US Dollar Rally Extended As Growth, Rate Forecasts Lifted

Source: DailyFX.com

Conditions seem to be improving for the ailing US dollar. A strong showing from the economic docket, falling crude prices and a boost to interest rate expectations all helped to drive the greenback to its third consecutive rally today. Looking at the fundamental source of this dollar strength, the first quarter GDP revision took the lead. Though the change to the annualized figure from an initially reported 0.6 percent clip to 0.9 percent merely matched economists’ expectations, the rebound helped sideline fears of an impending recession. The breakdown of the growth report revealed the narrowing of the trade balance to a five-year low - thanks to record exports and curbed imports - marked the largest positive change to the headline reading. However, consumer spending was unchanged at 1.0 percent growth from the year before – the slowest pace of expansion since the 2001 recession. This statistic should act as a warning for traders not to be too optimistic on the outlook for the second half. Indeed, the past two quarters expansion was still the worst period of growth in five years and consumer spending is expected to drop much further as the housing recession deepens and employment trends recede. Looking beyond the economic calendar, the pickup in the growth number added to the hawkish outlook for the June FOMC rate decision that has already been padded by the heavy inflation concerns in the minute’s forecasts and recent Fed speak. Fed Fund futures suggest the market is pricing in a 98 percent chance that rates will be held in June and a 34 percent probability of a quarter point hike in September.

My GBP/USD Trade (23-05-2008) --- Update (2)

*Click on the chart for the enlarged version.

Hello everyone,

To follow up on my previoue updated on (My GBP/USD Trade [23-05-2008]) --- Update (1).

Today, 30-05-2008, at around 08:40pm (Singapore Time) | 12:40pm (GMT), I have shifted my Stop Loss to Protective Stop at the price line of 1.9760 (70pips in the money). Price has now broke below my [Ash Weekly Pivot] and below my 200ma.

Currently, I am about 100pips in the money. Let's see how it goes. Will update as this trade goes by.

Peace and trade safely everyone...

My GBP/USD Trade (23-05-2008) --- Update (1)

*Click on the chart for the enlarged version.

Hello everyone,

To follow up on my previous trade [My GBP/USD Trade (23-05-2008)].

Today, 29-05-2008, at around 10:00pm (Singapore Time) | 02:00 (GMT), I have shifted my Stop Loss to Protective Stop at the price line of 1.9820 (10pips in the money). The reason on why I shift my Stop Loss to Protective Stop is that I am a little conservative due to price is unable to clear below [Ash Weekly Pivot] and currently, GBP is stronger than EUR. You can take a look at EUR/GBP (1 hour) chart to see what I mean.

Currently, I am about 60pips in the money. Let's see how it goes. Will update as this trade goes by.

Peace and trade safely everyone...

European Retail Sales Rebounds, As German Unemployment Increases

Source: Daily FX

The European region received conflicting fundamental data reports as retail sales sharply improves, while German unemployment increased. Consumer consumption in the 15 member region rose to 53.1 from 41.8 in April. The breakdown revealed increases in purchases of food and clothing, which improved from 40.2 to 69.2 and from 39.8 to 73.9 respectively. Germany led the charge as sales in the country grew at its fastest pace in eighteen months as the country’s labor market had been strong. However, a separate report showed German unemployment increase for the first time since January, 2006 with 4,000 more applicants. Economists were expecting a decline of 25,000 and the unemployment rate to fall to 7.8%. Nevertheless, unemployment remains at 7.9% -the lowest since August, 1992, leading many retailers to anticipate sales to remain strong in the near term. The rebound in consumption shows those consumers remain willing to spend, which may provide enough growth to offset the headwinds from the U.S. The data reinforces the ECB hawkish stance and may increase expectations that the central bank will start to consider a rate hike by the end of the year to rein in inflation.

US stocks surge as oil prices fall

Source: AFD

US stocks closed in positive territory on Tuesday as oil prices fell sharply from last week's record highs above 135 dollars a barrel, providing a respite to rising inflation concerns.

The Dow Jones Industrial Average advanced 68.72 points (0.55 percent) to close at 12,548.35 and the tech-dominated Nasdaq composite climbed 36.57 points (1.50 percent) to 2,481.24.

The broad market Standard & Poor's 500 index rose 9.42 points (0.68 percent) to finish at 1,385.35.

The stock market was closed on Monday for a public holiday.

"The drop in oil prices boosted shares of consumer companies," said Al Goldman, chief market strategist at Wachovia Securities.

Oil prices tumbled in profit taking amid growing concerns about US energy demand as the world's largest economy wallows in a housing crisis, tight credit and higher energy and food prices.

New York's main oil futures contract, light sweet crude for July delivery, closed 3.34 dollars lower and London's Brent North Sea crude for July lost 4.06 dollars, according to closing figures of 128 dollars.

Analysts said a survey showing plummeting consumer confidence and a
separate report showing the housing market remains in a rut triggered fresh
concerns about growth momentum.

The economy has stalled to a scant 0.6 percent growth pace in the past two quarters. The government is due to release its revised first-quarter growth estimate on Thursday.

The Commerce Department said sales of new homes in the United States rose 3.3 percent in April from the prior month, confounding market expectations of a decline.

"The market reaction to the new-home sales data has been positive, which is understandable given how depressed expectations were ahead of the report," Briefing.com analysts wrote in a client note.

But The Conference Board's consumer confidence index reading fell to a 16-year low in May.

The business research firm's monthly survey is seen as a gauge of future consumer spending, the driver of two-thirds of US economic activity.

"Consumers' inflation expectations, fuelled by increasing (gasoline) prices at the pump, are now at an all-time high and are likely to rise further in the months ahead," said Lynn Franco, director of The Conference Board consumer research centre.

