Month: December 2009

Market Movers of the Day

Europe

*EU Producer Price Index better than expected at 0.2%

*UK PMI Construction better than expected at 47.0

Americas

*US ADP Employment Change worse than forecasted at -169K

*US EIA Crude Oil Stocks rose 2.1M

*US Fed’s Beige Book

The Overall Sentiment

Equities

US stock markets closed rather flat in a day with no major key economic data releases. A slightly negative sentiment from the ADP Employment figures was reversed as the Fed stated in its Beige Book survey that the US economy shows “modest improvement”. The S&P was virtually unchanged advancing less than 0.1% and the Dow lost 0.2%. In Europe, the British FTSE 100 added 0.3% led by gains from mining companies on rising metal prices.  The German DAX managed to advance another 0.1% on top of yesterday’s 2.7% rally. Japanese Nikkei 225 rose 1.7% as the Yen weakened against the Dollar on the Fed’s reports of US economic improvement.

Forex

The Dollar ended with moderate gains against most majors in a rather calm day of trading ahead of some key economic data scheduled for the rest of the week. EUR/USD failed to hold the 1.51 level settling around 1.5050 ahead of the ECB’s monetary policy decision. The Pound strengthened against the Dollar and the Euro with GBP/USD in the 1.6650 area and EUR/GBP falling to 0.9050. For commodity-linked currencies the day was mixed as Gold continues to skyrocket but Crude Oil retreated on increasing stockpiles. The Aussie dollar advanced for a second day against its US counterpart but the Canadian dollar weakened. The Yen declined against all majors as bets increase on Japan’s intervention to stop the appreciation of its currency. USD/JPY climbed above the 87.50 level.

Commodities

Gold continued to make headlines as it climbed to a new record once again. The yellow metal reached $1216 as investors turn to Gold looking for a hedge against inflation and a weakening Dollar. Silver advanced as well surpassing $19.45. Crude Oil dropped below $77 as the EIA Crude Oil Stocks report showed that stockpiles unexpectedly rose 2.1 million barrels last week.

The Day Ahead

The day will start with Australian Retail Sales and New Zealand’s ANZ Commodity Price, but the market’s attention will be focused on the European session. For the Euro-zone’s GDP, estimates point to an expansion of 0.4% in the third quarter. The ECB is expected to leave interest rates at 1% and Trichet’s speech will be closely followed as rumors circling the market suggest that the ECB may announce a reduction to its emergency lending. Retail Sales and PMI Services are also due for release in the EU in a session with expected volatility for the Euro. In the US, Jobless Claims are forecasted to rise to 480K from 466K the previous week and the ISM Non-Manufacturing is likely to climb to 51.5 from 50.6 the month before.

Read more about the upcoming ECB rate decision and Friday’s US Nonfarm and Unemployment

Technical Analysis

AUD/JPY DAILY

AUD/JPY recently made a sharp correction from 82, briefly touching the 76.50 support level, to make a quick comeback to the 82 area riding on fresh bullish momentum. The next sessions should be closely watched for trading opportunities. A close above 82 could be the signal to enter a Long position, where a failed break attempt could encourage the bears to drag the cross back downwards.

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.

By CountingPips.com

U.S. employment data was released today in the form of the ADP National Employment Report and showed that U.S. private employment declined by more than expected in November. The nonfarm private employment fell by 169,000 workers in November following the revised October decline of 195,000 jobs. October’s data was revised downwards from the original release of 203,000 jobs lost.

November’s data surpassed the decline of 150,000 jobs that the market forecasts were expecting.  A silver lining in the data was that each of the last eight months have had smaller declines than the previous month.

The service-providing sector showed a decline of 81,000 jobs in November while the goods-producing sector fell by 88,000 jobs. The manufacturing sector had a loss of 44,000 jobs while construction jobs fell for the 34th straight month with a decline of 44,000 workers. All size of businesses continued to cut jobs in July as large businesses lost 44,000 jobs, medium sized businesses shed 57,000 jobs and small businesses dropped 68,000 jobs.

The market-moving US Nonfarm Payrolls report for November is to be released Friday at 12:30 pm GMT with market forecasts predicting an approximate decline of 120,000 jobs after October’s 190,000 decrease.

US Dollar gains in forex trading.

