Month: September 2009

By Fast Brokers – The USD/JPY finally found some support right above the highly psychological 90 level after collapsing beneath our 1st tier downtrend line.  The defense of 90 is to be expected, and the psychological weight of the area should be felt for some time.  The USD/JPY has been a key mover the past couple weeks following an extended period of consolidation.  Last week investors were favoring the Yen across the board despite Core Machinery Orders coming in much worse than analysts anticipated coupled with a weak GDP number.  These two data points would normally have helped buoy the Yen since investors would feel more comfortable with the U.S. economy vs. Japan’s.  However, there appears to be a strong psychological force at work that is making investors disregard present data.  Investors should recall the selloff in the USD/JPY was triggered by the DPJ’s victory.  Hence, there seems to be speculation that the DPJ’s economic policies will favor a stronger Yen instead of liquidating to keep the currency depreciated to aid exporters.  This would be a huge shift in economic policy and send shockwaves throughout the major Yen crosses.  On the other hand, investors shouldn’t get too far ahead of themselves since the DPJ has yet to make a significant economic policy decision.

Regardless of fundamental truths, the USD/JPY has made its directional decision clear.  Our 1st tier uptrend line is fading into the distance, and even our 1st tier downtrend line is losing sight of present price.  Therefore, even if the USD/JPY should continue to stabilize, we view the strength as a direct result of oversold conditions.  We’ve witnessed fundamental breakouts in both the EUR/USD and gold, showing investors are divesting from the Dollar.  The Yen should benefit from such a fundamental divergence from the Dollar, much to the USD/JPY’s chagrin.  Meanwhile, the psychological 90 level should play a key psychological role.  The USD/JPY also has the trading ranges established during December 2008 and January 2009 lows.  Therefore, the USD/JPY seems to be running out of room to the downside for the time being despite the prevalence of the downtrend.

The BOJ will make its first monetary policy decision following the shift in Japan’s governmental power.  Hence, eyes will be glued to the headlines late Wednesday as investors look for a change in policy from the previous administration.  However, we believe the BOJ will keep its monetary policy intact since the shift is governance is so fresh.

Present Price: 90.73

Resistances:  90.77, 90.96, 91.18, 91.43, 91.72

Supports:  90.55, 90.33, 90.11, 89.75, 89.42

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.

By Fast Brokers – The EUR/USD is gravitating around the psychological 1.45 area as we suspected may happen.  However, the EUR/USD is recovering quickly from losses earlier today by bouncing off of our 2nd tier uptrend line.  Meanwhile, our 3rd tier uptrend line is reaching an inflection point with our makeshift 1st tier downtrend line.  We say makeshift because the best we could do to form a downtrend line was to connect through last week’s highs.  We notice interest is waning on the sell-side, and the lack of convincing downward momentum keeps the EUR/USD’s new near-term uptrend alive and well.  The Euro’s relative strength is back in 1st gear with a large bounce taking place in the EUR/GBP.  However, we find little reasoning behind the move since Britain’s economic data outperformed the EU’s last week.  Perhaps are speculating the BoE may keep the gates of liquidity open.

The EU will gradually re-enter the econ. data headlines following a very quiet week.  The first key release will be tomorrow’s ZEW Economic Sentiment data.  Analysts are expecting continual improvement in sentiment regarding the EU’s economy.  This wouldn’t be surprising considering the latest wave of econ. data from the EU was positive.  Tomorrow’s ZEW data will be accompanied by employment data from Britain along with pricing data from the U.S.  The FX markets sprung back to life last week after the official end to summer.  We’ve seen volatility increase across the board and we expect price movements to pick up as Autumn nears.  Last week’s breakout to the topside was a key technical movement, and we have little reason to alter our positive near-term outlook on the EUR/USD.  A seismic reversal to the downside would require large setbacks in global economic data along with technically significant declines in U.S. equities.  However, the global stimulus packages are still impacting the economy, so we don’t expect the legitimacy of the EUR/USD’s uptrend to be brought into question until 3rd quarter earnings season rolls around.

