Month: November 2010

By CountingPips.com

Legendary investor and billionaire George Soros has opened a new office in Hong Kong for his hedge fund, according to a recent article in the Wall Street Journal (WSJ). The WSJ received confirmation from a Soros Fund Management spokesperson of the new opening but did not provide further specifics.

Soros is one of the world’s most famous investors and currency traders with his fund managing approximately $27 billion. In September, Soros was named history’s most successful hedge fund manager by the Financial Times with estimated total returns of $32 billion in his 30+ years of trading.

FreeWeek of Elliott Wave International’s Currency Specialty Service is here thru Nov. 18

By Elliott Wave International

On November 1, the EUR/USD — the euro-dollar exchange rate and the most actively-traded forex pair — was trading the $1.38 range, near the level it is today.

But if you look at what the EUR/USD did between November 1 and 9, you’ll see a huge 400-point (or pip, in forex lingo) rally into the November 4 top — and an equally huge decline back to the levels we see today.

That’s an 800-pip “round trip” in just six trading days — a huge move which obviously caught a lot of the U.S. dollar bears and bulls by surprise. Could you have seen it coming?

If you know how to analyze currencies with Elliott wave, the answer is probably “yes.” Wave analysis helps you identify patterns in market charts and tells you how those patterns — ideally — should develop. In other words, Elliott allows you to narrow down multiple possibilities to a handful of probabilities.

A probability is never a certainty. But it’s better than a shot in the dark, as this example demonstrates.

On November 1, Elliott Wave International’s Currency Specialty Service posted the following end-of-day forecast. (Some Elliott wave labels removed for this article):

[Higher, into a top] The euro is poised to thrust above 1.4160. The question is if the thrust takes place before the FOMC announcement and ends afterward, or starts in response to the announcement. Before or after, the euro should hit new highs.

What gave Currency Specialty Service the confidence to make that forecast? It was the “contracting triangle” pattern you see in the chart above. They often appear in 4th waves, right before the market’s final push in wave 5. The EUR fulfilled the forecast with a 400-pip rally into the November 4 top. The following day, our Currency Specialty Service wrote:

The euro is reversing course after a thrust from a triangle. The decline from 1.4283 might not be in five waves, but it has the characteristics of an impulsive wave. A correction of the rally from August should reach the 1.3636-1.3700 area, the 38.2% retracement of the advance…

…which brings us to the price levels where we find the EUR/USD today. And if you’re curious to know what Currency Specialty Service has to say now, you have a great opportunity:

FreeWeek is live through noon EST on Thursday, November 18! You can access all the intraday, daily, weekly and monthly forecasts from EWI’s Currency Specialty Service right now through noon Eastern time Thursday, Nov. 18. This service is valued at $494/month, but you can get it free! Click here to access Currency Specialty Service FreeWeek.

By Greg Holden – The EUR/GBP has been receiving some support at its current price level. We can see on the chart below that the pair has touched the 0.8500 price mark and hurriedly bounced off. The EUR has been falling amidst debt concerns in the euro zone’s periphery, but it appears the British pound’s recent sell-off against other pairs, such as the USD and JPY, has assisted in a modicum of support for the EUR, at least against this currency.

What is also worth noting is the fact that the RSI and Stochastic (slow) indicators both reached into the over-bought region during the pair’s downward descent, but have since exited this area. Their breach of the over-bought region was an indication to sell, but their hasty retreat may indicate that technical pressure has begun to shift into a bullish posture.

If the Stochastic (slow) on the chart quickly reaches into the over-sold region, where it appears to be heading, this could support the technical correction we’re seeing on this pair. The RSI is less likely to provide direction unless the pair moves in a highly volatile manner. Traders should therefore pay closer attention to the Stochastic today. If it drops below the over-sold region, the pair may find further upward support. If not, we could see the downtrend of the EUR persist into the weekend’s close.

EUR/GBP – 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.

Good day ladies and gents of FX trading! In today’s forex feature is the daily canvas of the EURUSD pair a.k.a the “fiber”. The last time I posted on this was when it broke out from the bullish symmetrical triangle formation (kindly see this) and made a new 10-month high at 1.4248. However, as you can see from its chart, the EURUSD has slipped for a fifth straight day today after marking that high. Those who are long on the euro and short on the greenback, however, should not worry too much as the pair could turn back and head north again. At present, the pair is trading just above the 1.3700 support. Notice how this level acted as a resistance early this year before switching its role in to a support. A doji candle, which represents indecision between buyers and sellers, can also be seen. Now, an occurrence of a doji following days of sell-off could be bullish since it signals that buyers are starting to pick up the euro. Moreover, a hidden bullish divergence, where the price registers higher lows and the stochastics mark lower lows, is also present. This suggests that traders could soon push the euro higher.

