US Existing Home Sales on the rise, US Treasury Secretary Timothy Geithner testifies before the Congressional Oversight Panel in Washington DC, and US House Price Index are the major events of the day. Let’s review the today’s activities.

In the US, Existing Home Sales expected an increase of 400,000 above 5.77 M in May. This continuous rise is an excellent indicator for economic growth.

Later in the US, US Treasury Secretary Timothy Geithner testifies on the Troubled Asset Relief Program before the Congressional Oversight Panel, in Washington DC. His speeches often reflect the US President’s economic policies, signaling policy shifts to the public and to foreign governments.

Finally in the US, House Price Index anticipated a drop of 0.1% following May’s rise, reaching 0.2% and Richmond Manufacturing Index is also foreseen to decrease of 5 points subsequent a previous drop reaching 21 points.

In Canada, Core CPI remains unchanged at 0.3% indicating stability in the market while CPI which includes Volatile items anticipated a drop of 0.2%.

Finally in Canada, BOC Deputy Governor Timothy Lane speaks at the CFA Society, in Winnipeg volatility in key interest rates is expected.

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

In Europe, German Ifo Business Climate is anticipated a slight decrease of 0.3 points reaching 101.2 nevertheless, reflecting an optimistic view of the German market. The firms are considerably more satisfied with their current business situation.

More in Europe, Current Account surplus is expected a reduction of 0.6B since the previous month attaining 1.1B.

Finally in Europe, Consumer Confidence continues to drop reaching -19 points indicating a growing pessimism in the market.

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

In Great Britain, Annual Budget Release is released outlining the government’s budget for the year, including expected spending and income levels, borrowing levels, financial objectives, and planned investments. An increased spending will indicate market growth.

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

In Switzerland, Trade Balance is likely to decrease by 500,000K following recent increases.

In New Zealand, Current Account Deficit is in for a great improvement expecting a drop of 3.27B from -3.57B to -0.30B which is excellent news for New Zealand and Credit Card Spending is expected to remain around 1.9%.

That’s it for today. Happy forex trading!

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GBP/USD Technical Analysis

US Philly Fed Manufacturing Index is released; Unemployment Claims are expected to drop once again, CB Leading Index is heading for a decrease. This and more awaits us today.

In the US, Philly Fed Manufacturing Index, survey of about 250 manufacturers in the Philadelphia Federal Reserve district which asks respondents to rate the relative level of general business conditions, measuring the level of a diffusion index based on surveyed manufacturers in Philadelphia, is about to rise up to 21.9 from 20.2. It’s a leading indicator of economic health and early signal of future economic activity such as spending, hiring, and investment.

More In the US, Unemployment Claims a data released weekly that measures the number of individuals who filed for unemployment insurance for the first time during the past week; is about to drop to 43,000 from 45,000 an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions;

Later in the US, CB Leading Index is expected to drop from 1.4% to 0.3% and Natural Gas Storage will probably remain 94B.

In Canada, Leading Index designed to predict the direction of the economy is expected to drop to 0.7% after the previous rise of 1% in April.

Later in Canada, Bank of Canada’s Review is released quarterly reporting about the economy and central banking, from the Department of Monetary and Financial Analysis.

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

In Europe, German PPI is expected to drop by 0.1% from 0.7% in April signals lower inflation rates.

Also in Europe, Consumer Confidence is expected to continue its decrease by an additional point arriving at -16 points.

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

In Great Britain, Retail Sales are expected to drop by 0.1% from April’s 0.4% indicating less consumer purchases.

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

In Switzerland, ZEW Economic Expectations is expected to remain in the realm of 53.4 points as in April showing an overall stable market activity.

More in  Switzerland,  SNB Governing Board Vice-Chairman Thomas Jordan speaks about monetary policy and its impact on the real economy, in Wettingen. Key Interest rates are to be affected and information revealed concerning future monetary policy.

In Australia, Melbourne Institute Inflation Expectations are believed to remain 4% as in April.

