Month: January 2010

By Fast Brokers – The EUR/USD has been fluctuating around its psychological 1.40 level as invertors digest the Fed’s monetary policy statement, Obama’s State of the Union Address, and today’s mixed bag of U.S. economic data.  While Bernanke and the Fed played it safe and kept its policy in neutral, volatility really picked up during Obama’s State of the Union Address.  The EUR/USD initially headed south to intra-session lows, but the risk trade rallied as Obama spoke and addressed the financial industry with a slap on the wrist and this encouraged investors that his proposed regulation may not be as constrictive as previously thought.  However, the impact from Obama’s speech should wear off by the beginning of next week.  Meanwhile, the U.S.released weaker than expected Unemployment Claims and Durable Goods data.  These negative releases tack onto yesterday’s disappointing New Home Sales number, signaling the U.S. economy’s recovery is progressing very slowly.  On a bright note, the Core DGO number printed above analyst expectations, showing durable goods purchases excluding autos picked up.  In fact, the strong core number is probably limiting weakness in the EUR/USD right now as the Dollar wobbles.  In addition to today’s U.S. data releases, the EU printed a Germany Unemployment Change figure which topped analyst expectations, a positive development for the Euro.  However, the Euro is still underperforming, as highlighted by another downturn in the EUR/GBP.  That being said, it seems mixed EU econ data combined with worries surrounding Greece’s economy are continuing to weigh down on the currency.  The EU will release CPI and Money Supply data tomorrow to go along with the headline Unemployment Rate.  Although focus will likely remain on the U.S. as it releases its Advance GDP.  Meanwhile, even though the EUR/USD is sinking lower the AUD/USD and GBP/USD have firmed up over the past 24 hours, so it will be interesting to see how the Dollar reacts to tomorrow’s news.

Technically speaking, the EUR/USD faces topside technical barriers in the form of multiple downtrend lines along with 1/27 and 1/25 highs.  As for the downside, the EUR/USD has our 1st tier uptrend line serving as technical cushions along with previous January lows.  Our 1st and 2nd tier uptrend lines could carry some weight since they run through some April 2009 lows.  That being said, a failure of our 1st tier could send a fairly negative signal considering April 2009 lows are around the 1.30.

Present Price: 1.3989

Resistances: 1.4028, 1.4069, 1.410, 1.4135, 1.4174

Supports:  1.3981, 1.3950, 1.3929, 1.3900, 1.3876, 1.3833

Psychological: 1.40, January 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 Anton Eljwizat – In the last two weeks of trading, the GBP/NZD experienced much bullishness, as it stands now at 2.2810. However, as I demonstrate below, it seems that the pair’s bullish run may have run out of steam, and a bearish correction could be underway soon. Forex traders have the opportunity to wait for the downward breach on the hourlies and go short in order to ride out the impending wave.

• Below is the daily chart of the GBP/NZD currency pair.

• The technical indicators that are used are the William Percent Range, Relative Strength Index (RSI), and MACD.

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

• Point 2: The MACD indicates an impending bearish cross, signaling that the next move may be in a downward direction.

• Point 3: The Williams Percent Range signals further bearishness for the pair, which in turn indicates further downward pressure to occur anytime soon.

• Point 4: The Relative Strength Index (RSI) indicates that the price of this cross currently floats in the overbought territory, signaling downward pressure.

GBP/NZD Daily 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.

By Elliott Wave International

Like a spy who gets a burn notice, Federal Reserve Chairman Ben Bernanke has suddenly lost his support.

Bernanke has gone from being Time magazine’s Man of the Year in 2009 to … what? A Fed chairman embroiled in a controversial reconfirmation process before U.S. Congress. Why the sudden turnaround in his fortunes?

Robert Prechter, president of the research firm Elliott Wave International, has written about the history of the Fed and its chairmen several times over the years, and his research shows that their popularity rises and falls with social mood, which is measured by the stock market. Here is a compilation of excerpts from Prechter’s monthly market letter, The Elliott Wave Theorist, from 2005-2009 about the trouble he sees brewing at the Fed.

Can the Fed Stop Deflation? Robert Prechter answers this all-important question in his Free Deflation Survival Guide. The guide gives you a 60-page ebook that will help you understand deflation and its effects on society; you’ll even learn how to survive and prosper in such an environment. Download Your Free 60-Page Deflation eBook Here.

