Month: March 2010

By Fast Brokers – The USD/JPY is retesting its highly psychological 90 level as the Dollar pulls back across the board ahead of the FOMC.  Investors will be paying close attention to the Fed’s statement to see whether the central bank alters its dovish language.  Should there be any alteration, this could spur a Dollar rally and benefit the USD/JPY.  However, if the Fed keeps its loose policy statement intact, the risk trade could bounce in anticipation of more cheap money in the U.S.  The U.S. will also release building permits data today, meaning that either way the FX markets could be in for an active trading session.  The BoJ will also make its monetary policy decision during tomorrow’s Asia trading session.  It will be interesting to see whether the BoJ heeds to the DPJ’s calls for additionally liquidity injections to counter deflationary pressures.  If so, the USD/JPY could pop again as the BoJ takes a looser monetary policy stance than the Fed.  However, if the BoJ keeps its policy as is the USD/JPY may be buoyed around its highly psychological 90 area.  That being said, there are many events on the calendar which could have a considerable impact on the USD/JPY over the next 24 hours.

Technically speaking, the USD/JPY faces multiple downtrend lines along with 3.8, 3/10, and 3/12 highs.  Meanwhile, the highly psychological 90 area could continue to have an influence over the USD/JPY’s movements for the near-term.  As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with 3/9 lows.

Present Price: 90.06

Resistances: 90.16, 90.23, 90.29, 90.35, 90.41, 90.50

Supports: 90.01, 89.92, 89.84, 89.74, 89.64, 89.55

Psychological: 90, March 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 – The Cable is consolidating above Monday’s lows after undergoing a hefty selloff in response to more warning shots concerning UK debt levels.  Moody’s issued fresh statements warning the UK, U.S. and several EU countries to get their fiscal houses in order.  The prospect of a hung parliament in the UK is worrying investors that the government will not be able to make the necessary budget cuts to counter rising debt levels.  The EU issued a similar warning to the UK today citing concerns that proposed austerity measures are not enough to alleviate fiscal fears.  Another storm of negative statements dealt a blow to the Pound, highlighted by resilience in the EUR/GBP.  Hence, it’s the same old story for the Pound with psychological attacks weighing down the GBP/USD.  The UK will be quiet again on the data wire, leaving investors focused on today’s FOMC meeting.  Should the Fed maintain its dovish monetary language, this could help buoy the Cable and the risk trade in general.  However, if the Fed tightens its stance this could place downward pressure on the Cable with investors heading to the Dollar.  Therefore, investors should keep an eye on the market’s reaction to today’s Fed statement.  On a positive note, gold is rebounding from $1100/oz.  Gold is normally negatively correlated with the Dollar on a trend basis, so gold’s bounce could imply further stability in the risk trade.  Meanwhile, it will be interesting to see if the Cable can pop back above our 1st tier downtrend line since it runs through 2/23 eyes and has been a bearing concerning the longevity of the Cable’s present upswing from 2010 lows.

Technically speaking, the Cable has multiple uptrend lines serving as technical cushions along with 3/15 and 3/11 lows.  The psychological 1.50 area comes into play again and could serve as  a solid cushion.  As for the topside, the Cable faces multiple downtrend lines along with 3/3, 3/8 and 3/12 highs.

Present Price: 1.5056

Resistances: 1.5065, 1.5071, 1.5085, 1.5098, 1.5106, 1.5118

Supports: 1.5037, 1.5029, 1.5020, 1.5012, 1.5004, 1.4998

Psychological: 1.50 and March 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 – The AUD/USD has bounced from Monday lows after dipping below .91 and touching our key 2nd tier uptrend line.  The Aussie followed the EUR/USD and Cable lower amid a wave of risk-aversion in reaction to statements from Moody’s warning developed countries with increasing debt exposure to get their fiscal houses in line or face the possibility of a credit downgrade in the future.  Uncertainty, particularly in Europe, weighed on the Aussie as investors speculated that more debt issues could dissuade the RBA from tightening its monetary policy again.  However, the Aussie has staged a solid rebound thus far today, finding support in our key 2nd tier uptrend line which runs through 3/9 lows.  The RBA issued its meeting minutes today and the notes showed the RBA is holding its monetary stance for the time being and stands ready to tighten or loosen depending on fundamental conditions.  That being said, the RBA still seems to be leaning towards a hawkish monetary policy so long as employment and consumption continue to improve.  However, last week’s negative employment and housing reports have decreased the expectations of a rate hike at the central bank’s next meeting.  Meanwhile, focus will likely be on the U.S. with building permits data and an FOMC meeting on the way.  Should the FOMC maintain its loose monetary language then they risk trade could receive a boost.  On the other hand, any hawkish language alteration could have a negative impact on the Aussie in anticipation of tighter monetary policy from the Fed.

