Month: January 2010

Market Movers of the Day

Asia-Pacific

*New Zealand Trade Deficit narrowed more than forecasted to -269M

Europe

*German PMI Services worse than forecasted at 52.7

*UK Nationwide Consumer Confidence worse than predicted at 69

*UK PMI Services worse than expected at 56.8

*EU PMI Composite in line with market expectations at 54.2

*EU Industrial Orders worse than expected at -2.2% MoM

*EU PPI lower than forecasted at 0.1% MoM

Americas

*US ISM Non-Manufacturing worse than estimated at 50.1

*US ADP Employment Change worse than expected at -84K

*US EIA Crude Oil Stocks climbed 1.3M

*US FOMC Minutes

The Overall Sentiment

Equities

US stock markets barely managed to close on the positive side, led by gains from raw-materials producers as commodities continued to rally, after some oscillations caused by economic data releases that failed to meet expectations. The S&P added 0.1% and the Dow ended rather flat, advancing less than 0.1%. Minutes of the FOMC meeting in December showed difference of opinion between Fed policy-makers on the schedule for withdrawing the emergency stimulus program. Some officials stated that unwinding stimulus might hurt the recovery in the housing sector and expressed concerns about the economy being capable to sustain improvement once the support is removed. In Europe, the main indices oscillated throughout the day, closing little changed with a gain of less than 0.1%.

Forex

The Dollar weakened against most majors, gaining only against the Yen, as risk appetite set the tone in the Forex arena. EUR/USD climbed to 1.4435 intraday but still remained within range. The pound advanced modestly against the greenback, ending around 1.6020, after a volatile session ahead of the BOE’s rate decision. Commodity-linked currencies continued to shine as energy and metal extended gains. The Aussie dollar rose above 0.92 against its US peer and traded slightly beyond 85 versus the Yen, aiming to reach its highest levels in 15 months. The Canadian dollar strengthened against its US counterpart for a fifth day, almost touching the 1.03 level. The Yen weakened across the board as Japan’s Finance Minister Fujii resigned from office due to health problems, adding to the uncertainty and worries surrounding the direction of the Japanese economy. Naoto Kan was appointed as the new Finance Minister, with the duty of avoiding a double-dip recession, as deflation continues to loom over the economic health of the Land of the Rising sun.

Commodities

Crude Oil extended its advance in spite of a 1.3 million-barrel gain in stockpiles, almost touching $83.50 intraday, to close around $83.20. Gold continued to rally for a sixth day as the Dollar weakened, topping slightly above $1140. Silver rose as well, ending around $18.15.

The Day Ahead

The day will start with the Australian Retail Sales and Trade Balance, with expected positive figures that could fuel a further strengthening of the Aussie dollar. In the European session, EU Consumer Confidence is likely to continue in the road of improvement, whereas EU Retail Sales are expected to show no change from the previous month. The Bank of England’s rate decision will be the center of attention, with benchmark interest at 0.50% forecasted to remain unchanged, while no amends are predicted for the BoE’s Quantitative Easing program, at least until the next meeting in February. During the US session, Initial Jobless Claims are expected to rise to 440K, and the Canadian Ivey PMI is predicted to decrease to 52 from a previous 55.9.

Technical Analysis

GOLD DAILY

Bullish Scenario– A daily closing above 1140 will confirm the bullish sentiment driving the yellow metal to higher levels.

Target A– 1168

Target B– 1195

Bearish scenario– Resistance at 1140 holds sending Gold down for a correction.

Target A- 1110

Target B– 1072

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.

Being supported by the rising trend line from 87.37 to 88.97, USDJPY rebounded from 91.25, suggesting that a short term cycle bottom has been formed on 4-hour chart. Range trading between 91.25 and 93.21 is expected in a couple of days. As long as 91.25 support holds, the price action from 93.21 is treated as consolidation of uptrend from 84.82 and one more rise towards 94.00-95.00 area is still possible. However, below 91.25 will indicate that lengthier consolidation is underway, then another fall could be seen to 90.50 area.

