Month: May 2010

By CountingPips.com

The U.S. dollar resumed its increase against the euro today in trading while showing mixed results versus the other majors currencies in the forex markets. The dollar has gained ground today versus the euro, British pound, Japanese yen, Swiss franc and the New Zealand dollar while trading lower against the Canadian dollar and the Australian dollar, according to currency data by Oanda late in the afternoon of the U.S. session.

The euro’s comeback at the end of last week against the dollar was dashed today when the currency resumed its downtrend and fell under the 1.2400 exchange rate level. The euro had finished the week higher versus the dollar last week and rose for three straight days to close on Friday above the  1.2570 level. Today’s decline in the EUR/USD reached to under 1.2350, finding support around the 1.2340 exchange rate.

The US stock markets, meanwhile, experienced a late decline and traded lower today with the Dow Jones declining by 126 points, the Nasdaq decreasing over 15 points and the S&P 500 down by 14 points. Oil traded virtually unchanged to level at $70.09 per barrel while gold gained by $16.60 to trade at the $1,187.30 per ounce level.

EUR/USD 1-Hour Chart – The Euro declining today against the US dollar in the forex markets after ending last week on a positive note above 1.2570. The EUR/USD fell through the upward trendline on the hourly chart and declined under the 200-hour simple moving average (red line). The pair currently trades aright around the 1.2350 level.

Existing-Home Sales advance over 7 percent in April

Today’s economic news showed that U.S. existing-homes sales data rose more than expected for the month of April, according to the monthly report produced by the National Association of Realtors (NAR). The NAR report showed that existing-home sales including single family homes, co-ops and townhouses advanced by 7.6 percent in April to a seasonally adjusted annual rate of 5.77 million units. On an annual basis, the April existing-home sales level was higher by 22.8 percent from the April 2009 level.

Market forecasters were predicting the sales data would rise by 5.6 percent to reach a 5.65 million unit sales pace. March’s existing-homes sales had increased by a revised 7.0 percent to a 5.36 million home rate. The median sales price for existing homes was $173,100 in April while total housing inventory increased by 11.5 percent to a total of 4.04 million homes on the market for the month.

NAR chief economist Lawrence Yun commented in the report about the sales figures saying, “The upswing in April existing-home sales was expected because of the tax credit inducement, and no doubt there will be some temporary fallback in the months immediately after it expires, but other factors also are supporting the market.”

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$ 1.2360 level and was capped around the $1.2560 level.  Sentiment crumbled further in the eurozone this weekend as Bank of Spain seized Spanish savings bank CajasSur.  Finance minister Salgado today reported Spain will auction the bank off “in a relatively short period” and she added other savings bank are likely to complete mergers in the coming weeks.  Salgado also noted Spain’s financial system is “absolutely solvent.”  There will likely be many more bank failures across the eurozone in the coming weeks and months and these will also contribute to negative sentiment for the common currency.  Eurosystem banks deposited €253.5 billion with the central bank overnight.  The three-month U.S. Dollar Libor rate climbed to 0.51% today, the highest level since 16 July 2009.  The eurozone debt crisis has raised concerns that many banks’ assets may be weaker-than-expected and led to higher borrowing costs in the market.  Notably, three-month U.S. Libor is a benchmark for approximately US$ 360 trillion in financial instruments worldwide.  Data to be released in the eurozone tomorrow include March industrial new orders.  In U.S. news, Treasury Secretary Geithner met with European counterparts late last week before meeting with counterparts in Beijing.  Data released in the U.S. today saw the April Chicago Fed national activity index print at +0.29, up from the revised print of +0.13.  April existing home sales data will be released later in the North American session and are expected to expand about 5.6% to an annualized rate of 5.65 million units. Federal Reserve Chairman Bernanke also continues his meeting in Beijing with Chinese officials.  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 ¥90.45 level and was supported around the ¥89.75 level.  The yen pared early gains at the dollar’s expense but remained bid on the crosses, reflecting the perceived safe haven trade that continues to rule the market.  Bank of Japan released its monthly economic report today, noting “the economy is starting to recover moderately, induced by improvement in overseas economic conditions.  This is at least marginally more optimistic than its April report in which it noted “Japan’s economy has been picking up mainly due to improvement in overseas economic conditions and to various policy measures, although there is not yet sufficient momentum to support a self-sustaining recovery in domestic private demand.”  The May report also noted “Attention should be paid to potential risks to Japan’s economy, such as a possible slowdown in overseas economies, particularly in Europe, fluctuations in financial markets and the influence of deflation.” Vice finance minister Minezaki said it is “questionable” that Bank of Japan’s new lending programs announced last week will be sufficient to stimulate growth, adding “chances are low for banks to aggressively lend.”  Data released in Japan today saw April supermarket sales improve to -4.9% y/y while the March all-industry activity index was off 0.8% m/m, up from the prior reading of -2.3% m/m. The Nikkei 225 stock index lost 0.27% to close at ¥9,758.40. 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 ¥111.20 level and was capped around the ¥113.35 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥129.80 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥77.55 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8287 in the over-the-counter market, up from CNY 6.8278.  There is speculation that People’s Bank of China may offer higher yields on one-year bills later this week to absorb more cash from the money market.  People’s Bank of China adviser Li Daokui today said “Politically it is worthwhile, it makes sense, for the two sides – China and the U.S. – to see some progress in renminbi reform in the near future.” PBoC Governor Zhou spoke about policymaking today, reporting “China is a large country with a large population so most of the important factors that need to be considered are domestic ones.  International factors will influence monetary policy decisions such as exchange-rate policies, but such influence is usually smaller than that from domestic factors.”  Prime Minister Hu said China will continue talks on reform of the yuan and liberalize its economy with yuan reforms.  At U.S.-Chinese discussions that started this weekend, U.S. Treasury Secretary Geithner is said to have adopted a softer tone with China.   Data to be released in China over the next week include the April leading index, May PMI manufacturing, an May HSBC manufacturing PMI.

£

The British pound depreciated vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.4350 level and was capped around the $1.4525 level.  Chancellor of the Exchequer Osborne reported the new Cameron government hopes to decrease fiscal spending by at least £6 billion in what would be an abrupt shift from the policies of former Prime Minister Brown.  Outgoing Bank of England Monetary Policy Committee member Barker reported more difficult times are ahead for the U.K. economy.  U.K. GDP data will be released tomorrow and are expected to expand about 0.3% m/m and decline 0.2% y/y.  Cable bids are cited around the US$ 1.4110 level.  The euro depreciated vis-à-vis the British pound as the single currency tested bids around the £0.8585 level and was capped around the £0.8670 level.

CHF

The Swiss franc depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1605 level and was supported around the CHF 1.1490 level.  The April UBS consumption indicator will be released tomorrow. Data released in Switzerland last week saw the April M3 money supply expand 5.4% y/y.  Swiss National Bank Vice Chairman Jordan last week reported the central bank is “decisively” averting an appreciation of the franc, leading to speculation the SNB’s actions prompted today’s massive short covering in the euro.  It was reported last week that the Swiss National Bank’s foreign currency holdings rose to CHF 153.6 billion in April from CHF 125.1 billion in March, the latest evidence of SNB intervention.  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 1.4330 level while the British pound gained ground vis-à-vis the Swiss franc and tested offers around the CHF 1.6770 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 ForexYard – Last week’s Euro rally proved to be short-lived following today’s decision by the Spanish government to take over one of the leading banks in Spain. The takeover reinforced investor doubts regarding the Euro-zone economies, and led to a drop for the single currency against its major counterparts. EUR/USD, currently trading just below the 1.2400 level, has dropped approximately 200 pips since last night. EUR/GBP has also seen a significant drop since last night, falling from 0.8700 to its current level of 0.8622.

Traders will want to pay attention to the U.S. Existing Home Sales report set to be released at 14:00 GMT today. Following last month’s stronger than expected home sales figures, investors are waiting to see if the uptrend will continue. With analysts forecasting a strong home sales figure, traders will want to watch out for Dollar gains in afternoon and evening trading. That being said, should the figure come in below expectations the greenback may take some losses against certain currencies like the JPY and CAD.

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 Greg Holden – The US Dollar’s recent resurgence has caused a stir across a number of markets, but the subsequent rumblings are not unexpected. Any time investors see a sharp movement by any currency there is an understanding that a correction is in the works. The economy does, after all, move in cycles. For some of the Scandinavian currencies, like the Swedish Kroner, the timing could not be better, as I will demonstrate using the chart below.

– The chart shown here is the weekly chart of the USD/SEK, courtesy of ForexYard’s trading platform.

– The indicators used are the Relative Strength Index (RSI), Stochastic (fast), and the DeMarker.

– Point 1: Here we can see that the price of this pair has recently struck a long-term significant barrier just above the current price of 7.9017. This indicates the level of pressure we should see being placed on the greenback.

– Point 2: The RSI is signaling that the pair is floating well within the over-bought territory and has recently turned downward, indicating a reversal may be happening as I write these words.

– Point 3: Our Stochastic (fast) is showing an impending bearish cross, the Stochastic (slow) not shown below, is showing something similar, but has the cross a little further off in the making. Both of these indicators (slow and fast) are suggesting that any day now this pair should see a sharp downward correction, if not outright reversal.

– Point 4: The DeMarker indicator identifies price exhaustion and stability. When the line within this indicator moves above 0.7000 it is said to be expecting a bearish reversal. The higher above 0.7000 the line goes, the stronger the bearish tendency becomes. We can see below that the line is at the very top of the indicator and technical traders should thus be expecting little more than a downward movement for this pair and trade accordingly.

USD/SEK – Weekly Chart

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

By Fast Brokers – The Aussie is consolidating above its psychological .82 level following last week’s steep decline.  It seems investors are taking advantage of oversold conditions as the risk trade stabilizes across the board.  Investors punished the Aussie last week as the Shanghai Composite experienced a heavy selloff and Australian resource companies tumbled amid fear of a decrease in demand from China.  Additionally, investors feel the new government tax levied on resource companies could hamper economic growth.  All of this points to a neutral stance at the RBA and the central bank did not deviate from this assumption by citing worries that problems in the EU could spill over into the global economy.   On a positive note, the Shanghai Composite is up over 3% today after the government announced that new property taxes may not come into effect for another few years.  However, this is all speculation and we’ll have to see how the situation develops.  Regardless, an upturn in the SCI is good news for the Aussie since the composite has been dragged into a bear market.  Australian new motor vehicle sales screamed higher by 8.4% last month despite the RBA rate hikes.  Data points like these help provide validity for the central bank’s hawkish monetary regime.  Australia will be quiet on the data wire tomorrow, leaving to currency pair up to broad-based movements in the risk trade over the near-term, meaning investors should keep a sharp eye on the news wire for any new developments in the EU.
Technically speaking, the Aussie faces technical barriers in the form of 5/21 highs and the psychological .85 level.  As for the downside, the Aussie has technical cushions in the form of intraday, 5/20, and September 2009 lows.

Price: .8277
Resistances:  .8291, .8314, .8329, .8341, .8363, .8384
Supports:  .8251, .8224, .8195, .8172, .8154, .8138
Psychological:  .85, .84, .83, May 2010 and September 2009 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 bouncing back towards $1190/oz after hitting bottom just above $1160/oz on Friday.  Despite gold’s rapid decline from $1250/oz, the precious metal still has solid technical supports in place in the form of monthly lows and the psychological $1150/oz level.  Due to the extent of gold’s recent rise it is not surprising that the precious metal has undergone a wave of profit taking.  Gold’s decline also accelerated last week as the major dollar pairs bounced from their lows.  However, the precious metal is moving in lockstep with the risk trade today and should the pullback in the dollar pick up speed gold may continue its climb back towards $1200/oz.  Investors should remember that despite gold’s status as a safe haven investment vehicle, the precious metal also tends to exhibit a negative correlation with the greenback.  Hence, gold’s upward trajectory is still intact, particularly if uncertainty persists in the EU over the medium-term.

Technically speaking, gold faces technical barriers in the form of intraday and 5/20 highs.  Additionally, the psychological $1200/oz level should serve as a solid technical barrier should it be reached.  As for the downside, gold still has multiple uptrend lines serving as technical cushions along with 5/21 and 5/5 lows.  Furthermore, the $1150/oz level should serve as a strong technical cushion should it be tested.

Present Price: $1187.08/ oz
Resistances: $1187.26/oz, $1191.33/oz, $1195.20/oz, $1199.30/oz, $1202.59/oz
Supports:  $1178.97/oz, $1174.76/oz, $1171.60/oz, $1168.80/oz, $1163.89/oz.
Psychological:  $1200/oz, $1150/oz

(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 consolidating around its psychological 90 level as it tries to form a bottom above last week’s lows like the rest of the risk trade.  The USD/JPY could undergo another one of its extended consolidative periods like we witnessed in the middle of the month.  However, markets are still vulnerable to volatility due to unstable conditions in the EU.  The BoJ proved to be proactive again last week by announcing another 1 Trillion yen lending program at the benchmark rate in order to bolster economic growth.  This follows a $22 billion injection of liquidity the week before.  The two actions could help buoy the USD/JPY over the near-term.  However, there’s little reason to believe the Yen will lose its status as a safe haven should there be another large flight from risk.  Meanwhile, the USD/JPY could continue to fluctuate around 90 due to its psychological relevance as investors decided where to take the next leg.   Japan will be quiet on the data wire, leaving the USD/JPY up to psychological events in the EU and data from the U.S. over the next couple trading sessions.

Technically speaking, the USD/JPY faces technical barriers in the form of multiple downtrend lines along with intraday highs and the psychological 91 level.  As for the downside, the USD/JPY has technical supports in the form of intraday and 5/21 lows.

Present Price: 90.14
Resistances: 90.27, 90.42, 90.55, 90.64., 90.77, 90.88
Supports:  90.01, 89.86, 89.73, 89.54, 89.34, 89.20
Psychological:  .90, 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.

