After consolidation, AUDUSD continues its upward movement from 0.8771 and reaches as high as 0.9622 level. Further rise is still possible in a couple of days and next target would be at 0.9700-0.9750 area. Key support is now at 0.9462, as long as this level holds, uptrend could b expected to continue. However, a breakdown below 0.9462 will indicate that a cycle top has been formed on 4-hour chart, then pullback to 0.9300 area could be seen to follow.
USDCAD’s downward move from 1.0672 extended to as low as 1.0191. Key resistance is now at 1.0378, as long as this level holds, downtrend from 1.0672 is expected to continue and one more fall towards 1.0107 support is possible next week. On the other side, the pair may be forming a cycle bottom at 1.0191 level on daily chart, a break above 1.0378 key resistance will confirm the cycle bottom and indicate that the fall from 1.0672 has completed, then another rise to re-test 1.0676 resistance could be seen.
For long term analysis, USDCAD formed a cycle top at 1.0852 level on weekly chart. Rang trading between 0.9930 and 1.0852 would more likely be seen in next several weeks.
(Note: This interview was originally recorded on September 20, 2010)
In the video below, Robert Prechter talks to Yahoo! Finance Tech Ticker host Aaron Task and Henry Blodget about extreme readings in various indicators that confirm his bear-market forecast.
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By CountingPips.com
Durable goods orders fell more than expected in August while new home sales were unchanged for the month, according to separate reports released by the U.S. Commerce Department today. New orders for durable goods orders declined by 1.3 percent or by $2.5 billion to a seasonally adjusted total of $191.2 billion in August. Today’s report follows a revised decrease of 0.7 percent in new orders for July and marks a third decline in the last four months. 
Contributing to the slowdown in orders was a 10.3 percent decrease in orders for transportation equipment.
Durable goods are assets that are generally considered to last more than three years.
Today’s data came in worse than market forecasts that were expecting durable goods orders to decrease by approximately 1.0 percent for the month.
New orders for durable goods, excluding transportation, came in better than expected and rose by 2.0 percent in August following a decrease by 2.8 percent in July. Market forecasts were predicting an increase of 1.0 percent in durable goods minus transportation.
Shipments of durable goods fell by 1.5 percent after two months of increases while unfilled orders fell by 0.1 percent. Durable good inventories increased for the eighth consecutive month with a rise of 0.4 percent. August nondefense orders for new goods declined by 0.9 percent and defense orders for capital goods fell by 1.5 percent to a total of $9.4 billion.
New Home Sales are flat after declining to a new low
New Home Sales in the United States were unchanged in August after registering a new record low level the month before, according to a separate report released by the Department of Commerce today. Purchases of new single family homes remained unchanged in August at an annual rate of 288,000 new homes sold. The July data originally showed an annual rate of 276,000 homes sold but was revised higher to 288,000. This revised number still remains the lowest level on record since the government started keeping records in 1963.
Market forecasters were expecting an increase by 6.9 percent in the monthly sales level for an annual rate of 295,000 new homes sold. On an annual basis, August’s rate of new homes sold was 28.9 percent lower than the August 2009 sales level.
Leading the decrease in August was a 26.1 percent drop in new homes sold in the the Midwest while the South registered a 10.8 percent decline in sales. Sales in the Northeast rose by 16.7 percent while the West saw an advance by 54.3 percent from July to August.
On an annual basis, all four regions had declining sales levels from the August 2009 period with the Midwest showing the largest decrease by 38.2 percent over that time. The Northeast’s annual sales level was down by 5.4 percent while the West is lower by 33.6 percent and the South is lower by 28.2 percent.
FOREX: US Dollar on the decline today, Stocks rising higher
The U.S. dollar has been mostly lower in forex trading today against the other major currencies while the U.S. stock markets have been higher by close to 2 percent for the day. The dollar has fallen today versus the euro, British pound sterling, Canadian dollar, Japanese yen, Australian dollar and the New Zealand dollar, according to currency data by Oanda. The Swiss franc is currently trading close to unchanged versus the American currency in forex trading action.
The U.S. stock markets, meanwhile, have gained sharply so far today with the Dow Jones rising by nearly 200 points, the Nasdaq increasing almost 50 points and the S&P 500 up by over 20 points at time of writing. Oil has advanced by $1.18 to $76.36 while gold has made a new record high today and edges closer to that $1,300 per ounce level with the current price at the $1,296.30 per ounce level.
