Month: October 2010

Good day to you my Forex friends! Guess what?!?! The Australian dollar has recently marked a new historical high over the US dollar. And from the looks of it, it seems that the AUDUSD pair has still a lot of legs left to move higher. As you can see from its 8-hour chart, the pair has been trading on a well defined uptrend for quite some time now. Earlier this week, the pair opened with a bullish gap though this move was invalidated when it fell below the bottom of the gap. Nonetheless, the tide has even turned for the better now as it formed and then broke out from an ascending triangle formation after moving past its previous all-time high at 0.9849. Gauging from the height of the pattern, the pair could run upwards by at least 150 pips more from 0.9900, bringing the 1.0000 marker in sight. As long as the uptrend holds, the Australian dollar would most likely reach parity with the greenback in the near term.

Recent talks of more money printing scheme (quantitative easing) by the US Federal Reserve has reflected negatively on the USD. Fed Chairman Ben Bernanke earlier stated the possibility of another round of quantitative easing or the printing of more money in layman’s term to support the economy by encouraging the public to borrow and to spend. Aiming to reduce the daily market lending rate by increasing the money supply would of course lessen the dollar’s valuation.

Based on the latest survey, retail sales and inflation figures in the US are expected to remain subdued. If these numbers remain flat over the next with the country’s labor market staying weak as well in the succeeding months then it is quite possible for the Fed to indeed do as it is suggesting now.

More on LaidTrades.com …

During today’s trading, USD/CAD briefly broke parity for the first time since April and the AUD/USD pair is nearing parity. The USD also declined to a record low versus the CHF today, as well as to a new 15 year low versus the Japanese yen. The recent negative sentiment regarding the greenback is due to bets the Federal Reserve will increase purchases of government debt, i.e. quantitative easing as soon as their next meeting in November. The release of today’s weaker than expected data only strengthened the case for further monetary easing. 

The number of Americans filing first-time applications for unemployment benefits unexpectedly increased last week. Jobless claims rose by 13,000 to 462,000 in the week ended Oct. 9. This indicates that though the economy is not likely to go to a double dip recession, the recovery is much slower than hoped and will take longer to recover than anticipated. The prospect of a prolonged unemployment rate around 10% is one of the main reasons the Federal Reserve is considering extending monetary easing policies.

Further bad news came from the trade deficit numbers, which showed the deficit widened more than forecast in August. The deficit with China reached a record level for the month as imports climbed. Irritation in the U.S and Europe grows as China is restraining the Yuan to aid exports; friction over exchange-rate and trade policy dominated discussions at the IMF’s annual meeting in Washington this month.

Tomorrow Federal Reserve Chairman Ben Bernanke is expected to speak about the future of the monetary policy. The FOMC committee is currently divided on how to proceed with its monetary policy. While some expanding its asset purchases program, others feel that it may not have much effect on the unemployment levels in the long run. While it is very likely the Fed will indeed resume asset purchases in the near future, the biggest question is how much. The current expectation, in light of the dismal economic data being published recently, is for a substantial amount. However, considering the level of disagreement among the FOMC members, the numbers may prove to be much smaller than expected, which will ultimately give the USD a much needed boost.

By Chris Vermeulen
www.TheGoldAndOilGuy.com

Oct 14th
Its been an interesting week with stocks, commodities and currencies having a knee jerk reaction to the FOMC minutes released Tuesday afternoon. In short the Fed clearly said there must be more quantitative easing before things will get better. It was this news which triggered a rally in both stocks and commodities.

Quantitative easing is a fast way to devalue the dollar and the Fed is doing a great job at that. As long as the dollar continues to decline the stock market will keep rising.

This week kicked off earning season with INTC and JPM beating analyst estimates. We usually see the market trade up the first week of earnings and then start to sell off by the end of earnings season. Both INTC and JPM sold off on strong volume today despite the good earnings and today’s broad market rally. This just goes to show the market has not forgot about buy on rumor sell on news… The big/smart money sold into the morning gaps exiting at a premium price. Is this foreshadowing for what is to come?

Take a look at the chart below which shows the falling dollar and how its helping to boost stocks and commodities.