The U.S. dollar has been stronger in forex trading today against the other major currencies today in the US trading session.  The euro, Japanese yen, Swiss franc, Australian dollar, Canadian dollar and New Zealand dollar have all declined versus the American currency while the British pound has increased so far today at 12:26pm EST.

NZD/USD Chart – The New Zealand Dollar falling against the US Dollar in forex trading and trading under the 55-hour simple moving average after the NZD/USD gained by approximately 90 pips yesterday .

By Fast Brokers – Gold’s incredible uptrend appears alive and well after the precious metal popped passed $1200/oz with relative ease.  Gold continues to knock down barriers as investors and governments look to divest from the Dollar.  Yesterday’s positive manufacturing data from China combined with the RBA’s 25 basis point increase was enough to signal that the rally of emerging economies is continuing.  Hence, investors were confident enough to send gold past $1200/oz while delivering another round of Dollar weakness in succession with a rally in emerging equities.  Meanwhile, investors are eagerly awaiting tomorrow’s ECB monetary policy meeting along with key econ releases from the U.S. and UK.  Therefore, investors should keep an eye on activity in the Dollar over the next 24-48 hours.  Should U.S. and UK data print positively and the ECB deliver a more hawkish monetary policy stance we may witness another wave of Dollar weakness, thereby sending gold higher due to its negative correlation with the Greenback.  On the other hand, a retracement towards $1200/oz wouldn’t be surprising since we witnessed similar at $1100/oz and $1000/oz.

Technically speaking, gold has multiple uptrend lines serving as technical cushions in addition to 11/30 and 11/24 lows.  Furthermore, the psychological $1200/oz and $1175/oz levels serve as supports should they be tested.  As for the topside, we’re still unable to initiate a reliable downtrend line due to the lack of historical data.  Therefore, the psychological $1200/oz level and intraday highs serve as the only technical barriers for the time being.

Present Price: $1210.05/oz

Resistances: $1214.05/oz, $1216.37/oz

Supports: $1206.24/oz, $1202.74/oz, $1198.87/oz, $1194.17/oz, $1189.65/oz, $1183.65/oz

Psychological: $1200/oz, $1175/oz, 2009 Highs

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 consolidating following a muted reaction to yesterday’s emergency BoJ meeting.  As we highlighted in yesterday’s commentary, the BoJ made 10 trillion Yen available for loans to commercial banks at the central bank’s 0.1% benchmark rate.  Investors still don’t seem too impressed by the results of yesterday’s emergency meeting since many bulls were hoping for more excessive QE measures.  Therefore, although yesterday’s decision by the BoJ may have stabilized the USD/JPY, thus far it hasn’t been enough to cause any noteworthy devaluation of the Yen.  Hence, it will be interesting to see whether Japan’s Finance Ministry applies more pressure on the BoJ to use more tools to fight a strengthening Yen.  Meanwhile, focus is shifting back to the EU and U.S.  The ECB will make a monetary policy decision of its own tomorrow and the U.S. will release weekly Unemployment Claims along with ISM Non-Manufacturing PMI data.   Hence, FX markets could be in for a busy 24-48 hours.

Technically speaking, 85 continues to serve as a psychological cushion while 90 hangs far overhead.  Should conditions deteriorate below 85, we notice that the 82.50-85 area proved to be a strong support area during the Spring/Summer of 1995.  Therefore, the USD/JPY could experience similar support should the currency pair’s downturn continue.  As for the topside, there are multiple downtrend lines serving as technical barriers along with Tuesday’s highs as the long-term downtrend bears down on price.  Hence, the USD/JPY has its work cut out for it to the topside should the currency pair want to re-challenge the highly psychological 90 level.  Meanwhile, an encouraging development would be for the USD/JPY to move back above January ’09 and October ’09 lows.

Present Price: 87.07

Resistances: 87.36, 87.51, 87.72, 87.82, 87.94, 88.13, 88.39

Supports: 86.96, 86.69, 86.49, 86.30, 86.14, 85.99, 85.74

Psychological: 85, 90, 80

Market Commentary provided by Fast Brokers.

