Month: March 2010

By Anton Eljwizat – The GBP has dropped significantly versus the CAD in the past month, and it is currently trading around 153.55. And now as evident in the data below, the daily chart is giving bullish signals, indicating that the GBP/CAD pair might go up. Forex traders can take advantage of this impending movement by having their Entry Orders in place to capture this reversal.

• Below is the daily GBP/CAD chart by ForexYard.

• The technical indicators used are the Relative Strength Index (RSI), MACD, and Williams Percent Range.

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

• The Relative Strength Index (RSI) signals that the price of this pair currently floats in the over-sold territory, indicating upward pressure.

• The MACD indicates an impending bullish cross, which may signal an upward movement is going to occur in the near future.

• The Williams Percent Range is testing the lower border at the -100 mark, which merely highlights some added upward pressure.

GBP/CAD Daily Chart

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

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

Gold’s safe-haven status is based on hype, not histor

By Nico Isaac

As I sat down to watch the Oscar pre-show on Sunday night, March 7, one word was repeatedly used to describe the celebrity starlets and their designer duds: GOLD. Gold bustiers and gold lame skirts, shiny gun-metal dresses and glittery sequined gowns all basking in the golden shadow of the final golden statue.

Everywhere you look, from the Red Carpet to Wall Street, gold is definitely in “fashion.” As for why, one word comes to mind: safe-haven. See, according to the mainstream financial experts, the more unstable the global economy, the greater the appeal for the precious metal.

And, with a staggering 17% unemployment rate in the United States, alongside slumping real estate sales, Eurozone weakness, the Greece debt debacle, and so on — the only thing going up is gold’s supposed disaster premium. Here, take these recent news items for example:

• “Bullion Sales Hit Record In Stampede To Safety.” (Financial Times)
• “Gold Ticks Higher On Safe Haven Buying. The risk trade is resuming.” (AP)
• “Gold Rose to 6 ½ Week Highs as the metal benefits from fears over financial instability in general. The market is looking for some security with gold.” (Reuters)
• “Gold Rush: This is a new round of safe haven buying.” (Bloomberg)

There’s just one problem: The correlation between a falling economy AND rising gold prices is based solely on hype, NOT history.

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Case in point: In the March 2008 Elliott Wave Theorist (republished in his 40-page Gold and Silver eBook), Elliott Wave International President Bob Prechter presents an indisputable case AGAINST the safe-haven status of gold.

The first piece of evidence: The following table showing gold’s performance during the 11 officially recognized recessions beginning in 1945.

Prechter also plotted the Dow Jones Industrial Average into the same period and made this startling discovery: The average total return for the Dow during recessions since 1945 is 6.89%. Taking into account modern transaction costs, the Dow actually beats gold with a 6.87% return.

The most powerful myth-debunking punch of all, though, came via the second chart of gold’s performance — this time during periods of financial growth.

In Prechter’s own words:

“All huge gains in gold have come while the economy was expanding… The idea that gold reliably rises during recessions and depressions is wrong. In fact, like most such passionately accepted lore, it’s backwards.”

Now, this doesn’t mean that you shouldn’t own gold in a financial crisis. On the contrary: In chapter 22 of his Wall Street Journal business bestseller, Conquer the Crash, Prechter lists 5 reasons why “you should buy gold and silver anyway.” Gold is “real money,” after all! It’s just that, despite widespread beliefs to the contrary, you shouldn’t expect “huge gains in gold” when the economy contracts.

Download Robert Prechter’s FREE 40-Page Gold and Silver eBook. Is gold a simple buy-and-hold at today’s prices? The independent insights in this valuable ebook deliver Prechter’s complete analysis and help you decide how to – and how not to – incorporate gold and silver successfully into your own investment strategy. Learn more, and download your Gold and Silver eBook here.

Source: ForexYard

Investors raised their appetite for riskier assets during yesterday’s trading, but still avoided European and British currencies because of debt worries. The big gainers yesterday were the AUD and CAD, both currencies are linked to commodities, in particular crude oil. Crude oil had recently gained in positive momentum, although it closed slightly lower yesterday. The question remains whether the EUR and GBP will attract some of the appetite for riskier assets.

