Written by ForexCycle.com
USDCHF has found support at the lower border of the rising price channel on 4-hour chart. Sideways movement between 1.0387 and 1.0507 is expected later today. As long as 1.0387 support holds, we’d expect uptrend to continue and another rise towards 1.0550 area is still possible. However, below 1.0387 will indicate that a short term cycle top has been formed at 1.0507, and the uptrend from 0.9959 has completed, then deeper decline could be seen to 1.0300 zone.
Source: ForexYard
Despite a moderate upturn in today’s early hours, the EUR continues to trade within its bearish trends versus most of its major counterparts. As we approach the holidays Christmas and New Years, many markets will experience a level of thin trading which could intensify market movements over the next week and a half. The EUR’s upward tick in today’s market may be a result of this thin trading since its upward move did not seem to coincide with any events which would cause it.
The USD will also be on shaky ground, but most analysts are continuing to claim that the greenback is on path to climb even further going into 2010. Where Dollar news is most important is in commodity trading.
The prices of Gold and Silver both seem to be reacting in a very predictable manner in regard to the value of the dollar, but Crude Oil seems to be acting contrarily to market perceptions. Many explanations are put forth, but the truth is that it’s irrelevant considering this correlation will likely continue through to January 1st and traders can benefit from this behavior by trading accordingly.
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 CountingPips.com
Canadian Retail Sales increased in October for the eighth month out of the last ten months according to the monthly report released by Statistics Canada today. Retail sales increased by 0.8 percent to C$35.3 billion in October following a revised increase of 1.1 percent in September. The rise in retail sales matched economic 
forecasts that were predicting the 0.8 percent increase for the month.
Core retail sales, excluding automobile sales, advanced by 0.3 percent in October following a revised gain of 1.0 percent in September. The gain in core sales surpassed forecasts that were expecting a 0.2 percent increase.
Contributing to the rise in the retail sales numbers was an increase in the automotive sector by 3.0 percent as the new auto sector has now gained for six straight months. Gasoline station sales increased for the third month in a row with a 2.5 percent rise. Negatively contributing to the monthly retail sales were decreases in the food and beverages stores sector which saw a 1.2 percent decline while the pharmacies and personal care sector also decreased by 0.9 percent.
By Fast Brokers – The AUD/USD is consolidating just above Friday lows as we recognize similar activity in both the EUR/USD and Gold. The Dollar appears to be relaxing a bit due to the lack of economic data on the calendar today, allowing Aussie bears to lock in profits as activity begins subsiding for Christmas. Australia will be quiet on the data front this week, leaving the AUD/USD’s activity up to broad-based movements in the Dollar. Hence, investors should keep an eye on the Greenback’s reaction to tomorrow’s U.S. Final GDP and Existing Home Sales data followed by the BoE’s monetary policy meeting on Wednesday. Should U.S. economic data flows continue to top analyst expectations, the FX markets could experience another wave of broad-based Dollar strength. Furthermore, investors should monitor the EUR/USD’s interaction with our technical supports since the currency pair sank below key uptrend lines last week, creating the possibility for further Dollar strength over the near-term. The AUD/USD is strongly correlated with the EUR/USD and gold, meaning setbacks in either of these investment vehicles could drag the AUD/USD lower. Australia’s GDP printed below analyst expectations last week while the RBA’s meeting minutes revealed that the central bank is taking a wait and see approach to the impact of its rate hikes. Therefore, the AUD/USD should hold up as long as the Dollar continues to stabilize since investors the central bank isn’t quite as hawkish as before.
Technically speaking, the AUD/USD has multiple uptrend lines serving as technical cushions along with 12/18 and 10/6 lows. Our 3rd tier uptrend line runs through July lows, meaning another leg lower could imply a more extensive, medium-term pullback. As for the topside, the currency pair faces multiple downtrend lines along with 12/18 highs and the psychological .90 level. Therefore, the AUD/USD appears to have its work cut out for it to the topside.