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

In New Zealand, Annual Budget Release outlines the government’s budget for the year, including expected spending and income levels, borrowing levels, financial objectives, and planned investments in case Domestic government spending is high it indicates a busy and healthy market activity.

More in New Zealand, Visitor Arrivals is hoped to remain 1.1% as in April’s rise after a continuing decrease in the previous months.

That’s it for today. Happy forex trading!

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U.S. IBD/TIPP Economic Optimism is expected to rise and the Wholesale Inventories indicate a rising demand in the market while Britain’s Manufacturing Production and Industrial Production predicted to drop reflecting market deceleration. Here is today’s review. 

In the US, IBD/TIPP Economic Optimism is expected to rise in 0.5 points bringing more optimism to the market after Non -Farm Employment Change showed a rise of 35000 in the number of employed people in the market.

Later in the US, Wholesale Inventories released monthly is foreseen a drop of 0.1%   from 0.6% in the previous month which is another good sign for the market’s activity since a decline in Wholesale Inventories indicates that retailers are buying more goods to meet strong or rising demand.

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

In Europe German Final CPI released monthly, measuring the average price of a fixed market basket of goods and services purchased by consumers, and therefore give an overall read of Inflationary pressures is expected to remain of  -0.1%  indicating deflation and the German Wholesale Price Index is also heading for a drop from 1.3% to 0.3% following the same tendency.

More in Europe, Switzerland’s SECO Consumer Climate is expected to edge up by 9 points from -7 in the previous month indicating a good business climate and a favorable insight on future consumer spending.

Finally in Europe, Deutsche Bundesbank President Axel Weber, delivers a speech about exit strategies in financial politics at the CER-ETH/KOF lecture, in Zurich. And will have impact on Eurozone’s key interest rates and future monetary policy;

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

In Great Britain, Manufacturing Production is predicted to drop by 1% from the rise experienced in the previous month, indicating poor industrial production. 

More in Great Britain, Industrial Production is also expected to fall to 0.3% from 1.0% in the previous month indicating market deceleration.

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

That’s it for today. Happy forex trading!

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After the Non-Farm Payrolls, another busy week expects forex traders. A British rate decision, European GDP figures, and American consumer sentiment and retail sales are among the major events this week. Let’s see what’s expecting us.

Echoes from the British general election will continue to accompany us, but the important British indicators will slowly take over the scene. In Europe, the never-ending debt issues will also have a strong impact. OK, let’s start:

1. British rate decision: Published on Monday 11:00 GMT. This rate decision was delayed due to the elections. There are speculations that Mervyn King can step up his measures, now that the elections are behind us. Inflation is rising. While the chance of raising the Official Bank Rate is very small, a different rate statement regarding future policy could boost the Pound, although this King wants a weak Pound.
2. Australian Annual Budget Release: Published on Tuesday at 9:30 GMT. The Australian Treasury will present the budget to the parliament and will lay out the economic prospects for the next year. This event is likely to rock the Aussie, as well as the kiwi.
3. British employment figures: Published on Wednesday at 8:30 GMT. Last month’s Claimant Count Change, the earliest and most important employment figure, continued the positive trend and showed a drop of over 32,000 unemployed people. On the other hand, the unemployment rate jumped to 7.8%. A setback can be seen now, and this might hurt the Pound.
4. German GDP: Published on Wednesday at 6:00 GMT. Europe’s biggest economy badly disappointed markets in Q4 – the economy stalled. Germany was considered the locomotive of the Euro-zone, carrying the weak economies on its back. Germany must return to growth in Q1’s preliminary release for the Euro to rise.
5. European Flash GDP: Published on Wednesday at 9:00 GMT. Although being released after the German and French figures, this publication also rocks the Euro. The economies in the Euro zone stalled in Q4 of 2010 – the initial report of 0.4% growth was later revised to no growth at all. There’s fear that Q1 will see a return to contraction – this will definitely hurt the Euro.
6. British BOE Inflation Report: Published on Wednesday at 9:30 GMT. Two days after the rate decision, Mervyn King has another opportunity to impact currency trading. This report doesn’t cover only inflation – it also contains updated economic forecasts and could hint about future rate policy. King will hold a press conference to accompany the release.
7. American and Canadian Trade Balance: Published on Wednesday at 12:30 GMT. This double-feature release in both countries always shakes USD/CAD. Canada enjoys a surplus in its balance while the US deficit is growing. A continuation of this trend could help the loonie.
8. Australian employment data: Published on Thursday at 1:30 GMT. After another rate hike, the sixth since the crisis, employment figures will probably justify this. Australia gained almost 20,000 jobs last month, and the unemployment rate remained at 5.3%. Both figures are expected to improve.
9. American Unemployment Claims: Published on Thursday at 12:30 GMT. The first weekly jobless claims release after the Non-Farm Payrolls will probably show a continuation of the trend – slightly less claims.
10. American Retail Sales: Published on Friday at 12:30 GMT. This important consumer related figure always rocks the markets. Last month saw a strong rise of 1.6% and also Core retail sales exceeded expectations with a rise of 0.6%. Rises this time will probably be weaker.
11. American Consumer Sentiment: Published on Friday 13:55 GMT. The university of Michigan’s consumer sentiment survey fell short of expectations last time – it fell from 73.6 to 69.5, the lowest in 5 months. This is a highly regarded survey, and comes at a sensitive time – just before the market closes.

