EUR/USD got into narrow range trading, clinging to the uptrend support but breaking higher.  Will the pair pick a direction? Here’s a quick update on technicals, fundamentals  and community trends.

EUR/USD within new uptrend channel, that began last week. Click to enlarge.

EUR/USD Technicals

• Asian session:  EUR/USD bounced from the 1.2665 support line to the 1.2722 resistance line.
• Current Range is between 1.2665 to 1.2722.
• Further levels: Below, 1.2610, 1.2460, 1.2330 and 1.2150. Above  1.2722, 1.2840, 1.2930, 1.30 and 1.3110.
• Uptrend channel lost again: EUR/USD trades in an uptrend channel. Uptrend support began from the lows it reached on August 24th through a low on August 25th. Uptrend resistance began on a swing high on August 24th and was formed on August 26th. This is a notable line. EUR/USD lost it.

EUR/USD Fundamentals

All times are GMT. Most important events emphasized.

• 6:00: German Retail Sales. Exp. +0.6%, Actual -0.3%. Disappointment.
• 8:00: Final Manufacturing PMI. Exp. 55 points.
• 11:30: US Challenger Job Cuts.
• 12:15: ADP Non-Farm Employment Change. Exp. +20K.
• 14:00: US ISM Manufacturing PMI. Exp. 53.2.
• 14:00: US Construction Spending. Exp. -0.4%.
• 14:45: US FOMC member Elizabeth Duke talks.

EUR/USD Sentiment

• Market is in risk aversive mood. This means that bad US indicators are dollar positive, although devastating figures that we’ve seen in recent days just shocked the markets.
• The 1.2610 line is critical on the downside.
• This is a busy week, with the Non-Farm Payrolls at the end of it. There are two important hints for the NFP today – ADP NFP, which supplies a hint about private sector jobs and the manufacturing PMI, which is an indicator of economic activity in August.
• Currensee Community: 55% are Short, 45% are long, with shortists having the upper hand. These are 949 open positions in real accounts trading this pair at the moment.

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U.S. DAP Employment Report, ISM Manufacturing Index and Australian GDP are at the top of our market moving events for today. Here is an outlook on the economic activities awaiting us.

In the US, Automatic Data Processing Employment Report, a measure of jobs lost or added to the private sector of the economy, also serving as a preliminary estimate for the outcome of the monthly non-farm payrolls expecting a slower jobs creation of up to 20 K jobs in August from 42 K in July and Challenger Job cuts fell 57.2% in July totaled 41,676, a similar number is expected now, however the job-cut report must be analyzed with caution. It doesn’t distinguish between layoffs scheduled for the short-term or the long term, or whether job cuts are handled through attrition or actual layoffs.

More in the US, ISM Manufacturing Index, a leading indicator of industrial activity, expected to register another month of slower growth with the index pulling back to 53.2 from 55.5 in July and ISM Manufacturing Prices also predicted to drop to 55.5 from 57.5 in July.
Later in the US, The Department of Energy reported that in the week ending August 20th, 2010, U.S. crude oil increased by 4.1 million barrels, a smaller increase of 1.3M is expected now and Construction Spending expected to decrease by 0.4% following 0.1% increase in June.

Finally in the US, Total Vehicle Sales predicted to increase by 100K reaching 11.6M and Federal Reserve Governor Elizabeth Duke speaks about Neighborhood Stabilization at the Federal Reserve REO and Vacant Properties Summit, in Washington may affect interest rates and provide info on future monetary policy.

In Europe, German Retail Sales the primary gauge of consumer spending, expected 0.6% rise following a worse than expected drop of 0.9% in the previous month.

More in Europe, Final Manufacturing Purchasing Managers’ Index a leading indicator of economic health is foreseen to remain 55.0 indicating expansion.

For more on the Euro, read the EUR/USD forecast and Casey Stubbs’ latest analysis.

In Great Britain, House prices a leading indicator of the housing industry’s health increased by 0.6% in July.  This modest rise offset the 0.6% fall in June and is likely to increase this time as well.

More in Great Britain, Manufacturing Purchasing Managers’ Index a leading indicator of economic health predicted 57.1 points, 0.2 less than in the previous month but overall an encouraging figure.

Read more about the Pound in the GBP/USD forecast.

In Switzerland, SVME Purchasing Managers’ Index expected to drop 1 point to 65.9 indicating stability and growth in the Swiss market.

