Month: February 2011

Feb. 15 (Bloomberg) — Google Inc. executive Wael Ghonim, whose social-media expertise helped trigger the anti-government protests that toppled Egypt’s Hosni Mubarak, speaks about the rebuilding the country’s economy. Ghonim spoke with Bloomberg’s Margaret Brennan yesterday. Deirdre Bolton reports on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)

On Tuesday, February 15th, you can expect Sirius XM Radio’s (SIRI) earnings report early on the morning. Rovi Corp (ROVI), Tesla Motors (TSLA), Allscripts Healthcare (MDRX), and Dell (DELL) will be reporting their earnings in the afternoon. Economic data due out on Tuesday include Empire Manufacturing figures, the Import Price Index (MoM), and Retail Sales at 8:30AM ET and Business Inventories at 10AM ET.

Feb. 15 (Bloomberg) — Viktor Shvets, head of regional strategy at Samsung Securities Co., talks about the outlook for China’s economy after inflation exceeded the government’s target for a fourth month. He speaks with Francine Lacqua on Bloomberg Television’s “On The Move.”

After rising for a fifth consecutive week last Wednesday, tomorrow’s US Crude Oil Inventories report (15:30 GMT) is expected to show continued surpluses of supply in the world’s largest energy consumer. Forecasts expect to see between 1.5M and 2.6M barrels of inventory growth.

Oil prices received a bump in Tuesday’s European trading session as uncertainty about Egypt’s political future, as well as the protests in Yemen and Iran, have driven many speculators to anticipate coming disruptions in supply.

Growth in American inventories appears to support this assessment as consumers stockpile oil in expectation of a coming reduction in output.

The price for a barrel of Light, Sweet Crude today jumped from $84.85 to as high as $85.94 before meeting resistance and pausing near $85.85 during early New York trading.

Traders may be able to deduce one important factor for trading Crude Oil on Wednesday. If US crude inventories decline, or grow far less than expected, we may see a jump in oil prices as supply appears to be descending and/or demand has increased.

However, should Wednesday’s inventory report reveal the expected increases to US stockpiles, traders may anticipate stability to Crude Oil’s recent bearishness.

We may continue to see some upward movement as speculators mull the recent turmoil in the Middle East, but the supply-demand equation appears to support the recent downturn.

Feb. 15 (Bloomberg) — Andrew Hall disclosed that his hedge fund held oil and gas stocks with a market value of $283 million at year-end, a sign the energy trader delved into equities during the fourth quarter. Bloomberg’s Matt Miller reports in today’s Movers & Shakers. (Source: Bloomberg)

2010 was a marquee year for Andrew Tan’s flagship company Megaworld Corporation or MEG in the Philippine Stock Exchange as it was able to book a 69.86%. However, MEG’s outlook had started to look a bit bleak around December as it started to form a head and shoulders pattern which technical analysts consider as a bearish pattern. In my presentation in Absolute Traders’ year-end chart analysis forum last December, I noted that people should start to avoid MEG at that mean time given its technical set-up. In my colleague’s post in January 12 (kindly see it here), he mentioned again MEG’s likely downturn. And guess what? Exactly a week after that (January 19), MEG’s breakdown occurred.

Since breaching the head and shoulders’ neckline at PHP 2.20, MEG had slipped to a low of PHP 1.98. After doing so, it managed to rally back to to the neckline but was unable o move past above it. For almost a month now, MEG has been stuck within a rectangle pattern (trading between PHP 2.00 and PHP 2.20). Its bias, however, is bearish given its recent breakdown from a head and shoulders pattern. Hence, a fall below the rectangle’s support at PHP 2.00 could send it down to its downside target of PHP 1.80 or to its former high at PHP 1.74.

So to avoid possible losses, I would immediately cut my long positions especially if the support at PHP 2.00 gets broken. Of course, I would want to sell my positions at rallies. But that’s just me. By the way, this is not to say that Megaworld Corporation is not a fundamentally sound company because it is. Perhaps the market is just waiting for a more attractive price before they get on board once again.

More on LaidTrades.com …

By GCI Forex Research

Fundamental Outlook at 0800 GMT (EDT + 0400)

USD

Dollar performance was mixed during the Asia session with losses incurred against the euro, while further gains were made versus the yen. EURUSD traded 1.3473-1.3528, USDJPY 83.20-83.56. AUDUSD was temporarily supported by China’s CPI print, which was more benign than consensus forecasts. An uneventful BoJ policy announcement had no currency impact. There were no major data releases in the US overnight, but today should be more eventful. Advance retail sales are due and the winter weather in January could make it a more volatile release. We are looking for +0.1% on the headline release vs. consensus of +0.5%, largely due to bad weather. A disappointing headline print could knock the dollar and Treasury yields lower. But our economists note that even if the data comes in around their lower estimate, their forecast is consistent with total real consumer spending (including services), staying largely unchanged on the month.
EUR

