Share This Story
Forex Trading StrategiesMarkets treading water until next year. JPY stronger overnight as Japanese stocks tumble on year's final trading day.
Market indecisive ahead of long weekend though it will likely make up its mind in the first week of the New Year.
MAJOR HEADLINES – PREVIOUS SESSION
• US Chicago PMI for December out at 61.5 vs. 60.0 expected and 61.7 in November
• US Existing Home Sales for November out at 6.97M vs. 7.00M expected
• Crude oil prices rose on US Weekly Storage numbers.
JPY was stronger again overnight and the USD a bit weaker across the board.
THEMES TO WATCH – UPCOMING SESSION
The market doesn't seem to want to make any significant directional commitments in the quiet period here between Christmas and New Year, as the JPY strengthened again after USD/JPY rejected an attempt to break above 118.00. AUD/USD continues to bounce from its recent lows and could have another 30-40 pips of upside before resistance is found. EUR/USD is still mired in the hopeless range.
US stock markets seem to be expressing a bit of pessimism - though this could just be profit taking ahead of the new year. Last year saw a huge decline in stocks from day one of the new year as the USD also bashed stronger. It may be that the market fears a repeat. In any case, last year showed how quickly the currency market can get down to business when everyone has had time to think over the holidays and get down to business on the first trading day of the year. We expect the themes to begin to take shape next week.
The US housing market seems to clearly be slowing, as the Existing Home Sales number for November yesterday showed the lowest level of activity (on a seasonally adjusted basis) since March of this year. We expect this development to deepen and extend and eventually pull the rug out from under the American consumer - though as we've discussed, the effects of the slowing housing market appear to be far slower to develop than we originally anticipated - but the macro scene inevitably seems to point to a lower USD - the question being whether we get some surprising strength in US economic numbers and hawkishness from the Fed in the short term at Bernanke's first couple of meetings. The path to the January 31 FOMC "handover" meeting will be an interesting one. 1.1940 and 1.1800 in EUR/USD would seem to trigger the directional view in EUR/USD next week.
This will be the final report until Tuesday, January 3 as most major markets are closed on Monday. We'll be back in the New Year!
Note: the support/resistance levels used in the matrix’s of this document are levels derived from yesterday high, low and close. Reference in the text to other support/resistance levels will occur.
Saxo Bank A/S shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee or implication by Saxo Bank that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis, especially leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated.
Please read our full Analysis Disclosure & Disclaimer at www.saxobank.com/analysis/disclaimer.
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."