Month: April 2010

By Russell Glaser – The Cable’s long term bearish trend appears to be weakening. In the process, a double bottom reversal pattern may be forming on the daily chart.

As shown below in the forex technical analysis, the daily chart displays the long term trend line has been broken and a potential double bottom taking place.

This common reversal pattern has two points near the same price level and takes the shape of a W. The resistance line rests at the peak of the pattern at the price of 1.5380. This potential double bottom will be complete when the price breaks above this resistance level.

Traders need to be aware that this remains a potential double bottom until the resistance line is breached. This could simply be a consolidation pattern before a resumption of the long term downward sloping trend.

The future price move after a breach of the resistance level can be measured from the resistance line down to the bottom of the chart pattern. This would be a potential price move higher of approximately 600 pips. This would also signal a reversal of the long term downward trend and the beginning of a new uptrend.

Special thanks go out to FX Salesman Joseph Binestock for his recognition of the chart pattern.

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 Ashley Smith – After traders caught up with markets that were closed for Easter, new economic data is set to be released today that should influence the price of spot crude oil and the dollar.

GBP – Services PMI – 8:30 GMT
– A survey of business conditions and future outlook – a leading indicator of economic health
– Expected to show little change. A worse than expected result will likely intensify the Pounds decline.

USD – Fed Chairman Bernanke Speaks – 17:15 GMT
– With no assuring remarks from yesterday FOMC meeting minutes regarding monetary policy tightening in the near future, investors will be awaiting any signs for Bernanke regarding interest rate increases and the state of the U.S economic recovery.

USD – Crude Oil Inventories – 14:30
– With Oil prices heading towards the $90 a barrel level, consumer demand remains an important variable. Any decline in inventories will likely help push Oil prices towards that level.

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

Disagreement over Greece’s rescue package reignited concerns over the pace of recovery in the Euro-Zone, dampening demand for the common currency. The U.S Dollar reached parity with the Canadian Dollar yesterday, briefly trading below the CAD for the first time since July 2008.

Economic News

USD – USD Trades Higher versus Most Counterparts

The Dollar strengthened Tuesday as new doubts surfaced about Greece’s financial situation and economic recovery. Supporting the USD further were minutes from the FOMC meeting which trimmed the forecasts for economic growth and inflation while not giving any hints as to when the extended period of low rates is expected to change in the near future.

Contributing to the greenback’s strength was the fact that European and British markets were closed Monday and last Friday for Easter, and Tuesday was the first opportunity of markets to react to the positive economic data released from the U.S during those days, particularly Monday’s ISM Non Manufacturing PMI and Pending Home Sales.

The Canadian Dollar reached parity versus the USD Tuesday, trading higher than the greenback for the first time since July 2008 as Crude Oil Prices continue to rise on prospects of an increase in interest rates ahead of the U.S.

EUR – EUR Down on Renewed Greece Concerns

New reports concerning Greece’s dissatisfaction with the standby credit plan agreed to during a European Union summit last month and the involvement of the IMF reignited negative sentiment towards the EUR. The EUR weakened to $1.3379 from $1.3399.

The British pound was also lower Tuesday, falling to $1.5239 in today’s early trading, after British Prime Minister Gordon Brown set a date for the much anticipated U.K. general election. Sterling dropped against 10 of its 16 most traded currency pairs over concerns the elections will result in a parliament in which no party wins a clear majority. The U.K fiscal troubles are a major part behind the election.

Looking ahead to today, traders should follow the release of the British Services PMI at 8:30 GMT. A better than expected result might help revive the Pound.

JPY – Yen Rises on Renewed Concerns over Global Recovery

The Yen continued its rise against the EUR Tuesday as concerns over Greece’s rescue package dampened demand for the common currency and boosted demand for the safety of the Japanese currency. The Yen rose to 125.36 per EUR in today’s Asian trading from 125.67 yesterday; however, it stayed relatively unchanged against the Dollar at 93.70 per Dollar from 93.79 yesterday.

The Australian Dollar rose 0.8% to 92.78 U.S. cents Tuesday after the Reserve Bank of Australia hiked its key interest rate a quarter of a percentage point, to 4.25%, as expected by most economists.

The BOJ Press Conference and Overnight Call Rate are expected today. While the interest rate is expected to remain unchanged, the press conference is expected to provide direction for the JPY for the day as well as the rest of the week.

OIL – Crude Stays Higher Ahead of Inventory Release

Crude Oil futures stayed higher Tuesday ahead of today’s release of U.S. energy supply data. Light, sweet crude for May delivery settled at $86.84 a barrel on the New York Mercantile Exchange.

Oil wavered most of the day Tuesday as a shaky stock market and strong Dollar weighed on Crude prices. Crude did receive a boost following the release of minutes from the FOMC meeting which signaled that monetary policy is unlikely to tighten in the near future, boosting commodities as an alternative investment.

