Tuesday, December 30, 2008
Dec-30 Daily Forex Analysis
| by: Forexyard Headlines Stagnant Markets Leave Opportunities for Forex Traders The approaching year end and illiquid forex market has produced large short term price movements. Traders may find opportunities to profit from these quick price spikes by closely following their hourly chart. With many large market makers closed, volatility is forecasted to remain high as we close the books on a historic year. Economic News USD High Price Volatility for Dollar amid Light Trading As expected, there was very light volume in trading yesterday but high price volatility for the EUR/USD. The pair climbed as high as the 1.4360 mark. After the 1.4000 support line was broken, a corresponding rally in Crude Oil prices was seen due to a weaker Dollar. The pair ended the day down at 1.4043. The pullback of the EUR during the financial crisis has been largely eroded as the year end approaches, leaving the Dollar range trading between 1.3900 and 1.4200. This type of trading may be seen throughout the remainder of the year as currency markets see high price swings due to illiquid market conditions. This could leave traders with some potentially profitable trading opportunities for the next two days. As to what direction the Dollar may go for the coming year, the question needed to be asked is, are we finished with the big deleveraging that we've seen from the financial crisis? We may see some deleveraging that could strengthen the Dollar in the short term, but some fiscal and monetary policies choices by the U.S. government may lead to a weaker Dollar in 2009. Today traders will be looking for the consumer confidence index to be released. The survey is forecasted to show a small increase in U.S. household confidence. Market conditions may again create high price volatility in the EUR/USD and other Dollar crosses. EUR New Year Rate Cuts Drop GBP The GBP continues to head lower against the EUR as Britain may have a further Interest Rate cut priced into the EUR/GBP. There is a lot of negative news currently circling the GBP/USD, and the comments by European Central Bank (ECB) President Trichet that the ECB may hold Interest Rates steady in the near future may lend further support for the EUR. Also signals from the Bank of England show a potential rate cut in the future for Britain. Last week the EUR/GBP briefly hit an all time high, very close to a 1-1 trade parity. Yesterday the pair ended the day down at 0.9690. Since the beginning of the financial crisis, the GBP has been one of the hardest hit currencies. The EUR/GBP has risen over 43% since September. This pair could be in line for a correction in the near future, or as some analysts are predicting, could be setting a new standard in the currency market pecking order. JPY Yen Sees High Volatility but Little Changes Japanese markets are closed for a banking holiday today and will be for the remainder of the year. This may ease the pressure on the USD/JPY. The recent appreciation of the Yen has prompted the Japanese government to call for direct government intervention to depreciate the Yen in the open market. As the appetite for risk has climbed the last month, so has the value of the Yen. The USD/JPY closed the day down at 90.30. Don't expect too much movement from this currency pair until trading in the New Year begins. Look for the JPY to hover around the 90.00 mark. Oil Middle East Violence Sparks a Rise in Crude Prices A rally in Crude Oil was seen yesterday as continuing violence in the Middle East sparked a price jump. The price reached above $42 at one point, settling at $39.60 for the day. Analysts are concerned that an increase of violence in the region could disrupt Oil supplies, driving Crude prices higher. The price appears to be so low, that some are calling this event the start of a rally in Crude Oil prices. This idea may hold little water, unless other Oil producing nations are brought into the conflict which may cause a disruption in the supplies. For the remainder of the year, Crude may continue to hover around the $40 mark. Technical News EUR/USD A bearish cross on hourly chart's Slow Stochastic implies that a downwards correction might take place in the nearest time frame. The daily chart's RSI is floating in the overbought zone suggesting that the upward trend might be out of steam. Going short with tight stops appears to be the right strategy today. GBP/USD The hourly chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, there is a fresh bullish cross on the daily chart's Slow Stochastic indicates that an uptrend correction might take place in the nearest future. When the upwards breach occurs, going long with tight stops appears to be preferable strategy. USD/JPY The pair has been range-trading for a while now, with no specific direction. The Daily chart's Slow Stochastic providing us with mixed signals. All oscillators on the 4 hour chart do not provide a clear direction as well. Waiting for a clearer sign on the hourlies might be a good strategy today. USD/CHF The 4 hour chart is showing mixed signals with its Slow Stochastic fluctuating at the neutral territory. However, the Daily Chart's RSI is already floating in the oversold territory indicating that a bullish correction might take place in the nearest future. When the upwards breach occurs, going long with tight stops appears to be preferable strategy. The Wild Card Gold The bullish trend is loosing its steam and the price is consolidating around the $874 for an ounce. The daily chart's RSI is floating in an overbought territory suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. This might be a good opportunity for forex traders to enter the trend at a very early stage. Labels: Forex Analysis, Forex Trend, Market Analysis, Market Trend, World Market |
Dec-29 Daily Forex Analysis
| by: Forexyard Headlines The End of 2008: Beginning of another Great Depression? For the first time in decades economists are saying that we are heading for another Great Depression. With stocks continually sliding, sales dropping, and almost all global economies contracting simultaneously, these economists may not be far off with their assessment. It appears the one area left where investors can make money is in forex trading! Economic News USD USD Loses Strength as Holiday Shopping Disappoints Retailers After the Christmas holiday passed, many retail stores were expecting a small reversal to the recent economic slump seen around the world. Post-holiday shopping discounts usually lead to a vast increase in consumer spending. This year, however, the credit crisis and economic recession have consumers worried about home financing and individual savings more than holiday shopping, and retailers are feeling the pinch. For the first time in decades economists are saying that we are heading for another Great Depression. With stocks continually sliding, sales dropping, and almost all global economies contracting simultaneously, these economists may not be far off with their assessment. It appears the one area left where investors can make money is in forex trading. By bailing out of weaker or lower yielding currencies and buying into safe havens, such as the USD or EUR, thereby driving their value higher, traders can make substantial profits. The USD appears to have lost strength over the holidays and is now trading near the 1.4200 level against the EUR. Supporting this notion is the weakness of the Dollar against the Swiss Franc, which currently trades below 1.0600. Today's rising Crude Oil prices may also indicate a depreciation of the greenback. As far as USD trading goes, investors would be wise to pay attention to the movement of Crude Oil prices as well as the EUR this week as low volume holiday trading is still underway in the United States with the upcoming New Years celebration on Wednesday night. EUR EUR Decimates Competition Prior to 10-Year Anniversary So far, the EUR has remained the currency-of-choice among many investors throughout this holiday season. In fact, it has almost obtained parity with the Pound Sterling and is steadily climbing against the USD, reaching almost as high as 1.4200. This upswing, if it continues, may indicate a trend that could climb as high as 1.4700 against the greenback; just in time for the New Year's celebration this Wednesday night. New Year's Day, Thursday, also represents the 10th anniversary of the EUR's existence. Since its inception as an official currency, the EUR has helped lower inflation and increase free trade throughout Europe. Helping the continent regain the strength it lost during the decades following WWII, the EUR has been a stabilizing factor in an otherwise troubled economy. Now, with the global recession, the EUR appears to have become one of the safe-haven currencies of choice among investors as the U.S. markets grow weaker. With little trading taking place because of the holidays, forex traders can expect to see a continuation of the trends currently in place. With the EUR strengthening across the boards, it may be a wise bet to keep an eye on this somewhat powerful currency. No doubt