Month: October 2009

By Fast Brokers – The USD/JPY is popping after Japan’s Trade Balance came in much lower than analyst expectations coupled with a downward revision of the previous release.  Analysts are eager to point out that Japan’s exports declined at a slower rate.  However, the Trade Balance still took a hit, telling us the improvement in imports far exceeded that in exports.  The USD/JPY is climbing in reaction to the unexpected outflow of Yen in conjunction with a rally fueled by oversold conditions.  The USD/JPY has managed to separate itself from 90 while climbing past our 1st and 2nd tier downtrend lines.  However, topside volume is fading and the currency pair still faces our 3rd and 4th tier downtrend lines along with 9/21 highs.  Meanwhile, there are many downtrend lines we can construct beyond these barriers due to the currency pair’s extensive deterioration over the medium-term.  Therefore, we are cautiously optimistic and will need further topside confirmation before considering revising our outlook on the USD/JPY over the longer-term.  As for the downside, the USD/JPY continues to create breathing room.  We find cushions in the form of our 3rd tier uptrend line along with 10/21 lows and the highly psychological 90 level.

Meanwhile, all eyes will be on tomorrow’s wave of EU and British econ data long with continued Q3 results.  The USD/JPY’s correlation with U.S. equities it’s a bit out of whack these days.  However, any broad-based favoritism of the risk trade would likely benefit the USD/JPY’s uptrend.  Considering the GBP/USD and EUR/USD have limited topside technical barriers, the USD/JPY’s present run could have more room to go over the near-term.

Present Price: 91.57

Resistances: 91.76, 91.90, 92.03, 92.18, 92.38, 92.51

Supports:  91.38, 91.26, 91.16, 90.85, 90.67

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 back wrestling with the highly psychological 1.50 level after breaking through the barrier yesterday.  We view yesterday’s movement as an important technical development since we previously explained how 1.50 represents our final topside barrier before 1.55.  Hence, we could be on the brink of another near-term breakout in the currency pair should tomorrow’s EU PMI data print well.  On a cautionary note, headwinds are gaining strength due to growing psychological forces.  The ECB has heightened its rhetoric regarding its concern about a weaker Dollar.  Though the ECB is all talk right now, the central bank may become proactive should the Fed neglect to make a concerted effort to tighten its belt, so to speak.  Meanwhile, China’s economic data came in around analyst expectations today and investors are a bit disappointed that there wasn’t a topside surprise as we’ve become accustomed to.  Furthermore, hawkish sentiment is brewing once again in China since investors are becoming increasingly concerned that excess liquidity is creating asset bubbles.  The change in tone is worth noting since investors are uncertain how a tightening of liquidity in China would impact the global economic recovery.  However, the government appears content with its current monetary policy and a shift likely wouldn’t come until 2010.  Today’s EU Current Account data certainly doesn’t allay fears that an appreciating Euro will choke the EU’s economic recovery.  The sharp reversal in the Current Account shows exports are suffering due to a strong Euro and high unemployment in developed nations.  Therefore, tomorrow’s PMI and German Ifo Business Climate data could determine whether investors are comfortable sending the Euro even higher despite psychological and now fundamental headwinds.  Even though there are topside psychological forces beginning to work against the EUR/USD, investors should also take note that the Beige Book confirmed the Fed has no plans for tightening its own belt any time in the near future.  Therefore, it seems the ECB will need to take action should it want to reverse the EUR/USD’s medium-term uptrend.

As for the time being, the EUR/USD’s near-term and medium-term uptrends are intact and the remainder of the week is all about PMI data and Q3 earnings.  Fundamentals would likely trump negative psychological forces should earnings continue to roll in positively while tomorrow’s PMI numbers top expectations.  However, negative developments in either could send the currency pair reeling towards weekly lows.  Meanwhile, investors should keep an eye on the S&P futures since they have failed to break through their psychological 1100 level.  Any considerable downward pressure in U.S. equities would likely send investors towards the safe haven of the Dollar.  Investors should pay particularly close attention to our 1st tier uptrend line and the psychological 1050 level.  Overall, the markets are still trying to make up their minds regarding whether to continue this year’s impressive bull run.  Technicals continue to support this belief, and until positive technicals deteriorate the EUR/USD’s uptrend is in place.

