By FX Empire.com

EUR/USD Technical Analysis for Week of February 6, 2012

EUR/USD had a negative week over the last five sessions, and the pair seems to be stuck in between two big areas. The resistance can be defined as the 1.32 level, and the support can be defined as the 1.30 to 1.29 area. The resulting candle was a hammer though, and the market does look like it wants to rise.

Looking at this candle, we have a simple and binary type of trade setup. The breaking of the top of the hammer, and by extension the 1.32 level would be a very supportive signal that has us buying. The breaking of the bottom of the hammer would be massively bearish, and have us selling hand over fist. As soon as one of these signals happen, we will be in the market again.

 

EUR/USD Fundamental Analysis for Week of February 6, 2012

Economic Events: (GMT)

Please review the individual daily forecast for explanations and expected results

Feb. 06	CAD	Ivey PMI
	NZD	Unemployment Rate
Feb. 07	AUD	Interest Rate Decision
	AUD	RBA Rate Statement
Feb. 08	USD	FOMC Meeting Minutes
Feb. 09	GBP	Interest Rate Decision
	EUR	Interest Rate Decision
	USD	Initial Jobless Claims
	EUR	ECB Press Conference
Feb. 10	CNY	Chinese CPI (YoY)
	CAD	Trade Balance
	USD	Trade Balance

                               

Historical:

Highest: 1.5091 USD on 03 Dec 2009.

Average: 1.3709 USD over this period.

Lowest: 1.19 USD on 07 Jun 2010.

Rules:

Out of the major currency pairs the most popular and easy to trade currency pair is the EUR/USD. It has become so popular with traders these days that even when there is no visible trade to be had it is yet traded as a matter of habit. This is of course something that should be avoided and any investor who trades this currency pair wisely can do so successfully with sizable profits at the end of the day.

The first thing with trading currencies is to realize that the EUR/USD is made up of two separate currencies although considered to be one unit when taken as a pair. The weaknesses and strengths of each currency have to be taken into consideration when trading the unit as it influences the final outcome. Another factor that is often overlooked by traders or investors is that the weakening of one currency along with the strengthening of the other currency in the pair results in the generation of pips. It is according to this that entry and exit from the Forex market has to be done in order to maintain profitability.

Trading comprises of careful market studying, strategizing, planning and executing the plan in a timely manner. This is entirely different to scalping which is resorted to by many a trader on a regular basis. These traders are often clueless as to the market situation and just use this as a type of defense mechanism to compensate for the general lack of information and knowledge. The EUR/USD is a currency pair that certainly offers a lot of currencies trading opportunities if handled correctly.

Characteristics

Average broker spread: 2-3 pips 
Daily range average: 90-100 pips 
Best time to trade: Euro Session (0700 GMT – 1700 GMT) 
some factors affecting the EUR/USD rate: 

• The interest rate differential between the European Bank(ECB) and the Federal Reserve(FED)
• Dollar strength drives EUR/USD lower
• FED intervention to weaken the dollar the sends EUR/USD higher

Trading the EUR/USD 

Trading Experience: New and Advanced currency traders 
Trading Style: Day trading and Swing trading 

1) Applying Technical Analysis and/or Analyzing Fundamental News from the Euro and US zone to make EUR/USD trading decisions. Breaking strong psychological levels (1.3000, 1.2000,..) and/or surprising economic news releases can make the EUR/USD move a lot in one direction without much retracements. 

2) Since the EUR/USD pair tends to be negatively correlated to the USD/CHF, it is always a good idea to compare both EUR/USD and USD/CHF charts in order to predict future moves, if USD/CHF breaks above an important resistance level and EUR/USD didn’t break support level yet, the EUR/USD is very likely to break below support level. 

 

Analysis and Recommendation:

The EUR/USD closed at 1.3158.The euro was on a roller-coaster ride on Friday after the U.S. Labor Department reported that 243,000 jobs were added in January and the unemployment rate dipped to 8.3%.

The markets all week have been reacting only to news and economic reports. US jobs data and unemployment figures surprised the market this week, adding 243k jobs and unemployment dropping to 8.3%. Overall this was a strong week for the US and the greenback. The euro fell close to the 1.305 mark before regaining strength against the greenback.  The moving back up to 1.3158.

After reacting to the news and pushing the dollar up against all major currencies, the markets realized that this would reduce the need for Fed intervention, diminishing the chances of more QE or changes in monetary policy. Compounding this with more craziness is Greece, the USD gave back some of its gains.

Greece is still not resolved and the special meeting of the EU that was scheduled for Monday to review the Greek proposal has been cancelled.

There are several problems, which include Germany wanting to have more control over the Greek budget in the future, since it will be mostly German taxpayers who will be funding the bailout. Also the Greek politicians are not supportive of the addition austerity measures, facing elections in April; many political leaders are more concerned with re-election that demands from the EU and IMF.

The Greek Prime Minister said in a statement on Saturday, that the deal will be concluded by the end of the Sunday, satisfying politicians, creditors and the EU, ECB and IMF. The markets will await this new agreement.

Strength:

1) US- Jan Payroll gains show big upside surprise of 243k, about 100k more than expected, unemployment rate falls to 8.3%

2)  US- ISM services index rises to best since Feb ’11

3)  US-ISM manufacturing up 1 pt but touch less than expected

4) US -Jan vehicle sales at 14.1mm is best since clunker month in Aug ’09 and the most since May ’08 before that

5) US – savings rate rises to 4% from 3.5%

6) US -Initial Jobless Claims fall 12k

7) Germany -unemployed fall again, rate at 6.7%

8 ) UK- manufacturing and services PMI figures both rise

9) Eurozone- manufacturing and services PMI in line with initial

10) Portuguese bond yields fall from highs, Italian yields lower too with Spain flat

11)China – manufacturing PMI stays above 50, Taiwan and South Korea rise but remain below 50

12) India – manufacturing and services PMI both jump

Weakness:

1) US- Jan Consumer Confidence falls almost 4 pts to 61.1, well below expectations of 68 as labor market answers soften and those that plan to buy a home falls to lowest since Aug and those that plan to buy a car down at lowest since Oct ’10

2) US -CS home price index falls to lowest since Feb ’03

3) US -MBA said refi’s fell 3.6% and purchase apps were down 1.7%

4) Canada – Jan jobs report disappoints

5) China – PMI services index falls to 52.9 from 56, the 2nd lowest since Feb ’11

6) Taiwan -economy in a recession after Q4 contraction q/o/q

7) Greek- debt discussions for another week are hours away from wrapping up, becoming a nightmare

