Month: September 2009

By Fast Brokers – Gold shined again yesterday, separating from $1000/oz and February 2009 highs on its way towards March 2008 highs. Investors snatched up the previous metal in light of the continual selloff in the Dollar. Gold continues to exercise a positive correlation with U.S. equities, so a breach of 1050 in the S&P futures was more than enough of an incentive for investors to rush gold. We find little reason to favor the Dollar nor frown upon U.S. equities over the near-term, thereby giving gold the opportunity to tackle 2008 highs. However, March 2008 highs could still prove to be a challenging immediate-term obstacle should they be encountered. Furthermore, we recognize considerable immediate-term resistance in the EUR/USD at 1.50 and support in the USD/JPY at 90. Additionally, the GBP/USD is floating around 1.65 as the currency pair battles the BoE’s dovish monetary policy. Considering the extend of the rally in gold and equities as well as the heavy sell-off in the Dollar, consolidative profit-taking around present levels would not be surprising for the time being. Furthermore, news will be relatively quiet on the econ data front until the EU releases its wave of PMI data next Wednesday. Hence, investors may take the next few sessions as an opportune time to lock-in some profits. Regardless, the medium-term uptrend in gold is alive and well, and we expect March 2008 highs to fail over the near-term.

Present Price: $1015.48/oz

Resistances: $1018.06/oz, $1020.86/oz, $1022.17/oz, $1024.04/oz, $1027.33/oz

Supports: $1015.58/oz, $1014.13/oz, $1012.07/oz, $1010.01/oz, $1008.52/oz, $1006.84/oz.

Psychological: March 2008 highs, $1000/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

With recent fears over inflation and fiscal deficits, the market surprisingly appears calmer than it should be. The USD has continued its decline, suggesting that either faith in the American economy is fleeting, or investors are increasing their risk appetite and dumping US Treasuries. Either way, the decline in the value of the USD has helped boost energy prices and fueled export growth worldwide. Economic recovery seems to be underway, but many caution that it will still be a long and bumpy ride.

Economic News

USD – Dollars Falls on Market Optimism

The Dollar dropped to near 1-year lows against most of its major currency pairs yesterday as optimism about the global economy eroded the greenback’s safe-haven appeal. By yesterday’s close, the USD fell against the EUR, pushing the oft-traded currency pair to 1.4730. The Dollar experienced similar behavior against the GBP and closed at 1.6492.

Traders have sold the Dollar heavily this month as recovery hopes have diminished safe-haven demand. The prospect of low U.S. yields and concerns about the U.S. fiscal deficit also fueled Dollar selling. In addition, market participants increased bets on stocks and commodities, encouraged by better-than-expected U.S. consumer price index (CPI) and Industrial production data yesterday, while Federal Reserve chairman Ben Bernanke said the U.S. recession was most likely over, though he also warned the recovery would be slow.

Today’s Unemployment Claims and Building Permits releases are expected to have a strong impact on the U.S currency. Any result could be a surprise, and the Dollar could go either way as a result. In any case, traders are unsure how the market will react to today’s data. A weak report could feed risk aversion, boost Treasuries and actually aid the U.S Dollar. Then again, a better than expected result might be seen as a sign of relative U.S. economic strength, and lift the Dollar. Or it could also encourage risk-taking and aid commodities and higher-yielding currencies at the Dollar’s expense.

EUR – EUR Rises on Weaker Dollar

The EUR strengthened against most of its major currencies yesterday as gains in stocks and commodities prompted investors to wade into riskier currency trades. The 16 nation currency extended gains to hit a near one-year high against the dollar and closed at around 1.4714. The EUR experienced similar behavior against the CHF as the pair rose from 1.5150 to 1.5195 by day’s end.

The EUR was affected by the global stock market rally and the bearish Dollar. The U.S. stock market rally led investors to buy-back into the EUR, as they looked for returns on buying commodity-linked and higher-yielding currencies in Wednesday’s trading.