The expectations index, a component of the index, suggests "little likelihood of a turnaround in the immediate months ahead," she said.

Among stocks in focus, JPMorgan Chase rose 1.63 percent to 43.01 dollars. The investment bank said it would end its global payments joint venture with First Data, Chase Paymentech Solutions, by the end of the year.

Bank of America added 0.71 percent to 34.17. The big US bank said it was raising its stake in Chinese bank China Construction Bank through a 1.86-billion dollar investment.

Airline stocks soared, with a tumble in crude oil prices helping to fuel gains. AMR Corp., the parent of American Airlines, rallied 8.23 percent to 6.84; Delta Air Lines surged 5.92 percent to 7.64; and Continental Airlines lifted 4.93 percent to 13.83.

The bond market weakened. The yield on the 10-year Treasury bond rose to 3.921 percent from 3.831 percent on Friday, and that on the 30-year bond climbed to 4.645 percent from 4.557 percent. Bond prices and yields move in opposite directions.

This week's sensitive price for [26-05-2008] - [30-05-2008]...

Hello everyone,

This week's sensitive price are as follow:

1) EUR/USD >>> 1.5714

2) GBP/USD >>> 1.9729

3) EUR/GBP >>> 0.7972

4) USD/JPY >>> 103.43

5) USD/CHF >>> 1.0315

6) EUR/JPY >>> 162.72

7) GBP/JPY >>> 204.45

8) NZD/JPY >>> 80.87

9) AUD/USD >>> 0.9585

10) USD/CAD >>> 0.9890

Peace and trade safely everyone...

Global Events Calendar [26-05-2008] - [30-05-2008]

*Time displayed is based on Singapore Time (GMT+08:00)

--------------------------------------------------------------------------------
Global Events Calendar [26-05-2008] - [30-05-2008]
--------------------------------------------------------------------------------

Monday [26-05-2008]
6:45am--------------NZD Trade Balance
1:00pm--------------USD New York Fed President Geithner Speaks
[Whole Day Event]---GBP Holiday: Spring Bank Holiday
[Whole Day Event]---USD Holiday: Memorial Day

Tuesday [27-05-2008]
7:50am---JPY CSPI y/y
9:00am---NZD Business Confidence
10:00am--NZD RBNZ Inflation Expectations q/q
2:00pm---EUR German Consumer Confidence
2:00pm---EUR German Final GDP q/q
2:15pm---CHF Trade Balance
4:00pm---CHF Consumption Indicator
4:30pm---GBP BBA Mortgage Approvals
8:15pm---USD Fed Governor Kroszner Speaks
9:00pm---USD National HPI Composite-20 y/y
10:00pm--USD New Home Sales
10:00pm--USD Consumer Confidence
10:00pm--USD Richmond Fed Index

Wednesday [28-05-2008]
8:30am-----------AUD WMI Leading Index m/m
9:30am-----------AUD Construction Work Done q/q
2:00pm-----------EUR German Import Price Index m/m
4:00pm-----------EUR Current Account
[Time Unknown]---JPY BOJ Governor Shirakawa Speaks
8:30pm-----------USD Core Durable Goods Orders m/m
8:30pm-----------USD Durable Goods Orders m/m
[Time Unknown]---EUR German CPI m/m (p)

Thursday [29-05-2008]
12:50am--USD Minneapolis Fed President Stern Speaks
7:50am---JPY Retail Sales y/y
7:50am---JPY Large Retailers' Sales y/y
9:00am---USD Dallas Fed President Fisher Speaks
9:30am---AUD Private New Capital Expenditure q/q
2:00pm---GBP Nationwide House Prices m/m
3:15pm---CHF Employment Level
3:55pm---EUR German Unemployment Change m/m
4:00pm---EUR M3 Money Supply y/y
5:00pm---EUR Consumer Confidence
6:00pm---GBP CBI Distributive Trades Realized
8:30pm---CAD Current Account
8:30pm---USD Prelim GDP q/q
8:30pm---USD Prelim GDP Price Index q/q
8:30pm---USD Unemployment Claims
10:30pm--USD Crude Oil Inventories
10:30pm--USD Natural Gas Storage

Friday [30-05-2008]
2:30am---USD Fed Chairman Bernanke Speaks
6:45am---NZD Building Consents m/m
7:00am---USD Fed Vice Chairman Kohn Speaks
7:01am---GBP Consumer Confidence
7:15am---JPY Manufacturing PMI
7:30am---JPY Core CPI y/y
7:30am---JPY Core Tokyo CPI y/y
7:30am---JPY Overall Household Spending y/y
7:30am---JPY Unemployment Rate
7:50am---JPY Industrial Production m/m (p)
1:00pm---JPY Housing Starts y/y
2:00pm---EUR German Retail Sales m/m
5:00pm---EUR CPI Flash Estimate y/y
5:00pm---EUR Italian CPI m/m
5:00pm---EUR Unemployment Rate
5:30pm---CHF Leading Index m/m
8:30pm---CAD GDP m/m
8:30pm---CAD RMPI m/m
8:30pm---CAD IPPI m/m
8:30pm---USD Core PCE Price Index m/m
8:30pm---USD Personal Spending m/m
8:30pm---USD Personal Income m/m
9:45pm---USD Chicago PMI
9:55pm---USD Revised Michigan Sentiment
--------------------------------------------------------------------------------

My GBP/USD Trade (23-05-2008)

*Click on the the charts, 1 hour(Before) and 4 hour(Before) for the enlarged version.

Hello everyone,

I have been quite busy currently. Now, I am with Fortis Bank.

Anyway, my trade on the GBP/USD on the (23-05-2008). I initiated a short position at 09:42pm (Singapore Time) | 01:42pm (GMT) at the price line of 1.9830.

