Jan-12 Daily Forex Forecast and Trend Analysis

Jan-11 Daily Forex Forecast and Trend Analysis

Jan-06 Daily Forex Forecast and Trend Analysis

Jan-06 Daily Forex Forecast and Trend Analysis

Jan-05 Daily Forex Forecast and Trend Analysis

Jan-04 Daily Forex Forecast and Trend Analysis

Dec-24 Daily Forex Forecast and Trend Analysis

Dec-23 Daily Forex Forecast and Trend Analysis

Dec-22 Daily Forex Forecast and Trend Analysis

Dec-21 Daily Forex Forecast and Trend Analysis





February 2007 March 2007 September 2007 November 2007 December 2007 February 2008 May 2008 August 2008 September 2008 October 2008 November 2008 December 2008 January 2009 February 2009 March 2009 April 2009 May 2009 June 2009 July 2009 August 2009 September 2009 October 2009 November 2009 December 2009 January 2010 February 2010 March 2010 April 2010 May 2010 June 2010 July 2010 August 2010 September 2010 October 2010 November 2010 December 2010 January 2011




Easy-Forex
Master-Forex
Forex-Factory
Forex-tsd
ForexYard
Forex Education
Marketiva
OnLine Forex



Blogger

FinalSense

Amazon

Yahoo

Ebay



Tuesday, September 30, 2008
30-Sep World Daily Markets Briefing
by: ADVFN Newsdesk

US Stocks at a Glance

US STOCKS-Market rises at open on bailout revival hope

NEW YORK - U.S. stocks rose at the open on Tuesday, clawing back from Wall Street's worst slide in more than 20 years, as investors bet that Washington will work to  revive a plan to stabilize the U.S. financial system.
   
The Dow Jones industrial average was up 179.36 points, or 1.73 percent, at 10,544.81. The Standard & Poor's 500 Index was up 24.49 points, or 2.21 percent, at 1,130.88. The Nasdaq Composite Index was up 51.86 points, or 2.61 percent, at 2,035.59.

US home price drops hit fresh records in July - S&P

NEW YORK - Prices of single-family homes plunged a record 16.3 percent in July from a year earlier, extending declines that have plagued the housing market for two years, according to the Standard &
Poor's/Case-Shiller Home Price Indexes.
      
The S&P/Case Shiller composite index of 20 metropolitan areas fell 0.9 percent in July from June, S&P said in a statement on Tuesday. Since the peak of the housing boom in July 2006, the index has dropped 19.5 percent, it said.
      
S&P said its composite index of 10 metropolitan areas declined 1.1 percent in July for a 17.5 percent year-over-year drop. From two years ago, the index is down 21.1 percent. The pace of home price declines has slowed in the past three months, however, S&P said.


Forex

FOREX-Dlr rallies vs yen; cautious optimism creeps in

LONDON -  The dollar jumped 1 percent against the yen on Tuesday, as shock at the failure of the U.S. Congress to approve a $700 billion bank bailout plan gave way to cautious optimism that a deal may yet be reached.
   
Talk that U.S. lawmakers may reach some kind of agreement by the end of the week and speculation that central banks could slash interest rates allowed risk aversion to ease, with U.S. stock futures rebounding after Wall Street on Monday experienced its biggest one-day sell-off since 1997.
   
Trading continues to be dominated by waves of volatility, however, making it difficult for currencies to establish firm direction. "We're seeing dollar/yen bounce around as optimism ebbs and flows about the U.S. bailout package, but we're not getting a trend," Standard Bank currency analyst Steve Barrow said.
   
"Markets tend to move when we're pretty certain about something. Here everyone's flying blind," he said, describing volatility as "astronomical". Implied one month dollar/yen volatility jumped to its highest since mid March at 19.1 percent.
   
The dollar slumped to a four-month low against the yen at 103.50 on trading platform EBS as investors scrambled into safe haven assets after U.S. lawmakers unexpectedly rejected the unprecedented rescue deal, which should have injected some life into frozen money markets.
   
But by 1104 GMT, the dollar was up 1.1 percent against the yen to 105.19, according to Reuters data. The euro fell 0.6 percent to $1.4416 and by 0.1 percent against the yen to 150.27.
   
The euro and the pound made very little headway against the dollar, staying not far above the 10-day lows reached on Monday as evidence continued to highlight the international complexion of the banking crisis.
   
The French government took a 25 percent stake in Belgian-French financial services group Dexia after a capital injection of 6.4 billion euros by France, Belgium and Luxembourg to shore it up.
   
Ireland's government announced a scheme to safeguard deposits on Irish banks, which it said guarantees around 400 bln euros of liabilities.
   
Banks in Britain, Belgium, Russia, Iceland and the United States have been rescued by authorities so far this week, prompting mammoth injections of cash into the global banking system by central banks on Monday aimed at lubricating money markets.
   
But interbank rates remained painfully high, showing the central banks have not succeeded in easing credit tightness. The market expects U.S. consumer confidence data and the latest purchasing managers' index on Chicago manufacturing activity later on Tuesday to underline the weakness of the U.S. economy.


Europe share

Europe shares seesaw ahead of Bush speech; drugs up

LONDON - European shares fell by midday on Tuesday in volatile trade as investors turned to safe haven drug stocks to offset weakness in the banking sector ahead of a speech by U.S. President George Bush on a rescue package.
      
By 1125 GMT, the FTSEurofirst 300 index of top European shares was down 0.1 percent at 1,045.98 in choppy trade after seesawing between 2.7 percent lower on the day and 0.5 percent higher.
     
President Bush is due to speak at 1245 GMT after U.S. lawmakers rejected a $700 billion financial sector rescue plan on Monday. The Senate is to return on Wednesday and the House on Thursday after a break for the Jewish New Year Holiday of Rosh Hashanah. No laws can be passed in their absence but staff could work on a revised plan.
      
"The logic is something has to be done when U.S. lawmakers re-assemble on Thursday. Otherwise it is likely actions will be taken by governments to safeguard bank deposits with the Irish government already taking this step," said Ed Menashy, strategist at Charles Stanley. 
      
Belgian-French financial services group Dexia gained 13 percent after the group got a 6.4 billion-euro ($9.18 billion) capital boost from public shareholders as a deepening global credit crisis shook European banks.
      
Anglo Irish Bank and Allied Irish Banks were 36 percent and 20 percent higher respectively after the Irish government guaranteed all bank deposits for two years. However, Royal Bank of Scotland, HBOS, UniCredit and BNP Paribas were down 2.7 percent to 6.9 percent.
      
Across Europe, the FTSE 100 index was up 0.4 percent, Germany's DAX was down 0.8 percent and France's CAC 40 was 0.07 percent higher. "No one really expected a no vote, but it's encouraging that they're clearly going to vote on this again. Bush and (Henry) Paulson will use their political might to twist people's arms -- if you call heads or tails and lose, you'll toss the coin again," one trader said.
       
"Some people are also seeing the Irish government stepping in as a sign that more governments will get involved. We're coming off oversold positions but people will sell in any rally.
        
The pharmaceutical sector was the top weighted gainer on the index as investors turned towards defensive stocks as trade remained volatile.  AstraZeneca, GlaxoSmithKline, Novartis and Sanofi-Aventis rose 0.6-2.6
percent.
      
"As no news on the approval of the TARP (Troubled Asset Relief Program) is likely to arrive until Thursday, safe haven-type trades should remain popular," UniCredit said in a note.
      
Miners were higher as copper prices rose 0.1 percent. Antofagasta, BHP Billiton, Lonmin, Rio Tinto, and Xstrata were up 0.2-5 percent.
      
However, energy stocks were in the doldrums despite oil steadying to around $98 after a near-10 percent drop in the previous session. Oil stocks BG Group,  Royal Dutch Shell, BP and Total were 0.6-1.1
percent lower.
      
Swedish fashion giant H&M slid 9 percent after the company reported a weaker-than-expected third-quarter pretax profit of 4.59 billion crowns. German automaker Daimler fell 5.5 percent as analysts pointed to the effects of the credit crunch on the group's financing unit. 


Asia at a Glance

Asian stock market summary

JAPAN
The benchmark Nikkei shed 4.1 percent to close at 11,259.86, the lowest finish since June 2005, after U.S. lawmakers rejected a $700 billion bailout plan for the financial system.
   
The broader Topix declined 3.6 percent to end at 1,087.41, after tumbling more than 5 percent at one stage.

SOUTH KOREA
The Korea Composite Stock Price Index closed down 0.57 percent to 1,448.06, paring losses after plunging as much as 5.5 percent on U.S. lawmakers' rejection of the bailout plan for the financial sector.

AUSTRALIA
The benchmark S&P/ASX 200 index finished down 4.3 percent at 4,600.5, the lowest close since December 2005, joining other regional markets in a sell-off after U.S. lawmakers rejected a bailout package for the troubled financial sector.

TAIWAN
The weighted index closed down 3.55 percent at 5,719.28, following a historic sell-off on Wall Street. Dealers said the effect of panic selling due to anticipation of margin calls was somewhat offset by the intervention of the National Stabilization Fund and other government funds, which stepped in to buy.

CHINA MARKETS SHUT FOR THE NATIONAL DAY HOLIDAY.

HONG KONG
The Hang Seng index closed up 135.53 points or 0.76 pct at 18,016.21, off a low of 16,799.29 and high of 18,029.77.

INDIA
The Bombay Stock Exchange's 30-share benchmark Sensitive Index closed 264.68 points or 2.1 percent higher at 12,860.43 points, wiping out nearly 443 points from the day's low before its upward march. The key index fell 11.7 percent in the month. The National Stock Exchange's S&P CNX Nifty ended higher by 71.15 points or 1.85 percent at 3,921.20.

Labels: ,

29-Sep World Daily Markets Briefing
by: ADVFN Newsdesk

US Stocks at a Glance

US STOCKS-Market drops at open on bank worries

NEW YORK - U.S. stocks fell on Monday as the rescue of two major European banks and a takeover of Wachovia Corp's bank operations by Citigroup heightened concerns about the widening fallout from the credit crisis.

The Dow Jones industrial average .DJI was down 138.35 points, or 1.24 percent, at 11,004.78. The Standard & Poor's 500 Index .SPX was down 16.31 points, or 1.34 percent, at 1,196.70. The Nasdaq Composite Index .IXIC was down 36.88 points, or 1.69 percent, at 2,146.46.

US August consumer spending unchanged; personal income up 0.5 pct

WASHINGTON - US consumer spending was flat in August despite a larger-than-expected increase in personal income, while inflation rose at its fastest annual pace in more than 13 years, the Commerce Department said today.
   
