Month: October 2009

Source: ForexYard

As the first week of October kicked off last week, traders witnessed a number of volatile jumps in the worlds 2 primary currencies: the EUR and USD. Optimism appeared to be on the rise in America while Europe was giving off signals of a lagging economy. The USD had pared a moderate percentage of its previous losses until employment data in the US hampered those gains and sent the EUR flying high. As a result, every other currency in the forex market was impacted in a similar way since these currencies have the ability to influence world prices. The question remains: Will this week’s data calm the market, or simply add fuel to the flames?

Economic News

USD – Poor Employment Data Diminishes Bullish Week

Last week the Dollar saw a volatile trading session against all of the major currencies. The greenback started last week with rising trends against the Euro and Pound, yet eventually returned to similar rates from the beginning of the week.

Last week’s early rally of the Dollar was mainly due to the positive Consumer Confidence survey on Tuesday. The survey showed that consumers in the U.S currently have a positive view regarding economic conditions such as labor availability, business conditions, and the overall economic situation.

Even though the survey failed to reach expectations for a 57.0 result, the mark above 50.0 boosted the Dollar. In addition, the Pending Home Sales rose for the 7th consecutive month, indicating that the housing sector in the U.S is showing recovery signals. On the long-term, a sequence of positive housing data is likely to support the Dollar, as many see it as the number one parameter in the economy’s condition.

However, the poor employment figures have halted and reversed the Dollar’s rising trend. The Non-Farm Employment Change report showed that the U.S economy lost 263,000 jobs in September, which was more than had been expected. This had investors questioning the economy’s recovery and pushed them away from the Dollar.

Looking ahead to this week, many impacting publication are expected from the U.S economy. The Non-Manufacturing Purchasing Managers’ Index (PMI), the weekly Unemployment Claims and the U.S Trade Balance are all likely to influence the market the most. Traders are advised to pay special attention to the employment figures since last week’s data has apparently made this one of the most urgent matters at the moment.

EUR – EUR Recovers before the Weekend

The Euro underwent a volatile trading week. As the week began, the Euro saw bearish trends against most of the major currencies, including the Dollar and the Yen. However, close to the weekend, the Euro saw a reverse of trends and managed to recover.

The Euro’s bullish trend came mainly as a result of the poor data published from the Euro-Zone last week. The German Preliminary Consumer Price Index (CPI) fell at a faster pace than expected. The report showed German CPI dropping by 0.4%, more than the 0.2% drop expected by analysts.

In addition, the German Retail Sales for August dropped by 1.5% as opposed to July. The Retails Sales measure the total value of inflation-adjusted sales at the retail level. The negative figures for both these German economic indicators have created speculations that the German economy’s recovery might take longer than expected. This has driven investors to look to safe-havens such as the USD.

However, just before the weekend, the Euro managed to recover most of its losses. The Euro’s appreciation came as a result of the poor employment data from the U.S. As for the week ahead, many interesting pieces of data are expected from the Euro-Zone. The most intriguing news is likely to be the Interest Rates announcement on Thursday. If the European Central Bank (ECB) will surprise and hike rates, a sharp rising trend might take place. Traders are advised to follow this publication very closely.

JPY – Yen Sees Mixed Results against the Majors

Just like the rest of the major currencies, the JPY saw mixed results during last week’s trading sessions. The Yen saw a changing trend throughout the week, and by Friday it returned to its former price levels.

It appears that the Yen’s volatility was due to the mixed results from the Japanese economy. Batches of both positive and negative data lead to a jumpy trading week. On one hand, better than expected Japanese Retail Sales figures and a better than expected Non-Manufacturing Index have shown that the Japanese economy might be doing better than many analysts claim.

On the other hand, the poor Manufacturing Index figures and the negative Core CPI result have questioned the stability of the economy. It seems that investors were left confused by the sharp differences of each publication, and a volatile session was inevitable.

As for this week, the most impacting data from the Japanese economy seems to be the Core Machinery Orders report, which is scheduled for Thursday. This report measures the total value of new private sector purchase orders placed with manufacturers. If the end result will reach expectations for a 2.2% growth, the Yen is likely to appreciate as a result.

Crude Oil – Crude Oil Remains Under $70 a Barrel

Crude Oil saw a sharp uptrend during last week’s session, and a barrel of crude oil was traded for over $71 a barrel. However, the bullish trend was halted and for the past few days a barrel of oil has been trading for under $70.

