USDCAD stays in a trading range between 1.9977 and 1.0104. Lengthier sideways movement in the range is still possible later today. However, the price action in the trading range is more likely consolidation of downtrend from 1.0302, as long as 1.0104 resistance holds, another fall towards 0.9900 is still possible after consolidation, and a breakdown below 0.9977 could signal resumption of downtrend.
By GCI Forex Research
Fundamental Outlook at 1400 GMT (EDT + 0400)
€
The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3690 level and was supported around the $1.3565 level. The common currency extended gains from late last week after it was reported that eurozone officials reached an agreement to provide financial assistance to Greece if that country cannot meet its refinancing needs in the market. Greece has billions of euro in bonds maturing over the next couple of months and the recent increase in Greek yields may render it too expensive – or even impossible – for Greece to refinance its maturing debt. The package offered by Greek officials is said to total some US$ 61 billion. The spread between Greek ten-year bonds and German bunds narrowed today to around 350bps. Dealers will again focus on the significant fiscal problems of Spain and Portugal and eurozone officials may be forced to assist them as well. European Central Bank President Trichet reported the Greek plan as a “positive” step and called on the Greek government to meet its fiscal obligations. German Chancellor Merkel is said to be facing major criticisms in her country for agreeing to the new financial assistance to Greece at below-market rates. Data to be released in Germany tomorrow include March consumer price inflation followed by French February current account data and March consumer price inflation data on Wednesday. In U.S. news, the March monthly budget statement printed at –US$ 65.4 billion. Data to be released in the U.S. tomorrow include the March NFIB small business optimism index, February trade balance, and March import price index. Fed Governors Duke and Tarullo spoke today about non-monetary issues. Euro bids are cited around the US$ 1.3175 level.
¥/ CNY
The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥93.60 level and was supported around the ¥92.90 level. Minutes from the Bank of Japan Policy Board meeting on 16-17 March were released overnight in which some rate-setters concluded “there was no solid justification for enhancing monetary conditions. The market may also increasingly come to consider that the bank would take whatever policy action the market has anticipated.” BoJ policymakers doubled a lending program for commercial banks to ¥20 trillion. Many members said the program’s expansion “reaffirmed the bank’s stance on continuing to consistently make a contribution” to improve economic growth and overcome deflation. One common criticism is that the program will accomplish little as far as actually improving liquidity measures in the real economy and stimulating final private demand. Data released in Japan overnight saw March bank lending decline 1.8% y/y, worse than the prior reading of -1.5%. Data to be released in the Australasian session will include the March domestic corporate goods price index and March Tokyo-area condominium sales. The Nikkei 225 stock index climbed 0.42% to close at 11,251.90. U.S. dollar offers are cited around the ¥96.85 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥127.45 level and was supported around the ¥126.60 level. The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥144.50 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥88.30 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8257 in the over-the-counter market, up from CNY 6.8236. U.S. and Chinese officials will convene in Washington, D.C. this week to discuss China’s exchange rate policy and other financial aspects of the bilateral relationship. China today reported its foreign exchange reserves totaled US$ 2.447 trillion at the end of March. Also, China’s trade surplus in the first quarter was off 77% to US$ 14.49 billion. China is said to have posted a rare US$ 7.24 billion trade deficit in March.
₤
The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.5485 level and was supported around the $1.5365 level. Traders are closely monitoring the lead-up to the U.K. general election on 6 May amid talk that Prime Minister Brown may have narrowed the gap against Tory challenger Cameron, the presumed favourite. Dealers are still speculating the most likely scenario will be a hung Parliament and sterling has generally been weaker as a result of this premise. Data to be released in the Australasian session include the BRC March retail sales monitor and the March RICS house price balance. Cable bids are cited around the US$ 1.5140 level. The euro moved higher vis-à-vis the British pound as the single currency tested offers around the £0.8845 level and was supported around the £0.8805 level.
CHF
The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.0530 level and was capped around the CHF 1.0615 level. Data to be released in Switzerland tomorrow include the March producer and import price index. On Friday, Swiss National Bank Governing Board member Danthine said “avoiding inflation” is a “medium-term” challenge. Data released in Switzerland last week saw the March unemployment rate decline to 4.2% from 4.4% in February. U.S. dollar offers are cited around the CHF 1.0920 level. The euro moved lower vis-à-vis the Swiss franc as the single currency tested bids around the CHF 1.4380 level while the British pound moved lower vis-à-vis the Swiss franc and tested bids around the CHF 1.6270 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.