In Australia, Gross Domestic Product, the main measure of economic activity and growth should confirm the expectations for faster economic growth in Q2 2010 by up to 0.9% q/q from 0.5% in the first quarter.

More in Australia, Commodity Prices a leading indicator of the nation’s trade balance since commodities account for over half of Australia’s export earnings has climbed 7% to 51.0% in July and is expected a similar rise this time as well.
For more on the Aussie, read the AUD/USD forecast.

In New Zealand, ANZ Commodity Prices dropped 0.8% in July a small rise is expected now.
In Japan, Monetary Base measuring change in the total quantity of domestic currency in circulation and current account deposits held at the BOJ forecasted 6.3% rise 0.2% more than in July.

That’s it for today. Happy forex trading!

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Non-Farm Payrolls, GDP releases, consumer confidence and many more high risk news event provide opportunities for binary options on currencies. Here are potential setups for forex this week.

Binary options can be utilized as an alternative to the traditional stop loss, as a tool for protecting against false breakouts and lots more. One-hour binary options can be used for trading on news events. 

You can trade binary options at StartOptions, a respected binary options provider.

I’ve selected the events and the setups based on study already done for the forex weekly outlooks, and the potential reactions to surprises. Some events collide with each other and could offset each other. These events weren’t selected.

Quick explanation:

• CALL options – if the price closes above the price you purchased at expiry, you earn 75%. If it closes below, you’re left with 10%.
• PUT options – if the price closes below the price you purchased at expiry, you earn 75%. If it closes above, you’re left with 10%.

OK, let’s review the events:

1. Japanese Average Cash Earnings: Tuesday, 1:30 GMT. Market expectations currently stand on +0.9%. 1.5% or higher – PUT option on USD/JPY. Negative outcome, CALL option on USD/JPY.
2. German Unemployment Change: Tuesday , 7:55 GMT. Market expects a loss of 19K. a loss of 35K or more – CALL option on EUR/USD. a rise in unemployment -PUT option on EUR/USD.
3. Canadian GDP: Tuesday, 12:30 GMT. Market expects +0.2%. +0.5% or more, PUT option on USD/CAD. Negative result – CALL option on USD/CAD.
4. US CB Consumer Confidence: Tuesday, 14:00 GMT. Market expects 50.9. 55 or more – CALL option on USD/JPY. 47 or less – PUT option on USD/JPY.
5. Australian GDP: Wednesday, 1:30 GMT. Market expects +0.9%. +0.4% or less, PUT option on AUD/USD. 1.4% or more – CALL option on AUD/USD.
6. British Manufacturing PMI: Wednesday, 8:30 GMT. Market expects 57.1. 60 or more, CALL option on GBP/USD, Below 50, PUT option on GBP/USD.
7. US ADP Non-Farm Employment Change: Wednesday, 12:15 GMT. Market expects +20K. +50K or more, CALL option on USD/JPY. Negative number – PUT option on USD/JPY.
8. US ISM Manufacturing PMI: Wednesday, 14:00 GMT. Market expects 53.3. 56 or higher – CALL option on USD/JPY. Under 50, PUT option on USD/JPY.
9. Australian Trade Balance: Thursday, 1:30 GMT. Market expects +3.11 billion. +4 billion or more – CALL option on AUD/USD. +1 billion or less – PUT option on AUD/USD.
10. British Nationwide HPI: Thursday, 6:00 GMT. Market expects -0.3%. -0.8% or worse, PUT option on GBP/USD. +0.1% or more, CALL option on GBP/USD.
11. Swiss Retail Sales: Thursday, 7:15 GMT. Market expects +2.3%. 3% or more – PUT option on USD/CHF. 1% or less – CALL option on USD/CHF.
12. US Unemployment Claims: Thursday, 12:30 GMT. Market expects 477K. 500K or more – PUT option on USD/JPY. 450K or less, CALL option on USD/JPY.
13. British Services PMI: Friday 8:30 GMT. Market expects  53.1. 56 or more – CALL option on GBP/USD. Below 50, PUT option on GBP/USD.
14. European Retail Sales: Friday 9:00 GMT. Market expects +0.3%. +1% or more, CALL option on EUR/USD. -0.5% or less – PUT option on EUR/USD.
15. US Non-Farm Payrolls: Friday 12:30 GMT. Market expects – 100K. -200K or worse – PUT option on USD/JPY. +20K or more – CALL option on USD/JPY.
16. US ISM Non-Manufacturing PMI: Friday 14:00 GMT. Market expects 53.6. 56.5 or more – CALL option on USD/JPY. Below 50 – PUT option on USD/JPY.

