EUR Remains Bullish Despite Egyptian Turmoil

Source: ForexYard

The euro was able to stay above the 1.3700 level against the US dollar in overnight trading, as analysts are predicting a hike in euro-zone interest rates in the near future. The anticipated hike outweighed investor concerns regarding the prolonged Egyptian turmoil, which had sent riskier assets like the euro down earlier in the week.

Economic News

USD – USD Tumbles in Overnight Session

The US dollar turned bearish late last night, as rumors began circulating that the euro-zone may raise key interest rates in the near future. The anticipated move caused investors to flock to riskier assets like the euro and sterling, largely at the expense of the greenback. The EUR/USD was once again able to move above the psychologically significant 1.3700 level, after having fallen as low as 1.3570 during yesterday’s session. Currently the pair stands at 1.3716. The GBP/USD shot up close to 60 pips in the overnight session before staging a slight correction. Currently the pair stands at 1.6045.

Today, dollar traders will want to pay close attention to this month’s US ISM Manufacturing PMI, scheduled to be released at 15:00 GMT. The manufacturing industry has proven to be a significant indicator of American economic health. For today’s figure, analysts are predicting a result of around 57.8, which if true would signal industry expansion, albeit less than in December. Assuming the PMI comes in as predicted, the dollar may see some short term gains in the afternoon session.

In addition, traders do not want to forget that this is Non-Farm payrolls week. Wednesday’s ADP Non-Farm Employment Change and Friday’s Non-Farm Payrolls figure are going to inject a substantial amount of volatility into the marketplace. Do not miss this unique opportunity for large profits following the news.

EUR – EUR Trading Mixed Against Main Currency Rivals

An anticipated euro-zone interest rate hike caused the EUR to turn bullish against the safe haven dollar and yen throughout the day yesterday. That being said, the euro was not able to maintain its gains against the Japanese currency in the overnight session. The EUR/JPY has begun correct itself, and has already fallen close to 30 pips since late last night. Currently the pair is trading just above the 112.40 level.

Against the UK pound, the euro was decidedly bearish throughout the day yesterday. The EUR/GBP dropped close to 80 pips yesterday, and has yet to stage a significant upward correction. Currently the pair is trading close to the 0.8550 level.

Today, traders will want to pay particular attention to the UK Manufacturing PMI, scheduled to be released at 09:30 GMT. The PMI is forecasted to say that there was expansion in the British manufacturing sector last month. Should the PMI come in at its anticipated level of 58.0, the euro could move down further against sterling in the morning session today.

JPY – Yen Maintains Bullish Trend

The JPY has been largely able to recover from last week’s surprise sovereign debt rating downgrade, and the USD/JPY pair is once again trading below the 82.00 level. The pair had gone as high as 82.14 during the evening session last night, but ultimately turned bearish as investors chose the safe haven yen amid all of the uncertainties in Egypt.

Against the euro, the yen tumbled during yesterday’s session, but started to stage a recovery overnight. Currently the EUR/JPY is trading at 112.44, down almost 30 pips from late last night.

Today, a lack of significant Japanese news means that the yen will likely move based on the manufacturing data set to be released out of the UK and US. A positive indicator from either the UK or US may lead to renewed risk taking among investors, which would likely cause the yen to turn bearish today.

OIL – Crude Oil Flat Following Bullish Session Yesterday

After shooting up more than $4 yesterday, crude oil traded relatively flat in the overnight session. Oil’s bullish behavior was attributed to the turmoil in Egypt, which has threatened to spread throughout the Arab world. Investors are still fearful that further political unrest in the Middle East may hamper oil production. As such, the price of oil went from as low as $88.34 a barrel yesterday, to as high as $92.30. Currently the commodity is trading at $91.86.

Today, traders will want to keep up with any news from Egypt. Further unrest is likely to drive the price of oil higher. At the same time, the sooner the Egyptian government is able to quell protests and reinstate a level of calm in the country, the sooner the price of oil will likely stabilize.

Technical News


The Bollinger Bands on the 8-hour chart appear to be tightening, indicating that a price shift is likely to occur in the near future. Furthermore, the Relative Strength Index on the daily chart is in overbought territory, indicating that the shift may be downward. Traders are advised to go short with their positions today.


The Williams Percent Range is currently well into the overbought zone on the daily chart, indicating that a downward correction may occur today. In addition, the Relative Strength Index on the 8-hour chart is also overbought. Going short may be the wise choice today.


The Stochastic Slow on the 8-hour chart has formed a bullish cross, indicating that an upward correction is likely to occur in the near future. The Williams Percent Range on the daily chart is currently at the -90 level, giving further support to the theory of upward movement today. Going long with tight stops may be the preferred strategy today.


Most technical indicators on the hourly chart show this pair range trading, indicating that no specific direction is being predicted at this time. Traders may want to take a wait and see approach for this pair, as a clearer picture is likely to present itself later today.

The Wild Card


The Bollinger Bands on the 8-hour chart appear to be narrowing, indicating that a price shift is likely to occur soon. The Williams Percent Range on the same chart is currently in overbought territory, and a bearish cross appears to be forming on the 4-hour chart’s Stochastic Slow. All signs are pointing to a downward correction, giving forex traders an excellent opportunity to open up short positions for potentially significant profits.

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US Dollar declines whereas the EURO remains Strong despite Egypt Political Crisis

The US dollar remained under pressure on Monday’s North American trading session due to unrest in Egypt whereas the Euro strengthened on the latest consumer price data which is expected to result in anti inflationary measures by European Central Bank.