(November 2005) The Coming Change at the Fed | Public figureheads have a way of representing eras. This is certainly true of entertainment icons and politicians. The history of Fed chairmanship implies a similar tendency for changes of the guard to coincide with changes in social mood and therefore stock prices and the economy. [The chart below] depicts our social-mood meter—the DJIA—since the Fed’s creation in 1913, marked with the reigning chairmen according to a list on the Fed’s website.

The first chairman, Hamlin, presided over a straight-up boom. As it ended, Harding took over and presided over an inflationary period that accompanied a bear market, exiting just as a new uptrend was developing. Crissinger took over at the onset of the Roaring Twenties, and Young presided over the boom, the peak and the rebound into 1930. Meyer took over just as confidence was collapsing and left the office in early 1933 at the exact bottom of the Great Depression. The next three chairmen struggled through the choppy years of the 1940s. Then Martin presided over virtually the entire advance from the early 1950s through 1969, exiting just before the recession of 1970. Burns and Miller presided over a bear market and exited as the new uptrend was developing. Volcker, after weathering an inflation crisis, presided over the explosive ’80s. Greenspan has presided over the manic ’90s and the topping process. [Ben Bernanke] will have his own era. Given the eras that have immediately preceded the coming change in leadership, the odds are that this new environment will be a bear market.

(June 2006) Economists are convinced that the Fed can “fight” inflation or deflation by manipulating interest rates. But for the most part, all the Fed does is to follow price trends. When the markets fall and the economy weakens, the price of money falls with them, so interest rates go down. When the markets rise and the economy strengthens, the price of money rises with them, so interest rates go up. The Fed’s rates fell along with markets and the economy from 2001 to 2003. They have risen along with markets and the economy since then. Regardless of the Fed’s promise to keep raising rates, you can bet that the price of money will fall right along with the markets and the economy. Pundits will say that the Fed is “fighting” deflation, but it will simply be lowering its prices in line with the others.

It is highly likely that the next eight years or so will test the nearly universally accepted theory—among bulls and bears alike—that the Fed can control anything at all. The Great Depression made it look like a gang of fools, as will the coming deflationary collapse. We have predicted unequivocally that the new Fed chairman will go down as Hoover did: the butt of all the blame, and if you are reading the newspapers you can see that it’s already started. “When Bernanke Speaks, the Markets Freak” (San Jose Mercury News, June 10, 2006); “Bernanke is being blamed for spooking Wall Street” (USA Today, June 7, 2006); “Bernanke to blame for volatility” (Globe and Mail, Canada, Jun 13, 2006). The new chairman had a brief honeymoon (which we also predicted), but it’s already over.

By the way, I heard his commencement speech at MIT last week, and in it he spoke eloquently of the value of technology and free markets. But he also opined that economists have successfully applied technology to macroeconomics. We believe that the collective unconscious herding impulse cannot be tamed, directed or managed. In our socionomic view, the Fed cannot control the mood behind the markets, but rather, the mood behind the markets controls how people judge the Fed. We’ll ultimately find out who’s right.

Can the Fed Stop Deflation? Robert Prechter answers this all-important question in his Free Deflation Survival Guide. The guide gives you a 60-page ebook that will help you understand deflation and its effects on society; you’ll even learn how to survive and prosper in such an environment. Download Your Free 60-Page Deflation eBook Here.

(December 2009) Bernanke’s greatest achievement was not the measly $1.25t. of debt that he arranged to have the Fed monetize; it was convincing the government to shift the burden of debt default from the speculators and creditors to taxpayers.

(September 2009) Thanks to the Fed Chairman and two Treasury Secretaries, profligate bankers have been cashing checks off the Fed’s and the Treasury’s accounts, and the poor savers and taxpayers who fund these institutions are unaware that their personal bank accounts are being tapped by counterfeiters and thieves.

That lack of awareness may soon change. Declining social mood is fueling the drive to expose the Fed’s secrets. [Ed. note: Bloomberg News has sued the Fed under the Freedom of Information Act; Congressmen Ron Paul, R-Texas, and Barney Frank, D-Mass., are leading a charge to audit the Fed.] Exposing the Fed’s secret deals could lead to scandal and the collapse of major money-center banks. But most important to our monetary outlook, it will serve to curb the Fed’s reflation efforts. As I have written many times, deflation will win. Social mood is impulsive and cannot be stopped. The downtrend will claim its victims by whatever measures it must take to do so.