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

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

By Fast Brokers – The Cable has added onto yesterday’s rally during today’s Asia trading session in reaction to encouraging comments from the BoE’s chief economist, Spencer Dale.  During a business conference in eastern England, Spencer Dale noted that he believes the UK’s economy has turned a corner.  Dale’s comments during the conference brought more buyers to the table despite yesterday’s mixed econ data.  While the Nationwide HPI figures printed about in line with analyst estimates, Manufacturing PMI data from both the UK and US dipped.  However, investors seem to be brushing the sluggish manufacturing data aside and are opting to focus on the overall sustainability of the global economic recovery.  Spencer Dale’s comments combined with positive Chinese data and a rate hike from the RBA have proven enough to bring the risk trade back into play.  Right now investors are waiting for this morning’s ADP Non-Farm Employment Change number.

A tough employment market has been a thorn in America’s side during its economic recovery.  In a noteworthy development, last week’s Unemployment Claims finally dipped below their psychological 500k level.  Hence, a smaller than expected decline in today’s ADP figure could result in a pop in the risk trade.  On the other hand, sluggish ADP data could deflate the Cable’s present rally and drag the currency pair back towards 1.65.  In addition to today’s U.S. employment release, investors are eagerly awaiting tomorrow’s ECB meeting.  Trichet had a more hawkish tone at the central bank’s last press conference.  Therefore, it will be interesting to see whether the ECB maintains this tone or even delivers a shock be extracting some of its alternative liquidity measures.  Either way, tomorrow’s ECB decision could have an impact on the overall risk trade.  In addition to the ECB meeting, Britain will release its Halifax HPI and Services PMI data points.  Investors will likely be paying rather close attention to the PMI number since services account for nearly 70% of the UK’s GDP.

Meanwhile, gold has rallied beyond its psychological $1200/oz level and the S&P futures are holding strong above their own highly psychological 1100 level.  Hence, the Cable’s positive correlations are currently creating an environment supportive of further downward movements in the Dollar should economic fundamentals comply.  That being said, investors should also keep an eye on the EUR/USD and its interaction with our 3rd tier downtrend line as well as November highs should they be tested.  A topside breakout in the EUR/USD could signal a more extensive rally in the FX risk trade, thereby benefitting the Cable.

Technically speaking, the Cable still faces multiple downtrend lines along with 11/25 and 11/17 highs.  Our 4th tier downtrend line appears to carry the most weight since it runs through 11/17 highs.  A movement beyond our 4th tier could imply more extensive near-term gains in the Cable.  As for the downside, the Cable could find supports in the psychological 1.65 area along with 11/20, 11/30, and 11/27 lows.  Additionally, the GBP/USD has multiple uptrend lines serving as technical cushions.

Present Price: 1.6682

Resistances: 1.6707, 1.6730, 1.6748, 1.6790, 1.6821, 1.6847, 1.6872

Supports: 1.6644, 1.6691, 1.6600, 1.6571, 1.6543, 1.6498, 1.6461

Psychological: 1.65, 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.

By Fast Brokers – The EUR/USD is consolidating following yesterday’s solid gains in reaction to encouraging Chinese Manufacturing PMI data in conjunction with a 25 basis point increase from the RBA.  Meanwhile, gold has broken past its psychological $1200/oz level and the S&P futures are holding strong above their own highly psychological 1100 level.  Therefore, the EUR/USD’s positive correlations are creating an environment conductive for another leg up in the currency pair.  However, investors are presently waiting upon America’s ADP Non-Farm Unemployment Change number due this morning.  A tough employment market has been a thorn in America’s side during its economic recovery.  In a noteworthy development, last week’s Unemployment Claims finally dipped below their psychological 500k level.  Hence, a smaller than expected decline in today’s ADP figure could result in a pop in the risk trade.  On the other hand, sluggish ADP data could drag the EUR/USD back towards its psychological 1.50 level.

In addition to today’s ADP Non-Farm Unemployment Change data, Euro investors are eagerly awaiting tomorrow’s ECB meeting.  Trichet had a more hawkish tone at the central bank’s last press conference.  Therefore, it will be interesting to see whether the ECB maintains this tone or even delivers a shock be extracting some of its alternative liquidity measures.  Either way, there is a bit of uncertainty heading into tomorrow’s meeting, meaning we could witness sizable volatility over the next 24-48 hours, especially considering the U.S. will announce its headline Unemployment Rate on Friday.