Technically speaking, the Aussie has multiple uptrend lines serving as technical cushions along with intraday lows, 3/15 lows, 3/9 lows, and the psychological .90 area.  As for the topside, the Aussie has multiple downtrend lines serving as technical barriers along with the psychological .92 area.  Additionally, previous 2010 highs could serve as a hefty technical barrier should they be tested.

Price: .9146

Resistances: .9160, .9171, .9186, .9194, .9213, .9227

Supports: .9137, .9126, .9114, .9104, .9090, .9073

Psychological: .92, .90,  2010 highs

(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 Editorial Staff

The following article is adapted from a special report on “Popular Culture and the Stock Market” published by Robert Prechter, founder and CEO of the technical analysis and research firm Elliott Wave International. Although originally published in 1985, “Popular Culture and the Stock Market” is so timeless and relevant that USA Today covered its insights in a recent Nov. 2009 article. For the rest of this revealing 50-page report, download it for free here.

This year’s Academy Awards gave us movies about war (The Hurt Locker), football (The Blind Side), country music (Crazy Heart) and going native (Avatar), but nowhere did we see a horror movie nominated. In fact, it looks like Sweeney Todd, The Demon Barber of Fleet Street was the most recent to be nominated in 2008, for art direction (which it won), costume design and best actor, although the last one to win major awards for Best Picture, Director, Actor and Actress was The Silence of the Lambs in 1991.

Whether horror films win Academy Awards or not, they tell an interesting story about mass psychology. Research here at Elliott Wave International shows that horror films proliferate during bear markets, whereas upbeat, sweet-natured Disney movies show up during bull markets. Since the Dow has been in a bear-market rally for a year, now is not the time for horror films to dominate the movie theaters. But their time will come again.

In the meantime, to catch up on why all kinds of pop culture — including fashion, art, movies and music — can help to explain the markets, take a few minutes to read a piece called Popular Culture and the Stock Market, which Bob Prechter wrote in 1985. Here’s an excerpt about horror movies as a sample.

* * * * *

From Popular Culture and the Stock Market by Bob Prechter

While musicals, adventures, and comedies weave into the pattern, one particularly clear example of correlation with the stock market is provided by horror movies. Horror movies descended upon the American scene in 1930-1933, the years the Dow Jones Industrials collapsed. Five classic horror films were all produced in less than three short years. Frankenstein and Dracula premiered in 1931, in the middle of the great bear market. Dr. Jekyll and Mr. Hyde played in 1932, the bear market bottom year and the only year that a horror film actor was ever granted an Oscar. The Mummy and King Kong hit the screen in 1933, on the double bottom. These are the classic horror films of all time, along with the new breed in the 1970s, and they all sold big. The message appeared to be that people had an inhuman, horrible side to them. Just to prove the vision correct, Hitler was placed in power in 1933 (an expression of the darkest public mood in decades) and fulfilled it. For thirteen years, lasting only slightly past the stock market bottom of 1942, films continued to feature Frankenstein monsters, vampires, werewolves and undead mummies. Ironically, Hollywood tried to introduce a new monster in 1935 during a bull market, but Werewolf of London was a flop. When film makers tried again in 1941, in the depths of a bear market, The Wolf Man was a smash hit.

Shortly after the bull market in stocks resumed in 1942, films abandoned dark, foreboding horror in the most sure-fire way: by laughing at it. When Abbott and Costello met Frankenstein, horror had no power. That decade treated moviegoers to patriotic war films and love themes. The 1950s gave us sci-fi adventures in a celebration of man’s abilities; all the while, the bull market in stocks raged on. The early 1960s introduced exciting James Bond adventures and happy musicals. The milder horror styles of the bull market years and the limited extent of their popularity stand in stark contrast to those of the bear market years.

Then a change hit. Just about the time the stock market was peaking, film makers became introspective, doubting and cynical. How far the change in cinematic mood had carried didn’t become fully clear until 1969-1970, when Night of the Living Dead and The Texas Chainsaw Massacre debuted. Just look at the chart of the Dow [not shown], and you’ll see the crash in mood that inspired those movies. The trend was set for the 1970s, as slice-and-dice horror hit the screen. There also appeared a rash of re-makes of the old Dracula and Frankenstein stories, but as a dominant theme, Frankenstein couldn’t cut it; we weren’t afraid of him any more.