Technically speaking, the EUR/USD’s topside barriers are the psychological 1.50 level, intraday highs, and our makeshift 3rd tier downtrend line.  As for the downside, the currency pair has several technical cushions waiting nearby, beginning with our multiple uptrend lines along with 10/21 and 10/19 lows.

Present Price: 1.4997

Resistances: 1.5021, 1.5052, 1.5086, 1.5127, 1.5146

Supports: 1.4981, 1.4942, 1.4921, 1.4880, 1.4860, 1.4834

Psychological: 1.50

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers – The Cable is dipping after breaking through our previous 3rd and 4th tier downtrend lines and the psychological 1.65 level.  We mentioned before how a failure of both our 3rd and 4th tiers signals a probable retest of September highs and possibly the highly psychological 1.70 level.  The Pound continues to find strength in the BoE’s decision to stray from its overtly dovish monetary policy in light of recent optimistic econ data.  After all, King’s previous hawkish sentiment was a leading factor driving the GBP/USD towards its October lows.  Therefore, it’s reasonable to expect the Cable to flourish in a more neutral policy environment coupled with improving fundamentals.  However, the BoE has yet to make a concrete action, and the central bank will likely need further fundamental confirmation showing that Britain’s economy warrants a tighter monetary policy before considering physically tightening the reigns.

Speaking of fundamentals, Britain’s Retail Sales data printed 0% growth for the second time in a row, indicating the improvement in unemployment hasn’t yielded higher consumption.  Moving East, China reported econ data that was altogether in line with analyst expectations.  China’s inability to beat estimates has dented investor optimism a bit, though there shouldn’t be much of a hangover.  More importantly, bankers and analysts are expressing their concern about excess liquidity again, and its possible China will need to tighten in 2010.  However, it’s still 2009, and this type of speculation shouldn’t impact global markets too much unless government officials officially announce China’s express intent to take action.

Meanwhile, all eyes are on Q3 earnings and tomorrow’s wave of econ data.  U.S. earnings continue to top estimates, and this may drown out building psychological headwinds from the ECB and China.  Britain will release its Prelim GDP and BBA Mortgage Approvals data tomorrow.  Investors expect Prelim GDP to turn positive along with a steady improvement in Mortgage Approvals.  Additionally, the EU’s PMI data should carry some weight since the last PMI wave signaled a cool down in Germany.

Technically speaking, the Cable’s in good shape and a test of September highs in the near-term seems probable.  The EUR/USD briefly ventured beyond 1.50 and the AUD/USD continues to climb higher.  The big development to watch is the S&P’s 1100 approach.  Should the S&P futures break beyond 1100, we can expect a corresponding rally in the risk trade.   We’ve created a makeshift 4th tier downtrend line for the Cable to serve as a topside barrier along with 9/15 and 9/11 highs.  As for the downside, the Cable’s impressive ascent has created quite a few technical cushions, including our 4th tier uptrend line along with the psychological 1.65 level and intraday lows.

Present Price: 1.6561

Resistances: 1.6564, 1.6594, 1.6630, 1.6658, 1.6686, 1.6718

Supports: 1.6538. 1.6515, 1.6489, 1.6459, 1.6427, 1.6399

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.

Source: ForexYard

Witnessing a steady decline during this week’s trading sessions, the USD became weakened as traders unwound their Dollar-buy positions in exchange for riskier assets, such as stocks. The global stock rally seen yesterday may have been one of the leading causes in the Dollar’s depreciation. With recent market optimism, traders may continue to see a small downward trend in the U.S. Dollar as its positions are unwound in exchange for higher yielding assets.

Economic News

USD – U.S. Unemployment Claims on Tap

The dollar hit a one-month low against the sterling pound on Wednesday and the EUR broke above $1.50 for the first time in 14 months as expectations that U.S. interest rates will be kept low continued to weigh on the greenback.

Though the U.S. economy is expected to have exited the recession in the third quarter, investors fear rising unemployment will keep the Fed from lifting interest rates quickly. That would diminish the dollar’s appeal and encourage investors to buy higher-yielding, higher-risk currencies and assets instead.

