March 2012 – Page 55 – InvestMacro FX

March 9, 2012

Forex CT 9-3-12 Market Update & Outlook

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.

March 9, 2012

US Non-Farm Payrolls Set to Generate Heavy Market Volatility

Source: ForexYard

Investor optimism that Greece would successfully execute an important debt-swap, boosted riskier assets throughout yesterday’s trading session. As a result, the EUR/USD shot up over 100 pips during the European session, reaching as high as 1.3272. Today, the US Non-Farm Payrolls figure is forecasted to generate significant market volatility. Assuming the indicator comes in as expected, risk taking may increase, which could help the euro extend yesterday’s gains.

Economic News

USD – US Employment Data May Lead to Dollar Gains

The US dollar took some losses against its riskier currency rivals yesterday, after positive euro-zone developments caused investors to move away from safe-haven assets. Against the euro, the USD tumbled well over 100 pips, while the AUD/USD jumped as high as 1.0667 during the European session. At the same time, the USD/JPY shot up as high as 81.71 after negative Japanese indicators resulted in increased pressure on the yen. Analysts are warning that it will be hard for the USD/JPY to break above the 82.00 level as long as US interest rates remain at their current level.

Turning to today, the US Non-Farm Employment Change figure is guaranteed to be the highlight of the trading session. At the moment, analysts are forecasting that the US added around 208K jobs in February. If true, the number would represent a healthy boost in the US employment sector, and could result in increased risk taking in the marketplace. At the same time, the Non-Farms figure is notoriously hard to predict. If the figure comes in significantly below expectations, safe haven currencies like the yen could see gains to close out the week.

EUR – EUR Sees Gains amid Positive News

The euro climbed against virtually all of its main currency rivals yesterday, as optimism that Greece would successfully complete a debt swap resulted in an increase in risk taking among traders. A press conference from the ECB President did little to influence the euro, after euro-zone interest rates were left at their current level of 1%. The EUR/USD climbed as high as 1.3272, while the EUR/JPY gained approximately 135 pips, peaking at 108.33. Despite the gains, analysts were quick to warn that ongoing worries regarding the euro-zone debt crisis limited any gains by the common currency.

Today, employment data out of the US is likely to result in heavy fluctuations among euro pairs. Should the Non-Farm Payrolls figure come in at or above the expected 208K, the euro may be able to extend yesterday’s gains against safe-haven currencies, specifically the Japanese yen. At the same time, investors could revert back to safe-haven assets in the case that the employment data comes in significantly below forecasts. The euro would likely drop against most of its main currency rivals as a result.

JPY – Yen Remains Bearish Following Poor Japanese Fundamentals

The yen extended losses against most of its main currency rivals yesterday, as poor Japanese fundamental indicators created doubts about the currency’s safe haven status. The USD/JPY turned bullish after the Japanese Current Account and Final GDP Price Index came in below expectations. The pair peaked yesterday at 81.72 before reversing during the evening session. Against the euro, the yen dropped close to 170 pips following an increase in risk taking amid positive euro-zone news. The EUR/JPY went as high as 108.34 before staging a reversal.

Turning to today, the yen is likely to be heavily influenced by the US Non-Farm Payrolls figure, set to be released at 13:30 GMT. Should the figure come in below expectations, investors may begin to doubt the pace of the US economic recovery and revert back to safe-haven assets. In such a scenario, the yen would likely see gains against most of its main currency rivals.

Crude Oil – Risk Taking Leads to Gains for Oil

Optimism regarding a Greek debt swap deal led to an increase in investor risk taking yesterday. The price of oil saw a brief spike as a result, following days of downward movement. Crude moved up over $1 a barrel yesterday, peaking at $107.08 during the European session. The commodity was not able to sustain its upward momentum, and eventually turned bearish during evening trading.

As we close out the week, the price of oil could see further gains depending on the result of the US Non-Farm Payrolls figure. A better than expected figure could result in additional risk taking among investors, which could turn oil bullish once again. At the same time, should the figure come in below the forecasted 208K, investors could once again revert to safe-haven assets which may result in oil moving downward.

Technical News

EUR/USD

The Williams Percent Range on the daily chart has drifted into oversold territory, indicating that upward movement could occur in the near future. The Slow Stochastic on the same chart appears to be close to forming a bullish cross. Traders will want to keep an eye on this indicator. If the cross forms, it could be a sign of an impending upward correction.

GBP/USD

Most long-term technical indicators place this pair in neutral territory, meaning that no definitive trend is apparent at the moment. Traders may want to take a wait and see approach, as a clearer picture may present itself later on.

USD/JPY

Following the bearish trend the pair has seen in recent days, technical indicators are now showing this pair in neutral territory. The Williams Percent Range on the daily chart is at -50, while the Relative Strength Index is right around the 60 level. Taking a wait and see approach may be the wise choice.

