Month: July 2010

Forex Market Review by Finexo.com

Global risk appetite has returned to the markets, with both the Euro and the Sterling benefiting against the Dollar and the Yen. While some analysts are still criticizing the Euro Zone bank stress test for being significantly “unstressful”, markets have continued to react positively to test results.  Moreover, risk appetite surged yesterday after a report showed a bigger-than-expected increase in U.S new home sales in June and FedEx Corp.’s boosted its earnings prospects, proving that the US economy is far from a double-dip recession scenario.

Today’s focus is on the U.S Consumer Confidence report, a major survey of 5,000 people that typically rocks the markets. Last month this key indicator plunged from 63.3 to 52.9 – reflecting the generally fear of a double dip recession. While analysts predicted another fall to 51.3 this time, the recent boost in investor confidence may has increased speculations of potential positive upside movement in the index.

EUR/USD

The Euro extended its rally against a weakened Dollar in this morning’s Asian session.  The single European currency successfully passed yesterday’s high, to touch on a new 5-day high of $1.3017.  The currency had since pulled back to around the $1.30 level. However, the EUR/USD is likely to remain in its current trading zone, or even go higher as some markets participants see a push towards the 1.3125 mark.  Fundamentally, the recent better-than-expected string of data coming from the Euro Zone, together with the overall positive reaction to the stress tests, could help the EUR/USD push for further gains.

GBP/USD

The Pound has also benefited from the recent increase in risk appetite, as yesterday’s rally pushed the British currency to appreciate more than 70 pips against its American counterpart.  The pair has since entered into a consolidation phase, and has remained range bound between 1.5477 and 1.5505 in this morning’s Asian session. Typically, a tight consolidation pattern potentially leads to a break out in either direction. While on the downside, the pair could find support near its 20-day moving average around 1.5260, on the up side a potential push towards 1.5650 seems unlikely.

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.

Source: ForexYard

The EUR once again reached above $1.30 on Monday after better than expected economic data from the US, and an advance in global equities, boosted demand for riskier assets. Gold continues to decline as market concerns ease and people turn away from safe-haven assets.

Economic News

USD – Dollar Declines on Renewed Risk Appetite

The US dollar declined against all of its major counterparts Monday following the release of better than expected US New Home Sales data. Combined with a boost in FedEx Corp.’s earnings, these two reports together have helped to raise demand for riskier assets. New US home purchases increased 24% from May to an annual pace of 330,000.

The Dollar depreciated 0.7% to $1.008 per EUR during today’s early Asian trading, from $1.2909 at the end of last week. The dollar fell to 86.86 Yen, from 87.46.

Looking ahead to today, traders are advised to follow the release of the CB Consumer Confidence at 14:00 GMT. Better than expected results on this report may intensify the greenback’s recent downtrend, especially since risk appetite will rise with a positive reading.

EUR – EUR and GBP Advance after Banks Pass Stress Tests

The EUR remained within its trading range as results from the stress tests continued to reassure investors. The common currency traded within a cent of the 10-week high of $1.3029 reached July 20; however, it has since returned to trade around $1.3015.

The EUR rose to ¥112.97, up from ¥112.11, after reaching ¥113.48, the highest level since June 3rd. The British pound also rose to $1.5490 from $1.5425 after briefly reaching above $1.55, the highest levels since late April.

The Pound advanced after a July 23rd announcement that HSBC Holdings Plc, Barclays Plc, Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc passed the European bank stress tests.

JPY – Yen Drops as Demand for Safe-Haven Currencies Diminishes

The Japanese yen fell versus all 16 major counterparts after the release of better than expected US New Home Sales data. The yen’s safe-haven appeal also diminished as global equities gained and boosted demand for riskier currencies.

The JPY is currently trading at 113.07 per EUR as of today’s early Asian trading, from 112.89 in New York yesterday, when it touched 113.48, the lowest since June 3. The yen is at 86.95 per USD, up slightly from 86.88.

Traders should follow the release of today’s economic data from the US and Europe as positive news will likely dampen demand for the yen further.

