Month: May 2009

By Fast Brokers

The EUR/USD is recovering some of yesterday’s losses incurred from the selloff in U.S. equities.  The currency pair is re-approaching our 1st tier uptrend line after Germany’s unemployment change number came in much better than expected.  The fact unemployment change has exited the 40k-60k range is very encouraging for the EU and creates a sense of normalcy in the employment market. Today’s release tags onto the positive current account data we saw yesterday, and the PMI and economic sentiment numbers from last week.  Therefore, economic data continues its upward trend for the most part, encouraging investors the global economy is stabilizing.  Recent economic data highlights our belief that the EUR/USD’s present pullback as a result of overbought conditions combined with a hesitation at the psychological 1.40 level.  Therefore, the EUR/USD could experience a solid rally today if America’s durable goods orders and new home sales numbers exceed expectations.

The EUR/USD remains in a bullish trend with the next natural obstacles being previous May highs and 1.40.  If the currency pair can climb past these obstacles, we could see a solid near-term pop towards the 1.43 area.  However, the EUR/USD has its work cut out for it as our trend lines crawl towards their inflection point, which will likely be reached before week’s end.  Therefore, we anticipate further consolidation until our trend lines collide followed by a strong directional move.  Despite our bullish outlook, yesterday’s solid volume on a down-bar is a disconcerting, and makes us a little wary.  Additionally, the inconsistent performance of the S&P has cast a shadow of a doubt on present equity valuations.  Therefore, if U.S. equities should falter, the EUR/USD would likely exercise its positive correlation and follow suit.  If the EUR/USD should continue its decline, May 21 lows serve as an important support area.  Regardless of the near-term uncertainty, we maintain our bullish outlook trend wise until further notice.

Fundamentally, we find resistances of 1.3899, 1.3922, 1.3958, 1.3991, and 1.4024.  To the downside, we see supports of 1.3847, 1.3807, 1.3756, 1.3732, and 1.3659.  The 1.35 area serves as a psychological cushion with 1.40 acting as a psychological barrier.  The EUR/USD is currently exchanging at 1.3889.

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers

The Cable weakened with U.S. equities yesterday, exercising its positive correlation with the S&P futures as investors locked in gains at the highly psychological 1.60 level.  Today’s CBI realized sales number was a little disappointing, as was yesterday’s BBA mortgage approvals.  Therefore, the optimism surrounding a recovery in consumption and housing has been dented.  Regardless, all-around economic data from Britain remains on the upswing until we see significant drawbacks across the board.  Hence, the Cable remains in a bullish trend, although it may experience relative weakness as compared to its European counterpart, reflected by a stabilizing EUR/GBP.

Our 2nd tier downtrend line is a critical obstacle since it stretches back to July 2008 highs, forming our last foreseeable blockade for the medium-term.  Hence, even though the Cable’s near-term gains have been impressive, we could witness even more exciting movements to the upside if the currency pair can clear the 2nd tier.  Due to the significance of present levels, we wouldn’t be surprised to experience continued hesitation around 1.60 as investors debate leaving the key resistance behind.  Meanwhile, the GBP/USD is building up a solid base between 1.5822 and 1.5988, which could serve as a reliable defense should the currency leap above 1.60.  We advise keeping a close eye on volume over the next couple sessions.  A large up-bar backed by considerable volume could indicate a forthcoming breakout.

All eyes will be on U.S. equity markets and their reaction to incoming economic data and Treasury bill auctions.  As with the EUR/USD, the inconsistent performance of the S&P serves as a negative counterpunch to the optimistic fundamentals exhibited by the Cable.  However, if the S&P can manage to shake loose of 900 and make a fundamental move to the upside this would likely push both the GBP/USD and the EUR/USD beyond their respective barriers.  We maintain our bullish outlook on the GBP/USD trend-wise until further notice.

