By CountingPips.com
Today’s Important News Releases – Wednesday, November 17, 2010
AUDUSD continues its downward movement from 1.0182 and the fall extended to as low as 0.9724 level. Deeper decline towards 0.9651 key support is still possible later today, a breakdown below this level will suggest that the long term uptrend from 0.8066 (May 25 low) has completed at 1.0182 already, then the following downward move could bring price to 0.9000 or even lower. Resistance is at 0.9919, only break above this level could indicate that the fall from 1.0182 has completed, then another rise towards 1.0182 previous high could be seen.
The US dollar has continued its recent surge higher against the Indian rupee in the forex market today and has touched its highest exchange rate in approximately six weeks.
The USD/INR currency pair reached a high point exchange rate today at 45.85 rupees per dollar after opening the day near the 45.30 exchange rate. The pair currently trades around the 45.79 exchange rate near the end of the US session.
The dollar’s strength follows the recent decline to a 26-month low point against the rupee that was reached on November 5th at the 44.03 level. Since that recent low point, the dollar has reversed course and risen to its highest level since late September against the rupee.
USD/INR – Dollar/Rupee currency pair rises above 50-day simple moving average (sma) with the 200-day sma sitting close above near 46.00.
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By Greg Holden – The pressure being placed on Ireland to accept a bailout of its financial institutions has been weighing on risk appetite throughout the region. Traders appear weary of taking on too much risk, which has pulled funds away from the higher yielding assets. One result has been a weakening Norwegian krone (NOK).
Norway’s central bank remarked on October 26 that it would be waiting until mid-2011 to continue its monetary tightening policies. The dovish statement made clear that Norway was awaiting further recovery in other economies before attempting to expand more aggressively. As a result, the NOK has become vulnerable to risk aversion, which appears to have spiked in recent weeks.
Meanwhile, Sweden’s krona (SEK) is expected to gain from this influx of risk aversion. Analysts are forecasting a rise in capital inflows over the next few months for Sweden as its hawkish bank statements and monetary tightening appear to increase its appeal. The SEK has, in fact, been the second highest performing currency in 2010, only slightly behind the Australian dollar.
USD/NOK Breaches Resistance at 5.9825
The current price of the USD/NOK around the 5.9965 level shows a price which has recently breached the significant 38.2% Fibonacci retracement line. On the chart below, we can see that the MACD and RSI both show additional room for upward mobility since neither has yet entered their respective over-bought regions.
As with the above analysis, if pressure continues to mount throughout Europe due to Irish debt concerns, risk aversion will likely continue to loom large. With the current stance of Norgesbank, the NOK is open to downward pressure from the fundamental side. We can also see that the pair has yet to meet any significant resistance on the technical side, and appears to have the momentum to continue towards 6.1500, indicated by the 50% Fibonacci retracement line.
USD/NOK – Daily 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 CountingPips.com
The latest Commitments of Traders (COT) report, released on Monday by the Chicago Mercantile Exchange, showed that futures speculators decreased their bets in favor of the major currencies against the US dollar. Non-commercial futures positions, those taken by hedge funds and large speculators, were overall net short the US dollar by $21.85 billion against other major currencies as of November 9th, down from a total short position of $24.53 billion on November 2nd, according to data published by Reuters which calculates the dollar positions against the euro, British pound, Japanese yen, Australian dollar, Canadian dollar and the Swiss franc. Speculators have raised their bets for the dollar three out of the last four weeks.
*The COT report is usually released on Fridays but was delayed until Monday due to a bank holiday.
On an individual currency basis, speculators added to their long positions for the British pound sterling, Canadian dollar, Mexican peso, Swiss franc and the New Zealand dollar while cutting long positions in the euro, Japanese yen and the Australian dollar compared to the week before.
EuroFx: Currency specs were net long the euro against the U.S. dollar by 23,283 contracts as of November 9th. This is a decrease of approximately 15,000 contracts following net long positions of 38,610 contracts on November 2nd and the third straight week of declining euro long positions.
