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A Brief Look At USD/CAD Last week the currency pair moved steadily on the upside as the prices of commodities declined. On Monday we started slow, trading in a tight range in the early hours of the session. The 0.97 level acted as a support, curbing the bears’ efforts to push the USD/CAD lower, while the 25-period moving average acted as a resistance. Investors, trading range in binary options profited from this movement in close boundaries, but their strategy lost its validity when the bulls finally took control of the market and sent the Loonie lower against its U.S. counterpart. The move to the upside was largely due to a decline in the prices of commodities, but also in part due to the worse-than-expected foreign securities purchases number. Analysts were projecting the value of domestic stocks, bonds and money-market assets purchased by foreigners to have risen to 11.30B, but instead they increased to just 6.67B. The currency pair finished its Monday session around the highs after encountering with some resistance at its 50-period moving average. It was a good level for traders of binary options to put as the rally was clearly running out of steam. Tuesday was a very choppy day with most of the trading occurring around the 50-period moving average. Neither the bulls, nor the bears were able to take a firm grasp of the market and as a result traders of range in binary options were once again the big winners. A good rate to enter in the option was the 50-period moving average, which stood at 0.9739. On Wednesday the sell-off in the higher-yielding currencies, including the Canadian dollar, continued as commodities took another hit after the crude oil inventories rose sharply by 8.5M barrels. The USD/CAD steadily moved to the upside, but its advance remained somewhat limited as some investors chose to put their money in the Loonie, running from the yen. This move came in a response to Bank of Japan’s decision to extend its bond-buying program by 10 trillion yens. Thursday was a pretty good day for traders of binary call options on the USD/CAD. The currency pair shot up, pushing above its 100-period moving average for a brief moment. Towards the end of the session, however, the rally ran out of the steam and the bulls scattered, giving way to the bears, which dominated the market for the rest of the day. The decline was in part due to the strong resistance at the 100-period moving average and in part due to some profit taking occurring ahead of the release of the closely monitored CPI figures on the following day. On Friday, the core CPI figures came in line with expectations, but the CPI numbers disappointed, rising by a modest 0.2%. At the same time the wholesale sales on a month over month basis dropped by 0.6%, which was their lowest reading since January. Analysts were projecting a much more modest dip of 0.1%. To make the matters worse, the reading for July was revised downwards – from -0.1% to -0.3%. After the news hit the wires investors shed their holdings in the Loonie, but even with this selling the USD/CAD was unable to reach the highs it touched on Thursday, finishing at 0.9760. This week the sell-off in the Canadian dollar continues as metal prices are extending their previous week’s declines. The USD/CAD is currently trading at 0.9807 after touching highs of 0.9815 earlier in the session. Traders, who want to profit from the movements in the currency pair should monitor closely the results from the reports that are scheduled to be released later in the week as they might have a significant impact over the direction of the USD/CAD. First we have the retail sales and the core retail sales, published on Tuesday, and later we have the GDP numbers, announced on Friday. Technically speaking, support in the currency pair is provided by the 100-period moving average around 0.9779, while resistance stands at the highs we touched in early September around 0.99. Oscillators are all trending higher with the relative strength index at 67 and the stochastic approaching overbought territory, currently standing at 74. The MACD is moving above the key 0 level, issuing mixed signals, which might indicate that the USD/CAD is looking for a direction. Source: binaryoption

00:50 JPY Trade Balance Forecast: -0.37T Previous: -0.33T The Trade Balance measures the difference in value between imported and exported goods and services over the reported period. A positive number indicates that more goods and services were exported than imported. A higher than expected reading should be taken as positive/bullish for the JPY, while a lower than expected reading should be taken as negative/bearish for the JPY. 03:30 CNY Chinese HSBC Manufacturing PMI Forecast: Previous: 47.60 Flash figures are released approximately 6 business days prior to the end of the month. Final figures overwrite the flash figures upon release and are in turn overwritten as the next Flash is available. The Purchasing Managers’ Index (PMI) is a composite indicator designed