Month: March 2012

By TraderVox.com

Tradervox (Dublin) – The Euro has been on a bearish run against major currencies this week due to the eurozone finance ministers meeting today which is expected to endorse a plan to combine the European Stability Mechanism kitty with that of European Financial Stability Facility. This will be done in a bid to strengthen the region’s financial firewall safeguarding the region’s economy against any crisis like the one for Greece. The idea of combining these two facilities had been vehemently contested by Germany and Ireland; however, these two countries have softened their stand and now they are willing to comprise in order to secure the currency bloc.

Currently the EFSF has 248 billion Euros out of its total capacity of 440 billion Euros. The ESM is set to have 500 billion Euros lending capacity and it is expected to take over from the EFSF completely. Therefore, it is expected that the Final ESM would have 500 billion-Euro capacity which include the amount that has already been utilized by the EFSF leaving only 308 billion Euros at the disposal of the newly created entity. Analysts are warning that this would lead to a less favored outcome that is likely to exert downward pressure on the euro.

Since this option is less favorable for the region, another version, which is a bit optimistic and opposed by Germany is letting EFSF and ESM to run concurrently, meaning that the kitty would amount to 748 billion Euros now, as 192 billion Euros have already be used from the EFSF kitty. The third scenario which might be acceptable is to let the EFSF and ESM to run concurrently up to then end of June when the EFSF expires and thereafter to continue with the ESM which has a capacity of 500 billion Euros.

Since the third option has been agree upon across the market, this might be the likely scenario outcome which will be against the traders’ expectation precipitating a scenario of “buy the rumor, sell facts.” It should also be noted that the high inflation rate, which despite lowering to 2.6 percent still remains above the ECB target, will affect the demand for the euro after the meeting.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

Source: ForexYard

Good news for the 17-nation currency as Europe’s finance ministers met today to discuss a possible increase in the rescue fund.As a result of the meeting, European stocks extended the biggest first-quarter gains since way back in 2006 and the Euro appreciated whilst default risk dropped.

The Euro made gains of 0.4% over the U.S dollar and the cost of insuring European sovereign debt against default broke a two-day increase.

The first Quarter saw the Euro appreciate 3% versus the U.S dollar in largest quarterly gain in a year, also showing a boost of 9.9% against the Yen in the same period, its biggest quarterly gain in 11 years.

Officials met today to discuss a possible increase  of the resuce funds. The increase  on emergency lending was said to be close to 940 billion euros which would be set to go until mid 2013.

In the end, the Eurozone countries came to an agreement to boost their firewall against the debt crisis to roughly 800 billion euros. This was officialy announced by Austrian Finance Minister Maria Fekter in Today’s meeting.

The real significance surrounding the meeting today was not about how much funds are increase by, but its do with the commitment shown by the European finance ministers to tackle the issue and boost funding levels.

Forex Market Analysis provided by ForexYard.

© 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 TraderVox.com

Tradervox (Dublin) – The single currency held on the recovery the late night recovery of yesterday as it traded above the 1.3300 levels. The pair is approaching the monthly highs formed during this week. It is currently trading around 1.3351, up about 0.38% for the day.

The support may be seen at 1.3325 and at 1.3280. The resistance may be seen at 1.3360 and at 1.3400 levels. Retail sales in Germany declined in the month of February by 1.1% against the expected rise of 1.2%. EMU released the CPI today which came at 2.6% while the expectation was 2.5%.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.

Euro zone finance ministers are likely to agree to temporarily almost double their financial backstops on Friday as one of the final moves to end the sovereign debt crisis, although Germany continues to favour a smaller increase.

Source: ForexYard

Traders moving assets to safer, lower yielding currencies appear to be playing a factor in the correction of the major crosses. The USD and JPY, which are seen as a safer bet than others currencies in times of market stress, will likely keep drawing demand as investors stay away from riskier assets.

Economic News

USD – U.S Dollar Soars against the EUR and GBP

The dollar rose against the EUR on Thursday, reversing the single currency’s earlier gains, as investors grew more risk averse and sought safety in the dollar. By yesterday’s close, the USD rose against the EUR, pushing the oft-traded currency pair to 1.3370. The dollar experienced similar behavior against the GBP and closed at 1.5900.
As the U.S economy stabilizes, currency traders have started to focus more on fundamentals such as economic growth and short-term interest rates. That shift, just getting underway, could take the shine off the soaring USD in the coming months. A stronger currency is important to the U.S. because it entices foreign investors to Treasury debt that finances the nation’s record budget deficit. The downside is that it may restrain profit growth at companies with international sales by making U.S. exports more expensive.

