Month: November 2009

By Russell Glaser – The Swedish krona continues to be one the strongest performing currencies against the dollar. Since the beginning of the month, the krona has climbed over 2.5% on the greenback. Last week the outlook for the economic recovery in Sweden was updated as signs the global economic crisis is weakening. This was a catalyst for the krona as the currency further strengthened, particularly against the dollar.

The economic output of Sweden is predicted to fall by 4.9% this year while growing by 2% in the following year. This is according to the Sweden Ministry of Finance. The previous forecasts were slated to be a contraction of 5.2% for the current year and growth of 0.6% in the following year. Unemployment forecasts were also reduced for next year to 10.7% from 11.4%.

The revised forecasts were followed by strong comments from the Swedish Finance Minister, Anders Borg. Borg would like to see further economic policy enacted to assist in the expansion of the Swedish economy. Along with a government stimulus package and spending on new infrastructure projects, the government is in the position to further cut taxes.

These economic measures bode well for the Swedish economy and in particular the krona. It may explain why traders have bid up the price of the krona in recent trading. As the dollar continues to fall against the major currencies and the Swedish government continues to submit favorable legislation on the part of the economy, being short on the USD/SEK is preferred.

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 Anton Eljwizat

• The chart below is the 4-hour EUR/NOK chart by ForexYard.

• The technical indicators used are the Slow Stochastic, MACD, and Williams Percent Range.

• The Slow Stochastic shows a bullish cross followed by an upward cascade price movement. This suggests that there is momentum behind the current upward correction.

• The MACD indicates an impending bullish cross, signaling that the next move may be in an upward direction.

• The Williams Percent Range shows that this pair was heavily over-sold peaked near the highest mark it could reach, and then turned a corner and now stands in a bullish posture.

• This might be a good opportunity for forex traders to enter the trend at a very early stage and a great entry price.

EUR/NOK 4-Hour Chart

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.

Source: ForexYard

The Producer Price Index (PPI) is expected to be the main driver of USD trading for Tuesday. The other major releases from the U.S. that forex traders are advised to follow are the TIC Long-Term Purchases, Core PPI and Industrial Production.

Economic News

USD – Dollar Tumbles on All Fronts

The U.S. Dollar fell against all of its major currency pairs yesterday. This was in response to traders dropping the USD, as stocks climbed after U.S. Retail Sales rose more than predicted, and Asian governments pledged to uphold their economic stimulus spending. In October, Retail Sales rose 1.4 %, vs. forecasts of a 0.9 % rise. The equity market rally sent the Standard & Poor’s 500 index to a 13-month high, as it rose 1.2% to over 1,105. What is impressive is that according to the U.S. Commerce Department, Retail Sales climbed from a 2.3 % dip in September.

The Dollar fell to a 15- month low against currency pairs such as the Pound. This is as the pair rose by as much as 165 pips to the 1.6876 level. The USD/JPY cross also dropped significantly yesterday by 52 pips to the 89.04 mark. The EUR/USD pair rose by 20 pips to the 1.4985 level. In addition, the greenback lost ground against the Canadian Dollar as the trading day dragged on. The U.S. Dollar Index, which tracks the currency vs. America’s largest trading partners, fell by 0.7 % to 74.834, after reaching 74.679. This was the lowest level since August 2008.

Looking ahead to today, there is much exciting economic news that is set to be published from the U.S. The most significant of these will be the PPI and Core PPI at 13:30 GMT, the TIC Long-Term Purchases at 14:00 GMT and the Industrial Production publication at 14:15 GMT. All of these releases are set to have a very high impact on both the volatility and strength of the USD. The forex market is expected to go extremely volatile before, during and after these publications. Therefore, it is advised that you open your positions in the Dollar whilst the opportunity is available to make big returns today.

EUR – GBP Climbs as Optimism Kicks In

The British currency made significant gains during Tuesday’s trading day against its most traded currency counterparts. This was in part sparked by the optimism coming out of the British property market. Britain’s 2 largest property companies, British Land and Land Securities, are expected to announce higher than expected gains in the coming days. This helped produce much optimism in the British currency, which is very important, as the British economy is highly dependant on the British property market.

