Month: November 2010

By CountingPips.com

The euro has increased slightly against the US dollar today in forex trading following two days of declines. The EUR/USD currency pair opened the day at the 1.3506 exchange rate, touched an intraday high of 1.3566 and has come down to currently trading at the 1.3523 level for a modest rise for the day.

The European common currency has been on a recent negative downtrend against the dollar since touching a high point for the year asIreland’s banking and sovereign debt vulnerabilities have been spotlighted and taken their toll. The EUR/USD currency pair is down to the 1.3500 exchange level from the high above 1.4200 in early November for a decline of approximately 700 pips in the span of two weeks.

Today’s news has revealed that England has offered their help to Ireland while European commission and IMF officials traveled to Ireland to discuss a potential bailout.

EUR/USD – The Euro rebounding very slightly in today’s trading after two days of declines and after falling through the 50-day simple moving average yesterday.

The US dollar has gained ground against the Indian rupee in the forex market today as the dollar has continued its hot streak since late last week.

The USD/INR currency pair opened the day near the 45.78 exchange rate and rose to touch its highest exchange rate in seven weeks at the 46.07 exchange rate. The highest position for the USD/INR since September 24th.

The pair currently trades around the 45.89 exchange rate before the end of the US session.

The dollar has made a strong reversal off the decline to a 26-month low point against the rupee that was reached on November 5th at the 44.03 level.

USD/INR – Dollar/Rupee currency pair rose above 50-day simple moving average (sma) in yesterday’s trading and today pierced the 200-day moving average before retreating lower.

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FxNewsIndia.com – India Forex News

By CountingPips.com

The US dollar has been trading lower against the other major currencies today in the forex markets following US inflation and housing data releases. The US stock markets, meanwhile, have been close to unchanged in the middle of the US session. The American currency has been on the defensive against the euro, British pound sterling, Japanese yen, New Zealand dollar, Australian dollar and the Swiss franc while trading virtually unchanged against the Canadian dollar.

The US stock markets have been close to unchanged with the Dow Jones higher by approximately 10 points, the NASDAQ up by over 11 points and the S&P 500 increasing by close to three points. Gold has risen today by $3.50 to trade at the $1341.80 per ounce level while oil has fallen by $1.65 to the $80.69 per barrel level.

Today’s economic data was led by the US consumer price index (CPI) that showed consumer price inflation rose by 0.2 percent from September to October. The CPI data marks the fourth consecutive month of higher consumer prices following a 0.1 percent gain in September and a 0.3 percent rise in August.

Energy prices contributed to the higher CPI in October with a rise of 2.6 percent while gasoline prices rose by 4.6 percent. Food prices edged higher for third consecutive month with a 0.1 percent increase in October following a rise of 0.3 percent in September.

On an annual basis, consumer prices rose by 1.2 percent over the October 2009 level following a 1.1 percent annual gain in September. The monthly and the yearly data were both slightly below forecasts which were expecting a monthly rise of 0.3 percent and an annual rise of 1.3 percent in October.

Core consumer prices, excluding volatile food and energy costs, were unchanged in October for a third consecutive month. On an annual basis, core prices were 0.6 percent above the October 2009 level.

Housing data: starts fall, building permits almost unchanged

The latest housing data out of the US showed that housing starts fell by over 10 percent in October while building permits edged slightly higher. Housing starts fell by 11.7 percent in October to an annual rate of 519,000 housing starts following September’s annual rate of 588,000, according to the latest data by the US Commerce Department. On an annual basis, October’s level is 1.9 percent below the October 2009 standing.

Building permits, a gauge of future construction, edged higher by 0.5 percent to an annual rate of 550,000 permits. This is just above annual rate of September’s 547,000 permits and 4.5 percent lower than the October 2009 level.

Housing completion data released in the same report showed that housing completions fell 3.2 percent in October while falling 18.4 percent on an annual basis from October 2009.

By Russell Glaser – Looking at the daily chart a few major Fibonacci numbers stand out and may provide the next target for the EUR/USD.

Following a breach below the rising support line off of the October lows, the EUR/USD switched from a consolidation phase and into a new downtrend.

From September to November the EUR/USD made a strong bullish move from the level of 1.2643 to a height of 1.4281. A Fibonacci retracement shows the pair has already used both the 38.2% level as a resistance and the 50% retracement level as a support. Judging from this price behavior it is reasonable to assume that the pair will continue lower to the 61.8% retracement level which lies at a price of 1.3270.

The August high of 1.3330 should stand out as a significant support level on the way as well as the rising trend line from the June and September lows.