it won't be enough to prevent the next Great Depression, but it's enough for wise investors to make profits from trading. JPY Strengthening JPY a Boon to Japanese Exports Any other central bank would look upon a strengthening currency as a blessing. Japan, however, may see it as a curse. As the Bank of Japan (BoJ) has intentionally held down the strength of its currency to boost Japanese exports, the recently growing JPY spells recession for the island economy. As exports fall, stocks aren't far behind. The Japanese Yen was one of the more traded currencies this past week as the holidays closed down the banks throughout Europe and the United States. Despite this, however, the currency failed to see any heavy movement. It appears most investors were out of the market and those who were still actively trading were not large enough to really make an impact. The story won't be much different for the JPY this week. The market movers will be the USD and EUR up until the market closes on 31 December for the New Year celebration. OIL Recent Conflict over Gaza Strip has Oil Prices on the Rise Investors almost witnessed the beginning of a price plummet for Crude Oil last week as most speculators were predicting that the Organization of Petroleum Exporting Countries' (OPEC's) production cut wouldn't be enough to quell the storm. Falling to as low as $36 a barrel last Friday, the price of Oil appears to have found some support today. During today's early trading hours, investors witnessed the price of Crude Oil swing sharply back up to just under the $40 mark. It appears the recent conflict between Israel and the Gaza Strip has stirred the metaphorical hornet's nest that is the Middle East. Speculation about reduced supply has helped push the price of Oil upward more than the pronounced OPEC production cut did two weeks ago. If this movement sustains itself, and if the USD continues to weaken, traders may see the price of Crude Oil trade between $45-50 a barrel by January 1st. Technical News EUR/USD The pair is in the middle of a steady uptrend, and is testing fresh highs on a daily basis. The very important key resistant level of 1.4150 has been breached and the pair is likely to continue its bullish trend. The Slow Stochastic on the daily chart shows that there is still more room to run and that going long is probably the best choice today. GBP/USD The hourly chart is showing that the cable is trading in a range with no specific direction for the past 8 trading hours. The very strong support level of 1.4699 has been breached, and the bearish cross on the daily chart's Slow Stochastic indicates that a local bearish move might take the cable back to the 1.4600 levels as a first target price. USD/JPY The 4 hour chart is showing that the pair still does not have a distinct direction, as the chart appears to be quite horizontal for the past week. However, a bearish cross on the daily chart's Slow Stochastic implying that a possible next move might be a bearish one. Going short with very tight stops might be a good strategy today. USD/CHF The pair is floating within quite a wide range on the daily chart, and appears to be heading down at the moment. The Slow Stochastic of the daily chart is moderately bearish, and the RSI confirm that bearish notion as well. It appears that going short with tight stops might be the right strategy today. The Wild Card Gold Gold prices rose significantly in the last two weeks and peaked at $885 for an ounce. However, daily charts' RSI is floating in an overbought territory suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. This might be a good opportunity for forex traders to enter the trend at a very early stage. Labels: Forex Analysis, Forex Trend, Market Analysis, Market Trend, World Market |
Monday, December 29, 2008
Dec-29 market commentary and technical levels
Mon, 29th of December, 2008 EURUSD Outlook The EURUSD bearish channel on 4h chart has been violated to the upside. On another point of view, the pair also broke the rectangle pattern (ranging market 1.3830 - 1.4125) to the upside. The bias is on the upside in nearest term. A consistent movement above 1.4125 area could trigger further bullish momentum testing 1.4300 resistance level. Immediate support is seen at 1.4100 followed by 1.4050. CCI in overbought area on 4h chart but movement below 100 line is rejected suggesting a potential bullish momentum continuation.
EURUSD Daily Supports and Resistances:
GBPUSD Outlook The GBPUSD continued it’s bearish momentum on Friday. The pair bottomed at 1.4650 and closed at 1.4652. We still have bearish price channel on hourly chart. The bias remains bearish. Only a violation of the bearish channel would be a violation to the current bearish scenario. Immediate resistance is seen at 1.4730. A break above that level would change the bias into neutral area. CCI in neutral area on hourly chart.
GBPUSD Daily Supports and Resistances:
USDJPY Outlook The USDJPY didn’t make a significant movement on Friday. On hourly chart we can see that after violated the bullish channel, the pair is moving in a rectangle pattern, which is a consolidation/continuation of the current bullish short term trend. The bias remains to the upside. I am expecting a breakout to the upside of the rectangle formation and targeting 91.60 resistance area. Immediate support is seen at 90.20.
USDJPY Daily Supports and Resistances:
USDCHF Outlook After breakout to the downside from the descending tringle formation on 4h chart, the USDCHF continued it’s bearish momentum. The bias remains bearish testing 1.0410 area again. Immediate resistance is seen at 1.0687. CCI in oversold area both in hourly and 4h chart suggesting a potential minor upside pressures.
USDCHF Daily Supports and Resistances:
Labels: Forex Analysis, Forex Trend, Market Analysis, Market Trend, money trading, World Market |
Friday, December 26, 2008
Dec-24 Daily Forex Analysis
| by: Forexyard Headlines Weak Dollar to Continue into 2009 The weak U.S. economy continues to preoccupy investors as the economic outlook is bleak. Analysts believe that the Dollar will continue its downtrend deep into 2009, despite the recent Interest Rate cuts and stimulus packages. Economic News USD Dollar Goes Bearish on Weak U.S. Economic Data The U.S currency continued to slip against the EUR, dropping 0.2% to as low as 1.3970. It also lost ground against many of the other currencies as investors continue to worry about the depth of the U.S. recession. The U.S. Existing and New Home Sales figures showed a further deterioration in the housing market, while the Gross Domestic Product (GDP) data confirmed the forecasted 0.5% contraction in the 3rd quarter, which marked the sharpest fall in 3rd quarter GDP since 2001. These weak data readings reveal that it may be a long time until the U.S. recovers from her deep recession. This is likely to push the Dollar even lower against its major currency pairs, especially during the year-end holiday season, as low liquidity may lead to more selling pressure on the U.S. currency. There was however a miner bullish correction on the Dollar's part during mid-day trading as investors who needed to close the books on 2008 bought back Dollars to rebalance their portfolios, lending the U.S. currency modest support. Despite this, analysts predict that the long-term prospects for the U.S. economy and currency remain worrisome. After the release of the poor GDP figures, some analysts say that the economy may contract by even more in the 4th quarter. Moreover, a further decline in New and Existing Home Sales in November implies that the combination of a weak labor and employment market will keep consumer spending and growth subdued well into 2009. Economists say that the Dollar's bearish momentum since the summer is due to demand from U.S. portfolio managers receding, and hedge funds liquidating assets and boosting cash holdings before year-end as the global financial crisis deepens. Concerns over a grim U.S. economic outlook continue to preoccupy investors. Rating agencies recently dropped their ratings on debt held by U.S. automakers, even though they recently received rescue packages from the U.S. government. Analysts remain of the view that the Dollar will continue its downtrend, and it becomes more and more clear that the Fed's policy in the U.S. will continue to be ultra-aggressive. EUR The European Currency Gains Ground Against the USD The Euro-Zone currency recorded another day of gains against the Dollar and a basket of major currencies. The EUR gained on Tuesday after the release of data confirming that the U.S. economy contracted in the 3rd quarter. This stoked concern that the U.S. is in a severe recession. Government data showed the U.S economy shrank 0.5% between July and September, as consumers and businesses cut spending. The European currency was up 0.4% vs. the USD at $1.3995. The EUR also rose 0.3% versus the JPY to 126.08. The British Pound slid to 94.72 pence per EUR amid speculation that the Bank of England (BoE) will cut Interest Rates at a faster pace than its Euro-Zone counterparts. Analysts speculate that the aggressive