Forex Daily Outlook – October 28th 2009

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Risk aversion continues to dominate the markets, and the US dollar enjoys it. Today’s highlights are Durable Goods Orders, New Home Sales and an interesting rate decision in New Zealand. Let’s see what’s on the menu today:

Australian CPI rose by 1% in the previous quarter, exceeding expectations of a 0.9% rise. Trimmed Mean CPI (or Core CPI if you wish), rose by 0.8%, as expected. In speech in Sydney, RBA Assistant governor Malcolm Edey said that the worst of the crisis is behind us – nothing new.

AUD/USD now trades at 0.9104, just above the 0.9090 resistance line. For more on the Aussie, read the AUD/USD Forecast.

In New Zealand, the NBNZ Business Confidence fell from 49.1 to 48.2. This important indicator hurt the kiwi, that fell further more below 0.74.

A rate decision awaits kiwi traders on the other side of the day. Alan Bollard’s RBNZ is officially expected to leave the interest rates unchanged at 2.5%. Following Australia’s rate hike, I wrote about the next country to raise the rates – New Zealand was the first bet.

Also when looking at market movements last week, it sees that NZD/USD is expecting a rate hike. Today at 20:00 GMT, we’ll if Bollard indeed makes a move with the Official Cash Rate. Also note the accompanying RBNZ Rate Statement. Trade Balance closes the day in New Zealand.

German Import Prices are due to drop by 0.7%. EUR/USD panicked yesterday on bad consumer confidence and fell below the support line. It’s still there. Throughout the day in Germany, Prelim CPI is released, and it’s expected to rise by 0.1%. For more on the Euro, read the EUR/USD Forecast.

In the US, Durable Goods Orders are expected to recover from last month’s fall, and rise by 1.2%. Also Core Durable Goods Orders, no less important, are expected to rise by 0.6%. Will these figures disappoint like yesterday’s consumer confidence?

Later in the US, New Home Sales are predicted to edge up from 429K to to 443K. Looking at the Existing Home Sales release from last week and house prices reported yesterday, there’s room for optimism regarding the American housing sector.

In Canada, BOC’s Mark Carney will continue testifying before parliament, together with Paul Jenkins. After breaking the 1.0625 resistance line, it turned into a support line for USD/CAD.

For more on the loonie, read the USD/CAD Forecast.

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About Author

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.

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