Forex Daily Analysis - Friday, Aug 24th

JPY Lower after BoJ keeps Target Rate at 0.5 pct. Carry trades continue its intra-week recovery as investors find additional comfort that central banks will dampen the downside risk in equities. Overnight News Bullets SZ Employment Level Q2, out at 3.737M vs a prior reading of 3.708M. YoY, out at 2.4% vs a prior reading of 1.8%. NO GDP Q2, out at 0.9% vs 0.6% exp. Mainland Q2, out at 1.3% vs 1.2% exp. UK Total Business Investment Q2, out at 0.8% vs 2.0% exp. YoY, out at 7.4% vs 8.8% exp. SZ ZEW Survey Expectations Aug, out at -5.1 vs a prior reading of -2.1. US Initial Jobless Claims Aug 17, out at 322K vs 320K exp. US Continuing Claims Aug 11, out at 2572K vs 2555K exp. US EIA Natural Gas Storage Aug, out at 23 vs 29 exp. NZ Trade Balance Jully, out at -791.0M vs -535.0M exp. NZ Imports July, out at 3.43B out at 3.28B exp. NZ Exports July, out at 2.64B vs 2.75B exp. JN Corp Service Price (YoY) July, out at 1.6% vs 1.5% exp. O/N Data Heat map: EU US JP UK SZ AU CA NZ NO SE FR 0 + + - 0 0 0 - + 0 0 Calendar Today's Highlights: Time (GMT) Region Release Consensus 08:00 EC PMI Composite (AUG) 56.9 08:00 NO Unemployment Rate – AKU (JUN) 2.5% 08:30 UK GDP QoQ/YoY (2Q) 0.8% / 3.0% 08:30 UK Private Consumption (2Q) 0.7% 08:30 UK Government Spending (2Q) 0.5% 08:30 UK Exports / Imports (2Q) -0.8% / -0.3% 12:30 US Durable Goods Orders (JUL) 1.0% 12:30 US Durable Goods Orders ex. Transportation (JUL) 0.6% 14:00 US New Home Sales (JUL) 820K 14:00 US New Home Sales MoM (JUL) -1.7% 17:00 US Baker Hughes U.S. Rig Count (AUG) Prior 1795 This and Next Week’s Highlights: Date Region Release 27 Aug SW Trade Balance 27 Aug US Existing Home Sales 28 Aug FR Housing starts, Housing Permits 28 Aug SW PPI, Retail Sales 28 Aug SZ UBS Consumption Indicator 28 Aug GE IFO – Business Climate, IFO – Current Assesment, IFO – Expectations, CPI 28 Aug UK BBA Loans for house purchase 28 Aug US S&P/Case Shiller House Price Index, Consumer Confidence, Richmond Fed Manufacturing Index, ABC Consumer Confidence What's going on? New Zealand's trade deficit rose much more then analyst consensus. This lead us to believe that the elevated current account deficit will continue to weigh heavily on NZD buying interest going into the remainder of the year. NZDJPY still nedd to recover beyond 89.00 for the longer term bull trend to come back. FX Market : With relatively low volatility compared to last week carry continues its recovery face, with both EURUSD and Cable looking bid. EUR USD JPY GBP CHF AUD CAD NZD NOK SEK PLN + - - + - + 0 - + 0 0 FX Trading Strategies Pair Supp. Resis. Comments GBPUSD 1.9930 2.0190 GBP rose yesterday on back of expectations that the BoE could raise rates faster than expected. We are looking for confirmation in the GDP-figures today at 08:30 GMT. Buy the break of 2.0061 bid, targeting 2.0160. Place your stop bid at 2.0035.

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