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.

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By GCI Forex Research

Fundamental Outlook at 0800 GMT (EDT + 0400)

USD

The dollar’s rebound paused during the Asia session as holiday conditions prevailed across much of Southeast Asia and the Middle East. EURUSD traded 1.3448-1.3516, and USDJPY 83.24-83.59. Asian equities were generally weaker after the S&P 500 fell -1.6%. Fed speakers continued to defend the recent FOMC decision with Atlanta Fed President Lockhart saying it was not designed to engineer a depreciation of the dollar. Opinions were also offered on whether the target of $600 bn would be reached or even exceeded. Chicago Fed President Evans said that the figure of $600 bn was “a good place to start” and Boston Fed President Rosengren said that he expects the $600 bn target to be reached. Both said bond purchases could be extended further, if the economic conditions called for it. However, St. Louis Fed President Bullard was less sure. He said he was not in favour of setting the $600bn goal in the first place as “there is no sense in prejudging” how much the Fed will ultimately purchase. He added that a premature end to the bond buying program is a “possibility” but that “the economy would have to improve a fair amount” for this to happen. Ahead, US October CPI is due for release.
EUR

Ireland’s Prime Minister Cowen said that the government has not asked for a sovereign bailout, but conceded that “we are prepared to work with our counterparts in the euro area to see in what way we can&normalise market conditions”. Cowen added that Ireland was pre-funded until mid-2011 and said the 4-year plan for deficit reduction would be released next week. Finance Minister Lenihan later said that “any assistance in relation to resolving the problem of the Irish banking system will be most welcome”, although he added that financial assistance is not inevitable.
While Ireland has not asked for aid, consultations with the IMF, the ECB, and the European Commission are due to begin later this week. EU Commissioner Rehn said that these talks can be regarded as preparation for a potential aid program for Ireland, should it be necessary.
Separately, the Eurogroup’s Junker said the Eurogroup would support Ireland if it asked for aid. He also welcomed Portugal’s commitment to cut the budget deficit to 4.5% of GDP and called on Greece to be more specific regarding its 2011 austerity measures.
JPY

Japan’s Finance Minister Noda brought back intervention speculation when he reiterated his commitment to take decisive steps on forex including intervention when necessary. He also said September’s intervention was driven by the need to control excessive currency flows, and was therefore not the start of a policy of competitive devaluation.
GBP

UK consumer price inflation slightly surprised to the upside, and BoE Governor King wrote another letter to Chancellor Osborne to explain. In line with the recent change in forecast, CPI increased to 3.2% y/y and seems set to stay in excess of 3% through Q1. In his letter, King said the rise in inflation has been driven by temporary factors such as the VAT rate hike, but the general trend should fall back in line with target in the medium term, as the effects of fiscal austerity feed through. Speaking later in the day, King said that the BoE could do further QE if it wanted to.
The minutes are due today from the BoE’s Nov. 4 policy meeting, where no change was made to policy. At the October meeting, MPC member Posen voted for ?50 bn in fresh QE, while MPC member Sentance wanted a rate hike. Sterling is likely to be highly sensitive to any change in the voting arithmetic.
AUD

The Q3 wage price index rose by +1.1% q/q, the fastest pace in almost 2 years. Our Australian economists note that the annualized rate of growth in skilled vacancies moderated somewhat, signaling a slower pace of jobs growth ahead. Our economists conclude that today’s data is consistent with the RBA’s central case, meaning that higher interest rates will likely be needed next year.

TECHNICAL OUTLOOK
AUDUSD eyes 0.9652 support
EURUSD BEARISH Breach of 1.3574 has exposed 1.3363. Resistance at 1.3777 ahead of 1.4282
USDJPY BULLISH Focus on 83.99, only a break above 85.93 would confirm a bull trend. Initial support at 82.40 ahead of 81.66 reaction low
GBPUSD NEUTRAL Resistance at 1.6379 but support at 1.5804 is in view.
USDCHF BULLISH Rise above 0.9972 has exposed 1.0183. Near-term support at 0.9829
AUDUSD BEARISH Pullback from 1.0183 eyes 0.9652; next support at 0.9542 reaction low
USDCAD NEUTRAL Break of 1.0380 would put odds in favor of bull trend. Downside risks no more than 0.9931
EURCHF BEARISH Push through 1.3229 and 1.3072 would expose 1.2766. Sustained break of 1.3834 required for resumption of bull trend.
EURGBP BEARISH Sell-off from 0.8942 held at 0.8449. Next support at 0.8390
EURJPY BEARISH Remains heavy below 115.68; break of 111.05 reaction low would expose 107.73.

