Month: August 2010

By CountingPips.com

The U.S. dollar has been mixed in forex market trading today against the other major currencies while the American stock markets have dropped following the worse than expected weekly jobless claims report. The dollar has gained ground versus the Australian dollar, New Zealand dollar and Canadian dollar while losing ground against the Swiss franc, Japanese yen and British pound sterling in today’s forex trading action. The dollar is trading close to unchanged against the euro as the EUR/USD hovers near the day’s opening exchange rate at 1.2795.

The U.S. stock markets, meanwhile, have had a negative day today with the Dow declining by approximately 160 points, the Nasdaq decreasing by over 30 points while the S&P 500 is down by over 18 points at time of writing. Oil has moved lower by $1.18 to $74.24 per barrel while gold has advanced by $3.70 to trade at the $1,233.40 per ounce level.

Economic News: Jobless Claims climb

Today’s economic news schedule was highlighted by the US Department of Labor’s weekly jobless claims report that showed jobless claims came in at their worst number in nine months. Jobless claims increased unexpectedly in the week that ended on August 14th by 12,000 workers to a total of 500,000 unemployed workers. This marked the first time jobless claims had risen to 500,000 workers since November of 2009.

The 4-week moving average of unemployed workers increased by 8,000 workers from the previous week to a total of 482,500. Market forecasts were expecting weekly jobless claims to fall to 478,000 workers following the previous week’s 488,000 number of claims.

Workers seeking continuing claims for unemployment benefits for the week ending August 7th decreased for the week by 13,000 workers to a total of 4,478,000 unemployed workers. The 4-week moving average of continuing claims dropped by 1,500 workers to a total of 4,526,750.

Manufacturing activity dips

Released in a separate report today was the Philadelphia Manufacturing Index by the Philadelphia Federal Reserve that showed an unexpected decline for August in its business outlook survey. The Philly general business diffusion index fell to -7.7 in August after July’s score of 5.1. August’s negative level marked the lowest level for the manufacturing index in over a year. A negative score is considered a contraction in that area or sector while a positive score signals growth. The score for August fell more than predicted as economic forecasts were expecting a 7.0 score for the month.

Leading Indicators edge higher

The U.S. Leading Indicators Index, published by the Conference Board today, edged higher in the month of July by 0.1 percent. The Leading Indicator Index, which measures future economic activity, had registered a decrease of 0.3 percent in June. The monthly rise for July was just below market forecasts that were expecting a 0.2 percent increase.

By GCI Forex Research

Fundamental Outlook at 1400 GMT (EDT + 0400)

USD

On the Asian markets EUR-USD has been under slight pressure this morning trading at levels around 1.28. The currency pair seems to have been stuck in its range between 1.27 and 1.30 all week. Prices well above 1.30 seem to have felt excessive to some market participants while on the other hand the successful bond auctions in the Eurozone prevented a further depreciation of the euro. The data side is not providing any real momentum either. While no Eurozone data worth mentioning is due for publication today there is only second tier data due for publication from the US – the Philadelphia-Fed activity index as well as the Conference Board’s leading indicator. Weekly initial jobless claims are also unlikely to move markets notably.

EUR

The question remains which issues might provide stronger momentum for EUR-USD. The central banks are unlikely to provide anything much. Fed as well as ECB will leave rates unchanged well into 2011. Expected rate differentials are therefore unlikely to play a role for the FX markets. We would expect that US economic data might soon end fears of a double dip, which would eliminate one factor putting pressure on the dollar. In the Eurozone the subject of national finances might however become more virulent again. The consolidation efforts of the problem countries are considerable and in some cases even further advanced than originally expected, but the second phase of the savings efforts should begin soon. This phase is usually particularly painful. GDP data for Q2 illustrated that the economies of those countries which have to consolidate their national finances are under discernable pressure due to the savings efforts. Against this background internal pressures opposed to the savings measures are likely to rise. Increased protests and possible strikes are then going to illustrate once again that the European debt crisis is far from over. All these factors point towards lower prices in EUR-USD.

GBP

In fact the minutes of the BoE’s last meeting were rather unspectacular. As expected Andrew Sentance was once again the only member to vote in favour of a 25bp rate hike. A more expansionary monetary policy as well as a moderate tightening was discussed, but in the end the majority of members considered the current rate level to be appropriate. Sterling was nonetheless able to appreciate against euro and US dollar following the publication. Obviously some market participants had feared that the BoE might decide on further measures of quantitative easing. The minutes, however, once again confirmed that the BoE currently has a neutral monetary policy stance. Members were ready to response in either direction depending on how inflation and the economy develop. Against this background markets are likely to pay particular attention on economic data publications. July retail sales are due for publication today. Markets expect only a moderate rise in sales for July. We see potential for a positive surprise, which should support Sterling.