Daily Forex Signals

By CountingPips.com

U.S. employment data was released today in the form of the ADP National Employment Report and showed that U.S. private employment declined by more than expected in December. The nonfarm private employment fell by 84,000 workers in December following the revised November decline of 145,000 jobs. November’s data was revised downwards from the original release of 169,000 jobs lost.

December’s data surpassed the decline of 75,000 jobs that the market forecasts were expecting.  The employment data, despite the decrease, has improved in each of the last nine months and today’s report marked the best result since March of 2008.

The service-providing sector showed an increase of 12,000 jobs in December while the goods-producing sector fell by 96,000 jobs. The manufacturing sector had a loss of 43,000 jobs while construction jobs fell for the 35th straight month with a decline of 52,000 workers. All size of businesses continued to cut jobs in December as large businesses lost 34,000 jobs, medium sized businesses shed 25,000 jobs and small businesses dropped 25,000 jobs. Small businesses in the services sector did show an uptick of hiring with an increase of 11,000 jobs.

The market-moving US Nonfarm Payrolls report for December is to be released Friday at 12:30 pm GMT with market forecasts predicting a flat result or no change in the jobs after November’s surprising decrease of just 11,000 jobs.

US Dollar lower in forex trading.

The U.S. dollar has been mostly on the defensive in forex trading against the major currencies today. The dollar has gained versus the Japanese yen while falling against the euro, Canadian dollar, Swiss franc, Australian dollar and the New Zealand dollar according to currency data by Oanda at 1:49 pm EST. The dollar is trading virtually unchanged against British pound.

The US stock markets have been mixed with the Dow Jones and the S&P 500 trading virtually unchanged at the time of writing while the Nasdaq has decreased over 5 points.  Oil has edged higher by about $1.00 to trade at $82.84 while gold has gained by almost $16.00 to trading around the $1,134.00 per ounce level.

USD/CAD Chart – The US Dollar falling versus the Canadian Dollar today in forex trading. The USD/CAD has declined for four straight days and today touched its lowest level in trading since October 20th at the 1.0320 level.

By Yan Petters – Some of you have already noticed it, but for those of you who have not, you may want to pay attention. The EUR/NOK pair has dropped over 3,000 pips during the last month! With no signs of halting, this appears to be one of the sharpest trends in the market.

• The chart below is the EUR/NOK 4-hour chart by ForexYard.
• The technical indicators used are the Bollinger Bands, the Slow Stochastic, the MACD/OsMA and the Relative Strength Index (RSI).
• All 3, Slow Stochastic, MACD and the RSI are showing a negative slope, which indicates that the momentum is clearly bearish.
• Furthermore, the MACD and the RSI show a very accurate bearish channel, which also indicates that the pair is in the midst of a strong bearish trend.
• The pair has now reached a significant support level at the 8.1550 price.
• If the pair will manage to breach though, another sharp drop could be expected.
• However, be cautious, if the pair will fail to breach this level, a bullish correction might be initiated as a result.

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.

By Rita Ruvinski – The Australian dollar hit a 2 year high against the EUR Wednesday and a 3 week high versus the U.S dollar as prices of commodities gold and oil which make up more than half the nation’s exports, held near 14-month highs. Crude oil, Australia’s 4th most-valuable commodity export, traded near a 14-month high yesterday, making a strong impact on the currency’s strength.

The Australia’s dollar gained 0.3 % against the European single currency and went below 1.60, the most since November 2007. The AUS/USD cross rose 0.2% to 91.38 from 91.19 when it reached 91.74 cents, the most since Dec. 14. The Aussie also climbed 0.6% against the Japanese yen to 84.15 yen.

Demand for Australia’s dollar increased after the Australian home-building approvals rose 5.9% in November, the Bureau of Statistics said today. Given a rise in commodities, higher equities and the Australian dollar’s yield advantage over other currencies, investors feel comfortable about buying the local currency.

The outlook for commodity prices in particular will be a key driver for sentiment toward the Aussie in coming months, according to analysts. The Aussie will likely be one of the best-performing currencies in the coming weeks, with potential price targets of 1.5602 and 1.5514 in extension.

