Title: US Data on Tap - The Chicago PMI.
Economical News
USD
It has been a very important trading day for the Greenback yesterday as the US GDP has been published. Gross Domestic Product (GDP) measures the total value of all goods and services produced by the economy. GDP is the broadest measure of activity and the primary gauge of the economy's health. To foreign investors, a strong economy is viewed favorably because it spurs investment opportunities in the domestic stock and bond markets. More importantly, the central bank is more likely to raise interest rates in the face of a strong and growing economy. The combination of these effects can have a large impact on the demand for the nation's currency. The figures were stronger than expected as the GDP Annualized Q/Q came in at 2.5% after 2.2% expectancy, and the Deflator came in inline with expectations of 1.7%.
To add to the positive sentiment, we saw the Jobless Claims drop to 308K, which also brings a brighter picture on the US labor market.
As for today, the Core Personal Consumption Expenditure is expected to be released at 12:30 GMT. It is expected to come in a bit lower than last month's 0.3% at 0.2%.
The Core PCE is a very important indicator for the nation's inflation, and will be closely scrutinized by traders today.
The biggest new event coming from the US today is the Chicago PMI which is known to be a relatively large price shaker. It is expected to come in stronger than last month's 47.9 at 49.5. That still not very good news for the US economy, as it does not indicate expansion.
It looks like the USD is going to continue to be quite indifferent to market events as it has been yesterday, and if no big surprises will happen, we should be seeing a calm price action all throughout the trading day.
EUR
A relatively light day regarding news events yesterday caused no major movements for the EUR against the majors, as the only mentionable event was ECB president Trichet's speech. As no radical moves took place, the EUR rally up could continue at a steady pace as it has been for quite a while now.
There are several news events expected in the Euro-Zone today such as the German retail sales, French consumer confidence, French Producer prices, Euro-zone consumer confidence and Euro-zone unemployment. Improvements are expected all around, which should continue to support the EUR.
JPY
There was a flow of news that came from the Japanese market overnight, with mixed figures. The JPY Core CPI came in lower than expected at -0.2%, followed by a week Tokyo CPI at -0.1%. The positive figure came in the form of the Overall Household Spending which came in much higher than expected at 1.3%. The mixed data caused the JPY to strengthen a bit overnight and is floating around 117.50 against the USD. That trend might be stopped if the US Chicago PMI will come out stronger than expected.
Technical Analysis
EUR/USD
The pair has been floating around 1.3350 and shows a steady rate for the up-trend. The daily charts are slightly bullish as the hourly studies are floating in neutral territory. The movement appears to be up, yet it would probably be wiser to range trade today.
GBP/USD
The pair has been moving in a wide range for quite a while now, and it peaked at 1.9655 overnight. The daily charts are slightly bearish, and the hourlies are entering overbought levels. It looks as if the pair is floating into the upper side of the range, and we might see a break down for the bottom side of it.
USD/JPY
It has been a choppy week for the pair as very volatile price action has been quite a routine for the USD/JPY. The daily charts are bullish, as the hourlies are overbought.
A preferable strategy for today might be buying on dips.
USD/CHF
Choppy consolidation sums up this week's price action, within a 1.2230/1.2085 range.
Daily studies are bullish with neutral hourlies, which suggest that a trending move might be very close. Range trading using the hourlies might be preferable today.
Wild Card
GBP/NZD
The pair has been going through a massive downtrend for a long time now and shows no signs of stopping. A very important support has been broken last week at 2.7520, which indicates that the momentum is only growing stronger which gives forex traders a great opportunity for a short position and swing away for further trend movement.
Market Trend
| EUR/USD | GBP/USD | USD/JPY | USD/CHF | AUD/USD | EUR/GBP | |
|---|---|---|---|---|---|---|
| Daily Trend |  |
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| Weekly Trend | |
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| Resistance | 1.3454 | 1.9830 | 120.76 | 1.2328 | 0.8171 | 0.6865 |
| 1.3408 | 1.9726 | 119.73 | 1.2253 | 0.8110 | 0.6837 | |
| 1.3344 | 1.9667 | 118.30 | 1.2213 | 0.8079 | 0.6815 | |
| Support | 1.3297 | 1.9545 | 117.40 | 1.2150 | 0.8047 | 0.6794 |
| 1.3255 | 1.9466 | 116.92 | 1.2112 | 0.8011 | 0.6751 | |
| 1.3205 | 1.9426 | 116.39 | 1.2083 | 0.7958 | 0.6710 |
Indicators
| Date | Time GMT | $€£¥ | Event | Period | Prev. | Forecast | Imp |
|---|---|---|---|---|---|---|---|
| 30/03/2007 | 12:30 | USD | Personal Income | Feb (M/M) | 1.0% | 0.3% |  |
| 30/03/2007 | 12:30 | USD | Personal Spending | Feb (M/M) | 0.5% | 0.3% |  |
| 30/03/2007 | 13:45 | USD | Chicago PMI | Mar | 47.9% | 49.5% |  |
| 30/03/2007 | 14:00 | USD | Construction Spending | Feb (M/M) | -0.8% | -0.6% | |
| 30/03/2007 | 14:00 | USD | Consumer Sentiment | Mar (Rev) | 88.8 | 88.8 | |