Month: August 2010

By Natalie R. – Last week’s trading session was characterized by the recovery of the U.S. dollar. The recovery took place as a batch of disappointing data from the U.S. economy has created speculations that a global economic recovery might be halted. As a result, the yen, which is considered to be a safe asset as well, strengthened, and energy prices, such as crude oil, dropped.

If the negative data will continue to dominate this week as well, these trends are likely to precede, especially the bullish dollar. Traders are advised to follow the major publications, mainly from the U.S. and the euro-zone.

Here are today’s leading news events:

• 09:00 GMT, Euro-zone’s Consumer Price Indices (CPI) – The CPI is the main gauge of the region’s inflation. If the end result will reach above expectations for 1.7%, the euro might strengthen as a result.

• 12:30 GMT, U.S. Empire State Manufacturing index – This is a survey of about 200 manufacturers in New York state, who are asked to rate their general business conditions. A positive data, above 8.1, might erase some of the dollar’s gains.

• 13:00 GMT, TIC Long-Term Purchases – This indicator measures the difference between foreign long-term securities purchased by U.S. citizens, to ones purchased by foreigners. If the end result will reach expectations for 35.3B, the dollar might strengthen further.

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

The U.S. dollar corrected looses against most of the major currencies during last week’s session, as data showed that global recovery might take longer than expected. This decreased risk-appetite in the market, and turned investors to look for safer assets, such as the dollar and the Japanese yen. Crude Oil prices also fell as a result. With a heavy news week ahead, this trend might extend if the economic publications will continue to provide signals for a slowdown in the global recovery.

Economic News

USD – Negative Economic Data Boosts the Dollar

The U.S. dollar rallied vs. most of the major currencies during last week’s trading session. The dollar gained about 500 pips against the euro and about 400 pips against the British Pound.

The dollar fell last week as a result of several disappointing publications from the U.S. economy. The U.S. Trade Balance, a report which measures the difference between imported and exported goods and services, showed that the U.S. trade deficit widened sharply to $49.9B in June, failing to reach expectations for a $42.0B deficit. In addition, the U.S. employment condition continues to deteriorate. The U.S. weekly Unemployment Claims showed that 484,000 peoples have filed for unemployment insurance for the first time during the past week, well above expectations for 465,000 individuals. This continued the negative employment data from the Non-Farm Payrolls publications which released a week ago. The negative data keeps investors cautious regarding their portfolios, and as a result increases risk-aversion in the market. This boosts the dollar, which is considered to be a safe investment. As long as the U.S. economy continues to provide negative signals the dollar may rise further.

As for the week ahead, many interesting publications are expected from the U.S. economy. Traders are advised to follow the Long-Term Purchases, the Building Permits, the Producer Price Index (PPI), the Unemployment Claims and the Philly Manufacturing Index. These indicators tend to have a large impact on the market, and each publication is likely to influence the dollar’s trading.

EUR – Euro Erases Profits as Data Shows Global Recovery May Take Longer Than Expected

The euro fell against most of the major currencies during last week’s trading session. The euro dropped about 500 pips against the U.S. dollar, and the EUR/USD pair is now trading around the 1.2790 level. The euro also fell about 450 pips vs. the yen and about 150 pips vs. the British pound.

Two main reasons led to the euro’s downfall last week. The first reason was the negative data from the U.S. economy. Data showed that the unemployment condition in the U.S. continued to deteriorate during the past week. In addition, the U.S. Trade Balance fell more than expected, and as a result created concerns that the recovery of the U.S. economy will take longer than expected, which will probably halt global recovery as well. This increased risk-aversion, and turned investors to close their long positions on relatively risky currencies, such as the euro and the pound.
The second reason for the euro’s drop is the dissipating data from the euro-zone. The European Industrial Production failed to reach expectations for a 0.7% rise in June, and has fallen by 0.1%. In addition, French Preliminary Non-Farm Payrolls saw merely a 0.2% rise during the 2nd quarter, failing to reach expectations for a 0.4% rise. The disappointing data has added to the uncertainty in the market, and as a result weakened the euro.

As for this week, the economic indicator which might have the largest impact on the euro looks to be the German ZEW Economic Sentiment. This is a survey of about 350 German institutional investors, who are asked to rate the economic outlook of Germany. A positive end result might initiate a correction for the euro against the major currencies.