Personal consumption expenditures were unchanged in August after rising a downwardly revised 0.1% in the prior month. August's unchanged level of spending was the lowest since February, when spending was also flat.
   
Economists polled by Thomson Reuters IFR Markets expected consumption to rise 0.2% in August. After adjusting for inflation, real consumer spending was also unchanged in August, after falling slightly in June and July.
   
Personal income was up 0.5%, well above the 0.2% rise economists were expecting. But after adjusting for inflation and taxes, real disposable income fell 0.9% in August, the third consecutive monthly decline.
   
Private employers paid their workers $24.5 billion in August, up from $16.3 billion in July. Payrolls were up in all categories except manufacturing, which fell $1.6 billion from July.
   
The overall increase in wages and salaries offset a sharp drop in payments issued under the Economic Stimulus Act of 2008. Those payments fell to $1.0 billion in August from $13.7 billion in July.
   
Inflation as measured by the core Personal Consumption Expenditure (PCE) index, which excludes food and energy, rose 0.2% in August as expected. That's less than the 0.3% gain seen in June and July.

Over the last year, the core PCE price index has increased 2.6%, the highest this measure of inflation has been since January 1995.


Forex

FOREX-Euro, stg hit slopes vs dlr as bank crisis spreads

LONDON - The euro and sterling tumbled more than 2 percent against the dollar on Monday as the impact of the latest financial storm fanned out beyond the United States, forcing bank nationalisations in Europe.

European banking sector troubles, which also sent share prices diving, threatened to overshadow the proposed and hard fought $700 billion U.S. bank bailout deal that looked set for approval later on Monday.

The dollar's rally against the single European currency deepened as the Belgian, Dutch and Luxembourg governments nationalised parts of banking and insurance group Fortis and agreed to inject 11.2 billion euros into the financial group.

Sterling was on track for its biggest one-day percentage fall against the dollar as troubles at UK lender Bradford & Bingley led the UK government to nationalise its lending activities.

And Iceland's banking sector stress was highlighted as its government took control of Glitnir, its third biggest bank. Analysts said the latest developments snapped attention back to the international nature of the financial crisis, compared with a recent tendency to concentrate on the United States.

"I think there's been a very lax attitude over the last couple of weeks to suggest that its been seen as a purely U.S.-centric problem," Rabobank markets strategist Jeremy Stretch said. "We've gone from a piece-meal response in the U.S. to something more substantive with the bailout package, whether it works or not is a different matter," he added.

By 1100 GMT, the euro had fallen 1.8 percent against the dollar to $1.4347, having earlier fallen more than 2 percent to a 10-day low at $1.4301 according to Reuters data.

Sterling dipped below $1.80 to a 10-day low at $1.7962, setting it on course for its biggest one-day percentage fall since mid-1993. U.S. lawmakers geared up for a possible vote on Monday on creating the massive $700 billion government fund.

Congressional leaders from both parties said they had reached a tentative agreement early on Sunday, but questions abound as to whether the rescue plan, which aims to use taxpayer funds to buy up toxic mortgage debt, would restore confidence to shaky markets and head off a deeper downturn.

"Obviously progress of the Fed's bailout plan when it is presented on Capitol Hill later today will provide some key direction for markets," said Gary Thomson, head of sales trading at CMC Markets.

"Just how sustainable the dollar's rally will be may well depend on the speed of progress of the bill but one thing that seems certain is that the greenback may well be on the front foot once more," he added.

Reflecting the dollar's broad rally, the high-yielding Australian and New Zealand dollars fell 2.0 and 1.5 percent respectively versus the U.S. currency, which also gain 1.4 percent against the safe-haven Swiss franc. But while the Swiss franc was depressed, aversion to risk boosted the low-yielding Japanese yen as share prices fell.

The euro slipped 1.6 percent to 152.36 yen, while the FTSEurofirst 300 index was down 3.16 percent at 1069.70.

"It looked on Friday as if the passage of the (U.S. bailout) plan would cause the yen to suffer, but there has been such a run of names in trouble that the yen impact has been small," Calyon senior currency strategist Daragh Maher said.


Europe share

European shares slip as Dexia, Fortis hammer banks

LONDON - European share prices fell  sharply early on Monday, as nationalisations and liquidity fears  hammered bank stocks and overshadowed prospects in the United  States of the $700 billion bailout plan for its banks going  ahead.
   
By 0856 GMT, the FTSEurofirst 300 index of top European  shares was down 2.6 percent at 1,075.90 points, having fallen  more than 3 percent earlier.
   
Belgian-Dutch group Fortis underwent  nationalisation on Sunday after emergency talks with European Central Bank President Jean-Claude Trichet. Fortis is the first major euro zone bank to buckle since  U.S. mortgage defaults triggered global financial turmoil in  August last year. Its shares gave up early gains to slide 18  percent.
   
"The nationalisations have an incredibly negative readacross  for the sector," said Mark Sartori, head of European sales  trading at Fox-Pitt, Kelton.  "The contagion is spreading to mainland Europe and  everyone's asking: 'who's next?'" added Sartori. The DJ Stoxx European banking sector index fell  nearly 5 percent.
   
Fortis's Belgian-French rival Dexia sank 23  percent following a Le Figaro newspaper report that said the  bank could launch an emergency capital increase. A Dexia spokesman said that it continued to evaluate a  response to the current global financial crisis, offering no  comment on any capital increase. He said the company's liquidity  situation was totally healthy.
   
Germany's Commerzbank was down 23 percent. This  was despite the group saying it has already covered group refinancing needs for 2008. Hypo Real Estate plummeted 60 percent after it secured a credit line of up to 35 billion euros ($51.21 billion)  from a consortium of listed and public-sector banks in Germany,  a source familiar with the situation said on Monday. 
   
"This move will have significant impact on Hypo Real's  future profits. We are downgrading from "buy" to "hold" as an  initial step. Our estimates and target are under review  until further details are disclosed," said Christoph Bossmann,  at WestLB.
   
Across Europe the FTSE 100 index was down 2.5 percent,  Germany's DAX was 3.1 percent lower and France's CAC 40 was down  3.3 percent. The UK government said that lender Bradford & Bingley's  branch network will be sold to Spanish bank Santander  and the remainder of the group would be nationalised.

"The news from Fortis and Bradford & Bingley has agitated  worries that there are more problems out there and that the $700  billion package will not turn things around quickly. There are  concerns now earnings across most markets will be weak," said  Bernard McAlinden, market strategist at NCB Stockbrokers.
   
Royal Bank of Scotland, UBS, Banco  Santander, Barclays, UniCredit and  BNP Paribas were 5.7-8.2 percent lower. Investors stayed cautious as U.S. lawmakers prepared to vote  on Monday on a $700 billion government fund to buy bad debt,  worrying that this may not be enough to help stabilise the economy.  
  
Worries over demand from a slowing economy pushed miners  lower as copper fell 2.6 percent. Anglo American, Antofagasta, BHP Billiton, Kazakhmys, Xstrata down 4.5-8.4  percent. Meanwhile oil extended its decline, with crude  falling nearly 3.3 percent to $103.27 a barrel, pressured by  gains in the U.S dollar.  BG Group, BP and Royal Dutch Shell  were between 1.7 and 2.2 percent lower.


Asia at a Glance

Asian stock market summary

JAPAN
The benchmark Nikkei ended down 1.3 percent at 11,743.61, as investor caution about the implementing of a U.S. bailout plan for the financial sector outweighed initial relief that a deal was being done.
   
Major banks shed much of their gains or sank into negative territory, while blue-chip exporters such as Toyota Motor Corp fell sharply on worries about the global economic outlook.
  
The broader Topix lost 1.7 percent to close at 1,127.87.

SOUTH KOREA
The Korea Composite Stock Price Index closed down 1.35 percent at 1,456.36 as steep falls in the won fuelled worries about volatility in domestic financial markets, sending banks sharply lower and stoking concerns about foreign currency-related losses.
   
AUSTRALIA
The benchmark S&P/ASX 200 index fell 2 percent to 4,807.4, reversing earlier gains, as resource stocks came under pressure on ongoing worries about the outlook for global demand.
   
U.S. lawmakers finally reached a deal on a $700 billion bailout for the financial sector, but doubts are already creeping in as to how effective the package will be.
 
CHINA
China markets were shut for the National Day holiday.

HONG KONG
The Hang Seng index closed down 801.41 points or 4.29 pct at 17,880.68, off a low of 17,796.34 and high of 18,742.25.

Labels: ,

30-Sep Daily Forex Analysis
by: Forexyard

Technical News

EUR/USD
There is a very distinct bearish channel forming on the daily chart, as the pair is now floating in the middle of it. Currently, as all oscillators are pointing down it seems that the bearish movement should extend.


GBP/USD
The cable is in the middle of a bearish corrective move that was initiated at the 1.8600 level. The hourlies are showing additional bearish momentum and the daily chart supports that notion. Going short seems to be preferable


USD/JPY
The range trading continues as the pair fails to create a significant breach. However, a bullish cross on the daily chart's Slow Stochastic suggests that the pair should see a rising trend. Going long might be the right choice today.


USD/CHF
There is a very accurate channel forming on the 4 hour chart, as the pair is now floating on the upper barrier of it. A flag formation on the daily chart indicates that the bullish trend has more room to go. Going long with tight stops might be a good strategy.


The Wild Card

Gold
After peaking at $917 an ounce, gold prices have failed to reach this level once again. And now, as all oscillators on the daily chart are giving bearish signals, it seems that gold prices might face a sharp drop. Forex traders could have an opportunity to benefit from what could be a very strong trend.


Economic News

USD

Core PCE Price Index Help boost the USD
As the U.S. Congress studies the government's $700 billion rescue proposal, the dollar will face some pressure to go lower as trader confidence in the dollar becomes further damaged. There is still great uncertainty about when the U.S. rescue package will pass and how much of a burden it will place on the U.S. tax payers. In order to stabilize the USD, the federal government must inject permanent capital into the financial system in order to restore confidence and halt the financial turmoil in the markets.

The federal government is broadening its effort to revive confidence in the market. Last week the Fed expanded its swap lines with the European Central Bank and Swiss National Bank by $70 billion, and created $110 billion in new facilities with central banks in Japan. These steps were designed to improve liquidity conditions in global financial markets. However, the dollar may not regain its bullish trend so soon. The speculation on the effectiveness of the U.S. government's proposed $700 billion bailout plan still hovers over the financial sector. The main focus is on whether Congress will approve the rescue plan within the week. And if indeed it is passed, will the plan function as hoped.