Hollywood had to horrify us to satisfy us, and it did. The bloody slasher-on-the-loose movies were shocking versions of the ’30s’ monster shows, while the equally gory zombie films had a modern twist. In the 1930s, Dracula was a fitting allegory for the perceived fear of the day, that the aristocrat was sucking the blood of the common people. In the 1970s, horror was perpetrated by a group eating people alive, not an individual monster. An army of dead-but-moving flesh-eating zombies devouring every living person in sight was a fitting allegory for the new horror of the day, voracious government and the welfare state, and the pressures that most people felt as a result. The nature of late ’70s’ warfare ultimately reflected the mass-devouring visions, with the destruction of internal populations in Cambodia and China.

Learn what’s really behind trends in the stock market, music, fashion, movies and more… Read Robert Prechter’s Full 50-page Report, “Popular Culture and the Stock Market,” FREE

By Yan Petters – The GBP/AUD pair is dropping quite constantly for almost two years now. Normally, traders are advised to stay away from this pair as it is considered to be too volatile, and is even named by several analysts as an exotic pair. However, traders should not miss out on such unique opportunity.

• The chart below is the GBP/AUD 1-Week chart by ForexYard.
• The technical indicators used are the Bollinger Bands, the Slow Stochastic, the MACD/OsMA and the Relative Strength Index (RSI).
• The MACD provide a bearish cross once again, indicating that the freefall has more room to go.
• The RSI has failed to reach the 60 line, and has once again dropped into the ‘Over-Sold’ zone. This suggests that the momentum is still bearish.
• Nevertheless, the Slow Stochastic shows a bullish cross, which means that the bearish momentum might halt a bit. Yet as the last 2 years shows us, bullish crosses of the Slow Stochastic have predicted halts in the bearish trend and not bullish reversal.
• It seems that as long that the Pound continues to fall on all fronts, the largest drop will take place against the AUD.

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 sharp reduction in domestic and foreign investment in the United States, and a decline in the US stock market, the USD and JPY appear to have made more than moderate gains against most of their rivals, and the EUR may be on the short end of the market as a result. However, given today’s ZEW economic sentiment reports, there is a chance that the EUR could experience a modest rebound if the figures come out in favor of the Euro-Zone’s regional economy.

Economic News

USD – Dollar Up on Risk Aversion; Fed Funds Rate on Tap

The US Dollar surged versus the majority of its currency counterparts during yesterday’s trading. Against the EUR, the greenback reached towards 1.3640 up from yesterday opening price of 1.3775. A significant price shift in the market yesterday was also the sudden surge in the value of the Canadian Dollar (CAD) against the buck. The USD/CAD began to reach towards parity with a current price of 1.0185.

Two important economic indicators came in at levels unforeseen by economists yesterday. The TIC Long-Term Purchases report, which is a measure of investment in the local US market, was published significantly lower than was expected. Additionally, the NAHB Housing Market Index dropped this past month, highlighting weakness in the American housing sector.

Most investors would normally expect a sudden sell-off in USD, but the opposite in fact took place. The Dollar and Yen each shot up following the above reports due to a dramatic rise in risk aversion. US stocks plummeted following the news but the greenback has gained from risk flight.

These price movements also seem to have come at the start of a volatile trading week. Today’s release of the US Building Permits report could help verify whether yesterday’s NAHB report was accurate and give more direction for the strength of the local economy in the US. The Federal Reserve Board will also be publishing its decision on US short-term interest rates. The latest string of data from the United States suggests that a rate hike would be premature at this point, so investors shouldn’t expect much change from this event, but volatility, as always, should be anticipated.

EUR – EUR Facing Sell Pressure from Risk Flight

The EUR appears to have taken modest losses in yesterday’s trading. Starting with a high near 1.3775 versus the USD, the 16-nation single currency is now trading near the 1.3690 price level. The Euro has also taken similar losses against the Swiss Franc, and currently trades at 1.4505, down from 1.4550.

With a sharp reduction in domestic and foreign investment in the United States, and a decline in the US stock market, the USD and JPY appear to have made more than moderate gains against most of their rivals, and the EUR may be on the short end of the market as a result. The sudden return of risk aversion has the Euro-Zone currency bearing the brunt of this sell-off.