The main reason for the halt in the uptrend seems to be concerns that the U.S economy will take longer to recover. That is of course due to the poor employment data from last week. The logic behind it is that the U.S is the biggest energy-consuming nation in the world, and thus any deterioration in its condition might signal a decrease in fuel demand. In addition, another reason for lowering oil prices was the rising supplies from Russia.

Russia increased output by 1.7% in September, and the combination of dropping demand and rising supply has prevented Crude Oil from reaching above $70 a barrel again.

Looking ahead to this week, the high volatility in Crude Oil’s trading is likely to continue. Traders are advised to follow the leading publications from the U.S. and the Euro-Zone as they tend to have a great impact on oil prices. In addition, traders should also pay attention to the Crude Oil Inventories report on Wednesday. This weekly report usually leads to sharp change of prices for the black gold.

Technical News

EUR/USD

There appears to be a fresh bearish cross on the hourly Slow Stochastic, and an impending bearish cross on the hourly MACD, which suggests the next movement is most likely going to be in a downward direction. The relatively older bearish cross on the daily MACD, and subsequent downward sliding indicator, supports this notion. Going short appears to be today’s preferable strategy.

GBP/USD

The price of this pair has recently entered the over-bought territory on the hourly RSI, suggesting a level of downward pressure on its price. A bearish cross also appears imminent on the 4-hour Slow Stochastic, suggesting today’s primary movements could be in a downward direction. Going short may be a wise choice today.

USD/JPY

While the bearish cross on the hourly Slow Stochastic has finished, and the indicator is cascading downward, there appears to be another bearish cross forming on the 4-hour Slow Stochastic, suggesting another downward move is impending. Traders can benefit from this upcoming movement by entering short positions early and riding out the wave.

USD/CHF

The only clear indication on this pair seems to be the fresh bullish cross on the hourly Slow Stochastic, which suggests an upward correction is due to take place in the nearest future. However, the Bollinger Bands on the daily chart appear to be tightening which suggests that a volatile jump could happen later this week and traders should be on the lookout for indications regarding its direction. For today, going long might be a good short-term tactic.

The Wild Card – Gold

A bearish cross has recently taken place on the hourly Slow Stochastic for this commodity, suggesting an impending downward correction is imminent. The bearish cross on the 4-hour MACD supports this notion. Forex traders involved with the commodities market might want to consider going short on Gold in the next few hours as an overwhelming amount of evidence suggests bearishness for the day.

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

The End of a Volatile Week, Three Rate Decisions Ahead

Volatility returned to the markets last week as the bears took control and pushed the major U.S stock indices lower. The S&P 500 closed with a weekly loss of 1.84%, while the Nasdaq closed the week lower by -1.87%.  Profit taking seemed to be the theme of the week, prior to the employment report released by the Bureau of Labor Statistics (BLS) on Friday.  The equity market moves where rather ordinary and showed no irrational movement up until Thursday’s session.  Economic data had a major impact on Thursday’s U.S stock session as Initial Jobless claims showed that 551k people had filed for unemployment benefits, exceeding market expectations. Furthermore ISM manufacturing added to the sell-off as showing a worse than expected figure.  Even though the benchmark S&P 500 index received a major blow Thursday losing 2.6%, it was able to hold its 50 day moving average. To date it is poised to bounce after falling almost 6% since its high of 1080, earlier this month.

The major mover of the week was the US unemployment number which was released by the BLS on Friday.  The US lost 263,000 jobs in September and the unemployment rate increased to 9.8%.  Average expectations for this number were for losses of 175,000 jobs with Goldman Sachs at the high, near -250,000. Although the jobs number came in weaker that analysts had expected, one can see on the chart below that job losses are improving, since the low created in January of this year.

Forex Pairs on Major Support Levels

Consolidation was the major theme last week on the Forex market as participants took profits on their long positions ahead of the release of the employment result.  The resilient Euro also felt the pressure dropping against the U.S Dollar. After touching a high on Monday of 1.4719, the EUR/USD slid down to $1.4526 on Tuesday.  The beginning of the week was also characterized by light volume.  Comments from the ECB’s Trichet that a strong dollar is “extremely important”, created heavy trading in the Euro which persisted for the balance of the week.  The comments are not out of line with G7 policy and are not a step up the intervention ladder.  The Euro derived little benefit from the weekend elections in Germany and retail sales unexpectedly dropped in August, denting optimism about the strength of the recovery in the region.  Even though this pair has now come down to double support, continued pressure could push it back into the 6 big figure range,  which the currency pair traded in from May to mid September.

