Month: May 2010

By Anton Eljwizat – Platinum made modest gains yesterday on safe-haven buying on contiuned worries about euro zone debt, tension on the Korean peninsula and in the face of expectations of continued dollar strength. However, I will illustrate below that the platinum may very well be heading for a reversal. Forex traders can take advantage of this imminent downward movement by entering short positions at an excellent entry price.

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

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

• Point 2: The Slow Stochastic indicates a bearish cross, signaling that the next move may be in a downward direction.

• Point 3: The Relative Strength Index (RSI) indicates that the price of this cross currently floats in the overbought territory, signaling downward pressure.

• Point 4: The Williams Percent Ranges is showing that this pair is heavily over-bought and may be experiencing strong downward pressure.

Platinum 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.

Source: ForexYard

Renewed debt concerns among the Euro-zone countries sent the single currency spiraling down yet again in overnight trading. EUR/USD dropped well below the 1.2200 level, approaching a 4-year low. Today, traders can expect a number of U.S. economic indicators to create volatility in the marketplace. Whether or these indicators this will help the Euro is still unknown.

Economic News

USD – Dollar Receives a Boost Following Durable Goods Report

An unexpected increase in Durable Goods Sales sent the Dollar rising against most of its major counterparts yesterday. Additionally, fresh deficit concerns in Greece and Portugal sent the Euro tumbling to nearly a 4 year low against the Dollar. Currently trading just below 1.2200, EUR/USD dropped as low 1.2160 last night. GBP/USD dropped from 1.4440 to 1.4375 before bouncing back to its current level 1.4395.

At the same time, things were not all good for the Dollar yesterday. USD/JPY was trading fairly moderately throughout the day before seeing a slight drop last night. The pair has been dipping below the 90.00 level throughout the night, which may indicate a downward trend is on the horizon.

Several U.S. economic indicators today are forecasted to send the Dollar higher. The Preliminary GDP Report and this week’s Unemployment Claims Report are both expected to create heavy market volatility, and analysts are predicting both to show improvements over their respective previous readings. Should either of the indicators come in at or above expectations, trader can expect the greenback to receive a boost in afternoon trading.

EUR – China Debt Reassessment Sends Euro Lower

News that China is moving to reassess its Euro debt holdings sent the single currency spiraling down throughout the day yesterday. Growing fears in China regarding deficits in both Greece and Portugal caused the reevaluation. Consequently, the Euro tumbled to nearly a 4-year low against the U.S. Dollar. In addition, EUR/JPY fell from 111.36 yesterday, to 109.42 in late night trading. Currently, the pair has seen a slight upwards reversal and is trading around the 110.15 level.

Today, the Euro is likely to continue its downward trend as several U.S. economic indicators are likely to give a boost to the greenback. At the same time, a lack of any significant European news events will do nothing to boost confidence in the fledgling Euro economies. Furthermore, most investors are still extremely weary of investing in the Euro-zone right now, choosing instead to place their funds in safe-haven assets like the Dollar and Yen. With the U.S. economy currently in a boom period, traders may want to avoid buying into the Euro at the moment.

JPY – Yen Retains Safe-Haven Status and Continues to Make Gains

Like the Dollar, the Yen has largely retained gains made throughout the most recent trading sessions. Against riskier currencies like the Euro and British Pound, the Japanese currency has remained strong. EUR/JPY fell almost 200 pips throughout the day yesterday before staging a mild recovery. GBP/JPY was trading as high 130.50 before dropping to 129.36 last night. Currently the pair has bounced back and is hovering around 129.80.

Today, analysts are predicting the Yen to have a strong day, as Euro concerns continue to dominate the news cycle. With no realistic long term solutions for the European deficit crisis on the horizon, traders can expect the JPY to retain its safe-haven status, and as such move up alongside the greenback throughout the day.

