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