Month: February 2010

“There is no group more subjective than conventional analysts.” — Robert Prechter.

By Vadim Pokhlebkin

Elliott wavers sometimes hear the criticism that patterns in market charts can be “open to interpretation.” For example, what looks like a finished 1-2-3 correction to one analyst, another analyst may interpret as 1-2-3 of a developing impulse, with waves 4 and 5 on the way.

Does this happen? Absolutely. (Although, there are always tools an Elliottician can employ to firm up the wave count.) But here’s the real question: What’s the alternative?
Typical alternatives amount to analysis of the “fundamentals”: Jobs, interest rates, CPI, PPI, what Ben Bernanke said on Tuesday — it all goes into the pot. Result? Well, if you think it’s clear and unambiguous, guess again. Here’s a fresh example.

Find out what really moves markets — download the free 118-page Independent Investor eBook. The Independent Investor eBook shows you exactly what moves markets and what doesn’t. You might be surprised to discover it’s not the Fed or “surprise” news events. Learn more, and download your free ebook here.

On the evening of February 18, in a surprise move, the Federal Reserve raised its discount rate — the interest rate at which it lends money to banks. The next morning the S&P futures were pointing lower; everyone was bracing for a weak day — because, as conventional thinking goes, higher interest rates are bad for business, the economy, and ultimately for the stock market. Friday morning, stocks indeed opened lower and major news headlines confirmed:

• Wall St opens weaker after Fed move
• … Investors Wary After Fed Move
• Stocks Open Lower After Surprise Fed Move

But around 11am that same morning, the DJIA turned around and moved higher. Now look at what the headlines from major sources were saying after lunch on February 19:

• US stocks bounce back; Fed move viewed in positive light
• US Stocks Up A Bit On Fed Discount Rate Increase
• Stocks Higher After Fed Move

What was a “bearish move” by the Fed in the morning morphed into a “bullish” one by the afternoon! Same event. Same market. Same day. Completely opposite interpretation!

This brings to mind the answer EWI’s President Robert Prechter once gave when asked about the objectivity of Elliott wave analysis. Bob said:

“I always ask, ‘compared to what?’ There is no group more subjective than conventional analysts who look at the same ‘fundamental’ news event — a war, the level of interest rates, the P/E ratio, GDP reports, you name it — and come up with countless opposing conclusions. They generally don’t even bother to study the data. Show me a forecasting method that is totally objective or contains no human interpretation. There is no such thing, even in a black box. To answer your question more specifically, though, properly there should be no subjectivity in interpreting Elliott waves patterns. There is a set of rules and guidelines for that interpretation. Interpretation gives you only the most probable scenario(s), not a sure one. But people mislabel probabilistic forecasting as subjectivity. And subjectivity or bias can ruin that value, just as in any other approach. Sometimes we screw up. But in contrast to the outrageously improbable (if not downright false) wave interpretations or other types of forecasts we often see from others, we are as close to an objective service as you’re going to find. We hire analysts who know the rules of Elliott cold.”

Find out what really moves markets — download the free 118-page Independent Investor eBook. The Independent Investor eBook shows you exactly what moves markets and what doesn’t. You might be surprised to discover it’s not the Fed or “surprise” news events. Learn more, and download your free ebook here.

Source: ForexYard

The U.S. Dollar saw some major gains on the Euro last night. The pair went as low as 1.3500 before rebounding to its current level of about 1.3540. Today, Fed Chairman Ben Bernanke is scheduled to testify before the U.S. Congress, an event likely to create heavy market volatility throughout his testimony and in the minutes after.

Economic News

USD – Significant U.S. News Could Lead to USD Volatility

With the most significant economic indicators being released today revolving around the U.S. economy, the Dollar is likely to see some heavy volatility, especially against the Euro and Yen. Yesterday, the greenback was able to maintain its bearish trend against the EUR, reaching the 1.3500 level.

Although the pair has bounced back slightly, most analysts are not predicting any significant upward movement in the near future. Conversely, the USD dropped against the Yen as investors flocked to the safe haven status of the Japanese currency in trading yesterday. The USD/JPY fell over 60 pips before leveling out at its current level of around 90.20.

