Month: September 2009

The Dollar Continues to Slide Against Counterparts

Last week was characterized by additional Dollar selling as the greenback continued to drop on improving economic data and reassurance from government officials that the U.S economy is now on the right track, back to a recovery.  US industrial production rose a stronger than expected 0.8% m/m in August, while the July gain was revised up to 1.0% m/m from 0.5%.

President Obama took the stage numerous times during the week, stating that job losses are bottoming out and that the new impositions, tariffs, will not spark a trade war between the U.S and China. According to Bloomberg news, President Barack Obama stated that he is now very optimistic about the U.S getting a set of rules in place that will prevent another similar crisis to what the U.S economy has experienced over the past two years. Even though he did mention that the U.S economy is far from out of the woods, his overall tone was optimistic regarding the economic future. In addition Fed Chairman Ben Bernanke stepped up to the plate, mentioning that the current recession has ‘very likely’ ended.

The leader of the week was the euro climbing to new highs vs. the dollar. Even though there was little follow-through, the nature of the trend was a slow grind higher for the euro. The EUR/USD tested highs seen in December of 2008, and has now reached major resistance of $ 1.50.  When taking a look at the chart below one can see that the week was characterized by another leg higher, one that has now brought the EUR/USD into its early 2008’s range.

Renewed concerns about the UK banking sector acted as a catalyst to drive the British pound below important support of $1.6400. During Friday’s session a telegraph revealed that Lloyds’ banking group failed the FSA stress test and will have to remain under the government’s asset protection program for a while longer. Furthermore the regulator decided that the bank will require an extra £28bn to withstand bad debts.  The GBP/USD crashed during Friday’s session but seemed to hold its 100 day moving average which it is sure to re-test at the beginning of this week.  One must note that even though the GBP has shown relative weakness compared to other currency pairs against the Dollar, support of 1.6231 could prevent a major landslide.

The euro’s cross of its 20 day moving average also extended its gains against the pound last week, after breaking above the 50% retracement of this year’s falls.  The EUR/GBP broke above a weekly trend line, one which inspired bullish traders to take this pair higher. Due to a much higher return from the Euro-zone and further problems in the U.K, some which are expected to weigh on the Bank of England and prevent them from attempting to exit its quantitative easing program anytime soon, investors preferred to take the EUR/GBP higher for the week, reaching target resistance of £0.9

*courtesy of netdania.com

U.S data continues to prevail

During the week the US released inspiring economic data, which included the aforementioned industrial production as well as Retail Sales, and the Philadelphia Federal Reserve survey.    Retail sales jumped in August by the largest amount in more than three years, spurred by widespread gains beyond the expected increases of auto sales from the government’s Cash for Clunkers program.    The Commerce Department said Tuesday that retail sales rose a seasonally adjusted 2.7 percent last month, after falling 0.2 percent in July. It was the largest gain in three-and-a-half years and beat analysts’ expectations of a 2 percent increase.

The Philly Fed Survey, a broad measure of manufacturing conditions, increased from ‐7.5 in July to 4.2 this month. The percentage of firms reporting increases in activity (27%) was slightly higher than the percentage reporting decreases (23%). Other broad indicators also suggested improvement. The current new orders index edged six points higher, from ‐2.2 to 4.2, also its highest reading since November 2007. The current shipments index increased 10 points, to a slightly positive reading.

The positive data sparked renewed buying during the week on the equity markets, as the major indices continued to climb during the week. The S&P 500 touched new highs for 2009, closing the week higher by 25.5 points or 2.45%. From a weekly perspective, the S&P 500 continues to move away from its head and shoulder breakout pattern and now seems like it is heading for its 200 weekly moving average, located at 1250 points. Despite that fact, one must note that the daily chart is showing signs of being overbought. Current price levels could lead to a pull back before the next leg higher.