The dollar index DXY which measures the greenback’s performance versus its six major rival currencies declined to 77.77 as compared to 78.171on Friday’s late trading session.

The Euro surged to 1.3689 versus the US dollar as compared to 1.3608 on Friday. The British Pound also advanced to 1.6020 against the greenback as compared to 1.3608 on Friday.

The Euro remained strong on the latest report by European Union according to which consumer price inflation in United Kingdom increased to 2.4 percent in January as compared to 2.2 percent in December.

Senior market analyst Andrew Wilkinson from Interactive Brokers commented, “That pace is the highest since October 2008 and served to unleash further fears that the ECB won’t be able to sit still when they meet on Thursday for fear of a nasty incipient trend in inflation.”

The US dollar however performed in Asian trading session due to its perception of a safe haven in case of crisis but the greenback later declined in North American trading session as the US consumer spending increased more than the forecasts for the last month.

Fresh buying in Japanese Yen was seen in Asian trading session as the pair USD/YEN declined to 82.07 from 82.16 on Friday.

The Egyptian crisis has resulted in heavy depreciation of Egyptian Pound as the US dollar advanced 0.4 percent to 5.8429 Egyptian pounds. The greenback has reached its highest since 2005 versus the Egyptian currency.

About the Author

Daily forex trading news written by Rehan from

Current Week’s Outlook for USD/JPY

The list of major events that could affect the trading of the pair USD/JPY is as follows:-

Today Japan reported its preliminary data on Industrial production whereas US is expected to publish its official report on personal consumption expenditure and Chicago PMI.

On Tuesday February 1st, 2011 Japan will report its official data on average cash earnings. Data on manufacturing growth will be published in US by Institute of Supply Management.

On February 2nd, 2011 payroll processing company ADP will publish private sector employment data in United States. Moreover official data on US crude oil inventories will also be released on Wednesday.

On Thursday February 3rd, 2011 key report on Jobless claims, productivity, factory orders and labor costs will be released in United States while ISM will also report its non manufacturing PMI.

On Friday February 4th, 2011 key data of US economic health of non-farm payrolls, unemployment rate and average hourly earnings will be reported.

About the Author

Daily forex trading news written by Rehan from

Event that could affect the trading of GBP/USD for the week January 31st to February 4th, 2011

The list of events that could affect trading of the pair GBP/USD in current week are as under:-

Today official data on personal consumption expenditure is to be reported in United States. Further the leading indicator of Chicago PMI will also be published.

On Tuesday February 1st, 2011 official data on manufacturing growth will be reported by Institute of Supply Management in United States. In United Kingdom data on house prices, mortgage approvals, lending to individuals, M4 money supply and manufacturing will published.

On February 2nd 2011 construction PMI indicator will be published in United Kingdom while United States will publish a report on private sector employment and crude oil inventories.

On Thursday February 3rd, 2011 key report on jobless claims, labor costs, factory orders and productivity will be published in United States while UK will report its leading economic indicator of services PMI.

On Thursday Be Bernanke chairman US Federal Reserve will also address publicly and give some hint about the future direction of monetary policy.

On February 4th, 2011 weekly data on non-farm payrolls, average hourly earnings and unemployment rate will be released in United States.

About the Author

Daily forex trading news written by Rehan from

USD/SEK’s Bearish Momentum


As we can see from the chart below (provided by ForexYard), the USD/SEK has been trading within a major downtrend for some time now. The current reading has pushed below the Sept. 2009 price, making this a 2-year low price mark.

Moreover, as we can see from the Relative Strength Index (RSI) the price remains in neutral territory and does not show any accumulation of technical pressure to the upside.

The Stochastic (slow) on our weekly chart, however, does reveal what appears to be an impending bullish cross. There appears to be several days or weeks before this cross occurs, on the other hand, which means the bearish momentum remains dominant for the time being.

Technical analysts have said they expect some level of retracement in the USD/SEK towards 6.5000 by mid-February, likely assisted by a boost to the USD from Valentine’s Day retail sales growth. The peaking SEK values are also expected to start cutting into corporate profits in Sweden over the next several months and at least a few forecasts are beginning to reflect this expected shrinkage.

For the moment, however, traders may expect a continuation of bearishness in the USD/SEK as the pair seems to retain solid downward momentum heading into the first week of February.

USD/SEK – Weekly Chart
USDSEK - Weekly Chart

Swedish Krona Reaches 10-yr High vs. EUR


The Swedish economy has been outperforming many of its regional neighbors over the past few years and traders are beginning to see a signal that its currency is breaking barriers.

The krona (SEK) touched a 2-year high against the US dollar (USD) yesterday, a high of 6.3886. As a recent safe-haven away from the sovereign debt crisis of the euro zone, the SEK also pushed towards a 10-year high against the euro (EUR), reaching 8.7830 before bouncing back to its recent price near 8.8200.

Sweden’s relative growth was highlighted by December’s trade surplus figures, revealing an expansion beyond the expected 7.9B SEK to a whopping 10.9B SEK. Growth in Sweden’s large telecom industry, with Ericsson leading the way, helped boost Swedish exports and drive the trade surplus to this December reading.

Swedish fashion retailer H&M, however, experienced a mild dip in Q4 profits, but announced its plans to open another 250 stores in fiscal 2011, citing market optimism. The stronger SEK has begun to gouge Sweden’s retail industry by increasing the price of domestic goods, but the impact has so far not been dire enough to dampen Sweden’s economic growth forecasts.