8 )Eurozone -Amount of LTRO funds from ECB continue to be redeposited with the ECB

 

Feb 07  09:00  Netherlands Eur 5.0bn Jul 2022 DSL

Feb 07  10:10  Greece  6M T-bill auction

Feb 07  10.30  UK  Auctions 1.75% 2017 conventional Gilt

Feb 07  15:30  UK  Details gilt auction on Feb 16

Feb 07  18:00  US  Auctions 3Y Notes

Feb 08  10:10  Sweden  Nominal bond auction

Feb 08  10:30  Germany  Eur 4.0bn Feb 2017 Bobl

Feb 08  10:30  Swiss  Bond auction

Feb 08  16:30  Italy   Details BOT auction on Feb 13

Feb 08  18:00  US  Auctions 10Y Notes

Feb 09  10:10  Sweden  Sek 0.75bn I/L bond auction

Feb 09  15:30  Sweden  Details I/L bond auction on Mar 23

Feb 09  16:00  US  Announces auctions of 30Y TIPS on Feb 16

Feb 09  16:30  Italy   Details BTP/CCTeu auction on Feb 14

Feb 09  18:00  Italy   Auctions 30Y Bonds

Feb 10  11:00  Belgium  OLO auction

USD/JPY Technical Analysis for Week of February 6, 2012

The USD/JPY pair fell during most of the week, but the Friday session saw a sharp rise in the value of this market. The Non-Farm Payroll numbers came out strongly, and this pushed the pair up. The Bank of Japan is sitting just below, and as a result – we simply cannot sell this market. The buying of it is difficult as well, because the range that we are in is so tight. This is a shorter-term market at this point, and we are waiting to see if the 80 level gives way in order to buy and hold. Until then, it is difficult to be involved for more than short-term trades.

USD/JPY Fundamental Analysis for Week of February 6, 2012

Economic Events:  (GMT)

Feb. 06	CAD	Ivey PMI
	NZD	Unemployment Rate
Feb. 07	AUD	Interest Rate Decision
	AUD	RBA Rate Statement
Feb. 08	USD	FOMC Meeting Minutes
Feb. 09	GBP	Interest Rate Decision
	EUR	Interest Rate Decision
	USD	Initial Jobless Claims
	EUR	ECB Press Conference
Feb. 10	CNY	Chinese CPI (YoY)
	CAD	Trade Balance
	USD	Trade Balance

 

Rule:

The USD/JPY foreign currency exchange rate is the price of one U.S. dollar – the base currency – in terms of Japanese yen – the quote currency. For example, a bid/ask quote of 89.29/89.32 means that one U.S. dollar can be bought for 89.32 yen and one U.S. dollar can be sold at 89.29 yen.

If the U.S. dollar is expected to appreciate against the yen, then the above quote might rise to say, 89.73/89.76. The forex strategy in this case would be to buy USD/JPY. If, on the other hand, the U.S. dollar is expected to depreciate against the yen, then the above quote might fall to say, 88.68/88.71. The forex strategy in this case would be to sell USD/JPY.

In the USD/JPY trade, trying to pick tops or bottoms during that time would have been difficult. However, with the bull trend so dominant, the far easier and smarter trade was to look for technical opportunities to go with the fundamental theme and trade with the market trend rather than to trying to fade it.

Against the Japanese yen, whose central bank held rates steady at zero, the dollar appreciated 19% from its lowest to highest levels. USD/JPY was in a very strong uptrend throughout the year, but even so, there were plenty of retraces along the way. These pullbacks were perfect opportunities for traders to combine technicals with fundamentals to enter the trade at an opportune moment. 

Daily range average : 80-90 pips
Best time to trade: Asian Session (2400 GMT – 0900 GMT) 
Some factors affecting the USD/JPY rate: 

• The interest rate differential between the Bank of Japan(BoJ) and the Federal Reserve
• Japanese government intervention to maintain their currency sends USD/JPY lower

 

Analysis and Recommendation:

The USD/JPY ended the week at 76.61opening at 76.22

The markets went on a rollercoaster ride on Friday after the U.S. Labor Department reported that 243,000 jobs were added in January and the unemployment rate dipped to 8.3%.

The markets all week have been reacting only to news and economic reports. US jobs data and unemployment figures surprised the market this week, adding 243k jobs and unemployment dropping to 8.3%. Overall this was a strong week for the US and the greenback.

After reacting to the news and pushing the dollar up against all major currencies, the markets realized that this would reduce the need for Fed intervention, diminishing the chances of more QE or changes in monetary policy. Compounding this with more craziness is Greece, the USD gave back some of its gains.

Greece is still not resolved and the special meeting of the EU that was scheduled for Monday to review the Greek proposal has been cancelled.

There are several problems, which include Germany wanting to have more control over the Greek budget in the future, since it will be mostly German taxpayers who will be funding the bailout. Also the Greek politicians are not supportive of the addition austerity measures, facing elections in April; many political leaders are more concerned with re-election that demands from the EU and IMF.

The Greek Prime Minister said in a statement on Saturday, that the deal will be concluded by the end of the Sunday, satisfying politicians, creditors and the EU, ECB and IMF. The markets will await this new agreement.

The U.S. dollar was boosted on Friday, after stronger-than-forecast U.S. employment data dampened expectations that the Federal Reserve will implement fresh monetary easing measures to stimulate growth.

Also on Friday report showing a greater-than-expected expansion in the U.S. service sector in January also boosted the greenback.

On Thursday Fed Chairman Ben Bernanke said the economy has shown “signs of improvement” but warned that the outlook remained “uncertain”.

The dollar continued to strengthen against the yen

Watch carefully for BoJ intervention.

