Month: December 2010

This morning The Telegraph has posted an interview with Nouriel Roubini: an economist dubbed Dr. Doom in the press because he predicted the credit crisis before most people in 2006. Obviously since then Roubini’s comments have gained a huge amount of credibility, and today he has revealed his assessment of the global economic outlook in 2011. Let’s take a look.

Hope And Pray

Perhaps the most striking part of Roubini’s assessment of the 2011 global economic strategy is that it’s based on blind faith. Regarding the euro zone for instance Roubini comments that indebted member states such as Spain are chiefly dependent on the European Central Bank for financing. Yet he isn’t convinced the ECB can resolve the crisis.

This comment doesn’t place much stock in the decisiveness of EMU officials. For instance on Friday the European Commission is expected to make the EFSF a permanent rescue mechanism for indebted members. This combined with concerted austerity efforts in indebted nations such as Spain and Portugal might be enough to keep EMU members solvent.

No Double Dip Recessions

Roubini is called Doctor Doom in part because (though he was right about the 2008 credit crunch) his predictions are deeply pessimistic. He believes though that 1^st world nations that have recently recovered from recession (including the UK and US) will not fall back into recession next year.

This prediction might be a little optimistic. In the UK for instance the Coalition tax cuts have yet to come into effect while this morning unexpectedly high unemployment figures were released. In the US meanwhile President Obama has no strategy for dealing with the astronomical US deficit. In short it’s no time yet to get complacent.

by Peter Lavelle with foreign currency exchange specialist Pure FX.

By Anton Eljwizat – The pair has recorded much bearish behavior in the past several days. However, the technical data indicates that this trend may reverse anytime soon. For example, as I demonstrate below, the 8-hour chart signals that a bullish reversal is imminent. Forex traders have the opportunity to wait for the upward breach on the hourlies and go long in order to ride out the impending wave.

• Below is the 8-hour chart of the NZD/CHF currency pair.

• The technical indicators used are the Slow Stochastic, Williams Percent Range, and Relative Strength Index (RSI).
• Point 1: The Slow Stochastic indicates a bullish cross, signaling that the next move may be in an upward direction.

• Point 2: The Relative Strength Index (RSI) signals that the price of this pair currently floats in the over-sold territory, indicating upward pressure.

• Point 3: The Williams Percent Range has peaked near at the -100 marker, which means that there may actually be a strong level of upward pressure.

NZD/CHF 8- Hour 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 GCI Forex Research

Fundamental Outlook at 0800 GMT (EDT + 0400)

USD

Risk traded on a generally soft tone overnight as a combination of regional concerns and higher US yields post-FOMC – the 10y yield hit 3.5% for the first time in 7 months – weighed on sentiment. In addition, Moody’s put Spain’s sovereign ratings on review for a possible downgrade. The FOMC itself did not surprise much, the statement acknowledged economic recovery is continuing, comparing with the November statement which said “the pace of the recovery in output and employment continues to be slow.” However, the FOMC emphasized the lack of progress toward the dual mandate saying, “Currently the unemployment rate is elevated and measures of underlying inflation are somewhat low.” Post-the FOMC statement, the dollar was supported by a rise in the US 10y yield, which rose on disappointment that the FOMC did not accelerate or front-load its Treasury purchases as hoped for by some in the market. There remains plenty of event risk for both European and US markets ahead today, given the crowded data and political calendar and we expect some degree of profit-taking on short-dollar positions in a less-favourable risk environment.
EUR

Moody’s has put Spain’s Aa1 ratings on review for possible downgrade. The news added to pressure on the euro, which was already trading on a softer tone post-FOMC. The agency cited concerns over the country’s funding needs, debt levels and control over public finances. The Eurozone will remain the key focus in the short term as Ireland’s parliament will also be voting on the IMF package today.
The ZEW survey was mixed with the current situation number lower in Germany and the economic sentiment surveys higher across both Germany and the Eurozone. The German reading was slightly disappointing but PMIs are still due this week, which should give an indication of where GDP is headed.
Italian Premier Berlusconi and his government survived no-confidence votes in the upper and lower houses. The winning margin in the lower house was 314 in favor versus 311 opposed. While the victory ensures continuity in office for Berlusconi, the thin margin of victory suggests that there could be further political uncertainty. And this could raise concerns on his political ability to enforce austerity measures, which could weigh on the euro in 2011.
S&P revised its outlook on Belgium from stable to negative, citing “prolonged political uncertainty”.
JPY