Fundamentally, we find resistances of 1.5988, 1.6062, 1.6129, 1.6233, and 1.6307.  To the downside, we see supports of 1.5988, 1.5899, 1.5822, 1.5727, and 1.5662.  The GBP/USD is currently exchanging at 1.5953.

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers

The USD/JPY is making an encouraging move to the upside, running past our 1st tier downtrend line after Japan announced an asset deficit of roughly $6.61 billion.  In other words, domestic investors purchased an excess of $6.61 worth of foreign assets, likely participating in the large U.S. Treasury auctions.  This news indicates a boost in supply of the Yen, and is weakening the Japanese currency against equal interest bearing currencies such as the Dollar.   In addition to the asset purchase news, Japan reported a retail sales number 3 basis points above analyst expectations.  Therefore, consumption of retail goods continues to climb back towards reasonable levels, showing consumer confidence is on the rise with the employment market stabilizing.

It will be interesting to see if today’s pop in the USD/JPY receives significant volume.  The currency pair faces several downtrend lines to the upside and will need considerable momentum to piece together a fundamental move.  We can’t forget that Tuesday’s trade balance was far below analyst expectations, painting a mixed picture of the Japanese economy.  Considering the downward forces bearing down on price, we maintain our bearish outlook on the USD/JPY until we witness a fundamental shift to the upside.  One thing is for certain, today’s move is encouraging and brushes aside the topic of a rapidly appreciating Yen for the time being.

Fundamentally, we find resistances of 96.90, 97.45, 97.98, 98.59, and 99.25.  To the downside, we see supports of 96.33, 95.82, 95.12, 94.43, and 93.77.  The 100 level serves as a key psychological barrier with 95 acting as a psychological cushion.  The USD/JPY is currently exchanging at 96.84.

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers

Gold continues its stabilization, balancing along the highly psychological $950/oz level.  Our resistance and support levels are fairly tight as the S&P battles its demons at 900, meaning consolidation could continue for the immediate-term.  Meanwhile, gold is building a new base which can serve as solid support in the future.  Our 2nd and 3rd tier uptrend and downtrend lines reached an inflection point today, highlighting the relative importance of present levels.  Gold continues to exhibit a positive correlation with U.S. equities.  The recovery in global equity markets is sending oil sky high while the Dollar depreciates across the board, sparking fear of inflation.  Gold has served as a reliable hedge against inflation in the past.  As a result, investors are fleeing to the precious metal.  Additionally, we wouldn’t be surprised if China is aggressively purchasing the precious metal to diversify its reserves.

While momentum is in favor of the uptrend, the downtrend still has several upcoming barriers preventing gold from a large breakout to the upside.  To give you a better idea of the limitations to the upside trend-wise, create layers of downtrends beginning from March 2008 highs and connecting through February 2009 highs.  If the precious metal can manage to rally above these potential downtrend lines, then we may witness an all-out bull trend.  The fact that gold is stabilizing around $950/oz is a positive sign indicating bulls could be preparing to take the next step to the upside.

Fundamentally we maintain our resistances of $950.87/oz, $953.40/oz, and $955.66/oz with fresh top-ends resting at $959.24/oz and $961.45/oz.  To the downside, we see supports of $948.96/oz, $946.33/oz, $944.48/oz, $942.45/oz, and $940.45/oz. Gold is currently trading at $950.50/oz.

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

Source: ForexYard

The U.S. Dollar and Crude Oil experienced much bullishness in yesterday’s trading. The Dollar reacted positively to decent existing Home Sales data and Timothy Geithner’s optimistic speech regarding the U.S. economy. This helped the Dollar record a correction against most of its major currency pairs. Crude Oil also reacted positively to the news, helping the “black gold” extend its bullish run.

Economic News

USD – Dollar Rises on Positive Economic Data

The Dollar rallied yesterday against most of its major counterparts after data suggesting the slowdown in the U.S. housing market has bottomed out gave support to the U.S. currency as a safe-haven. The Dollar has been sold off recently partially due to growing optimism about the outlook for the U.S. economy. The USD finished yesterday’s trading session 150 pips higher against the EUR at the 1.3819 level.