USD/CHF

The daily chart’s Williams Percent Range is currently in overbought territory, indicating that a downward correction may occur in the near future. A bearish cross on the 8-hour chart’s Slow Stochastic supports this theory. Going short may be a wise choice for this pair.

The Wild Card

AUD/USD

A bullish cross on the daily chart’s Slow Stochastic indicates that this pair could see upward movement in the near future. This theory is supported by the 8-hour chart’s Relative Strength Index which has dropped into oversold territory. Forex traders may want to go long in their positions ahead of a possible upward breach.

Forex Market Analysis provided by ForexYard.

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.

March 9, 2012

BOC and ECB keep Stimulus as Risks Ease

By TraderVox.com

Tradervox (Dublin) – The Bank of Canada decided to keep prolong it monetary stimulus and indicated that the risks are edging closer to quicker inflation reducing the risk of another global recession. The BOC joined its peers in euro area and UK as they too have kept their stimulus package. Officials at the bank of Canada have left the main interest rate at one percent making this the longest pause since the 1950s. Further, officials have indicated that there is less slack in the economy due to the easing global tension and faster domestic spending, which may list prices.

The Canadian dollar increased after this announcement that came the same day as the ECB President Mario Draghi said that the inflation will break the ECB’s two percent limit this year. Such sentiments were also evident in UK, when two Bank of England policy makers indicated that the inflation may be firmer than expected.

According to Dawn Desjardins, an Assistant Chief Economist at Royal bank of Canada in Toronto, the Bank of Canada is trying to shed some light on the broader range of risks for the financial market, businesses and households to react hence kept the interest rates low.

Indicating the same sentiments as in the UK, the Bank of Canada kept its interest rates low and said that inflation might be greater that it had forecasted in January due to reduced economic slack and the higher oil prices. The officials also indicated that the economic growth might be faster than projected due to factors that were not specified. The bank of Canada policy makers led by the governor Mark Carney indicated in a statement released today that the development that has been experienced recently is marginal and the economy still required monetary stimulus.

The loonie increased by 0.7 percent against the dollar to sell at 99.02 cents per US dollar yesterday, a day before the decision by the COB officials. The USDCAD pair will also be affected by the labor market report expected later today.

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March 9, 2012

Williams-Sonoma Beats Estimates (WSM).mp4

3-8-12-Williams-Sonoma (NYSE:WSM) reported Q4 EPS of $1.17, beating estimates by $0.04.Revenues in the quarter rose 6% year-over-year to $1.27 billion, inline with estimates.Williams-Sonoma (NYSE:WSM) has potential upside of 5.2% based on a current price of $37.84 and an average consensus analyst price target of $39.79.

March 9, 2012

Euro Stabilizing

Source: ForexYard

Following positive news from the EU, the euro has stabilized significantly against the USD and the Japanese yen this afternoon. Private investors are reported to have agreed to swap 85% of Greek debt. This would allow for Greece to meet its debt obligations for now and provides a bit of breathing room for the debt-strapped country. This news reflects overall investor confidence and approval in the measures taken by Greece in order to restructure its debt and make the necessary budget cuts in order to get its economic house in order. As of this morning, the euro is running up against the greenback at $1.3216 and is trading against the yen at 108.10.

A123 Misses Estimates in Q4, Rose 68.3% Year-Over-Year (AONE)

March 9, 2012

Aussie and Kiwi Set for a Decline

By TraderVox.com

Tradervox (Dublin) – The New Zealand and Australian dollars are set for a weekly decline. The Australian dollar continues to decline after a report showing that the nation registered a trade deficit in the fourth quarter. The New Zealand dollar is headed for five day decline in two months against the yen after the Central Bank Governor Alan Bollard indicated in a news interview that an interest-rate cut is a possibility if the strong currency undermines the economic growth. The decline in the South Pacific currencies was reduced by reports showing that the inflation in China reduced last month.

Greg Gibbs, a Foreign Exchange Strategist at Royal Bank of Scotland Group Plc said that the trade balance data appears like a weak number and it has put some downward pressure on the Australian dollar. This is also as a result of a weaker tone in the economic data in the past two weeks.

The Australian currency was little changed selling at $1.0642 from yesterday when it surged 0.6 percent against the dollar. The Australian dollar has declined 0.9 percent this week. However, the Aussie increased by 0.2 percent against the yen to sell at 86.99 yen after strengthening 1.2 percent yesterday.

The New Zealand dollar increased by 0.2 percent against the US dollar to settle at 82.58 US cents; it also climbed 0.4 percent against the yen to settle at 67.51 yen. The Kiwi is, however, headed for a 0.5 percent decline against the JPY this week. This is the largest weekly drop for the Kiwi since the week ended Dec. 30.