These expected market reactions and setups are general market commentary. This is by no means investment advice.

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The summer ends with a very busy week, including GDP releases, the European rate decision and many American figures culminating in the king of forex – Non-Farm Payrolls. Here’s an outlook for the 14 major market moving events.

The notion of a double dip recession in the US strengthened in the past week, especially with disastrous number from home sales, and even though Bernanke made an effort to calm the markets. The question is - Will the US economy fall alone? This storm of negative numbers, such as the downwards revision of GDP, will probably continue pouring in this week.

1. US Personal Spending: Published on Monday at 12:30 GMT. This figure is an important gauge for consumers’ mood. Growth in spending slowed down and stalled last month. Now, there’s fear that spending will squeeze, but economists still hope for a 0.4% rise.
2. European Unemployment Rate: Published on Tuesday at 9:00 GMT. While Germany enjoyed stellar growth in Q2, and also enjoys dropping unemployment, the rest of the continent still suffers with an unemployment rate of 10%. This figure is published about an hour after the German Unemployment Change figure, and will emphasize the gap, slowing Euro bulls.
3. Canadian GDP: Published on Tuesday at 12:30 GMT. Canada’s unique monthly release of the GDP provides action for the USD/CAD more frequently. After a great first quarter, the Canadian economy slowed down in Q2. This release is for the month of June, closing the second quarter and is of high importance. A 0.2% rise is expected.
4. US CB Consumer Confidence: Published on Wednesday at 14:00 GMT. This wide survey of 5000 households always rocks the markets. After topping 63 points two months ago, confidence fell quickly and dropped to 50.4points last month. Another small rise to 51.3 points is hoped for now.
5. US FOMC Meeting Minutes: Published on Tuesday at 18:00 GMT. Two weeks after the groundbreaking FOMC statement, we’ll get to see how worried the members are and if there are differences between them. The Federal Reserve expressed concerns about the recovery and renewed the bond buying program in the last meeting – a move that eventually sent the dollar skyrocketing for a few days.
6. Australian GDP: Published on Wednesday at 1:30 GMT. Australia, which was never officially in a recession, has also seen slower growth in Q1 – only 0.5% after 1.1% in Q4 of 2009. This important figure will probably be stronger now – a growth rate of 0.9%. This  will rock both the Aussie and the kiwi.
7. US ADP Non-Farm Employment Change: Published on Wednesday at 12:15 GMT. This indicator for the private sector continues to be of high importance for the Non-Farm Payrolls, as the overall figure is still distorted by the decennial census. ADP showed four months of small gains in jobs. A smaller figure than last month’s 42K gain is likely now – 22K.
8. US ISM Manufacturing PMI: Published on Wednesday at 14:00 GMT. This is one of the indicators that didn’t disappoint last month – it surprised with 55.5 points – showing that the manufacturing sector is still expanding at a good rate. This survey of 400 purchasing managers is now expected to dip. The big question is if it will drop under the critical 50 point mark meaning contraction. Expectations stand on a drop to 53.6 points.
9. European rate decision: Published on Thursday at 11:45 GMT. Jean-Claude Trichet has a great second quarter and higher inflation on one hand, and great concerns for the future and high unemployment rate on the other hand. The result will probably be leaving the European Minimum Bid Rate unchanged once again on 1% but expressing higher concerns in the press conference, due 45 minutes after the rate announcement.
10. US Unemployment Claims: Published on Thursday at 12:30 GMT. After topping 500K two weeks ago, jobless claims dipped to 473K last week, giving some relief. This is the last job-related figure before the Non-Farm Payrolls. Another rise above 500K will be problematic, while only a drop under 430K will provide hope.
11. US Pending Home Sales: Published on Thursday at 14:00 GMT. Pending home sales, like the whole housing sector, is dependent on government aid. Without it, we’ve seen a 30% drop in pending sales two months ago, another drop of 2.6% last month, and huge drops in existing and new home sales reported last week. Another drop is expected now – 1.5%.
12. Swiss GDP: Published on Thursday at 6:45 GMT. The Swiss economy saw three quarter of growth after the recession, with a 0.4%growth rate in Q1. Growth is expected to continue in this stable country also in Q2, and it could even be stronger – 0.8%.
13. US Non-Farm Payrolls: Published on Friday at 12:30 GMT. The king of forex trading was disappointing last month – yet another big drop in jobs – 131K. The effect of the decennial census was still felt then, and will be felt now as well, since 200,000 workers were still employed around the census as of last month. So, also now the focus will be on the private sector change. A drop in jobs in the private sector can sure happen now, after all of August’s figures have been terrible. Consensus for the headline figure stand on a drop of 100,000. The accompanying figure – the unemployment rate, will probably remain around 9.5% and will leave the focus on the NFP.
14. US ISM Non-Manufacturing PMI: Published on Friday at 14:00 GMT. Complementing the manufacturing sector, the services sector has also been good last month (54.3 points) and will probably dip this time to 53.6 points. It’s importance is lower this month, as it’s released after the NFP.