Analysts have suggested that central banks outside of the United States are considering winding down programs that have flooded their economies with money. If the U.S. Federal Reserve doesn’t follow suit and holds interest rates at record lows, that would diminish investor desire to hold dollars.

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

EUR – EUR Reaches 2009 High against USD

The EUR topped $1.5030 for the first time since August 2008 on optimism that the global economic recovery is gathering momentum, increasing demand for riskier assets at the expense of the greenback.

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

The British pound also jumped, hitting a high of 1.6631 against the US dollar as investors grew more confident that the Bank of England’s (BOE) rate-setting committee may halt, at least temporarily, a controversial program of buying bonds to boost the economy. The rise followed the release of Minutes from the BOE’s October meeting that showed policymakers were in agreement on limiting the central bank’s bond-buying program.

As the global economy stabilizes, currency traders have started to focus more on fundamentals such as economic growth and short-term interest rates. That shift, just getting underway, could take the shine off the soaring EUR in the coming months.

JPY – Yen’s Bearish Sentiment Continues

The Japanese Yen saw a bearish trading session yesterday, losing ground against most of its currency crosses. The JPY fell broadly against the EUR and closed at 1.3650, while the GBP/JPY cross also rose to around 151.43. The only economic events out of Japan yesterday were the trade balance figures; the result was lower than forecast as volatility kept to a minimum.

The JPY’s trends will be affected by the rallies of its primary currency pairs today. It seems that the USD and EUR are expected to continue a volatile trading session today, especially against the Japanese currency. Traders should keep a close look on the news coming from the U.S. and Europe as these economies will be the deciding factors in the JPY’s movement today, especially the U.S Unemployment Claims at 12:30 GMT. It is also advisable for traders to follow any unexpected comments coming from key Japanese governmental figures, as this is also likely to lead to further JPY volatility.

Crude Oil – Crude Oil Boosted by Dollar’s Weakness

Oil prices hit new highs for the year Wednesday just as the dollar fell to new lows against the EUR, showing how much the weak U.S. currency has come to dominate energy markets. The run-up in prices came within minutes of a government report showing that crude supplies in the United States are growing and that refiners are producing very little gasoline because consumers aren’t using as much.

Even though the amount of crude oil in storage is well above normal for this time of year, it seems any movement in the dollar pushes more value into oil, raising prices further. Crude is priced in dollars, so it gets more expensive as the USD falls.

Technical News

EUR/USD

It appears as if a few significant bearish crosses have occurred on the hourly and 4-hour MACD for this pair. The price also hovers near the over-bought territory on the daily RSI, suggesting a downward correction may be imminent. Going short may not be a bad idea today.

GBP/USD

There seem to be fresh bearish crosses on the 4-hour and daily Slow Stochastic, suggesting a bearish correction may be due. The price also floats in the over-bought territory on the 4-hour and daily RSI, suggesting strong downward pressure. Going short may be a wise tactic today.

USD/JPY

The price of this pair has recently entered the over-bought territory on the 4-hour RSI, but remains in an upward direction, suggesting the notion that there may be some upward momentum remaining. An imminent bearish cross also appears to be forming on the hourly Slow Stochastic, which supports the notion of a future downward movement. Waiting for the downward correction and then going short appears to be today’s preferable strategy.

USD/CHF

There appear to be very large bullish crosses on the hourly and 4-hour MACD, indicating a future upward movement. As the price has just entered the over-sold territory on the daily RSI, there seems to be a strong chance of an upward correction today. Going long may not be a bad choice.

The Wild Card – USD/ZAR

After sustaining a very sharp upward movement, the technical indicators for this pair are unanimously showing signs of an impending downward correction. There are bearish crosses on the hourly and daily Slow Stochastic, and the price is floating in the over-bought territory on the hourly and 4-hour RSI. Forex traders have a great opportunity to catch this very predictable movement by entering short positions on this pair as early as possible and riding out the fall.