While earnings season is trying to steal the spot light in the market, the fact is everything for the past 2 months has been about the US Dollar. If you put a chart of the dollar and the SP500 together they trade almost tick for tick in reverse directions. The amount of money getting pumped into the market cannot last and it will lead to a huge volume reversal day in due time. Until this happens the market will trade higher.

Taking a look at the SPY daily chart the 5, 10, and 14 simple moving averages tend to act as buy zones. The market was choppy from April until about 2 months ago. Now we are seeing the market smooth out and traders are switching to more of a trend trading strategy and not so much looking for extreme sentiment levels which typically signal short term tops and bottoms. Focusing on buying at these moving averages has been providing good support thus far. Stops should be set on a closing basis, meaning if the market is to close below the moving average then exiting the position is a safe play. It’s always best to layer your stops (scale out) in trending market. So stops below the 5, 10, 14 and even the 20ma will provide you with enough wiggle room to riding a trend.

Mid-Week Trading Conclusion:

In short, we are in a strong uptrend and until we get a major reversal day, buying the market is the way to go. The market as we all know is way over bought so if you decide to take a position on your own, be sure to keep it small. I would also like to note that financial stocks were the worst performing on the day so that could be telling us there could be some profit taking in the next day or two.

Chris Vermeulen
www.TheGoldAndOilGuy.com

By Zachary Scheidt, Editor, Taipan’s New Growth Investor and Velocity Trader, TaipanPublishingGroup.com

To put it bluntly, the case for buying gold right about now is as obvious as the nose on Barbra Streisand’s face.

This past Friday, gold futures closed at $1,345 an ounce – the second highest gold price on record. Goldman Sachs just announced that they are raising their 12-month target price on the shiny metal to $1,650 an ounce, citing that the “return of quantitative easing is likely to continue to be [a] strong catalyst for gold.”

I’m sure you’ve heard all of the commentary about how excessive printing has the potential to eventually destroy the U.S. dollar (and other paper currencies as well). That’s exactly why we have been seeing the price of gold skyrocket over recent months. The fears are all being realized and investors are in a full-fledged flight to safety.

Rising prices in precious metals are not lost on anyone. Not on institutional investors, not on sovereign wealth funds (SWFs), not on the Federal Reserve, and certainly not on individual investors.

Heck, you can’t even turn on the TV anymore without some guy yelling at you to buy gold coins. And quite honestly, he’s RIGHT! Gold is one of the best ways to protect the purchasing power of your hard-earned savings.

But there’s another very important reason why you should be buying gold now, today, while you still can…

Government Gold Hoarding Disguised As Healthcare?

Remember all that fuss about the healthcare reform bill? And all that talk about transparency and honesty?

Well, here’s the cold, hard truth: The bill is chock-full of side agreements and hidden clauses – most of which are extremely damaging to business and commerce.

As my regular New Growth Investor readers know, I’ve had a special focus on the healthcare sector for quite some time.

So I kept close tabs on all the reform hoopla… and I took personal interest in carefully reading the new bill. I wasn’t surprised to find hidden loopholes.

But I was surprised at what I found buried deep in section 9006.

One of the clauses that some (well meaning, I’m sure) congressman managed to fit into the bill is a statement that allows for the taxation of anyone wishing to sell more than a certain amount of physical gold.

This measure makes it easier for the Fed to track what gold assets you own – ultimately leading to what some believe could be restrictions on what precious metals you are and are not allowed to hold.

(By the way, I’m guest editing Smart Investing Daily today… but regular editors Sara Nunnally and Jared Levy always make investing simple with their easy-to-understand investment articles.)

History Repeats Itself

Did you know that only a few generations ago it was actually illegal to own physical gold?

Under President Franklin D. Roosevelt, a law was passed that actually allowed the government to confiscate physical gold. If U.S. citizens did not turn in their precious metal, they faced a fine and up to five years in prison.

The clause in the new healthcare reform bill could conceivably pave the way for the government to track, tax and eventually restrict an individual’s right to buy, sell or even OWN physical gold.

Why would the government enact this kind of regulation?