Today, investors will want to pay careful attention to the testimony set to be given by Fed Chairman Ben Bernanke. After last week’s surprise interest rate hike for emergency bank loans, anticipation is high for any new news regarding the state of the U.S. economy. Positive sentiment will likely lead to major gains for the greenback.

Additionally, the American New Home Sales Report is set to be released later today. If the figure comes in as predicted, traders can predict big things happening for the Dollar. On the other hand, the housing market has been lagging for the last few months. Negative news may temper investor confidence in the Dollar, leading to big gains for the Yen.

EUR – Negative European News Leads to Losses for Euro

After a series of European economic indicators came in below expectations yesterday, the EUR saw losses across the board. The EUR/GBP dropped over 80 pips before leveling out in overnight trading. EUR/JPY dropped from 124.45 yesterday, to its current level 122.25.

Investors have yet to show much confidence in the Greek bailout plan, and following yesterday’s disappointing news, all signs appear to be bearish for the ailing currency.

Today, traders will want to pay attention to the Industrial New Orders report, set to be released at 10:00 GMT. The report is a leading indicator of production, and could provide a clear look at the current state of the Euro-Zone economies.

The Euro is not forecasted to break out of its current slump today. With most analysts predicting a decrease in European industrial production from last month, the single currency will have a hard time attracting any risk taking among investors.

JPY – Risk Aversion Leads to Yen Gains

Yesterday saw several economic indicators in both Europe and the U.S. come in below expectations. This resulted in a loss of investor risk appetite, leading to major gains for the safe-haven Yen. The JPY increased significantly against the Dollar, Euro and British Pound, and is currently in position to continue on that course today.

Depending on the outcome of the testimony today by the U.S. Federal Reserve Board Chairman, Ben Bernanke, the Yen could take advantage of a volatile situation and increase its profits. Yen traders will want to pay careful attention to the testimony. Any indication that the U.S. economic recovery is slowing down would be good news for JPY. That being said, if the statement comes in positive for the U.S. economy, risk sentiment could return causing the Yen to lose in afternoon trading.

Crude Oil – Crude Oil Inventories on Tap Today

Following a report that U.S. oil stockpiles declined over the last month, the price of crude increased as investors rushed to buy up the commodity. Currently, crude is trading around the 79.19 level, an increase from 78.57 reached last night.

Today, traders will want to pay attention to the U.S. Crude Oil Inventories report, set to be released at 15:30 GMT. If this release is near the forecasted decrease in inventories, it may further drive up prices. Additionally, depending on the direction the Dollar takes following Fed Chairman Bernanke’s statements today, crude prices could rise or fall. Good news for the Dollar would likely lead to a drop in oil prices, with bad news likely to drive up prices for the commodity.

Technical News

EUR/USD

This pair continues to trade within its bearish channel instigated in mid-January, although there are signs that it is beginning to flatten out. After yesterday’s downtick in late trading, the pair now seems poised to correct itself back upwards once more. A fresh bullish cross on the 4-hour Stochastic (slow) supports this notion. Going long through today’s early hours may be a wise move.

GBP/USD

The Bollinger Bands on both the hourly and 4-hour charts are beginning to tighten building up towards what appears to be a volatile movement. The hourly Stochastic (slow) shows a bearish cross right on the 80 line of the indicator, suggesting a downturn. Other indicators, however, show no signs of direction. Waiting for the volatile breach and then joining the move may be a smart tactic today.

USD/JPY

A fresh bullish cross appears to have just formed on the 4-hour Stochastic (slow), suggesting an upward movement may be getting priced-in during the nearest time-frame. The price also floats in the over-sold territory on the 4-hour RSI, which supports this notion. Going long with tight stops may be today’s preferable strategy.

USD/CHF

This pair has entered a distinct bullish channel lately and appears to be showing signals that it will continue. After a very short down-tick, the hourly Stochastic (slow) is showing a bullish cross. However, the 4-hour Stochastic (slow) is showing a bearish cross. These may appear to contradict each other, but they do not. They merely express a continuation of the bullish channel with distinct highs and lows. Buying on lows and selling on highs within this trend could be a good idea in today’s trading.

