Month: September 2012

Article by Investment U

Most of you buy stocks. You hang on to them for anywhere from a few minutes to a few decades. You hope they’ll go up and then you sell for a profit. Buy low, sell high… that’s what we’ve been taught.

But there are other investors who do the opposite – they sell high and buy low. Sounds similar, but it’s a very different strategy. It’s known as shorting stock. A short seller sells the stock first and buys it back later. If the stock is bought back at a lower price, the investor makes money.

Here’s how it works…

Let’s say an investor shorts 100 shares of Facebook (Nasdaq: FB) at $18.

If he buys Facebook back at $12, he’ll make $600, because he bought it at $12 and sold it at $18, even though he did it in the reverse order.

However, if Facebook rallies to $24, he’ll lose $600. He’ll have bought the stock at $24, but sold it at $18.

Remember, though, the sale took place first.

In order to sell a stock that an investor doesn’t have, he has to borrow it from his broker. Sometimes, stock isn’t available to borrow, in which case the investor can’t short the stock.

It’s an aggressive strategy, one that has unlimited risk.

Think of it this way: When an investor buys a stock, the most he can lose is the amount invested. The stock can’t go below zero. However, a shorted stock can go up indefinitely. Imagine what an investor would have lost if he shorted Apple (Nasdaq: AAPL) at $30?

How to Profit From a Short Squeeze

Shorting is a way to take advantage of a stock that falls in price. But because of the extra risk, it’s not for everyone.
However, investors who are bullish on a stock can take advantage of short sellers in a move that’s known as a “short squeeze.”

When a stock that’s heavily shorted starts to rise, existing shorts “cover” or buy the stock back to avoid suffering big losses.

That extra buying by short sellers covering their positions leads to more demand for the stock and pushes it north in what’s known as a short squeeze. Investors who own a heavily shorted stock that gets squeezed sometimes find themselves with a stock moving sharply higher.

Here’s a recent example.

Repros Therapeutics (Nasdaq: RPRX) is a small-cap biotech company. Over 20% of Repros’ float is sold short. That’s a huge percentage.

So last week, when Repros’ stock was moving higher, it’s very likely that shorts started covering their shares, pushing the stock even further skyward…

Above is a chart of Repros. Look what happened on August 30^th.  There was no news on the stock that day, but as the stock advanced, buyers piled in, moving the price well above $12.  Because there were so many shorts in the stock, it is likely that some of them bought back shares to close their position and limit their losses, which added fuel to the fire.

Today, the stock continued to advance above $14. The stock is up nearly 40% in five days – again on no news. That’s likely a short squeeze.

When I was an analyst at a contrarian research firm, the only stocks any of us were allowed to put a “Buy” rating on were those with at least 10% of the float sold short. It was a way of stacking the odds in our favor so that if the stock did start rising, there was another source of demand to push it still higher.

Let’s take a look at a few stocks that could squeeze the shorts if they get going in the right direction:

iStar Financial (NYSE: SFI), which offers financing to the commercial real estate industry, has 21% of its float sold short. The stock is near the top of its yearlong range. If it breaks out above $7.75, you might see short covering that would propel the stock higher.

Movie theater chain Regal Entertainment Group (NYSE: RGC) has a whopping 32% of its float sold short. That means one out of every three shares have been shorted.

Here’s an interesting figure – nearly 26 million shares of Regal have been shorted. Yet the stock only trades about a million and a half shares a day on average. What happens if the company has a strong earnings report or the stock makes a new high on its own?

With Regal also close to its 52-week high, a breakout could fuel a wave of short covering. And considering that 17 times the average daily volume has been sold short, it wouldn’t take that much short covering to ignite the stock higher.

Understanding the forces that can push a stock higher increases your chances of success. And when you own a stock, there’s nothing more satisfying that squeezing someone’s shorts. Well, you know what I mean.

Good Investing,

Marc

Editor’s Note: In the premium edition of today’s newsletter, Marc tells a select group of our readers about one of his favorite short squeeze candidates. It’s the stock of a small biotech firm with a 13.5% short float, which he’d be happy to own regardless of whether the short squeeze comes to fruition.