JPY – Yen Strengthens Against the Euro and the Pound on Increased Risk Aversion

The yen appreciated against most of the major currencies during last week’s trading session. The yen gained about 450 pips against the euro, and about 350 pips against the British pound. Against the U.S. dollar the yen saw a volatile session without a clear trend.

The yen rose significantly last week, as disappointing data from the U.S. economy increased concerns that global recovery may take longer than expected. In addition, negative reports from the Japanese economy also contributed to the uncertainty in the market. The Japanese Current Account, which measures the difference between imported and exported goods and services rose to 1.36T, yet failed to reach expectations for 1.44T. In addition, the Core Machinery Orders rose by 1.6% in June, well below expectations for a 5.6% rise.
It currently seems that for as long that data from Japan, the U.S. and the euro-zone will indicate that global economic recovery might be halted, the yen, as safe-haven, is likely to strengthen as a result.

Looking ahead to this week, traders are advised to follow the major economic publications from Japan, the U.S. and the euro-zone, and to take under consideration that positive data might increase risk appetite, and as a result erase the yen’s gains from the past week.

Crude Oil – Crude Oil Falls To $75.05 a Barrel

Crude Oil is trading near a one month low, as a barrel of crude oil is currently trading around $75.70. A barrel of crude oil was traded for about $80 when last week’s trading took off, yet crude saw a sharp decline, and reached a weekly low of $75.05 on Friday.

Crude oil fell during last week’s session as negative data from the U.S. economy has created concerns that the world’s largest consumer of energy products will reduce its demand for fuel. Crude oil reached its monthly low following the disappointing U.S. Retail Sales. At the moment, crude oil continues to weaken as an early publication has shown that the Japanese economy has grown less than expected during the 2nd quarter, adding to concerned regarding a reduced demand for oil.

As for the week ahead, traders are advised to follow the main publications from the U.S and the euro-zone, as they usually have a large affect on crude oil’s trading. Traders are also advised to follow the U.S. Crude Oil Inventories report on Wednesday, as this report tends to have an instant impact on oil prices.

Technical News

EUR/USD

While the pair took a significant drop to close out last week’s trading, it has been fairly steady since markets opened. The Stochastic Slow on the daily chart indicates a bullish cross may form soon, typically a sign that upward movement could occur. This theory is supported by the Relative Strength Index on the 8-hour chart. Traders are advised to go long today.

GBP/USD

Despite some small price fluctuations in overnight trading, the pair is trading at the around the same rate as when markets opened for the week. That being said, the Slow Stochastic on the daily chart shows signs of impending upward movement. Traders may want to open long positions today, as bullish movement could take place.

USD/JPY

Following a steep drop in overnight trading, the pair now appears to be trading in neutral territory. With most technical indicators not showing a clear indication of where the pair could be moving, traders may want to take a wait and see approach with their positions today. A clearer picture could present itself in afternoon trading.

USD/CHF

With no strong price shifts recorded in overnight trading, most technical indicators are not showing a clear direction for the pair at the moment. That being said, market volatility is expected later today, so traders will want to pay close attention to both the Bollinger Bands and Relative Strength Index on the 4 and 8-hour charts for any signs of movement.

The Wild Card

S&P500

The CFD has seen a steep drop in value over the course of the last week. That being said, the Slow Stochastic on the daily chart and the Relative Strength Index on the 8-hour chart both show the S&P trading in oversold territory, meaning an upward correction is likely today. CFD traders may want to go long today in order to capitalize on a potentially lucrative price shift.

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 – Equity markets retraced this week as investors returned to the risk off trade. Prices of riskier currencies, along with petroleum and grains retreated as investors absorbed a number of economic data points that where softer than expected. For the week, the S&P 500 Index declined by 43 points or 3.85 percent.

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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.

USDCHF stays in a trading range between 1.0461 and 1.0624. Support is at 1.0461, as long as this level holds, another rise to re-test 1.0675 key resistance is still possible, a break above this level will indicate that the fall from 1.1730 (Jun 1 high) had completed at 1.0331 already. On the other side, a breakdown below 1.0461 could trigger another fall towards 1.0331 previous low.

Daily Forex Forecast

By Mark Nicholas – Investment in the foreign currency market, more generally called as forex trading, used to work as off-limits to of retail traders. Until recently, forex trading was kept for experts at huge investment financial institutions, protect money plus central banks.

Although now, any trader who really wants to understand ways to take part in the foreign currency market. Of course, that doesn’t mean forex trading system is meant for all.

