The Swiss National Bank left its three month libor target rate without change in line with market forecasts at 0.25%. The statement from the Central Bank outlines their commitment to supplying liquidity and safeguarding the Swiss franc versus the euro.

It seems that after the positive retail numbers the SNB has revised its GDP growth estimates, and now expect Switzerland’s economy to fall between 1.5% and 2%. Although it may not seem like a positive it is because of their earlier forecast of a fall between 2.5% and 3%. Rising unemployment and a deepening recession might convince the Swiss National Bank to return to its previous estimate.

For more Swiss and International Economic data visit FXEconostats

Britain Expected to Leave Recession by End of Year

The Office for National Statistics (ONS) said today that Britain will soon exit the deep recession and join a growing list of economies that have returned to positive growth.

“Today’s data offers further indications that we are likely to see growth in the third quarter” and an end to Britain’s deep recession, said Charles Davis, an economist at Independent Consultants, the Centre for Economics and Business Research. More

IMF Increases 2010 Global Growth Forecast

The International Monetary Fund (IMF) has increased its forecast for global growth for next year to about 3 percent from 2.5 percent.

“The recovery is stronger than initially forecast,” Portugal, a former deputy finance minister in Brazil, told journalists on the sidelines of a business seminar. More

Japan’s Consumer Prices Fall for 6th Straight Month

Core consumer prices in Japan dropped another 2.4 percent in August when compared to the same month one year ago, marking the sixth straight month of declines. The decline was due mostly to lower gasoline and energy prices. More

Oil Lower in European Trading

US crude futures dropped 17 cents to $66.57 a barrel by midday in Europe, while North Sea Brent crude futures fell 11 cents to $65.43. Expectations of weaker demand are expected to be reinforced by weekly inventory data from the United States due later this week.

“Crude will continue to move according to the stock markets and inversely to the dollar, which will remain weak,” said Tony Nunan, risk manager at Mitsubishi Corp in Tokyo. More

Trichet summed it up yesterday, ‘In the present situation it is extremely important that we can have in the framework at the level of global finance and the global economy a strong dollar……’ there you have it, the end of this long USD bear run. He convinced me, if the ECB says so, it’s a done deal! ‘The solidity of the dollar is very important’. Wait one moment, perhaps he was talking about the AUD, CAD or NZD? What ever one he was referring to, like other CBankers of late, they are trying to weaken their own currencies with verbal intervention. Canada’s Governor Carney is losing his battle!

The US$ is stronger in the O/N trading session. Currently it is higher against 14 of the 16 most actively traded currencies in a ‘whippy’ trading range.

We have little to chew on again in North America today as we wait for the granddaddy of employment reports this Friday. This morning, do not be surprised if we are treated to US house prices fallen at a slower pace and consumer confidence improving, further signs that the recession is abating. It seems that investors remain punch drunk from the G20 last week. The masses have been very quick in buying equities. Their fear of missing the next move higher is obviously too great. It’s not about global fundamentals, it’s about liquidity and the market is awash with it! Other events this week could shape our short term goals and rain on the party. Tomorrow’s unlimited provision of term liquidity by the ECB at the refi-rate and Friday’s US payroll numbers. The one way directional play of equities, commodities, treasuries and the USD will end in tears sooner than we think!

The USD$ is currently higher against the EUR -0.19%, GBP -0.13%, CHF -0.26% and JPY -0.10%. The commodity currencies are stronger this morning, CAD +0.38% and AUD +0.31%. Governor Carney took to the stage yesterday after a volatile weekend for the loonie. He continues to try and talk down the CAD’s strength. He said that the Canadian economy is recovering from its 1st recession in 17-years, however, warns that the ‘persistent strength’ in the currency could offset the improvement in growth and keep inflation below its target (2%). Again he reiterated that he would keep O/N rates at historical lows (+0.25%) until June of next year unless ‘the inflation out look changes dramatically’. After last weeks abysmal retail sales number (-0.6% vs. +0.8%), that will not to be an issue in the medium term! He remains optimistic and even commented that the economy may grow faster in the 2nd-half of this year than their ‘twice’ revised predictions. The pace of growth could be attributed to a gain in auto productions and a faster drawdown of inventories. Year-to-date the currency has appreciated +12% vs. the -18% decline that was recorded last year. The consistently weaker USD has made Canadian products uncompetitive. This is a global story, not an isolated case. On the flip side Canada has ‘stuff’ that the rest of the world requires and that commodities. Carney said that the Cbank is ‘not out of bullets in terms of implementing policy’, but, they are not also ‘trigger-happy’. For the time being the loonie remains consistently range bound influenced by commodity and global equities. On deeper USD pull-backs, speculators are happy to sell the domestic currency.