Crude Oil – Crude Remains around $79 a Barrel

Better than expected economic data from the US and advancing global equities helped support oil prices around $79 a barrel. Crude oil for September delivery traded at $78.85 a barrel, down 13 cents in electronic trading on the New York Mercantile Exchange

Oil seems to remain between $70 and $80 as future demand remains unknown and above average stockpiles are keeping Crude from breaching higher. For the time being, oil futures continue to trade on economic data as well as movements in equities.
Traders should follow the release of today’s US CB Consumer Confidence report at 14:00 GMT as better than expected results might help push oil prices closer to the $80 resistance level.

Technical News

EUR/USD

The price has broken out from the rising channel pattern on the daily chart for the second time; making a solid close above the upper line of the channel. A pullback into the channel pattern would signal a false breakout, as was the case last in last week’s trading. A rise to the 38.2% Fibonacci retracement level at 1.3110 would signal a confirmation of the breakout pattern.

GBP/USD

The pair rose as high as the resistance line of 1.5520, found the May high before falling back to close up at 1.5494. Momentum appears to be behind the price move as the 14-day Momentum indicator is sloping higher at 103, indicating further appreciation may be in store for the pair. The next significant resistance level comes in at 1.5820.

USD/JPY

The bullish correction the pair experienced in the later half of last week came to an end yesterday. The price rose as high as the 20-day simple moving average before heading sharply lower. The inability for the pair to breach this resistance level indicates a sharp downtrend in the pair. Traders should be short with a first target at the support level of 86.25.

USD/CHF

Shorter-time frame charts on this pair don’t seem to be hinting too strongly at an impending direction. The hourly and 4-hour Stochastic (slow) and RSIs show upward mobility, but have not yet entered signal territory. We can see, however, that the weekly chart’s Stochastic (slow) is giving off what appears to be a recent bullish cross. It seems upward pressure is mounting on this pair and we may see traders taking long positions as a result.

The Wild Card

USD/SEK

After a few days of trading sideways, this pair now seems to be giving off some clear buy signals. The 4-hour Stochastic (slow) appears to be approaching the beginning of a bullish cross, indicating future upward movement. The daily and weekly Stochastic (slow) also seem to indicate an impending bullish cross. The daily RSI also appears to be floating in the over-sold territory, indicating further upward pressure. Forex traders may want to take advantage of this information and enter a short-term long position on this pair for quick daily profits.

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 – Strong Asian economic numbers, and a renewed appetite for risk, pushed the Euro close to the 1.30 resistance level.  A break of 1.30 on a closing basis should lead to 1.3250.

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.

Good day forex friends! It’s been a long time since I last posted about FX but now I’m back! So here it is! In today’s canvas is an update of the EURUSD pair. As you can see from its daily chart, the euro has been recovering very well after it hit a low of around 1.1900 against the greenback back in June. Technically, the pair appears to have reversed already as evidenced by its breakout from an inverted head and shoulders pattern and its move past the long term downtrend line. While it is still quite possible for the EURUSD to turn south again, the chances of it moving higher, though, in my opinion, is now better than before. At present, the pair is trekking on an uptrend line. And as long as this line is left intact, the pair would most likely head higher. If it clears the 1.3000 resistance, it could aim for 1.3300. A break of the uptrend line, however, could send it back down to at least 1.2700.

Fundamentally, the expected increase in the GfK German Consumer Climate (from 3.5 to 3.6) and the probable hike in Germany’s as well as in the euro zone’s inflation figures could send the euro higher versus the greenback. Germany’s month-over-month CPI for July is seen to jump to 0.3% from 0.1% while the euro zone’s year-over-year consumer prices are also projected to rise by 1.7%, better than 1.4% logged during the previous month. The anticipated dip in Germany’s July unemployment rate (from 7.7% to 7.6%) could also send the euro higher. Given these projections plus the recent rally in the global markets, the confidence at least in the German market would have likely increased as well.

More on LaidTrades.com …

Hiyo peeps! On this post is the daily chart of the NZDUSD pair. As you can see, the pair has been generally trading sideways for the past several months now. Though for the past two months, it has been showing some promising upswings. After falling to a low of 0.6560 back in June, the pair has seen rallied all the way back to 0.7300. If only I was able to buy at June’s low, I would have netted about 740 pips already in just two months! Oh well. In any case, the pair now is approaching a critical resistance just above 0.7300. A failure to successfully clear this level could push it down near the short term uptrend line again which is somewhere around 0.7150. A break of the high just above 0.7300, on the other hand, could propel it to 0.7400, 0.7500, or even 0.7600.

