The Euro extends decline as consumer confidence in the Euro area falls in July

The Takeaway: [Euro zone consumer confidence drops] > [could signal further economic recession] > [EURUSD down]
The confidence of consumers in the 17-nation eurozone fell slightly in June in the uncertainty in the head, to June 17 elections Greek and Spanish banking bailout of the sector. The Brussels-based European Commission, reported today that the indicator of consumer confidence flash in the block of the single currency fell slightly to-19.6 in June, after rising last month at-19.3. The consensus forecast 28 economists surveyed by Bloomberg News had requested a decrease of - 20.0.
With more contraction in the manufacturing and services sectors, the decline in the perception of household could report that the economic stagnation in the euro zone deepened in the current quarter.
Chart 1-minute EURUSD: 21 June 2012
Graph created with the scope of the market - prepared by Chen Wen - Tzu
The euro extended its fall against the greenback, as declining among consumers adds to an increased risk of contracting spending households and signals of slowdown of growth in the euro zone. At the time of this report, the EURUSD pair has less than US $ 1.2600 commercial.

$ USD rallies as may consumer confidence hits highest level since October 2007

The Takeaway: may u. of Michigan confidence Final Index 79.3 waves > Americans could extend their spending due to the higher financial confidence > USD/CAD loss to extend
US consumer confidence for may hit the highest level since October 2007, reflecting optimism persisted on the prospective resistance of the economy, inflation has eased and prospects of employment and wages have become more favourable.
The Thomson Reuters / final index of the University of Michigan mounted to 79.3 in May before 76.4 in April and well over 74.3 last May. The increase continued streak of consecutive earnings index, now at 10 months. Also topped test estimation of consensus as economists surveyed by Bloomberg News widely anticipated the gauge to hold in May of 77.8 preliminary reading.
The increase in confidence in the six months was substantial, with the Sentiment Index climbing well above the average of the recession of 69.3 but still less than the average of 88.1 for periods of non-récession. Consumers still had much hope on a growth of employment renewed in a short term despite the slowdown of jobs recently published by the Ministry of labour. Index of economic Conditions significantly increased to 87.2 in May of 82.9 in April. The Economic Outlook index advanced to 71.7 preliminary reading and 72.3 April 74.3. "The most likely prospect is that employment growth CV modest pace and confidence largely unchanged until after the November election and decisions relating to fiscal policy are taken", said Richard Curtin, Chief Economist of consumer surveys.
The final report revealed that expectations of inflation during one year before continue moderate to 3.0% preliminary reading of monthfrom may of 3.1% and 3.2% in April following a withdrawal of price of gasoline. During this time, the expectations for five years edged 2.7% to 3.0% of the preliminary report.
USDCAD1-minute chart: May 25, 2012

Graph created with strategy trader - prepared by Trang Nguyen
The US dollar has immediately edged more higher against most of its major trading partners in the minutes that followed the stronger than expected consumer confidence report. Seen 1 minute table USDCAD above, the greenback travelled 20 pips against the dollar of 1.0265 in of 1.0285 in thirty minutes. In the as of this report, the USDCAD trade to $1.02849.

€ Euro Pressured after Survey Says Consumer Confidence to Weaken German

The Takeaway: German GfK provides weakening-> energy costs consumer confidence, inflation weakens the weight given the power to purchase-> Euro against US Dollar

The German consumer confidence will decrease in May that rising energy costs weakening purchasing power of households, the Institute German GfK, said today. The GfK consumer confidence index can set revised drop 5.6% to 5.8% in April. Markets expected a reading of may of 5.9%, based on the median forecasts by a team of economists.

Rising prices of energy have been seen weighing on household spending as inflation creeps power by threatening to torpedo the economic recovery of Europe. Fears of inflation have seeped to the surface in Germany property increase prices and monetary policy remains loose. Rising inflation in Germany could have repercussions generalized to the rest of the Germany of the given euro size and influence of the 17-nation bloc.

€ EURCAD: Trading Canada’s Consumer Price Report

Trading the News: Canada Consumer Price Index

What’s Expected:

Time of release: 04/20/2012 12:30 GMT, 8:30 EDT

Primary Pair Impact: EURCAD

Expected: 2.0%

Previous: 2.6%

DailyFX Forecast: 1.8% to 2.2%

Why Is This Event Important:

The headline reading for Canadian inflation is expected to fall back to 2.0% in March and a soft consumer price report could drag on the loonie as it dampens expectations for a rate hike. Indeed, the Bank of Canada scaled back its dovish tone for monetary policy as the economic recovery gathers pace, but we may see the central bank preserve its wait-and-see approach throughout 2012 on the back of easing price pressures.

Recent Economic Developments

The Upside

Business Outlook Future Sales (1Q)

Net Change in Employment (MAR)

The Downside

Manufacturing Sales (FED) (JAN)

As businesses sentiment improves, firms may pass on higher costs onto consumer amid the ongoing improvement in the labor market, and an above-forecast print may lead the EURCAD to give back the advance from earlier this week as market participants increase bets for higher borrowing costs. However, the slowdown in private sector consumption may encourage businesses to keep a lid on consumer prices and a dismal CPI report could trigger a sharp selloff in the loonie as market participants scale back bets for a rate hike. In turn, the short-term rebound in the EURCAD may gather pace over the next 24-hours of trading, and we may see the pair continue to retrace the decline from earlier this month as the pair appears to be carving a major bottom in 2012.