Crude Oil – Crude Receives a Boost Following Inventories Report

After consistently falling in price over the last month, crude oil prices received a boost after a report showed U.S. inventories to be higher then expected. While this would normally lead to a drop in prices, it appears that demand in the world’s largest energy consumer is also up ahead of the busy summer months. In the last 24-hours alone, prices jumped from 69.45 to their current level of 71.34.

Today, traders can expect prices to continue to rise, should the U.S. economic news come in as forecasted. A better economy in the U.S. typically leads to more discretionary spending among consumers, which in turn leads to more fuel being used.

Technical News

EUR/USD

The cross has experienced much bearishness in the last several days, and currently stands at the 1.2270 level. There is much evidence in the chart’s oscillators that supports a possible bullish correction today. This is supported by the 4-hour chart’s Slow Stochastic. Going long with tight stops may turn out to bring big profits today.

GBP/USD

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/JPY

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

USD/CHF

The pair has recorded much bullish behavior in the past several days. However, the technical data indicates that this trend may reverse anytime soon. For example, the daily chart’s Stochastic Slow signals that a bearish reversal is imminent. . Going short with tight stops might be a wise choice.

The Wild Card

Gold

Gold prices rose significantly yesterday and peaked at $1218 an ounce. However, the 4-hour chart’s RSI is floating in an overbought territory suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. This might be a good opportunity for forex traders to enter the trend at a very early stage.

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 remains in uptrend from 1.0501 (Feb 14 low), and the fall from 1.1695 is treated as consolidation of uptrend. Range trading between 1.1424 and 1.1695 would more likely be seen in a couple of days. As long as 1.1424 support holds, we would expect uptrend to resume and another rise to 1.1800 is possible. However, a breakdown below 1.1424 level will indicate that the rise from 1.0501 has completed at 1.1695 already, then deeper decline could be seen to 1.1300 area.

Daily Forex Forecast

Every Big Bear Grew From a Cub

By Elliott Wave International

The famous “10% correction” that market pundits talk about sounds so nice and tidy, so predictable and tolerable. It’s as if this “cute little correction” came neatly wrapped, looked like an M&M candy character, and smiled at you and your family after you open the box.

If only it were so.

“If all the market ever did on the downside was dip 10% once every two years, then investing would be easier than shooting fish in a barrel. Obviously, this is not the case. The fact is that the stock market’s movements are a fractal. Declines come in widely varying sizes.” – The Elliott Wave Theorist, December 2001

There is no way to know in advance whether a particular market downturn will fall 11%, 35% or 89%. Even the Wave Principle only forecasts probabilities — not certainties.

Read Part One of Robert Prechter’s Latest Two-Part, April-May Theorists FREE
The April-May Theorist series entitled “Deadly Bearish Big Picture” reveals a lucid picture for 2010-2016. It’s the flipside of Robert Prechter’s February 2009 Forecast for a ‘Sharp and Scary’ Rally. Click here to download the 10-page part one for FREE now.

One thing that is certain — every bear market reached a 10% drop before prices fell even further.

And another near-certainty is that too many money managers will use the phrase “buying weakness” when the market falls 10%. On May 7, after the Dow Jones had fallen several hundred points in a few days, two money managers being interviewed side by side said in effect, “Buy.” Not a word was said about caution. Not a word was offered about even the possibility of a major trend change in the market.

On the other hand, it was refreshing to hear a representative of a fund family say, “I don’t know why anyone needs to be a hero, and try to catch the bottom.”

You may be tempted to jump back in because the market has recently “corrected.” Yet consider what EWI’s Short Term Update subscribers read on May 7 — “. . .we would caution that some of history’s largest stock declines have occurred only after stocks were deeply oversold.”

Two key features of the Elliott Wave Principle is its ability to establish a price target for the current trend, and a time range.

In his latest Elliott Wave Theorist (a two-part April-May issue), Robert Prechter tells why market participants should look far beyond a mere 10%-15% move in the now-unfolding trend.