Strength:

1) US- Jan Payroll gains show big upside surprise of 243k, about 100k more than expected, unemployment rate falls to 8.3%

2)  US- ISM services index rises to best since Feb ’11

3)  US-ISM manufacturing up 1 pt but touch less than expected

4) US -Jan vehicle sales at 14.1mm is best since clunker month in Aug ’09 and the most since May ’08 before that

5) US – savings rate rises to 4% from 3.5%

6) US -Initial Jobless Claims fall 12k

7) Germany -unemployed fall again, rate at 6.7%

8 ) UK- manufacturing and services PMI figures both rise

9) Eurozone- manufacturing and services PMI in line with initial

10) Portuguese bond yields fall from highs, Italian yields lower too with Spain flat

11)China – manufacturing PMI stays above 50, Taiwan and South Korea rise but remain below 50

12) India – manufacturing and services PMI both jump

Weakness:

1) US- Jan Consumer Confidence falls almost 4 pts to 61.1, well below expectations of 68 as labor market answers soften and those that plan to buy a home falls to lowest since Aug and those that plan to buy a car down at lowest since Oct ’10

2) US -CS home price index falls to lowest since Feb ’03

3) US -MBA said refi’s fell 3.6% and purchase apps were down 1.7%

4) Canada – Jan jobs report disappoints

5) China – PMI services index falls to 52.9 from 56, the 2nd lowest since Feb ’11

6) Taiwan -economy in a recession after Q4 contraction q/o/q

7) Greek- debt discussions for another week are hours away from wrapping up, becoming a nightmare

8 ) Eurozone -Amount of LTRO funds from ECB continue to be redeposited with the ECB

 

Upcoming Sovereign Bond Sales Dates

Feb 07  09:00  Netherlands Eur 5.0bn Jul 2022 DSL

Feb 07  10:10  Greece  6M T-bill auction

Feb 07  10.30  UK  Auctions 1.75% 2017 conventional Gilt

Feb 07  15:30  UK  Details gilt auction on Feb 16

Feb 07  18:00  US  Auctions 3Y Notes

Feb 08  10:10  Sweden  Nominal bond auction

Feb 08  10:30  Germany  Eur 4.0bn Feb 2017 Bobl

Feb 08  10:30  Swiss  Bond auction

Feb 08  16:30  Italy   Details BOT auction on Feb 13

Feb 08  18:00  US  Auctions 10Y Notes

Feb 09  10:10  Sweden  Sek 0.75bn I/L bond auction

Feb 09  15:30  Sweden  Details I/L bond auction on Mar 23

Feb 09  16:00  US  Announces auctions of 30Y TIPS on Feb 16

Feb 09  16:30  Italy   Details BTP/CCTeu auction on Feb 14

Feb 09  18:00  Italy   Auctions 30Y Bonds

Feb 10  11:00  Belgium  OLO auction

GBP/USD Technical Analysis for Week of February 6, 2012

The GBP/USD pair rose again this previous week as the Pound continues to beat up on the Dollar. The 1.58 level has given way, and we are now pressing the 1.59 level. The UK is presently heavily exposed to the European Union, and as such we are a bit perplexed by the sudden surge in the Pound. The trend is still down though, and as a result – we are looking for a selling signal. The next couple of days will be very important in the future of this pair. We are willing to sell on exhaustive candles, and a failure to stay above the 1.5650 level. A breakdown below the 1.53 level has us selling aggressively. A break above the 1.62 level is what it will take for us to buy as the current levels are so tight for traders that are looking to be in the trade for more than a few days or even hours.

GBP/USD Fundamental Analysis for Week of February 6, 2012

Economic Events

Feb. 06	CAD	Ivey PMI
	NZD	Unemployment Rate
Feb. 07	AUD	Interest Rate Decision
	AUD	RBA Rate Statement
Feb. 08	USD	FOMC Meeting Minutes
Feb. 09	GBP	Interest Rate Decision
	EUR	Interest Rate Decision
	USD	Initial Jobless Claims
	EUR	ECB Press Conference
Feb. 10	CNY	Chinese CPI (YoY)
	CAD	Trade Balance
	USD	Trade Balance

Historical:

Highest: 1.681 USD on 17 Nov 2009.

Average: 1.5807 USD over this period.

Rule:

GBP/USD: While the ranges are wider (and so should stops be), the lines are rather distinctive, especially towards the borders of the long term wide range. This pair makes for good trades, with the new austerity program implemented in the UK, the GBP is moving more on Fundamentals now.

Characteristics

Average broker spread: 4-5 pips 
Daily range average: 150-200 pips 
Best time to trade: Euro Session (0700 GMT – 1700 GMT)
Some factors affecting the GBP/USD rate: 

• The interest rate differential between the Bank of England(BoE) and the Federal Reserve
• High yield and attractive growth in the UK drives GBP/USD higher

Trading the GBP/USD 

Trading Experience: Expert currency traders
Trading Style: Day trading and Swing trades 

How to trade? 

Applying Technical Analysis and/or Analyzing Fundamental News from the UK and US zone to make GBP/USD trading decisions. Watch out for false break outs. Surprising economic news releases can make the GBP/USD move a lot in one direction without much retracement. 

Analysis and Recommendation:

The GBP/USD closed the week 1.5814. The sterling picked up energy after positive economic data on manufacturing and services.

The markets went on a rollercoaster ride on Friday after the U.S. Labor Department reported that 243,000 jobs were added in January and the unemployment rate dipped to 8.3%.

The markets all week have been reacting only to news and economic reports. US jobs data and unemployment figures surprised the market this week, adding 243k jobs and unemployment dropping to 8.3%. Overall this was a strong week for the US and the greenback.

After reacting to the news and pushing the dollar up against all major currencies, the markets realized that this would reduce the need for Fed intervention, diminishing the chances of more QE or changes in monetary policy. Compounding this with more craziness is Greece, the USD gave back some of its gains.

Greece is still not resolved and the special meeting of the EU that was scheduled for Monday to review the Greek proposal has been cancelled.

There are several problems, which include Germany wanting to have more control over the Greek budget in the future, since it will be mostly German taxpayers who will be funding the bailout. Also the Greek politicians are not supportive of the addition austerity measures, facing elections in April; many political leaders are more concerned with re-election that demands from the EU and IMF.

The Greek Prime Minister said in a statement on Saturday, that the deal will be concluded by the end of the Sunday, satisfying politicians, creditors and the EU, ECB and IMF. The markets will await this new agreement.

The U.S. dollar was boosted on Friday, after stronger-than-forecast U.S. employment data dampened expectations that the Federal Reserve will implement fresh monetary easing measures to stimulate growth.

Also on Friday report showing a greater-than-expected expansion in the U.S. service sector in January also boosted the greenback.

On Thursday Fed Chairman Ben Bernanke said the economy has shown “signs of improvement” but warned that the outlook remained “uncertain”.

The GBP recovered against the USD and is trading close to last Thursday range. 

