Month: March 2011

Good Morning. It’s Tuesday, March 15, 2011. At this hour, U.S. equity futures are down. Overseas, the Asian markets retreated, while the European markets are lower. Hewlett-Packard (HPQ) raised its quarterly dividend 50% to 12c per share. Hewlett-Packard to build webOS into a leading connectivity platform…FTI Consulting (FCN) expects to acquire from LECG (XPRT) the majority of its remaining European operations…Dole Food (DOLE) sees more normal earnings in FY11.

By GCI Forex Research

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400)

USD

Markets turned severely risk-averse during the Asia session amid reports that another explosion at a malfunctioning nuclear power facility may have ruptured the reactor’s outer protective casing, allowing much larger quantities of radioactive material to escape. Prime Minister Kan declared that “substantial amounts of radiation are leaking in the area” and that “we are making utmost efforts to prevent further explosions or the release of radioactive materials”. The Nikkei-225 went into freefall and dropped 14% at one point. EURUSD traded 1.3893-1.4003, USDJPY 81.23-82.01. Although USDJPY was relatively stable, AUDJPY and NZDJPY fell sharply. Stock indices and equity futures also weakened worldwide and UST yields were 14bp lower at one point. Overnight developments also affected central bank tightening expectations: at one point the OIS market was pricing in a 50% chance of a cut at the RBA’s upcoming April meeting. This had nothing to do with the content of the RBA’s March minutes which were also released overnight and were largely unremarkable. From here, we expect the performance of global stock markets today will play a key role in dictating short term FX direction.

EUR

ECB Governing Council member Bini-Smaghi continued to signal an imminent hike in interest rates. He said the ECB “needs to be ready to react immediately to prevent any increase in inflation expectations”. He also reminded his audience that the ECB has “indicated to markets that they should prepare for a re-normalisation of interest rates.”
The latest meeting of Eurozone finance ministers provided no further detail on proposed changes to Europe’s financial rescue facilities. However, Eurogroup Chairman Juncker said he expects more detail will emerge next Monday on the design of the ESM (the proposed successor to the current ?440 bn EFSF).
Portugal’s Prime Minister Socrates repeated his opposition to Portugal accepting external financial assistance. He said the government would meet its fiscal targets whatever the economic conditions.
Fitch said that decisions announced at the weekend materially enhance Europe’s policy response to the sovereign debt crisis, yet do not resolve concerns over the solvency of some highly indebted Eurozone countries.
Ireland’s new Finance Minister Noonan said there is no way Ireland will agree to raise its corporate tax rate in exchange for a lower interest rate on rescue loans advanced through the EFSF.

JPY

Moody’s said it is “very unlikely” that the earthquake would affect Japan’s rating. However, while noting that Japan can still fund fiscal deficits at exceptionally low cost, Moody’s said the quake may have hastened the point at which investors lose confidence in the public finances.
Finance Minister Noda pledged to keep monitoring markets and to take appropriate steps at the appropriate time.
Noda also announced plans for a supplementary budget to help deal with the aftermath of the earthquake. He said the size of the budget would likely exceed that announced at the time of the 1995 Kobe earthquake, but that his first approach would be to deploy funds held in reserve as part of the budget for the current fiscal year.

GBP

Sterling was boosted when Fitch affirmed the UK’s AAA rating, outlook stable, noting that the risks to the rating are reduced by a strong and credible fiscal consolidation program. Fitch also expressed concern that higher oil prices may result in faster interest rate hikes than are currently being assumed.

