The Riksbank is clearly much more worried about inflation than financial markets or analysts appear to be. The Riksbank has stated it will deliver hikes in September (4) and October (23). The main reason of course being higher inflation on oil/fuel and food, etc. The oil price is expected to remain around USD140/bl until 2011. The most interesting aspect, in our view, is that the Riksbank has repositioned itself (again) as an 'inflationnutter'. Indeed, if our forecasts are correct, with higher

Overview: In June the employment report continued to print moderate job losses consistent with a nearly stagnant, but not recessionary, US economy. The economy shed 62,000 jobs (DB -50,000, Consensus - 60,000) in June and on top of this the employment figures for the previous months were revised down by 52,000. Hence, the report included a total loss of jobs of 114,000 persons. Moreover, the unemployment rate failed to move lower keeping its level of 5.5% in June. Wage moderation continues.

Overview: The ECB raised rates on 3 July by 25 bp to 4.25%, which came as no surprise. As we expected, there was a much more balanced approach in both the introductory statement and the question and answer session than there was in June; the committee used milder language in order to ensure it did not feed expectations of more rate changes. Details: This time the ECB expressed much more concern about the growth picture by reintroducing references to downside risks to growth, omitting upside

Action Insight Weekly Review and Outlook EUR/USD Pullback on Trichet, Fedspeaks ahead Dollar staged a strong rebound last week, helped by ECB Trichet downplaying the chance of another rate hike from ECB after raising rates by 25bps to 4.25% on Thursday. But the biggest winner was indeed the Aussie which with respective crosses topping the top movers chart even though RBA was on hold and sounded slightly dovish. Also, the rebound in dollar is viewed as a profit taking correction ahead of a long

Being contained by the support of the price channel, USDCHF rebounded from 1.0111. The pair might be forming a cycle bottom on daily chart. Further rise to test 1.0539 previous high resistance is still possible in next several days, a break of this level will confirm the cycle bottom and signal resumption of long term up trend. For long term analysis, USDCHF formed a long term cycle top at 1.0623 on weekly chart. Consolidation in a range between 0.9634 and 1.0623 is expected. Up trend will

Gold has hit our target of 940.29, and has since cooled a bit to 931.70.  Now support is waiting at 928.06, 922.25, 917.58, and 908.25.  If price manages to break above 940.29, then the next targets are currently waiting at 960.10, then 992.14.

I will be holding a live webinar at 12:00 GMT about the backtesting trading systems. You can join through the following link:

http://www.fxstreet.com/live/sessions/session.aspx?id=48ceb250-2de6-4cbd-a837-4ef303ec0965

If you want more details on how to attend webinars at FXstreet.com, please go to:
http://www.fxstreet.com/forum/showthread.php?t=129

See you all there I hope!

* The post ECB/NFP dollar rally looks overdone
* ECB hikes as expected, but was it a one and done?
* US employment data were much worse than expected
* Key data and events to watch next week

In one fell swoop the greenback managed to reverse what was shaping up to be a terrible week, on the back of an NFP number that was seen as in line with expectations and an ECB seemingly on hold following the 25 bps increase. EUR/USD opened the week near 1.5790 and looked poised to break through 1.5800 in earnest, a level it had not closed above since late April. Even the 1.6000 area seemed within reach as EUR/USD crossed above 1.5900 just ahead of the simultaneous ECB press statement/US NFP release. It was not to be, however, as the NFP report was deemed to be in line with consensus (we argue it was worse below) while Trichet was interpreted as telling the market that the ECB is on hold. EUR/USD shot down quickly following Trichet's comments and was sitting more than 200 pips lower at 1.5690 just hours later. Given other market developments we believe this move was likely overdone.  Full text »

digg this! | del.icio.us | Technorati | Stumble It!

* The post ECB/NFP dollar rally looks overdone
* ECB hikes as expected, but was it a one and done?
* US employment data were much worse than expected
* Key data and events to watch next week

In one fell swoop the greenback managed to reverse what was shaping up to be a terrible week, on the back of an NFP number that was seen as in line with expectations and an ECB seemingly on hold following the 25 bps increase. EUR/USD opened the week near 1.5790 and looked poised to break through 1.5800 in earnest, a level it had not closed above since late April. Even the 1.6000 area seemed within reach as EUR/USD crossed above 1.5900 just ahead of the simultaneous ECB press statement/US NFP release. It was not to be, however, as the NFP report was deemed to be in line with consensus (we argue it was worse below) while Trichet was interpreted as telling the market that the ECB is on hold. EUR/USD shot down quickly following Trichet's comments and was sitting more than 200 pips lower at 1.5690 just hours later. Given other market developments we believe this move was likely overdone.  Full text »

digg this! | del.icio.us | Technorati | Stumble It!

EUR/USD As one of my mentors ‘Zoltan Vass’ would say; Believe what you see! Once again we have seen another volatile reaction after important economic news. And this was the strongest reaction so far. It is also important to note (as Zoltan pointed out to me) that this reaction is quite a contrary move to the news that preceded such a strong rejection. How to trade this For now it is best to look for selling opportunities. Thursday’s move produced a strong Engulfing Bearish candle and all