InvestMacro FX

By CountingPips.com

U.S. Existing Homes sales increased more than expected and rose for the fourth month in a row in July according to the monthly report produced by the National Association of Realtors. The NAR report showed that existing-home sales including single family homes, co-ops and townhouses rose by 7.2 percent in July to a seasonally adjusted annual rate of 5.24 million units. The July data put existing home sales at four straight monthly gains for the first time since June 2004 and marked the largest monthly rise in ten years.

The sales pace surpassed economic forecasts that were predicting an approximate increase of 2.3 percent to a 5 million unit sales pace after June’s sales data had increased by 3.6 percent. On an annual basis, July’s existing-homes sales are 5 percent higher than the July 2008 sales pace.

Helping spur buyers into the market in July were a combination of low interest rates, a government tax credit for first time buyers and lower house prices as July’s median sales price is 15.1 percent lower than price level of July 2008.

NAR chief economist Lawrence Yun commented on July’s increase saying, “The housing market has decisively turned for the better.  A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales.”

The Northeast region led the sales pace in July with a 13.4 percent increase while the Midwest existing home sales rose by 10.9 percent and the South saw a 7.1 percent sales gain.  On the negative side, the West’s existing home sales declined by 1.7 percent for the month.

US Dollar falls lower in Forex Trading as risk appetite flows.

The U.S. dollar has been mostly lower today against the other major currencies in the spot forex market as risk appetite has flourished today on the strength of the positive manufacturing data out of Europe and the better than expected US housing data.  The dollar has been weaker versus the euro, British pound, Australian dollar, Canadian dollar, Swiss franc and New Zealand dollar while trading higher versus the Japanese yen.

The euro has advanced versus the dollar as the EUR/USD and reached past the 1.4370 threshold today before retreating to trading at 1.4327 at 12:47 pm after opening the day at 1.4225 at 00:00 GMT according to currency data from Oanda.

The British pound has risen today as the GBP/USD has advanced from its 1.6443 opening exchange rate to trading at 1.6497 usd per gbp.

The dollar has traded higher versus the Japanese yen today and the pair is trading at 94.49 after opening at the day at the 93.61 exchange rate.

The dollar is falling versus the Canadian loonie for the fourth day in a row as the USD/CAD trades at the exchange rate of 1.0821 after opening the day at 1.0932.

The dollar has also fallen against the Swiss franc as the USD/CHF trades at 1.0580 after opening at 1.0643 today.

The Australian and New Zealand dollars have both advanced higher today against the USD. The AUD/USD has climbed from its 0.8237 opening rate to trading at 0.8358 later this afternoon.  The NZD/USD has increased from its 0.6733 opening to trading at 0.6833 later today.

USD/CAD Chart – The US Dollar declining today versus the Canadian Dollar for the fourth day in a row.

By Fast Brokers – Investors are biting on the USD/JPY after U.S. Existing Home Sales beat analyst expectations.  The USD/JPY’s about face shows the level of uncertainty surrounding the viability of the Dollar.  Investors are suddenly more comfortable buying the Dollar after a series of positive global economic data.  However, the USD/JPY still clearly faces significant downward pressure, and it will take more than one session of data to turn things around.  On the other hand, we’re sure it’s comforting for the BOJ to see the USD/JPY forming some sort of bottom as the currency pair tries to get back to its psychological 95 level.  Meanwhile, the S&P futures and leapt to fresh 2009 highs, a positive development for the concept of a global economic recovery.  We will have to monitor whether the S&P futures can separate themselves further from their highly psychological 1000 level.  If so, the USD/JPY may be inclined to follow U.S. equities higher as investors cautiously return to risk.

Technically speaking, the USD/JPY’s obstacles to the topside are our 3rd tier downtrend line and the psychological 95 level.  We created a near 1st tier uptrend line running through July’s bottom.  Our 2nd tier uptrend line is approaching its inflection point with our 3rd tier downtrend line, indicating volatility could escalate.  The trend collision could be positive for the USD/JPY since the currency pair’s momentum is in favor of the bulls today.