The Sterling extended losses against the EUR and JPY yesterday, after U.K. unemployment jumped to the highest level since 1995 as the recession destroyed work in industries from banking to construction, stoking concerns about the pace of recovery in the British economy. The GBP was also down 0.8% against the EUR at 0.8920.

Looking ahead to today, the most important economic indicator scheduled to be released from Britain is the Retail Sales report at 8:30 GMT. Analysts are forecasting this figure to decrease from its previous reading. Traders will be paying close attention to today’s announcement as a better than expected result may boost the GBP in the short-term. Traders are also advised to follow the Trade Balance figures coming out of Euro-Zone at 9:00 GMT, as this result may set the EUR’s main currency crosses going into today’s trading.

JPY – USD/JPY Hits 7-Month High

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 around the 133.70 level. The Japanese yen also saw bullishness against the Dollar, closing in on a 7-month high against the U.S. currency after Japan’s incoming finance minister said a strong yen had advantages for the nation’s economy.

The Japanese market should have a heavy effect on the JPY versus its major currency counterparts, as the Overnight Call Rate will be announced today. The rate is expected to remain unchanged, but traders should pay close attention to the BoJ Press Conference that will follow to look for expectations of Japan’s economic future. A bullish statement from the BoJ could lead some traders to believe that it is forecasting a rosier financial climate in Japan.

Crude Oil – Crude Oil spikes on Better Inventory Data

Crude Oil prices experienced another day of appreciation as the oft-traded commodity rose above $72.80 during yesterday’s trading session. Oil prices traded up for the second straight day. This has been compounded by a weaker Dollar that has also caused investors to flee to commodities such as Crude Oil.

Moreover, with crude oil inventories in the US shrinking more than anticipated, there is a chance that prices will continue to rise as demand climbs from market optimism and economic growth. These factors point to the notion that Crude Oil’s price may stumble across more support in the near future and continue to rise.

Technical News

EUR/USD

The price of this pair appears to be floating in the over-bought territory on the hourly and daily RSI, suggesting downward pressure. There also appears to be a fresh bearish cross on the 4-hour and daily Slow Stochastic, indicating that the next movement will likely be down. Going short might be a wise choice today.

GBP/USD

This pair seems to be consolidating around 1.6500 lately. With a doji candlestick formation on the daily chart, and bullish crosses on the hourly and 4-hour MACD, the next movement may indeed be an upward reversal for this pair. Going long with tight stops could turn out to be a smart move today.

USD/JPY

All oscillators on this pair have completed a bullish indication and are now cascading upward. The momentum of this pair seems to have shifted from a downward direction to an upward direction. Going long may be today’s preferable tactic.

USD/CHF

There seems to be a distinct bullish cross on the daily Slow Stochastic of this pair, suggesting the next movement may be in an upward direction. The price also floats in the over-sold territory of the daily RSI, which supports this notion. Going long might not be a bad idea today.

The Wild Card – Gold

This precious metal’s sustained upward movement has resulted in its price floating in the over-bought territory on the 4-hour and daily RSI, suggesting significant downward pressure. With 2 consecutive bearish crosses on the 4-hour Slow Stochastic and hourly MACD, forex traders may have an opportunity to jump on the downward correction of this commodity, and at a great entry price.