To make sure, there are compelling reasons to think about forex trading for investment option. Firstly, the market is not closed twenty four hours a day, seven days a week, enabling someone to buy and sell while the Asian markets open if you’re thus inclined. Next, forex broker agents recommend a substantial amount of leverage, meaning you are able to start an account with simply some 100 bucks plus have the authority to trade a much larger amount of cash. Third, the forex market is the most liquid financial market in the world. Daily an abundance of funds changes hands in this market than the entire world’s equity plus bond markets combined.

Although this really is often known as a trader’s market and not all investor is a trader. Luckily, there’s a approach to obtain your forex fix without being chained with a computer. Exchange-traded funds are the best way meant for investors to achieve contact with many currencies without needing to trade considering the every day volatility of the forex market. Let’s go looking at a few of the significant forex Exchange-traded funds investors must know about.

PowerShares DB US Dollar Index Bullish ETF (NYSE: UUP) With the forex world, the dollar still rules the roost. That makes UUP essential – know among currency Exchange-traded funds, from it mirrors the dollar’s performance. UUP is one of most liquid currency Exchange-traded funds on the market with normal each day buying and selling quantity of over 4.7 million shares. This is an important consideration since many currency Exchange-traded funds are lightly traded, even a few that track most important currencies.

UUP tracks the U.S. Dollar Index, measuring the dollar’s strength in contrast to the euro, the British pound, the Japanese yen, the Canadian dollar, the Swedish krona and the Swiss franc. Buyers also needs to be alert of UUP’s bearish equivalent, the PowerShares DB US Dollar Index Bearish ETF (NYSE: UDN), if a quick dollar place is most appropriate.

CurrencyShares Euro Trust (NYSE: FXE) The euro, employed by 16 European nations with financial giants France as well as Germany, is the next most heavily traded currency following at the U.S. dollar. The euro is seen as a dangerous asset than either the dollar otherwise yen, so when the market’s appetite for risk is high, the euro in general outperforms other most important currencies.

The other holds true too: traders flee most unstable currencies at the time risk appetite wanes. Luckily, FXE has a well-liked bearish counterpart that should also be on your list of currency ETFs: The ProShares Ultra Short Euro ETF (NYSE: EUO).

WisdomTree Dreyfus Emerging Currency ETF (NYSE: CEW) Investment in rising market equities may be difficult , but investing emerging market currencies can be downright risky. It can be probably better for most investors to have exposure through an emerging currency ETF such as CEW. CEW invests in various currencies that can be considered conservative emerging market plays, such as Brazilian real, Chinese yuan plus Indian rupee. However CEW’s other constituents, including Chile, Hungary, Israel, Malaysia and Mexico, form this an ETF worth a look for all those eager to include considerable risk to their portfolios.

PowerShares DB G10 Currency Harvest ETF (NYSE: DBV) DBV focuses exclusively on developed market currencies. DBV is comprised of the futures contracts in 10 different currencies, together with the euro, yen, Australian dollar, Canadian dollar, pound, franc plus Norwegian krone. Note that DBV does not calculate the strength of U.S. Dollar relative to its other holdings. Rather, the Dollar is in basket of ten currencies tracked by DBV.

CurrencyShares Australian Dollar Trust (NYSE: FXA) The Australian currency is generally known as a commodity currency, which means its value has a strong correlation to the price of commodities – in this instance gold. History has revealed that while gold rates move higher, the Aussie dollar typically follows in step. Which means traders know how to indirectly profit exposure to gold through having FXA. Another reason to consider FXA is the general keenness of Reserve Bank of Australia to raise rates of interest – superb news for investors holding Australian dollars.

CurrencyShares Canadian Dollar Trust (NYSE: FXC) The Canadian dollar is one more commodity currency. Also known as loonie, the Canadian dollar has a historical correlation to crude oil costs since Canada is one of major crude producers in the world. Actually, the Canadian oil sands region is believed to carry one of the leading oil reserves outer the Middle East. Oil has a major influence on Canada’s economy plus, in turn, on the value of loonie. Consider FXC as a backdoor play on oil rates, especially as oil companies may be planning to move operations from the Gulf of Mexico since offshore drilling becomes more regulated.