A regular monthly meeting of Eurozone finance ministers broke up as expected without any agreement on how Europe’s existing financial rescue mechanism might be enhanced over the coming weeks. However, Eurogroup president Juncker said agreement had been reached on the size of the ESM – the permanent mechanism that is due to take over in 2013. Juncker said the EU’s contribution to the ESM would ensure an effective EUR500 bn lending capacity, and said the IMF will make contributions on top of that. Juncker also said there could be an extra Eurogroup meeting on March 21, ahead of the end of month EU leaders summit.
The ECB revealed it had purchased no sovereign bonds under the Securities Markets Program by Tuesday of last week.
JPY

The BoJ kept the policy rate unchanged and continues to target a range of 0-0.1%. No changes were made to any of the asset purchase or lending facilities.
GBP

We expect another above-target CPI print of 4.00% y/y, in line with consensus, which could keep BoE rate hiking expectations elevated.
CHF

We raise our 3m EURCHF forecast to 1.35 to reflect that Swiss outperformance may be coming to an end as the global economy reflates and as the SNB continues to ease rates.
AUD

The RBA minutes from the Feb 1 meeting provided little in the way of additional insight into the policy board’s current thinking. The key message was that recent consumer caution and lower than expected CPI have convinced the RBA that it need be in no hurry to hike again. Our Australian economists continue to see the first 2011 policy rate hike in August/September.

TECHNICAL OUTLOOK
EURUSD 1.3428 support.
EURUSD NEUTRAL Move below 1.3428 would expose 1.3364. Initial resistance at 1.3621.
USDJPY BULLISH Resistance at 83.68 continues to hold; push above the level would expose 84.51. Support at 82.71.
GBPUSD BULLISH While support at 1.5922 holds, expect recovery towards 1.6138 and 1.6186.
USDCHF BULLISH Break through 0.9776/84 would expose 0.9852. Support is at 0.9575.
AUDUSD NEUTRAL Model is neutral; 1.0137 and 0.9961 mark the near-term directional triggers.
USDCAD BEARISH Support at 0.9832/20 zone holds; break through this would expose 0.9712. Near-term resistance at 0.9918.
EURCHF BULLISH Clearance of 1.3086 exposes 1.3015. Resistance at 1.3206.
EURGBP BEARISH Momentum is negative; eyes 0.8389/77 support zone. Near-term resistance is at 0.8462.
EURJPY BULLISH Rise above 113.44 would expose 114.01/94 resistance area. Support lies at 112.06.

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 falling well over 100 pips since late last week, the EUR/GBP pair seems poised for a bullish reversal in the near future. Long term technical indicators are showing a potentially significant upward correction, giving forex traders a great opportunity to open up long positions before the upward breach occurs.

We will be looking at the 8-hour EUR/GBP chart provided by ForexYard. The technical indicators being examined are the Stochastic Slow, Williams Percent Range and MACD.

1. The Stochastic Slow has formed a bullish cross, which is typically a sign that upward movement is likely to occur in the near future.

2. The Williams Percent Range is currently right around the -90 level. Typically when the indicator drops below -80, it is a sign that the currency pair is in oversold territory and may be due for upward movement.

3. Finally, the MACD has formed a bullish cross, lending further evidence to our original theory that the pair is likely to move up 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 Greg Holden

The Swedish economy is once more at the forefront of Scandinavian news, with the krona (SEK) bullish against its primary rivals. After an increase to the short-term repo rate by the Riksbank, forecasts on the SEK appear to favor additional gains throughout 2011, but the cost exporters will bear from this increase has become a concern.

A variety of industries in Sweden have benefited from the competitiveness of Swedish goods. The Swedish telecom industry continues to hold a strong competitive edge, with Ericsson posting steady growth. Truck-maker Volvo AB Asia also posted a 50% increase in sales over the last nine months.

The downside to the latest upsurge in the krona, however, has been that manufacturers and a variety of retail companies are suffering losses from a decline in exporting power. The rising price of raw materials and crude oil has gouged Sweden’s manufacturing industry, as SKF AB – a leading ball-bearing manufacturer – reported lower than expected profits; citing high raw material prices as a factor.

As the Riksbank recently increased its short-term repo rate to 1.50%, the krona has seen continuous gains. The EUR/SEK posted a sharp drop today, following the Riksbank decision, from 8.7809 to as low as 8.7426. The USD/SEK witnessed a similar drop from 6.5000 to as low as 6.4572 before retracing back to its current price of 6.4640.

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

A heavy news day is expected today, as leading economic releases from France, Germany, Great Britain and the U.S. are scheduled. The abnormal amount of significant news events is likely to create high volatility throughout the majority of today’s trading session, and traders are advised to be prepped.

Economic News

USD – Dollar Strengthens on Positive Expectations for This Week’s U.S. Economic Releases

The U.S. dollar climbed yesterday against most of its major currency counterparts. The dollar began Monday’s trading session with a 120 pip gain against the euro, and the EUR/USD reached as low as the 1.3430 level. The dollar also saw a 40 pip gain vs. the Japanese yen.

The dollar strengthened today against most of its rivals after analysts released their projection for the economic indicators which are expected later on this week. The forecasts include positive results for some of the more significant economic indicators, such as the Retail Sales and Consumer Price Index, and as a result supported demand for the greenback.

