Month: June 2010

By Fast Brokers – The USD/JPY is trying to avoid a retest of its highly psychological 90 level after the Nikkei underwent another sizable sell-off.  Japanese bond yields hit fresh lows and are around December 2008 levels as investors head for the safety of government bonds.  The Yen is benefitting from gradual risk aversion, a signal that some investors are losing confidence in the global economic recovery despite newfound stability in the Euro.  Naoto Kan continues to emphasize the government’s intention to reign in Japan’s budget deficit, a Yen positive. Meanwhile, it will be interesting to see whether the EUR/USD and Cable can retest and surpass monthly highs.  If so, this could help balance the USD/JPY and keep the currency pair above 90 due to its positive correlation with the risk trade.  Investors will be focusing on the U.S. today with new home sales and the Fed’s monthly monetary policy decision on the way.  Japan will dot the data wire tomorrow with its trade balance, though psychological forces from the West will likely drive markets through the end of the week.

Technically speaking, the USD/JPY faces multiple downtrend lines along with 6/21 and 6/16 highs.  As for the downside, the USD/JPY has technical supports in the form of multiple uptrend lines along with intraday and 5/26 lows.  Additionally, the highly psychological 90 level should serve as a solid technical support should it be tested.

Present Price: 90.47
Resistances: 90.50, 90.63, 90.74, 90.86, 91, 91.13, 91.34., 91.48
Supports:   90.31, 90.20, 90.05, 89.90, 89.77, 89.55, 89.35
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 has outperformed over the past 24 hours as investors react positively to the details of parliament’s emergency budget.  The new tax on financials is not as high as earlier anticipated, giving banks a boost and pushing the Pound higher.  Meanwhile, the EUR/USD is hanging tight within its uptrend trading range, a positive for the risk trade as a whole.  The performance of the Cable will now depend on the outcome of today’s BoE meeting minutes.  Should the central bank give a vote of confidence to the UK economy this could lead to a test of the Cable’s highly psychological 1.50 level.  On the other hand, the Cable’s present upswing could be derailed should investors react negatively to the Fed’s monetary policy meeting or if any unwanted developments occur in the EU.  The UK will be quiet on the data wire for the remainder of the week, meaning psychological should retain control of the markets along with U.S. economic data, placing additional emphasis on today’s U.S. new home sales figure.  If new home sales disappoint like yesterday’s existing home sales number this could cap near-term gains in the Cable.

Technically speaking, 1.50 is still hanging over head along with 6/21 highs and multiple uptrend lines.  As for the downside, the Cable has intraday and 6/17 lows serving as technical cushions along with the psychological 1.45 level should it be tested.

Present Price: 1.4878
Resistances: 1.4879, 1.4917, 1.4938, 1.4957, 1.4984, 1.5005
Supports: 1.4839, 1.4801, 1.4767, 1.4746, 1.4715, 1.4680
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 Russell Glaser – The USD/DKK daily chart below displays an increasing bullish trend with a major and a minor trend line. The slope for the second trend line is greater than the first and signals that the trend is increasing in its speed. The Danish krone has been strengthening and the pair has fallen from its high in the recent bullish trend and may have arrived at an attractive price to enter long on the pair.

The Danish krone has almost retraced to the 23.6% Fibonacci level at 5.9000 for the recent daily trend and has since bounced higher. We can see from the chart that another support line has formed from this week’s trading at a price of 5.9650 (S1). This retracement has formed the second contact point for minor trend line.

A technical signal to buy is provided by the RSI 14. The indicator has entered into the oversold region and is now rising above the 30 line.

Traders may want to go long on this signal with the first target at the resistance line at 6.1200 (R1). The second target would be the swing high of the bullish trend at a price of 6.2500.

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

The U.S. Dollar and the Japanese Yen gained ground yesterday while Euro and other higher-yielding currencies remained on the defensive as it appears that the recent risk rally has run its course and the excitement from China’s new Yuan policy has died off.

