Month: March 2010

By Fast Brokers – The EUR/USD has plunged beneath previous March highs in reaction to IMF involvement in Greece’s financial assistance becoming more likely.  France is beginning to turn Germany’s way, favoring IMF involvement on a certain level, and not until Greece is unable to attain financing on its own two legs.  Investors reacted negatively to the news, sending the EUR/USD back to levels not seen since May 2009.  Adding to the EUR/USD’s downward momentum was Fitch’s announcement that it is lowering Portugal’s credit rating to AA-.  The fear of more PIIGS nations needing financial assistance when the EU has failed to come up with a plan for Greece has sent investors scurrying towards the Dollar for safety.  The EUR/USD had been stuck in a trading range for a while, albeit a wide one, and today’s large pullback could signal that the EUR/USD is in for yet another leg down.  Today’s negative EU debt news had led investors to dismiss an altogether encouraging day of economic data from the EU.  The Flash PMI figures and German Ifo Business Climate number showed that economic activity is still on the path to recovery, at least in Germany and France.  Although today’s data has been dismissed thus far, it could help the EUR/USD stabilize once the impacts from today’s negative psychological events exhaust themselves.   Meanwhile, the Dollar is gaining across the board while gold ducks back below $1100/oz.  Hence, a clear message of risk-aversion has been delivered.  U.S. DGO data printed mixed, with the core outperforming while the headline disappointed.  Therefore, although auto purchases are cooling, consumption is continuing to show improvement.  Investors are presently waiting for U.S. New Home Sales data, and it will be interesting to see how this figure fares since it has been on a steady decline for some time now.  If New Home Sales should outperform, this could benefit the Dollar due to speculation that the Fed could raise sooner than anticipated.

Technically speaking, the EUR/USD clearly faces a multitude of downtrend lines due to the extent of today’s pullback.  Since uptrend lines are sitting far below, the EUR/USD’s objective now becomes to set a new base, which could take a little while barring a positive reaction to this week’s EU summit.  The EUR/USD now has March and April 2009 levels serving as supports/resistances.

Present Price: 1.3344
Resistances: 1.3372, 1.3391, 1.3410, 1.3447, 1.3473
Supports:  1.3340, 1.3320, 1.3300, 1.3284, 1.3268, 1.3245
Psychological: March lows, 1.33

(click chart to enlarge)

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By Ashley Smith – The Australian and New Zealand Dollars have been suffering this week along with other higher yielding currencies from the negative economic sentiment and the strong Dollar. Continued concerns over the Greek debt crisis, as well as today’s downgrade of Portugal, dampened demand for riskier currencies and pushed investors to the USD as a refuge.

The decline in Gold and Oil prices throughout the week also contributed to the decline as these are Australia’s 3rd and 4th most valuable commodity exports. With no major news events from the region this week, the South Pacific currency continues to follow the trend of other growth linked currencies and decline versus the Dollar. The AUD is currently trading at 91.16 U.S cents after briefly dropping to below 90.00 cents.

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 CountingPips.com

The European common currency declined sharply today in forex trading as Portugal’s credit rating was downgraded to “AA-” by the ratings agency Fitch Ratings. Portugal’s credit rating was “AA” before today’s action. The downgrade was prompted on concerns of the country’s high debt obligations and has added more negative sentiment for the euro on top of Greece’s well publicized debt problems.

EU leaders are scheduled to meet for a Eurozone summit on Thursday and Friday and will be faced with renewed pressure to come up with a European solution for Greece’s troubles or turn to the IMF for help after the Portugal downgrade. German Chancellor Angela Merkel has said that the summit won’t lead to a decision on Greece’s situation while other EU leaders are pressing for a framework that could lead to a solution.

News out of the EU summit will likely play a pivotal role in the euro’s direction, especially in the short-term.

EUR/USD 4-Hour Chart – The EUR/USD currency pair fell to a fresh 10-month low-point today as the pair touched its lowest level since May 7th, 2009 at the 1.3332 exchange rate. The EUR/USD had risen to the 1.3817 exchange rate as recently as March 17th before declining over the past week and accelerating lower today. Today’s action has seen the euro fall by over 100 pips to the dollar while the euro touched a fresh all-time low versus the Swiss franc.

By Dan Eduard – The Scandinavian Kroner has recorded steep losses against the U.S. Dollar as of late, a reflection of the overall drop in risk sentiment among investors. Despite a fair amount of confidence in the Swedish economy, the USD/SEK has risen to an almost three-week high. The pair rose to 7.2380 earlier in the week before a minor downward correction occurred. The Swedish currency has faired much better against the Euro. The EUR/SEK tumbled over 500 pips on Tuesday amid news that a Greek bailout will likely be financed by the Intenational Monetary Fund (IMF) and not other Euro-Zone currencies.