What I saw was that, chart pattern (Double-Top) formation and candle analysis a rejection at the price line of the previous high at around 1.9847. To support my analysis, under my 1 hour chart, Long [Ash C Wave] is still down, [Ash CrossOver] kissing. Under my 4 hour chart, [Ash CrossOver] kissing.

Using Fibo Retracement, my Target Profit is placed at 1.9605(225pips), near to 61.8% Fibo at the price line of 1.9603. My Stop Loss is at 1.9880(50pips). Risk : Reward = 50 : 225 = 1 : 4.5

Currently, I am around 26pips in the money when market closes on Friday. Will update as this trade goes by.

Peace and trade safely everyone...

USD/CAD - This Week's Technical Opportunity [26-05-2008] - [30-05-2008]

Source: DailyFX.com

The oil ‘crisis’ is dominating financial headlines, business shows, and even congress’ agenda. When the price of a commodity commands this level of publicity, the probability of a sharp reversal is heightened. As a currency trader, one way to speculate on an oil reversal is with the USDCAD. What’s more, risk is well defined.


This is a longer term look at the decline from the 2002 top near 1.60. The drop is in 7 waves (to this point), and could be complete as a double zigzag correction. If this pattern holds, then a multi-year low is in place at .9055 and the USDCAD is headed much higher in the coming months. A word of caution though; there is an alternate bearish pattern that holds just as much weight and allows for a new low (below .9055) before a major low is considered in place. For bulls though, risk is low. We’ll address this in shorter term charts.

The break of a trendline a few weeks ago is worrisome but as long as price is above .9710 (keeping a series of higher lows intact), a bullish argument can be made. A drop below .9710 will either lead to a drop below .9055 (and final low) quickly or complete wave B of a triangle. In the case of the latter, the USDCAD would trade in a range for probably the rest of the year. In summary, a drop below .9710 warrants a bearish bias. Even in the case of the triangle, the pair likely drops into the .9300 area to complete wave B.


This is the chart that we have been showing in the technicals for some time and illustrates why we have favored the bull side. We are treating the advance from .9710 to 1.0324 as wave 1 (probably of a larger C wave) of a bull cycle. The slow drop from 1.0324 has all the earmarks of a correction; time consuming and consisting of 3 wave movements. The bullish line in the sand is .9710. With price so close to there, reward/risk is heavily skewed in favor of bulls. The minimum objective is above 1.0324.

The U.S. dollar is at key technical levels

Source: Forexnews.com

The economy in the United States stays vulnerable, mostly supported by the international trade. Consolidation, rather than growth, could the be scenario of the next months/years, as the global credit bubble is fading away. The U.S. dollar, in the mean time, reached an important short term top against major currencies.

Consumes to decline further in the U.S.
Lower employment, housing declines and high oil prices might be stronger than the coming fiscal stimulus. Americans are pessimistic about the present and future state of the economy, while inflation is expected to pick up substantially in the coming months. Consequently, consumes should retreat further, although the fiscal package might give a brief boost to sells over the Summer.

The preliminary report of the Reuters/University of Michigan consumer sentiment index slumped 3.1 points to 59.5 (-1.5 expected), the worst numbers in almost thirty years. Retail sales declined 0.2% in April from March’s increase of 0.2%. Consumption has been almost flat so far with motor vehicles and parts showing the largest losses. Excluding the autos component, retail sales moved up 0.5% (+0.2% expected).

In reality, latest housing data was better than expected, but results should be observed over a larger period of time, since starts are down almost 30% compared to one year ago. In April, housing starts jumped 8.2%, the strongest move in more than two years, while permits increased 4.9%. Starts were supported by the construction of multi-family homes, as single-family houses declined to the lowest level in seventeen years.

Manufacturing production fading locally
A weak domestic market is subduing manufacturing production in the United States. In April, industrial production slid 0.7% (-0.3% expected). Capacity utilization declined to the lowest level of the past three years at 79.7%. Manufacturing production is very weak locally and moved down 0.8%, after remaining flat in March and falling 0.7% in February. Motor vehicles and part production slumped more than 8.0%. Finally, business equipment production, an indicator of capital spending, decreased 1.1% versus March’s up move of 0.7%.

Despite the economy clearly moderating, the Federal Reserve should implement a “wait and watch” approach supported by milder inflation data. Starting in June or the subsequent meeting will depend on the coming economic numbers. In April, the Consumer Price Index (CPI) rose only 0.2% month over month and declined 3.9% from 4.% on an annual basis. The core index fell instead to 2.3% from 2.4%.

A strong GDP in Europe. Will it last?
As more current data is producing weaker numbers in Europe, growth has been quite good during the first three months of the year. In the first quarter of 2008, the Euro zone Gross Domestic Product (GDP) showed a 0.7% growth month on month (+0.5% expected), above the previous 0.4%, and 2.2% year on year. Euro zone industrial production declined instead 0.2% month on month (-0.1% expected) in March, versus February’s +0.3%, and is now 2.0% year on year (+2.4% expected).

German and France have been two important assets to the European economy. In fact, in the first quarter of this year, the economy grew 1.5% (+0.7% expected) in Germany compared the 0.3% registered in the last quarter of 2007. Annually, it has been 2.6% (+1.7% expected). In France, growth has been 0.6% month on month (+0.4% expected) and 2.2% year on year (+1.9% expected).

Inflation is ECB’s main target
Economic expansion is expected to decline in the second part of 2008, since many emerging markets should surrender to the global slowdown. However, the European Central Bank (ECB) will not change its policy for now, although inflation receded a bit lately. In fact, Euro zone inflation stays strong at 3.0%, but core inflation declined to 1.6%, the lowest level of the past two years.