Today the Consumer Confidence Index indicator will be released. This is a survey of about 5,000 households which rates the relative level of current and future economic conditions. If the actual result will turn out to be higher than the forecast 55.0, which is lower than the previous 56.9, then we will probably see the U.S. currency gaining back some of last week's losses.


EUR

Will the Economic Data Today Help to Boost the EUR
The European Central Bank (ECB) continues its latest attempt to ease money market turmoil. The ECB began offering overnight dollar funding last week as part of a joint effort with U.S. Federal Reserve, and other top central banks, to ease shortages in short-term dollar liquidity. The EUR sentiment remained bearish through the week primary due to uncertainty in the U.S. financial sector. Furthermore a move by Central Banks to inject money into the European financial system also supported the Euro-Zone currency versus the dollar.

However, despite the EUR's recent positive momentum, the economic news coming from the Euro-Zone has not been too encouraging. The European financial sector is still struggling with the looming threat of economic recession. The latest data released from the Euro-Zone indicated that the crisis in Europe is far from over. In Germany, Europe's biggest economy, the Munich-based Ifo institute's business climate index fell to a three-year low of 92.9 from 94.8 in August. In France, business confidence declined to the weakest in five years, while sentiment in Italy dropped to a seven-year low.

The economic outlook is clouded by the turmoil in financial markets. Financial institutions worldwide have reported more than $520 billion in losses and write-downs since the lending crisis started. The market looks ahead for ECB President Jean-Claude Trichet's speech today at 16:00 GMT. Traders are advised to follow his speech as high volatility is often experienced during these events. As the head of the ECB, Trichet has more influence over the EUR's value than any other person. In the upcoming speech the traders may detect subtle clues regarding future monetary policy for the 15-nation currency.


JPY

Positive Economic Indicators Help JPY
In Japan, the recent nomination of Taro Aso, a 68-year old former foreign minister, will almost certainly bring some stability to the Japanese currency. The country's economic decline in the second quarter of 2008 was due largely to the latest political turmoil following Prime Minister Yasuo Fukuda's resignation in September.

The outlook for Japan's economy in the third quarter is expecting further weakness, and economic concerns have risen to the top of the political agenda. The main reasons for this downgrade are the figures from private consumption and exports of goods and services. Exports, which contribute not only to economic growth but also stimulate business investment, and indirectly consumer spending, fell recently. As a result, private consumption contracted by 0.5% in the second quarter. There is great pressure on the new Prime Minister to articulate plans to revive the economy, while also taking into account the structural constraints the country faces, such as its poor fiscal position and ageing population. Taro Aso has come out most clearly in favor of increasing spending, and therefore of delaying the proposed return to primary fiscal balance.

Today, the movement of the JPY will likely be affected by the release of the Tankan Manufacturing Index. This Index is a leading indicator of the country's economic health. Since businesses are more likely to react quickly to changes in the market. A change in their sentiment can be an early signal of future economic activity such as spending, hiring, and investment.


OIL

What is Moving the Price of Crude Oil?
The price of Crude Oil has recently been rising because of the worsening prospects for the world economy and the closure of several refineries during recent hurricanes, which reduced Oil supplies. However, Crude Oil's prices may fall as oil companies restart petroleum production plants and refineries in the aftermath of Gustav and Ike.

US Congressional leaders from both parties said they had reached a tentative agreement on the proposed government rescue plan. Since announced, this rescue package plan has strengthened the U.S. currency pushing the price of Oil further down. On the other hand, the fact that the bailout package plan has been passed, doesn't necessarily mean that there won't be any further obstacles on the road to U.S. economic recovery. There is still much worry about the outlook for America's financial future, and its demand for Oil.

If the U.S. bank bailout plan fails to prevent an economic slowdown, the demand for food and fuel will likely go down, lowering the price of Oil even further.

Labels: , ,

29-Sep Daily Forex Analysis
by:Forexyard

Technical News

EUR/USD
The pair has retained its bearish inclination during the weekend and is currently traded at the 1.4470 level. The 4 hour studies show that the current price has dropped beneath the Bollinger Band's lower border, suggesting that another bearish session is expected. Next target price might be 1.4350


GBP/USD
After going through a mild bullish correction on Friday, the cable has resumed its bearish trend with full steam as it dropped almost 150 on the beginning of the trading week. As all oscillators on the 4 hour chart are pointing down, it seems that another bearish movement might take place.


USD/JPY
The pair is continuing to provide mixed results with no specific direction. However, a bearish cross on the 4 hour chart's Slow Stochastic indicates that a downtrend is imminent. Going short might be the right strategy today.


USD/CHF
There is a very accurate bullish channel forming on the 1 hour chart, as the pair is floating in the middle of it. And now, the Bollinger Bands on the 4 hour chart are tightening, implying that another bullish move is forthcoming, with a target price of 1.1100.


The Wild Card

Oil
Oil price are continuing to fluctuate within a restricted range, and a barrel of oil is currently traded around $105.20. Nevertheless, a bearish cross on the 4 hour chart's Slow Stochastic indicates that oil prices should depreciate. This might be a good opportunity for forex traders to join a very popular trend.


Economic News

USD

Dollar in Position for a Rebound
After taking a beating last week, the USD is beginning to show some small signs of recovery. Starting the week clouded by uncertainty and straining under market anxiety, the USD sustained blow after blow from the impact of deliberations about a U.S. economic rescue plan, and worse-than-forecasted economic indicators. The verdict is almost out as news from Washington is indicating that a breakthrough was made over the weekend and the bailout package is almost set to be passed into law, giving the U.S. Treasury more authority over the financial workings of domestic banks and financial institutions and, in theory, stabilizing the recent financial crisis.

Generating less volatility than expected, the market last week was characterized more by lack of direction than anything else, as analysts struggled to predict the movement of the major currencies. The $700 billion rescue plan, the largest financial bailout since the Great Depression, if enacted, could put an end to this currency flotation and send traders en masse back to regular trading. Fed Chairman Bernanke and Treasury Secretary Paulson are both pushing Congress to pass this legislation as quickly as possible. But is this bailout package a blessing or a curse? With the potential to correct the economic woes of today's market, it also pushes the U.S. financial system closer to socialism and farther away from the capitalist economy which gave it its most powerful boost following the Great Depression and World War II. Analysts are divided about the short- and long-term costs and benefits of this package, but only time will tell which side was right.

Looking at the expectations for today, traders can anticipate less volatility with the USD as few major indicators are set to be released and the bailout package is still being discussed. Unless a major decision is passed regarding the bailout, the USD is expected to remain rather stable versus its currency counterparts. Looking at the rest of the week, traders may look for larger amounts of volatility come Wednesday as ADP Non-Farm Payrolls are expected, followed by the actual Non-Farm Payrolls figure to be released Friday. These indicators typically generate high trading volume, as well as market volatility, as traders anticipate their impact on the market. Traders should start the week looking to set up beneficial positions for what could be a big week in the Forex market.


EUR

German Economy Implicates Recession for Euro-Zone
Last week, the EUR went through some choppy waters while showing mixed results against the Majors. The 15-nation currency lost value versus the USD closing at 1.4665 on Friday, but gaining significant ground against the GBP just before closing out Friday's trading session. The EUR did experience some volatility against the JPY, due to a strong news week by the Asian powerhouse. The EUR bullishness against the USD was mostly motivated by U.S. developments, as investors around the world are closely following what moves will be enacted by the U.S. leadership in order to improve the economy's condition.

The economic indicators from the European economy, released last week, continue to confirm what the European Central Bank fears most: a Euro-Zone recession. The German Ifo Business Climate extended its 7-month decline as it was published at 92.9, failing to reach expectations of a 94.2 reading. As Germany possesses one of the most influential European economies, its indicators have a strong impact on the entire Euro-Zone. While the EUR continues receiving negative signals, it appears as though it will continue floating with no significant price breach so long as the other major economies especially that of the United States, release no significant data.

Looking ahead this week, we have important events to anticipate from the Euro-Zone such as German Unemployment Change, the CPI Flash Estimate, and others. European Central Bank president Jean-Claude Trichet is set to speak twice this week. The first will be after accepting the European Banker of the Year award, and the second will be in a debate on the role of wage politics for growth and competitiveness at the European Trade Union Conference. Traders should expect high volatility in the market at these times as investors try to ascertain the future movement of interest rates. Today, the market will be driven more by global news events than anything else as few economic indicators are set to be released.


JPY

Japan's Economy Afflicted by Negative Expectations
Last week was a wild week for the JPY as it experienced a hefty amount of volatility. The Asian currency experienced bearish trends versus all of the major currencies during most of last week's trading sessions, until late in the week when it began to make some reversals. The Japanese currency gained over 100 pips against the USD when it closed trading at 106.13 last Friday, after losing value steadily throughout the week. The weakened U.S. economy has been one of the major culprits in Japan's economic downturn, as well as the price jump in Crude Oil, which has generated an adverse impact on the JPY. An example of this was delivered when the Japanese exports to the U.S. fell by 19.1% in August, marking its lowest figures since January 2006, all of which pushed investors to lose confidence that the Japanese economy would be less affected by recent events. This week should be a somewhat active week for the JPY as well seeing as a batch of indicators are expected to shed light on the Japanese economy as a whole. The JPY is off to a good start this week as yesterday's Retail Sales figure came out better than expected. If this week's indicators continue to produce positive results, the JPY could see a strengthening week. An important event will be Tuesday's Tankan Manufacturing Index and Non-Manufacturing Index. These indicators are a measure of general health in the Japanese economy. They are currently forecast to be a negative number, indicating an economic contraction and hence may signal the possibility that Japan will not release much positive data this week. Traders should also keep tabs on the USD and EUR trends as they continue to be very dominant factors in the movement of the market.


OIL

Price of Crude Oil will be Heavily Influenced by U.S. Bailout Package
Crude Oil continues its decline; the contract price settled down at $106.89 a barrel last Friday. Even though there has been some bullish momentum in the market for the past few months, prices are still down 28% from record highs above $147 a barrel reached in July. The main reason for that spike was the economic crisis world-wide and high fuel costs which hurt demand in the United States and other developed economies. The price of Oil is down now primarily because of the USD. The dollar rose against the major currencies on Monday. Hopes that the bailout bill will soon be passed and revive the U.S. financial system has spurred a rally in the U.S. currency.