Because if consumers lose faith in the value of the U.S. dollar – and begin using precious metals as currency once again, it would completely obliterate the current power that the Federal Reserve has in regulating currency.

Gone would be the power to inject liquidity into the market, gone would be much of the ability to tax the population (after all, taxing in worthless dollars wouldn’t be very beneficial), gone would be the financial control that the government has over the broad economy.

Buy Gold Without Government Intervention While You Still Can!

The gold clause buried in section 9006 of the healthcare reform bill looks like a lot of tax mumbo jumbo to the untrained eye. I think that’s why you aren’t hearing about the ramifications of it from the talking heads on CNBC yet.

But the result in plain English is that now all sales and purchases between citizens of over $600 must be filed with the IRS.

With gold over $1,200 an ounce, that means every gold bar, every gold coin. The most popularly traded gold coin, the American Eagle, costs over twice the $600 ceiling.

And in 2012, when the new rules take effect, the IRS will be able to catalog the private gold holdings of American citizens. Every gold transaction will pass under the watchful eyes of the government.

Scary, huh?

That’s why I’m telling everyone who will listen that they need to stock up on gold now, while the government is still out of the picture. Because come 2012, that will all change.

Publisher’s Note: If you hear the price of gold is likely to more than double, your instinct is likely to buy gold, right? But what if I showed you an investment that rallied nearly 12 TIMES the amount that gold rallied during the last bull market in gold?

In fact, today Zach has three investment recommendations for you that should make many times the coming increase in the price of gold. Get your copy of his free report here.

Don’t forget to follow us on Facebook and Twitter for the latest in financial market news, investment commentary and exclusive special promotions.

About the Author

Zach Scheidt is the Editor of Taipan’s New Growth Investor and Velocity Trader, two of Taipan Publishing Group’s financial research investment newsletters. Zach’s experience as a hedge fund manager has given him the skills to manage sizeable investments of a number of private investment partners and develop advanced investment strategies to make the highest returns possible.

For Taipan’s New Growth Investor, Zach researches and profiles innovative new companies capable of creating long-term wealth regardless of the state of the stock market. He focuses on high-yield dividend stocks and provides simple long-term investment strategies. For Velocity Trader, Zach carefully scans thousands of stocks, looking for companies that have the potential to make huge stock price moves. He then uses option trading strategies to identify short-term investment opportunities for significant gains.

By Thomas Bainbridge – Markets across the globe are on the up, which is somewhat surprising considering that the talks surrounding Basle III have managed to potentially deliver a memorandum for disaster.

Generals have a tendency to fight the last war and both the central banks and finance ministers seem to be as blinkered as the WWI commanders in their conviction that ‘one big push’ will win the war. In their desperate attempts to avoid a repeat of 2008/2009, law makers risk creating an even poorer situation.

Unfortunately for the indebted nations of the West, we need the banks to be as imaginative as possible in order to get lending going again, however this appears to be the last thing on their agenda.

Senior management of financial institutions are committing a massive amount of their time on regulatory issues and capital is now being stretched even further. Can you imagine any other sector utilising such a scarce resource so unproductively without complaint?

As Simon Denham of Capital Spreads recently remarket, “Apologies, but increasing cash requirements for almost all risks, then forcing an increase in required capital levels by relation to a different criteria (share capital) is not going to lead to increased lending.

“However banks will probably be relieved that our Lords and Masters did not come out with something worse than Basle III”.

The damaging effect of what is going on may have started to show through in the UK’s trade figures. They had a gloomy look about them: 1) they were terrible, 2) the visible deficit was £1 billion larger than was expected and 3) the invisible surplus was £500 million worse than anticipated.

Is this an indication that, with tax rates so hugely out of line with those elsewhere in the world and overheads now far higher in the UK than in comparably more stable parts of the globe, that financial business is starting to leave these isles?

If London loses its European superiority, the consequences for the UK could be grim. However Basle III is just the start. When will the regulators learn that letting politicians anywhere near financial regulation is just a disaster waiting to happen?

The concept that bans on short selling (in spread betting, CFDs etc) or central reporting of positions are in any way stabilising decisions is simply whimsical. The majority of UK companies already report every single equity trade to the regulators. The fact is that the regulators are swamped by data. Multiply this by every state in the European Union and you have a considerable problem.

