Month: June 2010

By CountingPips.com

The U.S. dollar has been on the defensive in forex trading against the other major currencies today as risk appetite has flowed in the financial markets and pushed the euro to its highest level in two weeks. The positive investor sentiment boosted the U.S. stock markets, gold and crude oil higher while the dollar and the Japanese yen have been on the defensive most of the day.

The dollar has declined versus the euro, Swiss franc, British pound, Canadian dollar, Australian dollar, New Zealand dollar and the Japanese Yen while the yen has declined against all of the above besides the dollar, according to currency data by Oanda at the end of the U.S. trading session.

The euro (EUR/USD) increased to its highest level since June 1st and ascended over the 1.2300 exchange rate to touch a high at 1.2349. The British pound traded at its best level against the dollar in a month at 1.4837 while the Swiss franc also reached its highest level versus the dollar since May 18th in today’s trading action.

The U.S. stock markets, meanwhile, advanced sharply higher today with the Dow Jones ending the day up by approximately 214 points, the Nasdaq increasing about 62 points and the S&P 500 up by over 26 points. Oil rose by $1.38 to $76.50 per barrel while gold increased by $10.20 to trade at the $1,233.50 per ounce level.

EUR/USD 1-Hour Chart – The Euro followed through higher against the US dollar in the forex markets today and rallied to touch near the 1.2350 exchange rate. The EUR/USD has now gained ground for two consecutive days and currently trades right around the major 1.2330 level (2008 low point/support level).

Many infamous authoritarian regimes emerged during or after big bear markets

By Elliott Wave International

Fear and uncertainty that drive a severe bear market are the same emotions which can set the stage for authoritarianism, in most any nation.

“Bear markets of sufficient size appear to bring about a desire to slaughter groups of successful people. In 1793-1794, radical Frenchmen guillotined countless members of high society. In the 1930s, Stalin slaughtered Ukrainians. In the 1940s, Nazis slaughtered Jews. In the 1970s, Communists in Cambodia and China slaughtered the affluent. In 1998, after their country’s financial collapse, Indonesians went on a rampage and slaughtered Chinese merchants.” – Bob Prechter, Wave Principle of Human Social Behavior, p. 270

Why do authoritarian tendencies emerge only during bear markets in stocks?

“As society becomes more fearful, many individuals yearn for the safety and order promised by strong, controlling leaders.” – The Socionomist, May 2010

Learn How to Anticipate and Prepare for Political Conflict and War, Bull Markets and Bear Markets. The 118-page Independent Investor eBook covers a vast array of investment topics and exposes myths that mainstream investors accept as fact. Once you learn the real cause of conflict and war, you might be surprised how the stock market plays a key role in forecasting major social events. Click here to download the 118-page Independent Investor eBook for FREE

Bob Prechter’s new science of socionomics explains that stock market fluctuations mirror trends in people’s collective mood. In simple terms, when the market is buoyant, it indicates positive social mood; the opposite when a bear market takes over.

The fascinating part is that because the stock market and social mood trend closely together, a forecaster can apply Elliott wave analysis to both — and predict both.

Generally, widespread brutalities and wars do not follow the first phase of a bear market. Extreme violence, when it does occur, often follows the worst part of the market’s downturn — like the end of the Great Depression, a negative social mood period that ultimately ushered in World War II.

But even during the first phase, a negative social mood grows. So, if a forecaster determines correctly where in the wave structure social mood resides, he can make educated forecasts about what will follow in society — given what has happened before under similar social mood trends.

Authoritarianism is a subject of heated discussions these days, which makes it a timely topic for a socionomic study. The latest, two-part issue of the monthly Socionomist gives you just that: A look at historic trends and specific forecasts for the years ahead.

