Month: June 2010

Source: ForexYard

The U.S currency rose Tuesday, extending gains, adding to investors’ desire of safe havens amid worries over global growth prospects, this time stemming from data in China and concerns about the health of European banks.

Economic News

USD – Dollar Rises on Risk Aversion

The U.S Dollar rose yesterday against its major counterparts on risk aversion as investors worried about the expiration of a key Euro-Zone refinancing program this week.

The Dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was 0.2% higher at 85.817, holding above last week’s low around 85.09.

The U.S currency extended gains against the EUR after the Conference Board’s consumer confidence index plummeted to 52.9 in June, from a downwardly revised 62.7 in May. Analysts said the EUR/USD pair is likely to remain under pressure until Thursday.

However against Japan’s currency which tends to be the biggest beneficiary of safe-haven flows when risk aversion is on the rise the USD fell to the lowest since December. The Dollar declined to 88.50 yen, down from 89.39 on Monday. A drop in U.S. Treasury yields, which makes U.S. debt less attractive to Japanese investors, had also been weighing on dollar/yen cross.

EUR – The EUR Hits Record Low on Swiss Franc

The European currency hit a lifetime low against the Swiss franc and a 3 week trough versus the Japanese yen on Tuesday ahead of a deadline for European banks to repay money to the European Central Bank (ECB). European banks must repay 442 billion euros ($545.5 billion) to the ECB on Thursday, leaving a potential liquidity shortfall in the financial system of over 100 billion euros.

The EUR fell as low as 1.3250 francs, the weakest since its 1999 launch. The 16 -nation currency also dropped 1% vs. Yen to its weakest in three weeks at 108.62 yen. Against the Dollar, the EUR fell 0.4 % on the day to $1.2235 after losing 0.8% on Monday. The EUR also hit a 19-month low against Sterling to 81.14 pence yesterday.

Financial markets will also closely watch debt auctions by France and Spain later this week after tepid demand for Italy’s sale of 7 billion euros of government bonds on Monday kept worries about Euro-Zone debt troubles alive. As such the EUR may extend its losses vs. its trading rivals at least till the situation is stabilized.

JPY – Yen Gains on Japan Exporter Repatriation

The Japanese yen benefited as Japanese exporters repatriated earnings ahead of the second quarter end, selling the EUR and Dollar, and as a steep fall in Shanghai stocks added to the Japanese currency’s safe-haven allure.

The Yen also gained even after Japanese data showed the country’s unemployment rate rose in May to a seasonally adjusted 5.2%, up from 5.1% in April and confounding expectations for a drop in joblessness.

Crude Oil – Crude Declines a 3rd Day on Concern over China

Crude Oil prices settled 3% lower Tuesday as a downward revision of a leading Chinese economic indicator sparked a broad market sell-off.

Oil dropped for a 3rd day on concern over weakening economic growth in China and as confidence declined more than forecast among consumers in the U.S., the world’s biggest energy user. Markets were roiled by fears of a slowdown in China, with investors flocking to the safety of Gold. Only ongoing fears that Tropical Storm Alex could still wreak havoc in oil-producing and refining areas in the Gulf of Mexico provided some support for the Crude prices.

Technical News

EUR/USD

This pair is currently testing a significant support line at 1.2200. A number of indicators appear to be showing upward pressure. The 4-hour Stochastic (slow) has undergone a recent bullish cross and the RSI is floating in the over-sold territory as of this morning. Going long appears to be a preferable strategy today.

GBP/USD

This pair has been trading within a bullish channel for a number of weeks with very few signals of stopping. However, we can see on the daily chart a number of indicators showing that this pair may come down in the near future. The daily Stochastic (slow) has just undergone a bearish cross and the RSI has recently exited the over-bought region and is now descending downward. We may see strong downward pressure if these technicals continue. Going short with tight stops might not be a bad idea today.

USD/JPY

The cross has been dropping for the past 3 weeks now, as it now stands at the 88.50 level. However, the daily Chart’s RSI is already floating in the oversold territory indicating that a bullish correction might take place in the nearest future. Going long with tight stops may turn out to be the right choice today.