Present Price: 94.61

Resistances: 94.71, 94.95, 95.26, 95.44, 95.96

Supports:  94.36, 94.08, 93.88, 93.65, 93.42

Psychological: 95

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers – The Cable is moving higher after EU PMI and U.S. Existing Home Sales data surpassed analyst expectations.  The S&P futures are setting new 2009 highs while the EUR/USD tests some important technical barriers to the topside.  However, the GBP/USD is only participating partially since investors are still sour about the level of debt in Britain.  Furthermore, this has been a relatively light week data-wise for the UK, giving investors less incentive to be bullish on the Pound after the surprising details of the BOE’s meeting minutes. The Cable is participating nonetheless, since a breakout in the S&P futures is certainly positive for the concept of a global economic recovery.  Meanwhile, we noticed investors started snapping up the USD/JPY after the U.S. Existing Homes Data, showing us investors are dipping their toes back into risk.  This is positive for the GBP/USD’s near-term outlook since the Pound should be considered a riskier currency at the point in time.

Despite today’s breakout in the S&P futures and the GBP/USD’s tilt upwards, the currency pair still faces our 3rd tier downtrend line and August 13th highs.  The GBP/USD will likely need some solid backing volume-wise to get past these two technical obstacles.  The currency pair continues to gravitate towards its psychological 1.65 range, and is stuck in a consolidative mindset right now.  However, the GBP/USD’s near and medium-term slopes are positive, giving us reason to believe momentum ultimately lies in favor of the bulls.  Meanwhile, the Cable has our 1st and 2nd trend lines to fall back on along with intraday and 8/19 lows.  Britain’s economic data will get a little more active next week, beginning with Nationwide HPI on Monday.

Present Price: 1.6517

Resistances: 1.6551, 1.6569, 1.6608, 1.6631, 1.6659

Supports: 1.6512, 1.6482, 1.6455, 1.6430, 1.6407

Psychological: 1.65

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers – The EUR/USD is making a solid move higher past 8/13-8/14 highs after the wave of PMI data came in above analyst expectations.  In fact, a couple PMI data points are registering expansion (50+) while the rest are making a strong case to do the same.  Such positive improvements in data tend to have a larger impact on the EUR/USD than the GBP/USD since the ECB’s interest rate remains at 1%.  The growth in PMI mirrors the expansion we saw in the EU’s Economic Sentiment data released earlier this week.  Hence, the EU is making a good case for returning to GDP growth in H2.  The EUR/USD is reacting accordingly, knocking on the door of our readjusted 2nd tier downtrend line.  The EUR/USD is now in an advantageous position since our downtrend lines are tight.  If the EUR/USD can get above our 4th tier downtrend line, the currency pair may experience exciting movements to the topside since the 4th tier runs through August highs.  Hence, a breakdown of our 4th tier downtrend line would likely yield a retest of August 5th highs.

Meanwhile, the S&P futures are staring down their own August highs as investors await Existing Home Sales data.  A large increase in this data set could propel the S&P futures to new 2009 highs and add fire to the EUR/USD’s upward momentum due to their positive correlation.  However, disappointing Existing Home Sales data could drag the S&P futures back towards 1000 and keep the EUR/USD locked beneath our 4th tier downtrend line for the session. Regardless, momentum is clearly in favor of the upside do to positive developments in EU economic data.

Present Price: 1.4337

Resistances: 1.4350, 1.4360, 1.4375, 1.4405, 1.4420

Supports: 1.4237, 1.4315, 1.4304, 1.4294, 1.4264

Psychological: 1.40

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Bob Prechter

The following is an excerpt from Robert Prechter’s Elliott Wave Theorist.  Elliott Wave International is currently offering Bob’s recent Elliott Wave Theorist, free.

On February 23, EWT called for the S&P to bottom in the 600s and then begin a sharp rally, the biggest since the 2007 high. The S&P bottomed at 667 on March 6. Then the stock market and commodities went almost straight up for three months as the dollar fell.

On March 18, Treasury bonds had their biggest up day ever, thanks to the Fed’s initiating its T-bond buying program. The next day, EWT reiterated our bearish stance on Treasury bonds. T-bond futures declined relentlessly from the previous day’s high at 130-15 to a low of 111-21 on June 11.

That’s when there were indications of impending trend changes. The June 11 issue called for interim tops in stocks, metals and oil and a temporary bottom in the dollar. The Dow topped that day and fell nearly 800 points; silver reversed and fell from $16 to $12.45; gold slid about $90; and oil, which had just doubled, reversed and fell from $73.38 to $58.32. The dollar simultaneously rallied and traced out a triangle for wave 4. Bonds bounced as well. As far as I can tell, our scenarios at all degrees are all on track.

