EUR/USD & The Week Ahead

With Europe off another day, the week in the far east is opening very quietly, with little news and economic data. However, the EUR/USD pair could be gearing up for an exciting week as more news is sure to hit the wires as the world tries to revive its economy and a number of important economic releases out of the US are expected, namely Retail Sales, CPI, TIC Flows, the Fed’s Beige Book and the University of Michigan’s Consumer Confidence Indicator. On a the daily perspective with this slew of critical US economic data to be released, it will be interesting to see how the pair holds up with little technical support as we look at the retracement below. We will be tracking this closely in the days to come.

EURUSD moves to new highs on the weaker Beige Book

The EURUSD has moved higher post the Beige Book.  The price has now breached the 100 hour moving average after 3 hour attempts that could not muster a close above key level.  The current level comes in at the 1.2614 level.  The high yesterday came in at 1.2677.   This is the next target.  Above that, the 200 hour MA at the 1.2694 level comes into play. Watching the hourly close for confirmation.

Headlines from Feds Beige Book

•  SIGNIFICANT PICKUP NOT EXPECTED UNTIL LATE ‘09, 2010
• ECONOMY DETERIORATED FURTHER IN FEBRUARY, FED SAYS
• SPENDING `VERY WEAK’ EXCEPT FOR FOOD, DRUGS
• COMMERCIAL REAL ESTATE `WEAKENED SIGNIFICANTLY’
•  LITTLE OR NO SIGN OF SLOWING IN HOUSE-PRICE SLIDE
•  BOOK SAYS ECONOMIC DETERIORATION `BROAD BASED’
•  RESIDENTIAL REAL-ESTATE MARKETS `STAGNANT’
• CITES `PRONOUNCED DECLINES’ IN MANUFACTURING
• BUSINESS-LOAN DEMAND DOWN, CREDIT `REMAINED TIGHT’
• HOSPITALS SEEING LESS DEMAND FOR SERVICES AS PEOPLE ELECT NOT TO HAVE ELECTIVE SURGERY
• DISMAL HOLIDAY SALES.  SOME PICKUP IN JAN/FED
• SLIGHT DETERIORATION IN CREDIT QUALITY FOR CONSUMERS/BUSINESSES

The recovery is being pushed out to lat 2009/2010.  The report should hurt the dollar.

US Beige Book of economic activity across the US to be released at 2:00 PM

The Feds Beige Book will be released at 2:00 PM today. The Beige Book is an anecdotal report of the economic conditions across the US.  It is meant to be timely and also looks at the varous regions (Federal Reserve districts).   I would expect that conditions remain weak with employment still weak along with growth and housing.

Forex News Fed’s Beige Book released.

•  GENERALLY WEAK  MANUFACTURING, HOUSING DECLINED
• BOOK REPORTS ECONOMY WEAKENED FURTHER IN PAST MONTH
•  MOST COMMERCIAL REAL-ESTATE MARKETS DETERIORATED
• REPORTS GENERAL WEAKENING IN MOST LABOR MARKETS
• GENERALL WEAK MANUFACTURING, HOUSING DECLINED
• MOST COMMERCIAL REAL-ESTATE MARKETS DETERIORATED
• REDUCED OR LOW ACTIVITY ACROSS RANGE OF INDUSTRIES
• GENERALLY WEAK;’ MANUFACTURING, HOUSING DECLINED
• ECONOMY WEAKENED FURTHER IN PAST MONTH
• GENERAL WEAKENING IN MOST LABOR MARKETS
• WAGE PRESSURES REMAINED LARGELY CONTAINED

Forex News Fed’s Stern on the wires. Feds Beige Book to be released at 2:00 PM

•  SAYS HEALTHY GROWTH MAY RETURN SOMETIME IN 2010
•  PREDICTS U.S. ECONOMIC RECOVERY WILL BE SUBDUED BUT IS NOT FAR OFF
• RECESSION WILL LAST AT LEAST TWO MORE QUARTERS

At 2:00 PM the market will get further anecdotal news on the economy when the Fed’s Beige Book will be released.  The Beige Book is a region by region assessment of the economic activity within those regions.

Forex News US Initial and Continuing Claims due out at 8:30 AM

 The The weekly claims data for the US will be released at 8:30 AM.  The Initial Claims is expected to come in at 575K after last weeks spike to 586K.  Last weeks gain was a 26 year high.  Meanwhile the Continuing Claims are expected to rise to 4400k from 4370k.  The recent high for the release has been 4431K.  This series is also at levels not seen since 1982. 

Next week the US NFP will be released.  The early call is for another oversized decline of 475K.   

Forex Trading GBPUSD looks to test the lows from yesterday

The GBPUSD is approaching the lows from yesterday at the 1.4381 level now.  The upside was tried but when a rally failed, and the old low at 1.4466 gave way, the bottom picking traders gave up and the downside was probed.  The low so far has been 1.4391.  A break of the 1.4381 level should lead to further selling.  The GBPUSD has not reached this low since April 2002.  For a longer term perspective, the 2002 low reached 1.4041 while the 2001 low reached 1.3681. 

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