to provide an overall view of activity in the manufacturing sector and acts as an leading indicator for the whole economy.When PMI is below 50.0 this indicates that the manufacturing economy is declining and a value above 50.0 indicates an expansion of the manufacturing economy. A higher than expected reading should be taken as positive/bullish for the CNY , while a lower than expected reading should be taken as negative/bearish for the CNY. 05:30 JPY Bank of Japan Governor Shirakawa Speaks Bank of Japan (BOJ) Governor Masaaki Shirakawa (April 2008 – April 2013) is to speak. As head of the BOJ, which sets short term interest rates, he has a major influence over the value of the yen. Traders watch his speeches closely as they are often used to drop subtle hints regarding future monetary policy and interest rate shifts. His comments may determine a short-term positive or negative trend. 06:00 JPY Bank of Japan Monthly Report The Bank of Japan’s (BoJ) monthly report contains the statistical data that policymakers evaluate when setting interest rates. The report also provides detailed analysis of current and future economic conditions from the bank’s perspective. 08:00 EUR French Manufacturing PMI Forecast: 46.4 Previous: 46.0 The French Manufacturing Purchasing Manager’s Index (PMI) measures the activity level of purchasing managers in the manufacturing sector. A reading above 50 indicates expansion in the sector; a reading below 50 indicates contraction. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance. A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR. 08:30 EUR German Manufacturing PMI Forecast: 45.3 Previous: 44.7 The German Manufacturing Purchasing Managers’ Index (PMI) measures the activity level of purchasing managers in the manufacturing sector. A reading above 50 indicates expansion in the sector; below indicates contraction. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance. A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR. 09:00 EUR Manufacturing PMI Forecast: 45.4 Previous: 45.1 The Manufacturing Purchasing Managers’ Index (PMI) measures the activity level of purchasing managers in the manufacturing sector. A reading above 50 indicates expansion in the sector; below 50 indicates contraction. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance. A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR. 09:30 GBP Retail Sales (YoY) Forecast: 2.7% Previous: 2.8% Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity. A higher than expected reading should be taken as positive/bullish for the GBP, while a lower than expected reading should be taken as negative/bearish for the GBP. 09:30 GBP Retail Sales (MoM) Forecast: -0.4% Previous: 0.3% Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity. A higher than expected reading should be taken as positive/bullish for the GBP, while a lower than expected reading should be taken as negative/bearish for the GBP. 11:00 GBP CBI Industrial Trends Orders Forecast: -15 Previous: -21 The Confederation of British Industry (CBI) Industrial Trends Orders measures the economic expectations of the manufacturing executives in the U.K. It is a leading indicator of business conditions. A level above zero indicates order volume is expected to increase; a level below zero indicates expectations are for lower volumes. The reading is compiled from a survey of about 550 manufacturers. A higher than expected reading should be taken as positive/bullish for the GBP, while a lower than expected reading should be taken as negative/bearish for the GBP. 13:00 BRL Brazilian Unemployment Rate Forecast: 5.6% Previous: 5.8% The Unemployment Rate measures the percentage of the total work force that is unemployed and actively seeking employment. A higher than expected reading should be taken as negative/bearish for the BRL, while a lower than expected reading should be taken as positive/bullish for the BRL. 13:30 USD Initial Jobless Claims Forecast: 373K Previous: 382K Initial Jobless Claims measures the number of individuals who filed for unemployment insurance for the first time during the past week. This is the earliest U.S. economic data, but the market impact varies from week to week. A higher than expected reading should be taken as negative/bearish for the USD, while a lower than expected reading should be taken as positive/bullish for the USD. 13:30 USD Continuing Jobless Claims Forecast: 3275K Previous: 3283K Continuing Jobless Claims measures the number of unemployed individuals who qualify for benefits under unemployment insurance. A higher than expected reading should be taken as negative/bearish for the USD, while a lower than expected reading should be taken as positive/bullish for the USD. 15:00 USD Philadelphia Fed Manufacturing Index Forecast: -4.1 Previous: -7.1 The Philadelphia Federal Reserve Manufacturing Index rates the relative level of general business conditions in Philadelphia. A level above zero on the index indicates improving conditions; below indicates worsening conditions. The data is compiled from a survey of about 250 manufacturers in the Philadelphia Federal Reserve district. A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD. 17:00 USD Continuing Jobless Claims Mario Draghi (born 3 September 1947) is an Italian banker and economist who has been governor of the Bank of Italy and succeeded Jean Claude Trichet as President of the European Central Bank starting November 2011. As head of the ECB, which controls short term interest rates, he has more influence over the EUR value than any other person. His comments may determine a short-term positive or negative trend. Source: binaryoption