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

Australian Westpac leading index at 1.1%

Japanese Merchandise Trade Balance at ¥520.6M lower than expected

Europe

Bank of England Minuets

UK CBI Industrial Trends Survey at -51 less than expected

Americas

US MBA Mortgage applications fall -13.7%

EIA Crude oil stocks at 1.3M

Fed’s Beige Book

The Overall Sentiment

Equities

Although earning releases continued to surprise for the better sentiment was rather negative with most benchmark indexes in the US and across the board closing at red territory amid profit taking dominance. Between the positive out comers were two banks Morgan Stanly and Wells Fargo, Morgan Stanly posted a loss for the quarter but EPS was still higher than expected and Wells Fargo which topped analysts’ expectations with earnings higher by 60%.At the day’s end the Dow industrial was lower by -0.92% closing bellow the 10,000 milestone and the S&P retreated by -0.89%.

FX

Although sentiment for equities was largely negative the typical divergence between risk aversion in equities and demand for the Greenback faded. The Dollar was under strong selling pressure with investors somewhat unwilling to hold the Dollar amid speculations rates in the US will rise long after other G7 countries marking the Greenback as a classic contender for a carry trade sell. The publication of the Fed’s Beige book the fed’s updated outlook on the economy outlined the fed sees stabilization and modest improvements in the US housing and manufacturing sector however unemployment continues to expand and commercial real estate still remains the weakest link in the US economy .The beige book was received negatively by the market which by that time continued to push the Dollar to new lows for the year with the Euro trading above the 1.5$ a substantial sociological resistance and the Swiss Franc less than 40 pips short of parity with the Dollar. The Sterling continued to push closer to the 1.67$ zone trading around 1.664$ and the Yen remained rather flat against the Dollar holding the 90.5-91.5 range.

Commodities

Sentiment was in tandem to the anti Dollar sentiment in the FX market with investors betting on higher petroleum and metals. Oil moved higher once against settling around 81.5$ largely ignoring the higher EIA stocks change as investors eye the 100$ mark as the ultimate target. Natural Gas also performed well moving above the 5$ mark before topping out around 5.3$ .In the Metals arena Gold moved once again to its record high at 1070$ while silver failed to break the 18$ once again and ended the day around 17.5$ an ounce.

The Day Ahead

The opening data for the day will be the Japanese all industry activity index with activity slightly lower as Japanese manufactures continue to struggle. Moving to Europe the Swiss Franc could gather some attention with the Swiss trade balance due at 8:00 GMT but more importantly the financial results of Credit Suisse which were substantially better than expected pointing the embedded risk for Swiss banks might be easing , which could lead  the Swiss central bank to feel more comfortable with a higher Franc. Current account for the EU is also due at the same time and will reflect on capital inflows and trading balances under a strong Euro. In the US the initial Jobless claims will gather attention as always with investors surveys pointing an expected 516k figure. The concluding data for the day will be the US housing price index and the US leading indicators which some consider as a barometer for GDP growth. Sentiment will also be largely affected by Dollar sentiment especially in the US and of course the earning releases in the background which continue to stream in.

Technical Analysis

USD/CHF

After encountering a strong resistance just below the 1.1 mark the pair has moved in a constant bearish channel towards the 1$ mark. A break of that support would be significant as this is the last important resistance before the 0.96 level which is the historical low for the pair. A failure to break the 1$ mark could move the pair to the 1.03 zone which is the upper resistance in the bearish channel. A break of the channel price range upwards should be closely watched as this could indicate a bullish cycle is in stored for the pair.

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 – Of the three major indexes we track: DOW, NASDAQ and the S&P 500, only the NASDAQ is in thin air.

What do I mean by thin air? So far the NASDAQ is the only index to make it past the 50% Fibonacci retracement levels as measured from the highs seen in 2007 and the lows that were made in March of this year.

Both the Dow and the S&P 500 have rallied strongly from their March lows but have not made it over the 50% retracement level.

Many professional traders – myself included – are looking at the NASDAQ’s Fibonacci retracement as it represents a potentially key turning point for this year’s market.

While not all the pieces are in place to go short or get out of long positions, one of the first clues is being put in place today by the Japanese candlestick charts.

In my new video, I share with you the NASDAQ retracement levels, as well as one of the key components that could lead to a potential reversal to the downside.

As always, our videos are free to watch and there is no need to register.

Watch the New Video Here…

Enjoy the video, all the best.