The Norwegian Krone has also seen dramatic losses against the USD lately. The USD/NOK moved as high as 5.9802 in trading on Monday, before making a slight correction. The pair has since been fluctuating, although it appears to have settled around the 5.9400 level.

Scandinavian currency traders will want to pay attention to several upcoming news events likely to impact the forex marketplace. The US New Home Sales report is forecasted to show an increase in new home sales over the last month. If this is indeed true, the Dollar could increase its recent gains on the Kroner. That being said, the housing market is notoriously hard to predict. Kroner traders looking for a good time to enter the market will want to see if the housing figure comes in below expectations, in which case the Scandinavian currencies may see some gains. Additionally, Kroner traders will want to keep up with the British Annual Budget release, as well as the latest U.S. Crude Oil Inventories figure, both of which could create market volatility.

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.

A FREE report keeps you on the right side of precious metals

By Nico Isaac

Right now, the gold BULL-ion bandwagon is more crowded than a New York subway train during rush hour. But before you squeeze your way into the crowd of passengers, you should know one thing: Those steering the course are using outdated maps based on ill-conceived notions and illusory hopes.

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It is impossible to foresee the end of major trends in precious metals

BEFORE they occur. Hindsight is foresight.

NOT SO, says Prechter. Since gold and silver established their all-time record peaks in 1979-80, he has stayed one step ahead of the metals’ history-making turns. Here, Chapters 2 and 3 of the Gold & Silver eBook offer up the following excerpts from Bob’s earliest writings:

Silver

• November 18, 1979, Elliott Wave Theorist (EWT): With silver prices hovering near $20/ounce, Bob wrote: “If my wave count is valid, silver can be expected to drop back down to between $4 and $6, $3.20-$3.49 some time in the next decade.”

What actually happened: From there, silver prices embarked on a 13-year bear market that saw prices plunge into the $3.50-per-ounce area.

• March 26, 1993, EWT: “Silver is approaching a major bottom” of its decades-plus long downtrend.

What actually happened: Silver found its low in 1993.

Gold

• December 9, 1979, EWT: “After 13 years of rise, Elliott counts now suggest an important top is near in gold. The downside target is at least $282.50.”

What actually happened: While the price projection for gold’s peak was far off the mark (the Theorist cited the upper $480/ounce range), the time target of early 1980 was met with accuracy. From its 1980 peak, gold prices plummeted nearly 70% before hitting bottom in 2001.

• At the Crest of the Tidal Wave, 1995: “One attractive termination date for the gold bottom is New Year’s Day of 2001 (plus/minus a month). That way, it will have lasted a … a lean 21 years from the 1980 peak.”

What actually happened: Gold registered its low at $255 on February 20, 2001.

Now that we can see that it is possible to benefit from foresight about the end of major trends in precious metals, what about these other popular notions —

• Gold always goes up in recession and depressions.
• Gold always performs better than stocks in economic downturns.
• Gold and Silver are just beginning (as in the year 2010) their biggest bull market runs ever.

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.

Forex Market Review by Finexo.com

Forex Market Review & Analysis by Finexo.com

Disclaimer: Trading the foreign exchange (Forex) carries a high level of risk, and may not be suitable for all investors.

Forex Market Review by Finexo.com

Past Events
• USD Existing Home Sales, out at 5.02M versus expected 5.01M, prior 5.05M
• GBP Consumer Price Index, out at 3.0% versus expected 3.1%, prior 3.5%
• GBP Confederation of British Industry Realized Sales, out at 13 versus expected 18, prior 23

Upcoming Events
• GBP Annual Budget Release (1230 GMT)
• USD Core Durable Goods Orders m/m (1230 GMT)
• USD New Home Sales (1400 GMT)
• EUR German Ifo Business Climate (0900 GMT)

Market Commentary

In the US figures for sales of existing homes fell in February for the third month indicating that the high unemployment level is hindering demand in the housing sector. Sales dropped 0.6% to a 5.02 million annual rate, the lowest level in eight months. The expansion and extension of a federal tax credit that helped to stabilize the housing market in 2009 hasn’t taken effect so far this year due to continuing high unemployment levels.

Existing home sales were forecast to fall to a 5 million annual rate from a 5.05 million rate in January. Data on existing home sales, which accounts for more than 90% of the market, is compiled from contract closings and may reflect purchases agreed weeks or even months earlier. This is why many economists consider new home sales figures, recorded when a contract is signed a more accurate and timely reflection of the market.

Data on new home sales is due to be published later today. The Commerce Department is expected to report that the figure rose last month after slumping in January to the lowest level since records began in 1963.

