Month: January 2011

The US dollar has gained very slight ground against the Indian rupee in the forex market today following yesterday’s unchanged results.

The USD/INR currency pair opened the day near the 45.86 exchange rate and reached its highest exchange rate for the day at the 46.17 level, according to currency data from Oanda.

The pair’s price action encountered resistance for a third straight day right at or above the 200-day moving average near the 46.00 exchange rate.

The pair currently trades above the 45.88 exchange rate near the end of the US session.

USD/INR Forex Chart – The Dollar/Rupee currency pair tested and hit resistance at the 200-day simple moving average (red line) for third day in a row in today’s trading as the dollar has made only slight gains against the Rupee.

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FxNewsIndia.com – Indian Rupee Forex News

By CountingPips.com

Canadian employment data released today showed that jobs rose for a second straight month in December, according to the monthly report by Statistics Canada. Today’s jobs report showed that employment rose by 22,000 workers in December following a gain of approximately 15,000 jobs in November. The jobs data slightly surpassed the market forecasts which were predicting an increase by approximately 20,000 workers for the month.

The Canadian unemployment rate remained steady at 7.6 percent, according to the report. On an annual basis through December 2010, Canadian employment increased by 369,000 workers or 2.2 percent after declining by 1.1 percent the year prior.

Full-time employment was the main driver for jobs in December with an increase by 38,000 hires while part-time employment fell by 16,000 workers for the month.

The goods-producing sector saw jobs gain by 40,000 workers in December as manufacturing added 65,000 jobs and employment in natural resources rose by over 7,000 workers. Construction hires fell by 27,000 for the month.

The service-providing sector shed approximately 19,000 jobs in December as the healthcare category saw a loss of 23,000 jobs while trade jobs fell by 22,000 jobs. The largest contributor to jobs in the service sector was the transportation and warehousing category which produced a gain of 44,000 jobs in December.

A free Club EWI report exposes the TEN most misleading myths of Wall Street, including this one: “Earnings drive the stock market.”

By Elliott Wave International

Since the time of buttonwood trees, Wall Street has had its own version of the Ten Commandments — the cornerstone principles of conventional economic wisdom. The first of these writ-in-stone notions is the widespread belief that earnings drive the stock market.

By this line of reasoning, knowing where a market’s prices will trend next is simply a matter of knowing how the companies that comprise said market are expected to perform. On this, the recent news items below capture the public’s devoted following of earnings data:

• “Stocks Rebound As Investors Await Earnings.” (Associated Press)
• “US Stocks Drop As Earnings Data Fall Short” (MarketWatch)
• “Sideways Market Looks For Direction: Earnings Could Point The Way” (MarketWatch)

In reality, though, much of this belief is based on faith, not facts. While earnings may play a role in the price of an individual stock, the stock market as a whole marches to a different drummer.

You get this ground-breaking revelation in the FREE report from Club Elliott Wave International (Club EWI, for short) titled “Market Myths Exposed.” In Chapter One, our editors shatter the smoke-screen surrounding the widespread notion that “Earnings Drive Stock Prices” with these enlightening insights:

• “Quarterly earnings reports announce a company’s achievements from the previous quarter. Trying to predict futures prices movements based on what happened three months ago is akin to driving down the highway looking only in the rearview mirror. It leaves investors eating the markets dust when the trend changes.”
• And — There is no consistent correlation between upbeat earnings and an uptrend in stock prices; or vice a versa, downbeat earnings and a decline in stocks. Case in point: During the 1973-4 bear market, the S&P 500 plummeted 50% while S&P earnings rose every quarter over that period. Here, “Market Myths Exposed” provides the following, visual reinforcement: A chart of the S&P 500 versus S&P 500 Quarterly Earnings since 1998.

As you can see, the market enjoyed record quarterly earnings right alongside the historic, bear market turn in stocks in 2000. Then again, the first negative quarter ever in 2009 preceded the March 2009 bottom in stocks.

“Market Myths Exposed” dispels the top TEN fallacies of mainstream economic thought. The misconception that “Earnings Drive the Stock Market” is number one. The remaining nine are equally capable of knocking your socks off and most importantly, helping you protect your financial future.

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By CountingPips.com

The U.S. dollar has been trading mostly lower in the forex markets against the other major currencies following today’s government employment report. The British pound, Japanese yen, New Zealand dollar, Australian dollar and Canadian dollar have all gained ground versus the American currency while the euro and the Swiss franc trade almost unchanged.