Economic News

USD – USD Firm against EUR; Declining vs. AUD and CAD

The U.S. Dollar remained strong against the Pound and the Euro yesterday. Credit downgrade warnings by rating agencies regarding some European countries such as Greece, Portugal and the UK continued to worry investors. The EUR/USD traded low for most of the day, as a result. Currently the pair is trading at 1.3600.

The USD did decline against the Australian Dollar and the Canadian Dollar, however. These pairs are currently trading at 0.9154 and 1.0267 respectively.

Wholesale Inventories is expected to be published later today. Although, this is not a significant parameter, investors will look at the result as a sign of the U.S. fiscal health. A lower than expected inventories reading might boost the USD higher against the other major currencies.

The most anticipated data from the U.S. will be published on Friday: Retails Sales, and the University of Michigan (UoM) consumer confidence survey. Traders are advised to build their positions tomorrow and Thursday while trade is still relatively calm.

EUR – Rating Agencies Continue to Add Pressure to EUR

The EUR continued to be influenced by debt worries. The currency is slowly declining against the Yen and the USD. Although during trading it managed to visit the green territory, both Monday and Tuesday it failed to finish higher against the JPY or the greenback.

The EUR/USD is trading in a narrow range around 1.3600. Appetite for risk might benefit the EUR in the coming trading days if data from Europe published today and tomorrow prove that the economy is indeed expanding.

No significant data was published yesterday. Today, better than expected news from the UK and Germany should send the EUR higher against safe haven currencies such as the USD and JPY. Manufacturing Production from the UK is expected to rise 0.3%, German Final CPI is forecasted to rise 0.2% and the regional Trade Balance forecast stands at a potential 16.4B surplus.

JPY – Yen Slides as Risk Appetite Grows

The JPY continued its bullish movement against the EUR and GBP yesterday; although, toward the end of trading both currencies pared some of their losses. Currently the pairs are trading at 122.39 and 134.69 respectively.

The Yen declined significantly against the AUD, which is currently trading at 82.40. It is also declining against the CAD, currently trading at 87.65. Good economic data from china or the U.S., or continued strength in commodities, should support this most recent trend.

Core Machinery data published last night in Japan fell 3.7%. The data is a leading indicator of corporate capital spending. The fall in machinery orders is evidence for a slow economic growth. The publication may lead the Bank of Japan (BOJ) to issue further economic easing programs to increase demand by Japanese consumers, and push the economy higher.

OIL – Crude Oil Prices Declined Yesterday as Investors Closed on Profits

Crude Oil slightly declined during yesterday’s trading, but remained above $80 a barrel. Currently, Crude Oil is trading at $81.57, and it seems to be continuing its bullish trend since mid-February.

The U.S. Energy Information Administration (EIA) published a report yesterday forecasting that the price of oil should climb to $85 a barrel in the near future. They also projected that the price should remain above $80 a barrel this spring.

Later on today, the U.S. EIA is expected to publish Crude Oil Inventories, forecasted to grow by 1.9M barrels. Any lower figure should boost the price even higher. In recent weeks, data came above forecasts, but it failed to influence the price. It seems that the price of oil could remain above $80 a barrel. However, a serious boost in price should be supported by strong fundamental data. Better than expected U.S. Retail Sales to be published on Friday might push the price toward $85.

Technical News

EUR/USD

The 4-hour chart is showing that the pair is still floating within its bearish channel. However, the RSI on the 4H chart is bellow the 30 line, indicating that the market is oversold. The Slow Stochastic is also showing a fresh bullish cross, suggesting that an upward move is imminent. Going long with tight stops appears to be preferable.

GBP/USD

The pair is in the middle of a strong downtrend, and is testing fresh lows on a daily basis. The very important key support level of 1.4935 has been breached and the pair is likely to continue is bearish trend. Next target price might be around 1.4800

USD/JPY

For the past few days the pair has been floating around 90.00 with no apparent breach. Now, however, new signs for a bearish move are given in the form of a bearish cross on the Slow Stochastic of both the daily and the hourly charts. Traders are advised to wait for the break and swing.

USD/CHF

The pair continues to provide exclusive bullish signals, and is now traded around the 1.0750 level. All oscillators on the daily chart are pointing up and further bullishness will probably take place, with potential target price of 1.0825.