The British economy made significant gains against its major currency counterparts. The GBP/USD cross finished yesterday’s trading higher by a whopping 117 pips at the 1.6828 level. The British currency made significant inroads into the EUR, as the pair fell by 53 pips to the 0.8900 level. With regards to the EUR/USD pair, it rose by 20 pips to the 1.4985 level. Much of this behavior was due to a global stock market rally that was boosted by impressive U.S. Retail Sales figures. As was seen, riskier currencies such as the Pound were the main benefactors of this.

Today, there is scheduled to be much market moving data that will be released from both Britain and the Euro-Zone. From Britain, there will be the CPI and RPI at 09:30 GMT. From the Euro-Zone, there will be the publication of the Trade Balance figures at 10:00 GMT. Better-than-expected results are likely to boost both the GBP and EUR significantly. Also, it would be wise for traders to open large positions in GBP and EUR crosses as soon as possible. Doing so would ensure maximum market participation for Tuesday’s trading.

JPY – Yen Soars against the Dollar

The Yen soared against the Dollar in Monday’s trading, due to the GDP (Gross Domestic Product) of Japan (the second biggest economy) growing by 4.8 % in the 3rd quarter. This was the second consecutive increase since the start of the nation’s deepest postwar recession. The Yen also jumped due to Asian leaders promising to maintain the economic stimulus packages during a meeting in Singapore yesterday.

The Yen rose by 52 pips against the USD to close at the 89.04 level. The JPY also made impressive gains vs. the European currency. It seems that we are seeing evidence that the economic stimulus has helped Japan exit the recent recession. It is expected that the demand in Japan’s economy will eventually pick up. As a result, the Japanese economy and the Yen will continue to build on recent gains.

OIL – Crude Oil Rises by Most in 6 Weeks

Crude Oil rose by the most in 6-weeks on a weak USD and a stock market rally in the U.S. As a result, this boosted investor’s confidence that energy demand will increase significantly in the coming months. Crude Oil closed at $79.46 from an opening of $77.22. Crude was helped as traders bought-up the commodity as an alternative investment, due to the mass sell-off of the USD.

It seems that traders are optimistic about the U.S. and global economy. This has really helped Crude prices. However, the commodity may only rise significantly above $80, if we see more impressive data and significantly higher demand too. It seems that the Organization of Oil Petroleum Exporting Countries (OPEC) is happy with the current prices levels. They expect prices to rise in the very near future.

Technical News

EUR/USD

The hourly chart is showing a bullish cross has formed on the pair’s Slow Stochastic Oscillator, indicating the potential for an upward price movement. As the pair fluctuates, it has been trading in the lower half of its Bollinger Bands. It appears the 20 day moving average is a significant resistance level. Traders may want to use the middle line as a level to take profits.

GBP/USD

The GBP/USD is displaying bearish signals. The 4-hour chart has a bearish cross which has formed on the Slow Stochastic Oscillator, indicating the potential for a downward price movement. This is supported by the Relative Strength Index, floating in the overbought zone, lending further support for potential price depreciation. Traders may want to be short on this pair today.

USD/JPY

The long term downward sloping trend continues today as the pair has fallen for the last 3 consecutive trading days. Per the hourly chart, the pair has been experiencing range trading between the price levels of 89.15 and 89.00. For the traders that recognize this established zone, significant profits can be made by placing stops and limits at these price levels.

USD/CHF

The hourly chart shows the pair has crossed back into its upper Bollinger Band after an earlier breakout. A bearish cross has formed on the Slow Stochastic Oscillator, indicating the potential for a downward price movement. Traders may want to catch the downward fluctuation that is in the same direction as the long term trend.

The Wild Card – Crude Oil

Crude Oil is displaying significant bearish signals after yesterday’s failed breach of the $80 price level. The 4-hour chart has the pair trading in the overbought zone on the pair’s Relative Strength Index, indicating a possible move lower. The chart also shows a bearish cross has formed on the Slow Stochastic Oscillator that may support this downward move. Forex and commodity traders may want to be short on Crude Oil today as a significant price move may be in the making.