In fact, he told me its cash flow and profits are projected to grow 48% per year over the next five years. For more information on Marc’s recommendation today and how to upgrade your subscription for just $5, click here.

Article by Investment U

Article by Investment U

Is this drought of Biblical proportions?

Well, I doubt they’ll still be talking about this for the next two millennia – but it may get some discussion for a few decades.

Drought is referred to as the “creeping disaster.” It doesn’t hit you hard and in the face like a tornado or hurricane. It wears you down, slowly but surely, over time. However, what we’re experiencing now is more hare-like than tortoise-esque…

From mid-June to mid-July, the amount of farmland lost to drought has been astounding. Over this period, the percentage of land under the category of severe drought increased from 17% to 39%. The reason? We’ve hit a perfect storm of nasty crop weather. There’s been little rain, and 2012 is scheduled to go on as the hottest year ever recorded.

Reports from the U.S. government state that this is the largest drought since 1956. More than half the country is experiencing somewhere between moderate to extreme drought. Before long we should all expect to see this drought hit the economy, raising the prices of everything from food to gas.

Since many investors aren’t comfortable with trading commodities or futures contracts, I’ve identified a great stock play on this below. But first, let me discuss how this drought is affecting commodity prices.

How Has This Hit Commodity Prices?

Expect commodities to enter a bull market, with grain futures leading the way. The Standard & Poor’s GSCI gauge of 24 raw materials was up last week about 1.2% to 677.29 – that’s the highest since the spring. It’s skyrocketed 21% from this year’s lowest close back on June 21.

In August alone soybeans reached a new all-time high of $17.1275 a bushel, while corn set a record at $8.49 a bushel. In June, the Department of Agriculture decreased its corn harvest forecast by 27%. It also went on to say that it estimates almost 40% of the U.S. corn crop is in bad shape.

Sudakshina Unnikrishnan, a London-based analyst at Barclays Plc stated, “The grains have been the strongest performing subsector in commodities the past few months, and that has purely been driven by supply-side considerations and the U.S. drought in particular.”

Goldman Sachs Thinks Rally Will Continue

In the middle of June, Goldman Sachs Group Inc. moved to a “near-term overweight” recommendation in commodities. Earlier this month they held steadfast on forecasts for a rally where corn would reach $9 a bushel, soybeans could reach $20 a bushel and wheat could see $9.80 a bushel by November.

Goldman analyst Damien Courvalin wrote, “We expect soybean prices to outperform to ration resilient export demand in the face of critically low U.S. supplies, corn prices to rally to secure sufficient ethanol demand destruction and wheat prices to underperform corn prices on relatively higher supplies.”

According to the USDA, U.S. corn production may drop to 10.78 billion bushels, a six-year low, while the soybean harvest at 2.69 billion bushels would be the smallest since 2007. Crops are in the worst condition since 1988, a year when the corn harvest tumbled by 31% because of drought.

An Easy Way to Play It…

A lot of times when people talk about the commodities market, they talk about how they’re going to play commodity futures. All you may know about the commodities markets is what you remember from the movie Trading Places, where Dan Aykroyd and Eddie Murphy put the Dukes out of business by means of a false orange juice “crop report.”

Almost 30 years later, most people who’ve seen the movie still don’t know how they got rich and were able to hang out on the tropical island with a young Jamie Lee Curtis. So I’m going to give you a less complicated play on the matter…

The one company you want to take a long hard look at is Darling International (NYSE: DAR). This 130-year-old company is in the rendering business.

Never heard of the rendering business? A lot of people haven’t. Rendering means you render down animals into oils and proteins used by agricultural, leather and chemical firms. It also recycles cooking oils and baking waste used by commercial businesses into high-energy animal feed parts and commercial oils. It’s the largest and the only publicly traded rendering company. It’s up around 25% year-to-date.

Darling has put itself in this position through the rollercoaster ride known as animal feed prices. The agricultural world uses its tallow, yellow grease, and meat and bone meal products as alternatives to corn and soybeans. So now you get it…

They stand to make a killing with the prices of corn and soybean going crazy the next few months.

