Month: March 2010

By Anton Eljwizat – The USD/SEK cross has been experiencing much bullish behavior in the last few days. However, there is much technical data that supports a bearish move for today. As I demonstrate below, that the USD/SEK may very well be heading for a reversal, and it might have the potential of reaching towards 7.1000 in the coming days. Forex traders can take advantage of this imminent downward movement by entering short positions at an excellent entry price.

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

• Point 1: The RSI signals that the price of this pair currently floats in the over-bought territory, indicating downward pressure.

• Point 2: The MACD indicates an impending bearish cross, which may signal a downward movement is going to occur in the near future.

• Point 3: The Williams Percent Range has peaked near at the 0 marker, which means that there may actually be a strong level of downward pressure.

USD/SEK 8-Hour 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.

By Yan Petters – The EUR/GBP pair saw a bullish trend for the past several weeks, however currently it seems that a bearish correction might take place. The pair has failed to breach through the 0.9050 level lately, and as a result the pair slightly dropped and is trading near the 0.8980 level.

• The chart below is the EUR/GBP 4-hour chart by ForexYard.
• The technical indicators used are the Bollinger Bands, the Slow Stochastic, the MACD/OsMA and the Relative Strength Index (RSI).
• It can be seen that the pair is trading within a restricted range of 150 pips for quite some time now.
• The pair has recently failed to breach the 0.9050 level, which has initiated a bearish correction.
• Both the Slow Stochastic and the RSI are pointing down at the moment, suggesting that the bearish momentum has more steam in it.
• The MACD seems to be on the verge to complete a bearish cross. If the cross will indeed take place, this will further indicate that the current trend is bearish.
• The next support levels are located at the 0.8900, 0.8860 and the 0.8750 prices.
• The next resistant levels are located at the 0.9050, 0.9125 and the 0.9150 prices.
• If the pair will manage to breach through 3 consecutive levels, this will ensure that the pair is in the midst of a long-lasting trend.

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

The U.S. Dollar turned slightly lower versus the EUR as traders positioned for a big European Union (EU) meeting this week amid signs of a deepening divide among policy-makers over aid to Greece.

Economic News

USD – USD Weakens as Risk Sentiment Improves

The U.S Dollar pulled back from a 3-week high against the EUR yesterday pressured by an improvement in risk appetite following gains in U.S. stocks. U.S. stocks rose on Monday as the passage of a bill overhauling healthcare ended uncertainty about the reform.

However, traders said the rebound will be short-lived because of the failure in a quick resolution over Greece during this week’s summit. A Greek fiscal crisis has helped make investors more cautious of risky assets in recent weeks, boosting the greenback against the EUR.

The Dollar also turned lower against the British pound and Japanese yen, pushing down an index of the greenback’s performance against a basket of currencies. The USD fell 0.5% to buy 90.11 yen, and 0.4% against the GBP to $1.5066.

The currency market will look ahead this week to U.S. economic data releases including reports on housing due on Tuesday and Wednesday and to a testimony by Federal Reserve Board Chairman Ben Bernanke on Thursday.

EUR – Euro Rises Ahead of EU meeting

The European currency rose from a 3-week low against the U.S Dollar as European leaders tried to allay concerns that they were unprepared to aid Greece, easing pressure on higher-yielding assets. The EUR rose 0.2% to $1.3558 from $1.3530 on March 19. It earlier fell to $1.3464, the weakest level since March 2.

The spotlight this week turns to a summit of European Union (EU) leaders Thursday. The EUR may fall lower if European leaders don’t decide quickly on helping Greece in financing the region’s biggest budget deficit. Analysts said the EUR may remain vulnerable to further weakness and volatility before and during the summit.

The British Pound weakened for a 3rd day against the U.S Dollar. The GBP was also driven lower amid speculation that Dubai World will prolong the repayment of its loans, hurting earnings at U.K. banks that serviced the state-owned Emirati company. The key event for the week will be the release of the government’s budget for the 2010-11 fiscal year on Wednesday.

