Trading News Events

- U.S. Advance Retail Sales to Rise for Fourth Straight Month
- Fed to Highlight Resilience in Private Consumption

Trading the News: U.S. Advance Retail Sales

The U.S. Advance Retail Sales report may encourage a more meaningful rebound in the dollar as private sector consumption is expected to increase at a faster pace in August.
What’s Expected:
Time of release: 09/13/2013 12:30 GMT, 8:30 EDT
Primary Pair Impact: EURUSD
Expected: 0.5%
Previous: 0.2%
DailyFX Forecast:0.2% to 0.6%

Why Is This Event Important:

With the Federal Open Market Committee (FOMC) interest rate decision on tap for next week, fundamental developments highlighting a stronger recovery may spur a more meaningful U.S. dollar rebound going into the central bank meeting, and a material shift in the policy outlook may generate a rally in the reserve currency as the Fed slowly moves away from its easing cycle.

Expectations: Bullish Argument/Scenario

Release	Expected	Actual
Average Weekly Earnings (YoY) (AUG)	2.1%	2.2%
Consumer Confidence (AUG)	79.0	81.5
Domestic Vehicle Sales (AUG)	12.30M	12.44M

The pickup in wage growth along with the ongoing rebound in household sentiment may encourage a strong retail sales report, and a positive print may spark a near-term rally in the USD as the world’s largest economy gets on a more sustainable path.

Risk: Bearish Argument/Scenario

Release	Expected	Actual
Change in Non-Farm Payrolls (AUG)	180K	169K
Consumer Credit (JUL)	$12.700B	$10.437B
Challenger Job Cuts (YoY) (AUG)	--	56.5%

Nevertheless, the ongoing weakness in the labor market paired with the slowdown in private sector credit may weigh on consumption, and a dismal sales report may fuel the decline from earlier this month as market participants scale back bets of seeing a less-dovish FOMC.

How To Trade This Event Risk

Bullish USD Trade: Retail Sales Climbs 0.5% or greater

• Need red, five-minute candle following the data to consider a short EURUSD trade
• If market reaction favors a short trade, sell EURUSD with two separate position
• Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward
• Move stop to entry on remaining position once initial target is hit, set reasonable limit

Bearish USD Trade: Household Spending Disappoints

• Need green, five-minute candle to favor a long EURUSD trade
• Implement same setup as the bearish dollar trade, just in reverse

Potential Price Targets For The Rate Decision
EURUSD Daily

Chart - Created

• Carves lower high ahead of FOMC meeting; Bearish RSI divergence
• Interim Resistance: 1.314 (61.8% Fib retracement)
• Interim Support: 1.3220-30 (50.0% retracement) & 1.3110-20 (38.2% retracement)

Impact that the U.S. Advance Retail Sales report has had on USD during the last release

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
JUL 2013	08/13/2013 8:30 GMT	0.3%	0.2%	-42	-30

July 2013 U.S. Advance Retail Sales



Household spending increased another 0.2% in July following the 0.6% advance the month prior, which was largely driven by higher gasoline receipts along with a pickup in discretionary spending. Despite the weaker-than-expected print, the resilience in private sector consumption, propped up the dollar, with the EURUSD slipping back below the 1.3250 region, but we saw the reserve currency consolidate during the North American trade as the pair ended the day at 1.3260.

--- Written by David Song, Currency Analyst

More...

- U.K. Inflation to Slow for the Second-Month in August
- Core Consumer Price Growth to Rebound from 2013 Low

Trading the News: U.K. Consumer Price Index

The U.K. Consumer Price report may trigger a more meaningful correction in the GBPUSD as a slower rate of inflation raises the Bank of England’s (BoE) scope to retain its highly accommodative policy stance.

What’s Expected:

Time of release: 09/17/2013 8:30 GMT, 4:30 EDT
Primary Pair Impact: GBPUSD
Expected: 2.7%
Previous: 2.8%
DailyFX Forecast: 2.7% to 3.0%

Why Is This Event Important:

In light of the fresh remarks coming out of the BoE Testimony, it seems as though the central bank will toughen its stance to achieve the 2% target for price growth, and the central bank may start to adopt a more hawkish tone for monetary policy as it continues to operate under its inflation-targeting framework.

