Month: January 2011

Intel (INTC) said late yesterday it has settled patent disputes with Nvidia (NVDA), and Intel will pay Nvidia $1.5 billion over the next five years. The agreement ends all outstanding legal disputes between the companies, and gives Intel a license to Nvidias patents, subject to the terms of their agreement.

Alcoa (AA) marked the traditional kick-off to earnings season late yesterday, swinging to a profit for the fourth quarter. The aluminum producer said net income totaled $258 million, or $0.24 per share, compared to a loss of $277 million, or $0.28 per share, in the same quarter last year.

By Dan Eduard

Over the last week, the US dollar has moved up more than 2000 pips against its Danish counterpart, largely due to positive fundamental data that has caused investors to flock to the greenback. At the same time, technical data is now showing that the pair’s bullish run may be coming to an end.

We will be looking at the daily chart for USD/DKK, provided by ForexYard. The technical indicators being examined are the Bollinger Bands, Relative Strength Index (RSI), Stochastic Slow and Williams Percent Range.

1. We can see that the last several price ticks are right along the upper Bollinger Band. This is typically a sign that a downward trend is likely to occur in the near future.

2. While the Relative Strength Index is not currently in overbought territory, it is pointing upward and seems poised to breach the upper resistance line. When it does, a bearish correction is likely to occur.

3. The Stochastic Slow has formed a bearish cross and is already pointing downward. Traders can take this as a clear sign that downward pressure exists for this pair.

4. The Williams Percent Range is currently right around the -10 level. Typically when this indicator is above -20, it is a sign that the pair is overbought and likely to correct itself.

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

During the Asia session, FX markets were driven by news that floodwater had reached Brisbane, and that Japan intends to buy bonds issued by the EFSF – Europe’s EUR440 bn financial rescue fund. Although the price action was volatile the dollar is largely unchanged against the euro at the time of writing, but AUDUSD dropped more than a big figure. EURUSD traded 1.2912-1.2991, and USDJPY 82.68-83.14. Atlanta Fed President Lockhart, an alternate voter in 2011, continues to support QE2 as there are further headwinds to the US recovery. He said the December jobs report showed a modest pace of recovery and he sees little sign of inflationary pressures. Lockhart also said the Fed’s monetary policy is not intended to influence the dollar. Dallas Fed President Fisher sounded somewhat sceptical of additional monetary easing given he believes that the Fed has done “near as much as we can do”, and that boosting the US recovery is up to fiscal authorities now. Philadelphia Fed President Plosser and Minnesota Fed President Kocherlakota are due to speak later today. Our team of analysts still looks for moderate dollar strength ahead as the US recovery continues and external developments remain in favour of the dollar.
EUR

The euro got a boost after Japan’s Finance Minister Noda said Japan intended to buy about 20% of the forthcoming bond due to be issued by the EFSF around the end of January.
Finland’s Finance Minister Katainen said that Portugal needs to take strong political decisions to calm markets, and that Ireland may not be the last country to seek EU/IMF help.
French, German, Portuguese and Spanish officials denied reports that other Eurozone member nations were pressuring Portugal to accept a bail-out package amid the pressure on its sovereign borrowing costs. A French official was also quoted as saying the situation in Portugal is not as serious as was the situation in Ireland or Greece. Eurozone peripheral cash spreads tightened but levels still remain elevated around late-2010 wides and the upcoming auctions for Italy, Portugal and Spain will be the barometers for their borrowing costs. There were also reports that the ECB had been active with their Securities Markets Programme but we will have to wait until the weekly settlement data is published next week.
JPY

Japan’s Finance Minister Noda said Japan intends to buy about 20% of the forthcoming EFSF bond. The eventual size of this first EFSF offering is not yet known, but is expected to be in the range of Yen3-8 bn. Noda said he would like to use existing euro-denominated FX reserves to fund the purchase. As such, we do not expect any FX flow to accrue from this possible future transaction, although Japan’s involvement should be seen as a mild euro positive.
CHF

Retail sales in November were slightly above consensus at +2.50% y/y, highlighting the relatively strong fundamentals of the Swiss economy.
CAD

