Australia City

Australia Stocks Open The Week Strong

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The ASX 200 is up 53.8 points to 4889.00 to start the week off with a bullish tone. Australian markets were closed yesterday. The gain in Australian stocks is being lead by the banks on optimism for more RBA rate cuts. This is the 9th straight day of gains for Australian stocks. NAB published its business confidence survey that showed Australian businesses are more optimistic heading into 2013. The Aussie dollar is rebounding slightly from its recent weakness. It is currently at 1.0437 to the US dollar, up 21 pips.

All Eyes Will Be On US Data This Week

Whether the market rally can be sustained will be in large part determined this week by the data coming out of the US. On tap this week out of the US is consumer confidence data, Case-Shiller Home Price Index, GDP, Federal Reserve announcement, jobless claims, personal income, Chicago PMI, and on Friday will be the employment report, PMI manufacturing, consumer sentiment, ISM Manufacturing Index, and construction spending. These important data points will determine if the bull run continues or if we see a correction in the market.

Consolidation Expected In The Forex Markets

Most major forex pairs look set to consolidate, but the major trends are still decidedly in tact. I still expect yen weakness, euro strength, and pound weakness. Japanese authorities will continue their rhetoric to weaken the yen. Britain is on the verge of a triple dip recession and new Governor Carney has said he will do similar policies to Ben Bernanke. The euro zone is looking promising on the strength out of Germany and looks set to move higher.

Euro Running Into Resistance at 1.35

The euro is currently trading at 1.3456 to the US dollar. The market has significant overhead resistance at the 1.35 level. If the market can break through that barrier, the market could test the 1.37 level. A lot will depend on the data out of the US this week as to whether the euro breaks through this level or corrects.

Economic Data On The Schedule

The following are the important items on the economic calendar (all times GMT):

  • 0700 German Import Price Index (MoM) -0.2% forecast 0.0% prev (Euro)
  • 0700 GfK German Consumer Climate 5.7 forecast 5.6 prev (Euro)
  • 0745 French Consumer Confidence 86 forecast 86 prev (Euro)
  • 0800 Spanish Retail Sales (YoY) -8.9% forecast -7.8% prev (Euro)
  • 1400 S&P Case-Shiller Home Prices 5.5% forecast 4.3% prev (USD)
  • 1500 Consumer Confidence 64.0 forecast 65.1 prev (USD)
  • 2350 Japan Retail Sales (YoY) 0.3% forecast 1.2% prev (Yen)

Follow the data and also traders can trade gold on the back of dollar strength or weakness. Please keep that in mind as gold and the US dollar have an inverse relationship.

As always good luck to all binary traders and be sure to check back tomorrow for the latest update!