USD/CHF

The pair has recorded much bearish 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 bullish reversal is imminent. An upward trend today is also supported by the RSI. Going long with tight stops may turn out to pay off today.

The Wild Card

Crude Oil

Crude oil prices are once again dropping, and it is currently traded around $75.75 a barrel. And now, the 4-hour chart’s RSI is giving bullish signals, indicating that crude prices might go up. This might give forex traders a great opportunity to enter a very popular trend.

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 was pushed below 1.22 early and remained under pressure for most of the trading session.  The 442 billion-repo operation by the ECB has created anxiety within the market.  The Euro should continue to consolidate between 1.19 and 1.25. Click here to read the full daily Review

Forex Market Analysis provided by eToro

Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.

USDCHF’s downward movement extends to as low as 1.0801 level. Resistance remains at the upper boundary of the falling price channel on 4-hour chart. As long as the channel resistance holds, deeper decline is still possible and next target would be at 1.0600-1.0750 area. However, a clear break above the channel resistance will indicate that a cycle bottom is being formed, then minor consolidation of downtrend could be seen.

Daily Forex Analysis

By CountingPips.com

The US dollar has been sharply higher against the other major currencies in forex trading today while the US stock markets have retreated lower following stock declines in Asia and Europe. Poor consumer confidence data released today has dampened risk appetite in the US session and propelled the markets lower as the Conference Board report came in worse than anticipated. June’s US consumer confidence report scored 52.9 for the month following a 62.7 revised score for May and below the 62.5 that the market forecasters were expecting.

Earlier today, the Conference Board also revised its April leading indicator score for China to its lowest level in five months, prompting fears of a potential Chinese economic slowdown.

The dollar today has traded higher versus the euro, British Pound sterling, Australian dollar, New Zealand dollar and the Canadian dollar while falling against the Japanese yen and the Swiss franc, according to currency data in the afternoon of the US trading session.

US stock markets have fallen sharply in their session today as the Dow Jones industrial average has declined over 2% and 200 points to trade under the 10,000 level. The NASDAQ has fallen over 3% and the S&P 500 has decreased by over 2.5% so far today. Oil has traded lower by $2.42 to level at $75.83 per barrel while gold has increased by almost 4 dollars today to level at $1,242.00 per ounce.

EUR/USD Forex hourly chart — The euro falling sharply against the US dollar in forex trading for a second day in a row and currently trading around 1.2200 mark. The Euro/US Dollar pair broke through recent support at 1.2250 to touch the 1.2150 exchange rate, marking its lowest level in over two weeks since June 13. Next lower support level will be the 1.2150 area and a break of this level could signal a further test of the June 7th low at the 1.1875 exchange rate.

By Adam Hewison – Make no mistake about it, last week was a very important week for the stock market. Looking on the weekly equity charts, you will see one of the most powerful Japanese candlestick lines. This one line on the chart indicates that there could be some major problems ahead for the stock market.

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By Russell Glaser – The EUR/USD is showing a technical signal that the bullish correction may have exhausted itself. The weekly chart below shows last week’s trading formed a doji reversal. Behind the candlestick, we can assume that the bulls have lost control of the market and the bearish trend could continue in the near 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.

Hiyo FX fans! On this post is an update of the NZDUSD pair which I posted on June 22 (kindly click here to see my previous entry). Now, perhaps you are asking what’s up with my title. Well, it’s exactly what it is cause if you check out the 4-hour canvas of the pair, it has since consolidated within a rectangle or a box after breaking out from a double bottom and a symmetrical triangle. In a consolidation phase, especially when it is coming off an uptrend, traders are silently accumulating the currently. Hence, whenever a security or an asset is ranging, it can be used as a first indication of a likely surge in volatility sooner or later. If the pair breaches the range’s resistance around 0.7150, it could lunge itself past the double bottom’s minimum upside target towards 0.7275, where the KitKat is, figuratively. On the low side, a break below the range’s support could push it lower back to the neckline of the double bottom. Though as mentioned, since the pair is on an uptrend at least in this time frame, a move north is more likely.

