GBPUSD stays in a trading range between 1.5535 and 1.5712. Another rise towards 1.5712 key resistance would more likely be seen later today, a break above this level will confirm that a cycle bottom has been formed at 1.5535 level on 4-hour chart, then another rise towards 1.5997 previous high could be seen. On the downside, below 1.5535 could resume the downward move from 1.5997, then next target would be at 1.5400 area.
By Adam Hewison – The early market action on Monday, August 16th, triggered a key weekly “Trade Triangle” to the downside. Our weekly “Trade Triangle” turned red, indicating that all trends are negative and now pointing lower.
In this new 90 second video I show you some of the scenarios we can see playing out for the S&P 500. I think you’ll find this new video informative and educational. You will also come to understand the power of our “Trade Triangle” technology.
To see more of Adam’s Videos click here or sign up for Adam’s Free 10-part Professional Trading Course.
All the best,
Adam Hewison
President of INO.com
Co-founder of MarketClub
By GCI Forex Research
Fundamental Outlook at 1400 GMT (EDT + 0400)
USD
The dollar weakened gradually during a quiet Asian session as investors looked ahead to today’s industrial production data out of the US. EURUSD traded 1.2804-1.2865 and USDJPY 85.12-85.44. Risk-seeking remained muted after US equities closed flat and Treasurys were bid, with lower yields across the curve. Disappointing Empire Manufacturing data and a surprise drop in the NAHB Housing Market Index did not help the dollar, though the Fed’s Senior Loan Officer Opinion Survey showed broad easing in lending standards. The survey noted that the easing in standards is still concentrated at large banks but there was improvement among smaller banks as well, which is important because small banks more often serve small businesses, where the credit crunch has been the worst.
Treasury TIC data showed foreign selling of US corporate debt and equities in June while Treasurys remained in demand. But Chinese holdings of Treasurys slid again in June, according to TIC data. That said, there has been decent US data as of late and industrial production and housing starts are up next. We could see some headline risk from the Treasury’s Housing Finance Conference, scheduled to begin at 1300 GMT, but chances of any follow-through could be limited right now given upcoming mid-term elections and with Congress out of session. Property market as well as industrial production data is due for publication today in the US. On the whole we are slightly more optimistic than consensus but it is questionable whether that will be sufficient to end the debate about a possible double dip. There is some indication that the sideways move in EUR-USD between 1.27 and 1.30 will continue today. The technical levels to look out for are 1.2730 at the lower end and 1.30 at the top end.
EUR
Peripheral sovereign spreads continued to widen ahead of Ireland’s EUR1.5bn auction of 2014 and 2020 bonds. That said, our fixed income strategists expect to see solid domestic demand given the small volume on offer, and the fact that an estimated 81% of Ireland’s 2010 issuance program is already complete. The latest ECB reports showed EUR10 mn in bond purchases in the last week despite speculation that the ECB had been buying a decent amount of Irish debt. The data includes purchases up to Tuesday of last week, for settlement on Aug 13, so investors will keep an eye on next week’s release to see if there was indeed any truth to the matter.
Eurozone CPI was slightly better than expected at -0.3% m/m, and 1.7% y/y. Core CPI came in at 1.0% y/y. The Eurozone and German ZEW surveys will be closely monitored for signs of softening as the recent Q2 GDP data likely marks the cyclical peak.
GBP
July CPI is expected to moderate again to +3.1% y/y (prev. +3.2%). Although the reading remains well above the BoE’s 2% medium-term target, Governor King has made it clear that near-term CPI strength would be looked through, and the recent Inflation Report confirms that inflation is expected to return to target in 2012.
We maintain our negative outlook on cable as the BoE will likely be forced to keep policy loose until well into next year to offset contractionary and disinflationary consequences of fiscal consolidation. Nevertheless there could be further gains versus the euro, as any escalation in Eurozone debt issues would lead to safe-haven Gilt inflows.