Another support for the dollar came after European finance ministers ruled out immediate steps to fight the region’s debt crisis. This has weakened the euro, and as a result boosted its primary rival – the USD.

Looking ahead to today, many significant publications are expected from the U.S. economy. Most attention should be given to the Retail Sales reports and to the Long-Term Purchases indicator, which represents the balance of domestic and foreign investment. These reports are expected to show positive results. If the end results will meet expectations, the dollar may see another bullish session today.

EUR – Euro Falls after Finance Ministers Rule out Immediate Steps to Fight Debt Crisis

The euro fell against most of the major currencies during Monday’s trading session. The 17-nation currency began yesterday’s session with sharp drops against both the U.S. dollar and the Japanese yen The EUR/USD fell 120 pips and the EUR/JPPY dropped 70.

The euro slid yesterday after European finance ministers ruled out immediate steps to fight off the region’s debt crisis. The officials agreed that a permanent rescue mechanism to be set up in 2013 would total 500 billion euros, yet they did not announce immediate steps as expected. The German Finance Minister added that the markets are so stable right now that it’s better not to unsettle them with superfluous discussions.

The market received the announcement with a measure of disappointment after expecting to the officials to agree on immediate steps, and this has added to the bearish pressure on the euro.

As for today, a batch of data is expected from the euro-zone. The most significant releases look to be the German Preliminary Gross Domestic Product and the German ZEW Economic Sentiment. Germany holds the largest and strongest economy in the euro-zone, and thus its financial outlook has a significant impact on the euro. If the end results will provide positive data, the euro might correct yesterday’s losses.

JPY – Yen Sees Mixed Results Vs. The Majors

The Japanese yen saw a rather jumpy session during yesterday’s trading. The yen mainly saw ups and down against most of the major currencies, which concluded in a 40 pip drop against the U.S. dollar and a 40 pip gain against the euro.

The Japanese currency was mostly influenced by its rivals yesterday. The yen fell against the dollar after analysts estimated that U.S. Retails Sales climbed by 0.6 percent on January, and the nation’s Consumer Price Index rose by 0.4 percent.

On the other hand, the yen strengthened against the euro as the euro-zone’s finance ministers ruled out immediate steps to fight off the region’s debt crisis. This has added to the bearish pressure on the euro, which slid against most of the major currencies, including the yen.

Looking ahead to today, no significant releases are expected from the Japanese economy. Traders are advised to follow the Japanese equity markets, and also to follow the economic publications which are expected from the U.S. and the euro-zone, as these are likely to have a large impact on the yen as well.

Crude Oil – Crude Oil Falls To $84.56 a Barrel on Growing U.S. Oil Supplies

Crude oil began Monday’s trading session with a sharp bullish trend and reached as high as $86.49 a barrel. However, a swift reversal then took place, and the commodity fell almost 200 pips, reaching as low as $84.56 a barrel

Crude began yesterday’s trading with a bullish trend after unrest spread from Egypt to other Middle Eastern nations. This has renewed concerns that crude supplies from the region could be disrupted, with the biggest concerns revolving around protests in Iran, the world’s fourth-largest crude oil exporter.

Nevertheless, by midday crude prices saw a sharp drop as oil traders weighed growing U.S. oil supplies against unrest in the Middle East. U.S. crude stockpiles are expected to increase by 1.2M barrels and gasoline stocks are expected to increase by 800,000. It is clear that traders are currently more influenced by the rising supplies in the U.S. than the possible disruption in oil supplies from the Middle East.

As for today, traders should follow all updates regarding the unrest in the Middle East, especially in Iran, as this may keep impacting the oil market. In addition, traders are advised to follow the leading economic releases from the U.S. and the euro-zone, as these are also likely to affect crude prices today.

Technical News

EUR/USD

After falling to the 1.3426 level, the EUR/USD pair began correcting its losses, and is currently trading near the 1.3510 level. In addition, as the RSI on the 4-hour chart has crossed the 30-line and continues to point up, it seems that the bullish correction might proceed today, with the potential to reach the 1.3600 level.

GBP/USD

The cable has been range-trading for the past couple of weeks, shifting between the 1.5960 and the 1.6270 levels. Now, as a bearish cross is taking place on the daily chart’s MACD it seems that a bearish move might be forthcoming. Going short seems to be the right choice today.

USD/JPY

The pair saw a very timid trading session yesterday, remaining near the 83.30 level. Currently a bearish cross on both the daily chart’s Slow Stochastic and the 4-hour chart’s MACD indicates that a bearish move could be imminent, with the potential to push the pair as low as the 82.00 level.

USD/CHF

After peaking at the 0.9770 level the pair started correcting its gains, and is currently trading near the 0.9690 level. In addition, as all the oscillators on the 4-hour chart are pointing down, it seems that the bearish correction might proceed today. Going short with tight stops might be the right strategy today.

The Wild Card

Gold

Over the past week, gold saw several failed attempts to breach through the $1,368 resistance level. Now, as the Bollinger Bands on the weekly chart are tightening and a bullish cross takes place on the Slow Stochastic, it seems that gold might cross the resistance level today. This might be a great opportunity for forex traders to catch the trend at its beginning.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

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