Month: September 2009

By Fast Brokers – The EUR/USD is heading south along with the GBP/USD and gold while the USD/JPY pops following a much better than expected wave of economic data from the U.S.  Strength in the Dollar off of positive U.S. econ data is the opposite reaction of what we’d normally expect.  Therefore, we are witnessing an interesting alteration in sentiment as investors favor the Dollar due to comparative strength of the U.S. economy.  We will monitor the correlation between the Dollar and the S&P closely over the next 24 hours to see if this reversal follows through.  Meanwhile, The Euro is exhibiting relative strength against the Pound after BoE Governor King announced the central bank is leaning towards decreasing the deposit rate it pays banks on reserves, thereby increasing liquidity in the financial system.  King’s continual dovish attitude counters that of the ECB’s Trichet, who has incessantly fought off the doves and maintained a relatively hawkish stance during the economic downturn.  The ECB’s steadfast behavior is paying dividends for the Euro as we witness a huge breakout in the EUR/GBP.  In fact, this appears to be a new leg up in the EUR/GBP, indicating further strength in the EU vs. Britain over the near-term.

The Euro is managing to exercise relative strength despite the fact that Germany’s ZEW Economic Confidence number came in shy of analyst expectations today.  However, even though Germany’s number missed, the overall EU ZEW Economic Confidence data eclipsed expectations.  Regardless of the mixed results, the ZEW Economic Confidence readings have recovered considerably and are nearing 2006 highs.  Today’s data helps confirm that the economic recovery continues to take root in the EU region.  The Euro is benefitting from the mixed/positive data in conjunction with the ECB’s minimum bid rate holding steady at 1%.  The EU will release CPI data tomorrow and we will watch closely to see whether the rapid decline in consumer prices can finally reach some form of stabilization.  Positive CPI data would only help buoy the Euro more since this would allow the ECB to feel comfortable keeping their present liquidity measures in place instead of being pressured to fight off deflation.  Meanwhile, it seems like the divergence in attitudes regarding monetary policy at central banks is resulting in more independent performance among the major currency pairs.  We believe the divergence in correlations could persist over time since the central banks may take different approaches in regards to the process of unwinding their respective liquidity packages.  Hence, investors shouldn’t overreact to the collapse in the GBP/USD today since Trichet and King obviously have their differences.

Technically speaking, the EUR/USD is still riding high off of last Tuesday’s breakout to the topside.  The currency pair continues to set higher lows while trading above the psychological 1.45 level.  We still place significance on Tuesday’s movement since the EUR/USD leapt to new 2009 highs.  There aren’t any concrete, historical downtrend lines we can cross through present ranges.  Hence, the medium-term uptrend is clearly intact.  However, the 1.45-1.50 should continue to be a sticky range since there is quite of bit of historical trading in this range in late 2008.  As a result, the EUR/USD will likely need another jolt to break free of its topside obstacles.  The next technical barriers are December 2008 highs along with the highly psychological 1.50 level.  As for the downside, the EUR/USD has Monday’s lows along with the psychological 1.45 level.

Present Price: 1.4590

Resistances: 1.4591, 1.4607, 1.4639, 1.4672, 1.4710

Supports: 1.4669, 1.4550, 1.4534, 1.4518, 1.4506

Psychological: 1.45

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 is dropping like a rock today while the EUR/GBP soars following a dovish statement from BoE Governor King.  King said the BoE is leaning towards decreasing the deposit rate it pays banks on reserves they park at the central bank.  Such a decision would encourage banks to lend more and increase liquidity in the system.  The continual dovish monetary stance of the BoE is punishing the Pound relative to other currencies.  It seems the central bank is intent on pumping up liquidity despite this week’s improvement in pricing.  Today’s CPI and RPI data beat expectations along with a strong rise in Input PPI last week.  However, Governor King is not impressed, and it appears the BoE may even add onto the balance of its QE program at the next policy meeting.  The last time King applied a monetary shock we received a stream of negative economic data from Britain, thereby justifying the BoE’s action.  Is King preparing us for another set of disappointing economic data?  We will find out tomorrow since Britain will print its CCC data.

