EUR/USD Technical Analysis for May 23, 2011
The EUR/USD fell hard on Friday as the markets began to worry about the Greek debt issues again. This leads the market into the weekend thinking about various scenarios, and none of them good. Because of this, the pair fell back into the support “zone” between 1.40 and 1.42 areas. The market is still technically bullish until we break through the 1.40 area to the downside, but it is going to take real courage to go long at this point as the market is closing right at the daily lows.
EUR/USD Daily Fundamental Analysis for May 23, 2011
The EUR/USD will start the week with caution and volatility after ending the previous week on Friday under downbeat and negative pressures.
Last week, the euro managed to end with some gains to cut back on the weekly losses seen in the previous two weeks, ever since Trichet extended any monetary tightening beyond June.
The euro was merely bolstered slightly by the passed bailout for Portugal, whereas the resolution on the Greek crisis was not seen and likely to return to haunt the euro soon. The euro is under heavy pressures as is the market with the growing pessimism over the outlook for the global recovery, which in role is keeping the dollar strong.
Haven demand is supporting greenback and keeping the euro burdened with its debt woes. This week the sentiment is likely to concentrate on the growth outlook while in search of any new developments on the Greek crisis.
The start of the week will be with euro area’s sectors performance in May as investors are downbeat already over the outlook for the slowing global recovery. Germany will start with the Flash PMI estimates for May at 07:30 GMT. The manufacturing PMI might have slowed to 62.3 from 62.9 and the Services might have eased to 61.3 from 62.0.
The euro area Flash PMI May estimates are due at 08:00 GMT the Manufacturing is expected to slow to 57.6 from 58.0 and Services also slower to 56.6 from 56.7.
The U.S. is not due to release any fundamentals on Monday and accordingly leaving more room for speculation and volatility ahead of the first quarter GDP revision later this week.
AUD/USD Technical Analysis for May 23, 2011
The AUD/USD found itself flat at the end of the day on Friday, and stalling in the middle of a range. The pair looks like it wants to rise – but the market’s anxiety is currently hurting its performance. As long as we are over 1.05 – we think it should be a buy only. If it breaks lower, we look at 1.02 are a great area as well. It isn’t until under that level that we even think of a short.
AUD/USD Daily Fundamental Analysis for May 23, 2011
The Australian currency rose against its major counterpart the greenback last week on some unwinding heavy selling pressures and easing commodity slump alongside positive Australian data compared to those from the United States.
Demand for the Australian dollar accelerated as the investors bet the Reserve Bank of Australia (RBA) will increase the interest rates by 25 basis points during the next meeting in one of the economy's efforts to contain inflation pressures that may hurt the recovery.
Moreover, the recovery in Australian is to improve, where the government forecasts mining investment of A$76 billion next fiscal year, spurring companies to hire workers and support domestic spending and accordingly inflation, keeping the RBA on the watch and with a hawkish bias.
On Monday the both economies are not going to release any fundamentals, so the AUD/USD will trade according to the market sentiment.
AUD/NZD Technical Analysis for May 23, 2011
The AUD/NZD fell hard on Friday, and looks weak. However, we are currently near a minor support area at the 1.34 area, and there is significant support below at 1.32 as well. In fact, the 1.32 area is our trigger to short as it is such an important floor for this pair. The ceiling is currently in the neighborhood of 1.37, and we look for shorter term trades in this pair if anything at all. The overall trend is up – but looks vulnerable at the moment.
AUD/NZD Daily Fundamental Analysis for May 23, 2011
The AUD/NZD pair traded within a consolidation area last week, where both currencies advanced against greenback, which made it hard for the AUD/NZD pair to move in a specific trend.
The economic growth in Australia will moderate during the first three months of the year, after the natural disasters that hit the nation on January and February; where the Reserve Bank of Australia decided to leave interest rates steady for the fourth consecutive month at 4.75% to sustain growth.
The New Zealand currency rebound last week after the economy reported rising producer input pricesby 2.2% from 0.9% a quarter earlier, which supports the outlook for higher inflation and accordingly chances for the RBNZ to move on rates.
The pair is expected to continue trading with high fluctuations and within a tight trading range and heavily affected by the market sentiment and the outlook for the U.S. dollar.
On Monday both economies are not going to release any fundamental data, and accordingly the AUD/NZD will trade according to the market sentiment.
NZD/USD Technical Analysis for May 23, 2011
The NZD/USD pair had a very bullish day on Friday, but fell short of breaking the 0.80 level, signaling that perhaps the range will continue. Because of this, we look to buy at 0.78, and sell at 0.80 until we break through one of those levels. It should be said that the overall trend is up, and buying is certainly safer.
NZD/USD Daily Fundamental Analysis for May 23, 2011
The kiwi has jumped versus the greenback last week following two weeks of consecutive decline, fueled by signs of economic growth and unwinding of the heavy pessimism over the outlook with easing commodities sell-off that helped kiwi regain some of its losses.
The New Zealand economic recovery is likely to strengthen in the coming period as the government and the central bank aim to stimulate growth following the earthquakes.
