Month: March 2010

By Fast Brokers – The Aussie has posted a considerable rally today in reaction to comments from RBA Governor Stevens implying that he feels uncomfortable with price levels right now, a hint that the central bank could continue its hawkish monetary stance.   This contrasts quotes from Stevens on Friday when he suggested that global economic uncertainty, particularly in the EU, is unsettling.  Hence, Stevens is sending a muddy message, casting a shadow of uncertainty upon the RBA’s next monetary policy meeting.  Regardless, today’s hawkish comments are in the foreground, taking precedence and driving the Aussie higher.  Meanwhile, investors have dipped their toes back into the Euro and Cable in the wake of the EU’s agreement to help Greece should conditions deteriorate further.  The broad-based pop in the risk trade stemming from Friday’s announcement has also benefitted the Aussie.  However, Fitch’s Portugal downgrade lingers while the EUR/USD and Cable battle their psychological 1.35 and 1.50 levels, respectively.  The Aussie also faces its share of technical barriers, though the currency pair still flexes its comparative strength.  Though the data wire is quiet today, news will pick up again tomorrow the Final GDP from the U.K. followed by U.S. CB Consumer Confidence.  However, Aussie investors will likely place more emphasis on Wednesday’s Building Approvals and Retail Sales data from Australia.  Should these two data points outperform, this would confirm Stevens’ concern about inflation and stoke speculation that the RBA may raise rates again, a positive for the Aussie.  However, if the data disappoints while the overall risk trade drags the Aussie may not have the momentum to break free of its near-term topside technicals.

Technically speaking, the Aussie has 3/23 and 3/27 highs serving as technical barriers along with multiple downtrend lines.  As for the downside, the Aussie has multiple uptrend lines serving as technical cushions along with 3/25 and 3/26 lows.  Additionally, the highly psychological .90 level could serve as a solid technical cushion once again should it be tested.

Price: .9153
Resistances: .9163, .9176, .9185, .9199, .9214, .9230
Supports: .9130, .9118, .9106, .9087, .9073, .9054, .9031
Psychological: .90, .91, March Lows and 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 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.

By Fast Brokers – The S&P futures are continuing their fluctuation above the psychological 1150 level as investors prop up the risk trade in the wake of an EU agreement concerning future financial assistance for Greece.  The FX markets saw solid pops in the EUR/USD, Cable and Aussie as investors felt comfortable dipping into the risk trade amid oversold conditions.  However, these major Dollar pairs have met some solid technical barriers as they pursue their respective recoveries.  Hence, it seems the risk trade will need more confirmations, likely in the form of economic data, to knock the Dollar out of its downtrend and send the risk trade higher.   Although the data wire is quiet today, the U.S. will release CB Consumer Confidence following UK Final GDP and Nationwide HPI.  Hence, activity could pick up tomorrow as we head into Wednesday’s highly anticipated ADP Non-Farm Payrolls report.  This week’s focus will likely center on U.S. employment.  If U.S. employment doesn’t improve as quickly as anticipated, investors could head back towards the Dollar for safety and drag U.S. equities lower.  On the other hand, weak employment data could also yield speculation that the Fed will need to keep liquidity loose, a positive for equities and the S&P futures.  On the flipside, strong U.S. employment data may help seal confidence in the economic recovery.  While this could prove to be a positive for U.S. equities, should employment improve too quickly this could lead to speculation that the Fed will tighten sooner than anticipated, a negative for U.S. equities.  Regardless, it will be interesting to see how the S&P futures react to this week’s data for the movements could prove to be counterintuitive to the usual relationship between macro data and equities.  Meanwhile, it will be interesting to see if the S&P futures can hold above their psychological 1150 level while maintaining their upward momentum.

Technically speaking, the S&P futures face topside technical barriers in the form of 3/25 highs and the psychological 1075 level.  Additionally, the psychological 1200 level could serve as a solid technical barrier should it be tested.   As for the downside, the S&P futures have multiple uptrend lines serving as technical cushions along with 3/24 and 3/22 lows.  Additionally, the psychological 1150 level could serve as a solid technical cushion should it be tested.

Price: 1165.50
Resistances: 1168.73, 1170.46, 1172.19, 1174.72, 1176.45
Supports: 1163.39, 1162.17, 1160.87, 1158.99, 1157.48
Psychological: 2010 highs, 1150, 1175, 1200

(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 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.

