Month: February 2011

Source: ForexYard

Following yesterday’s losses, the US dollar has the potential to stage a bullish correction today providing that this week’s Unemployment Claims figure comes in as predicted. Analysts are currently forecasting a number of around 411K, which if true, would signal a further decline in unemployment in the US.

Economic News

USD – Dollar Begins to Rebound in Asian Trading

Comments yesterday from Fed Chairman Bernanke sent the dollar plummeting against most of its main currency rivals, including the euro and yen. Bernanke voiced concerns regarding the high level of unemployment in the US, which investors interpreted as a sign that the Fed will continue with its stimulus package. The EUR/USD spiked well over 100 pips yesterday, peaking at just above the 1.3740 level. Meanwhile, the USD/JPY fell close to 40 pips, dropping as low as 82.18 during the evening session.

The dollar was able to stage a minor recovery in the overnight session, largely because riskier currencies like the euro lack strong fundamental news to boost them to new highs against the greenback. The EUR/USD fell over 20 pips, and is currently on its way to dropping below the psychologically significant 1.3700 level. The USD/JPY shot up some 25 pips last night, and is currently trading at 82.55.

Today, dollar traders will want to keep a close watch on the latest US Unemployment Claims figure, set to be released at 13:30 GMT. Given Bernanke’s comments yesterday, today’s figure is likely to carry more weight than usual in the marketplace.
Analysts are currently forecasting the number to come in around 411K, which if true, would represent a drop over last week. Barring any surprises, the positive employment data will likely lead to some gains for the dollar in the afternoon session.

EUR – Euro May Turn Bearish Today

The euro saw a bullish day yesterday following pessimistic comments from the US Fed Chairman regarding the current state of the US economic recovery. Against the dollar, the euro surged over 100 pips and was able to breach the psychologically significant 1.3700 barrier. The EUR/GBP moved up some 50 pips before staging a slight downward correction during the overnight session. In addition, the EUR/JPY has gone up close to 100 pips in the last 24 hours, and is not showing signs of a possible reversal.

Today, euro traders will want to pay attention to the fundamental news out of the UK and US. At 12:00 GMT, the UK will release its Official Bank Rate. Analysts are debating whether the MPC will raise national interest rates above their current level of 0.50%. If so, riskier currencies like the British pound and euro are likely to see strong upward movement. That being said, new unemployment claims in the US are expected to drop when the latest figure is released at 13:30 GMT. This could give the US dollar a boost against the euro in the afternoon session.

JPY – Yen Continues to Take Losses as Risk Taking Returns to Marketplace

The JPY took losses against virtually all of its main currency rivals yesterday, as speculation that the demand for Japanese exports may be weakening weighed down on the currency. The GBP/JPY moved up close to 70 pips yesterday, and peaked at just below the 133.00 level. Currently the pair is trading 132.80. The EUR/JPY continues to move up after gaining more than 100 pips in trading yesterday. The pair currently stands at 113.15.

Today, yen traders will want to pay attention to the major news out of the UK and US. Should the UK Monetary Policy Committee decide to leave national interest rates at their current levels, investors may revert back to safe haven currencies like the yen in mid-day trading. Furthermore, if the US reports a drop in the number of people seeking first time unemployment insurance, the yen is likely to see additional gains against the European currencies.

Crude Oil – Crude Down from Yesterday’s Highs

Following yesterday’s brief spike in the price of crude oil, the commodity has remained largely steady throughout the overnight session. Crude jumped as high as $88.14 a barrel yesterday, following the release of the US Crude Oil Inventories figure. Stockpiles in the US are smaller than what analysts had predicted, meaning that demand is up in the world’s largest oil consuming nation.

That being said, the impact of the inventory figure proved to be short lived, and oil is currently trading at $86.75 a barrel. Today, traders will want to pay attention to the effect the US Unemployment Claims has on the dollar. If the dollar turns bullish in afternoon trading, expect crude to continue to drop throughout the day.