Fundamentally, Germany’s third quarter GDP report on Friday will be the highlight of this week as far as the euro is concerned. Germany, which takes up about a third of the entire output of the eurozone, is seen to have grown by another 0.8% after posting a 2.2% growth in the second quarter. Now, the DAX or the German stock index, which consists the 30 biggest German companies that are trading in the Frankfurt Stock Exchange, has risen from an opening of 5,885.61 in July to close at 6,229.02 in September. During the previous 3 months, the index dropped from 6,189.38 to 5.965.52. So if the index indeed acts as a leading barometer of the health of Germany’s economy, then the rise in DAX from July to September should fair and reflect better on the country’s actual GDP growth for the same quarter. Contrast that to the 2.2% expansion in Germany’s GDP despite a slide in the DAX during the same period. Given these factors, an upside in Germany’s 3Q score is then possible. The euro could get another boost if the actual GDP data exceeds the market’s forecast. Tune in!

More on LaidTrades.com …

By GCI Forex Research

Fundamental Outlook at 0800 GMT (EDT + 0400)

USD

The dollar made broad substantial gains during the Asia session on signs that lawmakers and policymakers are becoming increasingly concerned about the intensifying Eurozone debt crisis. EURUSD traded 1.3592-1.3670, and USDJPY 82.24-82.61. The S&P 500 finished down -0.42%, but Asian equities are even deeper in the red at the time of writing. No official communiqué from the G20 Summit has yet been released, but comments already on the newswires suggest that the chance of a substantive agreement on imbalances is remote. Naturally, bilateral meetings held on the fringes of the summit were also in focus. Reports suggested that the key meeting between US President Obama and China President Hu focused on exchange rate policy. Newswires also reported that, during another bilateral meeting, German Chancellor Merkel expressed concern to Obama about US monetary policy. Today, the University of Michigan confidence survey is due, and our US economists and the consensus expect a modest increase in the headline index to 69.0 from 67.7 previously. The New York Fed is also due to begin Treasury purchases under the Fed’s latest round of quantitative easing, concentrating on the 4-6 year segment of the curve.
EUR

Sovereign bond yields of peripheral Eurozone nations continued to blow out yesterday. Ireland’s Prime Minister Cowen said that the latest widening of Irish yields was caused by uncertainty over German proposals to create a permanent sovereign rescue mechanism. The proposals include the suggestion that bondholders could be forced to take haircuts, and Cowen said the Irish government is making diplomatic efforts to clarify the details of the plan.
German Chancellor Merkel said that the EU is prepared to deal with all possible scenarios concerning Ireland, but that it is up to individual countries to ask for help if it is needed. Merkel said that markets have misunderstood discussions surrounding the future of Eurozone bailouts. Finance Minister Schaeuble agreed, saying the situation is “a total misunderstanding”. Moody’s said it will conclude its review of Ireland’s credit rating in December, adding that the four-year fiscal consolidation plan, which is due to be published in November, will be key to the ratings decision.
European Commission President Barroso said the EU would be ready to come to Ireland’s aid if needed. Ireland’s Finance Minister Lenihan said Barroso’s comments were helpful and demonstrate the solidarity that exists within the Eurozone. ECB Executive Board Member Stark said the ECB is in the process of withdrawing unconventional measures, but that these will be kept in place as long as necessary. He added that the ECB’s current interest rate settings are appropriate. Stark said it would be an illusion to think that the crisis is over, and insisted that ECB activity in Eurozone bond markets is motivated by monetary policy, and not politics.
On Greece, Stark said that consolidation efforts are on track, and that “it is possible” for Greece to overcome its economic difficulties.
CHF

The SNB reported a loss on of CHF 8.5bn for the first three quarters of this year, and said that loss was mainly attributable to exchange rate losses on foreign currency positions.

TECHNICAL OUTLOOK
EURUSD 1.3235 support.
EURUSD BEARISH Violation of 1.3635 triggers the negative tone. Next support at 1.3235.
USDJPY BULLISH Recovery through 81.99 exposes 83.99. Initial support defined at 81.55 ahead of 79.75 key support.
GBPUSD BULLISH Focus is on 1.6379 ahead of 1.6458. Support holds at 1.5651.
USDCHF NEUTRAL Trading within 0.9972 and 0.9463 which mark the key directional triggers.
AUDUSD NEUTRAL Pullback from 1.0183 has support at 0.9652 ahead of 0.9542 reaction low.
USDCAD BEARISH Push through 0.9981 has exposed 0.9820 with scope for 0.9712 next. Resistance at 1.0156.
EURCHF BEARISH Violation of 1.3265 exposes 1.3072. Sustained break of 1.3834 required for resumption of bull trend.
EURGBP BEARISH Momentum is negative; move below 0.8390 would expose 0.8311. Resistance at 0.8552 yesterday’s high.
EURJPY BEARISH Remains heavy below 115.68; initial support at 111.53 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.