On Monday the Yen took a shot at reaching weekly support seen at ¥87.05.  The USD/JPY hit a low of ¥88.22, but softness in the US markets pushed the currency pair back above ¥89.  The numbers out of Asia failed to help the Yen during the week; Japan’s Q3 Tankan report demonstrated that business sentiment is continuing to improve in the third quarter after hitting a record low in Q1. The figures also revealed worse than expected forecasts for capital spending cuts and likely to weigh on thoughts regarding the sustainability of the current recovery.  On a positive note the unemployment rate fell to 5.5% in August down from 5.7% in July. The number exceeded market expectations, which were at 5.8%. Household spending also climbed by 2.6% in August, after dropping 2% in July. From a technical point of view the USD/JPY chart shows that the currency pair should attempt weekly support in the trading sessions to come if risk aversion continues to remain on the minds of market participants.

The Sterling also consolidated vs. the Dollar and the Yen this week after testing lows during Monday’s session.  The GBP/USD briefly broke 1.58 touching 1.5769 after breaking important psychological support level of 1.60 at the end of last week.  GBP/JPY broke through 140 hitting a low of ¥139.71 on Monday before bouncing back and consolidating around ¥143.  The Sterling gained after GFK consumer confidence came in much stronger than forecast, pushing cable back up above $1.60.  Credit problems that continue to persist somewhat eased this week but failed to help Sterling.  The BoE credit conditions survey mentioned that low funding costs, an improved economic outlook and lower default rates are expected to see lending rise in Q4.  Unfortunately the IMF disagreed with the BoE, warning that the UK is vulnerable to a credit shortage.

When taking a glance at the chart below one can see that last week’s trading session, ended mixed with the GBP/USD clinging on for support. Should support of $1.5853 break, this pair could be in stall for a nasty fall.

An Interest Rate Decision Week

Looking forward, market participants will have to keep an eye on interested rate decisions from the RBA on Wednesday, the BOE and ECB on Thursday. Even though no rate changes are expected, traders will scrutinize the comments that follow in order to receive a better clue of future monetary policy. Eyes will focus on the RBA rate decision as current economic data is showing that they are the closest to raising their rate. Even though a rate hike is unexpected this time round, hawkish words from officials could send the AUD/USD higher.  Earlier during the week, there will be PMI service reports from the US, UK and the EMU on Monday.  It will be interesting to see if the risk aversion continues, especially as the major currency pairs are now trading around critical support levels.

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 – Yesterday I produced a video on how to trade divergences in the S&P 500. Today, I’m following up that video with a divergence I see developing in one of the biggest tech stocks in the world, Apple (NASDAQ_AAPL).

In this short four minute video, I’ll explain some of the possible negative divergences that are building for this market. Divergences do not mean that Apple is going to collapse, as the major trend in the stock remains firmly in the positive camp. However, it could indicate that Apple is at a highpoint for the time being.

As always, our videos are available to view without charge and without registration.

Watch the New Apple Video Here…

If you enjoy these videos, share them with your friends. I am sure they will find them both helpful and educational.

All the best,

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

By CountingPips.com

The U.S. Nonfarm Payrolls employment report reversed the trend of the last couple months by coming in worse than expected and the unemployment rate bumped up to a 26-year high in September.  The Department of Labor nonfarm payrolls report showed that U.S. payrolls shed 263,000 jobs in September, surpassing market forecasts expecting an approximately 175,000 jobs lost and marking the twenty-first straight month that companies have shed workers. August’s employment decline was revised from the original report of 216,000 jobs lost to a 201,000 decline. The unemployment rate moved up from 9.7 percent in August to 9.8 percent last month and bringing the rate to its highest standing since June 1983.

The July and August employment reports had been better than economic forecasts, spurring optimism that September’s report would continue to show improvement.