Corrective patterns can be complex, so we should hesitate to be too specific about the shape this bear market rally will take. But from lows on July 8 (intraday) and 10 (close), the stock market may have begun the second phase of advance that will fulfill our ideal scenario for a three-wave (up-down-up) rally. In concert with rising stocks, bonds have started another declining wave, and the dollar appears to have turned down in wave 5 (see chart in the June issue), heading toward its final low. Although commodities should bounce, their wave patterns suggest that many key commodities will fail to make new highs this year in this second and final phase of partial recovery in the overall financial markets.

Meanwhile, our forecast for a change in people’s attitudes to a less pessimistic outlook is proceeding apace. Here are some of the reports evidencing this change:

More than 90 percent of economists predict the recession will end this year. [The] vast majority pick 3rd quarter as the time. (AP, 5/27)
Manufacturing and housing reports this week may offer signs that the recession-stricken U.S. economy is within months of hitting bottom, economists said. (USA, 6/15)

Fewer people say they’ve prospered over the past year than in decades, a USA TODAY/Gallup Poll finds. Over the past two months, however, expectations for the future have brightened significantly amid rising optimism about a stock market rebound and economic turnaround. “I think the administration is going in the right direction,” says… Now 36% of those surveyed in the Gallup-Healthways well-being poll say the economy is getting better. That’s not exactly head-over-heels exuberance, but it is double the number who felt that way at the beginning of the year and a notable spike in the nation’s frame of mind. Thirty-three percent say they’re satisfied with the way things are going in the United States; in January, just 13% did. (USA, 6/23/09)

If only to confirm the socionomic causality at work, an economist quoted in the article above muses, “The one anomaly in the puzzle is that people shouldn’t be feeling better because the jobs market is so terrible and unemployment is likely to keep rising.” Of course it would be an anomaly, and people should not feel better, if mood were exogenously caused. But it is endogenously regulated, and it precedes social actions, which produce events such as job creation and elimination. That people feel better is evident in our rising sociometer, the stock market. If the rally continues, economists will soon agree that the Fed’s “quantitative easing” and Congress’ massive spending are “working.” Those predicting more inflation and hyperinflation will have the last seeming confirmation of their opinions. Then, a few months from now, some economists will probably express similar puzzlement when the stock market starts plummeting again despite the fact that the economy has improved.

But all of these considerations are temporary. Conditions are relative, and behind the scenes, the depression has been, and still is, grinding away.

For more information, download the FREE 10-page issue of Bob Prechter’s recent Elliott Wave Theorist. It challenges current recovery hype with hard facts, independent analysis, and insightful charts. You’ll find out why the worst is NOT over and what you can do to safeguard your financial future.

By Adam Hewison – Today’s short video is something quite special.

In many of my previous videos we’ve looked at charts using Japanese candlestick charts. While this is interesting, I’ve never quite explained to you some of the powers behind using Japanese candlestick charts.

So here’s what we are going to do; watch the video, and I will point out to you some powerful Japanese candlestick formations on Google, Gold and Crude Oil.

MarketClub is making available to you with just a phone call a very special PDF booklet on Japanese candlestick charting. The title of the booklet is “17 Moneymaking Candlestick Formations You Can Use Today”.

So enjoy the video.

See the New Video Here…

Thanks.
Adam Hewison

Source: ForexYard

The U.S. Dollar is expected to go volatile today on U.S. Homes Sales data and the speech by Federal Reserve Chairman Ben Bernanke at 14:00 GMT. Bernanke is expected to discuss the economic crisis and recovery. With regards to the home sales data, the figure is expected to rise to 5.03 million, up from the previous figure of 4.89 million. Forex traders should follow both of these events closely as they are set to determine the USD’s main crosses for Friday’s trading.

Economic News

USD – Positive Economic Data Weighs in on Dollar

The Dollar declined versus most major counterparts throughout much of yesterday’s trading on Thursday as U.S. equity markets rallied amid better-than-forecast data. Weighing further on the USD, the Philadelphia Fed reported that manufacturing in the region unexpectedly expanded this month for the first time in almost a year, a sign the U.S. economy is recovering. Furthermore, the Conference Board said the index of leading economic indicators rose 0.6% in July, its fourth consecutive monthly gain. The Dollar index traded at 78.331, down slightly from 78.485.

