Month: July 2010

By Anton Eljwizat – The USD has dropped significantly versus the SEK in the past several days, and it is currently traded around 7.4070. And now as evident in the data below, the daily chart is giving bullish signals, indicating that USD/SEK pair might go up. Forex traders can take advantage of this impending movement by having their Entry Orders in place to capture this reversal.

• Below is the daily chart of the USD/SEK currency pair.

• The technical indicators that are used are the William Percent Range, Relative Strength Index (RSI), and Slow Stochastic.

• Point 1: The Slow Stochastic indicates a bullish cross, signaling that the next move may be in an upward direction.

• Point 2: Point 1: The Relative Strength Index (RSI) indicates that the price of this cross currently floats in the oversold territory, signaling upward pressure.

• Point 3: The Williams Percent Ranges is showing that this pair is heavily over-sold and may be experiencing strong upward pressure.

USD/SEK Daily 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

Risk taking took over the marketplace yesterday, as the euro hit a two-month high against the U.S. dollar. A solid day for the global stock market as well as a successful bill auction in Greece, were the main factors causing investors to dump their safe-haven assets in favor of more volatile currencies and commodities.

Economic News

USD – USD Continues to Fall Against Its European Counterparts

Following the most recent return to risk taking among investors, the dollar fell against most of its main currency rivals, including the U.K. pound and euro. While an increase in the stock market is being cited as the main reason for the dollar’s decline, it is also worth noting that the U.S. Trade Balance figure came in below expectations yesterday. Furthermore, strong U.K. CPI and German Economic Sentiment figures helped bring the greenback lower.

GBP/USD has shot up around 200 pips in the last 24-hours. Although a moderate correction has taken place, the pair appears to be holding around the 1.5200 level going into today’s trading. EUR/USD hit a 2-month high in trading yesterday. The pair has risen around 175 pips over the last day, and is currently at the 1.2720 level.

Today, USD traders will want to watch out for several U.S. economic indicators that are likely to create market volatility. The Core Retail Sales, as well as the Retail Sales reports are set to be released at 12:30 GMT. Both are forecasted to show negative figures and could negatively impact the dollar. At the same time, should either figure unexpectedly come in above 0%, the greenback may receive a boost in afternoon trading. At 18:00 GMT, the Federal Open Market Committee is scheduled to release its latest meeting minutes. This usually provides investors with a solid indication about where the U.S. economy currently stands. USD could experience some volatility depending on the statement.

EUR – Euro Continues to Gain on Safe-Haven Dollar and Yen

Following a significant jump in the global stock market yesterday, the euro made substantial gains on most of its main currency rivals. EUR/USD hit a 2-month high before making a slight downward correction. Currently the pair is trading around the 1.2720 level. Against the yen, the euro moved up well over 200 pips during the last 24 hours. Currently EUR/JPY is trading steadily around the 113.10 level.

Today, traders will want to pay attention a number of U.S. news events, as well as several European ones. Euro-zone CPI and Industrial Production figures, set to be released at 09:00 GMT, are forecasted to come in above last month’s levels. If this is indeed the case, investor confidence in the global economic recovery is likely to increase further. This would likely elevate the euro against the dollar, yen and British pound. Furthermore, several U.S. economic indicators are predicted to come in below last month’s figures. Should the American economy show further signs of deterioration, the dollar will likely continue to suffer against the euro as a result.

JPY – Yen Tumbles Following Gains in the Stock Market

JPY fell against virtually all of its major rivals throughout the day yesterday, and in overnight trading. The USD/JPY has gone up some 80 pips over the last day, while GBP/JPY rose an astonishing 270 pips during the past 24-hours. The reason behind the Japanese currency’s drop is largely the gains made on the global stock market. As investor confidence in the global economic recovery increases, safe-haven currencies like the dollar and yen typically drop as a result. As long as the stock market continues to see gains, traders can expect the yen to drop against more volatile currencies.

Today, the JPY value will largely be determined by U.K. and euro-zone economic indicators. Traders will want to pay attention the U.K. Claimant Count Change as well as European industrial production figures. Both are forecasted to show improvement over the previous month’s results. If analysts’ predictions are true, investor confidence will likely continue to rise. In this case, traders can expect the yen to drop further.

OIL – Oil Prices Shoot Up as Investor Confidence Rises

As investor confidence has risen over the last few days, oil prices continue to go up. The price of crude has shot up some 265 pips over the last 24-hours, ahead of today’s U.S. inventory report. The weekly report is forecasted to show that U.S. inventories have increased over the last week. Typically this means that demand is low and prices fall as a result.

