Last week’s currency trading review
The USD/JPY opened the week above Y88 with Yen on the backfoot with heavy interference from the newly elected Government is expected in 2013. PM Abe wants the BOJ to target 2% inflation via increased bond purchases and monetary easing. With Japan suffering from deflation the market expects the BOJ to announce major new programs to meet the Governments demands. EUR/JPY is critical failing at Y116 but well supported on pullbacks so far.
The EUR/USD was under heavy pressure last week after failing to break 1.3300 once again we turned our focus to the downside. After the FOMC minutes gave traders a reason to buy USD the EUR/USD sank to 1.3010 on Friday. While the major is range trading in the 1.3300-1.3000 range we prefer to buy dips rather than sell rallies with the burden of proof still on the Dollar bulls in 2013.
Currency Movement last week
EUR/USD was down -1.15% closing at 1.3067, after opening the week at 1.3217.
USD/JPY was up +2.43% closing at 88.14, after opening at 86.00.
GBP/USD was down -0.60% closing at 1.6070 after opening at 1.6167.
AUD/USD was +1.03% closing at 1.0478 after opening at 1.0370.
This Week’s Trading Preview
Pivot: 114.5
Our preference: Long positions above 114.5 with targets @ 115.2 & 115.6 in extension.
Alternative scenario: Below 114.5 look for further downside with 114 & 113.6 as targets.
Comment: intraday technical indicators are mixed and call for caution.
Key levels
116
115.6
115.2
114.67 last
114.5
114
113.6
Forex Economic Data Preview
In the States; On Wednesday, Crude Oil Inventories. On Thursday, Weekly Jobless Claims forecast at 361k vs. 372k previously. Also FOMC Member George and Bullard Speaks. On Friday, November Trade Balance forecast at -41.1bn vs. -42.2bn previously. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone; On Tuesday, November Eurozone Retail Sales forecast at 0.3% vs. -1.2% previously. Also November Unemployment Rate forecast at 11.8% vs. 11.7% previously. On Wednesday German industrial Production forecast at 1.1% vs. -2.6% previously. On Thursday, ECB Rate decision forecast at 0.75% vs. 0.75% previously. Focus on the press conference afterwards. In the UK; On Wednesday Trade Balance forecast at -9bn vs. -9.5bn previously. On Thursday, Official Bank Rate forecast at 0.5% vs. 0.5% previously. Also the Asset Purchase Facility is forecast to remain at 375bn. We will provide our previews and reviews of these data releases in the daily summary.
In Japan; On Friday, November Current Account forecast at 0.31T vs. 0.41T previously. In Australia; On Tuesday, November Trade Balance forecast at -2.64bn vs. -2.21bn previously. On Wednesday, November Retail Sales forecast at 0.3% vs. 0.0% previously.
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