December 2008 highs should serve as an intermediate technical barrier to the topside should they be tested.  Meanwhile, the 1.45-1.50 range could prove to be sticky since the EUR/USD has quite a bit of historical trading in this zone dating back to 11/2008-03/2009 and 08/2009-09/2009.   Hence, 1.50 represents a key psychological barrier as far as the EUR/USD’s medium-term uptrend is concerned.

Present Price: 1.4580

Resistances: 1.4591, 1.4607, 1.4639, 1.4672, 1.4710

Supports: 1.4550, 1.4534, 1.4518, 1.4506, 1.4494

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.

Source: ForexYard

The Dollar is likely to go volatile during and following the speech by President Obama today at 16:00 GMT. Meanwhile, forex traders are advised to take positions on trades, as a few of data releases coming out of Euro-Zone and Britain are likely to affect the greenback’s main currency crosses.

Economic News

USD – Dollar Finishes a Week of Falling Trends

During last week’s trading session, traders that went short on the dollar made profits. The dollar dropped over 300 pips against the Euro, around 400 pips against the Pound, and slid about 350 pips against the Yen.

The Dollar weakened in light of some negative data published from the U.S economy. The U.S Trade Balance report for July showed that the difference between imports and exports increased by 16 percent, the most since 1999. The gap rose to $32 billion from a revised $27.5 billion in June. Also last week, The U.S Consumer Credit, which measures the change in the total value of outstanding consumer credit that requires installment payments, dropped by 21.6$ billion in July.

The end result of this indicator was five times lower than forecasted by analysis, and thus has a negative impact on the Dollar. The Unemployment data from the U.S continues to be bleak. It’s been the 35th week in a raw on which over 500,000 individuals have filed for unemployment insurance for the first time. It appears that until the employment condition will take a turn for the better, the Dollar might continue to weaken.

Looking ahead to this week, a batch of data is expected from the U.S economy, including the Retails Sales Indices, the Producer Price Induces, the Consumer Price Indices, the Long-Term Purchases, the Building Permits and the weekly Unemployment Claims. Traders are advised to follow all these publications very closely as positive result from these indicators might have the potential to reverse the current bearish trend of the greenback.

EUR – Mixed Results from the Euro-Zone Creates Volatility for the EUR

The Euro underwent a very volatile session during last week’s trading. The EUR rose significantly against the Dollar, lifting the EUR/USD pair above the 1.4600 level. However the Euro dropped against the Yen, and saw mixed results against the Pound.

The Euro began last week’s session with rising trends against the major currencies thanks to a positive Factory Orders figures from the German economy. This indicator measures the change in the total value of new purchase orders placed with manufacturers. Analysts predicted a rise of 2.0% during July, yet the end result showed that factory orders rose by 3.5%, increasing for the fifth consecutive month.

However the bullish trend reached its end following poor Industrial Production data from both Germany and France. This indicator is a leasing indicator of economic health as production reacts quickly to ups and downs in the business cycle. Thus, the negative figures showed that it is still soon to declare that the Euro-Zone has pulled out of recession, and that the leading economies of the Euro-Zone are still tumbling.

As for this week, many interesting publication are expected from the Euro-Zone. The data which seems to have the potential to impact the Euro the most is the German ZEW Economic Sentiment report, expected on Tuesday 09:00 GMT. It is a survey of about 350 German institutional investors and analysts who are asked to rate the next 6-months economic outlook for Germany. This report usually has an immense effect on the market, and a positive figure might have the potential to boost the EUR.

JPY – JPY Rises Against the Majors

The Yen rose last week against all the major currencies. The Yen appreciated about 350 pips against the Dollar, sending the USD/JPY pair as low as the 90.16 level. The Yen also soared around 200 pips against the Euro and about 350 pips against the Pound, marking an all around bullish session.

