Look ahead at the forex week of September 8th

Discussion in 'Forex' started by LearningMarkets, Sep 7, 2008.

  1. LearningMarkets

    LearningMarkets ET Sponsor

    The week ends with a strong trend in the market towards weak commodities and a stronger USD. These kinds of breakout trends are great profit opportunities and come along all too infrequently. At this point our job becomes less about forecasting and more about preparing for potential disruptors to the trend. The coming week isn't as heavy of a news week as the preceding two weeks have been but we will still want to watch the retail sales numbers due from Australia, New Zealand and the US as well as trade numbers in North America for potential disruptions to the trend.

    Retail sales are a good measure of consumer health in an economy and is therefore one of the ways traders forecast currency strength. More of the most recent retail reports in Australia have been below expectations than above but a positive surprise this week could be a fundamental that AUD bulls rally around in the short term. That may lead to a pause in the trend in the commodity currencies.

    In addition, we are watching US trade numbers on Thursday for signs that the very positive export numbers revealed in a recent GDP release are likely to continue supporting economic growth. The decline in the USD over the last few years may be very supportive for exports in an economy that needs growth anywhere it can get it. Ironically, exports that are boosted by a long term weak USD are likely to help increasing its value in the short term, which could be good for the existing trend.

    To see this week's video podcast, click here: http://www.pfxglobal.com/forex-podcast/retail-sales-consumer-confidence-and-a-strong-trend.html