The Tankan index was slightly better than expected with the larger manufacturers’ diffusion index coming in at 5 (cons. 3). Nevertheless this was the first quarterly decline in 7 quarters and still shows Japan’s recovery is fragile. Asian stocks are generally soft as concerns over regional growth momentum remain in place.
The BoJ will begin buying ETFs and Japanese REITs as soon as today and the bank will post transaction amounts online on the day the purchases are done. This follows BoJ purchases of government and corporate debt. But BoJ Governor Shirakawa again raised the possibility of further JGB purchases if the economy slows down faster than expected.
GBP

CPI numbers were higher than consensus at 3.3% y/y while the RPI numbers also beat expectations at 4.5%. Our UK economist notes that the main drivers were food and clothing, which posted the highest inflation rate since 1997. Sterling failed to react positively to the news because stagflation fears seem to be surpassing the reduced prospects of further QE. But the hawks, such as MPC member Sentance, continue to call for monetary policy tightening.

TECHNICAL OUTLOOK
EURUSD 1.3305/1.3292 support.
EURUSD NEUTRAL Pullback from 1.3499 has support at 1.3305/1.3292.
USDJPY BULLISH Focus is on 84.35/41 with little resistance above this till 85.40. Support at 82.84.
GBPUSD NEUTRAL Initial resistance at 1.5965, while support lies at 1.5720.
USDCHF BEARISH Violation of 0.9548 would expose 0.9463 key low. Resistance at 0.9726 previous low.
AUDUSD BULLISH Next resistance above 1.0031 lies at 1.0091. Support at 0.9833.
USDCAD BEARISH Focus on 0.9978/31 support zone; initial resistance defined at 1.0141.
EURCHF BEARISH Momentum is negative; the cross eyes 1.2766. Resistance at 1.3004.
EURGBP NEUTRAL Recovery eyes 0.8528, with initial support defined at 0.8433.
EURJPY NEUTRAL 113.67 and 110.49 mark the near-term directional triggers.

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.

By Forex Signs, Inc.

GBPUSD continues to make an upward trend within the bullish channel, with price consolidating between immediate support level 1.5738 and immediate resistance level 1.5770. Buy bias remains at the medium term as price is now testing the immediate resistance. A break above the immediate resistance going to 1.5819 may continue its bullish trend. If price breaks below immediate support and breaches the bottom line of the bullish channel, a bearish correction may occur. If price breaks above 1.5819 and would test yesterday’s resistance level 1.5909, a bullish trend is confirmed. If price continues to fall testing the next support level 1.5716, it may endanger the buy bias. RSI (14) in the medium term shows price is still within the neutral zone, suggesting that the current bullish trend may continue.

Rising US Consumer Prices May Help US Rally Against Other Majors

For the upcoming American session, a rising Consumer Price Index is expected to help the dollar strengthen as economists predict an increase of 0.2% figure for the month of November. In the upcoming session’s November PPI report, the index for finished consumer foods prices advanced 1%, after falling 0.1% in September. The report also revealed a rise of 2.1% in the price of finished energy goods, with higher gasoline prices leading the advance, rising 4.7% while home heating oil prices rose 7%. Excluding energy, November’s PPI would have gained 0.4%, reversing last month’s 0.4% decline. The increase in CPI would likely complete the Fed’s $600B bond purchase program, despite last week’s extension of the Bush-era tax cut measure. The closely watched core CPI rate, which strips out volatile food and energy prices, is also expected to go up 0.1% in November after being flat for three consecutive months. The anticipated gain is mostly due to rounding effects.

Overall these indicators should provide some movement for the greenback. The inflation report will probably not provoke much interest in financial markets, but confirmation that prices remain stable could be a boost for U.S. after a huge sell-off last week on fears the tax deal would further inflate an already wide budget deficit.