The AUD dollar rose for a 3rd-day down-under and is now approaching its strongest level in over a year vs. the USD. Traders continue to add to their bets that the RBA will need to raise rates by year end. Fundamental data remains somewhat stronger than most other major economies. Their budget deficit was -$23.7b for the year ending in June, less than the previous month’s estimates of -$28b. With global bourses advancing, investors risk appetite desires higher-yielding asset classes (0.8726).

Crude is higher in the O/N session ($66.94 up +10c). There were a number of factors yesterday that lent support to oil. Firstly, after last weeks aggressive retreat (-8%) the market was in need of some sort of correction. Secondly, crude managed to follow stocks higher on the back of proposed mergers in the tech and health industry. Finally, the threat of imposing greater sanction on Iran because of its nuclear program has heightened geo-political issues. Technically oil prices are inflated, they are not supported by market fundamentals, but geo-politics will always keep the black-stuffs prices artificially high. Do not expect the situation to change anytime soon. Last week, the surprise jump in US crude and product stocks had raised doubts that prices may have run ahead of demand fundamentals. But because of Iran, the landscape has changed again. The EIA report revealed an unexpected increase in stockpiles at some refineries idled for seasonal maintenance. Inventories climbed +2.86m barrels to +335.6m last week vs. the bullish expectation of a decline of -1.4m barrels. The fundamental gain in inventories was the largest in nearly 2-months and pushed stockpiles +9.1% above the 5-year average for the week. Refineries are operating at +85.6% of capacity, w/w, and are down -1.4% from the previous week. Ongoing proof of demand destruction is seen in the US’s fuel consumption numbers which have dropped -3.3% to +18.5m barrels a day (the lowest in 3-months). Even more of an eye opener was gas stocks whose inventories rose +5.41m barrels to +213.1m (the biggest increase in 9-months and has left stocks +6.5% above the 5-year average). The market was anticipating only a +500k gain! We could not leave the inventory for distillates out, they rose +2.96m barrels to +170.8m, and the highest level in 26-years! So we may have to forget fundamentals in the short term again and see politically what develops for guidance.
Gold prices have stayed close to home after the initial surge in the value of the greenback. However, speculators see an opportunity for the yellow metal to gain with the dollar’s renewed pressure and heightened geo-political tension in the Middle East boosting the demand for the ‘yellow metal’ as an alternative investment ($994).

The Nikkei closed at 10,100 up +91. The DAX index in Europe was at 5,709 down -27; the FTSE (UK) currently is 5,148 down -17. The early call for the open of key US indices is lower. The 10-year bonds eased 4bp yesterday (3.29%) and are little changed in the O/N session. Treasury prices continue to maintain their bid as investors speculate that the Fed will signal that interest rates will remain at record-low levels for the ‘foreseeable future’ as inflation remains subdued. Capital markets fear that the US unemployment rate may chose to grind higher in Sept. The report is out this Friday and at the moment any pull backs are coveted. Investors are moving down the curve, selling the front end in search of yield.

The US dollar edged higher against most of its major rivals in early New York trading on Tuesday. The greenback stayed at 2-week high against the Swiss franc, 15-day high versus the euro and a 4-day high against the Japanese yen.

In economic news, the S&P/Case-Shiller 20-City Composite Home Price Index fell at an annual rate of 13.3 percent in July compared to the 15.4 percent drop reported for June. Economists had expected the index to be down 14.2 percent year-over-year.

At the same time, the Conference Board said its consumer confidence index slipped to 53.1 in September from a revised 54.5 in August. Economists had been expecting the index to increase to 57.0 from the 54.1 originally reported for the previous month.

Dallas Federal Reserve President Richard Fisher said today that the country should exercise cautious optimism in the coming months as the economy recovers, as the housing industry is “still on life support.”

The dollar advanced more than 2.3 percent to a 4-day high of 90.36 against the Japanese yen by 10:00 am ET from yesterday’s fresh 8-month low of 88.25. The next upside target for the dollar-yen pair is likely to be seen around the 91.0 level. The pair ended Monday’s trading higher at 89.65.
The yen traded lower today after the Cabinet Office said that consumer prices in Japan were down 2.2 percent on year in August,, further triggering fears of deflation. The result matched forecasts exactly following the 2.2 percent annual fall in July. On a monthly basis, inflation was up 0.3 percent.

Core CPI, which strips out volatile prices for fresh food, was down an annual 2.4 percent in August – again matching the forecast after the 2.2 percent annual contraction in the previous month. Minus fresh food and energy, inflation was down 0.9 percent on year.

