USDCHF formed a short term cycle top at 1.0794 level on 4-hour chart. As long as the channel support holds, the pair is treated as in uptrend from 1.0132 and the falling from 1.0794 is consolidation of uptrend. Bounce would more likely be seen from the bottom of the price channel later today and one more rise towards 1.0900 is still possible. However, a clear break below the channel support will suggest that the rise from 1.0132 has completed.
By CountingPips.com
The US Dollar has been trading lower in forex trading today against most of the major currencies as risk appetite has re-emerged on the possibility that the EU will come to the rescue of Greece, which is struggling with a major government debt problem. A report out of the Wall Street Journal today said that the German government may provide 
aid to Greece although German government officials have denied a plan is in place.
The euro advanced higher on the speculation of a Greece bailout and climbed over 100 pips against the U.S. dollar today. The euro also traded higher against the Japanese yen, British pound, Canadian dollar and Swiss franc. The Australian and New Zealand dollars rose versus the European currency in today’s trading.
The euro fell to an eight and a half month low last week versus the U.S. dollar as the Greece debt problem really took center stage and spurred investors to flee riskier positions. Futures bets against the euro climbed to a record high as of February 2nd, according to the Commitments of Traders (COT) report by the Chicago Mercantile Exchange. Non-commercial futures positions were net short the euro by 43,741 contracts after being net short by 39,539 contracts the week before as net short positions have increased for four straight weeks. The COT report is a useful tool for traders to gauge investor sentiment in terms of positions in the futures market.
Meanwhile, the U.S. dollar was on the losing end of trading today against most of its major currency counterparts. The dollar fell versus euro, British pound, Canadian dollar, Australian dollar, Swiss franc and the New Zealand dollar while gaining against the Japanese yen.
The US stock markets had a winning session today after a down day yesterday with the Dow gaining by 150.25 points, the Nasdaq increasing 24.82 points and the S&P 500 up by 13.78 points. Oil traded higher by $1.86 to $73.75 while gold gained by $11.00 to $1,076.70 per ounce.
EUR/USD Chart – The euro on a two-day upswing in the forex markets against the U.S. dollar. The EUR/USD reached a high above the 1.3830 level today, just touching the 200-hour moving average in blue before retreating lower.
By GCI Forex Research
Fundamental Outlook at 1500 GMT (EDT + 0500)
€
The euro appreciated sharply vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3840 level and was supported around the $1.3640 level. The common currency added to intraday gains during the North American session as U.S. equities were on the positive side out of the gate. Many rumours circulated during the European and North American sessions involving Greece’s deficit problems. First, dealers reacted to chatter that European Central Bank President Trichet cut short a trip to Sydney where he was meeting with central bank governors and returned to Europe for an emergency meeting of the ECB, a story the central bank denied. Later, it was reported by a senior German ruling coalition “source” that eurozone governments have decided in principle to help Greece but a German spokesman later denied the report. In addition to Greece, traders remain fixated on the deficits of Spain and Portugal. The so-called sovereign credit crisis will likely extend to other countries outside of the eurozone in due course but in the short-term, the issue remains a net negative for the common currency. European Union leaders will convene on Thursday to discuss strategies to accelerate economic growth but Greece is not currently on the agenda. Data released in the eurozone today saw Germany’s December trade surplus print at €16.7 billion, down from €17.0 billion in November. Also, German December consumer price inflation was confirmed at -0.6% m/m and up +0.8% y/y. In U.S. news, data released in the U.S. today saw December wholesale inventories off 0.8%. Data to be released in the U.S. tomorrow include MBA mortgage applications and the December trade balance. The Federal Reserve will release testimony tomorrow by Fed Chairman Bernanke regarding the Fed’s strategy to exit its low interest rate and liquidity programs. Bernanke was to testify before the House Financial Services Committee about “Unwinding Emergency Federal Liquidity Programs and Implications for Economic Recovery” tomorrow but this is being delayed on account of weather. Bernanke is next scheduled to testify around 20 February. 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 ¥89.80 level and was supported around the ¥89.20 level. National Strategy minister Sengoku reported the government will “watch the economy closely” as the fiscal year ends. The Tokyo three-month interbank offered rate (Tibor) for yen deposits declined to a multi-year low, reaching 0.44462% and reflecting all of the unwanted liquidity available in the Japanese financial system. BoJ Deputy Governor Yamaguchi yesterday warned economic growth “may stall” temporarily and said “growth may be in a pretty severe state through this summer, so we can’t really expect a rapid expansion.” The Nikkei 225 stock index lost 0.19% to close at ¥9,932.90. U.S. dollar offers are cited around the ¥94.75 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥123.65 level and was supported around the ¥121.70 level. The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥140.40 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥84.25 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8267 in the over-the-counter market, up from CNY 6.8266. People’s Bank of China Governor Zhou hawkishly said “Right now the inflation rate has started to go up, but the level is still relatively low. We need to closely watch (the level of inflation).” Some economists expect China’s consumer price inflation likely advanced 2.1% y/y last month. Japanese think tank Nomura Institute of Capital Markets today reported China may permit the yuan to strengthen at an annual rate of 5% vis-à-vis the U.S. dollar after possibly raising borrowing costs in June.
