Canadian dollar holds ahead of CPI

No major news remains for the remaining of the week. Yes, Ben Bernanke is going to present his semiannual financial policy to the Senate today, but he did this in front of the House yesterday, so I do not expect anything drastic to happen. Traders might send the greenback lower just to make extra profits for the end of the week and let gbp/usd reach 1.5300 and eur/usd 1.3300 levels, but that is not for sure. The nearest resistance for eur/usd is 1.3130 and for gbp/usd 1.5250. Intermediate trend for European currencies remains upwards and for US dollar downwards. 

One event that is of interest for currency traders should be Canadian Consumer Price Index coming tomorrow at 12:30 GMT. You never know which direction will ‘the loonie’ go, but there is a clear technical bearish bias for the currency. Although fundamental expectations are bullish and traders might position for such news tomorrow you should always remember the axiom ‘buy the rumor and sell the fact’. In my opinion current expectations of economists are too optimistic and Canadian dollar might fall if those expectations are not fulfilled. In the meantime (today and till the release) Canadian dollar will probably rise moderately. Get ready for this risk event.

Pound reverses course after minutes

Yesterday was a bad day for British Pound when CPI was released. However, today the picture changed as Bank of England minutes were released and Pound rallied against all currency pairs. In most cases the move was around one hundred pips in a matter of a few minutes. I do expect this strength to continue as bullish minutes show intentions of Bank of England to increase interest rates in the nearest future. It may not do so, but as inflation picks up they will be forced to do that sooner rather than later. 

Another risk even is coming in about ten minutes when chief of Federal Reserve Ben Bernanke will give a speech on semiannual policy to the House. The bias remains bearish for the US dollar. The last thing that can move markets today is the interest rate decision from the Central Bank of Canada. Canadian dollar looks slightly bullish, particularly against Japanese Yen and possibly US dollar. However, we have to see what Ben Bernanke points out to US politicians regarding his financial policy. I am intending to buy eur/usd above 1.3155 and cad/jpy if it goes above 96.10 level with a 30 pip stop. The take profit area is around 97.00 for cad/jpy and 1.3290 for eur/usd.

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.

Which falls Euro or Pound?

As two very important events are scheduled for today one may wonder which currency will fall and which one will rise. United Kingdom has to release Forex news first. Bank of England will deliver their decision about interest rates and Bank chief should also deliver some speech about central bank’s financial policy. I am bullish towards Pound and bearish towards Euro at the moment. However, I will concentrate more on gbp/chf and gbp/nzd pairs. These look most attractive at the moment. Pound Franc pair has to clear 1.4500 level to confirm bullish bias. I buy above that price area. 

Euro, on the other had looks kind of bearish. I am looking at eur/nzd now and the technical structure of it is very bearish. So, it looks weak against commodities and today’s event might change the course for Euro against commodities, but nobody knows what will happen to eur/usd, eur/jpy and eur/gbp pairs. Euro US dollar pair seems to be sitting on support as well as gbp/usd pair. So, it alludes to the idea that the greenback might fall. I also do not rule the chance of Euro forming double bottom patterns in commodity currencies on hourly charts. Whatever happens, be sure to be on the same side as the market. 

See you tomorrow with more updates.

Federal Market Committee outcome: dollar rises

Forex news from Federal Market Committee did have significant impact yesterday. Dollar regained almost half that it lost in a matter of a few trading sessions. FED gave a very clear signal that it will end this stimulation program quite soon. No wonder stocks fell, gold and silver collapsed and dollar rose. Technically it was all clear: Pound and Euro had already made to their resistance. 

One thing is not sure and that is what would be to the downtrend in Japanese Yen. It looks like it is not over yet. Various Yen pairs are taking out their resistance level, which means that Japanese Yen will continue falling. If the momentum does not stop here we are going to see new lows in eur/usd, gbp/usd and new highs in usd/jpy pairs. 

Tomorrow Canada CPI is released. That should set the tone for Canadian dollar pairs for the upcoming week.

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.

FED fails to push dollar lower

FED interest rate decision failed to push US dollar lower and Euro rally stalled. Japanese Yen also failed to drop further and may start rising bit by bit. Tomorrow we have Non Farm Payrolls data, which will be key event of the week. It may hint as to whether Euro rally will continue or not. It can also provide new optimism for Yen bears. If that fails we may see significant correction in prices as Yen will strengthen, particularly against British pound. gbp/jpy may collapse to 134.00 level in the coming weeks and eur/jpy to 113.00. 

Eur/usd will also down. At least short term correction to 134.00 level should take place. So, let us wait to see further development in price action after NFP.