That being said, oil has seen substantial gains due to the rise in stocks over the last several days. Should indices continue to move up today, traders can expect oil prices to rise as well. Attention should be given to both European and U.S. economic indicators to see where investor sentiment stands throughout the day. Positive data out of Europe will likely lead to higher oil prices.

Technical News

EUR/USD

Yesterday’s appreciation in the pair has allowed for a breach of the daily chart’s long term downward sloping trend line that began in December of 2009. Supporting the shift in the trend is the positive sloping 20-day and 50-day simple moving average. This signals a shift to the upside for the trend. As such, traders should be trading with the trend and going long.

GBP/USD

A false breakout has been displayed on the daily chart as the pair previously breached below the rising channel lines beginning on June 8th. Yesterday the pair broke higher to the resistance level of 1.5240 which brings the pair back into the channel to confirm the false breakout. The pair could target the next resistance levels of 1.5380 and 1.5520 respectively.

USD/JPY

The pair is testing the 89.15 resistance level and is showing strong momentum to the upside as the Relative Strength Index (14) is sloping sharply higher. A breach above the resistance level could take the pair higher to 89.75 where a reversal to the downside may be possible.

USD/CHF

The sharp downward trend that began in early June is seeing some consolidation near the 61.8% Fibonacci retracement level from the downtrend’s peak. The pullback to this level makes for a good entry back into the downtrend as today’s daily high ran into resistance at the 10-day simple moving average line. The next price target is the lows from this week at 1.0480.

The Wild Card

Oil

Spot crude oil prices continue to rise following the buy signal displayed on the daily chart. A cross of the 5-day simple moving average above the 20-day simple moving average could signal the beginning of a new bullish trend. CFD traders may want to enter long with a target of $80 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.

By eToro – Despite a downgrade of Portugal’s debt by Moody’s the Euro continued its rally. The close above 1.2700 was impressive.  The Euro is likely to test resistance near 1.3000. 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.

EURUSD has formed a cycle bottom at 1.2523 level on 4-hour chart. Further rally would more likely be seen later today and next target would be at 1.2800 area. On the downside, the pair is facing the upper border of a price channel again, if the channel resistance holds, pullback to test 1.2523 key support is possible, below this level will indicate that the rise from 1.2150 is complete, then the following downward movement could bring price back to the lower border of the channel.

Daily Forex Signals

By GCI Forex Research

Fundamental Outlook at 1400 GMT (EDT + 0400)

€

The euro appreciated sharply vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.2735 level and was supported around the $1.2520 level. The common currency reached its highest level since 12 May as dealers positioned themselves ahead of the U.S. corporate earnings season that many dealers believe will evidence strong results for the second quarter.  Alcoa, the U.S. aluminum production giant, reported better-than-expected earnings results.  Dealers also moved into the euro after Greece sold €1.625 billion in 26-week Treasury bills at a yield of 4.65% – below the 5% rate the European Union lent funds at in its bailout package to Greece.  The euro easily absorbed news that Portugal’s credit rating was reduced two notches to A1 by Moody’s on account of that country’s expanding debt position and weaker economic growth.  Eurozone finance ministers convened yesterday and Dutch finance minister de Jager reported eurozone banks “will get a certain period to refinance themselves in the market, but the countries will immediately announce that there is a certain backstop.”  European regulators are conducting stress tests on 91 different banks to evaluate their ability to withstand losses on sovereign bond holdings.  Data released in the eurozone today saw the EMU-16 July ZEW economic sentiment survey come in weaker-than-expected at 10.7, down from the prior reading of 18.8, while Germany’s ZEW economic sentiment survey fell to 21.2 and the current situation sub-index improved to 14.6.  Other German data saw the June wholesale price index decline 0.2% m/m and climb 5.1% y/y.  Other data released today saw French June consumer price inflation up 0.0% m/m and 1.5% y/y while the harmonized components were up 0.0% m/m and 1.7% y/y.  In U.S. news, traders are waiting to see if the U.S. Senate achieves a final passage of the financial overhaul legislation on 15 July.  The Federal Reserves sold US$ 2.12 billion of term deposits in its third test auction today, a new tool the Fed may use to absord excess liquidity from the banking system.  Data released in the U.S. today saw June NFIB small business optimism recede while the May trade balance deficit worsened to –US$ 42.3 billion.  Many data including retail sales will be released tomorrow along with minutes from the most recent Federal Open Market Committee meeting.  Euro offers are cited around the US$ 1.2830 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥88.00 figure and was capped around the ¥88.85 level.  Bank of Japan’s Policy Board is expected to keep its overnight call rate target unchanged at 0.10% when its interest rate announcement is made tonight.  BoJ Governor Shirakawa last week noted Japan’s economy is “likely to stay on a recovery trend” with improving domestic demand.  The central bank will likely retain some policy tools ready to deploy in case the situation in Europe deteriorates further or deflation worsens in Japan.  BoJ is likely to be pressured by the government following this weekend’s election loss, the yen’s ongoing strength, and unstable equity markets.  Last month, BoJ unveiled details about its new ¥3 trillion lending program to stimulate lending to companies.  Data released in Japan overnight saw May industrial production up 0.1% m/m and 20.4% y/y with May capacity utilization up 0.8% m/m.  Also, June consumer confidence improved to 43.6 from the prior print of 42.7.  The Nikkei 225 stock index lost 0.11% to close at ¥9,537.23. U.S. dollar bids are cited around the ¥86.29 level.   The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥112.35 level and was supported around the ¥110.65 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥134.05 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥84.00 figure. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.7725 in the over-the-counter market, up from CNY 6.7711.  Data to be released in China tomorrow night include Q2 GDP growth, June producer prices, June consumer prices, June retail sales, and June industrial production.  The economy is expected to have expanded an annualized 10.5% in the second quarter.