Strength:

1) US- Jan Payroll gains show big upside surprise of 243k, about 100k more than expected, unemployment rate falls to 8.3%

2)  US- ISM services index rises to best since Feb ’11

3)  US-ISM manufacturing up 1 pt but touch less than expected

4) US -Jan vehicle sales at 14.1mm is best since clunker month in Aug ’09 and the most since May ’08 before that

5) US – savings rate rises to 4% from 3.5%

6) US -Initial Jobless Claims fall 12k

7) Germany -unemployed fall again, rate at 6.7%

8 ) UK- manufacturing and services PMI figures both rise

9) Eurozone- manufacturing and services PMI in line with initial

10) Portuguese bond yields fall from highs, Italian yields lower too with Spain flat

11)China – manufacturing PMI stays above 50, Taiwan and South Korea rise but remain below 50

12) India – manufacturing and services PMI both jump

Weakness:

1) US- Jan Consumer Confidence falls almost 4 pts to 61.1, well below expectations of 68 as labor market answers soften and those that plan to buy a home falls to lowest since Aug and those that plan to buy a car down at lowest since Oct ’10

2) US -CS home price index falls to lowest since Feb ’03

3) US -MBA said refi’s fell 3.6% and purchase apps were down 1.7%

4) Canada – Jan jobs report disappoints

5) China – PMI services index falls to 52.9 from 56, the 2nd lowest since Feb ’11

6) Taiwan -economy in a recession after Q4 contraction q/o/q

7) Greek- debt discussions for another week are hours away from wrapping up, becoming a nightmare

8 )Eurozone -Amount of LTRO funds from ECB continue to be redeposited with the ECB

 

Feb 07  09:00  Netherlands Eur 5.0bn Jul 2022 DSL

Feb 07  10:10  Greece  6M T-bill auction

Feb 07  10.30  UK  Auctions 1.75% 2017 conventional Gilt

Feb 07  15:30  UK  Details gilt auction on Feb 16

Feb 07  18:00  US  Auctions 3Y Notes

Feb 08  10:10  Sweden  Nominal bond auction

Feb 08  10:30  Germany  Eur 4.0bn Feb 2017 Bobl

Feb 08  10:30  Swiss  Bond auction

Feb 08  16:30  Italy   Details BOT auction on Feb 13

Feb 08  18:00  US  Auctions 10Y Notes

Feb 09  10:10  Sweden  Sek 0.75bn I/L bond auction

Feb 09  15:30  Sweden  Details I/L bond auction on Mar 23

Feb 09  16:00  US  Announces auctions of 30Y TIPS on Feb 16

Feb 09  16:30  Italy   Details BTP/CCTeu auction on Feb 14

Feb 09  18:00  Italy   Auctions 30Y Bonds

Feb 10  11:00  Belgium  OLO auction

EUR/GBP Technical Analysis for Week of February 6, 2012

The EUR/GBP pair continued its consolidation just below the 0.84 level this past week, and the action still looks bearish. The 0.8280 level on the daily chart seems to be somewhat supportive, but the candle still shows bearishness anyway. The pair is at low levels, and this consolidation simply makes sense as the pair will need to catch its breath. After all, this pair is more accustomed to grinding, not falling rapidly.

However, we are still Euro bears, and will continue to be overall. The Pound is strong at the moment, and more importantly – not the Euro. Because of this, we will short this pair on a break below the 0.8280 level. We won’t consider longs until we close above the 0.85 handle.

EUR/GBP Fundamental Analysis for Week of February 6, 2012

Economic Events:

Feb. 06	CAD	Ivey PMI
	NZD	Unemployment Rate
Feb. 07	AUD	Interest Rate Decision
	AUD	RBA Rate Statement
Feb. 08	USD	FOMC Meeting Minutes
Feb. 09	GBP	Interest Rate Decision
	EUR	Interest Rate Decision
	USD	Initial Jobless Claims
	EUR	ECB Press Conference
Feb. 10	CNY	Chinese CPI (YoY)
	CAD	Trade Balance
	USD	Trade Balance

Historical:

Highest: 1.2336 EUR on 29 Jun 2010.

Average: 1.1548 EUR over this period.

Lowest: 1.0686 EUR on 13 Oct 2009.

Rule:

EUR/GBP: The cross tends to move in ranges, with relatively clear barriers. The narrower ranges made it somewhat harder, but it seems to return to wider ranges. The GBP is does not seem to move in response to the EUR as directly currently. The UK austerity program vs. The EU debt crisis seems to have them moving in opposing distances. They are developing new trading personalities and there is a good deal of profit to be made trading this pair. They can be volatile.

Characteristics
Average broker spread: 2-3 pips 
Daily range average : 25-50 pips 

What moves EUR/GBP?

• The interest rate differential between the European Bank(ECB) and the Bank of England(BoE)
• European and UK economic data
• Growth differentials between the Euro zone and UK

Trading the EUR/GBP 

Applying Technical Analysis and Analyzing Fundamental News from the Euro and UK zone. EUR/GBP is excellent for the beginning forex trader because it’s low volatility. 

 

Analysis and Recommendations

The EUR/GBP followed the trend this week closing at 0.8322 the euro fell to the 1.3050 range against the USD  and then recovered. In the UK there was positive information for the manufacturing and services area.

The markets all week have been reacting only to news and economic reports. US jobs data and unemployment figures surprised the market this week, adding 243k jobs and unemployment dropping to 8.3%. Overall this was a strong week for the US and the greenback.

After reacting to the news and pushing the dollar up against all major currencies, the markets realized that this would reduce the need for Fed intervention, diminishing the chances of more QE or changes in monetary policy. Compounding this with more craziness is Greece, the USD gave back some of its gains.

Greece is still not resolved and the special meeting of the EU that was scheduled for Monday to review the Greek proposal has been cancelled.

There are several problems, which include Germany wanting to have more control over the Greek budget in the future, since it will be mostly German taxpayers who will be funding the bailout. Also the Greek politicians are not supportive of the addition austerity measures, facing elections in April; many political leaders are more concerned with re-election that demands from the EU and IMF.

The Greek Prime Minister said in a statement on Saturday, that the deal will be concluded by the end of the Sunday, satisfying politicians, creditors and the EU, ECB and IMF. The markets will await this new agreement.

The U.S. dollar was boosted on Friday, after stronger-than-forecast U.S. employment data dampened expectations that the Federal Reserve will implement fresh monetary easing measures to stimulate growth.

Also on Friday report showing a greater-than-expected expansion in the U.S. service sector in January also boosted the greenback.

On Thursday Fed Chairman Ben Bernanke said the economy has shown “signs of improvement” but warned that the outlook remained “uncertain”.