The major economic event that came out of the U.S yesterday was the Existing Home Sales data release. Home resales in the U.S. probably rose in April as foreclosure auctions and improved affordability spurred bargain hunters. Moreover, record-low mortgage rates, tax credits and falling prices may keep boost demand of unsold homes. In turn, a pickup in sales may help stem the slump in property values, which is key to shoring up household finances and construction as the economy begins to emerge from the recession.

The Dollar also extended its gains against the EUR yesterday after an auction of fresh five-year Treasury debt attracted solid demand, easing fears that U.S. deficits have soured foreigner’s appetite for U.S. assets.

USD trading will be interesting today as important economic data is expected to be released. From 12:30 GMT a series of economic indicators will be released, starting with Core Durable Goods figures, Unemployment Claims and the New Home Sales. Surprisingly, almost all of these releases are expected to be higher than their previous figures, meaning the USD could continue to show further bullishness today. Traders should stay close to the market today, as there is a strong chance to capitalize on the fluctuations which will likely follow these releases.

EUR – The EUR Loses Momentum

The EUR lost momentum during yesterday’s trading session, correcting the sharp gains against the Dollar and JPY seen last week. This was following comments by a European Central Bank policymaker suggesting further Interest Rate cuts could not be ruled out, and profit-taking after a rally last week hurt the European currency. By yesterday’s close, the 16 nation currency fell sharply against the USD, pushing the oft-traded currency pair to 1.3819. The EUR experienced similar behavior against the JPY and closed at 1.3300.

However, the Pound Sterling was the biggest mover amongst the majors, propelled higher by receding pessimism about the UK economy and financial sector. This was boosted by a general move into riskier assets as equity markets rose after a pick-up in U.S. consumer confidence. The Pound outperformed the EUR, hitting $1.60 for the first time in almost seven months as investors continued to pare back the large bets against the currency built up after the collapse of Lehman Brothers last year.

Looking ahead to today, the most important economic indicator scheduled to be released from the Euro-Zone is the German Unemployment Change at 8:00 GMT. Analysts are forecasting this figure to slightly increase from its previous reading. Traders will be paying close attention to today’s announcement as a stronger than expected result may boost the EUR in the short-term. Traders are also advised to follow the CBI Realized Sales figures coming out of Britain at 10:00 GMT, and the Unemployment Claims figures coming out of the U.S. at 12:30 GMT as these results may set the EUR’s main currency crosses going into next week.

JPY – Yen Experiences Mixed Results against the Majors

The Yen completed yesterday’s trading session with mixed results versus its major currency pairs as investors chose the Dollar over the Yen for a safe-haven trade. The JPY fell against the USD and closed around 95.25. However, the Japanese Yen rose almost 40 pips versus the EUR, closing at 133.00.

The major economic event that came out of Japan yesterday was the Retail Sales figures. Retail Sales fell for an eighth month in April as worsening job prospects and declining wages deterred shoppers. The deep recession is spreading to households, whose outlays account for more than half of the economy. Japan will struggle to return to a sustainable growth path as long as companies from Toyota Company keep cutting jobs to minimize losses.

Crude Oil – Crude Oil Approaches the $63 Price Level

Crude Oil prices experienced another day of appreciation as the oft-traded commodity nearly hit $63 during yesterday’s trading session. This has been compounded by a weaker Dollar in recent weeks, causing investors to flee to commodities such as Crude Oil. Furthermore, if the U.S. continues to publish more positive economic news, and if the American government continues to be aggressive in tackling the current financial crisis, then Crude prices may hit $75 by the 4th quarter of 2009.

Expectations that consumers may once again want more Oil when the recession bottoms out have also fueled the rally, with traders watching the stock market for economic telltales. There is a reasonable possibility that Oil prices will continue to be bullish going into next week, providing that the economic situation of the leading economies continues to rapidly improve.