Learn How to Anticipate and Prepare for Political Conflict and War, Bull Markets and Bear Markets. The 118-page Independent Investor eBook covers a vast array of investment topics and exposes myths that mainstream investors accept as fact. Once you learn the real cause of conflict and war, you might be surprised how the stock market plays a key role in forecasting major social events. Click here to download the 118-page Independent Investor eBook for FREE

By Adam Hewison – Whether it is the spill in the Gulf, which continues unabated, or talk on Capitol Hill, the subject is crude oil.

Today we received a signal by way of our weekly “Trade Triangle” to get long crude oil. In this new brief video, we show you the exact levels to keep your eye on and also where a logical stop would go for this position. We have had a lot of

questions on Fibonacci retracements lately and this video goes into detail about that phenomenon and how you can best use it.

As always our videos are free to watch and there are no registration requirements. e are always interested in your views

so leave us a comment and let us know what you think.

Watch the New Video Now…

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

To see more of Adam’s Videos click here or sign up for Adam’s Free 10-part Professional Trading Course.

By Adam Hewison – The sharp rally we saw on Friday followed through on Monday, but appears to have run out of steam. In this new short video, I show you what you should be looking at in this market and how I think it should be played.

The video is short, less than two minutes, but you’ll get a lot of good information that will help you trade these choppy, choppy markets.

I’m also interested in your views on the S&P500, so just leave us a comment and tell us what you think.

Watch the New Video Now….

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

By Fast Brokers – The USD/JPY is continuing its consolidation, albeit an upwardly biased one, between 91-92 despite yesterday’s solid risk rally.  The EUR/USD, Cable, and Aussie all logged substantial gains after the UK’s budget office predicted a smaller than expected deficit.  However, the risk rally fizzled at the end of the trading session after news hit the wires that Moody’s lowered its rating on Greek debt to junk status.  Meanwhile, the USD/JPY has been stuck in a range-bound pattern after the early June rally stemming from the resignation of Naoto Kan.  However, as we’ve seen in the past, the USD/JPY is prone to sharp, sudden movements following days of relative inactivity.  Therefore, investors should be wary.  It seems the USD/JPY is waiting to see whether the new upward momentum in the risk trade can materialize into a more lasting trend.  Hence, investors should keep a close eye on the ability of other major dollar pairs to break through key downtrend lines.  Meanwhile, investors are waiting on the BoJ’s first monetary policy decision with Kan as prime minister.  Regardless, investors aren’t expecting any drastic change in strategy with all central bankers monitoring activity in the EU.  Speaking of which, keep a close eye on the EU news wires for any new developments.

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: 91.56
Resistances: 91.70, 91.80, 91.97., 92.11, 92.25, 92.39, 92.58
Supports:  91.53, 91.38, 91.29, 91.13, 91, 90.86, 90.74, 90.62
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 surged back towards 1.48 after the Office of Budget Responsibility estimated a smaller UK budget deficit than anticipated.  The downward revision gives investors more confidence that the UK will be able to maintain its AAA rating, clearly a Cable positive.  However, the 2011-2012 deficit projection is still above 10% and as we’ve seen in the past, budget estimates are not always accurate.  Regardless, the OBR’s announcement has allowed the Cable to expand upon its upward momentum originating from May lows.  These figures from the OBR come a week before parliament releases its highly anticipated emergency budget and it will be interesting to see what the treasury comes up with.  Meanwhile, investors will shift their focus UK CPI and the inflation report hearings.  Even though the BoE has waved off inflation concerns, CPI has been over its target of 3% for some time now and investors will be looking carefully to see if recent inflationary pressures really do cool.  Investors will also be focusing on the EU again as analysts monitor bond spreads of PIIGS countries following Moody’s downgrade of Greek debt to junk status.  Although the move does not come as a surprise, the downgrade could cap gains in the Cable and other major dollar pairs over the near-term.