Source: ForexYard

The main discussion in the market yesterday revolved around the European debt concerns, especially regarding Irish bonds. This has reduced risk appetite in the market and decreased appeal for the euro. As a result, the dollar continued with bullish momentum and the EUR/USD pair is now trading near a 6-week low.

Economic News

USD – Dollar Reaches 6-Week High vs. Euro

The U.S. dollar rallied against most of its major counterparts yesterday. The greenback gained about 200 pips vs. the euro, and the EUR/USD pair fell near the 1.3600 level, marking a 6-week low. The dollar saw gains against the Japanese yen and the British pound as well.

The dollar gained yesterday on concerns that some European countries will have difficulties paying their debts. This caused a drop in global stocks and as a result decreased demand for riskier assets. In addition, a sequence of positive data that was published from the U.S. economy lately is also supporting demand for the greenback. U.S. payrolls increased by 151,000 jobs in October, more than double the forecast.

This was the first month of positive employment change since July. In addition, the U.S. Trade Balance and the weekly Unemployment Claims reports have provided better results than anticipated as well. It appears that positive data, combined with European debt concerns, has managed to reduce the effect of the Federal Reserve’s debt purchase program. As a result, the dollar, which was expected to be debased, is rising almost on all fronts.

Looking ahead to today, the most significant release from the U.S. economy looks to be the Preliminary Consumer Sentiment. Analysts have forecast that consumer confidence rose to a reading of 69.1 during the past month, from 67.7 on the October release. Such a result has potential to boost the dollar further against its major counterparts.

EUR – Euro Sharply Falls on European Sovereign-Debt Concerns

The euro fell against all the major currencies during yesterday’s trading session. The euro fell about 200 pips against the U.S. dollar, and the EUR/USD pair is now trading near a 6-week low. The euro saw a 100 pip drop against the British pound and the Japanese yen as well.

The euro fell yesterday on growing uncertainty regarding Ireland’s ability to repay its debts. Investors are worried that Ireland won’t be able to cut spending as planned, and may require a bailout. It was also reported yesterday that euro zone members are checking whether Ireland needs financial aid from a 750 billion euro rescue fund.

The renewed speculations regarding the European debts are decreasing the appeal of the euro, and have turned investors to purchase safer assets, such as the U.S. dollar. It appears that until concrete data will show that Ireland can sustain its debts, the euro might see further bearishness against most of the major currencies.

As for today, a batch of data is expected from the euro zone. The most significant release seems to the German Preliminary Gross Domestic Product (GDP). The GDP measures the change in value of all goods and services produced by an economy. Analysts have forecast that German GDP rose by 0.8% during the 3rd quarter. Such a result might correct some of the euro’s recent losses. Traders are also advised to follow the European Flash GDP and the Industrial Production reports today, as these could impact the currency as well.

JPY – Yen Sees Mixed Results vs. Majors

The Japanese yen saw a very volatile session against its major rivals on Thursday. The yen fell about 40 pips vs. the U.S dollar, and the USD/JPY pair is trading near a 1-month high. The yen however gained about 100 pips vs. the euro and the EUR/JPY pair has dropped to the 112.10 level.

The yen fell against the dollar yesterday as U.S. Treasury 10-year yields near a 7-week high made dollar assets more attractive to international investors. The yen also fell versus the greenback due to the boosted demand for the dollar. On the other hand, the yen rallied against the euro on concerns that some European countries, Ireland in particular, might have difficulty paying their debts. As a result, the euro fell on all fronts, and the yen was no exception. It currently seems that the ongoing speculations regarding European sovereign debt might strengthen the yen against the euro further.

Looking ahead to today, no significant news releases are expected from the Japanese economy. Traders are advised to follow the leading publications from the U.S. and the euro zone. Special attention should be given to the U.S. Preliminary Consumer Sentiment and the German Preliminary GDP, as these reports are likely to have the largest impact on the market today.

Crude Oil – Crude Oil Drops to $86.30 a Barrel

Crude oil dropped for the first time in three days during yesterday’s trading session. Crude began yesterday’s trading with a bullish move, and reached as high as $88.60 a barrel. However, a sharp drop took place, and a barrel of crude oil was traded for $86.30.

Crude oil fell yesterday following the U.S. dollar’s appreciation versus the euro, which reduced the appeal of raw materials. The dollar gained about 200 pips against the euro yesterday following speculations that several European countries will have difficulties paying off their debts. As a result, dollar-denominated commodities, such as crude oil, have weakened.

As for today, traders are advised to follow the leading publications from the U.S., especially the Preliminary Consumer Sentiment. A higher consumer sentiment will mean that U.S. citizens feel more financially secure, and are likely to increase their demand for energy. This might correct some of crude oil’s losses from yesterday.