(August 2009) On July 26, in a speech in Kansas City, MO, Fed Chairman Ben Bernanke declared, “I was not going to be the Federal Reserve chairman who presided over the second Great Depression.” (WSJ, 7/27) We think this implication of a fait accompli is premature. Clearly, the Fed Chairman and the majority of economists are of the opinion that the worst of the financial crisis is past and that the Fed’s unprecedented lending has averted deflation and depression. But wave 3 down in the stock market will dispel these illusions. Years ago, we suggested that Chairman Greenspan quit if he wanted to keep his lofty reputation. He didn’t do it. Now Chairman Bernanke should consider this option.

So will Bernanke serve a second term as Fed chairman? The January 2010 Elliott Wave Financial Forecast says, “Social mood is still too elevated to deny Bernanke reappointment as head of the Fed. … But rising political tension confirms that his next term will be far more stressful than his first.”

Can the Fed Stop Deflation? Robert Prechter answers this all-important question in his Free Deflation Survival Guide. The guide gives you a 60-page ebook that will help you understand deflation and its effects on society; you’ll even learn how to survive and prosper in such an environment. Download Your Free 60-Page Deflation eBook Here.

Source: ForexYard

Following signals from the U.S. Federal Reserve that American interest rates may be increased sooner then expected, the U.S. Dollar got a significant boost in trading last night and in the early morning today. Today, a full set of Dollar related news events will likely determine the direction the greenback goes for the rest of the week.

Economic News

USD – Interest Rate Rumors Boost Dollar

The U.S. Federal Reserve (FED) left interest rates unchanged following their policy meeting on Wednesday, but an overall tone of optimism left the door open to an increase in the near future. The Dollar reacted to the news by shooting up to a near 6-month high against the Euro. The pair was trading as low as 1.3994 on Wednesday, before rebounding to its current level of 1.4020.

Today, the forex news cycle will be dominated by Dollar events. Core Durable Goods Orders, the latest Unemployment Claims report, as well as the Senate vote to reappoint Ben Bernanke as chairman of the FED, are all likely to create heavy market volatility.

Analysts are generally optimistic about today’s Dollar news, with unemployment forecasted to drop and the Core Durable Goods Orders in positive territory. Traders can expect the Dollar to make further gains today providing the news comes in as predicted. This will likely be especially true against the Euro, which is still reeling from Greek debt concerns.

EUR – Euro Hits near Record Lows against Dollar

The Euro dropped below the psychologically significant 1.4000 mark yesterday against the U.S. Dollar. This was largely due to rumors that U.S. interest rates may be increased in the near future, combined with continuing concerns regarding Greek debt. Investors shied away from riskier currencies as it became apparent that European interest rates will likely remain at their record lows for some time.

Today, any movement among Euro pairs will likely be a result of Dollar news. The only potentially significant European news event today is the German unemployment change report set to be released at 08:55 GMT. Unemployment in Germany is forecasted to have risen over the last month, which if true, will likely weigh down on the already weak Euro.

Traders will want to pay attention to any news regarding Portugal’s handling of their debt. Experts are saying that their current budget will not do enough to cut their deficit to a responsible level. If true, this would likely mean more bad news for the Euro in the forex market.

JPY – USD/JPY Rises Following FED Meeting

The Yen took some significant losses against the Dollar in early morning trading today, rising to its current level of 90.30. Investors are continuing to flock to the greenback and away from the Yen as American interest rates may change in the near future. JPY also fell against the Euro, with the pair shooting up to its current level of 126.50.

Yen traders will want to pay attention to a number of news events, such as the Japanese Household Spending Report and the Japanese Monetary Policy Meeting minutes, both scheduled to be released today. Any positive news regarding the Japanese economy will likely help the Yen bounce back from its current status in the marketplace.

Crude Oil – Oil Increases Following American Inventories Report

Following Wednesday’s news that U.S. Oil inventories unexpectedly fell last week, prices increased somewhat significantly to the current level of 73.90. Investors hoping for prices to remain at or near the $74.00 level were pleasantly surprised by yesterdays report. Typically when inventories fall, demand goes up, thereby driving up prices.

Today, Crude traders will want to pay attention to any U.S. Dollar movement. If the Dollar continues to make gains, Oil prices may drop. A strong Dollar usually drives investors away from alternative investments like Oil. That being said, any worse then expected U.S. economic news could result in solid Oil gains in trading today.