Technical News

EUR/USD

The pair has experienced high volatility in the past day. The 1-day oscillator fails to show a clear direction for the pair. However, the 1 hour and 1 day chart’s RSI signals that the pair is set for some bullish momentum today. Going long with tight stops could turn out to be a good strategy today.

GBP/USD

The 4-hour and 1 day chart’s Slow Stochastic indicates that the pair is set for bearish behavior today. However, the 1-hour, 4-hour and 1 day chart’s RSI backs bullish momentum for the near future. Waiting until the signals are clearer may be a wise choice until entering this pair.

USD/JPY

The pair has experienced much bullish behavior in the past week. The 4-hour and daily chart’s Slow Stochastic indicates that a bearish cross is imminent. However, the 1 day chart’s RSI shows that there is still much bullish momentum for the upcoming day. Going long with tight stops may be the correct pick for today.

USD/CHF

In the past several weeks the pair seems to have been oversold. Therefore, the pair’s behavior in the past few days points to a bullish correction. The 1-hour and 1 day chart’s Slow Stochastic points to a continuation of a short-medium term bullish correction. It may be a wise choice to enter a popular trend as the pair could surpass the 1.1000 mark in the foreseeable future.

The Wild Card – Crude Oil

Crude Oil is currently undergoing a bullish correction as it approaches $65 a barrel. The pair is approaching the upper boarder of the chart’s 1 day Bollinger Bands. The bullish trend is likely to continue as the commodity approaches the 70 line on the 1 day chart’s RSI. Entering this popular trend now seems to be a good option today for forex traders.

Forex Market Analysis provided by Forex Yard.

© 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.

U.S. Existing Homes sales increased more than expected for the month of April according to the monthly report produced by the National Association of Realtors. The NAR report showed that existing-home sales including single family homes, co-ops and townhouses increased 2.9 percent in April to a seasonally adjusted annual rate of 4.68 million units.

Economic forecasts were predicting an increase of 2.0 percent for the month following a revised 3.4 percent decrease in March. On an annual basis, April’s existing-homes sales are 3.5 percent lower than the April 2008 sales pace of 4.85 million units.

The median sales price for existing homes was $170,200 in April while total housing inventory showed an increase of 8.8 percent in April to a total of 3.97 million homes.

NAR chief economist Lawrence Yun commented on April’s increase saying, “Most of the sales are taking place in lower price ranges and activity is beginning to pick up in the midprice ranges, but high-end home sales remain sluggish”.

US Dollar mixed in Forex Trading today.

The U.S. dollar has been mixed today in forex trading against the other major currencies. The U.S. stock markets have been in negative territory today as General Motors looks to be headed towards bankruptcy.  The Dow Jones Industrial Average has lost almost 100 points so far today while the Nadaq and the S&P500 have declined approximately 3.80 points and 7.83 points, respectively.

The dollar, meanwhile, has been higher versus the euro, Australian dollar, New Zealand dollar, Canadian dollar and the Swiss franc while falling against the Japanese yen and the British pound.

The euro has declined versus the dollar today as the EUR/USD has fallen from its 1.3976 opening(00:00 GMT) to trading at 1.3916 in the afternoon of the U.S. trading session at 2:58pm EST according to currency data from Oanda.

The British pound has continued its climb today as the GBP/USD has advanced from its 1.5973 opening exchange rate to trading at 1.6045 usd per gbp. The dollar has fallen versus the Japanese yen and trading at 95.19 after opening at the day at the 95.41 exchange rate.

The dollar has gained slightly today versus the Canadian loonie as the USD/CAD trades at the exchange rate of 1.1149 after opening the day at 1.1133.

The dollar has gained against the Swiss franc as the USD/CHF trades at 1.0868 after opening at 1.0852 today while the dollar has also been stronger against the Australian dollar and New Zealand dollar. The AUD/USD trades at 0.7831 after a 0.7872 opening while the NZD/USD trades at 0.6194 today after opening at the exchange rate of 0.6228.