By Adam Hewison – Here is a market that we like a lot more than the US market. We really
like the way its acting and it looks set to take out the highs that were
seen in December of 2009. If that is the case, then we could see this
market make all-time highs pretty quickly. You definitely want to have
this one on your radar screen.
In this new short video, I show you what I’m looking at and how we
showcased this market last week when we did our last webinar. This
webinar is set to be rebroadcast on Friday, September 24th at 5pm
EST/9pm GMT.
This market is still looking good and looking strong. Pay very close to
it this Friday because if it closes well, it should bode well for the
following week.
All the best,
Adam Hewison
President of INO.com
Co-founder of MarketClub
Hiyo FX peeps! Did I get your attention? Yes. I believe that its very likely that the EURUSD pair could gain by about 1,250 pips. Now that’s a lot! As you can see from its daily chart, the fiber has recently broken out from a very nice cup and handle formation. At present, the pair is trading just above the neckline of the pattern. With the stochastics in the overbought territory, it could exchange in a range-bound fashion for awhile before moving north. Now, a move past the 1.3500 resistance could send it on the way towards its minimum upside target (computed by projecting the height of the pattern from the point of breakout at 1.4750. If all go well, it could achieve this target in about 6 months which is also the time that it took to form the pattern.
Despite the recent dip in Europe’s Purchasing Managers’ Indices (PMIs), the business climate in Germany as measured in the German Ifo Business Climate Index surprisingly jumped to its highest score in more than three years this month. The index came in at 106.8 which is over the market’s 106.3 estimate. This rise indicates that German companies can withstand the weaker international demand. On the other side of the globe, in the US, the Fed’s inclination to place another set of stimulus programs to support the slowing growth in the US’s economy has of course weakened the greenback to the benefit of the other non-dollar currencies like the EUR. This plus the rally in the US equities markets have also urged investors to move away from the USD in exchange of the higher yielding assets and anti-dollars like the euro.
Just now, the US’s core durable orders for the month of August have grown by 2.0%, which is almost twice of the 0.9% forecast. The previous month’s change was also positively revised to -2.8% from -3.8%. These numbers signify that the chances of the earlier threat of a double dip recession in the US economy have gotten lesser and lesser.
For next week, the CB Consumer Confidence in September is seen to fall to 52.5 from 53.5. But given the strong rally in the global equities markets for the past two weeks which show the manifestation of consumer confidence in the markets, it is therefore possible for the index to have a better-than-expected result. A better-than-projected mark, as we know, could spur some risk taking and EUR buying.
More on LaidTrades.com …
Why Government Reports Aren’t the Only Indicators of Economic Health
By Jared Levy, Editor, Smart Investing Daily
When I am not traveling to New York City, Philly or Chicago, I work mostly from my home office. I tend to look out the window while I write and trade. I get a nice view of the Dallas skyline and trees, but I also have a fairly clear view of the neighborhood dry cleaner, whom I have been going to for many years. Over the past year, I have noticed the parking lot fairly empty and the drive-through window not as busy as it used to be.
Observing this for months, I thought I would visit Joseph, the owner of the dry cleaner (and friend), and ask how he was doing. Usually I just drive through and pick up and drop off my dry cleaning with one of his friendly staff and give Joe a wave, but this time, I wanted to know how Joe (and his business) was doing.
Joseph, who is young and extremely involved in his small — but usually busy and integral part of my diverse neighborhood — business, is a very personable and smart man who has his finger on the pulse of the local economy here in Dallas.
He has to, because in the dry-cleaning/alterations business, the profit margins are relatively low, which means that changes in flow of customers and/or articles of clothing can have a profound impact on business and this can happen in a relatively short period of time.
This dry cleaner serves a community of multimillionaires from Highland Park to college students from SMU and everything in between. The neighborhood has a large, dense base of young white-collar professionals, which is Joe’s bread and butter.
Joe mentioned that he has been in a lull for a while and mentioned that every day still, long-time customers of his are losing their jobs. He said this with a surprised and concerned look in his eyes. Always positive, Joe did mention that things seemed to be picking up, possibly as people go back to school and back to work after summer vacations.
He did agree when I asked if the average customer was increasing their wash/wear cycles, trying to get the most of that $1.99+ it costs to clean a garment. So maybe Americans do not smell as good in the recession as they did at the beginning of 2007 — that could be another economic indicator.
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Even though this anecdotal evidence may seem to have minimal merit when analyzing the health of the U.S. economy, it may actually have more credence than you think. Many of these Americans are on the front lines and have the highest sensitivity to changes in consumer health.