S&P500 – Daily Chart

This week’s data:

Even though the economic calendar is relatively light on data next week the U.S should continue to lead the markets, due to an upcoming interest rate decision. Even though a no change status is expected by most traders, growing speculation that the Fed could raise rates in months to come are weighing on the investors. While the decision itself should pass with no major affect on the price movement, many will be observing the statement that is expected to be released shortly after. Furthermore when taking a glance at yields, one can see that the curve is now pricing in future rate hikes.

In addition to the awaited rate decision, the U.S will release its leading indicators, durable goods, existing and new home sales. The housing data will be closely scrutinized by investors especially as recent data has shown a dramatic improvement, compared to previous months. According to the National Association of Home Builders, confidence edged up again in September, despite an ease in single family starts.

Market Analysis provided by eToro

Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.

© 2009 eToro Blog.

By ForexTraders.com

Online forex trading offers lots of opportunities to determined beginners, but also poses some serious risks for an undisciplined trader. Forex is highly leveraged, and volatile, and the combination can be lethal for your account if you don’t assume the proper attitude and adopt correct practices in your trading. Still, forex is a great boon to the trader who knows how to control himself, when to trade, and remain realistic while assessing market conditions. In this article we’ll take a look at some of the general guidelines from which every trader can benefit provided that he applies them with discipline and determination.

1. Always use the stop-loss order

Quite simply, the stop-loss order is your guarantee against a wiped-out account in case things go wrong. If you place this order properly you can go read, have fun, watch TV or do whatever you want as the computer takes over the task of cutting down your losses in case that there are unexpected developments. Although trading software can sometimes fail, this is rare, and for the most part you have the power to reduce your losses by using the stop-loss order effectively.

1. Focus on and perfect your skills in risk management

The word effectively, of course, bring us to the matter of money management. In money management you learn about the tools that can be used to minimize losses and maximize your profits. Analysis never gives you certain outcomes, because you are never in control of the market action, nor can you know with any degree of certitude the future direction of the price. However, you are capable of controlling your own behavior, and doing so in a profitable way is all that money management is about. Money management is probably the most important aspect of trading.

1. Don’t fight the market, don’t try to be right, if you don’t understand, don’t trade

In general, you can be right or wrong, but the market is always right. That doesn’t mean that market participants always make rational choices that can be termed to be correct in the long term, but it does mean that the decisions of the market are always final. There’s no court of appeal for the forex market. If you have lost, there’s no way of getting back your losses. And no one will ask questions once you make a profit regardless of the methods you use.

1. Know that technical tools never guarantee an outcome

For a successful trader career it is crucial to understand that the technical tools of analysis never guarantee that a scenario will occur. In fact they don’t even speak of high probability. Market events are random in the short-term, and no amount of effort will grant you the ability to confine or transform the market action into a deterministic pattern that will give foolproof signals about the future. It is best to use technical tools for determining entry and exit points only, without making any conjectures about the direction of the market on their basis alone.

1. Use analysis for entry points, and money management for being profitable

In sum, use technical analysis for determining the entry or exit point of a trade, while using money management to ensure that on the whole your trades bring a net profit. Don’t fight the market, and don’t be deluded into thinking that you can predict the future in the short-term. Markets act by emotions in the short-term, and emotions of the mass cannot be analyzed effectively because by definition they don’t depend on logic. Forex analysis is good for ordering your trades, and giving a logical framework for trading decisions, also for avoiding arbitrariness in trade decisions which is crucial for a disciplined, rigorous approach. But it’s not a tool of prognostication, and those who assume it as such are often disappointed by their results.

By Elliott Wave International

It’s one of the first rules in the book of mainstream economic wisdom: a country’s economy is the thermometer which “reads” its stock market’s temperature. If financial conditions are heating up, stocks rise; if they are cooling down, stocks fall. Were it so simple — millionaires wouldn’t make up a measly .15% of the global population.

Obviously, there’s a major flaw with this logic; namely, it isn’t true. Time and again, stock prices smolder to near boiling even as economic growth chills to the bone. (The opposite also holds: Stock prices cool down even as the economy is on fire.)