TECHNICAL OUTLOOK
EURJPY 111.96 key support.
EURUSD BULLISH Upside potential stalled in front of 1.4000/36 resistance area; a break here would expose 1.4086. Near-term support lies at 1.3752.
USDJPY BEARISH Initial resistance defined at 83.30; while support at 80.62 holds, move below this level would open way towards key low at 80.22.
GBPUSD NEUTRAL Resistance is at 1.6200, while support lies at 1.5977/64 area.
USDCHF BEARISH Bearish pressure holds above 0.9236/00 support zone, move below this would expose 0.8951. Initial resistance is at 0.9369 ahead of 0.9421.
AUDUSD BEARISH Break below 0.9944 triggers the bear trend, next support lies at 0.9867. Initial resistance at 1.0107 intraday high.
USDCAD NEUTRAL Recovery through 0.9803 renders the model neutral with next resistance at 0.9902. Support defined at 0.9735 intraday low.
EURCHF NEUTRAL 1.3040 and 1.2827 mark the near-term directional triggers.
EURGBP BULLISH Outlook remains bullish; focus is on through 0.8692 ahead of 0.8777. Near-term support is at 0.8590.
EURJPY NEUTRAL While 111.96 marks the key support, resistance lies at 116.00.

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 GCI Forex Research

Gold Movement

Gold prices traded lower by 0.19% against the USD in the 24 hour period ending 23:00GMT, at 1,426.48 per ounce, snapping a two-day advance, as Japan’s strongest quake and a worsening nuclear accident spurred concern that the global economic recovery may be hurt, prompting investors to book profits.

In the Asian session at 4:00GMT, gold is trading at USD 1,408.38 per ounce, 1.27% lower from 23:00GMT.

The pair is expected to find its first short term resistance at 1,419.68, with the next resistance at 1,430.99. The pair is expected to find support at 1,407.83 and subsequently at 1,407.29.

The yellow metal is showing convergence with its 20 Hr moving average and its 50 Hr moving average.

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 Anton Eljwizat

With an abnormal number of news events coming from the euro-zone and the United States today, forex traders have been in a frenzy to place their bets before the trading day gets underway. Trading during these news events, which typically carry a lot of market volatility, is a fast way to double your forex trading balance; the wise trader knows this. Special attention should be paid to the German Economic Sentiment report at 10:00 GMT, the U.S TIC Long Term Purchases at 13:00 GMT, and Federal Funds Rate at 18:15 GMT. Will you take advantage of the impending volatility, or sit on the sidelines and miss out?

10:00 GMT- German Economic Sentiment

This monthly report reflects the level of diffusion index based on surveyed German institutional investors and analysts. This indicator always leads to extreme market volatility in the major currency pairs. If the results turn out to be lower than forecasts, then the EUR may record a fairly bearish session in today’s trading.

13:00 GMT- USD TIC Long -Term Purchases

The Long Term Purchases report measures the difference in value between foreign long-term securities purchased by US citizens and US long-term securities purchased by foreigner during the reported period. This report has a direct correlation with the strength of the US economy. If the end result will beat expectations for 59.3B, the USD might strengthen as a result.

18:15 GMT: USD – Federal Fund Rate and FOMC Statement

The FOMC is scheduled to release its decision on short term interest rates today. These monetary policy releases tend to have a stronger impact than other economic reports since they factor directly into the value of the nation’s currency. Any increase to America’s interest rates will no doubt boost the USD, but expectations are for the rates to be held steady today meaning traders shouldn’t expect much change due to this report.

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 Federal Reserve is expected to keep its benchmark Interest Rate unchanged near zero today, as traders get ready for a busy news cycle. The Fed Statement is expected to provide an assessment of the current economic condition in the world’s largest economy and more importantly provide an economic outlook. It is therefore likely to set the short-term direction for the USD.

Economic News

USD – Dollar Falls Ahead of Heavy News Day

The dollar extended declines versus the yen to hit a session low in midday trading on Monday, helped by repatriation flows by Japanese insurers in the wake of the country’s devastating earthquake and tsunami. By yesterday’s close, the USD fell sharply against the JPY, pushing the oft-traded currency pair to 81.70. The dollar experienced similar behavior against the GBP and closed at around 1.6170.