On the economic front, it looks like the New Zealand dollar or the Kiwi would be on the bright side of things for this week. You see, on Wednesday at 9:00 pm GMT, the Reserve Bank of New Zealand (RBNZ) is widely expected that it would raise its interest rates from 2.75% to 3.00%. While there is still an outside opportunity that the RBNZ would surprise the markets by not raising its rates, the NZD would still move higher at least up until the release of the central bank’s decision. From today until Wednesday, the market still has a lot of time to price in the projected rate hike. The recent rally in the global equities as well due partly to the stellar corporate earnings in the US could also ease the market’s tentativeness.

In any case, as what I’ve mentioned, the RBNZ could also postpone its rate hike due to New Zealand’s weaker-than-expected retail sales figures. New Zealand’s headline retail sales only grew by 0.4% during the last month compared to the 0.6% consensus. The country’s core retail sales likewise tallied a dismal 0.2% dip. Moreover, the softer-than-anticipated quarterly CPI of 0.3% could likewise factor in the bank’s decision to hold any rate increases. So if the bank does not hike, then the Kiwi would most likely take a hit.

More on LaidTrades.com …

By ForexYard – Positive economic data as well as optimistic earnings reports published lately have boosted demand for riskier currencies, pushing the EUR back above the $1.30 level. Traders should continue following these indicators as a continuation of optimistic news will likely intensify the current trend.

Tody’s Leading Events:

6:00 GMT: EUR – GfK German Consumer Climate
14:00 GMT: USD – CB Consumer Confidence

Consumer confidence is a highly useful indicator as it lends insight into future consumption as well as manufacturing. The more people are confident about their future, the more they will be willing to purchase. Consumer spending accounts for a major part of economic activity; therefore, consumer confidence is a very valuable indicator.

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.

USDCHF trades in a range between 1.0394 and 1.0675. Another rise towards 1.0675 resistance is expected later today. As long as this level holds, the price action in the range is treated as consolidation of downtrend from 1.1730 (Jun 1 high), and another fall to 1.0300 is still possible, and a breakdown below 1.0394 could signal resumption of downtrend, only rise above 1.0675 could indicate that the fall from 1.1730 has completed at 1.0394 already.

Daily Forex Signals

By Elliott Wave International

If “fundamentals” drive trend changes in financial markets, then shouldn’t the same factors have consistent effects on prices?

For example: Positive economic data should ignite a rally, while negative news should initiate decline. In the real world, though, this is hardly the case.

On a regular basis, markets go up on bad news, down on good news, and both directions on the same news — almost as if to say, “Talk to the hand cuz the chart ain’t listening.”

Unable to deny this fly in the fundamental ointment, the mainstream experts often attempt to reconcile the inconsistencies with phrases like “shrugged off,” “defied” or “in spite of.”

That begs the next question: How do you know when a market is going to cooperate with fundamental logic and when it won’t? ANSWER: You don’t.

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Take, for instance, the first three news items below regarding the July 22 performance in crude oil, versus the fourth headline, which occurred on July 23:

1. Crude prices surge nearly 4% in their sharpest one-day percentage gain since May. The rally was “aided by fears that Tropical Storm Bonnie will enter the Gulf of Mexico over the weekend and disrupt oil production.” (Wall Street Journal)
2. “Oil Prices Soar As Gulf Storm Threat Looms” (Associated Press)
3. “The storm should keep oil prices bubbling if it continues to strengthen and remain on track.” (Bloomberg)

vs.

1. “Oil Slips From Surge Despite Storm Threats” (Commodity Online)

Unlike fundamental analysis, technical analysis methods don’t rely on the news to explain or predict market moves. They look at the markets’ internals instead.

Get FREE access to Elliott Wave International’s most intensive forecasting service for the global Energy markets. Now through noon Eastern time July 28, you can get timely intraday charts, forecasts and analysis for Crude Oil and Natural Gas. You’ll also get daily, weekly and monthly analysis and forecasts for all major Energy markets and Energy ETFs. Access FreeWeek now.

