7/12/2009 - The Current Market Sentiment

[fxreco...@gmail.com]

The market has found in the better than expected non-farm payroll of
November which came at just -11k while the market was waiting for 140k
of losing jobs a reference to a nearer coming Fed's tightening action
than what was pricing as the Fed's governors have repeated it several
time that there is no change of the Fed's easing policy without a
crucial change in the labor market which gave a strength to the
greenback in spite of the rising of the US stocks after the data which
triggered the investors' optimism to take risk driving Dow above 10500
before slipping to close the session up by just 22 points at 10388 on
these increasing speculations that there can be a closer end of the
fed's current quantitive easing steps which surely have helped the
equities markets to take back a lot of what they have lost after the
credit crisis.
So, the Japanese yen was the most hurt currency after these data
instead of the greenback this time as it carried the investors'
carried trades this time as the greenback interest rate outlook has
improved after the data. USD JPY closed the week well above 90
psychological level and in spite of the European currencies losing
versus the greenback they could make new highs of the week versus the
Japanese yen EURJPY close the week at 134.34, GBPUSD at 148.82 and
CHFJPY at 89

The greenback could find a stronger ability to put pressure on the oil
prices pushing the crude oil to close below 76$ and the gold as well
The gold to lose more than 50$ after the data as the Fed's tightening
can cap the inflation pressure upside risks from another side which
can have further attention from the Fed in the future which can
underpin the greenback by the fed's Next meeting next week.

God Willing, it is important to listen to Ben Bernenke language today
after these optimistic labor data of November but there is no key
important data from US this week to follow but the US trade balance of
October which is waited to be -36.7B$ from -36.47B$ next Thursday and
by the end of the week, we have the release of US November retail
sales which are expected to be up monthly by .6% and by .4% excluding
the auto sales and we have also next Friday the preliminary release if
US UN Michigan University consuming sentiment survey of December which
is forecasted to be 68.5 from 67.4 in November.

Best wishes

FX Consultant
Walid Salah El Din
E-Mail: ma...@fx-recommends.com
http://www.fx-recommends.com