Month: June 2009

By Adam Hewison – With the S&P 500 falling to a fresh two-week low, the big question is this a correction, or the start of a major trend on the downside?

I have just finished a short video that details many of the key concerns that we have for this market. If you have not seen our videos before you may enjoy this one. This video does not require a plug-in.

The video is free to watch and there is no need to register. I would love to get your feedback about this video on our blog.

See the New Video here….

All the best,

Adam Hewison
President, INO.com
Co-creator, MarketClub

Source: ForexYard

As the USD shows unclear signals about where it is heading, and the EUR appears to be following the lead of the greenback, the market’s primary currencies seem to be confusing the bulk of forex traders. On the other hand, the British Pound has shown strong signs of life and Britain is scheduled to release significant economic data today which may cause the GBP to be the main subject of today’s trading.

Economic News

USD – USD Erratic from Mixed Signals

The USD dropped against most of its major currency rivals yesterday, pressured by Russian angling for a new global reserve currency. By yesterday’s close, the USD fell against the EUR, pushing the oft-traded currency pair to 1.3835. The Dollar experienced similar behavior against the GBP and closed at 1.6402.

Concerns that the pace of economic recovery may be more tepid than initially thought forced a retreat in a broad equity advance in the United States. While U.S. housing starts in May rebounded and producer prices rose less than expected, suggesting inflation pressures were muted. But not all investors were convinced that the economy is on a path to recovery, and global stocks turned lower as the strong rise in U.S. housing starts was outweighed by a slide in industrial production.

Looking ahead to today, the most important economic indicator scheduled to be released from the U.S. is the Core CPI at 12:30 GMT. Analysts are forecasting this figure to increase from its previous reading. Traders will be paying close attention to today’s announcement as a stronger than expected result may boost the USD in the short-term. Traders are also advised to follow Federal Reserve Chairman Ben Bernanke’s speech at 13:00 GMT. This speech is very important as it is very likely to impact the Dollar’s volatility. This may set the pace for the Dollar going into the rest of the week.

EUR – EUR Rises on Positive Economic Data

The EUR experienced a bullish day of trading yesterday against the USD, mainly due to the German ZEW economic expectation figure. The ZEW indicator jumped to 44.8 in June from 31.1 in May. This suggests that analysts and investors were not as grim about the economy as before. In other words, the improvement in this consumer sentiment signals that the worries about a further aggravation of the economic recession may be limited by the end of the year. The reading is now firmly in positive territory, which indicates that optimists far outnumber pessimists.

Since the release of this important figure earlier yesterday the EUR has climbed against the USD, and continued during today’s trading session and closed at 1.3835, as trader confidence returned back to the EUR. A strong EUR may continue in the coming days if the European economy continues to release better-than-expected economic figures. If this does occur, the confidence of investors may continue to return back to the EUR in the short-term.

Looking ahead to today, the Euro-Zone and Britain are set to publish a number of important data releases. These include the British Claimant Count Change at 8:30 GMT and the Euro-Zone Trade Balance at 9:00 GMT. These figures are likely to determine the GBP and EUR’s strength going into end-of-week trading. Forex traders are also advised to closely follow the speech coming from U.S. Fed Chairman Ben Bernanke, as the forex market is likely to be very volatile while he speaks.

JPY – Yen Experiences Mixed Results against Major Currencies

The Yen completed yesterday’s trading session with mixed results versus the other major currencies. The JPY was broadly unchanged versus the EUR yesterday and closed its trading session at around the 133.50 level. The JPY also saw bullishness against the USD and closed at 96.50.

The Yen rose and stocks slumped the most in more than two months on concern a global recovery may be delayed. While the Bank of Japan (BOJ) said earlier that the nation’s worst post-war recession is easing, BOJ Governor Shirakawa said that the economy is improving because of three temporary factors: replacement of stockpiles at home and abroad, global fiscal stimulus measures, and improving confidence. It’s unclear whether a recovery in demand will take hold.