In April, German Consumer Price Index (CPI) declined 0.2% month on month, after increasing 0.3% in March, and is 2.4% annually versus 3.1%. German inflation represents almost 30% of the total monetary union inflation rate. In France, the Consumer Price Index (CPI) rose 0.3% in April on the top of March’s 0.8%. Annually, CPI is now 3.0% from 3.2%.

USD/JPY targeting support again

EUR/USD found an important support on the lower Bollinger band at 1.53. The short term trend is neutral. A move above 1.5690 would lift the European currency to 1.5780, 1.5850. A decline below 1.5170 would instead target 1.5050.

GBP/USD rebounded from the important support a 1.9400/1.9500. The next target could eventually be 1.9650, eventually 1.9750. Only a move below 1.9320 would eventually target 1.9250, 1.9160.

USD/JPY continues to consolidate between 106 and 102. The market appears to be targeting again 103.00/102.60. A move below 101.40 could eventually let prices to slip to 100.40, 100.00. A move above 106.30 would instead lift the USD to 107.00.

No Signs Of A Bottom In The US Housing Recession From Existing Sales

Source: Daily FX

The FOMC's remarks that there have been few signs that the housing market has bottomed out were given weight with today's existing home sales report. According to the National Association of Realtors report, purchases of previously owned homes slipped 1.0 percent to a 4.89 million annual pace. For a market driver, this data was better than economists forcasts for a 1.6 percent drop to 4.85 million homes; yet this contraction still marks the ninth contraction for the past year and a new low for records gong back to 1999. Looking into the details of the report, the foundation of the market in single family homes was faring just as badly as the headline number would suggest. Single family home sales slipped 0.5 percent to a 4.34 million clip, while supplies surged to a 10.7 months supply from 9.6 months in March. On the other hand, while sales and inventories extend the recession, the ongoing decline in prices brings the market closer to a buyers market. The median price of sales through the month dropped 8.0 percent from last year, though there was a second consecutive increase on a monthly basis. Going forward, existing home sales will be the bellweather for gauging the eventual turn in the housing market as sales of existing homes will preceed a rebound in price and construction activity.

U.K. Retail Sales Fall Less Than Expected

Source: Daily FX

U.K. April retail sales fell 0.2% equaling the revised drop from the month prior, but better than the 0.4% decline predicted by economists. Annualized sales fell to 4.2% as expected from an upwardly revised 4.7% in March. Food retailers led the fall as sales declined 1% in April following a 0.9% drop the month prior. Clothing sales were flat as Britons continue to show that their appetite for shopping has some life. Consumers have seen their purchasing power diminished by rising inflation due to record energy and food costs. The better than expected results will give policy makers some relief, as they have signaled that inflationary pressures will prevent then from cutting rates in the near-term. Oil’s reaching above $135 a barrel may keep rates unchanged for the remainder of the year, as Governor King was already expecting inflation to remain above the central bank’s 3% threshold for several quarters. Growth forecasts for the country have been revised to 1% from 3% the year prior, as the housing slump continue to weigh on the economy, putting the MPC in a precarious situation.

This week's sensitive price for [19-05-2008] - [23-05-2008]...

Hello everyone,

This week's sensitive price are as follow:

1) EUR/USD >>> 1.5535

2) GBP/USD >>> 1.9533

3) EUR/GBP >>> 0.7946

4) USD/JPY >>> 104.06

5) USD/CHF >>> 1.0490

6) EUR/JPY >>> 161.53

7) GBP/JPY >>> 203.17

8) NZD/JPY >>> 79.99

9) AUD/USD >>> 0.9483

10) USD/CAD >>> 1.0009

Peace and trade safely everyone...

Global Events Calendar [19-05-2008] - [23-05-2008]

*Time displayed is based on Singapore Time (GMT+8:00)

--------------------------------------------------------------------------------
Global Events Calendar [19-05-2008] - [23-05-2008]
--------------------------------------------------------------------------------

Monday [19-05-2008]
7:01am--------------GBP Rightmove House Price Index m/m
[Whole Day Event]---CAD Holiday: Victoria Day
10:00pm-------------USD Fed Holds TAF Auction
10:00pm-------------USD Leading Index m/m

Tuesday [20-05-2008]
6:45am-----------NZD Visitor Arrivals m/m
7:50am-----------JPY Tertiary Industry Activity Index m/m
9:30am-----------AUD RBA Meeting Minutes
[Time Unknown]---JPY Overnight Call Rate
2:00pm-----------EUR German PPI m/m
2:00pm-----------JPY BOJ Monthly Report
[Time Unknown]---JPY BOJ Press Conference
3:15pm-----------CHF PPI m/m
5:00pm-----------EUR German ZEW Economic Sentiment
5:00pm-----------EUR ZEW Economic Sentiment
8:30pm-----------CAD Foreign Securities Purchases
8:30pm-----------CAD Wholesale Sales m/m
8:30pm-----------USD PPI m/m
8:30pm-----------USD Core PPI m/m
9:00pm-----------USD Fed Vice Chairman Kohn Speaks
9:00pm-----------USD IBD/TIPP Economic Optimism
10:00pm----------USD Fed Publishes TAF Summary

Wednesday [21-05-2008]
8:30am---AUD WMI Consumer Sentiment m/m
9:30am---AUD New Motor Vehicle Sales m/m
11:00am--NZD Credit Card Spending y/y
4:00pm---EUR German Ifo Business Climate Index
4:00pm---EUR German Ifo Business Expectations Index
4:30pm---GBP MPC Meeting Minutes
4:30pm---GBP M4 Money Supply m/m
4:30pm---GBP Public Sector Net Borrowing
5:00pm---CHF ZEW Expectations
7:00pm---CAD Core CPI m/m
7:00pm---CAD CPI m/m
8:30pm---CAD Leading Indicators m/m
10:30pm--USD Crude Oil Inventories

