FXstreet.com Live Sessions Archives: US GDP Live Coverage with Nick Nasad

Read all the US GDP Live Coverage we made with Nick Nasad on Nov 25th.

US GDP Live Coverage with Nick Nasad

(11/25/2008)
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12:59

FXstreet.com: Good morning, good evening and good night to everyone. Welcome to our Today's US GDP Live Coverage with Nick Nasad, Market Analyst at CMS Forex

12:59

FXstreet.com: Nick Nasad is a currency market analyst with CMS Forex for the last 3 years. He closely monitors fundamental releases and reports their results and provides commentary to the company’s clients through CMS Forex’s interactive economic calendar Forex Capsule and through daily Forex market video recaps. He has also written extensive educational material on using technical analysis in trading Forex.

1:00	FXstreet.com: Welcome Nick and many thanks for being with us today.

1:00	Nick Nasad - CMS: Hello everyone, thank you very much for having me

1:00

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1:01	FXstreet.com: CMS General Research page

1:01	FXstreet.com: Daily video about the main market news

1:01	FXstreet.com: Expert Analysis of Today's Market

1:01	FXstreet.com: Forex Capsule - Weekly Chart Analysis and calendar for the week ahead

1:01	Nick Nasad - CMS: Its a pleasure to join you today and give you my comments on today's GDP release, fundamental outlook and trading activity for the next hour.

1:02

FXstreet.com: We have still seen the volatile market driven by the turmoil in the financial market and been cognizant of the risks of a global slowdown. As the US gov agreed a rescue plan for Citigroup, stock markets bounced back and the USD got depreciated against all the majors.
Yesterday U.S. Existing Home Sales resulted worse than expectations (Actual -3.1% VS Forecast 3.5%). According to the NAR statistics, the percentage drop in prices was the biggest since 1968 data. It seems that recovery in the housing sector needs some more time.
Gross Domestic Product provides overall indication of economic health. GDP is soon released and its expected result is -0.5%.
What do you expect for the data, Nick?

1:02	Nick Nasad - CMS: Today's GDP report comes amid a flurry of economic data today and tomorrow.

1:03	Nick Nasad - CMS: since its the second release, the market may not react as strongly to it at 8:30, even though its expected to show a downward revision to -0.5% from -0.3%.

1:04	Nick Nasad - CMS: whats importat here is to see if the number comes in much lower than expected, especially if its a result of a slowdown in consumer spending, it may have an impact on teh confidnece of the market

1:05	Nick Nasad - CMS: As was pointed out, yesterday saw risk sentiment improve as equities rallied around the world. This sentiment was conintued in Tokyo, but it did not translate into further gains in carry trade pairs.

1:07

Nick Nasad - CMS: Overnight we we saw some retracement and correction in USD/JPY , GBP/JPY, EUR/USD, and a much further retracement is possible if data dissapoints today. After GDP we still have data on housing and consumer confidence coming out which may influence the direction of the market for the rest of the day.

1:08	FXstreet.com: Right after the event, you will be able to watch it covered and explained in full detail in CMS Forex Website, in the section:

1:08	FXstreet.com: Expert Analysis of Today's Market

1:08	FXstreet.com: Let's review yesterday's broadcast, Nick

1:08

[Video file]

CMS Forex News 2008-11-24 Play

1:10	Nick Nasad - CMS: What you are watching is our daily video recap, where we put together the day's fundamental data and key market highlights into one video broadcast. We publish these on our site in the late afternoon.

1:11	FXstreet.com: Nick, let's answer some of the questions we are already receiving by our users. Please, keep on sending your questions to Nick, we will try to answer as many as possible.

1:11	[Comment From Heah Peng Hong] Since market is expecting a poor GDP data, the release will probably not cause a big move in currency and shares.

1:12	Nick Nasad - CMS: Heah Peng Hong, you are likely correct in your assessment as most of the recent deterioration came in the beginning of the 4th quarter, therefore I dont see a large downward revision in the data.

1:13	Nick Nasad - CMS: but the focus will shift back on talks of a global recession, compared to the euphoria seen in the markets yesterday as a result of the Citigroup bailout

1:14	Nick Nasad - CMS: if the data comes in lower than expected, it can bring back risp aversion, undoing part of yesterday's gains for the Euro and Pound. We have already seen this starting overnight.