About the Author

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What’s up forex peeps?! Welcome to another day of forex trading! We have the EURUSD in today’s fx pick. As you can see from its 4-hour chart, the EURUSD or the fiber came crashing in yesterday’s trading. After reaching a new 3-month high just above 1.3300. , the euro slid, breaking the pair’s uptrend line in the process. In less than a week, the fell by more than 400 pips against the greenback! Ouch! At present, the pair is trading just below 1.2900 and since the next obvious support is still somewhere within 1.2800 and 1.2700, it still have some room to move lower. If the support here gets taken out, beware as the pair could fall all the way to 1.2500! But given its recent drop and its oversold condition, it can also range or even retrace as sellers pocket some of their profits.

Fundamentally, the slide in the the euro was caused by several factors. The weaker-than-expected retail sales (17.9% versus 18.5%) in China damped the confidence of the market. You see, a 17.9% is not really weak but apparently the market is expecting a lot from China. Why? Well, China is now the number 2 biggest economy in the world and a robust figure in its retail sales could mean business for all its trading partners. The number 3 economy, Japan, also failed to impress with only a 1.9% jump in its machinery orders, lower than the 5.6% forecast.

The Bank of England and the US Federal Reserve worsened the situation further by saying that risks are still present in their respective economy.

As a result, risk aversion in the broader market made a comeback, leading investors to flee to the safety of the greenback. Stocks, as well as currencies like the euro, as a consequence, were sold off.

The highlight of today will be the release of the US’s unemployment claims for the week ending July 31. Initial jobless claims are seen to be at 465,000, lesser than the 479,000 tallied the week before. Now, lesser jobless claims could ease the markets while a worse count would more likely extend the losses. Watch out for its announcement today at 12:30 pm GMT.

More on LaidTrades.com …

TGIF! Welcome to another day of FX trading. In today’s chart is an update of the US dollar index (USDX) that I presented the other day (please check it here). Back then the index was still moving within a descending channel. My thinking was, it would continue to move lower since the channel was still intact. The index, however, broke above the resistance of the channel in yesterday’s price action. Now, will it start to trade on higher ground? Maybe. However, it could still move south or sideways given the lack of a reversal pattern (double bottom, cup and handle, inverted head and shoulders,etc.). So if it weakens again, it could fall back to the 80.000 area. A potential bearish divergence, where the price moves lower and the stochastics move higher, suggests this possibility.

Several key economic releases today will be critical for the USD’s short term valuation. Later at 9:00 am GMT, the euro zone’s second quarter flash GDP will be reported. Euro zone’s economy is seen to have expanded by 0.7% in the second quarter on top of the 0.2% gain during the first saga of the year. But given Germany’s better-than-expected 2Q GDP score of 2.2% (vs. 0.5%), an upside is likely in the broader euro economy since about a third of the euro zone’s total production is from Germany.

The US’s retail sales and CPI figures in July plus the University of Michigan consumer sentiment index in August can cause some volatility. the US’s month-over-month core CPI and headline CPI in July are seen to be at 0.1% and 0.2%, respectively. Retail sales on the other hand, are projected to have to gain by 0.5% after dipping by the same rate in the previous month. Furthermore, consumer sentiment in August is anticipated to reach 69.4 from 67.8. So if any of these accounts comes in at least in line with expectations or better, the market’s fear can be eased thereby causing a consolidation or even a rally in equities and the non-dollar currencies. Worse than projected results, on the flip side, can be positive for the USD given yesterday’s risk aversion-dollar movement.

More on LaidTrades.com …

By GCI Forex Research

Fundamental Outlook at 0800 GMT (EDT + 0400)

USD

The dollar weakened ever so slightly versus much of the G10 as investors wait for more data to help clarify the global economic outlook. Stocks in Asia are broadly flat at the time of writing and US equities finished modestly negative. Gold has managed to hold onto yesterday’s gains immediately after US jobless claims disappointed, and touched a high of $1217.23/oz. US data disappointments, such as the latest jobless claims, are not helping risk appetite and investors will scrutinize the next wave of consumer-related data, with retail sales, CPI and the University of Michigan consumer confidence index due today. While US data needs to stabilize to calm investors, the relative data discrepancy between the Eurozone and the US might recede after the upcoming Q2 Eurozone GDP print, as ECB President Trichet acknowledged that the second half will not be as robust as Q2. There is still appetite for the dollar as a safe haven, at least relative to the euro and sterling, and there are certain dollar asset classes such as corporate credit, which remain attractive, though the latest Fed actions have investors treading more cautiously.

