Month: February 2010

By Fast Brokers – The EUR/USD is fluctuating above Monday lows as investors digest the EU’s plan to take a wait and see approach with Greece.  The finance ministers have decided to give Greece a 30-day window to prove it can implement its plan to reduce its outstanding debt.  If Greece’s actions prove insufficient, the ministers hinted they may apply further debt-reduction measures.  In all, the EU is choosing to give Greece a chance while allowing financial markets to settle.  However, should the situation go awry volatility could return quickly.  Therefore, the EU is leaving itself a bit exposed by choosing a more passive approach to dealing with the situation.  On the other hand, should Greek bond yields calm in the next 30-days and the EU approve of the government’s austerity actions this could provide a boost of confidence to the Euro.  In addition to today’s news concerning Greece, EU economic sentiment data printed mixed.  Although Germany’s economic sentiment number came in stronger than anticipated, the headline EU figure disappointed.  Hence, although confidence concerning Germany’s economy is holding strong, debt concerns in Greece, Portugal and Spain are clearly weighing on the EU region.  Meanwhile, investors are awaiting the Empire Manufacturing Index and TIC Long-Term Purchases data from the U.S.    It will be interesting to see whether the EUR/USD can continue to consolidate and even build some upward momentum considering the FX market volatility as of late.  On a positive note, the EUR/USD is within striking range of our 3rd tier downtrend line which runs through February highs, or the 1.40 area.  Hence, a large positive shift in investor sentiment has the capability of yielding some strong near-term gains in the EUR/USD.  However, debt concerns continue to weigh on the Euro for the time being/

Technically speaking, the EUR/USD faces topside technical barriers in the form of multiple downtrend lines along with intraday, 2/8 and 2/11 highs.  As for the downside, the EUR/USD has multiple uptrend lines serving as technical cushions along with 2/15 and 2/12  lows and the psychological 1.35 level should it be tested.

Present Price: 1.3650

Resistances: 1.3664, 1.3693, 1.3721, 1.3747, 1.3766, 1.3799

Supports:  1.3639, 1.3617, 1.3592, 1.3577, 1.3550, 1.3526

Psychological: February highs and lows, 1.35

(click chart to enlarge)

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 Russell Glaser – Our Forex Technical Analysis shows a bearish pennant patter may have formed on the 4-hour chart of the EUR/JPY.

The typical bearish pennant takes roughly 1-3 weeks to develop and this instance is no exception. The chart below shows a steep decline in the price, followed by a continuation pattern, identified by 2 converging trend lines.

We will be looking for a break of the lower trend line for a continuation of the downward trend. Then the pair’s potential decline could be measured by the distance where the downward sloping trend line began (126.94) to a break of the lower line in the downtrend (121.90).

This would give us a price target of roughly 500 pips.

EUR/JPY 4-Hour Chart

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

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

Source: ForexYard

This week began with a relatively quiet trading session; however this calmness is likely to end today. The German ZEW Economic Sentiment and the U.S. Long-Term Purchases reports look to create large volatility in the market today. In addition, the problematic Greek economy is likely to continue and affect the market today.

Economic News

USD – Dollar Retains Steady Rates

The Dollar saw a very stabile session during yesterday’s trading. The Dollar continues to trade at a very high rate against the Euro, as the EUR/USD has bottomed at the 1.3578 level, trading near a 9-month low.

The Dollar’s trading was quite flat yesterday, mainly because U.S. banks were closed in observance of President’s Day. There seems to be two main reasons that keep the Dollar at its strong form at the moment. The first reason is the European concerns regarding Greek debt. Investors still have fears regarding a possible slowdown in the Euro-Zone economic recovery. This leads them to look for safe haven investments such as the Dollar and the Yen, and retains the Dollar’s bullish tend against most of the major currencies. In addition, the Dollar is also affected by the prices of crude oil. Crude oil dropped almost consistently for the past 4-weeks, further boosting the Dollar.

