Trading Tips from 21 to 30

[walid]

The single currency has had another strong push by rising of the IFO Germane climate index to another all times high in January at 110.3 after reaching 109.9 in December and this strong figure has come after the recent better than expected January Germane ZEW economic sentiment which had come at 15.4 from 4.3 in December while the market was waiting for just 6.3 could and also January EU ZEW economic sentiment which reached 25.4 and the markets were waiting for 17.3 from 15.5 in December to underpin the growth outlook in the Euro zone fortified by strong economic expansion in Germany helping the single currency to get over 1.36 by the end of last week the next supporting level is expected to be at the recent previous top at 1.379 and this can form a stronger level as breaking it can open the way again to 1.4 psychological level while the way down should be met by supporting level at 1.326 where it has dropped to this week and this level can be followed by 1.309 and then the recent bottom of the pair at 1.287 level where it could rebound from recently by repeated Portuguese denying of the need for this made package by European countries and the IMF and the Japanese promises of buying European bonds this month could help it to rebounds dueled by markets cheeriness of successful bonds auctions in Portugal , Spain and Italy and also Trichet's reference to building inflation pressure in the Euro zone after the ECB recent meeting when it has decided to keep the interest rate unchanged at 1% again which can suggest that there is another pressure on the ECB for capping its funding reducing its provided ample of liquidities fearing of further inflation pressure directing some of their care to the easing value risks of the single currency which could have another strong week after closing at 1.3882 a week earlier rising from this aforementioned low at 1.287 versus the greenback giving strong fast containing reversing sign as the worries about the EU debt contagion have calmed down especially after the direct EU Financial ministers reference to add more funds to the EU and the IMF package for lending the EU debt ailing economies and ruling banking stress tests as in US for giving better transparent view to the markets about the current EU banking sector crediting position and god willing, we wait today too for new important data from the Euro zone as the release of EU Jan PMI Manufacturing index is expected to be at 57.1 and the non-manufacturing index to be 54.2 as the same as December.
The Asian markets have been possessed by the end of the week by the Chinese interest rate outlook despite the easing of the Chinese CPI to 4.6% from 28 months high in November at 5.1% yearly, it could not sway the markets from expecting further tightening actions from PBOC as its Q4 GDP came up yearly by 9.8% and it was expected to be just 9.6% and also December retail sales of December rose by 19.1% while the markets were waiting for just 18.7% and December industrial productions came up by 13.5% and they were expected to be 13.3% which show to the markets that the economic growth in china is still strong opening the door for further tightening which can lower their demand for commodities which can effect negatively on both of Australia and New Zealand exports and GDP as well as they are the nearest markets to china which put pressure on the Aussi to reach .983 and the Kiwi to fall to .7525 from .7785 undermined by lower than expected December all industrial activities index release which came down by .1% while the markets were waiting for rising by .2% from declining by .2% in November and also import prices in December came down by 3.8% quarterly while they were expected to rise by .9% from .8% a quarter earlier thanks to the taken tightening actions in New Zealand.
The gold also as a mirror of inflation has come under pressure since the recent strong easing of CPI in China during December and also the better than expected weekly US inventories of the crude oil which rose by 2.6% from falling a week earlier by 2.2% while the markets were waiting for declining by 1.1% which weighed negatively on the oil prices and from other side, we have had new better than expected weekly initial jobless claim which came down to 404k and they were forecasted to be 425k from strong rising to 445k a weak earlier and also US existing homes sales of December which rose to 5.28m from 4.7m while the markets were waiting for 4.8 m monthly in December to be up monthly by 4.5% from 5.6% in November and also US leading indicator of December which was forecasted to be .7% from 1.1% in November and it could rose to 1% which come in line with the recent growing market expectations of having better growth rates out from US this year by God's will.
The gold has broken 1360$ supporting level ending the week below 1340$ and its next expected support is expected to be at 1329$ and then 1315$ after it had been under pressure recently getting down below 1400$ by better US growth outlook could contain the market sentiment bringing back the market confidence in the US economy and the investors' risk appetite of business spending in the greenback which is expected to be much credibly wanted this year having stronger yielding debt outlook reducing the market demands for safe haven stance currently.
The cable could close the week hardly above 1.60 psychological level negatively impacted by UK retail sales of December which have slumped by .8% while they have been expected to get down by just .1% from rising by just .3% in November and UK mortgage approvals which have fallen to 40.00k from 48.00k while the market was waiting for 49.00k. the cable could rise to 1.6058 on strong December inflation data out from UK earlier last week as UK CPI has reached 3.7% yearly while it was expected to be just 3.3% while the monthly figure has been 1% and it was expected to be just .7% which could show that the UK economy is exposed to stagflation risks this year as it has become ruled out to have a new added funds to the BOE 200b Stg buying bonds plan, if there is a new tightening action from the MPC to come for fighting the inflation upside risks as Andrew Sentence the only MPC voting member who has called for hiking the interest rate by 25 basis points in their last meeting and we wait to hear from him again about his appreciation of the current inflation pressure which can support the British pound while the current economic situation which is still looking in needs of BOE easing measures.
The cable retracing back to 1.5835 where it has tried to form a new base before to continue ascending up as what has been mentioned before in the recent reports making it its next supporting level 1.5835 again and breaking it can lead to 1.57 then 1.558 while the main supporting level is now at 1.534 where it was its recent bottom while the next resisting level can be at 1.6092 then its recent main top which has been formed in the beginning of last November at 1.6296 when the greenback was under pressure from the Fed's decision to add another 600b$ in another step of its QE policy for stimulating the economic growth in US.
Kind Regards
FX Market Strategist
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