The COT report is published every Friday by the Chicago Mercantile Exchange (CME) and shows futures positions as of the previous Tuesday. It can be a useful tool for traders to gauge investor sentiment and to look for potential changes in the direction of a currency or commodity. Each currency contract is a quote for that currency directly against the U.S. dollar, where as a net short amount of contracts means that more speculators are betting that currency to fall against the dollar and net long position expect that currency to rise versus the dollar. Open interest is the number of open contracts that have not been closed by a transaction or by delivery.
GBP: The British pound sterling positions rose higher to a net of 21,266 contracts after being long on November 2nd by 15,182 positions. The latest data is a second straight week of increasing pound positions following three weeks of declines in the GBP long positions.
JPY: The Japanese yen net long contracts declined to 36,654 contracts as of November 9th from 46,455 net long contracts reported on November 2nd.
CAD: The Canadian dollar positions advanced higher for a second straight week to a net total of 37,338 contracts after totaling 23,365 net longs on November 2nd.
CHF: Swiss franc long positions were essentially unchanged for third straight week at 12,615 long contracts as of November 9th after totaling a net of 12,465 long contracts on November 2nd.
AUD: The Australian dollar positions decreased lower for the sixth straight week after reaching their highest level since April on September 28th. AUD futures contracts declined to a net amount of 47,616 long contracts as of November 9th from 51,180 long contracts on November 2nd.
NZD: New Zealand dollar futures positions jumped higher to their highest level all year at a total of 22,250 long contracts after a total of 19,148 long contracts the week before.
MXN: Mexican peso long contracts increased as of November 9th to 88,746 net long positions from 82,272 longs the week prior. The latest data marks two straight weeks of increases for the Mexican peso speculative positions.
COT Data Summary as of November 9th, 2010
Large Speculators Net Positions vs. the US Dollar
Euro: + 23,283 contracts from +38,610 contracts
British pound sterling: + 21,266 contracts from +15,182 contracts
Australian dollar: + 47,616 contracts from +51,180 contracts
Canadian dollar: + 37,338 contracts from +23,365 contracts
Japanese yen: + 36,654 contracts from +46,455 contracts
Mexican peso: + 88,746 contracts from +82,272 contracts
New Zealand dollar: + 22,250 contracts from +19,148 contracts
Swiss franc: + 12,615 contracts from +12,465 contracts
Go to the Commitment of Traders CME raw futures data
Further COT Resources from around the web:
Roughly a month ago, the Philippine Peso together with many other currencies were trading strongly against the US dollar. If you look at the dollar-to-peso chart (USD/PHP), the peso even reached a high of P41.991 versus the greenback last November 4. However, the P42.00 marker proved to be resilient, at least at that time, as the dollar rebounded off of it. At present, the Philippine Peso is trading back at around P43.70. Several technical factors, though, indicate that the dollar’s rally could be over and the peso could appreciate once more. As mentioned, the peso is exchanging at around the P43.70 level which used to be a former support. A support, as we know is a level where traders buy the currency. But after breaking through that level, that level’s role could flip from a support to a resistance. Noticeably, the dollar has been unable to rally above it for the last couple of days. Coincidentally, this level also magically corresponds to the 38.2% Fibonacci retracement level that I drew. A hidden bearish divergence, where the price registers lower lows and the stochastic oscillator marks higher highs, is also evident (for those who are newbies, these concepts might be a little off the roof but we at LaidTrades will soon include these in our wikipedia and lessons portion). And with conditions in the overbought territory as indicated in the stochastics, traders could soon pick up the peso in exchange of the dollar.