EURUSD
The Euro halted its recent decline against the U.S. dollar this morning, rising from a 4-day low just hours before of the Federal Reserve’s key interest rate announcement. The EUR/USD touched on 1.2245 during the early Asian sessions – its lowest since June 17th.

Later today, the U.S Fed is expected to hold its benchmark interest rate near 0%, in what it hopes will be a relatively calm meeting. However, economists do not predict that the Fed will soften its “extending period” language at today’s meeting.

Also out today, the U.S Census Bureau will release the number of new homes sold during May.  Analysts predict that the number will fall 19% from 504K to 424K. This key housing figure follows yesterday’s disappointing sales of previously owned homes, which unexpectedly fell 2.2% in May.

Support/Resistance 1.2240/1.2356

GBP/USD
Yesterday, Britain’s newly elected government laid out what has been called an “unavoidable budget,” in hopes of reducing the nation’s massive budget deficit.  In his speech before parliament, Treasury chief George Osborne unveiled a fiscal tightening plan of new spending cuts, tax hikes  and bank levies that will add up to 8% of the U.K’s GDP by 2015-16, representing the deepest cuts in over three decades.  The Sterling rose above the 1.48 mark as the UK budget was applauded by many of the world’s rating agencies.

Support/Resistance 1.4800/1.4921

Forex Market Review & Analysis by Finexo.com

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By Anton Eljwizat – The EUR/CHF has recorded much bearish behavior in the past several days. However, the technical data indicates that this trend may reverse anytime soon. For example, as I demonstrate below, the 8-hour chart signals that a bullish reversal is imminent, and it might have the potential of reaching towards 1.3750 in the coming days. Forex traders can take advantage of this imminent upward movement by entering long positions at an excellent entry price.

• Below is the 8-hour chart of the EUR/CHF currency pair.

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

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

• Point 2: The RSI signals that the price of this pair currently floats in the over-sold territory, indicating upward pressure.

• Point 3: The Slow Stochastic indicates an impeding bullish cross, signaling that the next move may be in an upward direction.

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

EUR/CHF 8-Hour Chart

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

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

Source: ForexYard

The US currency recovered some earlier gains against the EUR yesterday as stocks turned notably lower in afternoon trading, indicating to fx traders that investors’ appetite for riskier assets has diminished. The main piece of US economic news during today’s session will be the Federal Funds Rate decision. At the end of their 2-day meeting Wednesday afternoon, the Federal Reserve is expected to keep interest rates at near-zero and to maintain its pledge to keep these low rates in place for an extended period of time.

Economic News

USD – Dollar Up vs. EUR for 2nd Straight Day

The US dollar gained for its second straight day against the EUR on Tuesday as new concerns about the funding needs of European banks offset stronger-than-expected German economic data. Against the Japanese yen, the Dollar fell to 90.56, from 91.97 late Monday.

The greenback had been higher earlier in the session as a downgrade of a major French bank resurrected worries about the European economic outlook, and as enthusiasm over China’s revised currency policy faded.

Also affecting the foreign-exchange market, analysts have said that investors trimmed their expectations that China’s plans to loosen its so-called peg against the US dollar will boost global economic growth.

Beijing’s weekend announcement had spurred a sharp rally in US stocks, commodities and currencies highly sensitive to economic growth, such as the Australian dollar, to start the trading week, while weighing on investments seen as safety plays — including the US dollar. Now, however, the initial euphoria appears to have faded.

EUR – EUR/USD Pulls Back from 1-Month High

The European currency retreated from a one-month high against the US dollar on Tuesday, tracking a pullback in the yuan a day after China’s pledge to allow its currency to trade more freely had spurred risk demand. The EUR barely reacted to the German Ifo business climate index, which came in slightly higher than expected at a two-year peak in June, while the expectations index fell.

The upward momentum seen on Monday in the EUR and higher-risk currencies, including the Australian dollar, petered out as investors acknowledged that a more flexible yuan policy would not lead to a sharp appreciation in the currency. The euro traded at $1.2271, down 0.2% on the day after falling to $1.2259. The EUR pulled back from $1.2490 hit on Monday, its strongest since May 24, after failing to break into the $1.25 region.