The decline in jobs was spread throughout most economic sectors with the exception of the education & health services sector which saw 3,000 jobs created in September. The service-providing sector was the hardest hit by job losses for the month as this sector lost 147,000 total jobs with professional & business services shedding 8,000 workers, retail trade cutting 39,000 workers and leisure & hospitality losing 9,000 workers for the month.  Government employment also declined by 53,000. The goods-producing sector lost 116,000 jobs for the month as the manufacturing sector cut 51,000 jobs and the construction sector lost 64,000 jobs.

A separate release today showed that factory orders in the U.S. fell by more than expected and by the most in five months.  August orders to U.S. factories fell by 0.8 percent after increasing by a revised 1.4 percent in July according to the Commerce Department.  Market forecasts were expecting a 0.7 percent rise after four straight months of increases.  Contributing to the fall in August was a 42.6 percent decline in commercial aircraft orders.

US Dollar is mixed in forex trading today.

The U.S. dollar has been mixed in forex trading today against the other major currencies following the government jobs report. The dollar started off trading higher overnight but has lost ground after the job report was released. Overall at 1:45pm in the US trading session, the dollar has been stronger versus the Australian dollar and Japanese yen while falling against the euro, British pound, Canadian dollar and New Zealand dollar.

EUR/USD Chart – The Euro gaining against the US Dollar in fluctuating trading action today.  The Euro fell below the 1.4490 exchange rate in early trading today only to shoot back over 1.4640 later and has settled in trading around the 1.4600 area in the US afternoon.

By Fast Brokers – Crude futures have recovered from intraday lows inflicted by worse than expected U.S. employment data.  Rising unemployment and declining consumption should take its toll on demand for crude.  Additionally weekly inventories registered a sizable surplus for the second week in a row.  Despite the negative supply and demand fundamentals crude continues to prove resilient.  In fact, yesterday crude showed a muted reaction to negative data compared to the large pullback in U.S. equities.  Today crude is being buoyed by the positive performance of the EUR/USD in the face of another weak session in U.S. equities.  Therefore, crude futures continue to carve their own path in the midst of volatile performances of both the Dollar and U.S. equities.  The stability of crude is mysterious and we can only speculate as to the reasons behind recent resilience.  Tension surrounding Iran’s nuclear program could be buoying the price of crude.  However, Iran made concessions and appears to be playing ball, so this line of reasoning doesn’t carry much weight.  Another possibility is that the regulation curbing trading of commodity futures could be lowering volatility.  Lastly, investors may be reluctant to send crude out of its trading range due to the fear that OPEC will manipulate production to keep crude within its desired $68-$73/bbl trading range.  We believe the last reason may be the more prominent driving force behind crude’s resilience, yet we are merely speculating.

Regardless of the reasoning, crude has climbed back above our 2nd tier uptrend line and is trading back around the psychological $70/bbl level.  Crude futures registered large buy-side volume on Wednesday’s up-bar, indicating investors are standing behind crude’s recent step higher.  However, the futures are still stuck beneath our 3rd tier downtrend line and multiple September highs, not to mention the psychological $75/bbl level.  Therefore, gains should be limited to the topside as long as these technical barriers are in place.  As for the downside, crude futures above our 1st and 2nd tier uptrend lines along with previous September lows and the psychological $65/bbl level.  Due to the wedge taking place and the inconsistency of crude’s behavior with its correlations, we have a neutral outlook trend-wise on crude.  Crude’s fate will ultimately rest on the S&P’s ability to bottom and the Dollar’s behavior over the near-term.  Any wave of massive Dollar appreciation coupled with an exacerbated downturn in U.S. equities would likely drag crude futures lower, and vice versa.  Since we are presently negative on the EUR/USD, GBP/USD, and S&P trend-wise, we are tempted to have a negative outlook on crude.  However, we will stay in neutral as long as crude bounces around in its present wedge.