The improving of the market risk appetite and the growing concerns about the inflation in the Euro zone have contained the market sentiment pushing the single currency above 1.365 ahead of waited resistance at the recent previous top of it versus the greenback at 1.379 and this can form a stronger level as breaking it can open the way again to 1.4 psychological level while the way down should be met by supporting level at 1.326 where it has dropped to this week and this level can be followed by 1.309 and then the recent bottom of the pair at 1.287 level where it could rebound from recently by repeated Portuguese denying of the need for this made package by European countries and the IMF and the Japanese promises of buying European bonds this month could help it to rebounds dueled by markets cheeriness of successful bonds auctions in Portugal , Spain and Italy and also Trichet's reference to building inflation pressure in the Euro zone which has been repeated again highlighting a closer than expected tightening actions from the ECB can lead it to revise down its provided ample of liquidity for supporting the ailing countries of debt and raising the interest rate giving much care to the easing value risks of the single currency which continued to have better its recovery signs by new better than expected rising release of preliminary reading of EU Jan PMI non-manufacturing index to 55.2 while it was waited to be 54.2 and also Jan Manufacturing index which was nearly at it is similar strong pace of expansion by 56.9 coming down from expected 57.1 in December and this new data has come to show that there is no worrying growth downside risks can cap the ECB from tightening as they came after rising of the IFO Germane climate index to another all times high in January at 110.3 after reaching 109.9 in December and this strong figure has come after the recent better than expected January Germane ZEW economic sentiment which had come at 15.4 from 4.3 in December while the market was waiting for just 6.3 could and also January EU ZEW economic sentiment which reached 25.4 and the markets were waiting for 17.3 from 15.5 in December to underpin the growth outlook in the Euro zone fortified by strong economic expansion in Germany.
The improving of the market confidence has been really obvious this week by higher demand for the high yielding currencies for taking risks and lower demand for gold which has been hit again by the Saudi oil Minister's expectations of similar oil prices in 2011 to 2010 with increased probability of pumping more oil in the case of the demand increasing driving the oil prices down weighing negatively on the gold to face another supporting level at 1329.$ and breaking it can lead to 1315$ after it had been under pressure recently getting down below 1400$ by better US growth outlook could contain the market sentiment bringing back the market confidence in the US economy and the investors' risk appetite of business spending in the greenback which is expected to be much credibly wanted this year having stronger yielding debt outlook reducing the market demands for safe haven stance currently.
The Aussi could come up over parity again before correcting to .995 currently after reaching .983 and the Kiwi which has fallen to .7525 from .7785 undermined by lower than expected December all industrial activities index release which came down by .1% while the markets were waiting for rising by .2% from declining by .2% in November and also import prices in December came down by 3.8% quarterly while they were expected to rise by .9% from .8% a quarter earlier could come back above .765 thanks to the taken tightening actions in New Zealand thanks to the improving of the market sentiment which pushed greenback down and the Asian equities markets up following US which had strong gaining session drove Dow up further to be close to another jump above 12000 psychological level.
The Japanese yen could also keep its gains trading currently at 82.4 versus the greenback after BOJ keeping of the interest rate unanimously from 0% to .1% revising up its real GDP median view strongly to 3.3% this year from 2.1% in its recent meeting in October keeping its median view of core CPI unchanged at in 2012 at .6% revising up it in 2011 to -.3% from -.4% referring to expected rising of the commodities prices can increase the inflation but it is expected to be moderate inflation with the recovery outlook this year.
While The cable is still trading around 1.60 psychological level as it is still negatively impacted by UK retail sales of December which have slumped by .8% while they have been expected to get down by just .1% from rising by just .3% in November and UK mortgage approvals which have fallen to 40.00k from 48.00k while the market was waiting for 49.00k. The cable could rise to 1.6058 on strong December inflation data out from UK earlier last week as UK CPI has reached 3.7% yearly while it was expected to be just 3.3% while the monthly figure has been 1% and it was expected to be just .7% which could show that the UK economy is exposed to stagflation risks this year as it has become ruled out to have a new added funds to the BOE 200b Stg buying bonds plan, if there is a new tightening action from the MPC to come for fighting the inflation upside risks as Andrew Sentence the only MPC voting member who has called for hiking the interest rate by 25 basis points in their last meeting while the current economic situation is still looking in need of BOE easing measures.
The cable next support is expected to be at 1.5835 where it has tried to form a new base before to continue ascending up and breaking it can lead to 1.57 then 1.558 while the main supporting level is now at 1.534 where it was its recent bottom while the next resisting level can be at 1.6092 then its recent main top which has been formed in the beginning of last November at 1.6296 when the greenback was under pressure from the Fed's decision to add another 600b$ in another step of its QE policy for stimulating the economic growth in US and it is expected to give better economic out look in US later this week after keeping this package unchanged last month.
God willing, we wait from UK today for Q4 GDP to be up by .5% from .7% in the third quarter and yearly to be up by 2.6% from 2.7% in the third quarter and we wait also from US for the broad consumers confidence index of January to be 54.5 from 52.5 in December while November housing prices index is expected to be -.1% from .7% and Jan Richmond Fed Manufacturing Index to get down to 23 from 25 in December.

Kind Regards
FX Market Strategist
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