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

Tuesday’s much worse than expected Pending Homes Sales release boosted the U.S. Dollar and the Yen as investors returned to the safety of the greenback and the Japanese currency. Both the Yen and Dollar reverted back to gaining in times of negative economic data. A full news day today will likely prove quite volatile for the major pairs, particularly in light of yesterday’s disappointing surprise.

Economic News

USD – USD Regains Safe Heaven Status

The USD advanced against most of its counterparts except the Yen Tuesday, as a slew of negative data reduced appetite for riskier assets, and investors turned to the safety of the greenback and the JPY.

The Pending Home Sales report plunged a seasonally adjusted 16% in November from October, pressuring equities and reducing the appeal of riskier assets. The Dollar Index rose to 77.684, up from 77.503 late Monday and 77.34 earlier in the session.

Today, investors’ attention will be focused on the release of the FOMC meeting minutes at 19:00 GMT as they will look for any clues regarding rate increases and a timeline for the removal of stimulus and a tightening of monetary policy. Today will also see the release of the ADP Non Farm Payroll Report at 13:15 GMT. This will be a prelude to Friday’s highly anticipated Non Farm Employment release. The ISM Non Manufacturing PMI is expected at 15:00 GMT. This eventful day will likely prove very volatile for the greenback and its counterparts.

EUR – EUR Pressured by Renewed Credit Concerns

Credit concerns returned to the Euro-Zone Tuesday, putting negative pressure on the common currency, with Iceland facing a downgrade of its credit rating. The EUR was little affected by data showing unemployment in Germany unexpectedly fell in December, the sixth consecutive monthly decline. Late Tuesday in New York, the EUR was at $1.4368 from $1.4411 late Monday and at 131.73 yen from 133.42 yen. The U.K. Pound was at $1.5996 from $1.6101. A decline in equities following the release of the disappointing U.S Pending Homes Sales data put further pressure on the EUR as investors shied away from riskier assets and turned to the safety of the USD and JPY.

With U.S economic data dominating the news releases today, the EUR and Pound’s movements will likely be affected by the movements of the U.S currency. However, several important news releases are expected from Europe today, including the release of the British Services PMI at 9:00 GMT and the Euro-Zone Industrial New Orders at 10:00 GMT. After several months of expansion, the figure is expected to show a decline for the previous month; this will likely put further pressure on the EUR/USD pair.

JPY – JPY Benefits form Negative Economic Data

The Yen traded near a two-week high against the Dollar as disappointing U.S Pending Home Sales data signaled an uneven U.S economic recovery. This reduced expectations that the Federal Reserve will raise interest rates earlier than expected.

The Yen traded early this morning at 91.64 per USD from 91.71 yesterday when it declined to 91.26, the lowest level since Dec. 25. The JPY was at 131.79 per EUR from 131.75 yesterday. Adding further pressure to the USD versus the JPY was a decline in U.S Treasury Yields, making it less attractive for Japanese investors to buy foreign currency. Today’s economic data releases will likely provide a direction for the Yen.

Crude Oil – Crude Gains for Ninth Consecutive Day

Light, sweet crude for February delivery settled 26 cents, or 0.3%, higher at $81.77 a barrel on the New York Mercantile Exchange. While oil prices continued to grow Tuesday, the rally flattened out as equities declined and USD gained versus most of its major counterparts. Light volume trading ahead of the release of today’s U.S. crude and fuel inventory data added to the decline in momentum. The report from the Energy Information Administration (EIA) is due at 15:30 GMT.

Total stockpiles declined to their lowest levels since March last week as demand improved, driven up by an increase in heating oil consumption due to exceptionally cold weather in most of the U.S, the world’s largest oil consumer. This week’s data is expected to show a drop in stockpiles, and might lead to a reversal for the current rally in oil prices.

Technical News

EUR/USD

After going through a mild technical correction, it appears that the pair has resumed its general downtrend, as it is now trading at the 1.4350 level. Currently, as all oscillators on the 4-hour chart are pointing down, it seems that going short might be the preferable decision today.

