Looking Back (June.30-July 6)

GBP/USD: The Pound Sterling went pretty much where I expected it to go. During the July 2 London trading hours the stock market rallied 9.8% creating an immediate demand for the Pound; however the new demand petered out just shy of 1.530, falling hard after the not-so-great England Central Bank's Monetary Report as expected.

EUR/USD: Extremely mediocre producer activity and around the same Unemployment Rate as last month sets up for a pessimistic ECB Report and follow-up press conference. ECB President Mario Dragzi shared similar sentiment with BOE President Mark Carney.

"Both the European Central Bank and the Bank of England stood aligned against the Fed’s decision to cut stimulus spending, committing to record low interest rates. The ECB will keep its rate at 0.5 percent, and the BoE has hinted at lower rates.

In an unprecedented move, European central bankers broke new ground to protect their economies from a US-led surge in bond yields, indicating they will keep benchmark interest rates low for an "extended period.”

ECB President Mario Draghi said the decision was aimed at supporting the euro economy of the anticipated decline in US money printing, but insisted the consensus was reached without US influence.

European markets rallied on the news, which posted their biggest one-day jump in 11 months, but the pound and euro fell against the US dollar, with the euro hitting a five-week low.

"We are not reacting to other central bank’s monetary policy decisions," Draghi said."

source: Autonomous Nonprofit Organization “TV-Novosti”, 2005–2013. http://rt.com/business/euro-bank-interest-rate-693/)

AUD/USD: Sluggish manufacturing performances have slowly gotten better, but still below where the RBA wants it to be. The Australian Trade Balance remains at $-2637M signaling that the Australian dollar is still too high to encourage foreign buying of Australian goods and services. Retail sales grew 0.1%; pretty slow for a growing economy. Consumer confidence began to rebound from a bottom set in May of -7.0%. Concerning however is the continuing shrink of full-time employment. Employment Changes month-to-month beat expectations of a grisly outlook but most of the work is part-time which will impact earnings. A decline in the GDP growth rate raises concerns of the economic expansion ending.

Weekly Summary

	Pair	Open	Close	Gains	Pips
Sell	AUD/USD	0.9192	0.9184	2%	0.0008
Sell	AUD/USD	0.9169	0.9112	14.25%	0.0057
Sell	AUD/USD	0.9061	0.9181	30%	-0.0120
Buy	AUD/USD	0.9112	0.9098	3.50%	-0.0014
Buy	AUD/USD	0.9108	0.9126	4.50%	0.0018
Totals				-6%	-51

Sell	GBP/USD	1.5131	1.52	17.25%	-0.0069
Sell	GBP/USD	1.5269	1.5073	49%	0.0196
Sell	GBP/USD	1.5213	1.5073	35%	0.0140
Sell	GBP/USD	1.5198	1.5073	31.25%	0.0125
Buy	GBP/USD	1.5232	1.5271	9.75%	0.0039
				107.75%	431

Sell	EUR/USD	1.3022	1.2947	18.75%	0.0075
Sell	EUR/USD	1.2986	1.2947	9.75%	0.0039
Sell	EUR/USD	1.2987	1.2947	10%	0.004
Sell	EUR/USD	1.2959	1.2947	3%	0.0012
Sell	EUR/USD	1.2913	1.2915	0.50%	0.0002
				41.00%	166

Sell	USD/JPY	99.79	99.6	4.76%	0.19
Buy	USD/JPY	99.81	100.01	5%	0.20
				9.76%	39

Grand Total                                                  164.26%         419

           

Open Orders (18:00 UTC)

Closed Positions   

 Sell     AUD/USD         TP     0.9112          14.25%
 Sell     GBP/USD         SL     1.2500          17.25%
 Buy     GBP/USD         M      1.5279          14.50%



Confidence Level             Pair                Open          SL           TP              Gains  to date

High                    Sell     EUR/USD       1.3022       1.3209      1.2922          2.75%