Take, for instance, Germany’s main stock index, the DAX 30. On August 13, Europe’s number one economy reported a .3% rise in gross domestic product (GDP) — Germany’s first quarter of growth since January 2008. Soon after, the DAX began to rally and finished the day at a fresh, ten-month high.

In no time at all, every financial media outlet from Wall Street to la-la land had their story: “Germany’s DAX rose nearly 1% on the GDP data. The big picture will be one of ongoing gradual recovery through 2010.” (LA Times)

One problem: the DAX’s bullish flame has been burning since the index landed at a two-year low on March 9, 2009. YET — the economic data over those six months has been about as “hot” as the Arctic Circle. Here, the following news stories from the time say plenty:

• March 24, Wall Street Journal: “There’s a slew of evidence that Germany is in an economic freefall: A 19% drop in industrial output, a 23% decline in exports, a 35% drop in new manufacturing orders, and on. The numbers we’re seeing are just mind-boggling.”

(FreeWeek Kicks Off With Germany: On September 16, EWI launched its first-ever FreeWeek featuring its youngest subscriber services: European Short Term Update and Asian-Pacific Short Term Update. Take advantage of this amazing opportunity. Click HERE to sign on and get invaluable insight into Europe’s #1 market.)

• April 30, New York Times reveals a 17% year-over-year decline in Germany’s exports and writes, “With 47% of its GDP generated by exports, Germany would suffer a severe contraction in its economy.”
• May 16, Wall Street Journal: “In the fourth-quarter 2009, Germany’s GDP plunged 3.5%; its worst performance in nearly four decades.”
• May 17: Tens of thousands of German workers march through downtown Berlin to express their anxiety over the alarming increase in unemployment: at 7.7%.
• June 29 Associated Press: Germany’s GDP has now fallen by nearly 7% in the past four quarters with widespread expectations for a 5.5% to 6% contraction by the years end.
• July 3 WSJ: “Germany’s own recession is the deepest of any major economy in the world, apart from Japan.”
• September 8 speech by Germany’s Chancellor Angela Merkel: “We are in the worst economic crisis that the Federal Republic of Germany has experienced in 60 years.”

You get the picture: During the DAX’s entire six-month long winning streak, Germany’s economic figures have been bleaker than bleak. The mainstream correlation was broken in its box along with any pre-emptive opportunity to position for the uptrend.

That, however, was NOT the case for EWI’s European Financial Forecast. Here, the following archive of our analysis shows the extent to which objective analysis of the market’s internal measures keeps traders ahead of the biggest moves:

March 2009 European Financial Forecast(release date: February 25)

“We favor the fourth-wave contracting triangle interpretation for the DAX. The DAX broke through a solid support shelf at 4014 this week so selling pressure could intensify before we see a notable rally.” The end of the wave v decline should come near 3440.

March 6 European Short Term Update (ESTU):

“The DAX situation is similar to the entire region. We believe that the market is closing in on a low; perhaps it’s a week away from finding a decent bottom.”
On March 9, the index did indeed “find” its bottom at 3588.

March 13 ESTU:

“We must entertain the possibility that the low earlier this week may hold for a time, weeks or months, and the risk-reward equation is not as heavily favorable for the bears.”

So, where will Germany’s DAX be headed next? Find out at the unbeatable price of $0.00. No, that’s not a typo; it’s how much it will cost you to read objective insight, view original price charts, and recieve trend-breaking, and making details about Germany’s DAX for a full seven days. These are just few of the benefits of EWI’s first-ever FreeWeek featuring European Short Term Update, and its Asian-Pacific counterpart.

FreeWeek continues from September 16 through September 23. Get all the details on how to participate in this amazing offer today.