For today, traders should follow the release of the U.S Crude Oil inventory data which are expected to show a decline in inventories. Better than or as expected results may help push Oil prices closer to the $90 a barrel level.

Technical News

EUR/USD

Euro weakness continues as the pair broke through the bearish flag continuation pattern that appeared on the daily chart. We may expect the pair to continue to fall as the 7-day Relative Strength Indicator is sloping sharply lower. The indicator has moved into the oversold level and traders may want to stay short until the indicator moves back above the 30 level.

GBP/USD

A double bottom pattern has formed on the daily chart, signaling a potential shift in the long term trend. The first bottom formed on March 1st, the second bottom occurred on March 25th, and the resistance level rests at 1.5385. A break of this resistance line will signal a completion of the double bottom pattern and a turn to a bullish trend. The move higher could be the measurement from the resistance line to the bottom, approximately 600 pips.

USD/JPY

The daily chart shows the uptrend may be weakening, as the MACD histogram has begun to slope downwards, signaling the momentum of the price move is fading. Traders will want to look for 2 signals before going short. Two potential signals may be a breach of the 10-day RSI below the 70 line and the second signal being the price moving below the support level of 93.75.

USD/CHF

The pair continues to move higher and the indicators do not show any resistance on the daily chart. Traders will want to be aware of the resistance level resting at 1.0750. A breach of this price level could propel the pair higher to the next significant resistance line of 1.0820.

The Wild Card

Gold

Spot gold could see resistance to the recent uptrend that has taken place since the end of March. The price is approaching the 23.6% Fibonacci retracement level from the previous long term bullish trend on the daily chart. Forex and commodity traders may be wise to anticipate the price to fall once it arrives at this key level of $1139.

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.

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USDCHF’s bounce from 1.0434 extends further to as high as 1.0721 level. Further rally to test 1.0750 resistance is still possible later today. Pullback would more likely be seen before breaking above this level. Support is at 1.0650 followed by 1.0600, below these levels will indicate that a cycle top has been formed on 4-hour chart, then the fallowing downtrend could take price back towards 1.0434 previous low.

Daily Forex Forecast

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$ 1.3355 level and was capped around the $1.3495 level.  The common currency fell significantly on new concerns about Greece’s fiscal condition.  A report suggested Greece may try to bypass the International Monetary Fund’s involvement in financial assistance to the country because the conditions may be too tight.  Greek finance minister Papaconstantinou denied the report and said the country has never sought to exclude the IMF from the rescue package.  Greece needs to borrow about €42 billion in 2010 and this may include as much as US$ 10 billion in U.S. dollar bonds.  IMF officials are expected to meet with Greek officials again this week.  In another report, there is talk that Greek investors and corporations are moving assets outside of Greece for asset protection purposes.  This is the latest chapter in the Greek saga and it is likely not the last.  Some dealers have suggested Greece’s woes are analogous to AIG’s and have compared the situations involving Portugal and Spain to Lehman’s troubles, in reference to the U.S. investment banking giant that was not bailed out.  Data released in the eurozone today saw the April Sentix investor confidence index print at +2.5, up from the prior reading of -7.2.  EMU-16 March PMI data will be released tomorrow.  In U.S. news, minutes from the Federal Open Market Committee’s March meeting were released today and they reported “While recent data pointed to a noticeable pickup in the pace of consumer spending during the first quarter, participants agreed that household spending going forward was likely to remain constrained by weak labor market conditions, lower housing wealth, tight credit, and modest income growth.”  The minutes also revealed “Participants saw recent inflation readings as suggesting a slightly greater deceleration in consumer prices than had been expected. A number of participants observed that moderation in price changes was widespread across many categories of spending.” Most dealers believe the Fed will wait to raise its benchmark federal funds target rate for several months because they want to see if consumer prices are more inflationary or deflationary and they will want to see ongoing improvements in the U.S. labour market.  It was reported on Friday that March non-farm payrolls expanded at their highest rate in three years. Minneapolis Fed President Kocherlakota today said he supports the gradual sale of mortgage-backed securities. The Fed last week ended a massive US$ 1.25 trillion MBS-buying program that provided liquidity to the financial system.  Euro bids are cited around the US$ 1.3175 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥93.65 level and was capped around the ¥94.35 level. Finance Minister Kan reported Bank of Japan Governor Shirakawa is “doing a very good job.”  Financial services minister Kamei reported the government will need to enact additional fiscal measures to stop the strong deflationary pressures that are evident.  Japan’s ability to implement additional budgetary stimuli is rather limited given the massive amount of outstanding Japanese government bonds. Data released in Japan today saw the February coincident index improve to 100.7 from 100.3 while the February leading economic index improved to 97.9 from 96.7.  The central bank may increase its assessment of the Japanese economy on account of an improvement in the export sector and the recent improvement in the Tankan survey of corporate sentiment.  The Nikkei 225 stock index lost 0.50% to close at ¥11,282.32. U.S. dollar offers are cited around the ¥96.85 level.  The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥125.35 level and was capped around the ¥127.35 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥142.05 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥87.50 level. In Chinese news, the U.S. dollar was unchanged vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8257 in the over-the-counter market.  The big news involving China continues to be that the Obama administration is delaying the release of a report due 15 April that could have potentially labeled China a currency manipulator.  The move to delay the release of the report could signal negotiations are ongoing between the two countries or could signal China may let the yuan appreciate further in the coming days.  Chinese leadership will visit Washington, D.C. on 12-13 April.  It was reported today that China’s net foreign debt totaled US$ 428.6 billion at the end of 2009, up 14% y/y.