Diversifying Outside of Animal Feed

The company has also found itself in a strong position in the bio-fuel industry as an alternative to vegetable oils.

Darling, when it first entered the fray in the biodiesel business, had to deal with a two-edged sword. On the technology side, they faced a temperature problem. In the beginning, biodiesel made from animal fat worked as long as the temperature was above 50 degrees. Anything colder produced a block of rendered animal “stuff.”

The problem was solved by UOP – a division of Honeywell International Inc. (NYSE: HON) – which gave Darling a hydro-treating process to correct the problem.

As far as marketing and distribution were concerned, the problem was getting a foot in the door of an industry controlled by heavyweights. But to their good fortune, three years ago Valero contacted Darling and said it was interested in working with them to expand its alternative energy portfolio. The move into fuels doesn’t just expand their business opportunities – it also presents a hedge against its feed business.

When I first looked at the company, I saw it as a good play against this “blitzkrieg” drought we’ve faced this summer. However, now that I’ve done more research, it’s probably a solid long-term play.

Good Investing,

Jason

Article by Investment U

By The Sizemore Letter

ECB President Mario Draghi fired his “big bazooka” on Thursday, or at least that is how the market interpreted his press conference comments.

The ECB would engage in potentially unlimited “outright monetary transactions,” meaning that the ECB would buy as many short-term bonds as it takes to keep yields manageable. To drive home his point that he means business, Draghi added with rhetorical flourish that “the euro is irreversible.”

NOT SO FAST BUDDY

We shall see. We’ve been made promises before only to be disappointed later by failure to execute. “Irreversible” may or may not include an eventual Greek exit. And far more critically, Spain and the bailout institutions remain in a sort of standoff; Spain will not be given a bailout (including the ECB bond buying) until it submits to strict conditions, but Spanish Prime Minister Mariano Rajoy will not request a bailout until he knows in advance what the conditions will be. Presumably, negotiations have been going on behind closed doors between Spain and the bailout institutions.

BIG BOUNCE IN SPANISH ETF

In any event, the markets are taking the meeting as an unambiguous positive. My recommendation last week–the iShares MSCI Spain ETF ($EWP)–has enjoyed a phenomenal bounce, as have most risky assets.

Barring an unexpected twist from the German Constitutional Court on September 12, I think we could be looking at a monster rally to finish the year in most risky assets.

REACH FOR RISK

I recommend investors add a little risk to their portfolios on any pullbacks. And I’d start with an allocation to emerging markets. The iShares MSCI Emerging Markets ETF ($EEM) should benefit handsomely from a revival in investors’ animal spirits.

DON’T MISS OUT

Be on the lookout for unexpected ripples coming out of Europe. But don’t let fear keep you from participating in what could be the best rally of the past several years.

This article first appeared on TraderPlanet.

No related posts.

By TraderVox.com

Tradervox.com (Dublin) – The 17-nation currency rose to its strongest in two-months against the Japanese currency after Mario Draghi, the European Central Bank President, rolled out a plan to purchase government bonds from countries with high borrowing cost. The announcement spurred demand for riskier assets, causing the US dollar and the yen to weaken against commodity related currencies. The greenback fell prior to a report expected to show a slowing pace in US hiring. The euro had earlier weakened against the greenback on speculation the euro zone will register an economic contraction this year.

According to Charles St-Arnaud, who works as a Foreign Exchange Strategist in New York at Nomura Holdings Inc, the Draghi’s announcement has helped to reduce the tail risk of another intensification of the debt crisis. In his statement to investors, Charles, indicated that the worst might be over for the euro-dollar pair albeit for the short term. He said that the pair might continue to fall in the long term as there are other risks involved in effecting the plan. The announced pushed the Standard & Poor’s 500 Index up by 2 percent, boosting the demand for commodity related currencies.