JPY – The Yen Weakens Broadly

Japan’s currency declined against all of its 16 major counterparts as an advance in Asian stocks encouraged investors to buy for higher-yielding assets. The Japanese yen fell for the first time in 5 days against the EUR on speculation European Union (EU) leaders meeting this week will agree on an aid package for Greece, dampening demand for the safety of Japan’s currency. The JPY dropped to 122.43 per EUR from 122.21 yesterday when it climbed to 121.06, the highest since March 5.

OIL – Spot Crude Oil Rises Above $81 as Dollar Dips

Oil prices turned higher and above the $80-a-barrel mark on Monday as confidence on Wall Street and easing concerns over Greece pressured the U.S. Dollar downwards and lifted commodities.

Oil prices slumped 1.8% on Friday, pressured by the USD’s strength and the decision of India’s central bank to raise interest rates. A stronger Dollar tends to hamper commodities, as it makes them more expensive for holders of other currencies and reduces their value as an investment hedge.

In the absence of major economic data Tuesday, oil traders will be taking most of their cues from currency and equity markets.

Technical News

EUR/USD

The price of this pair appears to be floating in the over-sold territory on the weekly chart’s RSI indicating an upward correction may be imminent. The upward direction on the daily chart’s Slow Stochastic also supports this notion. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.

GBP/USD

The GBP/USD has gone bullish yesterday, and currently stands at the 1.5085 level. The daily chart’s Slow Stochastic supports this currency cross to rise further today. However, the 4-hour chart’s Stochastic Slow signals that a bearish reversal will take place today. Entering the pair when the signs are clearer seems to be the wise choice today.

USD/JPY

The pair has been range-trading for a while now, with no specific direction. The Daily chart’s Slow Stochastic providing us with mixed signals. All oscillators on the 4 hour chart do not provide a clear direction as well. Waiting for a clearer sign on the hourlies might be a good strategy today.

USD/CHF

The typical range trading on the hourly chart continues. The 4-hour chart RSI is floating in neutral territory. However, there is an impending bullish cross forming on the daily chart’s MACD indicating a bullish correction might take place in the nearest future. Going long with tight stops might be the right strategy today.

The Wild Card

USD/SEK

This pair’s sustained upward movement has finally pushed its price into the over-bought territory on the 8-hour chart’s RSI. Not only that, but there actually appears to be a bearish cross on the Slow Stochastic pointing to an imminent downward correction. Forex traders have the opportunity to wait for the downward breach on the hourlies and go short in order to ride out the impending wave.

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.

USDCHF stays in a falling price channel on 4-hour chart. As long as the channel resistance holds, another fall towards 1.0400 is still possible and a break 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.

Forex Reports

By GCI Forex Research

Fundamental Outlook at 1500 GMT (EDT + 0500)

