Month: May 2010

By Russell Glaser – According to the daily chart below, the USD/NOK is showing signs of a pair trading in a trending environment. A buying opportunity may exist as the pair has displayed a tendency to bounce higher from the 10-day Simple Moving Average.

The moving averages for the USD/NOK are aligned in a perfect order which identifies a trending environment. The 200-day simple moving average (SMA) is below the price action and is sloping higher, followed by the 100-day SMA, next the 50-day SMA, then the 20-day SMA, and finally the 10-day SMA.

A buying trend appears as the price has consistently moved higher once the price has reached the 10-day SMA. As such, traders can use this as an opportunity to enter into the bullish trend.

1. The long term trend line taking into account all the price action.
2. A midterm trend line taking into account the most recent bullish pattern.
3. A speed trend line drawn to show the recent upturn the pair has experienced.
4. Resistance level 1 at a price of 6.3175.
5. Resistance level 2 at a price of 6.6000
6. Stop order at a price of 6.1500

The pair may continue its bullish trend towards these two resistance levels. Traders should go long with a first target at resistance level 1 and a second target of resistance level 2.

Should the pair continue to move higher, traders may add to their position if the price retraces to the 10-day SMA.

The Forex Technical Analysis would not be complete without a stop for risk management. A stop should be calculated by taking the Average True Range (14) and dividing it by 2 (1050/2 = 525). Subtract this from the 10-day SMA (6.2025 – 525 = 6.1500). Traders should place a stop at 6.1500 if the trade should fail to materialize.

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 AUD/USD pair seems about to break the trading range. The pair was range-trading between the 0.8700 and the 0.9400 levels for several weeks now, yet recently saw a sharp drop. The pair slid about 600 pips in 2 weeks, and is now trading at the 0.8760 level. Can it drop further?

• The chart below is the AUD/USD 1-day chart by ForexYard.
• The technical indicators used are the Bollinger Bands, the Slow Stochastic, the MACD and the Relative Strength Index (RSI).
• The pair has recently failed to breach the support level placed at the price of 0.8675. The pair now seems on its way to test the support level again.
• Both the MACD and the RSI are providing bearish signals, suggesting that the pair has potential to cross the support level.
• In case that the support level will be breached, the pair is likely to drop towards the 0.8570 level. The next support level will then be at the 0.8400 price.
• The current resistant level is placed at the 0.9030 level. The next resistant levels are at 0.9110 and 0.9320.

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: ForexYard

Yesterday started as a volatile day in which the EUR/USD pair continued to drop and Crude Oil traded below 70$ a barrel. However, during the New York trading hours, after several economic reports from the U.S. signaled a sustained economic recovery, investor confidence improved. Thereafter the EUR managed to gain back some of its losses and crude oil price ended almost unchanged yesterday.

Economic News

USD – USD – Dollar Trades Lower Against the EUR

The Dollar lost part of its rally against the Euro and against the pound. Other major counterparts remained almost unchanged during yesterday’s trading. The EUR/USD is currently trading near 1.2330. The pair was trading above 1.2400 during yesterday’s late session. almost 150 pips higher than its five months record low.

The gains in the Euro came after the TIC report signaled a sustained economic recovery. Thereafter, another report showed home builders are more optimistic about house sales. Normally better than expected reports should strengthen the local currency, in this case the Dollar. However, in the current economic conditions the U.S. is still considered the leader of the global economy. Therefore, as long as positive results continue to arrive from the U.S., investors believe other countries economic conditions would improve including Europe. Consequently, surprisingly good results from the U.S. might actually support other riskier currencies.

Today, traders are advised to follow reports published one hour before New York trading begins. Higher Building Permits data could raise investors’ confidence and a higher than expected Producer Price Index (PPI), should support the USD.

EUR – EUR Snaps Bearish Streak

The EUR gained for the first time in a week after reaching its lowest price against the USD since 2006. This might signal an end to the short term rapid decline of the EUR against its major counterparts.

The EUR rebounded against the greenback after reports about the U.S. economy raised confidence among analysts regarding growth. Fears about an economic slow down in Europe are not over yet, but as long as the U.S. economy is still expanding investors’ confidence should improve nt in general.