Moreover, the latest news that Iran, the world's fourth-largest exporter of Oil, has avoided new sanctions in a United Nations vote over the weekend also put some downward pressure on prices of Light Sweet Crude. However, the traders remain cautious about the U.S. government's bailout package. There is some fear that this risky package could generate a decrease in the demand for Oil. The market is paying close attention to the U.S. lawmakers' upcoming vote later today, which will establish future U.S. government policy regarding monetary and fiscal policy. A possibility still remains that the $700 billion government bailout package won't pass in Congress. In that case, a looming economic slowdown in the U.S. won't be prevented and would cut demand in the world's biggest energy-consuming nation, which will lead to further deterioration in the price of Crude Oil.

Labels: , ,

Friday, September 26, 2008
26-Sep World Daily Markets Briefing
by: ADVFN Newsdesk

US Stocks at a Glance

US STOCKS-Wall St slides on stalled bailout, WaMu collapse
NEW YORK - U.S. stocks dropped at the open on Friday after congressional talks on a $700 billion financial sector bailout stalled and authorities seized the largest U.S. thrift, heightening worries about the fallout from the credit crisis.

The Dow Jones industrial average .DJI was down 126.80 points, or 1.15 percent, at 10,895.26. The Standard & Poor's 500 Index .SPX was down 18.36 points, or 1.52 percent, at 1,190.82. The Nasdaq Composite Index .IXIC was down 47.03 points, or 2.15 percent, at 2,139.54.

US Q2 GDP downwardly revised GDP to a 2.8% growth rate from 3.3%

WASHINGTON - The US economy grew at a revised 2.8% annual rate in the second quarter, a half percentage point lower than previously estimated as the Commerce Department made downward revisions to consumer spending, exports and some business investment.
   
Economists polled by Thomson Reuters IFR Markets were expecting second quarter GDP, which measures the country's output of goods and services during the three months ending in June, to remain unchanged at 3.3%.
   
Commerce downwardly revised consumer spending to a 1.2% gain, from the 1.7% gain last reported. This revision subtracted 0.37 percentage points off the last estimate of total GDP, or about two thirds of the downward revision.
  
Total exports grew 12.3%, slower than the 13.2% gain previously reported.  Commerce said the downward revision to exports was "mostly to exports of services and reflected the incorporation of quarterly international transactions accounts data."
   
Exports have supported GDP growth in an otherwise downward economic period, but the Federal Reserve expects a slowing in exports to weigh on growth over the next few quarters.
   
Imports fell 7.3%, slightly less than the first reported 7.6% decline.  The revisions to imports and exports subtracted 0.17 percentage points off the prior estimate of total GDP in the second quarter.
   
Overall, real nonresidential fixed investment rose 2.5% while real residential fixed investment fell 13.3%, less than the 15.7% decline Commerce first announced.
 
Overall inflation, as measured by the personal consumption expenditures price index, rose 4.3% in the second quarter, up slightly from the 4.2% previously reported. Core PCE inflation, which excludes food and energy prices, rose 1.8% in the second quarter, down from the 2.1% first reported.  Economists were expecting core PCE to remain unchanged in the second quarter. 


Forex

FOREX-Yen gains broadly as risk appetite sours

NEW YORK - The yen climbed broadly on Friday as stalled negotiations on a proposed $700 billion bailout of the U.S. financial sector and the collapse of Washington Mutual prompted jittery investors to shun risky
trades.
      
Investors sold high-yielding currencies such as the Australian dollar and dumped stocks around the world, and sought the safety of government bonds. Money markets also came under pressure, with three-month dollar interbank rates -- which spans the seasonally illiquid Christmas period -- remained at high levels
at the London fixing.
     
Talks on the bailout broke down late on Thursday. As this developed, U.S. authorities closed Washington Mutual and sold its assets in the country's largest ever bank failure, causing massive ructions in the market.
      
"The collapse of negotiations on Capitol Hill yesterday combined with the failure of Washington Mutual have greatly  increased investors' aversion to risk and it's no surprise that we're seeing the Japanese yen benefit as a result," said Omer Esiner, senior market analyst, at Ruesch International in Washington.
      
The yen has gained 1.6 percent against the dollar so far this week and about 3 percent this month amid heightened pressure in financial markets.  In early New York trading, the dollar was down 1.1 percent against the yen at 105.22 yen, while the euro lost 1.0 percent to 154.04 yen. Against the dollar, the euro was little changed at $1.4619.        

Data showing that the U.S. economy grew less than previously estimated in the second quarter weighed modestly on the dollar, but volume was thin as investors remained focused on the bailout.
      
The dollar index on the ICE Futures Exchange, a measure of the greenback's value against six major currencies, fell 0.2 percent to 76.866. "All we care about is that something gets done in Washington," said Greg Salvaggio, senior vice president of capital markets at Tempus Consulting in Washington.
      
"What we are seeing is foreign exchange traders have taken a back seat and we are looking for direction from credit and equity markets and certainly Congress to see if anything gets done. Failure to have a deal, or at least look like a deal is being done, prior to the close for markets today could lead to significant downward pressure across the board on the dollar."
     
The high-yielding Australian dollar fell 0.6 percent against the U.S. dollar to US$0.8302 and more than 1.6 percent against the yen to 87.35 yen, as investors unwound bets on higher-risk currencies. Central banks coordinated to provide further liquidity on Friday as fund demand ahead of the quarter-end exacerbated already dysfunctional money markets.
      
Market participants still expect the $700 billion U.S. bank bailout package to be agreed in some form and they are unwilling to adopt big positions as a result, analysts said. Talks over the plan will resume on Friday.
      
News of the Washington Mutual failure further damaged sentiment, although the third-largest U.S. bank JP Morgan Chase & Co said it bought the deposits of the bank, which had seen its stock price virtually wiped out because of massive amounts of bad mortgages


Europe share

European shares fall, hit by U.S. bailout snag
FRANKURT - European stocks fell by midday on Friday, with financials weighing heavily after U.S. failure to agree a $700 billion financial sector bailout plan and the collapse of U.S. bank Washington Mutual.

At 1125 GMT the FTSEurofirst 300 index of top European shares was down 2.1 percent at 1,101.70 points, almost reversing gains of 2.2 percent made in the previous session. The index has fallen around 26 percent this year.

"Yesterday, everybody thought (the U.S.) was maybe close to coming to a deal, and so everybody was astonished over the extra differences and points they have to clear," said Heinz-Gerd Sonnenschein, equity strategist at Postbank in Bonn, Germany.

"You see the nervousness about the overall market and it is a question what will come next and how quick can we get the programme from the U.S."

Washington Mutual was closed by the U.S. government on Thursday, making it the largest failure of a U.S. bank, and its banking assets were sold to JPMorgan for $1.9 billion.

Banks were the top-weighted losers on the FTSEurofirst 300, with Lloyds TSB sliding 6.7 percent, and Deutsche Bank down 3.3 percent and Royal Bank of Scotland 3.2 percent lower.

Dutch-Belgian bank Fortis fell 12.1 percent, having dropped to a 14-year low at one point on Thursday, amid concerns over the group's liquidity, traders said. Fortis Chief Executive Herman Verwilst told a hastily called news conference the bank had no liquidity issue but was looking to sell more non-core activities than anticipated.

Another top loser was British mortgage lender Bradford & Bingley which slid 10.6 percent as a cost-cutting programme unveiled on Thursday failed to dispel concerns over its funding position.

B&B shares are down more than 60 percent since the beginning of the month, with the bank's high dependence on expensive wholesale funding raising doubts over its prospects as an independent lender, analysts say.

Insurers were also weak, with French AXA falling 4.1 percent, Swiss Re down 2.4 percent, Dutch ING losing 4.8 percent and Germany's Allianz 1.5 percent lower.

U.S. congressional leaders were due to try again on Friday to save the $700 billion Wall Street rescue plan after talks degenerated into chaos on Thursday when a rival Republican plan emerged.

"The ongoing discord is massively unsettling and the fact that we now have Washington Mutual added to the list of casualties is escalating the cynicism," said Martin Slaney, head of derivatives at GFT Global Markets in a note.

"If anything, reports of an alternative plan have added to the uncertainty. Timing is the key issue here; if a deal hasn't been signed and sealed over the weekend, expect massive market turmoil. Monday will be a bloodbath."

The FTSEurofirst 300 hit a three-year low of 1,059.16 in intraday trading on Sept. 18. Away from financials, shares in mobile phone maker Nokia fell 3.8 percent to 13.4 euros. JPMorgan lowered its 2009 earnings-per-share estimate for Nokia by 11.6 percent and cut its price target for the stock to 10 euros from 11 euros, citing a "worsening market".

Energy shares fell as the crude oil price CLc1 dropped 2.5 percent to $105.32 a barrel. BP was down 2.1 percent, Royal Dutch Shell dipped 1.8 percent and Total traded 1.8 percent lower.



Asia at a Glance

Asian stock market summary

JAPAN
The Nikkei 225 Stock Average finished down 0.9 percent at 11,893.16, as investors retreated to the sidelines due to concerns over the Bush Administration's $700 billion rescue package for U.S. banks.
   
Local investors shrugged off a Wall Street rally of nearly 200 points overnight on hopes for the bailout package. The broader Topix lost 0.5 percent to end at 1,147.89.

SOUTH KOREA
The Korea Composite Stock Price Index ended lower 1.68 percent at 1,476.33, after a U.S. financial sector rescue plan stalled late Thursday, sending exporters and banking shares lower.
   
The Seoul markets had a muted response to reports that U.S. lender Washington Mutual had agreed late Thursday to be acquired by JPMorgan Chase as part of a government-brokered rescue plan.
 
AUSTRALIA
The S&P/ASX 200 index ended down 0.5 percent at 4,904.8, in a rocky session as the progress of the U.S. bailout plan stalled and America suffered its biggest bank failure yet, with Washington Mutual swallowed by JPMorgan.
   
Financial stocks such as investment bank Macquarie Group and miner BHP Billiton Ltd turned lower as nervous investors waited for U.S. Congress to decide if and when it will proceed with the rescue package.

CHINA
The benchmark Shanghai Composite Index finished down 0.16 percent at 2,293.48, in cautious trade ahead of a week-long holiday and on uncertainty surrounding the US financial sector bailout.
  
The Shenzhen market edged higher due to a rebound in property stocks amid hopes for higher sales during the holidays.
   
Ping An Insurance dragged down the main index on worries about possible losses from its investment in Fortis, while brokers provided some support amid continued hopes for the imminent launch of margin trading.
   
The China markets will be shut next week for the National Day holiday. The Shanghai A-share Index fell 0.17 percent to 2,408.88, while the Shenzhen A-share Index added 1.02 percent to 644.95.
   
The Shanghai B-share Index rose 1.31 percent to 132.76 and the Shenzhen B-share Index was up 1.49 percent at 311.30.