1:14	[Comment From mike] what reaction will have the dollar following the release of the GDP?

1:16

Nick Nasad - CMS: Its hard to say prior to the release, but currently we are seeinga pull-back from the rally we saw yesterday. We have hit some supports, and a figure thats in line with expectations may be positive for sentiment. That may mean teh Dollar gains against the Yen, but we have a second rally in Euro and Pound against the Dollar.

1:17	Nick Nasad - CMS: If we see a worse-than-expected release, we can see a stronger retracement of yesterday's rallies. I personally think we will see a number thats in line with expectations.

1:17	Nick Nasad - CMS: then we will have to focus on stocks and and some of the reaction to other releases today.

1:18	[Comment From Aram] What happen for Dolar and yen if the GDP lower than expected?

1:19	Nick Nasad - CMS: Despite yesterday's strong rally in USD/JPY, which followed Friday's bounce from 93.50.. we only reached the highs seen last Wednesday around 97.50.

1:20	Nick Nasad - CMS: Resistance was strong there and we have retraced a bit more thean 38.2% from Friday's low to yesterday's high.

1:20	Nick Nasad - CMS: right now, the Dollar is gaining prior to the release on the Yen, as futures are pointing to a positive start to US stocks

1:22	Nick Nasad - CMS: I just wanted to mention to the viewers that CMS Forex is currently gearing up for a trading contest with prizes of up to $30,000.

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1:23	FXstreet.com: Here you have more info about this great event you can't miss: http://www.cmsfx.com/en/my-account/open-free-practice-account/ultimate-forex-championship/

1:24	Nick Nasad - CMS: you can practice with a demo account as well, as we have recently released a new version of VT Trader

1:24	FXstreet.com: More questions from our viewers gathered here at FXstreet.com today:

1:24	[Comment From mike] Do you think that the dollar could still reach the 1.20?

1:26	Nick Nasad - CMS: 1.20 is a realistic target for Eur/USD if we break below the recent line of support setting up with the last couple of major lows (around 1.24)

1:26	Nick Nasad - CMS: the Dollar has been gaining on flight to safety as the global financial marekts continue to face uncertainty.

1:27	Nick Nasad - CMS: I think tehre will be further turbulence to come in the next few weeks, especially as retail sales data comes in pointing to a bleak 4th quarter. That can hurt risk sentiment, and extend the strong downtrend seen the last 3 months in the EUR/USD

1:28	FXstreet.com: Just 2 minutes last for the data to be released...

1:28	FXstreet.com: CMS Forex is currently gearing up for a trading contest with prizes of up to $30,000.

1:28	Nick Nasad - CMS: right now we are seeing some strength by risk appetite

1:28	FXstreet.com: http://www.cmsfx.com/en/my-account/open-free-practice-account/ultimate-forex-championship/

1:28	[Comment From sam] can virtual account win?

1:29	Nick Nasad - CMS: USD/JPY has halved its overnight losses

1:29	Nick Nasad - CMS: and usd/cad and gbp/usd are seeing some moves away from the greenback

1:29	Nick Nasad - CMS: Sam, you can practice on a virtual account, but the contest is for live users only.

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1:30	FXstreet.com: GDP Data Released: -0,5

1:30	Nick Nasad - CMS: -0.5% was the forecast and shoudl be supportive of carry-trade and risk appetite

1:31	Nick Nasad - CMS: consumer spending dropped 3.7%

1:32	FXstreet.com: The official data can be read at: http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

1:32	Nick Nasad - CMS: it was -3.1% in the advance version. this shows softer spending and is an indication consumers continue to scale back purschases in the face of deteriorating economic conditions.

1:33	Nick Nasad - CMS: Businesses decreased spending more than previously thought as well. Outlays fell by 1.5% July through September, which was bigger than the originally estimated 1.0% decrease.

1:33	[Comment From mike] that maybe a sign that the economy is recovering a bit.

1:33	Nick Nasad - CMS: the response so far is a rally in investor sentiments, which is showing up as increases in EUR/USD and USD/JPY

1:34	Nick Nasad - CMS: EUR/USD looks set to retest yesterday's high, and the USD/CAD is falling through its most recent short term support

1:35	Nick Nasad - CMS: i think we are going to see tough times ahead for the 4th quarter, the 3rd quarter ends with September, which only saw the beginnign of the most recent bout of turbulence in global financial markets.