Today traders are advised to continue following new updates regarding the European fiscal crisis. Moreover, plenty of macro data due out should support the Euro if it is better than expected. The main data to watch is the German ZEW Economic sentiment, EUR economic sentiment, and GBP Consumer Price Index (CPI).

JPY – Investors Return to Riskier Assets

The Yen lost some of its value last week after traders returned to buy the Pound and the Euro. The Japanese yen ended yesterday lower against all its major counterparts.

Yesterday’s weakness in the Yen was a direct reaction to investors’ rising confidence about a global recovery in spite of a possible slowdown in Europe. A report published during the early hours didn’t help to support the Yen. The Japanese Tertiary Industry Activity index, which measures demand for services, slipped 3% in March.

As for today, the decline in the Yen is expected to continue against its major counterparts. If macro reports from Europe are more than expected, the pace of the Yen’s decline might even increase. The dollar strengthened against the JPY, currently trading at 92.50. The USD/JPY is yet to cross its resistance level at 93, which would signal further Yen weakness.

OIL – Higher in Early Trading Hours Following Last Week’s Drop

Crude oil traded below 70$ a barrel during yesterday’s trading session. This level has not been reached since December of last year. Oil prices are influenced by the Dollar, similar to other commodities. Therefore any strengthening of the Dollar leads to weaker Crude Oil prices. The positive EUR/USD trading at the end of yesterday supported Spot Crude Oil prices and the commodity is currently trading near $74.

As for tomorrow, Crude Oil will continue to be influenced by the Euro. Traders are advised to follow macro European data releases and later from the U.S. economy. Unless new fears about Europe’s fragile economy are published, Crude Oil prices may continue to advance and follow suit with the Euro.

Technical News

EUR/USD

Despite yesterday’s correction of the pair up to1.2413, momentum remains behind the dollar. The simple moving averages of 200, 100, 50, 20, and 10 days remain in a perfect order and are downward sloping. This signals a strong trending environment. As such, traders should be short on the pair with a first support located at the swing low on the 4-hour chart of 1.2233.

GBP/USD

The downtrend continues and appears to be strengthening as the daily chart shows the ADX indicator rising higher with a reading of 44, indicating a strong trending environment. The 14-day Relative Strength Index is sloping lower and continues to follow a downward sloping trend line. Despite the index floating in the oversold region, traders should stay short on the pair until the RSI breaks above the 30 level. The next support level for the pair rests at 1.4250.

USD/JPY

The pair has traded in a wide range the past 48 hours but the appreciation in the pair has been contained by the 4-hour chart’s 20-period middle line of the Bollinger Bands. Traders can also see a potential bearish cross forming on the 4-hour chart’s Slow Stochastic, indicating the potential for downward movement in the pair. Traders may want to be short with target of 91.75.

USD/CHF

The strong uptrend remains intact despite yesterday’s declines. The simple moving averages of 200, 100, 50, 20, and 10 days remain in a perfect order and are upward sloping. This signals a strong trending environment. As such, traders should be long on the pair with a first resistance level located at the swing high on the 4-hour chart of 1.1444.

The Wild Card

Oil

Spot crude oil is currently trading at the resistance line of $74. Should the commodity fail to break this price level, CFD traders should go short with two price targets in mind. The first is located at the support level of $69.50, and the second target is at the support line of $65.00.

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 Adam Hewison – This past weekend I visited some friends in Texas. The reason I bring this up, is that these folks are very worldly and very smart. During my visit, the conversation naturally turned to the market and what is going on.

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One of the great things about our “Trade Triangle” technology is that it both takes emotion out of the market and gives you a game plan to be successful. In this short video you will see exactly what I mean.

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Adam Hewison
President, INO.com
Co-creator, MarketClub.com

The EUR/USD hit a four year low during yesterday’s trading day, before recovering and ending positive at the end of a volatile trading session. The EUR managed to regain back part of its losses against the Dollar after declining for six consecutive days. Some analysts believe that the EUR/USD pair has hit a bottom and is now ready for a short term recovery.