That’s it for the major events this week. Stay tuned for in-depth coverages of specific currencies.

Further reading:

• For EUR/USD, check out  the Euro/Dollar Forecast.
• For GBP/USD  (cable), look into the British Pound forecast.
• For the Australian dollar (Aussie), check out the AUD/USD forecast.
• For the New Zealand dollar (kiwi), read the NZD/USD forecast.
• For USD/CAD (loonie), check out the Canadian dollar forecast.

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free..

U.S. ADP an early indicator of non-farm payrolls and US ISM Non-Manufacturing Index are the major activities on our menu. Here is an outlook on today’s market moving events.

U.S. Automatic Data Processing Employment Report, a preliminary estimate for the outcome of the monthly non-farm payrolls is expected to add as many as 36,000 new jobs in July, as opposed to only 13,000 jobs in June. Faster private sector jobs creation could reduce the number of jobs forecasted to be lost in Friday’s non-farm payrolls report.

More in the US, ISM Non-Manufacturing Index, leading indicator of economic conditions in the services industries: agriculture, mining, construction, transportation, communications, wholesale trade and retail trade reflecting the U.S. economic slowdown with activity in the services industries pulling back to 53.3 from a previous reading of 53.8.

Finally in the US, Crude Oil Inventories predicted to decrease by 1.4B following 7.3M rise in the previous week and Challenger Job Cuts decreased by 47.1% and is likely to continue decreasing.

For more on USD/CAD, read the Canadian dollar forecast.

In Europe, Retail Sales a primary gauge of consumer spending is predicted a flat reading following 0.1% increase in the previous month.

More in Europe, Final Services PMI based on a survey of about 600 purchasing managers asked to rate the relative level of business conditions is forecasted to remain 56.0 points.

For more on the Euro, read the EUR/USD forecast and Casey Stubbs’ latest analysis.

In Great Britain, In Great Britain, Halifax House Price Index a leading indicator of the housing industry’s health predicted 0.4% drop following the unexpected 0.6% dip in June.

More in Great Britain, Services PMI based on surveyed purchasing managers in the services industry expected to rise by 0.2 points to 54.6 points following a worse than expected 54.4 points in June.

Read more about the Pound in the GBP/USD forecast.

In Australia, Trade Balance surplus expected to continue increasing  bringing optimistic news for the Australian market forecasted to reach 1.815B following 1.65B in the previous month.

More in Australia, House Price Index is foreseen a 2.2% rise following 4.8% in the previous quarter.

For more on the Aussie, read the AUD/USD forecast.

In New Zealand, Employment Change the earliest indication of the employment situation and tends to create hefty market impacts expected to increase by 0.5% following 1.0% in the previous quarter while Unemployment Rate climbs to 6.2% from 6.0 % in the previous quarter.
That’s it for today. Happy forex trading!

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It’s the first week in the month, and Friday brings the king of forex – Non-Farm Payrolls. We’re expecting to see another significant drop in jobs – still the after-effect of the government census, but also a reflection of the slowdown. Here’s a preview for this major release, including things to watch out for, and expected markets reactions.

