Month: December 2012

Source: ForexYard

An ominous trend has developed among the top global economies in regards to industrial production. Great Britain initially published a report which showed industrial order expectations sinking rapidly for the month of April. Then the euro zone released its industrial new orders report on Wednesday, revealing slower growth than was expected, and coming alongside a sluggish core durable goods report from the United States.

This morning’s sharp downturn in Japanese industrial production, linked with those similar downturns in Great Britain, Europe and the United States, has now emerged and together paints a grim picture. On the currency side, the yen still suffers from its own economic concerns, but dollar bears outpaced the yen’s in this morning’s trading hours, helping to sink the USD/JPY temporarily despite Japan’s dire economic outlook. The pair also looks to be continuing this movement for the foreseeable future given the shift in sentiment away from the US dollar.

But the JPY did lose ground against almost all of its rivals yesterday partially as a result of the industrial downturn, but also as an S&P downgrade of Japan’s debt outlook from ‘stable’ to ‘negative’ caused a shift away from the island economy in the short- to mid-term.

The recent wave of industrial reports, revealing a global faltering among the industrial sector, may also be connected with recent GDP figures out of Britain and the United States. British Prelim GDP showed little movement, but remains at a dismal 0.5%. US Advance GDP, however, came out below expectations at 1.8%; pathetic when compared with Q4 2010 GDP, which published growth of 3.1%.

Being the first of three GDP reports from the US means the American economy still has time to lift this figure to an acceptable level. The downshift away from the greenback should help in the next few months by lifting exports. And this means traders should be able to profit from short dollar trades over the next few weeks, according to our analysts.

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© 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 pound is the best performer on the day after the Q1 GDP data while the yen is down. All this leads up to the US interest rate announcement and the inaugural Fed press conference with Chairman Ben Bernanke to follow.

Following the release of UK Q1 GDP numbers the pound traded higher with sterling the best performing currency so far today. The release was in line with market expectations of 0.5% and stands in stark contrast to the Q4 2010 numbers that showed the UK economy contracted by -0.5%. The GBP/USD jumped higher to 1.6580 before trading back to 1.6550. A rebound in UK growth should support sterling in the short term and a GBP/USD target still remains at the 2009 high of 1.7040. Support comes in today at 1.6420 near the upper channel line from the consolidation pattern of late last week.

The yen is on its back foot across the board as recent gains in the Japanese currency are being unrolled. The cause of today’s JPY declines is the S&P cut to the sovereign rating outlook due to increased costs from the earthquake and tsunami. The rising cleanup and recovery costs do not come as a surprise, but nevertheless the announcement by S&P helped to trigger a yen reversal. Recent yen strength has been apparent since mid-April after traders who were long on the JPY have recovered from the hit they took following the unilateral intervention to weaken the JPY. The USD/JPY is trading higher at 82.30 and the momentum of today’s move could carry the pair higher to the 83.00 level.

All eyes now turn to the Federal Reserve as today will mark the first quarterly news conference by the Fed Chairman. Prior to the press conference the Fed Funds Rate will be released and no changes are expected. This mantra goes as well for the QEII program as most Fed watchers forecast the US central bank to carry out the full $600B of bond purchases. The accompanying FOMC statement may indicate a slight improvement in the US economy as growth looks to have picked up and inflationary pressures have increased but are still below a level that would prompt any withdrawal of the loose monetary policy that helps to support the economic recovery.

Volatility in the dollar may increase given the new Q&A session Bernanke will endeavor upon. He should face questions not only pertaining to monetary policy and unemployment rates but also the weakness in the dollar will likely be addressed. The new format may not increase transparency into the Fed’s future actions but market volatility should be increased.

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© 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 USD/JPY fell to a record low during the start of the overnight session, as the aftermath of last week’s devastating earthquake and tsunami in Japan continue to generate extreme volatility in the marketplace. The pair dropped over 300 pips in a matter of minutes, reaching as low as 76.40 before bouncing back up to its current rate of 79.45. While several potentially significant US news events are scheduled to be released today, traders are warned that any developments out of Japan are likely to have the highest impact on the market.

Here is a roundup of the day’s main economic indicators:

12:30 GMT-US Core CPI

The Core CPI figure measures the change in price in goods and services, excluding food and energy, over the last month. This is considered a vital gauge of inflation in the US, and tends to have a direct impact on the value of the dollar.

Today’s CPI is forecasted to come in at 0.1%, which if true, would signal a slight drop over last month’s. The USD has been extremely bearish as of late. If today’s figure comes in at 0.1%, the currency is likely to take further losses.

12:30 GMT-US Unemployment Claims

The weekly US Unemployment Claims figure is considered one of the more significant news events on the forex calendar. Analysts are predicting a slight drop in the number of people filing for first time unemployment insurance this week. If the predicted figure of the 388K turns out to be true, the dollar may be able to pull in some short term gains during the afternoon session.

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© 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 USD/JPY pair has been range-trading for the past ten weeks, shifting between the 81.00 and the 84.50 levels. The pair recently reached a significant support level yet failed to cross it. As a result, the USD/JPY began climbing upwards, and still looks to reach higher. As several technical indicators show, the pair has potential to reach as high as the 84.50 level.