cut in Britain's Interest Rates will occur in January. The GBP also slipped versus the Dollar to $1.4738 after a report showed Britian's economy shrank more than forecasted in the 3rd quarter as the service industry fell the most in nearly 18 years. Meanwhile the governments of France, Germany, and the U.K announced stimulus packages in order lift their countries out of recession. Germany, the largest economy in the Euro-Zone, said that its stimulus plan amounts to 1.3 percent of the Gross Domestic Product (GDP). Across Europe, consumer morale and spending data on Tuesday showed some unexpected resilience, suggesting shoppers' gloom about the economic downturn is being tempered by the steep fall in inflation. Many analysts expect consumer morale to spiral sharply downwards as job losses gather speed and offset the positive wealth effect which the dive in inflation has produced. So far this has not happened, and on Tuesday the United States also reported a bounce in consumer sentiment this month due to declining prices. There is little doubt that if GDP depreciates further in the Euro-Zone, then Europe may find herself in a more prolonged recession than originally anticipated. JPY Yen Falls to One Week Low Against the Dollar The Yen fell to a 1 week low versus the Dollar, and also declined against the EUR, as some investors returned to carry trades, selling low-yielding currencies and using the proceeds to buy higher-yielding assets. This comes about as the Bank of Japan (BoJ) cut its benchmark Interest Rate last week to 0.1% from the previous 0.3%. Apparently the market has pulled back from extreme risk aversion levels at the expense of the Japanese currency. The JPY declined 0.7% to 90.87 against the Dollar, and also declined 0.9% to 126.92 vs. the EUR; following a 1.3% loss on Monday's trading. The Japanese Yen has gained 24% against the Dollar this year, heading for its largest annual increase in more than two decades amid speculation that the credit crisis will deepen. According to analysts the JPY is likely to continue depreciating as the market moves away from extreme risk-averse tones into more safe assets. On Tuesday, the JPY drifted lower against the USD, as investors continued to lock in profits on the Japanese currency's recent steep gains, cautious not to push the pair lower in case Japan's government intervenes. Japan, which is battling a recession, is concerned with stemming the appreciation of the Yen in order to protect the competitiveness of its exports. Analysts' prognosis is that the risk for now is a less than prior the rate cut, because the Dollar is above 90 Yen. Therefore intervention from the Bank of Japan seems to have worked. However, traders as a whole are not willing to push the Dollar lower, and this is likely to support a further decline in the Yen. OIL Has the Record Oil Slide Reached Its Bottom? On Tuesday the Crude Oil prices declined as much as 2.3% to below $39 a barrel, extending its slide from a record $147.27 a barrel in July. The primary factor that has been guiding the market is the concern about Oil demand amid the global recession. Tuesday's losses came after weak U.S. government data showed the economy of the world's biggest energy consumer shrank 0.5% in the 3rd quarter as the credit and housing crisis continue to worsen. The United States Energy Information Administration (EIA) expects global Oil demand to shrink in 2008 and 2009 due to the financial turmoil, marking the first decline in Oil demand since 1983. Previously, the demand from emerging markets such as China had pushed Oil prices to their peak of above $147 a barrel in July. However today, even the Asian economies appear to be suffering from the global recession. The Organization of Petroleum Exporting Countries (OPEC), which has already agreed to slash global Oil supplies by 5% in response to collapsing demand as a result of the economic slowdown, may hold an emergency meeting before its next scheduled gathering in March 2009. The cartel's President Chakib Khelil said on Tuesday that the organization will review the market again and cut supply again if Crude continues its slide. Technical News EUR/USD The daily chart's RSI signals that this pair is being over-bought and will likely see a downward correction in the near future. The Bollinger Bands on the 4-hour chart are also tightening indicating that a volatile movement is imminent. Going short appears to be the right strategy today. GBP/USD The price is trading near the lower border of the 4-hour chart's Bollinger Bands, which are also beginning to tighten, indicating that a volatile upward correction may occur today. The 4-hour chart's RSI supports this notion as it floats just inside the over-sold territory. Going long might be the right choice today. USD/JPY It appears that a bullish cross has occurred on the hourly chart's Slow Stochastic, indicating an upward movement is imminent. However, the 4-hour chart's RSI is floating in the over-bought territory, signaling that a correction to the recent upward movement may occur. Forex traders should wait for a clearer signal before choosing a direction on this pair today. USD/CHF The RSI on both the 4-hour and daily chart is showing that this pair is floating in the over-sold territory, indicating an upward correction may occur in the near future. The Bollinger Bands on the hourly and 4-hour chart are also tightening meaning a volatile price movement will likely occur. Going long might be a good strategy today. The Wild Card NZD/USD It appears that a bearish cross has occurred on the hourly chart's Slow Stochastic, indicating a downward correction is imminent. In support of this, the pair also floats in the over-bought territory on the daily chart's RSI. Forex traders can benefit by entering sell positions early and riding out this downward correction. Labels: Forex Analysis, Forex Trend, Market Analysis, Market Trend, World Market |
Wednesday, December 24, 2008
Dec-24 market commentary and technical levels
Wed, 24th of December, 2008 EURUSD Outlook
EURUSD Daily Supports and Resistances:
GBPUSD Outlook
GBPUSD Daily Supports and Resistances:
USDJPY Outlook
USDJPY Daily Supports and Resistances:
USDCHF Outlook
USDCHF Daily Supports and Resistances:
Merry Christmas and have a great holiday! Labels: Forex Analysis, Forex Trend, Market Analysis, Market Trend, World Market |
Tuesday, December 23, 2008
Dec-23 Daily Forex Analysis
| by: Forexyard Headlines Oil Drops Sharply Amid End of Year Trading Trading in Crude Oil has been extremely volatile in the past 24 hours due to limited market liquidity and fewer market participants. The price has dropped over 8% ahead of the holiday break. This is creating excellent opportunities for traders to come into the market on a high price swing. Economic News USD Light Trading Brings Volatility to the Dollar The light trading that is typical during the close of the year is having an impact on the movement of the Dollar. National holidays in Japan have significantly limited the amount of liquidity in the forex market, while the approaching holidays in the U.S. has left trading desks working on a skeleton staff. This has led the EUR/USD to trade in large price swings lately due to the limited amount of players increasing the pair's volatility. At one point in yesterday's trading, the Dollar reached as low as 1.3923. Despite the difficult market conditions the Dollar finished the day relatively unchanged at 1.3978. Against the GBP, the USD ended yesterday's trading session nearly unchanged to close at 1.4829. There was also relatively little movement in USD/JPY as the pair closed the day at 90.23. Analysts emphasize that large movements in these currency pairs are unlikely to occur until after the holiday season. Today, investors can look for more fundamental data that may help drive the Dollar lower. The U.S. Existing Home Sales and New Home Sales are due to be released today at 3:00pm GMT. If these figures continue the trend of a poor performing U.S. housing sector, look for the EUR/USD to climb to the 1.4150 level. EUR EUR Continues to Rise against the Dollar As the year end approaches, the repatriation of capital has been occurring in the European market. The deleveraging by U.S. investors in September and October heavily influenced short-term price movements in the commodity and currency markets. There is a strong possibility that the repatriation of the EUR has been undertaken by large European investors as the year end approaches. This may have been a driver for many of the large price spikes that were seen in the past week of volatile trading. The repatriating EUR may help to solidify the rally that the EUR/USD saw last week as the pair climbed as high as the 1.4600 mark. Since last Thursday though, the pair has traded around the 1.39-1.40 level. Against the GBP, the EUR has hit record levels in recent weeks. Looking ahead, it is likely that the EUR/GBP pair hold between 0.94-0.95 ranges as the EUR holds onto to its recent gains against the Cable. Later today, European Central Bank President, Jean-Claude Trichet is due to talk about the current economic