About the Author

Forex Signs, Inc., Founded in 2006 in Wall Street, New York City, FSI relentlessly strives to be the premier Forex brokerage company in the industry by providing exclusive and unmatched trading and investment related services while constantly developing innovative solutions that cater to the vast requirements of both individual and institutional market participants.

The UK has enjoyed a stream of positive economic releases in the last fortnight. For instance last week industrial production figures were upbeat while yesterday the October CPI (Consumer Price Index) numbers indicated rising inflation. This is positive for sterling because it lessens the chance the Bank of England will introduce another bout of quantitative easing.

This morning though the stream of positive news has ended with the announcement that UK unemployment increased in the three months leading up to October. The Official for National Statistics has reported saying that the number of claimants increased by 35k pushing the total back above 2.5 million.

Economic commentators have been saying for some weeks that present optimism toward sterling is fragile. The UK economic recovery is far from secure and any bad news could buoy concerns that conditions will remain negative into 2011. Hence the release today could lead to sterling weakness.

In the US meanwhile the Fed decided yesterday to maintain interest rates at 0.00-0.25% without increasing its program of quantitative easing. Chairman Ben Bernanke commented that the US economic outlook looks more positive than a month ago: President Obama’s new tax cuts are likely to increase consumer spending. US unemployment though remains stubbornly high.

Furthermore sentiment toward the dollar soured yesterday because credit rating agency Moody’s warned that the US AAA rating could be downgraded in the coming year. This is because the US deficit is incredibly high at present with no official plans to combat this: in fact President Obama’s tax cuts mean extending the deficit further.

The credit ratings of Belgium and Spain also came under threat from Moody’s in EMU economic news yesterday. Like the US this is because these nations face stunningly high deficits, and might possibly request an ECB-IMF bailout in the next year.

However presently the markets are looking to the European Commission meeting on Friday for a permanent solution to the EMU crisis. Officials are expected to make the EFSF a permanent mechanism for rescuing indebted members, and this could assure the markets that nations such as Spain and Belgium are secure even if they eventually request financial support.

Coming up later today is the November CPI (Consumer Price Index) release from the US. This will indicate the rate of inflation in the US. However the Fed’s continuing program of quantitative easing means the release is unlikely to be significant.

by Peter Lavelle with foreign currency exchange specialist Pure FX.

RISK DISCLAIMER

Forex trading involves high risk. Before any trade, you should consider carefully the investment objectives and the level of risk. The data sent by mail is not necessarily real-time data or precise. Real-Forex is not liable for the losses resulting from the utilization of the data. Real-Forex (Finnocorp Trading Solution Ltd.) is not liable for losses or damages as a result of reliance on the information provided by e-mail or on the overall data, quotes, charts, signals buy / sell. It is hereby clarified that the investor must be aware of risks involved in trading in financial markets, which is a form of investment that may contain potential risks.

NZD/USD

Daily graph: http://www.itziktenne.com/RF/NZD_DAILY_151210.JPG

The downtrend, started a few weeks ago, moved the pair until the support level of 0.7436. However, the last four sessions corrected this downtrend with small and weak candles, showing the weakness of the bulls against the bears.

 The downtrend is expected to restart according to our analyses, creating an opportunity to go “Short”. Still, this opportunity requires a confirmation through the identification of a decreasing configuration on 1H scaled graph.

Potential trade

1H graph: http://www.itziktenne.com/RF/NZD_1H_151210.JPG

The required configuration should appear when the 1H support at 0.7514 will be broken down.

–        “Limit” order on “Short” position 10 pips below the mentioned support, meaning: 0.7504

–        “Stop Loss” on the last peak reached: 0.7549

–        1^st degree to “Take Profit” on the following support: 0.7492

USD/CHF

Daily graph: http://www.itziktenne.com/RF/CHF_DAILY_151210.JPG

The pair is moving aside between 1(Resistance) more or less and 0.9550 (Support). During the last session, the pair almost reached the support 0.9550. This support was reached already 3 times during the last few weeks, and each time started to increase back. When the support will be reached 2 outcomes are possible:

The pair can either be stopped by the support, make a rebound and begin to increase back, a movement which may create an opportunity to go “Long”; or it can cross downward the support and close below it, which is an indication for the current trend to keep decreasing, which may suggest an opportunity to go “Short”.