Technical News

EUR/USD

The pair may be seeing some correction today as the RSI on the 4 hour, 8 hour and daily charts are floating in the oversold territory. There is also an impending bullish cross seen on the hourly MACD. Going long for today may be a good option.

GBP/USD

The pair is currently trading in neutral territory, but traders will want to pay attention hourly chart MACD which exhibits a fresh bearish cross, indicating the pair’s recent downward trend persists. Still, traders may want to take a wait and see approach regarding this pair today.

USD/JPY

A downward correction may be seen today as the hourly and 2 hour RSI are floating in the overbought territory and a bearish cross is seen on the 2 hour and 4 hour charts’ Slow Stochastic. Going short for the day may be advised.

USD/CHF

The 4 hour, 8 hour and daily RSI are floating in the overbought territory. A breach of the upper Bollinger Band is evident on the 8 hour chart, while an impending bearish cross is evident on the hourly MACD. Going short for the day may be a good option.

The Wild Card

GBP/CHF

The pair may be seeing some downward correction today. A breach of the upper Bollinger Band is evident on the 2 hour chart, while a bearish cross is evident on the 4 hour and 8 hour charts’ Slow Stochastic. The two hour, 8 hour and daily RSI are floating in the overbought territory, supporting the notion of a correction. Forex traders are advised to go short for the day.

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.

Not so long ago the US was perceived to be lagging behind the rest of the world recovering from the crisis much slower than other G7 nations. As a result the Dollar was pushed south rather vigorously with the grim growth outlook constantly looming. However recent data shows this might not be the case as some key indicators surprised for the better. The US GDP rose 2.2% for Q3 in an annual pace and both ISM Manufacturing and consumer confidence held above the 50 mark. Most importantly unemployment is showing signs of stabilizing with initial Jobless claims holding under 500K and unemployment steady at 10%.With the UK economic performance lagging and sovereign default of Spain, Portugal and Greece weighing on the EU, shorting the dollar is no longer the obvious choice. Already consensus bets are slowly shifting towards the Dollar. The Greenback rebounded from its lows gaining since December 7.5% and 4% against the Euro and the Pound respectively.

The Fed– one of the strongest factors influencing Dollar bets in becoming more optimistic on the US economy. Although the Fed continues to stress rates in the US will be extremely low for a pronged period the Fed is actually tightening monetary conditions by other means. The Fed ended its Quantitative Easing program which was aimed to assist credit moreover the Fed declared its mortgage securities purchase will end in March. Both pose liquidity facilities intended to tackle the tight credit conditions, ending both means the Fed will print less Dollars and outlines the Fed is bullish on the economy, signaling the economy can stand on its own feet. Yesterday in the Fed rate decision Fed Chairman Ben Bernanke kept his pledge to leave rates low and left the key rate unchanged at a record low of 0.25%.Nevertheless when examining the rhetoric of the statement it Is evident the Fed is becoming more bullish on the economy. The Chairman announced that the Fed’s mortgage backed securities purchasing program of $1.43 Trillion will end in March as planned and expressed optimism by stressing that economic activity continues to improve. The chairman also changed its rhetoric on inflation calling inflation prospects as likely to remain moderate rather weak as it previously stated, a slight improvement pointing the Fed no longer sees inflation as completely out of the question. The Dollar reacted with a modest gain but was able to dip under the 1.4$ key barrier against the euro.

The Housing Market still the largest risk–Although the Fed statement yesterday was rather bullish on the economy one thing grabbed investors attention, the Fed did not relate to the housing market. It seems that the Fed intentionally avoided any statements with respect to the housing market amid the planned exit of MBS program (Mortgage Backed securities). In fact when examining the latest figures coming out of the housing market with new homes sales falling  7.6% MoM and existing home sales falling a staggering -16.7% MoM it is not surprising the Fed avoided relating to the housing market . Relating to the weak figures could panic over the Fed’s exit program.A panic the Fed is more than interested to avoid.

Why are investors concerned so much from weakness in the housing market? The largest banks in the US have gigantic exposures to the housing markets if the housing market continues to deteriorate credit delinquencies will rise and the pressure on US banks will mount. The result will be tighter credit conditions and a grave risk to the entire recovery process.

Ahead of tomorrow’s GDP figure, is it time to bet on the buck?

