Investors this week will continue to monitor the news out of Japan and Libya, along with key economic data and earnings reports. Good morning, Im Kristin Bianco, with the Week Ahead Market Report for April 11, 2011.
Apple iPhone 5 to start production in September
Apple’s (APPL) iPhone 5 should start production in September, reports Business Insider. According to a note from Avian Securities, the new iPhone may not be in the market till the end of this year or the beginning of 2012. Avian cites conversations with a “key component supplier” to Apple for its report.
The Senior Strategist: Here’s your financial week
Senior Strategist Ib Fredslund Madsen outlines this weeks financial events and themes.
Video Courtesy of en.jyskebank.tv
Weekly Preview – Carry Trade Returns
By Russell Glaser
The sharp appreciation of the euro and the Aussie dollar coupled with the continued decline of the dollar and the yen highlight traders’ appetite for yield and distaste for currencies with loose monetary policy.
EUR/USD
For the third time in the past four weeks the pair is closing on its weekly high indicating momentum is behind the move higher. A breach of the long term trend line off of the 2008 high should also help spur bids for the euro. Traders will initially target the 2010 high at 1.4580 with a mid-term target at 1.5140 from 2009. Weekly stochastics show the pair is overbought and to the downside the 20-day moving average at 1.4180 has proved to be supportive. Value buyers should be looking to enter on dips at 1.4020 and 1.3860.
AUD/USD
The Aussie dollar continues to make new all-time highs on the back of the carry trade. The next big round number is 1.0600 and should be targeted by traders. Technical indicators show the pair is overbought but are not yet signaling for a reversal. Support for the pair comes in at Thursday’s low at 1.0410, followed by 1.2090 and the February high at 1.0200.
USD/JPY
The pair’s appreciation was capped at 85.50 where the trend line falling off of the 2007 high comes in. Momentum has swung higher and a breach of this barrier should initially target the post intervention high from September at 85.90. Traders should be targeting the May 2010 low at 88 where the pair should encounter selling pressure with the 100-week moving average not too far behind at 88.60. Support is found at this week’s low at 83.85. The 2010 low at 80.20 as well as the previous channel line should contain any pullback in the pair.
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.
Forex CT 11-4-11 Forex Commentary
Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.
ForexCT Afternoon Thoughts 11-04-11
Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.
Yen Hits New 11-Month Low against Euro
Source: ForexYard
The JPY started off the week by falling to a fresh 11-month low against the euro, as positive global data has led to increased risk taking among investors. After hitting 123.30 during the overnight session, the EUR/JPY has since dropped to its current level of 122.50. With little in the way of significant news from either the euro-zone or Japan scheduled for today, traders can expect the current trend to continue.
Economic News
USD – USD Sinks against Majors
The US dollar dropped against most of its major currency rivals during last week’s trading session. The greenback fell about 300 pips vs. the euro and the EUR/USD pair reached as high as the 1.4450 level, marking a 16-month high. The dollar fell about 250 pips against the British pound as well.
The dollar’s decline in 2011 was driven by interest rate hikes or the expectations of them from European central banks. A sharply divided Washington – which can’t seem to agree on budget deficit issues and come up with a credible medium-term plan for fiscal consolidation – also contributed to the decline.
Currency strategists generally agree the weak dollar is a theme that will drive foreign exchange markets for some time, especially as long as the US Federal Reserve keeps the prospect of interest rate hikes at arm’s length. But the extent to which the dollar will weaken further is an area of debate in the foreign exchange markets.
Looking ahead to this week, many significant economic releases are expected from the U.S. economy. The most noteworthy reports look to be the Retail Sales, the weekly Unemployment Claims, the CPI and the TIC Long-Term Purchases. Traders are advised to follow these reports as they are likely to have a large impact on the dollar.
EUR – Euro Trades Steady Ahead of Slow News Day
The euro started off the week virtually unchanged against most of its main currency rivals, including the USD and British pound. It appears that the 17-nation single currency may have hit strong resistance following last week’s bullish run, spurned by the euro-zone interest rate hike. The EUR/USD is currently trading at 1.4463, down slightly from last Friday’s high of 1.4486. The EUR/GBP, currently at 0.8836, is down marginally versus its rate at market closing last week.
The euro was able to make fairly strong gains against the Japanese yen during the overnight session, and the EUR/JPY pair hit a fresh 11-month high before staging a slight correction. The pair is currently trading steadily at 1.2250, down almost 80 pips since it peaked last night.
Turning to today, a slow news day will likely mean that the euro will maintain its current trends. That being said, traders will want to pay attention to any developments out of Japan regarding the ongoing efforts to rebuild the stricken nation. If any further complications arise regarding the nuclear crisis there, the yen is likely to fall further against the euro.
JPY – Yen Falls To a 11-Month Low against the Euro
The yen fell to an 11-month low against the euro and a 2- year trough versus the Australian dollar in overnight trading on Monday, and stayed on a weakening trend as investors piled into carry trades in favor of higher-yielding assets.
The yen has fallen sharply in the wake of joint yen-selling intervention by the Group of Seven industrialized nations in March. The G7 stepped in after the yen hit a record high of 76.25 yen to the dollar on March 17, propelled by speculation that Japanese investors would repatriate their overseas assets after a massive earthquake and tsunami struck Japan’s northeast on March 11.