Analysts have said that a ratings downgrade of French bank BNP Paribas by Fitch, and Standard & Poor’s announcement that it was raising its estimates for loan losses for Spain’s banking sector on Monday, also weighed on the EUR. The single currency extended losses after Moody’s Investor Services cut two Greek government sponsored ABS. Market players said the EUR would face more losses, but technical analysts said near-term support was seen at $1.2253.

JPY – Yen Rises vs. Major Currencies

The Japanese yen rallied against all 16 of its most-traded counterparts after a report showed existing-home sales in the US unexpectedly fell in May, spurring speculation that growth may be slowing in the world’s largest economy. It rose 0.6% to 90.57 per dollar, from 91.11 yesterday.

Japan’s currency also gained against the EUR in more than two weeks amid speculation that European banks will struggle to raise money. The JPY rose 1.2%, the most on an intraday basis since June 7, to 110.86 euro before trading at 111.14 up 0.9%.

Crude Oil – Oil Declines for First Time in 3 Days as US Home Sales Drop

Crude Oil prices dropped for the first time in 3 days as sales of existing US homes unexpectedly fell in May, signaling the economy is struggling to recover. The contract earlier hit an intraday high of $78.95 a barrel, but had gone down all the way to $77.79 prior to that.

After floor trading closed, a report by the Washington-based American Petroleum Institute showed a surprise increase in oil and oil-products inventories, ahead of a more closely watched report by the Department of Energy today at 14:30 GMT.

Technical News

EUR/USD

The Bollinger Bands on the hourly chart appear to be tightening in expectation of a volatile movement. The price seems to be floating in the over-sold territory on the 4-hour chart’s RSI, and the weekly chart’s Momentum oscillator is still pointing upward. The chance exists that the volatile movement will be upward as a result. Traders can take advantage by going long with tight stops in place.

GBP/USD

This currency pair appears to be continuing its cyclical movement within the current bullish channel. After a recent upturn there is a chance that we will see some downward pressure on this pair to conform to the present trend. The price already looks to be entering the over-bought region of the daily RSI which gives us an indication that it is expected to depreciate in the near future.

USD/JPY

After a modest downturn, the USD/JPY now appears to be expecting an upward correction. The current price of 90.50 seems to be a solid support level which this pair has found difficult to breach. The 4-hour Stochastic (slow) is showing a fresh bullish cross, and the weekly chart’s Momentum oscillator has flattened out from its previous downward direction. It seems as if an upward shift could take place soon and traders can take advantage by entering long positions early.

USD/CHF

The Stochastic (slow) indicator on the daily chart for this pair seems to be showing a recent bullish cross. After breaching the lower border of the daily chart’s Bollinger Bands, this pair now appears to be undergoing its expected bullish correction. Going long with tight stops may not be a bad idea today.

The Wild Card

USD/NOK

Following a modest increase in value, the price of this pair now appears poised for a bearish correction. The 4-hour Stochastic (slow) indicator is showing a fresh bearish cross, suggesting that the next major movement will be in a downward direction. The 4-hour RSI also shows the price being over-bought, which highlights the downward pressure already present on this pair. Forex traders can take advantage of this impending downward movement by entering their short positions now, and at a great entry price.

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 sold off slightly as investors continue to take profit on short-term Euro position.  A break of the 1.2450 area, should lead to higher prices for EUR/USD. 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.

GBPUSD broke below the lower boundary of the rising price channel on 4-hour chart, suggesting that a cycle top is being formed at 1.4935. Key support is now at 1.4684, a break below this level will confirm the cycle top and indicate that the rise from 1.4346 is complete, then the following downward movement could price price to 1.4450 area. Only rise above 1.4935 could trigger another rise to 1.5000 area.