One main factor that is affecting the Peso exchange rate is the level of remittance (dollars) from abroad that is sent back to the country. For those who do not know, about 11% of the country’s gross domestic product or simply total output comes from the money sent home by overseas Filipino workers (OFWs). In 2009, remittances went up by 5.4 % to a new historical of $17.348 billion from $16.426 billion in 2008. For 2010, remittances are even seen to reach $21.3 billion, reflecting a 23% jump from last year. Now it is very likely that the dollar inflows for the year would hit or even exceed that target. Remember, Christmas is very much celebrated in the Philippines since more than 90% of its population are Catholic. Christmas shopping and giving gifts to family and friends have always been an indelible part of Filipinos’ culture. Having said that, remittances from abroad will surely soar during the holiday season because of this. As you know, the more money we receive, the more we can spend. More money spent would then benefit the individual businesses and the whole economy in general which would likewise reflect on the currency (peso). Moreover, improved consumer sentiment during this season would lead investors towards the higher yielding assets and away from the USD. Such would also indirectly benefit the peso exchange rate.
More on LaidTrades.com …
By Yan Petters – The GBP/JPY pair recently saw an extraordinary bullish trend, gaining almost 700 pips and peaking at the 133.77 level. However, the pair saw several failed attempts to reach to the 134.00 level, and a bearish correction appears to be imminent.
• The chart below is the GBP/JPY 8-hour chart by ForexYard.
• There is a very notable bullish trend line, which took off at October 27, and has peaked on November 12, at the level of 133.77.
• However, the pair saw about 4 failed attempts to cross the 133.80 level, indicating that the bullish pressure is losing steam.
• Currently, a bearish cross has been forming on the Slow Stochastic, suggesting that a bearish move might be impending.
• In addition, the RSI is now pointing down, also indicating that a bearish move could be imminent. If the RSI will fall below the 70-line it might validate the bearish correction.
• The next support levels are located at 132.85, 131.90 and 130.95
• The next resistant levels are located at 133.80 and 135.00
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 during the US session after New York Fed President Dudley said that the Fed’s latest round of Treasury purchases is equivalent to a 75bp cut in the policy rate. EURUSD traded 1.3561-1.3656, and USDJPY 82.72-83.27. FOMC Vice Chairman Yellen earlier sounded extremely dovish and said she saw “inflation lingering near current levels for a long time”. Yellen said she could be in favour of extended purchases beyond June “if I were to continue to be concerned about the outlook and thought that further purchases could work.” Both speakers also said that the Fed’s latest policy initiative was not designed to weaken the dollar. The S&P 500 finished down -0.12%. US data were largely overshadowed by Eurozone comments on the developing sovereign risk story. The NY Fed’s Empire State manufacturing current activity index plunged to -11.1, weaker than expected. In contrast, total retail sales were better than expected at 1.2% (cons: +0.7%, UBSe: +0.6%) in October after an upwardly revised 0.7% gain in September (was 0.6%). Ex-autos sales rose in line with expectations: up 0.4% after an upwardly revised 0.5% (was 0.4%) in September. Ahead, US October PPI, September TIC data, October industrial production, and the November NAHB housing market index will be released.
EUR
Various policymakers across Europe commented on the Irish situation yesterday. An Irish junior minister said that Ireland has not approached the EU or IMF to arrange a sovereign bailout. However, despite the denials from the Irish government, media reports continue to run the story. Irish opposition spokesperson Noonan said he believed that European intervention for Ireland is underway and that matters could come to a head over the next 24 hours.
The FT reported that Portugal’s Finance Minister said the risk was high that Portugal would need external assistance. However, in subsequent comments, he said there is “no imminent” request for foreign aid and that Portugal will maintain its strategy of raising financing from the markets.
Greek debt figures provided grim reading as the level of government debt in 2009 was revised up to 126.8% of GDP from 115.1%. The revisions from eurostat also revised the budget deficit upwards to 15.4% of GDP.
GBP
Ahead of the BoE minutes on Wednesday, MPC member Martin Weale suggested that the committee will be split as he expressed his worries about the effectiveness of any monetary tightening or loosening.
CHF
The combined PPI and IPI index in Switzerland was slightly lower than market consensus at -0.4% (m/m) and +0.3% (y/y), providing further evidence that pricing pressures remain largely subdued.