TAIWAN
The weighted index closed down 2.16 percent at 5,929.63, on uncertainty surrounding the US government's financial sector bailout plan.
   
Fears that the bailout will be delayed wiped out modest early gains in local share prices following a cut in local interest rates.



Metals

Gold rises 0.4 pct after three-day losing streak
Gold edged higher on Friday after three days of losses, finding support among physical buyers that offset pressure from a rebound in U.S. stocks as Congress drew nearer approving a $700 billion bailout.

Spot gold was quoted up $3.55 or 0.4 percent at $879.30/882.30 per ounce as of 2341 GMT compared with the previous nominal close of $875.70. Prices eased this week since ending on Monday at just above $900, their highest since Aug. 1.

The near-term technical trend weakened slightly after the cash price dipped below the five-day moving average of around $884.

Gold has gained about 20 percent since Sept. 11 as safe-haven demand heightened, when a collapse in the share price of Lehman Brothers raised questions about the stability of the U.S. and global financial sector.

But hope that the U.S. government's bail-out would soon help restore confidence in the system, slowing the flight from risk, lifted U.S. stocks on Thursday, with the Dow Jones industrial average .DJI was up 196.89 points, or 1.82 percent, at 11,022.06 and the Nasdaq gaining 1.43 percent.

A strong dollar also weighed on gold, but the metal's losses were limited by Thursday's gains in oil. U.S. crude oil futures settled up $2.29 at $108.02 per barrel.

Bullion holdings of SPDR Gold Trust GLD.P, the world's largest gold-backed exchange-traded fund, remained unchanged at a record 724.94 tonnes as of Wednesday.

Gold futures contracts on the Tokyo Commodity Exchange were expected to open lower following falls in the spot price the previous day.

Labels:

26-Sep Daily Forex Analysis
by:Forexyard

Technical News

EUR/USD
After touching the high of 1.4765 yesterday, the pair now seems to consolidate around 1.46 level again. The price may continue to move downwards and it is expected to float within a range of 1.4600 level to 1.4500. As it seems, this bearish pressure is likely continue gather momentum till the end of the day. Placing short orders with tight stops might be a preferable choice for today


GBP/USD
There is a bearish cross on the daily chart's Slow Stochastic and it appears that the bearish price movement might be back in play. The Slow Stochastic and the RSI of the hourly chart are also supporting that bearish notion while an upcoming test of the 1.8300 level is quite imminent. If indeed that level is breached, swinging in the trend would be the best strategy.


USD/JPY
According to the 4 hour chart this pair has been range-trading for a while now, with no specific direction. The daily chart's Slow Stochastic flows in neutral territory implying the continuation of the range trading. All oscillators on the 4-hour chart do not provide a clear direction either. Traders are advised to wait for a clearer sign before entering the market.


USD/CHF
According to 4 hour chart the pair now floats within the range with no specific direction. If happens, a breach beyond the 1.0830 support level is likely to validate the bearish movement. In that case 1.0800 will be the next target price.



The Wild Card

Gold
After failing to breach the 900 resistance level yesterday, Gold prices dropped significantly, and are now seem to consolidate around $870 price level. The Bollinger Bands on the 4-hour charts are tightening indicating the upcoming volatility. This might be a good opportunity for forex traders to join a downward movement.


Economic News

USD

Dollar Gains Strength despite 17-Year Low Housing Data
Yesterday the USD stayed relatively flat given the recent market madness. In early trading sessions the USD hit session lows against the other major currencies only to rebound later in the day, but never actually breaking any significant price barriers. Closing out the day, the USD sat nearly unmoved versus the EUR at a price level of 1.4672, only 30 points below the previous day's closing.

Traders witnessed a minor phenomenon in the market yesterday regarding the USD. Despite predictions by analysts that a lower-than-forecast New Home Sales figure would weaken the USD, it actually did the opposite in spot trading. Indicating a weakness in the U.S. housing sector, the New Home Sales figure came out at 460,000, well below the forecasted figure of 510,000, and hitting a record 17-year low! This should have highlighted the obvious fragility of the U.S. economy, yet it generated an appreciation for the value of the USD against all its currency counterparts. While indicating a general, long-term weakness in the American economy, it didn't stop traders from buying up dollars during the hours following this indicator's release. Traders shouldn't get their hopes up, however. Analysts are expecting the effects of this housing crisis to make their mark over the next few days, even weeks, as the impact of this data becomes fully realized throughout the market. Also, with the debate raging over the financial rescue plan, and a recent announcement that U.S. interest rates would likely not be lowered again, traders were not paying very close attention to these economic indicators.

Today traders can expect an even slower pace to the movement of the USD. A small number of figures are expected to be released. Among them we have the release of the final GDP figure from the Second Quarter, which is expected to remain unchanged at a 3.3% annual rate. The core PCE Price index, an inflation indicator, is also expected to remain without changes at 1.2%. These few indicators will only slightly move the American currency and traders should pay closer attention to the proceedings surrounding the bailout plan as this will likely drive the market more than any economic indicator.


EUR

Euro-Zone Currency Flattens Under Market Anxiety
During yesterday's trading session, the EUR saw mixed result versus most of the major currencies. In early trading, the 15-nation currency gained some small momentum versus the dollar, reaching as high as 1.4767, but then lost steam due to the U.S. government's announcement about stabilizing and strengthening its interest rates. As of this morning, the EUR was down slightly against the USD, falling slightly below 1.47, as well as falling against the JPY to 155.37 caused by a decrease in risk appetite.

The GfK Group's Consumer Confidence indicator unexpectedly improved in October, rising to 1.8 from an upwardly revised 1.6 in September. The results from this survey showed that consumers are a little more confident about their situation despite growing fears of a recession. However, the consumption forecast for this year was reduced to 0% from the previously expected 0.5%, plunging the future of the European economy into more doubt.

Looking ahead today, Germany will be releasing bits of data regarding the price of imported goods and preliminary inflation figures. These indicators will not move the EUR very much as their impact is less significant than what is happening elsewhere in the market. Without much change taking place today, the EUR will primarily continue to lose ground to most of its currency rivals. Traders should continue to track the deliberations about the U.S. economic recovery program as this is what is driving the market today more than any other factor.


JPY

High Inflationary Figures Pass Unnoticed by Bank of Japan
Yesterday, the JPY saw bullish trends against most of its currency counterparts after experiencing an early depreciation. The JPY was trading near 104.50 against the dollar during New York trading hours, but later on the USD was came down in value and was then trading at 105.92 against the Yen during a somewhat choppy session, while versus the EUR, the JPY reversed losses and was consolidated at over 155.40.

News from the Japanese economy provided traders with the National Core CPI, which stuck at the 10-year high figure of 2.4%, while Tokyo's Core CPI hit a new decade high in September at 1.7%, despite the prediction of a decrease in this figure in light of slightly falling oil prices. These inflation figures passed unnoticed by the Bank of Japan (BoJ), however, on whether or not they would change Interest Rates. Their biggest worry appears to be the downside risk to the economy of such a change in its rates. Logically it seems the BoJ would not raise the rates until next year when the financial crisis has passed and the global economy begins its recovery. As for today, the JPY will be absent from the economic calendar. Traders should keep an eye on the Yen's counterparts, as well as data from the U.S. regarding the rescue plan, before placing their orders as we could see some volatility before market closing.


Oil

What is Moving the Price of Crude Oil?
Traders saw a slight increase in the price of Crude Oil yesterday. This came surprisingly at the same time as the USD's appreciation following an announcement about stabilizing Interest Rates. Historically, the price of Oil has been inversely related to the value of the USD; meaning, as the USD goes up, the price of Oil typically falls. This did not happen yesterday, however. Analysts explain that the deliberation over the U.S. financial bailout plan has been driving market prices more than other factors. As such, normal correlations are less relevant as anxiety, unpredictability, and volatility are creating atypical results in today's market.

To understand the movement of Oil's price, traders should pay attention to longer-term expectations of the dollar's movement. While the USD appreciated overall yesterday, it is expected to fall in the coming weeks and that has led traders to buy into Crude Oil while selling non-US currencies and driving their prices below the USD's. As of this morning, the price of Crude Oil sits just below $106 and may experience a relatively flat trading day as the U.S. market is in the driver's seat of the coming weekend's prices.

Labels: , , ,

26-Sep Market Commentary and Technical Levels
Fri, 26th of September, 2008
By Setyo Wibowo (analyst@fxinstructor.com)

EURUSD Outlook
The EURUSD made indecisive movement by opened and closed at almost the same price yesterday (1.4613 and 1.4617). The pair attempted to pushed lower, bottomed at 1.4560 but further bearish momentum was rejected as the pair closed higher. Early today in Asian session the pair was traded softly higher around 1.4660 at the time I wrote this comment. My model is mixed with neutral bias. Immediate support is seen at 1.4603 followed by 1.4560 (yesterday’s low). CCI just cross -100 line up on 4h chart suggesting a potential bullish pressure testing 1.4770 resistance area.

EURUSD Daily Supports and Resistances:

S1= 1.4529
S2= 1.4441
S3= 1.4322
R1= 1.4736
R2= 1.4855
R3= 1.4943


GBPUSD Outlook
The GBPUSD break out to the downside from the ranging area of 1.8642 and 1.8472 yesterday. The pair bottomed at 1.8305 and closed at 1.8381. However the pair was traded softly higher around 1.8420 at the time I wrote this comment. My model goes mixed with downside bias. Immediate resistance is seen at 1.8467. Initial support at 1.8380 followed by 1.8305 (yesterday’s low). CCI about to cross 100 line down on daily chart suggesting a potential bearish view.

GBPUSD Daily Supports and Resistances:

S1= 1.8235
S2= 1.8089
S3= 1.7873
R1= 1.8597
R2= 1.8813
R3= 1.8959


USDJPY Outlook
The USDJPY continued it’s bullish momentum yesterday. The pair topped at 107.01 and closed at 106.47. However the pair was corrected lower early today in Asian session, traded around 105.90 at the time I wrote this comment. My model is mixed with downside bias. Immediate resistance is seen at 106.50. Initial support at 105.50 followed by 104.70. CCI just cross -100 line down on 4h chart suggesting a potential downside pressure.

USDJPY Daily Supports and Resistances:

S1= 105.61
S2= 104.76
S3= 104.06
R1= 107.16
R2= 107.86
R3= 108.71


USDCHF Outlook
The USDCHF current bullish momentum was softly corrected yesterday but bearish momentum was also seemed very limited. My model is mixed with neutral bias. I am expecting a ranging market between 1.0943 and 1.0800. A break out from that ranging area would give us a clearer direction. CCI in oversold area on daily chart.