JPY

Japan’s Sankei newspaper reported that the BoJ is now thinking about easing monetary policy by extending its 3m fixed rate lending facility. The article suggested this could be done in one of two ways: either by raising the ceiling on the scheme from ¥20 trn to ¥30 trn, or by extending the maturity of the loans offered from 3m to 6m.

Speculation that the BoJ could call an emergency meeting today caused USDJPY to climb 25 pips, but most of the gains were relinquished when Reuters quoted unnamed sources saying that an emergency meeting was unlikely today. Finance Minister Noda repeated that he is watching FX moves.

TECHNICAL OUTLOOK

EURUSD NEUTRAL Sell-off from 1.3334 found support at 1.2734. Next support below the level lies at 1.2604. Initial resistance is at 1.2933

USDJPY BEARISH Focus is on 84.73 with next support lying at 79.75. Near-term resistance at 87.15 ahead of 88.12

GBPUSD NEUTRAL Model is neutral; while support holds at 1.5324, only a break above 1.5999 would confirm the resumption of bullish trend.

USDCHF BEARISH Sustained break of 1.0332 would open 1.0131 ahead of 0.9918 key support. Near-term resistance is defined at 1.0534 ahead of 1.0676

AUDUSD NEUTRAL Model is neutral; 0.9222 and 0.8860 mark the near-term directional triggers.

USDCAD NEUTRAL Remains constructive above 1.0108, resistance is defined at 1.0494 ahead of 1.0680

EURCHF BEARISH Clearance of 1.3272 would expose 1.3074. Near-term resistance at 1.3539 ahead of 1.3924

EURGBP BEARISH Focus is on the downside; expect loses to target 0.8167 with scope for 0.8068 next. Short-term resistance is defined at 0.8363

EURJPY BEARISH Trend is bearish; focus is on 107.32; move below the level would open 104.72. 111.57 defines the near-term resistance

Forex Daily Market Commentary provided by GCI Financial Ltd.

GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.

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.

Hiyo forex peeps! In today’s FX feature is an update on the US dollar index (please see my my previous post here). As you can see from its daily chart, the index appears to be poised for a break to the upside. Why? Well, the index has recently broken above its downtrend line and at present it seems to be forming and inverted head and shoulders formation. As you know, such formation is a bullish reversal pattern. Hence, a move above its neckline could send it all the way to 86.000 (minimum upside target as gauged by projecting the height of the formation from the point of potential break out). A failure to move past the neckline, however, could cause it to just trade sideways or even to fall back to its previous low at 80.085.

Well, the recent tentativeness in the global markets have caused a lot of investors to flee back to the safety of the greenback. Economic 101 states that a price of an asset goes up as a result of an increase in the… wait for it… demand. For today, the notable US economic release will be the country’s Philadelphia Fed Manufacturing Index for the month of August. While the index is projected to rise to 7.1 from 5.1, if you look at the previous results, for three months now it had fallen short of the market’s consensus. The US’s weak retail sales for July could have carried over to August as a result of the waning confidence in the markets. If this is so then there could be another flight of risk aversion which could lead the market back to the open arms of the USD. Watch out for its release at 2:00 pm GMT today!

More on LaidTrades.com …

By Russell Glaser – Examining the GBP/USD from different time frames shows a shift in the long term trend to the downside.

The weekly chart shows an uptrend that was capped close to 1.5960, close to the 61.8% Fibonacci retracement level from the 2009 August high to this year’s low in May. A bearish engulfing pattern from the previous week’s trading hints at further bearish movement in the pair. A tweezers top reversal also is apparent as the heights of the candlesticks differ only by 2 pips.

The rising trend line looks to be nullified if the GBP/USD will close below the trend line this week. This week’s high price reached as far as the trend line at 1.5700 where the price promptly fell. This resistance coincides with the low from October when the pair was caught in a range trading environment prior to the previous bearish trend.

Moving onto the daily chart, further signals appear hinting at a shift in the long term trend of the GBP/USD. For the last two days the pair has breached and closed below the rising trend line, signaling a shift in the direction of the trend. The 20-day exponential moving average has also turned to the downside, another sign that the trend is reversing from an uptrend to a downtrend.

Support levels are found at yesterday’s low for the day at 1.5500 (S1) followed by the 200-day exponential moving average line at 1.5390 (S2).

Resistance levels come in at this week’s high of 1.5700(R1) and the 61.8% Fibonacci retracement level at 1.5960 (R2).

Forex Market Analysis provided by ForexYard.

© 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 Finexo

Coming Up Today (all times GMT)

• GBP Retail Sales m/m. (8:30)
• USD Unemployment Claims (12:30)
• USD Philly Fed Manufacturing Index (14:00)
• USD Natural Gas Storage (14:30)

Amid continuing concerns that economic recovery is slowing, gold traded close to its seven week high as investors sought the safe haven investment. On the riskier side, equities closed flat and most currencies remained range bound. The US dollar fell against the yen, the Euro failed to breach $1.29, and the Canadian dollar gained.