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

Europe

*EU Consumer Price Index worse than expected at 0.2%

*EU Core Consumer Price Index at 1.2%, in line with market estimations

Americas

*US Retail Sales at 1.4%, better than forecasted

*US Retail Sales ex. Autos below expectations at 0.2%

*US Empire State Manufacturing Survey worse than expected at 23.5

*US Fed’s Chairman Bernanke speech

The Overall Sentiment

Equities

US stock markets rallied boosted by better-than-expected Retail Sales figures and the assurance of Asian countries to keep stimulus policies in place. The Dow advanced 1.3% and the S&P added 1.5% reaching its highest level in 13 months. Energy companies were on the driver’s seat as oil climbed the most in four weeks. The positive sentiment was felt all across the globe as the APEC members expressed their commitment to maintain stimulus measures to support the recovery of their national economies. In Europe the DAX advanced 2.1% and the FTSE 100 rose 1.6% hitting a 14-month high. Japanese Nikkei 225 gained 0.3%.

Forex

The Dollar continues to weaken remaining slightly above 15-month lows against its major counterparts. During Europe’s trading hours the greenback remained little changed even with the release of a weak CPI for the Euro-zone. Later on, as chairman Bernanke reassured the Fed’s commitment to a strong Dollar the greenback spiked. The move was rapidly reversed as Bernanke’s pessimistic views about a slow economic recovery was interpreted by traders as grounds for the US central bank to keep low interest rates and quantitative easing policies for as long as possible. The EUR/USD jumped to an intraday high above 1.50 but corrected to remain expectant slightly below this psychological level. The Pound was the best performer of the day versus its US peer trading above 1.68, its highest levels in 3 months. The currencies tied to commodities advanced as Oil rallied and Gold hit a new record high. The Aussie dollar briefly topped above 0.94 reaching a fresh 15-month intraday high but corrected to settle around 0.9360 ahead of RBA’s Monthly Minutes. USD/JPY lost strongly consolidating around 89, its lowest level in a month.

Commodities

Gold hit a new record once again trading above $1143 as investors turn to alternative investments to the weakening Dollar. Silver soared to top above $18.40 reaching its highest level in 15 months. Crude Oil rallied touching the $80 mark to finally close around $79.50.

The Day Ahead

The day will start with the Reserve Bank of Australia’s Monthly Minutes which will be followed by traders to assess the pace of rate hikes and removal of monetary stimulus. During the European session Swiss Retail Sales and UK CPI figures will be released followed by the Euro-zone Trade Balance, in which better-than-expected numbers could send the EUR/USD to test the 1.50 once again. Moving to the US, Produce Price Index, Treasury International Capital Flows report and Industrial Production are due for release.

Technical Analysis

NZD/USD DAILY

After topping at 0.7629 NZD/USD corrected finding support just below 0.71. It regained strength developing a new bullish attempt to reach for higher highs. The following sessions should be closely followed for the opportunity to join the uptrend wave or the chance to go Short if the break fails and a double-top formation appears.

Daily Forex 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.

Crude Oil rose by the most in 6-weeks on a weak USD and a stock market rally in the U.S. As a result, this boosted investor’s confidence that energy demand will increase significantly in the coming months. Crude Oil closed at $79.46 from an opening of $77.22. Crude was helped as traders bought-up the commodity as an alternative investment, due to the mass sell-off of the USD.

It seems that traders are optimistic about the U.S. and global economy. This has really helped Crude prices. However, the commodity may only rise significantly above $80, if we see more impressive data and significantly higher demand too. It seems that the Organization of Oil Petroleum Exporting Countries (OPEC) is happy with the current prices levels. They expect prices to rise in the very near future.