Meanwhile, gold and the EUR/USD are holding up relatively well despite the large pullback in the Cable.  If the BoE continues to take measures devaluing the Pound, then we may begin to witness a more consistent divergence in correlation among the major currency crosses.  In fact, King’s intention may be to create an environment conductive of a weaker Pound in order to attract more global demand for Britain’s services and manufactured goods.  The central banks are clearly starting to make more individual judgements regarding their monetary policy after the banks acted in unison during the height of the economic downturn.  We will monitor the behavior of the GBP/USD and EUR/GBP closely over the next 24-48 hours to see whether the dramatic divergence in performance abates following the psychological monetary shock issued by King.  Investors should keep in mind the last monetary shock from the BoE resulted in an incessant leg down.  Therefore, the GBP/USD could have more negative territory ahead of it in the near-term.  However, the BoE didn’t actually enact any policy, only implied the possibility of an event occurring.  Therefore, the pullback might not be as dramatic as when the BoE surprisingly added onto its QE package.

Technically speaking, the pullback taking place in the Cable today is large and abrupt.  The sharp reversal in the GBP/USD is accompanied by a shot of sell-side volume.  Therefore, there is obviously weight behind today’s movement.  The currency pair has dropped beneath the psychological 1.65 level and 9/9 lows, both negative technical developments.  The next question will be whether the GBP/USD can hold onto the bottom of the 8/19-8/24 trading range along with our 2nd tier uptrend line.  Ultimately, our new 1st tier uptrend line serves as the most important gauge in regards to the currency pair’s near-term uptrend since it connects through September lows.  However, our 1st tier uptrend line is still sitting far off in the distance.  As for the topside, the GBP/USD must now deal with all three of our downtrend lines along with the psychological 1.65 level.  A positive development today would be for the Cable to close above 1.65 and our 2nd tier uptrend line.  We are negative on the GBP/USD for the immediate-term due to the developments today regarding Britain’s monetary policy.

Present Price: 1.6475

Resistances: 1.6495, 1.6524, 1.6551, 1.6570, 1.6595, 1.6622

Supports: 1.6455, 1.6431, 1.6402, 1.6388, 1.6366

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’s mini-rally is cooling after interacting with our 1st tier downtrend line.  The USD/JPY experienced further strength initially this morning after investors snapped up the Dollar following a wave of better than expected U.S. economic data.  However, this favoritism is wearing thin as the S&P futures return earlier gains and the GBP/USD collapses.  Regardless of today’s broad-based appreciation of the Dollar, the USD/JPY remains entrenched in its medium-term downtrend due to the currency pair’s incredible selloff since the beginning of August.  The USD/JPY is well out of reach of our 1st tier uptrend line, and it seems the currency pair is headed for a battle with its psychological 90 level.  Despite the USD/JPY’s negative tendency, the currency pair seems to be running out of room to the downside since it has historical trading ranges nearby dating back to December 2008 and January 2009 lows.  Meanwhile, investors continue to act off of the belief that the DPJ will enact economic policies supportive of a stronger Yen.  However, it remains to be seen whether the BoJ will alter its monetary policy approach in any dramatic way.  Late Wednesday the BoJ will meet for the first time since the DPJ’s victory.  Though we expect the BoJ to keep its monetary policy intact, such a large shift in governmental power does create a sense of uncertainty in the Yen crosses.  In the meantime, the USD/JPY’s performance should be reliant on its negative correlation with U.S. equities, at least until Wednesday’s BoJ meeting that is.

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.

September 15, 2009

Take it from the person who won the United States Trading Championship with profits of more than 440% in 1984 – there are five things that every successful trader needs to know how to do:

1. Have a method to trade.
2. Have the discipline to follow your method.
3. Get real trading experience, instead of only trading on paper.
4. Have the mental fortitude to accept the fact that losses are part of the game.
5. Have the mental fortitude to accept huge gains.

Bonus tip: Find a mentor.

That trader who won the championship in a record-breaking fashion is Robert Prechter, the founder and president of Elliott Wave International. Once you think you’ve mastered his 5 tips for how to trade successfully, then the best thing to do is to find a mentor. In this excerpt from the book, Prechter’s Perspective, Bob Prechter discusses how sitting at the elbow of a professional trader can make all the difference in learning the trade of trading.