Looking ahead to today, the most impacting event on the economic calendar looks to be the Long-Term Purchases report, which will be released at 14:00 GMT. This report measures the difference in value between foreign long-term securities purchased by U.S. citizens and U.S. long-term securities purchased by foreigners during December. This reports the trust of foreign investors in the U.S. economy, and thus has a large impact on the Dollar. If the end result will reach above expectations for 50.3B, the Dollar is likely to strengthen as a result.

EUR – German ZEW Economic Sentiment on Tap

The Euro continues to weaken against the major currencies. The Euro dropped against the Dollar, the Pound and the Yen during yesterday’s trading. The Euro is currently trading near a 9-month low against the Dollar.

The Euro dropped further vs. the major currencies mostly due to market concerns over Greek debt. For the time being, the European leadership refuses to expose their rescue plan for the Greek economy. This keeps a high level of uncertainty in the market regarding the Euro-Zone economic recovery. The lack of progress by the Euro-Zone’s leadership during the last 2 weeks is turning investors to look for safer investments, and by so to weaken the Euro. It currently seems that the Greek deficit crisis has potential to weaken the Euro further, especially against the Dollar and the Yen.

As for today, the German ZEW Economic Sentiment report is expected at 10:00. This is a survey of German institutional investors and analysts who are asked to rate the German economic outlook for the next 6 months. Analysts forecast that the German Economic Sentiment dropped from 47.2 in January to 42.5. Such a decline in German economic optimism could extend the Euro’s bearish trend. Traders should also follow the European ZEW Economic Sentiment, which is scheduled for the same time, yet tends to have less impact on the market.

JPY – Yen Strengthens Following Positive GDP Figures

The Yen saw a rising trend against most of the major currencies during yesterday’s trading session. The Yen rose against the Dollar and the Pound, and so a 60 pips rise vs. the Euro.

The Yen was boosted by better than expected Gross Domestic Product (GDP) figures for the 4th quarter of 2009. The report shows that the Japanese economy rose by 1.1% during the 4th quarter of 2009. It seems that a global trade revival has increased demand for Japanese exports. This proves that the Japanese economy is indeed recovering, and in a faster pace than expected. The Yen also rises as a result of the Greek debt crisis. There are concrete concerns at the moment regarding how this will affect the Euro-Zone’s economic recovery. For as long that the uncertainty on this matter remains, the Yen, which is considered to be a relatively safe investment, is likely to rise.

Today, the most interesting publication from the Japanese economy looks to be the Tertiary Industry Activity. This report measures the change in the total value of services purchased by businesses. Businesses are usually quickly affected by market conditions, and thus this indicator is considered to be quite reliable. If the actual result will be positive, it is likely to support the Yen.

Crude Oil – Crude Oil Remains at $74 a Barrel

Crude oil saw a relatively peaceful session during yesterday’s trading. Crude oil dropped to $73.70 a barrel by midday, yet rose back up to $74 as the trading day reached its end.

A barrel of oil lost about $10 of its value over the last month. Crude oil seems to be largely affected by the European uncertainty regarding the Greek deficit crisis. The worries of a possible slowdown in European recovery may damage the demand for energy, and thus decrease the value of oil. In addition, the bullish trend of the Dollar also has a negative affect on crude oil. Oil is valued in Dollars, and thus when the Dollar is boosted, crude oil tends to drop in response.

Looking ahead to today, traders should follow the main publications from the U.S. economy and the Euro-Zone, as they are likely to impact crude oil the most. Traders should also look for developments regarding the Greek debt crisis, as any development on this issue is likely to have a strong impact on the market.

Technical News

EUR/USD

The charts are showing some resistance to the pair’s bearish trend. The weekly chart shows a bullish cross has formed on the Slow Stochastic Oscillator, indicating the potential for the pair to appreciate in price. The daily chart may confirm this price action. The MACD shows as a bullish cross has formed as well as the histogram moving above the 0 line, indicating a buy signal. Traders may want to scale back their long term short positions in light of this potential pullback.