While borrowing costs are low and prices are down, sustained jobs gains are the missing ingredient in promoting a rebound in the housing market. The unemployment rate which reached a 26 year high of 10.15% in October is projected to end the year at 9.5%.
Also out in the US today are reports for core durable goods orders. The figure is expected to climb for the third month in a row adding to evidence of a recovery in the manufacturing sector. The projected rise in durable goods orders would follow a 2.6% jump in January that was the biggest since July 2009.

The US Dollar continued to gain on both the Pound and the Euro in yesterday’s trading.  The USD rose 0.58% against the Pound to close at GBP 1.5020. It appreciated 0.71% against the Euro which closed at EUR 1.3468.

In Britain yesterday figures revealed that the UK’s inflation rate dropped more than forecast in February. Consumer prices rose 3% from a year earlier, after increasing 3.5% in January according to the Office for National Statistics. On the month, prices rose by 0.4%.
The Pound rose against the Euro yesterday, gaining 0.14% to close trading at GBP 0.8964.
The inflation rate fell because of large downward movements on prices from items like toys, books and gas bills. UK gas prices have been cut three times in the last 12 months with the last cut seeing prices fall by 7%, saving the average household 55 Pounds or $83 per year.
UK retail sales slowed more than expected in February though retailers are expecting a small recovery next month according to the Confederation of British Industry’s report yesterday. Monthly distributive sales fell to 13 in March from 23 in February. Economists had predicted a reading of 15.

“Despite not matching the strength seen in February, it is encouraging that high street sales have continued to grow this month,” said Andy Clarke, chairman of the survey panel. However, Clarke warned that trading was unlikely to be easy over the coming months.”The outlook for Easter may still be positive, but with a weak economy and pay freezes for many, consumers are likely to remain cautious for some time,” he said.

All eyes will be on the UK later today as Prime Minister Gordon Brown’s government unveils the annual budget. Chancellor Alistair Darling has reiterated there will be “no giveaways” ahead of the general election. The Pound has had its worst annual start in the currency market in 13 years, dropping 7% against the US Dollar since January. The currency has been weakened by uncertainty regarding the outcome of the general election which Prime Minister Gordon Brown must call by June. The government was forced to borrow heavily during the recession resulting in one of the highest deficits in Europe.

Mr. Darling has said that while there had been signs recently that the economy was improving, with unemployment falling and government borrowing lower than forecast there was still a lot of uncertainty. The budget is expected to focus on encouraging private sector investment and securing long term economic growth. The government plans to halve the budget deficit – which at 12.6% is one of the highest in Europe- over the next four years.

He said “the mood of the times is not for giveaways. People are not daft, they know perfectly well we need to get borrowing down and secure (economic) recovery”.

In the Euro Zone the weaker Euro is predicted to have boosted German exports ahead of the German Ifo Business Climate survey today. The index is expected to have increased to 95.8 from 95.2 in February. Warmer weather is also expected to have led to a resumption in consumer spending and construction.

Greece’s fiscal crisis has contributed to the Euro’s 10% drop against the US Dollar in the last four months making German exports more competitive outside the Euro Zone. Bundesbank President Axel Weber has said that the EU’s largest economy may contract in the first quarter before rebounding in the second.

The EU summit to be held in Brussels tomorrow and Friday is expected to center around finding a resolution to the Greek debt crisis. Yesterday a German Finance Ministry official told reporters in Berlin that Germany and France agreed to back an IMF role in any aid for Greece. The shift, made before start of the summit, came a week after Euro-area finance ministers had agreed to a European framework for a bailout.

Forex Market Review & Analysis by Finexo.com

Disclaimer: Trading the foreign exchange (Forex) carries a high level of risk, and may not be suitable for all investors.

Source: Forex Yard

Investors saw mixed signals regarding the Greece bailout plan. However, the European Union (EU) meeting on Thursday may end the uncertainty surrounding the aid program. Meanwhile the EUR has hit an all time low against the Swiss Franc, down more than 100 pips yesterday; currently the pair is trading at 1.4230, down from 1.4614 less than two weeks ago, and marking a record low point for the pair.

Economic News

USD – Existing Home Sales Falls in February; Stocks End Higher

The greenback ended stronger yesterday against the EUR, after the EUR made an attempt to rebound a day before yesterday and the EUR/USD pair is now currently trading at 1.3451.

The support to the USD against other currencies came as a result of approving the health reform and putting and end to political uncertainty which was driving investors out of the market. The USD was slightly up against the Yen; currently the pair is trading at 90.54. The USD was almost unchanged against the AUD, ending the trading day at 0.9173.

The strength of the greenback came in contrast to the decline in the Existing Home Sales report. After falling for the third month, the report has put doubts over economic recovery. Therefore, investors will be looking closely on the New Home Sales report, due later today at 14:00 GMT for an indication of the housing market’s recent direction. Lower than expected results may cause the USD to decline against other major currencies.