€

The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3495 level and was capped around the $1.3545 level.  The common currency came off on fresh fireworks regarding Greece’s acute fiscal situation.  German Chancellor Merkel said policymakers must not create “illusions” this week regarding a possible agreement regarding financial assistance for Greece.  Greek Prime Minister Papandreou and European Commission President Barroso said this week’s summit of European Union leaders on 25-26 March should provide details about what type of assistance may be available to Greece.  Many dealers believe the International Monetary Fund will end up providing financial assistance to Greece if required while others believe Greece will have to obtain additional assistance from elsewhere.  Ecofin head Juncker said Greece “will not be abandoned if aid is needed.”  Germany’s Bundesbank reported financial deficits is not part of the IMF’s mandate with one Bundesbank official suggesting Greece should just consider itself insolvent.  European Central Bank member Weber warned Germany will need to rely on domestic demand more for economic growth, warning recent export performance is not sustainable.  Data to be released in the eurozone tomorrow include EMU-16 March industrial confidence followed by PMI data later this week.  In U.S. news, data released in the U.S. today saw the February Chicago Fed National Activity Index decline to -0.64 from the downwardly revised prior reading of -0.04.  Traders and economists alike are still discussing the Obama administration’s success in passing some initial health care reform overnight through the U.S. Congress.  Two major questions concern how this will impact the U.S. politically – particularly in November’s mid-term elections – and what impact a health care deal will have on U.S. debt levels, credit ratings, and market sentiment.  There is renewed talk the U.S. may lose its ‘AAA’ credit rating on account of concerns the sustainability of the U.S.’s massive debt.  The U.S. Treasury has sold some US$ 2.59 trillion in debt since the beginning of 2009 and the U.S. budget deficit now exceeds 10% of U.S. gross domestic product.  In recent weeks, some U.S. corporate debt has become more highly-valued than U.S. Treasuries.  About 7% of U.S. tax revenue this year will be spent on servicing the U.S.’s massive debt load.  St. Louis Fed President Bullard today said the U.S. is “about to turn the corner” in the U.S. labour market with some “good months of jobs data coming up very, very soon.”  Bullard speculated March will provide a good tally of non-farm payrolls data and said he expects a “reasonable” economic recovery.  Fed Chairman Bernanke on Friday said the U.S. needs a mechanism where financial firms can be unwound without having to resort to taxpayer money. Euro bids are cited around the US$ 1.3335 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥90.40 level and was capped around the ¥90.75 level.  Japanese financial markets were closed overnight and will reopen tonight.  Dealers cited lingering repatriation flows back into Japan ahead of the fiscal year end next week.  It was reported overnight that Bank of Japan’s Japanese government bond holdings now total ¥51.6 trillion, a fresh two-year high.  National Strategy Minister Sengoku last week reported Japan has “extremely little” room for additional fiscal stimulus.  In contrast, Financial Services Minister Kamei last week reported the government should compile a stimulus package.  Bank of Japan last week expanded monetary policy further, doubling a three-month lending facility to ¥20 trillion.  Data to be released in Japan overnight include February merchandise trade and February convenience and supermarket store sales.  The Nikkei 225 stock index climbed 0.75% on Friday to close at ¥10,824.72. 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 ¥122.15 level and was capped around the ¥122.60 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥135.85 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥85.05 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8267 in the over-the-counter market, up from CNY 6.8266.  Traders are starting to focus on a U.S. government report due 15 April that could potentially identify China as a “currency manipulator.”  Chinese-U.S. relations remain quite embittered at the moment with China suggesting most of the U.S.’s economic and financial problems are of its own making.  U.S. Ambassador to China Huntsman verbally intervened last week, saying the U.S. “hopes to see more flexibility on the exchange rate. I would be misleading you if I left you with the impression that this wasn’t a very, very important issue in the United States, and will continue to be. We’ll see how the next few weeks play out.”  The central bank is expected to tighten monetary policy further imminently. February industrial profits data will be released this week.

₤

The British pound depreciated vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.4930 level and was capped around the $1.5025 level.  Bank of England Monetary Policy Committee member Sentance last week reported he’s “been relatively encouraged by the turnaround we’ve seen in the last year, both in the UK and in the global economy.  You have to recognize there is some risk of a double dip, but that’s not the central forecast. You’d have to see some factors bring that about: we’ve seen big shocks in the international economy over the last couple of years, so you couldn’t rule out some new shocks emerging on the financial front which could set back the economy. But that’s not my central expectation.”  It was reported last week that Bank of England reported net business lending fell 9.3% m/m, the sharpest decline since record-keeping began in 1999.    Cable bids are cited around the US$ 1.4455 level.  The euro moved lower vis-à-vis the British pound as the single currency tested bids around the US$ 0.9000 figure and was capped around the £0.9045 level.