Looking ahead to today, the most important economic indicator scheduled to be released from the U.S. is the Revised UoM Consumer Sentiment at 12:55 GMT. Traders will be paying close attention to today’s announcement as a stronger than expected result may boost the USD in the short-term. Traders should pay close attention to the market as there is an opportunity for traders to capitalize on the fluctuations which are likely to follow this release.

EUR – Euro Tumbles vs. Main Currency Rivals

The euro fell against most of its major currency pairs yesterday on Thursday as concerns about contagion from the euro zone debt crisis resurfaced, with investors wary on the common currency ahead of Spain’s budget on Friday. By yesterday’s close, the EUR fell 1% against the JPY to 109.00.The 16 nation currency experienced similar behavior against the USD and closed at around 1.3300.
Analysts said the euro was unlikely to break below its recent range of roughly between $1.30 and $1.35, with market players expecting a euro zone finance ministers’ meeting to approve bolstering the region’s rescue fund on Friday.

Looking ahead to today, the most important economic indicator scheduled to be released from Euro-Zone is German Retail Sales at 6:00 GMT. Analysts are forecasting this figure to increase from its previous reading. Traders should pay close attention to the market as there is an opportunity for traders to capitalize on the fluctuations which are likely to follow this release.

JPY – Yen Continues its Bullishness against Major Currencies

The Japanese Yen strengthened against most of its major counterparts yesterday, continuing to prove that for the time being that this is the solid currency that traders can rely on to provide them with steady profits. The Yen extended gains versus the Dollar on Thursday, to trade at about 109.00 amid a broad sell-off in the EUR. The JPY also saw bullishness against the USD and closed at around 82.10.
As for today, the JPY’s trends will be affected by the rallies of its primary currency pairs. It seems the USD and EUR are expected to continue a volatile trading session today and their crosses with the JPY will likely be as well. Traders should keep a close look on the news coming from the U.S. and Europe as these economies will be the deciding factors in the JPY’s movement today.

Gold – Gold Sinks on USD Strength

Gold prices slipped below $1,660 an ounce in Europe on Thursday, extending their retreat from two-week highs into a third session, as the dollar recovered from a near one-month low and crude oil prices turned lower.
Spot gold was down 0.4% at $1,656.50 an ounce. It has struggled for traction after a rally early in the week sparked by Federal Reserve hints that accommodative monetary policy is set to persist.
Looking ahead, traders are advised to watch carefully the global stock markets and the major economic indicators which will be published from the U.S. in order to predict the next movements in gold prices.

Technical News

EUR/USD

A bearish cross on the daily chart’s Slow Stochastic indicates that the pair may see downward movement. This theory is supported by the Williams Percent Range on the daily chart, which is currently at -20. Going short may be a wise choice for this pair.

GBP/USD

Most long term technical indicators show this pair trading in neutral territory, meaning that no major movements are forecasted at this time. Traders may want to take a wait and see approach, as a clearer picture may present itself in the coming days.

USD/JPY

Both the Relative Strength Index and Williams Percent Range on the daily chart have moved into the overbought zone, indicating that the pair could see downward movement in the coming days. Traders may want to go short in their positions ahead of a possible bearish correction.

USD/CHF

The daily chart’s Williams Percent Range is currently in oversold territory, indicating that the pair could see an upward correction in the near future. In addition, the Slow Stochastic on the same chart has formed a bullish cross. Going long may be the wise choice for this pair.

The Wild Card

GBP/AUD

GBP/AUD sustained upward movement has finally pushed its price into the over-bought territory on the 8-hour chart’s RSI. Not only that, but there actually appears to be a bearish cross on the Slow Stochastic pointing to an imminent downward correction. 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.

Forex Market Analysis provided by ForexYard.

© 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.

Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.

Jobless claims have dropped again to a fresh four year low, the LA Times reports. The new numbers, released on Thursday, are another sign of continued economic and jobs recovery.This week’s figure falls 5,000 under last week’s jobless claims, which were upwardly revised to 368,500. The four week moving average also dropped 3,500 from the last week’s average.Jobs have been added at a rate of 200,000 per month for the last three months, a sign that the economy is steadily and strongly recovering. Employers are demonstrating a new confidence in the economic status quo.The Commerce Department has said that the gross domestic product expanded 3% in the last quarter of last year.

Jim Flaherty delivered the 2012 federal budget on Thursday, CBC’s Terry Milewski reports

Finance Minister Jim Flaherty delivers the federal budget in the House of Commons