As for this week, traders are advised to follow the Japanese equity market, as the yen is highly affected by its movements. Special attention should also be given to the Monetary Policy Meeting Minutes scheduled for today, as its release is likely to have a significant impact on yen trading.
Crude Oil – Crude Oil Hits a Fresh 2 1/2 Year High amid Mid-East Unrest
The price of oil soared last week, hitting a fresh two-and-a-half year high at $113 a barrel, as investor concerns regarding supplies out of the Middle East continued to affect the market.
Widening unrest in the Middle East and a weakening dollar lent new impetus to a rally in oil markets with Brent crude briefly hitting the $113.18 mark before pulling back slightly on prospects of a peace deal in Libya.
As for today, traders are advised to follow all the developments from Libya, as this conflict is now the main catalyst in crude trading. In the case of any further escalation in the fighting there, oil prices might climb even further.
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 anytime soon. For example, the daily chart’s Stochastic Slow signals that a bearish reversal is imminent. . Going short with tight stops might be a wise choice.
GBP/USD
The price of this pair appears to be floating in the over-bought territory on the 8-hour chart’s RSI indicating a downward correction may be imminent. The downward direction on the daily chart’s Momentum oscillator also supports this notion. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.
USD/JPY
The 4-hour chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, the daily Chart’s RSI is already floating in the over-bought territory indicating that a bearish correction might take place in the nearest future. Going short with tight stops might be the right strategy today.
USD/CHF
The cross has been dropping for the past week now, as it now stands at the 0.9080 level. The Slow Stochastic of the daily chart shows a bullish cross has recently formed, indicating that an upward correction is imminent. This view is also supported by the RSI of the 8-hour chart. Going long with tight stops may turn out to be the right choice today.
The Wild Card
Crude Oil
Oil prices rose significantly in the last week and peaked at $113.18 per barrel. However, daily charts’ RSI is floating in an overbought territory suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. This might be a good opportunity for forex traders to enter the trend at a very early stage.
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.
Holcim Philippines, Inc. Breaks Its Silence
Holcim Philippines, Inc. or HLCM in the Philippine Stock Exchange is in the business of producing cement and concrete. Last Friday, the company’s shares popped out of the radar when it unexpectedly rose by 10.62%.
HLCM was one of the best performing stocks in 2010. It opened the year 2010 at only PHP 4.75 and reached a high of PHP 16.26 in December. After peaking at the said high, HLCM gradually fell until it marked a low of PHP 10.04 this February 28, 2011. It then consolidated within a symmetrical triangle before it broke out from the triangle and its 4-month downtrend line last Friday.
Friday’s breakout appears to be valid given the volume behind it. Notice also that both MACD and RSI are indicating that it could be starting to gain an upward momentum. Should buying interest remains, HLCM could aim for its initial target at PHP 14.00. A move past that could then send it back to around PHP 16.00.
More on LaidTrades.com …
Daily Market Review for the 11.04.2011
AUD/JPY
Time: 08:00 Rate: 89.50
Strategy: Short
Daily time frame
This pair which was mentioned in the previous market reviews performed continuous increase of about 21%, the continuous movement of this size is from the longest that were seen in this pair, in the area of 90.60-89.90 there is the Fibonacci level of 161.8 % of the last downward movement which can be used as a resistance point to provide the creation the first downward retracement.
As can be seen by the graph bellow:
4 hour time frame
The price creates clear bearish deviations in the indicator CCI 20 (green) and closes the Bullinger Band, the aspect indicating the downward volatility and gathering before choosing a new way. A good point for entering short is after the stop of the upward price pattern (pattern M or the creation of high lower low and the downward break down)
As can be seen by the graph bellow:
Potential Trade
Short after the break down of the high patterns and the double top pattern.
Stop: beyond the pattern or beyond the red area 90.70.
First target: 86.50 (retracement 23.6 Fibonacci of the upward movement, daily time frame)
Optional second target: 84.20 (retracement 38.2 Fibonacci).
USD/CHF
Time: 08:30 Rate: 0.9085
Strategy: Long
4 hour time frame
Before the end of the week the pair was examined for the creation of the movement to the two directions, activated the short trigger (0.9130) of the 4 hour time frame and arrived with success to the target of 0.9060.
As can be seen by the graph bellow:
Daily time frame
Although the downtrends before the end of the week, the pair still satisfies the conditions for short bull wolf pattern but should be waited for a clear price stop and the break out of the level 0.9340.
One should pay attention to two important points in the price stop- one in the psychological area of the level 0.9000 and the second lower in the area of 0.8800 which is the most important Fibonacci area. These areas could be used as good support for the short time frame trading.
As can be seen by the graph bellow:
Potential Trade
Long in the break out of 0.9340
First target: 0.9590
Second target: 1.0000
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AUDUSD rose strongly to 1.0581
AUDUSD rose strongly to as high as 1.0581. Support is now at 1.0500, as long as this level holds, uptrend could b expected to continue, and next target would be at 1.0700 zone. However, below 1.0500 will indicate that a cycle top has been formed on 4-hour chart, then consolidation of uptrend could be seen.