The Wild Card

USD/MXN

After a volatile breach of the upper border of the Bollinger Bands on the hourly chart, this pair now appears positioned for a steady downward correction. Bouncing from the lower border to the upper border in the 4-hour Bollinger Bands supports this notion. Forex traders can also see that the price is currently floating in the over-bought territory on the 4-hour RSI, and a fresh bearish cross has recently formed on the 4-hour Stochastic (slow). Going short on the Dollar against the Mexican Peso in today’s trading may not be a bad idea.

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 presenting a volatile first hour, the U.S indices plunged by over -1.5% as economic data showed that consumers are still doubtful about the economic situation.  Even though the housing market showed relative strength with the S&P/Case-Shiller index climbing by 0.3%, Consumer confidence dropped to a 10 month low of 46 points.

According to the data, investors are now more pessimistic about the economy than they were at the depths of the 2007-2009recession. The percentage of consumers anticipating an improvement in business conditions over the next six months decreased to 16.7% from 20.7%, while those anticipating conditions will worse increased from 15.3% from 12.7%.One must note that the Consumer Confidence Survey is based on a representative sample of 5000 U.S households.

Unlike Monday’s session, when financials pulled the market higher, the financial sector was the worst performing sector of the intraday session, shredding 1.8%. From a technical point of view, the S&P500 retraced after hitting its 50 day moving average. Yesterday’s session wiped out 4 previous bullish sessions, as investors preferred to cash in on recent gains. One must note; technical support lies ahead, at 1085 points.

Forex

The Dollar index managed to gain ground yesterday after the U.S equity market experienced a sell-off. The Index climbed higher and finished the session around 80.9 points. From a technical point of view the index is still pointing towards minor divergence, a signal which often leads to a minor correction. Even though the Dollar might not experience a major sell-off leading the index down to one of its Fibonacci retracement areas, the index could stumble around current levels.

On individual pairs the EUR/USD and the GBP/USD both dropped to lower levels, pulled lower by a rising Dollar and worse than expected fundamental data. The German IFO report fell from 95.8 to 95.2 in the month of February, pulled down by services. Germany’s demand hasn’t been at its fullest, something that can be blamed on sentiment. In addition, a recent cut-back by the government, reducing its incentives for car purchases, had a negative effect on demand.

Over in the U.K the Pound felt some pressure after BOE governor Mervyn King released his comments. King stated that the economic recovery is still fragile, as the economy is still dealing with the aftershocks of one its worst recessions. Furthermore he stated that the recent decline in consumption from Europe is having a major effect on British exports. Europe is one of the U.K’s largest consumers. Governor King hinted that quantitative easing could be used to prevent any further economic damage.

From a technical point of view the GBP/USD is now trading on a fine-line, above double support. Even though indicators are pointing towards a minor bounce, a break of the current level could lead this pair to much lower ground.

The Day Ahead

The day ahead should be an interesting one, as Germany is scheduled to release its GDP figure and the U.S will follow with its New Home Sales. Germany is expected to show that the economy contracted by -1.7%. New Home sales are expected to jump and come out at 355k, compared to a previous 342k.

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.

GBPUSD drops sharply from 1.5575 and reaches as low as 1.5393 level. Now the fall could possibly be resumption of downtrend from 1.6456. Deeper decline is expected to test 1.5350 support later today, a breakdown below this level will confirm that the downward movement has resumed, then next target would be at 1.5250 area.