Technically speaking, the EUR/USD has created some space between present price and the psychological 1.50 level.  The currency pair has cleared October highs once again and could take a shot at November highs.  That being said, investors should monitor the EUR/USD’s interaction with our 3rd tier downtrend line and 11/25 highs should they be tested.  A breakout beyond these two technical barriers could yield a more accelerated upward movement.  As for the downside, the EUR/USD has multiple uptrend lines serving as technical cushions along with intraday lows and the psychological 1.50 level.

Present Price: 1.5087

Resistances: 1.5107, 1.5117, 1.5133, 1.5154, 1.5168, 1.5117, 1.5133

Supports: 1.5071, 1.5064, 1.5045, 1.5027, 1.5015, 1.4988, 1.4977

Psychological: 1.50, November Highs

Market Commentary provided by Fast Brokers.

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

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

Source: ForexYard

The Dollar fell to its lowest level in 15 months against the EUR and a basket of other major currencies Wednesday as concerns about Dubai’s debt problems faded adding to demand for higher-yielding assets. Government-related Dubai World said it began talks with banks to restructure $26 billion of debt. The holding company is seeking to delay payments on less than half its $59 billion of obligations, easing concern a potential default may set back the global financial system’s recovery from the credit crisis.

Economic News

USD – U.S Currency Rises vs. Yen after BOJ Meeting

The U.S. dollar was on the defensive broadly on Wednesday while the EUR and higher-yielding currencies extended impressive gains as investor risk appetite showed little sign of waning ahead of the year end. The Dollar weakened 0.6% to $1.5088 per EUR from $1.5005 yesterday.

The greenback declined for a 2nd day against the EUR as U.S. stock gains followed advances in Europe. The Dollar also declined against the Australian and New Zealand currencies as investors shunned the low-yielding currency in favor of higher-yielding assets for a 2nd straight session. Still, the greenback advanced versus the Japanese yen after the Bank of Japan announced more loans for banks to fight off deflationary pressures. The USD stood at 86.61 yen, having retreated from a high of 87.53, with traders expecting it to hold below the 87 yen mark.

The U.S. dollar also remained lower after the Institute for Supply Management said its manufacturing index fell to 53.6 in November from 55.7 the previous month, dropping far more than economists predicted. The U.S dollar may extend its decline against most major currencies after U.S. pending home resales unexpectedly rose and Dubai World said its debt talks are constructive adding to demand for higher-yielding assets.

EUR – GBP Rises as U.K. House Prices Advance

The European currency was trading around 17-month highs against the U.S dollar at $1.5088 on Tuesday as worries about Dubai’s debt problems eased, while rising stock and commodity prices dimmed the greenback’s safe-haven allure.

The British pound advanced against the U.S dollar and the EUR as house prices rose for a 7th month and Dubai World began talks with banks, easing concern a delay in debt payments will hurt U.K. lenders. The U.K. currency rose to $1.6621 from $1.6440 yesterday. The Sterling strengthened to 90.86 pence per EUR, from 91.25 pence.

The GBP climbed even as an index compiled by the Chartered Institute of Purchasing and Supply and Market Economics showed U.K. manufacturing expanded last month less than economists predicted. Morgan Stanley said that U.K is likely to limp out of recession, certainly relative to its global peers.

JPY – Yen Weakens on BOJ New Operations

The Japanese yen was off its lows against the U.S. dollar, with investors disappointed by the Bank of Japan’s (BoJ) steps to attack deflationary pressures. Traders said some long dollar/yen positions are likely to be liquidated further. The JPY weakened after the Bank of Japan announced more monetary easing measures to fight deflation and help the ailing economy while holding interest rates at 0.1%.

The Bank of Japan decided at an emergency meeting to make available 10 trillion yen for short-term loans to commercial banks. It also unanimously voted to keep its overnight call-rate target at 0.1%. But despite the Yen’s weakness on Tuesday, some analysts said the BOJ moves will not be enough to slow long-term yen buying against the dollar. Many traders expect more Yen strength against the U.S dollar so long as U.S. interest rates also remain essentially at zero too, and that the prospects of yen-weakening intervention by Japan remains low given the Dollar’s overall weakness.

Oil – Crude Trades Around $78 Ahead of EIA data

Crude Oil pared gains on Wednesday to trade almost half a percent lower after industry data showed that U.S. crude stocks rose much more than expected, more than offsetting weakness in the U.S dollar.