By Fast Brokers – Gold is adding onto Friday’s gains after the precious metal popped back above its highly psychological $1100/oz level in the wake of an EU agreement concerning potential financial aid for Greece.  Gold followed positive risk trade money flows, indicating the precious metal’s negative correlation with the Dollar is in full-effect.  That being said, investors should remain on the cautious side since both the EUR/USD and Cable still face key technical barriers, mostly notably their psychological 1.35 and 1.50 levels, respectively.  Hence, investors should keep tabs on the major Dollar pairs along with their interactions with important technical levels.  Although the data wire is quiet today, the flow will pick up tomorrow with Final GDP and HPI data from the UK followed by U.S. CB Consumer Confidence.  However, attention is focused on Wednesdays ADP employment number followed by Friday’s headline employment change figure.  That being said, activity in gold and the FX markets could pick up as the week progresses.  Meanwhile, it will be interesting to see gold can continue to build off of last week’s bottom and hold above its highly psychological $1100/oz level.

Technically speaking, gold has multiple downtrend lines serving as technical barriers along with intraday and 3/19 highs.  As for the downside, gold now has multiple uptrend line serving as technical cushions intraday and 3/23 lows.  Additionally, the $1100/oz level could continue to have an influence on price over the near-term.

Present Price: $1110.40/oz
Resistances: $1111.28/oz, $1112.31/oz, $1113.75/oz, $1114.66/oz, $1115.46/oz, $1117.07/oz
Supports: $1109.95/oz, $1109.25/oz, $1108.13/oz, $1106.84/oz, $1105.24/oz, $1103.64/oz
Psychological: $1100/oz, March 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 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.

Source: Forex Yard – The U.S Dollar and JPY edged lower against major counterparts in Asian and European trading Monday, as the European currency continued its recovery from Friday after the European Union enlisted the assistance of the International Monetary Fund to help with Greece’s recovery plan.

The Yen continued its decline against the EUR on signs the global economic recovery is substantiating, boosted demand for higher-yielding assets. The JPY declined against its 16 major counterparts ahead of the U.S Non Farm Employment report Friday that is expected to show the U.S. job market is improving, further supporting market optimism.

The EUR is currently at $1.3471, from $1.3410, after climbing as high as $1.3527. The Yen fell to 124.64 per EUR from 124.06 in New York last week. Japan’s currency is relatively unchanged at 92.50 per USD, from 92.52 Friday. The Pound is currently at $1.4982 after earlier rising to $1.5018.

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.

This week the US economy will gather most of investors’ attention as the week will be loaded with highly significant market moving figures. The Week will open with the US PCE price index one of the Fed’s leading indicators for inflation and a known factor in the Fed’s inflationary outlook. The PCE is expected to point on a balanced inflationary picture with consensus bets pointing on a 2% gain for the PCE index yy in line with the Fed target of 2% annual inflation. Consumer confidence will follow alongside US manufacturing and housing data. The Consumer confidence is expected to still point on subdued consumer spending with investors eyeing a reading of 50 which is considered the minimal reading for consumer expansion. In the Housing sector the Case Shiller index is expected to show dented housing prices alongside the mortgage market index which is expect to be dented as well amid tight credit conditions which continue to pressure on households. The ADP figure will gather the center of attention as investors see the ADP figure as a good barometer for the Nonfarm and unemployment figures which follow after.ADP employment is expected to rise by 40k after falling by -20K the month before, thus confirming investors’ assessments that the US Job market is slowly stabilizing and possibly recovering.

FX trade to be in rage ahead of the Data- Overall after the Dollar sentiment eased towards the end of last week in reaction to the news on an EU consensus to aid Greece. The agreement on a combined guarantee of financial aid to Greece together with the IMF will allow investors to shift their attention back towards pure economic data .Investors trimmed their Dollar bets ahead of this week’s data and are now waiting to see wither the US economy will continue to recover faster than its European peers. Investors will focus mainly on the ADP employment figure as the US job market is known to affect strongly on the Fed rate policy. The housing market will also gather some attention amid the expected exit of the Fed from its 1.4$ Trillion mortgage backed securities program aimed to stimulate the housing market with lower lending rates.

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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 Ashley Smith – The Australian Dollar ended its recent downward trend in today’s Asian and European trading, ahead of Wednesday’s Retail Sales report which is expected to shows February sales rose. The AUD was further boosted be comments made by Reserve Bank of Australia Governor Glenn Stevens hinting at further interest rate hikes. The bank has raised rates at four of its past five meetings.