Expectations: Bearish Argument/Scenario

Release	Expected	Actual
Average Weekly Earnings inc Bonus (3MoY) (JUL)	1.3%	1.1%
BRC Shop Pirce Index (YoY) (AUG)	--	-0.5%
CBI Trends Selling Price (AUG)	3

Nevertheless, businesses in the U.K. may continue to offer discounted prices amid the slowdown in wage growth along with the persistent slack in the real economy, and a soft inflation print may prompt a near-term reversal in the GBPUSD as market participants scale back bets of seeing the BoE move away from its easing cycle.

Risk: Bullish Argument/Scenario

Release	Expected	Actual
Jobless Claims Change (JUL)	-21.0K	-32.6K
Net Consumer Credit (JUL)	0.6B	0.6B
Retail Sales inc Auto (MoM) (JUL)	0.7%	1.1%

However, the recent pickup in private sector activity may encouraged stronger price growth in the U.K., and a better-than-expected CPI print may spark fresh monthly highs in the British Pound as we see a growing number of central bank officials turn upbeat towards the economy.

How To Trade This Event Risk

Bearish GBP Trade: U.K. CPI Narrows to 2.7% or Lower

• Need red, five-minute candle following the print to consider a short GBPUSD trade
• If market reaction favors a sell trade, short GBPUSD with two separate position
• Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward
• Move stop to entry on remaining position once initial target is hit, set reasonable limit

Bullish GBP Trade: Headline & Core Inflation Tops Forecast

• Need green, five-minute candle to favor a long GBPUSD trade
• Implement same setup as the bearish British Pound trade, just in opposite direction

Potential Price Targets For The Release

GBPUSD Daily

• Upward Trending Channel Dating Back to July Continues to Take Shape
• Relative Strength Index Retains Bullish Trend; Close Below 70 to Trigger Correction
• Interim Resistance: 1.6000 Pivot to 1.6050 (78.6% Fibonacci retracement)
• Former Resistance Around 1.5680-90 (38.2% Fib retracement) to Act as New Support

Impact that the U.K. Consumer Price report has had on GBP during the last month

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
JUL 2013	08/13/2013 8:30 GMT	2.8%	2.8%	+37	+13

July 2013 U.K. Consumer Price Index



The headline reading for U.K. inflation narrowed 2.8% in July from 2.9% the month prior, while core consumer price growth slipped to 2.0% amid forecasts for a 2.2% print. Despite the slower rate of price growth, the in-line print propped up the British Pound, with the GBPUSD climbing above the 1.5475 region, but we saw the sterling consolidate during the day as the pair closed at 1.5446.

--- Written by David Song, Currency Analyst

More...

- Federal Open Market Committee (FOMC) to Release Updated Forecast
- Fed Chairman Ben Bernanke to Hold Press Conference at 18:30 GMT

Trading the News: Federal Open Market Committee Meeting

A material shift in the Federal Open Market Committee’s (FOMC) policy may prop up the U.S. dollar as market participants see the central bank scaling back its bond-purchasing program to $40B in September.

What’s Expected:

Time of release: 09/18/2013 18:00 GMT, 14:00 EDT
Primary Pair Impact: EURUSD
Expected: $40B
Previous: $45B
DailyFX Forecast: $30B to $45B

Why Is This Event Important:

Indeed, there are three possible outcomes (taper, no taper & no taper with more detailed exit strategy), all of which will set the near-term outlook for the U.S. dollar , but the more encompassing market reaction may take shape following Chairman Ben Bernanke’s press conference should the central bank head continue to call for an end of quantitative easing in 2014.

Expectations: Bullish Argument/Scenario

Release	Expected	Actual
ISM Non-Manufacturing (AUG)	55.0	58.6
ISM Manufacturing (AUG)	54.0	55.7
Gross Domestic Product (Annualized) (QoQ) (2Q P)	2.2%	2.5%

The updated forecasts (growth, inflation & interest rate) from the Fed may highlight a stronger recovery for the U.S. economy, and any comments showing a greater willingness to implement the exit strategy ahead of schedule may generate a sharp rally in the dollar as market participants see higher interest rates on the horizon.

Risk: Bearish Argument/Scenario

Release	Expected	Actual
Consumer Price Index (YoY) (AUG)	1.6%	1.5%
Change in Non-Farm Payrolls (AUG)	180K	169K
Personal Consumption Expenditure Core (YoY) (JUL)	1.3%	1.2%

Nevertheless, the Fed may show further support for its highly accommodative policy stance amid the threat for deflation, and signs of a delay in the exit strategy may trigger a marked decline in the reserve currency as central bank dove Janet Yellen inches closer to taking the chairmanship.