Potential Price Targets For The Release

 A look at the encompassing structure sees the EURCAD continuing to consolidate into the apex of a wedge formation with the exchange rate now testing daily resistance at the 23.6% Fibonacci extension taken from the September 19th and January 17th troughs at 1.3050. A breach above this level eyes daily resistance at the 50-day moving average at 1.3136 backed by the 38.2% extension at 1.3165. Note that RSI broke below trendline support dating back to January with oscillator now attempting break back above. We will reserve a new trendline support dating back to the March lows as our downside trigger which if compromised negates our medium-term bullish bias.

 Our 30min scalp chart shows the EURCAD attempting to break above interim resistance at the 23.6% Fibonacci extension taken form the March 14th and April 5th troughs at 1.3050. Clear RSI bullish divergence suggests further topside moves are likely with subsequent targets eyed at 1.3080, the 38.2% extension at 1.3113 and 1.3140. Note that the 50% extension at 1.3165 coincides with the 38.2% extension taken on our daily chart and if breached offers further conviction on our directional bias. Interim support rests at 1.3005 backed by 1.2970 and 1.2945. A break below this level eyes the 2012-low at 1.2870 backed by the 2011 lows at 1.2770. Should the data prompt a bearish loonie response look to target topside levels with our bias weighted to the topside so long as the monthly low at 1.2933 is respected.

How To Trade This Event Risk

Forecasts for a slower rate of inflation casts a bearish outlook for the loonie, but an above-forecast print could pave the way for a long Canadian dollar trade as investors see the BoC gradually withdrawing monetary support. Therefore, if the CPI tops market expectations, we will need to see a red, five-minute candle following the report to establish a sell entry on two-lots of EURCAD. Once these conditions are fulfilled, we will place the initial stop at the nearby swing high or a reasonable distance from the entry, and this risk will generate our first target. The second objective will be based on discretion, and we will move the stop on the second lot to breakeven once the first trade hits its target in order to lock-in our winnings.

However, as private sector consumption wanes, businesses may dampen prices in an effort to draw demands, and a soft inflation report could spark a selloff in the Canadian dollar as it curbs speculation for higher interest rates. As a result, if the headline reading falls back to 2.0% or lower, we will implement the same strategy for a long euro-loonie trade as the short position laid out above, just in reverse.

Impact that the Canada Consumer Price report has had on CAD during the last month

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

February 2012 Canada Consumer Price Index

 Consumer prices in Canada increased at an annualized pace of 2.6% after expanding 2.5% in January, while the core rate of inflation climbed 2.3% to mark the fastest pace of growth since July 2007. Indeed, the EURCAD tipped higher following the release as the headline reading fell short of market expectations, but the Canadian dollar regained its footing during the North American trade, with the pair ending the session at 1.3233.

U.S. Consumer Credit, Greek Bailout Hopes Hint at Bullish Market

Stocks are up in Europe, with the FTSE 100 slightly in the green and the MSCI All Country World Index  up a third of a percent as the market reverses its attitude towards Greece thanks to progress on a bailout plan with creditors. Investors may also be looking to reverse bearish moves in European markets earlier this week, as hope replaces gloom, prompting BlackRock mogul Larry Fink to encourage investors to go one hundred percent into equities.

Stocks may also be up thanks to last afternoon’s revelation that consumer credit rose by $19.3 billion in December, a surprising reverse of the deleveraging trend that had suggested that consumer consumption would remain sluggish as unemployment stayed high and wages stagnated in America. Analysts had expected an increase of around $7.7 billion, so the results are more than double expectations. The greater use of credit may hint at greater consumer confidence, which should translate into higher spending and a recovery to the retail and financial sectors.
Revolving credit rose by $2.76 billion in a sign that consumers were more willing to use credit cards to fund their holiday shopping. The news comes after some credit companies reported lower charge-off rates in recent months.
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Wall Street Poised to End in Red on Consumer Confidence

(eToro Blog) Wall Street is poised to end the last day in January in the Red. Wall Street indices were down after the Conference Board reported that its gauge of consumer confidence fell in January. The confidence index fell to 61.1 in January from 64.8 in December. Consumer confidence dropped as sentiment on business conditions and employment declined from the previous two months. In another report, the S&P Case Shiller index reported that home price index dropped 1.3%. For the year, the index measured a 3.7% drop in home prices. This confirms with the statements from Fed Chairman Ben Bernanke that the housing market remains week and continues to make it difficult for the Fed to rescue the economy.

With Wall Street looking to end the last day in the red, OpenBook trader joker811 has been very actively trading the indices. This traded started shorting the DJ30, NSDQ100 and SPX500 in the European session and booked profits on several trades including a massive 22% profit on a short SPX500 position. This trader focuses on trading in the indices and EURUSD. The trader is up 15% so far this week primarily because of their wins in trading indices.

Wall Street was slumped in the red today with the Dow down 61 points, the Nasdaq down 9 points and the S&P 500 down 4 points at the time of writing this report. While European indices ended in the positive today on progress made at the EU summit, Wall Street reacted negatively to declining confidence and home prices. Traders on OpenBook are primarily short the Dow (DJ30) with average limits at 12,450 and stops at 12,750.

OpenBook trader qur1024 is another trader who has been mixing up his currency trading with indices. This trader too focuses on the EURUSD but also watches the SPX500. The trader allocates 18% of their portfolio to SPX500 and booked several profitable trades in the past several days as high as 20.83%.

Another OpenBook trader who benefited from the EURSUD drop today is trader Zapdos. This trader shorted the EURUSD near 1.3176 and closed it near 1.3123 for a 212% gain. This trader has closed other EURUSD trades as well this morning with gains ranging from 8% to 28%. In addition the trader is holding short positions on SPX500 with floating profits of 17% and 21% respectively.