Last week was pretty volatile for the currency pair, as analysts were expecting the Federal Reserve to announce a new wave of quantitative easing in its meeting, scheduled for Thursday. The U.S. currency lost ground against all its major counterparts as market participants saw the potential extension of the Fed’s bond-buying program to have a dilutive effect on the greenback. The USDCHF dropped steadily all week long, starting at 0.9445 and finishing it close to the lows. On Monday the currency pair was struggling for quite some time with the support at the 0.945 level and after several failed attempts at breaking it the bears finally gave in and the bulls returned to the market, closing the Franc slightly higher, at 0.9463. On Tuesday, however, the support finally gave in and the USDCHF dropped sharply, touching lows of 0.99373 for the session before bouncing back up and finishing at 0.9389. The Wednesday session was rather quiet right until the last couple of trading hours as traders were preparing for the Federal Reserve meeting on Thursday and for the Swiss National Bank monetary policy assessment. Towards the end of the day market participants grew increasingly confident that the Federal Reserve will be forced to intervene in the markets as the unexpected increase in oil inventories indicated that the production in U.S. is slowing. On Thursday the selling intensified as the U.S. central bank surprised investors by announcing a much more aggressive bond-buying program than the one market participants were expecting. The Fed vowed to buy $40 billion worth of mortgage backed securities and long-term government bonds for as long as needed for the labor market to start recovering. At the same time the Swiss National Bank decided to leave its key interest rate at its record low of <0.25%. The USDCHF declined sharply on the news, finishing the session at 0.935, just a whisker above the lows for the day. On Friday the investors continued to shed their holdings in the dollar sending it to new lows against the Franc. The currency pair moved to its lowest level since mid-May despite the better-than-expected numbers, coming for the U.S. economy. Around noon we touched the lowest rate for the session – 0.9229 and in the afternoon the volatility slowly died as traders resorted to profit-taking activities ahead of the weekend. The currency pair finished the week not far away from the lows, slightly above the 0.925 level – at 0.9255. This week the USDCHF is trading in a very tight range around the lows it touched last week as investors prefer to refrain from further selling of the dollar since the greenback starts to look oversold against almost all its major counterparts. Moreover, the week is relatively quiet in terms of economic news, which is also affecting the trading volumes. Today we had the ZEW Economic Expectations number released for the Swiss economy, which indicated that the sentiment among investors took another hit in September. The news, however, had little impact on the USDCHF, which continued to move sideways. Tomorrow we have the trade balance figures being announced for the Swiss economy with investors expecting the surplus on the current account to have shrunk to 2.45B in August from a reading of 2.92B in July. Although the number is usually closely monitored, there are other news that will be drawing the attention of the market participants such as the unemployment claims and the Philly Fed manufacturing index for the U.S. economy and the bond auction in Spain. Technically speaking, the support in the USD/CHF seems to be forming around the 0.925 level, while resistance is standing at the 0.93 level. Oscillators are all trending higher with the relative strength index at 44 and the stochastic at 59. The MACD bounced from the lows it touched at the end of last week and is currently issuing buy signals, but it is still way below the key 0 level. Source: binaryoption