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

Australia’s Westpac leading index down -1.1%

Japanese BSI Large Manufacturing at 15.5 better than expected

Japanese Tertiary industry index up 0.6% MoM surprising for the better

Europe

Swiss ZEW Survey expectations at 58

Swiss adjusted retail sales down up 1% YoY slightly lower than expected

UK claimant count rate at 5% in line with expectations

UK Average earnings including bonuses up 2.5% versus 2% expected

UK ILO unemployment rate at 7.9% slightly better than 8% expected

UK Jobless claims change at 24.4k

EU CPI up 1.3% YoY higher than market expectations

Americas

In the US MBA Mortgage applications down -8.6%

US CPI down -1.5% YoY slightly less than expected

US Current account deficit at -$98.8B

US Total Long Term Net TIC flows at $15.3B substantially lower than expected

US Industrial production up 0.8% MoM surprising for the better

US Capacity utilization at 69.6% better than market expectations

EIA Crude oil stocks down -4.7M Barrels showing healthy demand

US NAHK Housing market index at 19

Canadian Manufacturing shipments up 5.5% MoM

The Overall Sentiment

A day loaded with highly important economic data in the US and Europe ended with markets gaining as data was received well by markets and spurred more bets on the recovery story. In Asia pacific Japanese industrial data surprised for the better although the Nikkei ended the day lower as the strong Yen weighted on the index. In the London session positive sentiment was robust with better than expected UK unemployment figures and EU CPI data. Stocks in the region ended on the money with the FTSE 100 rising 1.63% and in Frankfurt the DAX advancing 1.27%.Moving to the New York session positive sentiment continued with the positive comments from Fed chairman Ben Bernanke a day before fueling stocks’ advance north. Market in the US and Canada where also largely effected by the positive economic  data coming from the US which pointed an improvement in industrial production which many consider as a leading indicator for business cycles. At the day’s end US majors indexes closed on the green side with the S&P gaining 1.53% and the Dow rising 1.12%.In the FX arena Dollar weakness continued to reign as investors appetite for risk pushed the greenback to cheaper levels with the Euro reaching a one year record of 1.47$.In the commodities arena Gold continued to shine reaching to 18 months high of 1020$ an ounce mainly due to dollar weakness and low interest rate expectations. Although the metal later settled lower the yellow metal is increasingly showing signs of basing itself above the 1000$ mark and teasing the possibility of reaching the 1033$ the all time record. In the energy play Oil edged higher with a fall in EIA crude stocks improving the outlook for the black gold. Overall markets traded on a rather strong positive note with investors expecting inventories buildup in Q3 to positively affect the bottom line.

The Day Ahead

At the early trading hours markets eyes will be on the BoJ rate decision in Japan where rate are expected to be left unchanged at 0.1% as the deflationary pressures in Japan continues to be afloat .Investors eyes will be mainly focused on the statement coming from the BoJ rather than the decision itself with markets eager to hear what will be the next step by the BoJ the improve price stability and what are the prospect for the Japanese economy as a whole. Later in the Day markets’ focus will move to Data coming from Europe with the EU trade balance, UK retail sales and in Switzerland the SNB rate decision coming at mid day GMT. The SNB is expected to keep rates on hold at 0.25% as to relief pressure on Swiss banks. In Canada CPI and the leading indicators are due with markets expecting rather weak data as the Canadian economy is strongly linked to the US. In the US initial Jobless claims are expected to stand around the mid of 500K and the Philadelphia Fed  manufacturing index expected to show additional improvement in pursuance to the industrial data a day before.

Technical Analysis

EUR/JPY

After the pair has topped out around the 138 level the pair slide to lower levels and entered a month of bearish adjustment. However the double dip of the 131 support which ended with an unsuccessful break might signal the bearish cycle is wearing out. The pair has move from bearish to flat and is now trading in the 131-134.5 price band. Noticing the fast and slow exponential moving average it is evident a solid break of the 134.5 has the ability to end the bearish trend and move the pair back into the major bullish trend with the 138 as the first target in sight. Only a break of the 131 downward would suggest the bearish adjustment has more appetite to fill with the 128 as the next stop.

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 Adam Hewison – My wife and I just got back from cruising the Maine coastline and we were blessed with great weather and calm seas. When I got back to my summer home and had access once again to the internet, I immediately started looking through the MarketClub charts. It was then that I realized that it has been sometime since I last did a video on the Dollar Index.

Since we are heading back to our home in Maryland on Wednesday, this will be my last video postcard from Maine.

So let’s get started.

The last time I made a video of this index was a little over two months ago. In that video our Trade Triangle technology predicted that we would see further weakness in the Dollar Index. Guess what? This market has weakened substantially since our last video on July 14. We also pointed this out in a short blog post on September 3.

Our Trade Triangle technology has really been on top of this market and captured every major move since inception. MarketClub’s “Trade Triangles” remain steadfastly bearish and there appears to be no lasting turnaround in the Dollar Index as of this writing.