situation in Europe later today. Traders shouldn't expect to see sharp market movements following the President's speech. The EUR may consolidate its appreciation from last week, possibly through the end of the week and the holiday break. JPY Yen Holds its Strength Despite Bleak Economic Outlook The Yen may have begun to reverse its recent rise against the Dollar, but during trading yesterday the pair was relatively unchanged. This comes as a change to recent market events that saw the Yen climb to a 13-year high against the Dollar in the previous week of trading. Yesterday, the USD/JPY ended the day down slightly at 90.23. The low volatility was due the closure of Japan's markets, due to the emperor's birthday. The previous week was highlighted by two significant Interest Rate Cuts. The first was in the U.S., which sent rates near to 0%, and as a result the Yen saw a sharp appreciation vs. the USD. Later in the week, the Bank of Japan responded by lowering its rates to 0.10%. Following the Japan's rate cut, the Yen showed a slight turn around, helping the Yen rise to the 90 Yen mark. The continued strengthening of the Yen remains a concern for the Japanese economy. This is reflected by the government expressing its displeasure of the strong Yen. In recent statements, the government revealed that the economic outlook will continue to be bleak deep into 2009, and Japan's economic woes are likely to become more severe as the economic crisis deepens. Therefore, only a much weaker Yen may recue Japan's economy in the coming months. Oil Oil Plunges to Below $40 a Barrel Crude Oil prices slid yesterday, approaching a four-and-a-half year low as the recent record production cuts from the Organization of the Petroleum Exporting Countries (OPEC) failed to spark a rally in the price of Crude Oil last week. The price of Crude ended the day at 39.71, and appeared to be holding below the $40 mark, a big psychological barrier. This marks a drop of nearly $4.50 a barrel, one of the biggest daily price drops of Oil in months. Traders have shrugged off any type of support in the market for Oil, as the global recessions continues to worsen. This in turn has driven the price of Crude lower. Two large production cuts by OPEC, volatile equity markets, and poor fundamental data have failed to boost the price in recent trading days. The price of Crude Oil is likely to remain below the $40 mark until after the U.S. holiday season. Technical News EUR/USD The pair has been traded around the 1.40 levels during yesterday's trading session without making a significant breach. Yet now, a bearish cross on the hourly chart's Slow Stochastic indicates that a bearish move is forthcoming. Daily chart's Slow Stochastic is negatively sloped also supporting this notion. Going short appears to be the right choice today. GBP/USD Lately, this pair has been going through a relatively choppy trading session and seems to be unable to pick up a sustained trend. The 4-hour chart's Bollinger Bands are widened and its Slow Stochastic flows in a neutral territory. Forex traders are advised to wait for a clearer signal before entering the market n this pair. USD/JPY The pair has been range-trading for a while now, with no specific direction. Hourly chart's Slow Stochastic providing us with mixed signals. 4 hour chart does not provide a clear direction as well. Traders are advised to wait for a clearer signal on the hourly level before placing orders today. USD/CHF The typical range trading on the 4 hour chart continues. Both the hourly RSI and the Slow Stochastic are floating in neutral territory. However, the daily chart RSI is already floating in the oversold territory. It appears that the next move might be a bullish one. When the upwards breach occurs, going long with tight stops appears to be preferable strategy. The Wild Card Crude Oil Oil prices are once again dropping, and a barrel of Oil is currently traded at around the 39 price level. And now, all oscillators on the hourlies chart are giving bullish signals, indicating that oil prices might go up. This might give forex traders a great opportunity to enter a very popular trend. Labels: Forex Analysis, Forex Trend, Market Analysis, Market Trend, World Market |
Dec-23 market commentary and technical levels
Tue, 23th of December, 2008 EURUSD Outlook
EURUSD Daily Supports and Resistances:
GBPUSD Outlook
GBPUSD Daily Supports and Resistances:
USDJPY Outlook
USDJPY Daily Supports and Resistances:
USDCHF Outlook
USDCHF Daily Supports and Resistances:
Have a great day! Labels: Forex Analysis, Forex Trend, Market Analysis, Market Trend, World Market |
Monday, December 22, 2008
Dec-22 Daily Forex Analysis
| by: Forexyard Headlines Dollar May Gain Today Despite Low Volatility The Dollar may gain ground today despite the low volatility of the holiday season, as traders prepare for what could be a possible negative economic news coming out of Europe. It is also advisable to pay close attention to the way Europe and Japan react to America's auto bailout. Economic News USD U.S. Auto Bailout a Blessing and a Curse; Will the Dollar Recover? Things are looking down for the U.S. automotive industry as the proclaimed bailout has now been considered a delay for the inevitable rather than disaster prevention. While not certain, of course, the prediction by many analysts that the 3 auto giants (GM, Chrysler, and Ford) may in fact still face significant problems despite receiving bailout funds has helped weaken the strengthening position of the USD over the weekend. Ending last week's trading around the 1.4000 level against the EUR, the USD actually made strong gains after spiking up to the 1.4600 level around Thursday afternoon. After news that the auto bailout had been passed, traders began buying heavily back into the USD; however, as forecasters began claiming that an auto bailout wasn't enough to save these companies, skepticism in the Dollar returned. At the start of today's trading, the greenback began rising slowly back towards the 1.4100 price level, but now it currently sits just under 1.4000 against the EUR, and near the 1.5000 level against the GBP. Oddly enough, many economists believe the Dollar was highly over-sold last week and is currently positioned to regain all it lost and potentially even strengthen more in the coming months. This week, however, traders may expect less volatility in the USD as the Christmas holiday approaches and traders leave the market to be with their loved ones. No economic news will be released today, but important housing data will be released tomorrow and lend some insight into what's happening with the American economy after this weekend's bailout news. Will the Dollar get its second wind? EUR Euro-Zone not Stronger than U.S. after all; EUR Depreciates Last week's EUR feeding frenzy may have been short-lived. With so much negative news building up in the American economy, the EUR appeared to be the safe bet. Investors bailed out of the Dollar en masse and jumped into the Euro-Zone currency as the safe haven of choice after the U.S. Federal Reserve's decision to reduce Interest Rates to almost 0%. The beginning of this week may tell a different story, however. By last Thursday the EUR had gained value against the USD up to the 1.4600 price level; by the end of trading Friday it had lost 600 pips to stand just below 1.4000. It appeared as if traders caught wind of a disastrous economic outlook for the American economy and bailed out. Shortly thereafter it sank in that Europe was no better off than the United States. After one of the largest intra-week trading movements in the history of the EUR/USD pair, the 15-nation currency is now returning to its previous whipping-boy status; taking hits left and right as the Dollar reclaims its strength. The pair currently stands just under 1.4000 and will likely continue downward. This week may end up being one of the quietest news weeks of the year for Europe. Today, traders will be given information on European industry and trade, but the figures are not forecasted to produce any meaningful impact on the EUR. After that, the Euro-Zone and Britain won't be releasing any significant data until after the Christmas holiday is over. Until Wednesday night - Christmas Eve - the U.S. will be in the driver's seat of the global economy. JPY BoJ Weakens JPY to Boost Exports The Bank of Japan's (BoJ) monetary intervention last week has helped slow down the appreciation of the JPY in this week's early trading hours. With Japan's trade gap growing and economy entering a deeper recession, the BoJ needed to take steps to weaken the national currency in order to boost Japanese exports. So far the intervention has worked as the JPY has begun to depreciate against all of its currency counterparts. Whether or not this helps the Japanese economy in time to turn back the recession and return the island country back to growth is another matter. This week will be slightly more important for the JPY than most other currencies. While its biggest news was the near-0% interest rate decision taken last week, this week will witness the Japanese economy