EURUSD may be forming a cycle top at 1.2466 level on 4-hour chart. Deeper decline to test 1.2241 key support could be seen later today, a breakdown below this level will confirm the cycle top and indicate that the rise from 1.1876 has completed, then the following downward movement could bring price to 1.2050-1.2100 area. However, as long as 1.2241 key support holds, one more rise towards 1.2550 area is still possible.
By CountingPips.com
The U.S. dollar reversed early losses (following the Chinese currency adjustment) to gain against the other major currencies in forex trading while the U.S. stock markets turned lower today. The American currency gained for the day versus the euro, British pound, Swiss franc, Japanese yen, Canadian dollar, Australian dollar and the New Zealand 
dollar, according to currency data from Oanda.
The U.S. stock markets, meanwhile, reversed lower after starting the day sharply higher with the Dow Jones ending the day down by 8 points, the Nasdaq decreasing about 20 points and the S&P 500 lower by over 4 points. Oil was flat today at the $77.82 per barrel level while gold was also flat at the $1,239.70 per ounce level.
The EUR/USD currency pair opened the day near the 1.2414 mark and touched an intraday high at 1.2466 in early morning trading before turning lower to decline below the 1.2350 level in U.S. afternoon trading. The EUR/USD had held above 1.2350 since last Thursday but has dipped below the 1.2330 level (2008 low point) as of time of writing today. Further declines could signal that we have touched a short-term top in this pair (and risk appetite) from the rebound off of the June 7th lows.
Below 1.2330, the 1.2250 level (recent support), the 1.2150 level (recent support) and the 21-day simple moving average (1.2218) are areas of potential support while a break below the 1.2150 level will provide downside pressure for a retest of the 1.1876 level. Further upside advancement could see the 1.2600 area looming as potential resistance. 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.
Key Levels:
1.2620 – fibo retracement level
1.2580/1.2600 – previous support/resistance
1.2452 – May 28th resistance
1.2417 – intraday high 6-18
1.2330 – 2008 low support/resistance
1.2300 – support/resistance
1.2250/70 – previous support/resistance
1.2218 – 21-day moving average
1.2150 – level (recent support)
1.1876 – June 7th (4-year low)
By Adam Hewison – We have had a number of requests to do a video on Fibonacci
Retracements and how they can be used in trading.
I put together this five minute lesson on Fibonacci trading and
how I use this important tool to determine turning points in the
market. Like all tools, it has its flaws and should be used with
other complementary tools like our “Trade Triangle” technology.
As always, our videos are free to watch and there are no registration
requirements. I hope you have the time to comment and share if this
video helped you understand this important trading tool, or how you’re
already using it.
I hope you enjoy this brief lesson and it helps you understand
how to use this important tool.
Watch the Video Here…
All the best,
Adam Hewison
President of INO.com
Co-founder of MarketClub
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$ 1.2350 level and was capped around the $1.2465 level. European Central Bank officials spoke today and offered their latest views regarding the ongoing European credit crisis. President Trichet defended the central bank’s commitment to price stability, saying statements that price expectations have come unanchored are “unfounded.” Trichet also noted the economic recovery is likely to “remain moderate and uneven.” He also called for “better instruments to prevent excessive deficits” and wants sanctions against countries to become “quasi-automatic.” Trichet cited “more stringent reporting requirements or even a limitation of suspension of voting rights” as possibilities. Additionally, he said the ECB’s purchase of bonds are not engendering inflation risks. ECB member Gonzalez-Paramo warned about the proposed bank global bank tax, saying it could “hamper the flow of credit to the real economy.” ECB member Stark said the ECB “will not embark on a dimension in size of government bond purchases as it was done by other central banks” and called the ECB’s purchases “temporary in nature.” The ECB has spent about €51 billion purchasing government and corporate debt in the secondary market to keep a lid on yields and improve liquidity. In contrast, the Fed has purchased US$ 1.42 trillion in housing debt and US$ 300 billion in U.S. Treasuries whereas Bank of England has invested about £200 billion. Gonzalez-Paramo also said stress tests on European banks will cover both liquidity and capital positions. Stark added “no (eurozone) country will default” on its debts. Bundesbank’s monthly bulletin said the weak euro may offset fiscal tightening. ECB member Noyer called for “rigorous” budgetary discipline and said some banks are facing “increasing” funding problems. In U.S. news, data to be released tomorrow include May existing home sales, April house prices, and the June Richmond Fed manufacturing index. Group of Twenty officials will convene in Toronto this week and weekend to discuss global policy and could announce a global bank tax. The Federal Open Market Committee’s interest rate decision will be released this week and many traders believe it will contain 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 depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥91.45 level and was supported around the ¥90.25 level. The pair moved higher after China gave some indication it was moving to liberalize its yuan currency. Bank of Japan Governor Shirakawa met Prime Minister Kan overnight ahead of the G20 summit. 