Daily FX Profit Signal October 1st, 2009

Summary: Another exciting trading day comes to a close as another begins. First on our radar today was the Australian Dollar that managed to tower past previous levels of resistance and is now poised to move higher, unless this turns into a false breakout. With 2 more days to go before NFP, things can change rapidly, so we anticipate more volatility ahead of the weekend. A close above .88 cents is very bullish, the only problem the pair may have is sustainability. Second on the radar is the USD/CAD pair that gave up a lot of ground even after Canadian GDP release was worse than expected, 0% instead of an increase of .4%.  We expect a retracement and a continuation favoring the buck. Elsewhere in the news, the US may finally change political direction and hold a rare one-on-one meeting with Iranian diplomats about their nuclear program.  As risk aversion remains the main trading theme, breakdown during these talks would result in more funds repatriated back to the US, meaning stronger dollar.
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Daily FX Profit Signal September 30th, 2009

Summary: A mixed day to say the least. The buck was able to gain vs. the Euro, Yen, Suisse, but consolidated lower vs. the sterling, kiwi, and the Aussie and the Canadian dollar. We’re still seeing a lot of indecision in the markets; our next action is to catch the next trend. During that process, we also want to verify that the trend is in fact a trend and not a false breakout, much like the one we saw just a week ago when prices broke through their support/resistance levels. Just last week we mentioned Iran may pose risk and cause more money to flow back to the US for safe haven reasons; over the weekend, Iran was once again in the news, accused of having undisclosed nuclear facilities. Iran claims the facility is not operational and followed the laws in question. Either way, keep an eye on continuous confrontation as that’s how things lead up to bigger events.
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Daily FX Profit Signal September 29th, 2009

Summary: Another fun day with volatility playing a large role in shaping the recent candles. The Dollar continues to fight back and keeps the recent trend reversal in play. This Friday’s NFP data release will be the most important event of the week; however, there are plenty of other important economic data that will be released this week that could impact the market on a daily basis and add to levels of volatility. Check out the calendar in the “Trader Tools” section for more information. We still expect a struggle for direction and will look for economic data to lead the way.
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Economic Calendar 28 September - 2 October

DATE	TIME	CRNCY	EVENT	ACTUAL	FORECAST	PREVIOUS
Tue	GMT	GBP	GBP Gross Domestic Product (QoQ) (2Q F)	-0.60%	-0.60%	-0.70%
29-Sep	8:30 AM
	GMT	GBP	GBP Gross Domestic Product (YoY) (2Q F)	-5.50%	-5.40%	-5.50%
	8:30 AM
	GMT	USD	USD Consumer Confidence (SEP)	53.1	57	54.5 (R+)
	14:00 PM
Wed	GMT	JPY	JPY Tankan Large Manufacturers Outlook (3Q)	-21	-26	-30
30-Sep	23:50 PM
	GMT	JPY	JPY Tankan Non-Manufacturing Outlook (3Q)	-17	-22	-21
	23:50 PM
	GMT	JPY	JPY Tankan Large All Industry Capex (3Q)	-10.80%	-9.00%	-9.40%
	23:50 PM
Fri	GMT	USD	USD Change in Non-Farm Payrolls (SEP)	-263k	-175K	-201K(R+)
2-Oct	12:30 PM
	GMT	USD	USD Unemployment Rate (SEP)	9.8%	9.80%	9.70%
	12:30 PM
	GMT	USD	USD Change in Manufacturing Payrolls (SEP)	-51K	-50K	-63K
	12:30 PM
	GMT	USD	USD Average Hourly Earnings (MoM) (SEP)	0.1%	0.20%	0.30%
	12:30 PM

Interest Rate Decisions
Interest rates decisions news flashes provide guidelines for the overnight lending rate which are bound to have an effect on businesses and consumers alike. An upward surge in the cost of living - inflation and a runaway economy is slowed by hiking the interest rates. Lowering interest rates rejuvenates an economy from the doldrums by enabling consumers to get easy credit thus increasing consumption. Currencies strengthen when interest rates move north and weaken when the rates move southwards.