1:36	Nick Nasad - CMS: things turned really bad in october, adn that has been relfected in manufacturing and services reports like the ISM and will show up in things like duable goods orders (set to be released tomorrow) and retail sales. We have black friday coming up (the day after thanksgiving).

1:37	Nick Nasad - CMS: so you can expect a much worse GDP in the 4th quarter, which would officially put the US into recession (though we are already there by most economists accounts)

1:37	[Comment From mike] Do you think that the GDP cuold stifall further because of the growing deficit?

1:39

Nick Nasad - CMS: the trade deficit has seen an improvemnet the last few months as oil prices have come down and as US consumer import less luxury goods from abroad. so i see the trade deficit improving.. in terms of the US budget deficit, it will hurt the dollar in the long term as the government is spending alot of money to bailout teh financial sector and is expected to announce a major stimulus plan for the overall economy.

1:40	Nick Nasad - CMS: that will increase the fiscal deficit, which could hurt the Dollar once the financial crisis in global markets gets under control

1:40	[Comment From zeb] im short wallstreet 8550 target 6500

1:41	Nick Nasad - CMS: EUR/USD and USD/CAD are surging against the greenback right now

1:42	Nick Nasad - CMS: I will take that to mean that sentiment is strong this morning, and we may continue some of the moves seen yesterday.

1:43

Nick Nasad - CMS: zeb, i dont usually follow stocks, but I am sure there will be further surprises ahead taht will cause global equities to fall. the 4th quarter is going to be grizzly and is being priced in these past few weeks. Do I think it will reach 6500? it may, but sounds like that is too low.

1:43	[Comment From mike] is it going to retest the 1.30 today?

1:43	[Comment From mike] the financial crisis cuold still last a few years?

1:43	Nick Nasad - CMS: mike, looks like we are almost there already

1:44	Nick Nasad - CMS: we are definetly seeing a continuation of yesterday's sentiments and if are on the verge of breaking some new resistance/support levels (EUR/USD,. GBP/USD and USD/CAD)

1:45	Nick Nasad - CMS: each of those pairs has a 150+ candle for the last hour.

1:46	Nick Nasad - CMS: mike, i think the (immediate) financial crisis will come under control sooner than that but we will see secondary effects like what will happen to the big 3 automakers in teh US and the reprecussions to "Main street" which will be with us for the next year

1:47	[Comment From Sunny] will the euro continue to rise back to 1.30 -> 1.32 -> 1.35 .... or it will get back down to test 1.24 next week after the expected rate cuts ?

1:48	Nick Nasad - CMS: Sunny, You ar eright, if we have a strong convincing break, and trders are not swamped by negative data and equity moves the rest of the (shortened) holiday week, we may see a stronger rally in EUR/USD

1:48	Nick Nasad - CMS: key levels to watch are 1.31, then 1.33, two important highs from earlier in the month.

1:49

Nick Nasad - CMS: if those are broken we can see a move to 1.35.. However, the line of support and a good entry to buy this pair was after yesterday break ofa downward sloping line of resistance connecting the highs over the month.. Now its not as clear a signal until we see what happens aroudn 1.31.

1:51	[Comment From mike] Maybe we should wait to the reaction of the dow?

1:51

Nick Nasad - CMS: We have also a movce today by the Fed to unveil its new Term Asset-Backed Securities Loan Facility (TALF), a plan under which it will lend up to $200 billion to support the issuance of debt backed by consumer and small business debt like credit card loans, student debt, auto loans and loans backed by the Small Business Administration.

This can be helpful to consumer credit.

1:52	Nick Nasad - CMS: Mike, thats probably a good idea. Alot of currency moves these past few months have been predicated on investor sentiments more than fundamental data. and it seems like each day brings something new.

1:53	Nick Nasad - CMS: currently the yen cross pairs are not reacting much to the GDP release, or the NY open

1:53	Nick Nasad - CMS: and most of the action is in the Euro, Pound and Loonie vs greenback.

1:54	Nick Nasad - CMS: that to me says that at least this week, we may not have a need for flight to safety which had been boosting the Dollar whenever sentiement was down.