The Yen’s sharp bullish movements last week appears to be a correction to the over-weak Yen. It is a widely known that the Bank of Japan (BoJ) sees the weak Yen as the main tool to support the Japanese exporters in the attempt to recover the economy. Japan continues to hold the lowest Interest Rates in the industrial world, and the BoJ is making other steps as well, all in the effort to weaken the Yen. The key target that exporters are holding for the USD/JPY pair is around 94.50, and a lower rate might have severe consequences on the Japanese economy. However for now it seems that investors are still seeing the Yen as a safer haven then most of the major currencies and thus the JPY continues to strengthen.

As for the week ahead, The Japanese Interest Rates for September will be declared on Thursday. The BoJ is likely to leave interest rates, also knows as Overnight Call Rate at 0.10%. However, in case that the BoJ will surprise and will choose to alter rates, this is likely to have a large impact on the Yen. Either way, traders are advised to follow the press conference which is expected short after, as some interesting slues regarding future monetary system might be scattered.

Crude Oil – Crude Oil Drops towards $68 a Barrel

Last week’s trading session started with a massive bullish trend for crude oil, which lasted until Friday. A barrel of crude oil was traded for 72.50 at its peak. However, a sudden change happened then, dropping crude oil towards $68 a barrel.

It seems that oil prices dropped as a result of an appreciation of the Dollar since Friday, and some concerns that Crude Oil became over-valued following a week of straight rising trends. It also looks that a few unsatisfying results for financial indicators have increased fear that global economies may not recover as soon as expected, which will likely weaken demand for oil.

Looking ahead to this week, traders are advised to follow the Dollar’s value, and the U.S equity markets, as they tend to set the tone in crude oil trading. In addition, traders should also pay attention to the Crude Oil Inventories report scheduled for Wednesday, as its result has proven to have a large impact on crude oil’s value.

Technical News

EUR/USD

There is a bearish cross forming on the daily chart’s Slow Stochastic indicating a bearish correction might take place in the nearest future. The downward direction on the 4-hour chart’s Slow Stochastic also supports this notion. When the downward breach occurs, going short with tight stops appears to be preferable strategy.

GBP/USD

The GBP/USD cross has experienced a bullish trend for the past 2 weeks. However, it seems that this trend may be coming to an end. The RSI of the daily chart shows the pair floating in the overbought territory, indicating that a downward correction will happen anytime soon. Going short with tight stops might be a wise choice.

USD/JPY

The pair has recorded much bearish behavior in the past several days. However, the technical data indicates that this trend may reverse anytime soon. For example, the daily chart’s Stochastic Slow signals that a bullish reversal is imminent. An upward trend today is also supported by the 4-hour chart’s Slow Stochastic. Going long with tight stops may turn out to pay off today.

USD/CHF

The 4-hour chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, there is a fresh bullish cross forming on the daily chart’s Slow Stochastic indicating a bullish correction might take place in the nearest future. Going long might be a wise choice.

The Wild Card – Gold

Gold prices rose significantly in the last week and peaked at $1003.45 for an ounce. However, the daily chart’s RSI is floating in an overbought territory suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. This might be a good opportunity for forex traders to enter the trend at a very early stage.

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.

Transports lead the way higher, the Dollar Crashed

What started off as a dull week for stocks, quickly flip-sided, as economic data and risk appetite sent the major indices higher, and the Dollar to lower levels. The Transportation index led the US markets higher last week, climbing by 5.62% to close at 3974.5 points.  Even though the week was capped on Friday, due to FedEx raising its earnings forecast for its latest quarter, citing international shipments and cost-cutting, the stock had only a minor impact on the indices. The transportation index helped the S&P 500 climb higher throughout the week, rallying 26.3 points or 2.6% to 1042.7 points.

From a technical point of view one can see on the chart below that the transportation index broke its neckline resistance, after forming an inverted head and shoulders pattern.