For the Short Term– Consensus bets point to an expected 4.6% growth in an annual pace. If the figure will be within the range of consensus the Dollar move to break above current levels will be in place. If GDP will disappoint this could invite a correction in the Dollar after rallying in the last few weeks. The Dollar will be pushed to lower levels to regain momentum.

For the Long term-Watch for unemployment and existing home sales, since only a continuous improvement in both indicators will set the stage for a long term monetary tightening by the Fed. A rise in existing home sales signals home stocks are getting lower hence prospects for the whole real-estate sector will improve and banks will feel more comfortable to fuel businesses with credit. A fall in unemployment has always been a preliminary condition for the Fed to raise rates after a recession. If both will improve the possibility of a rate hike will become more imminent and Dollar bets will become more crowded.

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 breaks below the lower border of the rising price channel on 4-hour chart, suggesting that a short term cycle top is being formed at 1.0691. Range trading between 1.0550 and 1.0691 would more likely be seen in a couple of days. However, the price action from 1.0691 is treated as minor consolidation of uptrend from 1.0224. One more rise to 1.0900 is still possible after consolidation and a break above 1.0691 could signal resumption of uptrend.

Daily Forex Analysis

By CountingPips.com

The U.S. Federal Open Market Committee concluded its monetary policy meeting today by holding the U.S. interest rate steady at its record low level. The FOMC had cut the federal funds interest rate to the target range of 0 percent to 0.25 percent in December 2008 and today’s decision to keep the rate unchanged was widely expected by market forecasts.

The Fed statement was without major surprises and exhibited a more upbeat tone on the economy than previous releases. The statement said that, “economic activity has continued to strengthen and that the deterioration in the labor market is abating. Household spending is expanding at a moderate rate but remains constrained by a weak labor market, modest income growth, lower housing wealth, and tight credit.”

One of the most eagerly awaited parts of the statement was whether the FOMC would give any hint on when the interest rate level might change. Today, the statement gave no such indication and used the same language as in the past, saying the rate is likely to remain at “exceptionally low levels” and for “an extended period.”

Today’s decision was not a unanimous one as Kansas City Fed President Thomas M. Hoenig disagreed with the other nine FOMC members. According to the report, Hoenig thought the “economic and financial conditions had changed sufficiently that the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted.”

US Dollar gains in Forex Trading, reaches 6-month high against Euro

The U.S. dollar has been stronger in forex trading today against the other major currencies after the Federal Reserve’s interest rate announcement today. The dollar has gained today versus the euro, Japanese yen, Canadian dollar, Swiss franc, New Zealand dollar and the Australian dollar while falling against the British pound as of 5:16 pm EST according to currency data by Oanda.

The U.S. stock markets finished the day on a positive note with the Dow Jones gaining by 22.83 points, the Nasdaq increasing 12.77 points and the S&P 500 up by 3.43 points for the day.  Oil edged down by $1.06 to $73.65 while gold declined by $13.50 to trade at the $1,084.40 per ounce level.

EUR/USD Daily Chart – The Euro has continued its decrease versus the US Dollar today in forex trading and fell to its lowest level in over six months. The EUR/USD has fallen by approximately 50 pips today and traded under the 1.4000 level for the first time since July 15th as the pair hit a low of 1.3992. This pair has maintained its current downtrend since touching its January highpoint on January 13th at 1.4579 and has descended by approximately 550 pips in just about two weeks. The EUR/USD trading under the 200-day simple moving average (dark blue) below.

By CountingPips.com

New Home Sales in the United States decreased more than expected for the month of December according to data released by the Department of Commerce today. Purchases of new single family homes fell to an annual rate of 342,000 in December for a 7.6 percent decline from November. Revised data showed that new home sales decreased in November by 9.3 percent to an annual rate of 370,000 homes. On an annual basis, December’s rate of new homes sold was 8.6 percent lower than the December 2008 level.

December’s results failed to match market forecasts which were expecting a 3.0 percent increase in sales for an annual rate of 374,000 new homes sold.

Total new home sales for all of 2009 were estimated to number 374,000 homes, marking a record low annual sales level. This is 22.9 percent under the 2008 total of 485,000 new homes sold.

Contributing to the decrease in December was a 41.1 percent drop in new homes sold in the the Midwest while the South registered a 7.3 percent decline in sales. Sales in the Northeast surged by 42.9 percent while the West saw an increase by 5.2 percent from November to December.

US Dollar mixed in Forex Trading.