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By Fast Brokers – The Aussie darted beyond previous 2010 highs today after the EU’s decision to provide Greece with aid benefited the risk trade across the board. Due to the RBA’s comparatively hawkish stance coupled with solid Australia economic fundamentals the Aussie was ready to participate. However, the Aussie has come off of intraday highs after nearly testing November 2009 highs. Regardless, the Aussie’s uptrend is chugging along and with light data on the wire until Wednesday current momentums could carry on for the time being. Although the U.S. will release its Trade Balance figure tomorrow, this likely won’t have too large of an impact on the FX markets unless it registers a large deviation from analyst expectations. Meanwhile, Aussie investors should be paying close attention to developments in China. China is clamping down on lending as the government battles to contain its real estate bubble and inflationary pressures. China will release key data on Thursday, highlighted by CPI and GDP. Should China’s economic recovery cool from the implementation of tighter liquidity measures, the Aussie could be dragged lower amid lowered expectations for demand for Australia’s commodities. On the other hand, should China’s economic recovery plow ahead the Aussie could benefit directly since China’s rebound is helping fuel Australia’s economic growth.
Technically speaking, the Aussie faces technical barriers in the form of intraday and 11/17/09 highs. As for the downside, the Aussie has multiple uptrend lines serving as technical cushions along with intraday, 4/9, and 4/5 lows. Additionally, the psychological .93 and.92 levels could serve as technical cushions over the near-term.
Price: .9291
Resistances: .9306, .9316, .9330, .9342, .9353, .9383
Supports: .9291, .9273, .9259, .9247, .9234, .9215, .9202
Psychological: .93, .92, November 2009 highs, April 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.
By Fast Brokers – Gold is marching higher, nearly hitting $1170/oz as the precious metal benefits from today’s pop in the risk trade. The EU’s announcement of financial assistance for Greece has sent the Euro, Cable, and Aussie higher with investor uncertainty abating. Gold has benefitted from its negative Dollar correlation, surging past previous 2010 highs. Gold has been in a win-win situation lately. Investors have fled to the precious metal amid EU uncertainty and are buying up the commodity in reaction to Dollar weakness and correlative forces. Meanwhile, it will be interesting to see whether the EUR/USD can sustain today’s upward momentum and build a solid uptrend. Such a development could prove beneficial for gold due to the reasons listed above. The data wire will be relatively quiet again tomorrow until the U.S. releases its Trade Balance data, meaning present momentums could stay in play unless there is an unexpected psychological development.
Technically speaking, gold faces topside technical barriers in the form of intraday and 12/08 highs. Additionally, the $1170/oz area could serve as a technical barrier should it be tested. As for the downside, gold has fresh uptrend lines serving as technical cushions along with intraday and 4/9 lows. Additionally, the psychological $1160/oz and $1150/oz areas could serve as solid supports over the near-term
Present Price: $1161.55/ oz
Resistances: $1161.91/oz, $1163.20/oz, $1164.77/oz, $1166.21/oz, $1167.50/oz, $1169.22/oz
Supports: $1160.33/oz, $1158.61/oz, $1157.34/oz, $1156.14/oz, $1154.95/oz, $1153.73/oz
Psychological:$1170/oz, $1160/oz, $1150/oz, 2010 highs and April 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.
By Fast Brokers – The USD/JPY is moving sideways despite volatility taking place in the Euro and Pound after the EU announced an aid offer for Greece to settle credit markets. While once may expect the USD/JPY to benefit from such a development due to its positive correlation with the risk trade, investors are instead opting to keep the currency pair locked beneath its April highs. However, its new uptrend is still intact and we will have to see how the remainder of the trading session plays out. A possible element weighing on the USD/JPY could be speculation that China will appreciate the Yuan soon, which would likely benefit the Yen. Additionally, the BoJ may provide an upward revision for its economic performance outlook, also a Yen positive. Meanwhile, the data wire is relatively quiet until tomorrow’s U.S. Trade Balance data. Investors will be looking to see if U.S. imports increased. Strong U.S. imports implies an increase in demand for Japanese exports, a USD/JPY positive.
Technically speaking, the USD/JPY faces technical barriers in the form of previous April highs and the currency pair’s psychological 95 level. As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with intraday, 3/30, and 3/25 lows. Additionally, the psychological 93 level could serve as a psychological cushion for the near-term.