Surely, the falling of UK Q4 GDP into the negative territory could contain the market sentiment weighing negatively on the British pound which has slumped below 1.58 versus the greenback after this dovish data which have shown that the UK economy is in serious need to the BOE easing support for stimulating investments spending during a time the UK economy suffering from increasing of prices can put it under emerging the stagflation risks as we have seen recently December UK CPI reaching 3.7% yearly while it was expected to be just 3.3% and increased worries from the MPC of having this rate above 4% which can tie the BOE hands from taking any action towards any direction and this was obvious in the minutes of the recent meeting of the MPC as Possen was voting for increasing the BOE buying bonds plan from 200b Stg to 250 and Andrew Sentence was voting for hiking the interest rate by 25 basis points while the others were unable to adopt any of these 2 directions fearing of accumulating the risks pressure of the other with these rates of inflation and weak economic performance to have 3 split ways inside the MPC and this stance can be prolonged saving the monetary policies out leaving the door for the financial authority which is actually having strong criticizing because of its austerity measures which were concluded to cause this impact on the growth rates in UK as the falling of the governmental spending component currently for saving the UK economy from the Debt crisis impact which looked another serious risk should be face since the beginning of Jan 2010 a year ago when we have had the first net borrowing deficit month since the beginning of 1993 reaching 4.3b Stg while the market was waiting for covering 2.8B Stg which pushed the cable at that time to fall more than 2 figures to 1.4782 directly after the release of it as it can drive the budget deficit ratio to GDP above 12% like Greece which have been already facing defaulting growing risks could contain the market sentiment in this recent year which watched making new record later in March 2010 when it reached its highest level since recording beginning 63 years ago with a very wider than expected deficit of the Public sector net borrowing at 23.5b Stg and at that time it could underpin the conservative leading a week before the elections which was on the 6th of May and today we have seen Public sector net borrowing in the U.K. coming at 15.3 billion pounds in December 2010 from 19.677 billion pounds in November which can put pressure on this governmental spending too worrying about the budget deficit exacerbating.
The cable next support is expected to be at 1.57 after these recent dovish data which dropped down 1.5835 supporting level and in inability of getting over this level again, it can be confirmed as a new resistance to face 1.57 then 1.558 while the main supporting level is now at 1.534 where it was its recent bottom but if the inflation worries could come back containing the market sentiment again the cable can be supported 1.6092 which has been formed top of the it in the beginning of last November at 1.6296 when the greenback was under pressure from the Fed's decision to add another 600b$ in another step of its QE policy for stimulating the economic growth in US and it is expected to give better economic assessment today after keeping this package unchanged last month.
The European stocks came under pressure from UK dovish GDP data of the fourth quarter driving the US stocks indices to have a red opening before recovering its loses by the end of the day supported by rising of US broad consumers confidence index of January to 60.60 from 52.5 in December which was expected to be just 54.5 to have a light green closing could not be caught by the European equities markets but the single currency could get use of this recovery rising to 1.37 after it has been tracing the cable weakness. The single currency next resistance versus the greenback is expected to be by god's will at 1.379 and this can form a stronger level as breaking it can open the way again to 1.4 psychological level while the way down should be met by supporting level at 1.326 where it has dropped to this week and this level can be followed by 1.309 and then the recent bottom of the pair at 1.287 level where it could rebound from recently by repeated Portuguese denying of the need for this made package by European countries and the IMF and the Japanese promises of buying European bonds this month could help it to rebounds dueled by markets cheeriness of successful bonds auctions in Portugal , Spain and Italy and also Trichet's reference to building inflation pressure in the Euro zone which has been repeated again highlighting a closer than expected tightening actions from the ECB can lead it to revise down its provided ample of liquidity for supporting the ailing countries of debt and raising the interest rate giving much care to the easing value risks of the single currency which continued to have better its recovery signs by new better than expected rising release of preliminary reading of EU Jan PMI non-manufacturing index to 55.2 while it was waited to be 54.2 and also Jan Manufacturing index which was nearly at it is similar strong pace of expansion by 56.9 coming down from expected 57.1 in December and this new data has come to show that there is no worrying growth downside risks can cap the ECB from tightening as they came after rising of the IFO Germane climate index to another all times high in January at 110.3 after reaching 109.9 in December and this strong figure has come after the recent better than expected January Germane ZEW economic sentiment which had come at 15.4 from 4.3 in December while the market was waiting for just 6.3 could and also January EU ZEW economic sentiment which reached 25.4 and the markets were waiting for 17.3 from 15.5 in December to underpin the growth outlook in the Euro zone fortified by strong economic expansion in Germany.
The market confidence in the US economy could add to the investors' asking for risks buying the high yielding currencies lowering their demand for the gold which has been hit again this week by the Saudi oil Minister's expectations of similar oil prices in 2011 to 2010 with increased probability of pumping more oil in the case of rising of the demand driving the oil prices down weighing negatively on the gold to fall below face 1329.$ supporting level and it is now trading just above it after finding hardly support at 1321 while the next supporting level is expected to be at 1315$ as the gold has come under pressure in the recent weeks getting down from 1400$ after reaching 1429$ by better US growth outlook could contain the market sentiment bringing back lost trust in the US economy and the investors' risk appetite of business spending in the greenback which is expected to be much credibly wanted this year having stronger yielding debt outlook reducing the market demands for safe haven stance currently.
The Japanese yen could also keep its gains trading currently at 82 versus the greenback which has been under pressure versus it by new expected extension tries for cooling the business spending for taking unsecured securities positions by Obama driving the treasuries yields down after the recent BOJ decision of keeping the interest rate unanimously from 0% to .1% revising up its real GDP median view strongly to 3.3% this year from 2.1% in its recent meeting in October keeping its median view of core CPI unchanged at in 2012 at .6% revising up it in 2011 to -.3% from -.4% referring to expected rising of the commodities prices can increase the inflation but it is expected to be moderate inflation with the recovery outlook this year.
The Australian dollar could also keep its gains trading parity with the US dollar which was under pressure in the recent days by improving of the market risk appetite after retracing recently to .983 negatively impacted by increased market expectation of continuation of the Chinese monetary tightening stance after its Q4 GDP came up yearly by 9.8% and it was expected to be just 9.6% with the Kiwi which has fallen recently to .7525 from .7785 undermined by lower than expected December all industrial activities index release which came down by .1% while the markets were waiting for rising by .2% from declining by .2% in November and also import prices in December came down by 3.8% quarterly while they were expected to rise by .9% from .8% a quarter earlier could come back above .765 ahead of .77 thanks to the improving of the market sentiment which pushed greenback.
God willing, it is important today we wait from UK for the recent MPC minutes and from US for the FOMAC economic assessment following its interest rate decision which is expected to be as it is between 0% and .25% adding now new funds to its QE policy as it has done in December.