The answer in regards to the EUR recovery may lie within today’s macro reports from Europe. Looking at the EUR/USD pair analysts fear that Germany, Europe’s largest economy, deteriorated this month. EUR/USD declined during early trading hours today. In case these reports fail to raise investors confident the Euro could end its recovery started yesterday, reaching new lows by the end of today’s session.

Traders are advised to follow these economic publications:

• 09:00 GMT, EUR – German Economic Sentiment.

This is a survey of about 350 German institutional investors and analysts which are asked to rate relative 6-month economic outlook for Germany. If the end result will turn lower than last month’s result of 53.0, as expected, it is likely to weaken the EUR against the Dollar.

• 12:30 GMT, USD – Building Permits

 This report measures construction activity. If the end result will be better than expected, above 0.68M, it would further support the USD as the U.S. housing market is an important indictor for economic growth.

• 12:30 GMT, USD – Producer Price Index (PPI)

This report is a leading indicator of consumer inflation. It may serve as an indictor for consumer price index which is due later this week. Last month data came at 0.7% rise, but this month expectations are for a 0.1% rise. Better than expected result will support the Dollar

By GCI Forex Research

Fundamental Outlook at 1400 GMT (EDT + 0400)

€

The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.2235 level and was capped around the $1.2370 level.  The common currency remains severely on the defensive on account of heightened eurozone sovereign debt concerns.  The common currency has not traded at these depressed levels since April 2006.  European Central Bank member Nowotny said the euro is trading “in an absolutely normal range” and characterized the eurozone’s fiscal deficits and ability to finance them as “very serious.”  Borrowings at the ECB discount window have surged recently and are now above €4 billion.  The London interbank offered rate (Libor) for three-month loans in U.S. dollars reached its highest level in more than nine months at 0.46% today.  The U.S. dollar Libor-OIS spread, a barometers of banks’ reluctance to lend, grew to 0.25%, the highest level since 17 August.  Three-month Libor rates have expanded for eleven consecutive weeks and this is important because approximately US$ 360 trillion of financial products worldwide are benchmarked to the rate.  Credit default swap rates on several European countries continue to rise with Greece, Portugal, and Spain leading the way.  In U.S. news, data released today saw the May Empire State manufacturing index decline to 19.11 from the prior reading of 31.86.  March net long-term TIC flows expanded significantly to US$ 140.5 billion from the prior reading of US$ 47.1 billion while total net TIC flows grew to US$ 10.5 billion from the upwarly-revised prior reading of US$ 9.7 billion.  The May NAHB housing market index will be released later in the day and data to be released tomorrow include April PPI, April housing starts, and April building permits.  240 banks have failed in the U.S. since 2007 and a bill in the Senate would leave the Federal Reserve at the center of U.S. oversight.  European Commission Financial Services Commissioner Barnier reported he will seek a U.S. agreement that CDS trades must be registered.  Euro bids are cited around the US$ 1.2140 level.

¥/ CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥92.70 level and was supported around the ¥91.75 level.  Former Bank of Japan Policy Board member Taya today said “Three to four years from now I expect a sovereign debt crisis to hit Japan and long-term interest rates to surge.” Notably, Japan’s public debt is nearly twice the size of its gross domestic product – the highest level among major industrial countries.  Data released in Japan overnight saw March machine orders up 5.4% m/m and 1.2% y/y while the April domestic corporate goods price index was up 0.4% m/m and off 0.2% y/y.  Also, April Tokyo-area condominium sales were up 22.6% y/y.  The March tertiary index will be released tonight followed by April consumer confidence, April machine tool orders, and April department store sales.  The Nikkei 225 stock index lost 2.17% to close at ¥10,235.76.  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 ¥114.55 level and was supported around the ¥112.45 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥131.05 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥81.75 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8277 in the over-the-counter market, up from CNY 6.8266.  Data released in China on Friday saw April foreign direct investment up an actual 24.69% y/y, up from the prior reading of 12.08%.  Yuan forwards weakened on new speculation that China may delay the appreciation of its yuan currency on elevated fears about Europe’s debt crisis.  Singapore, Japan, and France called for China to end its peg to the U.S. dollar.  U.S. Treasury Secretary Geithner on Thursday said he is “confident” China is going to allow its currency to reflect market forces.

