Month: May 2012

By TraderVox.com

Tradervox (Dublin) – The Euro/dollar cross started the week with a break of the uptrend support of 1.30. The election result in France and Greece has been unfavorable for the euro and it has found support on low support. The euro/US dollar downfall started on Sunday after the election results in France where Sarkozy was defeated; in Greece the New Democracy and PASOK parties which are the major proponents for austerity program in Greece have not gotten the 151 majority required to win an election and the coalition government in the country is unlikely.

The pair has dropped to 1.2970 at the time of writing this, where it started its decline at 1.3023 and it has not been able to regain the 1.3050 line or its uptrend support of 1.3065. The pair continued to decline and broke the psychologically important round number of 1.30. It found a bottom at 1.2955, which is close to support at 1.2945, which is the lowest since January. Analysts are warning that if the 1.2945 breaks; the pair will find its next support at 1.2873.

Apart from the French, Greece, and German local elections, the pair will also be affected by the Sentix Investor Confidence report which is expected to be released on Monday. The reading is expected to drop from -8.2 to -14.7 which show increased pessimism in the regions economy which is bad for the euro. Further, German Factory Orders, which are expected to rise to 0.5 percent from previous reading of 0.3 percent, is expected to have very little effect on the euro. Other reports from Germany include the German Industrial production which will be released on Tuesday and the German Trade Balance on Wednesday. The same reports from France will be released on Thursday and Wednesday respectively.

The ECB monthly bulletin which will be released on Thursday is also likely to affect the trend of the euro/dollar pair. The pair is expected to remain under pressure and it has a bearish outlook for the week.

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

The outcome of the elections in France and especiallly Greece is weighing heavily on the financial markets this Monday morning.

In addition last weeks growth nervousness  is also carrying over to this week.

Listen to how Senior Strategist Ib Fredslund Madsen looks at these two themes and their impact on the financial market.

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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.

Source: ForexYard

A disappointing US jobs report resulted in the safe-haven US dollar sliding against the Japanese yen while rallying against riskier currencies like the AUD and EUR to close out last week’s trading session. Turning to today, elections held in France and Greece over the weekend are forecasted to generate significant market volatility. Any indication that Greece could back away from recent austerity measures as a result of the election could result in the euro extending its current bearish trend.

Economic News

USD – US Jobs Report Causes USD/JPY to Tumble

Last Friday’s US Non-Farm Payrolls figure came in at 115K, well below the forecasted 173K. The news represented the third month in a row of declining hiring in the US, and resulted in renewed speculation that the Fed may initiate a new round of quantitative easing in the near future. Following the news, the USD/JPY tumbled close to 50 pips before closing out the week at 79.86. Against riskier currencies, the dollar did see fairly significant gains, as investors decided to revert their funds to safe-havens following the news. The AUD/USD dropped close to 90 pips on Friday to finish the week at 1.0176.

Turning to today, dollar movement is likely to be determined by how investors interpret two euro-zone elections held over the weekend. Any signs that Greece could back away from austerity measures it recently enacted could result in further gains for safe-haven currencies like the USD. Later in the week, traders will want to pay attention to a speech from Fed Chairman Bernanke scheduled for Thursday. Any indications that a new quantitative easing package is on the way could result in further dollar losses against the yen.

EUR – Risk Aversion Leads to Significant Euro Losses

The euro turned bearish against most of its main currency rivals during trading last Friday, as a negative US jobs report combined with concerns about French and Greek elections led to risk aversion in the marketplace. Investors fear that new governments in either France or Greece could result in a conflict with Germany regarding the best way to help bolster euro-zone economies. The EUR/USD, which peaked at 1.3176 early in the day, fell close to 100 pips to finish the week at 1.3082. The EUR/JPY dropped around 115 pips to close out Friday’s session at 104.47.

Today, the euro is forecasted to see significant volatility as investors interpret the results of the two euro-zone elections. Further losses could be seen if Greece is seen as backing away from austerity measures it agreed to in order to receive an international bail-out package several months ago. Additionally, the German Retails Sales figure could result in modest euro losses if it comes in below the forecasted 0.8%. As the biggest economy in the region, German indicators tend to have a significant impact on the euro.

Gold – Gold Sees Significant Gains to Finish Week

Gold turned bullish for the first time in a week last Friday, as poor US employment data sent investors to safe-haven assets. Gold has steadily increased its status as a stable asset in recent months and has generally benefitted from poor global data. The precious metal finished out the week at $1642.03 an ounce, up from $1626.35 during morning trading.