Kind Regards
FX Market Strategist
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

The Fed's awaited economic assessment came cautious and less optimistic than expected appreciating the inability of the current growth rate to relieve the depression of the housing market and stronger labor demand but they have mentioned their appreciation of the rising of the commodities prices as BOJ has done the same earlier this week but in the same time the Fed has kept their expectation of inflation to be well-contained taking a downward direction depending on the gauges excluding the food and energy which shows underlying inflation tending down. So, they have voted unanimously to keep the interest rate unchanged between 0% to .25% and their recent announced 600b$ of buying bonds in last November in what has been called a second round of their quantitive easing policy unchanged till the end of June for keeping stimulating the economy unworried about the inflation pressure.
The greenback came under pressure from this assessment which was waited to give a higher appreciation of the recent good economic data out from US as we have seen this week US broad consumers confidence index of January to 60.60 from 52.5 in December which was expected to be just 54.5 and since the beginning of this year, we have got outstanding December ADP Employment release coming at nearly triple of the market expectations of just 100k at 297k added jobs from 93k in November and Nov US factory orders data which have shown rising by .7% while the market was waiting for decreasing by .4% after falling in October by .7% and also both of US December manufacturing index and non-manufacturing index getting better to 57 and 57.1 consecutively after US December Chicago PMI had come at 68.6 while it was waited to be 61.5 from 62.5 in November which are the best since the ending of the credit crisis which could help the US treasury yields to keep rising and the US stocks markets too supported by potential rising of the earning reports of the fourth quarter of last year which lead the market to see that the US economy is much more credible for better business spending right now despite the labor market which is still looking struggling lagged behind the other sectors performance joining the Fed's worries about it as we have seen December non-farm payrolls which have just added 103k while the market was waiting for 135k putting pressure on the greenback to run out of stream across the broad since the release of it.
After the British pound had come under strong pressure falling below 1.58 versus the greenback as the falling of UK Q4 GDP into the negative territory at -.5% quarterly while it was expected to be .5% which have shown that the UK economy is in serious need to the BOE easing stance, it could come over 1.59 versus the greenback again following the release of the recent MPC meeting minutes which have %shown stronger than expected appreciation of the inflation upside risks giving another vote to sentence who was calling for hiking the interest rate by .25 from the MPC voting member Mr. Martin Weale to be 6 to 2 to 1 decision of keeping the interest rate unchanged at .5% and its buying bonds plan unchanged at 200b Stg instead of 7 to 1 to 1 in their earlier meeting as Possen is still favoring increasing of the buying bonds plan. The recent UK economy data have shown that it is under emerging the stagflation risks as we have seen recently December UK CPI reaching 3.7% yearly while it was expected to be just 3.3% and increased worries from the MPC of having this rate above 4% which can tie the BOE hands from taking any action towards the tightening direction or the easing one for stimulating the growth which has shrunk in the last quarter of last year keeping everything unchanged fearing of accumulating the risks pressure of the other with these rates of inflation and weak economic performance which lead to these 3 split ways inside the MPC and this stance can be prolonged saving the monetary policies roles out leaving the door for the financial authority which is not actually in better position having strong criticizing because of its austerity measures which were concluded to cause this impact on the growth rates in UK as the falling of the governmental spending component currently for saving the UK economy from the Debt crisis impact which looked another serious risk should be face since the beginning of Jan 2010 a year ago when we have had the first net borrowing deficit month since the beginning of 1993 reaching 4.3b Stg while the market was waiting for covering 2.8B Stg which pushed the cable at that time to fall more than 2 figures to 1.4782 directly after the release of it as it can drive the budget deficit ratio to GDP above 12% like Greece which have been already facing defaulting growing risks could contain the market sentiment in this recent year which watched making new record later in March 2010 when it reached its highest level since recording beginning 63 years ago with a very wider than expected deficit of the Public sector net borrowing at 23.5b Stg and at that time it could underpin the conservative leading a week before the elections which was on the 6th of May and again we have seen this week the Public sector net borrowing in the U.K. coming at 15.3 billion pounds in December 2010 from 19.677 billion pounds in November which can put pressure on this governmental spending too worrying about the budget deficit exacerbating.
The cable next support is expected to be at 1.575 which has been reached after the dovish release of UK Q4 GDP followed by 1.57 and 1.558 then 1.534 where it was its recent bottom but if the inflation worries could continue containing the market sentiment it should face the psychological resistance at 1.6 then 1.605 which has been reached after the release of strong December UK CPI and in the case of passing it, it can meet another resistance at 1.6092 then 1.619 and after that formed top of the it which has been formed in the beginning of last November at 1.6296 when the greenback was under pressure from the Fed's decision to add another 600b$ in another step of its QE policy for stimulating the economic growth in US.
After the European stocks had come under pressure from UK dovish GDP data of the fourth quarter, it could join the US stocks indices gains which has started yesterday by rising of US broad consumers confidence index of January to 60.60 from 52.5 in December which was expected to be just 54.5 and it continued today with the Fed's economic assessment which hinted to the markets that it is to keep its QE easing policy unfazed of the recent improving of the economic performance data out from US helping Dow to jump above 12000 before easing back below by the US session end.
The single currency could get use of this risk appetite recover which weighed negatively on the greenback to keep its gains around 1.37 after it has been tracing the cable weakness.
The single currency next resistance versus the greenback is expected to be by god's will at 1.379 and this can form a stronger level as breaking it can open the way again to 1.4 psychological level while the way down should be met by supporting level at 1.326 where it has dropped to this week and this level can be followed by 1.309 and then the recent bottom of the pair at 1.287 level where it could rebound from recently by repeated Portuguese denying of the need for this made package by European countries and the IMF and the Japanese promises of buying European bonds this month could help it to rebounds dueled by markets cheeriness of successful bonds auctions in Portugal , Spain and Italy and also Trichet's reference to building inflation pressure in the Euro zone which has been repeated again highlighting a closer than expected tightening actions from the ECB can lead it to revise down its provided ample of liquidity for supporting the ailing countries of debt and raising the interest rate giving much care to the easing value risks of the single currency which continued to have better its recovery signs by new better than expected rising release of preliminary reading of EU Jan PMI non-manufacturing index to 55.2 while it was waited to be 54.2 and also Jan Manufacturing index which was nearly at it is similar strong pace of expansion by 56.9 coming down from expected 57.1 in December and this new data has come to show that there is no worrying growth downside risks can cap the ECB from tightening as they came after rising of the IFO Germane climate index to another all times high in January at 110.3 after reaching 109.9 in December and this strong figure has come after the recent better than expected January Germane ZEW economic sentiment which had come at 15.4 from 4.3 in December while the market was waiting for just 6.3 could and also January EU ZEW economic sentiment which reached 25.4 and the markets were waiting for 17.3 from 15.5 in December to underpin the growth outlook in the Euro zone fortified by strong economic expansion in Germany.
Kind Regards
FX Market Strategist
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