Thursday [22-05-2008]
1:00am--------------USD Fed Governor Warsh Speaks
2:00am--------------USD FOMC Meeting Minutes
7:50am--------------JPY All Industries Activity Index m/m
7:50am--------------JPY Trade Balance
10:00am-------------NZD NZ Annual Budget
[Whole Day Event]---EUR Holiday: Corpus Christi Day
4:00pm--------------EUR Italian Retail Sales m/m
4:30pm--------------GBP Retail Sales m/m
4:30pm--------------GBP Business Investment q/q (p)
5:00pm--------------EUR Industrial New Orders m/m
6:00pm--------------GBP CBI Industrial Trends Orders
8:30pm--------------CAD Core Retail Sales m/m
8:30pm--------------CAD Retail Sales m/m
8:30pm--------------USD Unemployment Claims
9:00pm--------------USD Fed Governor Kroszner Speaks
10:00pm-------------USD House Price Index m/m
10:30pm-------------USD Natural Gas Storage

Friday [23-05-2008]
1:20am---CAD BOC Governor Carney Speaks
7:50am---JPY Monetary Policy Meeting Minutes
2:15pm---CHF Trade Balance
2:45pm---EUR French Consumer Spending m/m
3:30pm---EUR German Manufacturing PMI (p)
3:30pm---EUR German Services PMI (p)
4:00pm---EUR Manufacturing PMI (p)
4:00pm---EUR Services PMI (p)
4:30pm---GBP Second Estimate GDP q/q
4:30pm---GBP Index of Services 3m/3m
5:00pm---EUR Italian GDP q/q
10:00pm--USD Existing Home Sales
--------------------------------------------------------------------------------

Traders expect US dollar rebound...

*Click on the image for the enlarged version.

Source: Taken from newspaper which they got it from Bloomberg.

U.S. Import Prices Increase, As Fuel and Metals Increased

Source: Daily FX

The U.S. import price index for April increased 1.8 percent, led by fuel and metals costs, which was greater than the expected 1.6 percent. The gain followed an upward revised 2.9 percent from the month prior, underlining inflation concerns. Fuels and lubricants saw a 4.3% increase following and 8.8% in March, as record oils prices continue to get passed through. Looking at all the components, we see that consumer goods ex autos prices increased 2%-its lowest in four months. The rising import prices may signal that tomorrow’s CPI may be higher than expected, with the core reading possible falling in line with expectations. The Fed is expected to pause their easing policy, but an increase in inflation will assuredly give them a greater reason to leave rates unchanged going forward. As consumers continued to get squeezed by rising prices and declining home values the growth outlook for the economy may decline.

US Retail Sales Fall In April, Weighed Down by Autos

Source: Daily FX

US Advance Retail Sales, as measured by the Commerce Department, slipped in line with expectation by 0.2 percent during the month of April. A 2.8 percent drop in auto sales weighed the headline index down, and excluding this factor, retail sales actually rose 0.5 percent. A further look at a breakdown of the index shows that gasoline station sales actually slipped 0.4 percent, and with average gas prices rising steadily over the course of the month to over $3.50/gallon, the data suggests that Americans are actually cutting back on their energy consumption. Overall, the drop in spending is not surprising, as consumer confidence has tumbled signficantly in recent months amidst a collapse in the housing sector and deteriorating labor market conditions.

Nevertheless, given the jump in the ex-auto component and stronger-than-expected import prices, the US dollar has rallied on the news and is pushing EUR/USD down toward 1.5400.

U.K. Inflation Rises the Most Since 1992

Source: Daily FX

U.K. inflation increased to 3.0% in April from 2.5% the month prior-the biggest increase since 1992. The rate stands 0.1% from breaching the central bank’s upper limit, which requires Governor King to write a letter of explanation to Chancellor Darling. A look at the components reveals that soaring food and energy prices are eating away consumer’s purchasing power. Food prices rose 5.8% as record wheat prices fed increases in Alcohol and Meat which increased 4.1% and 4.2% respectively. Energy costs also jump 13.6% after a 12.0% increase in March, as Oil prices continue to set new records. The appreciation in prices will make it difficult for the BoE to cut rates at their June meeting. Expectations have been that a quarter point cut was forthcoming as the housing slump and tight credit markets have started to filter throughout the rest of the economy and have weighed on consumer confidence and spending.

Global Events Calendar [12-05-2008] - [16-05-2008]

*Time displayed is based on Singapore Time (GMT+08:00).

---------------------------------------------------------------------------
Global Events Calendar [12-05-2008] - [16-05-2008]
---------------------------------------------------------------------------

Monday [12-05-2008]
7:50am--------------JPY M2+CD Money Supply y/y
9:30am--------------AUD Home Loans m/m
9:30am--------------AUD NAB Business Confidence
11:00am-------------JPY BOJ Governor Shirakawa Speaks
1:00pm--------------JPY Economy Watchers Current Index
2:00pm--------------JPY Machine Tool Orders y/y
[Whole Day Event]---CHF Holiday: Whit Monday
4:00pm--------------EUR Italian Industrial Production m/m
4:30pm--------------GBP PPI Input m/m
4:30pm--------------GBP Trade Balance
4:30pm--------------GBP PPI Output m/m
8:30pm--------------CAD New Housing Price Index m/m
11:00pm-------------EUR ECB President Trichet Speaks

Tuesday [13-05-2008]
6:45am---NZD FPI m/m
7:01am---GBP RICS House Price Balance
7:01am---GBP BRC Retail Sales Monitor y/y
4:30pm---GBP CPI y/y
4:30pm---GBP Core CPI y/y
4:30pm---GBP DCLG House Price Index y/y
4:30pm---GBP RPI y/y
6:10pm---USD Cleveland Fed President Pianalto Speaks
8:20pm---USD Fed Chairman Bernanke Speaks
8:30pm---USD Core Retail Sales m/m
8:30pm---USD Retail Sales m/m
8:30pm---USD Import Price Index m/m
10:00pm--USD Business Inventories m/m