How To Trade This Event Risk

Bullish USD Trade: FOMC Tapers QE and/or Lays More Detailed Exit Strategy

• Need red, five-minute candle following the print to consider a short EURUSD trade
• If market reaction favors a long dollar trade, short EURUSD with two separate position
• Place stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward
• Move stop to entry on remaining position once initial target is hit, set reasonable limit

Bearish USD Trade: QE Stays at $85B; Fed Supports Current Policy

• Need green, five-minute candle to favor a long EURUSD trade
• Implement same setup as the bullish dollar trade, just in opposite direction

Potential Price Targets For The Rate Decision

EURUSD

• Breaks Out of Downward Trend; Yet to Fill Sunday Gap Open
• Bearish Divergence in Relative Strength Index Remains Intact
• Interim Resistance: 1.3370 (100% Fib expansion) to 1.3380 Pivot
• Interim Support: 1.3150 (38.2% Fib retracement) to 1.3180 Pivot

Impact that the FOMC Interest Rate Decision has had on USD during the last release

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
JUL 2013	07/31/2013 18:00 GMT	0.25%	0.25%	+45	+12

July 2013 Federal Open Market Committee Interest Rate Decision

The FOMC sounded rather dovish after maintaining its current policy in July as the central bank continued to highlight the threat of subdued inflation, but it seems as though that a growing number of central bank officials are becoming increasingly upbeat towards the economy as the committee sees a stronger recovery ahead. Nevertheless, the dollar struggled to hold its ground following the policy statement, with the EURUSD pushing above the 1.3325 region, but we saw the pair consolidate going into the close as the euro-dollar end the day at 1.3300.

--- Written by David Song, Currency Analyst


More...

- U.S. 2Q GDP to Be Revised Higher from Preliminary Print
- Personal Consumption to Climb 1.9% Versus 1.8%

Trading the News: Final U.S. Gross Domestic Product

Another upward revision in the 2Q U.S. Gross Domestic Product (GDP) report may spur a more meaningful recovery in the dollar as it dampens the Fed’s scope to retain its highly accommodative policy stance.

What’s Expected:
Time of release: 09/26/2013 12:30 GMT, 8:30 EDT
Primary Pair Impact: EURUSD
Expected: 2.6%
Previous: 2.5%
DailyFX Forecast: 2.5% to 2.8%

Why Is This Event Important:

Indeed, the limited reaction to the U.S. data prints from earlier this week certainly suggests market participants are waiting on a larger fundamental catalyst to move on, and a positive development may foster a bullish setup for the reserve currency amid the ongoing discussion at the Fed to taper the asset-purchase program.

Expectations: Bullish Argument/Scenario

Release	Expected	Actual
Existing Home Sales (MoM) (AUG)	-2.6%	1.7%
ISM Non-Manufacturing (JUL)	53.1	56.0
ISM Manufacturing (JUL)	52.0	55.4

The pickup in business outputs paired with the ongoing recovery in the housing market may prompted a bigger-than-expected rise in the growth rate, and the FOMC may be more inclined to implement its exit strategy next month should the data raise the outlook for growth.

Risk: Bearish Argument/Scenario

Release	Expected	Actual
Consumer Confidence (SEP)	79.9	79.7
Advance Retail Sales (AUG)	0.5%	0.2%
Change in Non-Farm Payrolls (AUG)	180K	169K

Nevertheless, the slowdown in private consumption along with the persistent slack in the labor market may drag on the growth rate, and a dismal print may prompt the Fed to further delay the taper in an effort to encourage a stronger recovery.