Change in Employment
Change in employment index compares the employment to the unemployment rates in a certain economy. The index which is calculated by economist is used to predict future spending and consumption pertains which are likely to occur due to change of one of the parameters. An economy can either grow or contract depending on which of the two parameters changes.

Consumer Price Index (CPI)
CPI is one of the most reliable parameters used to gauge the extent of inflation on the economy. Every household spends money on some basic commodities and utilities, these items are collectively referred to as “the consumer basket”. By monitoring the changes in price of the consumer basket, economists are able to predict the interest trends. This is largely due to the fact that central bank will more often than not act to tame inflation by raising interest rates and vice versa. The adjustments of interest rates to keep consumer basket within the majorities reach will affect the underlying currency either strengthening or weakening it.

Retail Sales
Retails sales are good pointers of the state of the economy. When the economy is strong and growing, retails sales escalate and consumer are more willing to spend money on luxury goods. Conversely, a shrinking economy is characterized by a reduction in retail sales and cautious spending by consumers.

Trade Balance
This is simply the difference between total exports and total exports between two or more trading nations. Multinational trade involves the export and import of goods and services between nations. When one country exports more than it imports the net effect is a trade surplus. The reverse of this is known as trade deficit. Great emphasis is placed on Trade Balance Report as it shows the movement of goods and services between nations. Countries with trade surplus usually have stronger economies as there have more money in than what there are spending.

Gross Domestic Product - GDP
GDP is derived at by measuring the consumers’ ability to consume / afford goods and services produced within their economy. A strong GDP is a sign of a robust economy which should be checked for inflation - rising interest rates - while a weak GDP could be interpreted to indicate a recession meaning interest rates are likely to head south.

ISM Manufacturing Survey
This survey gauges the mood and sentiments of companies’ top brass, decision and policy makers towards inflation. The centerpiece of this survey is their take on business outlook - new business, production capacities, backlogs, inventory levels and manpower issues. A 50 points scale is used to interpret the findings with value 50 indicating expansion, while values below 50 are a sign of recession.

Daily FX Profit Signal September 28th, 2009

Summary: Happy Monday everyone! This week should be important as we expect to see more volatility as the fight for a trend continues. It seemed to us last week that the Dollar would resume losing more and more ground after breaking certain levels of resistance; however, we saw a general reversal as risk aversion once again set the scene. The rest of September may set the trend through the end of the year. We keep thinking that the Dollar will recover before the end of the year. Iran is once again in the news, testing short range missiles.  Israel has already commented that they will not allow Iran to have nuclear capabilities, neither friendly civilian nuclear power or for weapons purposes, so it’s a matter of time before a major conflict arises. There are debates on both sides as to how this will happens and when. We are certain the USD will strengthen on the news if something were to occur. This is a point to think about as it will come unexpectedly. Below is a link to a Bloomberg article discussing the G20 meeting, with some comments about the buck.  

http://www.bloomberg.com/apps/news?pid=20601087
<http://www.bloomberg.com/apps/news?pid=20601087&sid=aINN4BM6Fy5w>
&sid=aINN4BM6Fy5w
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Daily FX Profit Signal September 25th, 2009

Summary: A very interesting article discussing the future of the buck is attached in a link format below. The Euro continued to find selling pressure and the dollar was able to build on prior day’s momentum, strengthening to 1.4650 by the days’ end. The sterling also continued to break down, rolling as low as 1.6020 before finding support. We expect to see more volatility as the market continues to fight for direction. Economic data is trying to provide support but it has been mixed at best. The crowd is at odds on whether or not the USD should be improving or deteriorating. The current reversal needs to prove it has legs before we start taking sides. I agree with the article in general, but the questions that should be asked are how will the change take place, when, and how long will it take? Happy Friday and enjoy the weekend!

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6211858/HS
BC-bids-farewell-to-dollar-supremacy.html
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