In this short video, I want to show you exactly how the Trade Triangles can benefit your own trading. The process is very simple, very direct, and yes, very profitable. Nothing is guaranteed in trading, but you will certainly put the odds in your corner using our Trade Triangle technology.

There is no need to register for this video and of course you can watch it with my compliments. I highly recommend watching this video today otherwise you risk missing out on what could be the move of the year.

Enjoy the video.

Watch the New Video Here…

All the best,

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

By CountingPips.com

The US Dollar continued its slide in forex trading today against most of the major currencies. The dollar has lost ground to the euro, British pound, Australian dollar, New Zealand dollar, Swiss franc, Canadian dollar and Japanese yen at 4:11pm EDT according currency data by Oanda.

The US stock markets had another positive session today with the Dow Jones gaining by 108 points, the Nasdaq increasing over 30 points and the S&P 500 showing a 16 point gain.  Oil traded higher to $72.34 while gold rose by $13.90 to $1018.90 per ounce.

US economic news releases today showed that August consumer prices increased by 0.4 percent while on an annual basis consumber prices are 1.5 percent below August 2008. Core consumer prices, excluding food and energy, rose by 0.1 percent in August and are 1.4 percent higher on an annual basis than August 2008 according to the Department of Labor report.

The US current account deficit shrank in the second quarter of this year to a $98.8 billion shortfall after a revised $104.5 billion deficit was realized in the 1st quarter according to the Department of Commerce.

Foreign demand for long-term US securities fell sharply in July to a total of $15.3 billion according to the Treasury Department. This important data to watch capital flows in and out of the US had totaled $90.2 billion long-term purchases of securities in June.

Today’s USD Index Chart – The US Dollar Index, the dollar versus a basket of currencies, conveys the continued decline the USD has been on and the index fell to its lowest point of the year today around the 76.15 level.  The USD Index had made a 2009 high in early March at over a 89.60 reading.

USD Index – Daily Chart by MarketClub

In the 1930s, Ralph Nelson Elliott, a corporate accountant by profession, studied price movements in the financial markets and observed that certain patterns repeat themselves. He offered proof of his discovery by making astonishingly accurate stock market forecasts. What appears random and unrelated, Elliott said, will actually trace out a recognizable pattern once you learn what to look for. Elliott called his discovery “The Elliott Wave Principle,” and its implications were huge. He had identified the common link that drives the trends in human affairs, from financial markets to fashion, from politics to popular culture.

Robert Prechter, Jr., president of Elliott Wave International, resurrected the Wave Principle from near obscurity in 1976 when he discovered the complete body of R.N. Elliott’s work in the New York Library. Robert Prechter, Jr. and A.J. Frost published Elliott Wave Principle in 1978. The book received enthusiastic reviews and became a Wall Street bestseller. In Elliott Wave Principle, Prechter and Frost’s forecast called for a roaring bull market in the 1980s, to be followed by a record bear market. Needless to say, knowledge of the Wave Principle among private and professional investors grew dramatically in the 1980s.

When investors and traders first discover the Elliott Wave Principle, there are several reactions:

• Disbelief – that markets are patterned and largely predictable by technical analysis alone
• Joyous “irrational exuberance” – at having found a “crystal ball” to foretell the future
• And finally the correct, and useful response – “Wow, here is a valuable new tool I should learn to use.”

Just like any system or structure found in nature, the closer you look at wave patterns, the more structured complexity you see. It is structured, because nature’s patterns build on themselves, creating similar forms at progressively larger sizes. You can see these fractal patterns in botany, geography, physiology, and the things humans create, like roads, residential subdivisions… and – as recent discoveries have confirmed – in market prices.

Natural systems, including Elliott wave patterns in market charts, “grow” through time, and their forms are defined by interruptions to that growth.

Here’s what is meant by that. When your hands formed in the womb, they first looked like round paddles growing equally in all directions. Then, in the places between your fingers, cells ceased growing or died, and growth was directed to the five digits. This structured progress and regress is essential to all forms of growth. That this “punctuated growth” appears in market data is only natural – as Robert Prechter, Jr., the world’s foremost Elliott wave expert and president of Elliott Wave International, says, “Everything that thrives must have setbacks.”