JPY
At USD-JPY prices around 85, possible interventions on the part of the Ministry of Finance and the central bank remain the main issue for the FX markets. Last week comments by Japanese officials explaining the effects of a strong yen on the Japanese economy had increased. According to the English language newspaper Nikkei there will be a meeting between Prime Minister Naoto Kan and BoJ governor Masaaki Shirakawa next week. Obviously the meeting will be about the yen. It seems to make little sense though that the Prime Minister and the governor of the central bank take one week to arrange a meeting. So this news item could be part of the increasing verbal interventions on the part of the government. Should verbal interventions not suffice to take the appreciation pressure of the yen we expect Tokyo to take action effectively. While yesterday’s GDP data suggested that foreign trade remained resilient there was not much good news from the inflation side of things. A further appreciation of the yen would aggravate this situation due to falling import prices. Due to the threat of interventions downward potential in USD-JPY therefore seems limited. Against this background we would advise against possible shorts.
TECHNICAL OUTLOOK
EURUSD BEARISH Momentum is negative; next support below 1.2604 lies at 1.2152 ahead of 1.1877 key low. Initial resistance at 1.2933 ahead of 1.3334
USDJPY BEARISH Next big support below 84.73 lies at 79.95. Near-term resistance at 87.15 ahead of 88.12
GBPUSD NEUTRAL Model is neutral; 1.5999 and 1.5324 mark key near-term directional triggers
USDCHF BEARISH Stalled above 1.0332; break of the level would open 1.0131 ahead of 0.9918 key support. Near-term resistance is defined at 1.0534 ahead of 1.0676
AUDUSD BEARISH Break of 0.8860 would expose next support lying at 0.8781 ahead of 0.8634. Near-term resistance comes in at 0.9035 ahead of 0.9389
USDCAD BULLISH While support at 1.0108 holds, expect the gains to target 1.0587 with scope for 1.0853 next.
EURCHF BEARISH Clearance of 1.3342 has opened up the way for another run towards 1.3074. Near-term resistance at 1.3451 ahead of 1.3665
EURGBP BEARISH Outlook is bearish; violation of 0.8068 would expose 0.7694 next. Short-term resistance is defined at 0.8266 ahead of 0.8363
EURJPY 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.
By Adam Hewison – We have had a number of folks on our blog asking us about upside targets in the gold market. Hopefully this short two minute video will answer those questions.
Our “Trade Triangle” technology flashed a buy signal on gold at $1,210.52 on August 12. Since that time the gold market has rallied some $15.
I think you’ll find this video on one of the most emotional markets in the world to be right on the money.
To see more of Adam’s Videos click here or sign up for Adam’s Free 10-part Professional Trading Course.
All the best,
Adam Hewison
President of INO.com
Co-founder of MarketClub
“Fed’s Bullard Raises Specter of Japanese-Style Deflation,” read a July 29 Washington Post headline.
When the St. Louis Fed Chief speaks, people listen. Now that deflation — something that EWI’s president Robert Prechter has been warning about for several years — is making mainstream news headlines, is it too late to prepare?
It’s not too late.
There are still steps you can take if deflation is indeed in our future. The first step is to understand what it is. So we’ve put together a special, free, 60-page Club EWI resource, “The Guide to Understanding Deflation: Robert Prechter’s most important warnings about deflation.” Enjoy this quick excerpt. (For details on how to read this important report free, look below.)
When Does Deflation Occur?
By Robert Prechter
To understand inflation and deflation, we have to understand the terms money and credit.
Money is a socially accepted medium of exchange, value storage and final payment; credit may be summarized as a right to access money. In today’s economy, most credit is lent, so people often use the terms “credit” and “debt” interchangeably, as money lent by one entity is simultaneously money borrowed by another.
Deflation requires a precondition: a major societal buildup in the extension of credit (and its flip side, the assumption of debt). Austrian economists Ludwig von Mises and Friedrich Hayek warned of the consequences of credit expansion, as have a handful of other economists, who today are mostly ignored. Bank credit and Elliott wave expert Hamilton Bolton, in a 1957 letter, summarized his observations this way:
In reading a history of major depressions in the U.S. from 1830 on, I was impressed with the following:
(a) All were set off by a deflation of excess credit. This was the one factor in common.
(b) Sometimes the excess-of-credit situation seemed to last years before the bubble broke.
(c) Some outside event, such as a major failure, brought the thing to a head, but the signs were visible many months, and in some cases years, in advance.
(d) None was ever quite like the last, so that the public was always fooled thereby.