₤
The British pound moved higher vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.5650 level and was supported around the $1.5560 level. Data released in the U.K. today saw the December total trade deficit rise to ₤3.3 billion from ₤2.9 billion while the goods trade deficit increased to ₤7.3 billion from ₤6.8 billion. Also, the January RICS house price balance improved last month. Chancellor of the Exchequer Darling recently reported he fully supports Bank of England’s asset purchase pause that was announced on Thursday, adding the U.K. gilt market responded well. BoE has recently announced the weaker pound has benefited the U.K. economy. The central bank will publish its quarterly inflation report and new economic forecasts tomorrow. Cable bids are cited around the US$ 1.5340 level. The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.8815 level and was supported around the ₤0.8755 level.
CHF
The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.0655 level and was capped around the CHF 1.0745 level. Swiss National Bank member Jordan is quoted as having said it is premature to raise interest rates from their near zero per cent level. Jordan also reported the SNB will continue to prevent an “excessive” appreciate of the Swiss franc, adding the franc is seen as a “safe haven.” Data released in Switzerland today saw December real retail sales up 4.7% while the January unemployment rate rose to 4.5% from 4.4%. Some dealers are still talking about Friday’s reported intervention by Swiss National Bank in which the central bank is rumoued to have bid on the EUR/CHF cross some 280 pips above the current market price. U.S. dollar offers are cited around the CHF 1.0810 level. The euro moved higher vis-à-vis the Swiss franc as the single currency tested offers around the CHF 1.4685 level while the British pound came off vis-à-vis the Swiss franc and tested bids around the CHF 1.6635 level.
Forex Daily Market Commentary provided by GCI Financial Ltd.
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By Fast Brokers – Gold is moving higher today as the risk trade strengthens across the board. The EUR/USD, GBP/USD, and AUD/USD have all logged solid gains thus far today as investors speculate that the EU will be proactive in dealing with Greece’s fiscal situation. However, speculation is rampant in all directions, making today’s pop in the risk trade a bit circumspect. While the data wire will remain relatively quiet today, news will begin to pick up during tomorrow’s Asia trading session with the release of Australia’s Home Sales data followed by New Loans and Trade Balance numbers from China. Additionally, the BoE will release its Inflation Report accompanied by a public address from Governor King, not to mention UK Manufacturing Production data. Hence, volatility could pick up again as tomorrow’s trading session progresses. Investors should keep a sharp eye on the major Dollar pairs to gauge whether the risk trade is truly undergoing a recovery or whether we are merely witnessing a bounce in the road south. That being said, there’s little reason to believe gold will deviate from its negative correlation with the Dollar. Therefore, all eyes will likely be on activity the Greenback.
Technically speaking, we’ve formed some new uptrend lines which run through levels set last week. Additionally, 2/5 lows and the psychological $1050/oz level could serve as technical cushions. As for the topside, gold faces multiple downtrend lines along with the psychological $1075/oz and $1100/oz levels.