Technical News

EUR/USD

The pair is currently in the midst of very strong bearish momentum, and has fallen over 200 pips during trading yesterday. Currently, the MACD on the daily chart continues to provide bearish signals, suggesting that the pair might drop further with the potential to reach the 1.3560 level.

GBP/USD

The cable recently peaked at the 1.6175 level, but ever since it has provided bearish signals and is currently trading near the 1.6060 level. In addition, the RSI on the 4-hor chart has dropped below the 70 line – suggesting that further bearishness is impending. Going short might be the right choice today.

USD/JPY

The pair saw very little changes during yesterday’s trading session and has remained around the 82.20 level. However, now, as all oscillators on the daily chart are pointing up, it appears that a bullish move might take place soon. Going long with tight stops might be the preferable strategy today.

USD/CHF

The pair is gradually rising since the beginning of the week, and is now trading near the 0.9770 level. In addition, the MACD on the 4-hour chart indicates that the bullish move has more room to go, with a key target level of 0.9820.

The Wild Card

Crude Oil

Crude oil corrected some of this week’s gains during yesterday’s trading session, as it sharply dropped to $86.26 a barrel. Currently, a bearish cross on the daily chart’s Slow Stochastic suggests that the bearish move could be extended today. The RSI is pointing down as well, and if the RSI will fall below the 70-line it might verify the bearish move. This might be a good opportunity for forex traders to catch the trend at its beginning.

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 Greg Holden – Debate over the Fed’s recent QE2 maneuver has been generating some interesting volatility on commodity prices, particularly Gold. We’ve seen the US dollar gaining strength as investors anticipate the possibility of renewed inflationary growth in the US, but occasionally there is similar counter-pressure from investors working to price in the devaluation which must naturally accompany a money-printing policy such as QE2.

Commodity prices appear to be rising despite a strengthening USD, but there have been a few minor blips in downward movement amid growing concerns as to the effect of QE2. Moreover, the sudden weakness of the EUR in recent days, due to debt concerns in Europe’s periphery, has also added to these fluctuations in both the USD and commodity prices.

Previous articles have harped on the notion of a rising price of Gold, and nothing really seems to be able to change that analysis. We’ve seen Gold reach a nominal record high of $1,420 an ounce, even though its true record, after adjusting for inflation, was reached about 30 years ago.

What is interesting in this observation is the price reached at that time, in today’s dollars. When Gold took off in the 1980s, its value in today’s dollars was around $2,300 an ounce. If today’s price of Gold is heading in a similar direction, then right now may be the best time imaginable to open a Gold Trading Account and start making profits. What are you waiting for?

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 FxNewsChina

The Chinese economy continued to roar full speed ahead in October as retail sales advanced and inflation increased to a 25-month high. Chinese retail sales advanced in October by an annual increase of 18.6 percent over the October 2009 level to a total of 1428.5 billion yuan, according to the latest data by the National Bureau of Statistics. October’s pace was slightly off that of September which recorded an 18.8 percent rise in retail sales and just below market forecasts that were expecting a rise of 18.8 percent.

Data for the first 10 months of 2010 showed that retail sales increased at a pace of 18.3 percent to a total of 12,531.3 billion yuan.

The consumer price index (CPI), a main gauge of inflation, rose by 0.8 percent in October from September to an annual increase of 4.4 percent above the October 2009 level. The data follows an annual increase of 3.6 percent in September and surpassed market forecasters that were expecting the CPI to rise by 4.0 percent. Pushing the consumer price index higher was an increase in food prices by 10.1 percent while other prices increased by 1.6 percent.

Chinese producer prices for manufactured goods also increased in October by 0.7 percent from September. This brought the annual rate of increase for October to 5.0 percent above the October 2009 level following an annual increase of 4.3% in September. Market forecasts were looking for a 4.5 percent advancement.

Also highlighted in the report:

• Industrial production increased by 13.1 percent on an annual basis although 0.2 percent lower than the September production.

• Industrial production is up by 16.1 percent for the first 10 months of 2010 compared to last year.

• Urban investment in fixed assets has risen by 24.4 percent on an annual basis through the first 10 months of 2010 to a total of 18,755.6 billion yuan.

About the Author

FxNewsChina.com – China Forex News

By Natalie R. – Euro zone sovereign debt issues on the one hand, and the Federal Reserve resumption of bond buying programs on the other, continue to dominate market sentiment, causing great swings in currency levels, particularly the EUR/USD pair.

With bank holidays in the U.S, Canada and France today, no news events are expected today.

However, traders should follow the G20 meeting of finance ministers and central bankers taking place today and tomorrow as the leaders of the leading industrial nations are likely to focus on the current “currency war” situation. The future of the dollar and recent actions by the Federal Reserve are likely to take center 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.