Euro-Zone GDP, U.S. Retail Sales, and ECB 10th Anniversary

The euro-zone officially fell in its first recession after today's reports showed that the economy contracted 0.2 percent in the third quarter, following a 0.2 percent decline in the previous quarter.

The GDP numbers turned negative in Italy and Spain, and Germany. France escaped the official recession by an anemic 0.1 percent growth which the finance minister called it a surprise. Some analysts believe that the service sector in France is also subject to downturn and getting negative GDP numbers is just a matter of time.

Today was also the 10th anniversary of European Central Bank and there was a meeting in Frankfurt with Bernanke and Trichet and also central bankers from Israel, Mexico, and deputy governor of China's People Bank of China. Ahead of the Washington states summit which officially starts tomorrow, policy makers expressed their support to help financial institutions to overcome the credit crisis.

Reactions to the economic data were somewhat limited even to the record decline in the U.S. Advanced Retail Sales which fell 2.8 percent in October. Markets welcomed the central bankers' signals for continuing easing monetary policies with optimism to have at least some fiscal policy announcements from the Washington summit.

I made about 3 percent profit from selling eurjpy.

Buying EURUSD; Opening another front

I decided to go long on Euro against dollar, buying EURUSD at 1.5570 when the pair hit its 14H moving average, based on the same reasons mentioned before.

Selling Dollar; Taking position ahead of FOMC Rate Decision

Consumer confidence, housing and manufacturing data all came weaker than expected. US stocks are in green territory now, betting on that Fed is not in a position to raise rate at least now.

I still think that there are more dollar sellers before tomorrow FOMC minutes. Durable Goods Orders and US Existing Home Sales both are due to release tomorrow, both are expected to add more concerns about the economy, making it even easier to sell dollar.

I have started to make my position. Selling USDJPY looks technically an option. I sold it at 107.84. However the best option seems to be EURUSD knowing that German CPI is ahead but I wait until technical data improve in coming hours.

When data lose their strength

Increase in New Zealand retail sales was too weak to support the kiwi last night. Also strong inflationary signs in German CPI had nothing for the euro. The reason might be that any support for the currency from high level of interest rates has been offset by the possibility of its negative effects on the economy. USDJPY is also higher, so I think I was true in closing my positions this morning.

Buying Yen and Euro, Betting on inflation

Half an hour is left to the US market close; I decided to bet on negative effects from inflation. 10 hours left to the German CPI and I am long on EURUSD at 1.5422. I have sold USDJPY at 107.88; I see the today high as the full price of recent rise in US Advanced Retail Sales.

Technically there is MACD divergence in both charts.

Global inflation in G-8, Local CPIs in calendar

Germany CPI is ahead, always supportive for the euro, but the G-8 finance ministers summit, which is scheduled this weekend, makes it difficult to comfortably selling dollar; Inflation is the main concern and it is likely to be some comments in favor of a stronger dollar. US CPI is also scheduled tomorrow.

Inflation fear can negatively affect sentiment in global stock markets, and this is what I have no doubt about it. Generally it is in favor of Yen and Swiss frank, the two main sources of carry trading.

US Retail Sales, Germany CPI, Idea for the game

US advanced retail sales is to be released on Thursday, should it come as a support for the greenback it could arrange the scene for playing the Germany CPI on Friday.