£

The British pound depreciated vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.4250 level and was capped around the $1.4545 level. U.K. Chief Treasury Secretary Laws reported Treasury officials and Bank of England officials noted it “would be responsible and safe” to start reducing the fiscal deficit this year.  Data released in the U.K. overnight saw May Rightmove house prices up 0.7% m/m and 4.3% y/y while the May CBI industrial trends total orders index improved to -18 from the prior reading of -36.  April consumer price inflation data will be released tomorrow.  Cable bids are cited around the US$ 1.4110 level.  The euro appreciated vis-à-vis the British pound as the single currency tested offers around the £0.8585 level and was supported around the £0.84950 level.

CHF

The Swiss franc depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1445 level and was supported around the CHF 1.1320 level.  There is renewed speculation among some traders that Swiss National Bank will slow its purchases of euro for francs via official interventions.  Foreign currency investments comprise about 60% of the SNB’s balance sheet.  The Credit Suisse ZEW survey will be released on Thursday followed by April money supply data on Friday.  The euro gained ground vis-à-vis the Swiss franc as the single currency tested offers around the CHF 1.4015 level while the British pound lost ground vis-à-vis the Swiss franc and tested bids around the CHF 1.6300 figure.

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 Fast Brokers – Gold is having trouble breaking through its psychological $1250/oz level, yet is piecing together a solid period of consolidation well above its highly psychological $1200/oz area.  Consolidation in gold is understandable and welcome considering the rally which has taken place so far this month.  Stability in gold today as the risk trade pops supports the concept that the precious metal can still exercise its negative correlation with the greenback.  That being said, gold is still in a sweet spot so long as investor anxiety continues regarding the stability of the EU.  Hence, investors should keep a sharp eye on the news wire for any new psychological developments.  The data wire will pick back up again tomorrow with the UK, EU, and U.S. each printed a data point of significance.  Hence, this calm beginning to the weak could dissipate should the data stray from analyst expectations.

Technically speaking, gold faces technical barriers in the form of intraday highs and the psychological $1250/oz area.  As for the downside, gold has multiple uptrend lines serving as technical cushions along with intraday lows and the highly psychological $1200/oz area.  Gold has run out of meaningful technical barriers, normally a positive sign concerning near to medium term performance.

Present Price: $1236.45/ oz
Resistances: $1236.76/oz, $1239.51/oz, $1242.01/oz, $1244.32/oz, $1249.04/oz
Supports: $1232.16/oz, $1229.34/oz, $1225.82/oz, $1223.56/oz, $1219.26/oz
Psychological: $1250/oz, $1200/oz

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 is underperforming today in reaction to a collapse in the Shanghai Composite, which dropped by over -5% for the first time since August 2009.  The SCI is now down by nearly 20% over the past month alone as investor uncertainty increases concerning a slowdown in China.  Wen issued another statement today implying the government will continue to constrain the real estate market until prices are under control.  In addition to downward pressure stemming from future policy fears, investors are concerned that the swift pullback in the Euro will have a noticeable impact on demand for Chinese exports considering the EU is the nation’s top trading partner.  Meanwhile, the Aussie is being damaged from this negative sentiment as a slowdown in China turns from concept to reality.  A cool down in China could weigh on demand for Australian resources, denting economic growth in Australia and consequently pressuring the RBA to keep the rate hikes on hold.  Such developments and connections are clearly proving negative for the Aussie has .90 fades into the background.  Speaking of the RBA, investors will digest the RBA’s meeting minutes tomorrow, meaning the Aussie could undergo a period of elevated activity during the Asia trading session.  The EU, UK, and U.S. will also release key data points, meaning activity could pick up across the risk trade.

Technically speaking, the Aussie faces technical barriers in the form of 5/13 and 5/10 highs.  As for the downside, the Aussie has technical cushions in the form of intraday and 5/7 lows along with the psychological .87 area.