Technical News

EUR/USD

Technical data is providing mixed signals for this pair. The 8-hour chart’s Williams Percent Range is currently in the overbought region. At the same time, all indicators on the daily chart are in neutral territory and are not showing a specific direction for the pair. Traders may want to take wait and see approach today, as a clearer picture is likely to present itself later on.

GBP/USD

The Relative Strength Index on the daily chart is currently approaching overbought territory in a sign that a downward correction is likely to occur. Furthermore, the MACD on the same chart has formed a bearish cross. Going short with tight stops may be the preferred strategy today.

USD/JPY

The Stochastic Slow on the 8-hour chart has formed a bearish cross, meaning that downward movement is likely to occur today. Furthermore, the 4-hour chart’s Williams Percent Range is currently in overbought territory. Traders are advised to go short in their positions today.

USD/CHF

The Williams Percent Range on the daily chart is in overbought territory and angling downward, in a clear sign that downward movement is likely to occur. The Relative Strength Index on the same chart is approaching the overbought zone. Going short is likely to be the wise choice today.

The Wild Card

GBP/JPY

The Relative Strength Index on the daily chart is approaching overbought territory in a clear sign that downward pressure exists for this pair. Furthermore, the both the MACD and Williams Percent Range on the 8-hour chart indicate that bearish movement is likely to occur today. Now may be a great time for forex traders to open up sell position for this pair before the downward breach occurs.

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.

USDCHF remains in uptrend from 0.9328, and the pullback from 0.9660 is likely consolidation of uptrend. Support is at 0.9523, as long as this level holds, uptrend could be expected to continue and next target would be at 0.9700 area. However, a breakdown below 0.9523 support will indicate that a cycle top had been formed at 0.9660 level on 4-hour chart and the rise from 0.9328 had completed, then deeper decline could be seen to 0.9400 zone.

Daily Forex Forecast

Ramon Ang-led San Miguel Corporation of SMC in the Philippine Stock Exchange was under the spotlight during the last quarter of 2010. From around PHP 74.00 in October 2010, SMC had risen in a relatively fast pace to end the year at PHP 163.80. Now, that’s a gain of almost 120% in less than two months! Anyway, opened 2011 on a positive note when it reached a high of PHP 189.50 during the first 2 days of trading. However, the once ‘on-fire’ stock has apparently lost some of its steam. After reaching the mentioned high until the present, SMC has just moved sideways while marking a low of PHP 150.00 back in January 24.

As you can see from its chart above, SMC has consolidated within a right-angled and descending broadening triangle formation. Notice that when the stock weakened, the red moving average came to the rescue to pick it back up. In the coming days or so, SMC could swing higher if it is able to move past the resistance of the triangle at around PHP 189.00. Check also that the MACD has just made a bullish crossover, indicating a likely move higher soon. In any case, a failure to move past the triangle’s resistance could send it a drift once again or worse back to PHP 150.00.

On the fundamental side, SMC President Ramon Ang said the SMC could double its total revenues this year to PHP 530 billion from PHP 230 billion last year by consolidating its four power-generation plants and Petron Corporation (PCOR). He even went a step further when he said that the company is going to aim for a revenue level of PHP 1 trillion by 2016. Consolidating its other businesses and continually strengthening its infrastructure and power portfolio could be its ticket towards its goal. Moreover, the company will be spending about $4 billion in new investments in energy, telecommunications, and transportation. In fact, the company is already seeking to enter into a venture with Citra Lamotoro Gung Persado (Citra) of Indonesia and Star Tollway Corporation so that they can make a stronger group that can participate in the government’s public-private partnership (PPP) program.

More on LaidTrades.com …

Hello traders! My forex pick for the day is the Australian dollar versus the US dollar currency pair (AUD/USD). What I wanted to show is the possible 5-day symmetrical triangle pattern forming in its 1-hour chart. In case you do now know, symmetrical triangles have 50% chances of breaking out/breaking down and what usually determines the breaking point is where the trend is coming from. If the triangle’s coming from an uptrend, then there would be a higher chance of the price breaking out from the pattern’s resistance. If the triangle’s coming from a downtrend, then there’s a higher chance of a breakdown from the pattern’s support. In the current case of this Aussie pair, the triangle we are seeing is coming from an uptrend. The price is also moving above the 50 and 100-period moving averages which gives an overall bullish bias for the pair. Once the triangle’s resistance gets breached, the upside target price could be the 1.0254 all-time high. I got this by gauging the size of the triangle’s base then added it to the possible breakout point. In case a breakdown occurs, the target price could be 1.0055. However, before it reaches that level, it needs to first clear out the 1.0083 support.