Daily Forex Forecast

By GCI Forex Research

Fundamental Outlook at 1400 GMT (EDT + 0400)

€

The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.2250 level and was capped around the $1.2355 level.  European sovereign debt concerns were back at the forefront today and these led to a weaker common currency.  European Union Economic and Monetary Affairs Commissioner Rehn reported “Contrary to what some people argue, Europe is not suffocating growth by this strategy of fiscal consolidation. What we are doing is putting our fiscal houses in order in a gradual, differentiated way: faster where the doubts about fiscal sustainability have been biggest, and slower elsewhere.”  There is talk that the U.S. and Europe are at odds over a coordinated economic policy.  The former is said to favour higher levels of deficit spending to stimulate economic growth while the latter is said to support reduced fiscal spending and would be comfortable with reduced economic output.  The European Union is currently evaluating sanctions for “inadequate debt trajectory” and may consider a tax on bond issues by highly-indebted countries.  Eurogroup Chairman Juncker reported the economic recovery “remains fragile and loaded with risks.”  The common currency’s standing in many central banks’ reserve portfolios is diminishing, a reflection of the currency’s recent volatility and the eurozone’s significant debt woes.  German Chancellor Merkel reiterested Germany wants a stable euro and an independent European Central Bank.  European Central Bank member Ordonez said Bank of Spain will publish banks’ stress test results as soon as possible.  Data released in the eurozone today saw the EMU-16 April current account print at -€5.1 billion, down from the revised prior reading of +€1.5 billion, while EMU-16 June consumer confidence improved to -17.  German data saw the June Ifo business climate indicator improve to 101.8 while the expectations sub-index receded to 102.4.  In U.S. news, May existing home sales tumbled 2.2% m/m from an upwardly revised 8.0% in April to an annualized 5.66 million units, a surprise decrease.  The April house price index climbed 0.8% and the June Richmond Fed manufacturing index fell back to +23 from the prior reading of +26.  Most dealers believe the Federal Open Market Committee will keep interest its federal funds rate target unchanged at 0.25% tomorrow when its monetary policy decision is announced.  The Fed may also retain its “extended period” rhetoric to describe the ongoing accommodation of monetary policy.  Euro offers are cited around the US$ 1.2570 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥90.50 level and was capped around the ¥91.10 level.  Traders pushed the yen higher across the board, one day after the yen came off following China’s announcement that it would be liberalizing its yuan exchange rate policy.  Moody’s today affirmed its AA2 rating on Japan and maintained its stable outlook on the country.  Yields on 10-year Japanese government bonds fell to 1.185%, their lowest level since 5 January 2009.  There is some speculation the government plans to nearly double its growth projection for the current fiscal year to 2.6% following January’s estimate of 1.4%.  Notably, Japan’s economy contracted 2.0% during its last fiscal year and 3.7% the preceding fiscal year.  The government is expected to release new growth estimates as early as tomorrow.  BoJ will soon release its June quarterly survey of consumer sentiment and it is expected to evidence a fifth consecutive quarter of improved confidence.  Also, big firms are expected to expand capital spending by 4.9% this fiscal year.  Data released in Japan overnight saw May supermarket sales off 5.3% y/y.  The Nikkei 225 stock index lost 1.22% to close at ¥10,112.89.  The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥111.05 level and was capped around the ¥112.45 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥134.75 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥82.20 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8130 in the over-the-counter market, up from CNY 6.7969.  Traders booked profits on previous short dollar positions after China’s announcement that it would end its two-year U.S. dollar peg ahead of this week’s Group of Twenty summit in Toronto.  People’s Bank of China noted it will prevent “excessive” exchange rate movements.  Today’s CNY gains were the largest since July 2005 when China revalued the yuan.  Notably, the twelve-month non-deliverable yuan forward rose 1.1% to 6.6425 and this implies traders are speculating on a 2.3% yuan appreciation.  People’s Bank of China reported a stronger yuan will help curb inflation and focus investment on service industries from export manufacturing industries.  Most dealers expect the appreciation will be relatively gradual with some forecasts calling for about a 4-5% appreciation this year and around a similar amount next year.  During the past two years, Chinese monetary authorities bought dollars to prevent the yuan from strengthening too much.  The CNY appreciation some 21% during the three years after China introduced its managed float against a basket of currencies in July 2005.  The yuan has jumped some 16% vis-à-vis the euro this year and that may temper the yuan’s upside.  PBoC is estimated to have accumulated some US$ 2.4 trillion in foreign reserves while intervening in the currency markets.  May industrial profits data will be released on 24 June.

