Looking at the Friday session, we see a couple of interesting numbers by at the end of the day we feel that this is going to be more of a currency related day than anything else. With that being said, sometimes you have days where technicals will take over, and this could in fact be one of them.
Looking at the economic calendar, you can see that Chinese Trade Balance numbers come out during the early morning. This essentially represents the import/export number for China, and as a result a gives a slight look into the idea of how global trade is functioning. We doubt that this market is going to move drastically based upon this number, but it is something to pay attention to just in case there is some type of massive shock.
The first real significant number in our opinion into the Swiss unemployment numbers, which of course are expected to be roughly 3.0%. With that, if we get a better than anticipated number, it could move the USD/CHF currency pair, in the favor of the Swiss franc of course. Beyond that though, the number probably won’t have much of an effect on markets around the world beyond the SMI.
The Bank of Japan releases its Monetary Policy Statement during the day as well, but quite frankly everybody knows that the Bank of Japan is very loose with its monetary policy, and in less it starts listening even more and in a more drastic way, it’s almost impossible to imagine this moving the markets. However, it is important to understand that the USD/JPY is essentially at “no man’s land” at the moment, and as a result this could move the pair to either the 101 or the 103 level, which of course would be much more interesting than present levels. If we get movement, expect the market to go to either one of those handles.
Next up comes the United Kingdom’s Trade Balance numbers, which could in fact influence the FTSE, or perhaps the GBP/USD. The GBP/USD pair has found quite a bit of support at the 1.68 handle, and a good number out of this announcement could send this market bouncing higher. With that, we would aim for the 1.70 handle over the next couple of days. The FTSE has found significant support at the 6600 level, and most certainly massive support at the 6500 level. We would anticipate that the market would continue to find that area supportive, and more than likely would move a little bit higher based upon a stronger than anticipated number.
Beyond that, the next important announcement would be the Canadian Employment numbers, but at the end of the day this should only affect the USD/CAD pair, which is one that we think is trying to find a return to break tire. If the employment numbers out of Canada this, it’s very likely that the USD/CAD pair will continue to go higher.