The U.S. Dollar made some significant gains today, following a string of poor results from the world’s largest economy. This behavior is opposed to yesterday’s weak USD, which dropped on increasing optimism. The Producer Price Index (PPI) rose by 0.3 %, as opposed to the forecasted 0.6 % increase. The Core PPI unexpectedly declined, and the Industrial Production figures were worse than forecast too. This led to a buy-up of the safe-haven USD.

The EUR/USD pair rose by 120 pips today, as it currently stands at the 1.4847 level. The USD also reversed some of yesterday’s losses against the British currency, as the GBP/USD cross fell by 35 pips today to the 1.6786 mark. The U.S. Dollar also made some inroads into the JPY, as the USD/JPY cross has risen by 20 pips so far today. As late night trading kicks in, it is recommended that you continue buying into USD positions, as today’s trends are expected to continue.

By CountingPips.com

U.S. Retail Sales increased by more than expected as consumers picked up the spending pace in October according to a report by the U.S. Commerce Department released today. Advance estimates of retail sales showed that sales increased by 1.4 percent to $347.5 billion in October and surpassed market forecasts that were expecting a 0.9 percent increase for the month. September’s results were revised lower from an original estimate of a 1.4 percent fall to a decline of 2.3 percent.

On an annual basis, October sales were 1.7 percent below the October 2008 sales level following September’s annual decline of 6.3 percent. Core retail sales, excluding automobile sales and parts, increased by 0.2 percent in October after a 0.4 percent gain in September.

Boosting the retail sales numbers in October was a gain in automobile sales which rose 7.4 percent for the month. Gas station sales were flat for the month after a 15 percent decrease in September. Also contributing to the increase in retail sales were gains in food services & drinking places, nonstore retailers, miscellaneous stores retailers, general merchandise stores and health & personal care stores.

US Dollar falls in Currency Trading today.

Today’s currency trading has seen broad based US dollar declines against the major currencies as positive retail sales data and better GDP data (4.8% annual growth) out of Japan contributed to a risk taking environment. The dollar has lost ground to the euro, British pound, Australian dollar, New Zealand dollar, Swiss franc, Canadian dollar and Japanese yen at 4:12 pm EST according currency data by Oanda.

The US stock markets had a positive session today with the Dow Jones gaining by 136.49 points, the Nasdaq increasing 29.97 points and the S&P 500 showing a 15.82 point gain.  Oil has traded higher to $78.86 while gold rose by $22.50 to $1138.60 per ounce.

AUD/USD Chart – The Australian Dollar gaining today versus the US Dollar in Forex Trading. The AUD/USD marked a new 2009 high today as the pair broke through the 0.9400 level for the first time since July 2008.

By Fast Brokers – Gold is shooting higher again after rallying from $1100/oz on Friday.  Today’s positive performance stems from a strong EUR/USD and GBP/USD.  However, the real gold movers are the AUD/USD and S&P futures, which are both headed for new 2009 highs.  Therefore, it seems the risk trade is finally taking a cue from gold’s incredible rally as of late.  Now it seems gold’s positive correlations are leading the way, sending the precious metal beyond $1130/oz.  The S&P’s charge past its highly psychological 1100 level could prove to be a key move for the risk trade since the S&P futures have buckled under the pressure of 1100 for the past month.  Such a movement would likely serve as a positive catalyst for gold since stronger equities have been resulting in a weaker Dollar.  Since gold is also negatively correlated to the Dollar, the precious metal may be in for further near-term gains.  Hence, investors should keep an eye on the EUR/USD and its interaction with 1.50 and previous November/October highs (refer to EUR/USD commentary).  Any key topside breakout in the EUR/USD could serve as another positive indicator for gold.  Meanwhile, the U.S. will release some important pricing data tomorrow.  Therefore, the markets could remain in a volatile state for the next 24-48 hours.

Technically speaking, we’re still unable to install a downtrend line on our chart due to a lack of historical perspective.  Therefore, it’s difficult to find any topside technical barriers besides gold’s potentially psychological $1150/oz level.  As for the downside, gold has multiple uptrend lines serving as technical cushions along with intraday lows and the psychological $1100/oz level.

