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The EUR/USD had some good moves, and we had a few trades which totaled gains of about 324 pips. At $10 per pip for full lot trades, this gave profit potential of over $3000.

The Week In Review

Wherever traders looked for signs of strength in the American economy this week all they could discern was slippage or stasis. From the national Federation of Independent Business Index (NFIB) on Monday to the University of Michigan consumer Sentiment Survey on Friday every major US measure depicted a recovery fast losing steam, dragged down by unemployment, weak consumption, lack of wage growth and a moribund housing market.

The inventory rebuilding that powered expansion in the fourth quarter of last year and the first three months of 2010 has run its course. In May inventories gained only 0.1%, the smallest amount this year and the weakest since turning positive in October of last year.

The NFIB index for small business opinion sank to 89.0 in June the lowest score in three months. May's reading of 92.2 was the highest reading post recession. Business expectations for capital spending, profits, inventory, business conditions, sales expectations, and credit conditions declined though all are above reading from the first five months of the year. Job opening and hiring plans remained stable from May to June. Business hiring plans are better than they were at the end of last year and considerably improved upon 2009 but job openings have fallen since January and are almost as low as the worst readings from 2008 and 2009. Business owners no longer anticipate higher prices and judgment on whether now is a good time for expansion gained to its highest level this year. All of the components and the headline index are below levels reached during past recession recoveries.

Retail sales slipped 0.5% in June the second negative month in a row after May's 1.1% fall. With the economic boost from the government stimulus and business inventory rebuilding tailing off this raised fears that consumers, stymied by high unemployment, stagnant home prices and declining wages will not be able to sustain the economic recovery into the second half of the year. Excluding car dealers, consumption fell 0.1%. Activity in six of 13 retail sectors in the report decreased in June headed by a 2.3% decline in sales at auto dealers. US auto sales were running at an 11.4 million unit pace in June, a drop from May's 11.64 million volume and well off the five year monthly average of 14.06 million vehicles.

The FOMC minutes of the June 22nd meeting revealed a Fed increasingly worried about the performance of the US economy in the second half of the year. The Fed Governors appear evenly split whether the balance of unknown risks weigh more to the negative.

Industrial production was slightly better than expected 0.1% in June over the predicted -0.1%, but the details were decidedly negative. Utility production engendered by hot weather in much of the country grew 2.3%, manufacturing fell 0.4%.

For much of the week the dollar traded as if risk aversion were a thing of the past and the equities were supported by a string of relatively good earnings reports in the early part of the week. A weakening American economy will only spell trouble for a worldwide recovery. Much as Europe could not avoid contagion in the fall of 2008 when the US collapsed, neither can China and the rest of the world absolve their impact form US decline. The retreat of the euro against the dollar on Friday was not a return to the risk trade but it was an acknowledgement that the brief era of good feeling may be ending.

The calendar in the US is modestly light in the week ahead. Housing numbers kick off the week with the July NAHB Housing Market Index and continues into Tuesday with June Housing Starts and Building Permits. The data slate for Thursday sees weekly Jobless Claims, June Existing Home Sales, and June Leading Indicators. Fed Chairman Bernanke will deliver the semi-annual monetary policy out look to the Senate Banking Committee on Wednesday.

Eurozone data is relatively light but significant with a heavy emphasis on the aggregate EZ results of the bank stress tests on Friday. May Euro-Zone Current Account data is scheduled for Monday as is May Construction Output. No further data is scheduled until Thursday when PMI Composite, Services, and Manufacturing Output Indexes are to be released. Thursday wraps up eurozone data releases for the week with May Industrial New Orders and Euro-Zone Consumer Confidence. In Germany, Tuesday sees June Producer Prices with July PMI Manufacturing and PMI Services surveys to follow on Thursday. Friday closes out the data week with the July IFO Business Climate Index.

A moderate week of data lies ahead in the UK with June Public Sector Net Borrowing, June Mortgage Approvals, and the July CBI Optimism Index on Tuesday. Wednesday will have the Bank of England Minutes followed by June Retail Sales figures on Thursday. Friday wraps up the UK data session with the advance estimate for Q2 GDP.

Data out of Tokyo is light with May Leading and Coincident Indexes to be released on Tuesday. There is significant event risk though as BOJ intervention cannot be completely dismissed with USDJPY trading at current levels.

Canada begins a significant week of data with the Bank of Canada Rate announcement on Tuesday. Expectations are for an increase of +0.25% to 0.75%. Up next are May Wholesale Sales and May Retail Sales due out on Wednesday and Thursday. Friday wraps up the week with June CPI and Bank of Canada Core CPI set to be released.

The calendar down under begins with the release of the RBA minutes from the July meeting on Monday and continues with the Q2 NAB Business Confidence survey on Wednesday. Thursday wraps up the week with Q2 Import and Export Price Indexes.