The risk appetite has been brought back to the markets strongly after the release of January ISM Manufacturing index which jumped to 60.8 while the market was waiting for 58.2 from 58.5 in December which shows that the pace of recovery in US is still going well reinforcing the business spending weighing asking for the high yielding currencies for carrying risks such as the Aussi and Kiwi which are well-supported by commodities prices rising because of the Egyptian turmoil which reinforced the worries about the stability on the middle east geopolitical position as the events in Egypt continued pushing the commodities priced up on increased speculations of strong demand from the Egyptian government for resorting stabilities in its markets after as the turmoil caused strong shortages in its markets and it is important at this point to mention that there have been existing worries about the commodities prices from BOJ and the Fed earlier last month when their economic assessments earlier last month. The oil prices are also still trading around 100$ per barrel as the markets fear about the Suez channel exposure to these recent riots in the Egyptian streets which can threats the supplies from the Arabia rich of oil countries. Mubarak has come out for the second time expressing this time that he has no intention for new presidency period after the left 6 consecutive times referring to his commands for making new constitution modifications of the presidency terms under the pressure of the Egyptian street.
The British pound is still well supported by increased market speculations of having new adopted tightening stance from the BOE for fighting the inflation which has been surged recently with UK CPI index reaching 3.7% yearly, in the time of facing growth down side risks as we have seen the falling of UK Q4 GDP into the negative territory at -.5% quarterly emerging stagflation risks to face the UK economy capping the MPC from hiking the interest rate in the well required pace to anchor the inflation fearing of accumulating the risks facing the growth tackling the investments which is needed for stimulating growth. The cable could get over 1.62 and god willing, it should face now the resistance at 1.6296 in the beginning of last November when the greenback was under pressure from the Fed's decision to add another 600b$ in another step of its QE policy for stimulating the economic growth in US.

God willing, we are waiting today for January ADP Employment release to be 150k after outstanding December ADP Employment release had come at nearly triple of the market expectations of just 100k at 297k added jobs from 93k in November.

Kind Regards
FX Market Strategist
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

UK Service PMI of January which has risen above 50 into the expansion territory at 54.5 above the market expectations of 53.5 from 49.7 in December could contain the market sentiment pushing the cable up above 1.625. The British pound is still well supported by increased market speculations of having new adopted tightening stance from the BOE for fighting the inflation which has been surged recently with UK CPI index reaching 3.7% yearly, in the time of facing growth down side risks as we have seen the falling of UK Q4 GDP into the negative territory at -.5% quarterly emerging stagflation risks to face the UK economy capping the MPC from hiking the interest rate in the well required pace to anchor the inflation fearing of accumulating the risks facing the growth tackling the investments which is needed for stimulating growth. The cable could get over 1.62 and god willing, it should face now the resistance at 1.6296 in the beginning of last November when the greenback was under pressure from the Fed's decision to add another 600b$ in another step of its QE policy for stimulating the economic growth in US.
After the investors' risk appetite has improved by the strong release of January ISM Manufacturing index which jumped to 60.8 while the market was waiting for 58.2 from 58.5 in December which shows that the pace of recovery in US is still going well reinforcing the business spending, it get back skeptic by the concerns about the geopolitical concerns about the middle which have grown again by the clashes between the supporters of Mubarak and the protestors against him fueling the worries about the oil supplies from the Arabia rich of oil countries through the Suez channel because of these recent riots in the Egyptian streets which can threats these supplies pushing the oil prices above 100$ per barrel.
The commodities prices are still underpinned by these unstable situation in the middle east as the events in Egypt increased speculations of strong demand from the Egyptian government for resorting stabilities in its markets after as the turmoil caused strong shortages in its markets and it is important at this point to mention that there have been existing worries about the commodities prices from BOJ and the Fed earlier last month when their economic assessments earlier last month.
The single currency is still find difficulty to stand above its recent resisting level versus the greenback at 1.379 which were capping it from reaching 1.4 psychological level while the way down should be met by supporting level at 1.358 then 1.335 and 1.326 and the breaking of it can open the door for 1.309 and then the recent bottom of the pair at 1.287 level where it could rebound from by repeated Portuguese denying of the need for this made package by European countries and the IMF and the Japanese promises of buying European bonds this month could help it to rebounds dueled by markets cheeriness of successful bonds auctions in Portugal , Spain and Italy and also Trichet's reference to building inflation pressure in the Euro zone which has been assured by Jan EU CPI which has reached 2.4% y/y well above the 2% target of the ECB highlighting a closer than expected tightening actions from the ECB can lead it to revise down its provided ample of liquidity for supporting the ailing countries of debt and raising the interest rate giving much care to the easing value risks of the single currency which continued to have better recovery signs by new better than expected rising release of EU Jan PMI non-manufacturing index to 55.9 while it was waited to be 55.2 after Jan Manufacturing index which had come at 57.3 from 57.1 in December and these new data have come in line with the recent rising of the IFO Germane climate index to another all times high in January at 110.3 after reaching 109.9 in December and this strong figure has come after the recent better than expected January Germane ZEW economic sentiment which had come at 15.4 from 4.3 in December while the market was waiting for just 6.3 could and also January EU ZEW economic sentiment which reached 25.4 and the markets were waiting for 17.3 from 15.5 in December to underpin the growth outlook in the Euro zone fortified by strong economic expansion in Germany showing that there is no worrying growth downside risks can cap the ECB from tightening.
God willing, it is still important today to wait for the ECB interest rate decision and the ECB press conference which is expected to show higher concerns about the inflation outlook and from US, we wait for the initial weekly jobless claim to be down to 425k from 453k a weak earlier December factory orders to be up by 1% from.7% in November after falling in October by .7% and also January non-manufacturing index to be 57 from 57.1 in December. We wait also for the Fed chairman Bernenke's speaking.
Kind Regards
FX Market Strategist
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