According to the past experience with that support,  the “Stop and Reverse” option is more likely to occur.

Have a profitable day!

Real forex team

Source: ForexYard

The unexpected positive movement in the Japanese Tankan survey this morning helped to boost the yen against some of its European rivals in today’s trading, despite its downward movements against the CHF and USD. Traders should expect those Tankan figures to play out in today’s trading as well, with a likely positive retracement in the JPY against those other currency rivals.

Economic News

USD – Fed Policy Statement Strengthens Dollar

The US dollar strengthened yesterday after the Fed’s monetary policy statement strengthened expectations that it would complete its stimulus plan. Traders are expecting further Fed stimulus to lead to stronger growth for the US economy, which is what has been pushing up short-term Treasury yields lately.

Completing the Fed’s plan to buy $600 billion of Treasury bills by June would also increase the chance that the US could eventually experience a run-up in inflation, boosting longer-term yields. As a result, the EUR/USD experienced a solid retracement in yesterday’s trading, closing at 1.3340, down from the previous day’s high of 1.3432.

Today’s publication of the American consumer price index (CPI) could show that inflationary figures on the consumer side are already in positive growth, laying the groundwork for future interest rate hikes.

The long-term investment figures from Treasury International Capital (TIC) could also show positive growth in foreign investment. The heavy volume of news expected today should lead to higher volatility in the market which may lead to a stronger recovery in the dollar following Monday’s losses.

EUR – US Fed Speculation Drives EUR Lower in Tuesday Trading

The euro pared gains and retreated from a 3-week high against the US dollar yesterday after stronger-than-expected US retail sales data lifted bond yields and investor optimism about the American economy. The EUR/USD was trading lower at 1.3340 by the day’s close, down from 1.3432. The EUR/AUD experienced similar losses with a closing price of 1.3413, down from 1.3500.

The euro remained stronger against its other currency counterparts; however, as the EUR/JPY moved up almost 100 pips since Tuesday’s open and the EUR/GBP continues to move in a bullish direction, currently trading 0.8470.

Additionally, the European Central Bank (ECB) stepped up its purchases of government bonds last week, although the amount bought was still well below levels reached last spring. This has been one of the deciding factors in the EUR’s mixed movements.

The euro will be largely absent from the economic calendar today, with only two minor publications expected. Britain’s economic news may lead the European session with important unemployment data at 9:30 GMT and industry sales data at 11:00 GMT. The EUR is likely to continue the trends established at yesterday’s close, but the pound may experience some heavy volatility in the morning hours of the European session.

JPY – Unexpected Optimism in Japanese Tankan Survey Mutes JPY Losses

Asian stock markets were mixed this morning, with shares in Japan weighed by a report showing a weak outlook for the country’s manufacturing sector. The Tokyo market was slightly up, with demand capped by dim local economic news. The yen, surprisingly, was also lower as investment seemed to away from the Asian economies and into higher yielding assets.

The JPY was down against its major counterparts this morning, with the USD/JPY up at 83.85, from yesterday’s low of 82.83. The safe-haven Swiss franc made the more significant gains against the yen with a 7-day streak of bullishness pushing the pair from 84.06 last Tuesday to a current price of 87.04.

The unexpected positive movement in the Tankan survey this morning did, however, help boost the yen against some of its European rivals, such as the EUR and GBP. Traders should expect those Tankan figures to play out in today’s trading, with a likely positive retracement in the JPY.

Crude Oil – Oil Prices Continue Slide despite Canadian Pipeline Restart

The price of Crude Oil has been consolidating towards the $88 price level over the last week. News out of Canada regarding a pipeline restart was expected to halt the recent decline in crude prices, but appears to have had little impact. The latest movements have pushed the price from yesterday’s high of $89.46 to a current price just over $87.80.

