Month: January 2010

By Anton Eljwizat – The current bullish trend for USD/MXN may come to an end anytime soon, and a bearish correction could be in the making. Forex traders can take advantage of this imminent downward movement by entering short positions at an excellent entry price.

• Below is the 4-hour chart of the USD/MXN currency pair.

• The technical indicators used are the Slow Stochastic, Relative Strength Index (RSI) and Williams Percent Range.

• Point 1: There is a “doji” candlestick that has formed on the chart, indicating that a reversal should take place.

• Point 2: The Slow Stochastic indicates an impending bearish cross, which may signal a downward movement is going to occur in the near future.

• Point 3: The Relative Strength Index (RSI) indicates that the price of this cross currently floats in the overbought territory, signaling downward pressure.

• Point 4: The Williams Percent Range has peaked near at the 0 marker, which means that there may actually be a strong level of downward pressure.

USD/MXN 4-Hour Chart

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Source: ForexYard

The U.S. dollar rose on Thursday to a 6-month high against the EUR as investors around the globe signaled approval of the Federal Reserve’s more upbeat outlook for the U.S. economy. The U.S. currency continues to rally on persistent concerns over the fiscal health in some smaller Euro-Zone countries such as Greece and Portugal.

Economic News

USD – Dollar Weakens vs Yen after Weak U.S. Data

The U.S dollar extended gains on Thursday after the U.S. Labor Department reported that the number of initial jobless claims in the latest week fell 8,000 to 470,000.

Against its Japanese counterpart, the Dollar reversed earlier gains to trade at 89.89 yen, after topping 90 yen earlier and compared to 89.99 yen late Wednesday. The greenback pared its gains versus the Japanese yen after U.S. data showed initial jobless claims fell less than expected last week, while durable goods orders increased less than expected in December.

The U.S. dollar’s gains accelerated against major currencies after the Federal Reserve kept Interest Rates near zero, as expected, but issued a more upbeat assessment of the U.S. economy. Today, the main data focus will be U.S. fourth-quarter gross domestic product (GDP) at 1330 GMT. U.S. GDP may have expanded at a 4.7% pace from October through December, more than double the prior quarter’s growth rate and the strongest since the first three months of 2006.

EUR – EUR Weakens vs. Majors

The EUR fell yesterday to its lowest level in 9 months against the Japanese yen and more than 6 months against the U.S dollar. The single currency dropped to $1.3918, its lowest since mid-July, before edging back to $1.3923, down 0.4% on the day. The EUR also fell as far as 124.81 yen, weakest the EUR/JPY has been since April, to stand 0.6% down on the day.

The 16-nation currency weakened for a 4th day against the greenback after the cost to protect Greek government bonds from default climbed to a record and before a report showed the Euro-zone’s unemployment rate reached an 11-year high. Adding to pressure on the EUR were warnings from credit ratings agencies that Portugal needs to come up with a clear plan of further budget consolidation beyond 2010 to prevent downgrades after this year’s budget plan failed to alleviate concerns.

The EUR may continue to depreciate against the U.S. dollar as Greek bonds and credit-default swaps show investors are beginning to doubt the nation can reduce the biggest budget shortfall in the European Union without assistance from outside.

JPY – Yen Firms as Fall in Stocks Undermines Sentiment

The Japanese yen appreciated yesterday to 89.59 against the U.S dollar today from 90.27, and appreciated to 124.83 per EUR, the strongest level since April 28. A stronger Yen reduces the value of overseas sales for Japanese companies when converted into their native currency.

The Yen gains were trimmed however as dollar buying emerged related to Japanese investment trusts, known as toushin. A fall on Wall Street also undermined investors’ willingness to hold risk positions, with many share markets in Asia also down more than 1 percent.

OIL – Crude Trades Near $74 on U.S. GDP Growth

Crude Oil prices reached $74 a barrel on Friday as investors focused on U.S. Gross Domestic Product data for the 4th quarter that is expected to show strong growth. Prices were slightly lower Thursday after the U.S. dollar rose to its highest level in more than 6-months against the EUR, which fell on concern over potential fiscal crises in European economies including Greece and Portugal. A stronger Dollar often indicates investors are funneling cash away from riskier assets such as commodities. It also can curb demand for crude oil from buyers who hold other currencies, since oil is priced in dollars.

