GBP/USD Holds Strong Despite EUR/USD’s Pullback

By Fast Brokers – The GBP/USD is topping out just below 1.67 after strengthening yesterday despite a sizable weakness in the EUR/USD.  The Pound’s relative strength is highlighted by a pullback in the EUR/GBP, and stems from Britain’s much better than expected Claimant Count Change number from Wednesday.  Britain’s relative inactivity on the newswire after this data release has allowed the GBP/USD to hold up pretty well considering investor uncertainty over the last 24 hours.

However, although Britain has been quiet, today’s econ data from the EU and U.S. have been disappointing all around.  The EU’s GDP data came in below analyst expectations, confirming that the EU’s economic recovery is occurring at a more gradual rate than anticipated.  Meanwhile, the U.S. Trade Balance widened, Import Prices printed 4 basis points light, and the Prelim UoM Consumer Sentiment number is discouraging.  The S&P futures and crude are both moving lower in reaction to today’s wave of data, meaning the GBP/USD may not be far behind due to the Dollar’s negative correlation with equities.  Furthermore, investors should keep in mind that BoE Governor King announced that the central bank is still open to addition liquidity injections should the conditions warrant it.  Therefore, if U.S. equities selloff today, the Pound’s excitement over unemployment data may wear thin.

Technically speaking, the GBP/USD has some solid near-term supports in place due to the Pounds recent relative strength.  The Cable still has our 1st and 2nd tier uptrend lines serving as technical cushions along with 11/12 and 11/05 lows.  Additionally, the Cable’s psychological 1.65 level could work in the currency pair’s favor shout it be tested.  As for the topside, the GBP/USD also faces multiple downtrend lines along with 11/11 and 11/09 highs.  If the Cable should break through these technical barriers, the psychological 1.70 level should serve as the next important topside technical.  Meanwhile, investors should keep an eye on the S&P futures and well as monitor gold’s ability to hold above $1100/oz.

Present Price: 1.6637

Resistances: 1.6666, 1.6694, 1.6730, 1.6761, 1.6797, 1.6828

Supports: 1.6615, 1.6598, 1.6574, 1.6528, 1.6497, 1.6466

Psychological: 1.65, 1.70, 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.

EUR/USD Pulls Back Following Weak EU GDP Data

By Fast Brokers – The EUR/USD is pulling back today after bouncing off of our previous 1st tier uptrend line.  The EUR/USD failed to break through our previous 2nd and 3rd tier downtrend lines on Thursday, and instead opted register a brisk decline despite a lack of econ data economic data besides EU Industrial Production (0.3% vs. 0.6% expected).  However, today’s wave of econ data shows that yesterday’s pullback was warranted.  German and French Prelim GDP numbers both came in below analyst expectations while the EU Flash GDP figure printed weak as well (0.4% vs. 0.6% expected).  Today’s wave of disappointing data tacks onto Tuesday’s negative ZEW Economic Sentiment numbers.  Hence, this week’s data flow indicates that the EU’s economic recovery is occurring at a more gradual rate than anticipated.  This realization is putting relative downward pressure on the Euro, as exhibited by the downturn taking place in the EUR/GBP following a consolidation period.  Hence, the ECB may be hard pressed to tighten its alternative liquidity measures come December, although we will have to see how upcoming data points pan out.

Meanwhile, yesterday’s better than expected U.S. Unemployment Claims data failed to excite investors, indicating the bulls may be running out of steam.  We’re currently waiting on Prelim UoM Consumer Sentiment.  However, we have already received data showing the U.S. Trade Balance widened more than anticipated and import prices came in 4 basis points below analyst expectations.  Therefore, a weak consumer sentiment number could drive the S&P futures into negative territory today and possibly extend intraday lows in the EUR/USD since the two investment vehicles are positively correlated.  Despite present weakness in the EUR/USD, the currency pair does have a few more technical cushions to fall back on should today’s pullback accelerate.

We’ve initiated three new uptrend lines to go along with our previous 1st tier uptrend line (now our 4th).  Our new uptrend lines are tightly spaced, indicated there could be some heavy support around this zone should it be tested.  In addition to our new uptrend lines, the EUR/USD also has 11/06 and 11/02 lows serving as technical cushions along with November lows should they be reached.  As for the topside, we’ve readjusted our downtrend lines to compensate for present weakness.  Therefore, the EUR/USD still faces multiple downtrend lines along with 11/05 and 10/15 highs.  Meanwhile, the currency pair is drifting further away from its highly psychological 1.50 level, making accelerated topside movements more difficult to attain.