By CountingPips.com

The Eurozone’s current account recorded a surplus for the first time in the last six months in July according to data from the European Central Bank.  The current account surplus registered at 6.6 billion euros for July following a revised deficit of 4.3 billion euros in June. June’s current account data was originally reported as a deficit of 5.3 billion euros.  The Eurozone had surpluses in goods of 11.2 billion euros and services of 2.7 billion euros while showing deficits in current transfers of 5.7 billion euros and income by 1.6 billion euros.

Today’s EU current account data follows yesterday’s positive Eurozone trade data which reached a seven-year high in July with a 12.6 billion euro surplus after a 5.4 billion euro deficit in June.  An increase in exports helped push the trade data into a surplus.

Also out of the Eurozone today was a release on German producer prices. Producer prices increased by 0.2 percent in August after a decline by 1.5 percent in July. This data surpassed forecasts expecting a 0.2 percent increase for August. On an annual basis, producer prices are 6.9 percent lower than the August 2008 level following July’s decrease of 7.8 percent on an annual basis.

The only North American news release on the schedule today is wholesale price information out of Canada.  Canadian wholesale prices increased for the second straight month in July with a gain of 2.8 percent to easily beat expectations of a 0.9 percent gain according to Statistics Canada.  June had registered a revised 0.8 percent gain.  Contributing to the rise in prices was a 14.2 percent increase in automotive products sector.

Source: ForexYard

The Dollar took a break from its bearish run versus the EUR yesterday, but the long term trend could continue today. Driving yesterday’s reversal were losses in U.S. equities and stronger manufacturing data from the U.S. Today’s trading will be highlighted by key data releases from Europe and Britain, perhaps returning the EUR/USD to its bullish streak.

Economic News

USD – USD Profits as Stocks Sell Off

The U.S. Dollar held small gains late Thursday as pessimism about the strength of the economic outlook put selling pressure on stocks and higher-yielding currencies. The currency had been lower earlier with stocks rising after the Federal Reserve Bank of Philadelphia’s index on manufacturing jumped far more than forecast this month.

The U.S Dollar also traded higher against the Yen at 91.21, up from 90.84 yen Wednesday. The Dollar sank to a seven-month low against the Japanese currency on Wednesday. The Dollar’s slide against the yen picked up pace after Japan’s Finance Minister Hirohisa Fujii said a strong yen had advantages for the nation’s economy.

The Dollar has been on the ropes in recent weeks, with the Dollar index losing 2.41% this month. Pressure has been tied in part to rising risk appetite, which has seen investors shun the greenback’s safe-haven status in favor of equities and other assets.

Still analysts expect the U.S Dollar to resume its more traditional relationship with economic data, rising with positive economic news and falling when the outlook for the U.S. turns gloomier.

EUR – Euro Hit 1-year Peak vs. the U.S Dollar

The European currency held onto gains to hover near a 1-year highs against the U.S. Dollar on Friday, as equities and commodities advanced on expectations of economic recovery, putting pressure on the greenback. It advanced a 3rd day to $1.4716 and yesterday reached $1.4737, the strongest level since last September. The EUR has gained more than 2.5% this month, riding improved investor confidence and expectations that U.S. rates are likely to stay at rock bottom for some time.

The EUR also traded near a 4 month high versus the Pound before a German report today that may show the pace of decline in producer prices slowed, providing more evidence the 16-nation region’s economy is emerging from the recession. The pound traded near its lowest since May as a report yesterday showed the jobless rate in the U.K. rose to the highest since 1995.

The 16-nation currency rose above 98 pence for the first time on Dec. 30. It advanced a third day to $1.4716 and yesterday reached $1.4737, the strongest level since Sept. 25, 2008. The Sterling is likely to weaken in the coming months as the government needs to rein in spending and its central bank is likely to retain an expansionary monetary policy, analysts said.

JPY – Yen Gains after BOJ’s Shirakawa Comments

The Japanese yen had gained after Japan’s new finance minister said currencies were not moving rapidly and that he opposed currency intervention as long as market moves were moderate. The Yen rose to the day’s high against the Dollar pushing the U.S. currency down more than 0.2% on the day to around 90.60 yen. The pair traded around 90.90 yen before the comments.