Elliott Wave International has released part one of their hugely popular How to Spot Trading Opportunities eBook for free. The eBook sells as a two-part set for $129. You can now download part 1 for free. Learn more here.

Question: Has any specific trading experience decreased your trading success?

Bob Prechter: Yes. My first trade in 1973 was wildly successful, and I was hardly wrong in my first six years at it. Then I had a big trading loss in 1979, and that taught me more than the wins. The best way to develop an optimal state of mind for trading is to fail a few times first and understand why it happened. When you start, you’re better off speculating with small amounts of real money. Using larger amounts of money will bankrupt you early, which, while an excellent lesson, is rather painful. If you want to be a trader, it is good to start young. Then when you lose your first two bundles, you can gain some wisdom and rebound.

Q.: It sounds painful. Is there any way at least to reduce the hard knocks?

Bob Prechter: There is one shortcut to obtaining experience, and that is to find a mentor.

Q.: Did you have a mentor?

Bob Prechter: In 1979, I sat with a professional trader for about a year. The most important thing he taught me was to keep trades small relative to your capital. It reduces the emotional factor.

Q.: How would one select a mentor?

Bob Prechter: The best way to select one is to find a person who is doing exactly what you would like to do for a living, then get to know him well enough to ask if he will tutor you or at least let you watch while he works. Locate someone who has proved himself over the years to be a successful trader or investor, and go visit him. Listen to him. Sit down with him, if possible, for six months. Watch what he does. More important, watch what he doesn’t do. Finding a guy who knows what he is doing is the best lesson you could ever have. You will undoubtedly find that he is very friendly as well, since his runaway ego of yesteryear, which undoubtedly got him involved in the markets in the first place, has long since been humbled, matured by the experience of trading. He will usually welcome the opportunity to tell you what he knows.

14 September, 2009 by Stephen Leahy

Boston Sept 14 09:09 EST

I have been away for two weeks and feel refreshed. There is something to be said about disconnecting your technology and information leashes and just getting away for a while.

It is easy for me to write that, though, because the medium-term positioning that we have written about since early July has come true. Our two core positions (long EUR/USD and long Gold) have acted as we expected. So the question is, What Is Next?

We will re-iterate that looking at any trade through one set of parameters or trade entry signals is a disaster waiting to happen. We always work to confirm multiple analyses before trading. But lets get started with some technical analysis:

Gold: The chart below is a daily chart. We used the same chart to call our last gold position from just below $950. At this time we see there is a combining of technical indicators near the $979 level which is where we took profit last time (see our Aug 21 posting www.backbayfx.com/blog.php). So we believe that this level will be a point of interest again. It looks to us like the mid-line of our Bollinger Bands AND the previous resistance level are in that same $979 area. Our concern is that we are confident that there are large Stop Loss orders up in the $1020 to $1030 levels. The largest of desks are incentivized to push gold higher and see what shakes out up there. So we are right in the middle of our two interesting price points…..we will sit out today to see what happens next.

EUR/USD: No questions, No rush, No problems. We remain committed to the 1.47xx handle on this move. Additionally, we are just now seeing the start of the expected parabolic build up of EUR/USD. Generally the peak of any movement is marked by an increasingly steep curve. To our eye, we have just begun that process.

Stay Nimble!

Stephen Leahy
Back Bay FX Services, LLC
www.backbayfx.com

Source: ForexYard

The U.S. Dollar fell versus the EUR but clung to small gains against other major rivals on Monday. This came as traders turned their focus to data coming this week and as the EUR and Yen hit technical levels that triggered some buying. The market focus now shifts to a slew of U.S. indicators to be released between Tuesday and Thursday that could determine whether the Dollar will continue to trade lower, or experience a pause.