That’s it for the major events this week.

Further reading:

• For the Euro, read the EUR USD Forecast.
• For the British Pound, look into the GBP/USD forecast.
• For the Australian dollar, read the AUD/USD forecast.
• For USD/CAD, check out the Canadian dollar forecast.

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

A very busy week expects Aussie traders with the rate decision is the key event. Here’s an outlook for the 11 Australian events, and an updated technical analysis for AUD/USD.

AUD/USD graph with support and resistance lines marked. Click to enlarge:

Producer prices rose by 1%, higher than expected, but consumer prices rose exactly as expected, raising the tension towards the rate decision. Also note  retails sales, building approvals and the trade balance. OK, let’s start:

1. AIG Manufacturing Index: Published on Sunday at 23:30 GMT. The Australia Industry Group showed three months of expansion in this index, similar to manufacturing PMI. Last month, the score was at 50.2 and it could fall below 50 this time, indicating contraction.
2. MI Inflation Gauge: Published on Monday at 00:30 GMT. The government’s CPI came out within expectations, so also this indicator by the Melbourne Institute, will probably not show a rise in inflation – last month’s 0.5% will probably be followed by a smaller rise.
3. HPI: Published on Monday at 1:30 GMT. This quarterly indicator made strong jumps in the past 3 quarters, including a 5.2% jump last time – exceeding expectations. A milder rise is predicted this time – 3.2%.
4. Commodity Prices: Published on Monday at 6:30 GMT. Australia’s commodity-oriented economy depends on rising prices. After 11 months of year-over-year drops, commodity prices finally rose by 1.4% last month. Another rise is expected this time.
5. Rate decision: Published on Tuesday at 4:30 GMT. Yet again, there’s uncertainty towards this decision. Australian economic indicators, especially inflation, hint a yet another rate hike – the sixth one since the crisis. On the other hand, there are mixed statements from senior RBA figures. There is a higher probability for a pause this time, but this uncertainty means that this will be an exciting event, as it was last month, with the surprise rate hike.
6. AIG Services Index: Published on Tuesday at 23:30 GMT. According to AIG, the services sector is now expecting contraction. This indicator doesn’t manage to climb above 50 points. At 48.4, it’s predicted to edge up, but not pass the important 50 point mark.
7. Building Approvals: Published on Wednesday at 1:30 GMT. Contrary to the HPI, this important housing sector figure dropped in the past two months and hurt the Aussie. Rises were expected each time. Also now, a rise is predicted – 0.9%.
8. Retail Sales: Published on Thursday at 1:30 GMT. High volatility has been seen in this important consumer-related figure. A rise of 1.2% in February was followed by a drop of 1.4%. This time, a rise is predicted. Sustainable consumer spending is necessary for further rate hikes. A rise of 0.8% is expected.
9. Trade Balance: Published on Thursday at 1:30 GMT, together with retail sales. Australia has a deficit in its trade balance in the past 11 months. After squeezing down to 1.1 billion, the deficit rose back 1.9 billion. A small rise is expected this time.
10. AIG Construction Index: Published on Thursday at 23:30 GMT. AIG’s last figure completes the picture for the housing sector. After making a leap to 57.7 points, showing bullishness in this sector, the index quickly deteriorated to 48.7 points – below 50. It’s now expected to rise back up above 50 points.
11. RBA Monetary Policy Statement: Published on Friday at 1:30 GMT. Three days after the rate decision, this indicator completes the central bank’s forecasts for the next quarter. It could contain hints about the next moves in the tightening cycle.