BoC Deputy Governor Cote said she is closely watching Canadian household debt given the considerable excess supply in the economy and the risks that a low interest rate environment presents.
This week started with a disappointing building permits figure for November but this is not to say the Canadian recovery is falling off the tracks, particularly as the BoC Senior Loan Officer Survey shows overall easing in business lending conditions for the fifth straight quarter and the Q4 Business Outlook Survey showed firms are positive on the 12-month economic outlook

TECHNICAL OUTLOOK
AUDUSD clears 0.9863/31.
EURUSD BEARISH Focus is on 1.2830/1.2796 support area. Resistance is at 1.3021.
USDJPY NEUTRAL Break above 83.67 would open up the way towards 84.51 mid-December high; support at 82.63.
GBPUSD NEUTRAL Upside potential holds below 1.5627, the key trend line resistance drawn off Nov. 5 high; 1.5475 marks the near term support.
USDCHF NEUTRAL Focus on the tough 0.9774 Fibonacci resistance. Support lies at 0.9605.
AUDUSD BEARISH Breach of 0.9863/31 support zone favours triggers negative tone; pressures 0.9812 next. Resistance at 0.9956 intraday high.
USDCAD BEARISH Outlook is bearish with focus on 0.9889/25 support area. Resistance is at 1.0004.
EURCHF BEARISH Focus is on 1.2402 key low, initial resistance at 1.2726.
EURGBP BEARISH Found support at 0.8285 ahead of 0.8252; resistance at 0.8339.
EURJPY BEARISH Next big support lies at 105.97 key low, resistance at 108.55.

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.

In Brief

Concerns that Portugal could soon seek an ECB-IMF bailout have sent the euro tumbling.

Retail sales in December fell 0.3% compared to 12 months ago according to figures from the British Retail Consortium.

The British Chamber of Commerce has raised concerns that poor Services sector performance could inhibit the recovery.

The UK has announced a £2.6 billion energy deal with China that secures the future of an essential oil refinery.

In Depth

EU

Good morning! Today rumours are rife that Portugal will soon have to accept an €80 billion bailout package from the ECB-IMF to support its ailing economy.

In recent days the cost of insuring Portuguese debt has risen to record highs at more than 7.0% – meaning the government must pay huge amounts to assure markets their investments are safe. This rate has the markets spooked that Portugal will soon be unable to raise funding without external aid.

On the back of these reports, the euro has fallen to four month lows against the US dollar and sterling.

The crucial test for Portugal will come on Wednesday at a forthcoming bond auction to raise public funds. If the markets refuse to buy Portuguese funds on concerns that the nation is about to become insolvent then Portugal will have no choice but to request an ECB-IMF bailout. This could easily send the euro tumbling even further against the major currencies.

UK

In the UK meanwhile the British Chamber of Commerce has raised concerns that poor performance in the Services sector could slow the recovery. GDP estimates for the fourth quarter 2010 have been revised downward to 0.4% from 0.7% following a poor December for Services. Businesses in that sector cut costs and reduced the number of people on their payrolls.

Furthermore retail sales in December fell 0.3% compared to December 2009 according to new figures released by the British Retail Consortium. This is chiefly due to the Arctic conditions experienced in the UK last month. However the drop could impact heavily on high street retailers: they’re highly dependent on strong December revenues.

On the flipside this morning the UK government has announced a £2.6 billion energy deal with China. This secures the long-term future of Grangemouth – one of Britain’s key oil refineries. It also opens the window to other agreements between China and the UK in the future.

For the most part though sterling has stable against most major currencies this morning.

Coming Up

Today is another relatively quiet day for economic data. The big events remain the forthcoming interest rates decisions from the Bank of England and ECB (European Central Bank) on Thursday.

by Peter Lavelle with specialist currency broker Pure FX.

By Greg Holden

The GBP/CHF, after experiencing a moderate upturn, appears to be leveling off as it meets its first significant resistance level at 1.5039.

The pair has breached beyond this resistance price but, as can be seen on the chart below, the price has begun to turn somewhat flat; indicating a test of this resistance is underway.