The U.S. Nonfarm Payrolls data released today showed that December jobs increased by less than expected and was a disappointment to those looking for a bigger number following Wednesday’s ADP employment surge. The Department of Labor nonfarm payrolls report showed that U.S. payrolls rose by 103,000 jobs in December while the unemployment rate declined by 0.4 percent to 9.4 percent.

Overall for 2010, 1.1 million jobs were created for an average gain of 94,000 jobs per month, according to the report.

November’s employment data was revised to a gain of 71,000 jobs after originally showing a rise of 39,000 and follows a revised increase of 210,000 jobs created in October.

The December report came in worse than the market forecasts that were expecting a rise of approximately 150,000 jobs but did manage to beat the expectations that the unemployment rate would decrease to 9.7 percent.

The gain in jobs was led by the service-providing sector which created 115,000 total jobs in December with education and health services adding 44,000 workers and leisure & hospitality services also adding 47,000 jobs. Retail trade added approximately 12,000 jobs for the month while professional and business service jobs increased by 7,000.

The goods-producing sector saw a decline of 2,000 workers in December as construction jobs fell by 16,000 workers while manufacturing rose by 10,000 jobs. Government hiring dipped by 10,000 workers for the month.

The US stock markets have been almost unchanged today following the report with the Dow Jones industrial average increasing by over 5 points while the NASDAQ has decreased by over 1 point and the S&P 500 is just about unchanged at time of writing.

Oil has risen by $0.47 to the $88.86 per barrel level while gold futures has continued its downward trajectory with a decrease by $15.90 to trade at the $1355.50 per ounce level.

By Russell Glaser

Yesterday’s closing price for the EUR/USD had significant technical ramifications.

The EUR/USD closed below the rising support line from the November and December lows and finished the day well below the 200-day moving average. The selling of the pair was capped at 1.2970, the November 30th low which is the first support level. A breach below this level would open the door for further declines, with support coming in at the September 6th high at 1.2920, followed by the 61.8% Fib retracement form the June to November move at 1.2800.

The rising support line should now turn into a resistance level. This comes in today at 1.3110. Further resistance is found at the top of the December to January consolidation pattern at 1.3440.

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 continued to grind higher during the Asia session, as guarded optimism builds over the upcoming payrolls report, and the strength of the US recovery in general. EURUSD traded 1.2968-1.3029, USDJPY 83.14-83.56. Asian equities were fractionally higher, after the S&P 500 finished down -0.2%. Press reports mentioned that US Treasury Secretary Geithner has written to Congress to urge that the US debt limit be raised, preferably before the end of March. Initial jobless claims rose in line with expectations in the week ended Jan 1 to 409k. Our analysts upped their estimate for nonfarm payrolls following the better data earlier this week. They forecast private payrolls rose +190k (cons: +170k) and total payrolls increased +160k (cons: +150k). The dollar has recently started to behave increasingly like a growth currency but today’s payrolls release, and Fed Chairman Bernanke’s testimony, will be a good litmus test for whether this trend can be sustained. Although we look for modest dollar strength in 2011, ongoing uncertainty on the recovery, coupled with the possibility of policy errors, is expected to keep FX volatility elevated.
EUR

The newswires carried comments from China’s PBoC. The Bank said the euro is an important part of its FX reserves investment, adding that Eurozone sovereign debt offers reasonable returns.
According to newswires, the EU Commission has put forward a blueprint for imposing haircuts on senior bondholders of European banks. The same reports suggest the measures could become law by 2013.
A Spanish newspaper, citing an unnamed government source, said that China has committed to purchase €6 bn of Spanish sovereign debt. This represents a relatively small portion of the €90 bn in Spanish supply our European rates strategists expect for 2011. The newspaper added that China’s Vice Premier Li has committed to buy as much Spanish debt as the combined holdings of China’s Greek and Portuguese bonds.
Eurozone consumer confidence came in softer than estimates at -11.0, down from November’s print of -9.4. However, German factory orders for November were much stronger than consensus, rising by +5.2% m/m and +20.6% y/y.
GBP

The UK services PMI disappointed, recording a figure of 49.7. Our UK economist notes that this is largely a blip in the trend due primarily to the adverse weather conditions experienced over the previous month, and the index should recover in January.
CHF

CPI for December was firmer than expected at +0.5% y/y, a significant rise on November’s print of +0.2%. This reading helps dampen expectations of renewed SNB intervention, especially as consumer surveys show inflation expectations are already picking up, suggesting upside CPI risks in 2011.