Crude gained after reports yesterday showed signs of increased manufacturing output in the U.S. and China, responsible for about 32 percent of global oil consumption. The commodity however pared yesterday’s gains after the American Petroleum Institute reported crude inventories rose 2.89 million barrels last week. Gasoline and distillate fuel stockpiles also climbed on a drop in refinery utilization, the report said.

Oil has rallied from below $33 last December but has held in a narrow band of $70 to $82 over the past two months. Some analysts see little chance prices will push above the range, given ample supplies and little sign of strengthening demand. Fresh direction will come later today when the U.S. Energy Information Administration issues its petroleum report.

Technical News

EUR/USD

The bullish trend is loosing its steam and the pair seems to consolidate around the 1.5090 level. The 4-hour chart’s Slow Stochastic is showing a fresh bearish cross suggesting that downwards correction might take place in the nearest time frame. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

GBP/USD

The hourly chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, there is a bearish cross forming on the 4- hour chart’s Slow Stochastic indicating a bearish correction might take place in the nearest future. Going short with tight stops may turn out to be the right choice today.

USD/JPY

The price of this pair appears to be floating in the over-sold territory on the daily chart’s RSI indicating an upward correction may be imminent. The upward direction on the weekly chart’s Momentum oscillator also supports this notion. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.

USD/CHF

The typical range trading on the hourly chart continues. The daily chart RSI is floating in neutral territory. However, there is a fresh bullish cross forming on the 4-hour chart’s Slow Stochastic indicating a bullish correction might take place in the nearest future. Going long might be a wise choice.

The Wild Card – Silver

The price of the commodity has soared to a new record, touching on a high at $19.30 yesterday. This has left the commodity potentially overbought. A bearish cross has formed on the 4-hour chart’s Slow Stochastic Oscillator, signaling a potential drop in the price. Forex and commodity traders may have an opportunity to sell silver at the peak of its appreciation 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.

Europe

Germany’s retail sales come out worse than expected at 0.5%

Germany’s unemployment change shows a -7.00k figure

Europe’s manufacturing PMI showed a better than expected figure at 52.40

Europe’s unemployment rate remained steady at 9.8%

Americas

ISM Manufacturing dropped to 53.60

Pending home sales increase by a surprising 3.70%

Daily Market Review 2^nd December

It was another positive day for stocks and commodities yesterday as the major indices climbed higher for the second day of this trading week. Volume surprised investors as the S&P500 index, among other major indices, were driven higher on increasing demand.

Even though recent news regarding Dubai world continued to weigh on sentiment, it was brushed aside as headlines showed that their debt is much lower than previously expected. According to Bloomberg news the current debt will stand on $26 billion, compared to previous rumors of $60 billion.

Economic data also had an effect on the session as deteriorating sectors suddenly showed signs of life. Although the major mover of the day, )ISM Manufacturing Index(, showed a weaker result, coming out at 53.60, compared to a 54.80 figure, pending home sales and construction spending beat economist’s expectations. The housing sector showed that NAR’s Pending Home Sales increased by 3.70%, compared to an expected -0.5%. Even though the number was lower than the previous result, it helped to boost the intraday session.

On the Amex, all of the 9 major sectors presented a positive session, with materials and utilities leading the way higher. Unlike Monday’s session, the financial sector was the lager of the day closing with a mild gain of 0.07%. The broader market closed with a gain of 1.21%, while the Dow Jones finished with a 1.37% profit.

Special – Gold Reaches a New High

The talk of the day was Gold, increasing higher to breach the 1200 mark. After a mild correction last week, this precious commodity reversed sharply on Friday and finished the week with a red hammer candlestick. Even though a negative hammer is less reliable than a positive one, Monday’s confirmation candle gave investors reassurance that was heading higher.

While some analysts are now claiming that Gold could reach the 1400 mark by the end of the year, one must note that the risk on Gold trades is very high. From a technical point of view, all of the indicators are now pointing to over-bought conditions, with the RSI standing at 83.06 points.

Forex

On the Forex market, the Yen crosses presented high volatility yesterday after the BOJ injected an additional 1 trillion yen ($11.5 billion) into short term money markets. The sudden news came 1 day after officials announced a new loan program aimed at stimulating Japan’s economy, and after they mentioned that they intend to maintain low rate levels to help the financial situation.