EUR

Over the past two months we had the impression that the market participants on the EUR-USD market suf-fered from similar symptoms. EUR-USD seemed dominated completely by US news. The debt crisis in Greece and other peripheral countries seemed forgotten just as its cyclical and struc-tural consequences. And while we consider about 2/3 of the euro recovery during that period to be justified (due to the fact that the FOMC seems to increasingly resemble a dovecote) 1/3 of the recovery from levels below 1.19 that is still present is due to this neglect of the markets. The symptoms seem to be improving slowly though. Yesterday the fact that an ECB poll among forecasters had resulted in deteriorating growth prospects as well as the surprisingly negative GDP data from Greece received surprising levels of attention – despite the fact that the change in the forecaster’s view was marginal and the surprisingly bad GDP data from Greece was counterbalanced by an upward revision of the previous quarter. If those suffering from neglect symptoms remain in remission one would have to expect that EUR-USD should find support from Eurozone data today. After all the GDP data is likely to come in slightly above analysts’ expectations and is very probably going to illustrate a strong Q2. But some care is required when predicting the effects on EUR-USD. First of all it seems to be generally expected that analysts’ expectations are exceeded – certainly when listening to the latest market comments. And moreover the problem of the Eurozone has never been ag-gregate growth but the problem cases. Strong growth in Germany or Finland is not going to help. The US data is more likely to provide support for EUR-USD, as retail sales are due for publica-tion today. For years the US consumers were the driver of the global economy. But the double dip prophets are of the view that they will remain inactive for years to come thus preventing a sustainable recovery. Our economists expect that this pessimistic view might be dented today. First available June data suggests that retail sales recorded a notable rise last month. That might create the impression that everything will be alright in the US while the problems in the Eurozone remain. From a fundamental point there is very little reason today for a continuation of the EUR-USD trend seen over the past few days.

JPY

The verbal interventions relating to the yen are gradually becoming stronger. Yesterday Minister of Finance Yoshihiko Noda let slip that there had been G7 consultations on civil ser-vant levels about the exchange rate developments. Japan would not really need outside help for interventions. The BoJ should be happy for every yen it creates in liquidity. But from another point of view coordination among G7 members would be necessary: It would remove the dan-ger of criticism from the US, in particular the US Congress. For that reason suggestions of this nature are important. But Noda’s comments were not the only intervention. Central bank gov-ernor Masaaki Shirakawa pointed out once again that the exchange rate developments and their effects on the Japanese economy were being observed carefully. And when Noda then pointed out he would communicate closely with Shirakawa that rounded things off completely. Yesterday’s comments are at best gradually stronger than previous Ministry of Finance and central bank comments. But their effect was nonetheless spectacular. According to general market conviction USD-JPY trades in the danger zone if it falls below 85.00, a fact that caused stronger verbal intervention in November. As a result small steps on the part of the Minister of Finance and the governor of the central bank have a particular effect. As a result hardly any-body is likely to have an appetite for a renewed attempt on the danger zone today. But that makes it increasingly difficult to justify JPY longs. Also from a fundamental point of view there are clearly no reasons for a USD-JPY exchange rate below 85.00.On the contrary: GDP publications next week are likely to be negative again. As a result Prime Minister Naoto Kan’s government is likely to once again face demands for additional fiscal policy stimulation. From a fundamental point of view all reason for an upward correction in USD-JPY. We expect prices around 87 in USD-JPY in the foreseeable future, and prices around 88 by year end.

TECHNICAL OUTLOOK

EURUSD BEARISH Move below 1.3024/1.2929 opens door for a run towards 1.2737. Initial resistance at 1.3070 ahead of 1.3334

USDJPY BEARISH The pair currently holds support at 84.73, a break here would leave little support till 79.95. Near-term resistance holds at 87.15 ahead of 88.12

GBPUSD NEUTRAL Recent pullback slashed through 1.5665 support thus exposing 1.5324. Initial resistance is defined at 1.5999 ahead of 1.6458 key high

USDCHF NEUTRAL Remains heavy below 1.0676 keeping our focus on the downside. Support holds at 1.0332 ahead of 1.0131

AUDUSD BEARISH Pullback from 0.9222 eyes 0.8896 with scope for 0.8634 next. 0.9389 marks the key resistance level

USDCAD BULLISH Model has turned bullish with upside gains initially capped at 1.0587 ahead of 1.0853. Near-term support comes in at 1.0303 ahead of 1.0108

EURCHF NEUTRAL Break of 1.3511 enhances the chances for another run towards 1.3074. Near-term resistance at 1.3665 ahead of 1.3924

EURGBP BEARISH While resistance at 0.8363 holds, expect loses to target 0.8068 with scope for 0.7694 next

EURJPY BEARISH Sustained break of 110.02 favors another bearish run towards 107.32. 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 CountingPips.com

U.S. retail sales reversed two straight months of decline and increased in July by a little less than expected, according to data released today. Advance estimates of retail sales showed that sales rose by 0.4 percent to a total of $362.7 billion in July following a revised decrease of 0.3 percent in June, according to the report by the U.S. Commerce Department.

