Forex Daily Outlook – October 23rd 2009

After a day of range trading, there are many indicators today, especially for EUR/USD and GBP/USD traders. British GDP, German Ifo Business Climate and a speech by Ben Bernanke are the highlights of today. Let’s review the events.

My post about EUR/USD and GBP/USD running out of fuel proved correct. Both pairs stalled yesterday, with EUR/USD dropping under 1.50, making me convinced that the break was unconvincing…

Australian Import Prices dropped by 3%, more than expected. This didn’t seem to hurt the Aussie too bad. AUD/USD trades now at 0.9272. For more on the Australian dollar, read the AUD/USD Forecast.

French Consumer Spending is predicted to rise by 0.3%, after a 1% drop last time. Soon afterwards, purchasing managers’ indexes are released. Flash Manufacturing PMI and Flash Services PMI are first released in France, then in Germany and finally in all of Europe. All in the numbers are expected to be above 50, indicating expectations for economic expansion.

More details about the European PMI are in the EUR/USD Forecast.

There’s another major release in Europe: German Ifo Business Climate, the highly regarded survey, is expected to advance again, this time to 92.1 points. The last release in Europe is the Industrial New Orders figure, which is expected to rise by 1.2%, less than last month’s 2.6% rise.

In Britain, Prelim GDP is expecting the Pound. Updated estimates from economists are talking about a 0.2% growth rate in the third quarter, ending a year of recession. As mentioned in the GBP/USD Forecast, the independent (yet unofficial) NIESR GDP estimate showed no growth in the third quarter. This is major release for the Pound.

Also in Britain, BBA Mortgage Approvals are predicted to rise from 38.1 to 39.7K, continuing to show recovery in the British housing sector.

Moving to the US, Ben Bernanke will speak today in a conference. He usually has the ability to move the markets.

Existing Home Sales are expected to rise from 5.1 to 5.37 million, showing more strength fro the American housing sector. Building Permits have disappointed earlier this week.

That’s it for today. Happy forex trading!