Economic News

USD – Dollar Tumbles to 1-Year Low vs. EUR

The Dollar tumbled to a 1-year low vs. the EUR in Monday’s trading. However, the USD did make some gains against other currencies, despite the USD falling in early trading, as Monday was a very volatile trading day. The main factor that pushed the U.S. lower against the EUR yesterday was that U.S. stocks made significant gains, led by industrial and financial shares that helped the market prevail over an earlier slump. This led investors to drop the USD in some cases for higher yielding currencies and equities.

The EUR/USD pair closed higher by 70 pips at the 1.4614 level, which was slightly lower than the high reached yesterday of 1.4652. Obama’s speech about the U.S. financial rules overhaul on Monday helped the USD strengthen against several major currencies. The USD/JPY cross finished trading at 91.10, the first daily rise in a week-and-half. This all shows that the USD was unable to gain considerable strength yesterday, as no economic data was released from the U.S., which put the greenback on the backburner.

Looking ahead to today, there is expected to be much economic data released from the U.S. economy. Core Retail Sales, PPI and Retail Sales figures will be released simultaneously at 12:30 GMT. If the figures are better than expected, then this may lend a lot of support to the greenback. However, worse figures could send the USD lower again the EUR for a second day in a row. Later on, Treasury Secretary Timothy Geithner is expected to speak about the U.S. economy at 14:00 GMT. Any clues about future U.S. Interest Rates are likely to create to great volatility in the U.S. Dollar going into mid-week trading.

EUR – EUR Soars despite Poor Fundamentals

The Euro-Zone Industrial Production fell for a 2nd straight month in July, stressing the frailty of the Euro-Zone economic recovery. The data was -0.3% lower from the previous reading, sparking possible fears that European Central Bank (ECB) President Jean-Claude Trichet will raise Euro-Zone interest rates later than originally forecast. Yesterday, all of this actually led to a buy-up of the EUR, as the European currency’s safe-haven status returned to the forefront.

The EUR made significant inroads into the U.S. Dollar, as the pair rose to 1.4614 level, it’s highest in nearly a year. The EUR also gained against the GBP by nearly 50 pips, as investors favored the EUR over the British currency in yesterday’s trading. It seems that despite yesterday’s lack of confidence in Europe, the European currency seemed to act the opposite way to the equity market. The EUR marked its first bullish trading day vs. the JPY since Wednesday, as the cross closed significantly higher at the 133.20 level.

Today, the most significant release from the Euro-Zone will be the German ZEW Economic Statement at 9:00 GMT. This is expected to be the main source of volatility for the EUR in early trading, as it is a leading measure of economic health for both the German and Euro-Zone economies. From Britain, the main releases today are the CPI figures at 8:30 GMT and the Inflation Report Hearings at 8:45 GMT. Optimistic results may push the GBP significantly higher today. This would be a much needed boost for the Pound, as it seeks to reverse yesterday’s losses against its major currency crosses.

JPY – Yen Slips against the Majors

The Yen slipped against the majors on Monday, as Japan’s currency failed to extend its recent gains. It is important to note that the Yen has gone very bullish against its major currency pairs in recent days. Therefore, yesterday’s behavior may be a correction due to the JPY being overvalued lately. Also, investors dropped the JPY on Monday, as they seeked to make profits in higher yielding currencies and commodities such as Crude Oil.

In yesterday’s trading, the Yen fell by 70 pips against the USD to the 91.10 level. The Yen closed 110 pips lower against the GBP at the 151.33 level, Also, the EUR/JPY cross finished trading 175 pips higher at 133.20. Today, the JPY is set to move on news coming out of the major economies. If there are good figures from these countries, the Yen’s downward correction may continue.

OIL – Crude Oil Steady Bellow $69 a Barrel

Crude Oil closed higher by 55 cents, or nearly 1%, to make a mini comeback by closing at $69.05. This was despite being down for much of yesterday’s trading session. Crude was helped by the USD’s weakness on Monday, as investor’s seeked an alternative investment for higher returns. The black gold also gained due to higher confidence owed to President Obama’s speech on Monday over financial regulation.

Crude is set for another mouthwatering and volatile day of trading today. If the USD continues to collapse today, Crude may go higher. Also, Oil may also continue rising if there is an equity market rally led by the U.S. Oil seems undervalued lately, so you traders are advised to buy into this popular commodity now as today’s trading gets under way.