Read Part One of Robert Prechter’s Latest Two-Part, April-May Theorists FREE
The April-May Theorist series entitled “Deadly Bearish Big Picture” reveals a lucid picture for 2010-2016. It’s the flipside of Robert Prechter’s February 2009 Forecast for a ‘Sharp and Scary’ Rally. Click here to download the 10-page part one for FREE now.

By Anton Eljwizat – We at ForexYard, encourage our customers to get involved in the most intense market events. As such, we think you should know that British CBI Realized Sales figures are expected tomorrow, May 27th, 10:00 (GMT), and you need to be prepared. Market events like this one tend to create either big changes to current trends or push current trends even further. Generally, the majors are the ones most affected by market events in general but Crude Oil, Gold prices, and even the price of Silver can change dramatically in the seconds after such a publication. For more information about the British CBI Realized Sales, please read below.

WHAT IS THE “CBI Realized Sales”?

Confederation of British Industry (CBI) is an indicator that is being used to measure the level of a diffusion index based on surveyed retailers and wholesalers. It’s a leading indicator of consumer spending because retailer and wholesaler sales are directly influenced by consumer buying levels. This indicator is released on a monthly basis and is seasonally adjusted.
Traders follow this survey very closely because consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices can force a central bank to raise interest rates to tame inflationary pressures.

How This Survey Can Help the British Pound?

The government report this week is expected to show that the CBI Realized Sales will probably rise to 14 in May, according to estimates, from 13 during the prior month. If the CBI Realized Sales data will come in-line with expectations or higher, the GBP may see its bullish trend continue based on the trade balance’s value. With a release of this nature, traders may witness the GBP resume its bullish run and probably test the 1.4600 price level against the USD once more.

How This Survey Can Hurt the British Pound?

However, if the number will turn out to be lower than forecasted, this might weigh on the British currency since it would be consistent with fears that the British economy is at risk of entering a deeper economic recession. A negative release of this kind may actually force the GBP into a bearish correction, testing the 1.4200 level against the USD in the short-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.

By GCI Forex Research

Fundamental Outlook at 1400 GMT (EDT + 0400)

€

The euro depreciated sharply vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.2200 figure and was capped around the $1.2385 level.  The common currency came off early in the North American session on a report that Spanish bank BBVA was unable to renew approximately US$ 1 billion in commercial paper funding this month.  While the amount would only represent about 0.2% of the assets on BBVA’s balance sheet, it could portend short-term funding difficulties for other Spanish banks.  Funding strains became evident in the Spanish banking market earlier this week and that precipitated the tie-up of some regional Spanish savings banks.  Many traders believe it is only a matter of time before the single currency tests major technical support at US$ 1.2010 and there are said to be significant options-related orders and stops around the psychologically-important US$ 1.2000 figure.  PIMCO chief Gross reported default may be an option for some highly-indebted countries.  German Chancellor Merkel verbally intervened in favour of a strong euro.  The amount of excess liquidity in the money markets reached a record high today as the European Central Bank continued to keep the system awash with euro.  Money markets are now oversupplied by approximately €440 billion.  ECB member Noyer called on central banks to limit market interventions and avert “moral hazard,” adding they should be “exceptional.”  Data released in Germany today saw June GfK consumer confidence decline to +3.5 from +3.7 in May.  Also, French April consumer spending was off 1.2% m/m and up 1.1% y/y and May business confidence ticked higher to 97.  In U.S. news, data released today saw MBA mortgage applications climb 11.3% while April headline durable goods orders were up 2.9% and the ex-transportation component was off 1.0%.  Additionally, April new home sales were up 14.8% m/m to an annualized rate of 504,000.  GDP numbers and jobless claims data will be released tomorrow.  Euro offers are cited around the US$ 1.2620 level.

