The Japanese release the Leading Index right away during the session on Wednesday, with an expected outcome of 105.4 for the announcement. Being the case, we think that anything above the 107 level would be enough to push the Nikkei much higher, as it has pulled back to significant consolidation. That area should be supportive, but it remains to be seen whether or not the announcement can move the market.The German Factory Orders number comes out shortly thereafter, with an anticipated number of 1.1%. With that, we think that’s a better than anticipated number would of course bring the DAX higher, and perhaps the EUR/USD pair as well. However, the EUR/USD pair did make a fresh low during the day on Tuesday, and it is possible that we are actually going to ignore this announcement and search for the natural support that is found at the 1.33 level. In fact, we believe that selling rallies on short-term charts will probably be the way to play this pair during the day.
The Swiss have the next major announcement, being the CPI numbers. This is a regional and localized announcement that should affect the USD/CHF pair, and perhaps the SMI if you have the ability to train that index. It’s anticipated to come out as 0.0%, so anything that’s better than anticipated could be pro-Swiss.
Retail numbers come out of several European economies during the day, but we believe that Germany will be the one that everybody follows. More than likely, it probably won’t move the market unless we see something extraordinary, so we have that in the back of our mind, but recognize that it’s probably not the most important thing to pay attention to for the session.
The United Kingdom releases Industrial Production and Manufacturing Production during the day, and anything above 2.3 in either of the announcements could move the FTSE higher, as well as the GBP/USD pair. After all, the GBP/USD pair does look bullish all of a sudden, at least for a decent bounce back to the 1.70 handle, so one of these announcements or even both of them being fatter than anticipated of course will only give more fuel to that particular move.
After that, we will be watching the US Crude Oil Inventory numbers. This should have very little effect on the markets outside of crude oil, but they are testing the $97.00 level, which is massive support. With that, a stronger than anticipated withdrawal of the inventories could send the market higher as we are near significant support anyway.