EURUSD An optimistic outlook surrounded the Euro earlier this week due to an increased demand motivated by the German government’s bond auction and the single currency rallied to a $1.2930 resistance level. However, failing to hold firm above $1.29, Euro gains came to an end yesterday.

GBPUSD Recovering from a three week low the pound hit the day’s high 0.1% higher at $1.556. This followed the release of the minutes from the BoE’s Monetary Policy Committee meeting earlier this month.  The data released by the central bank showed an 8-1 vote keeping the interest rate 0.5%, with only one board member favoring an increase. The dissenting vote represented the view that economic conditions have improved sufficiently in the last year, therefore easing could be relaxed and interest rates could be gradually increased. Investors reported option related offers of $1.5660/90, which might limit the Cable’s gain.

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.

By ForexYard – The Japanese yen dipped against the US dollar on Thursday as jitters about whether Japanese authorities would take new steps to rein in the yen’s rise left investors reluctant to chase it higher.

Investors are watching to see if the central bank will take more monetary easing steps – such as expanding liquidity – ahead of a meeting between Prime Minister Naoto Kan and Bank of Japan (BOJ) Governor Masaaki Shirakawa expected next Monday.

Meanwhile, much stronger-than-expected UK retail sales data this morning lifted the British pound and helped the euro off earlier lows against the greenback, though lingering concerns about the health of countries on the euro zone’s periphery kept it in negative territory.

Forex Market Analysis provided by ForexYard.

© 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

After tumbling in afternoon trading yesterday, the EUR/USD continued to drop in overnight trading, reaching as low as 1.2780. Analysts attribute the drop to the euro’s inability to stay above the psychologically significant level of 1.2900. Today, the greenback could see some more gains against its European counterpart, should the weekly unemployment claims and Philly Fed Manufacturing Index show growth in the U.S. economy.

Economic News

USD – Dollar Pares Losses against Yen, Continues to Gain on EUR and GBP

After coming dangerously close to again hitting a 15-year low against the yen yesterday, the U.S. dollar appears to have made a steady comeback. The USD/JPY has moved up over 30 pips since yesterday afternoon, and is currently trading around the 85.50 level. Furthermore, the dollar has made substantial gains against both the euro and U.K. pound in overnight trading. The EUR/USD is currently down 50 pips since last night, while the GBP/USD is down around 30 in the same amount of time.

Analysts attribute the dollar’s recent gains to rumors that the Japanese government could soon move in to limit the pace of the yen’s growth. The yen has seen substantial growth as of late, which generally tends to damage Japan’s export driven economy.

Today, the dollar will have several opportunities to extend its gains. At 12:30 GMT, the weekly U.S. unemployment figure is set to be released. Analysts are predicting a slight drop in this week’s figure which, if true, would be a welcomed piece of good news for the U.S. economy. An unemployment figure at or below the predicted level of 478K will likely help the dollar maintain its bullish course.

At 14:00 GMT, the Philly Fed Manufacturing Index is forecasted to show further gains in the U.S. manufacturing sector. If the figure comes in as predicted, USD traders may have an excellent opportunity to make some real profits.

EUR – EUR Tumbles vs. Sterling and CAD

The euro fell against most of its main currency rivals throughout the day yesterday and into overnight trading. Investor confidence in the euro’s rival currencies, like the U.K. pound and Canadian dollar, was elevated by a series of positive news events.

The minutes of the most recent British Monetary Policy Committee (MPC) meeting, as well as news of a planned acquisition of a major Canadian company, caused both of those countries’ currencies to shoot up against the euro. The EUR/GBP has fallen about 50 pips in the last day, while the EUR/CAD has gone down over 100 pips in the same amount of time.

Today, analysts are forecasting that the euro will likely maintain its bearish trend, as there is a lack of impacting news events emanating from Europe. That being said, should either the British Retail Sales report, or the U.S. unemployment figure come in at an unexpected rate, the 16-nation currency may be able to recoup some of yesterday’s losses.

JPY – Yen Continues to Make Gains despite Rumors of Government Intervention

Rumors continue to circulate that the Japanese government will soon step in to limit the continued growth of the yen in recent weeks. The Japanese economy is largely export based. When the yen is valued at a high rate, Japanese products are less attractive to foreign buyers.

While the yen continues to make gains against its main currency rivals, it appears that the rumors may be having a slight affect on JPY pairs. The EUR/JPY has steadily gone up in overnight trading, and is currently at the 109.75 level. Similarly, the GBP/JPY has moved up some 60 pips in the last few hours and is trading around the 133.40 level.