No major economic updates are due from New Zealand for the rest of the week which means that the Kiwi could continue ranging until the end of the week. The building approvals and retail sales reports from Australia, however, could cause the NZD to sway. The Kiwi and the Aussie are highly correlated given since the two countries are merely neighbors with more or less the same industries. Both currencies also have the highest interest rates with the former having 2.75% and the latter with 4.50%, making the two more attractive than their peers especially when there is a lot of risk taking in the market.

In any case, Australia’s building approvals is expected to come in at 0.0% in May after dipping sharply by 14.8% during the other month. Despite the RBA’s previous interest rate hikes and April’s dip, the account is still projected to grow by 32.5% from a year earlier which is way better than the 21.3% that was printed the other month. Moreover, the expected 0.3% rise in Australian retail sales for the same month after already gaining by 0.6% during the month prior could support the Aussie as well as its cousin, the NZD, at least in the short term. Better than anticipated results, of course, could push the higher yielding currencies higher.

More on LaidTrades.com …

Good day forex peeps! Here’s an update on the USDCHF which I published back on June 21 (kindly check my previous post here). As you can see from its chart, the pair has continued to drop and has even slipped past the 61.8% Fibonacci retracement level that I drew. Now, the only obvious support that is preventing it from declining further is the neckline of the former inverted head and shoulders pattern. With the stochastics in the oversold region, the US dollar could soon again take the driver seat away from the Swiss franc. Though, it is also possible that the pair would trade sideways for awhile before moving higher. Once it does, it could aim for its recent high at 1.1731. On the negative side, if and when the 1.0800 support and the former neckline give way, the Swissy could further trump the greenback and the pair could fall and revisit its previous low at 1.0435.

On the fundamental side, the Swissy’s gain was mostly due when the Swiss National Bank stated that the risk of deflation in the country is fading away. The bank’s statements then sparked some speculations that it would refrain from meddling in the market to purposely weaken the CHF.

For this week, though, the market will focus on the release of the grand daddy of economic reports, the US’s NFP report. For the month of June, US firms are sen to have slashed about 103,000. This marks the first job decline in the Us four months. Such drop would reflect to an uptick in the country’s unemployment rate to 9.8% from 9.7%. Now, consumption takes up about 70% of the US total output. With declining jobs, naturally, the people’s aggregate spending would dip as well because of their lesser total income. This scenario could then fuel some risk aversion in the markets, which could consequently lead to an increase in the safer assets like the USD.

More on LaidTrades.com …

By Dan Eduard – For over a week, the euro has been making consistent gains on its Danish counterpart. As we will see through a variety of technical indicators, the pair is set to enter into a bearish trend.

This analysis will be based on the daily chart for EUR/DKK, provided by ForexYard. The technical indicators we will use to support our theory are the Bollinger Bands, Stochastic Slow and Relative Strength Index.

1. The pair is currently trading right along the upper Bollinger Band. This is usually an indication of imminent downward movement. Furthermore, a widening of the Bollinger Bands, as seen in the chart, may be a sign of impending volatility.

2. The Stochastic Slow lines have formed a cross right on the upper resistance line. Traders can take this as a signal that a correction is likely to take place in the near future.

3. Lastly, the RSI is currently seen above the upper resistance line, indicating that a downward correction will take place. This further supports our original theory that the pair is likely to enter a downward trend.

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

Today, traders should pay close attention to the release of the U.S. Consumer Confidence report. This indicator always leads to extreme market volatility for the major currency pairs. Traders may find good opportunities to enter the market following this vital announcement at 14:00 GMT.

Economic News

USD – USD Rises against EUR on Sign of Strengthening Economic Recovery

The dollar rose broadly against the EUR but remained steady against its other rivals Monday morning, as news out of the Group of 20 gave investors little incentive to stake bold positions. By yesterday’s close, the USD rose against the EUR, pushing the oft- traded currency pair to 1.2280. The dollar experienced similar behavior against the AUD, with the pair closing at 0.8715. The USD did see bearishness as well, as it lost over 150 pips against the CHF and closed at 133.45.

Over the weekend, officials at the summit of G-20 nations in Toronto said they would jointly commit to at least halving fiscal deficits by 2013 and to stabilizing ratios of debt to gross domestic product by 2016.