Banks spend tens of millions on computer systems to process the data that they, alone, create. Can you imagine the processing programme that would be necessary to take every single derivative trade from every financial institution in the European Union? And then it has to be processed.

For all the forecasts of fiscal catastrophe it might be sensible to bear in mind that Britain and America will actually make money from their investments in the financial sector.

The permitted demise of the Lehman Brothers, whether incautiously engineered or not, was the real failure as it exposed every financial institution to the possibility of contagion.

In the UK, the failure of Northern Rock also appears odd in hindsight. It could be argued that it was not the financial institutions that should be placed with the blame for the events of 2008/2009, but the ‘lenders of last resort’ ie it was the central banks that reacted too late to events.

About the Author

A leading financial author based in the heart of London’s Canary Wharf. Thomas Bainbridge is a respected commentator on the financial markets including the Financial Spreads markets.

By Greg Holden – The US dollar has continued to plummet against most of its currency rivals this past week, with some now saying that a round of quantitative easing has already been priced in by speculators. The Canadian dollar has also been falling versus many of its currency counterparts, but interestingly it is reaching towards a 6-month high mark against the greenback.

In the chart below we can see that the USD/CAD pair has been falling for the past few months, but trading somewhat flat for the past half-year between 0.9960 and 1.0600. As the price approaches the 23.6% support level on the Fibonacci, traders should be able to determine the direction of the pair by its trading behavior over the next few days.

Other technical indicators seem to suggest an impending upward correction to the pair. The RSI on the chart below has the price just entering the over-sold region, suggesting a build-up in upward pressure. The Stochastic (slow) also appears moments away from a bullish cross, which supports the notion of an upward move.

So long as no major fundamental news causes a shift in value for either currency, the pair may likely see an upward correction after bouncing off the 0.9960 price level. Long-term buy positions appear to be beneficial for USD/CAD traders.

USD/CAD – Weekly 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.

By Russell Glaser – When it comes to inflation, the US stands pale in comparison to its rivals across the pond in Britain.

Given the loose monetary policies that have been in place since the beginning of the financial crisis in 2007, the US and British economies are in two opposite positions when dealing with inflation. But much of the same discussion is occurring in both central banks as to when another round of quantitative easing will occur. This may be fitting for the US, but disastrous for the UK.

Today and tomorrow the US will release two key inflationary data pieces. Today will see the release of PPI with an expectation of a measly rise of 0.2%, while the previous month showed an increase of 0.4%. Tomorrow will bring core CPI data which is forecasted to rise by only 0.1%. Last month core CPI was unchanged at 0.0%.

The lack of inflation in the US is a troubling sign that could lead to deflation and stagnant growth in the US economy. Therefore, the Fed is preparing another round of quantitative easing. This appears to be no longer a question of if, but when. The goal of this second parlay of asset purchases by the Fed is to stimulate not only the US economy but also increase inflation. This comes in stark contrast to the British economy which has been unable to reign in inflation.

Following Tuesday’s inflation numbers from the UK, Britain appears to have runaway inflation. British CPI climbed by 3.1%, which was in line with expectations. But core CPI, which doesn’t take into account the highly variable costs of food and energy products, climbed by 2.7%, above expectations for a rise of only 2.6%.

This bout of inflation may have been caused by loose monetary policy by the Bank of England (BOE) in their fight against the economic downturn.

But despite the rising inflation numbers, new discussions are appearing in the British media of another round of quantitative easing by the BOE to stimulate the UK economy, similar to their US counterparts at the Fed. This could lead to UK CPI rates in the range of 4%.

Typically currency traders fear inflation, unless it comes with expectations of rising interest rates along with it. Given that an increase in interest rates could stymie the tepid 1.2% growth in the UK economy, the BOE will most likely not raise interest rates anytime soon. Therefore, it appears the pound could be a fundamental sell following any rally in its value.