₤

The British pound depreciated vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.5125 level and was supported around the $1.5305 level. Cable spun lower after Prime Minister Brown called for a general election on 6 May and Parliament was dissolved.  The consensus is that the election could end in a hung Parliament even if challenger Cameron of the Tory party unseats the unpopular Brown.  Data released in the U.K. today saw March construction PMI improve to 53.1 from 48.5 in February.  Cable bids are cited around the US$ 1.4455 level.  The euro moved lower vis-à-vis the British pound as the single currency tested bids around the £0.8765 level and was capped around the £0.8860 level.

CHF

The Swiss franc depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.0720 level and was supported around the CHF 1.0610 level. Data released in Switzerland today saw March consumer price inflation up 0.1% m/m and 1.4% y/y.  Swiss National Bank is said to have intervened in the market last week by selling Swiss francs in what is estimated to have been a massive operation.  Swiss monetary, financial, and government officials have been warning that they will not tolerate a further increase in the franc in recent weeks but many traders speculated the central bank would not intervene to weaken the franc on account of growth in the Swiss economy.  While forecasts for economic growth and inflation have both been upwardly revised in recent weeks, SNB’s latest probable intervention underscores their commitment to preserving an export-driven recovery.   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 1.4315 level while the British pound moved higher vis-à-vis the Swiss franc and tested offers around the CHF 1.6335 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 Australian dollar has surged higher against the US dollar today in forex trading after the Reserve Bank of Australia increased its interest rate by 25 basis points and hinted more rate increases could follow. The Aussie-dollar pair (AUD/USD) has advanced by over approximately 85 pips today in trading to trade at its highest level since January 15th. The AUD/USD has now risen above the 0.9250 level in the U.S. session after opening the day around the 0.9197 exchange rate level.

The pair started its ascension higher following the expected rake hike this morning as the Australian cash rate now stands at 4.25 percent, well above the close-to-zero rates in many other major nations. This was the fifth rate increase for Australia in the last six months and marked a 14-month high interest rate level.

Reserve Bank of Australia governor Glenn Stevens said in the statement accompanying the rate decision that Australia’s “output growth over the year ahead is likely to exceed that seen last year” and that the “rate of unemployment appears to have peaked at a much lower level than earlier expected.”

Stevens also said that interest rates have been below their average for borrowers and that “it is appropriate for interest rates to be closer to average.” He added that this was one step in the direction towards the “process” of getting rates near their average, prompting speculation rates could go higher as soon as next month’s meeting.

AUD/USD 1-Hour Chart – The Aussie today accelerating higher against the US dollar with help from the RBA’s interest rate hike to trading above 0.9275 today. The pair has climbed to its highest exchange rate since January 15th after trading as low as 0.8578 on February 5th.

By Fast Brokers – Gold has broken through previous April highs and is testing the patience of 3/17 highs and the psychological $1135/oz level.   Strength in gold comes amid renewed weakness in the risk trade as the Euro and Pound take a beating.  Fresh uncertainty in Greece is sending government bond yields higher and investors divesting from the risk trade in succession.  Additionally, the Cable is being hit by the announcement of parliamentary elections being held on May 6th and the concept of a hung parliament slowly becoming reality.  Risk aversion has sent investors towards gold and higher yielding currency pairs.  Hence, gold’s usual negative correlation with the Greenback has gone astray as investors digest negative psychological developments.  Meanwhile, the precious metal is separating itself further from key downtrend lines running through March 3rd highs, or the $1150/oz area.  Therefore, gold could have some more topside momentum left for the near-term.  The Fed now comes into focus with the release of FOMC meeting minutes this afternoon, and investors will be paying attention to see whether the central bank’s economic outlook has improved in the wake of positive U.S. data.  Although the U.S. will be quiet on the data front tomorrow, investors will receive some important data from the UK along with the BoJ’s monetary policy announcement during the Asia trading session.  Investors should also keep an eye on the data wires for any more developments in Greece.