Monday’s trading session will kick off with a bang as we receive Japan’s Prelim GDP, EU’s CPI, and Retail Sales data from the U.S.  As a result, recent volatility could carry over into next week’s trading session.  More weaker than expected econ data results, particularly U.S. Retail Sales, could place further downward pressure on the EUR/USD and test the patience of the currency pair’s uptrend lines in the process.

Present Price: 1.4848

Resistances: 1.4883, 1.4907, 1.4934, 1.4950, 1.4966, 1.4987

Supports: 1.4839, 1.4822, 1.4811, 1.4793, 1.4779, 1.4764, 1.4729

Psychological: 1.50, November Highs and 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.

Two Major Forces Collide in the Index Markets

By Adam Hewison – On Wednesday, 11/11/09, the Dow Jones Industrial Index rallied to a 50% retracement level based on MarketClub’s Fibonacci measuring tool. The action today indicates that this level is very important and that it could be an important top for this market.

In my latest video I cover both the Dow and the S&P 500 and tell you what I think is going to happen to both of these markets in the near and intermediate term.

As always our videos are free to watch and there’s no need to register.

Watch the New Video Here….

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

U.S. Trade Balance Data to Set the Pace of the Dollar Today

Source: ForexYard

The Dollar rate today is set to be highly determined by the publication of the U.S. Trade Balance at 13:30 GMT. Other U.S. data will also play a pivotal role in the forex market today, such as the Import Prices at 13:30 GMT and the Prelim UoM Consumer Sentiment at 14:55 GMT. It’s also recommended that you follow the EUR Flash GDP results at 10:00 GMT. All the data mentioned will help determine the outcome of the USD and EUR’s man crosses later today.

Economic News

USD – Dollar Rises on Geithner Comments

The Dollar broke its recent trend yesterday, as the greenback strengthened against the EUR. Calls by Pacific nations for the Dollar to appreciate and comments by Treasury Secretary Timothy Geithner helped send the Dollar significantly higher. Geithner remarked that the federal government may require less borrowing than was initially anticipated to help alleviate the financial system. Also comments coming from the Asia-Pacific Economic Cooperation group were Dollar positive.

The EUR/USD rate fell sharply to its lowest level in a week, trading as low as 1.4821. The last time the pair was at this level was the previous week when the U.S. released the Non-Farm Payrolls. The pair ended Thursday’s trading down at 1.4859, from an opening price of 1.4989. The pair was down 0.8% for the day.

Today traders will look at the key U.S. Trade Balance numbers which are set to be released at 13:30 GMT. The data measures the difference in value between imported and exported goods and services for the previous month. This data is directly used in the valuing of currencies. The recent weakness of the Dollar may help reduce the value of the trade balance. If the outcome is less than the expected -$31.8B, we may see the EUR/USD continue its fall below the 1.4750 level.

EUR – EUR Falls with Equity Markets

Trading of the EUR/USD continues to track the level of risk in the market. As traders feel the opportunity to trade more on risk, the EUR/USD rate begins to rise. The opposite of this theory sides with a decrease of risk taking during the trading day. Traders pile into the Dollar as financial uncertainty creeps in and risk taking evaporates. This is also seen in the stock market. As the assumption grows of a recovering global economy, stocks are sent higher. When financial data fails to satisfy investor’s expectations, the stock market falls. Yesterday the Dow Jones Industrial Average was down 0.91%.

The EUR was influenced very little yesterday after industrial production in the European-Zone rose 0.3% for the month of September. The forecast for the economic indicator was expected to rise by 0.5%. Despite the negative outcome, the EUR/USD reacted mostly from negative equity markets.

Trading for the EUR/USD pair may continue to be pushed by movements of the equity markets. Traders should typically keep the values of equities in mind as the EUR/USD does see an affect from the performance of equities. The pair is currently trading near the 1.4870 mark. We can expect a potential trading range of the pair between 1.4960 and 1.4810 today.

JPY – Trade Policy on Tap with Obama in Asia

Traders are following the visit of President Barack Obama to Asian nations both today and this weekend. Any hint that he is supporting a strong Dollar policy could be beneficial to the USD/JPY cross. The president will be stopping in Japan, China, Singapore, and Korea, as he will meet with other world leaders. Traders will also be following any potential policy shifts over this weekend’s Asia-Pacific Economic Cooperation meeting.

