Fundamental analysis 23 October 2012 | Inside Forex trading

Last Monday was not an exception. As it often happens, on the first day of the current week on the trading it was observed slack and not interesting trade, which ended in neutral results of the main currency pairs. The dollar was under a small pressure of the European majors in the first part of the session. It probably could be caused by technical factors, when short-term investors began to correct their positions withing the strong level of support. It is not excluded that the messages from Spain supported optimism a little bit, where election results in one of the region of the country showed that the policy of Spain government is supported. By the end of trading the dollar ,managed to return all losses against the pound and a part of losses against the euro, but the dollar was leader when paired with the yen and managed to strengthen to the new local maximums. In this case the dollar was supported by weak data about the results of Japan foreign trade, which made the markets think that BoJ will continue to extend the relaxation program in the nearest future. The US economic statistics wasn?t published yesterday. There is not much information today. Attention can be drawn only on the FRS report by Richmond about the production activity. The forecasts suggest that the index will decrease by the level 3 from 4 in the previous month. Taking into account the absence of important news in other regions it can be suggested that there will be no active trading in the next session. Moreover, investor?s passivity may be caused by the approaching of such important event as the publication of FRS decision about the rate which will happen on the next Wednesday.

EUR

The euro increased a little on Monday trading. Probably investors began to correct their positions on the strong technical levels as a result of absence of news. Also one of the reason of some optimism increase could be the results of regional elections in Spain, where Prime Minister?s party remained in power in Galicia. It was regarded as the support of strict economy measures, conducted by government. Except it, another favourable news for the risk were the message from Germany about the support of Greece appeal about the terms prolongation, in the course of which all obligations, set for Athens in the time of aid receipt from international creditors, should be fulfilled. The Eurozone economy data weren?t published yesterday, information about the European financial management as usually contained the current problem in broad outline and didn?t influence investors? mood. Todays? news package is also almost empty. Market?s attention will be drawn only by the publication of preliminary estimation of consumer trust index of Eurozone during October, the forecasts expect further decrease of this index by -26.0 from -25.9 earlier, and it obviously won?t improve mood for the euro. As to the prospects, it is assumed that expectation of news about FRS decisions from the USA leave a volatility weak, the market will be waiting and begin to demonstrate range trading.

GBP

On Monday trading British currency followed common mood of the market and also strengthen against the dollar at the beginning of trading, but in the second part it was weakening. As a result sterling pound was in neutral position against the dollar at the end of trading according to price at the beginning. UK economic statistics was not published yesterday, and today it will be published a little bit. News packet will demonstrate only British Bank Association (BBA) report about mortgage credits in September ? it is expected the increase in the number of approved mortgage credits by 30.9 thousands from 30.5 thousand. As to the politics it is be introduced by the head of Bank of England M. Kipling. -According to him market may get information about the question ? will British regulator expend the relaxation program at the nearest meeting on deliveries.

JPY

The yen was continuing to decrease against all its opponents. Very weak results of Japanese external trading lead to the massive yen trading on Monday. It intensified an expectation of the relaxation in monetary policy of Bank of Japan. It is supported by the Members of Japanese government which announce about the necessity of economic stimulation. It increases the probability of that on October 30th at the next meeting of the managers of Bank of Japan additional measures of monetary policy will be announces. Japanese economic statistics published today showed mood decrease in small business ? confidence index in small business in October decreased by 43.7 from 45.1 earlier. As to the expectations concerning the yen, it seems that it is still under pressure, but in the nearest future yen trading will be over, as the USD/JPY pair approached a strong technical level 80.00, where resistance is stronger. Investors will also wait for the results of FRS meeting, which will be published tomorrow.

Source: http://blog.forex4you.com/fundamental-analysis-23-october-2012/

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