Price: $69.91/bbl

Resistances: $70.01/bbl, $70.36/bbl, $70.73/bbl, $71.13/bbl, $71.38/bbl, $71.78/bbl

Supports: $69.34/bbl, $68.97/bbl, $68.48/bbl, $68.08/bbl, $67.53/bbl

Psychological: $70//bbl, $65/bbl, $75/bbl

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 – Gold is paring earlier losses, bouncing off of 9/29 lows and our 2nd tier uptrend line.  Gold continues to hold strong above a key set of September lows despite the selloffs in the EUR/USD, GBP/USD, and USD/JPY.  Furthermore, the S&P futures are finally experiencing the pullback analysts anticipated.  The EUR/USD and GBP/USD are also trading above intraday lows, showing gold is tracking the Dollar more closely than equities as has been the norm throughout the economic downturn.  Speaking of which, investors should recall that the EUR/USD has been the best correlation to track as far as gold is concerned.  Coincidentally, we notice solid uptrend lines in both gold and the EUR/USD, whereas the Cable and USD/JPY have few near-term technical cushions.  Therefore, gold should continue to be resilient should the market-wide pullback pick up momentum.  However, there could come a breaking point in gold over time should its patience be tested.  For the time being, gold has September 29th lows and our 1st and 2nd tier uptrend lines serving as technical cushions.  Our 2nd tier uptrend line appears to carry more weight than our 1st tier.  A failure of our 2nd tier could imply a rather quick pullback towards $975/oz.  As for the topside, gold faces multiple downtrend lines, 9/30 highs, and of course the highly psychological $1000/oz level.  While it’s wise to maintain a neutral outlook on gold trend-wise for the time being, the downtrend has a stronger case over the near-term considering the negative performance of the precious metals correlations.

Present Price: $995.45/oz

Resistances: $997.20/oz, $999.16/oz, $1001.13/oz, $1003.62/oz, $1006.12/oz, $1009.15/oz

Supports: $995.06/oz,$992.92/oz, $990.96/oz, $988.82/oz, $986.96/oz, $984.99/oz

Psychological: $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.

By Fast Brokers – The EUR/USD has followed U.S. equities lower, dropping through our 4th tier uptrend line before tapping the psychological 1.45 level.  Though the EUR/USD bounced off of our 1st tier downtrend line, the currency pair continues to drift lower as strong bearish forces take control of the market as a whole.  We point out key technical declines in the S&P futures and the GBP/USD while the USD/JPY continues to drag towards January lows.  Additionally, the 30 Year T-Bonds broke out through September highs while gold and crude tipped lower.  Therefore, the markets are beginning to act in unison and are re-establishing correlations we’ve experienced since last year.  EU econ data has been light this week, giving the currency pair more of an incentive to follow its positive correlation with the S&P futures rather closely.  What little data we did receive from the EU provided little to cheer about.  German Retail Sales came in 150 basis points below expectations and the EU unemployment rate printed in line with analyst expectations at 9.6%.  However, fortunately for the Euro, the comparative lack of econ data has allowed the currency to recover its relative strength.  The Euro is firming up against the Pound, and the EUR/GBP appears poised to take a stab at September highs.  Additionally, the EUR/USD has the strongest technical backbone as compared to the GBP/USD and USD/JPY.  Hence, even if the pullback in the S&P futures exacerbates and we witness a continual broad-based appreciation of the Greenback, the EUR/USD has more reliable set of near-term defenses to help break its fall.

That being said, the EUR/USD has multiple uptrend lines along with the psychological 1.45 level serving as technical cushions.  However, a failure of our 1st tier uptrend line would likely yield a much more protracted downturn.  Fortunately for bulls, our 1st tier is quite a ways away, yet investors should still keep the level in mind.  For the time being, a second drop through our 4th tier uptrend line increases the probability of a sub-1.45 movement towards our bottom-end supports and 2nd tier uptrend line.  Meanwhile, the EUR/USD should continue to follow its positive correlation with U.S. equities since the EU doesn’t have a noteworthy data release until Monday’s retail sales data.  Even then, the Euro is looking at another dry week data-wise.  Hence, correlations should be closely watched.  The wild card in the deck is the ECB’s monetary policy decision on Thursday.  President Trichet made a semi-dovish statement for the first time in recent memory.  Therefore, though the ECB may keep its present liquidity measures in line, investors will be looking for further evidence regarding the central bank’s attitude towards the Dollar.  Further defense of a stronger greenback could place some psychological downward pressure on the EUR/USD.