Wednesday [14-05-2008]
1:30am---USD Dallas Fed President Fisher Speaks
7:50am---JPY CGPI y/y
7:50am---JPY Current Account
8:30am---AUD WMI Consumer Sentiment m/m
9:30am---AUD WPI q/q
2:40pm---EUR French CPI m/m
4:30pm---GBP Average Earnings Index +Bonus q/y
4:30pm---GBP Claimant Count Change
4:30pm---GBP Unemployment Rate
5:00pm---EUR Industrial Production m/m
5:30pm---GBP BOE Inflation Report
8:30pm---USD Core CPI m/m
8:30pm---USD CPI m/m
10:30pm--USD Crude Oil Inventories

Thursday [15-05-2008]
6:45am---NZD Retail Sales m/m
6:45am---NZD Core Retail Sales m/m
7:50am---JPY Core Machinery Orders m/m
8:00am---NZD Performance of Manufacturing Index
1:45pm---CHF Consumer Climate
2:00pm---EUR German GDP q/q (p)
2:00pm---EUR German CPI m/m (r)
2:45pm---EUR French GDP q/q (p)
5:00pm---CHF SNB Board Member Jordan Speaks
5:00pm---EUR Core CPI y/y
5:00pm---EUR GDP q/q (p)
5:00pm---EUR CPI y/y
6:30pm---AUD RBA Governor Stevens Speaks
7:40pm---EUR ECB President Trichet Speaks
8:30pm---CAD Manufacturing Shipments m/m
8:30pm---USD Empire State Business Conditions Index
8:30pm---USD Unemployment Claims
9:00pm---USD TIC Net Long-Term Transactions
9:15pm---USD Capacity Utilization Rate
9:15pm---USD Industrial Production m/m
9:30pm---USD Fed Chairman Bernanke Speaks
10:00pm--USD Philadelphia Fed Manufacturing Index
10:30pm--CAD BOC Spring Review

Friday [16-05-2008]
1:00am-----------USD NAHB Housing Market Index
6:45am-----------NZD PPI Input q/q
6:45am-----------NZD PPI Output q/q
7:50am-----------JPY GDP q/q (p)
7:50am-----------JPY GDP Deflator y/y (p)
12:30pm----------JPY Industrial Production m/m (r)
1:00pm-----------JPY Household Confidence
2:45pm-----------EUR French Nonfarm Employment q/q (p)
3:15pm-----------CHF Retail Sales y/y
4:00pm-----------EUR Italian Trade Balance
5:00pm-----------EUR Trade Balance
[Time Unknown]---AUD RBA Assistant Governor Debelle Speaks
8:30pm-----------CAD New Motor Vehicle Sales m/m
8:30pm-----------USD Building Permits
8:30pm-----------USD Housing Starts
10:00pm----------USD Consumer Sentiment (p)
---------------------------------------------------------------------------

Will Canadian Labor Market Data Force A USD/CAD Breakout?

Source: Daily FX

The only significant event risk on Friday will be from the release of the Canadian net employment change. This release is essentially "the other NFP" report, as the data tends to be highly market-moving for the Canadian dollar and rarely meets estimates. Lately, the net employment change has been lackluster and signs are starting to emerge that domestic demand is slowing. Indeed, during the month of February, wholesale sales plunged 1.8 percent while retail sales fell 0.7 percent. Meanwhile, the most recent Ivey PMI report reflected slowing in business activity, as the index eased less-than-expected to 57.6 from 59.0. A breakdown of the index showed prices soaring, and with the Bank of Canada's core CPI measure still well below their 2 percent target at 1.3 percent, the data suggests that businesses are not passing on these rising costs to customers, which would hurt profit margins. On the other hand, the employment component rose to a five-month high, indicating some potential for strong labor market figures from Statistics Canada. Such a result would spark substantial volatility for the Canadian dollar in the short-term, but nevertheless, with the US economy deteriorating rapidly, the financial markets remaining unstable, and inflation remaining below target, the Bank of Canada is likely to continue cutting rates when they meet again in June.

Quick Look on EUR/JPY [09-05-2008]...

*Attached chart (Weekly). Click on it for the enlarged version.

Hello everyone,

It appears that EUR/JPY is having a mega consolidation in the weekly chart. It is in this huge closing wedge and despite last week's big price rejection on the down side, yesterday's movements [08-05-2008] manage to create a new low.

After yesterday's bearish movements in the hourly chart, we are looking to short it only if a short opportunity arises. If a short opportunity arises at a good time and price and we are in it, our Target Profit will be at the support at the bottom wedge.

Peace and trade safely everyone...

My USD/JPY Trade [08-05-2008] --- Update (Final)

*Attached chart (1hour-After). Click on it for the enlarged version.

Hello everyone,

This is a final update from my previous update on my USD/JPY Trade [08-05-2008].

I just got home from IKEA :) My Protective Stop was hit at 06:51pm (Singapore Time) | 10:51am (GMT).

50pips profit for this trade :)

Peace and trade safely everyone...

My USD/JPY Trade (08-05-2008) --- Update (2)

Howdy everyone,

Update from my previous post.

Now about 03:49pm (Singapore Time) | 07:49am (GMT), I am around 96pips in the money. Everything is looking great. Shifted my Protective Stop even further to 104.25(50pips in the money) and Target Profit to 103.20(29th April 2008's low).

Will update as this trade goes by :)

Peace and trade safely everyone...

My USD/JPY Trade (08-05-2008) --- Update (1)

Hello everyone,

This is an update from my previous post.