(e) Some panics occurred under great government surpluses of revenue (1837, for instance) and some under great government deficits.
Near the end of a major expansion, few creditors expect default, which is why they lend freely to weak borrowers. Few borrowers expect their fortunes to change, which is why they borrow freely. The psychological aspect of deflation and depression cannot be overstated. …
Read the rest of this important 60-page Robert Prechter’s report online now, free! Here’s what else you’ll learn:
This article was syndicated by Elliott Wave International and was originally published under the headline Deflation: First Step, Understand It. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts lead by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
| Title: | EUR/USD – Down Trend |
| Story: | Trend is bearish in EUR/USD currency pair. EUR/USD is trying to print a possible bottom but in my opinion, intraday chart is providing corrective rally which should be considered as a short trading opportunity around Fibonacci retracement levels in EUR/USD. |
 | |
| Read Full Elliott Wave Forecast – Click Here…… | |
Neutral Trend
We need to see a close above (86.360) or below (84.910).. USDJPY is struggling in a battle between both market forces (bulls and bears) the instrument has a trading range to break. Any four hours close above (86.360) will open the way for a little push upward to test the resistance level at (86.630), and a four hours close below (84.910) will let the instrument test the next support level at (84.543).
| Important Price Levels | |||||
| Resistance | 85.650 | 85.960 | 86.330 | 86.630 | 86.970 |
| Support | 85.000 | 84.543 | 83.897 | 83.503 | 83.110 |
Market Analysis by 4xEagleEye.com
By Greg Holden – Norway’s central bank decided to leave interest rates unchanged last week, a decision which was broadly anticipated. Comments from Norges Bank Governor Svein Gjedrem seem to suggest that Norway’s economic growth and inflationary figures are on track with what they expected.
Since this key decision was made last week, the Norwegian krone (NOK) has steadily gained ground against its European and American rivals, the EUR and USD, respectively. Against the euro, the krone peaked just above 8.0000 before regaining its composure and climbing back to currently trade near 7.9060, almost a thousand pips higher since last week.
The USD/NOK tells a slightly different story. Following the bank’s decision to hold rates, the krone in fact experienced initial difficulty to gain strength against a broadly ascending US dollar. However, now that momentum has shifted somewhat, we see the NOK paring losses against the greenback. The pair climbed as high as 6.2286 last Wednesday before stabilizing. As of this morning, the USD/NOK has begun a steady decline and currently trades at 6.0815.
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 Yan Petters – For the past month, the USD/CHF pair range-traded between the 1.0350 and the 1.0650 levels, without marking a clear trend. Currently, after failing to drop below the 1.0350 level, the pair is testing the 1.0420 resistance level.
• The chart below is the USD/CHF 4-hour chart provided by ForexYard.
• The pair has recently failed to drop below the Fibonacci 0.0% retracement line, located at the 1.0350 level.
• At the moment, the pair is testing the 23.6% retracement line, located at the 1.0420 level.
• Technical analysis provides mixed signals at the moment, as the Slow Stochastic and the RSI suggest that the pair will rise further, whereas the MACD continues to provide bearish signals.
• Nevertheless, if the pair will manage to breach through the 1.0420 resistance level, it has potential to rise towards the 38.2% line, which is located at the 1.0465 level, and later on towards the 1.0500 level.
• If the pair will fail to cross the resistance level, it might drop back to the 1.0350 level.
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
Volumes were light during Monday’s trading as the yen climbed versus the major currencies. Japanese Q2 gross domestic product failed to meet market expectations, raising concerns over the pace of the global economic recovery.
The U.S. dollar was weaker across the board today as trading today began on a down note. Risk sentiment was sapped following disappointing Japanese GDP numbers.
The EUR/USD pair rose for the first trading day since the pair began a sharp correction last week. However, gains in the pair were reduced following the release of strong TIC long term purchases data. The report came in positive at 44.4B on expectations of 36.3B. But the added support was not enough to turn the tide of negative risk sentiment. The Dow Jones Industrials Average finished the day even.
Yesterday the EUR/USD closed up at 1.2820, from an opening day price of 1.2775. The GBP/USD was higher at 1.5650, after opening at 1.5573. The USD/CHF was significantly lower at 1.3090, from an opening day price of 1.0510 highlighting the lack of risk taking in yesterday’s trading.