More on LaidTrades.com …

Willy Ocier-led Belle Corporation or BEL in the Philippine Stock Exchange was one of the top stories in the domestic stock market in 2010. It was actually a sleeper during the first half of last year. Imagine, it was only trading at around PHP 1.80 in July before it eventually made a move north. From August until the end of 2010, it rose from PHP 1.85 to PHP 4.60. It did not stop there as BEL continued to move higher in January 2011 and on January 19, it reached a high PHP 6.49. From then on, profit taking took over and the stock slid back to a low of PHP 4.92.

A lot of people are asking, “Will BEL soon get back on the bullish track?” I would say that given its present technical set-up, there’s a good chance that BEL would make a turn around and head back north. As you can see from its daily chart, BEL has weakened back to the psychological PHP 5.00 price level. If you notice, this mark also coincides with the 38.2% Fibonacci retracement level of the last up wave, making it a good level of support. In addition to that, the issue’s uptrend line is still around to keep it from falling further. Moreover, a hidden bullish divergence, where the price registers higher lows while the RSI makes lower lows, is also present. This suggests that traders and investors could soon pick up the stock. A rally from PHP 5.00, therefore, could send it back to its former high at PHP 6.49. A break below it, on the other hand, could push it down to the other Fibonacci retracements levels – PHP 4.50 or PHP 4.00.

More on LaidTrades.com …

Walt Disney Co. (DIS) posted fiscal first quarter earnings after the closing bell yesterday, beating analyst expectations.

Gold, silver & rare earth

Which has the strongest trend right now?

In today’s video we will be looking at the gold market, analyzing the silver market, and finally, checking into the rare earth market.

Before you look at the video, you may want to consider doing this as an exercise: Write down which market has the strongest trend – up or down. Then rate the markets. Number 1 ……..Number 2 …….Number 3 ……. Once you see the video it will become clear to you how we rate these markets. It might surprise you.

If you’re using MarketClub’s “Trade Triangle” technology the answer is simple and you’ll discover it in a matter of seconds. If you haven’t used our “Trade Triangle” technology, this will be a good exercise for you to look and see just how powerful this technology is and how it can help your trading.

We all know that gold has had a big move, but so have silver and rare earth stocks. So what’s next?

I hope this video helps outline some ideas that you can put to good use in the future.

As always our videos are free to watch and there are no registration requirements. All we ask in return is that you Tweet about us and share this video with your friends. Also, please feel free to comment on our blog.

Watch the New Video Here…

Enjoy the video and every success in trading,

Adam Hewison
President of INO.com
Co-founder of MarketClub

Feb. 9 (Bloomberg) — Stephen Gallo, head of market analysis at Schneider Foreign Exchange in London, talks about the outlook for the yuan and interest rates in the U.K. He speaks with Mark Barton on Bloomberg Television’s “Countdown.”

By Greg Holden

As was highlighted in yesterday’s article, the British pound appears positioned to undergo a technical downward correction to its latest upswing. The GBP/CAD appears to also support such a perspective.

The GBP/CAD has been trading within a long-term downtrend since late January 2007, when the pair peaked at 2.3566. Since that time, the pound has given significant ground to the loonie, currently trading at 1.5965, a 32.2% loss in value over the past four years.

What I would like to emphasize here is not that this downtrend is coming to an end, but rather that traders should not expect it to come to an end anytime soon.

As per our technical analysis, this pair has recently touched the long-term trendline and begun its downward cycle.

The Relative Strength Index (RSI) shows the price gradually cascading downward, supporting the cyclical downturn. The Stochastic (slow) also shows what could be a bearish cross above the 80 line; a solid indication of impending bearishness.