Yesterday the USD/JPY traded higher, breaking the 90.50 resistance level, but failed to hold its gains. The pair eventually settled at the 90.26 mark, up from 89.78. As for today, it would be wise choice for forex traders to follow the key data releases from the U.S. and the Euro-Zone. The results of these will help determine the level of the JPY’s key crosses.

Crude Oil – Crude Falls as the Dollar Recovers

Crude Oil prices plummeted 3.7% yesterday, as U.S. data presented a lower demand and an increase in imports which raised the level of Crude Oil Inventories. A stronger Dollar also helped to accelerate the price decline in Crude Oil. Crude Oil finished the day down at $76.32 from an opening price of $79.29. This was as Crude Oil stocks rose by 1.8million barrels over the previous week. The increase was over 1 million barrels higher than market forecasts.

A stronger Dollar also helped to reduce the price of Crude. The typical relationship between Crude Oil and the Dollar has Crude Oil falling when the Dollar rises. The range trading between the levels of $78-$80 we have seen this past week was broken yesterday. Perhaps today the price may rebound back to the lower level of this range near $78.25 to close out this week’s trading.

Technical News

EUR/USD

The EUR/USD pair experienced much bearishness yesterday, and now stands at the 1.4870 level. The chart’s oscillators seem to be showing misleading signals. On the one hand, the MACD of the weekly chart signals that the pair may make a bearish move for today. On the other hand, the recently formed bearish cross on the 4-hour chart indicates that a bearish move for the pair may be imminent today. Entering the pair when the signals are clearer seems to be the wise choice for today.

GBP/USD

The pair has been range trading between the 1.6510 and 1.6800 levels in the past few days. The RSI of the hourly chart shows that the cross is floating in the overbought territory, signaling that we may see a downward move for the pair in the coming hours. Entering the pair when the downward breach occurs may turn out to bring big returns today.

USD/JPY

The pair has been range trading for a while now, with no specific direction. The daily chart’s Slow Stochastic is providing us with mixed signals. The 4-hour chart does not provide a clear direction as well. Waiting for a clearer sign on the hourlies chart might be a good strategy today.

USD/CHF

The bullish trend is loosing its steam, and the pair seems to consolidate around the 1.0160 level. The 4-hour chart’s Slow Stochastic is showing a fresh bearish cross, suggesting that a downwards correction might take place in the nearest time frame. When the downwards breach occurs, going short with tight stops appears to be the preferable strategy.

The Wild Card – Crude Oil

Crude Oil dropped significantly yesterday and it is currently trading around $76.80 per barrel. However, there is a bullish cross on the 4-hour chart’s Slow Stochastic, suggesting that the recent downward trend is loosing steam and that a bullish correction is impending. This might be a good opportunity for forex traders to enter the trend at a very early stage.

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

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

Forex Daily Market Review 13.11

 

Market Movers of the Day

Asia-Pacific

*Australian Unemployment Rate at 5.5% in line with market expectations

*Australian Employment Change better than expected at 24.5K

Europe

*ECB Monthly Report

*EU Industrial Production in September better than estimated at -12.9%

*Swiss ZEW Economic Expectations down to 56.4 from 65.0 the previous month

*ECB Trichet’s speech

Americas

*Canadian New Housing Price Index better than forecasted at 0.5%

*US Initial Jobless Claims better than expected at 502K

*US Continuing Jobless Claims better than expected at 5631K

*US EIA Crude Oil Stocks report showed stockpiles unexpectedly gained 1.8M

*US Treasury’s Geithner speech

The Overall Sentiment

Equities

US stock markets closed on the negative side dragged down by losses from energy companies as Crude Oil took a hit after the EIA weekly report showed an unexpected growth in oil stockpiles. The S&P 500 sank 1% after reaching a 13-month high yesterday and the Dow Jones slid 0.9%. In Europe the sentiment was mixed with dissimilar fortune for the main indices. In the UK equities climbed for a second day pushing the FTSE 100 up 0.2% while in Germany shares declined for a second day pulling the DAX down 0.1%. Japanese Nikkei 225 lost 0.6% led by energy and mining companies after the drop in oil and metal prices.

