US fundamental event risk will take center stage today. We have several economic releases at 0830 and 1000 EDT including US CPI and Jobless Claims. I discussed the possibility of a major USD turning point yesterday morning and it appears that we have made that turn. For a discussion with charts check out my forex video outlook from yesterday. The economic releases have not been making any difference to price swings overnight. We had excellent growth in Australia wages and negative retail sales in the United Kingdom but we continue to be guided by the USD. The USD appears to be retracing again now. Confirmation will be provided by new lows. The Swiss National Bank decided not to peg the Swiss Franc to the Euro yet and also refused to set a target for the currency.
Headline Event Risk Today
0830 EDT US Consumer Price Index
0830 EDT Canadian Leading Indicators
0830 EDT US Jobless Claims
1000 EDT US Philadelphia Fed Survey
2300 EDT New Zealand Credit Card Spending
0200 EDT German Producer Prices
0430 EDT UK Public Sector Net Borrowing
The Forex Daily Outlook for the EUR USD is for continuation lower. I was expecting a reversal between 1.4480 and 1.4500 yesterday and the pair went slightly higher but reverses quite decisively. It appears we are continuing on that same track today. The EUR-USD should make a lower high in a 2nd wave and then we should continue lower.
The Forex Daily Outlook for the USD JPY is for continuation lower. The USD-JPY is still trying to avoid new record lows. I think threat of intervention is too fresh for many people to directly buy Yen at this point. I still expect new record lows. I think the probability of a new record low today is high.
The Forex Daily Outlook for the GBP USD is for continuation lower. This pair has been remarkably bullish lately for no real reason. Now is the time to get back short and ride reality back down.
The Forex Daily Outlook for the USD CHF is for continuation lower. As I said above, the Swiss National Bank put off pegging the Swiss Franc to the Euro and even refused to set a target for their monetary policy. This is smart on their part because it leaves all their options open but it does not build confidence in the markets. Regardless the market looks ready to retrace the recent CHF weakness.
The Forex Daily Outlook for the AUD USD is for continuation lower. This pair looks extremely bearish. It has been making clear moves and I think it will be very rewarding to short this pair.
The Forex Daily Outlook for the USD CAD is for continuation higher. The only pair out of the seven that I’m bullish on. I would normally expect this pattern to resolve in more bearishness but I don’t want to fight the bullish USD turn that may be in progress. A bullish Elliott Wave count here requires a running flat which is a less common but acceptable pattern.
The Forex Daily Outlook for the NZD USD is for continuation lower. This is the same as the AUD-USD. The correction on this pair has not been as clear but it may be building more bearish momentum. The clear patterns overall make this pair a low risk excellent sell.