Today, yen values will largely be determined by U.S. news events. The yen and dollar are both considered to be safe haven currencies, and the two usually move in a similar fashion. Should any of the news create risk aversion among investors, the yen may continue its profitable run in afternoon and evening trading.

Crude Oil – Oil Prices Continue to Climb Despite Inventories Report

Despite a higher than forecasted U.S. crude oil inventories figure, released on Wednesday, oil prices began rising again throughout yesterday and into overnight trading. Prices are currently up over 120 pips from yesterday’s low point before the inventories report was released. Analysts attribute the increase in price to the recent gains made in the U.S. equities market. Furthermore, with the peak of the hurricane season still ahead, demand for oil could still increase.

Today, any gains in the U.S. stock market will likely benefit the price of oil. Furthermore, if the news set to be published today shows any gains made in the U.S. economy, oil prices could increase further as a result.

Technical News

EUR/USD

The short-term bullish channel appears to have been breached recently and indicators are beginning to show a movement into corrective territory. The hourly and daily RSI indicators are both floating in the over-sold territory, and the daily’s Stochastic (slow) is moving up from a recent bullish cross. All signs see to be pointing towards an upward corrective movement. Going long may be preferable today.

GBP/USD

This pair continues to float in a short-term bearish channel with few indications for future direction at the moment. The daily RSI appears to show the price just entering the over-sold territory, but still moving downward. The daily Stochastic (slow) also has a very recent bullish cross. The pair seems to be clinging to its bearish momentum, but signals are indicating it could reverse at any moment. It may be worth waiting for this swing before going long.

USD/JPY

This pair has witnessed long-term bearish movements and, surprisingly, the technical indicators show little signs of stopping this directionality. In fact, the hourly chart has the price floating in the over-bought territory, and the 4-hour Stochastic (slow) may be developing a bearish cross in the near future. Going short continues to be the wise choice on this pair.

USD/CHF

This pair continues to float in a tightening range, consolidating towards the 1.0450 price mark. Short-term indicators appear to support future downward movement, but the weekly chart’s RSI and Stochastic (slow) show strong indications for bullishness. Momentum for this pair could be building for strong future upward moves. Going long may be the best strategy.

The Wild Card

AUD/CHF

This unique pair appears to be providing early indications of a solid upward movement. It may still be too early to call, but indicators on this pair are just entering the over-sold territory, and a recent bullish cross on the 4-hour Stochastic (slow) highlights the potential for an upward movement. Forex traders have a chance to take a gamble and bet on the continuation of the Aussie’s recent strength, with an upward target near 0.9600.

Forex Market Analysis provided by ForexYard.

© 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 Russell Glaser – The price of spot crude oil fell sharply today but managed to climb back following better than expected weekly inventory data from the U.S. government. Another bullish indicator hints to an end of the short term correction and a potential price appreciation in the near term.

Spot crude oil prices traded as low as $74.18 today as the drop in prices that began in yesterday’s New York trading session continued into today’s trading. Broad based selling was seen following yesterday’s negative report from the American Petroleum Institute (API). The API stated crude oil stockpiles rose more than expected. This sent spot crude oil prices tumbling into today’s trading.

Spot crude oil prices finished the day near the $75.55 level after opening the day at $76.02.

The falling prices continued until today’s release of the U.S. Department of Energy Administration weekly crude oil inventories report showed a smaller than expected decline in crude oil stocks. U.S. crude oil inventories declined by only 0.8M barrels while economists had forecasted a decline of 1.1M barrels.

The contrast in the two data releases may have contributed to the increased volatility in the price of spot crude oil. Spot crude oil traded in a range today of $1.92. The Average True Range (14) for the commodity is only $1.58.

Despite the high price volatility, the bullish trend looks to be intact as spot crude oil prices rallied on today’s positive inventory data. As the price came back from its lows today, a hammer candlestick pattern has formed. This may signal an end to the recent bearish correction.

Technical indicators show the price may be in line for further gains. The bearish correction failed to close below the short term rising trend line, signaling the bullish uptrend is still valid and the failed breach only serves to reinforce the importance of this trend line.

A buy signal is also shown on the daily chart. The Slow Stochastic oscillator displays a bullish cross, indicating the next move of the price may be to the upside. The last time a bullish cross appeared on the stochastic, the price of spot crude oil rose to close above the significant resistance level of $80.
Resistance for spot crude oil trading is found at $78 (R1), followed by 79.90 (R2), and the August high at $83. However, support should be adjusted lower to today’s low at $74.18 (S1), just below the rising trend line. Should the price close below this support level, it would signal a shift in the trend to the downside.

Forex Market Analysis provided by ForexYard.

© 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 consolidated as the dollar was slightly softer against most major currencies.  The EUR/USD is trading in a 2 big figure range between 1.2935 and 1.2740 and looking for an impetus for future movements. 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.