The US currency fell against currencies such as the Canadian, Australian, and the New Zealand dollars as speculation rose about the slowing labor market in the US, spurring concerns that the Fed will work towards implementing another round of quantitative easing. The Canadian dollar increased by 0.8 percent against the dollar to trade at 98.27 Cents per US dollar. The Australian dollar advanced by 0.9 percent while the Kiwi advanced by the same margin. The Dollar Index dropped by 0.2 percent to 81.103, showing that the currency has dropped against six of its most traded counterparts.

On the other hand, the euro rose by 0.8 percent against the yen to exchange at 99.60 at the close of trading in New York yesterday. It had earlier touched 99.81 which is the strongest it has been since July 5. The euro advanced by 0.2 percent against the US dollar to trade at $1.2631 at the same time.

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

London Gold Market Report
from Ben Traynor
BullionVault
Friday 7 September 2012, 07:30 EDT

SPOT MARKET prices for buying gold rose to $1698 an ounce Friday morning, in line with where they started the week, while stock markets also rose, following yesterday’s announcement of the European Central Bank’s bond market intervention plan.

US Treasuries fell, while commodities were broadly flat, with the exception copper, which posted gains. Copper traders are now more bullish than at any time since last October, according to a survey by newswire Bloomberg, which sites “mounting speculation” about central bank stimulus measures, such as a third round of quantitative easing (QE3) from the Federal Reserve.

A day earlier, gold hit its highest level in six months at $1713 per ounce Thursday, although it fell following the publication of a stronger-than-expected ADP Employment Report, a precursor to today’s official August nonfarm payrolls release.

“There is definitely long liquidation going on after the ADP number,” says one trader in Singapore.
“People spent the whole of yesterday buying gold and it is a bit overcooked up here. Now we have good data and the market is struggling to see how it can get a bad [nonfarm] payrolls data.”

“The consensus expectation for today’s nonfarm payrolls is 130,000 [jobs added in August],” says a note from Rabobank this morning, “although in reality it may [now] have been revised upwards…the final clues for today’s nonfarm payrolls were positive, at least for the economic recovery, not for the chances of QE3.”

Prices to buy silver meantime climbed to $32.40 per ounce this morning – on course for a 2% weekly gain – while on the currency markets, the Euro rose to its highest level in more than two months, a day after ECB president Mario Draghi announced the new Outright Monetary Transactions program, aimed at tackling the Eurozone crisis by buying distressed Eurozone sovereign bonds.

“OMTs will enable us to address severe distortions in government bond markets which originate from, in particular, unfounded fears on the part of investors of the reversibility of the Euro,” Draghi told Thursday’s press conference.

There will be “no ex-ante limits” on the size of OMTs, Draghi added.

“This is your bazooka,” Organisation for Economic Cooperation and Development chief Jose Angel Gurria told the Financial Times yesterday, having used that phrase earlier in the week when urging the ECB to act.

OMTs will target debt of up to three years in maturity, Draghi said, and will also be fully sterilized – meaning the ECB will sell other securities to absorb the liquidity created.

In addition, OMT purchases will be subject to conditionality, meaning governments would have to enter into some form of bailout program with at least the possibility of bond purchases by the European Financial Stability Facility, or its scheduled permanent successor the European Stability Mechanism. Governments that fail to fulfill their bailout commitments could face a withdrawal of ECB support.

Benchmark 10-Year Spanish bond yields fell to their lowest level since April this morning, dipping below 5.7% – two percentage points below their high in July. Italian 10-Year yields hit a six-month low at just over 5%.

Neither Italy nor Spain has formally requested a bailout, although Spain’s government agreed a €100 billion credit line in June to finance the restructuring of its banking sector.

Germany’s Constitutional Court is due to rule next Wednesday on whether or not the creation of the ESM is at odds with German law.

“Investors still view gold as a non-paper currency and I don’t think anything the ECB said or did yesterday has changed people’s psyche,” says Simon Weeks, head of precious metals at Scotia Mocatta.

“Really they just kicked the can down the road.”

In Switzerland meantime, the central bank may be considering a de facto devaluation of the Swiss Franc, moving its price floor for the Euro-Franc exchange rate from SFr1.20 to SFr1.30, FT Alphaville reports.