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 the April all-industry activity index climb 1.8% m/m, up from the previous print of -0.7%. Also, May Nationwide department store sales were off 2.1% y/y and May Tokyo-area department store sales were off 1.8% y/y with May convenience store sales off 3.2% y/y. These weak sales data evidence the lack of final private demand in Japan and the economy’s ongoing bout with deflation. The Nikkei 225 stock index climbed 2.43% to close at ¥10,238.01. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥113.40 level and was supported around the ¥112.05 level. The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥136.00 figure while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥82.50 level. In Chinese news, the U.S. dollar depreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.7969 in the over-the-counter market, down from CNY 6.8261. The sharp move lower followed China’s decision to end a two-year U.S. dollar peg ahead of this week’s Group of Twenty summit in Toronto. 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. If the central bank is going to intervene less, it may have less U.S. dollars to recycle into U.S. Treasuries and related investments. PBoC suggested China’s balance of payments means there is no need for “large changes” in the yuan’s value because it is “not too far from equilibrium levels.” China’s current account surplus was around US$ 297 billion in 2009. A stronger yuan will likely reduce China’s rate of inflation that measured 3.1% last month. Today’s announcement by the central bank will have bought China time ahead of this weekend’s Group of Twenty summit in Toronto.
£
The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.4935 level and was supported around the US$ 1.4805 level. Traders await the release of the U.K. Budget Report tomorrow, especially considering Prime Minister Cameron’s recent fiscal cuts. Inflation remains above Bank of England’s 2% target rate and is expected to moderate in the medium-term. 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 £0.8330 level and was capped around the £0.8380 level.
CHF
The Swiss franc depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1110 level and was supported around the CHF 1.0995 level. Data released in Switzerland today saw the May M3 money supply up 7.1% y/y and data to be released tomorrow include the May trade balance. Swiss National Bank today 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. Last week, Swiss National Bank kept its three-month Swiss franc Libor target rate unchanged at 0.25% this week. Swiss National Bank Chairman Hildebrand effectively eased its stance on the Swiss franc, saying the risks of deflation have “largely disappeared.” SNB also warned it cannot keep interest rates at a record low in the medium term without engendering inflation. U.S. dollar offers are cited around the CHF 1.1470 level. The euro appreciated vis-à-vis the Swiss franc as the single currency tested offers around the CHF 1.3765 level while the British pound moved higher vis-à-vis the Swiss franc and tested offers around the CHF 1.6510 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 Anton Eljwizat – Last week’s bullish movement in Silver has pushed a number of technical indicators into the over-bought territory. As I will demonstrate below, the price of silver may very well be heading for a reversal. Forex traders can take advantage of this impending movement by having their Entry Orders in place to capture this reversal. Don’t forget your Stops and Limits!
• Point 1: The Slow Stochastic indicates a bearish cross, signaling that the next move may be in a downward direction.
• Point 2: The Relative Strength Index (RSI) indicates that the price of this cross currently floats in the overbought territory, signaling downward pressure.
• Point 3: The Williams Percent Range has peaked near at the 0 marker, which means that there may actually be a strong level of downward pressure.
Silver 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.
Market Analysis by Finexo.com
The Euro rose to a four week high against the USD and the Australian Dollar jumped more than 1% this morning, as news flooded the market that China would give the Yuan more flexibility. Beijing announcement to end to the Yuan’s fixed rate against the American Dollar has fueled traders to buy riskier assets.