Forex

The Dollar strengthened against most majors amid declarations from US Treasury Secretary Timothy Geithner at the Asia-Pacific Economic Cooperation Summit about the importance of a strong Dollar in maintaining global stability. In spite of rather positive data coming from the ECB Monthly Report and the Euro-zone Industrial Production, EUR/USD steeply dropped ending the day around the 1.4850 area. With no further UK data releases for the rest of the week the Pound traded sideways against the greenback around the 1.6550 level ultimately gaining modestly to close slightly below 1.66.  Winds of change may be starting to blow for the Canadian dollar which despite Canada’s positive housing figures was the biggest loser of the day against its US counterpart. USD/CAD rallied strongly closing around the 1.0550 level. The Aussie dollar hit a 15-month high as the Australian Employment Change came stronger than expected but suffered a sharp retreat as commodities declined to close around 0.9250. The Yen lost ground against the greenback but remained in range against most majors as many investors await statements from the APEC Summit in the course of US president Obama’s first visit to Asia.

Commodities

Crude Oil fell below $77 after the weekly EIA report showed stockpiles unexpectedly gained 1.8 million barrels. Gold traded above $1122 hitting a new record before dropping strongly as the Dollar strengthened to close slightly above $1105. Silver fell as well but remained within the $17.10-$17.75 range developed in the last sessions.

The Day Ahead

The day will start with Japanese Industrial Production and Consumer Confidence figures where in both cases analysts predict a negative outcome. Moving to Europe, third-quarter GDP figures will be released for Germany and the Euro-zone. Markets anticipate encouraging figures which could revive the bulls igniting a EUR/USD rally. In the US session, Canada’s International Merchandise Trade and the US Trade Balance are due for release at 13:30 GMT making it a very sensitive hour for USD/CAD. The day will close with the University of Michigan Consumer Sentiment Index which will be closely followed as the holiday shopping season is approaching.

Technical Analysis

AUD/USD DAILY

After another strong rally and a fresh 15-month high AUD/USD had its first declining session. Although its bullish intentions remain in place it seems it’s time for the Aussie dollar to blow up some steam before it continues to climb. It presents the opportunity to open a Short position to take advantage of a correction towards the overall ascending trend line.

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.

US Weekly Jobless Claims decrease more than expected. US Dollar is stronger today in Forex Trading.

By CountingPips.com

Weekly U.S. jobless claims declined more than expected in the week that ended on November 7th according to a release by the U.S. Labor Department today. New weekly jobless claims fell by 12,000 workers to a total of 502,000 unemployed workers. The previous week saw 514,000 in new unemployment claims. The decrease in claims surpassed economic forecasts that were predicting claims to number 510,000 for the week. The 4-week 250150DollarGraphsmoving average of new claims decreased by 4,500 from the previous week to 519,750 unemployed workers.

Workers seeking continuing claims for unemployment benefits for the week ending October 31st fell by 139,000 to total 5,631,000 unemployed workers. This also surpassed economic forecasts that were expecting 5,700,000 continuing claims for the week. The four week moving average of continuing benefits claims decreased by 100,750 workers to total 5,790,750 workers seeking continued unemployment benefits.

US Dollar gains in Forex Trading today

The U.S. dollar has been stronger in forex trading today against the other major currencies after being under pressure most of the week. The dollar gained today versus the euro, British pound, Japanese yen, Swiss franc, Australian dollar, Canadian dollar and New Zealand dollar at 3:05 pm EST in the US trading session.

The U.S. stock markets have been negative at time of writing with the Dow Jones down by over 80 points, the Nasdaq falling by roughly 14 points and the S&P 500 down by approximately 10 points.  Oil has declined today by $2.34 to trading around the $76.95 mark while gold has also fallen by approximately $6.80 today to trade around the $1,108.00 level.

EUR/USD Hourly Chart – The Euro falling versus the US Dollar today in Forex Trading from its upward hourly trajectory.  The Euro had gained versus the US Dollar most of this week  and touched as high as the 1.5048 level before retreating sharply today to the 1.4860 level.

11-12eur

Dollar Anticipates Release of U.S. Unemployment Claims

Source: ForexYard

The U.S. Unemployment Claims is the primary publication today that is set to determine the level of the USD when it is released at 13:30 GMT. The other main releases that are set to dominate forex trading, especially for currencies such as the Dollar and EUR is the publication of the Industrial Production from the Euro-Zone at 10:00 GMT and Crude Oil Inventories at 16:00 GMT. Traders may find good opportunities to enter the market following these vital announcements.