GBP/USD

The pair looks to take a pause from its sharp downward trend. The weekly chart shows a potential bullish cross forming on the Slow Stochastic Oscillator, indicating the potential for an upward price movement. This is supported by an entrance and then a breach of the lower barrier on the chart’s 7-day and 14-day RSI. Traders may want to use the 1.5745 resistance level for a target price to enter short after the pullback.

USD/JPY

The daily chart may present a good opportunity to get into the downward trend. Yesterday the pair climbed and then bounced off its major downward sloping trend line. The pair has continued its depreciation since. Traders may want to go short and use the support line of 89.13 as a level to take profit.

USD/CHF

The pair shows the bullish trend in tact, but may be showing signs of weakening. The weekly chart shows a potential bearish cross forming on the Slow Stochastic Oscillator, indicating the potential for a downward price movement. The weekly also shows the 10-day Relative Strength index has broken its upward trend line. While the price appreciation continues, traders may want to begin scaling back any long positions they may have in preparation for possible pullback in the price.

The Wild Card

EUR/JPY

A period of consolidation has left the pair tight against the daily chart’s downward sloping trend line that began on January 14th. The 7-day daily chart shows the pair has hit a significant resistance level for the fourth time. The previous occurrences were followed by a sharp drop in the price. This may give forex traders an opportunity to go short on this pair.

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.

After breaking below 1.3585 previous low, EURUSD traded in a narrow range. Deeper decline is still in favor and next target would be at 1.3400 area. Resistance is at the upper border of the falling price channel on 4-hour chart and key resistance is at 1.3838, a break above this level will indicate that the fall from 1.4579 has completed at 1.3531 already, then the following bounce could take price back to 1.4000 or even higher.

Daily Forex Forecast

By GCI Forex Research

Fundamental Outlook at 1500 GMT (EDT + 0500)

€

The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3580 level and was capped around the $1.3635 level.  Escalating sovereign credit concerns continue to weigh heavily on the common currency.  Dealers sold the euro again today on reports that eurozone finance ministers are not yet ready to provide specific details about what form or fashion a Greek “bailout” might take.  Greek finance minister Papaconstantinou today said “My guess is that what will stop markets attacking Greece at the moment is a further, more explicit message that makes operational what has been decided last Thursday.” Eurogroup Chaiman Juncker today reconfirmed the European Union is prepared to assist Greece.  European finance ministers meet again tomorrow and many dealers believe reported German opposition to a bailout may keep the focus on fiscal austerity measures Greece can take rather than focus on an explicit package of bilateral or multilateral financial aid.  Greece’s budget deficit is estimated to have been above 12.5% last year, far above the 3% limit imposed by the Maastricht Treaty.  Greece is expected to release a report in mid-March about the steps it is taking to address its fiscal problems.  European Central Bank member Orphanides today said it is “unthinkable” that a eurozone sovereign may default.  In addition to Greece, dealers are closely monitoring the fiscal situations in Portugal, Spain, and Ireland.  A German Parliament source today reported the European Union can provide aid to Greece as permitted in an emergency clause of some European Union treaties.  Aside from the eurozone credit crisis, there are growing sovereign concerns involving Dubai where some borrowers are said to be facing difficult times.  Five-year credit default swaps rose today to 651 basis points from 627 on Friday.  A Middle Eastern sovereign credit default would likely not have as large a consequence on the markets as a European default.  In U.S. news, data to be released tomorrow include the NAHB housing market index, December TICS flows, and the Empire State manufacturing index.  Liquidity was light during the North American session on account of market holidays in the U.S. and Canada.  Fed officials including Atlanta and Minneapolis Fed Presidents are scheculed to speak.  Euro bids are cited around the US$ 1.3530 level.