Daily Forex Analysis

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$ 1.3495 level and was capped around the $1.3690 level.  Traders continue to punish the common currency on account of the ongoing fiscal problems of eurozone members including Greece.  The Greek crisis is unlikely to be resolved for weeks, with Greece expected to provide the European Union with an interim update in mid-March on how it is improving its fiscal situation.  Many dealers believe bilateral or multilateral financial assistance will be provided involving some eurozone members but Germany continues to report there will be no financial assistance until Greece helps itself.  Data released in the eurozone today saw the February Ifo headline business climate index recede to 95.2 from 95.8 in January while the current assessment index weakened and the expectation survey ticked higher.  In U.S. news, some dealers remain critical of the Fed’s decision to lift the discount rate last week.  The Federal Deposit Insurance Corporation reported “problem” banks climbed to their highest level in seventeen years.  The FDIC noted there were 702 banks on their “problem” list representing US$ 402.8 billion in assets, a 27% q/q increase.  There will invariably be more bank failures in the U.S. in 2010.  The U.S. Treasury today expanded its Supplemental Financing Program, a move that will likely help the Fed to tighten policy further.  Fed Chairman Bernanke will testify in Congress tomorrow and Thursday.  Data released in the U.S. today saw the December CaseShiller home price index decline 3.08%, up from a revised -5.34%, and was up 0.32% m/m from a revised 0.26%.  Also, the February Richmond Fed manufacturing index improve to +2 from the prior reading of -2 and February consumer confidence fell sharply to 46.0 from a revised 56.5 in January.  Euro bids are cited around the US$ 1.3335 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥89.90 level and was capped around the ¥91.30 level.  Minutes from Bank of Japan’s 25-26 January Policy Board meeting were released overnight in which policymakers reported fiscal conditions are “serious.”  Last week, the central bank voted to not expand monetary policy further, much to the anger of the Hatoyama government.  In December, the central bank reported gross domestic product will expand 1.3% in the year beginning 1 April.  Finance minister Kan yesterday called on Bank of Japan to “make more efforts” to combat deflation, just days after suggesting the central bank target an inflation target.  BoJ Governor Shirakawa yesterday said Japan is “providing ample liquidity” and again called on the government to rein its massive public debt burden.  Prime Minister Hatoyama on Sunday indicated he “sincerely” hopes the BoJ will implement “monetary policy appropriately.” The spat between the central bank and government is worsening just days after data revealed deflationary pressures are deepening in Japan.  Vice finance minister Minezaki suggested the government should suspend a temporary measure that reduces taxes on income from dividends and capital gains.  The central bank last week voted to keep monetary policy unchanged and some dealers expressed surprise the central bank did not expand its monthly Japanese government bond buying operations.  Some traders have already starting repatriation inflows of yen back to Japan ahead of the fiscal year end at the end of March.  Notably, interbank yen borrowing costs fell and their premium over U.S. dollar loans fell to their lowest level since yen rates moved above dollar rates on 24 August last year – the first time this happened in sixteen years.  The spread between three-month yen loans and three-month dollar loans is now around 0.09 bps.  Three-month yen Libor is now trading around 0.25313%.  The Nikkei 225 stock index lost 0.47% to close at ¥10,352.10.    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 ¥121.55 level and was capped around the ¥124.50 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥138.70 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥83.00 figure. In Chinese news, the U.S. dollar depreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8264 in the over-the-counter market, down from CNY 6.8265.  Chinese financial markets were closed last week for the Chinese New Year holiday.  Chinese leaders this week said the country will maintain an “appropriately loose” monetary policy in 2010 and seek to balance the objectives of fostering growth and managing inflation expectations.  Some media reports are suggesting China is becoming increasingly concerned with the “carry trade” in which hot money inflows are finding their way into the Chinese financial system after borrowings are being made in cheaper currencies like the U.S. dollar.

₤

The British pound moved lower vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.5390 level and was capped around the $1.5575 level.  Bank of England Governor King today testified the U.K. economy may need additional quantitative easing measures to extend its “nascent” economic recovery.  King cited several economic risks including the “stalled” economic recovery in Europe but downplayed the market’s concerns over U.K. sovereign debt.  Data released in the U.K. today saw BBA January mortgage approvals decline to 35,100 from 45,650, the first decline since March 2009.  Cable bids are cited around the US$ 1.5340 level.  The euro moved lower vis-à-vis the British pound as the single currency tested bids around the ₤0.8750 level and was capped around the ₤0.8835 level.

CHF

The Swiss franc depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.0845 level and was supported around the CHF 1.0715 level.  Swiss National Bank is rumoured to have bought euro for francs again today in what would be the latest intervention move.  Data released in Switzerland today saw the January UBS consumption indicator improve to 1.36 from 1.19, its highest level since September 2008.  U.S. dollar offers are cited around the CHF 1.0930 level.  The euro moved higher vis-à-vis the Swiss franc as the single currency tested offers around the CHF 1.4680 level while the British pound appreciated vis-à-vis the Swiss franc and tested offers around the CHF 1.6735 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.