The retail sales results were just under than the 0.5 percent increase for July that the market forecasters were expecting. The July sales gain reverses two consecutive months of decline in sales that had followed a string of seven consecutive monthly sales increases through April.

On an annual basis, the July sales level was by 5.5 percent higher than the July 2009 level following an annual gain of 5.2 percent in June.

Core retail sales, excluding automobile sales and parts, rose by 0.2 percent in July after core sales declined by 0.1 percent in June. On an annual basis, core sales increased by 4.9 percent in July from July 2009 following an annual gain of 4.6 percent in June.

Contributing to the increase in retail sales numbers for July was a 1.6 percent advance in motor vehicle and parts dealer sales while gasoline station sales increased by 2.3 percent for the month. Also showing increases for the month were miscellaneous store retailers with a rise of 0.8 percent, nonstore retailers with a 0.2 percent gain and an increase by 0.2 percent in food services & drinking places.

Negatively contributing to retail sales last month were clothing and accessories stores (-0.7), general merchandise stores (-0.2), food & beverage stores (-0.3), clothing & clothing accessories stores (-0.7) and electronics & appliance stores (-0.1).

Consumer Confidence, Consumer Prices rise

In a separate data release today, consumer confidence edged higher for the month of August, according to the preliminary report by the University of Michigan/Reuters for August. Consumer confidence rose to a 69.6 score in August from a 67.8 score in July. The preliminary score surpassed market forecasters that were expecting a 69.0 reading for the month.

Consumer prices also rose in July to reverse three straight months of declines, according to the separate report by the US Department of Labor released this morning. The consumer price index rose by 0.3 percent in July following a 0.1 percent decrease in June. On an annual basis, the consumer price index rose by 1.2 percent over the July 2009 level. July’s monthly increase was just a bit higher than market forecasts that were expecting a 0.2 percent increase for the month.

Core consumer prices, excluding food and energy, rose by 0.1 percent in July and increased for the third straight month. On an annual basis, core consumer prices have risen by 0.9 percent over the July 2009 level. Contributing to the higher consumer prices for the month was a 2.6 percent gain in the energy index. This was the first increase in the energy index since January as gasoline prices helped boost this index with an increase of 4.6 percent in the month.

US Dollar mixed in Forex Markets

The U.S. dollar has been trading mixed in the forex markets against the other major currencies after today’s U.S. retail sales release. The American currency has gained ground today versus the euro, Swiss franc, Australian dollar, New Zealand dollar and the Japanese yen while losing ground to the Canadian dollar. The dollar has been virtually unchanged so far today against the British pound sterling.

The U.S. stock markets, meanwhile, have been slightly negative in the early going today with the Dow Jones decreasing by over 20 points, the Nasdaq down by approximately 10 point and the S&P 500 is lower by over three points just before noon in the U.S. trading session. Oil has edged lower by $0.38 to the $75.36 level while gold has dipped by $1.80 to stand at the $1,212.50 per ounce level.

EUR/USD Weekly Chart – The Euro declining this week versus the US dollar in Forex trading following six consecutive weeks of higher closes. The EUR/USD price is trading very close to the 50.0 percent fibonacci level around the 1.2780 exchange rate (on the decline from April 12th at the 1.3691 to June 7th low at 1.1876) and right above the rising trendline that started on June 7th low.

By Anton Eljwizat – A bullish move in the USD/DKK cross hasn’t received much support as of late. Below, I will demonstrate that the USD/DKK pair has already commenced a downward trend for today, and the cross may tumble another 200-300 pips during the day. Traders are strongly advised to take advantage of the trend at an early stage. Therefore, why not open short positions at an excellent price?

• Below is the 8-hour chart of the USD/DKK currency pair.

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

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

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

• Point 3: The Williams Percent Ranges signals further bearishness for the pair, which in turn indicates further downward pressure to occur anytime soon.

USD/DKK 8-Hour Chart

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.