¥/ CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥90.65 level and was supported around the ¥90.00 figure.  Bank of Japan Governor Shirakawa and Federal Reserve Chairman Bernanke reported the currency swap operations between the central banks “played a very important role in stabilizing global dollar funding markets during the crisis.”  Bernanke said he does not want to make the facility permanent and Shirakawa said it is important for the markets to know the facility exists as needed.  Minutes of the 30 April BoJ Policy Board meeting revealed the BoJ should “devise ways to avoid its excessive involvement in resource allocation among individual firms.”  Bernanke and Shirakawa both indicated it would be best if their central banks worked to keep inflation right around the 2% level.  Data released in Japan overnight saw the April corporate service price index decline 1.1% y/y while May small business confidence ticked lower to 46.7.  Data to be released tonight include April foreign trade data.  The Nikkei 225 stock index climbed 0.66% to close at ¥9,522.66.  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 ¥110.50 level and was capped around the ¥111.95 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥129.05 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥78.45 level. In Chinese news, the U.S. dollar depreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8290 in the over-the-counter market, down from CNY 6.8315.  Yuan forwards are pricing in virtually no appreciation in the yuan vis-à-vis the U.S. dollar over the next three months.  This follows the conclusion of talks between the U.S. and Chinese governments that offered little indication that a revaluation of the yuan had been solidified.  U.S. Treasury Secretary Geithner said revaluating the yuan is “absolutely” in China’s best interest.  There is now renewed focus on opening China’s bond market to international investors to improve the yuan’s standing as a global reserve currency.

£

The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.4450 level and was supported around the $1.4330 level.  Bank of England will expand its long-term funding mechanism next month and will incorporate a two-tier auction system that accepts a wider array of collateral to address stresses in the financial system.  Data released in the U.K. today saw April BBA loans for house purchases improve.  Bank of England Monetary Policy Committee member Posen this week said he cannot rule out deflationary pressures in the U.S. and U.K. economies.  Chancellor of the Exchequer Osborne this week reported the new Cameron government hopes to decrease fiscal spending by at least £6 billion in what would be an abrupt shift from the policies of former Prime Minister Brown.  Cable bids are cited around the US$ 1.4110 level.  The euro depreciated vis-à-vis the British pound as the single currency tested bids around the £0.8530 level and was capped around the £0.8580 level.

CHF

The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.1515 level and was capped around the CHF 1.1625 level.  Data to be released in Switzerland tomorrow include Q1 employment numbers.  There remains a sense among traders that Swiss National Bank may be unable to keep up with market speculation and may be forced at some point to abandon its franc-selling intervention operations on account of the major global bearish sentiment that overhangs the common currency.  U.S. dollar bids are cited around the US$ 1.1110 level.  The euro lost ground vis-à-vis the Swiss franc as the single currency tested bids around the CHF 1.4175 level while the British pound lost ground vis-à-vis the Swiss franc and tested bids around the CHF 1.6585 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

Economic news out of the U.S. today showed that new orders for durable goods and new homes sales increased by more than expected in the month of April. Durable goods orders in the United States rose by 2.9 percent in April to a total of $193.9 billion following a flat change in March, according to the report released by the U.S. Commerce Department today. April’s advance marked the fourth increase out of the last five months.

Market forecasts had been expecting that durable goods orders would increase by approximately 1.3 percent for the month. Durable goods are products manufactured in the U.S. and considered to last more than three years.

New orders for durable goods excluding transportation decreased by 1.0 percent in April following a revised increase of 4.8 percent in March. This data was worse than the market forecasts which were predicting an increase of 0.5 percent for durables minus transportation for the month.

Home Sales jump in April

New Home Sales jumped in the month of April as home buyers took advantage of the last month of an $8,000 tax credit, according to data released by the Department of Commerce today. Purchases of new single family homes rose to an annual rate of 504,000 in April for a 14.8 percent increase from March. Revised data showed that new home sales increased in March by 29.9 percent to an annual rate of 439,000 homes.

On an annual basis, February’s rate of new homes sold was 47.8 percent higher than the April 2009 level. Today’s sales data beat the market forecasts which were expecting a 3.4 percent increase in sales for an annual rate of 425,000 new homes sold.