High                    Sell     EUR/USD       1.2959       1.3053      1.2922          12.50%

High                    Sell     GBP/USD       1.5198       1.5505      1.5073          24.00%

High                    Sell     GBP/USD       1.5263       1.5505      1.5073          1.75% 

Moderate             Sell     AUD/USD       0.9169       0.9293      0.9112          1.25%


Moderate             Buy     AUD/USD       0.9108       0.8755     0.9419           12.75%        

Open Orders

Confidence Level             Pair                Open          SL           TP              Gains  to date

High                    Sell     EUR/USD       1.3022       1.3209      1.2922          13.00%

High                    Sell     GBP/USD       1.5198       1.5505      1.5073          12.75%

Moderate            Sell     AUD/USD      0.9169       0.9293      0.9112           5.50%

Low                    Buy    GBP/USD       1.5232       0.4923      1.5412           22.00%

RBA

SELLING  AUD/USD

Update: Possible support around .9157; recent upbeat manufacturing data might prevent it from reaching .9112

4:50 UTC:     Seller knee-jerking might end sooner than expected, but I am still short at this point

Post NYSE

GBP: Signs of a snail-pace economic recovery are showing with the PMI Manufacturing 1.1 points above the forecast and consumer credit increasing slightly (much better than decreasing); coupled with meh American news the Pound Sterling may gain a bit ahead of the BOE announcement. Lending for homes decreased against an expected gain; this was somewhat expected as the housing market tends to be a lagging indicator, optimistically this may be seen as the 'bottoming out' of the contraction.

EUR: A similar story to the Britons Euro-zone productivity indices edge slightly higher; however it should be noted that the German PMI decreased by 0.1 points possibly offsetting minor gains in France and Italy. Euro-zone unemployment increased but less than predicted; economic contraction lessening. Also of note the CPI increased as expected still a bit below 2%.

AUD: Fairly upbeat manufacturing and commodity price news sent the Aussie bulling against the dollar; adding to this momentum was yawn-inducing American news.

I am going to open positions later today announcing them over this blog; some of you risk-lovers probably already entered an AUD/USD buy pre-NYSE.

The week ahead: Australia

AUD/USD

The Bank of Australia's rate decision is coming out Tuesday 4:30 GMT on the back of previous week's neutral indicators of steady 3.0% credit growth and a 3% drop in job vacancies. Australian business confidence grew and new motor vehicle sales stopped dropping (for now). China, Australia's biggest trade partner is facing a liquidity trap with recent explosions in credit. China claims to keep credit regulation strict while not cutting available credit.

Earlier today China's Producer Manufacturing Index declined slightly while their index of leading indicators edges up slightly.

Australia's AiG Performance of Manufacturing Index shot up 5.8 points in today's news; manufacturing tends to be highly sensitive to economic changes making it an excellent leading indicator. With that in mind, is a stronger economic expansion on the horizon?



WHAT TO WATCH:

AUD RBA Commodity Price Index
AUD RBA Commodity Index SDR (YoY)
AUD Reserve Bank of Australia Rate Decision (out tomorrow!)
AUD AiG Performance of Service Index
AUD HIA New Home Sales (May & June)
AUD Retail sales s.a (MoM)
AUD Trade Balance (Australian Dollar)
AUD Building Approvals (MoM & YoY)
AUD AiG Performance of Construction Index
If the Chinese economy stabilizes its growth and commodity prices rise, the bulls will run wild; however it will get stifled if American news is upbeat (manufacturing news especially).

The week ahead: European Union

EUR/USD


The euro-zone is a hotbed of turbulence; attempting to consolidate so many nations into a streamlined economic policy: easier said than done. The Union does agree on one thing: our economies are hurting! Fragility in southern Europe is the flagship of Team Recession while Germany is trying (reluctantly at times) to launch Team Expansion into the spotlight.