1:30 AUD Employment Change Forecast: 5.1K Previous: 14.0K Change in the number of employed people during the previous month. Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity. a 1:30 AUD Unemployment Rate Forecast: 5.3% Previous: 5.2% Percentage of the total work force that is unemployed and actively seeking employment during the previous month. Although it’s generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. 1:00 GBP Asset Purchase Facility Forecast: 375B Previous: 375B Total value of money the BOE will create and use to purchase assets in the open market. It increases demand for bonds which tends to lower long-term interest rates. 11:00 GBP Official Bank Rate Forecast: 0.50% Previous: 0.50% Interest rate at which banks lend balances held at the BOE to other banks. Short term interest rates are the paramount factor in currency valuation – traders look at most other indicators merely to predict how rates will change in the future. 11:45 EUR Minimum Bid Rate Forecast: 0.50% Previous: 0.75% Interest rate on the main refinancing operations that provide the bulk of liquidity to the banking system. Short term interest rates are the paramount factor in currency valuation – traders look at most other indicators merely to predict how rates will change in the future. 12:15 USD ADP Non-Farm Employment Change Forecast: 141K Previous: 163K Estimated change in the number of employed people during the previous month, excluding the farming industry and government. Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity. 12:30 EUR ECB Press Conference ECB President and Vice President. It’s the primary method the ECB uses to communicate with investors regarding monetary policy. It covers in detail the factors that affected the most recent interest rate and other policy decisions, such as the overall economic outlook and inflation. Most importantly, it provides clues regarding future monetary policy. 12:30 USD Unemployment Claims Forecast: 141K Previous: 163K The number of individuals who filed for unemployment insurance for the first time during the past week. Although it’s generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. 14:00 USD ISM Non-Manufacturing PMI Forecast: 52.6 Previous: 52.6 Level of a diffusion index based on surveyed purchasing managers, excluding the manufacturing industry. It’s a leading indicator of economic health – businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy. Source: binaryoption

Moody’s downgrades European Union’s outlook to negative. These developments are not totally surprising to most binary analysts when taking into consideration the outlook changes of Germany, France, UK, and Holland. More interesting is the fact that Moody’s might even further cut the EU ratings due to the changes to the EU’s fiscal framework that imply in a conservative budget management. AtFrankfurt am Main, Germany on September 03, 2012 — Moody’s Investors Service has today changed to negative from stable its outlook on the Aaa long-term issuer rating of the European Union (EU). The rating agency has also changed to negative from stable its outlook on the provisional (P)Aaa rating of the EU’s medium-term note (MTN) programme. Most likely the main reason for the outlook change to negative reflects the negative outlooks now assigned to the Aaa sovereign ratings of key contributors to the EU budget: Germany, France, the UK and the Netherlands, which together account for around 45% of the EU’s budget revenue. Source: binaryoption

06:00 EUR German Gross Domestic Product Q2F (QoQ) Forecast: 0.3% Previous: 0.3% Change in the inflation-adjusted value of all goods and services produced by the economy. 06:00 EUR German Gross Domestic Product Q2F (YoY) Forecast: 1.0% Previous: 1.0% Change in the inflation-adjusted value of all goods and services produced by the economy. 07:30 EUR German Purchasing Manager Index Manufacturing August Forecast: 43.4 Previous: 43 Level of a diffusion index based on surveyed purchasing managers in the manufacturing industry. It’s a leading indicator of economic health – businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy. 07:30 EUR German Purchasing Manager Index Services August Forecast: 50.1 Previous: 50.3 Level of a diffusion index based on surveyed purchasing managers in the services industry. It’s a leading indicator of economic health – businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy. 12:30 USD Initial Jobless Claims August 18 Forecast: 365K Previous: 366K The number of individuals who filed for unemployment insurance for the first time during the past week. Although it’s generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. 14:00 USD New Home Sales July Forecast: 365K Previous: 350K Annualized number of new single-family homes that were sold during the previous month. It’s a leading indicator of economic health because the sale of a new home triggers a wide-reaching ripple effect. For example, furniture and appliances are purchased for the home, a mortgage is sold by the financing bank, and brokers are paid to execute the transaction. 14:00 USD House Price Index June Forecast: 0.5% Previous: 0.8% Change in the purchase price of homes with mortgages backed by Fannie Mae and Freddie Mac. It’s a leading indicator of the housing industry’s health because rising house prices attract investors and spur industry activity. Source: binaryoption

