Month: June 2010

By eToro – The Euro reversed course heading lower after Greece announced that it would return to the market for an additional auction next month.  The Euro remain range bound and will likely continue to tread water. Click here to read the full daily Review

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.

By GCI Forex Research

Fundamental Outlook at 1400 GMT (EDT + 0400)

€

The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.2330 level and was capped around the $1.2395 level.  The common currency moved lower as traders were unimpressed with the lack of commitment to reducing global deficits at the Group of Twenty meeting in Toronto this weekend.  Spanish and Italian debt declined today on account of the lack of a global agreement on deleveraging global output from massive fiscal spending programs and new debt issuance.  G-20 officials reported banks needs to raise capital “significantly” and added countries will need to phase in new rules by the end of 2012.  German Chancellor Merkel said the G-20 announcement “is a success (because) industrialized countries as a group accepted this.”  The G-20 noted their “goal” is to reduce deficits in half by 2013.  Bank for International Settlements General Manager Caruana indicated banks’ stress tests may “point to the need to take action” and added it will then “be necessary to take action.”  BIS Chairman Noyer noted “The main task of the public sector is to now design policies that minimize the risks of future financial crisis and promote sustainable growth.  In this regard, international cooperation will continue to be essential.”  Data released in the eurozone today saw May M3 money supply growth decline 0.2% y/y.  Provisional June consumer price inflation data for several German states moderated while the national June CPI figures came in at +0.1% m/m and +0.9% y/y.  On a harmonized basis, CPI was was up 0.0% m/m and 0.8% y/y.  French June consumer confidence data will be released tomorrow.   In U.S. news, data released today saw the May Chicago Fed national activity index move lower to 0.21.  Also, May personal income ticked lower to +0.4% while May personal spending moved higher to +0.2%.  Additionally, the May PCE deflator ticked lower to +1.9% and May core PCE was up 0.2% m/m and 1.3% y/y.  Some traders believe the disinflationary pressures in the U.S. economy could worsen and lead to the Fed “print money.”  The Obama administration’s plan to overhaul financial laws was set back today at least temporarily following the death of Senator Byrd.  Euro offers are cited around the US$ 1.2570 level.

¥/ CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥89.45 level and was supported around the ¥89.25 level.  Bank of Japan Deputy Governor Nishimura reported global financial regulations need to be overhauled but warned any “hasty implementation” may inhibit the “fragile” economic recovery.  Nishimura also said the new global regulations need to take into account regional economic differences.  Data released in Japan overnight saw May retail trade worsen to -2.0% m/m and +2.8% y/y while May large retailers’ sales worsened to 4.0%.  Data to be released in Japan overnight include May household spending, the May jobless rate, and May industrial production.  Bank of Japan is expected to keep monetary policy very accommodative and will continue to face pressure from the government to ease policy further, possibly through the purchase of additional Japanese government bonds.  The Nikkei 225 stock index lost 0.45% to close at ¥9,693.94.  U.S. dollar bids are cited around the ¥98.45 level.   The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥110.15 level and was capped around the ¥110.80 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥134.70 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥82.55 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.7959 in the over-the-counter market, up from CNY 6.7921.  Data released in China overnight saw the May leading index decline to 103.44 from the prior reading of 104.36.  Chinese yuan forwards reversed a four-day decline after the U.S. government predicted the yuan would appreciate further.  President Obama speculated the yuan is “going to go up significantly” at the Group of Twenty meeting this weekend.  People’s Bank of China reported it will improve the efficiency and quality of financial information.

£

The British pound depreciated vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.5015 level and was capped around the US$ 1.5070 level.  Data released in the U.K. today saw the June Hometrack housing survey up 0.1% m/m and 2.1% y/y.  Data to be released tomorrow include May net consumer credit, May net lending secured on dwellings, May mortgage approvals, and May money supply data.  Former Bank of England Monetary Policy Committee member Blanchflower warned the U.K. economy could move into a double dip recession given its current budget.  Chancellor of the Exchequer Osborne recently reported the government plans to reduce spending significantly, reduce welfare payments, and increase taxes on banks.  Cable bids are cited around the US$ 1.4620 level.  The euro depreciated vis-à-vis the British pound as the single currency tested bids around the £0.8185 level and was capped around the £0.8235 level.