Present Price: 93.28
Resistances: 93.35, 93.45, 93.57, 93.71, 93.86, 94.06, 94.26
Supports: 93.14, 93.04, 92.84, 92.70, 92.59, 92.40, 92.26
Psychological: .94, .93, 2010 highs
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be 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 Cable has popped to new April highs after the EU announced it is providing Greece with roughly $40 billion @ 5%. The deal has sparked a rally in the risk trade and the Cable has been more than willing to participate. After all, last week’s UK housing and manufacturing came in strong, placing the Cable in an environment to benefit from positive risk flows. The Cable is separating itself further from any meaningful downtrends, meaning this new upturn stemming from March lows could have legs. Should conditions in the EU continue to calm then focus will likely turn more towards economic fundamentals, meaning investors should keep a closer eye on the data wire. Although the UK was quiet on the data wire today, it will reenter the fray tomorrow by releasing the BRC Retail Sales Monitor, RICS House Price Balance, and its Trade Balance figures. The U.S. will follow with its own Trade Balance data, meaning investors will be digesting both import and export data. Since the UK’s manufacturing data has printed well, it would be surprising to see a smaller than expecting deficit. Meanwhile, investors should also keep an eye out for any election polls hitting the news wire throughout the week since we’ve seen these numbers have a noticeable impact on the Pound over the past month. Should the Conservatives lose ground to Labor this could drag on the Cable, and vice versa.
Technically speaking, the Cable faces technical barriers in the form of intraday, 2/23, and 2/17 highs. Additionally, the psychological 1.55 level could serve as a solid obstacle should it be tested. As for the downside, the Cable has fresh uptrend lines serving as technical cushions along with intraday lows. Additionally, the psychological 1.54 area could serve as a solid support over the near-term.
Present Price: 1.5402
Resistances: 1.5414, 1.5436, 1.5453, 1.5470, 1.5494, 1.5522
Supports: 1.5358, 1.5337, 1.5311, 1.5292, 1.5273, 1.5253
Psychological: 1.55, 1.54, February highs and April 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.
By Fast Brokers – The EUR/USD surged when the markets opened, toppling previous April highs with ease and tapped 1.37 after the EU announced it will provide Greece with roughly $40 billion @ 5% and the IMF will cover the rest. The EU finally caved in to supporting Greece after Greek bonds collapsed last week and yields surged to a record high. Greece is satisfied with the aid pledge thus far, although 5% is a bit above what the government was hoping for. Regardless, the risk trade has received a boost of confidence as Greece fears ease. Additionally, this could be the burst that the EUR/USD needs to shake free from its funk and piece together a nice uptrend, though we will have to see how conditions play out. Meanwhile, the data wire is calm until tomorrow when investors receive U.S. Trade Balance data. Since the EU will be quiet the Euro may continue to outperform unless there is a negative psychological development over the near-term. The story now becomes whether the EUR/USD can sustain its new upward momentum and build a more substantial uptrend.
Technically speaking, despite today’s upswing the EUR/USD faces fresh downtrend lines along with intraday, 3/3, and March highs. As for the downside, the EUR/USD has new uptrend lines serving as technical cushions along with intraday and 3/5 lows. Additionally, the psychological 1.36 and 1.35 levels could serve as technical cushions for the near-term.
Present Price: 1.3589
Resistances: 1.3597, 1.3613, 1.3624, 1.3632, 1.3642, 1.3655
Supports: 1.3586, 1.3577, 1.3563, 1.3551, 1.3540, 1.3531
Psychological: April and March highs, 1.35, 1.36, 1.37
(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 Russell Glaser – The long term downward sloping trend line is being tested after the euro appreciated versus the dollar. The rise in the pair coincides with the release of the EU rescue package for Greece. The daily chart below shows to what price the pair could appreciate to following the euro positive news.
The EUR/USD daily chart below shows the current long term downward sloping trend line for the pair. This trend line is being tested after last nights sharp appreciation in the pair.
There are a number of ways to detect a shift in the trend. Besides a breach of the trend line, traders can use retracement levels. The Fibonacci retracement level of 50% has already established itself as a significant resistance line in May, June and July of last year during the uptrend, as well as mid March during the downtrend.
While I remain bearish on the euro in general, the price target of 1.3800 for the correction seems probable in the near term.
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:
• GBP PPI Input m/m out at 3.6% versus expected 1.3%, prior 0.6% (revised)
• GBP PPI Output m/m out at 0.9%, versus expected 0.4%, prior 0.3%
• CAD Employment Change out at 17.9K versus expected 25.9K, prior 20.9K
• CAD Unemployment Rate out at 8.2% versus expected 8.1%, prior 8.2%
• AUD Home Loans m/m out at -1/8% versus expected -0.9%, prior -7.3% (revised)
Upcoming Events:
• CAD Housing Starts (1215GMT)
• CAD BOC Business Outlook Survey (1430GMT)
Tomorrow:
• USD Trade Balance (1230GMT)
• CAD Trade Balance (1230GMT)
Market Commentary:
The Euro surged to the highest level in more than three weeks against the U.S Dollar after European governments offered Greece a rescue package worth as much as €45Bn ($61bn) at below-market interest rates.
