Month: January 2011

By CountingPips.com

U.S. jobless claims increased by just slightly more than expected in the week that ended on January 1st, according to the data release by the U.S. Labor Department today. Weekly initial jobless claims increased by 18,000 workers to a total of 409,000 unemployed workers for the week through the first day of the new year. The 4-week moving average of unemployed workers decreased by 3,500 workers from the previous week to a total of 456,000 workers.

Market forecasts were expecting jobless claims to number approximately 405,000 claims following the prior week’s 391,000 revised number of claims.

Meanwhile, workers seeking continuing claims for unemployment benefits for the week ending December 25th decreased for the week. Continuing claims fell by 47,000 workers to a total of 4,103,000 unemployed workers. The 4-week moving average of continuing claims declined by 2,750 workers to a total of 4,122,500.

The market-moving US Nonfarm Payrolls report for December is to be released tomorrow at 13:30 pm GMT with early market forecasts predicting a potential gain of 140,000 jobs and with the unemployment rate dipping to 9.7 percent from 9.8 percent.

By Dan Eduard

While the dollar has made some fairly impressive gains on the rand as of late, the pair may be in store for a downward correction according to technical indicators. Since the 3rd of this month, the USD/ZAR has gone up over 1700 pips, and is currently trading around the 6.7660 level.

At the same time, the 8-hour chart is showing signs of an impending bearish move. Both the Williams Percent Range and RSI are overbought, while a bearish cross has already formed on the Slow Stochastic. Traders may want to go short in their positions, as the pair may drop to the 6.7000 level in the near future.

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 strengthen during the Asia session in the aftermath of the exceptionally strong ADP employment report. EURUSD traded 1.3130-1.3185, USDJPY 83.15-83.40. The FX reaction was very much in tune with our view that the dollar is poised to become a growth currency that benefits from stronger US data. The ADP change of +297k (cons. +100k) is the highest ever recorded, and was well above the upper range of economist estimates. The nonmanufacturing ISM index also beat expectations although the employment component slipped in December. Nevertheless, our US economists raised their December payroll forecast to +190k for private payrolls and +160k in total payrolls, up from +150k and +120k, respectively. They also lowered their unemployment rate forecast to 9.7% from 9.8%. Continued improvement in the economic backdrop should point to more dollar strength, particularly versus the yen and Swiss franc, as market participants could start to price out further quantitative easing. But we remain cautious until we see the actual payrolls print and hear what Fed Chairman Bernanke has to say on Friday. Jobless claims are due and the dollar is likely to find further support if fewer than 400k claims are reported
EUR

The European Commission said that its ?5 bn sale of bonds to finance Ireland’s rescue package was oversubscribed. The EFSF is expected to issue ?8 bn of bonds by the end of January for the same purpose.
An auction of Portuguese 6m bills was well covered, but the average yield was significantly higher than at the previous auction.
Eurozone PMIs were above consensus with services at 54.2 and composite at 55.5. The trend of diverging paths across Europe continued with softer data from Italy and Spain and stronger conditions across the ‘core’.
GBP

The UK construction PMI was disappointing at 49.1 in December, although this is likely to be due to adverse weather conditions. Our UK economist notes that the more important measure is the services sector PMI tomorrow.
CHF

December CPI is due but while the m/m print could be negative, the y/y reading should remain in positive territory, which should be enough to dampen expectations of renewed SNB intervention. Consumer surveys show inflation expectations picking up, suggesting upside CPI risks in 2011. We still look for some monetary policy tightening by the SNB in early 2011.
AUD

Residential building approvals for Nov. fell -4.2% m/m, a decline that was slightly faster than the consensus expected. AUDUSD did not react, and the pair seems more concerned with the impact of flooding in Queensland and a resurgent US dollar.