Economic News

USD – Unemployment Claims Report on Tap – Will USD Weakness Continue?

The Dollar hit a 15-month low against major currencies on Wednesday on the view that U.S. Interest Rates will remain low well into next year, though it regained some ground after failing to push through key levels. By yesterday’s close, the USD fell slightly against the EUR, pushing the oft-traded currency pair to 1.5015. The Dollar went bullish against the AUD and closed at 0.9355. The USD also experienced similar behavior against the GBP as it jumped around 120 points and closed at 1.6595.

Many worry that the U.S. economy, however, will recovery slowly, and a bevy of Federal Reserve officials have bolstered that view this week, warning the recovery would be erratic and hinting that Interest Rates would remain low for some time. Low Interest Rates make the Dollar less attractive to investors than higher-yielding currencies, stocks and commodities.

As for today, much data is expected from the U.S. economy. Special attention should be given to the Crude Oil Inventories, which is expected to increase from the previous reading. Traders should pay close attention to this figure as it has a strong correlation with the value of the U.S. Dollar. Also today, the Unemployment Claims is scheduled and should also have an impact on the market, because if it delivers unfavorable figures that will validate a problematic U.S. economy, and the USD is likely to weaken as a result.

EUR – EUR Strengthens as GBP Sinks

The EUR strengthened against most of its major counterparts yesterday, continuing to prove that for the time being that this is the solid currency that traders can rely on to provide them with steady profits. The 16 nation currency extended gains versus the Yen on Wednesday, to trade at about 134.70 amid a broad sell-off in the JPY. The EUR experienced similar behavior against the USD and closed at 1.5015.

The Pound also fell broadly against the Dollar and EUR, after Bank of England (BoE) Governor Mervyn King said weakness in the currency would help UK exporters and aid Britain’s recovery from recession. Earlier in the global session, BoE Governor King emphasized the need for the UK economy to rebalance away from imports to exports, and said that a weaker Pound would help achieve this.

Looking ahead to today, the most important economic indicator scheduled to be released from the Euro-Zone is the Industrial Production at 10:00 GMT. Analysts are forecasting this figure to be decrease from its previous reading. Traders will be paying close attention to today’s announcement as a stronger than expected result may boost the EUR in the short-term. Traders are also advised to follow the European Central Bank (ECB) President Trichet’s speech at 19:00 GMT. This speech is very important as it is very likely to Impact the EUR volatility.

JPY – Yen Declines as Stock Market Rallies

The Japanese Yen saw a bearish trading session yesterday, losing ground against most of its currency crosses, as a rise in most Asian and European stock prices reduced demand for currencies perceived as safe havens. The JPY fell against the EUR and closed at 1.3470, while the USD/JPY cross rose to around 89.80.

In addition, Japan’s Core Machinery Orders, a key indicator that shows capital investment in the industrial sector, increased at a faster pace in September. Data released by the Cabinet Office showed that Core Machinery Orders rose a seasonally adjusted 10.5% in September, much faster than the 0.5% increase in the previous month, but it failed to provide strength to the Yen, as investors may be waiting for key data due to be released today to implement their trading strategies.

Crude Oil – Traders Await Crude Oil Inventories Report

Oil prices rose slightly on Wednesday as Organization of Petroleum Exporting Countries (OPEC) said that the world would consume more Crude Oil in 2010 than previously expected. OPEC revised its previous estimates for global Oil demand growth to 750,000 barrels per day, up 50,000 barrels a day from last month’s estimate.

For the past several months, the weak Dollar has helped keep Oil prices high despite a slump in American consumption. Crude Oil prices tend to rise when the Dollar weakens and makes Oil cheaper for investors holding stronger currencies like the EUR. With regards top today’s trading, traders should pay attention to the Crude Oil Inventories report, as it tends to have a large impact on Crude Oil’s prices, especially in the short-term.

Technical News

EUR/USD

The cross now stands at the 1.4995 level, and there is expected to be much volatility for the pair today. The RSI of the weekly chart shows that the pair floats in the overbought territory, and that a bearish correction seems imminent. The MACD of the weekly chart also indicates that a bearish move may be looming. Going short with tight stops may turn out to pay off today.

GBP/USD

The pair experienced much bearish behavior yesterday, as it now stands at the 1.6561 mark. The pair is currently sinking lower down the weekly chart’s Bollinger Bands, signaling that further bearishness for the pair is expected today. Similar behavior is occurring on the Bollinger Bands of the 4-hour chart. Going short on the pair seems to be the popular choice for today.