How To Trade This Event Risk

Bullish USD Trade: 2Q GDP Expands 2.6% or Greater

• Need red, five-minute candle following the release to consider a short EURUSD trade
• If the market reaction favors a bullish dollar trade, establish short EURUSD with two position
• Place stop at the near-by swing high/reasonable distance from entry with at least 1:1 risk-to-reward
• Move stop to breakeven on remaining position once initial target is reached; set reasonable limit

Bearish USD Trade: Growth Rate Misses Market Forecast

• Need green, five-minute candle following the release to look at a long EURUSD entry
• Implement same setup as the bullish USD trade, just in opposite direction

Potential Price Targets For The Release

• Marks Fifth Failed Attempt to Close Above the 1.3530-40 (61.8% Fib expansion)
• Relative Strength Index Tracking Lower Following Bearish Break
• Interim Resistance: 1.3530-40 (61.8% Fibonacci expansion)
• Interim Support: 1.3360 (38.2% Fibonacci expansion) to 1.3380 Pivot

Impact that the U.S. GDP report has had on USD during the last quarter

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
1Q F 2013	06/26/2013 12:30 GMT	2.4%	1.8%	+7	-15

1Q F 2013 U.S. Gross Domestic Product

The final 1Q GDP print showed an unexpected downward revision in the growth rate as the economy expanding 1.8% during the first three-months of 2013, while Personal Consumption increased 2.6% versus an initial forecast of 3.4%. The dismal development dragged on the dollar, with the EURUSD rallying into the 1.3050 region, but the reaction was short-lived as the pair ended the day at 1.3010.

--- Written by David Song, Currency Analyst

More...

- Reserve Bank of Australia (RBA) to Retain Current Policy
- Governor Glenn Stevens to Implement Stronger Verbal Intervention?

Trading the News: Reserve Bank of Australia Interest Rate Decision
With the Reserve Bank of Australia widely expected to retain its wait-and-see approach in October, Governor Glenn Stevens may utilize stronger language to talk down the local currency in an effort to further assist with the rebalancing of the real economy.

What’s Expected:

Time of release: 10/01/2013 4:30 GMT, 0:30 EDT
Primary Pair Impact: AUDUSD
Expected: 2.50%
Previous: 2.50%
DailyFX Forecast: 2.50%

Why Is This Event Important:

The RBA may omit any comments referencing the cash rate as it relies on verbal intervention, but the fundamental outlook laid out by the central bank may sound more dovish amid the slowing recovery.

Expectations: Bearish Argument/Scenario

Release	Expected	Actual
Employment Change (AUG)	10.0K	-10.8K
Trade Balance (JUL)	100M	-765M
Retail Sales (MoM) (JUL)	0.4%	0.1%

The renewed weakness in the labor market along with the deterioration in global trade may prompt the RBA to show a greater willingness to further embark on its easing cycle in order to combat the downside risks for growth and inflation.

Risk: Bullish Argument/Scenario

Release	Expected	Actual
Westpac Consumer Confidence s.a. (MoM) (SEP)	--	4.7%
Home Loans (MoM) (JUL)	2.0%	2.4%
Gross Domestic Product s.a. (QoQ) (2Q)	0.5%	0.6%

Nevertheless, the spillover effects of record-low borrowing costs may greater concerns of an asset bubble, and a more neutral tone for monetary policy may spark a more meaningful reaction in the AUDUSD as it deviates from market expectations.

How To Trade This Event Risk

Bearish AUD Trade: RBA Toughens Verbal Intervention; Sees Rate Cut Potential

• Need to see red, five-minute candle following the statement for a potential short trade on AUDUSD
• If market reaction favors a short trade, sell AUDUSD with two separate position
• Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward
• Move stop to breakeven on remaining position once initial target is met, set reasonable limit

Bullish AUD Trade: Governor Stevens Adopts More Neutral Tone

• Need green, five-minute candle to consider a long AUDUSD trade
• Carry out the same setup as the bearish AUD trade, just in the opposite direction

Potential Price Targets For The Release

AUDUSD Daily

Chart

• New Downward Trending Channel Taking Shape; Lower High in September
• Interim Resistance: 0.9500 (38.2 retracement) to 0.9515 (1.618 expansion)
• Interim Support: 0.9290 Pivot to 0.9270 (100.0 expansion)

Impact that Reserve Bank of Australia has had on AUD during the last meeting

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
SEP 2013	09/03/2013 1:30 GMT	2.50%	2.50%	+53	+77

September 2013 Reserve Bank of Australia Rate Decision



The RBA struck a more neutral tone for monetary policy, leaving out any reference to additional rate cuts for the foreseeable future, but continued their push with verbal intervention and reiterated that ‘it is possible that the exchange rate will depreciate further over time, which would help to foster a rebalancing of growth in the economy.’ Nevertheless, easing bets for lower borrowing costs propped up the Australian dollar, with the AUDUSD climbing above the 0.9000 handle, and the higher-yielding currency continued to gain ground throughout the day as it closed at 0.9059.