By CountingPips.com

The U.S. dollar has been on the rise in the forex markets today while U.S. stocks have taken a hit as investor risk aversion has been the dominant theme in the U.S. session today. A sharp decline in the Conference Board’s consumer confidence survey to its lowest point since April 2009 has contributed to a higher preference for the safe haven currencies (U.S. dollar, Japanese Yen) and less demand for the higher-yielding currencies as well as stocks and oil.

The dollar has been driven higher today versus the euro, Swiss franc, British pound, Canadian dollar, New Zealand dollar and the Australian dollar, according to currency data by Oanda at 2:17 pm EST. The dollar, meanwhile, has fallen versus the biggest beneficiary of risk averse sentiment, the Japanese yen.

The U.S. stock markets have had a negative trading session today with the Dow Jones falling by over 80 points, the Nasdaq decreasing over 20 points and the S&P 500 showing over a 10-point shortfall. Oil has declined by $1.33 to the $78.92 per barrel level while gold has been unchanged and trades around the $1112.60 per ounce level.

Consumer Confidence decreases in February Survey

Consumer confidence fell in February after increasing for three straight months, according to a report released today by the Conference Board, which produces the Consumer Confidence Index. In a survey of 5,000 households, the index showed that consumer confidence decreased by 10.5 points from 56.5 in January to standing at 46.0 in February. The Expectations index also fell in February to 63.8 from 77.3 in January while the Present Situation index declined from 25.2 in January to 19.4 in February.

The Director of the Conference Board Consumer Research Center Lynn Franco talked about the newest survey saying, “Consumer Confidence, which had been improving over the past few months, declined sharply in February. Concerns about current business conditions and the job market pushed the Present Situation Index down to its lowest level in 27 years (Feb. 1983, 17.5). Consumers’ short-term outlook also took a turn for the worse, with fewer consumers anticipating an improvement in business conditions and the job market over the next six months. Consumers also remain extremely pessimistic about their income prospects. This combination of earnings and job anxieties is likely to continue to curb spending.”

U.S. house prices see small gain in December

Home prices in the U.S. improved in December to show a small increase for the seventh straight month, according to the Standard & Poors/Case-Shiller Home Price Index released today. The S & P’s/Case-Shiller Index measures sales prices of existing single-family homes in major cities nationally. The report showed that the 20-city composite index increased by 0.3 percent in December on seasonally adjusted basis. On an annual basis, the 20-city composite fell by 3.1 percent in December from the December 2008 level.

David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s, commented on the report saying, “As measured by prices, the housing market is definitely in better shape than it was this time last year, as the pace of deterioration has stabilized for now. However, the rate of improvement seen during the summer of 2009 has not been sustained.”

USD/JPY 1-Hour Chart -The U.S. Dollar falling versus the Japanese Yen today in forex trading. The USD/JPY pair has leveled at the significant 90.00 psychological level after breaking below the recent supportive trendline earlier today.

By Adam Hewison – Late in 2009 a lot of folks began asking us about buying silver instead of gold. At the time, we stated exactly how we felt, in that, why would you try to buy something that is not in the same league as gold? The two markets are completely different and are driven by a different set of emotions and fundamentals.

This is the first video that I’ve done on silver in quite some time, but I think it’s an important one for you to see.

Go straight to the video…

One of the standout features that I noticed was the fact that when gold was making new all-time highs in early December, silver failed to take out the March 2008 high. I consider this to be a negative.

In this short video you will very quickly see how we feel about silver and how you can benefit from looking at this market from a different perspective.

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

Watch the Video…

I hope you find this video both informative, educational, and enjoyable and that you have time to comment on blog about this video.

All the best,

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

By Fast Brokers – The Aussie is registering a sizable down-bar on the 4-hour as the risk trade pulls back across the board.  Weak economic data from Europe and the U.S. has dented upward momentum built up towards the end of last week.  The AUD/USD is participating to the downside this time around despite its relative strength as of late.  Although the Aussie has dipped back below its psychological level it is still trading comfortably above 2/19 lows.  Hence, the Aussie’s uptrend is still intact.  On the other hand, investors should continue to monitor activity in the Cable, EUR/USD and gold.  Should the Cable and EUR/USD trip below their previous February lows and gold follow south the Aussie may participate due to correlative forces.  Australia will release Construction Work and Wage Price Increase data during tomorrow’s Asia trading session.  However, Thursday’s CapEx data could have a larger impact on the Aussie.  The U.S. will release New Home Sales data tomorrow accompanied by Bernanke’s testimony before Congress.  Hence, volatility could pick up across all major Dollar pairs, particularly if Bernanke signals any intent for the Fed to tighten its monetary policy in the foreseeable future.