CHF

The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.0825 level and was capped around the CHF 1.0940 level.  The UBS consumption indicator will be released tomorrow followed by the June KOF leading indicator on Wednesday.  SNB will publish balance of payments data for Q1 tomorrow.  Swiss National Bank member Danthine reported deflationary pressures have “practically disappeared.”  Danthine added “If the need (to raise interest rates) was felt, the SNB would be able to react very quickly. But currently, we can work without having to hurry.”  Swiss National Bank is expected to intervene considerably less in the coming months after amassing a very large portfolio of euro reserves to prevent the franc from appreciating too much.  U.S. dollar offers are cited around the CHF 1.1470 level.  The euro depreciated vis-à-vis the Swiss franc as the single currency tested bids around the CHF 1.3355 level while the British pound moved lower vis-à-vis the Swiss franc and tested bids around the CHF 1.6295 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

The latest COT data out on Friday showed that futures speculators have increased their long bets for the U.S. dollar against the euro as of June 22nd, according to the Commitments of Traders (COT) data released by the Chicago Mercantile Exchange.

Non-commercial futures positions, those taken by hedge funds and large speculators, were net short the euro against the U.S. dollar by -70,974 contracts after being net short the euro by -62,360 contracts the week before on June 15th. The net short euro positions follows a sharp decline on the June 15th report to -62,360 from a total of -111,945 on June 8th.

The COT report is published every Friday by the Chicago Mercantile Exchange (CME) and shows futures positions as of the previous Tuesday. It can be a useful tool for traders to gauge investor sentiment and to look for potential changes in the direction of a currency or commodity. Each currency contract is a quote for that currency directly against the U.S. dollar, where as a net short amount of contracts means that more speculators are expecting that currency to fall against the dollar and net longs expect that currency to rise versus the dollar.

Other major currencies net short in the CME futures market against the dollar as of June 22nd were the British pound and the Swiss franc while the Australian dollar, New Zealand dollar, Japanese yen, Canadian dollar and Mexican peso all had a net long amount of contracts against the dollar.

The British Pound Sterling net shorts decreased to 46,346 from a total of 48,134 that were reported net short on June 15th while the Swiss franc positions were net short 10,265 contracts after 16,476 net shorts the week before.

The New Zealand dollar futures positions rose over to the long side with 822 long contracts after being net short -2,129 contracts on June 15th. The Japanese yen also turned net long in totals positions with 3,630 long contracts on June 22nd compared with -3680 net short contracts on June 15th as investors have trimmed their yen short positions substantially from being short by 65,612 contracts on May 4th.

The Australian dollar futures positions were net long by 11,806 contracts as of June 22nd, edging lower after totaling net 12,406 long contracts on June 15th and down from a total of 80,674 longs on April 13th.

The Canadian dollar long positions were net by 26,353 contracts and almost unchanged after 27,354 net longs the week before while the Mexican peso long contracts moved higher for a second week to 35,639 longs from 28,297 longs the prior week.

COT Data Summary (vs. the US Dollar)

Euro net shorts at 70,974 contracts from 62,360
British Pound net shorts at 46,346 from 48,134 short, decrease for 2nd straight week
Swiss Franc net shorts at 10,265 from 16,476
Canadian Dollar net longs at 26,353 from 27,354
Australian Dollar net longs at 11,806 from 12,406
New Zealand Dollar net longs at 822 from shorts of -2,129
Mexican Peso net longs at 35,639 from 28,297, 2 week increase
Japanese Yen net longs at 3,630 from -3680 shorts

Go to the Commitment of Traders CME futures data

Hello to you all! Today’s blog is actually my first post regarding the US equities market, specifically the US’s Dow Jones Industrial Average. The DJIA’s price chart, as you can see, is very similar to the one of the S&P 500 which my colleague published earlier (see his post here). Basically, the Dow is a price-weighted average of the 30 significant stocks that are traded on the New York Stock Exchange and the Nasdaq. Moreover, to technical analysts, the Dow is used as a leading barometer of the US’s economy. Well, if this is the case then we all should be worried. The ^DJI, together with the S&P 500, are both showing some signs of a possible reversal to the downside. Notice that the DJIA is also forming a potential head and shoulders pattern. A break of the formation’s neckline just below 9,750.00 would send it all the way down to 8.250.00. Both the MACD and the RSI are also giving bearish signals with the former’s histogram just about to turn negative. the latter, on the one hand, had already crossed below the 50-line, indicating that the index’s momentum is weakening. On the positive note, if the neckline hods, the Dow could once again reach the high at 10,593.86 or even revisit its 2010 high at 11,258.01.

