Texas Trade Forex Report For the Week of 5-1-2014 thru 11-1-2014

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 5-1-2013 thru 11-1-2014. I am Liz S, your currency analyst for this edition. I will be talking about the GPB/CAD, AUD/CAD, and CAD/CHF currency pairs, gold and oil in 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. On Friday, we closed at 1.7455 and made a high of 1.7538 on Friday on the daily chart.  The fib levels are 1.6579 at 50% level and 1.6835 at 61.8% level on the daily chart. The 23.6 fib level is at 1.6002 and 1.6313 at 38.2 percent fib level on the daily chart. We do see that this pair has been moving in uptrend since 30 July 2013 on the daily chart. It appear that this pair will have correct to order to resume the uptrend. I do see evidence of it happening since Thursday. We do have 2 sold red candlesticks on the daily chart. We do this week on tap the following economic events for the UK.

UK Economic Reports this Week

Monday, 6 January 2014

09:28 GMT

UK

GBP

Markit Services PMI (Dec)

60

60

08:00		GBP	Halifax House Prices (MoM) (Dec)	1			1.1%
08:00		GBP	Halifax House Prices (3m/YoY) (Dec)	1			7.7%

Thursday, 9 January 2014

09:30		GBP	Goods Trade Balance (Nov)			£-9.400B	£-9.732B
09:30		GBP	Total Trade Balance (Nov)				£-2.619B
09:30		GBP	Trade Balance; non-EU (Nov)				£-3.254B

Friday, 10 January 2014

00:01

GBP

BRC Retail Sales Monitor - All (YoY) (Dec)

0.6%

09:30

GBP

Industrial Production (YoY) (Nov)

2.8%

3.2%

09:30

GBP

Industrial Production (MoM) (Nov)

0.4%

0.4%

09:30

GBP

Manufacturing Production (MoM) (Nov)

0.4%

0.4%

09:30

GBP

Manufacturing Production (YoY) (Nov)

3.2%

2.7%

Canada Economic Reports this week

Monday, 6 January 2014

3:30		CAD	Raw Material Price Index (Nov)			-1.1%	-2.3%
13:30		CAD	Industrial Product Price (MoM) (Nov)			-0.3%	-0.3%

Tuesday, 7 January 2014

13:30		CAD	International Merchandise Trade (Nov)			$-0.150B	$0.075B
13:30		CAD	Exports (Nov)			$40.59B	$40.47B
13:30		CAD	Imports (Nov)			$40.8B	$40.4B
15:00		CAD	Ivey Purchasing Managers Index (Dec)				48.2
15:00		CAD	Ivey Purchasing Managers Index s.a (Dec)			52.0	53.7

Thursday, 9 January 2014

13:15		CAD	Housing Starts s.a (YoY) (Dec)			196.0K	192.2K
13:30		CAD	Building Permits (MoM) (Nov)			2.3%	7.4%
13:30		CAD	New Housing Price Index (MoM) (Nov)			0.3%	0.1%
13:30		CAD	New Housing Price Index (YoY) (Nov)				1.5%

 

Friday, 10 January 2014 

13:30		CAD	Unemployment Rate (Dec)			6.9%	6.9%
13:30		CAD	Net Change in Employment (Dec)				21.6K
13:30		CAD	Participation rate (Dec)				66.4%
13:30		CAD	Wholesale Sales (MoM) (Nov)				1.4%

We believe that if we get data that is mixed or worse out the UK  that you will see trend to the downside. This would end the uptrend that we have been seeing of late. I do expect that much of the data of out Canada has been soft of late to end soon. I do expect that it will improve over time. I would like see better manufacturer numbers and better export numbers along with healthy Trade Balance numbers for the UK. This tells me that the health UK is improving. I believe that solely relying on the consumer to drive the economy like housing and consumer credit and borrowing won’t alone the complete story at this point. It should not be a sticking point. If you have bad manufacturing numbers and good consumer borrowing and good housing starts, there is not something build a trade along at this point. At this point, I am bearish on this pair because of the data of the UK has been mixed. Also, we don’t have that consistent follow through after mixed data.