Traders will be looking today for signs the global economic outlook is improving following the dismal GDP numbers from Japan. A slew of data is on the calendar for today’s trading. The major data releases from the U.S. will be monthly building permits and monthly PPI. Housing data has been bleak during the recent downturn in U.S. economic data. Tomorrow’s release of building permits may carry the same trend. The inflationary data will also be significant as talk of deflationary conditions in the U.S. economy take shape. Support and resistance for the EUR/USD come in at last night’s low of 1.2730 followed by the mid July high of 1.3030.
Yesterday’s trading saw the euro mixed versus the major currencies as a lack of fundamental data releases for the euro zone held the currency within its daily trading ranges. The lone data release for Europe was yearly CPI data which came in as expected at 1.7%. However, this data piece was not influential as most of the data was known to the market via previous data releases.
Both the EUR/USD and GBP/USD traded higher, receiving support on technicals as the pairs approached the trend line from the bullish moves that began in early June.
The Swiss franc was stronger in yesterday’s trading, moving as low as 1.0350. The pair has been range trading between the 61.8% (1.0600) and the 76.4% Fibonacci retracement levels from the last bullish trend that began in January and ended in June of this year.
Significant data releases are on the economic calendar from Europe today. Traders will be following yearly British CPI data to confirm or rebuke claims of stagflation in the British economy. Also on the calendar is German ZEW Economic Sentiment. Better than expected results could continue to boost the euro and the pound versus the dollar in today’s trading.
Japanese economic data started this week’s trading on a down note. Yesterday Japan released disappointing Q2 GDP to the tune of 0.1%. Economists had expected the Japanese economy to expand by 0.6%. The stagnant growth increases concerns over the pace of the global economic recovery.
Following the release of poor data, the yen strengthened on safe-haven buying. The USD/JPY fell as low as 85.20 before ending the day at 85.30. The pair was held above the support level of 85 on speculation that the Bank of Japan will intervene and begin selling yen in order to weaken the nation’s currency. The Japanese economy is dependent on its exports to fuel economic growth. A strong yen makes Japanese exports less competitive overseas.
More gains for the yen may be in store today should U.S. building permits be released to weaker than expected data. This could cause a similar run to safe haven assets and add further doubts as to the recovery of the global economy. Support and resistance for the USD/JPY rest at 86.30 and 85.00.
Spot crude oil prices continued their decline yesterday. Causing the drop in the price was weaker than expected Japanese GDP data and a slumping U.S. dollar. This was the 5th consecutive drop in spot crude oil prices. The recent declines have amounted to more than $5 in the value of the commodity.
The price of spot crude oil ended the day at $75.50, after opening the day at $75.62. The price reached a low of $74.86.
The low for the day coincides with the short t term trend line that begins on May 25th. This is the 3rd point of contact the price has made with the trend line, making this a significant trend line.
Resistance for spot crude oil is found between the current price of $75.50 and $76.00. A breach above $76 may be an opportunity to go long on the commodity with a price target at the next resistance level just below $80.
The EUR/USD saw a mild bullish correction yesterday and gained about 100 pips. At the moment, as a bullish cross takes place on the MACD’s 4-hour chart, the pair looks to rise further, with potential to reach the 1.2920 level.
After dropping consistently during last week’s trading, the cable saw a modest bullish move yesterday, and has peaked at the 1.5700 level. Currently, a bullish cross of the Slow Stochastic on the daily chart is suggesting that the bullish move might be elongated.
There is a very distinct bearish channel formed on the daily chart, and the pair is now floating at the middle of it. In addition, as all the oscillators on the daily chart are pointing down, it seems that another bearish movement could be expected, with a key target price of 84.50.
For the past month the pair has been trading within a restricted range, between the 1.0350 and the 1.0620 levels. The MACD and the RSI on the 4-hour chart currently provide bearish signals, suggesting that going short with tight stops might be a good strategy today.
For the past month the pair has resumed the bearish trend, and after dropping over 400 pips, the pair is now trading around the 0.8200 level. Currently, the 4-hour chart’s MACD continues to point down, suggesting that further bearishness might be expected. This might be a good opportunity for forex traders to join a very popular trend.
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.