Fundamentals look favorable for the British pound, which suggests the pair will indeed breach this level.

However, the Swiss franc’s growing strength over the past several months has many speculators concerned that it will continue to move bullish absent a significant appeal from the Swiss National Bank (SNB) to address its currency’s unnatural growth.

Looking at the chart below also shows an immense amount of technical pressure mounting against the pair’s recent bullishness.

The Stochastic (slow) shows a high-peaking bearish cross, and the Williams Percent Range has almost touched the 0 mark, suggesting an imminent reversal to the latest movement.

GBP/CHF – 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.

Is something brewing with San Miguel Brewery (SMB) as of late? That is the question. Based on its price action for the last month or so, it looks like that the company is on to something. As you can see from its daily chart, SMB had sprung sharply from just below PHP 10.00 to a high of PHP 31.90 in an almost vertical fashion. After marking the said high, SMB has since consolidated into an ascending triangle. Remember that in an ascending triangle, the buyers are the ones who are more aggressive than the sellers as they continue to pick up the stock even at higher price levels. Therefore, a breakout to the upside is more likely than a breakdown. So in case the resistance at PHP 31.95 gets taken out, SMB could jet all the way to PHP 44.00. Moreover, one can also consider SMB’s movements in the last 2 months to be a pennant. If this is so, then it could even shoot up to PHP 54.00.

On the fundamental side, San Miguel Corporation (SMC) disclosed back in November 24, 2010 its plans to consolidate its liquor business by selling its stake in Ginebra San Miguel Inc. (GSMI) to SMB. SMC President Ramon Ang said that such deal could probably be reached in 3 months. Remember also that the Philippine Stock Exchange ordered SMB to comply with its 10-percent public ownership rule (presently, the public float only amounts to less than a percent). Increasing SMB’s public float to at least 10% would allow it to raise capitalization which it could use to finance its purchase of GSMI. In case you do not know, GMSI’s net income for the first three quarters of 2010 had risen by 29% to PHP 747.45 million from PHP 580.30 million during the same period in 2009. This increase, if sustained in the succeeding years, could be reflected in SMB’s bottom line. That is if SMB indeed goes on with the purchase.

More on LaidTrades.com …

Source: ForexYard

The U.S. dollar fell slightly against most of its major currency counterparts on Monday as the euro recovered from its losing streak, signaling a rise in risk appetite. The euro rallied to above 1.2950 against the dollar in Monday’s late trading session, from below 1.2900 in earlier trading.

Economic News

USD – U.S. Dollar Weakens as Risk Appetite Rises

The U.S. dollar fell slightly against most of its major currencies yesterday, as gains in stocks and commodities prompted investors to wade into riskier currency trades. By yesterday’s close, the USD fell against the EUR, pushing the oft-traded currency pair to 1.2950. The dollar experienced similar behavior against the GBP and closed at 1.5577. Against the yen, the dollar slipped 0.5% to 82.70 on Monday, the second straight day of declines.

Traders have started recently to focus more on fundamentals, such as economic growth and short-term interest rates. That shift, just getting underway, could take the shine off the soaring USD in the coming months. A stronger currency is important to the U.S. because it entices foreign investors to Treasury debt that finances the nation’s record budget deficit. The downside is that it may restrain profit growth at companies with international sales by making U.S. exports more expensive.

As for today, the calendar is lacking any major economic data releases for today’s trading from the U.S. and Europe. As such, traders will want to follow the movements of the major equity indices as the dollar has recently been trading in an inverse relationship to equities. Strength in stocks could propel the EUR/USD to its next short-term resistance line, which rests at 1.3000.

EUR – EUR Manages Gains despite Debt Concerns

The euro recovered from a four-month low against the U.S. dollar on Monday, though gains are not expected to hold given resurgent concerns about indebted euro zone countries and talk that Portugal will need a bailout. By yesterday’s close, the EUR traded up 0.4%; it remained down about 3.2% for the first six trading sessions this year.