Technical News

EUR/USD

The weekly chart shows the pair moving on a consistent downward sloping trend line. A downward sloping trend line is apparent on the 7-day Relative Strength Indicator and also on the 10-day Momentum Indicator. This shows the downward price movement may have room to run. The pair has passed a 32% retracement level from the previous long term uptrend and now the pair could reach the 50% retracement level which sits at the price of 1.3746. Traders may want to trade with the trend, going short.

GBP/USD

The range trading of the pair continues. The 4-hour chart shows a potential opportunity to enter the market inside the range. The pair fell close to the support level of 1.6109 and has begun to rise. The chart’s Slow Stochastic shows a potential bullish cross has formed, indicating the potential for an upward price appreciation. The chart’s 10-day Relative Strength Indicator has also fallen below the lower limit. Traders may want to wait for the RSI direction to turn up and go long with a target price of 1.6260.

USD/JPY

The weekly chart displays continuing bearish signals with a downward sloping trend line, and a downward sloping MACD histogram. This signals the potential continuation of the downward trend. Also the pair started its last downward move at the upper limit of its Bollinger Bands and has crossed the 20-day moving average. This shows the pair may continue moving lower until it reaches its lower border. The daily chart also shows the pair was unable to break the middle line of its Bollinger Bands, indicating a strong bearish trend. Traders may want to be short on this pair.

USD/CHF

The bullish trend is loosing its steam and the pair seems to consolidate around the 1.0525 level. The daily chart’s RSI is already floating in an overbought territory suggesting that a recent upwards trend is weakening and a bearish correction is impending. Going short with tight stops might be a wise choice.

The Wild Card

Silver

Silver prices are once again dropping and it is currently traded around $13.15 per ounce. And now, the daily chart’s Slow Stochastic is giving bullish signals, indicating that silver prices might go up. This might give forex traders a great opportunity to enter a very popular trend.

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Gold prices continue to be under pressure as the Dollar strengthens. The yellow metal started the week testing resistance at the $1100 level, but it headed south as the US currency rallied curbing the demand for metals as an alternative investment. Gold is currently being supported around $1075, but it’s hard to say that these supports could hold any longer if a new wave of selling pressure were to hit the market.  Gold traders will be closely watching the US GDP numbers and its effect on the Dollar as it seems clear that currencies are driving the price action of the metal. On a broader picture, recent cautious moves from China instructing banks to curb lending can be perceived as bearish for the Gold market. The opinion of billionaire investor George Soros about gold being “the ultimate bubble” is shared by many investors, suggesting that market’s sentiment could be anticipating further declines.

GOLD DAILY CHART

Bullish Scenario– Support around the 1075 level holds the bearish wave and sends Gold north in a new bullish cycle.

Target A– 1100
Target B– 1125

Bearish scenario– A break below the 1170-1175 area fuels the bearish sentiment further to test the 1050 level and potentially lower.

Target A- 1050
Target B– 1025

Daily Forex Market Analysis provided by eToro

Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.

© 2009 eToro Blog.

USDCAD broke below the rising price channel on 4-hour chart and formed a short term cycle top at 1.0691 level. Now the price action from 1.0691 is treated as consolidation of uptrend. As long as 1.0691 resistance holds, sideways movement is expected to continue, however, a clear break above 1.0691 level will suggest that a cycle bottom has been formed at 1.0556 level and the uptrend from 1.0224 has resumed, then next target would be at 1.0800 area.

Written by ForexCycle.com

By Adam Hewison – One of the most powerful technical tools that a trader possesses is a pencil and a ruler. It sounds kind of old-school, but the reality is trend lines in technical analysis are enormously important.

In my new video I will show you how the NASDAQ index has broken a very important trend line and what the ramifications are for this index.

We can all learn from the simplicity of this approach and how effective it is in the long run.

As always our videos are free to watch and there are no registration requirements.

Watch the New Video Here….

Enjoy the video and please feel free to comment on blog about this simple yet effective way of trading.