releasing more economic data than usual as the rest of the world goes on holiday. Forex traders should pay close attention to the JPY this week as it may begin its steady descent against the other major currencies. Oil OPEC Production Cut More Likely; Oil Prices Moving Up Realizing the lack of trust, many investors have in their ability to follow through with the production decision; the Organization of Petroleum Exporting Countries (OPEC) is now issuing strongly worded statements in which they express determination to stabilize the Crude Oil market. Traders may have begun to believe these claims as falling Oil prices have caused stocks and economic growth to falter in the Persian Gulf states recently. In order to maintain the recent infrastructure projects undertaken since July, the Gulf States will need higher energy prices to boost revenues. As such, the chances have gotten better that the talk of cutting production will be followed with action on OPEC's part next month. Combined with the U.S. stimulus package, to be undertaken when Barack Obama takes office later next month, investors are expecting a decrease in Crude Oil stockpiles. With supply expecting to decrease, market forces have begun to ease the price of Oil into an upward direction. Time will tell if this movement has strong enough support. Technical News EUR/USD After showing a consistent bullish momentum for the past week, the daily chart is showing signals of a falling correction. The bearish breach on the daily chart has created strong downwards momentum that might eventually carry the pair to the next target price of 1.3800. The hourly chart's Slow Stochastic is showing no crosses, which also indicate the continuation of the bearish trend. Going short appears to be preferable today. GBP/USD The hourlies chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, the 4 hour chart's RSI is already floating in the oversold territory indicating that a bullish correction might take place in the nearest future. When the upwards breach occurs, going long with tight stops appears to be preferable strategy. USD/JPY The pair has been range-trading for a while now, with no specific direction. The Daily chart's Slow Stochastic providing us with mixed signals. All oscillators on the 4 hour chart do not provide a clear direction as well. Waiting for a clearer sign on the hourlies might be a good strategy today. USD/CHF The hourly chart is showing mixed signals with its Slow Stochastic fluctuating at the neutral territory. However, the daily chart's RSI is already floating in the oversold territory indicating that a bullish correction might take place in the nearest future. When the upwards breach occurs, going long with tight stops appears to be preferable strategy. The Wild Card Gold The bullish trend is loosing its steam and the price is consolidating around the $843 for an ounce. The daily chart's RSI is floating in an overbought territory suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. This might be a good opportunity for forex traders to enter the trend at a very early stage. Labels: Forex Analysis, Forex Trend, Market Analysis, Market Trend, World Market |
Dec-22 market commentary and technical levels
Mon, 22th of December, 2008 EURUSD Outlook
EURUSD Daily Supports and Resistances:
GBPUSD Outlook
GBPUSD Daily Supports and Resistances:
USDJPY Outlook
USDJPY Daily Supports and Resistances:
USDCHF Outlook
USDCHF Daily Supports and Resistances:
Have a great day! Labels: Forex Analysis, Forex Trend, Market Analysis, Market Trend, money trading, World Market |
Saturday, December 20, 2008
Dec-19 World Daily Markets Briefing
| by: ADVFN Newsdesk This is the last World Market News Bulletins we will be sending out until the 5 January 2009 US Stocks at a Glance US STOCKSSNAPSHOT-Wall St opens higher after auto aid NEW YORK - U.S stocks rose on Friday in opening trading after news the U.S. government will throw a $17.4 billion lifeline to struggling automakers. U.S. President George W. Bush said a collapse of automakers would send the economy deeper into recession and would not be a responsible thing to let happen. For details see . The Dow Jones industrial average was up 90.16 points, or 1.05 percent, at 8,695.15. The Standard & Poor's 500 Index was up 8.64 points, or 0.98 percent, at 893.92. The Nasdaq Composite Index was up 27.39 points, or 1.76 percent, at 1,579.76/ Forex FOREX-Euro falls broadly, dollar stays weak vs yen LONDON- The euro fell broadly on Friday, as traders locked in profits from the currency's rally to a 2 1/2-month high against the dollar and its strongest level ever against sterling this week. The dollar fell closer to a 13-year low against the yen, reversing brief gains made after the Bank of Japan cut interest rates, as a dismal U.S. economic outlook continued to sting the currency. The euro fell below $1.40 for the first time since Wednesday, as traders reckoned that its broad surge this week may have been overdone. The single currency is on track to post a weekly gain of roughly 5 percent against the dollar, one of its biggest since the euro was launched in 1999. "There have been year-end related flows in the past couple of weeks (pushing up the euro) and such flows seem to be su bsiding a bit," said Ian Stannard, strategist at BNP Paribas. That prompted traders to take profits as they were adverse to holding risk in illiquid year-end market conditions. By 1150 GMT, the euro was down almost 2.0 percent at $1.4009 after hitting a low of $1.3987, according to Reuters data, dropping more than 3 cents from a session high. "We've seen a lot of volatility in the market in the past few days so people are in some sense keeping risk light and taking positions which are shorter-term," said Phyllis Papadavid, currency strategist at Societe Generale in London. The single currency has retreated from $1.4720 touched on electronic trading platform EBS on Thursday, its strongest since late September. Some in the market said that euro losses were also part of a delayed reaction to the European Central Bank's move on Thursday to cut the return it gives banks for holding cash at th e ECB and prod interbank money markets back to normality. The single currency also fell 2.5 percent to 124.40 yen, down from 131.03 yen hit on Thursday, its highest in nearly two months. Against sterling, it fell 1.7 percent to 93.24 pence, retreating from a record high of 95.56 pence hit according to Reuters data on Thursday. The dollar fell 0.4 percent to 89.04 yen, sliding within range of 87.13 yen reached on electronic trading platform EBS earlier in the week, for the first time since mid-1995. The yen was broadly supported as ongoing concerns about the global economy prompted more investors to dump risky positions including carry trades, where the low-yielding Japanese currency in past years was used to buy assets in higher-yielding currencies. The BOJ's decision to cut rates to 0.1 percent on Friday had provided a brief boost to the dollar as the monetary easing to ok the policy target rates of Japan and the U.S. to more or less equal footing. But the dollar quickly reversed those gains as the BOJ's move to put more funds into the market to ease the credit crunch was seen as positive for Japan's economy, boosting the yen. In addition, the possibility of a delay by the U.S. government on whether to bail out the country's ailing automakers and a fall in oil prices to their lowest in more than four years kept the U.S. currency under selling pressure. Bridge loans to carry the companies for several months could be announced as early as Friday, according sources not authorised to publically discuss negotiations on the issue. The possibility that the firms could fail could have a deep, negative impact on the wider economy stung the dollar, while a fall in oil prices to their lowest in more than four years also illustrated shrinking demand as a global recession takes hold. "The automakers ' issue is a problem for the entire U.S. economy ... and the fall in oil prices is part of a global economic story because of demand issues, and that's dragging on the dollar," said James Hughes, markets analyst at CMC Markets in London. Europe News Europe stocks fall on weak oils, bank rating cut LONDON - European stocks fell 1.2 percent by midday on Friday as a drop in the price of crude to its lowest in nearly five years punctured oil shares and underlined fears of a deep recession in major economies. At 1159 GMT, the FTSEurofirst 300 index of top European shares was down 1.2 percent at 816.87 points, with oils accounting for more than a third of losses. France's Total and Britain's BP took most points off the index, falling more than 4.5 percent, while Italy's ENI, Royal Dutch Shell and BG fell 3.1-5.7 percent. New York January crude futures CLc1, which expire later in the day, traded down 7.5 percent at $33.52 a barrel, while the February futures CLc2 were down 0.6 percent to just over $41.42. "The oil price is a real-time indicator for the global economy," said Gerhard Schw arz, head of global equity strategy at UniCredit in Munich. "It is a zero sum game: a lower oil