Yen and Dollar to strengthen next week?

The longer term picture for Japanese Yen and US dollar are quite bullish. You hopefully noticed that the most recent strength in US dollar index was basically due to the fact that Yen was weak. You could actually see dollar weakening in most pairs and strengthening on the Yen and dollar index strengthening at the same time. This has been changing lately. You can see how dollar weakened this weak across most currency pairs, not necessarily Yen, and dollar index collapsed. Anyway, we have very rich week upcoming. Major economies will announce their interest rates decision: US, Europe and UK. I do hope to see some ‘fireworks’. 

On the one hand aud/usd and nzd/usd displaying clear technical bullish patterns. On the other US dollar index is close to its’ support. What does that mean? Being a technician I am ready to go either way. Commodity currencies look bullish against most other currency pairs too: Euro, British Pound and Swiss Franc. I am thinking about going long in aud/usd and shorting gbp/aud, gbp/nzd as well as eur/nzd and eur/aud. It looks like major time for correction in these pairs has come. And the timing for that seems to strike next week. Get ready and do your own analysis over the weekend.

Producer Price Index and Michigan Confidence

Hi, fellow traders. This is the last day of the week and we might expect some volatility as it often gets pretty wild on Fridays. Dollar has been beaten recently and today’s data will either save it for the time being on the fall will accelerate. Nothing interesting happened during European session and traders are eagerly waiting for news from US to provide some stimulus and momentum for price action in various currency pairs. What events are scheduled in the next few hours?

One is US Producer Price Index, which is data of medium importance, but can still move markets if data comes in as surprise. That is released at 12:30 GMT. Another is Michigan Confidence and is marked as of high importance. I would not really agree to that, but market does react to it and past experiences show that it can create big moves in the market. That is to be released at 13:55 GMT. My personal preferences go to longing Euro against British Pound, Australian Dollar and New Zealand dollar as well as shorting US dollar. I particularly expect continuation of an uptrend in eur/gbp pair. It has been trying to push through 0.8600 level for a long time and now it holds above it. Let us see if Euro is able to make new highs today.

Friday fx news: job data

Friday has come and it promises to be very wild indeed. We have Non Farm payrolls and unemployment rate from United States at 12:30 GMT, as well as net change in employment and unemployment rate from Canada at exactly the same time. This data usually creates very volatile moves in the markets. I expect today will not be an exception to the rule. I hope you saw what happened yesterday when both UK and ECB released interest rate decisions with the comments that followed. Traders lost their heads by trying to short British Pound and Euro. Swiss Franc collapsed like a rock into the water. Remember most European currencies usually move in unison. Franc seems to be the weakest ‘guy’. 

What about other currencies. I assume that US dollar and Canadian dollar will move in unison today too. That’s what usually happens. Either both fall on the news or they both rise. Have this in mind when you place your trades. Gold in most cases falls when Non Farm payrolls comes out. I do not know why, but that is my experience. So, choose appropriate level to enter a short order in gold and if market goes down, so will you. Do not forget to set your stop and take profit orders though. So, a few hours left till the news. Let’s see what happens.

Markets are preparing for FED decisions

We have a very important event today. It may change current market trends across the board. It is FED rate decision. If they are going to signal an end to the monetary easing process we are going to have turmoil in financial markets all over the world. If you can afford I would recommend watching what happens in the markets around 18.00-19.00 GMT. This is the time when the release comes out and Ben Bernanke conference in Washington takes place. 

From technical perspective Japanese Yen should rise. Dollar is neutral with small bullish bias. Pound may rise too. Commodity currencies look much stronger than a week before.

US dollar under pressure

Yesterday delivered a terrible blow to the US dollar. Extremely worse than expected ISM Manufacturing numbers caused the greenback to collapse across the board. It is very likely that the trend will continue.

Bank of Australia left interest rates unchanged and this gives hope that the aussie will regain its' strength and change the intermediate trend from downwards to upwards. Today we have Australia's Gross domestic product numbers coming out at 01:30 GMT and if they are good this will spike a rally in most aussie crosses as well as in aud/usd.

Although aud/usd retraced today, it still looks bullish and ready to advance. I can see technical accumulation taking place. Let us wait and see what GDP number come out. See you tomorrow.