A report from the Bureau of Statistics indicated that the Australian imports outpaced exports adding pressure to the RBA governor Glenn Stevens to end the two-month pause in the interest rates. The Australian economy also slowed in the last quarter and payrolls have fallen in February.

The Reserve Bank of New Zealand governor Alan Bollard have decided to keep the interest rates at record low of 2.5 percent but indicated that a rate cut is a possibility if the strong currency affects the economic growth of the nation.

March 9, 2012

Positive Report from Labor Market May Not Convince the Fed

By TraderVox.com

Tradervox (Dublin) – A report from the labor market is expected to show that employers took more than 200,000 workers in February alone making it the third straight month that employers have increased employment. Some Economists are, however, skeptical whether this will be convincing enough for the Federal Reserve Chairman Ben S. Bernanke who reiterated his remarks that labor market remains far from normal. He also added that the interest rates will remain close to zero at least through to the end of 2014.

According to Chris Rupkey who is a Chief Financial Economist at Bank of Tokyo-Mitsubishi UFJ Ltd, the pace of job creation indicates that the expansion is likely to handle any news headwinds. He added that the Fed might be cautious since the economic growth has been disappointing so far. The labor report is expected to be released today at 8:30 am in Washington.

According to some surveys, the payrolls estimates may increase from 125,000 to 275,000. The January gain is the largest since last April when employers took 251,000 workers. The projected gain in February will mark the best six-months of job growth since the period ending June 2006. The expected expansion has had effects on the share prices as well as causing an increase of 0.8 percent in the Standard and Poor’s 500 Index.

According to Richard Fearon, a Chief Financial Officer at the Eaton Corp., the increased demand for the tractor-trailers has led to more hiring. This is just one of the companies that have increased its manpower due to increased hiring. There has been a reduction of 0.8 percent in the unemployment rate since August last year. There is also a reduction in dismissals in the companies, which is an indication of confident in the economic outlook.

A report released last week by the Commerce Department indicated that the US economy grew by 3 percent annual pace in the fourth quarter after increasing by 1.8 percent in the previous quarter. However, Bernanke, in his Feb. 29 testimony to congress, the unemployment rate remains at a record low in the long term. These sentiments have analysts and economists to believe that the Fed might not yet be convinced by the recent job market reports.

March 9, 2012

Yen Drops to 9-Month Low as Euro Sets to a Weekly Gain

By TraderVox.com

Tradervox (Dublin) – The yen declined to a nine-month low as investors speculate further easing by the Bank of Japan. Gains in Asian shares also reduced the demand for the currency. The yen declined against all of its major peers after Japanese Finance Minister Jun Azumi indicated that he expects the BOJ to take “appropriate” steps. The yen also declined prior to releasing a U.S. data report today that may show an increase in payrolls, reducing demand for lower-yielding assets. The euro is headed for a weekly increase prior to reports forecast to confirm a rebound in French industrial production and German exports.

According to Toshiya Yamauchi, A Senior Currency Analyst in Tokyo at Ueda Harlow LTD., the yen might remain bearish among the major currencies since investors are focused on the Bank of Japan’s actions especially the easing prospects.

The yen declined by 0.3 percent to settle at 81.80 per dollar after it had earlier touched a low of 81.89. This is the weakest it has been since May 26 last year. Against the euro, the yen declined by 0.3 percent to reach 108.05. The euro remained little unchanged at $1.3269. It rose 0.5 percent in the past five days.

The Bank of Japan had on February 14 set the inflation target at one percent and indicated that it would raise the government debt purchases. The Bank of Japan is set to expand its stimulus at its meeting next week as an indication of its commitment to easing deflation.

Reports released yesterday show that Japan reported a record deficit in the January current account. This is the widest measure of trade used by economists to measure a country’s trade margins. The deficit is as a result of shutting down of nuclear reactors due to the March 11 earthquake. This has resulted to an increase in the import of liquefied natural gas.

The yen further declined against the US dollar amidst indications that the US economy is recovering. Today’s job report is expected to show that employers added more than 200,000 jobs for the third month in February.

March 8, 2012

USDCAD’s fall extends to 0.9892

USDCAD’s fall from 1.0028 extends to as low as 0.9892. Lengthier sideways movement in a range between 0.9841 and 1.0050 is expected in a couple of days. As long as 1.0050 key resistance holds, the price action in the trading range is treated as consolidation of the downtrend from 1.0422 (Dec 14, 2011 high), and another fall towards 0.9700-0.9800 area is still possible. On the upside, a break above 1.0050 will indicate that the downtrend has completed at 0.9841 already, then the following upward movement could bring price back to 1.0400 zone.

usdcad

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