--- Written by David Song, Currency Analyst

More...

- European Central Bank (ECB) to Stay on Hold; Utilize Forward Guidance
- President Mario Draghi Has Hinted at Another Long-Term Refinancing Operation (LTRO)

Trading the News: European Central Bank Interest Rate Decision
The European Central Bank (ECB) is expected to keep the benchmark interest rate at 0.50% as the monetary union returns to growth, but President Mario Draghi may show a greater willingness further embark on the easing cycle in an effort to encourage a stronger recovery.

What’s Expected:
Time of release: 10/02/2013 11:45 GMT, 7:45 EDT
Primary Pair Impact: EURUSD
Expected: 0.50%
Previous: 0.50%
DailyFX Forecast: 0.50%

Why Is This Event Important:

During his testimony in front of the European Parliament, President Draghi argued that the central bank could implement another LTRO if needed, and the Governing Council may sounds more dovish this time around amid the growing threat for deflation.

Expectations: Bearish Argument/Scenario

Release	Expected	Actual
Euro-Zone Consumer Price Index (YoY) (SEP A)	1.2%	1.1%
Euro-Zone Trade Balance s.a. (JUL)	15.0B	11.1B
Euro-Zone Employment (2Q)	--	-0.1%

There could be a greater discussion for more non-standard measures at this month’s meeting as the persistent slack in the real economy threatens price stability, and any signals highlighting additional monetary support is likely to dampen the appeal of the Euro as market participants weigh the outlook for monetary policy.

Risk: Bullish Argument/Scenario

Release	Expected	Actual
Euro-Zone Economic Confidence (SEP)	96.0	96.9
Euro-Zone Purchasing Manager Index- Composite (SEP A)	51.8	52.1
Euro-Zone Construction Output (MoM) (JUL)	--	0.3%

However, the ECB may merely reiterate the policy statement from the September meeting amid the bright signs coming out of the region, and a more neutral tone may spark fresh monthly highs in the Euro as FX traders scale back bets for more easing.

How To Trade This Event Risk

Trading the ECB interest rate decision may not be as clear cut as some of our other trade setups as the press conference with President Draghi ends with a Q&A session

Bearish EUR Trade: ECB Sees More Non-Standard Measures on Tap

• Need to see red, five-minute candle following the decision/statement to consider a short EURUSD trade
• If market reaction favors a short Euro trade, sell EURUSD with two separate position
• Place stop at the near-by swing high/reasonable distance from cost; look for at least 1:1 risk-to-reward
• Move stop to entry on remaining position once initial target is met, set reasonable limit

Bullish EUR Trade: Draghi Shows Greater Willingness to Retain Current Policy

• Need green, five-minute candle to favor a long EURUSD trade
• Implement same strategy as the bearish euro trade, just in the opposite direction

Potential Price Targets For The Rate Decision

EURUSD Daily


Marks Eight Failed Attempts to Close Above 1.3530-40 (61.8% expansion)

• Relative Strength Index Holds Below 70 After Breaking Bullish Trend
• Interim Resistance: 1.3650-60 (78.6% expansion)
• Interim Support: 1.3450-60 (50.0% expansion)

Impact that the European Central Bank Interest Rate Decision has had on EUR during the last meeting

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
SEP 2013	09/05/2013 11:45 GMT	0.50%	0.50%	-39	-89

September 2013 European Central Bank Interest Rate Decision



The European Central Bank struck a rather cautious tone for the euro-area after keeping the benchmark interest rate on hold at 0.50%, with President Mario Draghi reiterating his pledged to retain the highly accommodative policy stance for an ‘extended’ period of time amid the ongoing weakness in the real economy. The dovish commentary coming out of the central bank dragged on the Euro, with the EURUSD falling below the 1.3200 handle, and the single currency continued to lose ground throughout the day as the pair closed at 1.3118.

--- Written by David Song, Currency Analyst

More...

- U.K. Purchasing Manager Index to Hold at 60.5- Highest Since 12/2006
- GBPUSD Eyes 1.6300 as Bullish Momentum Remains Intact

Trading the News: U.K. Purchasing Manager Index- Services

With the U.K. Services Purchasing Manager Index expected to hold at a 7-year high, a deviation from market expectations is likely to spur increased volatility in the British Pound as market participants weigh the outlook for monetary policy.