price shifts purchasing power from oil producing countries to consumers in oil-importing countries," he said. "The predominant factor for product demand in Western economies is the large amount of uncertainty around jobs in the next year." While a lower oil price relieves pressure on input and transport costs, it is widely being seen as an indicator of a global slowdown. To illustrate the link between rising oil prices, economic growth and share prices: an equities upswing between March 2003 and July 2007 was accompanied by steadily rising oil prices. And after a financial crisis stopped the equities bull run in its tracks, oil still went on to hit a peak of $147 in July, 2008. The impact of the financial crisis on growth then hit home, and oil began its downward journey. Banks were also broadly lower as rating agency Standard & Poor's announce d downgrades and outlook changes to the ratings of 12 major U.S. and European financial institutions. HSBC were off 2.9 percent, BNP Paribas down 5 percent and UBS fell 3 percent. Italy's UniCredit fell 2 percent after it said 2008 net profit would be 23 percent less than forecast if it does not manage to sell property assets. European banks face another "very tough" year in 2009, mainly due to deteriorating asset quality and the negative impacts of deleveraging, Merrill Lynch said in a note. Across Europe, Britain's FTSE was down 2.2 percent, Germany's DAX down 1.3 percent and France's CAC fell 1.6 percent. Traders said European markets would be volatile due to quadruple witching -- or the expiry of options and future contracts -- at different points during the day. "Volumes are thin and prices are going to move a round quite a lot. But the long only guys have gone very quiet -- many have closed books ahead of the Christmas and New Year break," said one trader. Potentially supportive was a fall in the euro as traders locked in profits from the currency's rally to a 2-1/2 month high against the dollar and its strongest level ever against sterling. Miners were also big losers as copper hit a new four-year low. Antofagasta, and Anglo American fell by more than 8 percent while Rio Tinto lost 4.5 percent. "Mining stocks are still trading at relatively high multiples and I believe that we will see some hefty downwards revisions in that sector," said Darren Winder, head of strategy research at Cazenove. The FTSEurofirst 300 has lost more than 46 percent this year, knocked down by a crisis in the credit markets that sparked a global economic downturn. Asia Markets Tokyo Stocks Decline In Spite Of Rate Cut, Stimulus Japanese stocks finished lower at the end of an eventful and volatile trading session Friday, with banks such as Mizuho Financial Group advancing, while Toyota Motor Corp. and energy-related shares extended losses. The Bank of Japan cut its benchmark interest rate to 0.1% from 0.3%, as expected, in response to weakening economic fundamentals. . Separately, the government reportedly approved an emergency stimulus package worth 43 trillion yen ($489 billion), including 20 trillion yen for purchasing equity holdings from banks to improve their liquidity. The Nikkei 225 Average ended 0.9% lower at 8,588.52, while the broader Topix index dropped 0.5% to 834.43, after changing direction a few times during the session. Yoji Takeda, head of regional equities at RBC Investment, said the Bank of Japan rate cut wasn't as big a surprise as the U.S. Federal Reserve's sharp reduction in the Fed funds rate earlier this week, but added the liquidity boosting measures by the central bank were a positive. "Had they not done that, market sentiment would have been very negative," said Takeda. Still, "investors are sort of skeptical at the moment. They want to see some [positive impact] on the economy, and that might take a while." Banking shares gained on the stimulus plan report, with Mitsubishi UFJ Financial Group (MTU) ending 3.3% higher, while Mizuho (MFG) shares climbed 1.2%. Shares of Toyota Motor (TM) dropped 2% after the Nikkei business daily reported the automobile giant was likely to post its first-ever operating loss during the year ending March 31 on plunging worldwide sales. Other markets in the region ended mixed after also wavering through the session, with indexes in Sydney, Shanghai, Mumbai, Seoul, Singapore and Taipei changing direction at least once. The choppiness came as overnight losses on Wall Street added to selling pressure, with some funds still keen to buy to boost their year-end portfolios. In Hong Kong, the Hang Seng Index ended 2.4% lower at 15,127.51. The widely-watched Hang Seng China Enterprises Index, also called the H share index, dropped a more modest 1.4% to 8,435.31, declining for the first time this week. Steve Cheng, associate director at Shenyin Wanguo in Hong Kong, said in spite of the day's losses, the Hong Kong market seemed "very resilient, as we are getting a lot of support" from Chinese shares traded in Hong Kong. "The reason might be that people are still expecting more measures from China, especially something like a cut in interest rates or bank reserve ratio. This happens before every weekend, but this time it seems more likely," said Cheng. Australia's S&P/ASX 200 finished up 1% at 3,615.70, reversing early declines, and South Korea's Kospi rose 0.4% to 1,180.97. Elsewhere, China's Shanghai Composite rose 0.1% to 2,018.46, Taiwan's Taiex was little changed at 4,694.52 and New Zealand's NZX 50 index lost 1.9% to 2,655.31. By late afternoon, India's Sensitive Index, or Sensex, gained 0.8% to 10,152.30, while Singapore's Straits Times Index slipped 0.1% to 1,796.68. Hong Kong stocks were weighed down as market heavyweight HSBC Holdings (HBC) tumbled 6.2%, on top of Thursday's 3.4% decline, on market speculation it may raise capital. Energy-related stocks dropped across the region, with Woodside Petroleum (WOPEY) slumping 4% and BHP Billiton (BHP) sliding 3.5% in Sydney. Inpex Corp. tumbled 5.9% in Tokyo, Cnooc (CEO) lost 4.9% in Hong Kong and Oil & Natural Gas Corp. fell 2.5% in Mumbai afternoon trading. January crude-oil futures rose as much as 18 cents to $36.40 a barrel in electronic trading, after sliding 9.6%, or $3.84, to $36.22 a barrel Thursday on the New York Mercantile Exchange. In Sydney, banks rebounded on bargain-buying after recent losses, with Commonwealth Bank of Australia (CBA.AU) rising 4.9% and Westpac Banking Corp. (WBK) gaining 8.6%. In Asian currency trading, the U.S. dollar changed hands for 88.76 yen, compared to 89.20 yen Thursday. Metals PRECIOUS-Gold drops more than 2 pct as euro falls LONDON - Gold dropped more than 2 percent in thin volumes on Friday as the euro lost ground against the dollar and bullion's recent rally slowed the pace of physical purchases, traders and analysts said. Spot gold fell to $833.70 an ounce by 1116 GMT, against $852.15 an ounce late in New York on Thursday. It had traded as high as $853.10. "The euro took a bit of a big hit this morning," said Tom Kendall, precious metals strategist at Mitsubishi. "I think that's going to be the feature of the day," he said. The euro fell broadly as traders locked in profits from the currency's rally to a 2 1/2-month high against the dollar and its strongest level ever against sterling. Bullion rallied to a two-month high of $881.20 this week, boosted by the gains in the euro, which had been on track to post a weekly rise of more than 5 percent against the dollar, its biggest since the single currency was launched in 1999. Bullion tends to move in the opposite direction to the dollar as a strong U.S. currency makes gold more expensive for local currency holders. "We are going to be bouncing around the range but the tendency is towards the downside for gold," Kendall said, adding oil's falls this week was also putting pressure on bullion. Crude oil, which fell to its lowest levels since 2004 on Thursday, is now more than $110 off its July peak, having shed a third of its value this month. U.S. light crude for January delivery was 51 cents lower at $35.71 a barrel at 1106 GMT ahead of the contract's expiry later on Friday. Crude for February delivery was slightly firmer at $42.15. Despite gold's impressive 20 percent rally in December alone, some thought the outlook remained bearish. "The economic outlook is as bad as it has been at any time in the past 100 years. Gold cannot be immune to this," said Fortis Metals in a research note. "It will be hit by a decline in jewellery demand, at least of the adornment variety." Local jewellers in Dubai's traditional gold markets said this week that sales had collapsed as much as 80 percent in the last couple of weeks. "Volatility is more of a deterrent than the absolute price level to people particularly in jewellery business," Kendall at Mitsubishi said. Technicals offered little support, others added. "Gold was in an overbought zone and warranted a correction," said precious metals analyst Pradeep Unni at Richcomm Global Services in Dubai. "Technically, gold is still very weak and hence a swift sell off to $820 and lower cannot be ruled out, as most momentum indicators are hovering in the uncomfortable overbought zones and have started to turn back," he said. Spot platinum was at $847.50 an ounce versus $849.50 while spot palladium was $1 higher at $175.50 an ounce. Silver edged down to $10.80 from $10.93. COMEX gold futures for February delivery GCG9 were down 2.39 percent at $840.00 per ounce. The contract fell $7.90 on the New York Mercantile Exchange on Thursday. Labels: Forex Analysis, Forex Trend, Market Analysis, Market Trend, Moving Average, World Market |