The Release of US Jan non-farm payroll has shocked the market by adding just 36k while the market was waiting for 150k jobs to be added but the declining of the unemployment rate to 9% from 9.4% while the market was waiting for rising to 9.6% could light the negative impact of the weak non-farm payroll which has shown also revising up of December added number to 121k from 103k. The greenback came under pressure directly after the data but quickly it has gained across the broad on the market consideration of the falling of the unemployment rate which has happened in January. The US labor have shown the instability of the labor market which is still struggling lagged behind the economic recovery which is still find difficulties in producing jobs.
The single currency is still under pressure because of Trichet's comments which have referred to moderate inflation upside risks over the long term after the ECB decision to keep the interest rate unchanged to reducing the current market discounting of having a close interest rate hike for fighting the inflation after Jan EU CPI which has reached 2.4% y/y well above the 2% target of the ECB. After The single currency could not have the ability to stand above 1.379 versus the greenback, it has eased back to 1.358 and the breaking of this level can lead to 1.335 and 1.326 and the falling of it can open the door for 1.309 and then the recent bottom of the pair at 1.287 level where it could rebound from by repeated Portuguese denying of the need for this made package by European countries and the IMF and the Japanese promises of buying European bonds this month could help it to rebounds fueled by markets cheeriness of successful bonds auctions in Portugal , Spain and Italy underpinned by The ECB members appreciation of building inflation pressure in the Euro zone.
After the cable had got a strong push from UK Service PMI of January which has risen above 50 into the expansion territory at 54.5 above the market expectations of 53.5 from 49.7 in December to jump above 1.625 reaching 1.6275, it came back under pressure from strong greenback gains across the broad with the current worries about the middle east geopolitical situation coming back containing the market sentiment asking for a safe haven stance supporting the gold as well which is trading currently above 1350$ per ounce but in the same time, this does not object that the British pound is still taking advantage from the market speculations of having new adopted tightening stance from the BOE for fighting the inflation which has been surged recently with UK CPI index reaching 3.7% yearly after the recent MPC meeting minutes which have shown stronger than expected appreciation of the inflation upside risks giving another vote to sentence who was calling for hiking the interest rate by .25 from the MPC voting member Mr. Martin Weale to be 6 to 2 to 1 decision of keeping the interest rate unchanged at .5% and its buying bonds plan unchanged at 200b Stg instead of 7 to 1 to 1 in their earlier meeting as Possen is still favoring increasing of the buying bonds plan but in the same time, the market is still appreciation growth downside risk which faces the UK economy dragging UK Q4 GDP into the negative territory at -.5% quarterly emerging stagflation risks capping the MPC from hiking the interest rate in the well required pace to anchor the inflation fearing of accumulating the risks facing the growth tackling the investments which is needed for stimulating growth. The cable is trading now below 1.62 reaching 1.6275 and inability to get over the formed resistance at 1.6296 which has been reached in the beginning of last November when the greenback was under pressure from the Fed's decision to add another 600b$ in another step of its QE policy for stimulating the economic growth in US.
The investors' risk appetite has hardly improved this week by the strong release of January ISM Manufacturing index which jumped to 60.8 while the market was waiting for 58.2 from 58.5 in December which shows that the pace of recovery in US is still going well reinforcing the business spending but it is still skeptic by the concerns about the geopolitical concerns about the middle which have grown again by the tension between the supporters of Mubarak and the protestors against him fueling the worries about the oil supplies from the Arabia rich of oil countries through the Suez channel which brought back the oil prices around 100$ a barrel
Kind Regards
FX Market Strategist
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

The new week has started in a quit way after the release of US Jan non-farm payroll has shocked the market by the end of last week by adding just 36k while the market was waiting for 150k jobs to be added but the declining of the unemployment rate to 9% from 9.4% while the market was waiting for rising to 9.6% which could light the negative impact of the weak non-farm payroll which has contained revising up of December added number to 121k from 103k.
The greenback came under pressure directly after these mixed data but quickly it has gained across the broad on the market greater consideration of the falling of the unemployment rate in January but generally the report could not change the current market sentiment towards the US labor market which is still looking struggling lagged behind the economic recovery which is still finding difficulties in producing jobs.
The investors' risk appetite has improved last week by the strong release of January ISM Manufacturing index which jumped to 60.8 while the market was waiting for 58.2 from 58.5 in December which shows that the pace of recovery in US is still going well reinforcing the business spending but it is still skeptic by the concerns about the geopolitical situation in the middle east worrying about the oil supplies from the Arabian rich countries of oil through the Suez channel after the tensions have extended into Egypt brining back the oil prices above 100$ a barrel supporting the gold as a safe haven stance of the money value versus the higher inflation outlook to rebound from 1306$ trading currently around 1350$ after it was under pressure because of the optimism of better growth rate in US this year can increase the calls for the greenback and the business spending rewarding with tame inflation pressure in US until now helping the Fed to keep its easing borrowing plans unchanged as it has done by the end of last month giving just reference to the rising of the commodities prices as BOJ which is fighting deflation has done earlier.
The single currency is still under pressure because of Trichet's comments which have referred to moderate inflation upside risks over the long term after the ECB decision to keep the interest rate unchanged to reducing the current market discounting of having a close interest rate hike for fighting the inflation after Jan EU CPI which has reached 2.4% y/y well above the 2% target of the ECB.
After The single currency could not have the ability to stand above 1.379 versus the greenback, it has eased back to 1.358 and it is now trading above it and the breaking of this level can lead to testing 1.335 then 1.326 and the falling of this level too can open the door for 1.309 and then the recent bottom of the pair at 1.287 level where it could rebound from by repeated Portuguese denying of the need for this made package by European countries and the IMF and the Japanese promises of buying European bonds this month could help it to rebounds fueled by markets cheeriness of successful bonds auctions in Portugal , Spain and Italy underpinned by The ECB members appreciation of building inflation pressure in the Euro zone.
After the cable had got a strong push from UK Service PMI of January which has risen above 50 into the expansion territory at 54.5 above the market expectations of 53.5 from 49.7 in December to jump above 1.625 reaching 1.6275, it came back under pressure from strong greenback gains across the broad with the current worries about the middle east geopolitical situation coming back containing the market sentiment leading the investors to buy back the greenback squaring their risky positions looking for a safer stance but in the same time, this does not object that the British pound is still taking advantage from the market speculations of having new adopted tightening stance from the BOE for fighting the inflation which has been surged recently with UK CPI index reaching 3.7% yearly after the recent MPC meeting minutes which have shown stronger than expected appreciation of the inflation upside risks giving another vote to sentence who was calling for hiking the interest rate by .25 from the MPC voting member Mr. Martin Weale to be 6 to 2 to 1 decision of keeping the interest rate unchanged at .5% and its buying bonds plan unchanged at 200b Stg instead of 7 to 1 to 1 in their earlier meeting as Possen is still favoring increasing of the buying bonds plan but in the same time, the market is still appreciation growth downside risk which faces the UK economy dragging UK Q4 GDP into the negative territory at -.5% quarterly emerging stagflation risks capping the MPC from hiking the interest rate in the well required pace to anchor the inflation fearing of accumulating the risks facing the growth tackling the investments which is needed for stimulating growth.
The cable is trading now below 1.62 after reaching 1.6275 and easing back from it unable to reach the formed resistance at 1.6296 which has been reached in the beginning of last November when the greenback was under pressure from the Fed's decision to add another 600b$ in another step of its QE policy for stimulating the economic growth in US.
Kind Regards
FX Market Strategist
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