Strength:

1) US- Jan Payroll gains show big upside surprise of 243k, about 100k more than expected, unemployment rate falls to 8.3%

2)  US- ISM services index rises to best since Feb ’11

3)  US-ISM manufacturing up 1 pt but touch less than expected

4) US -Jan vehicle sales at 14.1mm is best since clunker month in Aug ’09 and the most since May ’08 before that

5) US – savings rate rises to 4% from 3.5%

6) US -Initial Jobless Claims fall 12k

7) Germany -unemployed fall again, rate at 6.7%

8 ) UK- manufacturing and services PMI figures both rise

9) Eurozone- manufacturing and services PMI in line with initial

10) Portuguese bond yields fall from highs, Italian yields lower too with Spain flat

11)China – manufacturing PMI stays above 50, Taiwan and South Korea rise but remain below 50

12) India – manufacturing and services PMI both jump

Weakness:

1) US- Jan Consumer Confidence falls almost 4 pts to 61.1, well below expectations of 68 as labor market answers soften and those that plan to buy a home falls to lowest since Aug and those that plan to buy a car down at lowest since Oct ’10

2) US -CS home price index falls to lowest since Feb ’03

3) US -MBA said refi’s fell 3.6% and purchase apps were down 1.7%

4) Canada – Jan jobs report disappoints

5) China – PMI services index falls to 52.9 from 56, the 2nd lowest since Feb ’11

6) Taiwan -economy in a recession after Q4 contraction q/o/q

7) Greek- debt discussions for another week are hours away from wrapping up, becoming a nightmare

8 )Eurozone -Amount of LTRO funds from ECB continue to be redeposited with the ECB

 

Feb 07  09:00  Netherlands Eur 5.0bn Jul 2022 DSL

Feb 07  10:10  Greece  6M T-bill auction

Feb 07  10.30  UK  Auctions 1.75% 2017 conventional Gilt

Feb 07  15:30  UK  Details gilt auction on Feb 16

Feb 07  18:00  US  Auctions 3Y Notes

Feb 08  10:10  Sweden  Nominal bond auction

Feb 08  10:30  Germany  Eur 4.0bn Feb 2017 Bobl

Feb 08  10:30  Swiss  Bond auction

Feb 08  16:30  Italy   Details BOT auction on Feb 13

Feb 08  18:00  US  Auctions 10Y Notes

Feb 09  10:10  Sweden  Sek 0.75bn I/L bond auction

Feb 09  15:30  Sweden  Details I/L bond auction on Mar 23

Feb 09  16:00  US  Announces auctions of 30Y TIPS on Feb 16

Feb 09  16:30  Italy   Details BTP/CCTeu auction on Feb 14

Feb 09  18:00  Italy   Auctions 30Y Bonds

Feb 10  11:00  Belgium  OLO auction

USD/CHF Technical Analysis for Week of February 6, 2012

USD/CHF had a slightly positive week for the last five sessions, but the candle shape is a shooting star as the bottom of the recent fall. The 0.91 to 0.90 levels are supportive, and the Swiss National Bank isn’t going to let the Franc appreciate too much. However, the central bank will worry about the EUR/CHF pair, and not this one as much. None the less, the market looks like it has a lot of support all the way down to 0.85 or so, and because of this, we are looking for supportive candles just below where we are. We aren’t fans of buying the Fran in general, and as a result are waiting for a decent buy signal. So far, we haven’t gotten it.

USD/CHF Fundamental Analysis for Week of February 6, 2012

Economic Events: (GMT)

Feb. 06	CAD	Ivey PMI
	NZD	Unemployment Rate
Feb. 07	AUD	Interest Rate Decision
	AUD	RBA Rate Statement
Feb. 08	USD	FOMC Meeting Minutes
Feb. 09	GBP	Interest Rate Decision
	EUR	Interest Rate Decision
	USD	Initial Jobless Claims
	EUR	ECB Press Conference
Feb. 10	CNY	Chinese CPI (YoY)
	CAD	Trade Balance
	USD	Trade Balance

Historical

Highest: 1.1664 CHF on 07 Jun 2010.

Average: 0.9699 CHF over this period.

Lowest: 0.7224 CHF on 09 Aug 2011.

USD/CHF: The pair tends to break to an all-time low, then range back to the previous low. The ranges are very distinct. A break to the upside will likely meet another previous low. Pair are reliable.

Characteristics

Average broker spread: 4-5 pips 
Daily range average: 120-135 pips 
Best time to trade: Euro Session (0700 GMT – 1700 GMT) 
Factors affecting the USD/CHF rate: 

• Global stability and global recovery will send USD/CHF higher
• USD/CHF rallies on geopolitical instability

Trading the USD/CHF 

Trading Experience: Moderate and Advanced currency traders 
Trading Style: Day trading and Swing trades 

How to trade? 

1) Applying Technical Analysis Analyzing Fundamental News from the CHF and US zone to make USD/CHF trading decisions. 

2) Since the USD/CHF pair tends to be negatively correlated to the EUR/USD, it is always a good idea to compare both EUR/USD and USD/CHF charts in order to predict future moves, if EUR/USD breaks above an important resistance level and USD/CHF didn’t break support level yet, the USD/CHF is very likely to break below support level. This also illustrates how EUR/USD tends to lead the move ahead of USD/CHF.

 

Analysis and Recommendations:

 

USD/CHF closed the week at .9181

The Swiss National Bank stated that the Swiss Central bank will do its utmost to defend the euro/Swiss franc lower, at 1.20 exchange rates above the decision not to will change. The Swissie was down on poor economic news while the USD soared earlier on Friday on exception economic data, after initial market reaction, the greenback settled down when investors realized that this might mean little or no Fed intervention.

Official data showed on Thursday that the trade balance narrowed more-than-expected in December to CHF2.07 billion from CHF2.95 billion the previous month.

The data came after a report showing that Swiss retail sales rose far less-than-expected in December, adding 0.6% after a 1.8% rise the previous month and disappointing expectation for a 1.6% increase.

Manufacturing activity in Switzerland unexpectedly deteriorated in January, contracting for the fourth consecutive month.