Our outlook on the EUR/USD trend-wise is growing sour by the day.  Our negativity stems from the blatantly negative performances of both the GBP/USD and USD/JPY.  Additionally, the S&P futures finally gave way to the downside after persistent defense by the bulls.  The most disconcerting aspect of the situations is the amount of room the Cable and USD/JPY have to the downside.  Should their last lines of defense give way, near-term declines could really pick up.  Such a development would likely drag the S&P futures and the EUR/USD with it.  Therefore, investors should keep a close eye on the technical supports of the EUR/USD’s positive correlations.  As for the topside, the EUR/USD will need some positive unemployment data from the U.S. today to turn the tide.  The EUR/USD faces multiple downtrend lines along with Thursday highs.

Present Price: 1.4541

Resistances: 1.4563, 1.4584, 1.4608, 1.4630, 1.4656, 1.4677

Supports: 1.4541, 1.4519, 1.4501, 1.4479, 1.4462, 1.4437

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 declining rapidly once again after 1.60 and our multiple uptrend lines failed to hold.  Britain’s Manufacturing and Construction PMIs both came in weaker than expected, further confirming the pullback in global economic data.  On a positive note, Britain’s Nationwide HPI came in a basis point stronger than expected.  Though last week’s housing data hit a speed bump, British housing prices are holding up relatively well.  However, the 0.9% growth is still a sizable decline compared to the previous release of 1.4%.  The negative Manufacturing PMI appears to be the most disconcerting of the three, and is likely why BoE Governor King has approached monetary policy with a dovish stance.  Therefore, we expect King to maintain his dovish behavior unless manufacturing and services data turns a corner for the better.  Meanwhile, the Pound is dropping like a rock as we recognize sizable losses in the Cable and gains in the EUR/GBP.

The Cable has really put itself in a tough position by failing to stabilize above the psychological 1.60 level this last go-around.  The currency pair is now staring at September and June 2009 lows.  Furthermore, the GBP/USD’s ambivalence towards our 3rd tier uptrend line is discouraging for the medium-term.  If September lows fail to hold we could see a retracement towards our 2nd tier uptrend rather quickly.  The fact our 2nd tier uptrend line connects through March 2009 levels is a bit worrisome, since a failure of our 2nd tier could imply a medium-term downtrend towards the 1.40 level.  To make matters worse, there’s quite a bit of room between our 1st tier uptrend line (off-grid) and our 2nd tier uptrend line.  Therefore, losses could accelerate over the near-term if immediate technical cushions don’t hold up.  As for the immediate-term, investors will look to September lows and our 2nd tier uptrend line for technical support.  The Cable’s intraday performance will rely upon the outcome of U.S. unemployment data and the currency pair’s positive correlation with U.S. equities.  Negative data results and a movement in the S&P futures towards 1000 would likely encourage the Cable to test the boundaries of its technical cushions.

Britain will get back on the data train first thing Monday morning by releasing  its Halifax HPI and Services PMI.  The Services PMI release will be very important to the Cable’s near-term performance since services account for a large majority of Britain’s GDP.  A negative Services PMI number would only create another drag on the Pound.  Meanwhile, we maintain our negative outlook on the GBP/USD trend-wise due to the aforementioned reasons.

Present Price: 1.5844

Resistances: 1.5900, 1.5921, 1.5950, 1.5978, 1.6016, 1.6045

Supports: 1.5833, 1.5807, 1.5776, 1.5750, 1.5718, 1.5671

Psychological: 1.60, 1.55

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

As this week’s trading comes to an end, the market awaits vital data from the U.S. economy. Both the U.S. Non-Farm Employment Change and the U.S. Unemployment Rate is set to drive the volatility of the forex market when they are released at 12.30 GMT. Also important for forex traders to follow is the Halifax HPI figures from Britain at 06:00 GMT. It is recommended that forex traders open big positions in USD and GBP crosses now, as today’s trading unfolds.

Economic News

USD – Dollar Soars Ahead of Non-Farm Payrolls

The Dollar saw much bullishness against most of the major currency pairs during yesterday’s trading session. The Dollar gained over 100 pips against the EUR, as the EUR/USD pair dropped to the 1.4501 level. However, the Dollar weakened against the Yen during yesterday’s trading.

The rising Dollar came as both disappointing jobs and manufacturing data increased worries that the global economy recovery may be farther than expected, boosting the Dollar’s safe-haven status. The weekly U.S. Unemployment Claims report showed that the number of Americans filing for unemployment insurance for the first time during the past week rose to 551,000 from a revised 534,000 last week.