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

By Nico Isaac

When prices in a financial market go from Sea Level to Outer Space in a relatively brief time, two scenarios are at work — and they both start with the letters “B-U.”

When a precious metal goes from being a popular long-term investment of buy-and-holders to the quick, get-away “vehicle” of day-traders, two scenarios are at work — and they both start with letters “B-U.”

And when the majority of mainstream pundits see a “new paradigm” in which prices continue to rise indefinitely, two scenarios are at work – and, you guessed it, they both start with the letters “B-U.”

Enter: the recent Gold Rush of 2009, when ALL of the above conditions apply. Everyone from hedge funds to housewives now hustle to hitch their asset wagon to the rising gold star. Which begs this question: Which of the possible two scenarios are at work: B-U-ll
— Or B-U-bble?

Here’s the difference: A genuine bull market is driven by a self-sustaining internal dynamic that’s reflected by a host of technical indicators. A Bubble, on the other hand, is the result of untenable psychology that could shift at any moment and bring prices plummeting down.

For long-term forecasts and more in-depth, historical analysis for precious metals, download Prechter’s FREE 40-page eBook on Gold and Silver.

It goes without saying into which category the mainstream experts put Gold: namely, a new bull market that has years, if not decades more to soar. “Gold Will Hit $2,000 an ounce,” reads an October 8 Market Watch. And — “Gold Has More Upside… The metal’s bull run is just getting started,” adds a same day Barron’s.

I found hundreds of news items which agree about the long-term potential for gold’s uptrend. But not a single one could tell me why the rally would continue, other than because the experts say so.
To know whether a diamond is real, it must cut glass. And, to know whether the bull market in gold is real, it must encompass at least one of these FOUR traits:

1. A surge in demand that outpaces supply
2. A falling stock market, which raises the “safe haven” appeal of precious metals.
3. A real (not imagined) threat of inflation
4. An increase in value relative to major foreign currencies

Right now, the Gold market can NOT check off a single one of these items. Case in point:

Supply: Demand for gold from jewelry makers – which comprises 60%-70% of the market – has plummeted to its lowest level in 20 years.

“Safe haven” appeal: From its March 2009 bottom, the U.S. stock market has soared 50% right alongside rallying gold prices.

Inflation: As the October 2009 Elliott Wave Financial Forecast (EWFF) notes: An increase in money supply is only inflationary if it is used to RAISE the total amount of credit. This is NOT happening, as both bank credit and consumer credit levels are contracting for the first time since World War II.

A gold rally in other currencies: Again, the October 2009 EWFF presents the following close-up of Spot Gold prices VERSUS Gold denominated in foreign currencies such as the Canadian dollar, the Australian dollar, the euro, franc, pound, and yen since 2007.

The major non-confirmation between these two markets is clear, as is the overlying message: IF demand for gold truly outweighed supply, then its value as measured in other currencies would increase.

The rise in gold is primarily the result of speculation and a falling U.S. dollar. These are exactly the “untenable” forces that contribute to a Bubble, not a genuine Bull market. The difference is only a matter of time.
For long-term forecasts and more in-depth, historical analysis for precious metals, download Prechter’s FREE 40-page eBook on Gold and Silver.

Source: ForexYard

The Dollar strengthened versus the EUR following a decline in stock markets, poor U.S economic data and an unexpectedly dour outlook from the Bank of Canada. Concerns about the strength of U.S. corporate earnings and the strength of the global economic recovery dampened demand for risky assets, halting hit the EUR’s attempt to breach the $1.50 mark Tuesday.

Economic News

USD – USD Gains on Poor Economic Data

The USD recovered from recent pressure that pushed it to a fresh 14-month low versus the euro, advancing on Tuesday as stocks dropped and economic data showed more weakness in the U.S. housing sector. The dollar traded at $1.4921 per euro at 9:53 a.m. in Tokyo from $1.4945 yesterday in New York, when it touched $1.4994, the weakest level since August 2008. The greenback was at 90.91 yen from 90.78 yen.

The Dollar advanced against the EUR following the release of two economic reports that showed an unexpectedly large drop in U.S wholesale prices and a continued sluggishness in the housing sector. Comments from Euro-Zone finance ministers supporting a strong Dollar further contributed to the Dollar’s rise. A drop in equities also helped push the Dollar higher. The stock market continues to be an important driving force in the currency market and affect its direction.