1:55	[Comment From zeb] paulson says more than 100 banks go bankrupt in 2009

1:57

Nick Nasad - CMS: that is a large number, though we have seen some smaller banks go down, and large ones like Citi suffering in this environment. We will continue to see turbulence to end the year and into 2009, and alot will depend how the funds, such as the $700 billion rescue package will play out. So far, the government is more concerned about continuity and calming markets and preventing the collapse of large firms. there will be consolidation in teh banking sector as smaller banks find it harder to compete in this environment

1:57	[Comment From fxcm] yeees, we will probably see some 1,31 today/tonight and we are going up. for now we can fallow some kind of trend line

1:57	[Comment From fxcm] is long-term 1.16 possible in EUR/USD at all, some or saying this, me not believe this however.... what do you say Nick?

1:58	Nick Nasad - CMS: yes, it looks like in teh short term our break of the wedge pattern in EUR.USD is seeing a second rally. for the long term, 1.16 sounds rather low to me.

1:59	Nick Nasad - CMS: the dollar's strength the past few months has been to an extrodianary and swift change to the outlook of the global economy, the cuts by central banks, and flight to safety

2:00	Nick Nasad - CMS: but last week, even as we had strong sell-offs in stocks, the EUR.USD did not fall as much as other pairs, which led me to belive that the selling pressure may be drying up in the pair

2:01	Nick Nasad - CMS: though, i think we continue to be in a bias for the greenback and against the Euro, as we will continue to have uncertainty in the markets, The fall from 1.60 to 1.24 may see a retraction prior to the end of the year

2:02	[Comment From Guest] what do you think about approaching FX using Dow Theaory ? I think we are near the bottom but we have a long and slow way to recover from it at least 1,5 year. Is it possible to see EUR/JPY around 90 in few months ?

2:03	Nick Nasad - CMS: i dont use dow theory, but I think elliot waves can work rather well and be used in FX to help get an overall picture of market coniditons.

2:04	Nick Nasad - CMS: the Euro has further weakness ahead as the ECB will continue cutting rates in teh face of deteriorating economic conditions and lower inflation expectaions

2:04	Nick Nasad - CMS: the yiled between the eur/jpy will drop.. but i think we have had such a sharp fall since August.. from 170 to 114 that we are seeing a new line of support setting up using the last few major lows...

2:05	Nick Nasad - CMS: you will have to see how prices react as we are froming a bit of a triangle conolidation pattern that was broken, this week to the upside.

2:06	Nick Nasad - CMS: my time is running out here today guys

2:06	Nick Nasad - CMS: i want to remind you that you can come to our site and get daily video recaps, market newsletters and commentary in our dynamic economic calendar at our website.

2:07	FXstreet.com: Many thanks Nick for your participation and your help today in our GDP Live Coverage

2:07	Nick Nasad - CMS: one other thing to those that are interested

2:07	FXstreet.com: Here you have the links for CMS Forex Analysis and news

2:07	Nick Nasad - CMS: we have begun running an education webinar course on technical analysis

2:07	FXstreet.com: CMS General Research page

2:07	FXstreet.com: Daily video about the main market news

2:07	FXstreet.com: Expert Analysis of Today's Market

2:07	FXstreet.com: Forex Capsule - Weekly Chart Analysis and calendar for the week ahead

2:08	Nick Nasad - CMS: you can find info here: http://www.cmsfx.com/en/forex-education/forex-webinars/

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2:10	Nick Nasad - CMS: ok everyone, please check out our site and try our platform for a spin to see what VT Trader 2 has to offer, and if you are feeling up to it, any live accounts with $300 are automatically entered for our trading contest.

2:10	Nick Nasad - CMS: enjoy the breakouts today, and the action in forex markets.

2:10	FXstreet.com: I would like to thank you Nick for your time today, it has been amazing having you today and I really hope you will be back next month.

2:10	FXstreet.com: And many thanks to CMS Forex, our Sponsor for its support in this live event.

2:11	Nick Nasad - CMS: It was a pleasure to answer your questions, good luck and happy trading. Thank you FXstreet.com for having me.

2:11	FXstreet.com: See you in the next live Coverage on non-farm payrolls that will be hosted here next December, 5th.

2:12	Nick Nasad - CMS: Goodbye everyone. Thank you again.

2:13	FXstreet.com: I recommend you to visit our Real-Time Economic Calendar for more news and events: http://www.fxstreet.com/fundamental/economic-calendar/ and our CAG section for technical data on the most 31 traded pairs: http://www.fxstreet.com/rates-charts/currencies-glance/