EUR – EUR Looking to End Uncertainty Soon

The uncertainty surrounding the Greece bailout program has continued to influence traders’ willingness to hold the EUR. Remarks made by Germany, regarding the best way to help Greece, sent the EUR down against the USD earlier yesterday. Other posts made by France helped lift it up from a daily low. The volatile pattern of the EUR/USD will remain at least until Thursday’s European Union (EU) summit.

The EUR/CHF fell yesterday to 1.4230, which is an all time record low for the pair. It would be interesting to follow the Swiss National Bank (SNB) response, after previously making remarks that it would act to prevent further appreciation of its currency against the EUR. A strong CHF may hurt the Swiss economy by increasing the operating costs of Swiss companies.

Later today France (at 08:00 GMT) and Germany (at 08:30 GMT) should release Manufacturing and Services PMI reports. Better than expected results should lift the EUR against other major currencies, especially the USD. A positive German Business Climate report, published at 09:00 GMT, should also support the EUR.

JPY – Yen Slides as Risk Appetite Grows

The Japanese Yen traded calmly for most of yesterday’s trading, almost unchanged against the other major currencies. The main currency to decline against the JPY was the EUR, which came as a result of the Euro’s recent volatility against all major currencies, rather than any economic news. The EUR/JPY is currently trading at 121.87, 60 pips down from the day’s opening, after trading even lower during yesterday’s trade.

Just before the end of yesterday’s trading, at 23:50 GMT, Japan published its trade balance figures, which came out better than expected. Japanese exports grew in February at their fastest pace in 30 years. After the report was published, the JPY climbed against the USD. The report is showing an increase in exports both to the U.S. and Asia. This is a healthy signal about the global economy, pointing to the fact that consumers are slowly picking up demand around the globe.

Crude Oil – Spot Crude Oil Prices Continue to Rise

Spot Crude Oil is currently trading just over $81 a barrel, after visiting higher prices during yesterday’s trading. The US Existing Home Sales report helped lift oil prices, after analysts were pleased that the report showed only a slight decline in home sales. However, during after-hours, the price pared a portion of its gains.

Crude Oil’s price, recently, is moving within a very narrow range of $77-$83 a barrel. Investors appear nervous about the recovery of the global economy. Ending the uncertainty about Greece may also lift oil prices. Today, however, traders will pay attention to this week’s U.S. oil inventory data, due at 14:30 GMT. The forecast is for an increase of 1.3M barrels, any figure below the forecast should influence the price higher.

Technical News

EUR/USD

The cross has been dropping for the 2 days now, as it now stands at the 1.3410 level. The Slow Stochastic of the daily chart shows a bullish cross has recently formed, indicating that an upward correction is imminent. This view is also supported by the RSI of the hourly chart. Going long might be a wise choice

GBP/USD

The pair is continuing its bearish trend with the daily chart’s Slow Stochastic providing us with mixed signals. The oscillators on the 4-hour chart do not provide a clear direction either. Waiting for a clearer sign on the hourlies might be a good strategy today.

USD/JPY

The hourly chart displays a price move that has originated at the lower border of the Bollinger Bands and has the potential to appreciate all the way to its upper border. Going long with tight stops may be the popular choice today

USD/CHF

The bullish trend is loosing its steam and the pair seems to consolidate around the 1.0615 level. The 4-hour Chart’s RSI is already floating in the overbought territory indicating that downwards correction might take place in the nearest time frame. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

The Wild Card

EUR/JPY

After a sustained downward movement, this pair is now testing the significant resistance level of 121.00. With the price floating in the over-sold territory on the 4-hour RSI, and a fresh bullish cross on the daily Slow Stochastic, this pair is facing an impending upward correction which may turn out to be a reversal. Forex traders can benefit from this movement by going long on this pair and at a great entry 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.

By eToro – As a result of Portugal’s economic vulnerabilities and persistently low growth, Fitch Ratings has downgraded the country’s long-term credit rating from “AA” to “AA-“.

Tue to this downgrade, it will become significantly more difficult for Portugal to secure loans and investments to finance its chronic current account and budget deficits.

The Portuguese economy is now in a very fragile position trying to balance a rapidly growing public debt against a shrinking GDP growth rate.

How does it impact on you?

The downgrading of Portugal’s long term rating is crucial to you as traders, as it signals further pressures for an already distressed Euro. Fitch’s downgrade of the country’s rating will immediately divert investments away from the Euro to healthier markets, and the herd mentality that follows will force additional downward pressure on the European currency.

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.

USDCHF stays in a falling price channel and remains in downward movement from 1.0898. As long as the channel resistance holds, one more fall towards 1.0400 is still possible, and a breakdown below 1.0506 could signal resumption of downtrend. However, a clear break above the channel resistance could indicate that the fall from 1.0898 has completed at 1.0506 already, then the following uptrend could bring price to 1.0800-1.0900 area.

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