Price: 0.8848
Resistances: 0.8859, 0.8881, 0.8906, 0.8943, 0.8956
Supports: 0.8834, 0.8815, 0.8803, 0.8787, 0.8768, 0.8749
Psychological: 0.90, December 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 USD/JPY is consolidating psychological 90 level along with our 2nd and 3rd tier downtrend lines in reaction to stronger than expected Trade Balance data from Japan. The Trade balance data shows encouraging improvements in export demand, particular from Asian countries. Hence, it seems robust demand from China has managed to buoy Japanese exporters while demand from the West remains at discouraging levels. Although one may expect the USD/JPY to decline in reaction to today’s data with investors favoring the Yen, the currency pair has opted to hold strong above its highly psychological 90 level. The USD/JPY’s resilience likely has to do with a combination of an improvement in U.S. econ data coupled with the BoJ’s recent monetary policy statement. The BoJ stated that it is steadfast on fighting deflation, meaning it could maintain its dovish monetary policy for quite some time. The BoJ’s commitment to a loose monetary policy sent the USD/JPY beyond our 2nd and 3rd tier downtrend lines last week, which run through October highs. Hence, should the USD/JPY create some topside separation, the currency pair could piece together a solid near-term run towards 92. That being said, the USD/JPY still does face multiple downtrend lines along with previous December highs. Furthermore, the USD/JPY’s longer-term downtrend is still in play. Hence, the road higher could be rocky ahead should the currency pair’s positive momentum persist. Meanwhile, investors should keep an eye on broad-based activity in the Dollar since the EUR/USD and GBP/USD dropped below some key uptrend lines recently. Further deterioration in these currency pairs could yield strength in the USD/JPY.
Technically speaking, the USD/JPY faces topside technical barriers in the form of previous December highs along with our 4th and 5th tier downtrend lines. Furthermore, the psychological 90 area could still play a role considering how tough the trading zone has been to overcome in the past. As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with intraday, 12/14, and 12/09 lows. Meanwhile, the psychological 90 level could begin to work as a technical cushion.
Present Price: 90.53
Resistances: 90.58, 90.76, 90.94, 91.05, 91.22, 91.39
Supports: 90.36, 90.25, 90.10, 89.90, 89.75, 89.52
Psychological: 90, December 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 Cable is trading off intraday highs and seems to be considering a retest of Friday lows despite present stability in the Dollar and gold. FX markets are quiet today due to the lack of economic data and the wind down towards Christmas. However, the Pound is losing some of its relative strength today, highlighted by a pop in the EUR/GBP. Perhaps investors are finally reacting to the weak UK consumption data released at the end of last week. The UK will enter the newswires again tomorrow with the release of its Current Account and Final GDP data. Better than expected data could help the Pound retain its recent strength and keep the Cable above its psychological 1.60 level. On the other hand, weaker than expected UK numbers combined with strong U.S. econ data could extend the Cable’s downturn as investors favor the Greenback. The U.S. will release Final GDP data of its own along with Existing Home Sales. Should U.S. econ data continue to top analyst expectations, then the FX markets may exhibit further broad-based Dollar strength. Meanwhile, investors will likely have their attention focused on Wednesday BoE meeting. Although the central bank is expected to keep its recent monetary policy intact to see how recent QE measures play out, it will be interesting to see if there is a slight shift in the BoE’s monetary stance. Due to recent improvements in unemployment and prices, the BoE may deem it appropriate to exert a more hawkish tone in its monetary policy statement. Hence, volatility in the Cable could pick up a bit before Christmas as investors react to the BoE’s decision.
Technically speaking, the Cable’s large pullback this month has sent the currency pair below some key technical levels. Hence, it’s possible the Cable could be entering a more protracted downturn should the currency pair not stage a recovery above our 4th tier uptrend line, which runs through October lows. Meanwhile, we’ve installed multiple uptrend lines running through March lows. The fact we are now using March lows, or the 1.40 area, to create uptrend lines gives investors an idea of the extent of the damage inflicted by the Cable’s December pullback. Meanwhile, the Cable does have some near-term technical supports in the form of our 2nd and 3rd tier uptrend lines along with the psychological 1.60 level and 9/24 lows. As for the topside, the Cable faces multiple downtrend lines along with 12/18 and 12/16 highs. Additionally, the psychological 1.65 area should serve as a technical barrier should it be tested.