Positive economic data out of the United States has pushed the US dollar higher against its primary rival, the euro, leading to added bearish pressure to commodity prices. Precious metals like Gold and Silver also experienced a mild downturn in trading yesterday, suggesting the slide in oil prices were being driven by USD factors. Today’s economic figures will likely have similar results. Traders should keep an eye on the American data at 13:30 and 14:00 GMT as this will likely drive dollar volatility today.

Technical News

EUR/USD

The price on this pair appears to be descending out of the over-bought region on the 8-hour and weekly RSI, suggesting a buildup in bearish momentum. A fresh bearish cross on the 8-hour Stochastic (slow) supports this notion. Going short appears preferable today.

GBP/USD

A recent bearish cross on the daily Stochastic (slow) indicates that impending bearishness could be in store for this pair today. The descending pattern on the weekly RSI adds weight to this concept. Going short may be ideal in today’s market.

USD/JPY

The fresh bearish cross on the weekly Stochastic (slow) suggests an impending downward retracement to this pair’s recent upward movement. An impending bearish cross on the 4-hour Stochastic (slow) suggests the same. Going short with tight stops may be a wise tactic today.

USD/CHF

The price on this pair appears to have recently breached the over-sold region on the daily RSI, suggesting an impending buildup in bullish pressure. A similar position on the 4-hour RSI and a fresh bullish cross on the 4-hour Stochastic (slow) both support this notion. Going long appears to be today’s preferable strategy.

The Wild Card

EUR/CHF

This pair is showing a price just beginning to ascend out of the over-sold region on the daily RSI, suggesting a momentum shift may be occurring to the latest string of downward movements. The imminent bullish crosses on the daily and weekly Stochastic (slow) oscillators also suggest that forex traders may have a great opportunity to catch a trend reversal in action. When the price swings back upward, going long with tight stops could turn out to be highly profitable.

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.

After breaking above 1.3437 resistance, EURUSD pulled back from 1.3497, suggesting that a cycle top is being formed on 4-hour chart. Now the fall from 1.3497 could possibly be resumption of downtrend, deeper decline to test 1.3165 key support would likely be seen, a breakdown below this level will confirm the resumption of downtrend. Resistance is at 1.3497, only break above this level could take upside further to 1.3600 area.

Daily Forex Signals

By Forex Signs, Inc.

NZDCAD is slowly gaining a bullish momentum as price is now ranging at least50 points up from last weeks low of 0.7575. As of this writing price is consolidating between immediate support level 0.7547 and immediate resistance level 0.7622 within the minor bullish channel. Though price is near the bottom line of the bullish channel, candlesticks formation shows an uptrend within the bullish channel. Bias in the mid term is buy if price breaks above the immediate resistance level testing 0.7650. If price continues to break above the top line of the bullish channel we may see a bullish reversal. If price breaks below immediate support and bottom line of bullish channel, a bearish trend may continue and will only make its current trend a bullish correction. MACD (12,26,9) for the mid term suggest a buy position, with the fast line pulling ahead of the signal line below 0.00 level.

Strong Retail Sales Helping US Recovery

For the upcoming American session strong Retail Sales report for November may help the US economy on its recovery as early reports suggest an increase of 0.6% gain for the last month following October’s 1.2% rise in purchases. This is the fifth consecutive month that retail sales climbed as Americans began their holiday shopping and shows consumers are now playing a big role in the US recovery. Producer price index is also expected to climb 0.6% for November, slightly higher than 0.4% increase in October.

Another important event is the release of the FOMC statement, wherein the Fed would announce their interest rates. Economists expect the Fed to keep its current rates, and would focus more on the accompanying statement. With this report comes some backlash, as economists will wait if the Fed would expand its quantitative easing program this might pull the greenback down again and might trigger a sell-off.

About the Author

Forex Signs, Inc., Founded in 2006 in Wall Street, New York City, FSI relentlessly strives to be the premier Forex brokerage company in the industry by providing exclusive and unmatched trading and investment related services while constantly developing innovative solutions that cater to the vast requirements of both individual and institutional market participants.

A South Korean regulator has issued warnings to JPMorgan (JPM) and Barclays (BCS) over the sale of currency derivatives. The Financial Supervisory Service alleged both firms broke its rules.