Benchmark interest rates are 4%in Australia and 2.5% in New Zealand, compared with 0.1% in Japan and as low as zero in the U.S. Higher yields attract investors to the south pacific currency, along with strong economic fundamentals that support tighter monetary policy and higher interest rates. Australia’s currency rose to 91.45 U.S. cents from 90.41 cents last week in New York. It also climbed to 84.54 yen. While the U.S, U.K and Euro-Zone nations continue to exhibit mixed economic data, raising doubts as to the strength and stability of their economic recovery, Australia continues to perform consistently in par or above expectations thus providing strong ground to continued monetary tightening.

The New Zealand Dollar also gained in today’s trading, boosted by equity gains in Asia and Europe and ahead of a report that is expected to show that home building permits rose in February. New Zealand’s Dollar gained to 71.00 U.S. cents from last week and advanced to 65.53 Yen from 65.11 Yen.

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: Forex Yard

Last week ended with a recovery for the Euro, mainly due to speculations that the Euro-Zone will offer a bailout plan for Greece. This week’s trading will continue to be affected by the Greece debt crisis, yet the big move of the week is expected on Friday when the U.S. Non-Farm Payrolls will be released.

Economic News

USD – Dollar Continues To Strengthen Against the Majors

The Dollar’s rally vs. the majors continued on last week trading session. The Dollar reached a 10-month high against the Euro last week as the EUR/USD pair dropped to the 1.3266 level. The Dollar continued to strengthen against the Pound and Yen as well.

The Dollar rises as the U.S. economy provides more and more positive data. The Existing Home Sales report, which measures the number of residential buildings that were sold during February, rose by 5.02M. This has been the 8th month in a row that over 5 million buildings were sold. In addition, the Core Durable Goods Orders showed that the total value of new purchase orders placed with manufacturers for durable goods rose by 0.9%, beating expectations for a 0.6% rise. Yet the most significant data from last week was the weekly Unemployment Claims. The report showed that merely 442,000 individuals have filed for unemployment insurance for the first time during the past week. This has been the best result in 6 weeks, and one of the lowest amount of weekly jobless claims since the recession began.

As for the week ahead, the main news event of next week is the U.S. Non-Farm Payrolls on Friday. This report provides a very up to date data regarding the employment condition, and tends to have an immense impact on the market. Traders are also advised to follow the ADP forecast which is scheduled for Wednesday. Investors usually rely on the authenticity of this forecast, and thus this release often has a large impact on the market as well.

EUR – Euro Sees Mixed Results

The Euro began last week’s trading session with a falling trend against most of the major currencies. The Euro even reached a 10-month low against the Dollar on Thursday. However, during last Friday, the Euro managed to rebound and erased most of its losses.

Last week’s trading was once again mostly impacted by the Greece debt crisis. As the week began, it seemed that the European leaders will not agree on a rescue plan for Greece. This has reduced the already low risk appetite, and turned investors to look for safer assets. However, since Thursday concrete reports have claimed that an aid plan for Greece is about to be declared. This has boosted confidence in the region’s assets, and as a result supported the Euro as well. In addition, the German Business Climate survey has delivered a better than expected figures, mostly as a result of the weak Euro that boosted export prospects. The combination of the Greece bailout notification and the positive economic data has strengthened the Euro promptly.

Looking ahead to this week, a batch of data is expected from the Euro-Zone. Traders should first and for most follow any development regarding the Greece debt crisis. This issue is likely to continue affecting the Euro for the near future. In addition, traders should take under consideration that a final bailout plan is likely to boost the Euro.

JPY – Yen Looks to Bounce Back after Last Week’s fall

The Japanese Yen lost ground against its major rivals last week. The loss was uncharacteristic, as concern throughout global markets, which generally boosts the Yen did the exact opposite. Local economic news also failed to inspire a rise in the JPY as it gave up roughly 3% against the USD, EUR and GBP. Though not a significant loss, the lack of correlation to risk aversion could force traders to hesitate with JPY investments.

The JPY was static as it returned to trading early Monday morning. Positive retail sales numbers did not have much affect as the currency stayed close to closing prices at 92.60 to the dollar and 138.25 to the pound.

This week, should provide some movement throughout the major pairs, as the market gears up for Non-Farm Payrolls, and another week of heated debate over the US Healthcare reform and its effect on all markets. Local news from Japan should provide some movement for the JPY after the release of Wednesday’s Tankan Manufacturing Index. Forecasts look for growing improvement in the figure, as last months score of -24 was the highest in over two and a half years.