The bright spots for the week on the economic front came in the form of consumer sentiment.  On Friday, the Reuters/University of Michigan preliminary index of consumer sentiment increased to 70.2 this month, from 65.7 in August. The index was expected to increase to 67.5 points, only 1.8 points higher than its last figure.

Furthermore the WSJ helped drive the markets higher releasing an optimistic report. According to a recent poll; economists gave the U.S government high marks in terms of the way they dealt with the financial crisis, preventing a situation that could have been much worse. According to the results, most economists believe that unemployment will peak at 10.2% in 2010, before turning down on the way to recovery. The news was stimulating as it gave investors hope that the U.S unemployment rate could be reaching its highest levels.

How correlated is the dollar and the US equity market?

Recent statistics have shown that the Dollar-equity connection has been calculated above 90%.  This means that as the dollars falls, the equity markets in the US climb.  The dollar continued to fall this week, making lows for 2009 against many major counterparts.  The dollar index, declined to the lowest level for the year, dropping 3% to 76.68 points.   The index broke through weekly support and is now thought that it could test a range created in the summer of 2008, between 71-74 points.

The dollar was also on the definsive side this week against the Euro, the Yen and the Swiss Franc.  The USD/JPY currency pair broke through recent support of ¥92.00, and is now heading towards its weekly lows at ¥87.00. When taking a glance at the chart below one can see that this coinsides with price action in December 2008 and February 2009. One must note that the move was caused due to Dollar weakness, rather than Yen strength.  On the data front, Japan released a few unpleasant figures last week showing that their lending had increased at the slowest pace in eight months as companies continued to cut spending. Furthermore GDP showed a depressing result coming out at only 0.6%, compared to its previous 0.9%. While the massive USD/JPY move might have been profitable for certain traders, the current price of the Yen is yet again causing problems for Japanese exporters, weighing on Japan’s economic recovery.

The EUR/USD broke through a tight 6 big figure range that it had been trading in for the last 4 months.  Technically, the chart still looks strong and could test old highs near $1.49. Throughout the week this pair presented classical technical patterns allowing traders to jump on several times for the ride. With a rate of 1%, giving it the upper hand against the Pound, USD, and Yen, many are expecting further price patterns to occur, some of which could present excellent intraday setups. When taking a glance at the following 2 hour chart, one can see the recent price patterns have presented excellent intraday rallies.

Next week there are a number of key economic data points:

On the data front, an additional two banks will take the stage this week releasing their rate decisions. Japan is expected to leave its rate at a low of 0.1%, while Switzerland is expected to hold at 0.25%. Both these banks statements will be scrutinized by traders, as both the countries’ currencies are used in carry trades. Furthermore the U.S will release its retail sales and producer prices on Tuesday. Wednesday will be followed by the closely watched consumer price index. To finish the week the U.S will release a wave of data including housing starts, Building Permits and it’s closely watched Philadelphia Fed Survey.

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, under pressure most of the week and falling to new yearly lows, has been mixed in forex trading today against most of the major currencies. The dollar has regained a little ground against the euro, British pound, Australian dollar, Canadian dollar while falling to the Japanese yen and New Zealand dollar. The dollar is trading virtually unchanged versus the Swiss franc at the end of of the US trading session at 4:22pm EDT according to according currency data by Oanda.

The stock markets had a losing session today after five days of gains with the Dow declining by approximately 22 points, the Nasdaq decreasing 3 points and the S&P 500 falling by 1.41 points.  Oil traded lower to $69.81 while gold traded higher by $10.60 to $1006.00 per ounce.

Major economic news releases today showed that September consumer confidence in the U.S. was better than expected.  The University of Michigan/Reuters survey scored a 70.2 in September after a 65.7 score in August and past the expectations of a 67.5 score.  The current conditions index and the consumer expectations for six months from now also increased in the release.