The first step in Elliott wave analysis is identifying patterns in market prices. At their core, wave patterns are simple; there are only two of them: “impulse waves,” and “corrective waves.”

Impulse waves are composed of five sub-waves and move in the same direction as the trend of the next larger size (labeled as 1, 2, 3, 4, 5). Impulse waves are called so because they powerfully impel the market.

A corrective wave follows, composed of three sub-waves, and it moves against the trend of the next larger size (labeled as a, b, c). Corrective waves accomplish only a partial retracement, or “correction,” of the progress achieved by any preceding impulse wave.

As the figure to the right shows, one complete Elliott wave consists of eight waves and two phases: five-wave impulse phase, whose sub-waves are denoted by numbers, and the three-wave corrective phase, whose sub-waves are denoted by letters.

What R.N. Elliott set out to describe using the Elliott Wave Principle was how the market actually behaves. There are a number of specific variations on the underlying theme, which Elliott meticulously described and illustrated. He also noted the important fact that each pattern has identifiable requirements as well as tendencies. From these observations, he was able to formulate numerous rules and guidelines for proper wave identification. A thorough knowledge of such details is necessary to understand what the markets can do, and at least as important, what it does not do.

You have only just begun to learn the power and complexity of the Elliott Wave Principle. So, don’t let your Elliott wave education end here. Join Elliott Wave International’s free Club EWI and access the Basic Tutorial: 10 lessons on The Elliott Wave Principle and learn how to use this valuable tool in your own trading and investing.

About the Author

This Elliott Wave article is provided courtesy of Elliott Wave International

Source: ForexYard

The U.S Dollar struck a one-year low against a basket of currencies on Wednesday, as investors reduced dollar holdings on views that the U.S. currency may weaken for now due to pessimism over the U.S. economy. Investors have been selling the greenback across the board as they speculate the Federal Reserve will be forced to keep its Interest Rates low for the time being to support the country’s fragile economy. Looking ahead, currency players will watch for the U.S. consumer price index (CPI) for August to be released later in the day. The CPI data has the biggest potential to move forex markets, since a weak figure could lead to lower long-term U.S. interest rates, and that might prompt more Dollar selling.

Economic News

USD – Dollar Reaches Lowest from Improving Risk Appetite

The U.S Dollar declined Tuesday, pushing the currency to the lowest level in a year and reversing earlier gains versus major counterparts after a pair of economic reports said U.S Retail Sales and Producer Prices rose more than economists expected, encouraging speculation that the economy is reviving.

As the global recovery continues, and risk diversification takes place, traders could see the U.S. Dollar remain under pressure for the upcoming months. Against the Japanese yen the Dollar also gave up earlier gains to trade at 91.07 yen, little changed from 91.02 yen late Monday.

The greenback was also undermined by gains in global stock markets, which reduced the USD appeal as a safe haven. For months, the greenback has tended to move in the opposite direction as equities as investors’ willingness to buy riskier assets fluctuates. That trend has shown signs of diminishing in the past month or so, and resuming its more traditional correlation to economic data.

Traders have sold the U.S. currency heavily so far this month as optimism about a global economic recovery diminished safe-haven demand. The prospect of low U.S. yields and concerns about the widening U.S. fiscal deficit fueled Dollar selling.

Today in focus will be a slew of U.S. data to be released later in the day. The U.S. consumer price index (CPI) for August, 2nd quarter current account data, August industrial production numbers and September NAHB housing data are all due.

EUR – Pound Drops versus USD and EUR

The EUR dropped early Tuesday versus the Dollar after the ZEW German Economic Sentiment index showed weaker than expected results; however, the common currency later trimmed its losses, trading at $1.4671, from $1.4614 versus the Dollar on Monday.