TECHNICAL OUTLOOK
EURUSD breaks 1.3084/55.
EURUSD BEARISH Break of 1.3084/55 area has exposed 1.2830/1.2796. Resistance is at 1.3170.
USDJPY NEUTRAL Focus is on 83.67, with the big resistance at the 84.51 mid-December high next; support at 81.89.
GBPUSD BEARISH Support is at 1.5345 while resistance is at 1.5695.
USDCHF NEUTRAL Focus on the tough 0.9774 Fibonacci resistance. Support lies at 0.9469.
AUDUSD NEUTRAL Pressure on 0.9951/18 support area with resistance at 1.0256.
USDCAD BEARISH Break of 0.9917 would expose 0.9889/25 area. Initial resistance is at 1.0034.
EURCHF BEARISH Rise above 1.2699/1.2702 exposes 1.2847/88. Support is at 1.2456.
EURGBP BEARISH Decline through 0.8409 Fibonacci support has exposed 0.8347/35 support area; resistance at 0.8489 yesterday’s high.
EURJPY BEARISH Bearish outlook; support is at 107.61 with resistance at 110.82.

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 Yan Petters

Gold has failed to mark a new all-time high this week, and only reached as high as $1,423 an ounce. This has triggered a sharp bearish move, which is by now reflected in a 6,000 pips decline. Gold has already seen two failed attempts to drop below the $1,360 level, yet it currently seems that a third attempt is impending.

• The chart below is the spot gold 8-hour chart by ForexYard.
• The horizontal lines drawn on the chart represent the supportresistance levels of gold trading.
• It can be seen that after gold has failed to breach through the $1,423 resistance level, it has fallen steadily, and reached as low as $1,363 an ounce.
• Currently, a bearish cross of the Slow Stochastic indicates that another bearish session might be impending.
• In addition, the MACD continues to point down and the RSI continues to float below the 30-line, in the over-sold section. Both indicating that the bearish move still has more room to go.
• The next significant support level is placed at $1,360 an ounce. If gold falls below this level, it has the potential to reach $1,350, and afterwards $1,340 an ounce – before today’s trading ends.
• Nevertheless, in case that gold will fail to cross the $1,360 level, it might bounce back up, and reach $1,382 an ounce.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Source: ForexYard

The publication of the Non-Farm Payroll (NFP) data from the US at 13:30 GMT today is without a doubt the leading publication on the economic calendar. If this highly impactful employment report comes in line with Wednesday’s ADP figures, the USD could continue its current bullish run through the middle of next week.

Economic News

USD – Will December Non-Farm Payrolls Boost the USD?

The US dollar continued its bullish surge yesterday following up from Wednesday’s leap. Automatic Data Processing Inc. (ADP) published their monthly report on private sector employment change throughout the month of December showing a better-than-forecast growth in the American employment sector. The result was a strong upward movement in the greenback.

The EUR/USD dropped from 1.3433 to below 1.3000 for the first time since November 30th, representing a 3.2% shift in price over the past two days. The USD/JPY also changed direction, bouncing off the 81.00 price mark on January 2nd, climbing above 83.20 in today’s trading and looking to move higher following today’s NFP report.

The publication of the Non-Farm Payrolls data from the US at 13:30 GMT today is without a doubt the leading publication on the economic calendar. Should this highly impactful employment report come in line with Wednesday’s ADP figures, the USD could continue its current bullish run through the middle of next week.

EUR – EUR Bearish, Regional Reports May Add Strength in Short-Term

The euro has experienced steady bearish behavior against most of its currency counterparts over the past several trading days. Against the US dollar, the 17-nation currency fell over 3.2%, hitting below 1.3000 for the first time since late-November. Against the British pound, the euro dropped from a recent high of 0.8647 to a current price of 0.8414.

The American economy’s employment figures, while representing the most impactful data for the day, will not be the sole reports released from global economies. Europe is scheduled to release a series of economic reports also focusing on employment as well as regional trade deficits and retail sales.

On tap for today from the euro zone are the German and French trade balance figures, the unemployment rate from Italy specifically and the region generally, as well as the euro zone’s final GDP. Markets will most likely resist heavy volatility prior to the release of the US NFP data, but the EUR could see some bullish corrections if these reports show movement towards growth.

