Month: June 2010

By Fast Brokers – The USD/JPY is continuing its consolidation between 91-92 despite broad based gains in the risk trade.  Although the BoJ kept its benchmark rate unchanged the central bank announced a special loans program for commercial banks aimed at stimulating specific growth sectors.  Meanwhile, Prime Minister Kan seems to be setting the ground for tax hikes and/or other measures for reducing Japan’s expanding debt.  Japanese citizens seemed satisfied so far with Kan’s approach even though the new PM is in the waking hours of his reign.  He still hasn’t dealt with the issue of where to put America’s military base which is what ran Hatoyama out of office.  Therefore, we’ll have to wait and see how Kan fares after next month’s upper house election.  Getting back to fundamentals, Japan’s tertiary industry figure came in 4 basis points below analyst expectations.  Therefore, even though business spending made an encouraging improvement last month, analysts may not be too pleased with the figure.  Meanwhile, all eyes are on the EU after rumors spread that the IMF and U.S. Treasury are working on a $350 billion line of liquidity for Spain.  Though unverified, the rumors are weighing a bit on the risk trade regardless.  Key data will be coming from the U.S. tomorrow, including CPI, the Philly Index, and weekly unemployment claims.  Even though the USD/JPY has been stuck in a narrow trading range for quite some time now, investors should keep in mind that the currency pair is prone to sudden and sharp movements after periods of hibernation.

Technically speaking, the USD/JPY faces multiple downtrend lines along with 6/14 and 6/4 highs.  As for the downside, the USD/JPY has technical supports in the form of multiple uptrend lines along with 6/10 and 6/1 lows.  Additionally, the highly psychological 90 level should serve as a solid technical support should it be tested.

Present Price: 91.34
Resistances: 91.45, 91.58, 91.70, 91.85, 91.97., 92.11, 92.25
Supports:  91.24, 91.13, 91, 90.86, 90.74, 90.62, 90.50, 90.31
Psychological:  .90, .92, June highs and 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 Cable is having trouble breaking through 1.48 after an impressive run so far this month.  The Cable is moving sideways despite another encouraging decline in the claimant count change.  Hence, either the Cable is dealing with overbought conditions or the currency pair is dealing with headwinds blowing from the EU.  Although, UK CPI did drop a basis point yesterday.  Even though CPI remains above the key 3% mark, a cooling in prices takes some of the pressure off of the BoE to tighten liquidity.  Rumors are spreading that the IMF and U.S. Treasury have been working together on a $350 billion line of liquidity for Spain.  The Spanish government has adamantly denied the rumors, though this is the second time this month we have heard rumblings that Spain may be next in line for aid.  Spanish and Portuguese bond yields are widening in wake of the rumor and are likely weighing on a Cable which would normally be rising on such positive UK employment data.  Meanwhile, the EUR/USD is continuing its consistent climb from June lows, a positive development for the risk trade as a whole since a tumbling Euro has been weighing on most dollar pairs the past couple months.  The UK will light up the data wire again tomorrow with retail sales followed by U.S. CPI, unemployment claims, and the Philly Index.  Hence, markets could remain volatile as investors digest the wealth of data and earnings.  Additionally, investors should focus on the EU news wires again to see if there are any concrete developments in Spain.

Technically speaking, the Cable faces downtrend lines running through April highs along with 6/14 highs and the psychological 1.48 level.  As for the downside, the Cable is developing a new near-term support structure, including downtrend lines running through May and June lows.  The Cable also has technical supports in the form of 6/14 and 6/11 lows along with the 1.47 and 1.46 level should they be tested.

Present Price: 1.4796
Resistances: 1.4810, 1.4854, 1.4890, 1.4912, 1.4953, 1.4988
Supports: 1.4750, 1.4720, 1.4680, 1.4628, 1.4585, 1.4544
Psychological: 1.50, 1.45, June highs and 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 popped back above 1.23 yesterday as U.S. equities soared and investors made a return to risk across the board.  News spread that Jim Rogers bought up the Euro on Friday and Monday, signaling that big money is making its way back into European markets on the premise of oversold conditions.  However, in an interview with CNBC Rogers also hinted that he is not sure if this is just a technical bounce or a fundamental shift, meaning the big money could shift elsewhere should conditions deteriorate again.  In all, investors have been encouraged by the consistent rally from June lows and have shrugged off bad news this week.  EU economic sentiment plunged last week and this could be the beginning of the downturn in economic fundamentals stemming from the fiscal woes in the union.  However, the EUR/USD barely blinked an eye, suggesting a lot of damage has already been priced into the currency pair.  Spain is under watch again today as Spanish and Portugal bond yields widen from the German Bund.  Additionally, rumors spread that the IMF and U.S. are working on a $350 billion line of credit for Spain.  The Spanish government has vehemently denied the report, though the development should certainly be taken note of.  Meanwhile, EU CPI printed in line with analyst estimates and remains comfortably below the closely watched 3% level.  Therefore, the ECB has more wiggle room to keep liquidity loose to bolster struggling union members.  The EU will be quiet on the data wire tomorrow so all eyes will be on key U.S. releases, including CPI, the Philly Index, and weekly unemployment claims.  Investors should also keep a sharp eye on the EU news wires since this is the second time we have heard rumors about Spain needing liquidity and it’s possibly rumors could turn to fact.

Technically speaking, the EUR/USD still faces downtrend lines, though the near-term barriers are withering.  The EUR/USD does face topside obstacles in the form of intraday and 5/28 highs.  Additionally, the psychological 1.25 level could serve as a solid barrier should it be tested.  As for the downside, the EUR/USD has growing near-term uptrend lines serving as technical cushions along with intraday and 6/15 lows.

Present Price: 1.2294
Resistances: 1.2294, 1.2311, 1.2326, 1.2353, 1.2382, 1.2415
Supports:   1.2267, 1.2243, 1.2216, 1.2201, 1.2172, 1.2161
Psychological: June lows and highs, 1.23, 1.25, 1.20

(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 Anton Eljwizat – Crude oil prices rose significantly yesterday and peaked at $77.12 per barrel. However, the 4-hour chart is suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. Forex traders involved with commodities like this can take advantage of this knowledge by going short on crude oil now, and at a great entry price!

• Below is the 4-hour chart for crude oil by ForexYard.

• The technical indicators used are the Slow Stochastic, RSI and Williams Percent Range.

• Point 1: There is a “doji” candlestick formed in 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 RSI signals that the price of this pair currently floats in the over-bought territory, suggesting downward pressure.

• Point 4: Williams Percent Range also supports the downward direction.

Crude Oil 4-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.

By Yan Petters – After 2 months ion which the Dollar rose consistently against the Euro, the trend is making signs of halt. For the past week the Euro has been recovering, mainly due to speculations that the Euro-Zone will manage to recover from its debt crisis. It currently seems that until further negative data will prove otherwise, the Euro has potential to rise further vs. the major currencies.

Here are today’s leading news events:

• 08:30 GMT, British Claymont Count Change – This is the first release of British unemployment data in the month. Due to the earliness of this publication, it tends to have a large impact on the market. If the end will be negative it could weaken the Pound.

Further bullishness in the pair would make the next price target at the resistance line that rests at 1.5040.

• 12:30 GMT, U.S. Producer Price Index (PPI) – The PPI is a leading indicator of consumer inflation. A positive result will show that the economy is recovering and will likely to have a positive affect in the Dollar, and vice versa.

The pair is currently testing the 1.2350 resistance level A breach of this significant resistance level could propel the pair higher to the next resistance line which rests at 1.2520.

• 14:30 GMT, U.S. Crude Oil Inventories – This indicator measures the change in the number of barrels of crude oil held in inventory during the past week. The result of this report doesn’t have a consistent affect, yet it usually leads to high volatility in the market.

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.

Market Analysis by Finexo.com

EUR/USD
After faltering slightly, following news of Moody’s downgrade of Greece’s debt to junk status, the Euro resumed its rally against the Greenback.  The pair hit a two week above the 1.23 mark yesterday, as solid European debt auction lessened concerns about the region’s debt crisis. The pair was up at 1.2315, after touching on a high of 1.2349, its strongest price since June 1st.

A steady improvement in the global stock market outlook should continue to boost risk appetite; while at the same time safe haven currencies such as the greenback could come under extensive selling pressure.  However, despite the Euro’s rise, Forex traders should remain wary of any unexpected developments that could potentially lead to a reversal in the recent trend.

Support/ Resistance 1.2255/1.2375

GBP/USD
On Tuesday, the cable lost ground to trade near 1.4500, after the inflation figure was not as high as initially feared. Yesterday’s CPI report showed that U.K inflation slowed in May for the first time in three months. The key economic figure showed that consumer prices rose 3.4% compared to an expected rise of 3.5% and to a rise of 3.7% in April. However, the late afternoon rally on Wall Street helped the sterling climb to a new session high around 1.4830.

The release of the UK Claimant Count Change this morning, as well comments by the BOE’s governor Mervyn King this evening, could have a significant impact on the British currency. Any indication by King in regards to monetary tightening or any improvement in the numbers for the UK jobs market could have a significant affect on the Pound.

Support/Resistance 1.4730/1.4860

Forex Market Review & Analysis by Finexo.com

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By Greg Holden – After the government of Yukio Hatoyama came to an end in Japan, the election on June 8 of former Finance Minister Naoto Kan ushers in what some call a needed step to help Japan back into positive growth. But others have doubts.

Investors are now keeping a closer watch on Japan’s economic rumblings considering Kan’s political slant. Prime Minister Kan is a known fiscal conservative who has expressed dissatisfaction with the current price level of the Japanese yen (JPY). Might it be worth considering that steps will be taken by his new administration to lower its value?

This question has caused a stir in analysis circles as many attempt to speculate what Kan will do. It’s not necessarily his ruminations about the yen’s current level that have investors worried, many politicians express opinions on issues which they never plan on addressing while in office. Instead, it’s his history of being a politician who follows through with his convictions that spooks so many.

It doesn’t take a stretch of the imagination to think of him attempting a corrective measure to what he sees as one of the main issues affecting Japan’s growth. With a sudden boost in approval ratings, rising to 44% from below 20%, it appears Kan has some room to maneuver before falling out of favor, as so many Japanese politicians do during troubled times.

However, it should be worth noting that the primary currency combination of the USD/JPY seems to have revealed its Magic Number – this is what I would call the psychological barrier that the pair doesn’t seem to be able to breach. Despite repeated drops in the value of this pair, it doesn’t seem able to break past 88.00.

Kan may desire a weaker currency to boost Japan’s exports and aid the recovery of its equity markets, but it’s difficult to see the island currency gaining more strength than it currently has under any other circumstances.

Safe-haven currencies like the yen and US dollar are expected to drop as confidence rises. We’re beginning to receive reports that Greece and Spain are taking necessary steps to counteract recent difficulties, and they’re also beginning to see positive results from those steps, which has led to a beautiful rally in stock markets.

So the question becomes, will Kan even need to take steps to lower the JPY? Considering what’s happening, my guess is no. Such steps seem counter-productive and destabilizing to the market. But how’s a new Prime Minister to prove himself without doing something rash?

On the chart below you can see the clear downtrend spanning the last 3 years as well as the Magic barrier of 88.00. Even more significantly is the breach of the downtrend a few weeks back and the beginning of what looks like a modest upturn of the pair. Will it continue?

USD/JPY – 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.

Source: ForexYard

After several weeks in which the Dollar appreciated repeatedly against the Euro, the Euro is showing its first signs of recovery. The rising risk appetite in the market is the main reason for the strengthening Euro, but will it continue?

Economic News

USD – Dollar Weakens As Risk Appetite Soars

The Dollar tumbled against most of the major currencies during yesterday’s trading session. The Dollar fell to a two-week low vs. the Euro, dropping almost 200 pips in one day. The Dollar weakened against the Pound as well.

Global stocks continued to rally today and in turn are pressuring the dollar. The advance in global markets is increasing risk appetite and as a result turns investors to look for riskier assets, such as the Euro and the Pound. It seems that investors are under the impression that the European markets will recover, and are trying to take advantage of the weak Euro.

In addition, several economic indicators were published yesterday from the U.S. economy. The most significant publication was the Long-Term Purchases report. The report showed that demand for U.S. assets has increased more than forecasted. The expectations were for a $77.3B increase, yet the end result showed that demand for U.S. assets has increased by $83.0B. The positive data has also contributed to the higher risk-appetite, and as a result weakened the Dollar further.

As for today, a batch of data is expected from the U.S. economy. The most important news publications look to be the Buildings Permits and the Producer Price Index (PPI), both expected at 12:30 GMT. Analysts have forecasted that the Building Permits have increased by 0.63M on May. If the end result will be similar, it might support the Dollar. However, this will have a muted impact on the market, if the PPI will reach expectations and drop by 0.5%. Such a result will show that the U.S. economy might be recovering in a slower pace than expected, and as a result the Dollar recover from yesterday’s price move.

EUR – Euro Rallies as Stocks Continue To Rise

The Euro continued to strengthen yesterday against most of the major currencies. The Euro rose to a 2-week high against the Dollar and the EUR/USD pair is currently trading above the 1.2300 level. The Euro saw gains vs. the Pound and the Yen as well.

The Euro rallied today as gains in global markets increased the demand for riskier assets. The current global sentiment is that the Euro-Zone will manage to recover from the debt crisis and that the worst of it is behind us. This has increased risk-appetite and has influenced investors to open long positions on the Euro. It currently seems that as long as global markets will continue to show positive signs, the Euro is likely to strengthen in accordance. In addition, every positive data regarding the Euro-Zone’s debt crisis is likely to have a positive affect on the Euro as well. Rising stocks have such a strong impact on the market that the disappointing German ZEW Economic Sentiment had no affect on the market. The report dropped to 28.7 points from 45.8 on May, failing to reach expectations for a 48.7 result.

Looking ahead to today, many interesting economic publications are expected from the Euro-Zone. The most significant data seems to be the Consumer Price Indices (CPI). Analysts have forecasted that the European CPI will by 1.6% in May. If the end result will be similar, the Euro is likely to strengthen as a result. Traders are also advised to follow global stock markets, and to take under consideration that if the positive trend will continue, the Euro is likely rise as well.

JPY – Yen Drops against the Majors; BOJ Leaves Rates At 0.10%

The Yen fell against all the major currencies during yesterday’s trading session. The Yen lost about 200 pips against the Euro and about 150 pips against the Pound. The Yen dropped against the Dollar as well.

The main reason for the Yen’s slide is the higher demand for riskier assets in the market. Over the past two days stock markets around the globe have rallied, and as a result risk-appetite has increased. The Yen is considered to be a relatively safe asset, and as a result, the higher risk-appetite has turned investors to close their long positions on the Yen.

The Bank of Japan (BoJ) has decided to leave Interest Rates at 0.10%, the lowest level in the industrialized world. One of the main reasons that the BoJ keeps low Interest Rates is to weaken the Yen in order to support Japanese exports.

As for today, traders are advised to continue following global stock markets as they seem to have a large impact at the moment. If stocks will continue to rally, the Yen might see further bearishness.

OIL – Crude Oil Rises Above $77 a Barrel

Crude oil rose for the third consecutive day. Crude oil started yesterday’s trading session at $74.60 a barrels and gained about 250 pips. Crude oil is currently trading above $77 a barrel.

Crude oil has strengthened yesterday as gains in U.S. equity markets have created speculation that demand for fuel will increase. The Euro-Zone’s debt crisis had a negative affect on oil as investors feared that the European economies will reduce their demand for energy. However, recently trader’s concerns are easing and in addition to the rising equities, investors feel that demand for oil will increase. It currently seems that as long as equity markets will rise, crude oil is likely to gain as well.

As for today, traders are advised to follow the U.S. Crude Oil Inventories report. This report measures the change in the number of barrels of crude oil held in inventory by commercial firms during the past week. If the end result will be negative, crude oil has potential to rise further.

Technical News

EUR/USD

The pair appears to be correcting the long term bearish trend that has taken place since November, 2009. As such, major technical indicators are showing the pair is overbought, including the daily chart’s 10-day Momentum. A bearish cross also appears to be forming on the Slow Stochastic oscillator. Despite the technical signals, the pair is testing 1.2350 resistance level. A breach of this significant resistance level could propel the pair higher to the next resistance line which rests at 1.2520.

GBP/USD

Yesterday the pair breached the significant resistance level at the price of 1.4780 but failed to move above the 1.4840 resistance level. However, the pair did close above the 50-day Simple Moving Average line. Further bullishness in the pair would make the next price target at the resistance line that rests at 1.5040.

USD/JPY

The pair continues to consolidate between the support level at 90.80 and the resistance level at 93.00.The 4-hour chart shows a tendency to the downside as the pair failed to close above the Bollinger Band’s 20-period moving average line. The chart’s Relative Strength Index is also moving lower, indicating a downward trend. Traders may want to go short and target the support level at 90.80.

USD/CHF

The current bullish trend on the daily chart is being tested near the price level of 1.1300. We would like to see a bounce higher off of this big round number towards the 10-day Simple Moving Average that has been acting as a resistance level since June 9th.

The Wild Card

Gold

The price has fallen since a new all-time high was set in the price of spot gold at $1251.76. However, the drop in the price has been held in check by the commodity’s inability to breach below the 20-day Simple Moving Average. This may provide CFD traders a good point for an entry into the bullish trend of spot with a target at the $1251 resistance 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.

By eToro – The Euro increased despite a worse than expected EMU Zew Survey.  The EUR/USD moved above the 20-day moving average, and will probably continue to grind higher and test resistance near 1.2500.
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EURUSD breaks above the upper boundary of the falling price channel on 4-hour chart, suggesting completion of downtrend from 1.3817 (Mar 17 high). Support is now at 1.2165, as long as this level holds, further rally is still possible and next target would be at 1.2450-1.2500 area. Key support is at 1.2045, only fall below this level could turn price back to re-test 1.1876 previous low support.

Forex Forecast