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Friday, January 30, 2009
Jan-30 market commentary and technical levels

Fri, 30th of January, 2009
By Setyo Wibowo (analyst@fxinstructor.com)

EURUSD Outlook
As I had expected, the EURUSD had a bearish momentum yesterday. The pair hit my short target at 1.2980 even further bottomed at 1.2932. We have a valid bearish channel on hourly chart. The bias remains bearish targeting 1.2750 area. CCI in oversold area and heading up on hourly chart so watch out for a potential minor upside pressure testing 1.3015 resistance area. CCI just cross -100 line down on daily chart suggesting a potential bearish scenario.

eurusdhourly9

EURUSD Daily Supports and Resistances:

  • S1= 1.2854
  • S2= 1.2770
  • S3= 1.2608
  • R1= 1.3100
  • R2= 1.3262
  • R3= 1.3346

GBPUSD Outlook
The GBPUSD attempted to push lower yesterday. The pair bottomed at 1.4072 (12 pips higher from my short target at 1.4060) before whipsawed to the upside, topped at 1.4409 and closed at 1.4285. On hourly chart we can see that after violation to the former bullish channel, the price attempted to move higher, but the trend line resistance still hold. The bias is neutral in nearest term. Break below 1.4200 area could trigger further bearish momentum testing 1.4000 key level . CCI in neutral area on daily chart.

gbpusdhourly9

GBPUSD Daily Supports and Resistances:

  • S1= 1.4101
  • S2= 1.3918
  • S3= 1.3764
  • R1= 1.4438
  • R2= 1.4592
  • R3= 1.4775

USDJPY Outlook
The USDJPY failed to continue it’s bullish scenario yesterday. The pair bottomed at 89.46 and closed at 90.03. We have a new bearish channel on hourly chart. The bias is bearish in nearest term targeting 88.90 area. Immediate resistance is seen at 90.05. CCI in neutral area on daily chart.

usdjpyhourly11

USDJPY Daily Supports and Resistances:

  • S1= 89.44
  • S2= 88.86
  • S3= 88.26
  • R1= 90.62
  • R2= 91.22
  • R3= 91.80

USDCHF Outlook
The USDCHF didn’t make a significant move yesterday. The pair attempted to push lower, bottomed at 1.1406 but closed higher at 1.1543. The bias is neutral in nearest term. We still have a bullish channel on hourly chart, but the trend line resistance still hold. A breakout from the trend line resistance could trigger further bullish momentum targeting 1.1650. CCI about to cross the 100 line up on daily chart suggesting a potential upside pressure.

usdchfhourly4

USDCHF Daily Supports and Resistances:

  • S1= 1.1439
  • S2= 1.1336
  • S3= 1.1266
  • R1= 1.1612
  • R2= 1.1682
  • R3= 1.1785
Jan-30 Daily Forex Analysis
by: Forexyard


Economic News

USD

Dollar Rises on Safe-Haven Status

The USD may further extend its gains against the EUR today; on speculation that growing evidence of a global slowdown will increase the appeal of the U.S currency to traders as a safe-haven. The Dollar closed at $1.2889 per EUR from $1.3120, rising over 230 pips, the biggest gain in three weeks. The Dollar was broadly supported on Thursday as risk aversion came to the fore and optimism rose over the latest U.S. monetary and fiscal stimulus measures, which pushed the U.S currency higher.

The greenback also advanced after the Federal Reserve made its announcement about buying Treasuries to help boost the U.S economy. On Wednesday the Fed kept Interest Rates near zero as widely expected, and said it was prepared to buy long-term Treasury debt if that would help improve credit conditions. Moreover, a separate report revealed sales of new U.S. homes plunged 14.2% last month to a record low, further dulling the appeal of higher-risk currencies and assets such as stocks and boosting safe-haven flows into the Dollar. Apparently, bleak U.S. economic data and falling share prices kept investors wary of risk, even as countries embraced further monetary and fiscal stimulus to boost their economic growth.

Against the JPY however, the dollar was down 0.7% at 89.73 Yen yesterday. The greenback's decline came as a result of the Federal Reserve unwillingness to provide more information about buying Treasuries, fueling speculation investors will favor Japan's currency over the USD. The Dollar and Yen have been viewed as safe-haven currencies amid the global financial crisis, and both of these currencies often fluctuate depending on perceived shifts in investors' tolerance for risk.


EUR

EUR Falls on Weak Economic Data

The European currency retreated from gains made earlier in the week against its major counterparts. Against the USD it was down about 2% at $1.2889, after hitting a session low of $1.2875, and versus the Japanese currency, the EUR was down over 2% at 115.18 Yen. The EUR currency slipped on comments by European Central Bank (ECB) President Jean-Claude Trichet, who said that the ECB could cut key Euro-Zone Interest Rates below the current 2%, in addition to more unconventional measures.

The weak economic figures which came out of the Euro-Zone reversed any significant gains that the EUR made against the Dollar in recent days. The underlining weakness in the European economy was data showing that German unemployment posted its biggest increase in nearly four years in January. In addition, the European Commission said its index of executive and consumer sentiment declined to a record in January. The index fell to 68.9, the lowest level since it was started in 1985. Analysts say that for many investors, the strategy appears to be simple: to avoid risk; which means funds are flowing out of the EUR and back into the Dollar and the Yen. The slowing economic growth of the Euro-Zone has prompted investors to repatriate funds from higher-yielding assets that might cause the EUR to decline further.