TECHNICAL OUTLOOK
EURGBP support is at 0.8446.
EURUSD BEARISH Break of 1.3199 Fibonacci support exposes 1.3084/55 area.
USDJPY NEUTRAL Move above 83.10 has exposed 83.67, with the big resistance at the 84.51 mid-December high; support at 81.89.
GBPUSD NEUTRAL 1.5695 and 1.5345 mark the near term directional triggers.
USDCHF NEUTRAL Focus on the tough 0.9774 Fibonacci resistance. Support is at 0.9469 yesterday’s low.
AUDUSD NEUTRAL Support lies at 0.9951/18 while resistance is at 1.0256.
USDCAD BEARISH Bearish outlook; break of 0.9917 exposes 0.9889/25 area. Initial resistance is at 1.0034.
EURCHF NEUTRAL Model has turned neutral; rise above 1.2699/1.2702 exposes 1.2847/88. Support is at 1.2456.
EURGBP NEUTRAL Pressure on 0.8446 support holds while resistance is at 0.8637.
EURJPY NEUTRAL Focus is on 110.82 resistance while support lies at 107.61.

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 Dan Eduard

After spending the better part of the last two days stuck in a downward spiral, technical indicators are now showing that the Swiss franc is poised to turn bullish against its Japanese counterpart.

As we can see in the chart below, the Williams Percent Range and Relative Strength Index are already in oversold territory, indicating a bullish correction is imminent. The Stochastic Slow has yet to form a bullish cross, but appears to be heading in that direction. When it does, traders can expect the correction to take the pair toward 86.75 level.

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 greenback rallied yesterday on a report that hiring picked up in the month of December. Following better than expected inventory numbers the price of crude oil came off a 3-week low to trade above the $90 level.

Economic News

USD – Dollar Up on Surprising Job Data

The US dollar moved higher across the board after the release of better than expected ADP Non-Farm Jobs report. The unexpected increase in private jobs offers a ray of glimmer of hope for USD bulls and those who are bullish on the US economic recovery. The job market has been a laggard in the slow US economic recovery but may be the key to both an increase in growth as well as dollar strength.

The ADP report came in at 297k new jobs which was significantly higher than economists’ expectations of an increase of 101k.

At the close of New York trading, the EUR/USD was down sharply at 1.3145 after opening the day at 1.3270. Strong gains were booked for the dollar versus the yen with the USD/JPY trading up at 83.25 from 81.93. The USD/CHF was also higher at 0.9666 after opening at 0.9492.

Traders will now look to confirm the trend of improving employment with two key reports due out today and Friday. Today the US will release its weekly unemployment claims which are expected to come in at 400k. Friday will bring the all-important non -farm jobs report which is forecasted to show an increase of 136k jobs. Should these two key reports come in above market expectations, the EUR/USD may continue to build on the last two days of downward movement and test its 200-day moving average at 1.3060.

EUR – Euro Mixed After Strong US Data

Yesterday the EUR/USD fell to a 1-week low on better than expected US economic data but rallied against the Swiss franc and Japanese yen. This comes following better performing European industrial orders for the month of December. Last month new industrial orders rose by 1.4% on expectations of a rise of only 1.3%.

The significantly better than expected US jobs report and the stronger US non-manufacturing ISM PMI helped to boost the USD versus the euro. Portugal’s debt raising weighed on the market as the struggling European nation was forced to issue its debt at much higher yields than expected.

At the end of the trading day, the EUR/CHF was up at 1.2720 from an opening day price of 1.2595. The EUR/JPY was also higher at 109.60 from 108.74. However, the euro struggled versus the pound as the EUR/GBP was down at 0.8481 from 0.8523.

Traders will be looking towards the release of German factory orders to gauge the recovery in the industrial sector for Germany, Europe’s largest economy. Economists expect new factory orders to rise 1.0% in comparison with a previous gain of 1.6%. Should the report come in above market expectations, traders will be inclined to bid the euro higher with the next resistance level for the EUR/CHF coming in at the September low of 1.2765.

JPY – USD/JPY Shoots Higher on Strong US Economic Reports

The USD/JPY was up sharply on the day following the release of better than expected private job numbers and non-manufacturing PMI. For the past two out of three days, the USD/JPY has climbed, coming off of a two month low to now trade at a two week high. Traders have become bullish on the greenback with the stream of positive economic data coming from the States.

Yesterday the USD/JPY finished the day at 83.25 from 81.93. This is the pair’s highest close since mid-December when the pair began a continuation of the sharp downtrend.

No economic data is due out from Japan until next week so the yen will be susceptible to events and data coming from the US and Europe. Traders should be eyeing both Thursday and Friday’s US employment data as high impact events.

Should the bullish correction continue, the next resistance level for the USD/JPY rests at the mid-December high of 84.50.