CHF

The Swiss franc weakened vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.0635 level and was supported around the CHF 1.0575 level.  Swiss National Bank published its quarterly economic report today and noted it will continue to “act decisively” to prevent an “excessive” appreciation of the franc.  In recent days, many dealers speculated the SNB would be less likely to sell francs for euro given the recent improvement in the U.S. economy and the cross has fallen to fresh multi-month lows as a result. SNB today indicated it expects the Swiss recovery to be “moderate and fragile.”  Data released in Switzerland last week saw Q4 industrial production rise 6.4% q/q and decline 1.1% y/y while the February trade surplus declined to CHF 1.29 billion from CHF 2.42 billion.  The euro came off vis-à-vis the Swiss franc as the single currency tested bids around the CHF 1.4325 level while the British pound moved higher vis-à-vis the Swiss franc and tested offers around the CHF 1.5950 level.

Forex Daily Market Commentary provided by GCI Financial Ltd.

GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.

DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

By CountingPips.com

The US Dollar has been mixed in forex trading today against most of the major currencies on a very light news day. The dollar has been losing ground to the euro, British pound, Japanese yen, Australian dollar and the Swiss franc while gaining ground today versus the Canadian dollar. Against the New Zealand dollar, the USD has been virtually unchanged around the day’s opening exchange rate of 0.7064, according to according currency data by Oanda.

The US stock markets, meanwhile, had a winning session today with the Dow Jones gaining by approximately 44 points, the Nasdaq increasing approximately 21 points and the S&P 500 up by just about 6 points.  Oil traded slightly higher to $81.29 while gold lost $8.10 to level at $1,099.30 per ounce.

Economic news released in the Asian session today showed that Australian motor vehicles sales fell by 1.9 percent in February while on an annual basis vehicle sales increased 17.1 percent higher than the February 2009 level. This data follows a decline by 3.5 percent in January and an annual decline of 15.5 percent from January 2009.

The only notable news release out of the U.S. today was the Chicago Fed National Activity Index. The results showed that the measure of national economic activity declined in February to a -0.64 score following a revised -0.04 score in January, according to the Chicago Federal Reserve. The three-month moving average decreased to a -0.39 score following the -0.13 three-month moving average in January. Despite the decline, the report said that the three month moving average is still “higher than at any point since December 2007.” The Chicago Fed Index measures the national economy by calculating a weighted average of 85 indicators of national economic activity. A score above zero is considered above-average growth, below zero is below-average growth and at zero is considered growth at the historical trend.

EUR/USD Hourly Chart – Today, the Euro has turned around last week’s decline versus the dollar after risk aversion brought the EUR/USD back to the 1.3500 area on Friday.  The EUR/USD pair has increased by about 30+ pips today and trades right at the 50-hour moving average (Purple).  Overall, the key driver of the Euro still looks to be the Greece debt situation. Uncertainty and disagreement over the possible bailout of Greece will continue to press on the common currency heading into the European Union leaders summit that takes place on March 25th and 26th in Brussels. Although, German Chancellor Angela Merkel has said that the summit won’t lead to a decision on Greece’s situation, others, including Greece, have pointed to the summit as the time to provide a unified solution.

By Russell Glaser – India put the breaks on the market today, sending equities and commodities lower. Spot crude oil was trading lower during the afternoon hours of the European trading session. Driving the price of the commodity lower was a surprise rate increase by the Reserve Bank of India. This sparked worries of tighter monetary policy across other central banks. Falling spot crude oil prices could continue through the week.

The rate hike came as a surprise to the market as most economists had expected the Reserve Bank of India to increase rates in April. The bank hiked the key lending rating rate 0.25%, surprising the market. Worries over the interest rate increase could begin to slow the global economic recovery, stymieing future crude oil demand. European equities were also trading lower after the interest rate increase

This sent spot crude oil prices lower during todays trading. The price of spot crude oil dropped below the psychological price level of $80 to $79.60, after opening the trading week at $80.85.

Spot crude oil prices could be under further pressure this week on a stronger dollar. The greenback is forecasted to post more gains against the euro after European leaders have been unable to find a fitting solution to the Greek debt crisis. The issue could be resolved on Thursday as European leaders are scheduled to meet to discuss a possible bailout package for the struggling European Union nation. Until an agreement is reached, the dollar could continue to rise against the euro, pressuring spot crude oil prices. A stronger dollar could send spot crude oil prices lower to the next support level of $78.