By CountingPips.com

The latest Commitments of Traders (COT) data out on Friday showed that futures speculators continued to decrease their bets for the U.S. dollar against the euro for a third week as of July 20th, according to the COT data released by the Chicago Mercantile Exchange. Non-commercial futures positions, those taken by hedge funds and large speculators, were net short the euro against the U.S. dollar by -24,251 contracts after being net short the euro by -27,050 contracts the week before on July 13th.

Euro short positions have now declined for three straight weeks and sentiment has turned around quickly in the past few months with euro short positions having come off the all-time low level of -113,890 in May to being now at the best level since January.

The COT report is published every Friday by the Chicago Mercantile Exchange (CME) and shows futures positions as of the previous Tuesday. It can be a useful tool for traders to gauge investor sentiment and to look for potential changes in the direction of a currency or commodity. Each currency contract is a quote for that currency directly against the U.S. dollar, where as a net short amount of contracts means that more speculators are expecting that currency to fall against the dollar and net long position expect that currency to rise versus the dollar.

The British pound sterling was the only other major currency in addition to the euro that was net short in the CME futures market against the dollar as of July 20th while the Australian dollar, New Zealand dollar, Japanese yen, Swiss franc, Canadian dollar and Mexican peso all had a net long amount of contracts against the dollar.

The British pound net shorts decreased for a second straight week to -26,767 short positions from a total of -34,671 that were reported net short on July 13th. The Swiss franc positions turned to net long a couple of weeks ago and edged higher to 15,113 long contracts from 14,590 long contracts and have increased for three straight weeks.

The Japanese yen  net long contracts dipped last week to 40,911 from 47,359 net long contracts on July 13th. This interrupts a streak of five straight weeks of increases for the yen but yen positions have risen substantially from being short by -65,612 contracts on May 4th.

The Australian dollar futures positions gained for second straight week and were net long by 32,886 contracts as of July 20th following a net 23,480 long contracts on July 13th. The New Zealand dollar futures positions rose higher for a fifth straight week with 8,973 long contracts this week after a total of 5,452 long contracts as of July 13th.

The Canadian dollar long positions declined to a net 16,424 long contracts after 22,038 net longs the week before while Mexican peso long contracts advanced for a second straight week to 35,886 longs from 28,135 longs the prior week.

COT Data Summary (vs. the US Dollar) as of July 20th, 2010

Euro: -24,251 shorts from -27,050
British pound sterling: -26,767 shorts from -34,671
Australian dollar: 32,886 long contracts from 23,480
Canadian dollar: 16,424 long contracts from 22,038
Japanese yen: 40,911 long contracts from 47,359
Mexican peso: 35,886 long contracts from 28,135
New Zealand dollar: 8,973 long contracts from 5,452
Swiss franc: 15,113 long contracts from 14,590

Go to the Commitment of Traders CME raw futures data

By Greg Holden – The euro has been losing ground against the Australian dollar (AUD) for more than a year now, but we have been seeing signs of a pause at the current level, near a price of 1.4500. Traders who were expecting positive news about a euro rebound, however, may be sorely disappointed. The current pause has taken the shape of a consolidation trend, or pennant formation, on the weekly chart.

The pennant formation is typically known as a pause in the market which occurs right before a continuation of the previous trend. It forms after a sustained trend is broken, but then the price is unable to continuously break out of the previous pattern and gradually consolidates towards a point (see chart below). Once the point is reached, the previous trend – in the case of the EUR/AUD, a downtrend – will continue as before since trader sentiment wasn’t able to support the breaking of the trend.

Technical Analysis

– The chart used here is the EUR/AUD weekly chart, provided by ForexYard.

– The indicators being shown are the Relative Strength Index and Stochastic (slow).

– Point 1 on the chart represents the long and steady downtrend experienced by this currency pair over the past year-and-a-half.

– Point 2 marks the consolidation point of the pennant formation. As we can see, the current price sits near the lower border of the pennant formation and we may expect an upward move before it reaches the tip.

– Out indicators are both showing gradual upward pressure which supports the notion that we may see an upward price move prior to the conclusion of the pennant.

– As an additional side-note, this morning’s release of the Australian Producer Price Index (PPI) showed a far worse-than-expected release of only 0.3% growth, and may be putting pressure on the AUD in the short-term, also supporting the notion of an upward movement in this pair throughout the next day or two.

EUR/AUD – Weekly 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.