All the best,

Adam Hewison
President, INO.com
Co-creator, MarketClub

By GCI Forex Research

Fundamental Outlook at 1500 GMT (EDT + 0500)

€

The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3940 level and was capped around the $1.4050 level.  The common currency continues to suffer following a lack of clarity regarding Greece’s fiscal deficit and the manner in which Greece is trying to bridge its deficit.  Both Greece and China have denied the report that the former is asking the latter to purchase as much as €25 billion in Greek debt.  European officials spoke about Greece’s and the eurozone’s other fiscal problems today.  Greek Prime Minister Papandreou said his country will reduce its deficit while Spanish Prime Minister Zapatero pledged extensive reforms including up to €50 billion in spending cuts.  European Central Bank President Trichet said many industrialized countries share similar problems.  The German finance ministry today denied a fresh rumour that the European Union would help Greece avoid a fiscal meltdown.  Data released in the eurozone today saw EMU-16 economic confidence improve for a tenth consecutive month to 95.7.  Also, Germany’s unemployment rate climbed to 3.617 million in January, taking the unadjusted jobless rate higher to 8.6% from 7.8% in December.  In U.S. news, the U.S. dollar sold off on Obama’s State of the Union speech and U.S. equity markets also came off.  The Federal Open Market Committee yesterday kept interest rates unchanged and noted there has been economic improvement.  Also, the Fed noted its program to support mortgage-backed securities will unwind at the end of March as planned.  Kansas City Fed President Hoenig dissented yesterday by voting in favour of removing additional monetary accommodation at this time.  Data released in the U.S. today saw weekly initial jobless claims decrease to 470,000 from a revised 478,000 while continuing jobless claims fell to 4.602 million.  Also, December headline durable goods orders came in lower-than-expected at +0.3%, up from the November revised print of -0.4%, while the ex-transportation component printed at +0.9%, down from a revised +2.1%.  Also, the December Chicago Fed national activity index worsened to -0.61. Euro bids are cited around the US$ 1.3885 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥89.60 level and was capped around the ¥90.55 level.  Data released in Japan overnight saw December overall retail sales off a worse-than-expected 0.3% y/y and overall retail sales in the fourth quarter of 2009 were off 0.8% y/y, contributing to 2009’s overall 2.3% decline.  A media report today indicates that Japanese government bond issuance may rise to around ¥55 trillion in fiscal year 2013, up from the estimated ¥ 44.3 billion of new issuance planned for the next fiscal year.  Bank of Japan Governor Shirakawa was reported as saying the economic recovery “will not be interrupted” while former BoJ official Iwata said the central bank should clarify its position on “price stability.”  Bank of Japan kept its monthly economic assessment unchanged and noted the economy is “picking up,” adding it will continue to improve at a moderate pace.  The central bank also said the decline in consumer prices is moderating and housing investment has “stopped falling.” As expected, Bank of Japan’s Policy Board this kept its overnight call rate unchanged at 0.1% and kept its economic assessment intact.  The central bank upwardly revised its deflation forecast for the fiscal year that begins in April and is now eyeing a decline of 0.5%, better than the 0.8% decline in prices it predicted in October.  The Nikkei 225 stock index climbed 1.58% to close at ¥10,414.29.  U.S. dollar offers are cited around the ¥94.75 level.  The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥125.10 level and was capped around the ¥127.05 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥144.60 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥85.05 level. In Chinese news, the U.S. dollar depreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8268 in the over-the-counter market, down from CNY 6.8269.  People’s Bank of China Deputy Governor Zhu reported the U.S. carry trade is dangerous to the global economy and added China will continue to pursue a stable yuan.

₤

The British pound moved lower vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.6110 level and was capped around the $1.6275 level.  U.K. Chancellor of the Exchequer Darling said reform that has already been agreed-upon should be implemented.  Darling added the U.K. economic is “moving in the right direction”. Bank of England today announced it is abandoning its temporary swap lines with the Federal Reserve and said it has ended its asset purchase program of gilts.  Sterling picked up ground yesterday on comments from Bank of England Monetary Policy Committee member Sentance who said it will be difficult to keep inflation on target given sterling’s depreciation.  He also said data suggests the U.K. economy expanded more in Q4 than reported at +0.1%.  Cable bids are cited around the US$ 1.6030 level.  The euro moved lower vis-à-vis the British pound as the single currency tested bids around the ₤0.8600 figure and was capped around the ₤0.8675 level.