This is the most volatile event for currency traders, especially in EUR/USD in USD/JPY, which are most vulnerable to American releases. I recommend reading my 5 notes for Non-Farm Payrolls trading, especially for new traders. Let’s see what’s expecting us now:

Importance of Private Sector Numbers

In May, Non-Farm Payrolls jumped by 433K. This result, the highest gain in a long time, was expected. In May, the US government held the decennial census, hiring hundreds of thousands of people. This hiring began many months beforehand and reached the climax in May. So, even a bigger gain was expected. The big disappointment came from the private sector, that hired a small amount of people – this is the real problem.

In June, there were expectations for a “hangover”, due to the government’s release of all the temporary workers. And this drop, of 125K, was worse than expected, also due to weak hiring by the private sector.

The census effect is slowly fading away, but the change in jobs in the private sector will still play a big role, alongside the overall number. Expectations for the headline number are for a loss of 75K jobs. A loss of more than 100K will be a disappointment, while a loss of under 50K or even a  gain in jobs will be a good surprise. But it’s important to note the change in the private sector – a gain in jobs will be good, and a loss will be bad.

With the private sector change being important, the independent ADP Non-Farm Payrolls, released on Wednesday, will receive special attention. This isn’t always the best indicator for the headline number of the NFP, but as it’s a report for the private sector, it’s importance is high. A gain of 36K jobs is predicted here.

Unemployment Rate

Regarding the unemployment rate, its role became more subtle. Changes in the unemployment rate don’t necessarily reflect the economy, but rather statistical changes. In many cases, we’ve seen confusing figures – a gain in jobs with a rise in the unemployment rate, and the opposite – a drop in jobs together with a drop in the unemployment rate.

The unemployment rate will play a role only if it rises to 10% – the double digit psychological level has a strong effect on currency markets. In the other direction, only a drop to 9.2% or lower will be a positive sign. The rate likely to be something in the middle, ticking up from 9.5% to 9.6%, leaving the scene for the Non-Farm Payrolls.

A related figure is the weekly unemployment claims. Here, we’ve seen rock steady releases in the past few months, between 440K to 480K. If this Thursday’s number is out of this range, this could affect the preparations for the NFP, but this is highly unlikely. In the sole occasion when the number stood on 429K, it was quickly dismissed as a miscalculation.

Market Reaction

In the past month, we’re back to “normal” market reaction – no risk factor. This means that the dollar falls on weak US figures and rises on good ones. This applies to “risky” currencies such as the Euro, Pound, Aussie, loonie and kiwi, as well as the so called “safe haven” currencies such as the Swissy and the yen.

Note that the initial reaction, and the strong moves that occur before the release, don’t necessarily reflect the direction that the market will take later, towards the close of the week, and into the new week. I’ll mention again – the private sector number in the Non-Farm Payrolls still plays a big role – a gain or a loss here can determine a gain or a loss for the greenback.

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This week consists of quite a few market moving events that could provide opportunities for binary options trading. Here are 10 market moving events with potential market reactions and binary options setups.

Binary options can be used as an alternative to the traditional stop loss, as a tool for protecting against false breakouts and lots more. One-hour binary options can be used for trading on news events. 

You can trade binary options at StartOptions, a respected binary options provider.

I’ve selected the events and the setups based on study already done for the forex weekly outlooks, and the potential reactions to surprises. Some events collide with each other and could offset each other. These events weren’t selected.

Quick explanation:

• CALL options – if the price closes above the price you purchased at expiry, you earn 75%. If it closes below, you’re left with 10%.
• PUT options – if the price closes below the price you purchased at expiry, you earn 75%. If it closes above, you’re left with 10%.

OK, let’s review the events:

1. US ISM Manufacturing PMI: Monday 14:00 GMT. Market expectations currently stand on 54.3. 56.5  or higher – PUT option on EUR/USD. 52 or lower, CALL option on EUR/USD.
2. Australian rate decision: Tuesday, 4:30  GMT. Market expects unchanged rate at 4.50%, a rise to 4.75% – CALL option on AUD/USD. A drop to 4.25% – PUT option on AUD/USD.
3. British Services PMI: Wednesday 8:30 GMT. Market expects 54.6, a score of 57 or higher – CALL option on GBP/USD, 51 or lower – PUT option on GBP/USD.
4. US ADP Non-Farm Employment Change: Wednesday, 12:15 GMT. Market expects +36K. 60K or higher, PUT option on EUR/USD, negative outcome, CALL option on EUR/USD.
5. US ISM Non-Manufacturing PMI: Wednesday, 14:00 GMT. Market expects 53.3 points. A score of 55 or higher – PUT option on EUR/USD. Below 50 – CALL option on EUR/USD.
6. New Zealand Unemployment Rate: Wednesday, 22:45 GMT. Market expects a rise to 6.2%. Below 6% – CALL option on NZD/USD. Above 6.8% – PUT option on NZD/USD.
7. British rate decision: Thursday, 11:00 GMT. Market expects an unchanged rate at 0.5%. Any raise – CALL option on GBP/USD.
8. US Unemployment Claims: Thursday 12:30 GMT. Market expects 456K. 480K or higher – CALL option on EUR/USD. Below 430K – PUT option on EUR/USD.
9. Canadian Employment Change: Friday, 11:00 GMT. Market expects 10.3K. Above 30K – PUT option on USD/CAD. Negative number – CALL option on USD/CAD.
10. US Non-Farm Payrolls: Friday, 12:30 GMT. Market expects a loss of 75K. A positive outcome – PUT option on EUR/USD. A loss of over 100K, CALL option on EUR/USD.

These expected market reactions and setups are general market commentary. This is by no means investment advice.

If you’re interested in binary options, you’re welcome to go to StartOptions. They’re a leading binary options provider. This is how it looks on their screens:

For our subscribers only we worked a special deal and we got you a $300 free bonus on opening your account.

All you need to is deposit $1000 into your options account. Not spend. Just Deposit.

Full Disclosure: I’m affiliated with StartOptions.

The first week of the month is always very busy. We have rate decision in Europe and Britain, and lots of American figures – with the best for last – Non-Farm Payrolls. Here’s an outlook for this week’s major market movers.

EUR/USD struggled with resistance, but eventually kept on swimming in the uptrend channel. Yet again, it enjoyed US weakness rather than European strength. US weakness will probably continue through the next week as well. Let’s start:

1. US ISM Manufacturing PMI: Published on Monday at 14:00 GMT. Manufacturing in the US pushed the economy forward, being positive (above 50) in the past 11 months. But also here, a warning sign was seen last month, as this survey of 400 purchasing managers unexpectedly dropped to 56.2 points. Another drop is expected – to 54.3 points.
2. Ben Bernanke talks: Starts speaking in Charleston on Monday at 14:15 GMT. In a speech about the the challenges of the economy, the chairman of the Federal Reserve might release an updated opinion about the economy and about the interest rate. Any small hint may rock the markets.
3. Australian rate decision: Published on Tuesday at 4:30 GMT. If there were any forecasts for more rate hikes, they were erased as quarterly CPI, published last week, showed that inflation is very tame – no rate hike is necessary in Australia. So, Glenn Stevens is expected to leave the Cash Rate unchanged at 4.5%. The Aussie will rock by the wording of the accompanying rate statement.
4. US Personal Spending: Published on Tuesday at 12:30 GMT. Consumer spending could fall for the first time in 9 months. After it rose by only 0.2% last month, and the CB Consumer Confidence was weak, this important gauge will probably rise by only 0.1%, hurting the dollar.
5. US Pending Home Sales: Published on Tuesday at 14:00 GMT. The number of homes that were sold but are still awaiting the final transaction dropped by a whopping 30% last month, after a homebuyer tax credit expired. The housing sector is very vulnerable and still very dependent on government support. This time, a correction is expected – this should boost the dollar.
6. US ADP Non-Farm Employment Change: Published on Wednesday at 12:15 GMT. The importance of this report for the private sector rose in the past few months, as the decennial census caused big jumps in the Non-Farm Payrolls, and the focus was on the private sector. While this isn’t always a good indicator for the NFP, it always rocks the markets. Last month’s small and disappointing gain of 13K will probably be followed by a higher gain this time – 36K.
7. US ISM Non-Manufacturing PMI: Published on Wednesday at 14:00 GMT. Similar to the manufacturing PMI, also the services sector is already “over the hill”. Last month’s disappointing drop to 53.8 points is likely to be followed by another drop to 53.3 points, but the score is expected to be above 50 – still showing economic expansion.
8. New Zealand employment data: Published on Wednesday at 22:45 GMT. Employment figures always rock currencies. In New Zealand, the effect is stronger, as these numbers are released only once per quarter. The last release was superb – unemployment change jumped by 1%, and the unemployment rate made a steep drop from 7.1% to 6%, boosting both the kiwi and the Aussie. But this quarter won’t be that good – employment is expected to rise by only 0.5% and the unemployment rate is predicted to rise from 6% to 6.2% – still OK..
9. British rate decision: Published on Thursday at 11:00 GMT. There’s a chance of a rate hike in Britain. Mervyn King joined other economists by expressing concern about the rising inflation. Britain now enjoys a nice growth rate, and improving unemployment situation. One member wants a hike from 0.50% to 0.75%. Will the rest follow? Even if not, the accompanying MPC Rate Statement will definitely shake the Pound.
10. European rate decision: Published on Thursday at 11:45 GMT. In Europe, things aren’t so good. The unemployment rate is still very high, and while Germany is doing well, the rest of the continent is still struggling. Jean-Claude Trichet is expected to leave the European Minimum Bid Rate at 1%. His words regarding growth, employment and the unwinding debt crisis in the ECB Press Conference will rock the Euro.
11. US Unemployment Claims: Published on Thursday at 12:30 GMT. As the last hint before the Non-Farm Payrolls, jobless claims will porbably remain similar to last week’s number of 457K. This gauge remained in a narrow range between 440K to 480K in recent months. When it dropped to 429K three weeks ago, this was merely a wrong calculation. Only a big drop will boost the US dollar.
12. Canadian employment data: Published on Friday at 11:00 GMT. Contrary to its neighbor from the south, Canada’s job market is steaming hot. A huge gain of 93.2K was reported last month, far better than expected. Also the unemployment rate provided a very pleasant surprise, dropping below 8%. This time, a small gain in jobs is expected, and the unemployment rate is expected to remain unchanged.
13. US Non-Farm Payrolls: Published on Friday at 12:30 GMT. The monthly circus in forex trading saw a big hangover last month – a drop of 125K jobs. This followed a huge gain in the previous month – related to the census. A loss of 75,000 jobs is expected at the moment. The unemployment rate dropped to 9.5% – this good news is likely to be erased with a return to 9.6% this time. A special preview for this event will be posted later in the week.