The Easing of tension of Easing could bring back confidence in risky assets putting weights on the greenback. The Egyptian street has found in changing the leaders of the national democratic ruling party an open door for discussions with all parties in Egypt even the Muslim brothers lightening the pressure on Mubarak from US and Europe to quit immediately in a fast way which can put Egypt in mysterious ways. It looks currently that he is the best to reform currently as he is leaving and doing this reforming job for modifying the constitution of the presidency terms fulfilling the demands of change in the rest time of his leading as he does not look for further time in power.
Dow has made a new high today since the credit crisis at 12188 pushed up by this political improving in Egypt which helped the business sentiment and the equities markets in EU too to add more gains covering the loss of this credit crisis which reached its bottom on 9 March 2009 after aggressive falling of the assets prices has been triggered by the collapse mortgage market in US threating the creditability of its financial sector with the bankruptcy of Lehman brothers.
The single currency has been struggling after the falling of Germany factory orders by 3.4% monthly in December from gaining 5.4% in November while the market was waiting for shrinking by 1.4% but it could rebound with the recovery of the investors' risk appetite at 1.3505 to traded currently above 1.36 versus the greenback which is still finding demand by the rising of its treasuries yields and asking for borrowing while the economy is looking better in the recent months despite the struggling of it labor market as we have seen by the end of last week the release of US Jan non-farm payroll adding just 36k while the market was waiting for 150k jobs to be added with declining of the unemployment rate to 9% from 9.4% while the market was waiting for rising to 9.6% but since the strong release of January ISM Manufacturing index which jumped to 60.8 while the market was waiting for 58.2 from 58.5 in December the confidence in the US economy is getting momentum adding to the gains of its dividends driving the treasuries yields up reinforcing the business spending trust which has been tempered recently by the concerns about the geopolitical situation in the middle east worrying about the oil supplies from the Arabian rich countries of oil through the Suez channel after the tensions have extended into Egypt brining back the oil prices above 100$ a barrel supporting the gold as a safe haven stance of the money value versus the higher inflation outlook to rebound from 1306$ trading currently around 1350$ after it was under pressure because of the optimism of better growth rates in US this year can make the investing in the greenback rewarding with tame inflation pressure in US helping the Fed to keep its easing borrowing plans unchanged as it has done by the end of last month giving just reference to the rising of the commodities prices just as BOJ which is fighting deflation has done until now betting on its inability to move up the inflation over the long term in US.
Generally, The single currency is still under pressure because of Trichet's comments which have referred to moderate inflation upside risks over the long term after the ECB decision to keep the interest rate unchanged to reducing the market discounting of having a close interest rate hike for fighting the inflation after Jan EU CPI which has reached 2.4% y/y well above the 2% target of the ECB and so the single currency could not have the ability to fight for having a place above 1.379 versus the greenback breaking below 1.358 and it is now trading above 1.36 after finding support just above 1.35 psychological level but the breaking of this level can open the way for testing 1.335 then 1.326 and the falling of this level too can open the door for 1.309 and then the recent bottom of the pair at 1.287 level where it could rebound from by repeated Portuguese denying of the need for this made package by European countries and the IMF and the Japanese promises of buying European bonds this month could help it to rebounds fueled by markets cheeriness of successful bonds auctions in Portugal , Spain and Italy underpinned by The ECB members appreciation of building inflation pressure in the Euro zone.
After the cable had got a strong push from UK Service PMI of January which has risen above 50 into the expansion territory at 54.5 above the market expectations of 53.5 from 49.7 in December to jump above 1.625 reaching 1.6275 last week, The cable eased back from it unable to reach the formed resistance at 1.6296 which has been reached in the beginning of last November when the greenback was under pressure from the Fed's decision to add another 600b$ in another step of its QE policy for stimulating the economic growth in US but the British pound is still taking advantage from the market speculations of having new adopted tightening stance from the BOE for fighting the inflation which has been surged recently with UK CPI index reaching 3.7% yearly after the recent MPC meeting minutes which have shown stronger than expected appreciation of the inflation upside risks giving another vote to sentence who was calling for hiking the interest rate by .25 from the MPC voting member Mr. Martin Weale to be 6 to 2 to 1 decision of keeping the interest rate unchanged at .5% and its buying bonds plan unchanged at 200b Stg instead of 7 to 1 to 1 in their earlier meeting as Possen is still favoring increasing of the buying bonds plan but in the same time, the market is still appreciation growth downside risk which faces the UK economy dragging UK Q4 GDP into the negative territory at -.5% quarterly emerging stagflation risks capping the MPC from hiking the interest rate in the well required pace to anchor the inflation fearing of accumulating the risks facing the growth tackling the investments which is needed for stimulating growth, so it looks that the only available option to the BOE currently is to let the pound appreciate for containing the inflation helping the market trust in it.
Kind Regards
FX Market Strategist
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

