8/3/2019 FX Weekly Commentary - Oct 30 - Nov 05 2011

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The aftermath

of the EU

summit on how

 to rescue

Europe we saw

 the markets

 take out much

of their pent up

risk appetite

driving the

pairs and

markets higher than many of us expected with the

EURUSD reaching a high of 1.4246 halting at the

 top created 11/4/2010. Risk appetite drove S&P

 to close +3.78% for the week and we watched as

 the AUDUSD catapulted to 107.52 falling short of 

 the 68% retracement on the daily move down from

110.64.

Looking ahead this is a big week for the currency

markets as RBA, ECB & Fed release November

interest rate statements and market outlooks.

Monday markets will focus on RBA as they release

 their interest rate statement. Analysts’ are mixed

on what the statement will contain, markets are

calling for .25 (some forecasts indicate .50 with

others at no change) basis point reduction on the

heels of lack lust economic data from the Aussie.

This is an important release for the AUDUSD which

will be preceded by China’s PMI number. Markets

will undoubtly pour over the statements by the

RBA for dovish or hawkish statements for

indications of this risk rally continuation.

All eyes are will shift and focus on the two gorillas’

in the room the ECB and the Federal Reserve

which will likely overshadow the RBA. There is lots

of chatter about how Draghi will kick off his ECB

presidency. Questions remain around weather

Draghi will make the much needed rate cuts to

relieve pressure from the euro or will he hold the

line of his predecessor and keep rates unchanged.

One this is for sure it is highly unlikely we will see

a rate hike from the ECB anytime soon. Markets

will be very critical of Draghi first statement and

will look to characterize his tenure in office by his

initial actions. Anticipate volatility around this

statement and lots of speculation on the ECB

outlook.

Draghi will be followed by Fed Chairmen Bernanke

who will grab the market’s attention once again as

 the federal reserve releases their statement and

outlook of the us economy. Last week we heard

from Fed member’s discussion QE and their

willingness to issue another round. These are

likely feelers for the committee to gauge market

reaction. With the Feds commitment to keeping 

rates low through 2013 we do not expect rate

changes, however the markets will dissect every

word Bernanke says alongside each detail in the

statement. In the days leading up to the

Wednesday’s statement expect to hear markets,

addicted to free money, cry out for QE3. Do not be

confused by this rhetoric Bernanke will likely keep

 the options open and discuss the evaluation of 

operation twist conducted by the Fed in

September.

In closing this week is expected to be a pivotal

week for the markets with lingering uncertainty

from the Euro-zone as Draghi is put to his first

 test. The bulls will likely drive the markets up

Monday to close out October and start September

with a bang. These risk on moves are not

fundamentally supported and can quickly reverse

as the markets are brought back to reality of the

economic climate. That being said the markets

closed clearly bullish last week so be careful not to get trampled by the bull excitement.

Fundamental Outlook 

Elite Global

Trading  Forex Weekly Commentary Oct 30th –Nov 5th 2011  Volume 1, Issue 26

In this issue:

Fundamental

Outlook

1

AUDUSD

GBPUSD

EURCAD 

2 

EURUSD

NZDUSD

3 

 Yen Crosses

Event Risk 4 

Contact Info

Disclaimer 5

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Elite Global

Trading 

Oct 30th –Nov 5th 2011  Volume 1, Issue 26

AUDUSD: The Aussie has enjoyed a strong 

bounce off it's bottoms over the past 4 weeks.This pair specifically has made a move up of 

over 1300 pips this month. A pullback from

 this move is most likely on tap over the days

 to come. With RBA giving their rate decision

Monday night, a likely dovish Stevens will

weigh heavy on it's currency. This pair looks

for support to hold before it's next move

higher. With a possibility of a Risk move to

continue in November, this pair would be

driving towards 1.0900 area and higher.