The greenback also remained under broad selling pressure on expectations that U.S. interest rates will stay at very low levels for some time. Low rates reduce the attractiveness of U.S. assets and ease demand for the dollars to buy them.
Investors may look for the unusual price volatility to continue in the EUR/USD as the pair attempts to stabilize and find new support and resistance lines. Large price jumps such as these are not common place and present terrific opportunities to take advantage of the price swings for large profitable gains.

Looking ahead today, all eyes are focused on the U.S. Federal Funds Rate statement scheduled for 18:15 GMT. The overwhelming consensus is that the Fed will hold the federal funds rate steady at near-zero, where the Fed’s target has been since December 2008. The Fed Statement is expected to provide an assessment of the current economic condition in the world’s largest economy and more importantly provide an economic outlook. It is therefore likely to set the short-term direction for the USD.

EUR – EUR Once Again Above 1.4000 against Dollar

The euro extended gains against the U.S. dollar on Monday, hitting $1.40, after Eurogroup Chairman Jean-Claude Juncker said there has been a significant increase in inflation. The euro rose as high as $1.4002, up 0.7% on the day

Expectations that the ECB will raise interest rates next month have boosted the euro in recent sessions.

Traders have started 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 EUR in the coming months. A stronger currency is important to the euro zone because it entices foreign investors to invest in treasury debt that finances the region’s record budget deficit. The downside is that it may restrain profit growth at companies with international sales by making European exports more expensive.

Looking ahead to today, the most important economic indicator scheduled to be released from the euro-zone is the German ZEW Economic Sentiment. Analysts are forecasting this figure to increase from its previous reading. Traders will be paying close attention to today’s announcement as a stronger than expected result may continue to boost the EUR in the short-term.

JPY – Yen Continues to Book Gains Versus the Dollar

The yen rose against the U.S dollar on Monday and the USD/JPY could test its all-time lows as Japanese insurers and companies repatriated funds to help pay claims and reconstruction costs in the wake of the country’s devastating earthquake. The pair continued its bearish session during yesterday trading, and reached as low as 81.70 amid a broad sell-off in the USD.

Analysts said the yen could rise further in the near term, potentially testing its previous record, though they cautioned against betting aggressively on the currency’s strength.

The JPY may come under pressure in the medium to long run as the earthquake will likely force the Bank of Japan to keep its easing policy for longer to help the economic recovery.

Crude Oil – Crude Oil Climbs Back To $101.50 a Barrel on Middle East Unrest

Crude oil prices gained slightly on Monday to around $101.50 a barrel, as concerns about the Middle East remained amid the lower demand expectation caused by the Japan’s disaster.

Prices pared earlier losses on news that Saudi Arabia sent troops into neighbor country Bahrain to help put down weeks of protests. Concerns about the unrest in the region are likely to continue to boost prices.

In addition, oil and other commodities denominated in dollars for global trading tend to rise when the U.S. currency falls as they become cheaper for holders of other currencies. A move away from dollar-based pricing of the world’s leading commodity could further weaken the greenback.

As for today, the FOMC Statement will likely determine crude’s next moves, with any mildly positive elements within them likely to keep the price of oil bullish.

Technical News

EUR/USD

The pair has recorded much bullish behavior in the past several days. However the technical data indicates that this trend may reverse soon. For example, the 4-hour chart’s RSI signals that a bearish reversal is imminent. Going short with tight stops might be a wise choice.

GBP/USD

The GBP/USD went increasingly bullish yesterday, and currently stands at the 1.6180 level. The daily chart’s Slow Stochastic indicates this cross will likely rise further today. However, the 4-hour chart’s Stochastic Slow signals that a bearish reversal may take place. Entering the pair when the signs are clearer seems to be the wise choice today.

USD/JPY

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. The oscillators on the 4 hour chart are also not showing a clear direction. Waiting for a clearer sign on the hourlies might be a good strategy today.