The equities markets are still creeping up and Dow could make a new year high at 12238 underpinned by easing of tension in Egypt which could bring back confidence in risky assets. The Egyptian street has found in changing the leaders of the national democratic ruling party an open door for discussions with all parties in Egypt even the Muslim brothers lightening the pressure on Mubarak from US and Europe to quit immediately in a fast way can put Egypt in mysterious ways. It looks currently that he is the best to reform as he is leaving anyway and modifying the constitution of the presidency terms fulfilling the demands of change in the rest time of his leading will not take advantages from him. It was a smart move even it was not directly required this time by the uprising crowd but this does not object that the position is still open in Egypt.

The European equities markets could add more gains too covering the loss of the credit crisis which reached its bottom on 9 March 2009 after aggressive falling of the assets prices has been triggered by the collapse mortgage market in US threating the creditability of its financial sector with the bankruptcy of Lehman brothers.

While the Asian stocks indexes have been under pressure from the unexpected Chinese decision of hiking the yearly lending rate by 25 basis points to 6.06 from 5.81 for curbing inflation which lowered the demand outlook for commodities and the Aussi and the Kiwi too as the nearest commodities markets to china.

The single currency came under pressure again by the falling of December germane industrial productions by 1.5% while they were expected to be up by .2% from decreasing by .6% in November and these dovish data came a day after the falling of Germany factory orders by 3.4% monthly in December from gaining 5.4% in November while the market was waiting for shrinking by 1.4% to show easing of the demand of capital good from Germany which can slow the growth of it. The single is still trading anyway above 1.36 since it could rebound with the recovery of the investors' risk appetite at 1.3505 versus the greenback which is still supported by the rising of the treasuries yields and the increased demand for borrowing while the US economy is looking better in the recent months despite the struggling of its labor market as we have seen by the end of last week the release of US Jan non-farm payroll adding just 36k while the market was waiting for 150k jobs to be added with declining of the unemployment rate to 9% from 9.4% while the market was waiting for rising to 9.6% but since the strong release of January ISM Manufacturing index which jumped to 60.8 while the market was waiting for 58.2 from 58.5 in December the confidence in the US economy is getting momentum adding to the gains of its dividends driving the treasuries yields up reinforcing the business spending trust which has been tempered recently by the concerns about the geopolitical situation in the middle east worrying about the oil supplies from the Arabian rich countries of oil through the Suez channel after the tensions have extended into Egypt brining back the oil prices above 100$ a barrel supporting the gold as a safe haven stance of the money value versus the higher inflation outlook to rebound from 1306$ trading currently above 1360$ trying to get over 1380$ after it was under pressure because of the increased optimism of having better growth rates in US this year can make the investing in the greenback rewarding with tame inflation pressure can help the Fed to keep its easing borrowing plans unchanged as it has done by the end of last month giving just reference to the rising of the commodities prices just as BOJ which is fighting deflation has done until now betting on its inability to move up the inflation over the long term in US and by God's will, we will be waiting today for Bernanke's testifying to know more about that.

Generally, The single currency is still under pressure because of Trichet's comments which have referred to moderate inflation upside risks over the long term after the ECB decision to keep the interest rate unchanged to reducing the market discounting of having a close interest rate hike for fighting the inflation after Jan EU CPI which has reached 2.4% y/y well above the 2% target of the ECB and so the single currency could not have the ability to fight for having a place above 1.379 versus the greenback breaking below 1.358 and it is now trading above 1.36 after finding support just above 1.35 psychological level but the breaking of this level can open the way for testing 1.335 then 1.326 and the falling of this level too can open the door for 1.309 and then the recent bottom of the pair at 1.287 level where it could rebound from by repeated Portuguese denying of the need for this made package by European countries and the IMF and the Japanese promises of buying European bonds this month could help it to rebounds fueled by markets cheeriness of successful bonds auctions in Portugal , Spain and Italy underpinned by The ECB members appreciation of building inflation pressure in the Euro zone.

After the cable had got a strong push from UK Service PMI of January which has risen above 50 into the expansion territory at 54.5 above the market expectations of 53.5 from 49.7 in December to jump above 1.625 reaching 1.6275 last week, The cable eased back from it unable to reach the formed resistance at 1.6296 which has been reached in the beginning of last November when the greenback was under pressure from the Fed's decision to add another 600b$ in another step of its QE policy for stimulating the economic growth in US but the British pound is still taking advantage from the market speculations of having new adopted tightening stance from the BOE for fighting the inflation which has been surged recently with UK CPI index reaching 3.7% yearly after the recent MPC meeting minutes which have shown stronger than expected appreciation of the inflation upside risks giving another vote to sentence who was calling for hiking the interest rate by .25 from the MPC voting member Mr. Martin Weale to be 6 to 2 to 1 decision of keeping the interest rate unchanged at .5% and its buying bonds plan unchanged at 200b Stg instead of 7 to 1 to 1 in their earlier meeting as Possen is still favoring increasing of the buying bonds plan but in the same time, the market is still appreciation growth downside risk which faces the UK economy dragging UK Q4 GDP into the negative territory at -.5% quarterly emerging stagflation risks capping the MPC from hiking the interest rate in the well required pace to anchor the inflation fearing of accumulating the risks facing the growth tackling the investments which is needed for stimulating growth, so it looks that the only available option to the BOE currently is to let the pound appreciate for containing the inflation helping the market trust in it.

Kind Regards
FX Market Strategist
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com