Out of Europe, U.K. producer prices increased by 0.2 percent in August and registered a 0.4 percent decrease on an annual basis according to the Office of National Statistics. Core producer prices, excluding food, energy and tobacco, gained by 0.2 percent in August while on an annual basis core prices climbed by 0.7 percent.

Today’s EUR/USD Chart – The euro has given back just a bit of its gains today versus the dollar in trading as the EUR/USD pair trades around the 1.4570 level but did make a fresh 2009 high today above the 1.4630 level.  The euro has gained over 230 pips against the dollar from the beginning of this week. The euro could be on its way to test the December 2008 resistance level around 1.4700 after breaking through the early August resistance at the 1.4450 level.

Source: ForexYard

The publication of the U.S. Prelim UoM Consumer Sentiment report at 13:55 GMT is set to lead USD trading today. This release measures the level of a composite index based on surveyed consumers. The figure is expected to be 67.2, up from last month’s 65.7. The other important events that are set to drive the forex market today are GBP PPI Input at 8:30 GMT, the U.S. Import Prices at 12:30 GMT and U.S. treasury Secretary Timothy Geithner’s speech at 20:45 GMT. Therefore, if you traders want to make big money now, you should open big positions in the majors now.

Economic News

USD – Dollar Declines as Equity Market Rallies

The U.S Dollar fell against most of its major currency pairs yesterday, hitting its lowest level in nearly a year against the EUR, as gains in stocks and commodities prompted investors to wade into riskier currency trades. By yesterday’s close, the USD fell against the EUR, pushing the oft-traded currency pair to 1.4603. The Dollar experienced similar behavior against the GBP and closed at 1.66.99.

The Dollar has fallen every day this week against the EUR and Japanese Yen, and it marked its third straight daily decline against the Pound Sterling yesterday. Analysts attributed the fall in the Dollar, which has been treated as a lower risk, safe-haven investment, to growing optimism that the worst of the financial crisis has passed. This has caused investors to buy commodity-linked and higher-yielding currencies, which rallied earlier this week.

A leading indicator released yesterday was U.S. Unemployment Claims. This number handedly beat last week’s result. However, it failed to provide strength to the Dollar as investors may be waiting for key data due to be released today to implement their trading strategies.

Looking ahead to today, the most important economic indicator scheduled to be released from the U.S. is the Import Prices at 12:30 GMT. Traders will be paying close attention to today’s announcement as a stronger than expected result may boost the USD in the short-term. Traders are also advised to follow Treasury Secretary Timothy Geithner’s speech at around 20:45 GMT. This speech is very likely to impact USD volatility. Traders are advised to watch closely, as this is likely to set the pace of the Dollar going into next week’s trading.

EUR – EUR/USD Hits One Year High

The EUR rose to session highs against the Dollar yesterday as U.S. stocks extended gains and commodity prices firmed. The 16 nation currency hit 1.4612 against the Dollar, a fresh 2009 high. The EUR was broadly unchanged versus the CHF yesterday, and closed its trading session at around the 1.5140 level.

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 Thursday’s trading.

The Pound Sterling was actually the biggest mover amongst the majors, propelled higher by optimism about the UK economy and financial sector, and helped by a general move into riskier assets. Britain left Interest Rates at a record low of 0.50%, as it tries to get credit flowing again to strengthen an economy that may return to growth this quarter. Some reports show the outlook is brightening for Britain as Manufacturing Production rose 0.9pc in July in comparison to June. This was the biggest increase since January 2008.

Looking ahead to today, the most important economic indicator scheduled to be released from Britain is the PPI Input at 8:30 GMT. Analysts are forecasting this figure to increase from its previous reading. Traders will be paying close attention to today’s announcement as a better than expected result may continue to boost the GBP in the short-term.

JPY – Yen Makes Big Gains on the Dollar

The Japanese Yen strengthened against most of its major counterparts on Thursday, continuing to prove that for the time being that this is the solid currency that traders can rely on to provide them with steady profits. The Yen extended gains versus the Dollar on Thursday, to trade at about 91.40 amid a broad sell-off in the USD. The JPY also saw bullishness against the EUR and closed at 133.60.