What’s Expected:

Time of release: 08/15/20138:30 GMT, 4:30 EDT
Primary Pair Impact: GBPUSD
Expected: 60.5
Previous: 60.5
DailyFX Forecast: 59.0 to 61.0

Why Is This Event Important:

Indeed, a positive development may spur increased bets of seeing the Bank of England (BoE) carry out its exit strategy ahead of schedule as the more robust recovery appears to be pushing the central bank away from its easing cycle.

Expectations: Bullish Argument/Scenario

Release	Expected	Actual
Nationwide Home Price Index n.s.a. (YoY) (SEP)	0.5%	0.9%
Jobless Claims Change (AUG)	-21.0K	-32.6K
Mortgage Approvals (AUG)	61.5K	62.2K

Rising home prices along with the pickup in private sector credit may encourage another better-than-expected print, and the British Pound may continue outperform against its major counterparts as U.K. policy makers turn increasingly upbeat towards the real economy.

Risk: Bearish Argument/Scenario

Release	Expected	Actual
Retail Sales inc. Auto (MoM) (AUG)	0.4%	-0.9%
Total Business Investments (QoQ) (2Q F)	0.9%	-2.7%
Trade Balance (JUL)	-1.700B	-3.085B

Nevertheless, the near-term rally in the GBPUSD may come to a halt should the data dampen the outlook for stronger growth, and we may see Governor Mark Carney continue to rely on the non-standard measures to further insulate the economy.

How To Trade This Event Risk

Bullish GBP Trade: Services PMI Tops Forecast

• Need green, five-minute candle following the print to consider a long British Pound trade
• If market reaction favors a long trade, buy GBPUSD with two separate position
• Set stop at the near-by swing low/reasonable distance from entry; look for at least 1:1 risk-to-reward
• Move stop to entry on remaining position once initial target is hit, set reasonable limit

Bearish GBP Trade: Data Dampens Outlook for Stronger U.K. Recovery

• Need red, five-minute candle to favor a short GBPUSD trade
• Implement same setup as the bullish British Pound trade, just in opposite direction

Potential Price Targets For The Release

GBPUSD Daily

• Upward Trending Channel Remains Intact; Breaking Out of Multi-Year Wedge/Triangle?
• Relative Strength Index Maintains Bullish Momentum
• Interim Resistance: 1.6300 Pivot (2012 highs)
• Interim Support: 1.6000 Pivot

Impact that the U.K. Retail Sales report has had on GBP during the last month

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
AUG 2013	09/04/2013 8:30 GMT	59.7	60.5	+25	+47

August2013 U.K. Purchasing Manager Index- Services



The Purchasing Manager Index for service-based activity climbed to 60.5 from 60.2 in July - marking the highest reading since 2006 - and the more robust recovery may encourage the Bank of England to switch gears in the coming months as inflation continues to run above the 2% target. The British Pound extended the advance from earlier in the week, with the GBPUSD climbing above the 1.5600 handle, and the pair continued to track higher during the North American trade to close at 1.5623.

--- Written by David Song, Currency Analyst

More...

- U.K. Industrial Production to Rebound in August
- GBPUSD Holds Key Support; Bullish Trend in Focus

Trading the News: U.K. Industrial Production

The British Pound may make a more meaningful run at the 1.6300 handle as U.K. Industrial Production is expected to increase 0.4% in August.
What’s Expected:
Time of release: 10/09/2013 8:30 GMT, 4:30 EDT
Primary Pair Impact: GBPUSD
Expected: 0.4%
Previous: 0.2%
DailyFX Forecast: 0.4% to 0.6%

Why Is This Event Important:

The rebound in business outputs may encourage the Bank of England (BoE) to adopt an improved outlook for the U.K. economy, which could heighten bets of seeing the central bank implement its exit strategy ahead of schedule.

Expectations: Bearish Argument/Scenario

Release	Expected	Actual
Net Consumer Credit (AUG)	0.6B	0.6B
Producer Price Index- Output n.s.a. (YoY) (AUG)	1.8%	1.6%
Purchasing Manager Index- Manufacturing (AUG)	55.0	57.2

The U.K. may see a more meaningful pickup in business outputs on the back of easing input costs, and the shift in the policy outlook may keep the British Pound afloat as the central bank slowly moves away from its easing cycle.