AUD/USD Technical Analysis

The Aussie began the week with a drop under 0.9220 and reached 0.9135. It then recovered but couldn’t break the 0.9327 resistance line. The close at 0.9240 is slightly lower than last month.

Note that some lines have changed since last week’s outlook. The current range of the Aussie is 0.9220 to 0.9327 – this important resistance line was broken in recent weeks several times, but continues to play an important role.

Higher, 0.9366 is a minor resistance line. It was the peak at the beginning of April. Higher, 0.9405, the 2009 high, continues to be the highest level in sight, at least now.

Looking down below 0.9220, the next line of support is 0.9090, which worked as a support and resistance line many times in the past. Below, the round 0.90 line provides further support, as it was the swing low at the end of March.

Even lower, 0.8735 was December’s low and it’s followed by 0.8567, the lowest spot since October.

I remain bullish on the Aussie.

Australian and also Chinese indicators point to a bullish outlook for the Aussie. Another rate hike will add more strength.

Further reading:

• For a broad view of all the week’s major event in all currencies, read the forex weekly outlook.
• For the Euro, read the EUR USD Forecast.
• For the British Pound, look into the GBP/USD forecast.
• For USD/CAD, check out the Canadian dollar forecast.
• For the kiwi, here’s the NZD/USD forecast.

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

A busy day expects forex traders. The British budget release, American new durable goods orders and new home sales, New Zealand’s GDP and lots of European figures will rock the markets today. Let’s see what’s awaiting us:

Flash purchasing managers’ indices pour in during the European morning. France starts with its manufacturing and services figures. Germany follows, and the data for the whole continent is then released. All the figures are expected to edge up slightly. This will promise a choppy morning for EUR/USD. And there’s more in Europe:

German Ifo Business Climate continues the influx of European figures with an expected rise from 95.2 to 95.8 points. This highly regarded survey has been significantly better than other European indicators so far. A drop here will hurt the Euro.

The last European indicator today is the Industrial New Orders which are expected to rise by 2% after a more modest rise last month – 0.8%.

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

In Britain, the government will present make the Annual Budget Release. Alistair Darling, the British Chancellor of the Exchequer is expected to show a big budget – meaning a big deficit – hurting the British Pound. The presentation of the budget will take time – this includes presenting economic forecasts for the years to come. High volatility is expected.

For more on the British Pound, check out the GBP/USD forecast.

In the US, Durable Goods Orders are predicted to rise by 0.6% after a drop of 1% last time. Core Durable Goods Orders, which shot up by 2.6% last month, are expected to climb by 0.8%.

Another important release is New Home Sales. After Existing Home Sales were in line with expectations, remaining almost unchanged, new sales are predicted to follow, ticking up from 309K o 318K.

Later in the US, FOMC member Thomas Hoeing will make a public appearance. He’s the only member that voted to change the tone of the FOMC statement – make it more hawkish. Will he repeat this stance now?

