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.

Most important Forex news this week

Hi, it is Monday and time to look at the most important Forex news this week so that we would be ready to take action and trade them profitably. I expect most currency pairs to stay in their current ranges. However, it is highly probable that Japanese Yen will continue falling. At least technical structures of the currency show that. 

Monday

US – Advanced Retail Sales (coming at 12:30 GMT)

Tuesday

Australia – Reserve Bank of Australia Policy Meeting July Minutes (coming at 01:30 GMT). This could significant impact on the future movements in commodity currencies. 

Great Britain – Consumer Price Index (coming at 08:30 GMT). British Pound pairs should see increased volatility when the news is released. 

Europe – Consumer Price Index (coming at 09:00 GMT). 

US – Consumer Price Index (coming at 12:30 GMT). It is probably the most important event of the week. I would rather wait for it to be released and only to start trading (skipping GB and EU releases). 

Japan – Bank of Japan June meeting Minutes (coming at 23:50).

Wednesday

Great Britain – Bank of England Minutes (coming at 08:30 GMT). The second most important event of the week!

Canada – Bank of Canada Rate Decision (coming at 14:00 GMT). 

US – Federal Reserve Releases Beige Book (coming at 18:00 GMT). 

Thursday

US – Ben Bernanke delivers semi-annual report to Senate (coming at 14:00 GMT).

Friday

Canada – Consumer Price Index (coming at 12:30 GMT).

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.