Crude Oil – Crude Oil Prices Stable near $70

Oil fell during yesterday’s trading session and closed around $70.60; giving back early gains as worries about the ailing world economy persist.

Oil prices have risen steadily during the past two months, going above $70 a barrel and causing concern that high energy costs could slow the economic recovery from recession. Slowing production has contributed to the price increase, but weakness in the U.S. dollar may be the main cause.

As for today, traders should pay attention to the U.S Crude Oil Inventories report scheduled, as it tends to have a large impact on Crude Oil’s prices recently, especially for the short-term.

Technical News

EUR/USD

This pair has been range-trading between 1.4150 and 1.3750 for the past few days and doesn’t seem to have much clear direction. After a short upward movement, the Slow Stochastic on the hourly chart is signaling an impending bearish cross which means the range-trading is set to continue. Buying on lows and selling on highs might be a good choice today.

GBP/USD

This pair shows no clear indication of direction for the moment. Nevertheless, there is one signal which does appear clearly. The Bollinger Bands on the hourly chart are beginning to tighten and the MACD on all charts is near 0, indicating a volatile movement is impending. When the price jump occurs, entering positions to ride the wave will be a wise choice.

USD/JPY

The volatility this pair has seen recently has created a number of contradictory signals. The hourly chart shows a bearish cross on the Slow Stochastic, indicating a downward movement may be coming. Contrary to this is the bullish cross on the 4-hour chart, signaling an impending upward movement. Waiting for a clear signal might be wise today.

USD/CHF

The consolidation trend in this pair, which began with the low price near 1.0600, has started to reach its threshold. The latest downward movement will likely be followed by a quick correction before making a significant price jump. The short term oscillators point upward, signaling the impending correction. Forex traders can benefit greatly by calling the direction of the breach and riding the wave which is sure to follow.

The Wild Card – CAD/CHF

This pair has been trading very flat these past few weeks, but has now begun to show signs of life. The MACD on the hourly and 4-hour chart shows clear bullish crosses, signaling an impending bullish move. The daily chart also has a bullish cross on the Slow Stochastic, which supports this notion. Forex traders can join this upcoming trend by entering early buy positions and riding the upcoming spike for profits this week.

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.

• The chart below is the weekly Crude Oil chart by ForexYard.

• The technical indicators used are the Bollinger Bands, Stochastic and RSI.

• There is a “doji” candlestick formed in the chart, indicating that a reversal should take place.

• The trend has reached the Bollinger Bands’ upper border, which may hint that the uptrend has reached its conclusion.

• A bearish cross on the Stochastic suggests that bearish activity might be imminent.

• The RSI has switched directions and is now facing down, however a much stronger signal will be given once it drops bellows the 70 line.

• It currently seems that a bearish move might be on its way, yet a red candlestick is required in order to assure the notion. Forex traders are welcomed to follow Crude Oil’s daily chart and look for the potential drop.