The yen also got a boost after Bank of Japan (BOJ) Governor Masaaki Shirakawa said a stronger yen would push down prices in the near term but might support the economy in the longer run. The Japanese currency jumped versus the EUR, which trimmed earlier gains and slid to the day’s trough of 133.54 yen, down slightly on the day.

OIL – Crude Oil Trades Lower as USD Firms

Crude Oil finished slightly lower after a volatile session Thursday, as the U.S Dollar firmed and traders digested upbeat economic news and a bigger-than-expected drop in U.S. stockpiles in the previous session. Crude earlier rose to a high of $73.16 a barrel and fell to a low of $70.40 a barrel.

On Wednesday, Oil rose more than 2% after the Energy Department reported a bigger-than-expected drop of 4.7 million barrels in U.S. stockpiles of the commodity in the week ended Sept. 11. Oil remains unable to top the upper end of its trading range at $73 a barrel without a new trigger, analysts said.

Oil has tracked equities markets closely in recent months as dealers look to stocks as a leading indicator of an economic recovery that could boost ailing energy demand. What happens to the Dollar, stock market and Gold are now driving the Oil market on a daily basis. A weaker Dollar can fuel purchases of Oil and other Dollar-denominated commodities, as they become relatively less expensive to non-Dollar holding investors.

Technical News

EUR/USD

Yesterday’s respite in the pair’s bullish streak looks to have some legs in it. The daily chart displays a bearish cross has formed on the Slow Stochastic Oscillator, indicating the potential for a downward correction. The daily chart also shows the pair trading in the overbought zone on the Relative Strength Index, indicating the pair may be overpriced from the previous weeks rally. Traders may look to be short on this pair today.

GBP/USD

The Cable may be due for some short term strengthening against the Dollar today as the hourly chart shows the pair trading in the oversold range on the RSI. This suggests upward pressure for the currency pair. On the 4-hour chart the current bar has begun at the lower border of the Bollinger Bands, indicating the potential of the pair to rise from the lower border all the way to its upper border. A long position looks to be the right play.

USD/JPY

The hourly chart’s Bollinger Bands continue to tighten, indicating the potential for a violent breach of the pair’s borders. The weekly chart also shows a fresh bullish cross has formed on the pair’s Slow Stochastic, indicating the potential for long term upward movement. Traders could profit today by being long on this pair.

USD/CHF

While the pair remains in a bearish streak, the daily chart shows us that this downward movement may be coming to an end. The daily chart displays a bullish cross has formed on the pair’s Slow Stochastic Oscillator, indicating the potential for a change in direction. The pair is trading well below the lower level of the Relative Strength Index, indicating the pair is oversold. It may be the right time to go long.

The Wild Card – GBP/AUD

The hourly chart is showing buy signals today as a bullish cross has appeared on the chart’s Slow Stochastic, hinting towards an upward correction. The chart’s RSI is also showing upward momentum as the pair is trading in the oversold zone. Going long could be the profitable way for forex traders to go today.

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.

Market Movers of the Day

Asia-Pacific

*Bank of Japan left benchmark interest rate unchanged at 0.1%

Europe

*UK Retail Sales in August came unexpectedly unchanged from a month before

*Euro-zone Trade Balance better than expected at 6.8B euro

*Swiss National Bank left its key interest rate unchanged at 0.25%

Americas

*Canada’s Consumer Price Index dropped 0.8% in August on an annualized basis

*Canadian Leading Indicators gained 1.1% in August

*US Initial Jobless Claims unexpectedly fell to 545K

*US Continuing Claims rose to 6230K

*US Housing Starts rose to 598K in August meeting market expectations

*Philadelphia Fed Manufacturing Index climbed more than expected to 14.1 in    September