¥/ CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥90.40 level and was supported around the ¥89.60 level.  Traders are awaiting Bank of Japan Policy Board’s monetary policy decision this week with most expecting no change in policy despite an apparent intensification of deflationary pressures.  The central bank is likely to keep its bank lending program and intact along with its monthly purchases of Japanese government bonds.  Despite a recent 4.6% annualized increase in Q4 gross domestic product, some prices declined more than they have in more than 50 years and others dealers believe this decrease will result in additional easing measures from the central bank this week.  The GDP deflator tumbled 3% – the largest drop since at least 1955 – and the domestic demand deflator was off 2.9%.  Standard & Poors last month warned it may downgrade Japan’s ‘AA’ credit rating if it does not take steps to manage its deficit.  Prime Minister Hatoyama was on the tape today saying he cannot be optimistic about the economy.  The Nikkei 225 stock index lost 0.78% to close at ¥10,013.30.  U.S. dollar offers are cited around the ¥94.75 level.  The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥122.25 level and was capped around the ¥122.90 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥140.70 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥83.35 level. In Chinese news, the U.S. dollar remained steady vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8333 in the over-the-counter market.  Chinese financial markets were closed for the Chinese New Year holiday.  Last week, People’s Bank of China reconfirmed it will “gradually guide monetary conditions back to normal levels from the counter-crisis mode” but then the central bank lifted reserve requirements by 0.5%, effective 25 February. The central bank is clearly trying to contain inflationary pressures and avert asset bubbles.  Some China-watchers believe the central bank could allow the yuan to appreciate some 5% in the coming months.

₤

The British pound moved lower vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.5610 level and was capped around the $1.5720 level.  Dealers will pay very close attention to tomorrow’s U.K. inflation data.  Consumer price inflation reached 2.9% and there is some speculation it could top 3% for January when data are released tomorrow.  Bank of England Governor King last week prepared the market for a temporary spike in inflation, noting it should be back at target in two years’ time.  Yields on ten-year U.K. gilts are actually higher than Spanish and Italian ten-year debt, suggesting dealers are unhappy about the U.K. debt level or its prospects for inflation.  Chancellor of the Exchequer Darling today said the government aims to reduce its deficit by half over the next four years.  Cable bids are cited around the US$ 1.5340 level.  The euro moved lower vis-à-vis the British pound as the single currency tested bids around the ₤0.8670 level and was capped around the ₤0.8700 figure.

CHF

The Swiss franc depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.0805 level and was supported around the CHF 1.0750 level.  Data released in Switzerland today saw January producer price inflation climb 0.3% m/m and decline 1.3% y/y.  Swiss financial markets will likely be closed for most of the week for Carnival holidays.  Swiss National Bank is said to have intervened again by buying euro and selling Swiss franc over EBS last week for at least the second time this month.  U.S. dollar offers are cited around the CHF 1.0810 level.  The euro moved lower vis-à-vis the Swiss franc as the single currency tested bids around the CHF 1.4650 level while the British pound depreciated vis-à-vis the Swiss franc and tested bids around the CHF 1.6845 level.

Forex Daily Market Commentary provided by GCI Financial Ltd.

GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.

DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Spot crude oil prices were relatively unchanged during Monday’s quiet trading session. Concerns of European debt sill weighs on the market and poor fundamentals are limiting a potential price appreciation for the commodity.

Price action was limited in European trading and severely subdued during the New York trading hours. U.S. markets were closed on Monday in observance of Presidents Day.

Spot crude oil prices were trading at $74.20, relatively unchanged from their opening price of $74.10. Spot crude oil has been range-trading between the prices of $74.32 and $73.93. This price action has been observed since Friday’s 1.5% price drop caused by the increase in bank reserves required by China. Friday had prices dropping as low as $72.63. This point coincides with spot crude oil’s significant upward slanting trend line.

A lack of fundamental news in the market may have traders looking to macroeconomic indicators for direction in spot crude oil trading. The strength of the US dollar may help to push spot crude oil prices lower as further details are yet to be released regarding the economic aid package being constructed for Greece.

Spot crude oil trading has experienced significant price volatility since the outbreak of the Greek debt crisis and the recent monetary policy tightening that China has enacted.