The web now allows us to watch and read news and data from all over the U.S. (and globe for that matter). While I always say that looking out your front door and talking to people can usually be the best way to gauge sentiment, you can also look at the headlines, blogs and editorials that are published in major cities around the country to see what it happening out there and make sure that it jives with data that is being released.
(Investing doesn’t have to be complicated. Sign up for Smart Investing Daily and let my fellow editor Sara Nunnally and I simplify the stock market for you with our easy-to-understand investment articles.)
How can you get a gauge on the health of the American consumer? We all hear about the unemployment rate, which can be misleading not only because of the different types (groups) of unemployment, but also due to changes in something called the “labor force,” which basically is the number of Americans ready, willing and able to work.
The unemployment rate helps give a very macro view, but here are two other points (among others) you will want to check up on:
Each and every month (around the 5th) the Federal Reserve releases a report on the total amount of consumer credit outstanding in America. Think about it as the total outstanding credit card and loan debt, which can be used to pay for everything from motorcycles and education to washing machines and cruises. If this number is declining, fewer Americans are borrowing and perhaps spending as well.
If this number is on the decline, chances are that credit is tight, either because of banks not willing to lend or consumers not having the credit or both. It could also mean that Americans are saving their money and paying off debt because they are scared of not having a job next week.
I have a feeling that right now, it’s a bit of all three. In July alone, revolving consumer credit decreased at an annual rate of 6.25%.
Consumer spending (incl. healthcare) accounts for about 70% of our GDP, so this data set is extremely important used in conjunction with consumer credit to gauge our fellow Americans’ fiscal health. This report is also combined with consumer income, so we can see how much the average American is earning. The last report showed that consumer spending rose 0.4% in July from the previous month, after staying flat in June. If you adjust for inflation, spending grew only 0.2%.
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That weak consumer spending number is not good because American businesses need the consumer to spend for them to survive, and what is even scarier is that in that same time frame spending actually outpaced the savings rate, which tells me that Americans are NOT earning enough and obviously many are still out of work.
President Obama addressed this in his town hall meeting on CNBC Monday, noting “the average middle-class American’s income dropped 5.1% from 2001-2009.” Unfortunately, for those Americans out of work or struggling, he offered no real immediate solution to this issue.
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About the Author
Jared Levy is Co-Editor of Smart Investing Daily, a free e-letter dedicated to guiding investors through the world of finance in order to make smart investing decisions. His passion is teaching the public how to successfully trade and invest while keeping risk low.
Jared has spent the past 15 years of his career in the finance and options industry, working as a retail money manager, a floor specialist for Fortune 1000 companies, and most recently a senior derivatives strategist. He was one of the Philadelphia Stock Exchange’s youngest-ever members to become a market maker on three major U.S. exchanges.
He has been featured in several industry publications and won an Emmy for his daily video “Trader Cast.” Jared serves as a CNBC Fast Money contributor and has appeared on Bloomberg, Fox Business, CNN Radio, Wall Street Journal radio and is regularly quoted by Reuters, The Wall Street Journal and Yahoo! Finance, among other publications.
Hiyo FX friends! Here’s my short and sweet technical view on the CHFJPY pair. As you can see from its daily chart, the pair has broken out from a rare inverted head and shoulders continuation pattern. You see, an inverted head and shoulders pattern is generally a bullish reversal pattern although it can occur as a continuation from time to time as in this case. In any case, the upside target for the pair, judging by the height of the pattern and projecting it from the point of breakout, would be somewhere below 88.00. Sustained buying interest could push it over to that marker. At present, though, the pair’s move up north could take a halt given its overbought condition. Given this, it is possible for the pair to range or even retrace for awhile. If ever it weakens, the neckline of the previous formation should keep it afloat. Still, I could more or less say that things are looking up for the Swiss franc in the near term. Long Swiss franc anyone?
More on LaidTrades.com …
By Russell Glaser – Price action combined with a Fibonacci retracement level that coincides with a big round number should serve as traders’ target for the GBP/USD.
Looking at the weekly chart, traders should notice a few things from the recent price action. The bullish correction from May to August made a 61.8% retracement of the previous bearish trend that begins at the height of the pair in August 2009. The pair failed to breach this level twice and fell back to the 38.2% retracement level at 1.5300.
Following the drop to the 38.2% level, the GBP/USD made a bullish engulfing candlestick pattern the previous week and closed just shy of the 50% Fibonacci retracement level.