Investors worry over a recent rise in the JPY as it makes Japanese products less competitive abroad and hurts the value of overseas sales when translated back into the Japanese currency. With steady gains primarily against the Dollar, much of the Yen’s bullish movement could be contributed to the repatriation of overseas earnings by Japanese companies into the local economy. This has had a positive effect on major JPY currency pairings, as the rising turmoil in the market is leading to more investment in the Japanese currency.

Crude Oil – Oil Prices Rise as Inventories Fall

Oil prices extended a four-day rally to near $72.30 a barrel on Thursday after a U.S. report showed a surprise decline in Crude Oil inventories, and OPEC said it would maintain official output curbs. Crude Oil rose 31 cents to settle at $72.24 a barrel, topping off a 6% climb since last Thursday.

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

Technical News

EUR/USD

The pair has experienced a bullish run for the past week-and-half now, and currently stands at the 1.4615 level. The RSI of the 4-hour chart shows the pair floating in the overbought territory, signaling that a bearish correction is imminent. This view is also supported by the MACD of the weekly chart. Entering the trend at an early stage may turn out to bring high returns, as end-of-week trading kicks in.

GBP/USD

The GBP/USD pair has risen significantly higher in the past week, and has surpassed the 1.6700 mark. The pair sits above the upper border of the Bollinger Bands of the daily chart, indicating that the next move may be in a downward direction. The 4-hour chart’s Slow Stochastic shows a fresh bearish cross, meaning that the next move will be bearish. Going short with tight stops seems to be the right choice today.

USD/JPY

The cross has been dropping for the past week now, as it now stands at the 91.30 level. The Slow Stochastic of the hourly charts shows a bullish cross has recently formed, indicating that an upward correction is imminent. The RSI of the hourly charts shows the pair sitting in the oversold territory, indicating that the next move may be in an upward direction. Going long with tight stops may turn out to be the right choice today.

USD/CHF

The chart’s oscillators seem to be showing misleading signals for the USD/CHF cross. On the one hand, the MACD of the 4-hour chart and the RSI of the daily chart support an upward trend for today. On the other hand, the MACD and RSI of the weekly chart support a possible downward trend for today. Entering the pair when the signals are clearer seems to be the correct choice for today.

The Wild Card – Crude Oil

Crude Oil has been very bullish this week, and has given big returns for many forex traders. The weekly chart’s oscillators seem to be showing mixed signals. However, the MACD of the 4-hour chart offers a more accurate picture that the trend for today may be a downward correction. Going short with tight stops seems to be the preferred choice for 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.

By eToro

Market Movers of the Day

Asia-Pacific

Australian Employment change at -27.1k worse than expected

Japanese GDP for Q2 at 2.3% annualized which is significantly worse than expected