Present Price: 1.6105
Resistances: 1.6131, 1.6157, 1.6182, 1.6196, 1.6221, 1.6252
Supports: 1.6090, 1.6073, 1.6051, 1.6033, 1.5999, 1.5972
Psychological: 1.60, 1.65, September 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 EUR/USD is consolidating above Friday lows as the currency pair tries to form a new base during a trading session with little economic data. The EUR/USD has taken a considerable hit this month due to a combination of deteriorating conditions in some EU member states and strong economic data releases from the U.S. The concept that the Fed will begin reigning in its alternative liquidity measures has led to a bull run in the Dollar, dragging the EUR/USD below 1.45. The EUR/USD sank below our previous 1st tier uptrend line in the process, which runs through July lows. Hence, if the EUR/USD can’t make a strong rally above what is now our 2nd tier uptrend line soon, the currency pair is exposing itself to the possibility of a more extensive contraction towards the psychological 1.40 level. Meanwhile, the newswires will heat back up tomorrow as investors receive a bit of data before Christmas. The EU will kick off the session with its GfK Consumer Climate figure, followed by Final GDP and Existing Home Sales from the U.S. Any disappointing economic data from the U.S. could help the EUR/USD recover some of its December losses. However, more impressive data points could drag the currency pair lower as investors gain confidence in America’s economic recovery.
Technically speaking, we’ve readjusted our downtrend lines to compensate for the EUR/USD’s most recent pullback. As we mentioned previously, if the currency pair doesn’t pop back above our 2nd tier uptrend line we could be witnessing a technically significant reversal since our 2nd tier runs through July lows. Hence, the EUR/USD could be in the midst of a more protracted downturn. We’ve installed a new 1st tier uptrend line running through Friday’s base to give investors an idea of an immediate-term support level. As for the topside, the EUR/USD faces multiple downtrend lines along with technical barriers in the form of the psychological 1.45 level and 12/16 highs.
Present Price: 1.4356
Resistances: 1.4386, 1.4412, 1.4430, 1.4447, 1.4475, 1.4504
Supports: 1.4347, 1.4328, 1.4309, 1.4297, 1.4274, 1.4249, 1.4235
Psychological: 1.45, 1.40, 1.50, 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.
The following article is an excerpt from Robert Prechter’s Elliott Wave Theorist.
First they bought into the “stocks for the long run” case and got killed. Then they jumped on the commodity bandwagon and got killed. Many investors are buying back into these very same markets, but others are running to what they perceive as safe “yields” in the municipal bond market. So far this year, individual investors have “poured a record $55 billion” (Bloomberg, 11/12) into muni bond funds, with the pace running $2b. per week in August and September; many other investors are buying munis outright. These must be the people who tell us that they can’t live without “yield” and also cannot imagine their city, county or state government going bust. But as Conquer the Crash warned and as The Elliott Wave Theorist has reiterated, the muni bond market is heading for disaster.
Municipalities have borrowed more than they can repay, they have pension liabilities that they cannot meet (up to a trillion dollars’ worth, according to Moody’s), and tax receipts are falling. The only reason that states haven’t failed yet is the so-called “stimulus package,” which took money from savers, investors and taxpayers—thereby impoverishing the people who live in the various states—and gave it to state governments to spend so they would not have to cease their profligate spending. But political pressures will eventually cut off this gravy train. In the 2010-2017 period, the muni bond market will become awash in defaults. The leap in optimism since March, which has shown up in every financial market, has fueled a retreat in muni bond yields to their lowest level since 1967 and narrowed the spread between muni bond yields and Treasuries.
This rush to buy municipal bonds is occurring right on the cusp of a dramatic decline in their values. While many individuals are loading up right at the peak so they can participate in the next major market disaster, smarter investors, such as insurance companies Allstate and Guardian Life, are getting out. Subscribers to our services, we trust, own not a single municipal IOU. Our recommendation for investors is 100 percent safety, and such a program does not include muni bonds. If you are a recent subscriber, please read the second half of Conquer the Crash as a manual on how to get your finances safe.