Over in China, the world’s second-biggest gold buying nation behind India last year, Beijing has approved 1 trillion Yuan worth of infrastructure spending, equivalent to around $158 billion.

“With clear signs of a worsening slowdown of economic growth, China’s central government has finally taken real actions,” says Bank of America Merrill Lynch economist Lu Ting.

“They are clearly stepping up the infrastructure investment push to help boost confidence and revive growth,” adds Zhang Zhiwei, chief China economist at Nomura in Hong Kong.

“We believe the decision for the Chinese government to intensively announce these projects over the past two days signals a significant change in its policy stance from the incremental and reactive approach to a more decisive and proactive approach.”

In November 2008, China announced a 4 trillion Yuan stimulus package as a response to the global financial crisis.

The deputy governor of India’s central bank meantime has again cautioned Indians against buying gold, following comments he made in July.

“Because interest rates are very low, people are investing in gold,” said KC Chakrabarty on Friday.
“But the poor should never invest in gold for whenever they have purchased gold, it either lands up in the temple or in the hands of the moneylender or, at the most, it may be given away during a daughter’s marriage.”

Earlier this week, key figures in India’s bullion industry expressed fears that gold import duties may be hiked for the third time this year.

Ben Traynor
BullionVault

Gold value calculator   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics. Ben writes and presents BullionVault’s weekly gold market summary on YouTube and can be found on Google+

(c) BullionVault 2012

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

By TraderVox.com

Tradervox.com (Dublin) – South pacific dollars gained against major peers as Asia Stocks rallied on the European Central Bank bund purchases decision spurred risk demand in the market. The Australian dollar advanced against the greenback for the first time in almost a week as jobless rate in the country declined last month, indicating that employers in the mining sector are still hiring. The Labor Department report released yesterday showed that unemployment declined from 5.2 percent to 5.1 percent against the market expectation of an increase to 5.3 percent.

Kit Juckes, who heads the Foreign Exchange Research department at Societe Generale SA in London, said that the Australian dollar is seen to be defying market fundamentals. He cited that the global manufacturing is declining as US data has shown in the recent times. The two south pacific dollars increased as the Standard & Poor’s 500 Index gained by 2 percent, the strongest since August 3. The advance against the US dollar was also supported by speculations that the Fed may add stimulus. The US Labor Department will release its job report today. Andrew Slater, has predicted that the Aussie will be supported today as the market evaluates the ECB bond-purchasing plan; the risk-on mood will keep the Aussie and Kiwi strong.

The MSCI Asia Pacific Index of stocks advanced by 1.8 percent today following a 1.9 percent gain yesterday in the World’s MSCI Index. The Thomson Reuters & Jefferies CRB Index of row materials also increased for the first time since August 31 by 0.2 percent. The Australian dollar advanced by 0.2 percent to $1.0307 in Sydney after increasing by 0.9 percent to $1.0284 yesterday in New York. It advanced by 0.3 percent against the yen to touch 81.37 yen after it had increased 1.3 percent to 81.10 yen yesterday in New York.

The New Zealand dollar added 0.1 percent today in Sydney against the greenback to trade at 80.25 US cents. It had gained by 0.9 percent yesterday in New York to exchange at 80.15 US cents where it gained 1.5 percent against the Yen to trade at 63.20. It has advanced by 0.2 percent today in Sydney to trade at 63.34 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

Article by AlgosysFx Forex Trading Solutions

With market confidence on a high as the effects of the European Central Bank decision yesterday compounds with speculations on the labor market figures from the US, the Canadian dollar is set to bow down to its higher-yielding Australian counterpart. This is despite a shortfall in trade balance for the Land Down Under. A buy bias is apt to be
considered today as the markets come to a close this week.

Yesterday, ECB President Mario Draghi showed up market participants after announcing that the central bank would undertake a potentially unlimited program of short-term bond buying to ease funding pressures on governments that sought help. He, of course, had indebted nations Spain and Italy in mind, as woes have accompanied the two nation’s bond yields for some time now. The ECB chief made it clear however, that strict conditionality would apply as the central bank required countries to
make formal applications, where conditions must be met before any bonds would be bought. On a good note, the region’s central bank agreed to lower collateral requirements for banks in bailout countries, while still keeping the main refinancing rate unchanged at 0.75 percent.