By GCI Fx Research

€

The euro gained moderate ground-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3930 level and was supported around the $1.3750 level.  European Central Bank policymaker Mersch reported the eurozone economy is likely to return to positive economic growth “sometime in the middle of” 2010.  ECB member Weber said “more (monetary) measures are not needed” at this time and added liquidity measures are continuing to improve.  ECB member Draghi said it is too soon for policymakers to unwind their massive stimuli but added policymakers should be crafting their “exit strategies” now. Similarly, ECB member Ordonez reported a failure to absorb liquidity could “put the global economy at the end of a depressive spiral of grave consequences.”  Data released in the eurozone today saw the annual EMU-16 inflation rate decline to a record low of 0% in May while the monthly increase slowed to +0.1% from +0.4% in April.  It was also reported that EMU-16 Q1 labour costs were up 3.7% y/y, down from a record 4.0% pace in Q4 2009 while the German June ZEW economic expectations index improved to 44.8 from 31.1 in May.  Other big news in the eurozone today saw the ECB confirm the eurozone’s largest banks are facing additional write-downs of US$ 283 billion by the end of 2010.  In U.S. news, data released in the saw May housing starts climb 17.2% m/m to an annualized 532,000 rate while May building permits were up 7.5% m/m, their third consecutive increase.  These data suggest the U.S. housing market remains on the mend but with massive inventories of unsold homes still on the market and rising mortgage interest rates, the upside in the sector is limited.  In contrast to the rosy housing data, May industrial production was off 1.1% m/m with capacity utilization lower at 68.3%.  The American Bankers Association today reported the economic recession should abate in the third quarter.  Additional data saw May producer price inflation climb 0.2% m/m, less than the 0.6% print that economists expected, and down 5% y/y.  Core PPI was off 0.1% m/m, the first decline since October 2005.     Euro bids are cited around the US$ 1.3435 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥96.05 level and was capped around the ¥97.90 level.  Finance minister Yosano verbally intervened to support the U.S. dollar today, indicating “My thinking about the US economy or the world standard currency – the dollar – or my firm confidence in them, isn’t shaken at all.”  Yosano intimated Tokyo has no plans to sell the U.S. dollar.  Bank of Japan’s Policy Board meeting ended with little fanfare.  The central bank kept its overnight call rate target unchanged at 0.10%.  The Nikkei 225 stock index lost 1.74% to close at ¥10,039.67.  U.S. dollar offers are cited around the ¥104.15 level.  The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥132.70 level and was capped around the ¥135.35 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥156.45 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥88.10 level. In Chinese news, the U.S. dollar weakened vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8330 in the over-the-counter market, down from CNY 6.8353.

Daily Market Commentary provided by GCI Financial Ltd.

GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.

DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

– Below is the hourly chart for the USD/JPY.

– The indicators used are the Slow Stochastic and RSI.

– Point 1: The Slow Stochastic indicates an impending bullish cross, which may signal an upward movement is going to occur in the near future.

– Point 2: RSI signals that the price of this pair currently floats in the over-sold territory, indicating upward pressure.

– The volatile downward movement which occurred prior to this upward correction has generated these indicators, and there appears to be room for this correction to continue.

Since the opening of the U.S. market the Dollar has declined against most of its currency pairs. This was initiated by the publication of mixed results for U.S. economic indicators. For example positive housing starts and negative PPI data from the U.S. led to uncertainty in the forex market, as these figures showed mixed signs of recovery for the American economy. This also led U.S. stocks to fall for a second day in a row, as banks from Morgan Stanley to Goldman Sachs revealed today that they believe that the U.S. stock market rally has come to an end.

Retail and commodity shares were amongst the main losers today, as uncertainty took its foothold into the stock market. These combined factors led the USD to go bearish throughout Tuesday’s trading. The Dollar is currently trading lower against the GBP by nearly 200 pips at 1.6438. It is also trading lower against EUR and JPY, as traders feel that the U.S. currency is an unstable bet for today.

As the U.S. market comes to a close, the USD may continue to weaken further, as forex traders feel that the USD is a risky bet for today. As a result, fears about the Dollar’s instability has led Oil to rise over 60 cents. If today’s trend continues, then the USD may be in for a bumpy week as a sell-off of the Dollar may hit full-force. If this does occur, then we may see the EUR/USD hit the 1.3950 level by the end of the week.

By CountingPips.com

U.S. producer prices increased for a second straight month in May according to a report released today by the U.S. Labor Department. Producer prices or wholesale inflation increased by 0.2 percent in May following a 0.3 percent increase in April and a 1.2 percent decline in March. On an annual basis, producer prices have decreased by 5.0 percent from May 2008 following April’s annual 3.7 percent decline. Contributing to the price increase was a rise in energy prices by 2.9 percent in May after energy had decreased in both April and March.

Economic forecasts for the monthly producer price numbers were expecting a 0.6 percent increase and a 4.4 percent decrease on an annual basis. Core prices, excluding volatile energy and food costs, increased by 0.1 percent in May and registered a year-over-year increase of 3.0 percent.