Should today’s releases of the ZEW Economic Sentiment reports come lower than forecasted, there is a strong chance the EUR will continue to face selling pressure, especially if the report from Germany, the Euro-Zone’s largest economy, fails to meet expectations. In other news, however, the US Federal Reserve Board is due to release their decision on short-term interest rates and although no major changes are expected, there is typically a lot of pressure built into the opening of the American market prior to this event.

JPY – Yen Sees Modest Gains; BOJ Concerned over European Spill-Over

The Yen appears to be on the winning side of a recent return of risk aversion in the forex market. US stocks dropped after less-than-stellar investment data was published in the US. However, the JPY did gain from a positive manufacturing report from New York. The USD/JPY currently trades at a 2-week low of 90.02, from yesterday’s opening price near 90.55.

No matter how much strength the Yen gained in recent trading, the truth remains that the JPY continues to trade within steady ranges against its primary crosses. The mixed movements of the EUR and CHF have resulted in somewhat volatile conditions for the Yen, but it seems to be to the advantage of Japan in both cases. The only concern the Bank of Japan (BOJ) seems to be carrying is regarding the status of Europe considering their recent debt woes. BOJ governors are rightfully concerned about spillover into East Asia, but no real effect has been priced in yet.

Crude Oil – Crude Falls on USD Surge and Market Uncertainty

The price of Crude Oil has begun to waver in light of economic uncertainty. The TIC Long-Term Purchases report published from the US yesterday helped shake business sentiment, and stocks are trading lower as a result. The surging US Dollar has helped to put a damper on oil prices, but few economists see prices dropping further. Demand concerns appear to have risen out of yesterday’s economic data.

On the upside, Crude Oil has failed to breach out of its range-trading pattern and many analysts are expecting a rebound in today’s trading. The Federal Reserve Board is due to release their decision on short-term interest rates, and other monetary policies, later today. In light of recent data, rates will not likely be raised, but a hawkish statement could help to return some of the risk which was pulled out of the market yesterday. Such a result would pull the USD back down and help spot Crude Oil prices rebound.

Technical News

EUR/USD

While most of the pair’s indicators are floating in neutral territory, the hourly chart’s Slow Stochastic is exhibiting a fresh bearish cross while the RSI is floating in the overbought territory. Going short with tight stops might be advised for today.

GBP/USD

An upward correction may take place for the pair today as the 2 hour chart RSI is floating in the oversold territory and a bullish cross is evident on the 4 hour chart’s Slow Stochastic. Going long for the day may be a good option.

USD/JPY

The hourly and 2 hour charts’ RSI are floating in the oversold territory while a bullish cross is evident on the 2 hour and 4 hour charts’ Slow Stochastic. Furthermore, a breach of the lower Bollinger Band is evident on the 2 hour and 4 hour charts. Going long for the day may be advised.

USD/CHF

The pair may see an upward correction today as a bullish cross is evident on the hourly and daily charts’ Slow Stochastic, while the hourly and 8 hour charts’ RSI is floating in the oversold territory indicating an imminent upward movement. Going long for the day may be a good option.

The Wild Card

GBP/NZD

The pair’s hourly and 2 hour chart’s RSI is floating in the oversold territory with a bullish cross evident on the hourly, 2 hour and 4 hour charts’ Slow Stochastic. Furthermore, a breach of the lower Bollinger Band is evident on the hourly chart. Forex traders are advised to go long 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.

Dear Trader,

The U.S Interest Rate will be released today, March 16^th at 6:15pm GMT. Due to the expected influence of the announcement on the Forex market, we have collected for you a few trading ideas, which you might consider to take advantage of prior to the rate announcement –

EUR.USD, Hourly

Trading Advise- Although the Pair opened on a negative note this week the weekly outlook still remains bullish. Use the 1.36 to place your stop loss under it and ride a bullish trend close to the 1.4 level. Trim you bet slightly below 1.4 as the 1.4-1.42 is a heavy bids zone where we suggesting cautiousness.

EUR.USD, Daily

EUR.JPY, Hourly

Trading Advise- The Pair is expected to have a volatile journey north with the 124.85 as the first resistance. Although downside risk for the pair is still considerable we still see good upside potential with good risk reward ratio. Place your stop loss under 123 and ride a rebound to the 125 area.