Market has moved further in my favour. Now it is around 03:15pm (Singapore Time) | 07:15am (GMT), I am around 55pips in the money. My fast and slow [Ash C Wave] are looking good. My [Ash Down Up] has transformed into thick red bar. I have shifted my Protective Stop deeper to 104.55(20pips in the money) and my Target Profit further to 103.53(Low of 1st May 2008).

Will update as this trade goes by :)

Peace and trade safely everyone...

My USD/JPY Trade (08-05-2008)

*Attached chart (1hour-Before). Click on it for the enlarged version.

Hello everyone,

I shorted the USD/JPY today, [08-05-2008] at 10:09am (Singapore Time) | 02:09am (GMT) at the price line of 104.75.

what I saw was that, price action movements and candle pattern. After price has broke below my [Ash Weekly Pivot], it was unable to break above with a formation of candle pattern which is called "Falling Three Methods". It is a sign of continuation on the downside. My analysis was supported by Fast and Slow [Ash C Wave] down, MAs down and [Ash Cross Over] down. Double checked with the 4hour chart, [Ash Cross Over] down as well.

My Stop Loss at 105.01(26pips) and Target Profit at 104.00(75pips). Risk : Reward = 26 : 75 = 1 : 2.88

Market has moved in my favour and currently, 10:38am (Singapore Time) | 02:38am (GMT), I am around 30pips in the money. Have shifted my Stop Loss to Protective Stop at the price line of 104.74 (1pip in the money).

Will update as this trade goes by :)

Peace and trade safely everyone...

My EUR/USD Trade (07-05-2008) --- Update (Final)

*Attached chart(1hour-after). Click here for the enlarged version.

Hello everyone,

This post is an update from my previous post.

Sometimes, in trading, anything can happen and sometimes, it is just not yours :P I was nicely stopped out last night at 03:54am (Singapore Time) | 07:54pm (GMT) before heading my way and eventually reach my Target Profit.

Oh well, 25pips loss for this trade :P

Peace and trade safely everyone...

My EUR/USD Trade (07-05-2008)

*Attached chart(1 Hour-Before). Click on it for the enlarged version.

Hello everyone,

My trade on the EUR/USD today [07-05-2008]. I initiated a short position at the price line of 1.5385 at 11:38pm (Singapore Time) | 03:38pm (GMT).

Price action wise. I missed the beginning of the move because I was out and away :P Anyways, I got in when there was a chance. Price action movements. Supported by 1 hour chart's [Ash Cross Over] is not going up. Fast and Slow [Ash C Wave] already down. [Ash Down Up] is mega red bar. If this was not enough, I double checked the 4 hour chart, [Ash Cross Over] is down.

The best part to top up and support my analysis. Is mentioned in my previous post, Quick Look on EUR/USD (07-05-2008)

My Stop Loss at 1.5410(25pips) and Target Profit at 1.5290(95pips). Risk : Reward = 25 : 95 = 1 : 3.8

Will update as this trade goes by :)

Peace and trade safely everyone...

Quick Look on EUR/USD (07-05-2008)

*Attached chart(Daily). Click on it for the enlarged version.

Howdy everyone,

EUR/USD is looking good. Under the Daily chart, you can see that it has made its recovery towards the 38.2% (Fibo) and today's candle is forming into a good down close candle.

Market is forming a candle pattern that is called "Falling Three Method" which is a signal of continuation in the down side. We are also on the down side bias for EUR/USD for the longest time.

Personally, I have already initiated a short position and still holding on this pair which will be updated in a seperate post :)

Peace and trade safely everyone...

GBP/USD (Break-Out!)

*Attached chart(Daily). Click on it for the enlarged version.

Hello everyone,

GBP/USD has broke out below the closing wedge. As I have mentioned in my previous post, my gang and I are on the down side bias on the GBP/USD.

Now it has broken below the wedge. Be careful of possible pullbacks/retracements but we will not hesitate to short it when a down sell opportunity arises.

Peace and trade safely everyone...

Quick Look on GBP/USD...

*Attached chart (Daily). Click on it for the enlarged version.

Hello everyone,

For GBP/USD under Daily chart, it is in a closing wedge. Price action is below my [Ash Weekly Pivot], which it is unable to break above for the last two days.

My take for GBP/USD is still on the down side bias but be careful of bottom wedge support and yesterday's [06-05-2008] low at around the price line of 1.9634.

Peace and trade safely everyone...

Global Events Calendar [05-05-2008] - [09-05-2008]

*Time displayed is based on Singapore Time (GMT+08:00).

Before we go on with the Global Events Calendar, there are a few things to take note of for the week to come.

Monday [05-05-2008]
1) JPY - [Whole Day Event]>Holiday: Children's Day
2) GBP - [Whole Day Event]>Holiday: May Day
3) USD - [10:00pm]>Fed Holds TAF Auction

Tuesday [06-05-2008]
1) JPY - [Whole Day Event]>Holiday: Greenery Day Observed
2) USD - [08:30am]>Fed Chairman Ben Bernanke Speaks.
3) AUD - [12:30pm]>Interest Rate Statement(*They are looking to hold)
4) GBP - [04:30pm]>Industrial Production

Thursday [08-05-2008]
1) NZD - [06:45am]>Jobless Rate
2) AUD - [09:30am]>Jobless Rate
3) CHF - [01:45pm]>Jobless Rate
4) EUR - [02:00pm]>German Trade Balance
5) GBP - [07:00pm]>Interest Rate Statement[*They are looking to hold]
6) USD - [08:30pm]>Jobless Claims

Friday [09-05-2008]
1) CAD - [07:00pm]>Jobless Rate
2) CAD - [08:30pm]>Trade Balance
3) USD - [08:30pm]>Trade Balance

--------------------------------------------------------------------------------
Global Events Calendar [05-05-2008] - [09-05-2008]
--------------------------------------------------------------------------------