Barring any surprises on Friday, we should get a close above the 50% Fibonacci level at 1.5635.
This will allow for a potential price move to the 61.8% Fibonacci level and a target at the height of the May to August move at 1.5600. Many traders are psychologically drawn to big round numbers and therefore will set their sights as well as take profit levels near this area.
Support levels can be found in a range near 1.5520 followed by the 38.2% Fibonacci retracement level at 1.5300.
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 GCI Forex Research
Fundamental Outlook at 0800 GMT (EDT + 0400)
USD
Yesterday was a quiet NY trading session. The EURUSD continued to experience downward pressure from both disappointing data and sovereign risk concerns. The Euro Area PMIs came in weaker than expected today. In addition, Q2 Ireland GDP was disappointing, driving the 10 year government bond yield spread between Ireland and Germany wider. Thus, the markets moved into slightly risk-averse territory. On the US data front, initial jobless claims bounced up to 465k from 450k for their latest weekly read. August existing home sales came in very close to the consensus estimate at 7.6% m/m and, as a result, did not prompt much of a USD reaction. Headlines reported that President Obama stressed to China’s Premier Wen the “need for China to do more” on the currency issue. Ahead today, President Obama will meet with Prime Minister Kan. USDJPY traded 84.26-84.67. EURUSD traded in a range 1.3303-1.3413. The S&P 500 finished down 0.83% and the DJIA was down 0.72%.
EUR
Mixed news from Ireland as two T-Bill auctions came in with strong demand, while GDP data was disappointing. Bid-Cover ratios on the Feb 2011 and April 2011 auctions were 4.08 and 11.7, respectively. This again follows the trend of bond and CDS spread widening in between auctions, while the auctions themselves show relatively strong demand. The Irish 10y-Bund spread reached an historical high overnight, widening 21 bps on the back of comments from the Director of Ireland’s National Asset Management Agency that the subordinated debt of a prominent Irish commercial lender lacked guarantees.
Ireland Q2 GDP figures were well below consensus of +0.5%, registering a quarterly decline of (-)1.2% and casting further doubt on Irish policymakers. Q1 growth was revised down on the back of this from 2.7% to 2.2%. Portuguese spreads followed Irish spread movements, also posting record highs of 400 bps.
The PMIs for the Euro Area came in under expectations. The September PMI composite came in at 53.8 vs. expectations of 55.7 and down from 56.2 in August. Euro Area PMI in the manufacturing sector came in at 53.6 after 55.1 previously — a significant decline. Euro Area PMI in the service sector came in at 53.6 after 55.9. Again, the result was lower than expected and a significant decline. Ahead Friday is the German Ifo.
.
JPY
USDJPY suddenly spiked 80 pips at 04:15 GMT. Vice Finance Minister for International Affairs Tamaki said he had no comment on whether Japan had intervened. Finance Minister Noda also declined to comment. Earlier, Japan Prime Minister Kan met with US President Obama. Although no official announcement was made after the meeting, that in itself was significant. Clearly, we have yet to hear any official condemnation of Japanese intervention from the fiscal or monetary authorities in the US, silence which could be interpreted as an implicit green light for further intervention.
TECHNICAL OUTLOOK
USDJPY rebounds towards 85.93.
EURUSD NEUTRAL There is scope for move towards 1.3509 and 1.3818 next. Near-term support comes in at 1.3268 ahead of 1.3159.
USDJPY NEUTRAL The pair rebounds towards 85.93 with scope for 86.70 next. Support holds at 84.05 ahead of 82.88.
GBPUSD BULLISH Following the break of 1.5729, expect gains to extend towards 1.5999 key high. Support is defined at 1.5503 ahead of 1.5297.
USDCHF BEARISH Break through 0.9933/18 region reinstates the bearish trend. Next support lies at 0.9786 ahead of 0.9625. Resistance at 0.9983 intraday high.
AUDUSD BULLISH Bounce-off from 0.8771 found resistance at 0.9600, psychological level, ahead of 0.9850 key high. Near-term support is at 0.9442 ahead of 0.9309.
USDCAD NEUTRAL Choppy action holds between 1.0108 and 1.0509.
EURCHF NEUTRAL 1.3391 and 1.2991 mark the key near-term directional triggers.
EURGBP NEUTRAL Upside potential held below 0.8609 ahead of 0.8774. Support defined at 0.8463 ahead of 0.8390.
EURJPY NEUTRAL Eyes 114.74 with scope for 116.68 next. Support holds at 110.66 ahead of 107.73.
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.