Financial markets reacted positively to this bit of good news, as the Asian equities headed towards their biggest daily gain in six weeks, while European shares followed up its rally from yesterday. Adding to the positive mood of the markets was the decrease in US jobless claims, reported by the labor department. Filings for insurance claims amounted only to 365,000 last week, beating the 369,000 median estimate and 12,000 lower than the 377,000 upwardly revised data for the prior week.

Today, aside from residual effects of the ECB policy measure, which awaits a crucial meeting by the region’s financial ministers next week, investors are intent to look at jobs data from North America today. A weaker pace in hiring in August is forecast by analysts – only as much as 123,000, which compares with July’s labor data of 163,000. Though some economists are pricing in an actual result in the 120,000 to 150,000 region, a lack of jobs growth could still pressure the US Federal Reserve to act on the economy, and provide the much expected quantitative easing that the markets have been clamoring for. Such could further boost risk confidence today.

With the AUDCAD on a bullish correction since trades were directed by a strong bearish rally in early August, the skirmish between the two ComDolls could be detrimental to the Loonie currency. According to Bloomberg News, Australian government bonds fell, pushing the yield on 10- year government debt to its highest level since August 29. The rate advanced 10 basis points to 3.20 percent. The advance in rates was the biggest since August 16.

A long position is recommended for the AUDCAD, considering the above-mentioned factors. There is likelihood of price corrections however, on questions over
whether the ECB plan can save Italy and Spain. More so, Canadian employment change is perceived to show that the nation has added 9,900 to the labor market though unable to influence the 7.3 percent jobless rate as much.

For more news, analysis, technical charts and candlestick analysis, visit AlgosysFx

Source: ForexYard

At FOREXYARD, we believe in keeping our clients prepared for potentially significant news events. As such, traders will want to pay careful attention to the US Non-Farm Employment Change, set to be released today, September 7th at 12:30 GMT. The Non-Farm indicator is widely considered to be the most significant event on the forex calendar and consistently leads to market volatility. As can be seen in the chart below, last month’s better than expected figure led to major gains for the EUR/USD.

Don’t miss out on another opportunity to capitalize on market volatility!

Today’s news is forecasted to come in at 121K, well below last month’s 163K. If the predictions turn out to be true, speculations that the Fed will soon take steps to boost the US economic recovery could increase, which may lead to dollar losses before markets close for the weekend. This is an excellent opportunity for forex traders to take advantage of potentially significant news, so don’t miss out!

Read more forex news on our forex blog

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.

Source: ForexYard

The euro hovered near a two-month high against the USD for much of last night, following the announcement of the ECB’s new bond buying program, designed to lower borrowing costs in Spain and Italy. Also, the USD was able to maintain its gains against the JPY after the ECB news, combined with a better than expected US ADP Non-Farm Employment Change led to risk taking in the marketplace. The higher demand for the dollar resulted in downward movement for gold. The precious metal fell close to $12 an ounce last night and is currently trading at the $1692 level.

Main News for Today

US Non-Farm Payrolls/Unemployment Rate- 12:30 GMT
• The news is considered the most important event on the forex calendar and its impact is generally felt throughout the marketplace
• If the Non-Farm figure comes in above the expected 123K, the dollar may see gains against its main currency rivals including the euro, yen, Swiss franc and British pound
• If the dollar turns bullish following the news, crude oil may also see gains while gold could extend its downward trend

Read more forex news on our forex blog

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.

USDCHF stays in a trading range between 0.9503 and 0.9634, the price action in the range is treated as consolidation of the downtrend from 0.9809. Another fall could be expected after consolidation, and next target would be at 0.9400 area. Initial support is at 0.9503, a breakdown below this level could signal resumption of the downtrend. Key resistance is at 0.9634, only break above this level will indicate that the downtrend has completed at 0.9503 already, then the following upward movement could bring price to 0.9800 zone.

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