Risk: Bullish Argument/Scenario

Release	Expected	Actual
Retail Sales inc. Auto (MoM) (AUG)	0.4%	-0.9%
Total Business Investments (QoQ) (2Q F)	0.9%	-2.7%
Trade Balance (JUL)	-1.700B	-3.085B

However, the recent slowdown in private sector consumption may limit production over the near-term, and a dismal development may bring a more meaningful correction in the GBPUSD as market participants weigh the outlook for monetary policy.

How To Trade This Event Risk

Bullish GBP Trade: Industrial Output to Rebound

• Need green, five-minute candle following the print to consider a long British Pound trade
• If market reaction favors a long trade, buy GBPUSD with two separate position
• Set stop at the near-by swing low/reasonable distance from entry; look for at least 1:1 risk-to-reward
• Move stop to entry on remaining position once initial target is hit, set reasonable limit

Bearish GBP Trade: Data Dampens Outlook for Stronger U.K. Recovery

• Need red, five-minute candle to favor a short GBPUSD trade
• Implement same setup as the bullish British Pound trade, just in opposite direction

Potential Price Targets For The Release
GBPUSD Daily

• Upward Trending Channel Remains Intact; Multi-Year Wedge/Triangle at Risk
• Relative Strength Index Carving Higher Low?
• Interim Resistance: 1.6300 Pivot (2012 highs)
• Interim Support: 1.6000 Pivot

Impact that the U.K. Industrial Production report has had on GBP during the last month

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
JUL 2013	09/06/2013 8:30 GMT	0.2%	0.0%	-9	+29

July 2013 U.K. Industrial Production


Industrial outputs in the U.K. held flat in July after advancing a revised 1.3% the month prior, while manufacturing advanced another 0.2% during the same period. The weaker-than-expected print dragged on the British Pound, with the GBPUSD slipping below the 1.5570 region, but the sterling regained its footing during the day to close at 1.5623.

--- Written by David Song, Currency Analyst

More...

- Australia Employment to Mark First Rise Since June
- AUDUSD Bullish Trend Remains Intact; Key Resistance Ahead

Trading the News: Australia Employment Change
The bullish trend in the AUDUSD may continue to gather pace over the next 24-hours of trading as the Australian economy is expected to add 15.0K jobs in September.

What’s Expected:

Time of release: 10/10/2013 0:30 GMT, 20:30 EDT
Primary Pair Impact: AUDUSD
Expected: 15.0K
Previous: -10.8K
DailyFX Forecast: -10.0K to 15.0K

Why Is This Event Important:

Indeed, a rebound in job growth may encourage the Reserve Bank of Australia (RBA) to carry its wait-and-see approach into 2014, but the employment report has failed to meet market expectations over the last two prints (July & August) amid the ongoing slack in the $1T economy.

Expectations: Bullish Argument/Scenario

Release	Expected	Actual
ANZ Job Advertisements (MoM) (SEP)	--	0.2%
NAB Business Confidence (SEP)	--	12
Retail Sales (MoM) (AUG)	0.3%	0.4%

The ongoing improvement in business confidence along with the pickup in private sector consumption may prompt a more meaningful rebound in employment, and a positive print is likely to prop up the aussie as market participants scale back bets for additional RBA rate cuts.

Risk: Bearish Argument/Scenario

Release	Expected	Actual
Building Approvals (MoM) (AUG)	-0.5%	-4.7%
Trade Balance (AUG)	-400M	-815M
Company Operating Profits (QoQ) (2Q)	0.9%	-0.8%

However, the slowdown in global trade paired with the persistent slack in the real economy may continue to generate a weaker-than-expected labor report, and a dismal development may threaten the bullish trend in the AUDUSD as it renews bets for lower borrowing costs.

How To Trade This Event Risk

Bullish AUD Trade: Employment Rebounds 15.0K or Greater

• Need green, five-minute candle following the print to consider a long Australian dollar trade
• If market reaction favors a long trade, buy AUDUSD with two separate position
• Set stop at the near-by swing low/reasonable distance from entry; look for at least 1:1 risk-to-reward
• Move stop to entry on remaining position once initial target is hit, set reasonable limit

Bearish AUD Trade: Job Growth Weakens for Third Month

• Need red, five-minute candle to favor a short AUDUSD trade
• Implement same setup as the bullish Australian dollar trade, just in opposite direction