That’s it for the major events this week. Stay tuned for specific currency coverages.

Further reading:

• For EUR/USD, check out  the Euro/Dollar Forecast.
• For GBP/USD  (cable), look into the British Pound forecast.
• For the Australian dollar (Aussie), check out the AUD/USD forecast.
• For the New Zealand dollar (kiwi), read the NZD/USD forecast.
• For USD/CAD (loonie), check out the Canadian dollar forecast.

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free..

American ADP Non-Farm Payrolls, Canada’s GDP, British Final GDP, Swiss KOF Economic Barometer and Japan’s Tankan Manufacturing Index make the current headlines. Let’s review today’s activities.

In the US, American ADP Non-Farm Payrolls: The report for the private sector is sometimes called the “mini Non-Farm Payrolls”. In many months, it didn’t predict the direction of the NFP, but this changed last month, as the weak growth in the private sector was reflected in the NFP 2 days later. Three months of job gains will probably be followed by a fourth one. Expectations stand on a gain of 58K jobs.

More in the US, Chicago Purchasing Managers’ Index is foreseen another small drop following the unexpected fall in May gaining 59.2 points.

Finally in the US, Crude Oil Inventories expected to add to the surplus inventories following last week’s surge of 2.0 M.

In Canada, Canadian GDP for the month of March, that finished Q1, was excellent - 0.6%. This exceeded expectations and completed an annual growth rate of 6.1% in Q1. A modest rise of 0.2% is expected this time.

For more on USD/CAD, read the Canadian dollar forecast.

In Europe, Unemployment in Europe’s largest economy is forecasted to contract another 23K in June following the 45K drop during the previous month An ongoing improvement in the German labor market is likely to stoke an enhanced outlook for future growth, and the data could spur a bullish reaction in the single-currency as European policy makers expect the recovery to gather pace in the second-quarter.

More in Europe, Following the market muted reaction to the Eurozone CPI flash estimate which came in at 1.6% a small dip to 1.5% is anticipated.

Finally in Europe, ECB President Jean-Claude Trichet holds a press conference at the High-level Eurosystem Seminar with Central Banks and Monetary Agencies of the Gulf Cooperation Council, in Rome this may affect interest rates.