The Overall Sentiment

US stock markets fell retreating from their highest levels in 11 month with the S&P closing down 0.3% and the Dow losing 0.1%. In a day with mixed economic data flowing to the markets the Dollar had a volatile session against its major counterparties. Initial Jobless Claims unexpectedly dropped last week but were counterbalanced by a rise in Continuing Claims. Positive Housing Starts figures met forecasts signaling a measured improvement in the housing market. The Philadelphia Fed Manufacturing Index gained more than market estimations reaching its highest levels in more than two years driven by gaining shipments but with employment and orders components decreasing the manufacturing sector showed relative underlying weakness suggesting that a forceful recovery is improbable. The Canadian dollar hit an intraday 11-month high as Canadian Leading Indicators climbed in August the most in seven years spurring optimism about the Canadian economy and bringing risk-appetite into play. The Australian and New Zealand dollars also climbed to intraday highest levels in more than a year driven mainly by overall Dollar weakness as commodities ended the session rather flat and there was no significant economic data coming from the pacific region. The Pound had another hard session as more dissatisfying figures about the British economy were released with UK’s Retail Sales remaining unchanged from July. The Euro continued to show strength as the Euro-zone Trade surplus rose to its highest level in five years. In Japan the BoJ left interest rates unchanged and its policy makers stated they remain cautious about the economy showing signs of recovery as there’s still risk to the downside.

The Day Ahead

The day will start with expectations of volatility for the Yen as the BoJ will release its monthly study of Japan’s economy and the Leading Economic Index will forecast economic conditions for the short and mid-term. Positive data is expected from Germany’s Producer Price Index which is followed as an indicator of consumer inflation. Market estimations point to an increase in Canada’s Wholesale Sales which will indicate positive sentiment in consumer spending and retail sales adding to signs of optimism about the Canadian economy.

Technical Analysis

AUD/JPY DAILY

AUD/JPY continues to trade in range for the fifth week now moving back and forth across a channel with supports at 76.50 and an upper boundary just below 80.  The recent bearish cycle stalled at 77.50 followed by some bullish sessions that brought the cross back to the upper boundary. It presents an opportunity to enter a Short position to keep exploiting the sideways trading while it lasts. Stop loss orders should be placed above 80 and entering a Long position ought to be considered if that resistance is finally breached.

Market Analysis provided by eToro

Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.

© 2009 eToro Blog.

By CountingPips.com

The US Dollar has been mostly higher in forex trading today against most of the major currencies after this week’s dollar depreciation lost a little steam. The American currency gained some ground today versus the British pound, New Zealand dollar, Australian dollar, Canadian dollar and Japanese yen while the USD has been slightly lower versus the euro and Swiss franc at 4:41pm EDT according to according currency data by Oanda.

The US stock markets took a breather from their rallies today with the Dow falling by approximately 8 points, the Nasdaq decreasing 6.4 points and the S&P 500 down by 3.27 points.  Oil traded almost unchanged at $72.49 while gold lost $5.30 to $1013.60 per ounce.

Important economic developments of the day started with rate decision by the Bank of Japan and followed later by the Swiss National Bank.  Both central banks held their respective rates steady as widely expected at 0.1 percent for Japan and 0.25 percent for Switzerland.  The BOJ statement said that Japan’s economy is “showing signs of recovery” while the SNB statement said it “now expects real GDP to fall by between 1.5% and 2%”, better than previous estimates, and that “growth is likely to pick up again gradually during the months ahead.” The SNB also restated that it will act “decisively” to curb gains in the Swiss franc against the euro.

Elsewhere, UK retail sales showed no change in the month of August following a 0.2 percent rise in July according to UK National Statistics. Retail sales are now 2.1 percent higher than last year on an annual basis in the UK.  The Eurozone’s trade surplus reached a seven-year high in July with a 12.6 billion euro surplus after a 5.4 billion euro surplus in June.  Higher exports spurred the surplus higher as seasonally adjusted exports rose by 3.3 percent from June to July according to EuroStat.