EUR/USD Open 1.2314 High 1.2324 Low 1.2227 Close 1.2311 On Monday Euro/Dollar increased with almost 100 pips. The European currency appreciated from 1.2227 to 1.2324 yesterday, not matching the negative money flow sentiment at almost -21%, closing the day at 1.2311. This morning the Euro is trading quietly, with movements within yesterday's range for now. On the 1 hour chart new downward channel has formed, while on the 3 hour chart the downward channel has renewed. Break above the nearest resistance and yesterday's top at 1.2324 may trigger further strengthening of the Euro. Going bellow yesterday's bottom and first support at 1.2227, however, would confirm continuation of the bearish trend, towards next objective downwards 1.2110. Today's focus is on France and Italy Industrial production, at 6:45 and 8 GMT respectively. Quotes are moving bellow the 20 and 50 EMA on the 1 hour chart, indicating bearish pressure. The value of the RSI indicator is negative and calm, MACD is negative and declining, while CCI has crossed down the 100 line on the 1 hour chart, giving over all short signals. ibtimes

Talking Points [/left] Euro: Spain To Recapitalize Bankia With Debt, ECB Keeps Asset Purchases On Hold British Pound: BoE Drops Dovish Tone, Warns Of Sticky Price Growth U.S. Dollar: Benefits From Headline-Drive Market, Consumer Confidence Misses Forecasts Euro: Spain To Recapitalize Bankia With Debt, ECB Keeps Asset Purchases On Hold [/left] The Euro pared the overnight advance to 1.2573 amid heightening finance costs across the European periphery sapped risk-taking behavior, while Italy sold EUR 8.5B in 6-month bills yielding 2.104%, which compares to the 1.772% offered in April. Meanwhile, Spanish Prime Minister Mariano Rajoy said the government will now recapitalize Bankia with treasury debt rather than cash as region’s third-largest lender seeks a EUR 19B bailout, but it seems as though that the European Central Bank will carry its wait-and-see approach into the second-half of the year even as the governments operating under the fixed-exchange rate system become increasingly reliant on monetary support. [/left] Indeed, ECB board member Ewald Nowotny talked down speculation for restoring the asset-purchase program, stating that the Governing Council ‘ has done a number of measures that were very helpful and efficient for the economy ,’ and went onto say that the ‘the role of the ECB is in the field of liquidity, not solvency ’ as the central bank continues to endorse its current policy stance. As European policy makers continue to carry out a reactionary approach in tackling the risks surrounding the region, fears of Spanish bailout paired with the growing threat of a Greek exit continues to foster a bearish outlook for the single currency, but the pair appears to be carving out a short-term floor around the 1.2500 figure as the relative strength index continues to come off of the lows. We are waiting to see the RSI cross back above 30 to see a short-term correction take shape, but the headline-driven market may ultimately produce a fairly muted rebound in the exchange rate as European policy makers struggle to restore investor confidence. [/left] British Pound: BoE Drops Dovish Tone, Warns Of Sticky Price Growth [/left] The British Pound gave back the advance to 1.5716 as market participant scaled back their appetite for risk, but we may see another bullish run in the GBPUSD as the Bank of England strikes a more hawkish tone for monetary policy. BoE board member Ben Broadbent curbed bets for more quantitative easing amid the stickiness in underlying inflation, while chief economist Spencer Dale said the central bank needs to get price growth back towards the 2% target as he expects to see a more robust recovery later this year. As the BoE moves away from its easing cycle, it seems as though the Monetary Policy Committee will start to discuss a tentative exit strategy to address the risk for inflation, and the GBPUSD should continue to come off of the monthly low (1.5629) as it appears to be carving out a higher low in May. In turn, we will keep a close eye on the RSI as it comes off of oversold territory, and the pound-dollar may carve out a higher high in June as the shift in central bank rhetoric props up interest rate expectations. [/left] U.S. Dollar: Benefits From Headline-Drive Market, Consumer Confidence Misses Forecasts [/left] The greenback bounced back on Tuesday , with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR ) advancing to an overnight high of 10,202, and it seems as the headline-driven market may continue to prop up the reserve currency as currency traders show a fairly muted reaction to the developments coming out of the world’s largest economy. Although the Conference Board’s Consumer Confidence survey missed market expectations, household sentiment continues to come off of the 2011 lows, and we should see the Federal Reserve soften its dovish tone for monetary policy as the recovery gradually gathers pace. In turn, we should see the FOMC move away from its easing cycle, and the Fed may look to address the stickiness in price growth as central bank officials see the economy on a more sustainable path. [/left] thestreet.com [/left][/left]