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.

Forex Market Review by Finexo.com

Past Events
• German PPI m/m, out at 0.8% versus expected 0.1%, prior 0.8%
• CAD  Core CPI m/m, out at 0.7% versus expected 0.3%, prior 0.1%
• CAD CPI m/m, out at 0.4% as expected, prior 0.3%
• CAD Core Retail Sales m/m, out at 1.8% versus expected 0.5%, prior 0.7% (revised)
• CAD Retail Sales m/m, out at 0.7% versus expected 0.6%, prior 0.5% (revised)

Upcoming Events
• GBP Bank of England Governor King to Speak (1530 GMT)
• EUR ECB President Trichet to Speak (1530 GMT)

Tuesday
• USD Existing Home Sales (1400 GMT)
• GBP CPI y/y  (0930 GMT)
• GBP Realized Sales (1100 GMT)

Market Commentary

Last week the Euro fell against 15 of its 16 major peers as EU leaders appeared unable to agree a cohesive plan to bailout Greece. On Friday it tumbled 0.60% against the US Dollar closing trading at $1.3528. The previous day it had fallen as much as 0.93% against the USD.

Late last week Greek Prime Minister George Papandreou issued EU leaders with a one week deadline to come up with a concrete rescue plan for Greece and challenged Germany to abandon its doubts about rescue plans. Papandreou said he may turn to the IMF to overcome Greece’s debt crisis unless leaders agree to set up a lending facility before an EU summit due to be held in Brussels on March 25th and 26th. The EU commission President Jose Manuel Barrosa has urged immediate action on the matter and said the EU should spell out its rescue plan at the summit later this week.

Friday saw the release of Germany’s producer price index which remained unchanged in February after increasing by 0.8% in January. Market expectations had been for a 0.1% increase. Year-on-year Germany’s PPI fell 2.9% in February, versus a 3.4% decline in January.

Canada’s core inflation rate unexpectedly rose last month on higher costs for automobile insurance and accommodation during the Vancouver Winter Olympics. The increase will pressure the central bank to raise interest rates and drive the value of the Loonie higher. The Canadian economy is accelerating out of last year’s recession with retail sales also rising more than expected. Recent manufacturing reports also indicated rapid economic growth.
The speed of the rebound may change how fast Governor Mark Carney decides to raise the benchmark interest rate from its current record low level of 0.25%. He had pledged to keep the interest rate in place through June unless the inflationary outlook changed. The banks next interest rate decision is scheduled for April 20th.

On a monthly basis, core consumer prices rose 0.7%, the fastest since November 2008 and overall inflation was up 0.4%. Economists had predicted the monthly rates would be 0.3% for both total and core inflation. Retail sales rose 0.7% in January, as consumers stocked up on home improvement supplies before a federal tax credit expired. Wholesale sales rose at the fastest pace in three years in January and factory sales gained four times what economists had predicted.

During the middle of last week the Loonie traded within one cent parity with its American counterpart before dropping back 0.23% on Thursday as crude oil prices, the country’s largest export fell. On Friday the Loonie opened at USD $1.0137 and fell back a further 0.31% to close trading at USD $1.0169.

Over the weekend in the US Federal Reserve Chairman Ben Bernanke said government bailouts of large financial firms are ‘unconscionable’ and must be ended as part of a regulatory overhaul following the worst global financial crisis in decades. He also defended the central banks structure as a useful network to monitor the financial system and economy but he did not comment directly on the economy or outlook for monetary policy in his remarks. Last week the Fed pledged to keep the benchmark interest rate at near zero for “an extended period” to stimulate economic recovery.

The US report on existing home sales is due for release tomorrow. The housing sector played a major part in the global economic downturn and last week data showed that construction in the US is dropping as foreclosures continue to mount. The question for tomorrow will be whether the expanded and extended homebuyer tax credit program will help boost sales figures as the end of April deadline for contract signing gets closer.