Potential Price Targets For The Release
AUDUSD Daily

• Upward Trending Channel Continues to Take Shape
• Relative Strength Index Holds Above Support (53)
• Interim Resistance: 0.9500 (38.2% retracement) to 0.9520 (1.618% expansion)
• Interim Support: 0.9270 (100.0% expansion) to 0.9290 Pivot

Impact that the change in Australia Employment has had on AUD during the last month

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
AUG 2013	09/12/2013 1:30 GMT	10.0K	-10.8K	-65	-60

August 2013 Australia Employment Change



Australia lost another 10.8K jobs in August, with the unemployment rate advancing to 5.8% from 5.7% the month prior, and the ongoing weakness in the labor market may prompt the RBA to further embark on its easing cycle to further insulate the $1T economy. Indeed, the Australian dollar took a spill following the weaker-than-expected print, with the AUDUSD slipping below the 0.9300 handle, and the higher-yielding currency struggled to hold its ground throughout the day as the pair closed at 0.9269.

--- Written by David Song, Currency Analyst

More...

- U. of Michigan Confidence to Weaken for Third Month
- U.S. Dollar Relief Rally in Focus Amid Debt Talk

Trading the News: U. of Michigan Confidence

A further decline in the U. of Michigan Confidence survey may prompt a more bearish outlook for the U.S. dollar as it dampens the scope of seeing the Federal Open Market Committee (FOMC) taper the asset-purchase program at the October 29-30 meeting.

What’s Expected:
Time of release: 10/11/2013 13:55 GMT, 9:55 EDT
Primary Pair Impact: EURUSD
Expected: 75.7
Previous: 77.5
DailyFX Forecast: 72.0 to 79.0

Why Is This Event Important:

Indeed, the Fed may continue to delay its exit strategy in an effort to combat the fiscal drag, and the central bank may carry its highly accommodative policy stance into 2014 as a means to further insulate the real economy.

Risk: Bearish Argument/Scenario

Release	Expected	Actual
Consumer Confidence (SEP)	79.9	79.7
Gross Domestic Product (Annualized) (QoQ) (2Q F)	2.6%	2.5%
Change in Non-Farm Payrolls (AUG)	180K	169K

Household sentiment may weaken further in October amid the ongoing slack in the real economy, and the government shutdown may prompt a marked decline in the U. of Michigan survey as it dampens the scope for a stronger recovery.

Expectations: Bullish Argument/Scenario

Release	Expected	Actual
Consumer Credit (AUG)	$12.000B	$13.625B
Personal Income (AUG)	0.4%	0.4%
Average Hourly Earnings (YoY) (AUG)	2.1%	2.2%

Nevertheless, the pickup in wage growth along with the ongoing expansion in consumer credit may prop up consumer confidence, and a better-than-expected print may spur a more meaningful rally in the dollar as it raises the outlook for growth.

How To Trade This Event Risk

Bearish USD Trade: U. of Michigan Confidence Weakens for Third Month

• Need green, five-minute candle following the print to consider a short U.S. dollar trade
• If market reaction favors a short dollar trade, buy EURUSD with two separate position
• Set stop at the near-by swing low/reasonable distance from entry; look for at least 1:1 risk-to-reward
• Move stop to entry on remaining position once initial target is hit, set reasonable limit

Bullish USD Trade: Consumer Sentiment Improves

• Need red, five-minute candle to favor a short EURUSD trade
• Implement same setup as the bearish U.S. dollar trade, just in reverse

Potential Price Targets For The Release
EURUSD Daily

Chart -

• Breaks Bullish Trend From September; New Downward Trending Channel?
• Relative Strength Index Also Carving Bearish Trend
• Interim Resistance: 1.3650-60 (78.6% expansion)
• Interim Support: 1.3360-70 (38.2% expansion)

Impact that the U. of Michigan Confidence survey has had on USD during the last month

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
SEP P 2013	09/13/2013 13:55 GMT	82.0	76.8	-6	+33

September 2013 U. of Michigan Confidence



U.S. consumer confidence weakened for the second month in September, with the U. of Michigan survey narrowing to 76.8 from 82.1 the month prior, while inflation expectations advanced to an annualized 3.2% from 3.0% to mark the highest reading since March. The mixed reaction following the print was short-lived as the EURUSD worked its way back above the 1.3275 region, and the greenback continued to lose ground throughout the day as the pair closed at 1.3297.

--- Written by David Song, Currency Analyst

More...