Oil – Oil Consolidates Around $80 a Barrel

Last week’s trading proved one thing, $80 a barrel is a stabile price for crude oil. Crude began last week with a rising trend that peaked at $82.15 a barrel. However as the week progressed, crude oil saw several ups and downs, which took oil back to around $80 a barrel.

It seems that the reduction in the fourth quarter U.S. Gross Domestic Product has added to concerns that growth in fuel demand could slow. There are currently worries regarding the strength of the U.S. economy, which turns investors to look for safer assets than crude oil. It currently seems that crude oil will fail to reach above $83 a barrel unless concrete data will prove that the U.S. recovery pace is steady.

As for the following week, traders are advised to follow the main publication from the U.S. economy, especially the Non-Farm Payrolls on Friday, as they tend to impact crude oil the most. Traders should also follow the U.S. Crude Oil Inventories as this report has proven to have an imminent impact over the market.

Technical News

EUR/USD

The pair may be experiencing a downward trend today as the 2 hour and 4 hour RSI are heading into the overbought territory and with a bearish cross evident on the 8 hour chart’s Slow Stochastic. The daily RSI, however, is floating near the oversold territory. Going short with tight stops might be advised for today.

GBP/USD

The indicator’s for the pair are floating in neutral territory as the pair seems to be range trading between 1.4900 and 1.4960. Waiting on a clearer direction for the pair may be advised for today.

USD/JPY

The pair may be experiencing a downward correction today as the 4 hour, 8 hour and daily RSI are floating in the overbought territory while a bearish cross is evident on the hourly and daily charts’ Slow Stochastic. Furthermore, there is a breach of the upper Bollinger Band evident on the daily chart. Going short for today may be a good option.

USD/CHF

The pair may experience a slight downward movement today as a bearish cross is evident on the hourly chart’s Slow Stochastic, indicating an imminent downward movement. Going short with tight stops may be advised for today.

The Wild Card

USD/MXN

The hourly and 2 hour charts’ RSI is floating in the oversold territory, indicating an expected an expected upward movement. Furthermore, a bullish cross is evident on the 4 hour chart’s Slow Stochastic. Forex traders may be 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.

By eToro – The slow grinding increase in the equity markets continued this week as did the strength of the US dollar.  Over the past few weeks the strong correlation that seem to grip the currency and equity markets has now dissipated as the dollar has now become the currency of choice give the fiscal issues that have plagued the European Monetary Union.  For the week, the S&P 500 Index closed up higher by 1% at 1166.  For the past 4 weeks the Dow Jones Industrials, the S&P500 Index and the NASDAQ have all closed higher.

EU – The Bailout of Greece and Euro Weakness

The divergence of opinions with regards to Greece, has created strife in the marketplace as the ECB President Jean-Claude Trichet has made public comment as late as Thursday, that the IMF has no place in deciding how any European country should handle its fiscal issues.  This news came right before the EU agreed to a plan that would set up a safety net for Greece.  Trichet’s comments are directly opposite to the current opinion of Germany and France who have made the IMF involvement a condition of their participation in so called bailout of Greece.  Trichet also flip flopped on the issue of collateral.  The extension of the relaxed collateral rules is an important issue, even if lower quality paper gets a bigger haircut.  The size of the haircuts will be the main market focus of the next ECB meeting on April 8th.   These relaxed collateral rules, some argue, is tantamount to some easing of monetary policy.  The uncertainty comes on the back of a downgrade by Fitch which lowered Portugal’s sovereign credit rating one notch to AA- and warned of further cuts unless the government changes its fiscal course.  The cumulative effect on the currency has been dramatic.  Volatility in the Euro market has been relatively high with multiple day ranges.  During the course of the week, the Euro currency vs. the US dollar broke through support levels at 1.3400, and touched a low of 1.3267, before retracing some of the losses for the week (which opened near 1.36).  After the news that the EU would create a backstop for Greece, the Euro began to rally. Technically, the breakthrough along with the uncertainty created by multiple debt issues within the EU has formed a resistance level for the Euro, which could lead to additional selling near 1.3450.

Deflation in Japan

Meanwhile, the deflationary grip on Japan continues.  Headline CPI in February was 1.1% below year ago levels, the same pace as recorded in January.  The Core CPI (ex food and energy) figure was slightly higher than expected but still negative for a year in a row.  This follows Thursday’s report of a slightly larger than expected decline in corporate service prices.  The corporate service price index fell 1.3% year over year in February and the January series was revised down to -1.2% from -1.0%.  The Bank of Japan expects deflation to persist through the next fiscal year.  Of the 525 items tracked by the CPI basket, 335 fell in February compared with January when prices for 342 items fell.   The Japanese finance ministry has been persistent in pushing the BOJ to enhance its quantitative easing measures in an effort to stem further deflation.  Eventually, this will spill over into growth and create further downward pressure on the Japanese economy.

