Forex news from Europe and Canada

We have two very important pieces of news ahead of us today. The first piece is coming from Europe and that is German Consumer Price Index data (CPI). Europe has been showing very poor results economic results lately and this inflation number might cause strong decline in Euro pairs. If the news is worse than expected Euro weakness will definitely spill to Swiss Franc pairs too. I am looking for possibilities to short eur/gbp if the market starts moving the pair down. The release is scheduled at 12:00 GMT. 

The second piece of news comes from Canada and that is Canada Gross Domestic Product. Expectations are weaker than last month, but as veteran traders say: ‘buy the rumor and sell the fact’. We might reverse the saying. The number might be much better than expected. Then, CAD would rise. I am currently looking at aud/cad currency pair and see that it has formed a nice bearish technical structure. It means I am considering selling the pair if the news pushes it below current support price level of 0.9675. However, Canadian dollar looks a bit weak against other European currencies. So, I am going to place a very small order for selling. 

Let’s wait and see what the future brings.

GDP release breaks British Pound

I did not mark today’s Great Britain release on its’ Gross Domestic Product by mistake. You see I follow dailyfx calendar and they have statistics on which release has the highest impact on markets. I usually skip those that are of medium importance. However, it turned out that they marked today’s release as of medium importance and this fooled me. I actually had a long in gbp/chf from yesterday, which was not out right when the news hit the wire. It’s no wonder that Pound fell across the board. 

Open 15 minute charts in various British Pound pairs to see what happened. I follow 7 Pound denominated pairs and I can clearly see that ‘the cable’ (British Pound) was beaten in all of them. The biggest drop was probably in gbp/jpy. It collapsed around 70 pips. The second best pair to trade the news would have been eur/gbp, which has much higher pip value than most other pairs. It is not very volatile, but today its’ behavior was extraordinary. It rose around 40 pips, which would probably be equal to gbp/jpy fall or even worse. I am still positive on some Pound pairs, but they have to clear their technical resistance levels before real bullish price action is confirmed. 

I will expand more on this in tomorrow’s update.

GB news fails to lift Pound

British Pound started going down a few hours before very important Bank of England Stability Report was released. It stabilized minutes before the release and now after the release all Pound pairs seem to be consolidating. Pound is generally weak, especially against New Zealand, Australian dollar and US dollar. The only currency that it seems to be strong against is Swiss Franc. 

I currently have longs in gbp/chf pair and planning to keep it till 1.4800 level. I expect the area to be reached by the end of the week. The pair seems to have formed double bottom pattern and is now trying to break 1.4500 resistance level. If news from Germany tomorrow and Friday is more negative than positive this resistance will not hold and the above mentioned take profit target will be reached as I have planned. 

I have no real ideas why commodity currencies are rallying, but it could be connected with some stability coming back from China. In my opinion, this counter trend move in Aussie and Kiwi pairs will be short lived and we will have good opportunities to sell rallies and go in the direction of the main downward trend. 

You can see how individual currencies doing here: http://seekingalpha.com/data/currencies

Key Forex news this week

There are a few important pieces of Forex news this week that a trader can hopefully capitalize on. I say hopefully, because not all events create significant volatility and moves. However, a few ones this week should be of interest to most speculators. Let us briefly mention them. 

Wednesday

Bank of England Financial Stability Report (coming at 9:30 GMT). This one should move all pound pairs. I particularly expect gbp/chf break upwards and the outcome for gbp/jpy and gbp/cad one way or another. 

Thursday

EU – German unemployment change (coming at 7:55 GMT). Euro may slip lower in various Euro denominated pairs. 

JPY – Japan National Consumer Price Index (coming at 23:30 GMT). Yen may start a fresh uptrend after a long collapse. Watch particularly aud/jpy, nzd/jpy and cad/jpy as commodity currencies seem to be very weak. 

Friday

EU – German Consumer Price Index (coming at 12:00 GMT). The number is expected better than previous month. Imagine what happens if it is actually worse. It would send Euro down across the board. 

CAD – Canada Gross Domestic Product (coming at 12:30 GMT). One thing is clear: either Canadian dollar will strengthen and reverse or we might see a new downtrend develop as Canadian dollar is near its’ yearly lows. 

I will post an update after tomorrow news from Britain comes. See you then.

Canada CPI mark bottom in CAD?

Canada CPI is coming in few minutes. What do we expect? A lot of Canadian dollar pairs are showing possible bottoms. If you take gbp/cad or eur/cad as an example we can see clear resistance levels that both Euro and Pound were not able to break in a few years time. However, I do not rule the chance that this will change. I hope you see what happens in commodities. Gold has lost ground below ‘its’ feet and most other commodities are falling too. 

The same can be said about commodity currencies. Australian dollar as well as New Zealand dollar have been terribly falling recently. So, it is very probable that ‘loonie’ will fall too. Do not forget that it is highly correlated to oil and look what is happening to oil.