GBP/USD Chart – The British Pound advancing today versus the US dollar in forex trading and trading at its highest level since November 2008.

By Fast Brokers

The Euro is depreciating against the Dollar as the EUR/USD’s volume dips.  The currency pair’s impressive bull-run is cooling off below the highly psychological 1.40 level, and could get squeezed between our 2nd tier downtrend line and 1st/2nd tier uptrend lines.  The relative weakness of the Euro is reflected in the rapid selloff in the EUR/GBP with investors favoring the Pound over the Euro.  Although, since recent economic data from the EU hasn’t given investors much of a reason to balk, we view present losses as a symptom of overbought conditions.  Therefore, we are witnessing a healthy consolidation unless the downturn should pick up speed with sizeable volume.  However, we don’t believe this to be the case.  We view the bull-trend as alive and well with the last concrete downtrend, our 1st tier, fading into the background.  As for the immediate term, keep a close eye on our 1.3889 support.  If this doesn’t hold we could see a solid near-term decline.  As a result, our 2nd tier uptrend line should prove to be an important defense.

The EU will be relatively quiet on the economic news front, meaning the EUR/USD should reflect a sharp positive correlation with U.S. equities for the time being.  Hence, should the S&P futures build off of yesterday’s strong showing, the EUR/USD could be incline to follow suit to the upside.  Meanwhile, investors will be looking for a slight increase in the German Unemployment Change release tomorrow as manufacturers and exporters struggle with a stronger Euro and waning global consumption.  We maintain our bullish outlook on the EUR/USD trend-wise with fundamentals working in the bulls’ favor.

Fundamentally, we find resistances of 1.3922, 1.3958, 1.3991, 1.4024, and 1.4060.  To the downside, we see supports of 1.3889, 1.3847, 1.3807, and 1.3751.  The 1.35 area serves as a psychological cushion with 1.40 acting as a psychological barrier.  The EUR/USD is currently exchanging at 1.3911.

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers

The Cable continues its incredible run and is currently working to climb above our 2nd tier downtrend line and the psychological 1.60 level.  Our 2nd tier downtrend line is a critical obstacle since it stretches back to July 2008 highs, forming our last foreseeable blockade for the medium-term.  Hence, even though the Cable’s near-term gains have been impressive, we could witness even more exciting movements to the upside if the currency pair can clear the 2nd tier.  Due to the significance of present levels, we wouldn’t be surprised to experience a little hesitation back around 1.60 as investors debate leaving the key resistance behind.  We advise keeping a close eye on volume over the next couple sessions.  A large up-bar backed by considerable volume could indicate a forthcoming breakout.

The Cable is riding high despite BBA Mortgage Approvals showing home purchases may not be picking up as quickly as investors hoped.  Today’s BBA release reflects the same mixed message sent by yesterday’s Home Price Index release from the U.S.  Therefore, the housing sector continues to be a sore thumb in both Britain and the U.S.  Regardless, economic data from Britain has beat analyst expectations from almost every other economic standpoint over the last month.  As a result, economic releases will have to disappoint for the next couple weeks for investors to change their optimistic attitude.

Investors are shrugging off the fact that Britain now has a 33% chance of losing its AAA debt rating.  Hence, investors are sending a message that the U.S. is worse off concerning debt-exposure and monetary saturation induced by the massive injections of liquidity.  As a result, we’re witnessing a broad-based devaluation of the dollar around the globe.  The positive performances of both U.S. equities and Oil futures are only adding fuel to the fire with both the Cable and EUR/USD exercising their positive correlation with the S&P futures to the fullest extent.  Investors will be keeping a close eye on economic releases over the next two sessions including Existing and New Home Sales, Durable Goods Orders, and weekly Unemployment Claims from the U.S. coupled with Britain’s CBI Realized Sales.  We maintain our bullish outlook trend wise on the GBP/USD for the aforementioned reasons.