In Britain the consumer price index is due to be released tomorrow ahead of the annual budget announcement on Wednesday. The government plans to halve the budget deficit, one of the highest in Europe, which is expected to hit 12.6% of GDP this financial year. Figures released on Thursday showed that government borrowing for the year to the end of March is running at 132bn pounds, suggesting that full-year borrowing forecasts could come in well below the government’s forecast of 178bn pounds. Also last week figures showed that 2.45 million people in the UK are unemployed, 33,000 fewer than Februarys figure. But despite the recent signs that the economy was improving the budget is expected to focus on securing economic growth.
On Friday the Pound fell sharply against the US Dollar and the Euro after a Bank of England policymaker said the UK could still fall back into a recession. The Pound fell 2.4 cents or 1.5% against the US Dollar to $1.5013. Against the Euro it fell 1 cent, or 0.9%, to EUR 0.90094. The Pound has been on a bearish trend in the run up to the general election.

Uncertainty about who will win the election and whether there might be hung parliament has increased concerns about plans to cut debt levels. This uncertainty has weighed heavily on the Pound.

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.

By EWI Editorial Staff

You got your brackets filled out before the NCAA Men’s Basketball Tournament’s opening game on Thursday afternoon. Good — now sit back and enjoy the games. But if you’re looking for a good read during the numerous and lengthy time outs, we’ve got just the thing. It’s the most important investment report you will read in 2010. Forget the theoretical and hypothetical sorts of analysis that occupy so much space online. Bob Prechter gives 22 real-life examples of how deflation is beginning to spread in the U.S. economy — along with 13 charts that make the examples even clearer.

You want to know whether to prepare for inflation or deflation? This report will answer your questions. Read this excerpt to see what we mean. Oh, and try to forget that a No. 2 seed (Villanova) almost got upset in the first round and that Georgetown, a No. 3 seed, got beat by Ohio University, a 14 seed.

* * * * *

States Are Broke and Approaching Insolvency
While state “regulators” clamp down on profligate banks, the same states’ legislatures continue to blow money. For years, state governments have been spending every dime they could squeeze out of taxpayers plus all they could borrow. (The lone exception is Nebraska, which prohibits state indebtedness over $100k. Whatever Nebraska’s official position on any other issue, by this action alone it is the most enlightened state government in the union.)

But now even states’ borrowing ability has run into a brick wall, because the basis of their ability to pay interest—namely, tax receipts—is evaporating. The goose—the poor, overdriven taxpayer—is dying, and the production of golden eggs, which allowed state governments to binge for the past 40 years, is falling. The only reason that states did not either default on their loans or drastically cut their spending over the past year is that the federal government sucked a trillion dollars out of the loan market and handed it to countless undeserving entities, including state governments.

“It’s hard to imagine what happens when stimulus money runs out,” says a budget expert. (USA, 10/29/09) But it is not at all hard to imagine what will happen. Conquer the Crash imagined state insolvency seven years ago. The breezy transfer of money from innocent savers to state spenders is going to end, and when it does, states will cut spending and “services” drastically. They will also default on their debts, which will be deflationary.

Elliott Wave International’s latest free report puts 2010 into perspective like no other. The Most Important Investment Report You’ll Read in 2010 is a must-read for all independent-minded investors. The 13-page report is available for free download now. Learn more here.

By Anton Eljwizat – The EUR has dropped significantly versus the CHF in the last two weeks, and it is currently trading around 1.4330. And now as evident in the data below, the daily chart is giving bullish signals, indicating that the EUR/CHF 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 EUR/CHF chart by ForexYard.

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

• Point 1: There is a “doji” candlestick that has formed on the chart, indicating that a reversal should take place.

• Point 2: The Relative Strength Index (RSI) signals that the price of this pair currently floats in the over-sold territory, indicating upward pressure.

• Point 3: The Slow Stochastic indicates a bullish cross, signaling that the next move may be in an upward direction.

• Point 4: The Williams Percent Range is testing the lower border at the -100 mark, which merely highlights some added upward pressure.

EUR/CHF 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.