Technical News

EUR/USD

After the sharp rise in price yesterday, the pair has been down-correcting to find its true value. With most oscillators beginning to go neutral, the daily chart’s RSI still shows this pair in the over-bought territory, meaning there is still room for a downward correction. The Bollinger Bands are tightening on the 4 hour chart. As such, we might be seeing some downward movement today. Going short might be a wise choice.

GBP/USD

The recent uptrend has pushed the price of this pair into the over-bought territory on the RSI of the hourly chart, signaling an imminent downward correction. A bearish cross may also be forming on the hourly charts’ Slow Stochastic, which would support the notion of a downward move. Going short with tight stops might be a wise choice today.

USD/JPY

The bearish trend is loosing its steam and the pair seems to consolidate around the 91.00 level. The daily chart’s RSI is already floating in an oversold territory suggesting that a recent downtrend is loosing steam and a bullish correction is impending. Going long with tight stops appears to be preferable strategy.

USD/CHF

The 4 hour chart shows that the bearish channel still remains intact, and the pair is now floating around 1.0340 level. Both the RSI and the Slow Stochastic on the 4 hour chart are pointing towards bearish grounds, and no correction appears to be in sight. Going short seems to be a good strategy today.

The Wild Card – NZD/JPY

This pair’s sustained upward movement has finally pushed its price into the over-bought territory on the hourly chart’s RSI. Not only that, but there actually appears to be a bearish cross forming on the 4 hour charts’ Slow Stochastic pointing to an imminent downward correction. Forex traders have the opportunity to wait for the downward breach on the hourlies and go short in order to ride out the impending wave.

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

Japanese industrial production rose 2.1% better than expected

New Zealand Retail Sales fell -0.5% MoM

Europe

Swiss Producer and Import prices rise 0.1% slightly better than expected

EU industrial Production fell -0.3% in line with expectations

EU Employment change at -0.5% QoQ

UK RICS House Price balance substantially better than expected reading 10.7%

Americas

Canadian Capacity utilization at 67.4% for Q2

The Overall Sentiment

In Asia-pacific sentiment was strongly negative amid wows over the US-China trade dispute in which the US imposed taxes on Chinese imported tiers. Although this is has a rather marginal effect on both economies the dispute raised concerns over protectionism in the US which could snap future growth in emerging markets which are the main growth engine in Asia. Equities in the region sank lower with the Australian ASX falling -1.42% and the Nikkei falling -1.79%. In Japan sentiment was exceptionally negative as the negative sentiment was already afloat due to the stronger Yen which weighted on Japanese exporters. In Europe the EU industrial production continued to shrink but modestly and in the UK RICS Housing price balance surprised for the better pointing further improvement in UK housing market. In the FX arena the 3-months Dollar labor rates reached to a record low  pushing the greenback even lower against the Euro which traded around the 1.465$ area. However against other peers the dollar showed rather resilience and even slightly rebounded trading around 91¥ .Dollar also showed a rather resilience in the Commodities arena with Gold still around the 1000$ and oil at the 68 zone. The Canadian dollar also came under bearish pressure and ended the day flat against the Dollar after rising 1% in response to subdued oil prices.  In the US rumors the US government intends to sell its share in Citi Bank spurred more confidence on the financial system which is slowly becoming less dependent on the US government. Overall sentiment in the US was positive with bets on a US recovery continuing to push equities higher.

The Day Ahead

Economic data will returned to the spotlight starting with the RBA meeting Minutes which will shed more light on the probability of a rate hike in Australia. In the London session UK inflation and housing data will gather much attention as it will reflect on just how effective the quantitative easing program by the BoE is. In Germany the highly important ZEW survey will reflect on the sentiment in the German economy the largest in Europe. Moving to the US, economic data on inflation manufacturing and most importantly the consumer could swing sentiment both ways. The NY Empire state manufacturing index will reflect on the US manufacturing sector with investors expecting further imporment.PPI figures due at the same time will reflect on the status of inflation in the US and US retail sales due later in the day which will gather most of the attention with investors hoping for a recovery in consumption. As the US consumer posses 2/3 of the US economy, in markets eyes only a recovery in consumption will signal a true recovery.