The Dollar may continue its decline today as the release of today’s economic data may show sales of U.S. existing homes gained 2.1% last month, the highest since September 2008. An improvement in the U.S. housing market will further support risk appetite since the housing market crash was at the root of the current crisis.

Along with the Existing Home Sales report that will be released today at 14:00 GMT, traders should also follow Ben Bernanke’s testimony, set to begin at 14:00 GMT as well, as it tends to cause great market volatility and may intensify the current bearish sentiment on the Dollar.

EUR – EUR Extends Gains as Equities Continue to Rebound

The EUR extended its gains against the British Pound ahead of a report today that is forecasted to show Europe’s manufacturing and service industries contracted at a slower pace this month, adding to signs that the global recession is coming to an end.

The EUR traded at $1.4250 early this morning, from $1.4254 yesterday, and at 133.99 Yen from 134.26 Yen. Encouraging risk appetite further were recoveries in global equity markets, boosting demand for higher yielding currencies and commodities at the expense of the USD and JPY.

The French, German and Euro-Zone Manufacturing and Service data is expected to be released at 7:00 GMT, 7:30 GMT and 8:00 GMT respectively. With the recent recoveries in German and French GDPs, this data should provide an insight as to the sustainability of this recovery, and therefore have a major affect on the direction of the European currency.

JPY – Yen Boosted By a Drop in Asian Stocks

The JPY appreciated against the Dollar and Euro in today’s early trading as Asian stocks dropped, boosting demand for Japan’s currency as a refuge. The Yen typically strengthens in times of financial turmoil as Japan’s trade surplus makes the currency attractive.

Japan’s currency rose against all 16 major counterparts as Japan’s Nikkei 225 Stock Average fell 0.7% and the MSCI Asia Pacific Index of regional shares lost 0.2%. The Yen traded to 93.59 per Dollar from 94.36 in New York yesterday. Japan’s currency traded at 133.16 per EUR, up from 134.22. With no major news expected from Japan, movements in global equities will continue to dominate Yen sentiment for today.

Crude Oil – Crude Prices Fall Despite Global Optimism

Crude Oil finished trading at $72.14 a barrel yesterday, down $1.64, as investors felt that the commodity was overvalued. Therefore, they dropped the commodity, and put their money into even riskier assets. Traders dropped Crude for equities, as better than expected manufacturing data added to evidence the recession may be ending. Crude Oil prices also dropped yesterday, as investors realized it was overvalued, as prices soared over the previous 2 days.

In light of the continuous low demand, Oil prices have used equities to estimate the economy’s progress and recovery. While Wednesday’s equities rally was driven by the surprisingly low inventories, it does not appear to be the beginning of a trend, as only a sustained increase in demand can permanently bring down the inventory level, and there is still no sign for that. Therefore, if equities rise again today and the dollar weakens significantly, we may see Crude Oil prices rebound.

Technical News

EUR/USD

The hourly chart displays a price move that has originated at the lower border of the Bollinger Bands and has the potential to appreciate all the way to its upper border. Going long with tight stops may be the popular choice today.

GBP/USD

After dropping below the 1.6450 level this morning, the pair has continued its decline, creating an opportunity for traders to take advantage. The hourly chart shows the formation of a bullish cross on the Slow Stochastic Oscillator, indicating the potential for a violent breach. The pair is also trading in the oversold territory on the RSI, indicating the pair may be due for an upward correction.

USD/JPY

The pair is continuing its 10-day bearish trend with the daily chart’s Slow Stochastic providing us with mixed signals. The oscillators on the 4-hour chart do not provide a clear direction either. Waiting for a clearer sign on the hourlies might be a good strategy today.

USD/CHF

The pair fell for the second day on Thursday, and the USD/CHF cross now stands at the 1.0654 level. The technical data seems to be showing misleading signs. On the one hand, the MACD, RSI and Stochastic Slow of the weekly chart support a bearish trend for today. On the other hand, the MACD of the 4-hour chart and Stochastic slow of the daily chart support a bullish reversal for today. Entering the pair when the signals are clearer seems to be the preferred strategy for today.

The Wild Card – Silver

Silver has experienced much bearishness in the past 2 weeks as it currently trades at the $13.74. The current bearish trend is expected to come to n end anytime soon, and a bullish correction may be in the making. This is supported by the RSI of the hourly and daily chart, and the Stochastic Slow of the hourly and daily chart. Entering the commodity when the upward breach occurs may turn out to pay off for forex traders today.