AUD/CAD Daily Chart

Onto the AUD/CAD, we close at 0.9507 on Friday and is at 0.9533 the high on Friday. This pair has been trending down for some time. There is some worry out of China with the banking problems that are starting to become more prevalent. We will highlight them unlike a lot of our competition who won’t talk about it. But, we will talk about it. The banking problems out of China will affect Australia because Australia is China’s largest trading partner. As we hear more about it, you will definitely see a lot more volatility because of it. This does affect the overall view of what is happening there. Here are the fib levels. The key fib level for 23.6% are 0.9379 and at the 38.2% fib level is 0.9511. At the 50.0% fib level, it is 0.9619 and at the 61.8% fib level 0.9724. I have been looking the banking problems out of China and is making me re-think at this point a longer term view of things. I do expect we could see a short term bounce at this point. I would be more concerned now after hearing about the problems in China. I am bearish at this point.

Here is the Economic reports for Australia this week:

Sunday, 5 January 2014

22:30

AUD

AiG Performance of Services Index (Dec)

2

46.1

48.9

 Tuesday, 7 January 2014

00:30		AUD	Trade Balance (Nov)			-300M	-529M
00:30		AUD	Exports (Nov)				0%
00:30		AUD	Imports (Nov)				1%

Wednesday, 8 January 2014

00:30

AUD

ANZ Job Advertisements (Nov)

-0.8%

Thursday, 9 January 2014

00:30		AUD	Building Permits (MoM) (Nov)			-0.9%	-1.8%
00:30		AUD	Building Permits (YoY) (Nov)				23.1%
00:30		AUD	Retail Sales s.a. (MoM) (Dec)			0.5%	0.5%

CAD/CHF Daily Chart

Onto the CAD/CHF, this pair has been trading down since 17 May 2013. We closed on Friday at 0.8527 and made a high of 0.8527.This pair is bouncing very nicely at the moment. I did take on it before the start of the new year. The 23.6 fib level is at 0.8549 and 0.8728 at 38.2 percent fib level on the daily chart. The 50% fib level is at 0.8878 and 61.8 is at 0.9025 on the daily chart.  I am expecting to hear that the soft data coming out of Canada to end shortly. I do expect this downtrend that we have seen for a good part of last to end. I am slightly bullish at this point.

Gold Daily Chart

Onto gold, we closed on Friday in the positive and is trading currently at $1236.60. Gold is $0.40 higher. The fib levels on the daily chart are $1252.02 at the 23.6, $1268.13 at the 38.2% fib level, $1292.50 at the 50% level, at $1331.23 at 61.8 fib level on the daily chart.  I do expect that gold will track higher longer term down the road. Since we had this kind of decline, it is reminiscence of the downward slide that we saw the 1970s with gold. What happened, it is that you see a price spike up and healthy correction in the metal. A majority of analyst are proclaiming the recovery is here from the roof tops. What we need to see healthy Trade Balance number and manufacturing numbers that are not in the negative all the time. Because is the power behind the economy in the first place and not the consumer with borrowing and housing starts. Also, we need to unemployment below 5% to state that a real recovery is here. At this point, we are not seeing it really. You would need to see better export numbers and manufacturing numbers to see the US economy as well as the economies in the West appear to be recovering. I am not ready to jump on board until I do see solid evidence of this. Until we do see this happening, gold could still rise and especially if the Fed in the near future decides to hike rates and will make the US government’s job of paying down the US national debt tougher.

Oil Daily Chart

Onto oil, it closed above $94.05 on Friday. Oil went down during the start of the new year.  I am not expecting that it will stay that way.  I am still watching geo-political events that could cause oil surge. We could very well see a repeat above the $147.00 a barrel in the near future. Markets can be irrational on world events. I believe that longer term that we will see higher oil prices on the weekly chart and monthly chart. What appears at the moment is just consolidating and forming slight bottom at this point. I am cautiously optimistic about oil at this point. The next level of resistance on the daily chart is $104.12 resistance area. I am still bullish longer term on oil.

The markets are going to find that nominal value or real value of what the risk assets are worth. These themes of risk are not necessarily going to play themselves out longer term. We could see some short correction before we get major correction of this current market direction. They do run in cycles. What we could be seeing a bear market rally rather a true recovery. This is why I am especially cautious at this point to pronounce as a recovery. If you look at the rallies of the 1930s, you can find some of the very same similar resemblances of the current market action going on. I will be putting out special report for the readers of precious metals and other investors a bit later on. Good luck trading this week and I will put a daily report tomorrow. Just another note to everyone out there, I did make an addition to the website that you will notice and is the economic Forex report Calendar. It is there for a reference you can use at anytime. Just feel free to use whenever you need to.

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