USD/JPY

The pair is currently sitting in the oversold territory on the RSI of the weekly chart, indicating that a bullish move for today is imminent. We see that the cross is rapidly rising on the Bollinger Bands of the 1-hour chart, which also supports the bullish move for today. Going long with tight stops may turn out to pay off in today’s trading.

USD/CHF

The Slow Stochastic of the daily chart shows that a bullish cross has recently formed, indicating that an upward move for the pair for today is imminent. Also, the pair is currently rising higher through the Bollinger Bands of the weekly chart. It seems that going long on the pair as the trading get underway may turn out to bring big profits in the coming hours.

The Wild Card – Gold

Gold has experienced much volatility today, as it now stands at the $1120 mark. The RSI of the daily chart shows that the commodity is floating in the overbought territory, signaling that a bearish move may be underway for Gold today. Additionally, there seems to be a recent bearish cross that occurred on the Slow Stochastic of the daily chart. Going short with tight stops may turn out to pay off 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.

Forex Market Daily Update Nov.12, 09

Market Movers of the Day

Europe

UK Jobless claims change at 12.9K better than expected

UK Claimant count rate in line with expectations at 5.1%

UK ILO Unemployment at 7.8% Vs 8% expected

UK Average earnings (excluding bonus) at 1.8%

The Overall Sentiment

A day loaded with UK data ended with the Sterling sharply lower trading under 1.66$ and above 0.90£ against the Euro. Economic indicators were generally in line with expectations and even slightly better with unemployment at 7.8% against an expected 8% and the claimant count rate (counting people seeking work) was 5.1% as expected. The BoE even updated upwards its growth and inflation forecast for the near term. But the comment from Governor Marvin King than he does not rule out QE expansion in the future alongside comments from BoE official that a weak pound is positive for UK exports outlined that not only BoE officials still see downside risk for the economy but that the BoE actually feels comfortable with a weaker Pound. Investors reacted to the news by hammering the currency and pushing it under its weekly lows. Although sentiment for the Sterling was negative the overall risk to haven equation was rather balanced with the Dollar ending the day flat trading around 1.5 to the Euro and rebounding to 89.8¥ from its day lows against the Japanese Yen.

For CAD Outlook Click here

Equities

Sentiment in Wall street was rather positive effected by three major factors the Fed’s statement outlining once again that rates will remain low for some time, better than expected data from China but most importantly better than expected earnings coming from market movers including HP the world largest PC maker, Toll Brothers the real estate company. HP beat forecasts and upgraded its future forecasts and Toll Brothers reported strong results which pushed the share more than 16% higher. At the day’s end the NASDAQ was up by 0.74% and S&P by a modest 0.5%.

Commodities

Sentiment for Gold continued to be strongly bullish with the yellow metal continuing to surge well above the 1100 mark reaching to the 1020$ zone as investors continue to look for a hedge against Dollar weakness, Oil also gained but modestly and traded slightly higher than 79$.

The Day Ahead

Weak inflation figures coming from Japan before the opening of the trade with domestic corporate goods down -6.7% YoY could hamper bets on the Yen with the Japanese deflation problem taping once again. Sentiment for the Aussie could be rather positive as the better than expected unemployment data increased substantially bets the RBA will raise rates once again. In The EU the Industrial production due will shed some light on the effects the strong euro has on the regions industry but the ECB monthly report will gather most attention as market players still try to figure when the ECB will start worrying about inflation. In the US the combination of the Initial Jobless claims due and the anticipated earnings release of Wal-Mart the world’s largest retailer is expected to effect on sentiment in Wall Street but also on the Dollar-Risk play in the Forex space. The concluding events will be the Speeches coming from Treasury secretary Timothy Geithner and ECB chairman Jean Claude Trichet which always gather attention.

Technical Analysis

Gold/USD, Hourly

Bearish scenarioAfter failing to break the 1120-1125 zone the pair will modestly retreat to the lower Fibonacci support levels to regain momentum

Target A– 1110

Target B-1104

Bullish Scenario A break of the 1120 would push the pair to look for a new record which according to the latest trends is around 10 to 15 Dollars above

Target: 1135

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.

What’s Gold’s Next Stop?