Friday, December 19, 2008
| by: Forexyard Headlines Dollar Volatility Expected as Traders Weigh-In on Rate Cut As investors continue digesting the dramatic rate cut by the U.S. Federal Reserve earlier this week, the USD has continued to lose ground. For some investors, the Fed's measure has helped to open credits for cash-strapped borrowers. However, for others, the measure has not produced the positive impact that some traders had hoped. Economic News USD Dollar Recovers against the Pound and Euro The U.S. currency experienced heavy volatility throughout yesterday's trading session, and recovered some ground against the EUR after the U.S. markets opened. This was after a sharp decline in the Dollar since the start of the week, which saw a reduction in value of the greenback to as low as the 1.4716 mark reached yesterday. Against the JPY, the greenback also showed some recovery after the Japanese currency reached a 13-year high against the USD on Wednesday. The USD also recovered against the GBP yesterday, as the greenback increased nearly 500 pips against the cable to close at 1.5120. The U.S. Stock market plunged at the end of the trading day, as the Dow Jones registered a fall of more than 200 points. This was largely due to investors continuing to digest the dramatic rate cut by the U.S. Federal Reserve from earlier this week. For some investors, the Fed's measure that sent its Interest Rate to a record low range of 0-0.25% has helped to open credits for cash-strapped borrowers. However, for others, the measure has not produced the positive impact that some traders had hoped. Important economic releases yesterday showed that Unemployment Claims eased, showing a decline of 21,000 from the previous week's 26-year high of a revised 575,000 claims. This data reasserts that the economy is going through one of the worst economic crises since the Great Depression. The Philadelphia Fed Index, which is an indicator for regional manufacturing, and is seen as one of the first monthly indicators of the health of the U.S. manufacturing sector, was better than expected, which improved to -32.9 this month, from -39.3 in November. Today, traders should pay close attention to the equity markets to determine how to continue with USD positions, as well as to the news coming out other global markets in order to place their transactions accordingly with today's developments. EUR EUR Slides against Dollar and Spikes versus the GBP After continuing a bullish course during most of the week against the USD, the EUR retreated yesterday. Analysts believe that this is due to financial pressure that the Euro-Zone will have to follow the Fed and cut Interest Rates further. EUR/JPY level continued to trade flat, with little fluctuation over the $127.00 level. The EUR did however rise dramatically against the GBP to close at 0.9426, a 1 day rise of 140 pips. The economic events that came out of the Euro-Zone yesterday were the German Ifo Business Climate, which weakened for the seventh month running in December, after falling to 82.6 in December from 85.8 in November. The weaker Ifo reading, which has not been seen since German reunification in 1990, added more signs that the Euro-Zone economy is continuing its deterioration, and may require more cuts in Interest Rates. Looking ahead to today, we see that there is some important economic news that is likely to affect the EUR's volatility. The German PPI figures, which measure the change in the price of goods sold by manufacturers, will be published at 7:00am GMT. This indicator is forecasted to be lower than the previous month's figures. Traders are advised to follow the development of the other currencies, the GBP and JPY primarily, as news coming from these regions is likely to have an impact on the EUR's volatility today. JPY Bank of Japan Lowers Interest Rates to 0.10% The JPY began losing its momentum yesterday after a long week of steady gains. The Japanese currency experienced its first daily drop against the U.S. Dollar as the Japanese Finance Minister stated that currency intervention in the shape of an Interest Rate cut by the Bank of Japan (BoJ) may be used to keep the Yen from excessive appreciation. The rate cut did in fact happen during this morning's early trading hours. The Japanese Interest Rate now sits at 0.10%, the lowest in the world. Some officials believed that the intervention was necessary considering the recent currency gains and the ongoing global recession which has driven global Interest Rates to new lows. Lowered international rates have consequently pushed the value of the Yen to levels which have damaged Japan's ability to export. Traders may expect a somewhat steady depreciation in the Yen during the coming trading hours in response to this rate cut. Oil Oil Prices Resume Sliding despite OPEC's Production Cut Oil prices have been on the fritz lately; inexplicably dropping in value after the Organization of Petroleum Exporting Countries (OPEC) announced its supply cut and then quickly rebounding during early trading hours the next day. More recently, the price of Crude Oil has resumed falling back towards $40 a barrel, dipping as low as $41.54 yesterday. Apparently, expectations are low for OPEC to actually follow through with its production cut. If the price of Crude Oil fails to stabilize, the Oil cartel has left the door open for future cuts as they are trying to maintain a price level of $70-80 a barrel; their next policy meeting is scheduled for March 15, 2009, in Vienna. However, OPEC has stated that another emergency session could be called earlier if prices fall below $30 a barrel before March. Technical News EUR/USD The pair is in the middle of a very strong bullish trend and is now traded around 1.4250. The daily slow stochastic is showing that there is still room to run and that 1.4670 is a very strong resistance. If the pair breaches the resistance level, we might see a stronger bullish move that might take the pair into the 1.4900 zone. A failure to breach might bring a moderate corrective move. GBP/USD The cable is still floating around the 1.5120 level and shows moderate bullish momentum. The daily chart it appears that the pair has made a slight bearish correction, however on the 4 hour chart the RSI and the Slow Stochastic oscillators are starting to show first signals of a moderate bullish momentum. It might be preferable to sell on highs today. USD/JPY After bottoming at 87.70 two days ago, the pair now shows local signs of a correction. The 4 hour chart is showing that the bullish move might not have enough steam in it, and that the bearish trend will probably resume before the weekend. Selling on highs might be a good strategy today. USD/CHF The pair has been quite choppy in the past two days yet no clear direction was seen. The daily chart is showing bullish signals as the 4 hour chart is still quite bearish. Traders advised to wait for a clearer signal on the hourlies before entering the market. The Wild Card EUR/GBP The pair is in the midst of a very strong bullish correction move, and seems to have more steam in it. The Slow Stochastic oscillator on the 1 hour chart is also providing bullish signal. This is a great opportunity for forex traders to join a very promising bullish correction. Labels: Forex Analysis, Forex Trend, Market Analysis, Market Trend, money trading |
Dec-19 market commentary and technical levels
Fri, 19th of December, 2008 EURUSD Outlook
EURUSD Daily Supports and Resistances:
GBPUSD Outlook
GBPUSD Daily Supports and Resistances:
USDJPY Outlook
USDJPY Daily Supports and Resistances:
USDCHF Outlook
USDCHF Daily Supports and Resistances:
Labels: Forex Analysis, Forex Trend, FX Instructor, Market Analysis, money trading, Moving Average |
Thursday, December 18, 2008
Dec-18 World Daily Markets Briefing