Furthermore, tourism in New Zealand plays an important role in the economy, and there is about 10% of the population employed by the tourism industry, and a sizable portion of the nation's GDP is indirectly related to tourism, where the seasonally adjusted visitor arrivals increased 8% between March and April 2011.
On Monday the both economies New Zealand economy and the US economy are not going to release any fundamentals and accordingly the NZD/USD will trade according the market sentiment.
The sentiment this week is likely to remain focused on the outlook for the global recovery and especially with the U.S. preliminary GDP reading for the first quarter due on Thursday, which will increase the volatility and affect kiwi with the lack of much data from New Zealand this week.
USD/JPY Technical Analysis for May 23, 2011
The USD/JPY barely moved on Friday, showing how under traded this pair is right now. However, there are central banks underneath willing to bid this pair up if it falls too much. Since this was the site of the largest portion of interventions last time, you can be assured the central bankers are definitely watching this pair. We expect choppy and tight ranges for the short-term, with a little bit of drifting in the market.
USD/JPY Daily Fundamental Analysis for May 23, 2011
The USD/JPY pair advanced last week amid the downbeat economic data from Japan and the deeper than expected contraction in the first quarter, sending the economy back into recession.
The Japanese economy contracted during the first quarter by 0.9% after another contraction of 0.8% during the fourth quarter of 2010. The nation's exports plunged in the first quarter, affected by the March earthquake.
The Bank of Japan Governor Masaaki Shirakawa warned during a parliamentary committee meeting, that the Japanese economy is experienced a very sever state after the devastating earthquake that hit Japan on March 11.
Japanwill start the week at 05:00 GMT with the final reading of leading index for March, where the previous reading was 99.5. The final reading for the coincident index for March is also due following the previous 103.6.
The U.S. economy on the other hand will not release any major fundamentals on Monday and accordingly the sentiment will move the pair alongside the dollar’s outlook or the week ahead of key GDP figures later in the week from the United States.
GBP/USD Technical Analysis for May 23, 2011
The GBP/USD pair ran in circles Friday, eventually finishing slightly up. The market looks very choppy, and although it has a bullish bias – this pair is simply too choppy to trade this pair for our liking right now. The pair will be more attractive for us to buy above the 1.64 area.
GBP/USD Daily Fundamental Analysis for May 23, 2011
With no fundamentals from the UK and US, the pair may witness calm movements on Monday trading. Fears regarding the outlook of the British economy may push the pair to the downside, where on the other hand there are some worries that the Fed may keep lose monetary policy for a while to boost recovery.
Consequently, the outlook for the pair remains to the downside as the end of the US $600 billion bond-purchase program in June may lower the supply of dollar from markets and thereby give support to the green currency.
USD/CAD Technical Analysis for May 23, 2011
The USD/CAD pair fell, and then rose later in Friday trading as the market began to fear issues in Europe. While this isn’t necessary an indictment on the Canadian dollar, it was more a symptom of people simply wanting to buy the USD in general. The 0.97 area is still a massive cluster, and should be watched. For the time being, we can’t help but notice how much trouble this pair has staying above it for any length of time. If we break higher, we will look to sell again near parity. If we break lower – the trend continues and we are short. 0.97 is becoming more and more important in our eyes now.
USD/CAD Daily Fundamental Analysis for May 23, 2011
The USD/CAD pair rose on Friday and nearly erased all of its losses that were acquired throughout the week, where inflation as measures by CPI rose below expectations in Canada in April, while Canada’s retail sales in March trailed median estimates, which lowered expectations that the Bank of Canada will raise benchmark interest rates, and accordingly, the CAD weakened severely, which pushed the USD/CAD pair to the upside.
The USD/CAD pair’s rise was also supported on Friday by falling crude oil prices, where crude oil prices continued to trade below $100 a barrel, noting the CAD is a commodity currency that suffers from lower commodity prices.
The USD/CAD pair should continue to rise on Monday, although this projection is based on expectations that crude oil prices and other commodities will continue to drop on Monday amid the lack of economic news from both Canada and the United States, and the pair could move within a limited range with an upside tendency.
USD/CHF Technical Analysis for May 23, 2011
The USD/CHF has had another choppy day in the markets on Friday, but currently looks weak as the 0.88 level becomes a magnet for price lately. The trend is down, and the lows keep getting lower on shorter-term charts. The pair is considered the inverse of EUR/USD, and could get pushed higher if we see the EUR/USD meltdown. Of course, over time – the correlation should correct itself. The pair looks very weak for the time being though. As long as we are under the 0.88 area, we are looking to sell on signs of weakness.
USD/CHF Daily Fundamental Analysis for May 23, 2011
As of 07:00 GMT, the Swiss economy will release money supply M3 for the year ending April, yet it is expected to have slight effect on the pair's movements, where the US lacks fundamentals at the beginning of the week.
Later in the week, eyes will be on some trade data from Switzerland, and housing and GDP data from the United States.
The outlook for the pair remains to the upside as the dollar is predicted to continue its rebound against the franc after having a break in the week ending May 20 as the SNB is estimated to keep borrowing cost low for longer period, while the greenback may gain some strength after the end of the $600 billion bond-purchase program next month.
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