The British Pound was the big mover on currency markets, dropping versus the greenback and falling to a 3-month low versus the European single currency after Bank of England (BOE)Governor Mervyn King said the Monetary Policy Committee was considering a cut in the deposit rate paid on some reserves held by commercial banks at the BOE. The GBP fell 0.5% versus the USD to $1.6498. The EUR advanced to its highest level against the GBP since June, trading at 88.94 pence

While a slow news day is expected from the Euro-Zone today, the release of the British Unemployment data at 8:30 GMT might help the Pound to regain some of its losses. The release of the Euro-Zone CPI report might weigh down on the common currency if the number is worse than expected, sparking fears of deflation.

JPY – JPY Down after Release of Encouraging US Data

Japan’s currency traded at 133.45 per EUR early morning, from 133.47 yesterday in New York. It traded at 91.02 per USD from 91.05. The Yen is being sold as investors move away from risk averse trading and into higher yielding assets following encouraging economic data from the US which signaled the recession is coming to an end.

The release of the Industrial Production report today at 13:15 GMT is predicted to show an increase of 0.6%, the most since October. This will likely contribute to further sell off of the Yen versus its riskier counterparts.

Crude Oil – Crude Prices Near $71 a Barrel

Crude Oil fell nearly 1% toward $71 on Wednesday, giving up some of the previous day’s gains of 3%, as a higher-than-expected rise in oil product stocks outweighed news signaling a U.S. economic recovery.

Though Crude Oil has more than doubled from this year’s low of $32.70 hit on January 20, it is trading 72$ below the record high of more than $147 struck in July 2008. Economists expect Crude prices to hover between $60 and $70, as demand has still not recovered to the extent that would help to sustain prices above $70.

The American Petroleum Institute said in its weekly inventory report after Tuesday’s close that crude stocks rose by 631,000 barrels last week, against the forecast for a 2.4-million-barrel drawdown. The oil market is currently focusing more on EIA data than equities or the Dollar, analysts have said.

While today’s release of US inventory data due at 14:30 GMT is expected to show a drop in stockpiles, a modest drop might not be enough to push Oil on another rally as inventories are still at their highest level.

Technical News

EUR/USD

The hourly chart is showing mixed signals with its RSI fluctuating in the neutral territory. However, the daily chart’s RSI is already floating in the over-bought territory indicating that a bearish correction might take place in the nearest future. When the downwards breach occurs, going short with tight stops appears to be a preferable strategy.

GBP/USD

As a result of a significant downward movement yesterday, the pair has been pushed into the over-sold territory on the 4 hour chart’s RSI, indicating that an upward correction may occur later today. The hourly chart’s Slow Stochastic also appears to be showing an imminent bullish cross, which supports this notion. Going long with tight stops might be the right choice today.

USD/JPY

The pair has been range-trading for a while now, with no specific direction. The Daily chart’s Slow Stochastic is providing us with mixed signals. All oscillators on the 4 hour chart do not provide a clear direction either. Waiting for a clearer sign on the hourlies might be a good strategy today.

USD/CHF

This pair is in the middle of a very intensive downtrend that was initiated 3 days ago and it still shows great momentum that on a bigger scale appears to have more room to run. In the shorter time frame, there might be a minor bullish correction before the bearish move resumes. Selling on highs appears to be preferable today.

The Wild Card – Silver

The violent bullish trend continues as all technical indicators on the daily and the 4 hour charts are showing that the direction is up and the momentum is high. This provides forex traders with a great chance of enjoying the additional upwards momentum which still seems to be remaining for this commodity.

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 Analysis provided by eToro

Reassurance From Government Officials

This Week’s session were all about sentiment and official’s expectations, as President Barack Obama and Fed Chairman Ben Bernanke addressed the nation regarding the recent economic crisis. Furthermore, recent action by the U.S had a major influence on the last two trading days, as the U.S imposed tariffs, causing tension between the U.S and China. Despite stumbling in the early going, stocks worked their way higher to log their seventh gain, in eight session. The S&P500 closed the session with a 0.13% gain, while the Nasdaq jumped by 0.52%. From a technical point of view the S&P500 continued to climb, within its recent trend, hitting its upper resistance level.