USDCHF Daily Supports and Resistances:

S1= 1.0815
S2= 1.0737
S3= 1.0674
R1= 1.0956
R2= 1.1019
R3= 1.1097

Have a great weekend!

Labels: ,

Thursday, September 25, 2008
25-Sep Daily Forex Analysis
by: Forexyard

Technical News

EUR/USD
The 4-hour chart is showing that the pair is still floating within its bullish channel. However, the RSI on the daily chart has crossed the 80 line, indicating that the market is overbought. The Slow Stochastic is also showing a fresh bearish cross, suggesting that a bearish trend is imminent. Going short with tight stops appears to be preferable.


GBP/USD
The pair is in the middle of a strong uptrend, and is testing fresh highs on a daily basis. The very important key resistant level of 1.8600 has been breached and the pair is likely to continue is bullish trend. Next target price might be around 1.8700.


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. All 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
For the past few days the pair has been floating around 1.0800, with no apparent breach. Now, however, new signs for a bearish move are given in the form of a bearish cross on the Slow Stochastic of both the daily and the 4-hour chart. Traders are advised to wait for the break and swing.


The Wild Card

Oil
It seems that the strong bearish move that Oil experienced lately has vanished. As all oscillators on the daily chart are giving bullish signals, a bullish correction might be impending. This may give forex traders an excellent opportunity to catch the trend at a very early stage.


Economic News

USD

U.S. New Home Sales on Tap
The U.S. economic rescue plan of Bernanke and Paulson, as well as the Existing Home Sales figure, has caused frenzy in the market recently. Yesterday, the greenback underwent a volatile trading session against most of its currency counterparts. Starting the early trading sessions off rather flat, the USD's value suddenly dropped following the 14:00 GMT announcement of the Existing Home Sales indicator as it came out worse than forecasted. Correcting this move, however, was the jump in value directly after Paulson and Bernanke's testimonies late yesterday afternoon. It finished the day around the 1.4670 level against the EUR, slightly stronger than it was the day before.

The trading day began with small downtrends and low volatility for the USD as investors realized that the U.S leadership is having second thoughts regarding the financial bailout plan. Yesterday, Federal Reserve Board Chairman Ben Bernanke testified to the Congressional Joint Economic Committee stating that global financial markets were under extraordinary stress and threatening an already weak U.S. economy. He also testified that lenders are still more likely to remain cautious about extending credits to households and businesses, and described a gloomy economic outlook for the near future. However, it seems that Bernanke's decision to urge Congress to confirm the rescue plan was enough to trigger an uptrend for the USD later in the afternoon. This uptrend was strengthened by a continuation of the steady decline in Crude Oil prices, which fell to $105 a barrel after spiking to as high as $109 after the USD's early-afternoon weakness.

As for today, a batch of data is expected from the U.S. economy. So long as no crucial decisions regarding the bailout plan are made, these figures are expected to set the tone for the USD's pairs and crosses. Special attention should be given to the New Home Sales survey because if it delivers unfavorable figures later today, it will validate a problematic landscape in the U.S. housing sector, and the USD is likely to weaken as a result. Also today, the Core Durable Goods Orders and Unemployment Claims are scheduled which should also have an impact on the market.


EUR

EUR Strength Uncertain in Light of Negative Economic Data
Yesterday the EUR experienced a rather volatile session against the other major currencies as traders saw large fluctuations throughout most of the day. Despite a somewhat uncertain USD, the EUR still managed to lose over 100 pips against the dollar! However, after markets were closed, it managed to rise back to its former levels. The Euro-Zone continues to deliver negative signals, yet it seems that until global markets stabilize, and until clearer signs are given from the U.S. economy, the EUR will keep fluctuating without running through any significant breach.

The German Ifo Business Climate extended its continuing drop over the last 7 months as it was published at 92.9, failing to reach expectations of a 94.2 reading. This survey represents the slowdown in the German economy, as it was marked at 104.8 in March and has been dropping steadily on a monthly basis since then. The Euro-Zone is mostly affected by the German and French economies, and the poor figures delivered from these countries have generated the strong downtrend the EUR underwent in the previous two months, which was only halted by last week's turmoil caused by the U.S. economy.

Right now, the EUR is mostly impacted by U.S. developments, as investors around the world are closely following what moves will be enacted by the U.S. leadership in order to improve the economy's condition. Until then, as long as the uncertainty in the global markets remains, the EUR is likely to slightly benefit, as the USD is much more damaged by recent events. Nevertheless, the poor figures from the Euro-Zone may also prevent it from over-strengthening against the major currencies, and the overall volatile sessions are likely to continue throughout the near future.


JPY

Japan Experiences First Trade Deficit Since 1982
The JPY experienced a rather bearish session yesterday versus the other major currencies. The Yen was traded with falling trends during the early trading sessions, but managed to recover slightly later on.

The Japanese economy is beginning to be damaged by the U.S. economic slowdown. A good example was delivered yesterday as the Japanese exports to the U.S. fell by 19.1% in August, marking its lowest figures since January 2006. This was one of the reasons why Japan's Trade Balance figure was released yesterday as -0.11T for August. Excluding the month of January, when Japanese shipments overseas tend to drop on slower factory activity during the New Year holidays, it was the first deficit since 1982. The JPY lost its bullish momentum as investors lost their confidence that the Japanese economy will be less affected by recent events, and it is once again proving that a slowdown in U.S. economic activity also means a slowdown for global economic activity.

As for today, the Tokyo Core Consumer Price Index, which accounts for a majority of overall inflation, will be released and is forecasted by analysts to increase by 1.5%. Traders are advised to follow the publication of this indicator as a higher-than-forecasted result might generate an uptrend for the JPY, as high inflation may compel the Japanese bank chiefs to raise interest rates, and investors are very much aware of this. Traders should also stay tuned to the development of the U.S. economic rescue plan as further details may determine today's directions.


Oil

Market Anxiety Causes Crude Oil Price to Fluctuate Sharply
Predicting the movement for the price of Oil these past days has proven a difficult task for market analysts. Just when it was believed that traders would see a price range of $80-90, the price jumps back up to an unbearable level. These suspicious price jumps are being investigated, but that does not mean they have ceased. Yesterday, traders saw a recurrence of Monday's upswing as Oil prices peaked just over $109 before falling back to $105 by the end of the trading session. It appears as if the price of Light Sweet Crude floats in expectation of economic indicators and then jumps accordingly.

As with this past week, the direction for the price of Crude Oil will be driven by the perceived strength of the USD. With U.S. Crude Oil Inventories dropping 1.5M in yesterday's release, beating the forecast of a 2.0M decrease, Crude Oil leveled off later in the session and now sits near the $106 mark. However, during today's early sessions, the price of Oil appeared to be floating in the same manner as it had done during yesterday's early trading session. This is an indicator that its price is once again waiting for some sign of movement by the USD before choosing a clear direction. Smart traders could play off this anticipation and earn big profits by following closely those indicators which affect the USD as they have a strong inverse relationship with the price of Crude Oil.

Labels: , ,

25-Sep Market Commentary and Technical Levels
By Setyo Wibowo (analyst@fxinstructor.com)

EURUSD Outlook
The EURUSD attempted to push lower, but failed to stay below 1.4622 support area. Early today in Asian session the pair was traded higher around 1.4720 at the time I wrote this comment. My model is mixed with no trading zone in nearest term but the upside bullish scenario targeting 1.5000 area is still intact. Immediate resistance is seen at 1.4740 followed by 1.4815. Initial support at 1.4660 followed by 1.4603 (yesterday’s low).

EURUSD Daily Supports and Resistances:

S1= 1.4561
S2= 1.4510
S3= 1.4418
R1= 1.4704
R2= 1.4796
R3= 1.4847


GBPUSD Outlook
The GBPUSD can not made a break out from ranging area of 1.8642 and 1.8472. We need a break out from that ranging area to find a clearer direction. My model goes mixed with neutral bias. CCI in overbought area and heading down towards -100 line on daily chart suggesting a potential bearish pressure testing 1.8472 support level.

GBPUSD Daily Supports and Resistances:

S1= 1.8413
S2= 1.8361
S3= 1.8265
R1= 1.8561
R2= 1.8657
R3= 1.8709


USDJPY Outlook
The Greenback was traded stronger against Japanese Yen yesterday. The pair topped at 106.35 and closed at 106.17. However the pair was traded lower early today in Asian session. My model is mixed with neutral bias. Immediate resistance is seen at 106.35 (yesterday’s high). Initial support at 105.50 followed by 105.10. CCI in neutral area on daily chart.

USDJPY Daily Supports and Resistances:

S1= 105.56
S2= 104.95
S3= 104.56
R1= 106.56
R2= 106.95
R3= 107.56


USDCHF Outlook
The Greenback continued it’s positive momentum against Swiss Franc yesterday. The pair topped at 1.0934 and closed at 1.0921. However the pair was traded lower early today in Asian market, traded around 1.0840 at the time I wrote this comment. My model goes mixed with neutral bias. Immediate resistance is seen at 1.0934 (yesterday’s high). Initial support at 1.0825. CCI in neutral area on 4h chart.

USDCHF Daily Supports and Resistances:

S1= 1.0838
S2= 1.0755
S3= 1.0707
R1= 1.0969
R2= 1.1017
R3= 1.1100

Have a great day!

Labels: ,

ForexYard Indicator Report
by: Forexyard

Be Prepared! U.S. New Home Sales Tomorrow at 14:00 GMT.
We at ForexYard encourage our customers to get involved in the most intense market events. As such, we think you should know that the U.S. New Home Sales figures are expected tomorrow, September 25th, 14:00 (GMT), and you need to be prepared. Market events like this one tend to create either big changes to current trends or push current trends even further. Generally, the Majors are the ones most affected by market events in general, but Crude Oil, Gold prices, and even the price of Silver can change dramatically in the seconds after such a publication. For more information about the U.S. New Home Sales, please read below.


What is the U.S. New Home Sales?
U.S. New Home Sales is a leading economic indicator used to measure the annual number of new single-family homes that were sold during the previous month. While this is a monthly figure, it is reported in an annualized format. This report predominantly helps to validate trends seen in other forward-looking housing indicators, such as the Existing Home Sales.

It is a leading indicator of economic health because the sale of a new home impacts a wide variety of consumer spending, such as furniture and appliances that are purchased for the home, a mortgage that's being sold by the financing bank, and brokers that are paid to execute the transaction. Also important is the inclusion of mandatory and optional insurance on these new homes.

As a result of the mortgage crisis in the U.S., which has continued to threaten world markets, the importance of the housing sector has increased significantly.