However, the Yuan is not the only news rocking the markets – the affects of the devastating BP Oil Spill continue to spread across the globe. As big oil companies suffer from a particular bad public image (i.e blamed for the world’s ecological decay as well as high gasoline prices), it has been particular easy for the media, as well as politicians, to draw the public’s attention away from Europe’s sovereign debt crisis. As such, the EURUSD is up over 600 pips from its lows, leading equity indexes are at six week highs, and commodities – led by crude oil prices – have rallied.
EUR
Negative euro sentiments appear to be finally fading as the EUR continued to trade higher against the USD. Last week, the single European currency appreciated the most against its American counterpart since May 2009, as dwindling concerns over the region’s debt crisis encouraged traders to end bets against the shared currency.
Nonetheless, the Euro’s recent rise remains isolated to the greenback – the 16-nation common currency has been unable to appreciate much against the Pound, Aussie and Swiss Franc. This inconsistency may indicate that the Euro’s rise against is based more on dollar selling than euro buying. As such, this current status quo is likely to continue since economic data this week is US heavy while little high impact news is expected from the Euro zone.
Later today, ECB President Jean Claude Trichet will testify on Economic and Monetary Affairs before the European Parliament, in Brussels.
GBP
On Friday, the Pound rose to a one month high against the greenback as risk buying returned to the market and stronger economic data fueled investors to buy currency. The Sterling rose 0.3%, to hit a high of $1.4872 – the pairs highest level since May.
Up ahead, it is expected to be a heavy week for the British Pound as the UK will announce its Annual Budget on Tuesday followed by MPC Minutes on Wednesday. The Budget Release is actually the second one of the year; however, the change in government leadership has made the previous budget irrelevant as new spending cuts have been enacted. George Osborne, UK’s Chancellor of the Exchequer, will present the cuts in front of the parliament. With the newly elected government aiming for £6 billion in cuts for 2010, investors will be reading quickly through the budget to see if these cuts are realistic. The Pound could very well appreciate if the market reacts positively to the proposed budget, or depreciate of skepticism reigns.
Forex Market Review & Analysis by Finexo.com
Disclaimer: Trading the foreign exchange (Forex) carries a high level of risk, and may not be suitable for all investors. All information and opinions contained on this website are to be used for general informational purposes only and do not consitute investment advice.
Here’s an updated chart of the fiber or EURUSD pair. In my blog back in June 12, I noted that the pair could fall after finding some resistance at the support of the descending triangle which was also almost in line with the 38.2% Fibonacci retracement level that I marked. Notice, however, that at that time, the stochastics were still far from the overbought area, giving the pair more room to move higher. Over the next succeeding days, theeuro indeed continued to rise over the greenback, surpassing both the 38.2% and 50% Fibs. At present, the fiber is trading around 1.2400. And with the stochstics now in the overbought territory, it could soon resume its journey south. The presence of a bearish divergence, where the price marks lower highs and the oscillator prints higher highs, also suggest a likely downmove any time soon.
If the EUR indeed loses its support and falls, it could revisit its 2010 low at 1.1876. On the slightly positive note, a break of the 61.8% fib and the short term downtrend line could possibly send it back up to 1.3300, giving the euro bulls something to cheer about. While such price action does not necessarily lead to a bullish reversal, such would still allow those who are long to close at least part of their positions at a better price.
On the economic front, several market moving economic reports are due this week in the euro zone. Germany’s Ifo business climate survey, which is seen to have cooled a bit to 101.2 from 101.5, and the euro zone’s current account balance, which is likewise projected to have lessened a bit to €1.3 billion from €1.7 billion, will be on tap tomorrow (June 22). The latest manufacturing and services PMI from from, Germany, and the euro zone itself, most of which are expected drop slightly from their previous readings, will be on deck the next day. So the anticipated fall from these accounts plus any surprise downside from the high impact reports from the other nations like Canada’s inflation and retail sales reports, the US’s home sales and Federal rate decision, New land’s 1Q GDP report, could fundamentally weaken the euro. On the flip side,the projected gain from the euro zone’s industrial new orders (seen to grow by another 1.6%) plus any upside from the reports from the other major countries could lift the currency again.