As a result, oil prices could face further pressure this week as the commodity’s fundamentals come under pressure. Issues regarding the amount of supply and demand that are currently in the market may not be in equilibrium. Traders may want to look for a break of the $72.15 resistance level this week should further negative fundamental issues surface.

There was a slight divergence in riskier assets last week as the US equity markets where able to rebound from their recent large selloff, while the Euro was punished for the lack of action by European countries. Commodities found ground and were able to rebound slightly, as both the petroleum complex and gold were able to attract some investor interest.

The markets started the week on the defensive side as the prior week’s selloffs continued to weigh on investors’ minds.  In addition, the U.K came into focus on Monday as market participants were forced to absorb weekend news that was not favorable to the sterling. There are now two major things that are weighing on the: Politics and economics. The risks of a hung parliament have been highlighted in the latest polls, and have spooked market participants. One must note, under the US presidential system, a divided government is sometimes seen as a positive development in terms of checks and balances.  This does not hold in a parliamentary system where a hung parliament spells policy paralysis and confusion.

In terms of economics, the disappointment over Q4 GDP and debt issues continued to linger on the markets throughout the week. Even though many are comparing the U.K’s situation to those of Greece and Spain, there is still one important difference between the UK and euro zone members that is often lost in the polemics.  The UK is a currency issuer while Greece and Spain are not.

On Tuesday the market started to rebound as the Euro rallied together with the equity markets.  Market participants pushed the markets higher as they were anticipating positive comments from European officials on Thursday.  On the economic front,  Germany reported a better than expected December  trade surplus but while the data looks good on the surface at EUR16.7 bln, it underscores a key source of tension in the euro zone.  Officials from the major countries have long discussed the need to address global imbalances.  These imbalances also exist within the euro zone itself.  The German commitment to its export sector has enabled the country to export roughly 40% of its GDP (roughly in line with China).  However, its successful hyper-competitiveness also forces other countries such as Greece to run trade deficits.  The German seasonally adjusted trade surplus narrowed just EUR0.3 bln from EUR17.0 bln in November led by a 3.0% m/m gain in exports (vs. 1.1% in November), more than offsetting a 4.5% gain in imports (after a downwardly revised -6.5% drop.)

In contrast to Germany, the UK unexpectedly recorded a wider than expected trade deficit in December despite the weakness of the pound.  The December visible trade deficit widened to GBP7.23 bln vs. GBP6.7 bln expected and from GBP6.8 bln in November.  Additionally, the trade deficit with non-EU countries deteriorated despite evidence of growth in China and the US.  The non-EU deficit widened to GBP3.5 bln from GBP3.1 bln. Imports from non-EU countries jumped 7.6% as aircraft orders and oil rose.  Still, on the export front, the ONS reported that total exports in 2009 fell by the most on record or 9.5% y/y.

On Wednesday the markets consolidated as investors awaited an impetus to move the markets forward.  The US released its trade data which showed that the deficit widened in December, by more than expected. The deterioration was largely a function of oil imports.  Simply put, the US imported oil products at higher prices.  The non-energy deficit was largely steady at $16.7 bln from $16.5 in November.

On Thursday the market rebounded on news that EU leaders pledged they would back Greece.  The S&P 500 Index rallied 10 point to 1078 and the Dow moved up 106 points to solidly reclaim the 10,000 level.  Euro-zone countries pledged to support Greece through its debt crisis, but stated that they don’t need to provide financial support right now.  The Euro initially rallied early in the trading day on the back of the news, but was not able to hold on to its gains throughout the trading session.

In addition, Chinese inflation data captured headlines on Thursday, but even more importantly loan data that showed new Yuan loans surged in January, supported the PBOC’s recent decision to tweak bill rates and tighten reserve requirements for some banks.  New Yuan loans more than tripled to CNY1290 bln in January from CNY3798 bln in December likely reflecting a surge in borrowing ahead of perceived tightening later this year.