Earlier session started off with China – U.S worries, as investors began to speculate that recent actions by the two governments could lead to a trade dispute between the two. One must note that the U.S has recently imposed tariffs on Chinese tire imports. During yesterday’s session China released that it will open a probe regarding the possible dumping of subsidies of chicken and auto products from the U.S

President Obama countered the negative session by stating, that job losses are bottoming out and that the new impositions will not spark a trade war. According to Bloomberg news, President Barack Obama stated that he is very optimistic about the U.S getting a set of rules in place that will prevent another kind of crisis that the U.S economy has experienced. 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.

During yesterday’s session Fed Chairman strengthened the presidents statement, mentioning that the currency recession has ‘very likely’ ended. The statement helped the intraday session, driving the indices and sentiment higher.

The Pound Gets Pounded

On the Forex market the Dollar presented a volatile session, bouncing up and down against counterparts. During the first part of the session the Dollar strengthened, but quickly lost its ground as the major pairs found support during the session.

The EUR/USD pushed higher, while the Pound dropped throughout the second half of the session. The GBP/USD dropped dramatically, by over 100 pips after BOE Governor King Mentioned tin his statement that he’s considering cutting reserve deposit rates as a “useful supplement” to monetary policy. Even though the better than expected housing and inflation data helped to cushion the fall, the GBP/USD closed the session down at $1.6490.

The major mover of the week was the EUR/GBP, climbing higher by over 100 pips. As one can see on the chart below this pair broke its trendline and horizontal resistance levels. One should note that this pair is now out of range and could be heading for target 1.

Market Data to Watch Out For

Unlike earlier sessions, economic data will have an influence on today’s session, starting with released from the U.K. Their closely watched average Earnings Index + Bonus figure is expected to show a drop compared to last month’s 2.5%, and should come out at 2.1%.

Furthermore their unemployment rate is expected to jump to 8%. During the session the U.S will take the stage, releasing a wave of data, including; crude inventories, NAHB housing market index and industrial production. In addition, eyes will focus on the U.S’s CPI figure, one should show a slight decrease.

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

MarketClub has posted a new video showing how to use the Alerts feature in their trading analysis platform.  For those of you who are MarketClub members, this may come in handy. If you are not familiar with MarketClub, the platform is a web-based analysis platform that uses MarketClub’s Trade Triangle Technology to spot trend changes.

See the New Alerts Video Here…

For those who have not seen the platform, here is another video explaining their charting software.

By CountingPips.com

The US Dollar has been on the defensive today in forex trading against most of the other major currencies as risk appetite flowed with the positive U.S. economic releases out today. US retail sales, released by the Department of Commerce, surpassed expectations with a 2.7 percent monthly gain in August after a revised 0.2 percent fall in July.  Core retail sales, excluding auto sales, rose by a more modest 1.1 percent following July’s 0.5 percent decline.  The Empire manufacturing survey also increased more than expected in September to score its highest reading since 2007.  Manufacturers moods improved by 7 points in September from August.

US producer price inflation increased by 1.7 percent in August and surpassed forecasts expecting a 0.8 percent rise. On an annual basis, producer prices are 4.3 percent below the August 2008 level. Core producer prices, minus food & energy, rose by 0.2 percent in August and registered a 2.3 percent gain on an annual basis.

The US stock markets gained today for the second straight day with the Dow gaining by approximately 55.25 points, the Nasdaq increasing 9.94 points and the S&P 500 up by 3.22 points.  Oil traded higher to $70.88 while gold climbed $8.10 to $1008.00 per ounce.

The US dollar has been losing ground to the euro in trading today while also trading lower versus the Australian dollar, New Zealand dollar and Canadian dollar.  The dollar has gained ground today against the British pound while trading close to unchanged versus the Swiss franc and Japanese yen at 4:24pm EDT according to according currency data by Oanda.

EUR/USD Daily Chart – The euro, gaining for the second straight day versus the dollar, almost reached the 1.4700 threshold before retreating slightly lower. The euro has gained eight out of the last ten days to reach its highest levels of the year. Chart by MarketClub.