Present Price: $1071.75/oz
Resistances: $1073.95/oz, $1076.61/ oz, $1078.79/oz, $1082.19/oz, $1084.11/oz, $1087.31/oz
Supports: $1070.77/oz, $1067.61/oz, $1065.90/oz, $1062.26/oz, $1058,74/oz
Psychological: $1050/oz, $1075/oz, $1100/oz, February highs and lows
(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 Fast Brokers – Speculation is rampant once again, this time in favor of the risk trade as investors wonder whether Trichet’s early exit from a meeting in Australia to return to the EU implies the union has a solution for Greece’s troubling fiscal situation. However, it seems such speculation may be a bit preemptive and the risk trade could need more concrete fundamental and/or psychological improvements to establish a sustainable turnaround. Meanwhile, we still recognize a considerable downward pressure on the Cable considering the extent of last week’s downturn. Regardless, the bounce in the risk trade is a welcome development for the risk bulls. The Pound is exhibiting a relative weakness today, highlighted by another pop in the EUR/GBP. The UK’s trade deficit widened, registering the largest deficit since March 2009. A weak Trade Balance reading seems to be weighing on the Pound along with overall concern of exposure to Greece’s debt. Although the data wire for the remainder of the trading session is relatively quiet, activity will pick up during tomorrow’s Asia trading session with the release of Australia’s Home Loans data along with New Loans and Trade Balance numbers from China. Furthermore, the UK will print Manufacturing Production during the European trading session along with the much anticipated BoE Inflation report accompanied by a public address from Governor King. Inflation plays an important role in regards to the BoE setting monetary policy. Hence, if prices continue to rise, then investors may deduct that the BoE will be hesitant in tightening liquidity too quickly, especially considering present uncertainty in the EU. Hence, tomorrow could prove to be a busy session for the Pound.
Technically speaking, the Cable has multiple downtrend lines serving as technical barriers along with intraday and 2/5 highs. We’ve created some new uptrend lines, albeit tight ones, to serve as technical cushions along with the psychological 1.55 area.
Present Price: 1.5636
Resistances: 1.5639, 1.5673, 1.5690, 1.5717, 1.5758, 1.5775
Supports: 1.5572, 1.5558, 1.5533, 1.5502, 1.5470, 1.5444
Psychological: 1.55
(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 Fast Brokers – The risk trade ran with speculation that the EU plans to take action in regards to Greece’s troublesome fiscal situation. Trichet cut a trip to Australia short to return for an EU meeting this week, igniting speculation that the EU will be proactive in sorting out Greece’s troubles. However, such a deduction seems highly speculative and investors may not want to read too far into Trichet’s actions at this point in time. That being said, it appears the risk trade was looking for any excuse to bounce considering the extent of last week’s decline. Hence, the EUR/USD is still lodged in its downtrend and may need more concrete fundamental and/or psychological evidence to turn a corner. The data wire will begin to pick up during tomorrow’s Asia trading session with Australia releasing Home Loans data followed by New Loans and Trade Balance data from China. Additionally, the EU will release French Industrial Production and the U.S. will print its own Trade Balance numbers. Furthermore, the UK will publish its highly anticipated BoE Inflation Report accompanied by a public address from Mervyn King. Therefore, the FX markets have more than enough news and data to digest tomorrow and determine whether to take the present risk rally a step higher.
Technically speaking, the EUR/USD faces topside technical barriers in the form of multiple downtrend lines along with intraday and 2/4 highs. As for the downside, we’ve created a few new uptrend lines to serve as technical cushions along the psychological 1.35 level and previous February lows.
Present Price: 1.3732
Resistances: 1.3744, 1.3773, 1.3806, 1.3831, 1.3861, 1.3895
Supports: 1.3721, 1.3693, 1.3664, 1.3640, 1.3610, 1.3658
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 Rita Ruvinski – The pair has recorded much bullish behavior in the past 2 days. However, the technical data indicates that this trend may reverse anytime soon. For example as described below, the 30min. chart’s signals that a bearish reversal is imminent. This might be a good opportunity for forex traders to enter the trend at a very early stage and at a great entry price.