 

Strength:

1) US- Jan Payroll gains show big upside surprise of 243k, about 100k more than expected, unemployment rate falls to 8.3%

2)  US- ISM services index rises to best since Feb ’11

3)  US-ISM manufacturing up 1 pt but touch less than expected

4) US -Jan vehicle sales at 14.1mm is best since clunker month in Aug ’09 and the most since May ’08 before that

5) US – savings rate rises to 4% from 3.5%

6) US -Initial Jobless Claims fall 12k

7) Germany -unemployed fall again, rate at 6.7%

8 ) UK- manufacturing and services PMI figures both rise

9) Eurozone- manufacturing and services PMI in line with initial

10) Portuguese bond yields fall from highs, Italian yields lower too with Spain flat

11)China – manufacturing PMI stays above 50, Taiwan and South Korea rise but remain below 50

12) India – manufacturing and services PMI both jump

Weakness:

1) US- Jan Consumer Confidence falls almost 4 pts to 61.1, well below expectations of 68 as labor market answers soften and those that plan to buy a home falls to lowest since Aug and those that plan to buy a car down at lowest since Oct ’10

2) US -CS home price index falls to lowest since Feb ’03

3) US -MBA said refi’s fell 3.6% and purchase apps were down 1.7%

4) Canada – Jan jobs report disappoints

5) China – PMI services index falls to 52.9 from 56, the 2nd lowest since Feb ’11

6) Taiwan -economy in a recession after Q4 contraction q/o/q

7) Greek- debt discussions for another week are hours away from wrapping up, becoming a nightmare

8 ) Eurozone -Amount of LTRO funds from ECB continue to be redeposit with the ECB

 Government Bond Auctions

Feb 07  09:00  Netherlands Eur 5.0bn Jul 2022 DSL

Feb 07  10:10  Greece  6M T-bill auction

Feb 07  10.30  UK  Auctions 1.75% 2017 conventional Gilt

Feb 07  15:30  UK  Details gilt auction on Feb 16

Feb 07  18:00  US  Auctions 3Y Notes

Feb 08  10:10  Sweden  Nominal bond auction

Feb 08  10:30  Germany  Eur 4.0bn Feb 2017 Bobl

Feb 08  10:30  Swiss  Bond auction

Feb 08  16:30  Italy   Details BOT auction on Feb 13

Feb 08  18:00  US  Auctions 10Y Notes

Feb 09  10:10  Sweden  Sek 0.75bn I/L bond auction

Feb 09  15:30  Sweden  Details I/L bond auction on Mar 23

Feb 09  16:00  US  Announces auctions of 30Y TIPS on Feb 16

Feb 09  16:30  Italy   Details BTP/CCTeu auction on Feb 14

Feb 09  18:00  Italy   Auctions 30Y Bonds

Feb 10  11:00  Belgium  OLO auction

EUR/CHF Technical Analysis for Week of February 6, 2012

The EUR/CHF pair had a bullish week after falling much of the last month and a half. The 1.20 level was close at one point and this more than likely got a lot of the weaker shorts out of the market. The “risk on” attitude of the markets started this rally after the US Non-Farm Payroll number certainly didn’t hurt either.

It should be noted that the weekly candle is a hammer, (albeit a small one) and this could signal a rise in the rate. The breaking of the top of this hammer could be a good enough sign to go long if you are patient enough to let the SNB act as your backstop below the 1.20 level. 1.25 should be the very top if we get the move, and 1.24 is the start of that resistance area. We are not selling for obvious reasons.

EUR/CHF Fundamental Analysis for Week of February 6, 2012

Economic Event: (GMT)

Feb. 06	CAD	Ivey PMI
	NZD	Unemployment Rate
Feb. 07	AUD	Interest Rate Decision
	AUD	RBA Rate Statement
Feb. 08	USD	FOMC Meeting Minutes
Feb. 09	GBP	Interest Rate Decision
	EUR	Interest Rate Decision
	USD	Initial Jobless Claims
	EUR	ECB Press Conference
Feb. 10	CNY	Chinese CPI (YoY)
	CAD	Trade Balance
	USD	Trade Balance

Historical

Highest: 1.5193 CHF on 10 Oct 2009.

Average: 1.3271 CHF over this period.

Lowest: 1.026 CHF on 10 Aug 2011.

Rules:

Characteristics

Average broker spread: 3-5 pips 
Daily range average: 35-48 pips 

What moves:

• The interest rate differential between the European Bank(ECB) and the Swiss National Bank(SNB)
• Swiss and Euro zone fundamentals

Trading the EUR/CHF 

News from the Euro and Swiss zone. EUR/CHF is frequently chosen for carry trades which involves going long a high-yielding currency (EURO – 3.50%) against a low-yielding one (CHF – 1.50%). Traders earn daily interest fees when holding this pair long (rollover fees). 

 

Analysis and Recommendations:

The EUR/CHF closed the week 1.2082 slightly strong.   The Swiss National Bank reiterated all week that the Swiss Central bank will do all within its power to support the EUR/CHF at 1.20.

Official data showed on Thursday that the trade balance narrowed more-than-expected in December to CHF2.07 billion from CHF2.95 billion the previous month.

The data came after a report showing that Swiss retail sales rose far less-than-expected in December, adding 0.6% after a 1.8% rise the previous month and disappointing expectation for a 1.6% increase.

Manufacturing activity in Switzerland unexpectedly deteriorated in January, contracting for the fourth consecutive month. 

The euro went along on the rollercoaster ride on strong US employment data, the USD surged pushing all of its trading partners down, until the markets realized that the strong data meant little or no Fed intervention. The euro was able to regain some ground. 

Strength:

1) US- Jan Payroll gains show big upside surprise of 243k, about 100k more than expected, unemployment rate falls to 8.3%

2)  US- ISM services index rises to best since Feb ’11

3)  US-ISM manufacturing up 1 pt but touch less than expected

4) US -Jan vehicle sales at 14.1mm is best since clunker month in Aug ’09 and the most since May ’08 before that

5) US – savings rate rises to 4% from 3.5%

6) US -Initial Jobless Claims fall 12k

7) Germany -unemployed fall again, rate at 6.7%

8 ) UK- manufacturing and services PMI figures both rise

9) Eurozone- manufacturing and services PMI in line with initial

10) Portuguese bond yields fall from highs, Italian yields lower too with Spain flat

11)China – manufacturing PMI stays above 50, Taiwan and South Korea rise but remain below 50

12) India – manufacturing and services PMI both jump

Weakness:

1) US- Jan Consumer Confidence falls almost 4 pts to 61.1, well below expectations of 68 as labor market answers soften and those that plan to buy a home falls to lowest since Aug and those that plan to buy a car down at lowest since Oct ’10

2) US -CS home price index falls to lowest since Feb ’03

3) US -MBA said refi’s fell 3.6% and purchase apps were down 1.7%

4) Canada – Jan jobs report disappoints

5) China – PMI services index falls to 52.9 from 56, the 2nd lowest since Feb ’11

6) Taiwan -economy in a recession after Q4 contraction q/o/q

7) Greek- debt discussions for another week are hours away from wrapping up, becoming a nightmare

8 )Eurozone -Amount of LTRO funds from ECB continue to be redeposited with the ECB