Turning to this week, traders will want to continue monitoring data out of both the euro-zone and US. Any signs that the global economic recovery is slowing down further could result in gold extending its bullish trend. That being said, any positive indicators could result in risk taking in the marketplace, which may cause the precious metal to give up some of its recent gains.

Crude Oil – Crude Oil Falls below $98 Following US News

The price of crude oil tumbled over $4 a barrel during trading on Friday, reaching as low as $97.49, as a worse than expected US jobs report led to risk aversion in the marketplace. In addition, a general slowing down in the pace of the global economic recovery along with steadily increasing crude oil inventories in the US have been taken as signs that demand for oil has decreased, which has contributed to prices dropping.

Turning to this week, oil traders will want to pay attention to news out of the euro-zone. Any indications that this past weekend’s elections will cause additional risk aversion in the marketplace could lead to oil dropping further. Additionally, a speech from the Fed Chairman later in the week could result in market volatility. Mention of a new round of quantitative easing may result in oil extending its bearish trend.

Technical News

EUR/USD

The Williams Percent Range on the weekly chart has dropped into oversold territory, indicating that this pair could see upward movement in the coming days. Furthermore, the MACD/OsMA on the same chart appears to be forming a bullish cross. Traders will want to keep an eye on this pair, as it could stage an upward correction in the near future.

GBP/USD

A bearish cross has formed on the weekly chart’s Slow Stochastic, in a sign that downward movement could occur for this pair. In addition, another bearish cross on the daily chart’s MACD/OsMA is providing further evidence of an impending correction. Traders may want to go short in their positions.

USD/JPY

Most long term technical indicators place this pair in neutral territory, meaning that no definitive trend can be predicted at this time. The one exception is the weekly chart’s MACD/OsMA, which has formed a bearish cross. Traders will want to keep an eye on some of the other indicators on the weekly chart for signs of an impending downward correction.

USD/CHF

The Williams Percent Range on the weekly chart has crossed over into overbought territory, indicating that this pair could see downward movement in the near future. Furthermore, the Relative Strength Index (RSI) on the same chart is moving upward and appears poised to cross into the overbought zone as well. Traders will want to keep an eye on the RSI. If it crosses above 70, it may be a good time to open short positions.

The Wild Card

AUD/USD

A bearish cross has formed on the daily chart’s Slow Stochastic, indicating that this pair could see an upward correction. This theory is supported by the Williams Percent Range on the same chart, which has dropped below the -80 level. This may be a good time for forex traders to open long positions ahead of upward movement.

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 Central Bank News
The past week in monetary policy saw two central banks altering official interest rates; the Reserve Bank of Australia cut its base rate 50 basis points to 3.75%, while the National Bank of Rwanda hiked rates by 50bps to 7.50%.  Those central banks that held interest rates unchanged were: Colombia 5.25%, the EU 1.00%, Thailand 3.00%, Uganda 21.00%, Kenya 18.00%, Egypt 9.25%, Romania 5.25% and the Czech Republic at 0.75%.  Elsewhere Peru’s central bank announced alterations to its required reserves, Jordan’s central bank reduced bank loan rates and the People’s Bank of China stepped up liquidity operations; prompting some to expect imminent RRR cuts.

Looking at the central bank calendar, the week ahead sees the Bank of England announcing reviews of interest rate and asset purchase program settings – the market will be watching and hoping for any further quantitative easing. Other central banks meeting this week include the National Bank of Poland, the Norges Bank (Norway), Bank Indonesia, and the Central Reserve Bank of Peru.

Source: www.CentralBankNews.info

By TraderVox.com

Tradervox (Dublin) – Greek and French elections have put great pressure on the euro and other high yielding currencies as concerns about the region’s ability to deal with sovereign debt crisis increased. The euro dropped to a 3-month low after Francois Hollande won the French election against the incumbent Nicolas Sarkozy who got 48 percent of the vote against 52 percent for the Socialist party leader Hollande. In Greece, voters are supporting anti-bailout and anti-austerity parties as the preliminary election was held on Sunday. These results have increased concerns that austerity programs in the 17-nation trading bloc will be derailed.

The euro declined for the sixth day today, making it the longest decline period since September last year. This has come at a time when elections in the region are showing continued resentment of the austerity efforts. The German Chancellor’s party registered the worst election result in Schleswig-Holstein state in more than half a century compounding the problems raised by the Greek and French elections. In the meanwhile, the yen and the greenback rose, as the market sought for safe haven.