Technical Analysis

EUR/CAD

Since bottoming in July around the 1.5 zone the pair has been slowly but confidently moving in an upward trend with each peak higher than the previous. The pair is currently aiming the 1.63 level and in not showing any overbought signals. However the pair is trading in a rather tight range any strong swing upwards could ignite a sell off that would still leave the pair higher but within the tight range. As the pair will approach closer to the 1.63 level the resilience of the trend will be but to the test.

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 GCI Fx Research

€

The euro extended recent gains vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4650 level and was supported around the $1.4515 level.  The common currency reached its highest level since 18 December 2008 as negative sentiment continued to surround the U.S. dollar.  Data released in the eurozone today saw EMU-16 employment decline 702,000 in the second quarter, up from -1.2 million in the first quarter.  Other data released today saw EMU-16 July industrial production decline 0.3% m/m and 15.9% y/y.  Many economists believe the Federal Reserve will raise interest rates before the European Central Bank.  Interest rate futures are currently indicating the ECB will hike rates later and more slowly than the Fed.  Euribor interest rate futures are signaling the ECB will raise rates in Q4 2010 from their current 1.0% level.  In contrast, fed funds futures are predicting a 60% chance the Fed will lift interest rates to 0.25% no later than Q2 2010.  Most economists continue to predict the U.S. unemployment rate will top out north of 10% and that jobs may slowly be created next year.  The U.S. dollar has become a carry trade vehicle as borrowing costs are at record lows and the current interest rate structure is favouring higher-yielding currencies including the euro, Australian dollar, and New Zealand dollar.  The Obama administration is currently preparing a plan that would overhaul global financial institutions, an initiative the government will try to gain support for at the upcoming Group of Twenty summit in Pittsburgh.  ECB Vice President Papademos reported he will remain at the ECB until the end of his term and ECB President Trichet said that if Lehman Brothers were rescued one year ago it would not have necessarily have prevented the financial crisis from worsening.  ECB member Wellink said he expects the economic recovery to be “very slow.”  The European Union today maintained its 2009 eurozone inflation forecast at 0.4% and now sees gross domestic product growth off 4% this year.  In U.S. news, San Francisco Fed President Yellen reported the Fed should boost employment and curb disinflation.  Yellen also warned a major decline in the U.S. dollar could precipitate inflation and said unemployment will likely “remain elevated” for a few years.  Euro bids are cited around the US$ 1.3900 figure.

¥/ CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥91.15 level and was supported around the ¥90.20 level.  Bank of Japan’s Policy Board convenes this week and is likely to keep interest rates unchanged.  The central bank also likely will not decide at this meeting whether or not to let its liquidity support programs expire at the end of December.  BoJ-watchers are curious to see if the central bank will mention the deflationary pressures that are evident in the economy.  BoJ Governor Shirakawa will speak after the central bank’s decision is announced on Thursday and could reiterate that deflationary pressures are likely for some time.  Data released in Japan today saw the July revised industrial production up 2.1% m/m, better than the preliminary +1.9% print.  Ministry of finance official Tango reported the government is paying “close attention” to the yen but did not hint at actual intervention.  Notably, Japan’s fiscal half year ends at the end of this month and some of the recent appreciation of the yen could represent companies repatriating their overseas assets.  The Nikkei 225 stock index lost 2.32% to close at ¥10,202.06.  U.S. dollar offers are cited around the ¥94.75 level.  The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥132.90 level and was supported around the ¥131.30 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥149.90 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥87.80 level. In Chinese news, the U.S. dollar gained ground vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8224 in the over-the-counter market, up from CNY 6.8220.  The Obama administration announced tariffs on Chinese tires and other goods while China announced it is launching an anti-dumping investigation into U.S. chicken and auto products.  Most economists do not believe a trade war will ensue.

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.