Forex Market Analysis provided by Forex Yard.

© 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.

As we look at the end of week review for the trading week ending Friday August 21, it is apparent that the British Pound has experienced a very volatile trading week. The British currency has moved on a number of factors, and I want you forex traders to take advantage of the GBP now.

Despite falling yesterday, the GBP/USD pair is already up 20 pips today at 1.6465. The GBP/JPY cross is also trading higher by 60 pips at the 154.50 level in early Friday trading. This behavior may be due to overselling of the British Pound in recent days. Many analysts predict that the GBP may make a mini recovery today.

I recommend you traders follow U.S. Home Sales and Federal Reserve Chairman Ben Bernanke’s speech at 14:00 GMT, as optimistic results may lead to higher risk appetite in the forex market. This would mean that traders could buy riskier currencies, such as the GBP, as they intend to make big end-of-week profits.

You may be wondering how the GBP can recover today after such a turbulent week. The truth is the British currency still is very fragile. However, if we look at the bigger picture, since the start of the financial crisis the GBP has fallen dramatically. Therefore, talking of a bullish GBP today doesn’t seem unreasonable at all.

You can read my other postings on the GBP CAMPAIGN on the ForexYard blog to get even more insight into the British Pound. In addition, you can also start trading over 30 currency crosses and top commodities now by opening an account with us. As of now, open your GBP positions en masse to profit from today’s trading.

By GCI Fx Research

€

The euro moved higher vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4275 level and was supported around the $1.4200 figure.  European Central Bank member Bini Smaghi reiterated the central bank expects inflation to remain low over the coming year and will “do everything it takes to prevent it from rising.”  He also indicatyed the ECB does not expect EMU-16 growth before the middle of 2010.  Notably, EMU-16 GDP growth was -0.1% q/q, up from the record decline of -2.5% in the prior quarter. The euro moved higher partially on a reound in Chinese equity markets as the Shanghai Composite was up 4.5% today following recent flirtations with bear market territory.  Other major news today focused on a warning from Germany’s finance ministry that the economic stabilization may not hold.  It was reported last week that German GDP improved unexpectedly in the second quarter.  In U.S. news, data released in the U.S. today saw the Philadelphia Fed’s manufacturing survey improve to 4.2 from -7.5 in July while July leading economic indicators were up 0.6%.  Also, weekly initial jobless claims rose to 576,000 from a revised 561,000 and continuing jobless claims printed at 6.241 million, up from a revised 6.239 million.  Euro bids are cited around the US$ 1.3900 figure.

¥/ CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥94.55 level and was supported around the ¥93.85 level.  Bank of Japan Policy Board member Mizuno warned the domestic economic recovery could decelerate in the autumn, adding a sustained economic recovery would require “support from governments and central banks.”  He said the BoJ should prepare Japan for an extended bout with deflation, warning that “price declines will ease only at a moderate pace” in the year starting April 2011.  He also warned the central banks lacks the tools needed to “prop up prices and stimulate economic growth in the short term.”  The yen’s direction is uncertain given the real possibility that economic growth may slow further.  On the political front, a Democratic Party of Japan victory at the general election on 30 August could result in upward pressure on the yen and possibly more supply of Japanese government bonds.  The Nikkei 225 stock index climbed 1.76% to close at ¥10,383.41.  U.S. dollar offers are cited around the ¥104.15 level.  The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥134.60 level and was supported around the ¥133.40 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥156.70 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥88.65 level. In Chinese news, the U.S. dollar lost ground vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8273 in the over-the-counter market, down from CNY 6.8320.

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 CountingPips.com

Retail Sales data was released today out of the United Kingdom and showed that retail sales increased in July for the second month in a row according to a report by National Statistics. July’s retail sales increased by 0.4 percent following a revised increase of 1.3 percent in June. July’s annual rate of increase was 3.3 percent higher than the July 2008 level following June’s annual increase of a revised 3.1 percent.

Market forecasts had expected an approximate monthly increase of 0.4 percent in July and a 2.7 percent annual increase.

Contributing to the sales gain was a increase in household goods stores by 4.5 percent and other stores sales increased by 1.1 percent.  Overall, predominantly non-food stores increased by 1.1 percent in July while predominantly food stores declined by 1.0 percent.