Europe

In the UK BOE key rate left unchanged at 0.5% and QE program at £175Bn

Americas

Canadian key rate left unchanged at 0.25%

US Trade deficit at –32B worse than expectations

Initial Jobless claims at 550k in line with expectations

The Overall Sentiment

In Asia-Pacific Australian employment figures slightly disappointed and in Japan the Nikkei rose above 2% ahead of the expected GDP figures. In the London session the BOE rate decision was at the centre with the rate left unchanged at 0.5% as expected. In addition the comments from the BOE stating the UK economy is on its way to stabilize and that there is no need to expand the £175Bn quantitative easing program spurred more bets on a stronger sterling which traded around 0.875€ and close to 1.67$ .In Canada rate was also left unchanged at 0.25% and in the US sentiment was rather positive as investors felt more comfortable buying stocks in response to the speech by president Obama over healthcare issues lifting equities in the US higher and the Dollar lower. Although the equities buyout could be perceived as a reaction to dollar weakness rather then positive sentiment the combination of initial jobless claims which was in line with expectations at 550k and the sharp drop in the VIX of -3.17 pointed the market was rather optimistic then risk averse. At the Day’s end the euro consolidated with the 1.46$ and the Dollar Yen fell under the 92 level amid concerns over the Japanese economy. In the commodities arena Gold fell below 1,000$ as market volatility pulled back and Oil traded above 72$ barrel. Equities in the US led the positive sentiment with 5 consecutive sessions on the green, the DOW was up 0.84% and the S&P advanced 1.04%.The closing event for the day which accrued after most market were closed was testimony of US treasury secretary Timothy Geithner which outlined the government is willing to step out of its holdings in the banking system but when the timing is right. Geithner also expressed his optimistic view on the economy stating the economy is reconvening but also stated the recovery process will be painful.

The Day Ahead

Sentiment Asia pacific will largely be affected from the disappointing Japanese GDP figure published at the end of the Day before with the GDP rising 2.3% annualized in Q2 against expectations of 3.7% from the preliminary assessments by the Japanese government. However the sentiment in the region outside Japan could also be positively affected from the strong economic data coming from China which is the largest imports consumer in the region. In the London session sentiment will be affected from the statements of the BOE a day before and the PPI which will reflect more on health of the UK economy. In the US sentiment will mostly be affected from the testimony of the treasury secretary a day before which occurred after the markets were closed but most importantly from the looming threat of the sinking greenback. Overall sentiment is expected to be slightly on the positive side although 5 consecutive gains in Wall Street could spark some profit taking.

Technical Analysis

USD/JPY

Since January the pair has failed to trade under the 91 strong support. However latest developments show the pair is trading under the 91.5 and aiming the 90 area. A break of the 91 area would mark the 88-89 support as the next target for this long lasting bearish trend which started at the 100-101 peak. If the pair will eventually fail to close under the 91 a rebound above the 93 area might at least signal a pause in the trend.

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 Fast Brokers – The USD/JPY sank beneath July lows earlier today despite a much weaker than expected Core Machinery Orders number.  The setback in Core Machinery Orders is a bit disconcerting for Japan’s economy, yet could help buoy the USD/JPY today as investors show a slight preference for the Dollar amid mixed global economic data.  Ironically, the decline in Japan’s CMO coincides with a widening of America’s Trade Balance.  The increase in U.S. imports would lead one to believe that Japanese exports are improving.  However, the rapid of the appreciation of the Yen isn’t helping struggling Japanese exports too much.  Regardless, the mixed global data is helping the USD/JPY bounce off of our 1st tier downtrend line.

Japan’s Trade Balance data later tonight will be overshadowed by China’s wave of data.  China is the engine of growth for the global economic recovery.  Therefore, the USD/JPY’s immediate-term path will likely depend on the broad-based reaction of the Dollar to China’s economic data, particularly Industrial Production.  The slight improvement in American demand for China’s exports confirms our suspicion the red state’s data should outperform expectations.  Tuesday was a key technical session across the board, highlighted by breakouts to the topside in both the EUR/USD and GBP/USD along with a dive beneath September lows in the USD/JPY.  We expect these trends to continue over the near-term, meaning we could be talking about the psychological 90 level soon.  However, even if the USD/JPY should weaken further, the currency pair has historical consolidation beneath present levels dating back to January and February trading ranges.  Furthermore, the USD/JPY has the highly psychological 90 level to fall back on should the downturn pick up speed again.  As for the topside, our 1st tier uptrend line is fading into the distance, a disconcerting technical development.  For the time being, the USD/JPY must first get back above Tuesday highs.

Present Price: 91.88

Resistances:  91.96, 92.06, 92.27, 92.40, 92.54

Supports:  91.79, 91.64, 91.50, 91.41, 91.27

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.