According to some market analysts, traders are showing their concerns about the euro as voters in Greece and France are showing their dissatisfaction with the austerity measures. Results from France and Greece are indications that the debt crisis in Europe might prevail for a longer period as new negotiations are expected to be started. The debt crisis in Europe has driven several economies in the region back into recession including Spain and Netherlands. The austerity measures taken by the region were meant to deal with the debt crisis in the region but this has now gotten a blow as major supporters of the program have been defeated in their domestic political elections.

The euro declined against the US dollar to trade at $1.2986, after it had earlier declined to $1.2955, which the weakest since January 25. The 17-nation currency dropped 0.9 percent against the yen to trade at 103.59 yen.

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

By TraderVox.com

Tradervox (Dublin) – Risk appetite declined in the market as election results from France and Greece elicited concerns that the region will encounter difficulties in implementing austerity measures. The Australian and New Zealand dollars fell amid these concerns as risk appetite declined.

The Aussie dropped to the weakest this year against the US dollar after France election results were announced declaring Francios Hollande the new French president defeating pro-bailout and pro-austerity incumbent president Surkozy. In Greece, anti-bailout parties gained momentum hence compounding the sovereign debt crisis resolve efforts. The effects of the elections in Europe could not be counseled by positive domestic reports showing gains in Retail Sales and Building Approvals. Its counterpart, the New Zealand dollar, fell against the US dollar and the Yen as Asian stocks continued with a global rout.

According to Senior Currency Strategist, Sean Callow, of Westpac Banking Corp, the election results from Europe may bring the next wave of instability in the region as voters express there rejection of the austerity measures. He also said that the Kiwi and Aussie are expected to remain under pressure as this crisis continues. Francios Hollande got about 52 percent of the votes against 48 percent of the incumbent Nicolas Sarkozy. In Greece, the New Democracy and the Socialist Party, which are the two parties that secured a second bailout for Greece, are expected to be defeated in the election falling short of 151 seats needed to win a majority.

The Aussie fell by 0.4 percent against the dollar to trade at $1.0142, after it had touched this year’s lowest of $1.0110, which was last registered in December 29 last year. The Australian dollar is set for its longest spell of daily decline as it goes for the sixth day. The Aussie lost 0.4 percent against the yen to trade at 80.95 yen after touching 80.57, the lowest since January 30.

The kiwi declined to 79.07 US cents, it lowest since January 13, before trading 0.4 percent lower than May 4 close at 79.25. The kiwi was 0.5 percent down against the yen to trade at 63.24 yen.

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

By TraderVox.com

Tradervox (Dublin) – After voters in Greece and France voted against austerity measures, the euro is expected to have a tough week ahead. In Greece, the new government is expected to try and renegotiate the bailout conditions and this is expected to hurt the euro in the short term. In France, Francios Hollande’s victory is expected to change the austerity policy in Europe. These are some of the issues that will affect the euro in the short term; however, here are some of other major events that will move the market during the week.

Monday 7

The ANZ job Advertisements report for April will be released at 0130hrs GMT. This report will show the number of jobs advertised in the month of April which is an indication of future employment growth. A high number is regarded as bullish for the AUD while low reading is bearish.

Another report expected to affect the market is the Swiss Unemployment rate NSA. It is expected that the rate of unemployment dropped during the month fro, 3.2 percent to 3.1 percent. This is expected to strengthen the CHF against the dollar and the euro.

Tuesday 8

At 1130hrs GMT, the market will get the NFIB Business Optimism Index in the US. The previous reading was at 92.5 but the market is expecting a decrease in this value following the poor NFP report coming from the world’s largest economy.

Wednesday 9

The market will be keen on the Japan Leading Economic Index for the month of March. The report will be released by the cabinet office at 0500hrs GMT and it is expected to show an increase to 97.0 from the previous reading of 96.3. The report is expected to show confidence in the Japan economy.

Thursday 10

On this day, the UK Rate decision is the main event that will carry the day. The report is scheduled to be released at 1100hrs GMT. The market expects the BOE Monetary Policy Committee to maintain the current 0.50 percent interest rate.

Friday 11

The major event of the day will be the US PPI. The market is expecting the reading to remain unchanged for the second month.

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

The euro sank to a three-month low against the US dollar during overnight trading as investors continue to digest the results of yesterday’s elections in France and Greece. Crude oil extended its bearish trend as well, dropping over $2 a barrel during Asian trading.

Main News for Today

EUR Sentix Investor Confidence- 08:30 GMT
o Level of investor confidence is forecasted to have dropped since last month
o A final result of below -15.3 may lead to additional losses for the euro

EUR German Factory Orders- 10:00 GMT
o Factory orders in Germany forecasted to have gone up since last month
o A final result of over 0.5% could give the euro a temporary boost

CAD Building Permits- 12:30 GMT
o USD saw major gains against CAD due to risk aversion in the marketplace
o With today’s news forecasted to come in well below last month’s, the loonie’s bearish trend may contine
o A final result of below -0.5% could lead to additional losses for CAD

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 MoneyMorning.com.au

On Friday night we had April’s US employment numbers. They showed that the economy added just 115,000 jobs during the previous month.