Technically speaking, the Aussie has multiple uptrend lines serving as technical cushions along with intraday, 2/18, and 2/19 lows.  As for the topside, the Aussie has multiple downtrend lines serving as technical barriers along with the highly psychological. .90 level.

Price: .8955

Resistances:   .8969, .8981, .9004, .9018, .9039, .9059

Supports: .8949, .8930, .8917, .8903, .8885, .8873

Psychological: .90, February Highs

(click 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 USD/JPY extended yesterday’s pullback amid disagreements between the government and central bank in regards to monetary policy.  While the government wants a looser monetary policy to help counter deflationary pressures and prop up the economy, the BoJ is holding steadfast in its intent to avoid additional monetary creation.  The BoJ’s tight stance despite mounting pressure has led investors back to the Yen with the expansion of QE measures looking less likely for the time being.  Meanwhile, upcoming U.S. and Japanese economic data could create some volatility in the USD/JPY due to the uncertainty surrounding policy.  Stronger than expected U.S. data could favor the USD/JPY, and vice versa.  On the flipside, strong economic data from Japan could place further downward pressure on the USD/JPY with investors expecting the continuation of a neutral monetary policy.  Japan will release its Trade Balance data during tomorrow’s Asia trading session followed by New Home Sales from the U.S. along with Bernanke’s testimony before Congress.  Hence, activity could pick up in the USD/JPY over the next 24-48 hours.

Technically speaking, the USD/JPY has multiple downtrend lines serving as technical barriers along with intraday and 2/17 and 2/19 highs.  As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with 2/17, 2/16 and 2/12 lows.  Furthermore, the highly psychological 90 level could serve as a technical cushion should it be retested.

Present Price: 90.71

Resistances: 90.92, 91.03, 91.13, 91.28, 91.37, 91.46

Supports: 90.66, 90.53, 90.47, 90.33, 90.24, 90.12

Psychological: 90, February highs and lows

(click 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 Cable has registered a large leg down after breaching its psychological 1.55 level.  BBA Mortgage Approvals much weaker than expected, sparking speculation that the economic recovery is cooling.  Additionally, markets received discouraging EU data today, including the weakest French Consumer Spending reading since October 2006.  Hence, we’re viewing a route of the risk trade once again with fundamentals disappointing.  Meanwhile, King reiterated the BoE’s flexible monetary stance.  The central bank is taking the middle road by stating it is ready to be proactive should inflation either heat up faster than expected or dip to deflationary levels once again.  Such a flexible stance implies upcoming UK data could yield more volatility, particularly pricing numbers.  For the time being investors are awaiting U.S. CB Consumer Confidence data.  Should U.S. consumer confidence perform stronger than anticipated, the risk trade could experience further downward pressure with investors favoring the Dollar over the Pound and Euro based on comparative economic strength.  On the other hand, strong U.S. data could encourage investors that the global economic recovery is on track and give a little boost to the risk trade.  Hence, it will be interesting to see how the Dollar reacts to today’s release, particularly if it prints stronger than anticipated.  Meanwhile, although the Cable has experienced a setback it remains above previous February lows.  Hence, the currency pair still has an opportunity to salvage some of the positive momentum built up since 2/19.  Although the UK will be quiet on the data front tomorrow, the U.S. will release New Home Sales and Bernanke will testify before congress.  Therefore, FX markets could remain activity, especially if Bernanke gives any unexpected insight in regards to the Fed’s recent 25 basis point hike in the discount rate.

Technically speaking, the Cable has multiple downtrend lines serving as technical barriers along with intraday highs and the psychological 1.55 level.  As for the downside, the Cable has multiple uptrend lines serving as technical cushions (off screen) along with intraday and 2/19 lows.

Present Price: 1.5441

Resistances: 1.5458, 1.5482, 1.5503, 1.5524, 1.5543

Supports: 1.5428, 1.5407, 1.5390, 1.5365, 1.5348

Psychological: February lows, 1.55, 1.53

(click 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.