EUR/CHF is dropping, and the Swiss National Bank doesn’t like it at all. A member of the central bank, Thomas Jordan, will make a public appearance and might move the Swissy.

Another speech is due in Canada – the governor of the BOC, Mark Carney, will talk in Ottawa and might send some hints about the bank’s monetary policy. Read more about the loonie in the Canadian dollar forecast.

GDP in New Zealand is expected to follow its neighbor Australia with a rise of 0.8% in the fourth quarter. The economy grew by 0.2% in the third quarter. High volatility is expected in NZD/USD.

That’s it for today. Happy forex trading!

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Apparently the dollar only took a break just to show fresh strength. The upcoming week. The upcoming week starts with an easy Monday and then becomes busy with many American events. Note a special British event – the annual release of the budget. Let’s review the major market-movers for the upcoming week.

Also in the upcoming week, there’s a smaller-than-usual time difference between North America and Europe. This gives one extra overlapping hour, making day traders more busy and getting European and American events closer to each other – meaning more volatility. OK, let’s start:

1. British CPI: Published on Tuesday at 9:30 GMT. British inflation is above the governments’ target of 1-3%. This was already seen last month with a rise to 3.5% (annualized). Mervyn King was then forced to write a letter explaining the reasons for the result and the measures that will be taken. He wasn’t too excited, and wants to see a weaker Pound. This time, CPI is expected to rise by 3.1%, getting back in line. Was King right? If so, the Pound will drop.
2. American Existing Home Sales: Published on Tuesday at 14:00 GMT. The vast portion of home sales is of existing homes. This sector has seen a strong rise due to government programs, but then returned to normal. Sales are expected to stay almost unchanged at 5 million. A surprise will move the markets.
3. German Ifo Business Climate: Published on Wednesday at 9:00 GMT. This German survey continued to improve, while other German indicators fell. This is a wide survey of 7000 businesses, making it a closely watched indicator for EUR/USD. A small rise from 95.2 to 95.8 is predicted. This might hurt the Euro, that already began the awaited plunge.
4. British Annual Budget Release: Published on Wednesday at 12:30 GMT. Alistair Darling, the Chancellor of the Exchequer, knows how to pound the pound again and again. Less than two months before the general elections, the deficit isn’t expected to be reduced. Whatever the outcome, the Pound will rock.
5. American Durable Goods Orders: Published on Wednesday at 12:30 GMT. Last month, this indicator was quite confusing – durable goods orders rose by 2.6% while the core figure fell by 1%. These figures were revised to the downside. This time, both numbers are expected to rise by less than 1%.
6. American New Home Sales: Published on Wednesday at 14:00 GMT. Although new home sales are only a small part of home sales, this figure also tends to move currencies. Also here, when the government retreated, home sales plunged. A small rise from 309K to 316K is predicted.
7. New Zealand GDP: Published on Wednesday at 21:45 GMT. New Zealand takes its time with publishing the Gross Domestic Product. A growth rate of 0.8% is expected in Q4 of 2009. This is higher than Q3’s 0.2%. Also Australia saw similar growth rates in Q3 and Q4 – this figure will also move the Aussie.
8. American Unemployment Claims: Published on Thursday at 12:30 GMT. A steady drop in jobless has been seen since they touched 496K about a month ago. Another small drop is predicted this time, from 457K to 453K. After the last negative NFP figure, will we see a gain in jobs next time?
9. Ben Bernanke talks: Begins testifying on Thursday at 14:00 GMT. The head of the Federal Reserve comes to House Financial Services Committee for the second part of his testimony, that will focus on the exit strategy. This time it’s a questions and answers session. The questions and the reactions are unknown, so this may easily lead to remarks that can move the markets, even if Bernanke doesn’t bring any real news.
10. Japanese Tokyo Core CPI: Published on Thursday at 23:30 GMT. Japan’s deflation is a big burden on the economy, for many years. Tokyo’s figure is released before the national number and has a strong impact on the Yen. An annual drop of 1.7% is expected to follow last month’s 1.8%.
11. American Final GDP: Published on Friday at 12:30 GMT. The second release of American GDP for Q4 of 2009 was better than the first release - 5.9% (annualized). This erased the doubts that were about growth, that isn’t accompanied with a growth in jobs. The final release is expected to confirm this strong growth rate.