Just recently, the US’s House of Congress and Senate reached an agreement regarding the finalized financial reform bill. The bill, which is expected to be signed into law in the days to come, will ban banks from trading for their own account and making risky bets with their own money. This, of course, would naturally limit risks, and prevent a similar financial meltdown that occurred back in ’08 though it will likewise place a cap on the banks’ and their shareholders’ potential income. So coming into this week’s G20 meeting, US President Barack Obama urged the rest of G20-member countries to do the same. His position, however, was met with some resistances as the countries which have budget deficits raised that they to to address the imbalances first before overhauling their systems. As the meeting goes along, any disparity among the leaders on how to support the global recovery could send the DJI lower.

Another high impact report that could possibly weigh on the DJI is the upcoming US NFP report. US firms are projected to have slashed for the first time in four months a total of 103,000 employees in June, possibly causing the country’s unemployment rate to worsen to 9.8% from 9.7%. Such scenario, if deemed accurate, could cause some risk aversion. And since the Us is the world’s largest economy and the most followed one, a slide in its major indices could send negative shock waves across the globe. Most of the anti-dollar currencies would likely lose some support as well against the safer USD and JPY if and when a breakdown happens.

More on Laidtrades.com …

Market Analysis by Finexo.com

Compared with last week’s action-packed schedule, which included unexpected news of the Chinese Yuan’s move to flexibility, a dramatic UK Budget Release, and a rather dovish U.S Fed Statement, this week has started off on a relatively calm note. Major pairs continue to trade near last week’s closing levels, and with relatively little news expected today, traders could very well see a continuation of low volatility. However, there is always “calm before the storm” and with the U.S Non-Farm Payrolls released on Friday forex investors can most definitely expect choppy waters ahead.

EUR/USD

The Dollar was on the defensive this morning, as forex traders sought to reduce their long positions in favor of the Greenback and the Euro climbed as the market’s focus switched from the Euro Zone’s debt crisis to the U.S. recovery.

At the beginning of the last week, the Euro fell against the Dollar, before cutting losses in the wake of weaker-than-expected housing figures and a rather cautious tone from the Federal Reserve.  The EUR was at $1.2367 by Friday’s close, down nearly 0.5% from last Monday’s high of $1.2466.

Nonetheless, the EURUSD is making another move towards $1.2450 this morning. The single currency failed in its previous attempts to cross this key resistant level; however, this time around the Euro may have the strength the break the $1.2450 barrier as Dollar preferred sentiments appear to be declining.

Support/Resistance 1.2250/1.2400

GBPUSD

The British Pound rose to a 7-week high against the Greenback on Friday after the Bank England was seen as split on when to raise interest rates and the U.K government was applauded for its strict budget cuts.  On Friday, the Sterling hit a daily high of $1.5078 before retreating to close the week at $1.5047.

The Pound’s recent momentum demonstrates that investors are stepping up to support the GBP/USD pair; therefore, another potential breakout is plausible if the pair can successfully break above last week high.

Support/Resistance 1.5000/1.5080

AUD/USD

Down under in Australia, the Aussie rose against the Dollar, last week, as speculations increased that the weaker than expected U.S recovery will hinder the Fed from raising interest rates. Last week saw the Australian Dollar benefit from the Yuan’s move to flexibility, as Australia exports a great deal of commodities to China. However, the political upheaval in the land down under hampered the Australian Dollar’s rise. Last week, the ruling Labor party elected Julia Gillard to replace the current Prime Minister Kevin Rudd. Rudd’s popularity took a turn for the worse after he was criticized for imposing a 40% tax on mining profits. However, with the new prime minister sworn in and already promising to renegotiate the controversial 40% tax, the Aussie’s focus can return to this week’s fundamental news.

Forex Market Review & Analysis by Finexo.com

Disclaimer: Trading the foreign exchange (Forex) carries a high level of risk, and may not be suitable for all investors. All information and opinions contained on this website are to be used for general informational purposes only and do not consitute investment advice.

Some analysts noticed that historically during the month of the World Cup volatility and volume take a holiday. In a few weeks, however, we may see some sharp movements as according to some traders the markets will reflect on the “slow economic data” of the current period.

The impact of the World Cup is not all fun and games. A study by Dartmouth’s Tuck School of Business indicated that the “mood” of a country is affected by a loss in the World Cup to such a degree that following the loss, the local spot market in that country declines. On average, stock indices and CFD markets decline around 0.40% after the national team loses in a World Cup game. However, the same study concluded that there is a lack of evidence showing that stock indices rise when a team wins.
It’s also possible that some traders’ eyes are glued to the TV during important games, decreasing trading volumes.

Meanwhile, the South African rand has continued to gain on international currencies. The World Cup has become more expensive for foreign visitors. The South African rand has not been this strong since before 1994.