EUR.JPY, Daily

Special Attention- If you are a long term player watch for a daily close above the 125 level. A close above that level could ignite a strong rally for the pair. Place your stop loss under 120 and ride the pair to our long term target of 130.The pair’s move to 130 is expected to be volatile moreover a failure to close above 125 on a daily interval would invalidate our long term scenario.

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.

EURUSD’s bounce extended to 1.3795 only. The following pullback suggests that a cycle top is being formed on 4-hour chart. Now the fall from 1.0154 could possibly be resumption of downtrend from 15144 (Nov 25, 2009 high), another fall to 1.3200-1.3300 area may be expected and a breakdown below 1.3530 could confirm such case. However, above 1.3795 will indicate that the pair remains in upward movement from 1.3435, then further rally could be seen to 1.3850 or even 1.3935.

Daily Forex Analysis

By GCI Fx Research

€

The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bisa around the US$ 1.3685 level and was capped around the $1.3775 level.  The Federal Open Market Committee is not expected to make any significant changes to monetary policy tomorrow when its interest rate decision is announced.  The Obama administration is said to favour San Francisco Fed President Yellen to replace retiring Vice Chairman Kohn.  It is believed Obama may stack the Fed Board with so-called monetary doves to retain a downward bias on interest rates.  Data released in the U.S. today saw February capacity utilization rise to 72.7% from 72.5% while February industrial production fell to +0.1% from the prior reading of +0.9%.  Also, January total net Treasury International Capital flows printed at –US$ 33.4 billion, down from a revised +US 53.6 billion for December.  Net long-term TIC flows tumbled to US$ 19.1 billion from the prior reading of US$ 63.3 billion.  These data mean the U.S. did not cover its trade deficit in January through foreign investment inflows.  Other data released today saw the March Empire State manufacturing index decline to +22.86 from the previous reading of +24.91.  Dealers await the March NAHB housing market index later in the day and details about new financial services regulation legislation making its way through Congress.  In eurozone news, EMU-16 Q4 unemployment was off 0.2% q/q and 2.0% y/y.  Eurozone CPI data will be released tomorrow along with German ZEW data.  Traders remain fixated on Greece, especially as French finance minister Lagarde and other eurozone officials have intimated Greece may be able to resolve its massive fiscal deficit without external financial assistance.  European Union officials are said to have a “contingency” plan in place that they can implement “with the push of a button.”  Euro bids are cited around the US$ 1.3335 level.

¥/ CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥90.85 level and was supported around the ¥90.55 level.  Traders await Bank of Japan Policy Board’s interest rate decision tomorrow night with strong expectations of additional monetary easing.  The central bank may expand a ¥10 trillion fund that provides funding to banks when policymakers convene on 16-17 March and this is important because an unlimited uncollateralized loan facility expires on 31 March.  The central bank remains under significant pressure to do more to combat the deflation problem further.  BoJ Governor Shirakawa and other Policy Board members have recently indicated deflationary pressures are persisting because there is insufficient final private demand.  Shirakawa overnight said he is “not against inflation targeting” and said the central bank should not make policy based on short term price movements.  He also said that additional Japanese government bond purchases would mean the central bank will sell them eventually. Concerning the yen, Shirakawa said the central bank’s accommodative policy is impacting the yen and “proper action needs to be taken.”  It appears the Hatoyama government is becoming increasingly concerned with the yen’s strength and there is growing speculation the government may begin to officially intervene in the market, especially as the government increased the size of the funding it has available for intervention in its draft budget.  Data released in Japan overnight saw February consumer confidence improve to 40.0 while February Tokyo-area condominium sales climb 10.7% y/y.  Machine tool orders and tertiary index data will be released tomorrow.  The Nikkei 225 stock index climbed 0.01% to close at ¥10,751.98.  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 ¥124.25 level and was capped around the ¥125.15 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥136.10 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥85.85 level. In Chinese news, the U.S. dollar depreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8262 in the over-the-counter market, up from CNY 6.8256.  Data released in China overnight saw February actual foreign direct investment decrease to +1.08% from the prior reading of +7.80%.  Premier Wen Jinbao reported the yuan is “not undervalued.”  Chinese and U.S. tensions are definitely increasing and it remains to be seen how quickly China may liberalize its yuan exchange rate policy.