Forex Daily Market Commentary provided by GCI Financial Ltd.

GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.

DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

By CountingPips.com

Economic news out of the U.S. today showed that durable goods orders increased by less than expected in the month of December. Durable goods orders in the United States rose by 0.3 percent in December to a total of $167.9 billion according to the U.S. Commerce Department today. December’s total follows two straight months of decline including a revised decrease of 0.4 percent from November. November’s data was originally estimated to have risen by 0.2 percent before today’s revision.

Durable goods are products manufactured in the U.S. and considered to last more than three years. Market forecasts had been expecting that durable goods orders would increase by approximately 2.0 percent for the month.

New orders for durable goods excluding transportation increased by 0.9 percent in December following a revised increase of 2.1 percent in November. This data surpassed market forecasts which were predicting an increase of 0.5 percent for durables minus transportation for the month.

December’s results for shipments of durable goods increased by 2.9 percent and gained for the fourth straight month. Unfilled orders decreased for the fifteenth straight month by 1.2 percent while durable good inventories decreased 0.2 percent in December. December nondefense orders for new goods fell by 0.2 percent while defense orders for capital goods decreased by 2.8 percent.

Weekly Jobless Claims fall by 28,000.

A separate government release by the U.S. Labor Department showed that weekly U.S. jobless claims decreased in the week that ended on January 23rd. New jobless claims fell to a total of 470,000 unemployed workers, a decrease over the prior week by 8,000 workers. A 4-week moving average of unemployed workers declined by 9,500 from the prior week to a total of 456,250.

Meanwhile, workers seeking continuing claims for unemployment benefits for the week ending January 16th also decreased for the week. Continuing claims fell by 57,000 workers to a total of 4,602,000 unemployed workers. A four week moving average of continuing claims dropped by 94,250 to 4,669,250.

US Dollar trades higher in Forex.

The U.S. dollar has been gaining in forex trading today against the other major currencies as inverstor’s risk appetite has left the markets. The dollar has advanced today versus the euro, British pound, Canadian dollar and the Swiss franc while falling against the Japanese yen as of 1:19 pm EST according to currency data by Oanda. Against the New Zealand dollar and Australian dollar,  the American currency is trading virtually unchanged after reversing losses earlier today.

The U.S. stock markets, meanwhile, are declining sharply today with the Dow Jones following by approximately 100 points, the Nasdaq decreasing over 40 points and the S&P 500 down by almost 10 points so far.  Oil has edged down by $0.26 to $73.41 while gold has fallen by $3.20 to trade at the $1,081.30 per ounce level.

USD/CAD 4-Hour Chart – The US Dollar has pared some early losses today versus the Canadian Dollar in forex trading to gain by approximately 20 pips against the Canadian currency. The USD/CAD is gaining for the fourth day in a row today to trade over the 1.0650 level after touching a monthly low on January 14th below 1.0230.

By Fast Brokers – The AUD/USD posted a solid rally earlier today after dropping below our 1st tier uptrend line.  The FX market experienced a broad-based risk rally fueled by a positive reaction to Obama’s State of the Union.  Asia equity markets charged higher, a positive sign for the Aussie since China’s equities have been on a losing streak since the financial industry began tightening liquidity.  However, the Dollar is appreciating again after U.S. weekly Unemployment Claims printed higher than analyst expectations.  Furthermore, Durable Goods Orders came in weak as well.  However, the Core DGO data surpassed analyst expectations, showing consumption ex-auto has picked up.  Regardless, econ data this week has been altogether mixed with a negative tint, creating a downward drag on most major Dollar pairs and the AUD/USD is no exception.  Meanwhile, investors are preparing for tomorrow’s U.S. Advance GDP data release.  The GDP number will top off a wild week and volatility should remain at a heightened state.  Australia will be absent from the data wire for the remainder of the week, meaning the AUD/USD’s behavior should remain in the hands of broad-based activity in the Dollar along with any further news from China regarding liquidity.

Technically speaking, the AUD/USD is currently fighting to stay above our 3rd tier uptrend line with our 1st and 2nd tier hanging below.  Additionally, previous January lows and the psychological .8900 level should serve as technical cushions should they be reached.  As for the topside, the AUD/USD faces multiple downtrend lines along with 1/28 and 1/26 highs serving as technical barriers.  Furthermore, the .9000 area could continue to serve as a psychological force over the near-term.