Housing Starts, Building Permits rise.

U.S. Housing Starts and Building Permits increased in the month of May according to data released by the Commerce Department on new residential construction. Housing Starts grew by 17.2 percent in May to a seasonally adjusted annual rate of 532,000, an increase from April’s 454,000 estimated housing starts. May’s total on an annual basis, despite the monthly increase, is down 45.2 percent compared with May of 2008.

Building permits statistics, used as a predictor of future construction, showed a seasonally adjusted annual rate of 518,000 permits in May which is an increase of 4.0 percent compared to April. On an annual basis, May’s total is 47.0 percent below the level of May 2008.

Housing Completions for May decreased when compared to April with an annual rate of 811,000 privately-owned housing completions. This is a decrease of 3.3 percent from April and May’s annual rate is 28.8 percent below the May 2008 level.

Forex Market – US Dollar falling in Forex today.

The U.S. dollar has been falling lower in forex trading today after gaining yesterday. The dollar has fallen versus the euro, pound, franc, aussie, kiwi, loonie and the yen.

The euro has advanced versus the dollar today as the EUR/USD has risen from today’s 1.3799 opening(00:00 GMT) to trading at approximately 1.3843 in the afternoon of the US trading session at 1:42pm EST according to currency data by Oanda.

The British pound has increased today versus the American currency as the GBP/USD has gone from the 1.6246 opening to trading at 1.6421 dollars per pound.

The dollar has declined against the Japanese yen as the USD/JPY trades at 96.37 after its 96.64 opening exchange rate. The dollar has fallen against the Canadian loonie dollar after opening at 1.1350 earlier today to trading later at 1.1332.

The USD has declined against the Swiss franc after the USD/CHF’s opening at 1.0914 to trading at the 1.0874 exchange rate.

The Australian dollar has advanced as the AUD/USD has gone from 0.7900 to trading at 0.7971 while the New Zealand dollar (NZD/USD) has climbed from 0.6272 usd per nzd to trading at 0.6332.

By Adam Hewison

In my new short video I will show you some of the key elements and levels that I think should come in and support the gold market. The video is quite short, but it will lead you step by step into the detailed analysis of this not so precious metal.

The video is free to watch and there is no need to register. I would love to get your feedback about this video on our blog.

See the New Video here…

All the best,

Adam Hewison
President, INO.com
Co-creator, MarketClub

By Fast Brokers – The EUR/USD broke below our neckline yesterday, logging the selloff we anticipated.  Yesterday’s move came on large volume, continuing the theme of considerable activity to the downside.  So far this month we’ve seen rising volume to the downside on 6/4, 6/5, 6/10, and now 6/15.  The heightened interest on the sell-side could indicate there is more room to go to the south.  In addition to snapping the neckline, the EUR/USD closed beneath 5/28 lows, another negative technical indicator.  While we could see an immediate-term recovery towards our 2nd tier downtrend line and uptrend lines, we likely won’t witness any sizeable, game-changing gains.  The S&P futures also made a key technical pullback yesterday.  Due to their positive correlation, the movement of the S&P further supports our negative outlook on the EUR/USD.   It appears as if the next stop for the EUR/USD could be our 1st tier uptrend line and/or the 1.36 area.  This would likely serve as the next point of consolidation should the currency pair decided to stabilize and turn around.  As for the upside, the EUR/USD would need to fight back above our 2nd tier uptrend line and the psychological 1.40 level on large volume for us to alter our near-term outlook.

Meanwhile, the Euro continues to experience relative weakness across the board, emphasized by the deterioration of both the EUR/GBP and EUR/JPY.  The weakness results from the comparatively spotty data from the EU during the recovery process.  Additionally, investors could be showing the ECB has acted insufficiently in regards to their monetary policy in reaction to the economic crisis.  Flight to the Dollar could continue as investors try to diversify and decrease their overall risk exposure.  However, we do maintain our positive outlook for the medium-term.

