Texas Trade Forex Report For the Week of 19-1-2014 thru 25-1-2014

Good Morning, Good Afternoon or Good Evening where ever you are in the world. This is the Sunday and Weekend Edition of Texas Trade Report reporting for the week of 19-1-2013 thru 25-1-2014. I am Liz S, your currency analyst for this edition. We will be talking about the GBP/CAD, AUD/CHF, and NZD/CAD currency pairs these week report. This is sole focus of this report.  Before I can go any further, here is the risk disclaimer.

Risk Disclaimer:
  Trading Forex is a risky business and sometimes you will lose the money that you traded. You are leveraged 50:1 or even more. There is the risk of loss of the money have invested. Never invest money that you are not committed losing. There is a possibility of losing your original investment. If you are not sure about investing, seek the help of a registered investment adviser.

Also, the purpose of this trading lesson is education. This does not constitute trading advice. Nor do I give out trading signals. All opinions are my own and not Blogger.com nor Google.com.

GBP/CAD Daily Chart

Onto the focus of this week’s report, GBP/CAD is the first pair that I will be looking at for this report. We did close at 1.7998 on Friday and made a high of 1.8050.  This pair had been trending up since the last part of October. Here are the fib levels. The key fib level for 23.6% are 1.6217 and at the 38.2% fib level is 1.6580. At the 50.0% fib level, it is 1.6858. and at the 61.8% fib level is 1.7148. On Friday, we got better than expect retail sales report for the UK. This help to propel Cable to go higher. We are not really seeing any big retracements at the moment. Most of the dips are very shallow as it continues to trend up. We do have on Wednesday, 22 January 2014 an interest rate decision by the Bank of England. 

Here is what the events are for the UK on Wednesday:

09:30		GBP	Bank of England Minutes
09:30		GBP	BOE MPC Vote Cut			0	0
09:30		GBP	BOE MPC Vote Hike			0	0
09:30		GBP	BOE MPC Vote Unchanged			9	9
09:30		GBP	Claimant Count Change (Dec)			-35.0K	-36.7K
09:30		GBP	Average Earnings excluding Bonus (3Mo/Yr) (Nov)			1.0%	0.8%
09:30		GBP	Average Earnings including Bonus (3Mo/Yr) (Nov)			1.0%	0.9%
09:30		GBP	Claimant Count Rate (Nov)				3.8%
09:30		GBP	ILO Unemployment Rate (3M) (Nov)			7.3%	7.4%

 We do have the follow data for Canada this week starting.Tuesday,21 January:

13:30		CAD	Wholesale Sales (MoM) (Nov)			0.5%	1.4%
13:30		CAD	Manufacturing Shipments (MoM) (Nov)			0.3%	1.0%

Wednesday, Jan 22

5:00		CAD	BoC Interest Rate Decision			1%	1%
15:00		CAD	BOC Rate Statement
15:30		CAD	Bank of Canada Monetary Policy Report
16:15		CAD	BoC Press Conference

Friday, 24 January

13:30		CAD	Consumer Price Index (YoY) (Dec)			1.3%	0.9%
13:30		CAD	Bank of Canada Consumer Price Index Core (MoM) (Dec)			-0.4%	-0.1%
13:30		CAD	Bank of Canada Consumer Price Index Core (YoY) (Dec)			1.3%	1.1%
13:30		CAD	Consumer Price Index - Core (MoM) (Dec)				-0.3%
13:30		CAD	Consumer Price Index (MoM) (Dec)			-0.2%	0.0%

I do expect that the Bank of Canada could pursue a monetary policy of easing due to the data that has of late come in on the soft side.

 

GBP/CAD 30 Minute Chart

Onto the 30 minute chart, you can see the sharp jump up after the release of the retail sales for the UK. As you can see this congestion has remained as the result of the release of the retail sales. There is a possibility a retracement. It appears that it could be shallow. We have soft data out of Canada, which has help to keep this pair up. We can see this up trend is very strong. I am still bullish at this point.