Even though the news had an immediate effect on the Forex market, helping to boost Yen Counterparts, most of the pairs got stuck around critical levels. The USD/JPY jumped higher, but lost its steam as it touched resistance. The GBP/JPY got stuck around prior resistance of 144.63, last seen in October.

The EUR/JPY and the AUD/JPY also jumped higher, but continued to trade in their secondary down trend, below trend line resistance.

AUD/JPY

Ahead

Looking forward, the next couple of trading days will be characterized by high volatility. Apart from the ADP Nonfarm Employment Change, which is expected to show today a negative -148.00k, compared to last month’s gloomy figure of -203.00k, the ECB will present a wave of data tomorrow, followed by the awaited employment figures from the U.S on Friday.

Although the Non-farm figures are expected to show an improving market, the unemployment rate is currently expected to stay at its double digit figure of 10.2%.

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.

By Fast Brokers – Gold is knocking at its psychological $1200/oz level as the precious metal benefits from a return to the risk trade.  The combination of in line Chinese manufacturing data combined with another 25 basis rate increase from the RBA has boosted investor confidence recently dented by the Dubai debt issue.  The Dollar has responded with broad-based weakness while the S&P futures fight for some topside separation beyond their highly psychological 1100 level.  Weakness in the Dollar and strength in U.S. equities are developments supportive of gold’s uptrend, allowing investors to set new all-time highs with a bit of confidence.  Meanwhile, investors should monitor the reaction of U.S. equities to today’s ISM Manufacturing PMI and Pending Home Sales releases.  A breakout in the S&P futures could help gold climb above its psychological $1200/oz level.  Additionally, investors should keep an eye on the EUR/USD’s interaction with November highs and our 3rd tier downtrend line since gold is positively correlated to the currency pair.

Technically speaking, gold has multiple uptrend lines serving as technical cushions in addition to 11/30 and 11/24 lows.  Furthermore, the psychological $1175/oz and $1150/oz levels could serve as supports should they be tested.  As for the topside, we’re still unable to initiate a reliable downtrend line due to the lack of historical data.  Therefore, the psychological $1200/oz level serves as the only technical barrier for the time being.

Present Price: $1191.85/oz

Resistances: $1195.55/oz, $1198.87/oz

Supports: $1189.65/oz, $1184.85/oz, $1180.42/oz, $1176.73/oz, $1174.15/oz, $1168.25/oz

Psychological: $1200/oz, $1175/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 experienced a solid rally during the Asia trading sessions after the BoJ called an emergency meeting to confront a strengthening Yen and deflationary pressures.  The prospect of governmental intervention in the currency markets resulted in a selloff in the Yen with investors expecting either a large purchase Yen or QE measures.  However, the USD/JPY has since relinquished most of its intraday gains after the BoJ decided to make 10 trillion Yen available for loans to Japanese banks at the BoJ’s 0.1% benchmark rate, or essentially free loans.  Investors don’t seem too impressed by the results of the emergency meeting considering the post-meeting reaction of the USD/JPY.  However, we will have to see how the day pans out as investors digest today’s events.  Meanwhile, China’s Manufacturing PMI data printed in line with analyst expectations and the RBA decided to increase its benchmark rate by another 25 basis points.  The positive signals from these other major Pacific economies increases the outlook in demand for Japanese exports and services despite the Yen’s recent wave of appreciation.  Such developments seem to be benefitting the Yen as the USD/JPY drops back towards Monday’s levels.

Technically speaking, 85 seems to be the new psychological benchmark with 90 hanging far overhead.  Should conditions deteriorate below 85, we notice that the 82.50-85 area proved to be a strong support area during the Spring/Summer of 1995.  Therefore, the USD/JPY could experience similar support should the currency pair’s downturn continue.  As for the topside, there are multiple downtrend lines serving as technical barriers along with intraday highs as the long-term downtrend bears down on price.  Hence, the USD/JPY has its work cut out for it to the topside should the currency pair want to re-challenge the highly psychological 90 level.

Present Price: 86.85

Resistances: 87.04, 87.22, 87.51, 87.72, 87.82, 87.94, 88.13

Supports: 86.80, 86.64, 86.49, 86.30, 86.14, 85.99, 85.74, 85.51

Psychological: 85, 90, 80

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.