Looking ahead to today, a relatively light news day is expected from the U.S, however the release of the Crude Oil Inventories at 14:00 GMT as well as the Beige Book at 18:00 GMT will likely provide further direction to the Dollar.

EUR – EUR falls on Concerns the Currency’s Strength is Hurting Recovery

The EUR declined versus the Dollar after several Euro-Zone official expressed concerns over the volatility in the market and the growing strength of the common currency. The EUR retreated from a 14-month high against the USD on speculation European policy makers will today reiterate their concerns that the currency’s gains are hurting the region’s economic recovery. As the exchange rate nears $1.50, it presents problems for the European economy and manufacturing sector.

The EUR has strengthened 15% versus the Dollar in the past 6 months, making the region’s exports more expensive to overseas buyers. The EUR traded as high as $1.4994 versus the Dollar in earlier trade but failed to break above the psychologically important $1.50 level. It is currently trading at $1.4931, down from $1.4941 in the previous session. The EUR traded at 135.68 Yen from 135.66 Monday.

Looking ahead for the rest of the weak, the release of the Ifo institute’s business climate index Friday is expected to provide some support for the EUR as it is expected to show business confidence in Germany improved, adding to signs that the recovery is gaining momentum. Today, trader should follow closely the MPC Meeting Minutes due at 8:30 GMT as they will provide insight and direction for the GBP for the near future.

JPY – Yen Mixed against Major Currencies

The Bank of Japan (BoJ) minutes revealed the central bank is encouraged by recent performance of the Japanese economy, and not likely to add more liquidity to the monetary system, meaning decrease the quantitative easing program. The BoJ exhibited a more hawkish stance towards the Yen, supportive of a more conservative fiscal policy and a stronger currency. The Yen is currently trading at 135.35 against the EUR, down 0.18% from yesterday. The Japanese currency is currently at 90.65 against the Dollar, after briefly breaching the 91.00 level yesterday.

OIL – Crude Drops below $79 a Barrel

Crude Oil dropped below $79 a barrel as the Dollar strengthened and an industry report showed an increase in U.S crude stockpiles. The U.S is the world’s biggest energy consumer. Crude oil for December delivery dropped as much as 58 cents, or 0.7%, to $78.54 a barrel on the New York Mercantile Exchange.

Oil fell for a second day as U.S. equities declined and the Dollar rose from a 14-month low against the EUR. Furthermore, the American Petroleum Institute reported that crude supplies rose 3.85 million barrels.

An Energy Department report due today at 14:30 GMT is expected to show that U.S. inventories of Crude Oil rose 1.5 million barrels last week, likely putting further pressure on Oil Prices.

Technical News

EUR/USD

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

GBP/USD

The daily chart’s RSI signals that this pair is still being over-bought, which may help support the pair in a downward direction in the coming days. A bearish cross that is forming on the hourly chart’s Slow Stochastic also supports this notion. Going short with tight stops might be the right choice today.

USD/JPY

A bearish cross on the 4-hour chart is forming, signaling a potential price drop, while the Bollinger Bands are also tightening, pointing to an imminent volatile price movement. However, the 30min chart’s Slow Stochastic indicates a recent bullish cross, signaling a possible upward movement. In the short-term traders may expect a upward correction, but longer-term traders may want to maintain their short positions today.

USD/CHF

The bearish flag formation on the 4-hour chart is still valid as no major breaches occurred. The momentum is still very bearish as pointed by the daily RSI. Forex traders should wait for an additional breach through the 1.0080 level to validate the next sharp bearish move

The Wild Card – Silver

This commodity has been trying to massively correct the intensive bearish move, and is now trading around the 17.50 level. The sharp bullish channel is in a high spot at the moment and together with a bullish cross of the hourly chart’s Slow Stochastic it provides forex investors quite a good potential for long positions.

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 Greg Holden

We are continuing to watch Gold in this week’s analysis since the precious metal has continued rising to record highs. If you weren’t watching, Gold has risen from around $700 an ounce back in November of 2008, to almost $1100 an ounce today. Gold reached a record high mark of $1070.55 per ounce and has momentarily entered a downward correction. The question now is, will this upward trend continue following yesterday’s bearish move? OR, is the upward momentum finally running out?

