Forex Market Analysis provided by eToro
The European contagion is beginning to spread and today’s downgrade of Spain is a big deal. Spain’s economy is 5 times the size of Greece and Portugal. The Euro pushed through support at 1.3205, is poised to test the 1.2950 weekly trend line support level. Click here to read the full daily Review
The Hang Seng Index has recorded much bearish behavior in the past several days. However, the technical data indicates that this trend may reverse anytime soon. For example, as I demonstrate below, the 4-hour chart signals that a bullish reversal is imminent. CFD traders can take advantage of this imminent upward movement by entering long positions at an excellent entry price.
• Below is the 4-hour chart of the Hang Seng Index.
• The technical indicators used are the Relative Strength Index, MACD, and Williams Percent Ranges.
• Point 1: The Relative Strength Index (RSI) signals that the price of this pair currently floats in the over-sold territory, indicating upward pressure.
• Point 2: The MACD indicates an impeding bullish cross, signaling that the next move may be in an upward direction.
• Point 3: The Williams Percent Range is showing that this pair is heavily over-sold and may be experiencing strong upward pressure.
Hang Seng Index 4-Hour Chart
GBPUSD broke below 1.5191 key support, suggesting that a cycle top has been formed at 1.5497 level on 4-hour chart, and the bounce from 1.4798 has completed at 1.5522 already. Deeper decline is expected later today and target would be at the lower border of the price channel. Resistance is now at 1.5240, as long as this level holds, downtrend from 1.5497 could be expected to continue.
By GCI Forex Research
Fundamental Outlook at 1400 GMT (EDT + 0400)
€
The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3245 level and was supported around the $1.3140 level. As expected, the Federal Open Market Committee decided to keep interest rates unchanged. The FOMC reported “Information received since the Federal Open Market Committee met in March suggests that economic activity has continued to strengthen and that the labor market is beginning to improve. Growth in household spending has picked up recently but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software has risen significantly; however, investment in nonresidential structures is declining and employers remain reluctant to add to payrolls. Housing starts have edged up but remain at a depressed level. While bank lending continues to contract, financial market conditions remain supportive of economic growth. Although the pace of economic recovery is likely to be moderate for a time, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability. With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period. The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability. In light of improved functioning of financial markets, the Federal Reserve has closed all but one of the special liquidity facilities that it created to support markets during the crisis. The only remaining such program, the Term Asset-Backed Securities Loan Facility, is scheduled to close on June 30 for loans backed by new-issue commercial mortgage-backed securities; it closed on March 31 for loans backed by all other types of collateral.” Kansas City Fed President Hoenig dissented with the majority and he argued that “continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted because it could lead to a build-up of future imbalances and increase risks to longer run macroeconomic and financial stability, while limiting the Committee’s flexibility to begin raising rates modestly.” President Obama will announce new Fed Board nominees tomorrow. Data released in the U.S. today saw MBA mortgage applications decline 2.9% from the prior reading of +13.6%. In eurozone news, data released today saw the EMU-16 April business climate indicator improve to -0.12 while EMU-16 April industrial confidence improved to -18 with consumer confidence remaining unchanged, economic confidence improved, and services confidence improved. German data saw April harmonized consumer price inflation decline 0.1% m/m and increase 1.0% y/y. All eyes remain on Greece, Portugal, and Spain. It is being reported that Greece may require €120 billion in financial assistance over the next three years. Spain’s credit rating was downgraded today and worsening sovereign credit conditions may exacerbate conditions in the eurozone. Euro bids are cited around the US$ 1.3175 level.
¥/ CNY
The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥94.05 level and was supported around the ¥93.00 figure. Bank of Japan’s Policy Board is expected to keep its monetary policy unchanged and its main unsecured overnight call rate unchanged at 0.1% on Friday. The central bank is also expected to upgrade its assessment of current economic conditions and raise its consumer price inflation forecasts. The government will continue to pressure the central bank to maintain an ultra-easy monetary policy and possibly adopt an inflation target of 2%. Data released in Japan overnight saw March retail trade climb 0.8% m/m and 4.7% y/y. Also, March large retailers’ sales were off 5.0%. The Nikkei 225 stock index lost 2.57% to close at ¥10,924.79. U.S. dollar offers are cited around the ¥96.85 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥124.55 level and was supported around the ¥122.35 level. The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥141.70 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥86.85 level. In Chinese news, the U.S. dollar depreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8254 in the over-the-counter market, down from CNY 6.8257. People’s Bank of China pledged to keep flexible policies to react to “new conditions.” PBoC added “The world economy may stage a recovery in 2010, yet the foundation is still fragile and complicated by the growth rates of various economies and shifts in the macroeconomic policies.”