Technically speaking, gold faces topside technical barriers in the form of the psychological $1135/oz area and 3/17 highs.  As for the downside, gold has fresh uptrend lines serving as technical cushions along with intraday, 4/2, and 4/1 lows.

Present Price: $1132.90/ oz
Resistances: $1133.09/oz, $1134.05/oz, $1135.01/oz, $1135.88/oz, $1137.04/oz
Supports: $1131.72/oz, $1130.76/oz, $1129.86/oz, $1128.21/oz, $1127.28/oz, $1126.56/oz
Psychological: $1130/oz, March 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 Aussie briefly popped past March highs during the Asia trading session after the RBA decided to hike its benchmark rate by another 25 basis points.  The RBA opted to forgo warnings in the form of declining retail sales and building approvals data and decided Australia’s economy still needs to be cooled down.  The response in the Aussie is surprisingly tepid since one may expect the currency pair to register solid gains considering analysts were on the fence in regards to the probability of another interest rate increase.  Meanwhile, upward momentum in the Aussie is being limited by negative psychological developments in the EU.  Fresh uncertainty has sparked in Greece as government officials question the effectiveness of the IMF’s involvement in potential financial assistance packages from the EU.  Hesitant remarks from Greece’s government have sent bond yields higher and the Euro stumbling lower.  Meanwhile, the Cable is also being dealt a blow as reality begins to sink in that the UK will face a tight parliamentary election.  These two psychological developments are leading investors away from the risk trade, thereby hampering intraday gains in the Aussie.  However, the RBA’s rate hike could prove to be a positive for the Aussie’s medium-term outlook, particularly since the central bank implied that it will not hesitate to hike again should conditions warrant such action.  For the time being investors will turn their attention to the U.S. with the release of the FOMC’s meeting minutes.  Investors will be looking to see if the Fed has become more positive on America’s economic recovery in the wake of recent encouraging fundamental data.  Although Australia will be relatively quiet on the data front tomorrow, the BoJ’s monetary policy meeting followed by a key UK Services PMI release could spark activity in the FX markets.  Additionally, investors should keep an eye out for any more developments in Greece.

Technically speaking, the Aussie faces technical barriers in the form of intraday and 1/14 highs.  Speaking of which, the Aussie is creeping towards previous 2010 highs, meaning the 93 area could prove to be a tough barrier to crack over the near-term.  As for the downside, the Aussie has multiple uptrend lines serving as technical cushions along with intraday, 3/31, 3/15 lows.  Additionally, the psychological .92 and.91 levels could serve as a technical cushion should it be tested.

Price: .9226
Resistances: .9230, .9247, .9264, .9278, .9291, .9304
Supports: .9214, .9194, .9185, .9173, .9161, .9143
Psychological: .91, .92 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 USD/JPY is ducking back below its psychological 94 level as the risk trade experiences a setback across the board.  The concept of a hung parliament in the UK and renewed uncertainty in Greece has dented the risk trade’s recent rally.  Greece’s bond prices are dropping again after government officials expressed their disapproval of IMF involvement with any future financial aid packages due to the apparent severity of their proposed austerity measures.  The EUR/USD and Cable have taken a sizable hit today and investors are buying the Yen again in reaction to today’s developments.  Meanwhile, a little weakness in the USD/JPY can also be viewed as a healthy occurrence considering the extent of the currency pair’s recent rally from March lows.  The USD/JPY is still trading well above any meaningful downtrend lines, meaning the currency pair’s new uptrend is intact for the time being.  However, the BoJ will make a monetary policy decision tomorrow, and policy meetings normally have the potential to deliver a sizable impact to corresponding currency pairs.  Since the USD/JPY has made such an impressive comeback and is trading well above its highly psychological 90 area, the BoJ may feel comfortable expressing more confidence in Japan’s economic condition.  That being said, it seems unlikely the central bank will increase liquidity again.  Either way, it will be interesting to see whether tomorrow’s monetary policy statement yields more profit taking in the USD/JPY.  On the other hand, such the BoJ happen to remain very dovish this could benefit the currency pair due to recent waves of positive U.S. economic data.  Speaking of the U.S., the FOMC will release its meeting minutes today and investors will be looking to see if the central bank’s outlook has brightened.

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 4/2, 4/1, and 3/30 lows.  Additionally, the psychological 93 level could serve as a psychological cushion should it be tested.

Present Price: 93.83
Resistances: 94.06, 94.26, 94.40, 94.56, 94.74, 94.89
Supports: 93.80, 93.67, 93.57, 93.30, 93.09, 92.86
Psychological: .95, .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.