GBP/USD

The pair is still trading within the bearish channel as the direction still points downward. However there is a bullish hint in the form of a cross on the 2 hour Slow Stochastic. The hourly chart’s Bollinger Bands are tightening which indicates that the break is near. Going long with tight stops might be smart today.

USD/JPY

This pair is still in the midst of a steady uptrend which is not yet showing any sign of leveling out. There is also a very accurate bearish channel forming on the hourly chart indicating that there is still plenty of steam left in this bullish move. Once this pair breaches the 92.20 level it’s likely to make another sharp break upwards.

USD/CHF

The pair is in the midst of a bullish correction, and is currently trading around the 1.0340 level. As all oscillators on the 4 hour chart are pointing up, another bullish session might take place. Going long seems to be preferable.

The Wild Card

Platinum

After a period of volatile sessions, all oscillators on the hourly and 4 H charts are providing bullish signals, suggesting that this commodity is building a strong bullish momentum. Currently trading at $1536, Platinum might aim for the $1610 mark in the near future, giving forex traders an opportunity to enter the commodity at a convenient price.

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.

Europe

German Unemployment change drops by -3.00k

Germany’s unemployment rate held steady at 8.1%

Prices in the Euro-zone came out as expected at 0.9%

Americas

Pending home sales drop 16% vs. an expected -2.8%

Factory order climb 1.1% against economist’s expectations of 0.5%

Daily Market Review Jan 06, 10

The major indices were put to the test yesterday, after a positive start turned into a mixed session. After jumping higher at the start of the session, the two major indices; the Dow Jones and S&P500 dropped into negative territory. Housing data and Factory orders were the culprits of yesterday’s session, both having an intraday effect.

Pending home sales dropped 16% in November, the sharpest decline since the National Association of Realtors started tracking the data, in 2001. The report broke a major 10 month rally, which had been associated with increasing home sales since February. Despite the negative housing data, which is clearly showing that the sector is still struggling, Factory Orders hit the board showing improvement. New Orders for manufactured goods rose 1.1% in November, compared to economists’ expectations of a 0.5% figure. According to the Federal Reserve Bank of Cleveland, nondefense capital goods excluding aircraft bounced in November by a whopping 3.6%, while shipments continued to show improvement, increasing by 1%.

The nine major sectors presented a mixed picture with financials closing the day with a 1.84% gain. The lagger of the day was utilities, closing down by -1.19%. The Broader market index finished the session with a minor gain of 0.31% after presenting a volatile session. From a technical point of view the index is still trading at its recent highs, climbing higher due to the popular January affect.

Forex

On the Forex market the Dollar index bounced back, closing the session with a 0.14% gain, after trading most of the session mixed. From a technical point of view the Dollar index is now finding minor stability around its prior support level formed during last August at 77.48 points. Even though today’s candle is currently presenting a hammer, the course of the day will provide further confirmation as to whether the Dollar is finding proper support around current levels.

On individual pairs the GBP/USD lost further ground after the Wall Street Journal reported that the U.k’s government could face an 80% chance of a credit rating downgrade due to their deficit problems. According to the paper gilts could increase dramatically once the government stops its bond purchasing program, a situation which could have a negative effect on the GBP.

From a technical point of view the GBP/USD dropped throughout the session and is now coming down to test support of $1.5868. Indicators, including the RSI are still trading at reasonable levels, but could become oversold around the upcoming support level.

The USD/JPY also presented an interesting session, breaking trend line support. The move is currently being attributed to the upcoming NFP result, an event which could rattle the markets. Bullish traders preferred to take some money off the table, ahead of the major event and also due to recent news headlines stating that the Japanese government decided to accept Fujii’s resignation. During early morning hours the Dollar regained strength versus the Yen and is now testing its breakout.

The Day Ahead

Looking forward, today’s major events will be the ADP Nonfarm Employment Change and the FOMC meeting minutes. The employment report is expected to show a -75.00k decrease during the month of November, compared to October’s fall of -169.00k. One must note that even though the data is classed as market-moving, the report measures only the monthly change of the nonfarm private employment while the upcoming NFP result measures all non-farming businesses.

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.