AUD
The minutes from the RBA’s Nov 2 policy meeting revealed that the decision to hike the policy rate by +25bp was finely-balanced. Ultimately the policy board chose to be forward-looking on inflation, although a strong AUD, tame CPI, and subdued credit growth were noted as reasons that argued in favour of not hiking at that particular meeting.
TECHNICAL OUTLOOK
EURUSD support at 1.3235.
EURUSD BEARISH Breach of 1.3574 exposes 1.3235. 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 81.66 reaction low.
GBPUSD BULLISH Upside potential holds below 1.6379 ahead of 1.6458. Support holds at 1.5952.
USDCHF BULLISH Push through 0.9972 would expose 1.0183. Support at 0.9671 ahead of 0.9463.
AUDUSD NEUTRAL Pullback from 1.0183 has support at 0.9652 ahead of 0.9542 reaction low.
USDCAD BEARISH Stalled in front of 0.9931, push through the level would expose 0.9820 with scope for 0.9712 next. Resistance at 1.0156.
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 Move below 0.8390 would expose 0.8311. Resistance at 0.8638.
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.
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
US Dollar strength continues into the new week of trading as events surrounding Ireland and Greece push FX traders into safe-haven positions on the greenback.
The dollar was supported not only by resurgence of the European fiscal crisis but also due to the release of better than expected US retail sales data yesterday. Traders were seen posting strong bids for the dollar following the retail sales reports. The report posted an increase from October of 1.2% on expectations of a rise of only 0.7%. This is the fourth consecutive rise in the report and the largest gain since March.
The September numbers were also revised upward to 0.7% from a previous 0.6%. Leading the data in the retail sales reports were strong auto sales and parts along with a rise in building materials.
At the close of the trading day, the EUR/USD was trading lower at 1.3586, down from an opening day price of 1.3690. The GBP/USD was lower on the day at 1.6050, after opening the day at 1.6112. The USD/JPY was trading higher at 83.10, following an opening price of 82.52.
Today traders will be eyeing more economic data from the US. The most important releases on the day will be US PPI and TIC Long-Term Purchases. This inflationary data is too early to show the effects of the Fed’s second round of quantitative easing, but should go a long way to give both economists and traders a basis for judging future inflation expectations. The TIC report may also show recent inflows of US asset purchases.
Support and resistance for the EUR/USD come in at 1.3500, the 50% Fibonacci retracement from the September to November move, along with yesterday’s high of 1.3750.
Tensions are rising in the European Union (EU) as Greece and Ireland continue to struggle with their debt loads. Yesterday, Greek Prime Minister George Papandreou struck out at Germany’s stance that private investors should suffer the consequences of a future bailout of Greece. The Greek Prime Minister is of the view that this would create a situation of higher interest rates for those nations that are already cash strapped resulting in an unnecessary burden on those states.
The Prime Minister’s statements reflect two different positions in Europe over how a default by an EU member nation should be handled; should the EU use taxpayer euros to bail out other member states that cannot finance their debt’s, or should private investors bear the burden of a haircut on the bonds they hold, or at worse a flat out default?
The euro continues to weaken on the backdrop of EU fiscal troubles and is trading lower versus the dollar, and also against most of the other majors. The EUR/GBP is down at 0.8460, down from an opening day price of 0.8489. The EUR/CHF is lower at 1.3370 after trading as high as 1.3468. The EUR/JPY is also down at 112.89, following an opening day price of 112.97.
Significant economic data will be released today with the German ZEW economic sentiment. The report is expected to come in at -5.9. However, estimates could be on the low side and a worse than expected report may lead to further losses in the euro.
Yesterday the Japanese received some surprising economic news; Q3 GDP rose 0.9% while the market had only expected growth of 0.7%. The major driver of growth was consumer spending. However, the positives may mask other difficulties as net exports did not contribute to the overall calculation. Also many of the consumer goods that were purchased have government subsidies attached to them, helping to ease the burden on consumers.
For the past week the yen has experienced a bit of respite as the dollar gained ground against a basket of currencies. This has allowed for the USD/JPY to rise to a level not seen since early October.