As you can see below, the pair recently found a support line which has created a convergence triangle. The convergence point of this relatively new formation looks to be just barely above the 1.5500 price line, which represents our impending target.

Such convergence formations have historically meant that the pair will continue its long-term trend once reached. As such, traders may want to anticipate a stronger downward movement once the 1.5500 price line is breached in the coming weeks.

GBP/CAD – Weekly 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

US Treasury yields continued to advance during the Asia session, helping to push yield-sensitive pairs like USDJPY and USDCHF even higher. EURUSD traded 1.3613-1.3669, USDJPY 81.92-82.51. US Treasuries are still feeling the effects of yesterday’s weak auction and the 10y yield finally breached 3.75% overnight. Although the S&P 500 finished 0.42% ahead, Asian equities are marginally weaker at the time of writing as China’s latest rate hike weighs on sentiment.
Regional Fed Presidents Fisher (2011 voter), Lacker (2012 voter) and Lockhart (2012 voter) made public appearances. Fisher and Lacker again sounded relatively hawkish. Fisher said he expected QE2 to run its course until June, but reiterated his opposition to an additional round of asset purchases thereafter. Lacker said that although he would not support an imminent end to QE2, the question of cutting the program short is something to consider at each FOMC meeting. Lacker said he thinks core inflation has bottomed out, though he acknowledged the risk of rising headline inflation. Lockhart said there is a high bar to raising the current target for asset purchases, but he also stressed now is not the time to adjust the program. Fed Chairman Bernanke is due to testify at Congress and the head of the New York Fed Markets Group Brian Sack is scheduled to speak on QE2.
EUR

Although no agreement has yet been reached on enlarging the effective capacity or widening the scope of Europe’s rescue mechanism, finance ministers continue to express their preferences on how a reformed mechanism should look. Dutch Finance Minister De Jager said he opposes using the EFSF to buy sovereign bonds in primary and secondary markets, and even objects to countries buying back their debt using funds provided by the EFSF. Although he supports extending the maturity of Greece’s rescue loans so that they match those offered to Ireland, he is opposed to lowering the interest rate charged to either country.
German industrial production for December was slightly softer than expected at +10%y/y, and the monthly figure surprisingly contracted at -1.5%. But the overall outlook for the German industrial sector remains strong and the ECB is on alert for leakage into additional inflationary pressures. A major German car producer announced a pay deal for its workers and further events of this kind across Germany could see the ECB Governing Council up its rhetoric on second-round effects.
JPY

Moody’s said it would not take action on Japan’s sovereign rating today, but warned that the rating could come under pressure in future if the government’s fiscal reform agenda does not succeed. The agency added that the current rating is being supported by affordability of debt servicing, as well as Japan’s ability to refinance its debt.

TECHNICAL OUTLOOK
EURCHF breaks 1.3069.
EURUSD BULLISH Pullback found support at 1.3509; focus is on 1.3741 break of which is required to refocus towards 1.3862 recent high.
USDJPY NEUTRAL While support holds at 81.13, initial resistance is at 82.47.
GBPUSD BULLISH Expect gains to target 1.6186 ahead of 1.6279/99 zone. Near-term support is defined at 1.6010.
USDCHF BULLISH Breach of 0.9610 has put focus on 0.9687 ahead of 0.9764; support at 0.9524.
AUDUSD BULLISH Upside potential targets 1.0200/56 resistance zone. Support lies at 1.0083.
USDCAD NEUTRAL Rise through 0.9932 has turned the model to neutral; resistance lies at 0.9978 while support is at 0.9832/20 zone.
EURCHF BULLISH Move above 1.3069 has open up the way towards 1.3206/87 resistance zone. Support at 1.2973.
EURGBP BEARISH Recovery through 0.8477 exposes 0.8564; while this resistance holds focus is on the downside with initial support defined at 0.8389.
EURJPY BULLISH Focus is on 112.92, break of this would expose 114.01 next. Support zone is at 110.78/32.

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.