By Adam Hewison – After hitting our first upside target of $1,110 two days ago, gold prices backed off but still managed to close at their best levels today for a new record high close in New York basis the spot gold.

The question now is, what’s going to happen to gold after it hit our first target level?

The main trend continues to be positive and I believe that any pullback in this market should be met with good support. It is possible that we could see a pullback of $20-$25 which would not change the overall positive trend of the market which we see continuing until the end of the year.

As readers of this blog know, we have an upside target zone of $1,250-$1,300 an ounce for gold. While that target zone is still in place, we believe that the huge “energy field” that we’ve discussed in our earlier gold videos is capable of pushing this market higher.

In this new video I explain some of the areas that I’m looking at and also some of the places where you can place tight stops to lock in profits.

Watch the New Gold Video Here…

As always the videos are free to watch and there is no need to register. I would love to hear your views on gold in our Trader’s Blog comment section.
All the best,

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

Finance’s Euphoria: The Epilogue — What Record High Dollar Volume of Trading Says About Confidence

The following article was adapted from the November 2009 Elliott Wave Financial Forecast and reprinted with permission here. Until Nov. 11, you can read the rest of this brand-new report for free, during Elliott Wave International’s FreeWeek of U.S. forecasts. Learn more about FreeWeek, and download the rest of this report and others for free here.

By Steve Hochberg and Pete Kendall

When Wall Street’s total value of assets rose to a “mind-boggling 36.6 percent of GDP” in late 2006, The Elliott Wave Financial Forecast published a chart of U.S. financial assets literally rising off the page.

The Financial Forecast observed that financial engineers had “found a new object of investor affections—themselves” and asserted that “the financial industry’s position so close to the center of the mania can mean only one thing; it is only a matter of time” before a massive reversal grabbed hold. Financial indexes hit their all-time peak within a matter of weeks, in February. The major stock indexes joined the topping process in October 2007 and in December 2007 the economy followed. Subscribers will recall that one of the most important clues to the unfolding disaster was the level of financial exuberance relative to the fundamental economic performance.

This chart of the value of U.S. trading volume (courtesy of Alan Newman at www.cross-currents.net) reveals that the imbalance is far from corrected.

Incredibly, total dollar trading volume is even higher now than it was in 2007 when the economy was humming along. In June 2008, dollar trading volume also defied an initial thrust lower in stocks and the economy, eliciting this comment from the Financial Forecast:

The chart of dollar trading relative to GDP shows how much more willing investors are to trade shares in companies that operate in an economic environment that is anemic compared to that of the mid-1960s. A basic implication of the Wave Principle is that the public will always show up at the end of a rally, just in time to get clobbered. This chart shows that it is happening in a big, big way now because the market is at the precipice of the biggest decline in a long, long time.

Total dollar volume continues to rise despite further fundamental financial deterioration. Yes, GDP experienced a one-quarter, clunker-aided uptick of 3.5 percent in the third quarter. But the economy is in far worse shape than it was when we made the above statement. In fact, its recent performance on top of the decades-long economic underperformance (which is discussed extensively in Chapter 1 and Appendix E of the new edition of Robert Prechter’s Conquer the Crash) means that industrial production just experienced its worst decade since 1930-1939. Total manufacturing employment slipped to 11.7 million people, its lowest level since May 1941 when it was 33 percent of all jobs. According to Bianco Research, manufacturing now accounts for only about 9 percent of the workforce. Finance anchors the economy now, which makes it far more susceptible to non-rational dynamics.

As Prechter and Parker explain in “The Financial/Economic Dichotomy” (May 2007, Journal of Behavioral Finance), a financial system is not bound by the laws of supply and demand in the same way that an industrial economy is. In finance, confidence and fear rule decisions. “In the financial context,” say Prechter and Parker, “knowing what you think is not enough; you have to try to guess what everyone else will think.”

We do know one thing: When everyone is thinking the same, the opposite will happen.

Right now, record high dollar volume of trading shows that confidence, at least on this basis, has reached a new historic extreme.

Read the rest of the 10-page November 2009 Elliott Wave Financial Forecast now, when you signup for Elliott Wave International’s FreeWeek of U.S. forecasts. FreeWeek ends Nov. 11, so please act now to get an enormous wealth of current market analysis and forecasts — for free. Learn more about FreeWeek, and download the rest of this report and others for free here.


Steve Hochberg and Pete Kendall are co-editors of the Elliott Wave Financial Forecast.