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Currency Pair Overview:

U.S. Session Halts The Dollar’s Sell-Off

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TheLFB-Forex.com A Forex Trader Portal

Global Market Wrap:

13 Month Dow High On Risk Tolerance

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The global market advanced at the start of the new week after the G-20 meeting from Scotland wrapped up, and countries agreed to maintain the economic stimulus plans.

The Asian and European markets closed higher after the first session of the week, and the U.S. dollar was pushed lower, down to the 75.00 support region, where the recent moves found support.

As expected, the similar equity trade pattern was seen in the U.S. session where the S&P 500 gained more than 20 points from Friday’s close, while the Dow Jones and NASDAQ finished the trade around 2% higher.

The commodity markets are higher today, with oil positive by 2.5%, but still below the yearly highs, and gold which hit a top around 1110 before it fell to near-term 1100 support zone.

Higher equity and commodity markets are the reason for U.S. dollar index prices around 75.00, and at yearly lows.

 TheLFB Charting: Dollar Index Weekly view

On the weekly dollar index chart above we can see a tests of the current 75.00 support zone, where a breakout will put the 74.00 target area in play. The 74.00 area may become quite interesting considering to the price action from November of 2007 and June of 2008, when we saw some reversal moves once the level was hit.

One of the currencies that should gain against the U.S. dollar, if the index breaks through the 75.00 support area, is the British pound, which from an Elliott Wave view could be on the way to new highs with a red wave V in process, as shown on the daily chart below.

 TheLFB Charting: Gbp/Usd Daily Elliott Wave view

The first up-side target of a current impulse count, on a weak dollar index, will be at the 1.7041 area, where a break of wave C/III highs will put the Fibonacci projection levels around 1.7500 in play. In this zone traders may look for a completed wave V.

TheLFB-Forex.com A Forex Trader Portal

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TheLFB-Forex.com A Forex Trader Portal

Market Wire Update:

Short Dollar Trade Off Low Momentum

Forex Trader Note: Near-term moves in Asian trade have not managed to get the 4 hour global market momentum reads out of neutral mode. Most currencies are over-bought against the Usd, on low momentum. Forex pairs will now require a boost from oil and S&P trade to hold the recent moves that came on thin order flows overnight.

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In the regular series of weekly review articles, Larry Greenberg, of CurrencyThoughts gets into perspective the potential to come economically. The week begins with the post G-20 meeting reactions from finance ministers in Scotland, gets interrupted on Wednesday with holidays in the United States (Veterans Day) and Canada (Remembrance Day) and winds up on Friday the 13th. 

Only two central bank meetings of note are scheduled — in Korea and Chile — but the Bank of England’s quarterly Inflation Report and the ECB’s monthly Bulletin will draw market interest, too.  Many Fed and ECB officials have planned speeches: Tarullo, Lockhart, Rosengren, Yellen, Fisher and Evans among the former and Trichet, Tumpel-Gugerell, Weber and Stark from the latter.

Preliminary third-quarter GDP growth figures will be released by Germany, France, Italy, Spain, the Netherlands, and the euro area bloc.  Germany, France, Italy, the Netherlands, and Euroland also report industrial production. German trade statistics, final consumer prices and ZEW index of investor sentiment are scheduled too, as are Spanish and euro area consumer prices.

Britain’s data calendar includes a couple of house price measures, same-store retail sales, labor statistics, and trade figures.  Swedish industrial orders, industrial production, and consumer prices arrive next week, as do Norwegian consumer and producer prices, and Swiss import and producer prices.

This is the week when virtually all Chinese data for the month get released: the CPI and PPI, industrial production and retail sales, trade statistics and fixed asset investment, and money aggregates and bank lending.

Scheduled Japanese data include the current account, corporate goods prices, consumer confidence, the Economy Watchers index, machinery orders, and revised industrial production and capacity utilization.  Other Asian releases of note will be Indian and Malaysian industrial production, Taiwanese trade figures, South Korean unemployment, Hong Kong GDP and Singaporean retail sales.

The U.S. calendar is relatively light, consisting of trade figures, import prices, the monthly federal budget, IBD/TIPP economic optimism, and the U. Michigan consumer sentiment index.  Traders will also be monitoring weekly data such as jobless claims, energy inventories, consumer confidence, chain store sales, and mortgage applications.

Canada releases housing starts, house prices, trade figures and motor vehicle sales.  Among the economic data releases in Latin America will be Mexican consumer prices, trades and industrial production, Argentine consumer and producer prices, and Brazilian retail sales.

In Eastern Europe, the Czech Republic and Hungary announce quarterly GDP.  Poland, Romania and Hungary release consumer prices.  Romania, Poland and the Czech Republic report current account figures.  Czech retail sales are scheduled, too.

Australian labor statistics head up a slate for that economy that also includes business conditions and confidence, housing finance, and job ads.  New Zealand house prices and retail sales get released next week, and so do Turkish industrial production and current account figures and South African industrial output.

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