Present Price: $1130.45/oz

Resistances: $1131.19/oz $1133.16/oz

Supports: $1127.24/oz, $1124.42/oz, $11122.54/oz, $1117.87/oz, $1114.39/oz, $1110.59/oz

Psychological: $1100/oz., $1150/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 USD/JPY is drifting lower today following stronger than expected Prelim GDP data from Japan.  Furthermore, although the headline U.S. Retail Sales data topped expected, the Core number underperformed.  Altogether, this could be a negative catalyst for the USD/JPY.  The outperformance of Japan’s GDP could lead investors to favor the Yen over the Dollar considering America’s data continues to roll in negatively mixed.  Furthermore, the positive headline Retail Sales figure could bode well for Japanese automakers, thereby benefiting Japan’s economy and consequently the Yen.  However, the S&P futures are currently climbing past previous 2009 highs as investors take the mixed U.S. data in stride.  Therefore, it will be interesting to see how the USD/JPY reacts to both positive Japanese data along with a bullish technical move in U.S. equities.  There’s a possibility the two developments could counterbalance one another and leave the USD/JPY around its highly psychological 90 level for the time being.  However, we’ll just have to wait and see how the session pans out.

Meanwhile, the USD/JPY still has our 1st and 2nd tier uptrend lines serving as technical supports along with 11/11, 11/02, and 10/14 lows.  Therefore, the USD/JPY has quite a few technical cushions in place should conditions deteriorate.  As for the topside, the USD/JPY is still mired in its long-term downtrend and faces multiple downtrend lines along with 11/12 and 11/06 highs.  Furthermore, the psychological 90 level serves as both a technical cushion and barrier.  Therefore, the USD/JPY may need a sizable jolt to proceed in a more definite direction.

Present Price: 89.47

Resistances: 89.54, 89.68, 89.83, 89.98, 90.07, 90.20, 90.39

Supports:  89.41, 89.26, 89.15, 88.99, 88.85, 88.73, 88.58

Psychological: 90, November and October Lows

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 perking up this morning as the S&P futures fight to break loose of their psychological 1100 level.  The GBP/USD has benefitted from a relatively quiet data wire from Britain since the CCC number beat expectations.  However, the news flow will pick up tomorrow with the release of both CPI and RPI data points.  Furthermore, the BoE will release its anticipated Inflation Letter.  Since the BoE’s target inflation rate is 2%, any disappointing numbers concerning inflation could spark investor speculation that the BoE will inject more liquidity into its QE fund.  After all, Governor King recently left the door open to future alternative liquidity measures if deemed necessary.  Meanwhile, an inflation reading topping analyst expectations could boost the Cable beyond previous November highs and would support why the BoE opted to inject 25 billion Pounds at its last meeting instead of the anticipated 50 billion.

The U.S. will release pricing data of its own tomorrow along with TIC Long-Term Purchases, Capacity Utilization Rate, and Industrial Production.  As we saw today, the U.S. data flow continues to print negatively mixed.  Regardless, investors are snapping up equities and looking to send the S&P futures to fresh 2009 highs.  If the S&P futures should experience a topside breakout, the Cable may follow suit since the two investment vehicles are normally positively correlated.

Technically speaking, the Cable faces thin topside obstacles in the form of our 3rd and 4th tier downtrend lines along with previous November highs.  Since our 4th tier downtrend line runs through these November highs, a pop past our 4th tier on sufficient volume could indicate a more extensive near-term breakout towards August highs and the highly psychological 1.70 level due to a relative lack of historical resistance.  As for the downside, the GBP/USD has our 1st and 2nd tier uptrend lines serving as technical cushions along with 11/12 and 11/05 lows.  Furthermore, the psychological 1.65 level could work in the Cable’s favor should it be tested.

Present Price: 1.6741

Resistances: 1.6761, 1.6790, 1.6808, 1.6828, 1.6849, 1.6875

Supports: 1.6730, 1.6694, 1.6666, 1.6643, 1.6615, 1.6598

Psychological: 1.65, 1.70, November and August Highs, November Lows

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.