Forex Daily Market Commentary provided by GCI Financial Ltd.
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By CountingPips.com
The euro has traded higher against the U.S. dollar in forex trading despite touching a one-year low point earlier today. The euro-dollar pair (EUR/USD) has ascended above the 1.3200 exchange rate to show a current gain of approximately 30 pips on the day after dropping yesterday by over 200 pips. The EUR/USD rose to an intraday high of 1.3266 early in trading before falling to 1.3114 and marking the lowest trading level since April 28th, 2009. The euro has managed to pare that downtrend and has 
risen to currently trading near the 1.3220 level.
In today’s news, we learned that Spain had its debt rating downgraded to AA by the ratings agency Standard & Poor’s. This is only one day after similar downgrades on debts of Greece and Portugal and has heightened speculation the Greece crisis may be spreading.
Out of the U.S., the Federal Reserve held its interest rate at 0.25 percent as widely expected. The statement said that “economic activity has continued to strengthen and that the labor market is beginning to improve.” The statement also highlighted many of the aspects constraining the economy such as high unemployment, tight credit and the troubled housing market. The Fed did not change course from saying that the rate would stay at “exceptionally low levels” for an “an extended period” and once again passed on giving any signal on when a change in policy may come. Fed member Thomas M. Hoenig dissented from the committee for the third straight meeting as he objected to the expectations of low levels of interest rates going forward which may cause “imbalances” in the long-term.
Tomorrow’s economic schedule includes German employment results, Euro-Zone Industrial Confidence, the Chicago Fed national activity index and the U.S. weekly jobless claims.
EUR/USD Chart – The Euro today rebounding slightly against the US dollar on the 1-hour chart after touching over a one-year low earlier today. The pair fell over 200 pips yesterday after Greece and Portugal’s debt ratings were downgraded and while Goldman Sachs executives were grilled in front of Congress. Spain’s debt was also downgraded by the S&P today but didn’t hold the euro down for too long as the EUR/USD has popped its head back over 1.3200.
By Fast Brokers – The usually reliable Aussie joined in on the risk aversion yesterday, setting new April lows before bouncing back above its psychological .92 level. Debt fears in Greece spread to Portugal and other PIIGS nations, sparking speculation of contagion. Such uncertainty even dragged the Aussie lower since instability in the EU may lead the RBA to be cautious and neutral come May’s meeting. After all, Steven’s recently expressed that interest rates may be approaching a reasonable level. With the end of the RBA’s rate hikes coming into view, any additionally fiscal flare ups in the EU could have a more noticeable impact on the Aussie. Although yesterday’s PPI figures printed a bit hotter than expected, today’s CPI number was in line with analyst expectations. Hence, with prices tame and Australian fundamentals cooling down as of late, the RBA may become more incline to stand pat, an Aussie negative. Although Australia will be relatively quiet on the data wire tomorrow, the next 24 hours could prove to be active with the Fed’s monetary policy decision on the way.
Technically speaking, the Aussie faces technical barriers in the form of intraday, 4/26, 4/21, 4/15 and 4/12 highs. Additionally, the psychological .93 and .94 levels could serve as psychological obstacles over the near-term. As for the downside, the Aussie has multiple uptrend lines serving as technical cushions along with intraday and 3/22 lows.
Price: .9217
Resistances: .9219, .9227, .92.40, .92.51, .92.59, .92.68, 92.83
Supports: .9211, .9200, .9188, .9171, .9158, .9134
Psychological: .93, .94, .92, April highs and lows
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regarded neither 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 – Gold has regained its luster as a safe haven, casting aside its negative dollar correlation and rushing higher as the Euro and Pound dive. The S&P’s downgrades of Greek and Portugal debt really rocked the markets yesterday, sending the VIX, dollar and yen higher as investors headed for the exits. Meanwhile, attention turns to the Fed and investors will be looking to see whether the central bank alters its timeline for loose policy due to the recent upturn in U.S. economic fundamentals. However, since the Fed is likely to keep its policy unchanged due to high U.S. unemployment, new developments in fiscally troubled EU nations and in UK parliamentary elections will likely have the largest impact on gold over the near-term. Should EU bond yields continue to rise, this could boost the precious metal higher due to risk averse flows. Additionally, the closer the UK gets to a hung parliament the more uncertainty investor uncertainty will increase, a negative for the Pound and possibly a positive for gold.
