Data on tap - UK PPI Input, and Output.
Economical News
USD
The Strong ADP release on Thursday which exceeded expectations and was released at 150K new jobs, set the bar high for the change in Nonfarm Payrolls on Friday. Although the NFP indeed released higher than expected at 132K, it did not push the Greenback to far ahead, and the market's reaction was very soft, and against several currencies it took the USD moved down. Most of the other data that came from the US last week was strong, and surprisingly enough, had minimum effect, especially against the EUR.
This week the US calendar will be very light, with events expected on Thursday and Friday like the US Trade Balance, Retail Sales, and Consumer Sentiment.
As for today the US Consumer Credit is expected to be released (17:00 GMT) at 6.4B, with a previous release of 2.6B, and although the expectations are very high, it will probably not generate too much market movement, as most of the important news today is expected to come from Europe. The Greenback will probably be subjected to range trading this week, and will not make the significant break with the lack of major news to push it up again.
EUR
The European market demonstrated its strength on Friday as all of the news releases came out stronger than expected. The UK Industrial Production came out at 0.6% with expectations for 0.3%. The Manufacturing Production was released slightly higher than expected at 0.4%. The German Factory Orders soared to a much higher than expected 3.2% and rose from negative territory of -1.6%. All these positive figures managed to keep the European currencies very strong against the USD even after a stronger than expected release of the US Nonfarm Payrolls.
The most important release expected from Europe today will be the UK PPI Input and Output, at 8:30 GMT, the more important of the two is the Input figure which measures the rate of inflation experienced by manufacturers when purchasing goods and services. When manufactures pay more for goods and services, they are likely to pass the higher costs to the consumer, so PPI is thought to be a leading indicator of consumer inflation. PPI is highly regarded, and at extremes will have a market impact equal to that of its CPI counterpart.
JPY
There were two news releases during last night's Asian session, the first was Core Machinery Orders which came in at a much higher than expected 5.9%, and the second was M2+CD Money Supply which moderately exceeded expectations and was released at 1.8%. The positive news did not stop the JPY's weakening effect and with most of the JPY crosses regaining the uptrend, and with EUR/JPY still trading at record highs, it looks as if the carry trades are back in play, with steaming momentum. The fact the interest rates in Europe and the US are expected to remain unchanged in the near future, carry trades will not be affected, and will probably continue.
Technical Analysis
EUR/USD
The pair is consolidating around 1.3625 which proves to be a strong resistance, and it looks like it is going to hold for now. The daily charts are bearish, and the hourlies are neutral. The 4 Hour chart is showing a bearish cross on the slow stochastic, indicating that a reversal might be imminent.
GBP/USD
After a choppy session at the end of last week, and levels that are floating at 30 year highs, it looks as if the momentum is still up. The daily charts are bullish, and the hourlies are extremely overbought. A preferable strategy might be to wait for the hourlies to unwind, before taking a course of action.
USD/JPY
With the uptrend regaining momentum, and very bullish daily studies, the bias is up, with plenty of room to run. The hourlies are supportive of the bullish notion, and it looks as if the next target price is 124.30.
USD/CHF
After bottoming at 1.2100 last week, and then rebounding to the 1.2180 levels, the pair seems to have small price movement. All studies are showing mixed signals as the daily charts are showing bearish momentum, and the 4 Hour chart is showing the forming of an upward channel. A preferable strategy would be to wait for a clearer signal, and keep out for now
Wild Card
EUR/JPY
The pair is trading at an all time high and showing no signals of a pause. All indicators are supporting the bullish notion, and the daily RSI indicates that the trend is steaming up more than ever. This provides Forex traders with the opportunity to join in on a very strong up trend with high profit potential.
Market Trend
| EUR/USD | GBP/USD | USD/JPY | USD/CHF | AUD/USD | EUR/GBP | |
|---|---|---|---|---|---|---|
| Daily Trend |  |
 |
|
|
|
|
| Weekly Trend | |
|
|
 |
|
|
| Resistance | 1.3510 | 1.9945 | 124.14 | 1.2514 | 0.8534 | 0.6843 |
| 1.3476 | 1.9899 | 123.78 | 1.2495 | 0.8500 | 0.6810 | |
| 1.3400 | 1.9849 | 123.50 | 1.2423 | 0.8478 | 0.6767 | |
| Support | 1.3315 | 1.9779 | 122.99 | 1.2360 | 0.8400 | 0.6700 |
| 1.3265 | 1.9753 | 122.50 | 1.2312 | 0.8367 | 0.6682 | |
| 1.3240 | 1.9625 | 122.23 | 1.2289 | 0.8334 | 0.6653 |
Indicators
| Date | Time GMT | $€£¥ | Event | Period | Prev. | Forecast | Imp |
|---|---|---|---|---|---|---|---|
| 07/09/07 | 08:30 | GBP | PPI Input | m/m | 0.4% | 0.3% |  |
| 07/09/07 | 10:00 | EUR | German Industrial Production | m/m | -2.3% | 1.8% | |
| 07/09/07 | 22:00 | NZD | NZIER Business Confidence | -15 |  |