£

The British pound appreciated sharply vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.5190 level and was supported around the US$ 1.4965 level.  Data released in the U.K. today saw June consumer price inflation up 0.1% n/n and 3.2% y/y while the core index came in much stronger-than-expected at 3.1%, up from the prior result of 2.9%.  DCLG May house prices were up 11.0% y/y and June Nationwide consumer confidence will be released tonight followed by jobless data tomorrow.  Sterling climbed higher after the release of the CPI data on the premise that additional Bank of England Monetary Policy Committee members will vote for higher interest rates.  BoE’s Main Bank Rate target currently stands at 0.50%.  MPC member Sentance reported the MPC’s rate decision should support the private sector and said rate-setting is becoming more difficult.  MPC member Bailey said U.K. banks that are experiencing difficulties should restructure their debts.  Cable bids are cited around the US$ 1.4620 level.  The euro appreciated vis-à-vis the British pound as the single currency tested offers around the £0.8390 level and was supported around the £0.8315 level.

CHF

The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.0515 level and was capped around the CHF 1.0645 level.  Data released in Switzerland today saw June producer and import prices decline 0.4% m/m and climb 0.9% y/y.  Swiss National Bank President Hildebrand last week said he is “closely monitoring” the franc, adding its fluctuation has “clearly increased.”  Most dealers believe SNB has been forced to intervene less on account of all of the euro-denominated assets on its balance sheet but some note the SNB will likely continue to intervene at opportune levels.  U.S. dollar offers are cited around the CHF 1.0980 level.  The euro appreciated vis-à-vis the Swiss franc as the single currency tested offers around the CHF 1.3400 figure while the British pound moved higher vis-à-vis the Swiss franc and tested offers around the CHF 1.6055 level.

Forex Daily Market Commentary provided by GCI Financial Ltd.

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By Fast Brokers – Gold has popped past previous July highs after news hit that Moody’s is downgrade Portugal’s debt by two notches.  However, intraday gains are being capped by a relatively successful auction of Greek bonds, encouraging investors that Greece will not default on its debt.  Regardless, the Portugal downgrade gives investors uncertainty a bit of a boost and gold is benefitting.  Gold seems to have locked back into its uptrend in the process, though we will have to see if the precious metal can get beyond near-term downtrend lines.  If not, gold could be in for heavier losses.  We tend to err on the side of optimism since gold has shown it can benefit from both good times and bad.  Meanwhile, we’ll keep an eye on technicals and gold’s reaction to upcoming data and earnings.

Technically speaking, gold multiple uptrend lines in place and $1200/oz becomes a technical cushion once again.  Gold also has technical supports in the form of intraday and 7/7 lows.  As for the topside, gold faces technical barriers in the form of 6/1 and 6/30 highs.