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

After a relatively calm trading week, an extremely volatile session is expected starting today. Last week, the Dollar fell against most of the majors as poor housing data weakened the greenback; however this could all change following the U.S. employment data which is expected on Friday. Traders are also advised to follow the ADP forecast which is expected on Wednesday, as it is considered to be a reliable forecast for the real result that will be published on Friday. Will the Dollar Erase last week’s losses?

Economic News

USD – Dollar Weakens As Data Shows Slowdown in Economic Recovery

The Dollar slid against most of the major currencies during last week’s trading session. The Dollar dropped about 400 pips against the Pound and about 200 pips against the Yen.

The Dollar dropped as data showed that the U.S. economy’s recovery might be progressing slower than expected. The Existing Home Sales dipped by 2.2% in May to 5.66M from 5.79M in April, failing to reach expectations for 6.17M. The housing sector suffered from another misfortune as the New Home Sales failed to reach expectations as well. The report showed that sales of new homes plunged to a record low. Merely 300,000 new homes were sold during in May, well below the 446,000 which were sold in April, and well below the expected 424,000.

The unsatisfying data continued as the Durable Goods Orders report was published. The report showed that durable goods orders fell in May for the first time in 6 months. The report indicated a 1.1% drop. Following about 2 months in which the Dollar strengthened against most of the major currencies, such disappointing publications were enough to correct some of the Dollar’s gains.

As for the week ahead, many interesting publications are expected from the U.S. economy. The economic release which is likely to have the greatest impact will be the Non-Farm Payrolls report, scheduled for Friday. The Non-Farm payrolls report is the most reliable data regarding the U.S. employment status. Analysts have forecasted that unemployment condition in the U.S. has worsened during June. If the actual result will be similar, the Dollar’s drop may deepen.

EUR – Euro Drops On Disappointing Data from the Euro-Zone

The Euro plunged against most of its major counterparts last week. The Euro saw mixed results against the Dollar, yet weakened against both the Pound and the Yen. The Euro dropped about 400 pips against the Yen, and the EUR/JPY pair fell to the 109.52 level.

The Euro’s slide came as a result of several disappointing economic publications from the Euro-Zone. The European Current Account, which measures the difference in value between imported and exported goods and services, showed a €5.1 billion deficit in April, swinging from a €1.5 billion surplus in March. In addition, the Belgium Business Climate survey, which asks about 6,000 businesses to rate their business conditions and expectations for the next 6 months, dropped for the 27th consecutive time. Another disappointing economic publication was the Industrial New Orders report. The report showed that European industrial new orders rose by 0.9%, yet failed to reach expectations of 1.6%.

Following the ongoing gloomy forecasts regarding the Euro-Zone’s future, it seems that until solid data will prove that the European economies are truly recovering, the Euro may continue to tumble against the major currencies.

As for this week, traders are advised to follow the major publications from the German economy, such as the German Preliminary Consumer Price Index and the German Unemployment Claims. If the end results will show further recovery of the German economy, which is the largest and strongest economy in the Euro-Zone, the Euro might correct some of its losses. Traders are also recommended to follow The European Central Bank (ECB) President Trichet’s speech on Wednesday. Trichet is likely to discuss the ECB’s future plans and policy, and large volatility is likely to take place during his speech.

JPY – Yen Soars as Risk Aversion Increases

The Yen strengthened against most of the major currencies during last week’s trading session. The Yen marked a 200 pips gain vs. the Dollar, and the USD/JPY pair is now trading near the 89.30 level. The Yen strengthened against the Euro as well.

The main reason for the Yen’s rise last week was the disappointing data from the Euro-Zone and especially the U.S. economy. In the U.S. the housing sector, which was the catalyst for the recent global crisis, provided rather disturbing figures. This created concerns that the U.S. recovery might take longer than expected, and as a result will damage global recovery as well. The Euro-Zone has provided various disappointing economic publications as well. All this has reduces risk-appetite in the market, and turned investors to look for safer assets. The Yen is considered to be a relatively safe investment, and thus when risk aversion increases, investors tend to put their faith in the Yen. As a result the Yen soared against most of its counterparts.

Looking ahead to this week, a batch of data is expected from the Japanese economy. The most significant publication looks to be the Tankan Manufacturing Index, which is expected on Wednesday. This is a survey of about 1,200 large manufacturers, which are asked to rate the relative level of general business conditions. Analysts have forecasted that the end result will be negative. If the actual result will indeed be negative, the Yen may erase some of its gains from last week.