Also yesterday, the Manufacturing Purchasing Managers’ Index failed to reach expectations of the forecasted 53.9 result, as the end result was actually 52.6. The unsatisfying figures from yesterday’s U.S. data seems to have contributed to investors’ worries that a halt in the economic recovery will continue strengthening the greenback going into next week’s trading..

Looking ahead to today, the most significant data of the month is expected, as the Non-Farm Employment Change is scheduled for 12:30 GMT. It measures the change in the number of employed people during September, excluding the farming industry. Due to its early publication, this report tends to have an immense impact on the market. If the end result will continue to show that the American jobs sector is recovering, it may extend the Dollar’s bullish trend.

EUR – EUR Tumbles as Unemployment Rate Hits 10-Year High

The EUR dropped against all the major currencies on Thursday. The EUR slid to close lower by 150 pips against the EUR/USD, as the pair dropped to the 1.4501 level. The EUR also saw falling trends against the Yen and the Pound.

The EUR’s weakness yesterday came as a result of some negative data that was published from the Euro-Zone. The German Retail Sales fell by 1.5% in August as opposed to July. It seems that the fear of rising unemployment in Germany kept consumer spending in check, even as the economy showed signs of recovery. Adding to yesterday’s dismal data, the Euro-Zone Unemployment Rate rose to 9.6% in August, hitting a 10-Year high. The poor data has contributed to speculations that the Euro-Zone is still far from reaching economic recovery. As a result, the Dollar gained and the EUR weakened.

As for today, the most significant news event expected from the Euro-Zone is the European Producer Price Index (PPI). The PPI measures the change in the price of finished goods and services sold by producers. Despite being expected to have a large impact on the market, traders are also advised to focus their attention on the U.S employment figures, as they are expected to set the tone for today’s trading.

JPY – Yen Rises against the Majors

The JPY underwent a bullish trend against the major currencies during yesterday’s trading. The Yen rose over 150 pips against the EUR, as the pair dropped below the 130.00 level. The Yen also saw rising trends against the Dollar and the Pound. The Yen’s bullishness was largely due to a batch of positive data published from the Japanese economy. The Retail Sales figures for August dropped by 1.8%, better than the 2.4% drop expected. The Non-Manufacturing Index which measures the general business condition also delivered a better-than-expected figure.

We can see that the continuing publication of the combination of the positive economic data will continue increasing speculations that the Japanese economy is recovering, boosting the Yen. As for Friday’s trading, no significant data is expected from the Japanese economy. Traders should follow the leading publications from the U.S and the Euro-Zone, as they are likely to set the tome for the market today. Special attention should be put on the U.S Payrolls data.

Crude Oil – Crude Oil Stays at $70 a Barrel

Crude Oil saw a very volatile session during yesterday’s trading session. However, by the end of it, Crude returned to trade around $70 a barrel. Crude Oil began yesterday’s trading with a rising trend, reaching the 71.33 level at the peak. Yet due to the poor data from the U.S, Crude Oil dropped to almost $69 a barrel just a few hours later. The combination of lower-than-expected Manufacturing figures and the surge of the weekly American Unemployment Claims has increased concerns that the global recovery is not certain, which has put downward pressure on Crude.

As for today, traders are advised to follow the leading publications from the U.S economy, in order to set their positions on Crude Oil. Traders should focus on the Non-Farm Employment Change, as its result is likely to have a large impact on today’s trading, and bear in mind that a positive figure might have the potential to boost Oil prices once again today. It is therefore recommended that you open large positions in Crude Oil as soon as possible.

Technical News

EUR/USD

The pair experienced much bullishness yesterday, as it now stands at the 1.4545 level. The chart’s oscillators seem to be showing much mixed data, but the 1-week chart actually shows the most accurate picture. The 1-week chart’s MACD and RSI show the cross floating in the overbought territory, signaling that the next move will be lower. Taking advantage of the upcoming trend now seems to be the best choice for Friday’s trading.

GBP/USD

The GBP/USD cross has experienced much volatility in the past week. The MACD of the hourly chart, the RSI of the daily chart and the Stochastic Slow of the 4-hour chart shows the pair in the oversold territory. On the other hand, the MACD of the weekly chart shows the cross floating in the overbought territory. The best choice for today may be to enter the pair when the signals are clearer.