Against the European currency, the greenback climbed to a 15-day high of 1.4529 by 10:00 am ET. This may be compared to yesterday’s close of 1.4623. The euro-pound pair is presently worth 1.4544 with 1.447 seen as the next target level.

Eurozone economic sentiment rose to 82.8 in September, up from a revised reading of 80.8 in August and the expected level of 82.5, a monthly survey from the European Commission said today. However, the indicator stood well below its long-term average.

The consumer confidence index climbed to minus 19 from minus 22 in the previous month. At the same time, industrial sentiment improved to minus 24 from minus 25 and confidence in services moved up to minus 9 from minus 11.

Extending yesterday’s uptrend, the greenback jumped to a 2-week high of 1.0408 against the Swiss franc by 8:40 am ET. The dollar-franc pair that closed Monday’s deals at 1.0328 is presently worth 1.0395. On the upside, the greenback may find target around the 1.043 level.

Private consumption in Switzerland is likely to weaken in the coming months, the UBS consumption indicator suggested today.

The consumption indicator fell to 0.66 in August from 0.75 recorded in July. The indicator thus continued the downward trend that began a year ago. The UBS consumption indicator has now registered below its long-term average of 1.50 for eleven months now.
The dollar rebounded after hitting a 4-day low against the pound in early New York trading today. The greenback drifted higher to 1.5914 against the pound by 9:50 am ET from 1.5992 hit 2 hours ago. The cable is currently quoted at 1.593.

The latest report from Office for National Statistics showed that the UK economy contracted 0.6% sequentially in the second quarter. The second quarter decline was revised up from a 0.7% fall due to upward revisions to construction output.

On a yearly basis, gross domestic product dropped 5.5% in the second quarter, unchanged from the previous estimate. Annual decline was the biggest since records began in 1955.

Theme of the day again: NZD strength. NZD/JPY and NZD/USD two of the biggest % gainers on the day. EUR/NZD, AUD/NZD the biggest losers on the day, all in NZD strength.

General euro weakness abounds across the board.

NZD GDP expands the first time since the March 08 quarter.

BOE voted 9-0 to keep rates on hold.

Fed announces interest rates today @ 2:15pm EST. No change expected BUT it’s what they say in their statement that could make a difference. Supposedly, they’ve been talking with bond dealers about taking some of the stimulus back out of the economy. We’ll see if there’s any mention of this today.

Tomorrow: German IFO, U.S. Unemployment Claims, U.S. Existing Home Sales, G-20 meeting starts.

NZD going up on milk? Recovering Dairy prices could help New Zealand. Fonterra says that global dairy prices may make a slow, gradual recovery. Since they are one of NZD’s biggest companies & exporters of one of their biggest products…that’s a good sign for NZD.

Eur/Usd held the strong gains made during the previous sessions as the Dollar continues to slide. The Dollar lost value verses the Euro again and has been losing for many days in a row. The pair past the last important resistance level of 1.4800 and has been hanging close to that level for most of the Asian session. The pair is bullish and will continue to be bullish until some other signs give new signals and right now we see a ascending triangle on the 4hr chart which many times is a bullish signal as well.

The current resistance level is 1.4838 and the next major resistance level is the psychological 1.5000 level this is a very important level just because of the number itself. Look for the pair to challenge this level soon in the next few days. One major news item that is going to impact this pair is the FOMC Statement being held today at 2:15 PM. The most recent support levels are 1.4769 and 1.4669 watch the pair to slow down during a pullback at these level and find possible entry points on bounces or breaks of these levels.

EURUSD Forecast:
The EURUSD made a significant bullish momentum yesterday. On h4 chart below we can see that after breakout above the trendline resistance (red) price had a bullish momentum, topped at 1.4820 and closed at 1.4788. The rising wedge formation is no longer valid and the bearish reversal scenario has been canceled. The bias is bullish in nearest term targeting 1.4880 area before aim for 1.5000 area. CCI in overbought area and heading down on h4 chart so watch out for potential downside rebound testing 1.4766. Break below that area could lead us into no trading zone as the pair might rebound lower towards 1.4670 but the outlook remains bullish and short position is not recommended.

GBPUSD Forecast:
The GBPUSD made a significant bullish momentum yesterday. On h4 chart below we can see that after rejection to move below 1.6113 support area the pair bounced to the upside. The bias is bullish in nearest term targeting 1.6555 area and the bearish correction might over now. Immediate support at 1.6300 area. Break below that area should lead us back into no trading zone.

USDJPY Forecast:
The USDJPY failed to continued it’s bullish correction yesterday. On h4 chart below we can see that the bullish channel has been violated to the downside and price traded below 91.80 indicating that the bullish correction is now over and the pair is ready to continue it’s major bearish scenario. The bias is bearish in nearest term but watch out for a good support around key support level 90.20/10 area. Break below that area should trigger further bearish momentum targeting 89.60 area. Immediate resistance at 91.25. Break above that area should lead us into no trading zone but the outlook remains bearish and long position is not recommended.

