Newsletter September 22nd
Colt FX newsletter Monday September 22nd 2008
In this week’s issue:
Forex Review, September 15th to 19th
Calendar and Outlook, September 22nd to 26th
Live trading session: Wednesday 24th September
Forex Review September 15th to 19th
Washington to be Wall Street’s biggest player
As Lehman Brothers filed for bankruptcy, Merrill Lynch got gobbled up and AIG became the US government’s latest acquisition, economic data took the back seat when it came to currency prices. This rollercoaster of a week culminated in the announcement of yet another US Treasury bail-out plan which Henry Paulson expects will cost $700B.
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Chart 1 EUR (hourly)
Financial markets were shaken by the Lehman Brothers and Merrill Lynch developments and after gapping up at the open EUR/USD rose to test 1.4450. However, central banks around the world stepped in with copious amounts of cash and with the price of crude falling to below $95 a barrel, the European session opened to see the euro fall to 1.41: a level which offered support a number of times through the week. Monday’s weak US industrial numbers saw the Euro start to climb against the greenback and it reached 1.43 before returning to 1.41. The Fed voted unanimously to hold rates at 2.00%. The Fed said that it expected growth to continue to slow over the next few quarters while inflation should moderate at the same time. However it did add that both downside growth and upside inflation continued to be significant concerns.
Euro/dollar continued the rest of the week ranging between 1.41 and 1.45, as the US Treasury bailed out insurance giant AIG and oil prices started to rise once more and closed the week around$103.90. The US government also enacted a number of initiatives including a ban on the short-selling of equities, a pledge to insure the investors in money market funds against losses and plans to create some sort of super fund to buy mortgage securities from banks and then dispose of them as ‘toxic assets’. This final plan was first revealed on Friday and Treasury Secretary Henry Paulson said he was ready to spend hundreds of billions of tax payers’ dollars to get out of this hole. Further details have been released over the weekend, including the current estimate of cost, $700B and if US Congress pass the plans, it should spell the end of any notions that anyone might have about a ‘Free Market’
Sterling had its second week of gains against the dollar. Although, economic data releases played little part in its movement, some numbers were worthy of note. The Bank of England’s Monetary Policy Committee Meeting minutes saw the committee getting more dovish and UK retail sales came in surprisingly strong at 1.2%.
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Chart 2 Calendar Highlights
Calendar and Outlook September 22nd to 26th
Here are the highlights of this week’s economic calendar (chart 3). For an extensive list of the week’s economic releases and events see our economic calendar.
The US data calendar is relatively light this week. The action kicks off on Wednesday with existing home sales. Thursday is busy with initial jobless claims, durable goods and new home sales due up. Friday rounds out the week with the final cut on 2Q GDP and the University of Michigan consumer sentiment.
It is a touch busier in the Euro-zone in terms of data. On Tuesday we’ve got French German and Euro-zone PMIs. Wednesday sees the German IFO business climate survey and Germanys all important GfK consumer confidence is up on Thursday.
In the UK, Rightmove home prices are on deck for Sunday night followed by home purchase loan data on Tuesday. Wednesday’s CBI retail sales numbers have moved the market recently and there’s more housing market data on Friday with the Nationwide HPI.
It is a touch busier in the Euro-zone in terms of data. On Tuesday we’ve got French German and Euro-zone PMIs. Wednesday sees the German IFO business climate survey and Germanys all important GfK consumer confidence is up on Thursday.
In the UK, Rightmove home prices are on deck for Sunday night followed by home purchase loan data on Tuesday. Wednesday’s CBI retail sales numbers have moved the market recently and there’s more housing market data on Friday with the Nationwide HPI.
In these troubled times it’s wise to pay special attention to what the guys at the hem are saying. All eyes will be on Treasury Secretary Paulson and Fed Chairman Bernanke as they testify on the credit turmoil on Tuesday before a Senate panel. Bernanke is up again on Wednesday testifying before the Congressional Joint Economic Committee. Thursday has Paulson and Bernanke together again, this time before a House panel where they will talk about the GSE takeovers. ECB speakers next week include Trichet on Monday, Stark on Wednesday and Bini Smaghi on Thursday. The UK’s MPC members speaking dates include Gieve on Monday, Sentance on Wednesday and Barker on Thursday (For full details on these public engagements see our economic calendar).
Forecast September 22nd to 26th
We see euro / dollar trading within 1.4100 and1.4700.
Pound/dollar will find support at 1.7900 and if it breaks through resistance at 1.8480, the next target is 1.86.
Dollar/yen will continue to find support at 103.77 and resistance at 108.00
Pound/dollar will find support at 1.7900 and if it breaks through resistance at 1.8480, the next target is 1.86.
Dollar/yen will continue to find support at 103.77 and resistance at 108.00
Live Trading Sessions
The next session will be on September 24th at 14:30 to 16:30 GMT. We will be trading the live account on two Colt FX pairs and the micro-lot ‘ten to the moon’ feature. We will also be looking at the action on the other Colt FX pairs plus the trading system that Darren sent in and other trading opportunities.
If you’d like to join in, write to me at colt@coltfx.com.
Forex Club’s Platinum Package
Forex Club is offering the Colt FX distance learning course as part of their package of incentives to open a Platinum account. You can learn more about the details of this offer at http://www.fxclub.com/platinum/. You can find out more about Colt FX in our short film What is Colt FX?
Forex Club is offering the Colt FX distance learning course as part of their package of incentives to open a Platinum account. You can learn more about the details of this offer at http://www.fxclub.com/platinum/. You can find out more about Colt FX in our short film What is Colt FX?
That wraps it up for this week. Thank you for reading this far. Have a great week and I hope to see you at www.coltfx.com
If you have any questions about this newsletter or any of our services, please drop me a line at colt@coltfx.com.
Remember that one week’s access to Colt FX Module 1 is available for free at www.coltfx.com to everyone who subscibes to this newsletter.
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Disclaimer
www.coltfx.com, and any of its affiliates, will not be held responsible for the reliability or accuracy of the information available in this newsletter. The content provided is put forward in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Colt FX or its affiliates. The reader agrees not to hold Colt FX or any of its affiliates, liable for decisions that are based on information in this newsletter. We highly recommend that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.
www.coltfx.com, and any of its affiliates, will not be held responsible for the reliability or accuracy of the information available in this newsletter. The content provided is put forward in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Colt FX or its affiliates. The reader agrees not to hold Colt FX or any of its affiliates, liable for decisions that are based on information in this newsletter. We highly recommend that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.
22 September | 
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