USD/JPY

In yesterday’s trading, the USD/JPY cross experienced much bullishness. However, the chart’s oscillators support a bullish reversal for today. The Slow Stochastic of the weekly chart shows that a bullish cross has recently formed, indicating that an upward correction is imminent. Opening big positions in this pair at an early stage may turn out to pay off today.

USD/CHF

The pair has recorded a 3-day winning streak, and currently stands at the 1.0400 level. The Slow Stochastic of the hourly chart shows that a bullish cross has recently formed, indicating that today’s trend will be bullish. Additionally, the daily chart’s MACD also supports this view. Going long with tight stops may turn out to bring you big profits today.

The Wild Card – Crude Oil

The black gold has gone increasingly bullish this week, and now stands at about $70.15. The MACD of the 4-hour chart and the MACD of the weekly chart show that the recent bullish trend may be running out of steam, and that a bearish correction may happen anytime soon. The RSI of the 4-hour chart also supports this view. Going short with tight stops may turn out to bring big returns for forex traders today.

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Market Movers of the Day

Asia-Pacific

*Japanese Jobless Rate for August better than expected at 5.5%

*Japanese Overall Household Spending for August at 2.6% on an annualized basis

Europe

*German Retail Sales surprised for the worst at -1.5% in August

*Swiss SVME Purchasing Managers’ Index rose to 54.3 in September

*German PMI Manufacturing for September in line with market estimations at 49.6

*Euro-zone PMI Manufacturing for September better than forecasted at 49.3

*UK PMI Manufacturing for September worse than expected at 49.5

*Euro-zone Unemployment Rate climbed to 9.6% in August

Americas

*US Initial Jobless Claims unexpectedly rose to 551K

*US ISM Manufacturing Index surprised for the worst falling to 52.6 in September

*US Personal Income rose to 0.2% in August

*US Personal Consumption Expenditures slightly better than expected at 1.3% in August

The Overall Sentiment

The sentiment was negative in the first day of the fourth quarter with stock markets dropping sharply all over the globe. In the US the S&P fell 2.6% and the Dow lost 2.1%, the most since July, as disappointing economic data added worries about the recovery of the economy pushing the Dollar and the Yen higher in a typical risk aversion play ahead of Non-farm Payrolls. US Treasuries rose to their highest levels in four months. Slightly positive US data about personal income and consumption was overshadowed by negative figures in manufacturing and employment. The ISM Manufacturing Index posted its first decline in eight months showing that the sector expanded at a slower pace than the previous month and Jobless Claims unexpectedly rose from last week with investors expecting a decrease. Fed’s Chairman Bernanke stated the he sees no immediate risk on the dollar losing its status as the world’s main reserve currency. The economic figures coming from the Euro-zone were mixed with EU Unemployment Rate rising and PMI manufacturing gaining modestly. The Pound was little changed against the Dollar remaining under 1.60 and advanced against the Euro. Commodity-linked currencies lost ground versus the greenback as Oil traded below $70 in a volatile session and Gold corrected gains from a day before to trade back under $1000. In addition to the sell-off in US stock markets, positive data from Japan boosted the Yen against its major counterparties as the Japanese Jobless Rate surprisingly decreased in August and Household Spending rose to 2.6%.

The Day Ahead

Market eyes are set on the US Non-Farm Payrolls due at 12:30 GMT. NFPs are known for causing high volatility on its release. Market expectations point to a 175K drop showing improved numbers from a 216K decrease the previous month. A better-than-expected figure could ignite risk-appetite sending the Dollar lower against higher-yielding currencies, where a negative surprise could spur risk-aversion strengthening the Dollar. In any case, past experiences show that the initial move can be rapid one way or the other but not necessarily in the market’s real direction once the dust settles. US Unemployment Rate is also due at 12:30 GMT and expected to rise to 9.8%. Euro-zone PPI will indicate the direction of consumer inflation in the region and as German PPI rose, market forecasts point to climbing figures for the EU as well.

Technical Analysis

SILVER DAILY

After rallying strongly Silver has slowly corrected from its peak just above 17.50 moving in a downwards channel for the past two weeks. It presents the opportunity to open a Short position as it is currently trading slightly below the channel’s upper boundary. A break of the channel to the upside will signal that the metal has gathered strength to aim for new heights once again.

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.