Contributors to the increase were the presence of low mortgage rates and buyers taking advantage of the $8,000 tax credit for first-time home buyers while repeat buyers were also eligible for up to $6,500 in credits. The tax credit specified that buyers were to enter into a purchase contract by April 30th to be eligible.

FOREX: US Dollar mixed in Fx Trading today

The U.S. dollar has been mixed in the forex markets today against the other major currencies. The dollar has advanced today versus the euro, Swiss franc and New Zealand dollar while falling against the British pound, Canadian dollar, Australian dollar and the Japanese Yen, according to currency data by Oanda in the afternoon of the U.S. trading session.

The euro has fallen versus the dollar to trade under the 1.2200 exchange rate today and could be on its way to establishing a fresh 4-year low reached last week at 1.2143. The EUR/USD is down by over 100 pips today and well over 300 pips for the week.

The U.S. stock markets, meanwhile, have increased today with the Dow Jones rising by approximately 30 points, the Nasdaq increasing over 10 points and the S&P 500 up by almost 6 points at time of writing.  Oil has gained by $2.62 to $71.37 per barrel while gold has advanced by $15.30 to trade at the $1,197.80 per ounce level.

By Adam Hewison – It’s been just a little over a year since we had our first major buy signal for the S&P 500 at 888.70 on 5/4/09. Since that time, the S&P 500 has climbed approximately 61.8% from the lows that were seen in early March of ’09 and the highs that were seen in October of ’07.

We take our “Trade Triangle” technology very seriously and this signal today (5/25) at 1044.50 is our first major sell signal since 7/1/08 at 1,272.00 and should not be ignored.

There are a whole host of problems that are coming due around the world that will have negative consequences for the equity markets. The problems in Greece and Europe are well known and are likely to continue for the balance of the year. This is going to have a negative impact on markets in general.

In my new short video I show you exactly what I think is going to happen to the S&P 500 market and just how you can protect yourself if we are correct. As always our “Trade Triangles” will dictate all market action. At the present time all of our “Trade Triangles” are negative and pointing to the downside. This indicates that a very strong trend is in place and it likely to continue.

Many traders, especially younger traders, are unaware of how bear markets work. Bear markets tend to be demoralizing as they do not have any strong and sustained rallies. They tend to erode as more and more traders become unnerved and throw in the towel.

I invite you to take a look at this new video with no registration and no charge.

Watch the New S&P500 Video Here..

All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub

By Adam Hewison – The reality is, the world is in a whole mess of debt and it’s all coming due at the same time.

Make no mistake about it, the situation in Europe is dire. The problems with Greece are well known. The problems in Spain are growing, and the problems in Ireland and Portugal are about to rear their ugly heads.

I’m not going to rhapsodize about the problems in Europe, they are well known and are manifesting themselves in the price action of the world markets, however, in this short video on the euro I want to show you how monthly charts and our “Trade Triangles” tell the story and show the trend very clearly. I also show you a simple method that you can use in your everyday trading to estimate how far a move can go.

My hope is that this new video will highlight some of the reasons why I believe we could be seeing some strong opportunities in this market.

The video is available for viewing now and there is no charge or registration requirement.

Watch the New Video Now…

All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub

By Adam Hewison – After exiting all long positions at 1217.72 on 5/18, we reinstated long positions seven days later on 5/25 at 1196.57.

As many of you know who watch my videos, we use our weekly “Trade Triangles” for trend direction and our daily “Trade Triangles” for timing entry and exit points. It was those daily “Trade Triangles” that flashed a buy signal on 5/25.

Given the chaotic state of the world and all the cross currents that are running in the banking system, we would not be surprised to see gold once again climb up and challenge the $1,250 level. All of our “Trade Triangles” are green and 100% to the upside. This indicates that a strong trend is once again in place for the gold market.

The video is available for viewing now and there is no charge or registration requirement.

Watch the New Gold Video Now…

Gold traders are always a very vocal segment of the trading population and so we encourage you to let your voice be heard on our Trader’s Blog.

All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub