Expect market Volatility

Written by Research | 03 May 2010

Position Adjustment on Fundamentals

A barrage of news reports from Personal Income, ISM Manufacturing index to Non-Farm Payrolls would make market volatility to be wider as the new month of May comes in for the 2nd quarter of the year. The market holidays in Asia will keep some significant movements in line with last weeks trend for the time being. But would increase as the news comes out towards Friday's NFP numbers.

As the expectations are basically good numbers that may lead a continuation for the USD to be steadier to corrective mode as the issue of the 110B bailout for Greece has dominated the market news as of now. With the EURUSD still looming at the 1.3240 from a 1.3342 high as of this writing still maintains its vulnerability to move lower and may attempt the next major support of 1.2880 registered in April of 2009. Contrary to a steadier GBPUSD however, trailing the Euro directional trend at a slower pace from a 1.5385 high and a low at 1.5120. It is currently working in the mid-range level of 1.5248.

eur0503 gbp0503

The USDJPY and the USDCHF has more a clearer trend direction upwards but expect some continuation of wider swings. With the USDJPY sideways hourly formation just above the 94.00 levels and the USDCHF at 1.0822 steadier price from a low of 1.0742 corrective mode and may now attempt to the north of the charts. Just extra careful of buyers trap for wider lows along the way up as this may prove to move during this weeks increase volatility.

jpy0503 chf0503

We shall watch which of the majors would be taking the lead pace for the week other than the steadier AUDUSD keeping its price range between 0.9330 and 0.9150. Although, the stronger bullish sentiments still prevail and the Kiwi has been bullish on its trend currently at the 0.7295 working price from a 0.7110 low. the NZD has some clear legs for another new high specially whenever volume builds up along tha way. Stay with the Asian currencies for a more stable trend direction upwards but watch for corrective movements after the news reports for the week in the US specially Fridays NFP nos.

A quiet Asian session and European players may try to take advantage of a thinly traded market due to the Asian holiday. As these markets may tend to be more susceptible whenever major participants would take this advantage among the smaller fry.

Best of Luck to your trades!

Summary News Expectation for the Week

Personal Income and Consumption (March, Monday 8:30 ET)
Forecast: 0.2%, 0.5% Consensus: 0.3%, 0.6% Previous: 0.0%, 0.3%
March upward data in employment is expected to be good and push higher salary and
wages component of personal income, which would result for income growth of 0.2%.

ISM Manufacturing Index (April, Monday 10:00 ET)
Forecast: 60.9 Consensus: 59.8 Previous: 59.6
The ISM Manufacturing index is expected to rise in April, indicating that growth is
moving forward at a better pace.

Pending Home Sales (March, Tuesday 10:00 ET)
Forecast: 1.2% Consensus: 3.0% Previous: 8.2%
Home sales are expected to rise for the 2nd consecutive month in March, which
indicates that existing home sales will obviously move higher in the second quarter.

Productivity (1Q10, Thursday 8:30 ET)
Forecast: 2.7% Consensus: 2.5% Previous: 6.9%
Labor productivity has significantly move higher over the last three quarters

Non-Farm Payrolls (April, Friday 8:30 ET)
Forecast: 170K Consensus: 176K Previous: 162K
Non-farm payrolls are expected to increase for the second consecutive month.
Theremaybe some surprising numbers. Expect market volatility.