The US Dollar’s recent resurgence has caused a stir across a number of markets, but the subsequent rumblings are not unexpected. Any time investors see a sharp movement by any currency there is an understanding that a correction is in the works. The economy does, after all, move in cycles. For some of the Scandinavian currencies, like the Swedish Kroner, the timing could not be better, as I will demonstrate using the chart below.

– The chart shown here is the weekly chart of the USD/SEK, courtesy of ForexYard’s trading platform.

– The indicators used are the Relative Strength Index (RSI), Stochastic (fast), and the DeMarker.

– Point 1: Here we can see that the price of this pair has recently struck a long-term significant barrier just above the current price of 7.9017. This indicates the level of pressure we should see being placed on the greenback.

– Point 2: The RSI is signaling that the pair is floating well within the over-bought territory and has recently turned downward, indicating a reversal may be happening as I write these words.

– Point 3: Our Stochastic (fast) is showing an impending bearish cross, the Stochastic (slow) not shown below, is showing something similar, but has the cross a little further off in the making. Both of these indicators (slow and fast) are suggesting that any day now this pair should see a sharp downward correction, if not outright reversal.

– Point 4: The DeMarker indicator identifies price exhaustion and stability. When the line within this indicator moves above 0.7000 it is said to be expecting a bearish reversal. The higher above 0.7000 the line goes, the stronger the bearish tendency becomes. We can see below that the line is at the very top of the indicator and technical traders should thus be expecting little more than a downward movement for this pair and trade accordingly.

USD/SEK – Weekly Chart

By Fast Brokers – The Cable is looking to piece together some upward momentum from last week’s lows as Asia markets start Monday on a positive note.  We see gains across the board in the risk trade with investors biting on oversold conditions.  Europe will be on a banking holiday today and this gives markets another opportunity to stabilize as the break soothes uncertainty from last week.  The only meaningful figure on the data wire today will be U.S. existing home sales.  UK public sector borrowing came in about in line with analyst expectations while prelim mortgage approvals decline.  On a positive note, prelim UK business investment surged by 6%, meaning economic activity could be picking up a bit.  Attention will now shift to tomorrow’s UK revised GDP release, though it’s likely any revision would be limited in scope.  The data wire will be relatively quiet across the globe this week, meaning psychological forces should remain in control of market activity.  Cable investors are waiting on parliament’s emergency budget coming on 6/22.  Meanwhile, attention will likely remain focused on developments in the EU.
Technically speaking, the Cable faces multiple downtrend lines along with 5/18 and 5/14 highs.  Additionally, the psychological 1.45 area could serve as a solid barrier over the near-term.  As for the downside, the Cable has support in the form of intraday and 5/20 lows

Present Price: 1.4495
Resistances: 1.4495, 1.4521, 1.4543, 1.4584, 1.4623, 1.4673
Supports: 1.4476, 1.4431, 1.4409, 1.4387, 1.4362, 1.4326, 1.4305
Psychological: 1.42, 1.45, May 2010 and April 2009 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 is consolidating back towards its psychological 1.25 level after the EUR/USD powered higher at the end of last week, nearly touching 1.27 as the currency pair tries to form a bottom.  However, the EUR/USD’s rally did cool down a bit on Friday after the flash PMI data came in negative mixed and Germany Ifo Business Climate came in a tad shy of analyst estimates.  Meanwhile, Asian equity markets are up today with the SCI leading the pack.  This positive momentum could carry over into the European trading session due to the banking holiday.  However, we naturally recommend investors keep an eye on the news wire since conditions in the EU are still unstable.  Although gains from last week’s lows have been encouraging, the movement hasn’t been game changing thus far considering the extent of the downturn.  Investors should also keep in mind how quickly the 5/7-5/10 pop deteriorated.  Hence, it will be important to see the EUR/USD make a confirmation topside movement backed by convincing volume in order to turn the tide.  It seems 1.25 is the key level in play right now with 1.30 hanging overhead.  Attention is focused on China today with the U.S./China summit kicking off.  However, it’s unlikely there will be any major agreement concerning currency appreciation emanating from the conference, meaning the meetings could have a limited impact on FX activity.  Investors will also be looking at the U.S. today with Existing Home Sales data on deck.

Technically speaking, the EUR/USD faces multiple downtrend lines along with 5/21 and 5/12 highs.  Additionally, 1.25 could now become a solid technical cushion for the near-term.  As for the downside, the EUR/USD has supports in the form of intraday 5/21, and 5/20 lows along with the psychological 1.24 and 1.23 areas.

Present Price: 1.2523
Resistances: 1.2540, 1.2573, 1.2595, 1.2630, 1.2672, 1.2726
Supports:   1.2474, 1.2456, 1.2431, 1.2383, 1.2341, 1.2318
Psychological: May 2010 lows, April 2006 lows, 1.24, 1.25, 1.23, 1.27

(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.