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: 1.4755
Resistances: 1.4769, 1.4810, 1.4854, 1.4890, 1.4912, 1.4953
Supports: 1.4720, 1.4690, 1.4648, 1.4609, 1.4583, 1.4552, 1.4526
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 Aussie plowed through 5/28 highs and its psychological .85 level as the risk trade experienced a solid rally following a report from the UK’s budget office estimating a smaller than expected deficit.  However, gains in the Aussie and other major dollar pairs were capped after news hit that Moody’s is downgrade Greece’s debt to junk.  Although the downgrade had a negligible impact on the Euro, the news did sour enthusiasm generated by the new upward momentum in the risk trade.  Meanwhile, investors are waiting on the release of the RBA’s meeting minutes from this month’s monetary policy decision.  Investors will be looking to see how much the EU is weighing on the RBA’s approach  towards setting interesting rates.  Also, investors will be looking to see whether the RBA governors are positive on Australia’s economic state discounting negative developments in the EU.  Australia’s positive employment data did come after the RBA’s rate decision, so investors could still favor the Aussie over the near-term.  Meanwhile, although the Aussie does have some more room to the topside, the currency pair’s downtrend is still in play until there is a fundamental shift in sentiment.

Technically speaking, the Aussie faces technical barriers in the form of 6/14 and 5/18 highs.  As for the downside, the Aussie has supports in the form of uptrend lines running from May lows along with 6/11 lows and the psychological .85 and .84 levels.

Price: .8575
Resistances:  .8587, .8617, .8637, .8664, .8690, .8713, .8738
Supports:  .8565, .8547, .8523, .8500, .8469, .8455, .8435
Psychological:  .85

(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.

What’s up forex peeps! I present to you now a fresh peek on the AUDUSD. From my post about the pair last June 7, you can see that it has rallied all the way back up to the neckline of the previous double top formation after breaking down from a rising wedge formation. Though, it gets a bit tricky now given the conflicting technical signals that I see. This Monday’s price action confirmed its breakout from a double bottom formation. Notice also that it has already broken its short term downtrend line. Another bullish signal is the gap that occurred during the beginning of the week since a gap up is usually followed by another up move once it gets filled up. On the flip side, the neckline of the massive double top formation could halt the pair from moving higher. Conditions are also overbought as of the moment, suggesting that traders could once again push the Australian dollar down. But based on the technicals alone, if you ask me, I’d say that the pair has a higher chance of moving lower since it took a lot more time for it to form the double top pattern than the double bottom. In any case, if the pair is able to move past the neckline, its minimum upside target would be at 0.9150 (computed by projecting the height of the double bottom pattern from the point of breakout). But if it fails to do so, it could fall back to the 0.8100 area or revisit its 2010 low.

Fundamentally, the recent rally in the Aussie are perhaps due to some profit taking actions or covers on AUD short positions and by the apparent strengthening in the global economic rebound. Last Friday, the US equities markets still ended with a nice gain despite an unexpected drop in US retail sales because of the better than projected University of Michigan consumer sentiment report for the month of June. The index came in at 75.5 which is above the 74.5 consensus. Monday’s better-expected industrial production growth in the euro zone also sustained the market’s risk appetite. Moreover, the AUD’s interest rate (4.50%) advantage over it peers, gave it a lot more favor over the other majors whenever the market is bullish.

Nonetheless, the pair could still turn around and sink since the whole debt drama in the euro zone is still far from over. Greece as well as its neighbors in the region are presently facing some fiscal difficulties. In Australia, the central bank’s relatively high interest rate has apparently affected the housing market in the country and caused it to post losses during the last several months. No major economic data are due for release this week in Australia. Hence, any developments from Europe would more likely be the catalyst in the AUD’s short term movement.