The Wild Card

Silver

The 4H chart’s Bollinger Bands appear to be tightening on this commodity as prices prepare for a volatile jump. With bearish crosses on the hourly and daily Slow Stochastic, as well as an over-bought indication on the 4-hour RSI, the next major movement may indeed be in a downward direction. Forex traders involved in commodity trading can take advantage of this knowledge by going short on Silver and riding out what appears to be building up to be a sharp movement in price.

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.

Trading advice: Trade with the range

Although the pair is currently trading sideways on a daily basis, a good idea would be to take advantage of the current range for short term trading. The pair has found support around 1.352 and since then has slowly rebounded..Use the 1.352 as support with a target of the 1.369. Above 1.369 trades could be a bit choppy thus we advise to trim your profit around this area.

Trading advice: Bet on a rebound

Although the pair has been under bearish pressure in the last few hours upside momentum is slowly emerging. Use the 121.3 as support with the 123.6 as your target. The pair could easily rally beyond this point but we suggest slight caution above this level.

Trading advice: Wait for a Break

The pair is gradually gaining bullish momentum and could be gearing for a rebound. Wait for a break of the 135 and use 133.7 as support with 137.4 as your target. Potential could be way above it but above such levels we suggest to trim your profit.

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.

The markets presented an unstable session yesterday, bouncing at the opening bell, only to close with minor gains. Cisco has been a major mover over the last couple of trading days and has helped to drive techs to higher ground. According to recent news headlines Cisco has stated that its new high-speed data router has the potential to change the internet, allowing them to provide a better service to clients whom aren’t dealing with the overload of online traffic.

Even though the indices managed to close the session with minor gains, a feeling of profit taking was felt throughout the session, as investors preferred to maintain a cautious state of mind, around high levels. When observing the chart below one can see that the S&P500 has now reached its prior high, last formed in January.  From a technical point of view, the current level on the S&P500 could act as a major psychological level going forward and could cause the index to drop into a pullback. While fundamental data is slowly improving, backing this rally, many are now anxious to see whether the fed will begin its tightening policy, something that could rattle the markets and prevent a break-out.

The Dollar Held its Ground

On the Forex market the Dollar managed to hold around prior levels, but is yet to break its 81.5 resistance level. Even though the Greenback is in need for a technical pullback recent talks about a possible rate hike in the U.S are helping the Dollar to maintain its high level. With the current high unemployment rate and various sectors within the U.S economy still trying to find footing, one should expect that the rate hike rumors be only verbal ones, indicating towards a hike later on during the year.

Over in Europe, Greece’s condition continued to weigh on investors and prevented the Euro from gaining any major strength. Over the last couple of weeks problems from European members have hit the headlines numerous times, but no formal statement has been released about how the ECB is going to proceed and restore the Euro-zone to a more normal situation. Although Germany has been quite pro-active, mentioning that it might help the distressed country -Greece, other major countries, such as Spain and Portugal, have now grabbed the spot light due to their ongoing problems.

When taking a glance at the chart below one can see that the EUR/USD is in a major down trend, but currently climbing within its secondary trend. A break to the downside of the charts lower secondary trend line could signal further devaluation for the Euro.

The Day Ahead

Unlike yesterday’s session, volatility should pick up today as the economic calendar is flooded with events. The Euro-zone will take the stage first with France, Italy and the U.K all releasing their industrial production figures. Italy and France are both expected to show an increase in production while the U.K could show a lower than expected figure.

In addition, New- Zealand will take the stage and release its interest rate decisions. The market is expected a no-change statement compared to its neighbor Australia, who has now reached a fund rate of 4%.

Daily Forex Market Analysis provided by eToro

Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.

© 2009 eToro Blog.

By CountingPips.com

The U.S. Dollar has been mixed in forex trading today against most of the major currencies on a limited news day. The commodity currencies have been supported while the European currencies have fallen slightly versus the dollar in today’s trading action.

The dollar has lost ground against the Canadian dollar, Australian dollar, New Zealand dollar and the Japanese yen today while the American currency has edged slightly higher versus the euro, British pound and the Swiss franc, according currency data by Oanda.

The EUR/USD currency pair is currently lower by about 20 pips after opening the day (00:00GMT) at the 1.3619 exchange rate and has settled into trading near the 1.3600 level. The EUR/USD had fallen to an intraday low at 1.3537 before reversing direction.

The US stock markets have had a winning session today with the Dow gaining by approximately 40 points, the Nasdaq increasing over 14 points and the S&P 500 up by over 5 points. Oil has edged lower to $81.49 while gold is unchange at $1,123.60 per ounce.

Economic news releases today showed that Japan’s leading index increased in January to a 97.1 score from a 94.3 reading in December. This beat market forecasts expecting a score of around 96.6. Out of Europe, Switzerland’s consumer price index edged up by 0.1 percent in February after a 0.1 percent decline in January, according to the Switzerland Federal Statistics Office. On an annual basis, the February cpi increased by 0.9 percent over the February 2009 level.

The United Kingdom’s total trade deficit increased more than expected in January, according to data from National Statistics. The U.K. deficit in goods and services reached £3.8 billion in January following a deficit of £2.6 billion in December. This surpassed market forecasts looking for a deficit of approximately £3.0 billion. Exports, excluding oil and other volatile items, decreased by 6.0 percent in January while imports declined by 1.2 percent. The January trade deficit marked the largest since August 2008 for the U.K.

AUD/USD Chart – The Australian dollar has resumed its recent ascension versus the dollar in trading as the AUD/USD pair bounced off the rising trendline today to reach above the 0.9100 exchange rate today. The AUD/USD has now climbed over 300 pips since February 25th when the pair touched a 0.8800 lowpoint.

The Aussie is marching higher after holding strong despite recent weakness in the Pound and Euro.  The Aussie continues to outperform due to strong Australian fundamentals and the RBA’s tight monetary policy stance as compared to other central banks.  The Aussie is also finding strength after comments from the Fed’s Evans implying that the central bank’s loose monetary policy is here to stay until unemployment improves considerably, which could take quite a while considering how sluggish the U.S. recovery is.  Dovish comments from the Fed are benefitting the Aussie due to the interest rate differential with the possibility of future RBA rate hikes down the line.  Australia will come into focus again tomorrow with the release of Home Loans data.  It will be interesting to see if higher interest rates have weighed on lending.  Additionally, investors will receive key economic data from China over the next couple trading sessions.  Considering China has been driving Australia’s economic recovery, Chinese economic data could have a noticeable impact on the Aussie.  Stronger than expected numbers would likely favor the Aussie’s uptrend, and vice versa.  Meanwhile, there has been chatter that China will appreciate the Yuan in the near-future.  A stronger Yuan could have a negative impact on the Aussie since demand for Australia’s commodities could take a hit.  However, such matters are purely speculation right now and haven’t had much of an impact on the Aussie thus far.  The AUD/USD is testing the patience of our 1st and 2nd tier downtrend lines, which run through the .9250 area.  Hence, a positive development for the risk trade could yield considerable gains in the Aussie.

Technically speaking, the Aussie has multiple uptrend lines serving as technical cushions along with intraday, 3/4lows, and the psychological .90 area.  As for the topside, the Aussie has multiple downtrend lines serving as technical barriers along with March highs and the highly psychological .91 area.  Additionally, previous 2010 highs could serve as a hefty technical barrier should they be tested.

Price: .9104

Resistances: .9104, .9120, .9134, .9146, .9160, .9175

Supports: .9083, .9069, .9054, .9038, .9021, .9008

Psychological: .91, .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.

Gold has tacked onto yesterday’s 1% pullback in reaction to a broad-based downturn in the risk trade.  Hence, it seems gold is following its negative correlation with the Dollar once again.  On the bright side, gold has avoided a retest of its highly psychological $1100/oz level and remains above the lower band of its trading range.  Hence, the possibility of a return of gold’s upward momentum is not out of the question as investors lock in profits over the past couple trading sessions.  Much will depend on the Dollar’s reaction to upcoming economic data releases from China over the next couple trading sessions.  Strong Chinese data could favor the risk trade and send gold higher, whereas negative data could very well have the opposite effect.  Meanwhile, it will be interesting to see of gold can stabilize above its highly psychological $1100/oz level.  Additionally, our new 1st tier uptrend line could serve as a key support since it runs through February lows, or the $1090/oz area.

Technically speaking, we’ve formed two new makeshift downtrend lines running through 3/2 and 3/3 levels to give investors an idea of present resistance.  Additionally, gold must face previous March highs and the psychological $1050/oz area to the topside.  As for the downside, gold still has multiple uptrend lines serving as technical cushions, highlighted by our 1st tier as we mentioned before.  Furthermore, gold has the psychological $1100/oz level working in its favor should it be tested.

Present Price: $1113.24/oz

Resistances: $1114.21/oz, $1116.63/oz, $1118.75/oz, $1121.05/ oz, $1123.03/oz, $1124.97/oz

Supports: $1112.11/oz, $1110.07/oz, $1107.26/oz, $1104.71/oz, $1101.73/oz, $1099.20/oz

Psychological: $1100/oz, $1150/oz, January Highs, March 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.

The USD/JPY is settling following Friday’s impressive run on the heels of better than expected U.S. employment data.  The data wire has been relatively quiet since then, allowing investors to lock in profits ahead of key release from China.  China will print Trade Balance and New Loans data tomorrow followed by Industrial Production, CPI, and a host of other data due during Thursday’s Asia trading session.  Japan will also release Core Machinery Orders tomorrow followed by Final GDP on Thursday.  Hence, activity in the USD/JPY could pick up soon after this breather.  It will be interesting to see if the currency pair can pick up where it left off on Friday or whether it decides to revert back to the pressures of its downtrend.  Weaker than expected data from Japan could help lift the USD/JPY since investors may speculate that the BoJ will be more will to increase liquidity while the Fed stands still amid an improving U.S. economic landscape.  On the other hand, weak Japanese economic data could keep the USD/JPY buoyed around its highly psychological 90 area.  The 90 level has been a struggle for some time now and there’s little reason to believe this will end tomorrow.

Technically speaking, the USD/JPY still faces multiple downtrend lines along with the highly psychological level and previous March highs.  In fact, the USD/JPY still has to deal with February highs should the currency pair experience another near-term topside breakout.  Hence, the USD/JPY faces an uphill battle to the topside.  As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with intraday and 3/5 lows.

Present Price: 89.79

Resistances: 89.81, 89.90, 90.98, 90.04, 90.11, 90.21

Supports: 89.73, 89.64, 89.56, 89.46, 89.39, 89.31

Psychological: 90, March 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.

The Cable is attempting to stabilize right now after dropping below its psychological 1.50 level in the midst of a hefty selloff resulting from weak economic data and cautionary words from Moody’s and Fitch.  Yesterday’s RICS number printed well below analyst expectations, confirming last week’s pullback in the Halifax HPI.  Additionally, today’s UK Trade Balance figure underwent a discouraging setback to the -8 billion mark, signaling that demand for UK exports is not improving despite broad-based weakness in the Pound.  Hence, investors are speculating that the BoE will remain comparatively dovish.  However, we’d like to bring back to mind that last week’s UK Services PMI number experienced a sizable pop, an encouraging development considering the nation’s GDP is highly reliant on the services industry.  As a result, negativity in the Pound could be a bit overdone.  Today Fitch and Moody’s issued statements implying that the UK needs to get its fiscal house in order or face the risk of a downgrade in the nation’s credit rating.  Disconcerting comments from the ratings agencies did place additional downward pressure on the Cable, though they aren’t telling us anything investors don’t already know.  Keep in mind that the Cable’s selloff in the beginning of March resulted from a poll showing a dead heat in the parliamentary election, raising fear that there will be a deadlock when deciding upon whether to tighten fiscal spending.  Hence, the UK’s worrying fiscal situation has been in the headlights for some time now.  Although the data wire has been relatively quiet so far this week, it’ll begin to heat up tomorrow with China releasing New Loans and Trade Balance data over the next couple trading sessions.  Strong data from China could help out the risk trade, whereas negative data could favor the Dollar.  The UK will also release Manufacturing Production data tomorrow, though today’s Trade Balance figure sets the stage for a possible disappointment.

Technically speaking, the Cable has our 1st and 2nd tier uptrend lines serving as technical cushions along with intraday and 3/2 lows.  As for the topside, the Cable faces multiple downtrend lines along with 3/3 and 3/8 highs.  Meanwhile, the psychological 1.50 area could continue to play a role in the Cable’s near-term movements.

Present Price: 1.4952

Resistances: 1.4960, 1.4975, 1.4987, 1.5007, 1.5024, 1.5036

Supports: 1.4941, 1.4924, 1.4901, 1.4885, 1.4870, 1.4851

Psychological: 1.50, March 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 regarded neither 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.