{"id":5616,"date":"2010-01-04T08:17:46","date_gmt":"2010-01-04T13:17:46","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=5616"},"modified":"2010-01-04T08:17:46","modified_gmt":"2010-01-04T13:17:46","slug":"forex-weekly-market-review-january-4-2010","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/01\/04\/forex-weekly-market-review-january-4-2010\/","title":{"rendered":"Forex Weekly Market Review January 4, 2010"},"content":{"rendered":"
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The final week of\u00a02009 lacked direction as traders exited positions prior to Christmas, causing low volume across the board.\u00a0 The dollar index closed unchanged while the S&P 500 index dropped by 1%, despite better than expected Jobless Claims data.<\/p>\n

The week began slowly with analyst dissecting information out of China.\u00a0 \u00a0Chinese Premier Wen Jiabao warned of growing inflation expectations in a rare domestic media interview, expressing his concerns about the nation\u2019s fast-rising real-estate prices and acknowledging that Beijing may be paying a price for its aggressive response to the global financial crisis.\u00a0 Speaking to the state-run Xinhua news agency on Sunday, Mr. Wen also flatly rejected foreign criticism of China\u2019s exchange-rate policy, saying that stability in the yuan\u2019s value helps the global economy and that China won\u2019t bow to pressure to let it appreciate. \u201cKeeping the yuan\u2019s value basically steady is our contribution to the international community at a time when the world\u2019s major currencies have been devalued,\u201d he said.<\/p>\n

On Tuesday, market participants were required to absorb data on U.S. housing prices.\u00a0 U.S. home prices decreased at a slower annual rate in October, according to the S&P Case-Shiller home-price indexes, but prices were flat compared with September.\u00a0 The indexes showed that prices in 10 major metropolitan areas fell 6.4% in October from a year earlier, while in 20 major metropolitan areas, home prices dropped 7.3% on the year. Both indexes were flat in October compared with the previous month.\u00a0 David M. Blitzer, chairman of S&P\u2019s index committee, said the data, best described as flat overall, will likely \u201cspark worries that home prices are about to take a second dip\u201d as they come after solid improvement.<\/p>\n

All 20 major metropolitan areas again posted declines from a year earlier, the 19th time in a row. Las Vegas continued relative weakness, remaining the one market that had not seen a glimmer of hope throughout 2009. Prices have declined there for already 38 consecutive months.<\/p>\n

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On Wednesday the market bounced due to positive manufacturing news from the US.\u00a0 Companies in the U.S. expanded in December at the fastest pace in almost four years, signaling the economic recovery is gaining speed heading into 2010.\u00a0 The Institute for Supply Management Chicago Inc. said today its business barometer rose to 60, exceeding economist\u2019s expectations and reaching the highest level since January 2006. Readings above 50 signal expansion. Stimulus programs and discounting have propelled a rebound in global sales that is reducing stockpiles, which may spur manufacturers to further increase production in coming months.<\/p>\n

On Thursday the Labor Department reported that the number of people filing new claims for unemployment benefits in the U.S. fell to its lowest level in nearly 18 months, a sign the labor market may be turning a corner.\u00a0 Initial claims for unemployment benefits fell by 22,000 to a seasonally adjusted 432,000 in the week ended Dec. 26, the lowest level since July 19, 2008. The four-week average of new claims, which smoothes volatility in the data, dropped by 5,500 to 460,250, its 17th consecutive drop. The Labor Department said in its weekly report, released Thursday, that 4.98 million people had been collecting jobless benefits for more than a week in the week ended Dec. 19, a decline of 57,000.\u00a0 The unemployment rate for workers with unemployment insurance for the week ending Dec. 19 remained unchanged at 3.8%.<\/p>\n

Forex<\/strong><\/p>\n

On the Forex market the sterling bounced back strongly during the week, after Thursday\u2019s mixed session helped to push the GBP higher. Furthermore, to date there are talks of M&A related demand, which is helping to push the Sterling higher. The sterling rallied back to its 20 day moving average which is now at $1.6180, and could provide strong resistance for Cable.\u00a0 Earlier in the week, Sterling tested $1.5820 which provided strong support.\u00a0 The low 1.58 provided support in late September and early October and will be a key level for Sterling moving forward.<\/p>\n

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The dollar continued its climb against the Yen and continues to look very attractive from a technical point of view.\u00a0 The currency pair, USD\/JPY broke above trend line support at 91.80 and looks to be headed toward the next resistance levels near 97.00.\u00a0 Additionally, the 20 day moving average crossed above the 50 day moving average on USD\/JPY which drove a lot of technicians into the trade.\u00a0 The bullish trend will likely continue into the beginning of 2010.<\/p>\n

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The Week Ahead<\/strong><\/p>\n

Next week traders will be eyeing the EMU Purchasing Managers Index and the UK PMI on Monday. The market moving data will be immediately followed by the US ISM and Construction Spending figures.\u00a0 On Tuesday the EMU CPI and US Factory Orders and Pending Home Sales take center stage.<\/p>\n

Towards the end of the week a wave of data will be released including the US ISM Services and ADP Employment figures.\u00a0 The BOE will also approach the market and release its rate decision. The week will end with a bang as the U.S is scheduled to release its employment report. The unemployment rate is currently expected to hover around the 10% level at 10.1%.<\/p>\n

Daily Forex Market Analysis provided by eToro<\/a><\/strong><\/p>\n

Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don\u2019t trade with money you can\u2019t afford to lose.<\/p>\n

\u00a9 2009 eToro Blog.<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

By eToro – The final week of 2009 lacked direction as traders exited positions prior to Christmas, causing low volume across the board…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-5616","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/5616","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=5616"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/5616\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=5616"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=5616"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=5616"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}