A leading indicator released yesterday was the U.S. Personal Spending report. Consumer spending in the U.S. rose in May at a higher then forecasted rate, a sign households are gaining confidence in the recovery and the job market. Purchases rose 0.2% after little change last month. Incomes climbed 0.4% and the savings rate increased to its highest level in eight months.

Looking ahead to today, the news event that will likely have the biggest impact on the Dollar and its main currency pairs is the Consumer Confidence report, set to be released at 14:00 GMT. This report is considered very significant, and is likely to create dollar volatility. Traders should pay close attention to the market as there will likely be an opportunity to capitalize on the fluctuations which are likely to follow this release.

EUR – EUR Weakens to a 1 1/2-Year against the Pound

The EUR fell against most of its major currencies yesterday, pressured by bank funding concerns and caution ahead of more European debt sales this week. The Swiss franc rallied after a monetary official said the currency’s strength was not harming the Swiss economy. As a result, the EUR fell more than 1% to a record low of 1.3323 against CHF. Against sterling, the EUR hit a 1 1/2-year low and last traded down 1.1% at 81.30 pence.

The Swiss franc was the biggest mover amongst the majors yesterday, propelled higher by comments from a Swiss central bank member. The Swiss currency has been soaring of late, particularly since late June when the Swiss National Bank terminated its program of euro buying to limit the franc’s appreciation. Unless the central bank sees fresh signs that the franc’s ascent is generating deflation by making imports cheaper, it appears set to stand back and leave the currency to the whim of market forces.

JPY – Yen Sees Mix Results against the Majors

The Yen completed yesterday’s trading session with mixed results versus the other major currencies. The JPY was virtually unchanged versus the USD yesterday, and closed its trading session at around the 89.40 level. The JPY also saw bullishness against the EUR as it jumped around 100 points to close at 109.70.

As for today, Japan will be absent from the economic calendar. The JPY’s trends will be affected by the rallies of its primary currency pairs. It seems the USD and CHF are expected to continue a volatile trading session today, and their crosses with the JPY will likely be as well. Traders should pay attention to the news coming from the U.S. and Europe as these economies will be the deciding factors in the JPY’s movement today. Focus should be especially given to the U.S. Consumer Confidence report at 14:00 GMT.

Crude Oil – Oil Falls below $78.50

The price of crude oil fell on Monday on forecasts that tropical storm Alex will bypass the Gulf of Mexico’s main oil producing region and BP’s oil spill. The oil price had reached a seven-week high of $79.40 on earlier reports that Alex will become a hurricane in the next 48 hours.

The price was also dampened down by expectations that data due this week will show US consumer confidence waned and manufacturing growth slowed this month.

Moreover, a drop in the EUR against the dollar also has made oil a less appealing investment overseas. Crude is priced in dollars, so oil becomes more expensive for holders of other currencies when the dollar goes up. Analysts are concerned that the European debt crisis could slow down euro-zone economies and drag down demand for oil.

Technical News

EUR/USD

A cross on the 4-hour chart’s Stochastic Slow indicates that an upward correction may occur for the pair later today. This theory is supported by the Relative Strength Index on the hourly chart. Traders are advised to go long today, as upward movement is likely.

GBP/USD

The daily chart’s Slow Stochastic shows a cross forming above the upper resistance line, indicating downward movement could occur. We can also see that the Relative Strength Index on the 8-hour chart is giving signs that a bullish correction will likely occur today. Traders are advised to go short with tight stops today.

USD/JPY

There are numerous signs that this pair is well into oversold territory at the moment. These include the Bollinger Bands and Relative Strength Index on the daily chart, as well as the Relative Strength Index on the 8-hour chart, which are all showing signs that upward movement is imminent. Traders are advised to go long with tight stops today.

USD/CHF

The Slow Stochastic on the daily chart shows a cross forming below the lower support line, indicating a bullish correction will likely occur today. This theory is supported by the Relative Strength Index on the 8-hour chart, which shows the pair in oversold territory. Traders are advised to go long today.

The Wild Card

Nasdaq 100

The Relative Strength Index on the 8-hour chart indicates that the Nasdaq is trading well in oversold territory. This is typically a sign that an upward correction will occur during the course of the day. This theory is supported by the Stochastic Slow on the daily chart. CFD traders are advised to long with tight stops today.

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.