Outlook: Neutral, An expected move to

support off it's high of 1.0754 is expected to

start the week off. Support sits at 1.0600,

1.0540, 1.0500 and 1.0486, 1.0370 1.0320.

With Risk on having the possibility to go to

new highs in November, this pair may go

 touch the 1.1000 area and higher. We do not

rule this out after this pullback.

Australian Dollar / United States Dollar 

GBPUSD: The BOE has given clear direction

with their policy by adding to their QE program

which was their latest move, with amazement

it has not diminished the move up to 1.6100

on the GBPUSD at all. With not much to

change in the BOE policy over the rest of the

year, a move to some higher levels can be

expected in the GBPUSD. We look to see

1.6400 area to be touched before the next

major move below 1.5000.

Outlook: Neutral, we see a pullback to support

 to start this week off before the next push

higher over the weeks to come. Look for

support at 1.6090, 1.6052, 1.6021, 1.5990,

1.5945 and 1.5890. When we look higher for

 the next move up we see resistance at

1.6191, 1.6206, 1.6262, 1.6339, 1.6380,

1.6450.

UK Pound Sterling / United States Dollar

EURCAD: The Canadian Dollar has gained over

 the past several weeks and looks for further

gains, in the near future we see a move to the

mid 1.3000s to most probable for the

EURCAD. We have been in a very tight range

from 1.3900-1.4200 over the past few weeks

with only wicks above or below this range.

Lot's of indication to lower prices for this pairare occurring and we like this pair to the short

side once it breaks it's current range. One

 thing to consider when trading a range bound

pair is, a range needs to be respected until a

confirmed break occurs.

Outlook: Neutral, current range has held for

sometime now and a break is coming near,

we favor to the short-side below 1.3800

 targeting the 1.3500 area. Support sits at

1.3950 area, 1.3878 area, and 1.3823, a

break of these zones gives a clean move to

 the 1.3720, then to 1.3579. This move will

occur along side of the USDCAD move lowerover the weeks to come. Careful of the

EURUSD volatility giving this pair some wide

swings.

Euro / Canadian Dollar 

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NZDUSD: Has the similar look as the Aussie

for the near term outlook, a move to support

after hitting highs of the month last week. The

Kiwi Dollar has a strong possibility to gain

over the weeks to come with the RBNZ giving 

a strong economic outlook last week. This pair

has potential to reach the mid .8000s in the

month of November. If risk rallies die out and

do not continue in the month of November,

 this pair will likely struggle to reach higher

levels, for this pair is highly correlated with the

risk on move that we have been seeing over

 the last four weeks.

Outlook: Bullish Bias, a move to support

starting the week off is expected. Levels to

watch for. .8164, .8116, .8078, .8039,

and .8009. A move to higher levels over the

weeks to come is expected, levels to watch on

 the upside are, .8339, .8400, .8426, .8470,

and .8572.

New Zealand Dollar (Kiwi) / United States Dollar 

Elite Global

Trading 

Oct 30th –Nov 5th 2011  Volume 1, Issue 26

EURUSD: The Euro has overall enjoyed a nice

rally off it's lows of 1.3145 area starting the

month of October. This month has been a

giant month of risk rallies. Will this EURUSD

move continue for the months to come is a

big question all are asking. We have reached

some very important levels that may hold for

 the short-term 1.4250-80. The EU Summits

have given the markets temporary

confidence, will this hold up for larger gains

for the EURUSD? If so we will see the EURUSD

go back to the 1.4400 over the next few

weeks. Ahead of any moves higher we doexpect some headwinds that will move the

pair back down to 1.3950-1.3850 area. A

break below 1.3800 will expose the 1.3700-

1.3660 zone. We expect a move down to be

capped for the short term, and a move to test

 the 1.4280 level to be likely over the next

week.