Further reading:

• For the Euro, read the EUR USD Forecast.
• For the British Pound, look into the GBP/USD forecast.
• For the Australian dollar, read the AUD/USD forecast.
• For USD/CAD, check out the Canadian dollar forecast.

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

The Pound fell in the past volatile week. The upcoming week contains inflation figures and the budget release among other indicators. Here’s an outlook for the British events and an updated technical analysis for GBP/USD.

GBP/USD graph with support and resistance lines marked. Click to enlarge:

Britain enjoyed a significantly smaller number of unemployed people. At first it seemed that this surprising figure will send the Pound beyond 1.5350, but these hopes were shattered and the Pound fell sharply. Let’s start the review. The technical analysis will follow:

1. Mervyn King talks: Starts talking in London on Monday at 15:30. King has a tendency to hurt the Pound. He might relate to inflation (and dismiss it) or to the heavy government’s budget. The governor of the BOE could sure set the tone for the whole week.
2. CPI: Published on Tuesday at 9:30 GMT. British prices have risen and went beyond the government’s target of 1-3%. Mervyn King, head of the BOE, was forced to write a letter explaining the situation and the measures he’ll take. He wasn’t impressed from this rise and expects to see prices fall back in line. After reaching an annual rate of 3.5%, prices are expected to fall back to 3.1%. If so, King’s confidence will be proven correct. Core CPI is also expected to edge down - from 3.1% to 3% and RPI (Retail Price Index) is expected to remain unchanged at 3.7%.
3. BBA Mortgage Approvals: Published on Tuesday at 9:30 GMT and overshadowed by the inflation numbers. The British Bankers Association dominates about two third of Britain’s mortgages, and precedes the official release by the government. After a sharp and disappointing drop from 45.7K to 35.1K last month, another fall is predicted this time – to 34.3K.
4. CBI Realized Sales: Published on Wednesday at 11:00 GMT.  This survey of both retailers and wholesalers showed higher sales volume last month, when the score surprised and reached 23 points. This exceeded the negative expectations and pushed the Pound higher. The score is expected to drop from 23 to 20 points this time.
5. Annual Budget Release: Published on Wednesday at 12:30 GMT. Alistair Darling, the Chancellor of the Exchequer, will probably bring a big budget to parliament. Less than two months before the general elections, the government will probably avoid cutting the big deficit. This will probably hurt the Pound. Darling already did it in the past. It’s also important to note the economic projections that accompany the budget release. They’ll also move the Pound.
6. Retail Sales: Published on Wednesday at 9:30 GMT. In the past five months, this important economic indicator fell short of economists’ expectations. Last month was a big disappointment, with a fall of 1.8% in sales volume. A rise of 0.6% is predicted this time.
7. Revised Business Investment: Published on Friday at 9:30 GMT. The revised version will probably be slightly better than the initial release – a drop of 5.6% rather than 5.8% in investment. The big picture remains bleak – 7 consecutive months of squeezes in investments.

GBP/USD Technical Analysis

At the beginning of the week, GBP/USD tested the 1.5220 resistance line and bounced back down to 1.50. It later managed to break this line and test important 1.5350 line. It shortly traded above this line, but the gains didn’t hold and it fell to close just above 1.50.

The lines haven’t significantly changed since last week’s outlook. GBP/USD trades in a range between 1.50, a round psychological number and 1.5220, which is a minor resistance line.

Looking up, 1.5350 remains a major line of resistance, providing support for the pair last year and also one month ago. It was successfully tested now as well.

Above, 1.5520 provides a minor resistance line, working as both support and resistance recently. Even higher, 1.5833 provides a strong line of resistance after being a strong support line before the collapse.