Canada’s leading indicators index gained by 1.1 percent in August after an increase of 0.6 percent in July according to Statistics Canada while the Canadian consumer price index fell by 0.8 percent on an annual basis through July.  The CPI rose on a seasonally adjusted monthly basis by 0.3 percent as gasoline prices contributed to the rise.

US economic releases included housing data and initial jobless claims data.  US housing starts increased in August by 1.5 percent while building permits rose by 2.7 percent and housing completions fell by 5.5 percent.  Initial jobless claims fell by 12,000 workers and the 4-week moving average declined by 8,750 workers.  Continuing claims grew by 129,000 workers from the week before while the 4-week moving average declined by 5,500 workers.

Today’s EUR/CHF Chart – The Swiss National Bank today held its interest rate steady and reiterated its intention to stem the Swiss franc appreciation against the euro. The SNB this year intervened in the forex market for the first time in over a decade when the SNB was widely believed to have intervened on March 12th when the program was announced and again on June 24th (gray boxes on the chart show).  It has been speculated that the SNB’s so-called “line in the sand” for franc appreciation could be the 1.5000 level (blue line).

By Fast Brokers – The EUR/USD’s medium-term uptrend flexed its muscles yesterday, driving past 1.47 on solid buy-side activity.  The EUR/USD benefitted greatly from a return to risk following better than expected U.S. Industrial Production and Capacity Utilization.  As we explained in our previous analysis, the EUR/USD had few technical barriers to the topside, allowing for accelerated gains in the currency pair.  However, the bulls ran out of gas and the EUR/USD has topped out this morning, dipping back beneath December 2008 highs.  Weakness comes despite an absence of EU econ data and slightly stronger than expected U.S. Weekly Unemployment Claims.  Hence, we view today’s pullback as a symptom of overbought conditions.  The EUR/USD’s uptrend is alive and well due to a combination of outperforming global econ data and the ECB’s hawkish stance towards monetary policy.  The EU will cap the busy data week early Friday morning with German PPI and EU Current Account numbers.  Analysts are looking for Germany’s PPI to turn positive for the first time since October 2008 as well as a narrowing Current Account deficit.  Rising prices and a recovery in the Current Account would help support the ECB’s decision to refrain from injecting more liquidity in the monetary system, a positive catalyst for the EUR/USD.

Meanwhile, the EUR/USD could experience noticeable near-term resistance due to the historical consolidation between December 2008 and September 2008 highs.  The currency pair will likely opt to build a new base unless we receive impressive economic news in the immediate-term.  Considering Friday and Monday will be light on the data front, the next few trading sessions provide a great opportunity for investors to lock-in some profits ahead of the important EU PMI data releases next Tuesday.  We’ve readjusted our trend lines and still can’t form a downtrend line of substance.  Hence, the EUR/USD still has quite a bit of upward mobility despite historical consolidation in this area along with the highly psychological 1.50 level.  An eclipse of September 2008 highs would serve as yet another signal that the global economy is on the path to recovery.  As for the downside, the EUR/USD has multiple uptrend lines as Wednesday lows to fall back on.  The currency pair is separating itself from the psychological 1.45 level, another positive indicate for the EUR/USD trend-wise.