 

Feb 07  09:00  Netherlands Eur 5.0bn Jul 2022 DSL

Feb 07  10:10  Greece  6M T-bill auction

Feb 07  10.30  UK  Auctions 1.75% 2017 conventional Gilt

Feb 07  15:30  UK  Details gilt auction on Feb 16

Feb 07  18:00  US  Auctions 3Y Notes

Feb 08  10:10  Sweden  Nominal bond auction

Feb 08  10:30  Germany  Eur 4.0bn Feb 2017 Bobl

Feb 08  10:30  Swiss  Bond auction

Feb 08  16:30  Italy   Details BOT auction on Feb 13

Feb 08  18:00  US  Auctions 10Y Notes

Feb 09  10:10  Sweden  Sek 0.75bn I/L bond auction

Feb 09  15:30  Sweden  Details I/L bond auction on Mar 23

Feb 09  16:00  US  Announces auctions of 30Y TIPS on Feb 16

Feb 09  16:30  Italy   Details BTP/CCTeu auction on Feb 14

Feb 09  18:00  Italy   Auctions 30Y Bonds

Feb 10  11:00  Belgium  OLO auction

AUD/USD Technical Analysis for Week of February 6, 2012

The AUD/USD pair rose again this week after first pulling back a bit. The pair currently finds itself at the 1.0750 level – an area that has been significant several times over. The level is a big barrier that will have to be overcome in order to continue the bullish move.

However, with the Federal Reserve promising low rates until at least the end of 2014, this isn’t the type of environment that we think the Aussie is going to struggle in. The pair certainly looks like it is ready for a pullback, but this should only attract more investors into the Aussie, and by extension out of the Dollar. The yield alone will get some investors as the bond markets are offering so little these days.

The 1.04 level below certainly looks supportive, and it was the site of our triangle breakout that caused us at FXEmpire to call for a 1.12 rate in this pair eventually. The move won’t necessarily be immediate, but to think that the rate would be 1.12 sometime between now and the end of 2014 isn’t exactly hard to believe either!

The pair will be bought as long as we can stay above the 1.04 level, and we expect to see most of the “handles” below here offering support in the meantime. The gold market did selloff on Friday, but the historical correlation of gold and the Aussie rising at the same time didn’t come into play. This is because the “safety” part of the gold trade sold off, not the “anti-fiat currency” part of it. As long as the central banks are easing around the world, the gold markets will in general be strong.

The Aussie is in fact strong against many other currencies than just the Dollar. This is truly a pro-Aussie market rather than an anti-Dollar one. Because of this, we like owning the Aussie for the long run, and will continue to buy it against the Dollar, as well as many other currencies around the world as cheap money becomes the norm everywhere.

AUD/USD Fundamental Analysis for Week of February 6, 2012

Economic Events: (GMT)

Please review the daily forecast for explainations and expected results

 

Feb. 06	CAD	Ivey PMI
	NZD	Unemployment Rate
Feb. 07	AUD	Interest Rate Decision
	AUD	RBA Rate Statement
Feb. 08	USD	FOMC Meeting Minutes
Feb. 09	GBP	Interest Rate Decision
	EUR	Interest Rate Decision
	USD	Initial Jobless Claims
	EUR	ECB Press Conference
Feb. 10	CNY	Chinese CPI (YoY)
	CAD	Trade Balance
	USD	Trade Balance

Rule:

The Australian dollar still isn’t in its good old days, but the performance is definitely improving. Resistance lines tend to work in a smoother manner than support lines, but they also work well. The pair move well together, not much volatility, but easy to chart and easy to trade with low risk factors

 

Weekly Analysis and Recommendation:

The AUD/USD ended the week at 1.0770

The markets went on a rollercoaster ride on Friday after the U.S. Labor Department reported that 243,000 jobs were added in January and the unemployment rate dipped to 8.3%.

The markets all week have been reacting only to news and economic reports. US jobs data and unemployment figures surprised the market this week, adding 243k jobs and unemployment dropping to 8.3%. Overall this was a strong week for the US and the greenback.

After reacting to the news and pushing the dollar up against all major currencies, the markets realized that this would reduce the need for Fed intervention, diminishing the chances of more QE or changes in monetary policy. Compounding this with more craziness is Greece, the USD gave back some of its gains.

Greece is still not resolved and the special meeting of the EU that was scheduled for Monday to review the Greek proposal has been cancelled.

There are several problems, which include Germany wanting to have more control over the Greek budget in the future, since it will be mostly German taxpayers who will be funding the bailout. Also the Greek politicians are not supportive of the addition austerity measures, facing elections in April; many political leaders are more concerned with re-election that demands from the EU and IMF.

The Greek Prime Minister said in a statement on Saturday, that the deal will be concluded by the end of the Sunday, satisfying politicians, creditors and the EU, ECB and IMF. The markets will await this new agreement.

The U.S. dollar was boosted on Friday, after stronger-than-forecast U.S. employment data dampened expectations that the Federal Reserve will implement fresh monetary easing measures to stimulate growth.

Also on Friday report showing a greater-than-expected expansion in the U.S. service sector in January also boosted the greenback.

On Thursday Fed Chairman Ben Bernanke said the economy has shown “signs of improvement” but warned that the outlook remained “uncertain”.

Watch for RBA news this week. Last week Prime Minister Gillard stated that the AUD was strong as well as the economy and that they were keep abreast of the European situation. She also stated that the Aussie was becoming a safe haven currency.

Strength:

1) US- Jan Payroll gains show big upside surprise of 243k, about 100k more than expected, unemployment rate falls to 8.3%

2)  US- ISM services index rises to best since Feb ’11

3)  US-ISM manufacturing up 1 pt but touch less than expected

4) US -Jan vehicle sales at 14.1mm is best since clunker month in Aug ’09 and the most since May ’08 before that

5) US – savings rate rises to 4% from 3.5%

6) US -Initial Jobless Claims fall 12k

7) Germany -unemployed fall again, rate at 6.7%

8 ) UK- manufacturing and services PMI figures both rise

9) Eurozone- manufacturing and services PMI in line with initial

10) Portuguese bond yields fall from highs, Italian yields lower too with Spain flat

11)China – manufacturing PMI stays above 50, Taiwan and South Korea rise but remain below 50

12) India – manufacturing and services PMI both jump

Weakness:

1) US- Jan Consumer Confidence falls almost 4 pts to 61.1, well below expectations of 68 as labor market answers soften and those that plan to buy a home falls to lowest since Aug and those that plan to buy a car down at lowest since Oct ’10