Fundamentally, we find resistances of 1.6062, 1.6129, 1.6233, 1.6307, and 1.6388.  To the downside, we see supports of 1.5988, 1.5.5899, 1.5822, 1.5727, and 1.5662.  1.60 is becoming a psychological cushion with 1.65 acting as a psychological barrier.  The GBP/USD is currently exchanging at 1.6032.

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers

The USD/JPY is rebounding nicely from our 2nd tier uptrend line and critical March 18 lows despite the tensions surrounding North Korea.  Additionally, investors are brushing aside a much worse than expected Japanese Trade Balance coupled with a large downward revision in April’s release.  Japan’s negative Trade Balance shows global consumption may not be recovering as quickly as investors are pricing in.  Furthermore, exports to China could be slowing, indicating China’s economy may not be as strong as thought.  An overall appreciated Yen is really taking its toll on demand for Japanese exports.  However, before we read too far into the Trade Balance, we can’t forget Core Machinery Orders are rising at an encouraging pace.  Therefore, Japan’s forward-looking economic performance is looking up.  Japan will release Retail Sales later in Wednesday’s session, giving investors a better idea of the state of the nation’s economy.

Meanwhile, the USD/JPY remains lodged between our 2nd tier uptrend line and 1st tier downtrend lines.  The pressure is still clearly applied to the downside with 5 downtrend lines and the critical 100 level bearing overhead.  Every recent near-term pop has been accompanied by disappointing volume, showing the bulls lack conviction.  The USD/JPY has neglected its positive correlation with U.S. equities as of late, preferring to participate in the broad depreciation of the Dollar.  March 18 lows and our 2nd tier uptrend line continue to play a key defensive role.  If these cushions don’t hold, we could see the downturn pick up speed towards our 1st tier uptrend line.  The line of defense is running thin, meaning the Yen is on the cusp of a rapid appreciation against the Dollar.  Therefore, a large near-term pop backed by sizeable volume is sorely needed to keep the weak near-term uptrend alive.  We maintain our bearish outlook trend-wise due to the aforementioned reasons.

Fundamentally, we find resistances of 95.88, 96.33, 96.90, 97.32, and 97.98.  To the downside, we see supports of 95.12, 94.51, 93.66, 92.75, and 92.07.  The 100 level serves as a key psychological barrier with 95 acting as a psychological cushion.  The USD/JPY is currently exchanging at 95.26.

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers

Gold is consolidating after Tuesday’s losses, balancing along the highly psychological $950/oz level.  Meanwhile, our resistance and support levels are fairly as the S&P battles 900, meaning consolidation could continue for the near-term.  Our 2nd and 3rd tier uptrend and downtrend lines are reaching an inflection point today, reflecting the relative importance of present levels.  Gold continues to exhibit a positive correlation with U.S. equities.  The recovery in global equity markets is sending oil sky high while the Dollar depreciates across the board, sparking fear of inflation.  Gold has served as a reliable hedge against inflation in the past.  As a result, investors are fleeing to the precious metal.  Additionally, we wouldn’t be surprised if China is aggressively purchasing the precious metal to diversify its reserves.

While momentum is in favor of the uptrend, the downtrend still has several upcoming barriers preventing gold from a large breakout to the upside.  To give you a better idea of the limitations to the upside trend-wise, create layers of downtrends beginning from March 2008 highs and connecting through February 2009 highs.  If the precious metal can manage to rally above these potential downtrend lines, then we may witness an all-out bull trend.  The fact that gold is stabilizing around $950/oz is a positive sign indicating bulls could be preparing to take the next step to the upside.

Fundamentally we find resistances of $948.96/oz, $950.87/oz, $953.40/oz, $955.66/oz, and $959.24/oz.  To the downside, we see supports of $947.61/oz, $944.48/oz, $942.24/oz, $940.45/oz, and $938.41/oz. Gold is currently trading at $951.20/oz.

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.