Against the soaring Swiss franc (CHF), the euro rose 0.3% to 1.2525 francs. The Swiss currency weakened after a report said the Swiss government will meet business leaders and trade unions next week to discuss the implications of the record-strong Swiss franc.

The recovery in the euro, which fell below $1.2900 during early trading sessions yesterday for the first time since September, was partly helped by gains against the Swiss franc on speculation the Swiss government may take new measures to rein in currency strength. However, there was pressure growing on Portugal from Germany and France to seek financial help from the European Union (EU) and the International Monetary Fund (IMF) to prevent the debt crisis from spreading.

Portugal, Italy and Spain are all due to tap the bond market for funds this week. Investors were nervous about whether these highly indebted countries will be able to raise funds to sustainable levels in 2011.

JPY – Yen Higher vs. Major Currency Pairs

The Japanese yen experienced a bullish trading session yesterday, as it appreciated against most of its major currency pairs. The Japanese currency extended gains versus the U.S. dollar during yesterday’s trading session, to trade around 82.70 amid a broad sell-off in the USD. The JPY finished around 80 pips higher against the CHF to close out yesterday’s trading session at the 85.50 level.

Investors show concern over a recent rise in the JPY as it makes Japanese products less competitive abroad and hurts the value of overseas sales when translated back into the Japanese currency.

With steady gains primarily against the dollar, much of the Yen’s bullish movement could be contributed to the repatriation of overseas earnings by Japanese companies into the local economy. This has had a positive effect on major JPY currency pairings, as the rising turmoil in the market is leading to more investment in the Japanese yen.

Crude Oil – Spot Crude Oil Gains Close to 1% in Trading

Crude Oil prices rose more than 1% on Monday to around $89.35 a barrel, after a weekend leak shut the Trans-Alaska Pipeline and forced producers to cut output to about 5% of their daily average of 630,000 barrels.

The discovery of a leak at a pump station booster in Prudhoe Bay on Saturday shut the Alaska pipeline, which carries nearly 12% of domestic crude output. Alaskan regulators said on Monday they had no restart timetable yet, but the plan was to build a bypass line and use it to restart the system. Speculators are assessing what impact this will have on oil prices, but for the moment the price appears to be continuing its previous bullishness.

Technical News

EUR/USD

There is a fresh bullish cross forming on the daily chart’s Slow Stochastic, indicating a bullish correction might take place in the nearest future. The upward direction on the 4-hour chart’s RSI also supports this notion. Going long with tight stops might be the right strategy today.

GBP/USD

The pair has been range-trading for a while now, with no specific direction. The daily chart’s Slow Stochastic is providing us with mixed signals. All oscillators on the 4-hour chart do not provide a clear direction either. Waiting for a clearer sign on the hourlies might be a good strategy today.

USD/JPY

The pair has recorded much bullish behavior over the past several days. However, technical data indicates that this trend may reverse sometime soon. For example, the daily chart’s Slow Stochastic signals that a bearish reversal is imminent. Going short with tight stops might be a wise choice.

USD/CHF

The 4-hour chart is showing mixed signals with its RSI fluctuating in neutral territory. However, there is a bearish cross on the daily chart’s Slow Stochastic suggesting that a bearish correction might take place in the nearest future.

The Wild Card

Nasdaq 100

The Nasdaq 100 rose significantly in the last week and peaked at 2284.25. However, there is a bearish cross on the daily chart’s Slow Stochastic suggesting that the recent bullish trend is losing steam and a bearish correction may be impending. This might be a good opportunity for forex traders to enter this new 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.

AUDUSD remains in downtrend from 1.0255 and the fall extends to as low as 0.9856 level. Deeper decline is still possible in a couple of days and next target would be at 0.9700-0.9750 area. Resistance is at 0.9991, only break above this level could indicate that a cycle bottom has been formed on 4-hour chart, then sideways consolidation could be seen.

Written by ForexCycle.com

Stocks were mixed today as investors were occupied with European debt issues and upcoming 4th quarter earnings releases. Shares of AT&T weighed on the Dow after an announcement that it will no longer be the exclusive service provider for the iPhone.