The U.S. dollar has been mixed in forex trading today against the other major currencies after the new home sales report and before the Federal Reserve’s interest rate announcement later today.

The dollar has gained today versus the euro, Canadian dollar, Swiss franc, New Zealand dollar and the Australian dollar while falling against the Japanese yen and the British pound at 11:15 pm EST according to currency data by Oanda.

The U.S. stock markets have been mixed so far today with the Dow Jones falling by over 15 points, the Nasdaq increasing over 2 points and the S&P 500 down by just under 1 point at time of writing.  Oil has edged down by $0.10 to $74.61 while gold is down by $6.90 to trade at the $1,091.00 per ounce level.

EUR/USD 1H Chart – The Euro continuing its decrease versus the US Dollar today in forex trading.  The EUR/USD has fallen to trading under the 1.4040 level today. This pair has maintained its current downtrend since touching its January highpoint on January 13th at 1.4579.

By Fast Brokers – Gold is continuing its consolidation around the psychological $1100/oz level as the Dollar wavers ahead of U.S. New Home Sales and the Fed’s monetary policy decision.  The chaotic appearance of our chart implies that gold could be approaching a turning point.  All of our trend lines are colliding while the EUR/USD and AUD/USD trade around key supports.  That being said, investors should monitor the major Dollar crosses for any considerable technical setbacks for this could forewarn of a similar decline in gold.  On the other hand, should the major Dollar pairs be able to stabilize and the Dollar weaken, this could help gold make up for some of January’s lost ground.  In addition to today’s data and Fed decision, Obama will also deliver his State of the Union tonight followed by U.S. Durable Goods Orders tomorrow.  Hence, volatility could pick up over the next 24-48 hours.

Technically speaking, gold has multiple uptrend lines serving as technical cushions along December ’09 lows should they be tested.  As for the topside, gold faces a few steep downtrend lines along with the highly psychological $1100/oz level.  Furthermore, intraday and 12/31 highs could serve as technical barriers should they be reached.

Present Price: $1093.25/oz

Resistances: $1096.91/oz, $1100.67/oz, $1103.49/oz, $1106.31/oz, $1110.07/oz, $1115.39/oz

Supports: $1088.45/oz, $1085.01/oz, $1082.10/oz, $1079.30/oz, $1074.95/oz, $1070.65/oz

Psychological: $1075/oz, $1100/oz, December 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 is drifting lower today as the Dollar strengthens against the Pound and Euro, a sign the trend of risk aversion is still in place.  Chinese equities declined again today as investors digest a tighter monetary policy from the central bank.  Although the positive U.S. CB Realized Sales number aided the risk trade yesterday, the optimism wasn’t lasting and investors are opting to focus on today’s U.S. New Home Sales followed by the Fed’s monetary policy decision.  Furthermore, Obama will deliver his State of the Union tonight and he is expected to address his budget proposals for the coming year.  That being said, the Dollar should remain active for the next 24-48 hours, particularly with Durable Goods Orders on the way tomorrow.  Thursday’s CDO data could have a noticeable impact on the USD/JPY since Japan is reliant upon a recovery in U.S. consumption to help buoy Japanese manufacturers and exporters.  Negative CDO data could drag the USD/JPY lower to somewhat uncomfortable levels.  That being said, if the USD/JPY’s decline persists it will be interesting to see how long the BoJ will sit on the sidelines before taking a more vocal approach towards weakening the Yen.  Although the BoJ reiterated its intent to fight deflationary pressures yesterday, the statement wasn’t aggressive enough to warrant a pop in the USD/JPY.  Japan will release Retail Sales during Thursday’s Asia trading session followed by CPI, Household Spending, and Prelim Industrial Production on Friday.  Hence, activity could heat up in the USD/JPY as the week wears on.  Japan’s Trade Balance printed weaker than expected today, meaning Friday’s data set could come in mixed.

Technically speaking, the USD/JPY has multiple uptrend lines serving as technical cushions along with 12/18 and 12/14 lows.  As for the topside, the USD/JPY faces multiple downtrend lines along with intraday and 12/18 highs.  Furthermore, the psychological 90 level may work against the USD/JPY should conditions deteriorate further.

Present Price: 89.38

Resistances: 89.39, 89.60, 89.71, 89.95, 90.14, 90.39

Supports: 89.21, 89.02, 88.85, 88.62, 88.45, 88.28

Psychological: 90, December 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.