More on LaidTrades.com …

Here’s a look on the daily time frame of the US dollar index (USDX). In case you do not know, the USDX is a measure of the greenback’s value against a basket of several other major currencies. These currencies are made up of the geometric mean of the following: euro (57.6%), Japanese yen (13.6%), Sterling pound (11.9%), Canadian dollar (9.1%), Swedish krona (4.2%), and the Swiss franc (3.6%). Anyway, as you can see from its chart, the index has been on a positive tear after bottoming out at 74.170 back in November 25, 2009. It has gone past 88.50 when it broke out from an ascending triwngle pattern last week bu it has declined and weakened since then. Presently, the index is hovering around the high that was marked last April 2009 and the medium term uptrend line that drew in the chart. If this level holds, it could aim for the high at 2009 again at 89.50. But if the index fell below the mentioned supports, it could fall further until it finds some lift at the longer term uptrend line.

Sentimentally, the USD has been gaining favor over the other major currencies due to the ongoing risk aversion in the global markets particularly in Europe. The euro has been losing a lot of support as of late because of the fiscal crisis, which started in Greece, that is now spreading across the region. And since bulk of the index’s weight is composed of the euro (57.5%), a decline normally translates to a rise in the index. The USD sustained it losing streak this Monday when the euro zone’s industrial production for April surpassed the market’s 0.7% forecast with a 0.8% gain. The accounts March number was also positively revised to 1.5% from 1.3%. The growth in the European industrial production added signs that the global economic rally is gaining momentum.

Still, with majority of the EU-member countries hampered with debt. The market’s sentiment could eventually turn bearish. Until Greece and the other countries reduce their deficit back to 3% of their GDP (Greece currently has 12%) and they service their debts promptly, only then could the euro’s rebound be fully warranted. Doing so, however, would be difficulty and would take time.

More on LaidTrades.com …

By Russell Glaser – Spot gold prices have fallen from their all-time high as the euro and global equities have staged a small comeback on positive economic data from the U.S., Europe, and China. However, this doesn’t appear to be enough to derail the long term bullish trend the commodity has been experiencing over the past 20 months.

The price of spot gold has risen in the latest bullish trend from a low of $681, to a new all-time high of $1251 last week. This is an appreciation of roughly 84% since October of 2008.

Since the price of gold set a new high during the previous week, prices have fallen to $1224. Over the same period, the euro has moved higher versus the dollar by 2%.

Driving the long-term gains in the price of spot gold have been the demand for safe haven assets as the global economy struggles to pull itself out from the most recent economic recession. In light of the European fiscal crisis that is affecting the nations of Greece, Spain, Portugal, and Ireland, Europeans have been leading the charge with gold buying, changing the euro that has sunk value in exchange for the hard commodity gold.

Some well-known hedge fund managers have also been vocal advocates of for gold bulls. George Soros and John Paulson have had no reservations of expressing themselves as proponents for the commodity. This may be done to help influence others to get onto the gold bandwagon and to pressure the price of the commodity upwards.

Since October of 2008, spot gold prices have been acting as a safe haven asset, rising on poor economic data such as the May U.S. Non-Farm Payrolls report that failed to meet the market’s expectations.

However, as the recent string of positive economic data continues, traders have felt less of a need to buy the safe haven asset and have opted for relatively riskier, higher yielding currencies.

Last week, Federal Reserve Board Chairman Ben Bernanke testified before Congress that he expects the U.S. economy to grow by 3-4% and for an eventual replacement of the government stimulus funds by consumer and business spending.

China’s economic machine continues to be the engine of global growth. For the month of May, Chinese exports rose 48.5% from the equivalent period during the previous year. This was well above economists’ expectations for a rise of 32%.

Similar European export data was released yesterday. Monthly euro zone industrial production climbed 0.8% on economic forecasts of an increase of only 0.7%. This is quite surprising as the increase in economic activity occurred despite the fiscal crisis that hangs over Europe.

All of this positive economic news has led to a short term comeback in equities. The S&P 500 is up 5% since the beginning of last week and spot gold prices have come off of their all-time high.

Positive economic releases such as the aforementioned may have a negative short-term impact on the price of gold, but it should not derail the bullish trend. Until concrete evidence of a sustained economic recovery is released in the form of U.S. employment data, the price appreciation should continue in spot gold.

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.