 

AUD/CHF Daily Chart

Onto the AUD/CHF, we close at 0.7988 on Friday and made a high of 0.7999 on Friday. This pair has been trending down for some time. Here are the fib levels. The key fib level for 23.6% is 0.8189 and at the 38.2% fib level is 0.8415. At the 50.0% fib level, it is 0.8580 and at the 61.8% fib level 0.8752. We did receive the unemployment numbers for Australia and did send the Aussie Dollar to the downside. I do expect impact from the Chinese economic data that is being released on Monday, 20 January at 2:00 GMT. This data does impact Australia due the Australia being China’s largest trading partner. Here is the number that will be released on Monday, 20 January at 2:00 GMT:

02:00		CNY	Gross Domestic Product (QoQ) (Q4)	3		2.0%	2.2%
02:00		CNY	Gross Domestic Product (YoY) (Q4)	3		7.6%	7.8%
02:00		CNY	Industrial Production (YoY) (Dec)	2		9.8%	10.0%
02:00		CNY	Retail Sales (YoY) (Dec)	2		13.6%	13.7%
02:00		CNY	Urban investment (YTD) (YoY) (Dec)	2		19.8%	19.9%

 

AUD/CHF 30 Minute Chart

Onto the 30 minute chart, we do see a some continuation of the downward trend. The Bollinger bands do not seem to indication to be pointing up at this point. We do have on the only piece of data out of Switzerland takes on Tuesday, 21 January at 8:00 GMT. I don’t expect market moving like Chinese data. I do still see some possible continue of this trend for now. I am bearish at the moment on this pair.

NZD/CAD Daily Chart

Onto the NZD/CAD, this pair has been trending upward of late and closed on Friday at 0.9043. This pair made a high of 0.9122. The fib levels are for 23.6% at 0.8235 and the 38.2% fib level at 0.8419 on the daily chart. At the 50.0% fib level is 0.8109 and at the 61.8% fib level at 0.8712. We do see that much of data out of Canada has been soft. We do see that the Kiwi has been marching higher and higher on that soft data. We did get bit of dip on Friday. This pair has been on a tear. We do have on tap for the New Zealand dollar the following economic data:

Sunday, 19 January

21:00

NZD

REINZ House Price Index (MoM) (Dec)

1.2%

Monday, 20 January

21:45		NZD	Consumer Price Index (YoY) (Q4)			1.5%	1.4%
21:45		NZD	Consumer Price Index (QoQ) (Q4)			-0.1%	0.9%

Wednesday, 22 January

21:30

NZD

Business NZ PMI (Dec)

56.7

NZD/CAD 30 Minute Chart

Onto the 30 minute chart, we do see bit of the down trend that has taken place. I am not expecting a sharp retracement to the downside right away. This pair has been consistently going up. We do see that has made its move. We do expect there will be more follow through. We do see that it can still go down a bit more. This is to be expected. I am slightly bears short term on this pair.

There has been the drive showing that risk based assets like commodity currencies are still very much vulnerable to downside risks. We have seen moves toward risk aversion take place. The markets are confused at the moment because the mixed signals that Fed has given. Some pairs we have seen sideways action with no follow through in any given direction. Market love certainty and expect it. The data from the US since Friday does show good data and has priced it in. We did see the US Dollar take flight. We did see the Yen pairs go south. Much of the uncertainty lies on the fact when will the taper take place and for how long. Since March 2009, we have seen much of the markets continue upward. These trends have been long sustain over the last five years. We do know that with this expectation of the taper comes that the central banks will have to raise interests some point down the road. We are looking the bond markets and data related to employment and manufacturing to give much better clues as to where things could go. This is where we are going to formulate our trade plans on the basis of what the central banks are doing as far as monetary policy. We are paying attention to those policy decisions going forward. We want to see that data does match the reality. Good luck trading out there and have a good day. I will put another report later on.

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