Outlook: Neutral, with so many traders looking

 to short the EURUSD, the pair continues to

gain, and we will likely see more gains before

 the next major move down to the 1.2000s. A

move down towards 1.3900-1.3850 can be

expected before next major move to test

1.4280. The instability in the Euro zone does

not give much confidence in longs, but as

most are still shorting the EURUSD rising to

higher levels is not far fetched. Look for

1.4400 to be hit in the month of November.

Support 1.4080, 1.4022, 1.3988, 1.3950,

1.3848.

Euro / United States Dollar 

EURAUD: The Aussie is looking to make apullback in the days to come which will likely

boost this crosspair up to some higher levels

at the same time. With the RBA looking to give

a dovish outlook tomorrow, this pair will move

 to some key levels on the upside.

Outlook: Neutral, this pair has made a strong 

decline over the past few weeks and a move towards 1.3500 is most probable over this

next week. Levels to watch for on the way up,

1.3338, 1.3394, 1.3467, and 1.3535.

Support sits at 1.3192, 1.3180,1.3130, and

1.3101.

Euro / Australian Dollar

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Elite Global

Trading 

Oct 30th –Nov 5th 2011  Volume 1, Issue 26

Monday:

EUR: German Retail Sales 3am

EUR: CPI Flash Estimate 6am

EUR: Unemployment 6am

CAD: GDP 8:30am

USD: Chicago PMI 9:45am

NZD: Labor Costs 5:45pm

JPY: Monetary Policy Meeting Min 7:50pm

CNY: HSBC Final Manufacturing PMI 10:30pm

AUD: RBA Rate Statement 11:30pm

Tuesday:

GBP: Nationwide HPI 3:30am

CHF: Retail Sales 4:15am

GBP: Manufacturing PMI 5:30am

GBP: Prelim GDP 5:30am

USD: ISM Manufacturing PMI 10am

AUD: Building Approvals

Wednesday:

EUR: German Unemployment Change 4:55am

GBP: Construction PMI 5:30am

USD: ADP Non-Farm Employment Change

8:15am

USD: FOMC Statement 12:30pm

USD: FOMC Press Conference 2:15pm

NZD: Unemployment Rate 5:45pm

AUD: Retail Sales 8:30pm

Thursday:

G20 Meeting 

GBP: Services PMI 5:30am

USD: Unemployment Claims 8:30am

EUR: Min Bid Rate 8:45am

EUR: ECB Press Conference 9:45am

USD: ISM Non-Manufacturing PMI 10am

AUD: RBA Monetary Policy Statement

Friday:

G20 Meeting 

CAD: Employment Change 7am

CAD: Unemployment Rate 7am

EUR: German Factory Orders 7am

USD: Non-Farm Employment Change 8:30am

USD: Unemployment Rate 8:30am

CAD: Ivey PMI 10am

Weeks Event Risk 

 Yen crosses look to higher levels over the next

month. EURJPY is likely to trade at 109.80

and a break of the downward trend-line from

April 2011 will bring this pair higher towards

112.00 over the next month. The GBPJPY is

expected to rise as well towards the 130.00s

before the end of the year. A pullback for both

 these pairs is expected to start this week off.

Japanese Yen Crosses 

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Any reliance you place on

such information is therefore

strictly at your own risk.

In no event will we be liable for any

loss or damage including without

limitation, indirect or consequential

loss or damage, or any loss or

damage whatsoever arising from

loss of data or profits arising out of,

or in connection with, the use of this

newsletter. 

The information contained in this

newsletter is for general information

purposes only. The information is

provided by Elite Global Trading and

while we endeavor to keep the

information up to date and correct,

we make no representations or

warranties of any kind, express or

implied, about the completeness,

accuracy, reliability, suitability or

availability with respect to the

newsletter or the information,

products, services, or related

graphics contained on the

newsletter for any purpose.

News letter Authors:

Anthony Rousseau 

arousseau@eliteglobaltrader.com

James Putra

 jputra@eliteglobaltrader.com  

Tel: 786-759-0348

E-mail:

info@eliteglobaltrader.com 

Elite Global Trading  

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