£

The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.4855 level and was supported around the US$ 1.4685 level.  Chancellor of the Exchequer Osborne announced the U.K. will raise more than £2 billion per year by taxing banks that have risky balance sheets.  Both Germany and France are expected to follow suit with a similar levy.  Osborne’s Budget was presented today and the government is now forecasting economic growth of about 2.3% in 2011.  Also, the U.K. value-added tax was increased to 20% from 17.5%, a policy shift expected to add an additional £13 billion per year in revenue.  Cable bids are cited around the US$ 1.4620 level.  The euro depreciated vis-à-vis the British pound as the single currency tested bids around the £0.8275 level and was capped around the £0.8365 level.

CHF

The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.1035 level and was capped around the CHF 1.1120 level.  Data released in Switzerland today saw the May trade balance decline sharply to CHF 820 million from the upwardly-revised April total of CHF 2.06 billion.  This decline reflects the impact of the strong franc and the limited success Swiss National Bank has had in blunting the impact of the stronger franc through euro-buying intervention.  SNB member Jordan said deflation risks have largely gone away and said there is currently no need for intervention.  Swiss National Bank yesterday reported that its foreign currency investments rose to CHF 239 billion in May from CHF 153.6 billion in April, indicative of the significant amount of franc-selling intervention the central bank has been conducting to protect the Swiss export sector.  U.S. dollar offers are cited around the CHF 1.1470 level.  The euro depreciated vis-à-vis the Swiss franc as the single currency tested bids around the CHF 1.3585 level while the British pound moved lower vis-à-vis the Swiss franc and tested bids around the CHF 1.6295 level.

Forex Daily Market Commentary provided by GCI Financial Ltd.

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DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

By CountingPips.com

The U.S. dollar has traded higher Tuesday against the euro to edge up for a second straight day to start the week. U.S. stocks and oil have headed lower today while the dollar has been mixed overall against the other major currencies. Economic news released today by showed that U.S. existing homes fell more than expected in May by 2.2 percent. Market forecasts were expecting an increase of 6.0 percent after April registered an 8.0 percent revised advance.

The euro has trended lower along with the risk currencies (AUD,NZD,CAD) today and price action potentially signals that we may have touched a short-term top this week  from the rebound off of the June 7th lows. The EUR/USD currency pair opened the day near the 1.2323 mark, reaching an intraday high at 1.2353 in early morning trading before turning lower and falling below the 1.2300 level. The pair has now touched the lowest trading level since early Thursday of last week and currently consolidates near 1.2275 in the afternoon of the U.S. trading session.

On the downside for the EUR/USD, the 1.2250 level (today’s support), the 1.2150 level (recent support) and the 21-day  moving average (1.2207) are areas of potential support with a break below the 1.2150 level likely to provide downside pressure for a retest of the 1.1876 level. Further upside advancement would need to overcome 1.2350 resistence and could see the 1.2450/70 area and the 1.2600 area looming as potential resistance. On this recent rise higher, the 1.2466 level twice acted as resistence while the 1.2600 area has acted as previous support/resistance area and the 38.2 fibo retracement from 1.3817 to 1.1876 is right around the 1.2620 level.

EUR/USD Daily Chart

Key Levels:

1.2620 – fibo retracement level
1.2580/1.2600 – previous support/resistance
1.2450/70 – June 18 & 21 resistance
1.2417 – intraday high 6-18
1.2330/50 – 2008 low –  support/resistance
1.2300 – support/resistance
1.2250/70 – previous support/resistance June 22nd
1.2207 – 21-day moving average
1.2150 – previous support/resistance
1.1876 – June 7th (4-year low)