Below is the 30 min. chart of the EUR/JPY currency pair
The technical indicators that are used are the Fibonacci, Relative Strength Index (RSI), and Slow Stochastic.
Point 1: The Relative Strength Index (RSI) indicates that the price of this cross currently floats in the overbought territory, signaling a downward pressure.
Point 2: The Fibonacci Retracement shows that the pair has rebounded on its resistance key level of 123.00 and is challenging its support. The next levels that are likely to provide significant support are around 122.50 & 122.80.
Point 3: The Slow Stochastic indicates a bearish cross, signaling that the next move may be in a downward direction.
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
Traders are expecting a slow news day, and as such may experience thin trading conditions and low liquidity. The few reports expected shouldn’t cause too much of a stir, but with thin trading it may result in some decent price action. The EUR’s uptick on Monday has many concerned that the 16-nation currency is now due for a downward correction, especially given the rapidly declining sentiment in the Euro-Zone caused by decisions made in Greece and Portugal concerning national debt and government spending, respectively.
The US Dollar has steadily risen over the past few days, with other regions experiencing continual weakness from economic woes. Yesterday’s price movements gave little indication of direction for the greenback, however, as the price seemed to enter a consolidation trend against the majority of its primary currency rivals.
Against the EUR, the Dollar gained only moderately from 1.3677 to 1.3620, and similar results against the Pound, finishing the day near 1.5600. As of this morning, on the other hand, the USD appears to be in a mild decline as part of the consolidation taking place since last Friday. Analysts are beginning to anticipate a dramatic price movement sometime early this week.
Today’s news events may not create the spark necessary to push the USD out of its currently flat trend. The Investor’s Business Daily’s TechnoMetrica Institute of Policy and Politics (IBD/TIPP) is publishing its monthly Economic Optimism report. While not traditionally carrying a heavy impact, it is the most significant release coming out of the United States today and could therefore have a greater impact. Should today’s news be USD positive, the consolidation of the Dollar against its primary rivals could come to an end and the bullish movement of the greenback may likely continue.
The EUR seems to have sustained its bearish momentum despite yesterday’s brief upward tick. With a stellar performance against the Australian and Canadian Dollars, the EUR actually finished Monday at the 1.5795 and 1.4680 price levels, respectively. Economists remain weary, however, given economic worries surrounding member nations of the European Monetary Union (EMU).
The reason many analysts claim that downward pressure still exists on the 16-nation European currency is because Greece’s plan to tighten its spending has created some concern that the current plan doesn’t do enough. Moreover, Portugal announced that it would increase its government’s spending options, which has a number of market participants unnerved. A report out of Europe yesterday also showed the Sentix Investor Confidence report dropping much further than was anticipated, highlighting an upcoming downturn in the Euro-Zone.
Yesterday’s upward movement of the EUR shouldn’t be taken as a serious indicator of continued bullishness. With the US Dollar consolidating against most of its pairs, there exists a likelihood that the USD will break-out soon and the EUR will correct back downwards against the majority of its pairs. Many investors out there are beginning to short the 16-nation currency and forex traders would be wise to take note.
The Japanese Yen’s price action yesterday was among the flattest in the market. With little price movement against any currency pair, the JPY has apparently entered a narrow trading tunnel of no more than 50 pips between the highs and lows versus most currency rivals. The yen fluctuates near the 89.30 price mark against the USD, and sits steadily at 139.30 opposite the British Pound.
The likely culprit in this constricted movement are the contradictory reports of growing market sentiment and declines in money supplies published in reports on Sunday and Monday. With little news coming from the island economy today, and with a deficit in impacting news events from other regions, there is little reason to believe that the JPY will exit this tight trading range today. Traders can take advantage of these small fluctuations by entering short-term trades within the current range.
The price of spot Crude Oil has apparently begun to mirror the consolidation movement of the US Dollar since Friday. The price of this commodity has begun to sit steadily near $71.50 and a number of analysts are calling for an upward price target near $76 in the short-run with longer-term expectations below $70 a barrel.