Yesterday the USD/JPY ended trading at 83.00 up from an opening day price of 82.52.
Traders will want to follow the major data releases from the US and Europe for direction of the Japanese pairs. The next target for the USD/JPY may be the pre-intervention high at 85.90.
Spot crude oil prices were quiet today, trading in a tight range and finishing the day relatively unchanged. The commodity was unable to make a move in either direction as conflicting economic reports held spot crude oil prices in check.
The price of oil finished the day at $84.80, up from an opening day price of $84.61. Prices are off of last week’s high when the price of spot crude oil climbed to its highest level in two years.
Earlier in the trading day, the US released positive retail sales numbers that had traders putting in solid bids for crude oil. However, traders were dissuaded from placing too large of positions with the release of a worse than expected Empire State Manufacturing Index.
Today traders will be looking to the TIC Long-Term Purchases report along with the German ZEW Economic Sentiment report for direction. Wednesday will bring the release of the weekly US crude oil inventories report.
Support and resistance levels for spot crude oil come in at $80.40 and the high from November 11th at $88.62.
A falling momentum oscillator on the weekly chart points to further weakness in the pair. Traders may want to target the rising trend line from the June and September lows. Short term support may come in at 1.3500, the 50% Fibonacci retracement from the September to November move.
The pair is finding support at the rising trend line from June 8th and the September low as well as the 20-day simple moving average. Traders should be long with a target at the swing high of 1.6300
A bullish trend is developing on the daily chart and momentum is increasing now that the pair has closed above the pivot from mid-September. The next short term target may be the 100-day simple moving average at 83.85, followed by the pre-intervention high at 85.90.
A nice bullish uptrend has developed with 8 consecutive days of gains for the pair and a close above the 50-day simple moving average. A rising momentum oscillator hints at further gains in the pair. The next target rests at the November high of 0.9970.
Spot crude oil looks to have found support from the 20-day simple moving average. Forex traders can use this to their advantage by going long with a target on the swing high on the daily chart at $88.60 and a stop below the moving average line.
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.
NZD/USD
Daily graph: http://www.real-forex.com/charts-daily/November2010/NZD_DAILY_161110.JPG
The uptrend started a few weeks ago is clearly observable. However, there is a technical correction started about 5 sessions ago.
Please give attention to the following observations:
– The hammer appeared during the last sessions.
– The fact the pair corrected exactly 50% of the previous trend
– The almost instantaneous increase just after the pair reached those 50% correction.
These 3 points let us anticipate the renewal of the uptrend, creating the opportunity to go “Long”. However, a confirmation of the new orientation requires confirmation trough an increasing configuration on 1H graph.
Potential trade
1H Graph: http://www.real-forex.com/charts-daily/November2010/NZD_1H_161110.JPG
The required confirmation should appear once the pair will cross the resistance level at 0.7777. Once crossed, a market order can be entered. Following is one option:
– “Limit” order on “Long” position 10 pips above the resistance mentioned earlier, meaning: 0.7787.
– “Stop Loss” on the last dip point reached, meaning: 0.7745.
– 1st degree for “Take profit” on the following resistance: 0.7811
USD/CHF
Daily graph: http://www.real-forex.com/charts-daily/November2010/CHF_DAILY_161110.JPG
Friday’s session saw the pair to clearly cross the resistance of 0.9781 and to close above it. Actually the pair is on its way to the following resistance at 0.9931.
According to the candles appeared during the last few sessions, the bulls have the power over the bears and no one can stop them. In other words, we do not expect any soon reversing trend.
When the pair will reach that resistance it can have three different behaviors. Each one indicates a specific potential trade and soon trend:
1) Test of the resistance èindication of close reversal, potential for “Short” 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 “Short” order.
3) Clear and sharp breach of the resistance è It could be safer waiting for a small correction and after the identification of a increasing configuration on 1H graph, go “Long” along with the new trend.
Have a profitable day!
Real – Forex team 