Forex Daily Market Commentary provided by GCI Financial Ltd.

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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 Greg Holden – Following with the pattern of growing USD strength, it appears the Turkish lira can be added to the list. The USD/TRY has risen 0.5% over the past few days following a move by Ankara to curb liquidity by raising bank reserve requirements from 5.5% to 6.0%.

Bank lending in Turkey has grown at an average of 0.8% per week since January and there is a growing concern that banks may be overextending themselves in an effort to fuel growth. The result of this latest move by Turkey’s central bank was a sharp depreciation of the lira against the dollar.

The pair has moved from a price of 1.4008 just two weeks ago, upward to a current price of 1.4616. We can see on the chart below that the pair reached a significant support level near 1.4012, but failed to breach. The RSI and Stochastic (slow) both recently displayed bullish indicators and are currently both moving in a bullish direction, which suggests growing upward momentum for the pair.

If we follow the signals being shown on this chart, and support it with the fundamental devaluation taking place in Turkey, we can assume that this pair will be targeting the 50% Fibonacci level near a price of 1.4804 over the next few trading days. If momentum remains constant beyond that level, we could also see an extension of these bullish gains upward into the 1.50’s.

USD/TRY – 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 – Markets were quiet this morning during the European session as Ireland is in the midst of talks with the EU and the IMF. This follows yesterday’s gains in the dollar and pullbacks in equities and commodities.

Talks began this morning between Ireland and delegations from the EU and the IMF. The discussions surround a potential bailout for Irish banks that are teetering on the edge of insolvency and could push the Irish government into default. An aid package is expected to be pieced together to prevent a default by the banks or by Ireland. Despite the bailout talks, the EUR has seen little support as the EUR/USD is trading lower at 1.3490.

Yesterday the EUR/USD lost almost 1% and closed at the 1.3505 level for the first time since September. Equities were also down sharply with the Dow Jones Industrial Average losing 1.59%. Spot crude oil plunged 2.6%.

During the upcoming New York trading session traders will be eyeing the Irish bailout talks as well as US economic data set to be released. US Core CPI is due to be released at 13:30 GMT with market expectations set for a rise of barely 0.1%. The weekly crude oil inventory report is also on tap for 15:30 GMT. The government’s report has the ability to support the price of spot crude that is trading lower on the day at $82.10.

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

Traders moving assets to safer, lower yielding currencies appear to be playing a factor in the correction of the major crosses. The USD and JPY, which are seen as a safer bet than others currencies in times of market stress, will likely keep drawing demand as investors stay away from riskier assets.

Economic News

USD – Dollar Recovery Continues

The U.S. dollar rose broadly, climbing to a 7-week peak versus a basket of currencies as sharply lower stock and commodities prices boosted the greenback’s safe haven allure. The stronger dollar also prompted investors to unwind bets against the U.S. currency built up in recent months. As a result, the USD finished yesterday’s trading session 150 pips higher against the EUR at the1.3490 level. The greenback also saw bullishness against the GBP and closed at 1.5885.

Moreover, the dollar on Tuesday climbed against key currencies amid increasing concerns over the euro zone debt handling and prospects of an interest rate hike in China. Investors followed with concern the euro zone’s struggle to deal with alarming levels of sovereign debt, especially in Ireland, amid growing speculation that the former Celtic Tiger nation could be bailed out.

Looking ahead to today, the most important economic indicators scheduled to be released from the U.S. are the Building Permits, Core CPI and Crude Oil Inventories reports. Traders will be paying close attention to today’s announcements as stronger than expected results could further boost the USD in the short-term. Traders are also advised to follow a speech by FOMC member Bullard around 14:15 GMT. His speech is very likely to impact dollar volatility. Traders are advised to watch closely, as this is likely to set the pace of the dollar going into the rest of the week’s trading.

EUR – EUR Strength Not Likely to Return this Week

The EUR fell to a 7-week low against the U.S. dollar on Tuesday as investors grew increasingly risk-averse amid concern about fiscal problems in peripheral euro zone nations. By yesterday’s close, the EUR fell sharply against the USD, pushing the oft-traded currency pair to 1.3490. The 16-nation single currency experienced similar behavior against the JPY and closed at 112.40.

Ireland has come under intense pressure over its debt crunch, with a top European Union official saying the future of the 27-country union was at stake. Adding to worries was news that Greece will likely miss its fiscal targets this year and next, and Austria has not yet submitted its contribution to the aid package for Greece for December.