Crude Oil – Crude Oil Reaches Above $79 a Barrel

Crude Oil saw an extremely volatile session during last week’s trading. Crude Oil began last week with a sharp drop of about 400 pips, and a barrel of Crude Oil was traded below $76. However by Friday oil saw a sharp rise and Crude Oil is now trading above $79 a barrel.

Oil prices rose Friday as rough whether in the Caribbean Sea threatened to progress into a hurricane in the Gulf of Mexico. This created speculations that Oil supply could be damaged, and energy prices jumped in response. However, currently it seems that the rough whether will not develop into a severe storm, and as a result Oil’s bullish trend has eased, and Crude Oil’s prices remain steady at around $79 a barrel.

As for this week, traders are advised to follow every development regarding the weather around the Gulf of Mexico, as every publication regarding the potential hurricane could boost Oil prices once again. Traders are also advised to follow the U.S. Crude Oil Inventories report which is expected on Wednesday, as this report tends to have an immediate impact on the market.

Technical News

EUR/USD

After its recent bullish run the pair may be seeing some downward correction today. The RSI for the pair is floating in the overbought territory on the hourly chart while a bearish cross is evident on the 4 hour chart’s Slow Stochastic. An impending bearish cross can also be seen on the hourly MACD. Going short for the day may be advised.

GBP/USD

The pair may be seeing a bearish correction today as the RSI for the pair is floating in the overbought territory on the hourly, 8 hour and daily charts. A bearish cross is evident on the 4 hour, 8 hour and daily charts’ Slow Stochastic. A bearish cross is also evident on the hourly MACD. Going short for the day may be advised.

USD/JPY

The pair may see some recovery today following its recent drop. A bullish cross is evident on the 4 hour MACD as well as the 8 hour and daily charts’ Slow Stochastic. The RSI for the pair is floating in the oversold territory on the daily and 8 hour charts. Traders may be advised to go long for the day.

USD/CHF

The pair may be seeing some upward correction today as a bullish cross is evident on the hourly MACD as well as the 4 hour, 8 hour and daily charts’ Slow Stochastic. The pair’s RSI is floating in the oversold territory on the 2 hour, 4 hour, 8 hour and daily RSI while a breach of the Lower Bollinger Band is evident on the daily chart, indicating an imminent upward movement. Going long for the day may be advised.

The Wild Card

AUD/NZD

A breach of the upper Bollinger Band is evident on the 2 hour chart while the RSI for the pair is floating in the overbought territory on the hourly chart, indicating an imminent downward correction. Furthermore a bearish cross is also seen on the hourly and 2 hour charts’ Slow Stochastic. Forex traders may be advised to go short for today.

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.

Here’s an update on the price of gold from my previous most last June 10. As you can see, the price of gold has skyrocketed over the last couple of months and has yet again registered a new all-time high of $1,265.05 per ounce last June 21. It could aim for a new high in the coming days since its short term uptrend line is still well intact. Though, since its stochastics are still far from the oversold area, it could range for awhile or even retrace back to the support at $1,160.00 or at the long term uptrend line. In any case, the price of gold would likely continue to move higher in the longer term until it breaks its uptrend and reverses.

The increase in the demand for gold in the last several months is primarily due from both price speculation and market fear. It is important to note that gold bares no interest and dividends to its investors but given its intrinsic value, its one of the best assets out there that protects the investors money from inflation. Given the ongoing debt crisis in Europe and now the weak economic data from the world’s biggest economy, the US, fear is slowly making a a comeback. With the Fed’s near zero interest rates and its recent dovish comment regarding the US’s economy and their future policy, it’s no wonder why investors seek gold as a safe haven. Given the uncertainties in the market, both in Europe and in the US, any downbeat developments could send the price of gold higher. Such, though, could benefit the mining industry, specifically the gold miners. The commodity dollar like the Aussie, Kiwi, Loonie, and Swissy could also get some support with the increase in the price of gold.

More on LaidTrades.com …

By eToro – The equity fell as investors became risk adverse as the US economic data points continued to sour. The combination of poor housing data and a revised GDP lead the S&P 500 index down 40 points or 3.65% for the week.

Click here for the full review

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.

USDCHF continues its bearish movement and the fall from 1.1730 extends to as low as 1.0896 level. Deeper decline is still possible in a couple of days, and next target would be at 1.0800 area. Resistance is at the upper border of the falling price channel on 4-hour chart, now at 1.1010, as long as the channel resistance holds, downtrend could be expected to continue. Only a clear break above the channel resistance could take price back to 1.1100 zone.

Daily Forex Forecast