That may not sound too bad, but doesn’t go very far across a population of 312 million people recovering from a financial crisis.

The other problem is that this is now the second month in a row that these numbers have been a bit ‘soggy’.

From October of last year to this February, the monthly job numbers seemed to be gathering momentum. After being up and down like the proverbial for the last two years, they finally seemed to be forming a trend.

But these last few months have put the US economic ‘recovery’ into question.

This is a big reason why the US markets fell so badly on Friday night. The S&P500 fell 1.61%. And the Dow Jones Industrial Average fell 168 points, or 1.27%. Where the US markets go, the Australian market follows. This morning the Aussie market is down more than 1%.

Unfortunately, this rule works much better when the market falls than when it rises.

What is strange is that even though April’s employment numbers were disappointing, the US unemployment number actually FELL from 8.2% to 8.1%.

This has been falling steadily for months now. It was 9.1% just 6 months ago. But the market wasn’t impressed, and with good reason. The number is pretty meaningless, as it ignores those people that have given up looking for work.

My good pal and colleague, Murray Dawes, the editor of Slipstream Trader, has been following this for his subscribers, so I picked his brains for you this morning. Here’s a snapshot of our chat this morning. I started off by asking him what the job numbers meant for the markets…

Murray: ‘Friday night’s data has put the nail in the coffin of the idea that this recovery is gathering steam. The numbers are even worse if you dig a little beneath the surface. The BLS (Bureau of Labor Statistics) keeps fudging the numbers to make them look better than they are. For example the participation rate fell yet again by 0.2 to 63.6%. It is now at its lowest level since 1981. By lowering the participation rate the unemployment rate falls. Therefore the reported unemployment rate dropped 0.1 to 8.1%. This figure is a mirage. Without the falls in the participation rate the US unemployment rate would be well over 11%. The household survey said that the number of people employed actually fell by 169,000. The situation is much worse than it appears.’

Alex: ‘So Murray, you’ve been expecting the market to turn down for a while now, and Friday night’s drop in the US markets was fairly meaty. You have been telling your readers to short the market in preparation for this. Just how bearish are you now?’

Murray: ‘I have a strongly bearish view. In Slipstream Trader we currently have the biggest short position that I’ve had for over a year. US markets are having a false break of last April’s high and my immediate target for the S+P 500 is 1280-1300. That’s 7% below current levels. But that’s only an initial target. If Europe unravels the S+P 500 could head even lower – unless [US Federal Reserve chairman, Ben] Bernanke waves his wand and prints more money.’

Alex: ‘The Australian market is down on the back of the US data, but wouldn’t you say yesterday’s French election result is having an effect too? It’s ‘Au revoir’ to Mr Sarkozy, and ‘Bonjour’ to Presidente Hollande. As France is the second biggest economy after Germany, what do you reckon this election result means for the mess that Europe is in?’

Murray: ‘The elections in Europe are just a continuation of the change of leadership that’s occurring across the whole Eurozone as a result of the crisis. I don’t think France will be saved by installing a tax-and-spend socialist. The reason they are in the mess they’re in is because of the Welfare State paradigm. Now they want to do more of what caused the problem. Expect to see yet more ‘can-kicking’ at every opportunity until the whole thing blows sky high. Watching the bond market’s reaction to the French election will be interesting.’

The New Dynamic in Europe

The relationship between the outgoing Sarkozy and the German Chancellor, Angela Merkel, has been a cornerstone of how Europe has handled the crisis. But President Hollande was voted in on a mandate of renegotiating this relationship, and their countries plans for Europe.

Symbolically, his first meeting as President will be with Merkel, so he’s not wasting any time.

Those European bond markets Murray mentioned start trading later on today. The Spanish yields in particular had been worrying the markets as they jumped in the last few months. They have since pulled back. But that could change with so much uncertainty around Europe.

One thing looks certain. The market will see a lot of volatility in the coming weeks. And if there’s one thing traders like, its volatility. For traders that’s great news as it gives them the chance to profit from both rising and falling prices. To see where Murray thinks the market is heading next, check out his stock market update on his YouTube channel tomorrow, for a special update on the French elections, US employment data and the significance of the US market breaking through a key technical level.

Dr. Alex Cowie
Editor, Diggers & Drillers

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