The British pound also fell to a session low against the dollar as Bank of England (BOE) Governor Mervyn King said it was a concern that UK inflation was above target. King said the central bank could do further quantitative easing if that turns out to be necessary. The GBP fell as low as 1.5839, before recovering to 1.5885 yesterday

JPY – Additional Volatility Forecasted with Light Japanese News Day

The Japanese yen strengthened against most of its major counterparts yesterday, continuing to prove that for the time being this is a solid currency that traders can rely on to provide them with steady profits. The yen extended gains versus the EUR on Tuesday, to trade around 112.40 amid a broad sell-off in the EUR. The JPY also saw bullishness against the GBP and closed at 132.40.

As for today, Japan will be absent from the economic calendar. The JPY’s trends will be affected by the rallies of its primary currency pairs. It seems the USD and EUR are expected to continue a volatile trading session today and their crosses with the JPY will likely be as well. Traders should keep a close look on the news coming from the U.S. and Europe as these economies will be the deciding factors in the JPY’s movement today, especially the U.S. Building Permits at 13:30.

Crude Oil – Crude Oil Falls 3%

Oil slumped 3% on Tuesday to a 2-week low as the dollar rose on euro zone debt concerns and as fears that China’s attempts to cool inflation will reduce demand. China’s move sparked a broad commodities sell off yesterday.

A stronger U.S. dollar can pressure oil, and other dollar-denominated commodities, by attracting investors to foreign exchange markets seeking higher yields, increasing the value of greenbacks paid to producers and making commodities more expensive for users of other currencies.

Oil has retreated after hitting a 25-month peak above $88 a barrel last Thursday, the highest prices since the financial crisis.

Technical News

EUR/USD

The EUR/USD cross has experienced a bearish trend for the past few days. However, it seems that this trend may be coming to an end. The RSI of the 4-hour chart shows the pair floating in the over-sold territory, indicating that an upward correction may happen anytime soon. Going long with tight stops might be a wise choice.

GBP/USD

The price of this pair appears to be floating in the over-sold territory on the daily chart’s RSI, indicating an upward correction may be imminent. The upward direction on the hourly chart’s Momentum oscillator also supports this notion. When the upward breach occurs, going long with tight stops appears to be a preferable strategy

USD/JPY

The hourly chart is showing mixed signals with its RSI fluctuating in the neutral territory. However, the daily chart’s RSI is already floating in the over-bought territory indicating that a bearish correction might take place in the nearest future. Going short with tight stops might be a wise choice.

USD/CHF

The USD/CHF cross has experienced a bullish trend for the past week. However, it seems that this trend may be coming to an end. For example, the daily chart’s Stochastic Slow signals that a bearish reversal is imminent. A downward trend today is also supported by the 4-hour chart’s Slow Stochastic. Going short may turn out to pay off today.

The Wild Card

Crude Oil

Crude oil prices have dropped significantly yesterday and peaked at $82.50 a barrel. However, on the 8-hour chart, the RSI is floating in the over-sold territory which suggests that a bullish 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.

USD/CHF

Daily graph: http://www.real-forex.com/charts-daily/November2010/CHF_DAILY_171110.JPG

A resistance level on 0.9731 was crossed and during yesterday’s trading session, and clearly closed above it. For several sessions, the pair is on its way to the next resistance on the daily graph at 0.9931. During last session that resistance was crossed as well and visibly closed above it.

Currently, a “Long” trade is not an option since the pair requires a little correction in order to confirm the uptrend and the opportunity created. Two options are possible:

1. The pair is corrected but did not cross back the resistance of 0.9931. After the correction we suggest the identification of an increasing configuration on 1H graph.
2. A vain breach of the 0.9931 is done downward, immediately followed by a new increase, and creates the opportunity to go “Long”

Our analyses suggest the creation of such an opportunity during the tomorrow’s session or the following day.

AUD/USD

Daily graph: http://www.real-forex.com/charts-daily/November2010/AUD_DAILY_171110.JPG

Following an uptrend, which lasted for several months, the pair began to decrease back a few sessions ago by crossing a support level at 1.0002 and clearly closing below it.

Currently, the pair is making its way to the following support on the daily graph at 0.9661. When the pair will reach that support, it should be analyzed with the usual tools:

1)      Test of the support èindication of close reversal, potential for “Long” trades.

2)      Stop on the level. It could be better waiting for a “Parking” of about a session and a half, and then entering a “Long” order.

3)      Clear and sharp breach of the support è it could be safer waiting for a small correction and after the identification of a decreasing configuration on 1H graph, go “Short” along with the new trend.

Have a profitable day!

Real – Forex team