Get Your FREE 8-Lesson “Conquer the Crash Collection” Now! You’ll get valuable lessons on what to do with your pension plan, what to do if you run a business, how to handle calling in loans and paying off debt and so much more. Learn more and get your free 8 lessons here.
By Russell Glaser – Spot crude oil traders may see a week with high volatility as we head into the holidays. Driving this week’s trading may be the key indicators and the previous week’s news event surrounding the Iranian and Iraqi conflict over a disputed oil field. Wednesday’s oil inventories may provide some spark, but the impact on the valuation of the commodity may be minute as trading desks could be thin.
The price of crude oil is currently trading at $74.45. This is up from the previous week’s opening price of $69.76, a jump of 6.7%.
Last week’s market mover which still remains an issue this week was the incursion into an Iraqi oil field by Iranian forces. The Iranians are currently holding the oil field as negotiations are ongoing.
This type of an event has the ability to heat up tensions in the volatile region, driving up market prices on increasing supply concerns in the trading of spot crude oil.
Another factor affecting the price of spot crude oil has been the rising dollar. Despite the dollar’s appreciation last week of 2%, spot crude oil prices continued their upward climb. This runs counter to typical market behavior. Traditionally, spot crude oil prices fall with a strengthening dollar.
For economic releases, traders should be looking towards Wednesday’s crude oil inventories report that may impact the market on a short term basis. We may see high price fluctuations, but don’t expect the result to carry much long term weight.
Liquidity may be thin as we approach the holidays as many trading desks will be manned with skeleton staffs. As such, we could experience the price of spot crude oil to fluctuate this week between $75.50-$72.00.
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
Last week’s most significant trend in the market was the bullish Dollar. Ever since the positive U.S. Non-Farm Payrolls figures were published, the Dollar is recovering on all fronts. The main question for this week is whether the Dollar can strengthen further. Read below to find out more.
Economic News
USD – Dollar’s Rally Continues
The Dollar continued its rally last week. The Dollar strengthened against all the major currencies during last week’s session. The EUR/USD pair dropped to a 3-month low as the pair fell to the 1.4260 level.
Several positive economic indicators from the U.S. have extended the Dollar’s bullish trend. The U.S. Producer Price Index rose by 1.8% in November. This indicates that consumer inflation is rising in the U.S. This inflation implies that consumers feel safe again to spend, and this is one of the key-targets for recovery in the economy. In addition, the Philly Fed Manufacturing Index, a leading indicator of economic health as well, surprisingly rose to 20.4 points. And in a general perspective, it currently seems that the global confidence in the American economy is strengthening. This means that for as long as the U.S. economy will continue to provide reassuring data, the Dollar is likely to continue with the bullish trend.
As for the week ahead, the most interesting publications from the U.S economy appears to be regarding the housing sector. The first report will be the Existing Home sales scheduled for Tuesday. Analysts forecast that 6.31M building were sold during November. The second report is the New Home Sales on Wednesday, and expectations are that 442,000 new single-family homes were sold during November. If the two reports will indeed deliver such positive figures, this is likely to support the Dollar.
EUR – Euro Drops against the Majors
The EUR dropped against most of the major currencies during last week’s trading session. The EUR fell about 500 pips against the Dollar last week, reaching a 3-month low. The Euro also dropped against the Pound and the Yen.
There were two main reasons that led to the Euro’s downfall last week. The first reason was the mixed results from the Euro-Zone. After a month of positive data from the Euro-Zone, last week’s leading publications failed to continue with the positive trend. The ZEW Economic Sentiment dropped to a 5-month low, reaching merely 48.0 points, failing to reach expectations for a 50.9 result. Furthermore, this has been the third consecutive decrease in European economic sentiment. The second reason for the Euro’s drop is the strengthening of the Dollar. After a few months of weakening Dollar, the greenback returns to rise. It is only logical that this will initiate a modest bearish correction for the Euro, as these are the two leading global currencies.