If the Survey Comes Inline with Market Forecasts
Expectations for this month are suggesting that the U.S. New Home Sales will reach 510K in August, reflecting a 5K decrease since July. Such a result could demonstrate a shrinking housing sector in the U.S., which has been one of the U.S. economy's greatest concerns. It is widely known that this crisis was initiated as a result of the non-covered mortgages that dropped mortgage banks one by one, and have just recently taken the 160-year-old Lehman Brothers bank to the point of filing for bankruptcy protection. A decreasing figure will most likely be interpreted by investors as yet more proof that the American people are avoiding buying new homes, and that the mortgage banks are reluctant to offer mortgages as freely as they used to. Such a scenario will probably extend the greenback's bearish movement, and the EUR/USD might rise to test the 1.4800 level.

If the Survey Will Surprise With Bullishness
When the actual figure is higher than forecasted, traders are likely to see the USD appreciate against its currency pairs and crosses. The radical trading week we have just experienced, which included an extremely volatile trading session, concluded with significant weakness for the USD. Investors are now following the opportunity to make profits out of their open positions on the USD, and a better-than-expected figure on the New Home Sales survey, such as 540K will possibly provide them that exact opportunity. Such a figure is good because it will ease global market concerns regarding an expanding mortgage crisis. U.S. citizens feeling confident enough to purchase new homes is the best news that the American leadership can hope for, and the USD will rise in accordance. In this turn of events, the EUR/USD might correct itself down to reach as low as the 1.4400 level.

Labels: , ,

24-Sep Daily Forex Analysis
by: Forexyard

Technical News

EUR/USD
The pair has been going through choppy sessions with no distinct direction for the past 3 trading days. Several attempts to breach through the 1.4500 support level failed, and the pair is consolidating around 1.4650. The daily chart provides mixed signals; however, the 4-hour chart is showing signs of local bearish momentum. The Slow Stochastic is negatively sloped, implying that a bearish correction might continue in the near future.


GBP/USD
The daily chart indicates that the bullish trend has not yet said its last word. The Slow Stochastic is showing a positive slope on the daily chart, and it appears that the bearish trend will continue. Going short with tight stops might be a very wise choice today.


USD/JPY
The momentum which was created after the bearish breach through the flag on the 4-hour chart continues with full steam. The daily chart is still very bearish as the 4-hour chart is starting to show first signals of a moderate bullish momentum. It might be preferable to sell on highs today.


USD/CHF
There is a widening bullish channel forming on the 4-hour chart as the pair now floats at the bottom level of it. A bullish cross on the Slow Stochastic supports the notion that the pair will test the upper level of the channel, probably before the weekend. Going long with tight stops might be a good choice today.


The Wild Card

Silver
This commodity is in the midst of a strong bullish corrective move and appears to be heading to a very high price. The bullish channel, together with the sharp positive slope of the daily chart's Slow Stochastic, makes it quite lucrative for forex traders to join the bullish trend and swing in with wide stops.


Economic News

USD

Rescue Package Generates Confidence in the USD
The USD surprisingly underwent a bullish trading session yesterday as it appreciated against all of its major currency rivals. Earlier in the day, the greenback reached session highs against the EUR after negative Euro-Zone manufacturing data focused attention on weakness in the Euro-Zone. At the end of yesterday's session the USD closed at 1.4644 versus the EUR. The USD also saw steady gains against the Pound Sterling and Swiss Franc.

The most influential economic data coming from the U.S. yesterday were the testimonies of Fed Chairman Bernanke and Treasury Secretary Paulson to the Senate Committee on Banking, Housing, and Urban Affairs. Investors were encouraged by a slight decrease in oil prices as they awaited details of the U.S. government's bailout package. The initial euphoria about the plan to buy damaged mortgage debt has turned to anxiety about how the government will fund the $700 billion deal without burdening the U.S. taxpayer. Analysts say that this has limited the USD's gains. Liquidity was thin in the market, with investors uncertain about the future movement of the stock market. They were staying on the sidelines until turmoil in financial markets subsided. In other news, the Bernanke and Paulson testimonies were in support of their proposal to give the government the authority to buy up illiquid assets, something Congress seems skeptical about unless there are mechanisms built into the law that would protect U.S. taxpayers from any downside losses. The proposal has had a huge affect on the greenback so far this week.

Looking ahead to today, the most important financial indicator scheduled to come from the U.S. economy is the Existing Home Sales. Analysts forecast that the Existing Home Sales will slightly drop to 4.93M from 5.00M. If data returns inline with expectations we should see the dollar's resurrection continue as traders will look to infuse bullish USD positions. Traders should also keep tabs on today's testimonies by the Bernanke and Paulson as they are scheduled to testify to financial committees in Congress again today regarding their economic rescue package.


EUR

Negative Manufacturing Data Creates Bearish Reversal for EUR
The EUR finished yesterday's trading session with mixed results versus the major currencies. The 15-nation currency saw high volatility, especially against the USD, eventually closing at 1.4644 levels. The EUR also depreciated yesterday versus the GBP and JPY, but finished strong against the Swiss Franc.

The most influential economic indicator coming from the Euro-Zone was the Flash Manufacturing PMI. Euro-Zone services and manufacturing activity decreased for a fourth consecutive month in September, pointing to an economy in stagnation despite economic figures beating expectations. Euro-Zone manufacturing activity fell to a near seven-year low of 45.3 from August's 47.6, considerably below the 47.2 forecast. When this indicator is above 50.0 it signifies growth in the manufacturing industry, and just the opposite when it is below this figure. Another important indicator was French Consumer Spending. French shoppers cut back on spending in August, and manufacturing output saw its sharpest contraction in over six-and-a-half years in September, pointing to weak economic growth in the Third Quarter. These indicators point out the already well-known fact that the European economy has significantly weakened the EUR.

Looking ahead to today, the most important financial indicator scheduled from the Euro-Zone is the German Ifo Business Climate, which is an economic measure based on a survey of about 7,000 business managers and has historically been an excellent indicator of general economic health. Traders are advised to pay close attention to this announcement as a stronger-than-expected result may launch a bullish correction to the EUR's weakness which started yesterday.


JPY


Yen Gains Stability from Calming Markets
Yesterday, the JPY underwent a relatively flat session against most of its major currency rivals. Floating between 105 and 106 against the USD and closing at 105.64 yesterday. The JPY was predominantly influenced by the other major currencies' behavior, which experienced more volatile sessions due to the rapidly changing markets in today's economy.

The only economic indicator coming from Japan yesterday was the BSI Manufacturing Index, a general measure of market conditions and business health. Large manufacturing corporations saw their business conditions index bump up to -10.0 from -15.1 in the Second Quarter, while the Non-Manufacturing index also increased to -10.2 against a prior -15.3. Small corporations saw a minor increase in business conditions, but still have the largest number of negative figures. Sentiment in all industries increased from -36.5 to -34.3 in the Third Quarter, helping the JPY's stability overall.

Today's late release of the Japanese Trade Balance and CSPI should provide little fluctuation in the market as well. Traders should keep a close watch on the news coming from the U.S. and Euro-Zone as both will continue to be the deciding factors in the Yen's movement today.


Oil


Price of Oil Comes Down from Suspicious Price Jump
How can the recent spike in the price of Crude Oil be explained? An interesting perspective by analysts has it that a maneuver taken by powerful traders pushed the price to jump during the last hour of trading for October delivery of Light Sweet Crude in an attempt to grab a corner in the market. Investigations have been initiated to look into these allegations. This outlook can be justified by the fact that only about 41,000 trades changed hands, as compared to the usual 200,000+ that change hands on a typical trading day, yet still the market made an historic jump in price, which automatically raised eyebrows among investors.

Dropping from the $110 mark reached Monday and leveling-off near $106 during today's early trading sessions; the price of Crude Oil appears to be coming down from its recent flight. Adding to this downturn is the rally seen by the USD which has investors more confident in the strength of the currency market. For today's trading, the movement of the USD should remain a strong indicator for the price of Crude Oil, especially since Crude Oil Inventories are to be released today from the U.S., and the economic recovery program is still under deliberation, potentially causing higher volatility in the market.

Labels: , , ,

24-Sep World Daily Markets Briefing
by: ADVFN Newsdesk

FOREX

FOREX-Yen falls amid Goldman deal, dlr skittish on Fed plan

LONDON - The yen fell broadly on Wednesday as investors eased back from risk aversion, taking some comfort from news that Goldman Sachs would get fresh funding and the establishment of new Fed currency swap lines.

But while the dollar found respite against the yen, nagging worry about U.S. financial sector health hampered its broader progress with uncertainty spreading over the U.S. government's proposed $700 billion package to mop up toxic mortgage debt.

After getting caught in the eye of a financial storm that worsened last week when investment bank Lehman Brothers collapsed, investors took some reassurance from news that Warren Buffett's Berkshire Hathaway Inc said it would invest $5 billion in Goldman Sachs Group Inc.

Goldman is also working out a deal to get several billion dollars from Sumitomo Mitsui Financial Group, Kyodo news agency reported. The U.S. Federal Reserve also set up currency swap lines with more central banks, aiming to boost short-term U.S. dollar liquidity and help drive down interbank lending rates. [

"Both the developments in the investment banking sector and the temporary arrangement the Fed has made with some more international central banks is reflected in the yen's pricing," SG currency strategist Phyllis Papadavid said.

"But it's still a very uncertain environment and the risk backdrop is very difficult, despite policymakers efforts. There's a lot of uncertainty around what everyone is focused on, which is the U.S. policy package," she added.

Euro's gains against the dollar were stemmed by data showing a bigger-than-expected drop in German corporate sentiment. The Munich-based Ifo economic research institute said its business climate index fell to 92.9 in September from 94.8 in August. It was the lowest reading since May 2005 and below market expectations of 94.1.

At 1120 GMT, the dollar was down 0.1 percent against a basket of major currencies, while the euro rose 0.2 percent on the day to $1.4682.

The dollar was up 0.5 percent at 106.05 yen after hitting a session high of 106.34 yen. The euro gained 0.7 percent to 155.64 yen. In a bid to help dollar-starved banks raise funds, the Fed said it would establish temporary currency swap lines with central banks of Australia, Denmark, Sweden and Norway worth a total of $30 billion yen.

But bank-to-bank lending markets are still under stress. The interbank cost of borrowing overnight and three-month sterling jumped on Wednesday, the three-month cost of borrowing dollars and euro also rose, according to the British Bankers Association's latest daily fixing.

The dollar, which had seen a stunning run higher before the latest bout of turbulence, has been on the back foot since last week's demise of Lehman Brothers and the $85 billion rescue of American International Group Inc.

