ben Bernanke already made his move out of the usual cycle – the “mini rate hike” of the discount rate shocked the markets and signaled that the Federal Reserve will probably be more aggressive than other central banks. Will they finally drop the wording “an extended period of time” for the interest rate? As usual, the FOMC Statement will be in the limelight, as the Federal Funds Rate isn’t expected to move. Note that the statement can be very confusing.
5. Japanese rate decision: Published on Wednesday morning. Also in Japan, no change is expected in the rock bottomOvernight Call Rate, standing at 0.1%. The statement accompanying the decision will be carefully read, and the tone voiced at the press conference has the utmost importance for the Japanese yen.
6. British employment data: Published on Wednesday at 9:30 GMT. The number of unemployed Brits rose last month after two good months, as reflected in the Claimant Count Change. Another rise, of 8700 people, is expected this time. The unemployment rate, which relates to the previous month, is expected to follow the same line and rise from 7.8% to 7.9%.
7. American PPI: Published on Wednesday at 12:30 GMT. The first inflation figure of the week is about producer prices, and serves a warm up for the consumer prices. After a jump of 1.4% last month, a drop of 0.2% is predicted this time. Note that Core PPI is expected to edge up by 0.1%.
8. American CPI: Published on Thursday at 12:30 GMT. A rise in consumer prices is the key for future rate hikes. Last month the regular small changes: a rise of 0.2% in CPI and a drop of 0.1% in Core CPI. There aren’t any expectations this time – both indicators are expected to rise by 0.1%. This will be a very shaky time in the markets, as jobless claims are released at the same time.
9. American Unemployment Claims: Published on Thursday at 12:30 GMT. After jumping to almost 500K, jobless claims are slowly dropping, reaching 462K last week. Another drop to 456K is predicted now. A drop below 430K will boost the dollar. The rise in jobless claims was clearly reflected in the recent Non-Farm Payrolls.
10. American Philly Fed Manufacturing Index: Published on Thursday at 14:00 GMT. This important survey has been positive in the past 7 months, indicating improving economic conditions. After exceeding expectations and reaching 17.6, it’s predicted to soften to 17.3 points this time.

That’s it for the major events this week. I’ll later publish specific currency outlooks.

Further reading:

• For the Euro, read the EUR USD Forecast.
• For the Pound, look into the GBP/USD forecast.
• For the Australian dollar, read the AUD/USD forecast.
• For USD/CAD, check out the Canadian dollar forecast.

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EUR/USD made some gains, enjoying greenback weakness. The upcoming week contains 7 events that will move the Euro. Here’s an outlook for these events and an updated technical analysis for EUR/USD.

EUR/USD chart with support and resistance lines marked. Click to enlarge:

In the middle of the week, I wrote about bullish signs for the Euro within the range. Indeed, EUR/USD closed higher, but didn’t break any major levels. Will it stay in the range? Break? Let’s start the review. The technical analysis will follow:

1. Employment Change: Published on Monday at 10:00 GMT. This is a very late figure – released almost a quarter after the the quarter ends. It still has some impact on the Euro. 5 consecutive quarters of job losses will probably be followed by a sixth one.
2. ZEW Economic Sentiment: Published on Tuesday at 10:00 GMT. This major economic indicator deteriorate rapidly in the past 5 months, hurting the Euro each time. The German version of this survey has a stronger impact. It’s expected to drop once again, from 45.1 to 43.3 points. The all-European number is expected to remain almost unchanged at 40.1 points.
3. CPI: Published on Tuesday at 10:00 GMT and overshadowed by ZEW. Prices are very stable in Europe, and this doesn’t assist the Euro at all. According to the initial, flash release, year-over-year consumer prices stand at 0.9%. Core CPI stands at 0.8%. Both numbers will probably be confirmed. The release of the ZEW survey and the CPI at the same time means a volatile markets.
4. Axel Weber talks: Begins talking on Wednesday at 10:10 GMT. Weber is the leading candidate to replace Jean-Claude Trichet as the president of the ECB. The German media already began a campaign for him. So, his words become increasingly important. Hi speech in Bonn will probably shake the Euro.
5. Current Account: Published on Thursday at 9:00 GMT. Europe’s current account provides a point of light – in the past two months Europe enjoys a surplus in the overall difference between exports and imports of services, incomes and goods. The surplus is expected to rise from 1.9 to 2.9 billion. The figure relates to February.
6. Trade Balance: Published on Thursday at 10:00 GMT. The trade balance is the goods share in the current account. This release refers to January, so it’s a late figure – less impact. Europe’s surplus is expected to drop from 7 to 5 billion.
7. German PPI: Published on Friday at 7:00 GMT. After a strong and surprising rise of 0.8% last month (double the expectations), Germany’s producer prices are expected to rise by only 0.1% this time. This is the last inflation indicator for this week.

EUR/USD Technical Analysis

The Euro began the week by reaching down to the 1.3530 support line, but soon made a move upwards, breaking through 1.3680 and temporarily breaking 1.3780 before closing at 1.3768.

Some of the lines were added on last week’s outlook. The current range is between 1.3680 to 1.3780. Note that these are minor lines. Also 1.3530 is a minor support line.

The Euro is bound between two major lines – 1.3423 which was a bottom many months ago and just tested recently and on the upside. A break of these lines will indicate a long term trend for the pair.

Above 1.3850, 1.40 and 1.42 are additional resistance lines. Below, 1.3080 is a support line in the distance.

I am now neutral on EUR/USD.

It seems that the Greek crisis, although still not resolved, is fading away from the eyes of forex traders. Also the technical indicate stability – 1.3423 wasn’t broken. We’ll probably see more range trading.

This pair receives many interesting articles on the web. Here are my favorites:

• Larry Greenberg examines the pause in the dollar’s moves and looks at the big picture.
• Casey Stubbs describes the narrow range with his 4 hour charts.
• Dan Cook at TheLFB looks at the technicals.
• The Geek Knows reviews the week and looks forward.

Further reading:

• For a broad view of all the week’s major event in all currencies, read the forex weekly outlook.
• For GBP/USD, look into the GBP/USD forecast.
• For the Australian dollar, read the AUD/USD forecast.
• For USD/CAD, check out the Canadian dollar forecast.

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