GBPUSD broke below 1.6040 support, suggesting that a short term cycle top has been formed at 1.6238 level on 4-hour chart. Now the fall from 1.6238 could possibly be resumption of downtrend from 1.6875 (Nov 16 high). Deeper decline towards 1.5708 (Oct 13 low) is now in favor. Key resistance is now located at 1.6238, only break above this level could indicate that the fall from 1.6875 has completed.

Daily Forex Forecast

By CountingPips.com

U.S. Pending Homes sales declined sharply in the month of November according to the monthly report released by the National Association of Realtors(NAR) today. The NAR report showed that pending home sales contracts signed by buyers fell by 16.0 percent in November following October’s 3.9 percent increase. Despite the monthly decline, pending home sales were 15.5 percent above the November 2008 sales level. November’s sales drop surpassed market forecasts that were expecting an approximate 2.0 percent fall for the month.

NAR chief economist Lawrence Yun commented on November’s report saying, “It will be at least early spring before we see notable gains in sales activity as home buyers respond to the recently extended and expanded tax credit. The fact that pending home sales are comfortably above year-ago levels shows the market has gained sufficient momentum on its own. We expect another surge in the spring as more home buyers take advantage of affordable housing conditions before the tax credit expires.”

Pending home sales in the Northeast fell by 25.7 percent in November while the Midwest also saw a decline by 25.7 percent for the month. The South and the West saw lesser declines in November with decreases of 15.0 percent and 2.7 percent, respectively. On an annual basis, all four areas were above the November 2008 sales level with the Northeast showing an annual gain of 14.7 percent, the Midwest showing a 9.2 percent annual rise, the South showing a 14.7 percent increase and the West showing a 21.4 percent advancement.

US Dollar showing mixed results in forex trading.

The U.S. dollar has been mixed in forex trading today against the major currencies after the Pending Home Sales data. The dollar has gained versus the euro, British pound, Swiss franc, Australian dollar and the New Zealand dollar while falling against the Canadian dollar and the Japanese yen according to currency data by Oanda at 1:19 pm EST.

The US stock markets have traded lower today after yesterday’s strong gains with the Dow Jones falling by over 30 points and the Nasdaq decreasing over 4 points while the S&P 500 is unchanged at the time of writing.  Oil has edged higher to trade around $81.65 while gold has gained by almost $4.00 to trading around the $1,121.10 per ounce level.

By Fast Brokers – The Crude futures are holding strong above their psychological $80/bbl level as cold fronts continue to hit the U.S. and UK.  Harsh winter weather is increasing demand for heating oil, a positive catalyst for crude.  Furthermore, tensions in the Middle-East along with encouraging manufacturing data from both the U.S. and China are contributing to crude’s strong performance.  However, crude still faces 2009 highs and the psychological $80/bbl area proved to be a tough trading zone in the past.  Meanwhile, investors are looking forward to tomorrow’s ADP Non-Farm Employment Change data.  A turnaround in U.S. unemployment sparked December’s rally in equities and crude despite positive movements in the Dollar.  Hence, it will be interesting to see how investors react to tomorrow’s ADP figure should it print above or below analyst expectations.  That being said, crude’s correlation with the Dollar could be unreliable for the time being until we get a better idea of how the correlative forces play out.

Technically speaking, crude’s movement above our 3rd tier downtrend line could be a key development since our 3rd tier runs through November ’09 highs.  Hence, crude could be in for a retest of 2009 highs in the near-future.  That being said, the psychological $80/bbl area has proven to be a tricky trading zone in the past.  Therefore, crude may need more positive fundamental developments to send the future beyond 2009 levels.  As for the downside, crude has multiple uptrend lines serving as technical cushions along with 12/29 and 12/24 lows.  Additionally, the psychological $80/bbl level may now serve as a cushion should it be retested.

Price: $81.68/bbl

Resistances:  $81.81/bbl, $82.26/bbl, $82.75/bbl, $83.18/bbl

Supports: $81.29/bbl, $80.71/bbl, $80.35/bbl, $79.93/bbl, $79.23/bbl, $78.48/bbl

Psychological: $80/bbl, $75/bbl, 2009 highs

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.