| by: ADVFN Newsdesk US Stocks at a Glance US STOCKS-Wall St edges up as jobless claims ease NEW YORK - Wall Street edged higher in opening trade on Thursday as data on the labor market came in roughly in line with expectations, lifting optimism about the state of the anemic economy, but more companies warned of a continuing difficult environment. Ingersoll Rand Co Ltd fell more than 2.5 percent after it lowered its fourth-quarter and full-year 2008 revenue and earnings estimates, citing weakness in Europe. The number of U.S. workers filing new claims for jobless benefits fell last week, Labor Department data showed, but despite the decline, claims remain exceptionally high and are more than 200,000 higher than a year ago.. The Dow Jones industrial average rose 51.69 points, or 0.59 percent, at 8,876.03. The Standard & Poor's 500 Index edged up 4.31 points, or 0.48 percent, at 908.73. The Nasdaq Composite Index was up 5.80 points, or 0.37 percent, at1,585.11. Forex FOREX-Euro surges broadly, hits 2-1/2 mth high vs dlr LONDON - The euro surged across the board on Thursday, buoyed by expectations that euro zone interest rates will not fall as steeply as those in other major economies despite data pointing to worsening German business sentiment. In thin volatile trade, the euro surged to a 2-1/2 month high against the dollar at $1.4719. By 1105 GMT, it was up 1.5 percent on the day at $1.4620. The single currency also hit a fresh record high against sterling at 95.04 pence, according to Reuters data. Against the yen, the euro was up 2.5 percent at 128.96, after hitting a session high of 131.04 yen as Japan's finance minister said currency intervention was an option available to authorities The euro has been on an upswing since the U.S. Federal Reserve cut rates -- a benchmark for the return on holding dollars -- to a historic low near zero on Tuesday and said it would take "all available tools" to help its economy. Meanwhile, speculation that UK interest rates could fall sharply were fuelled by Bank of England Deputy Governor Charles Bean, who said UK interest rates could fall to zero Minutes from the Dec. 3-4 rate-setting meeting showed policymakers had discussed cutting by a larger margin than the 100 basis point easing that took benchmark rates to 2 percent. That contrasts with recent comments by European Central Bank members, who seem to be cautious about drastically reducing rates, where key rates now stand at 2.5 percent. "The euro is picking up quite a lot of support -- the yield differentials have moved out and that may well be providing some support," said Ian Stannard, senior currency strategist at BNP Paribas. Rate spreads between the euro zone and other countries have widened sharply in recent days, reflecting expectations for interest rate differentials to widen. The implied euribor/short sterling rate spread widened as much as 15 basis points to 75 basis points, compared with around zero at the start of the month. The euro's rise accelerated despite a weaker-than-expected reading of the Ifo institute's index on German business sentiment. The headline index fell to 82.6 in December from 85.8 in November, below expectations of 84.0. "The Ifo confirms continued deterioration in the German economy but what is worrying is the pace of decline," said Audrey Childe-Freeman at Brown Brothers Harriman in London. Still, "the ECB is reluctant to bring interest rates to zero and wants to wait in January, after cutting rates sharply in the past few months," she said. Earlier this week, ECB President Jean-Claude Trichet said he was focused on ways to ensure its 175 basis points of rate cuts since early October were passed on to the real economy. The dollar rose 0.8 percent to 87.99 yen, but remained trapped near 87.11, the lowest in more than 13 years. Recent comments by Japanese officials have kept speculation intact that authorities may intervene to rein in the currency's rise. "You want to keep an eye on the yen with the MOF and finance ministry comments earlier in the day - that might be a catalyst to watch for euro/yen," said Jeremy Stretch, markets strategist at Rabobank in London. "Alternatively it could be a presumption that people are nervous and that is exacerbating volatility." Other traders said central bank bids were seen in euro/yen, but not related to currency intervention. The Fed's rate cut has raised pressure on the Bank of Japan to cut rates at a two-day meeting that ends on Friday. Two-thirds of economists polled by Reuters this week expect the Japanese central bank to cut rates from the current 0.3 percent. Europe News Energy, bank stocks lead European shares lower FRANKFURT - European shares were slightly down in choppy midday trade on Thursday with falls in blue chip energy and bank stocks outweighing the rises in drugmakers. At 1157 GMT, the pan-European FTSEurofirst 300 index of top European shares was down 0.2 percent at 827.10 points, having traded between 823.20 and 833.02. The index has fallen about 45 percent so far this year. Energy stocks led the fallers, taking the most points off the index, as oil CLc1 remained at less than $41 a barrel. BP, StatoilHydro, BG Group, and Royal Dutch Shell fell 1.2 percent to 3.6 percent. However, grim data about the euro economy appeared to be already factored into the market. Germany's Ifo business climate index deteriorated sharply in December, falling to 82.6 from 84.0 in November, the lowest pan-German figure since reunification in 1990. "It's not a new thing that little attention is being paid to big European economic indicators," said Joerg Rahn, senior economist at MM Warburg. "The markets are already looking ahead, one step further and special factors such as a year-end rally may play a role." In the UK, British retail sales rose unexpectedly in November, while public sector net borrowing rose to its highest monthly total since records began, the Office for National Statistics said. "The bigger picture is fundamentally disastrous," said Giuseppe-Guido Amato, investment analyst at Lang & Schwarz. "But the sentiment of the market participants is bad enough that I think we could very well see a rally based on hope." "What you need now is commodities and shares in companies that have a good debt position." Drugmakers added the most points to the index as investors turned to the relative safety of defensive stocks. GlaxoSmithKline, AstraZeneca and Sanofi-Aventis were up between 1.5 percent and 3.3 percent. The DJ Stoxx European healthcare index has been the best performer this year, falling 20 percent compared with a decline of more than 60 percent for banks and miners as a credit crisis shook investor confidence. Banks were lower with BNP Paribas retreating 7 percent after it said it could not proceed with Fortis stake acquisition as planned because of Brussels court decision. HSBC fell 6.1 percent, investors worried about likely dividend cuts and capital raising at the bank. Retail stocks were lower after French retail giant Carrefour fell 8 percent as it warned it expected sales growth of 6.5 percent in 2008 at constant exchange rates, down from a previous target of about 7 percent. The DJ Stoxx European retail sector index was 1.1 percent lower, with Metro and Marks & Spencer down 1.1 percent and 2.5 percent, respectively. Across Europe, the FTSE 100 index was up 0.1 percent, Germany's DAX was 0.9 percent higher and France's CAC 40 was down 0.7 percent. Asia Markets Nikkei edges up as banks jump, BOJ meeting eyed TOKYO - The Nikkei average edged up 0.6 percent on Thursday, as banks such as Sumitomo Mitsui Financial Group jumped on expectations the Bank of Japan will follow the Federal Reserve's move to cut interest rates to near zero. But gains were capped by persistent concerns over the auto sector amid the global economic downturn and rises in the yen versus the dollar. Honda Motor slid after cutting its profit forecasts in its third warning this year. Panasonic Corp dipped after Goldman Sachs agreed to the electronics giant's offer to buy its stake in Sanyo Electric Co Ltd, and Sanyo shares fell as the bid was below its share price and only slightly sweeter than one Goldman rejected earlier this month. "A rise in bank shares supported the overall market throughout the day as expectations for a BOJ rate cut mount," said Shinji Igarashi, an equity manager in the sales department at Chuo Securities. The benchmark Nikkei rose 54.71 points to 8,667.23, a one-week closing high. The broader Topix was little changed on the day at 838.69. The dollar rose 0.8 percent to 87.95 yen, but stayed in sight of 87.13 yen hit on Wednesday, the lowest since mid-1995, weighing on some exporters. "Exporters will continue to suffer unless the yen stops appreciating, especially against the dollar," said Yuuki Sakurai, a general manager of financial and investment planning at Fukoku Mutual Life Insurance. Exporters are feeling the pinch from the yen's surge as they had made projections for this business year based on the assumption that the dollar would move around 100 yen. A stronger yen erodes exporters' overseas profits when turned back into yen. Banks extended gains booked on Wednesday. Mitsubishi UFJ Financial Group, Japan's biggest bank, rose 4.4 percent to 542 yen. No. 2 Mizuho Financial Group soared 8.1 percent to 256,800 yen and No. 3 Sumitomo Mitsui Financial Group surged 8.5 percent to 384,000 yen. Panasonic slid 0.5 percent to 1,021 yen, while Sanyo shed 1.4 percent to 141 yen. Honda slid 3.5 percent to 1,825 yen after Japan's No. 2 automaker slashed its operating forecast by two-thirds as the global recession batters car sales and sends the yen soaring. Trade was light on the Tokyo exchange's first section, with 1.9 billion shares changing hands, compared with last week's daily average of 2.3 billion. Declining stocks outnumbered advancing ones, 969 to 646. Labels: Forex Analysis, Forex Trend, Market Analysis, Market Trend, money trading, Moving Average, World Market |