JPY – JPY Mixed as EUR and USD Drive Market Volatility

The mixed results of the Japanese yen over the past several trading days shows a currency being driven by external factors. The yen has fallen significantly against the US dollar and British pound over the last few days, but has gained moderately versus the euro.

As a safe-haven currency, the JPY tends to find support when markets are weakened. The recent strength in the USD from Wednesday’s ADP employment figures has allowed the dollar to outpace the yen in short-term trading. Europe’s continued weakness explains the JPY’s persistent rise against that regional currency. With no economic reports expected out of Japan today, traders will want to pay attention to the US NFP data as this will likely drive today’s volatility.

Crude Oil – Crude Oil Looks to Continue Bearish Correction

The price for a barrel of Crude Oil has begun a modest decline since January 3rd. The resurgent US dollar helps explain much of this bearish behavior. However, technical indicators also suggest that oil was anticipating a bearish correction to its latest surge regardless of USD values.

Should the greenback continue its bullish run after the publication of Non-Farm Payrolls (NFP) at 13:30 GMT today, Crude Oil prices will most likely remain in a bullish corrective pattern through the middle of next week.

If European data shows a continued slow-down in growth with today’s publication of German industrial production and regional GDP, the price of Crude Oil will find additional resistance as fundamentals harken towards a decline in demand. Unless today’s NFP data surprises with negative figures, traders should anticipate a bearish price of oil through the remainder of this week’s trading.

Technical News

EUR/USD

Indicators on this pair appear to be showing a bearish tendency. The daily chart’s signals show neutrality, but with most oscillators pointing down. It appears the latest bearish movement still has room to run; meaning traders may want to hold their short positions for a bit longer today.

GBP/USD

Most oscillators on this pair show the price floating in neutral territory. However, the daily and weekly RSI and Stochastic (slow) indicators each point in a downward direction, suggesting bearish momentum. Traders may want to open short-term sell positions with tight stops today.

USD/JPY

The strong bullish movement over the past few trading days has finally pushed a number of indicators into corrective territory. The daily Stochastic (slow) shows an imminent bearish cross, suggesting the possibility of a correction today if the price continues above the 83.75 price level.

USD/CHF

The strong rebound this pair underwent over the last few days does not appear to have pushed indicators into corrective territory. Most signals show continued bullishness on the horizon. A swing in price appears far off and traders may want to hold onto their long positions on this pair.

The Wild Card

EUR/CHF

This pair appears to be reaching a bottoming-out price. Falling consistently for months, this pair now appears poised for a strong reversal with a number of indicators showing potential bullishness just up ahead. The fresh bullish cross on the weekly Stochastic (slow) illustrates this notion rather well and forex traders may want to heed this signal by taking profit on their short positions in preparation for the swing.

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.

The US dollar traded on much optimistic sentiments on Thursday after the news of reduced jobless claims for the current week as per latest data released by US Labor Department. According to the report jobless benefit claims increased by 18,000 to 409,000 in the last week. The figure of jobless claims has reduced in the current week which was already expected by several economists.

The dollar index DXY which measures the US dollar’s performance versus the its major six rivals surged to 80.789 from 80.246 on Wednesday which happens to be its highest in last two weeks.

Director of currency research Kathy Lien from GFT commented, “The dollar has rallied significantly and the sustainability of its gains hinges upon Friday’s nonfarm payrolls report.”

She further added, “The only reason why investors bought dollars over the past week is in anticipation of strong job growth so if payrolls disappoint, the dollar will come crashing down, yet given the low level of jobless claims and the strength of the ADP employment report, the dollar rallied today because the risk of a shortfall is small while the risk of a blowout number is large.”

The Euro declined to 1.3017 versus the US dollar as compared to $1.3153 on Wednesday’s late trading session. Euro gained earlier this week but witnessed the correction due to rising concerns over European Commission’s plan to opt for writing down of senior bondholders in case of any future bank failures as per EU’s new consultation paper.

The British Pound also declined to 1.5475 versus the greenback as compared to 1.5498 on Wednesday’s late trading session. The British Pound remained under severe selling pressure on weak UK’s economic data.

About the Author

Daily forex trading news written by Rehan from DailyForexTrade.com

Chris Vermeulen, thegoldandoilguy.com/trade-money-emotions.php