Crude Oil – Crude Oil Surges on Inventory Report

The price of crude oil settled above $90 yesterday following better than expected private sector job numbers and a larger than expected drawdown in crude oil stocks.

Spot crude oil prices ended the day up at $90.28 after opening the day at $89.15.

Following the release of strong employment data, spot crude oil prices were bid higher. Later in the day momentum behind the bullish move increased with the release of the weekly crude oil inventory numbers from the US Department of Energy Administration. The weekly data handily beat market expectations with crude oil stocks declining by 4.2m barrels on expectations of a decline of 1.4m barrels.

The rally in crude could continue should the upcoming US employment releases come in on the positive side. Resistance is found at Monday’s high of $92.56.

Technical News

EUR/USD

Two consecutive days of declines has the pair testing the 200-day moving average. The all-important support level comes in today at 1.3055. A breach below this level could trigger further declines in the pair with the next support level located at the November low of 1.2970.

GBP/USD

The pair has been range trading for the past three weeks and is characterized by low volatility and an ADX (14) that comes in at 15, indicating a trendless trading environment. Bias is to the downside, but traders may want to wait for a defined signal before making a move.

USD/JPY

Two days of strong gains have been booked for the pair. The price has made a solid close above its short term downward sloping trend line. More gains may be expected with resistance coming in at the mid-December high of 84.50.

USD/CHF

The pair is up sharply since the start of the week and is now approaching a key resistance zone. Between the prices of 0.9740 and 0.9775 lie the 50 day and 100 day moving average as well as a previous rising trend line from the October and November lows which may turn into a resistance level. A breach above this zone could spur further buying of the pair to the resistance at 0.9840.

The Wild Card

Silver

Silver prices have declined for the past three trading days from a high of 31.21. The declines took the commodity below the long term trend line which began in late August. However, the price did not close below this key support level which came in at $29.25. Forex traders may find a buying opportunity here to go long with a target at the previous high.

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 advanced on Wednesday’s North American trading session versus its major counterpart currencies. The surge in US dollar came after latest data showing improved private sector employment rate in United States.

The dollar index DXY which measures the greenback’s performance versus its six major rivals surged to 80.246 as compared to 79.33 on Tuesday’s trading session.  The latest report showed that US private sector payrolls increased by 297,000 for the month of December which surpassed the economists’ forecasted increase of 100,000 jobs.

Director of currency research Kathy Lien from GFT commented, “Although we expect the dollar to hold onto its gains going into the payrolls report, the strong ADP report will cause traders to reposition for a significant increase in nonfarm payrolls, should the number disappoint, the dollar could come crashing down.”

The Euro declined versus the US dollar to 1.3153 as compared to 1.3305 on Tuesdays while the British Pound dropped 0.5 percent to 1.5498 against the greenback. The US dollar also gained against the Japanese Yen to 83.26 from 82 on Late Tuesday.

The Euro remained under severe selling pressure mainly due to the news of exclusion of Irish government bonds from collateral options by Swiss National Bank. A spokesman of the central bank of Switzerland stated on the issue that only, “securities that fulfill stringent requirements with regard to credit rating and liquidity are accepted as collateral.”

Australian dollar reported the fall of 0.6 percent to 1.0003 versus the US dollar as the floods in province of Queensland created uncertainty among investors and traders about the country’s affected production which could result in lower exports.

About the Author

Daily forex trading news written by Rehan from DailyForexTrade.com

By Forex Signs, Inc.

After falling from 83.11 to 81.95 levels, which is approximately 116 pips down, the AUDJPY as of the moment is expected to move in consolidation between the resistance level at 82.44 and support level at 81.94. The MACD (12, 26, 9) of the M30 price chart is still showing signs of a consolidation, as the signal line closes its gap with the MACD line. But the anticipation for a probable selling proposal is still visible with the simple MA (65) along with the price at the 1-hour chart is heading towards the bearish channel. Apart from that, the Parabolic SAR line at the same time frame rises above the price, thus stimulating a prospective bearish momentum in the succeeding events. For the moment, a hold position is seen to be applicable for the current movement of the AUDJPY. And bearish opportunity with the pair heading towards the downtrend for the upcoming trading session is still foreseeable.