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

The dollar weakened across the board.during the Asia session, with the latest bout of weakness brought on by a further round of tightening by the Monetary Authority of Singapore. The euro and the yen made strong gains, and the Australian dollar approached, but did not reach, parity before retreating. EURUSD traded 1.3949-1.4094, USDJPY traded 81.17-81.90, and AUDUSD traded 0.9892-0.9982.
Asia stocks rallied through the session, with the Nikkei 2.1% higher at the time of writing, despite the stronger yen. Richmond Fed President Lacker said inflation is now on target as far as he was concerned. He added that he would probably not support more easing if economic conditions remain as they are. Lacker does not currently have an FOMC vote, and is not due to receive one until 2012.There were no top-tier 1 US economic data releases. However, import prices fell -0.3% (cons: -0.2%) in September after a +0.6% gain in August. Jobless claims due later will likely be the key focus today, ahead of Fed Chairman Bernanke’s speech on Friday entitled “Monetary Policy Objectives in a Low Inflation Environment”.
EUR

ECB Governing Council Member Nowotny said that the ECB’s sovereign bond buying program has been effective in the past when it was needed, and should not be disbanded too soon, as it “makes sense” to use it as a “safety belt”. His remarks come after fellow Governing Council Member Weber yesterday called for the program to be discontinued.
Nowotny also warned that unilateral steps on FX matters could be detrimental to the world economy. At 7.9% (cons. 7.5%, prev. 7.1%) and 1.0%, cons. 0.8%, prev. 0.0%) industrial production for August was released above expectations.
JPY

Finance Minister Noda repeated that Japan is closely watching FX moves. Economics Minister Kaieda said that the stronger yen is driving down sentiment significantly.
GBP

At 5.3k (cons. 5.0k, prev. 2.3k) claimant count in September rose broadly in line with market expectations. Average weekly earnings were released at 1.7% (cons. 1.6%, prev. 1.5%). According to our economist the only notable news is that labour earnings are gradually picking up. Latest data will unlikely have any major impact on the MPC.
BoE MPC member Sentance maintained his hawkish stance, saying that gradual rate increases constituted the right policy and would not endanger a pick-up in the economy.

CHF

In Switzerland, September producer and import prices fell 0.1% m/m (cons. 0.1%m/m) and rose 0.3% y/y (cons. 0.4%, prev. 0.5%). According to our economists lower import prices have been key in driving the headline reading lower. In Sweden, and according to the Swedish Public Employment Service, the unemployment rate rose in September to 8.3% from 8.1% in August.

TECHNICAL OUTLOOK

EURUSD clears 1.4045.
EURUSD BULLISH Recovery through 1.4045 exposes 1.4194 and 1.4371 Fibonacci resistance. Support at 1.3775.
USDJPY BEARISH The pair targets 79.75 with scope for 77.91 next. Resistance holds at 83.03 ahead of 83.99.
GBPUSD BULLISH Move above 1.6018/69 would trigger further gains towards 1.6276. Support at 1.5670 ahead of 1.5503.
USDCHF BEARISH Outlook is bearish; break below 0.9500 exposes 0.9225. Resistance at 0.9729 ahead of 0.9918 breakout low.
AUDUSD BULLISH Pressure on 1.000 psychological resistance; a break here would expose 1.0166. Support at 0.9834 ahead of 0.9709 reaction low.
USDCAD BEARISH Sharp decline targets 0.9931 ahead of 0.9820. Resistance at 1.0106.
EURCHF BULLISH Upside potential held at 1.3494 ahead of 1.3665. Initial support lies at 1.3265 ahead of 1.3072.
EURGBP BULLISH Break of 0.8808 exposes 0.8894 and 0.9039. Support holds at 0.8689 ahead of 0.8563.
EURJPY BULLISH Clearance of 113.26 exposed 110.66 support, but overall outlook is bullish with resistance at 115.68 ahead of 116.68 Fibonacci 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.

Source: ForexYard

The US dollar tumbled against a wide range of currencies Thursday, hit by continued weakness ahead of expected easing by the Federal Reserve, and quickly accelerated by a surprise decision by the Monetary Authority of Singapore to tighten its monetary policy.

Economic News

USD – US dollar Drops after Singapore News

The US currency marked a 10-month low against a basket of currencies on Thursday, coming under broad selling pressure after Singapore widened the trading band of the Singapore dollar, letting its currency hit a new record high.