The medium-term downtrend line formed through 12/18 lows, or our 1st tier downtrend line, is still far out of reach.  As long as 1.35 in the EUR/USD and the 900 area in the S&P are intact, the currency pair is in pretty good shape technically for the longer-term.  On the other hand, we have yet to see if the pullback we’re witnessing is healthy, or a reversal into the medium-term downtrend.  Ultimately, the fate of the Dollar relies upon the outcome of the current economic stabilization taking place.  If we are not witnessing a true recovery, then the Dollar would likely appreciate heavily once again.  However, we would need to witness a large, broad-based contraction in economic data globally.  Therefore, we maintain our negative near-term outlook and positive medium-term outlook on the EUR/USD trend-wise.

The EU will release key economic sentiment data along with its CPI number.  The U.S. and Britain will release important economic data points of their own, so we expect another session of high volatility.

Present Price: 1.3856

Resistances: 1.3895, 1.3954, 1.4019, 1.4052, 1.4111

Supports: 1.3847, 1.3807, 1.3759, 1.3724, 1.3682.

Psychological: 1.40, 1.35

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 pulled back on large volume yesterday as the Dollar appreciated across the board.  However, the GBP/USD’s losses were not technically significant as with the EUR/USD due to Britain’s relative strength economically.  The Cable now appears to be following our 2nd tier downtrend line while trading comfortably above the psychological 1.60 level.  Additionally, the GBP/USD is well above June lows whereas the EUR/USD closed beneath their respective June lows yesterday.  The relative strength of the Pound is further exemplified by the overall outperformance of the GBP/JPY and underperformance of the EUR/GBP.  Investors are rewarding the Pound for Britain’s strong showing in economic data while it seems that the BOE has taken the more appropriate measures to fight the crisis as compared to the Fed and ECB.  Investors will get a better sense of how the British economy is faring in less than an hour upon the release of the nation’s year-over-year CPI and RPI data.  Additionally, investors will digest important pricing data from both the EU and U.S.  If the numbers signify deflation, we could witness further near-term strength in the Dollar.

Despite the relative outperformance of the Pound, the Cable is still facing some considerable downward pressure due to the currency pair’s positive correlation with U.S. equities.  The S&P futures are indicating there may be further room to go to the downside.  Investors are concerned that international governments will not continue to support America’s expanding burden of debt.  Furthermore, U.S. equities may be overvalued due to their impressive run in the first half of 2009.  The challenge for the Cable to the upside is presented in the form of our 2nd and 3rd tier downtrend lines.  While we could see a bounce today in the face of oversold conditions, the Cable may be forced to participate in the near-term downtrend we’ve forecasted in the EUR/USD, USD/JPY, and S&P futures.  Ultimately, as with other major Dollar pairs, the medium-term fate of the GBP/USD relies upon the ability of the global economy to follow through on its path to recovery.  Any broad-scale pull back in the global economy, or a retraction into the problems we saw in 2008 would likely kick the Cable back into its medium-term downtrend.  However, we have no reason to suspect this and the medium-term uptrend line remains intact.

Meanwhile, our 3rd tier uptrend line is playing an important role as far as support is concerned.  If our 3rd tier doesn’t hold, we could witness a sharp near-term contraction towards our 2nd tier uptrend line and the psychological 1.60 level.  The rising volume yesterday to the downside is certainly a cause for concern and could be foreboding of an oncoming pullback.  As for the upside, the Cable will need to get above our 2nd and 3rd tier uptrend lines to have a chance at overcoming previous June highs.  We maintain our negative outlook for the short-term in the GBP/USD trend-wise due to the negative pressures in the global market place.

Present Price: 1.6335

Resistances: 1.6371, 1.6412, 1.6498, 1.6574, 1.6620

Supports: 1.6315, 1.6263, 1.6210, 1.6141, 1.6080

Psychological: 1.65, 1.60

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.