Strong Fed for a Stronger Currency

The U.S. dollar may expect a bullish sentiment in the trade today against its European contender as the Federal Reserve remains confident on pace and scale of quantitative easing 2. The QE2 scheme was announced in early November. Despite various doubts on the efficiency of the scheme, the Fed remains firm on their stand that QE2 will work. Further, the balance of economic data has gone beyond expectations since then, with most indicators pointing to an acceleration in the recuperation. This recommends to critics of the Fed plan that it may not have been necessary in the first place. However, at their December 14 meeting, most Fed officials appeared strong-minded to maintain QE2 as it situates, unless there is a much more dramatic pick-up in the US economy. During the meeting, Fed also discussed about the recovery’s pace; it is likely to remain modest, with unemployment and inflation deviating from the committee’s objectives for some time.
The unity displayed by the Fed may likely reflect optimism in the trade of the U.S. dollar. Traders will most probably take this opportunity to buy USD as FOMC Meeting Minutes benefit the currency.

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.

GBPUSD continues its sideways consolidation. Range trading between 1.5344 and 1.5664 is still in favor in a couple of days. As long as 1.5664 key resistance holds, downtrend is expected to resume after consolidation and one more fall to test 1.5296 (Sep 7 low) support is still possible, a break below this level will confirm that the long term uptrend from 1.4230 (May 20 low) is complete.

Daily Forex Signals

The US dollar has gained ground against the Indian rupee in the forex market for a second straight day as the dollar rose broadly today in trading on better than expected US private employment numbers.

The USD/INR currency pair opened the day near the 45.74 exchange rate and rose to touch its highest exchange rate since December 20th at the 46.03 exchange rate, according to currency data from Oanda. The pair’s price action encountered resistance right above the 200-day moving average at the 46.00 exchange rate.

The pair currently trades above the 45.80 exchange rate in the afternoon 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) in today’s trading as the dollar has risen for a second day against the Rupee.

About the Author

FxNewsIndia.com – Indian Rupee Forex News

By Forex Signs, Inc.

The U.S. dollar may expect a bullish sentiment in the trade today against its European contender as the Federal Reserve remains confident on pace and scale of quantitative easing 2. The QE2 scheme was announced in early November. Despite various doubts on the efficiency of the scheme, the Fed remains firm on their stand that QE2 will work. Further, the balance of economic data has gone beyond expectations since then, with most indicators pointing to an acceleration in the recuperation. This recommends to critics of the Fed plan that it may not have been necessary in the first place. However, at their December 14 meeting, most Fed officials appeared strong-minded to maintain QE2 as it situates, unless there is a much more dramatic pick-up in the US economy. During the meeting, Fed also discussed about the recovery’s pace; it is likely to remain modest, with unemployment and inflation deviating from the committee’s objectives for some time.

The unity displayed by the Fed may likely reflect optimism in the trade of the U.S. dollar. Traders will most probably take this opportunity to buy USD as FOMC Meeting Minutes benefit the currency.

Criscross Patern for AUDUSD

A further decline is expected to incur in the AUDUSD trade as the pair is currently engineering a downward trend in H1 time frame. The pair opened at price level 1.0054 with a bullish candle stick. At the time of writing, AUDUSD already broke initial support key level of 1.0007. With this, a strong bearish force is likely to transpire in the trade. Small bullish corrections eventuate every after a steep bearish candle, it is suggested to watch closely the chart while trading. A similar scenario occurred yesterday. The pair began with a bullish candle; price level is at 1.0157. Slight bullish corrections were seen almost every after 2 bearish candles. At the end of the day, the pair still lost roughly 100 pips. Again, declines may still place as technical indicators were implying so. CCI (14) at the moment is observed loitering at below -100 level. This implies that the AUDUSD pair is oversold. CCI (14) in H1 time frame dropped to as low as -175.113 then it created zigzag movements going up yet it has not reach beyond oversold parity of -100. At the same time, %R (14) is doing the same. Crisscross motions were distinguished which means bullish corrections were made yet these corrections were not strong enough to break the downward trend. With the pair having frequent corrections, it is best to set volatility at 90 pips only. However, there is also a slight chance that the AUDUSD pair might take a u-turn. If the Alligator’s lips become too close to the teeth, this might indicate that the trend may neutralize, thus a possibility of a reversal. So far, the teeth and lips are significantly distant from each other.

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.