At a semi-annual meeting Thursday morning, the Singapore central bank surprised many economists by effectively tightening its policy with an increase in slope of its Singapore dollar NEER band, at the same time maintaining its policy of modest and gradual appreciation of the Singapore dollar. Traders said selling in the greenback picked up momentum after the Monetary Authority of Singapore’s (MAS) move.

The dollar also fell 0.6% against the Japanese yen to hit a fresh 15-year low of 81.28 yen, despite constant wariness about Japanese intervention. While traders think Japan could intervene to keep the yen in check at any moment, some market participants speculated that Tokyo may prefer to avoid intervention ahead of the G20 meetings.

Still, some market players have said that financial markets may have already priced in quantitative easing by the Federal Reserve early next month and that the dollar’s decline may have soon run its course, in which case, any move by the Fed could significantly raise the USD’s value.

EUR – Euro Rises to 8-Month High

The euro rose to an 8-month high against the US dollar on Thursday, in a move one trader said might be spillover from Singapore’s central bank tightening of monetary policy. The euro jumped 0.9% to $1.4086, after rising as far as $1.4095, its highest in more than eight months.

The euro also gained 0.2% against the British pound to 88.23 pence yesterday. The euro may extend gains versus the pound after surpassing 88 pence for the first time since May on speculation the European Central Bank (ECB) will tighten monetary policy before the Bank of England (BOE) does, according to economists.

The euro is the top-performing currency in the past month, beating its major trading partners with a 4.3% advance. And now, as the euro has broken above key technical resistance at $1.4050, it may now trend as high as $1.4300 in coming weeks, according to analysts.

JPY – Yen Hits 15 Year Peak

The Japanese yen rose to its highest price level in 15 years versus the US currency before reports this week may fuel speculation that the Federal Reserve will ease its monetary policy further in order to support prices.

The dollar/yen cross dropped to 81.28, the weakest since April 1995, and traded at 81.32 yen, from 81.81 yesterday. While traders think Japan could intervene in the forex market to keep the yen in check at any moment, some participants speculate that Tokyo may prefer to avoid intervention ahead of the G20 meetings this weekend.

Crude Oil – Oil Gains on Rising Global Demand

Crude Oil prices snapped a 2 session losing streak to close higher Wednesday, on the heels of increased forecasts for world oil demand and a weaker dollar.

Oil climbed for a second day, rising 0.9 percent to $83.77 a barrel , ahead of a meeting of the Organization of Petroleum Exporting Countries (OPEC) today at which the group is expected to keep production unchanged and urge increased adherence to output quotas.

The price of crude in recent months has meandered between $75 and $85 a barrel, although it has been heading higher as the US dollar continues to soften.

Technical News

EUR/USD

It appears as if the Bollinger Bands on the 4H chart have begun to tighten in expectation of a volatile movement. Most indications show the pair floating in neutral territory, which is common before a large jump. However, the hourly and daily MACD all show bearish crosses, suggesting that a level of downward pressure does exist. Going short may be today’s preferable strategy.

GBP/USD

The price of this pair appears to be floating in the over-sold territory on the 4-hour RSI, suggesting upward pressure. The bullish crosses on the hourly MACD support this notion. With an impending bullish cross on the daily Slow Stochastic, the upward movement may be confirmed. Going long could prove to be a wise choice today.

USD/JPY

The daily chart is showing that the pair is still in the bearish configuration. However, the 4-hour chart’s RSI is already floating in the over-sold territory indicating that a bullish correction might take place in the nearest future. When the upwards breach occurs, going long with tight stops may be a wise tactic.

USD/CHF

Exhibiting similar behavior as the EUR/USD, this pair shows a tightening of the Bollinger Bands on the hourly chart, but with a level of upward pressure. Going long on this pair could prove beneficial in the hours ahead.

The Wild Card

Gold

Gold prices have rose significantly in the past two days and peaked at $1377 an ounce. However, a bearish cross on the hourly chart’s Slow Stochastic suggests that a bearish correction is impending. This might be a great opportunity for forex traders to enter the trend at a very early stage.

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.