After Thursday’s bounce, the markets retraced on Friday. China’s Central Bank raised its reserve requirement by a further 50bp (to 16.5% for big banks). It is the second time the central bank has tightened its monetary policy this year. The move came as a surprise to many. The PBOC move was also released only  a couple of days after the January trade figures confirmed a positive contribution to growth from external demand, but the surplus was actually weaker than expected, at $14.17bn (from $18.4bn) with export growth running at 21% y/y (from +17% y/y). While the economy is expected to expand by almost 10%, today’s policy decision confirms the strong commitment to moderate buoyant lending growth. This could have a negative effect on the global markets, dragging them lower.

Forex

Economic growth in the euro zone slowed in the final quarter of 2009.  Combined gross domestic product in the 16 countries that use the euro rose by a weaker than expected 0.1% in the fourth quarter from the previous quarter, and was down 2.1% on a year-to-year basis, according to the European Union’s statistics agency Eurostat. In the third quarter, GDP rose by 0.4%.

The Euro was punished on this news as well as the lack of specific action from European leaders, but managed to hold on around prior support. From a technical point of view the EUR/USD is now flirting with prior support. Even though this chart is over extended a clear break to the down-side could lead to lower levels.

The Australian Dollar surged after Australian employers added the most workers in more than three years in January.  The number of people employed rose 52,700 from December, more than three times the 15,000 median estimate of economist surveyed. The jobless rate fell to an 11-month low of 5.3 percent from 5.5 percent, the statistics bureau said in Sydney today. When observing the chart below, one can see that the Australian Dollar rallied after the employment figures, but is now trading on major resistance.

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 Adam Hewison – It’s no secret that we’ve been socked with snow this past week. During that time, I was flipping through channels and came across Jim Cramer’s show Mad Money. I’ve said this before, Jim is a great entertainer. I am not so sure how good he is at picking stocks.

He mentioned shorting one stock, Garmin (symbol GRMN). What he said about Garmin sort of made sense to me both from a technical and fundamental viewpoint.

See the Video Here.

So here is the fundamental viewpoint… Many of the new phones that are coming to market are referred to as “smart phones” and have the same capabilities as a standalone, turn-by-turn GPS. In my own case, I have an Apple iPhone. I was looking for a navigational application in the App Store and found exactly what I needed and the good news was – it was free, that’s right free. So the question is, why would anyone pay $150, $200, or even $300 to Garmin to have one of their systems? Fundamentally, I think his case is very sound.

Then, I looked at the technical picture for Garmin and noticed that we had a red monthly “Trade Triangle” sell signal some time ago (November 4th to be exact at the price point $27.06). So here we are some three to four months later having Jim Cramer tell us that Garmin may be a short.

For my money, I want to be trading the “Trade Triangles” and not listening to Jim Cramer and getting old news.

In this short video on Garmin, you will see exactly what were looking at and where the signals kick in. I also point out where one very important technical indicator is at a tipping point.

As always our videos are free to watch and there are no registration requirements.

See the Video Here.

I hope you enjoy the video and make a comment on the blog about how you feel about this market.

All the best,

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

By Anton Eljwizat – The EUR has dropped significantly versus the AUD in the past week, and it is currently trading around 1.5335. And now as evident in the data below, the daily chart is giving bullish signals, indicating that the EUR/AUD pair might go up. Forex traders can take advantage of this impending movement by having their Entry Orders in place to capture this reversal.

• Below is the daily chart of the EUR/AUD currency pair.

• The technical indicators that are used are the William Percent Range, Relative Strength Index (RSI), and Slow Stochastic.

• Point 1: There is a “doji” candlestick that has formed on the chart, indicating that a reversal should take place.

• Point 2: The Slow Stochastic indicates a bullish cross, signaling that the next move may be in an upward direction.

• Point 3: The Relative Strength Index (RSI) indicates that the price of this cross currently floats in the oversold territory, signaling upward pressure.

• Point 4: The Williams Percent Range has peaked near at the -100 marker, which means that there may actually be a strong level of upward pressure.