Looking down, 1.4870 is the next line of support under 1.50. This line was a bottom for the Pound recently. The stronger support line appears at 1.4780 – a line that was of importance last year, and also now provided support for the Pound after it collapsed.

A break of 1.4780 will lead the Pound to test 1.44, a support line that was successfully tested in May 2009.

I am bearish on GBP/USD.

After really good employment numbers weren’t enough for GBP/USD to break higher, this week’s budget deficit will probably weigh heavily on the Pound.

Further reading:

• For a broad view of all the week’s major event in all currencies, read the forex weekly outlook.
• For the Euro, read the EUR USD Forecast.
• For the Australian dollar, read the AUD/USD forecast.
• For USD/CAD, check out the Canadian dollar forecast.

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

Tension rises in the forex market as the calendar is very busy today. The highlights are rate decisions in Europe and Britain, plus a busy American calendar. Let’s see what’s awaiting us today.

Tension also comes from a possible resolution to the Greek crisis (although fragile), and the hints towards the big event on Friday: Nonfarm Payrolls, which currently have low expectations. So, let’s start review. Take a deep breath:

After a rate hike and a strong GDP result, Australia receives the last major release today: Trade Balance. Australia’s deficit is predicted to squeeze from 2.25 billion to 1.57 billion, showing a stronger economy.

On the other side of the day, AIG Construction Index will probably remain stable. Only a big surprise will shake the Aussie. For more, read the AUD/USD forecast.

British and European rate decisions

In Europe, the revised version of GDP for Q4 is expected to confirm the very slow growth – 0.1%. This figure usually comes out as expected. So, it will merely be a prelude for the rate decision.

The president of the ECB, Jean-Claude Trichet, is expected to leave the interest rate unchanged at 1%. There’s no reason whatsoever for a surprise, but the announcement of the European Minimum Bid Rate always shakes the markets. In recent days, there are hopes for a bailout program for Greece, so this will probably be the focus of the ECB Press Conference that Trichet will hold.

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

Also the British interest rate is expected to remain unchanged at 0.5%. But BOE governor Mervyn King can hurt sterling in another way. Along with the Official Bank Rate, also the fate of the Quantitative Easing program will be set. This program, also called Asset Purchase Facility, is meant to increase liquidity by buying bonds – spilling pounds. The program ran out of money, but King didn’t rule out renewing it. He isn’t expected to do it, but a surprise sure is possible.

It’s also important to notice the exact wording of the MPC Rate Statement, which may indicate future policy about the interest rate (probably nothing) or the QE program.

For more on the beaten British Pound, read the GBP/USD forecast.

Canadian strength to continue?

In Canada, after the growth rate was better than expected and the wording of the rate statement was OK, two major releases are due today. Building Permits are expected to rise by 1% after a 2.4% jump last time.

The second moving event for the loonie is Ivey PMI, which is predicted to rise from 50.8 to 56 points, recovering from a drop last month.

Towards the end of the day, the Canadian government will release the Annual Budget Release. This will cause lots of volatility for the Canadian dollar. Traders will check out the wording of the economic forecasts that are part of the budget.

USD/CAD made a break below the 1.04 level, and is now range-trading between 1.02 and 1.04. For more on the lonie, read the Canadian dollar forecast.

Busy American calendar

In the US, ADP Non-Farm Payrolls showed a loss of 20K jobs, within expectations. Today we have the last job indicator before the NFP – Unemployment Claims. They’re expected to drop to 472K after jumping to 496K last week.

Pending Home Sales are predicted to rise by 1.4%, following last month’s 1% rise – a continuation of the positive and steady trend. At the same time, Factory Orders are expected to make the same upwards move. Both indicators should push the dollar higher.

Apart from economic indicators, we also have two speeches from FOMC member James Bullard. He had a role in easing the effect of Bernanke’s mini-rate hike.

That’s it for today. Happy forex trading!

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