For more on the Euro, read the EUR/USD forecast and Casey Stubbs’ latest analysis.

In Great Britain, Nationwide HPI is expected a small drop to 0.3% following April’s predicted rise. The BBC quoted Nationwide’s chief economist, Martin Gahbauer, as saying: “The current supply-demand balance on the market is still consistent with relatively stable to modestly upward trending prices.”

More in Great Britain, British Final GDP: The final version of Britain’s GDP is expected to confirm the improved second release and show a growth rate of 0.3% in the first quarter. Only an upwards revision of the weak growth rate will boost the Pound. The next quarters will probably be worse in Britain, with budget cuts expected to dampen the recovery.

Later in Great Britain, Current Account is expected to widen its deficit to GBP -3.7 billion following the improvement of -1.7B in the previous quarter.

Read more about the Pound in the GBP/USD forecast.

In Switzerland, KOF Economic Barometer is highly regarded and moves the Swissy. Last month saw a significant rise from 2.05 to 2.16 – a score which was better than expected. The Swiss economy is doing well, and so is their currency, especially against the Euro. A small rise to 2.17 is expected now.

In Australia, Total credit provided to the private sector by financial intermediaries rose by 0.2% over April 2010, following an increase of 0.5% over March a further rise of 0.4% is expected. The Private Sector Credit released by the Reserve Bank of Australia is an amount of money that the Australian private sector borrows. It shows if the private sector can afford large expenses, which can fuel economic growth. It is considered as an indicator of business conditions and the overall economic condition in Australia. Generally, a high reading is seen as positive (or Bullish) for the AUD, whereas a low reading is seen as negative.

For more on the Aussie, read the AUD/USD forecast.

In Japan, Tankan Manufacturing Index: This fresh quarterly indicator always rocks the markets. 1,200 large manufacturers have shown less pessimism in Q1 as the core climbed from -24 to -14, as expected. The number for Q2 is expected to be slightly better, but still in the negative zone: -3 and Tankan Non-Manufacturing Index is also expecting an improvement from -14 to -8.

More in Japan, In April the average monthly total cash earnings per regular employee in Japan rose higher than expected reaching 1.5% a more modest increase of 0.9% is expected now.

That’s it for today. Happy forex trading!

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The upcoming release of the Non-Farm Payrolls will be a correction from the previous release due to government’s cut in jobs. Here’s a preview for the NFP on July 2nd, and the things to watch out for.

The decennial census that was held in May had an impact on Non-Farm Payrolls from the beginning of the year. Hiring of people to prepare the census lasted for a few months and culminated in May. We’ve seen a huge number last month – a gain of 431K. This is about to change:

The hangover comes now – the government is cutting the temporary workers that were hired and this will probably turn into a big loss of jobs – 100K this time. The markets are ready for a blow.

Similar to last month, the focus is on private sector hiring once again. Then, there were high expectations that this core number, uninfluenced by the census will rise by 180,000 jobs. But this turned into a bitter disappointment with only 41,000 jobs gained.

Also now there are high hopes – expectations stand on a gain of 113,000 jobs in the private sector, nearly three times last month’s move. Contrary to previous months, the earlier release of the ADP Non-Farm Payrolls is of high importance this time. As the focus is on the private sector, this independent release of private sector jobs could serve as a great indicator.

The expectations from the ADP release on Wednesday stand on a gain of 58K, about half of the expectations from the private sector gain in the official NFP. If the expectations from ADP are met, we could face a bigger slump in the NFP this time.

Regarding the unemployment rate, expectations are for a rise from 9.7% to 9.8%. A rise to 10% or more will be alarming while a drop to 9.5% will be a good sign. Any number in between will be disregarded and will leave the focus on the NFP.

Impact on forex

In the recent FOMC Statement, Ben Bernanke and his colleagues lowered the forecast for the economy. This hurt the dollar. Another disappointment in jobs will probably hurt the dollar yet again, and a positive surprise will boost it.

This means that the risk factor will be rather muted. When the risk factor is in play, a disappointing NFP will boost the dollar. Still, this is the most volatile event in forex trading. As I’ve written in the article 5 notes for Non-Farm Payrolls Trading, the initial reaction to the release at 12:30 GMT is not necessarily the direction that we’ll see afterwards.

So, trade with care and good luck!

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