More on LaidTrades.com …
By Natalie R. – With the recent disenchantment with the EUR in light of the ongoing Euro-Zone debt crisis and the uncertainty regarding the stability of the American economy and sustainability of the national debt, it seem like the world is in search of new reserve currencies. The top two choices appear to be the CHF and CAD.
One sign of the changing times is the fact that both Russia, who has the world’s 3rd largest foreign currency reserve, and China started to diversify their reserve base, likely in order to less dependent on the USD and EUR and begun purchasing the loonie.
The Canadian Dollar has been rising in recent months due to the relatively strong economic standing of the nation. According to the IMF, Canada will have the lowest net debt-to-output ratio among the G-7 countries, and along with the U.S. will have the fastest economic growth this year. It was also the first nation among the G-7 to raise its interest rates from a record low of 0.25% to 0.50% on June 1st. the Canadian Dollar’s rise was also fueled by the rise in Oil prices as well as the demand for the nation’s abundance of raw materials.
The Swiss Franc is another currency which has been gaining much strength recently, particularly against the EUR. The Swiss economy has also weather the economic recession fairly well and has a strong and effective Central Bank. The CHF received a boost this week as the Swiss National Bank dropped its promise to act decisively against an excessive rise in the Franc and said that for now deflation risks have largely disappeared.
While the CAD has experienced a very long rally versus the CHF over the recent months, however, it seems that recently the CHF is beginning to gain some ground versus the Canadian Dollar. With both Currencies cementing their status as alternative reserve currencies it will be interesting to see if this trend will continue, especially in light of the recent decision by the Swiss Central Bank.
After a long decline versus the CAD, the CHF seems to start gaining ground versus the Canadian Dollar and it appears that there is still room for the currency to appreciate further.
– Looking at point 1 it is evident that a bearish cross has formed on the chart’s Slow Stochastic indicating an imminent downward movement.
– Point 2 shows that the pair is trading near the overbought territory indicating a downward correction may be expected.
– Furthermore, looking at the MACD a bearish cross may be expected as it is at the upper border.
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.
Welcome to another week of forex trading my friends! Today, I present to you an updated daily chart of the USDCHF pair. From my post about it exactly a month ago back in May 21, I mentioned that the USD is bound to give up some of its gains back to the Swiss franc after the pair had reached a high of 1.1731 in June 1. At that time it was pretty clear that it was already losing its upward momentum. Stochastics was also in the extreme overbought region, suggesting a likely turn around soon. Indeed, it started to reverse and head south after just a couple of days, marking the wave 4 of a 5-wave cycle according to the Elliot Wave Theory.
At present, the pair is below 1.1100 which is, by the way, just around the 50% Fibonacci retracement level that I drew. Now, it could use this mark as a support to propel itself back up but if this mark does not hold, the pair could slide further down to 61.8% Fib or even back at the neckline of the inverted head and shoulders. In any case, in my opinion, the pair looks primed for another up move anytime soon given its oversold condition. A bullish divergence, with the price making higher lows and the stochastics registering lower lows, is likewise present, suggesting that traders could pick the dollar back up in exchange of the Swissy. So if and when it moves higher, it could aim at least for its 2010 high at or even reach the minimum upside target its previous breakout from an inverted head and shoulders at around 1.1900. Such move would then mark its wave 5 of the cycle.
Fundamentally, the Swiss National Bank (SNB) said last week in its Libor rate decision that it would not hesitate to interevene in the forex market to weaken the CHF if any risk of deflation in Switzerland returns. Note that the country’s month-over-month CPI had unexpectedly dropped by 0.1% in May. Another slide perhaps during this month or in the next would place a lot of pressure on the central bank to further ease its currency’s valuation to fight a probable deflation. On top of this, any surprise downside from any of the high profile economic reports (German Ifo business climate, Canadian inflation and retail sales, US home sales and Federal funds rate, New Zealand GDP) would likely cause some risk aversion, benefiting the safer currencies like the USD.
More on LaidTrades.com …
Source: ForexYard
Analysts have begun to make positive statements regarding China’s latest announcement that it may consider an easing of the rigidness of their monetary policy. This could result in the Chinese yuan being allowed to appreciate normally and boost risk appetite and market optimism in regards to a speedier recovery. It appears traders are scanning the horizon for a silver lining and China is believed to have come to the rescue, finally. But has it?