Price: .8990

Resistances:   .8995, .9005, .9019, .9030, .9042, .9056

Supports: .8982, .8972, .8960, .8950, .8940

Psychological: .90, January highs and lows

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers – The USD/JPY logged solid gains over the past 24 hours with the risk trading getting a boost from a positive reaction to Obama’s State of the Union.  Furthermore, the Fed’s commitment to a loose monetary policy helped fuel the risk trade.  Meanwhile, Japan released weaker than expected Retail Sales data, leading investors to prefer the Dollar over the Yen.  However, the USD/JPY is relinquishing some of its gains as the risk trade gets knocked by more negatively mixed U.S. economic data.  Weekly Unemployment Claims printed higher than analyst expectations, adding onto yesterday’s disappointing New Home Sales number.  Furthermore, Durable Goods Orders came in weaker than expected while the Core DGO number surpassed expectations.  This tells us that although consumption is improving, demand for autos is waning.  Such a development could be negative news for Japanese manufacturers especially considering all of the recalls Toyota is making right now.  Meanwhile, Japan will release a large set of data during tomorrow’s Asia trading session, including Household Spending, CPI, Prelim Industrial Production, and meeting minutes from the BoJ’s policy meeting this week.  Investors will be looking to see whether the BoJ hinted at any inclination to loosen liquidity to fight deflationary forces.  Furthermore, during the U.S. trading session investors will receive Prelim GDP data.  Hence, the USD/JPY could remain very active as the trading week comes to a close.

Technically speaking, the USD/JPY has multiple uptrend lines serving as technical cushions along with 1/22 and 1/26 lows.  As for the topside, the USD/JPY faces multiple downtrend lines along with intraday and 12/18 highs.  Furthermore, the .90 area could continue to have a psychological influence on the USD/JPY over the near-term.

Present Price: 90.06

Resistances: 90.22, 90.39, 90.57, 90.75, 90.90, 91.05

Supports: 89.95, 89.72, 89.55, 89.36, 89.21, 89.02

Psychological: 90, January highs and lows

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers – The Cable is trading slightly below intraday highs after rallying in reaction to the Fed’s commitment to loose monetary policy in addition to a broad-based risk rally occurring during Obama’s State of the Union.  Volatility is really picking up and the FX markets are all over the place as investors digest data and psychological events.   Although U.S. Unemployment Claims printed higher than expected and Durable Goods disappointed, the Core DGO number surpassed analyst expectations.  Hence, even though unemployment remains at a high level consumers are pickup up more pricey, longer lasting goods excluding autos.  The U.S. will also release its Advance GDP, meaning investors will have more than enough data to sift through.  Meanwhile, the UK will print its Nationwide HPI data tomorrow, suggesting volatility in the Cable could pick up a bit.  It will be interesting to see how the currency pair reacts should HPI come in light considering the Pound is exhibiting a relative strength despite disappointing Prelim GDP and Realized Sales data earlier this week.  The Pound’s strength is highlighted by another large leg down in the EUR/GBP.  Investors should also keep an eye on gold as it battles to get back above its psychological $1100/oz level.  A breakout in either direction could bring the Cable along for the ride considering the two are normally positively correlated.

Technically speaking, the Cable made an encouraging move today by topping January 25 highs.  However, the currency pair is presently being negated by our multiple downtrend lines.  In addition to these downtrend lines the Cable also faces technical obstacles in the form of 1/20, 1/15, and 1/29 highs.  As for the downside, the Cable has multiple uptrend lines serving as technical cushions along with 1/27, 1/26, and 1/22 lows.  Considering the Cable continues to set higher lows the currency pair appears to have a solid near-term support system in place.  Furthermore, the psychological 1.60 could serve as a technical cushion should conditions deteriorate.

Present Price: 1.6243

Resistances: 1.6247, 1.6264, 1.6285, 1.6312, 1.6334, 1.6359

Supports: 1.6223, 1.6195, 1.6171, 1.6143, 1.6119, 1.6099

Psychological: 1.60, 1.65, January highs and lows

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.