UK – Inflation Easing

In the UK, inflation data is beginning to ease after a couple of months of upward pressure.  The pace of inflation for February released this week was slightly lower than expected and BOE Governor King did not have to write an explanatory letter to the government as he was obliged to do in December and January.  The headline CPI rose 0.4%, slightly less than the market expected.  The year-over-year rate slipped for the first time since last September (3.0% vs. 3.5% in January).  Core inflation, which in the UK excludes energy, food, alcohol and tobacco, slowed to 2.9% from 3.1%.  Core measures of inflation have been generally tame in developed countries with the UK being the exception recently.  The ease in inflation will only help the BOE and allow for further quantitative easing if the economy stumbles.  Additionally, the easing of inflation expectations shifted bids pressure on the pound.  Technically, the pound faces a moving average crossover which is relatively bearish for the currency.

US – Bernanke speech, Housing prices, GDP

In a speech at a House hearing, Federal Reserve Chairman Ben Bernanke acknowledged that the Federal Reserve is closer to selling some of its $1.25 trillion portfolio of mortgage securities.  Chairman Bernanke has resisted this idea in the past because millions of U.S. homeowners and many investors would be affected by Federal Reserve sales which would push down prices and increase Mortgage rates.  This is Bernanke’s way of preparing the market for a normalization process.  “I anticipate that at some point we will, in fact, have a gradual sales process,” Chairman Bernanke said at a House hearing. The Fed has been purchasing mortgage-backed securities in an effort to stimulate the housing market with lower mortgage rates.

In US housing economic news, Sales of existing homes fell a third time in a row during February, but the decline was less than expected, spurring hope for a turnaround in the spring. Home re-sales tumbled by 0.6%, to a 5.02 million annual rate from an unadjusted 5.05 million in January, according to the National Association of Realtors.  Economists surveyed expected sales last month to decrease 2.0%, to a rate of 4.95 million.  The median price for an existing home was $165,100 in February, down 1.8% from February 2009.  The housing market has continued to show conflicting signals but the majority of the economic news has shown a market that is slow to recover.

Growth in the U.S. economy at the end of 2009 was slightly less than earlier estimates, according to the Commerce Department, mainly due to downward revision to consumer and business spending.  Gross domestic product rose at a 5.6% annual rate October through December, the Commerce Department reported Friday in its third GDP estimate for the final quarter of 2009.  Corporate profits climbed 8.2% in the fourth quarter, lower than the 13.8% surge in the third quarter. Year-over-year, earnings were up 51.8%.

Next week that market will be focusing on a plethora of economic data.  On Monday the EMU will release consumer confidence, expectations are for an index level of -17 compare to last month’s -17.  Later on Monday the US will release Personal Income and Consumption.  On Tuesday, market participants will focus on the UK GDP, US Consumer Confidence and Japanese PMI Manufacturing.  On Wednesday, Australian Retail Sales and EMU Employment take the headlines, along with the ADP Employment number.  Thursday is purchasing manager’s day, with the UK, EMU and US ISM all being released.  The big number for the week is Friday’s US Employment number.  Analysts expect a positive reading of 187 thousand jobs, which would be the first increase in more than a year.

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.

Being contained by 1.4784 previous low support, GBPUSD bounced from 1.4798. suggesting range trading between 1.4784 and 1.5001 is underway. However, the price action in the trading range is more likely consolidation of downtrend from 1.5382, another fall towards 1.4500 is possible after consolidation. On the other side, above 1.5001 resistance may suggest that a cycle bottom has been formed on 4-hour chart, then further rally could be seen to 1.5080 or even higher.

Daily Forex Signals

After breaking above the trading range between 89.63 and 91.08, USDJPY bounced sharply to as high as 92.95 level, suggesting that the rise from 88.14 could possibly be resumption of uptrend. Further rally to test 93.75 key resistance is expected next week, a break above this level will indicate that the pair is in a longer term uptrend from 84.82, then another rise towards 100.00 could be seen.

For long term analysis, USDJPY formed a cycle top at 93.75 level on weekly chart. However, the fall from 93.75 is more likely consolidation of uptrend, another rise towards 100.00 area would more likely be seen in next several weeks.

Weekly Forex Forecast