Looking ahead for this week, high impact data is expected from the Euro-Zone. Traders are advised to follow two leading publications, the German Consumer Climate and the French Consumer Spending report. Analysts expect a rather moderate result for both these indicators. However, if the end results will reach higher than expected, the Euro could be boosted as a result, and erase some of last week’s losses.
JPY – Yen Sees Mixed Results
The Yen’s volatility continued during last week’s trading session. On one hand, the Yen appreciated against the Euro, and the EUR/JPY pair dropped to the 127.50 level. However on the other hand, the Yen slid against the Dollar to a 1-month low, as the USD/JPY pair rose to the 90.89 level.
The most significant publication from the Japanese economy last week was the Overnight Call Rate, which is of course the Japanese Interest Rates announcement. The Bank of Japan (BoJ) decided to leave interest rates at their current levels of 0.10%. This kept Japan with the lowest interest rates in the industrial world. The BoJ continues with its approach to weaken the Yen in order to support Japanese industry and by that a recovery in the economy. Its main tool is the low interest rates, and it seems that the BoJ is succeeding in its target to weaken the Yen. The Yen’s rising trend against the Euro was mainly due to the weak Euro, which weakens on all fronts lately.
As for this week, several interesting economic publications are expected from Japan. The Manufacturing Index on Wednesday, the Household Spending on Thursday, and the Tokyo Core Consumer Price Index on Thursday. Traders are advised to follow these indicators in order to determine the Yen’s trend for this week.
OIL – Crude Oil Recovers – Back to $75 a Barrel
Crude oil prices surprisingly rose last week. After dropping below $70 a barrel for the first time in 2-months, crude oil erased some of its losses, and a barrel of crude oil reached $75.48 on Friday.
It appears that crude oil prices rose due to optimistic sentiment that global demand for energy will increase as the leading economies are recovering from the recession. In addition, the ongoing positive data from the U.S. economy seems to be the main reason for crude oil’s rising trend. The U.S. is the world’s largest energy consumer, and thus its recovery is likely to boost demand for oil. In addition, tension in the Middle East, as Iranian troops occupied an oil field in a disputed border area with Iraq has also contributed to the rising oil prices.
As for the week ahead, traders are advised to follow the leading economic publications from the U.S. as this has a large impact on commodities prices, especially crude oil. In addition, traders should also follow the U.S. Crude Oil Inventories scheduled for Wednesday. This report usually has an instant impact on the market, and traders should be prepared.
Technical News
EUR/USD
According to the RSI on the daily chart, the pair is currently trading in oversold territory, which suggests an upward correction may be imminent. The Stochastic Slow on the daily chart currently supports this as it shows a bullish cross has formed, indicating the potential for upward movement. Traders may want to be long on the pair today.
GBP/USD
The pair’s long-term downward correction has continued and shows little technical signs of changing. The daily chart is showing neutral indicators. However, the weekly chart shows a distinct downtrend with the pair moving from its upper Bollinger Band at a price of 1.6876, crossing the middle line, with a potential to reach the lower Bollinger Band. Traders with the long term view may like to be short with a limit close to the lower border near 1.5860.
USD/JPY
We can see from the hourly chart a tightening of the pair’s Bollinger Bands, signaling an imminent breach of the borders. According to the daily chart, the pair has been trading in the upper half of the chart’s Bollinger Bands, lending us to believe the pair will continue this trend. Traders may want to be long when this pair breaks out.
USD/CHF
The daily chart show’s the pair may be oversold as the Relative Strength Index is floating above the 80 level, leading us to believe a correction may be in the works. Traders may look to be short with a limit order to take profit at the middle Bollinger Band line at a price of 1.0245.
The Wild Card – GBP/AUD
The pair’s hourly chart is showing the potential for a downward correction in the price. Currently the pair is trading slightly outside its upper border on the Bollinger Bands. The Relative Strength Index displays the price may be overbought, indicating the potential for a price decline. We also see a potential bearish cross forming on the Stochastic Slow Oscillator. Forex traders may want to be short on this pair for the potential downward movement.
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.