₤

The British pound depreciated sharply vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.5020 level and was capped around the $1.5205 level. Sterling moved lower on remarks from Bank of England Monetary Policy Committee member Barker who reported the U.K. economy could recede again, adding the economic recovery will continue to be “bumpy and fragile.”  Cable continues to suffer from political uncertainty ahead of the upcoming mandatory General Election.  Prime Minister Brown is expected to lose to Tory leader Cameron but Cameron may not be able to form a majority government if he wins, and this could lead to a weaker pound.  U.K. DCLG house prices data will be released tomorrow.  On Friday, Bank of England Chief Economist and Monetary Policy Committee member Dale reported that from the time quantitative easing was implemented last year, “the economy has stabilized, household and business confidence have recovered, and financial market conditions have improved.”  Dale noted the BoE is poised to make additional purchases of assets if required but noted the central bank could also withdraw monetary stimulus at any time.   Cable bids are cited around the US$ 1.4455 level.  The euro moved higher vis-à-vis the British pound as the single currency tested offers around the US$ 0.9130 level and was supported around the $0.9045 level.

CHF

The Swiss franc depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.0615 level and was supported around the CHF 1.0575 level.  Data released in Switzerland today saw February producer and import prices decline 0.3% m/m and fall 1.0% y/y.  SECO March 2010 economic forecasts will be released tomorrow.  As expected, Swiss National Bank last week kept its three-month Swiss franc Libor target rate unchanged at 0.2% today.  SNB reported ‘The Swiss National Bank is maintaining its expansionary monetary policy. It will act decisively to prevent an excessive appreciation of the Swiss franc against the euro.”  SNB is forecasting the Swiss economy will expand about 1.5% this year.  SNB Chairman Hildebrand said the main risks to Swiss economic growth are “external” and reiterated foreign exchange intervention remains one of its tools.  January M2 money supply growth was an annualized 16.5%.  U.S. dollar offers are cited around the CHF 1.1045 level.  The euro moved lower vis-à-vis the Swiss franc as the single currency tested bids around the CHF 1.4525 level while the British pound moved lower and tested bids around the CHF 1.5915 level.

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 trading stronger in the forex markets today against most of the major currencies and has started off the week in the black after a decline last week. The dollar has made gains on Monday against the euro, British pound, Swiss franc, Canadian dollar, Australian dollar and the New Zealand dollar while the American currency has been declining versus the Japanese yen, according currency data by Oanda.

The euro has fallen versus the dollar by approximately 100 pips today as the EUR/USD currency pair has declined to trade near the 1.3660 level after opening the day at 1.3773. The EUR/USD rose last week by 144 pips to break out of its trading range and touched its highest level since February 11th after ending the prior three weeks almost unchanged.

The British pound has fallen by 150 pips today after gaining a total of 67 pips last week against the dollar and the GBP/USD is trading right above the psychological level at 1.5000.

The dollar has gained versus the Canadian dollar by approximately 30 pips today as the USD/CAD trades around the 1.0200 level. The dollar had fallen by 95 pips last week to the Canadian dollar to mark a second straight weekly decline. Rounding out the dollars gains today shows increases of approximately 40 pips versus the Swiss franc, the New Zealand dollar and Australian dollar while the USD has fallen against the Japanese yen by over 20 pips.

The dollar had fallen last week versus the Australian dollar (-76 pips), New Zealand dollar (-49 pips) and against the Swiss franc (-161 pips) while the USD gained 23 pips versus the Japanese yen.

The US stock markets today have had a mixed session today with the Dow gaining by approximately 17 points, the Nasdaq decreasing over 5 points and the S&P 500 up by less than 1 point. Oil has fallen lower by $1.33 to $79.91 while gold has risen by $3.60 at $1,105.10 per ounce.

NY Manufacturing expands and Investors pull back US investments

Economic news releases today showed that New York manufacturing activity dipped a bit in March but showed expanding levels while new orders increased. The business activity index showed its eight straight month of positive readings, according to the NY Federal Reserve. New orders rose sharply by 17 points in March while shipments, inventories and the employment indexes also increased in the month.

Also released today was the Treasury Department report on foreign investment for United States securities and it showed foreign investors scaled back on US investments in January. The net outflows by foreign investors in January was $33.4 billion following a net inflow of $53.6 billion in December. This important data, which measures capital flows in and out of the US, showed that foreign investors bought a total of $19.1 billion in long-term US securities in January after spending $63.3 billion in December.

EUR/USD Chart – The Euro falling back below the 1.3700 level versus the dollar in forex trading today. The EUR/USD climbed over 140 pips last week before retreating today and dropping down to the 100-hour moving average in red.