Price: .8803
Resistances:  .8803, .8822, .8843, .8855, .8869, .8885, .8898
Supports:  .8782, .8765, .8744, .8734, .8721, .8709
Psychological:  .89, .88, .87, May 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 looking to continue its consolidation above Friday lows as the currency pair undergoes another one of its characteristic sideways periods.  However, investors should keep in mind that the USD/JPY always has the potential to come alive at any given moment, so investors shouldn’t become complacent amid the present cool down.  On a positive note, the USD/JPY is still trading well above 5/7 lows and its highly psychological 90 level.  Core machinery orders printed slightly below analyst estimates, though the figure isn’t really anything to be overly concerned about.  More of a cause for concern is the collapse in the Shanghai Composite.  The SCI skidded another -5% today as fears mount that the government will continue to apply the breaks to the real estate industry.  Considering China is Japan’s top trading partner, a slowdown in China could be bad news for Japanese manufacturers who are finally starting to regain their footing.  Meanwhile, the Yen should maintain its role as a safe haven amid excessive uncertainty in the markets.  On the other hand, should conditions in Europe improve this could help lift the USD/JPY as investors pick up the risk trade again, particularly considering the $22 billion the BoJ just pumped into the system..  Regardless, psychological headwinds remain and investors should keep their eyes peeled.

Technically speaking, the USD/JPY faces technical barriers in the form of multiple downtrend lines along with intraday, 5/14, and 5/13 highs.  Additionally, the psychological .93level could serve as a solid barrier should it be tested.  As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with intraday and 5/7 lows.  Furthermore, the psychological .92 area could continue to serve as a solid support over the near-term.

Present Price: 92.36
Resistances: 92.38, 92.50., 92.66, 92.82, 92.95, 93.06, 93.29
Supports:   92.17, 92.07, 91.92,  91.80, 91.70, 91.53, 91.37
Psychological: .93, .92, .91, .90

(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 initially registered large losses today after Chancellor Osborne declared that there are many financial ‘skeletons in the cupboards’ left over by the previous administration.  In other words, Osborne is implying that the government may need to make steeper budget cuts than anticipated.  Parliament also announced that the emergency budget will be revealed on June 22nd and cut roughly 6 billion Pounds from the UK’s deficit.  Regardless, the Cable has heeded Osborne’s ‘skeletons’ warning since investors will likely have to wait for over a month to discover what this actually means.  Additionally, the Cable is benefitting from a relief rally in the risk trade as it seems a calm weekend has finally allowed investor anxieties to cool a bit following last week’s meltdown in the FX markets.  However, investors shouldn’t get too apprehensive since glaring bet concerns remain and could reignite at a moment’s.  Therefore, investors should keep a keen eye on the news wire this week for any stories or developments that could be a cause for concern for the risk trade.  Meanwhile, the LIBOR rate is edging higher along with interest rates on EU short-term paper.  Hence, markets are still in a fragile position.  The UK will print CPI tomorrow and it will be interesting to see whether the figure remains above the key 3% mark.  The BoE has cast aside excessive price growth over the past few months, meaning a 4th straight reading at 3%+ could put a little more pressure on the BoE to further address inflation concerns.  However, considering the bleak tone of the BoE’s inflation report last week a pullback in CPI wouldn’t be surprising.  Meanwhile, the key for the Cable is stabilization and the currency pair will look to climb back above its psychological 1.45 mark.  On the other hand, if current supports don’t hold the Cable could be headed to 1.40

Technically speaking, the Cable faces mounting downtrend lines along with 5/14 highs and the psychological 1.45 level.  As for the downside, the Cable has support in the form of intraday and 3/30 lows.  Additionally, the psychological 1.40 level could serve as a solid support should it be tested.

Present Price: 1.4475
Resistances: 1.4493, 1.4507, 1.4531, 1.4563, 1.4588
Supports: 1.4439, 1.4416, 1.4398, 1.4366, 1.4340, 1.4305
Psychological: 1.44, 1.43, 1.45, May 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.