Heading into the holiday season in the US, Canada, and Europe means that jewelry sales will likely increase and put artificial upward pressure on Gold prices. Many forecasts call for a price level near $1,100 an ounce, but speculators are getting hesitant about such a high price and are beginning to increase the size and duration of the bearish corrections. We’ll have to wait and see if the bulls can overtake the bears in today’s trading to determine the trend for the rest of the week.

For technical analysis on Gold prices, see the information below:

– The chart below is the weekly chart on Gold by ForexYard.

– The indicators used are the MACD/OsMA and Stochastic (slow).

– Point 1: Over the last year, the price of Gold has experienced a long, drawn-out consolidation trend. It is heading for a point now, which means a sharp volatile movement will likely occur in the next week or two.

– Point 2: The MACD is showing a series of bearish crosses, but very close to the 0 line, meaning there is not much downward pressure, but just enough to extend the recent correction slightly further.

– Point 3: The Stochastic (slow) also shows an impending bearish cross which, actually, refers to a future bearish movement.

– As can be seen, there does not seem to be much downward pressure on this commodity at the moment, which suggests that Gold prices may continue upwards in the near future before falling, likely sometime next week.

– If, however, the holiday season does play a heavier role in Gold trading, then the consolidation point could see a sharp upward movement as well. For now, we can anticipate the short bullish momentum remaining throughout this week.

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

Housing Data Disappoints, EUR/USD and GBP/USD Hold their Ground

After a lackluster morning yesterday, volatility picked up prior to the U.S open, as economic data disappointed investors. Housing starts and Building Permits both missed analysts’ estimates, coming out at 0.59m and 0.57m, respectively. Even though the numbers were only slightly under market expectations, the data showed investors that despite recent improvement, the housing market is going to encounter bumps in the road to recovery. Analysts’ were expecting a housing start result of 0.61m.

The major indices presented a negative session yesterday, closing with an average loss of -0.5%. Even though names like Apple and Caterpillar showed better than expected results, they failed to drive the indices higher. Caterpillar beat analyst’s estimates mentioning that despite the drop in profit, in the third quarter, the company expects it to be the lowest point and that the equipment giant should get back on its feet in the following quarters.

From a technical point of view, the Dow Jones Industrial Average has presented consolidation around its psychological level. On one hand, this index has failed to present an immediate break of the important level. (This was expected and explained in the previous video briefing). On the other hand, it continues to linger around that level and has so far failed to drop – this is often a good sign for further bullish traders.

Bank of Canada Holds at 0.25%

On the Forex market the Dollar continued to stay in recent trend, but presented a positive day. Investors took advantage of the intraday session and the Dollar’s intraday gains, as a negative session in Wall Street drove traders into the Dollar safe-haven.

Even though the Dollar jumped, the move wasn’t dramatic and most of the pairs ended the day around prior levels. The EUR/USD and the GBP/USD both held on to prior levels, with the GBP/USD trading around it upper trend line, also currently a resistance level. For further analysis on this pair, check out the chart analysis page.

Over in Canada the BOC presented no surprising statement, leaving their rate at a low of 0.25%. Even though the Bank mentioned that their economy is now feeling signs of the global recovery, they stated that they would prefer to sit on the sidelines at this point in time, refraining from intervening with monetary actions.

The Canadian Dollar reacted instantly on the Forex market, losing ground against counterparts. The USD/CAD climbed dramatically throughout the session but continued to remain in its recent downtrend. From a technical point of view the USD/CAD is now coming close to trend line and horizontal resistance, two lines that could put pressure on the recent bounce.

Market Data to Watch Out For

On the Data front, England and the U.S will take the stage today, releasing market moving data. The U.K will start by releasing its MPC meeting minutes. The event could spark movement on the GBP crosses, especially when some of the pairs are trading around critical levels. During afternoon hours, the U.S will take the stage, releasing its MBA mortgage approvals and Beige Book. The report will give details about the state of the 12 Federal Reserve districts covering the entire U.S.

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.

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