USD/CHF

The daily chart is showing mixed signals with its RSI fluctuating in neutral territory. However, there is a bullish cross forming on the 4-hour chart’s Slow Stochastic indicating an upward correction might take place in the near future. In that case traders are advised to swing in after the breach takes place.

The Wild Card

EUR/CAD

This pair’s sustained upward movement has finally pushed its price into the over-bought territory on the 8-hour chart’s RSI. In addition, there appears to be a bearish cross on the Slow Stochastic indicating a possible downward correction. Forex traders have the opportunity to wait for the downward breach on the hourlies and go short in order to ride out the impending wave.

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.

GBP-JPY

It can be seen that the price has got to the down side of the parallel descending channel (fragmentary purple line), stopped and a green candle opened which signifies reversal pattern if and when a confirming candle stick will be created, it will be given a signal of uptrend. It can be seen that the candle closes above the neck line of the bullish head and shoulders pattern, and this is another signal for the stubbornness of the buyers.

As can be seen by the graph bellow:

Potential Trade

In the break out of the price level of 132.80, you can search for an uptrend price structure in the hourly time frame, and to enter the long position.

As can be seen by the graph bellow:

NZD-USD

The price went down in a reduced channel, while touching three times on each side. Most likely, as for the structure of the channel the price will be corrected between one third to two thirds of the last downtrend in this channel.

As can be seen by the graph bellow:

Potential Trade

In the break out of the level 0.7455, you can switch to the hourly time frame and to search for the uptrend price structure and to enter the long position, target: 0.7547.   

As can be seen by the graph bellow:

RISK DISCLAIMER

Forex trading involves high risk. Before any trade, you should consider carefully the investment objectives and the level of risk. The data sent by mail is not necessarily real-time data or precise. Real-Forex is not liable for the losses resulting from the utilization of the data. Real-Forex (Finnocorp Trading Solution Ltd

.) is not liable for losses or damages as a result of reliance on the information provided by e-mail or on the overall data, quotes, charts, signals buy / sell. It is hereby clarified that the investor must be aware of risks involved in trading in financial markets, which is a form of investment that may contain potential risks.

Real-Forex team

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USDCHF stays in a trading range between 0.9201 and 0.9368 for several days. Deeper decline to test 0.9201 key support could be expected later today, a break below this level will indicate that the downtrend from 0.9774 has resumed, then next target would be at 0.9000 zone. Resistance is at 0.9315 followed at 0.9368, only break above these levels could indicate that lengthier consolidation of downtrend is underway, then further rally could be seen to 0.9400-0.9450 area.

Forex Signals

First Solar (NASDAQ:FSLR) and Suntech Power (NYSE:STP) led solar stocks higher today. The sector is a lone bright spot among the continuing fallout from the massive Japanese earthquake, tsunami, and the fear of a complete meltdown in 3 nuclear reactors damaged last week. Politicians around the globe have already taken advantage of the incident to raise concerns, suspend permits, and order new inspections and reviews. Shares of First Solar are trading up 4.88% at $146.56.

Commodities finished trading higher as crude oil futures moved higher in the last hour of trading after sitting lower on concerns about how the earthquake and the resulting impact will affect that country’s refining capacity. Gold ended fractionally higher. Light, sweet crude oil for April delivery finished up 0.1%, to $101.19 a barrel. In other energy futures, heating oil was down 0.38% to $3.05 a gallon while natural gas was down 2.8% to $3.92 per million British thermal units. Meanwhile, gold futures ended higher as the dollar weakened. Gold for April delivery finished up 0.2% to $1,424.90 an ounce. In other metal futures, silver was down 0.13% to $35.89 a troy ounce while copper traded down 0.38% to $4.19. The U.S. dollar index (DXY) is down 0.55% to $76.35.

Family Dollar Stores (FDO) hiked its fiscal second quarter guidance today on higher sales. The discounter said net sales rose 8.3% compared to last year, to $2.26 billion in the quarter ending February 26.