On Monday, if suffered its biggest one day fall versus the euro since the single currency's inception in January 1999. Dollar sentiment looked set to stay uncertain as doubts grew about the effectiveness of the U.S. government's proposed $700 billion bailout plan to tackle the financial crisis.

"The Treasury plan will remain the focus of the market, and an early approval will likely remain critical to stabilisation in market sentiment," UBS strategists said in a research note.

Traders will keep a close eye on comments by Fed chairman Ben Bernanke who is due to continue congressional testimony on Wednesday on the U.S. government's plan to buy up toxic assets from banks' balance sheets.

Also slated for release on Wednesday are figures on the U.S. housing sector, which triggered the global credit crisis and is seen as key to any economic recovery. August U.S. sales of existing homes are forecast to have declined to a 4.93 million annualised rate in August, down from 5 million, according to a Reuters poll ECON.


US Stocks at a Glance

US STOCKS-Market opens higher on Buffett boost

NEW YORK - U.S. stocks rose at the open on Wednesday after Warren Buffett made a $5 billion investment in Goldman Sachs Group Inc late on Tuesday, buoying sentiment in the beleaguered financial sector.
      
But even as the Goldman Sachs news spurred some optimism, investors worried congressional wrangling could delay or weaken the proposed $700 billion plan to rescue the financial sector, increasing unease about the struggling U.S. economy.
      
The Dow Jones industrial average was up 3.74 points, or 0.03 percent, at 10,857.91. The Standard & Poor's 500 Index was up 0.86 point, or 0.07 percent, at 1,189.08. The Nasdaq Composite Index was up 8.60 points, or 0.40 percent, at 2,161.93.

Shares of Goldman Sachs rose 2.71 percent to $128.44 in composite trading on Wednesday after markets opened and following Warren Buffett's purchase of a $5 billion stake in the venerable Wall Street investment bank.


Europe share

Europe stocks ease as automobiles, commodities fall

LONDON - European shares drifted lower on Wednesday, with falls in the automobile and commodities stocks outweighing stronger banks that advanced after Warren Buffett invested $5 billion into Goldman Sachs.

At 1139 GMT, the FTSEurofirst 300 index of top European shares was down 0.1 percent at 1,107.28 points after trading in a range of 1,106.35-1,116.45.

Banks were the top weighted gainers on the index, with UBS, Royal Bank of Scotland, Societe General, BNP Paribas and Credit Agricole rising between 1.2-5.5 percent.

Billionaire Warren Buffett bet on a Wall Street revival by buying a $5 billion stake in Goldman Sachs and a Japanese bank looked ready to follow, but markets were on edge as U.S. lawmakers clashed over a financial sector rescue.

Japan's third-largest bank, Sumitomo Mitsui Financial Group, also plans to invest in Goldman, Japanese media reported on Wednesday. A spokeswoman at Sumitomo said no decision had been made.

Architects of the proposed $700 billion bailout for financial firms faced a second day of grilling by U.S. lawmakers on Wednesday as the debate threatened to delay a decision until next week. Some analysts were sceptical on Buffett's move to buy a stake in Goldman Sachs.

"The market is really going sideways. Warren Buffett is not enough to turn the economy around," said Tom Hougaard, chief market strategist at City Index. "No one wants to be heavily invested," he added.

French utility EDF gained 3.7 percent. The company said it launched a 12.5 billion pound ($23.14 billion) agreed bid for nuclear operator British Energy, in a revamped offer to take control of Britain's nuclear power industry.

EDF, the world's top maker of nuclear energy, said it was offering 774 pence per British Energy share. It also proposed an alternative of 700 pence in cash plus one nuclear power note, a financial instrument linked to BE's future performance.

The FTSE 100 was down 0.6 percent, the German DAX was down 0.2 percent and France's CAC 40 fell 0.6 percent.

The automobile sector was lower, with Volkswagen down 1.5 percent after it said group vehicle sales fell 3 percent in August to 448,000 units.

Fiat fell 2.3 percent. It said late on Tuesday that its truck business Iveco expected a 5 to 10 percent drop next year in the western European market, as a liquidity shortage pushed consumers to delay purchases.

Energy stocks were also under pressure despite crude rising 2.4 percent. BG Group, Royal Dutch Shell, Tullow Oil and BP were down between 0.2-3.4 percent. "The trend is downward in commodity stocks. Energy stocks are not always correlated with the price of crude. Investors are still concerned about growth prospects," said Hougaard.

Miner Anglo American was down 5 percent after ING cut its price target to 3,525 pence from 3,750 pence and said it has less growth potential that its peers.

Vedanta Resources was 6.6 percent lower after it dropped plans to streamline its corporate structure into three units in view of recent changes in global financial markets. InBev was down 3.5 percent after Morgan Stanley cut the group to "underweight" from "equal-weight" with a price target cut to 40 euros from 60 euros.

Labels: ,

Tuesday, September 23, 2008
23-Sep - Daily Forex Analysis
by: Forexyard

Technical News

EUR/USD
Yesterday the pair was consolidated around the 1.4780 level, after making a 300 pips rise. Currently, a bearish cross on the 4-hour chart's Slow Stochastic suggests that a bearish correction might take place. Going short with tight stops could be a good strategy today.


GBP/USD
There is a very distinct bullish channel forming on the daily chart, as the cable is now floating in the middle of it. The current price has crossed the Bollinger Band's upper border, signifying that the uptrend should continue. Going long might be the right choice today.


USD/JPY
It appears that the bearish momentum has reached its peak, as the pair failed to breach the 105.00 level. A rise to the 105.70 will validate the bullish reversal, with a target price of 106.60.


USD/CHF
The pair has limited its bearish momentum after testing the 1.0700 level. And now, a bullish cross on the 4-hour chart's Slow Stochastic indicates that a bullish movement is quite imminent. Going long seems to be preferable.


The Wild Card

Gold
After failing to breach the $910 level, gold prices dropped significantly, and are now traded around $889. The Bollinger Bands on the 4-hour charts are tightening, suggesting that the bearish move should extend. This might be a great opportunity for forex traders to join a very promising trend.


Economic News


USD

Market Uncertainty Lands Heavy Blow against the USD
The USD saw a traumatic day of trading yesterday as it stretched as high as 1.48 versus the EUR, and spiked up to 1.8636 against the GBP. This sharp decline in the value of the USD comes from the ongoing financial crisis and the fact that the recent rescue plan has not yet produced enough confidence in the future of the financial sector. Investor uncertainty lingers over the question of whether or not this plan will do the job, especially when many of its details may not get released until later next week. Until then, the USD will continue to bear the brunt of the recent volatility emerging from this crisis.

Another player in the USD's recent drama is the sharp climb in the price of Crude Oil. As October contracts came to a close, traders dove into the craze over black gold and watched with joy at the record-high one-day jump in the price of Oil, adversely affecting the USD - as Oil is bought and sold in dollars - pushing its already weakened value to a lower mark.

Looking at today's trading, there will be two crucial testimonies given by U.S. Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson. These will represent the initial steps in the deliberation and implementation of their newly proposed economic rescue plan. They are expected to emphasize their latest actions concerning the $700 billion bailout, Fannie Mae and Freddie Mac, the investment bank failures, and other financial problems. Their testimony will take place at 14:00 GMT in front of the U.S. Senate Committee on Banking, Housing and Urban Affairs. Traders should watch these speeches carefully as they will no doubt bring extreme volatility to the market, especially on the direction for the USD over the next few days.


EUR

Will the EUR's Rally be Short-Lived?
The EUR's rally yesterday can be attributed to the rash sell-off in dollars as traders were bailing out of the USD in light of the recent Wall Street blues. No doubt European Central Bank President Trichet's speech about transparency in financial institutions made a positive impact as well. The EUR hit a high mark it hasn't seen in some time as it reached up to the 1.48 level against the USD, as well as spiking versus the JPY up to the 156.8 level. Given all the positive data emerging from yesterday's market it appears as if the EUR is on a rather strong bullish run. However, dark clouds are on the horizon.

The difficulties which the EUR may see are going to begin later today. With many economic indicators being released from France, Germany, Belgium, and the Euro-Zone in general, the European markets may see high volatility. The downside of these indicators comes from the fact that they are all expected to return negative results as compared to the previous release of this data.

On tap today, traders should pay close attention to French Consumer Spending, the French and German Manufacturing PMI, as well as the Euro-Zone's Industrial New Orders figure since all this data together will carry a heavy impact on the EUR. The question is whether or not the negative data coming from the Euro-Zone can out-do the strong downtrend in the USD and create a reversal in the EUR's primary trading pair. If today's indicators come out worse than expected, traders might see a reversal to yesterday's trends.


JPY

Japan Not Behind the Wheel of JPY's Recent Movement
No data emerged from the Japanese economy yesterday as banks on the island country observed Autumnal Equinox Day. As a result, the driving forces behind the JPY yesterday were the other major currencies. The JPY saw mixed results based on recent American and European figures. Against the USD, the Yen rose in value as the dollar took a plunge resulting from the recent financial crisis and market uncertainty. However, against the EUR, the JPY witnessed a sharp devaluing spike as the EUR recorded a long-overdue jump in strength.

As with the USD, the JPY is also influenced by the price of Crude Oil. When Oil prices soar, as traders saw yesterday, the Japanese economy loses steam from an expected increase in the cost of transporting goods, thereby increasing the cost of Japanese exports. Today, traders should watch the Japanese BSI Manufacturing Index indicator as it is forecasted to be lower than the last release. This negative release may drive the JPY further down versus its currency counterparts. However, the USD and EUR are expected to be behind the wheel of today's trading.


Oil

The Price of Crude Oil Soars
Just when investors thought it couldn't get worse, the market drops and creates a record jump in the price of Oil. The price of black gold made history yesterday as it jumped $25 in one day. This price explosion did not go unnoticed by traders. As investors gambled on the direction and future strength of the market, the price of Crude Oil became a stronger currency-hedge for traders. After experiencing a significant drop in price, falling as low as the $91 mark last week, the price of Light Sweet Crude unexpectedly reversed and began an upswing which has done nothing but gain strength.

The uptrend does not appear to be losing momentum; however, if the USD rallies, we may see some leveling-off in the price of Oil. Adding to the upswing in the price of Oil yesterday was the expiration of the contracts for October delivery of Light Sweet Crude. As the contracts for November kick off, traders may see some signs for a reversal. Today, on the other hand, traders should note the direction of the USD during and after the speeches delivered by Bernanke and Paulson as the dollar's movement is typically a strong indicator for the direction of price of Crude Oil.

Labels: , , ,