Home Forex Daily Analysis – January 29th 2009
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Forex Daily Analysis – January 29th 2009

There’s no anti climax after yesterday’s FOMC statement. Lots of economic indicators are due today across the globe, including Britain’s monthly  Nationwide HPI,  Core Durable Goods Orders  and  New Home Sales in the US among others.

FOMC Statement Insight

The Federal Reserve left interest rates at 0.25% as expected, but managed to move the markets. They said that the situation is very bad, but hinted that recovery could likely happen in the second half of 2009.

They surprised the markets by not choosing to print more dollars, and not buying too many treasuries. This sent the dollar up against all the currencies.

Toxic Assets plan – Ben Bernanke’s Fed will buy bad loans from banks in order to free them from these heavy weights, and to encourage them to lend cheaper money to people and businesses.

In addition, the Congress approved President Obama’s stimulus package – first hurdle is behind him. Now it’s up to the Senate, where it’s expected to pass as well.

Forex Indicators for today

The day began early with Japanese yearly  Retail Sales that dropped by 2.7%, much worse than expected. It wasn’t felt on USD/JPY that now trades at 89.90.

At 7:00 GMT, the monthly  Nationwide HPI was  published in Britain. It fell by only 1.3%. This is a very important economic indicator for the pound. Will this help the pound in its recovery course? GBP/USD now trades at 1.4091, not recovering from the FOMC statement, and even dropping more after the  Nationwide HPI release.

Later in Europe, the  German Unemployment Change will impact the Euro. 32K is predicted. EUR/USD is now at 1.3108. More from Europe: yearly  M3 Money Supply, Private Loans and  Consumer Confidence.

In Canada,  RMPI and  IPPI are expected to drop.

At 13:30 GMT, the party begins: monthly  Core Durable Goods Orders will be published in the US. It is expected to drop by 2.6%. Also the non-Core  Durable Goods Orders is fore casted to fall – but “only” by 1.9%.

At the same time in the US, the weekly  Unemployment Claims are released. They have worsened in the past weeks, and the forecast is optimistic – 580K.

And this isn’t everything:  New Home Sales are very important in the US: they are predicted to stand at 395,000, lower than last month’s 407K.

New Zealand, which was hurt by a dramatic rate cut and a bad trade balance, could break a support line with the  Building Consents due at 21:45 GMT. Here is more technical analysis for NZD/USD.

Happy Forex Trading!

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.