By CountingPips.com

The US Dollar has been mixed in forex trading today against most of the major currencies. The dollar has been losing ground to the European common currency, almost touching the 1.4700 exchange rate while also trading lower versus the Australian dollar, Swiss franc, New Zealand dollar.  The dollar has gained some ground today versus the British pound and Japanese yen. Against the Canadian dollar, the USD has been virtually unchanged around the day’s opening exchange rate of  1.0835 CAD per USD at 4:41pm EDT according to according currency data by Oanda.

The US stock markets had a winning session today after a down day on Friday with the Dow gaining by approximately 22 points, the Nasdaq increasing 10.88 points and the S&P 500 up by 6.59 points.  Oil traded lower to $68.86 while gold lost $5.00 to $999.90 per ounce.

Economic news releases today showed that Japanese industrial production increased in July by 2.1 percent while on an annual basis production is 22.7 percent lower than last year. An overnight release showed that New Zealand’s retail sales fell by 0.5 percent in July after a revised decline of 0.1 percent in June while core retail sales also fell by 0.5 percent. The sales declines were worse than forecasts that were expecting sales to increase by 0.4 percent and core sales to advance by 0.5 percent.

Out of Europe, Switzerland producer and import prices increased by 0.1 percent in August and registered a 5.5 percent decrease on an annual basis according to the Swiss Federal Statistics Office. European Industrial production fell by 0.3 percent in July and by 15.9 percent on an annual basis according to EuroStat.

EUR/USD Chart – The euro has resumed its ascension today versus the dollar in trading as the EUR/USD pair reached a high today of 1.4652 before retreating lower but has held above the 1.4600 level.  The euro has increased seven out of the last ten days against the American currency and is approaching an oversold condition on the Relative Strength Index (RSI) at over a 70 reading.

By Fast Brokers – The GBP/USD is finding strength in our 2nd tier uptrend line, avoiding a retest of the psychological 1.65 level following recent weakness.  Though we saw a slight uptick in volume to the downside on Friday, we don’t believe this pullback carries much weight.  We’ve seen technical breakouts to the topside in the EUR/USD and gold coupled with key declines in the USD/JPY.  Hence, it’s clear investors continue to look unfavorably upon the Dollar, which bodes well for the Pound even if investors are turned off by the BoE’s taste for liquidity.  The Pound will be tested further this week since we will receive key British economic data throughout the week.  Tomorrow Britain will release its CPI and RPI data along with the Inflation Report Hearings.  We will be paying particularly close attention to tomorrow’s pricing data since Friday’s Input PPI registered a surprising 2.2% growth rate.  The Pound could experience a round of relative strength if the return to growth in Britain’s pricing data accelerates.  Surprisingly positive pricing data tomorrow could lead investors to speculate that the BoE will keep any planned injections of liquidity on hold.  However, unflattering pricing data could have the opposite effect and keep the Pound lodged within its relative weakness.  Speaking of which, investors should keep a close eye on the EUR/GBP.  The currency pair has received a wave of buying, and is currently staring down August/September highs.  If the EUR/GBP surpasses these previous highs and breaks out to the topside, this would be a clear indication that Britain’s data will fail to impress this week.

Technically speaking, momentum in the GBP/USD remains to the topside due to last week’s large breakouts in the Cable’s positive correlations.  Meanwhile, our 1st tier uptrend line is reaching an inflection point with our 1st tier downtrend line.  Hence, we anticipate a possible pickup in volatility this week as economic data floods the FX market.  Though lying in the distance, our new 2nd tier downtrend line should serve as a key barometer regarding the health of the GBP/USD’s medium-term uptrend.  Since our 2nd tier downtrend line runs through August highs, an eclipse of the 2nd tier should indicate a large breakout to the topside.  As for the downside, the GBP/USD has our 1st and 2nd tier uptrend lines along with the psychological 1.65 level to fall back on.  Furthermore, the meat of the 8/10-8/24 trading range should prove to be both a reliable defense and obstacle due to its significance this summer.  Hence, investors should keep a close eye on the lid and the bottom of this trading band.

Present Price: 1.6570

Resistances: 1.6570, 1.6589, 1.6608, 1.6635, 1.6661

Supports: 1.6552, 1.6519, 1.6491, 1.6475, 1.6455, 1.6431

Psychological: 1.65

Market Commentary provided by Fast Brokers.

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