Team Expansion captain Germany hasn't been that healthy as of late. Although they have not entered a recession, they squeaked by with a 0.1% growth....exhilarating! Adding to investor uncertainty in the Euro was the continued recession of the continent's second largest market France and luke-warm German IFO Business Indicator news.

WHAT TO WATCH:

EUR French Purchasing Manager Index Manufacturing
EUR German Purchasing Manager Index Manufacturing
EUR Euro-zone Purchasing Manager Index Manufacturing
EUR Euro-zone Consumer Price Index Estimate (YoY)
EUR Euro-zone Unemployment Rate
EUR Euro-zone Consumer Price Index - Core (YoY)
EUR Euro-zone Producer Price Index (YoY)
EUR Euro-zone Producer Price Index (MoM)
EUR German Purchasing Manager Index Services
EUR Euro-zone Purchasing Manager Index Composite
EUR Euro-zone Purchasing Manager Index Services
EUR Euro-zone Producer Price Index (YoY)
EUR Euro-zone Producer Price Index (MoM)
EUR Euro-zone Retail Sales (MoM)
EUR Euro-zone Retail Sales (YoY)
EUR German Factory Orders n.s.a (YoY)
EUR German Factory Orders n.s.a (MoM)
EUR European Central Bank Rate Decision
EUR European Central Bank Deposit Facility Rate


There are a lot of factors this week that will influence the movement of the Euro, making this pair more difficult to predict the inter week price pattern. If the upcoming news is not convincingly upbeat, it's safe to say the Euro will suffer; similar to how England Pound Sterling drops with good American news.

The Euro has been highly volatile the past couple of weeks, it has a lot of comfortable room to drop below 1.3042. Likewise should an economic recovery reveal itself from this week's data it has no problem increasing to around 1.32 if not higher.

The week ahead: England

GBP/USD

It wasn't a good previous week for the Britons; industrial production shrunk last month which also helps explain why business investment (QoQ) has contracted since the beginning of this year. Payrolls have also increased by a mere 0.3% this past 3 months, well below the CPI of 2.7%; what does this mean? A dangerous shrink in consumer purchasing power, the same lifeblood needed to spur profits for businesses of the United Kingdom. Some of this negative news is drowned out by a steady increase in retail sales and a healthy housing market, however the Bank of England doesn't buy it. Last month their meetings certainly point to the fear of investors entering the British investment; the not-so-subtle hint of "inflation hitting 3 percent is expected" hints 'yea we're definitely not raising interest rates'.

WHAT TO WATCH
GBP Purchasing Manager Index Manufacturing
GBP Net Consumer Credit
GBP Purchasing Manager Index Construction
GBP Purchasing Manager Index Services
GBP Lloyds Employment Confidence
GBP Bank of England Rate Decision
GBP Bank of England Asset Purchase Target

The Pound Sterling has room to fall to around 1.50; if it drops down to that level before Wednesday it might correct upwards a bit. Save for left-field Bank of England Rate Decision (ex. rates go boom!) it will certainly drop (also not to forget positive American news adds downward pressure).

The Beginning

Hey guys, I've decided to move my FOREX analysis from Facebook onto a new platform to expose more than just my friends to my thoughts and opinions. I'm a 2009 graduate from SDSU with a Bachelor's in Economics. My love of the marketplace was first fueled by flying around in internet spaceships selling manufactured goods to other players. Making ISK (internet spaceship currency) is satisfying, but it won't pay the bills; my brother told me of this market called 'foreign exchange'.  Talk about a near endless of market opportunities! With so much information to sort, it's easy to get lost and confused.

Of the publicly available information out there on FOREX trading analysis, it seems to be 90 percent technical opinions and 10 percent economic opinions. Trading on that information alone is very risky; the world is too human to behave on technical analysis alone.

This blog is intended to be a more economic or 'fundamental' analysis than technical, although I will add some thoughts on technical movements in the market.

Pairs that I look at the most are as follows:

AUD/USD
NZD/USD
GBP/USD
EUR/USD