EUR/AUD Daily Chart

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

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

Source: ForexYard

With a slow news day forecasted for today, the Euro continues to be weighed down by Greece’s deficit worries. Further impacting the hard hit currency is the lack of a concrete plan from the European Central Bank to come to Greece’s aid. This does not bode well for the Euro in trading today.

Economic News

USD – Investors Continue to Flock to Safe Haven USD

Following the U.S. Dollar’s bullish session in trading last week, it appears that the greenback is set for another strong week against its major counterparts. A bank holiday in the U.S. today likely means that any Dollar movements will be determined by non-U.S. news.

Persistent Euro-zone deficit worries could give the Dollar a significant boost against EUR. In addition, further tightening of Chinese monetary policy is predicted to slow down the global economic recovery. These will likely drive investors to the save haven Dollar.

This week is full of different American economic indicators likely to impact the USD. The release of meeting minutes from the most recent Federal Reserve meeting, as well as a housing starts report are two events predicted to give the greenback a boost. As for today, the Dollar has yet to make any major moves against its counterparts. Traders may be wise to take a wait and see approach to see where the market is heading.

EUR – Lack of ECB Plan to Combat Deficits Hurts Euro

Following last weeks meeting of the European Central Bank, investors were decidedly unenthusiastic regarding the lack of a plan to assist Greece in combating its mounting debts. Consequently, the Euro dropped near a 9-month low against the U.S. Dollar. This pessimistic sentiment is predicted to continue this week, as it is becoming clear that there is no clear strategy to aid Greece.

With no major Euro indicators scheduled for today, investors seem to be going short on the single currency as it does not appear that any good news is on the horizon. Currently EUR/USD is trading around the 1.3605 level, very close to the near record lows reached last week. Fresh concerns over Spain and Portugal’s debts will likely do nothing to aid the ailing currency in the foreseeable future.

JPY – Yen Hurt by Fresh Chinese Regulations

Despite a GDP report showing that the Japanese economy grew at a strong rate in the last quarter of 2009, other market concerns weighed down on the Yen in trading today. Analysts do not predict that Japan will be able to maintain its current rate of growth. Furthermore, it appears that as China continues to execute its new monetary policy, the Yen suffers as a result. Fears that the Chinese actions could slow down the global economic recovery have not bode well for JPY. Currently USD/JPY is trading at around the 90.18 level, up almost 20 pips from when the market opened earlier. Traders may want to go long on the pair today as it appears that the greenback will maintain its gains in the near future.

Crude Oil – Crude Drops As a Result of Strong Dollar, Chinese Policy

After dropping rather significantly in trading late last week, crude is slightly up today as markets are still absorbing the new Chinese monetary policy. These modest gains are not forecasted to last. With China set to further tighten its banking policies, investor sentiment toward commodities in general is down. Furthermore, a higher then expected result from an American oil inventories report last week did not help the price of crude in trading. Forex traders may want to think twice before entering into any crude oil positions, at least until a clearer picture of the market place emerges.

Technical News

EUR/USD

While most indicators are currently floating in neutral territory with the pair currently range trading between 1.3580 and 1.3620, the 4 hour and daily RSI are floating near the oversold territory indicating that an upward correction may take place later today. Going long with tight stops may be advised.

GBP/USD

The daily RSI is floating in the oversold territory while a bullish cross is evident on the 2 hour MACD indicating an imminent upward movement might take place later today. Going long for today may be a good choice for today.

USD/JPY

The pair is currently range trading between 90.00 and 90.30 with most indicators floating in neutral territory. Waiting on a clearer direction for the pair may be advised for today.

USD/CHF

An impending bearish cross is evident on the hourly chart’s Slow Stochastic while the 4 hour RSI is floating in the overbought territory. Going short for today may be advised.

The Wild Card

GBP/AUD

A fresh bullish cross is evident on the 8 hour chart’s Slow Stochastic, while the daily and 8 hour RSI are floating in the oversold territory. Forex traders may be advised to go long for 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.