Monday [05-05-2008]
6:45am--------------NZD Labor Cost Index q/q
7:30am--------------AUD Services PMI
[Whole Day Event]---JPY Holiday: Children's Day
8:30am--------------AUD TDMI Inflation Gauge m/m
9:30am--------------AUD House Price Index q/q
11:00am-------------NZD ANZ Commodity Price Index
[Whole Day Event]---GBP Holiday: May Day
4:30pm--------------EUR Sentix Investor Confidence
[Time Unknown]------EUR ECB President Trichet Speaks
8:50pm--------------CAD BOC Deputy Governor Jenkins Speaks
10:00pm-------------USD ISM Non-Manufacturing Composite
10:00pm-------------USD Fed Holds TAF Auction

Tuesday [06-05-2008]
[Whole Day Event]---JPY Holiday: Greenery Day Observed
8:30am--------------USD Fed Chairman Bernanke Speaks
9:30am--------------AUD Trade Balance
12:30pm-------------AUD Interest Rate Statement
1:45pm--------------CHF CPI m/m
4:00pm--------------EUR Services PMI (r)
4:30pm--------------GBP Services PMI
5:00pm--------------EUR PPI m/m
8:30pm--------------CAD Building Permits m/m
10:00pm-------------CAD Ivey PMI

Wednesday [07-05-2008]
7:01am---GBP Consumer Confidence Index
7:30am---AUD Construction PMI
2:45pm---EUR French Government Budget Balance
2:45pm---EUR French Trade Balance
4:30pm---GBP Industrial Production m/m
4:30pm---GBP Manufacturing Production m/m
5:00pm---EUR Retail Sales m/m
5:30pm---GBP BRC Shop Price Index y/y
6:00pm---EUR German Factory Orders m/m
8:30pm---USD Nonfarm Productivity q/q (p)
8:30pm---USD Unit Labor Costs q/q (p)
8:45pm---USD Fed Governor Kroszner Speaks
10:00pm--USD Pending Home Sales m/m
10:30pm--USD Crude Oil Inventories

Thursday [08-06-2008]
3:00am---USD Consumer Credit m/m
6:45am---NZD Unemployment Rate
6:45am---NZD Employment Change q/q
7:01am---USD NIESR GDP Estimate
9:30am---AUD Employment Change
9:30am---AUD Unemployment Rate
1:45pm---CHF Unemployment Rate
2:00pm---EUR German Trade Balance
6:00pm---EUR German Industrial Production m/m
7:00pm---GBP Interest Rate Statement
7:45pm---EUR Minimum Bid Rate
8:15pm---CAD Housing Starts
8:30pm---EUR ECB Press Conference
8:30pm---USD Unemployment Claims
10:00pm--USD Wholesale Inventories m/m

Friday [09-05-2008]
9:30am---AUD RBA Monetary Policy Statement
1:00pm---JPY Leading Index m/m
2:45pm---EUR French Industrial Production m/m
7:00pm---CAD Employment Change
7:00pm---CAD Unemployment Rate
8:30pm---CAD Trade Balance
8:30pm---USD Trade Balance
--------------------------------------------------------------------------------

Chicago PMI Remains In Contractionary Territory Despite Mild Improvement

Source: Daily FX

Chicago PMI proved to be slightly better than expected, as the index rose to 48.3 from 48.2 versus forecasts for a drop to 47.5. However, PMI held below the pivotal 50 mark for the third consecutive month, suggesting that business activity continues to contract. Likewise, a breakdown of the index isn't entirely encouraging as new orders slipped while the employment component plunged to a reading of 35.3 from 44.6, which bodes ill for this Friday's non-farm payrolls. Furthermore, it is interesting to view the production and inventory components in light of this morning's Q1 GDP release. Q1 GDP grew 0.6 percent, due primarily to a pick up in inventory levels, which is something we've seen reflected in this round of Chicago PMI. Meanwhile, production jumped as well, suggesting that businesses are overproducing for current demand levels, which is leading inventories to build.

US Economy Thwarts The Start Of A Recession Through The First Quarter

Source: Daily FX

Though speculation of an oncoming US recession reached a fever pitch over the past few months, the government's data has revealed that economic activity held surprisingly steady through the opening three months of the year. In fact, the 0.6 percent clip of annualized expansion matched the pace from the previous quarter and bested economists' steadily revised forecasts of a slight decleration to a 0.5 percent pace. Putting the first quarter's rate of growth into context, the world's largest economy has ran at a 0.6 percent (the weakest pace five years) in three out of the past five quarters. In turn, this reality will act as a vail of caution when economists and traders forecast economic activity in coming quarters. The breakdown for the Commerce Department certainly gives reason to doubt the health of the economy going forward.

The highlight among the component figures was no doubt the 1.0 percent growth in personal consumption. While this was greater than the 0.7 percent figure expected, it nonetheless marks a significant cooling from the pace seen over the previous two quarters. What's more, since the end of the three quarter, gasoline and food prices have surged to records, mortgage costs rose and lending restrictions have tightened, and most importantly consumer confidence has plunged to a 26-year low. With these factors still at work, the American consumer - who accounts for nearly three quarters of GDP - may eventually steep the economy into a contraction. Outside of the personal consumption, the data was as bearish as pessimists had expected. Fixed investment dropped 9.7 percent over the period, lead by an intensified 26.7 percent plunge in residential activity. Government spending has failed to pick up the slack with a steady 2.0 percent rate of growth that matched the first quarter's level. And, even trade - the single greatest hope for a quick boost to expansion - has failed to show the benefits of slowing domestic demand and a weak US dollar. Imports rose 2.5 percent, following a contraction through the final months of 2007. More importantly, export shipments cooled for a second consecutive quarter to 5.5 percent - its slowest pace in a year.