Present Price: $1215.75/ oz
Resistances: $1216.85/oz, $1219.35/oz, $1221.01/oz, $1223.52/oz, $1225.55/oz, $1228.03/oz
Supports:  $1214.57/oz, $1212.49/oz, $1210.39/oz, $1208.55/oz, $1206.43/oz, $1203.77/oz
Psychological: $1200/oz, July highs and lows

By Fast Brokers – The Aussie is testing the upper bands of its recent consolidation pattern as the EUR/USD and Cable run higher in the wake of a successful debt auction in Greece.  Investors have shrugged off weak EU economic data and a Moody’s downgrade of Portugal’s debt and are instead focusing on Greece’s oversubscribed debt auction and a solid earnings report from blue-chip Alcoa.  Australia was relatively quiet on the data wire today, although business confidence did decline by a basis point.  Meanwhile, the Aussie looks set to perform well should investor sentiment continue to improve around the globe.  Recent economic data from Australia has been encouraging, including yesterday’s stronger than expected home loans figure.  Investors should also keep in mind that last week’s employment data topped estimates and the RBA expressed confidence in the sustainability of Australia’s economic recovery.  Hence, if the environment continues to improve in the EU and U.S. then the RBA has little reason to loosen monetary policy and more incentive to tighten in the future, a positive for the Aussie.  However, we will have to see how the week unfolds with key economic data from China, the EU, and U.S. over the coming days along with U.S. corporate earnings.

Technically speaking, the Aussie faces technical barriers in the form of 7/8 and June highs.  Additionally, the highly psychological .90 level could serve as a sufficient barrier should it be tested.  Therefore, the Aussie does have limited room to the topside unless it receives another strong fundamental or psychological boost.  As for the downside, the Aussie has multiple near-term uptrend lines working in its favor along with intraday lows and its psychological .85 level.

Price: .8779
Resistances:  .8789, .8804, .8828, .8858, .8879, .8902
Supports:  .8760, .8743, .8726, .8710, .8690, .8670, .8646
Psychological:  .90, .85, June highs and July lows

By CountingPips.com

The United States trade deficit increased to its highest level in over a year as demand for imports rose in May, according to a release by the Commerce Department today. The U.S. trade deficit rose by 4.8 percent as the deficit registered $42.3 billion in May following a revised deficit of $40.3 billion in April. This brings the trade deficit to its highest level since November of 2008.

Market forecasts were expecting the deficit to edge lower to approximately $39.2 billion for the month.

The U.S. had a total of $152.3 billion worth of exports in May which was an increase of $3.5 billion over April’s total of $148.7 billion. May imports rose by $5.5 billion to a total of $194.5 billion from $189.0 billion in April.

Contributing to the higher trade deficit was an increase in the imports of goods by $4.9 billion for the month. The U.S. had a trade deficit in goods by $1.9 billion in May while a U.S. surplus in services stood almost unchanged at $12.2 billion.

The U.S. politically sensitive trade deficit with China increased to $22.3 billion from a deficit of $19.3 billion in April while other notable U.S. trade deficits were with the European Union at a $6.2 billion, Japan at $3.6 billion, Mexico at $6.2 billion, OPEC at $7.8 billion and Germany at $2.9 billion.

U.S. trade surpluses with other countries included Australia at $1.1 billion, Hong Kong at $1.6 billion, Singapore at $0.9 billion and Egypt at $0.3 billion.

By Greg Holden – A clear descending triangle pattern has developed on the daily chart of the USD/NOK and many analysts are now expecting a bearish breakout in the coming days. A descending triangle formation historically represents a bearish signal.

The chart shown below is the USD/NOK daily chart provided by ForexYard. Support and resistance lines are indicated by corresponding letters and numbers (R = resistance; S = support).

– We can see that the latest candlestick on the chart is a doji candlestick, which represents a reversal to the previous movement. This means we may expect a short uptick before any bearish breakouts can occur.

– The moment to watch for is the breakout beyond the lower level of the descending triangle. The price of 6.3200 marks this lower border.

– Below this price level we have a number of psychological barriers which may indicate profitable targets. The first support line sits at 6.2500, followed by 6.1500, and ending around 6.0600.

USD/NOK – Daily Chart

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

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

By Anton Eljwizat – The volatile of the EUR/GBP pair continues to be affected by the volatile forex market. The last two weeks has seen a lot of bullish strength in the EUR/GBP pair. However, as I demonstrated below, it seems that the pair’s bullish run may have run out of steam, and a bearish correction could be underway soon. This might be a good opportunity for forex traders to enter the trend at a very early stage and at a great entry price.

• The technical indicators that are used are the William Percent Range, Relative Strength Index (RSI), and Slow Stochastic.

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

• Point 2: The Slow Stochastic indicates a bearish cross, signaling that the next move may be in a downward direction.

• Point 3: The Relative Strength Index (RSI) indicates that the price of this cross currently floats in the overbought territory, signaling downward pressure.

• Point 4: The Williams Percent Range shows that this pair was heavily over-bought peaked near the highest mark it could reach, and then turned a corner and now stands in a bearish posture.

EUR/GBP Daily 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.