Posts Tagged ‘Online Forex Trading’

The US dollar had an fine week, winning against currencies across the board, with the Aussie and the loonie suffering the biggest losses.  German ZEW Economic Sentiment, Rate decision in Japan and the UK as well as US Unemployment Claims and housing data are the main events on our calendar. Let’s have an approach on the main market-movers for this week.
The US manufacturing sector registered strong performance with a remarkable rise in Empire Manufacturing. Together with a rise in retail sales and solid inflation numbers, the US dollar left the disappointing NFP behind and enjoyed gains. The pound managed to give a fight to the dollar thanks to superb retail sales, but the rest were on the defensive. The Canadian dollar reached a new four year low against the greenback, and the Aussie collapsed to new 3 year lows after a terrible jobs report. Even the “Teflon” euro eventually depreciated. Volatility continues to provide opportunities.
UK employment data: Wednesday, 9:30. The number of jobless claims in the UK fell by 36,700 in November to 1.27 million, and the unemployment rate fell to 7.4% in October, to its lowest rate since 2009. Prime Minister David Cameron remarked that the plan is working, but there is still much work to be done. The workforce should be larger in order to provide solid economic recovery. A further decline of 32,300 jobless claims is forecasted while unemployment is expected to decline to 7.3%.
Source Office for National Statistics (latest release)
Measures Percentage of total work force that is unemployed and actively seeking employment during the past 3 months;
Usual Effect Actual < Forecast = Good for currency;
Frequency Released monthly, about 45 days after the month ends;
Next Release Feb 19, 2014
Why Traders
Care
Although it’s generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the country’s monetary policy;
Also Called ILO Unemployment Rate, Jobless Rate;

US Unemployment Claims: Thursday, 13:30. The number of Americans filing initial claims for unemployment benefits fell 2,000 last week to a seasonally adjusted 326,000, pushing the four week average by 13,500 to 335,000. The total number of Americans collecting unemployment benefits is expected to decline since a special federal program expired last month and is starting to affect recipients. Nevertheless, the number of new claims stabilized near pre-recession levels, indicating a solid recovery in the US economy. Jobless claims are expected to increase to 331,000.

Source Department of Labor (latest release)
Measures The number of individuals who filed for unemployment insurance for the first time during the past week;
Usual Effect Actual < Forecast = Good for currency;
Frequency Released weekly, 5 days after the week ends;
Next Release Jan 30, 2014
FF Notes This is the nation’s earliest economic data. The market impact fluctuates from week to week – there tends to be more focus on the release when traders need to diagnose recent developments, or when the reading is at extremes;
Why Traders
Care
Although it’s generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the country’s monetary policy;
Also Called Jobless Claims, Initial Claims;

US Existing Home Sales: Thursday, 15:00. U.S. home sales declined sharply in November to an annual rate of 4.90 million units, the lowest level in nearly a year, due to an increase in interest rates. This drop suggests the housing market is losing its growth momentum. The Fed tapering worsened the situation further as well as the Federal Housing Finance Agency’s plan to reduce the maximum size of mortgages which can be bought by taxpayer which is expected to have its toll on the housing sector. A rise to 4.99 million units is expected now. 

Source National Association of Realtors (latest release)
Measures Annualized number of residential buildings that were sold during the previous month, excluding new construction;
Usual Effect Actual > Forecast = Good for currency;
Frequency Released monthly, about 20 days after the month ends;
Next Release Feb 21, 2014
FF Notes While this is monthly data, it’s reported in an annualized format (monthly figure x12). Existing homes make up the majority of total sales and therefore tend to have more impact than New Home Sales;
Why Traders
Care
It’s a leading indicator of economic health because the sale of a home triggers a wide-reaching ripple effect. For example, renovations are done by the new owners, a mortgage is sold by the financing bank, and brokers are paid to execute the transaction;
Also Called Home Resales;

Technical Levels

Commodity Support 1 Support 2 Resistance 1 Resistance 2
Gold 1310 1305 1320 1327
Silver 21.59 21.36 21.85 22.03
Copper 3.259 3.250 3.270 3.385
Crude 94.33 94.04 94.90 95.21
Commodity Contract S3 S2 S1 R1 R2 R3
GOLD
The gold market waffled around unchanged early this morning but seemed to catch a bit of a bid into mid session. 
With modest weakness in the Dollar, higher equities and countervailing US scheduled data, the gold market was lucky to have come away with a slightly positive bias this morning. Factory orders were a touch weaker than expectations, while the ISM New York current Business Index showed a fairly significant jump. All things considered, the magnitude of the rise in the regional ISM might have countervailed some of the major headline status of the Factory orders results. This morning Gold did manage to rally in the face of the ISM improvement and then it fell back somewhat in the wake of the weaker factory orders report! In other words, gold seemed to need positive US data to rally this morning and that would seem to fly in the face of gold’s patterns last week.
SILVER
December silver fell back into the US scheduled data window and then recovered 9 cents in the face of the stronger than expected ISM report. 
Unfortunately December silver also fell back in the wake of the slightly softer than expected US Factory orders results. Therefore traders could suggest that silver is indeed acting like a physical commodity market in need of positive progression in the economy again and that in turn would seem to downplay the threat of tapering and the threat of adverse currency market action.
COPPER
After an initial rally on Friday, December copper prices appeared for some traders to lose their initial positive tone, and finished last week roughly 4.00 cents below their weekly highs. 
Many in the market feel that the most notable development for copper last week was improved Chinese economic data and slightly better than expected US economic data. However, copper recently saw a halt in a long held pattern of daily LME exchange copper stock declines. 
In addition, there was also an increase in weekly Shanghai copper stocks at the end of last week. The market was also presented with a series of higher copper production readings from China, Mexico and South America last week. Some traders that while supply has become a slightly negative issue for the market, and hopes for improved copper demand was able to strengthen copper prices last week in the face of overt weakness in a number of other commodities
CRUDE
The oil complex spent time on both sides of unchanged today as the market continues to digest bearish US oil fundamentals and technicals against a backdrop of mixed external price drivers.  Equities have remained mostly in positive territory over the last twenty four hours while the US dollar Index finally was hit with a light round of profit taking selling ending the day in negative territory and thus a slightly positive price driver for the oil complex today.
Global Economic Data
Time Data Prv Exp Impact
8:30 PM ISM Non-Manufacturing PMI 54.4 54.2 High
8:30 PM IBD/TIPP Economic Optimism 38.4 41.1 Low
ISM Non-Manufacturing PMI
Source Institute for Supply Management (latest release)
Measures Level of a diffusion index based on surveyed purchasing managers, excluding the manufacturing industry;
Usual Effect Actual > Forecast = Good for currency;
Frequency Released monthly, on the third business day after the month ends;
Next Release Dec 4, 2013
FF Notes Above 50.0 indicates industry expansion, below indicates contraction. Source changed series from unadjusted to seasonally adjusted as of January 2001. Source changed series calculation formula as of Feb 2008;
Why Traders
Care
It’s a leading indicator of economic health – businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy;
Derived Via Survey of about 400 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories;
IBD/TIPP Economic optimism
Source TIPP (latest release)
Measures Level of a diffusion index based on surveyed consumers;
Usual Effect Actual > Forecast = Good for currency;
Frequency Released monthly, around the middle of the current month;
Next Release Dec 11, 2013
FF Notes Above 50.0 indicates optimism, below indicates pessimism;
Derived Via Survey of about 900 consumers which asks respondents to rate the relative level of economic conditions including six-month economic outlook, personal financial outlook, and confidence in federal economic policies;
Also Called IBD/TIPP Consumer Confidence;