Crude Oil’s recent price movement has been less predictable than many were forecasting coming into 2010. However, as the greenback’s strength returns from increased market optimism and a halt to the rise in unemployment, there is a chance that crude oil’s price will more accurately reflect what is happening in the market in general as opposed to the contradictory movements we’ve seen lately. If the US Dollar does indeed break out of its consolidation trend, then it is very probable that Oil’s price will inversely reflect the movement of the greenback.
The pair seems to be exhibiting some mixed signals. The hourly chart’s Slow Stochastic exhibits a fresh bearish cross; however, the daily chart’s Slow Stochastic is exhibiting a bullish cross while the RSI is floating in the oversold territory. Going long with tight stops may be a good choice for today.
The pair’s recent downward trend may be seeing a correction later today as the 8 hour and daily chart’s RSI are floating in the oversold territory and a bearish cross is evident on the daily chart’s Slow Stochastic, indicating an imminent upward correction. Going long for the day may be advised.
The pair seems to be range trading at the moment, staying between 89.10 and 89.60, with most indicators floating in neutral territory. Waiting on a clearer direction for the pair may be advised for today.
The 8 hour and daily charts’ RSI are floating in the overbought territory while the daily chart’s Slow Stochastic is exhibiting a bearish cross. Going short for the day may be advised.
The daily chart’s Slow Stochastic is exhibiting a bearish cross while the 8 hour and daily RSI are floating in the overbought territory indicating an imminent downward trend. Forex traders are advised to go short for the day.
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.
USDCADUSD/CAD is trading right now around the 1.0750 level on the daily chart just between the 100 and 200 Day Moving Averages respectively. Look to these levels for immediate support and resistance on a daily basis and to give direction to the pair in the coming weeks. If you look at my earlier post you will notice that we examined this pair in January and were looking for a break of the 100 day moving average around 1.0550 (which it did) and also broke downtrend support, and the next resistance level was the 200 day moving average at 1.0858. Immediate support is now seen at the 100 day moving average around 1.0550 and down below to the old downtrend resistance line (now support) around 1.0450. A break to the topside could yield to1.1000, on to 1.1300 and upward to the 1.1600 area. Remember this is on a daily time-frame so you should always look at shorter time-frames as well depending on your strategy. This looks like a relatively quiet week both for USD and for CAD so keep your eye on Euro-zone news events to affect USD which will in turn affect the pair. Also, watch oil prices as there is a strong correlation to CAD and EUR as well.
Break- Term used to describe price moving higher through a resistance level or lower through a support level.
Moving Average-Moving averages measure the average price or exchange rate of a currency pair over a specific time frame.
Open– The initial price of a given security or commodity in a trading session. Also known as opening.
Resistance-The price level in which a currency pair has difficulty trading above. At resistance, price action tends to stall before breaking above, or reverse in the opposite direction.
Support-A price level in which a currency pair has difficulty falling below. At support, price action tends to stall before breaking below, or reverse in the opposite direction.
Trendline-A form of technical analysis formation created by drawing a line that connects a series of descending tops, descending bottoms, ascending tops or ascending bottoms.
Trendline-A form of technical analysis formation created by drawing a line that connects a series of descending tops, descending bottoms, ascending tops or ascending bottoms.
Technical Analysis-he art of forecasting price movements through the study of chart patterns, indicator signals, sentiment readings, volume and open interest.
Unlike fundamental analysis, technical analysis does not focus on economic data, but rather on interpretation of price data. One of the key tenets of technical analysis is that price patterns repeat themselves, allowing technical traders to make highly probabilistic bets on the direction of the instrument.
FX lends itself particularly well to technical analysis because it trades 24 hour per day and therefore provides a continuous stream of data that can be used for statistical analysis.
Calendar from forexfactory.com, glossary from FX Words, and charts powered by FX Solutions Accucharts
By Basil Fayadh
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.
Being contained by the upper border of the rising price channel on 4-hour chart, USDCHF pulls back from 1.0794, suggesting that a short term cycle top is being formed. Sideways movement is more likely be seen later today and bottom of the channel would be tested by the end of the sideways movement. However, as long as the channel support holds, the price action from 1.0794 is treated as consolidation of uptrend from 1.0132, one more rise towards 1.0900 is possible after consolidation.