USDCHF Forecast
The USDCHF continued it’s bearish momentum yesterday. On h4 chart below we can see that after break below 1.0275 support area the pair had a bearish momentum, bottomed at 1.0214 and closed at 1.0237. The bias is bearish in nearest term still targeting 1.0135 area. Immediate resistance at 1.0275. Break above that area should lead us into no trading zone as the pair might corrected higher testing 1.0380 but long position is not recommended.

Have a great day!

Forexpros Daily Analysis Sep 23, 2009

Free webinar – The Ichimoku Cloud

Expert: Chris Capre
When: Thu, Oct 1, 2009, 12:00 EST

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Euro Dollar

As expected, the Euro reached 1.48 for the first time this year, and also reached the first target suggested in yesterday’s report, which leaves the second target 1.4901 ahead of us, could we see it today? The current advance is still climbing (slowly we might add) without showing exhaustion, and the top of the current channel is at 1.49, these thing support the probability of going up. On the other hand, a divergence case on the RSI is developing as we speak, supporting the opposite scenario. These mixed signals could go in harmony if we manage to go up to 1.4901 first then go down to solve the divergence. The most important resistance for short-term is 1.4824, and breaking it is the key to hit 1.4901. the most important support for the short-term is 1.4783, and breaking it would threaten the Euro with a drop to the important 1.4698. Only if we break this support we can start talking about the big correction for the whole move up from 1.4176, because such a discussion before that break would be completely premature.

Support:
• 1.4783: short-term support.
• 1.4698: Fibonacci 61.8% for short-term (for the rise from 1.4610).
• 1.4646: Friday’s low, and the support area that showed strength recently.

Resistance:
• 1.4824: previous daily high.
• 1.4901: previous daily high.
• 1.4962: previous daily high.

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USD/JPY

The Dollar-Yen broke the support area 91.60-91.63 to go back into the negative territory again, and to drop more than 110 pips after the break. With that, we came to the end of the rising adventure that stopped at 92.50, and the downtrend came back to dominate. But, stopping near the support 90.51and holding above it, means that there is an existing possibility for another rise, without breaking 90.51. If price manages to hold above this support, there would be a good chance to test a number of important resistance levels most important of which is 91.74. we prefer waiting for a break of 91.74 or 90.51, since we believe that breaking any of those levels will decide the direction of the next move. If we break 91.74, we would be on the road again to 92.50. And if we break 90.51 the downside pressure will come back to drive the price gradually to test (and may be break) the psychological level 90, and to move towards targets below it, first of which is the important support area 89.68-89.78.

Support:
• 90.51: the previous support that stopped the current drop.
• 90.11: Sep 16th low.
• 89.68/78: important support area containing the lows of Feb 11th, 12th & Dec 29th 08.

Resistance:
• 91.25: Fibonacci 38.2% for the short-term.
• 91.74: Fibonacci 61.8% for the short-term.
• 92.70-92.80: previous support area which contains a number of daily lows in the past few months.

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Forex trading analysis by Forexpros – Written by Munther T. Marji

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Disclaimer:
Trading Futures and Options on Futures and Cash Forex transactions involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

WASHINGTON — Home-mortgage rates fell again this week, remaining at three-month lows, with the average rate on 30-year, fixed-rate mortgages retreating closer to 5%, according to Freddie Mac’s weekly survey.

After yields on Treasurys rebounded from the multidecade lows they hit earlier this year, they have since retraced a bit — taking mortgage rates with them.

Freddie economist Frank Nothaft said the results, which showed the third consecutive week of declines in fixed mortgage rates, suggest this year may post a record annual low for the survey, which began in 1971.

The 30-year fixed-rate mortgage averaged 5.04% for the week ended Thursday, down from last week’s 5.07% average and 5.78% a year ago. Rates on 15-year fixed-rate mortgages were 4.47%, down from 4.5% and 5.35%, respectively.

Five-year Treasury-indexed hybrid adjustable-rate mortgages were 4.51%, flat with last week’s 4.51% but down from 5.67% a year ago. One-year Treasury-indexed ARMs were 4.58%, down from 4.64% and 5.03%.

Hey everyone, today’s presentation is no different to what I have been putting out this whole week. It’s all about the Euro Pound cross as our guiding light for today’s trading. I once again use this cross to build a trade plan for the Pound USD and the Pound Yen. I am posting this video a little earlier than usual; as a result I make use of longer term timeframes to get a general idea for market direction. Good luck!! David Pegler