This week’s market opening delivered a shock in the form of a rapid drop in the value of the USD. Upon market opening, the greenback plummeted 81 pips against the euro and a similar amount against the British pound. The two pairs are currently trading at 1.2435 and 1.4844, respectively.
Analysts have begun to make positive statements regarding China’s latest announcement that it may consider an easing of the rigidness of their monetary policy. This could result in the Chinese yuan being allowed to appreciate normally and boost risk appetite and market optimism in regards to a speedier recovery.
However, it was not just the dollar which saw a significant price change. Dollar-based commodities also witnessed a sharp rise in value as the USD took the plunge. With oil prices rising rapidly, many analysts fear it could slow down the industrial recovery of the major global economies. The major monetary policies of countries like China have become more of a significant market mover than it has recently. It appears traders are scanning the horizon for a silver lining and China is believed to have come to the rescue, finally.
With few news events expected today, traders are advised to follow any announcements regarding China’s decision to re-value its currency and allow it the flexibility which many have been calling for since the economic crisis began.
Global EUR-traders have awoken to a pleasant surprise this morning. The euro appears to be on its way to a healthy recovery thanks to China. Versus the US dollar, the euro has risen towards 1.2450 from as low as 1.2050 seen last Wednesday. The EUR/GBP has experienced similar behavior with a surge towards 0.8375 from as low as 0.8220 last week.
With European Central Bank (ECB) President Jean-Claude Trichet due to speak about economic and monetary policies before the European Parliament in Brussels, there is a chance that riskier assets, such as the euro, could experience another sharp incline if news proves positive.
There is a risk, however, that Trichet will incorporate China’s latest announcement that it may make its currency more flexible and counter in order to bring more stability. While the euro zone wants an appreciation of the euro, the speed of its recovery could bring too much volatility which could lead to instability. Some analysts are expecting dovish statements to bring the EUR back into a corrective spin, but still bullish.
Even the safe-haven currency of the Japanese yen appreciated against the dollar in this morning’s trading hours. As the USD took a dive following this weekend’s surprise announcements by China, the JPY actually appeared to take off alongside the other riskier assets, which is somewhat uncommon for the island currency.
Japan’s new prime minister may take the opportunity to see his currency decline as the global economy recovers; a sentiment he has expressed a number of times before his election as PM. His personal dissatisfaction with the current strength of the JPY has become a major talking point among political and economic analysts lately. Should any announcements come from Japan in that regard, traders would be wise to pay attention.
Despite the US dollar’s surge, the price of Crude Oil may have been in a steady bullish channel before this morning’s announcements from China. The US driving season has officially kicked off as many Americans enter summer vacation with muddled optimism. This has boosted demand for the black gold and the depreciation of the dollar has only added to the momentum already being built.
This week’s news events may impact Crude Oil prices more than many are likely expecting. A number of analysts have begun to anticipate a rise in demand for oil and as a result this week’s manufacturing and industrial data from across the globe will give a sneak preview into the level of global demand. Should this week’s figures disappoint, we could see the price of oil hit $80 a barrel and promptly bounce off back towards $75.
The pair continues to move higher and is now trading close to the short term resistance at 1.2450, the daily high from May 28th. A breach of this resistance level may carry the pair to the next short term resistance at 1.2525, with the long term resistance resting at 1.2670.
The Cable is testing a speed line that branches off from the long term trend line on the weekly chart. The speed line begins on the week of January 17th. A breach of this trend line could propel the pair to the 1.5300 long term resistance level on the weekly chart.
Most technical indicators show the pair trading in neutral territory at the moment. With no discernable signs of a major price correction today, traders may want to take a wait and see approach in order to determine what the best options are.
The Relative Strength Index on the 8-hour chart shows the pair currently trading in oversold territory, indicating an upward correction should take place later today. This theory is supported by both the Bollinger Bands and Stochastic Slow on the daily chart. Traders are advised to go long with tight stops today.
Most technical indicators are currently showing this pair trading well in overbought territory. These include the Relative Strength Index on the 8-hour chart and the Stochastic Slow on the daily chart. Forex traders are advised to go short for this pair today, as a downward correction may occur.
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.