Technically speaking, gold burst through previous April highs yesterday, certainly a positive development for the precious metal in terms of momentum. That being said, gold is beginning to square its sights on the highly psychological $1200/oz level and previous all-time highs. As for the downside, gold has multiple uptrend lines serving as technical cushions along with intraday and 4/27 lows. Additionally, the psychological $1160/oz and $1150/oz areas could serve as solid cushions should they be tested.
Present Price: $1167.78/ oz
Resistances: $1168.59/oz, $1170.23/oz, $1172.43/oz, $1174.22/oz, $1176.48/oz, $1178.77/oz
Supports: $1165.17/oz, $1163.59/oz, $1161.37/oz, $1159.47/oz, $1157.26/oz, $1154.73/oz
Psychological: $1170/oz, $1160/oz, $1150/oz, April highs and lows
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regarded neither 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 has popped back to its psychological 94 level after suffering a sizable leg down yesterday. The USD/JPY headed south yesterday as investors snapped up the Yen in reaction to risk-averse flows across the FX market. The USD/JPY showed that the Yen is still a favored safe haven in times of accelerated uncertainty. However, the USD/JPY has recovered quickly with investors buying up Japanese bonds as investors divest from Greece and other fiscally troubled EU nations. Additionally, Japan’s retail sales stormed higher by 4.7%, signaling the nation’s economic recovery is gaining traction. As a result, there may be less pressure on the BoJ to loosen its policy since inflation may pick up with consumption. Japan will be on a banking holiday tomorrow, meaning attention will be focused on the Fed’s monetary policy decision later today. Though the central bank is expected to keep its policy unchanged, any tightening in the time frame could really boost the USD/JPY. However, if the Fed’s statement remains unchanged then the reaction may be negligible. Altogether, it wouldn’t be unreasonable to presume that activity will pick up over the next 24 hours since the Fed normally packs the punch to really move the FX markets.
Technically speaking, the USD/JPY faces technical barriers in the form of previous April highs. As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with intraday, 4/23, 4/22, and 4/19 lows. Additionally, the psychological 93 level could continue to serve as a psychological cushion should it be tested.
Present Price: 93.92
Resistances: 94.03, 94.20, 94.33, 94.52, 94.66, 94.79
Supports: 93.88, 93.73, 93.60, 93.45, 93.29, 93.04
Psychological: .94, .93, April highs and lows
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regarded neither 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 has taken a turn for the worse, hitting its psychological 1.52and dropping below 4/19 lows as EU uncertainty spread s to the UK. The fear of contagion in the EU pushed up bond yields across the union. Naturally investors have become concerned about the UK in the process due to the nation’s uncomfortable debt level. Additionally, election polls are all over the place with a hung parliament looking likely as May 6th approaches. The concept of fiscal contagion combined with the possibility of a hung parliament has worried investors that the new UK government will not be able to institute necessary austerity measures. The Cable has been whacked as a result and the currency pair will need to post a reassuring bounce soon to regain its poise. Both BBA mortgage approvals and CBI realized sales data points were negative yesterday, providing little relief for this troubled currency pair. Although the UK was quiet on the data wire today, all eyes will be focused on the Fed’s monetary policy decision. The Fed’s decision has the potential to really move the FX markets, particularly if the central bank changes its language concerning the time frame for its loose monetary policy. However, if the Fed keeps its policy as is the impact may be negligible. Regardless, investors should keep a close watch on how the greenback reacts to the Fed’s statement. The UK will also release Nationwide HPI tomorrow and there’s always the potential for a new development in the EU, meaning the next 24-48 hours could prove to be active.
Technically speaking, the Cable still has some uptrend lines serving as defense along with 4/6 and 3/31 lows. Additionally, the psychological 1.51 and 1.50 level could serve as solid technical cushions should they be tested. As for the topside, downtrend lines are now accumulating and the Cable also faces technical barriers in the form of 4/5, 3/17, and 4/26 highs. Furthermore, the psychological 1.53 level could serve as a solid barrier should it be reached.
Present Price: 1.5196
Resistances: 1.5209, 1.5223, 1.5237, 1.5249, 1.5265, 1.5279
Supports: 1.5190, 1.5180, 1.5164, 1.5141, 1.5122, 1.5101
Psychological: 1.53, 1.52, 1.51, 1.50, April highs and lows
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regarded neither 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.
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regarded neither 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.
