Waiting for US CPI data

Europe and Great Britain CPI data has been released. Although British CPI was slightly lower than expected British Pound fell across the board, particularly against commodity currencies. It is consolidating now, but in the wake of tomorrow’s data (Bank of England minutes) we can expect Pound weakness to continue. This week is full of CPI releases. Markets are now positioning themselves for US CPI that is to be released at 12:30 GMT today. From current technical action you can see that traders are bearish towards US dollar and are expecting negative data from United States. 

One can even see sort of a rounding base in eur/usd after correcting from 1.3200 highs that was reached after Ben Bernanke’s speech regarding economy, interest rates and ending of stimulation process. Since the sentiment for US dollar is bearish the data has to be much better than expected in order to stop the greenback from falling. If it simply meets the expectations you should not be surprised to see dollar continuing on its’ downtrend path. This should also be reflected in eur/gbp rise and gbp/chf fall. There is pretty good correlation among the above mentioned pairs. I keep on selling Pound and US dollar at the moment.

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.

Purchasing Manager Index pushes Pound up

There has been some Forex data of intermediate importance during European session and the one that particularly influenced moves in fx market was GBP Purchasing Manager Index. It made British Pound run up across the board. The data came out better than expected and this gives extra bullishness for the cable before key event on Thursday when the Bank of England releases its' interest rate decision. This strength may continue in eur/gbp and gbp/jpy. I currently am in both of the pairs. gbp/usd will probably hit resistance at 1.5300 level and only Thursday will determine where the pair will go.

Euro up and Loonie down

Euro had mixed reactions on a little bit better than expected CPI data from Europe. What will happen to European currency next week is hard to tell. However, looking at eur/usd price action you might guess that 1.3150 level is probably in the cards. At least, that's what I am getting ready for Monday and Tuesday. It is not quite clear whether eur/gbp will follow the price action. Time will show. I will concentrate on eur/usd for now.

Now, loonie went down against most currencies. The data was better than expected. Unfortunately, or should I say fortunately Canadian dollar went down. usd/cad and eur/cad are trying to make new highs and found it difficult to do for some time now. Next week could be the breaking point. I will post key events for the coming week tomorrow. One thing is clear, it will be key for commodity currencies. See you tomorrow.

News from Canada can cause loonie to collapse

Hi, folks. We are having quite a lot of important releases this week. Today is very significant, because Bank of Canada will announce its' interest rate decision. As you may see most of Canadian dollar pairs have been in pretty ugly ranges. Some tried to make new highs: such as usd/cad and gbp/cad, but failed. I guess today will be the day  when the loonie will collapse. Of course, this is just my speculation, but do not forget that interest rate decisions are the most important fundamental events in Forex market. So, be sure to watch what happens at 14.00 GMT today.

I am also expecting Euro to go down against US dollar and finally breach 1.2800 level and then go to last year low of around 1.2000. It may take some time. Friday may be key for Euro as we have Euro zone consumer price index coming out. That should send eur/usd and eur/gbp to their lows. I am already short eur/gbp and if Friday sees a breakout lower I will add to my position in the pair and likewise in Euro dollar short. Ok, enough for today. Hope to update my blog soon.