2) US -CS home price index falls to lowest since Feb ’03

3) US -MBA said refi’s fell 3.6% and purchase apps were down 1.7%

4) Canada – Jan jobs report disappoints

5) China – PMI services index falls to 52.9 from 56, the 2nd lowest since Feb ’11

6) Taiwan -economy in a recession after Q4 contraction q/o/q

7) Greek- debt discussions for another week are hours away from wrapping up, becoming a nightmare

8 ) Eurozone -Amount of LTRO funds from ECB continue to be redeposited with the ECB

 

Feb 07  09:00  Netherlands Eur 5.0bn Jul 2022 DSL

Feb 07  10:10  Greece  6M T-bill auction

Feb 07  10.30  UK  Auctions 1.75% 2017 conventional Gilt

Feb 07  15:30  UK  Details gilt auction on Feb 16

Feb 07  18:00  US  Auctions 3Y Notes

Feb 08  10:10  Sweden  Nominal bond auction

Feb 08  10:30  Germany  Eur 4.0bn Feb 2017 Bobl

Feb 08  10:30  Swiss  Bond auction

Feb 08  16:30  Italy   Details BOT auction on Feb 13

Feb 08  18:00  US  Auctions 10Y Notes

Feb 09  10:10  Sweden  Sek 0.75bn I/L bond auction

Feb 09  15:30  Sweden  Details I/L bond auction on Mar 23

Feb 09  16:00  US  Announces auctions of 30Y TIPS on Feb 16

Feb 09  16:30  Italy   Details BTP/CCTeu auction on Feb 14

Feb 09  18:00  Italy   Auctions 30Y Bonds

Feb 10  11:00  Belgium  OLO auction

USD/CAD Technical Analysis for Week of February 6, 2012

The USD/CAD pair fell hard on Friday and pushed the weekly close below the parity level that the market has been consolidating in. However, there is significant support in the 0.99 area, and this leads us to believe that the trading going forward will be choppy. Because of this, we are expecting a bounce, or at the very least a lot of headaches for traders. We are currently flat of this market until we get clear of the 0.9750 support level. In the mean time, there are many other set ups out there that don’t promise so much choppiness.

USD/CAD Fundamental Analysis for Week of February 6, 2012

Economic Events

Feb. 06	CAD	Ivey PMI
	NZD	Unemployment Rate
Feb. 07	AUD	Interest Rate Decision
	AUD	RBA Rate Statement
Feb. 08	USD	FOMC Meeting Minutes
Feb. 09	GBP	Interest Rate Decision
	EUR	Interest Rate Decision
	USD	Initial Jobless Claims
	EUR	ECB Press Conference
Feb. 10	CNY	Chinese CPI (YoY)
	CAD	Trade Balance
	USD	Trade Balance

Historical:

Highest: 1.0842 CAD on 01 Nov 2009.

Average: 1.0147 CAD over this period.

Lowest: 0.9435 CAD on 26 Jul 2011.

Rule:

The Canadian Dollar moves in reaction to the US Dollar. Movements are small and easy to track and trade. The Canadian Dollar also responds to economic reports within Canada. It has little action against foreign currencies except during major moves or crisis.

The USD/CAD is the single biggest beneficiary of rising oil prices. Canada which is already the biggest exporter of oil to the US will experience a boost to its economy when oil price continue to increase. Therefore, if oil rises the Canadian dollar is likely to follow. Over the past years, the correlation between the Canadian dollar and oil prices has been approximately 81%. 

Trading Ideas 

1) if you believe the price of oil will keep rising, it might be a good strategy to buy the Canadian dollar because it’s 81% positive correlation to oil over the past years. 

2) Since the USD/CAD pair tends to be highly correlated to oil, it might be a good idea to compare both Canadian dollar and oil charts in order to predict future moves, if for example oil breaks above an important resistance level and USD/CAD didn’t break resistance level yet, the USD/CAD is very likely to break above also. This illustrates how oil tends to lead the move ahead of USD/CAD. 

 

Analysis and Recommendation:

The USD/CAD closed at 0.9935 after surging to 1.0028 after US employment news. 

The markets went on a rollercoaster ride on Friday after the U.S. Labor Department reported that 243,000 jobs were added in January and the unemployment rate dipped to 8.3%.

The markets all week have been reacting only to news and economic reports. US jobs data and unemployment figures surprised the market this week, adding 243k jobs and unemployment dropping to 8.3%. Overall this was a strong week for the US and the greenback.

After reacting to the news and pushing the dollar up against all major currencies, the markets realized that this would reduce the need for Fed intervention, diminishing the chances of more QE or changes in monetary policy. Compounding this with more craziness is Greece, the USD gave back some of its gains.

Greece is still not resolved and the special meeting of the EU that was scheduled for Monday to review the Greek proposal has been cancelled.

There are several problems, which include Germany wanting to have more control over the Greek budget in the future, since it will be mostly German taxpayers who will be funding the bailout. Also the Greek politicians are not supportive of the addition austerity measures, facing elections in April; many political leaders are more concerned with re-election that demands from the EU and IMF.

The Greek Prime Minister said in a statement on Saturday, that the deal will be concluded by the end of the Sunday, satisfying politicians, creditors and the EU, ECB and IMF. The markets will await this new agreement.

The U.S. dollar was boosted on Friday, after stronger-than-forecast U.S. employment data dampened expectations that the Federal Reserve will implement fresh monetary easing measures to stimulate growth.

Also on Friday report showing a greater-than-expected expansion in the U.S. service sector in January also boosted the greenback.

On Thursday Fed Chairman Ben Bernanke said the economy has shown “signs of improvement” but warned that the outlook remained “uncertain”.

 Strength:

1) US- Jan Payroll gains show big upside surprise of 243k, about 100k more than expected, unemployment rate falls to 8.3%

2)  US- ISM services index rises to best since Feb ’11

3)  US-ISM manufacturing up 1 pt but touch less than expected

4) US -Jan vehicle sales at 14.1mm is best since clunker month in Aug ’09 and the most since May ’08 before that

5) US – savings rate rises to 4% from 3.5%

6) US -Initial Jobless Claims fall 12k

7) Germany -unemployed fall again, rate at 6.7%

8 ) UK- manufacturing and services PMI figures both rise

9) Eurozone- manufacturing and services PMI in line with initial

10) Portuguese bond yields fall from highs, Italian yields lower too with Spain flat

11)China – manufacturing PMI stays above 50, Taiwan and South Korea rise but remain below 50

12) India – manufacturing and services PMI both jump