Finance Ministers of the 16-nation single currency bloc have agreed to offer as much as €30bn in three year loans, at around 5% interest. This is much lower than current borrowing costs facing the debt-stricken nation, with the yield on Greek government debt rising to a record high of 7.5% last Thursday. The aid package also involves the International Monetary Fund, which will provide an additional €15bn. “The Eurogroup is confident that the determined efforts of the Greek authorities and of its European partners will allow to overcome the fiscal and structural challenges of the Greek economy,” an E.U. statement said.
Following the release of the news, the EUR rose 1.2% to strike a high of $1.36906, the highest price for the single currency since March 18th. This unexpected jump comes a few days after the single European currency dropped to within one cent of an 11-month low against the greenback, last Thursday. It rose 1.1%, the most since March 31, to 127.19 yen. The Euro also managed to regain all of last week’s losses against the British Pound. Following the news of a “Greek Bailout”, the EUR/GBP appreciated 0.50%- jumping from last Friday’s closing price of 0.87802 to a high of 0.88241, this morning.
The E.U. decision follows a nightmare week for the Greek administration, which saw borrowing costs soaring to a record high, while international ratings agency Fitch lowered the country’s credit rating on Friday to ‘BBB-‘ from ‘BBB+’ with a negative outlook.
For a second straight week, the British Pound climbed against the U.S dollar, as U.K producer prices jumped in March by more than the market has predicted, in the largest increase for since November 2008. PPI Input soared a record 3.6% between February and March, versus an expected increase of 0.6%, boosted by the rising cost of petroleum products. Britain’s Office of National Statistics also reported that the PPI Output increased above expectations, rising 0.9% for the previous month, and 5% from a year earlier. This monthly rise was more than double the market forecasted increase of 0.4%, adding signs that Britain’s economic recovery is gathering speed. The GBP closed on Friday at $1.53692, up 0.598% from the day’s opening price of 1.52778, and up 0.68% from the week’s opening price of $1.52654. In this morning Asian session, the GBP/USD extended above the 1.54000 mark, to hit a 7-week high of 
1.54833, before pulling back to the 1.5435 area.
Across the Atlantic, Canada added 17,900 jobs in March, fewer than the 25,900 economists had predicted, as construction and natural resources companies hired while the service industry shrank. Statistics Canada reported last Friday that the unemployment rate remained unchanged at 8.2%, despite a predicted decrease of 0.1%. While not as strong as expected, this smaller than predicted increase represents the third straight gain in Canada’s employment level, further adding evidence of a rebound in the early part of the year.
The Canadian dollar fell as low as C$1.0084, or 99.17 U.S. cents following the release of the report, before partially retracing its steps to close at C$1.00139. It was near parity with the U.S. dollar just before the data. While over the course the day, the Loonie fell 0.113% from its opening price of C$1.00252, the CAD managed to hold on to its prior week gains- closing the week up 0.567% from Monday’s opening price.
However, this weaker than expected employment data may grant the Bank of Canada some extra time as it ponders when to withdraw the extraordinary stimulus measures from the economy. The central bank has signaled that it won’t raise its benchmark interest rate from a record low level of 0.25% before July, unless inflation becomes a threat. With inflation already hovering near the bank’s 2% target and stronger than expected data pointing to a second straight quarter of 5% annualized growth, markets had begun to price in a chance of monetary tightening in June. But most analysts believe the central bank will keep its pledge to hold rates at least until the end of the second quarter.
Later today (1215GMT), the CMHC will release the number of Housing Starts for the month of March. The data is expected to report 201K new residential buildings that began construction during the previous month, up from 197K reported in February. Also out today (230GMT) is the Bank of Canada’s Business Outlook Survey – this report is highly respected given its source and timing in relation to interest rate decisions.
Tomorrow, both the US and Canada will simultaneously announce their trade balances. Last month, Canada reported a 0.8B surplus; however, the Canadian positive economic data was outshone by an unexpected decrease in the US trade deficit – which narrowed to 37.3B. This time around, the US expects its trade deficit to widen to 38.4B, which north of the border, Canada predicts that their trade surplus will remain consistent at 0.8B. This double hitter usual causes much volatility movement in the USD/CAD pair.
Down under in Australia, home-loan approvals fell in February for the fifth straight month following Governor Glenn Stevens continuous rate hikes along with the government decision cut grants top first time buyers. Waning demand for approvals adds to evidence that Governor Stevens’ decision to boost the benchmark interest rate five times in six meetings is cooling domestic demand. Just last week (April 6th), the RBA increased Australia’s overnight cash rate target by a quarter percentage point to 4.25%, adding to similar moves in March, December, November and October amid a rebound in consumer and business confidence, plus surging house prices. The Australian dollar traded at 93.41 U.S. cents as of 12:17 p.m. in Sydney from 93.45 cents just before the report was released.
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. All information and opinions contained on this website are to be used for general informational purposes only and do not consitute investment advice.