• The chart below is the USD/JPY 1-day chart by ForexYard.
• It is clearly seen that the pair’s trading was mainly characterized by ups and downs lately, without marking any real trend.
• The pair saw several failed attempts to breach through the 81.50 support level. As a result, it bounced back up and is currently trading near the 82.50 level.
• A bullish cross on the Slow Stochastic indicates that the bullish momentum has more room to go.
• The RSI has recently crossed the 30-level and is still pointing upwards. This indicates that the bullish move could proceed.
• In addition, the MACD looks to complete a bullish cross soon. If the bullish cross will indeed takes place, it could be used as further evidence that the upward movement will continue.
• The pair’s next resistance levels are located at the: 82.85, 83.50, 84.00 and the 84.50 level.
• The pair’s next support levels are at: 82.30, 81.50 and 80.90.

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 USD/JPY pair saw a very strong bullish trend in February, reaching as high as the 83.96 level. However, once the pair climbed towards almost 84.00, a sudden correction took place which was only stopped at the 81.60 level. Currently, the pair is once again testing the significant support level, if it falls below it, another sharp depreciation may take place.

• The chart below is the USD/JPY 4-hour chart by ForexYard.
• By February 4th the pair saw a strong bullish move, which was sharply reversed on February 16th. During the bearish correction, the pair has erased almost all of its gains.
• The Slow Stochastic has lately completed a bearish cross, signaling that another downward movement could take place soon.
• The RSI has recently climbed above the 30-line, just to fall below it again shortly after. This indicates that the bullish momentum was very poor, and that another bearish session is likely to take place.
• There is a very strong support level placed at 81.60. If the pair will fall below the support level, it is likely to drop towards the 81.30 level, followed by the 81.10 level.
• The next resistance levels are placed at the 82.00, 82.30 and 82.55 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.

Source: ForexYard

Following 10-weeks of consolidation, the USD/JPY has broken out of a triangle pattern.

Typically triangle patterns result in a continuation of the long term trend. However, as the daily chart shows, the USD/JPY has breached above the upper leg of the triangle.

An estimate of the price move from the triangle pattern calls for a 3.5 yen appreciation from the breakout price. A more conservative target may be the September high of 86.00. Along the way, resistance will be found at 83.70 and the top of the triangle pattern at 84.50.

In the direction of the long term trend, support is located at the declining upper leg of the triangle which comes in today at 82.80. 81.80 may come into play should the price retrace back into the triangle. Further support is the lower leg of the triangle at 81.40 and the January low at 80.90.

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

Today’s data releases from the UK and the US may help higher yielding assets receive a bid following yesterday’s coordinated central bank move and a reduced Chinese reserve requirement.

This morning we’ll get UK manufacturing PMI which is forecasted to fall to 47.1 from 47.4. Sterling has been bid the past 3-days versus the USD and the GBP/USD may find initial resistance at yesterday’s high of 1.5780, followed by the November 18th high of 1.5890. Support comes in at the November low of 1.5420.

Building on yesterday’s positive ADP jobs report and pending home sales the strong US economic data looks to continue into today and tomorrow. ISM manufacturing PMI will likely show the momentum from Q3 is carrying over in to Q4 which could translate into stronger GDP and finally put to bed the idea of a double dip US recession. Stronger data will likely keep the USD on its back foot and the USD/JPY could test yesterday’s low of 77.30 with scope for the November 18th low of 76.55.

Read more forex trading 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

Month end fixing may end up being USD positive as banks’ funding costs for USDs continue to rise. Trading in Asia was off to a rocky start with the Heng Seng down 1.80%. The economic calendar is crowded today but investors will continue to focus on the meeting of European finance ministers.

Bank funding costs are rising as lenders scramble to secure USD funding. Today’s end of month trading may increase demand for USDs, especially in Japan.

The meeting of European finance ministers continues into its second day and an article in The Telegraph highlights comments by German Finance Minister Wolfgang Schauble saying European finance ministers have not agreed on the terms of the EFSF.

This afternoon in the North American session we will have the ADP jobs report and US pending home sales, along with Canadian GDP data.

The USD could continue to firm in light of a failure of the European finance ministers to come away with concrete steps to shore up Europe’s finances. The EUR/USD has support at the October low of 1.3145. A break here and the pair could move to 1.0350, the 61% Fibonacci retracement of the June 2010 to May 2011 bullish trend. Resistance is found at yesterday’s high of 1.3440 and the November 18th high of 1.3610. The CAD/USD found support at 1.2060 and could now test the weekly high of 1.0520.

Read more forex trading 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 Swedish krona continues to weaken as the USD/SEK breaks higher above its 2-year downtrend.

Barring any surprises today the USD/SEK looks poised to close on a weekly basis above the downward sloping trend line from February 2009. The pair will encounter initial resistance at the September high of 6.9915, followed by the November 2010 high of 7.0700. A break here will open the door to the 2010 August and June highs of 7.5100 and 8.1350. The broken trend line may prove to be supportive at 6.6860 followed by the October low of 6.3075.

Read more forex trading 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

Today’s economic calendar will be highlighted by the release of the FOMC meeting minutes which are likely to show the Fed stands ready to act should inflation expectations continue to decline.

Investors remain firmly focused on events in Europe though the release of the meeting minutes from the past FOMC meeting could draw some attention from the markets. The Fed will likely address the improved US economic data but also keep the door open to additional monetary policy easing should the Fed see the need. With the doves firmly in control of the Fed and stagnant US unemployment, we continue to expect the Fed to initiate QE3.

The USD continues to move higher this morning versus the majors with the lone exception being the EUR/USD which has support at the base of the recent consolidation at 1.3430 and resistance at the October 18th high of 1.3555. Cable is trading near yesterday’s low of 1.5610 and a break here could open the door to the September low of 1.5325.

Read more forex trading 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.