Present Price: 1.4719

Resistances: 1.4741, 1.4772, 1.4800, 1.4822, 1.4841

Supports: 1.4703, 1.4678, 1.4656, 1.4631, 1.4608

Psychological: 1.45, 1.50

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 GBP/USD has managed to fight off the dovish statements from the BoE’s King, stabilizing around the psychological 1.65 level as global equity markets rally.  Yesterday we saw large rallies in the EUR/USD, gold, and U.S. equity markets.  The Cable’s positive correlations pulled the currency pair out of its intense pullback.  However, there remains a negative drag on the Cable which likely won’t reverse any time soon considering Britain will be very quiet next week on the economic data front.  On the other hand, Britain’s pricing and CCC data came in just ahead of expectations this week, helping counteract Governor King’s latest monetary shock.  As investors know, King stated the BoE is considering lowering the deposit rate paid on the bank reserves, thereby encouraging lending and increasing liquidity in the monetary system.  King’s latest dovish statement follows the BoE’s decision to surprise investors by injecting more funds into its QE package at the last monetary policy meeting.  The BoE’s relentless favoritism of liquidity worries investors that Britain’s economy may not be on as solid of footing as we are led to believe by the performance of econ data and equities.  King’s dovish attitude is having its intended consequences, holding down the Pound as the Dollar depreciates heavily across the board and gold climbs towards 2008 highs.  Therefore, even if current trends continue, the GBP/USD may only participate half-heartedly since the currency pair has downward inclinations.  We would not be surprised to see the GBP/USD experience further downward pressure over the near-term once investors take profits from risk-oriented investments.

Meanwhile, the Cable is back above 1.65, a comforting development for bulls.  However, the GBP/USD faces all three of our downtrend lines along with 9/15 and 9/11 highs.  Our 3rd tier downtrend line serves as a key barometer for a meaningful near-term uptrend in the GBP/USD since the line connects through August highs.  Our 1st tier downtrend and 3rd tier uptrend lines are reaching an inflection point right now, indicating the possibility of heightened volatility in the currency pair over the next 24 hours.  A pop to the topside would likely run to our 2nd tier downtrend line whereas a pullback would find support in our 2nd tier uptrend line.  The GBP/USD should take its cue from the broad-based performance of the Dollar and U.S. equities since Britain’s data news wire will be silent next week.  We maintain our negative outlook on the GBP/USD trend-wise and the Pound should continue to underperform for the time being.

Present Price: 1.6511

Resistances: 11.6524, 1.6551, 1.6570, 1.6595, 1.6622

Supports: 1.6495, 1.6475, 1.6455, 1.6431, 1.6402, 1.6382

Psychological: 1.65

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 has received considerable support at the highly psychological 90 level over the past 24 hours.  Strength in the USD/JPY comes despite broad-based weakness in the Dollar and new 2009 highs in gold.  The USD/JPY’s resilience is a result of two factors.  The first being the BoJ’s cautionary tone despite a little better overall outlook for Japan’s economy.  Japan’s economy clearly remains in tough spot since manufacturers and exporters are facing a strong Yen globally.  It’s likely the BoJ will refrain from tightening liquidity any time soon due to the unstable state of the nation’s economy.  The psychological impact of loose monetary policy combined with this week’s strong U.S. economic data is helping the USD/JPY find strong support at 90.  The second, and more prevalent, reason for the USD/JPY’s positive performance despite global weakness in the Dollar is the psychological weight carried by 90.  The defense of 90 is to be expected, and the USD/JPY has strong historical support between 88 and 90.  Hence, the USD/JPY has limited space to move to the downside over the immediate-term.

However, regardless of present support, the USD/JPY’s medium-term downtrend is still in the driver’s seat.  While the currency pair may experience a little more immediate-term movement to the topside, the USD/JPY remains in a downward trajectory.  The DPJ’s victory only adds strength to the USD/JPY’s downward momentum since the new administration favors a stronger Yen and less reliance on exports.  Additionally, breakouts in the EUR/USD, gold, and U.S. equities could continue this Autumn.  If so, we would only witness more selling interest in the Dollar.

Meanwhile, we’ve readjusted our trend lines to compensate for the USD/JPY’s recent downturn.  The currency pair faces four solid downtrend lines to the topside along with 9/9 and 9/7 highs.  As for the downside, the USD/JPY has our 1st and 2nd tier uptrend lines along with Wednesday lows and the highly psychological 90 level serving as cushions.  Though we have a slightly optimistic outlook on the USD/JPY for the immediate-term, we maintain a negative outlook on the currency pair over the near and medium-term.

Present Price: 91.25

Supports:  91.18, 90.96, 90.78, 90.57, 90.26

Resistances:  91.43, 91.65, 91.84, 92.04, 92.24

Psychological: 90

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.