By Fast Brokers – The Cable has reached the lid of the 8/13-8/21 trading range after the BOE kept its alternative liquidity package as is.  Investors shrugged off a weaker than expected Halifax HPI number, instead opting to give the Pound a relative strength as highlighted by the large pullback in the EUR/GBP.  The Halifax number is a bit surprising since Britain’s housing data has been stellar lately.  Investors may take more notice if we receive another setback in housing data in the near future.  Focus will return to the East tonight with China set to release a flood of economic data including Industrial Production.  Therefore, the FX markets should remain volatile over the remainder of the week since the longevity of the growth story in China has been brought into question lately.  Since China has been leading the charge of the global economic recovery, any setback in China’s economic data late Thursday PST could place some downward pressure on the Cable.  However, since the Cable and EUR/USD experienced technical breakouts on Tuesday, we believe China’s economic data will likely come in ahead of expectations and help fuel the GBP/USD’s rally.

The GBP/USD is looking to get above the lid of the 8/13-8/21 range and create some more breathing room between present price and the psychological 1.65 level.  Regardless, the Cable still has quite a bit of work to do to the topside due to the BOE’s large injection of liquidity a few weeks ago.  The pullback from August highs paved a bumpy road for the uptrend, whereas the EUR/USD broke free of its August highs on Tuesday’s technical movement.  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.  However, we will have to see the data from China before we get ahead of ourselves.  Britain will also release its PPI data tomorrow and investors are expecting producer prices to grow by 0.9%.  If data should disappoint over the next 24 hours, the GBP/USD has technical cushions in our three uptrend lines along with intraday lows and the psychological 1.65 level.  We maintain our bullish near-term outlook on the GBP/USD regardless of any immediate-term pullbacks due to the overwhelming bullish message delivered on Tuesday.

Present Price: 1.6608

Resistances: 1.6608, 1.6635, 1.6657, 1.6668, 1.6701, 1.6722

Supports: 1.6589, 1.6570, 1.6552, 1.6511, 1.6481

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 EUR/USD is looking to wrestle free of its slight consolidative period following Tuesday’s important movement to the topside.  As we explained in our previous analysis, the EUR/USD jumping past our previous 3rd tier downtrend line and August highs was a clear technical message in favor of the uptrend following heavy summer consolidation.  However, volume has tailed off a bit since then, and investors are waiting for China’s economic data Thursday evening EST.  Regardless of present consolidation, a fresh uptrend is alive and well, indicating China’s econ data will likely surpass analyst expectations.  We can’t create any new downtrend lines besides connecting through weekly highs, a very positive sign for the EUR/USD.  Therefore, we believe the EUR/USD has quite a lot of room left to go to the topside over the near-term.  However, December 2008 highs should serve as an intermediate technical barrier to the topside should they be tested.  Furthermore, the 1.45-1.50 range could prove to be sticky since the EUR/USD has quite a bit of historical trading in this zone dating back to 11/2008-03/2009 and 08/2009-09/2009.   Hence, 1.50 represents a key psychological barrier as far as the EUR/USD’s medium-term uptrend is concerned.

As for the downside, we’ve obviously readjusted our uptrend lines to compensate for Tuesday’s breakout and 1.45 becomes a psychological support.  France reported a setback in the recovery of the nation’s Industrial Production data, applying slight downward pressure on the EUR/USD.  However, Germany printed a much better than expected Industrial Production number on Monday, so EU Industrial Production has clearly been counterbalanced.  With EU economic data pretty much finished for the week, the one force that could alter the EUR/USD’s near-term upward trajectory would be disappointing Industrial Production data from China.  However, China’s data should come in line since the government feels comfortable enough to tighten the gates a little on liquidity.  We maintain our bullish near-term outlook on the EUR/USD even if the currency pair should gravitate to the psychological 1.45 level over the immediate-term.

Present Price: 1.4588

Resistances: 1.4590, 1.4606, 1.4639, 1.4672, 1.4710

Supports: 1.4550, 1.4534, 1.4518, 1.4506, 1.4483

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.