Looking ahead to today, there are 2 important economic data releases coming out of the Euro-Zone. The CPI Flash Estimate and the Unemployment Rate figures are set to be published at 10.00 GMT. If these figures are better than expected, then the EUR may reverse some of yesterday's declines. However, if the figures are in line with forecasts or worse, then the EUR may make additional losses today vs. the Dollar, Pound, and Yen. Forex traders are advised to pay attention to GDP figures coming from the U.S., and Consumer Confidence data coming from Britain later today, as this may determine the Euro's strength against the GBP and USD into the middle of next week.


JPY

Yen to Rise Further Due to Government Insufficiency

The Japanese Yen may rise further through the end of the country's fiscal year on March 31, as exporters buy the currency to hedge revenues, and money managers bring funds home amid the global slump. Analysts forecast that the market should expect even further Yen appreciation as the Japanese fiscal year comes to a close, as both corporate hedging and investor repatriation flows support the currency. The Japanese currency closed at 89.34 per Dollar from $89.68 yesterday. The Yen has gained 1% against the greenback this month, following a 23% rally last year. The JPY may continue to strengthen as investors unwind so-called carry trades, where they borrowed in the currency to invest in nations where benchmark Interest Rates exceeds Japan's 0.1%.

Recently, some important market players have called for more aggressive government measures to halt the Yen's rise. It's important to note that the strong Yen has significantly hits exporters profits. Even though the world is currently in a deep recession, it seems the Japanese government's policies are totally insufficient, according to many leading industrial leaders. Japan's Finance Ministry is unlikely to shield the country's exporters from a rising currency by ordering the Bank of Japan to intervene and sell the Yen. Some analysts predict that the structural Yen appreciation has yet to run its course as there remains scope for investors to unwind more carry trades, and they believe that JPY will appreciate further versus the USD, possibly to the 84 Yen within 3 months.


OIL

Crude Oil Floats on Weak U.S Economy and Strong Dollar

The Crude Oil prices failed to strengthen on Thursday, due to the release of another round of gloomy U.S. economic data, the world's top energy consumer. The failure of Oil to reverse recent losses was also owed to a strong U.S. Dollar in yesterday's trading. This came about largely due to reports showing U.S. unemployment rose to a record peak in mid-January, while new orders for long-lasting manufactured goods fell for a 5th month. The deepening U.S. economic recession has cut demand for fuel and contributed to the biggest 4-month buildup in U.S. crude stockpiles since 1990. Prices for Crude has dropped more than $100 since its peak last summer, ringing alarm bells for the Organization of Petroleum Exporting Countries (OPEC) nations dependent on Oil revenues. This has resulted in OPEC cutting output by 4.2 million barrels per day since September.

Crude Oil prices, however, were little changed yesterday, after settling at $41.56 a barrel. This was largely due to the fact that OPEC Secretary General Abdullah al-Badri said that the group would not hesitate to act again if the Oil price remained low, when speaking at the World Economic Forum in Davos, Switzerland. Oil producing nations are foresee that Oil will add to this weeks losses by the end of next weeks trading, as Thursday saw a potential U.S. Oil refiner strike and traders are speculating that a potential strike could affect supplies of refined products.


Technical News

EUR/USD
The price of this pair appears to be floating in the over-sold territory on the hourly chart's RSI indicating an upward correction might be imminent. The upward direction on the 4-hour chart's Momentum oscillator also supports this notion. Going long with tight stops might be the right choice today.


GBP/USD
The typical range trading on the 4 hour chart continues. Both the hourly RSI and Slow Stochastic are floating in neutral territory. However, there is a fresh bearish cross forming on the daily chart's Slow Stochastic indicating a bearish correction might take place in the nearest future. In that case traders are advised to swing in after the breach takes place.


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 daily chart is showing mixed signals with its Slow Stochastic fluctuating at the neutral territory. However, the Hourly Chart's RSI is already floating in the overbought territory indicating that a bearish correction might take place in the nearest future. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

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Thursday, January 29, 2009
Jan-29 Daily Forex Analysis
by: Forexyard


Economic News

USD

Dollar Strengthened by Fed's Statements

Yesterday's trading was highlighted by the Dollar's rally across the board after the release of the Federal Reserve's statement on Wednesday afternoon during the New York trading session. The greenback jumped against the EUR with the pair plunging below a significant support level of 1.3100. The Dollar also reversed most of its downward momentum against the Pound, closing the day at 1.4155. Against the Japanese Yen, the Dollar rose from 89.22 to end the day at 89.68.

The Dollar began the day in the red as traders feared the Fed may take up more unconventional methods of battling the U.S. economy's downturn. It was suspected that the Fed would buy long-term Treasury bonds in order to help lower U.S mortgage rates. There were also rumors in the market that the Fed would undertake efforts to prevent deflation from occurring. Traders have a negative view of these tactics as a rise in inflation would significantly hurt the Dollar's purchasing power.

Other traders have also taken the view that the Fed has been very aggressive in tackling the economic crisis in the U.S. The Federal Reserve was out in front of its European and British counterparts, slashing interest rates and aggressively adding bad banking assets to its balance sheet to support the U.S. banking industry. This has helped to create positive momentum for the Dollar.

Today's trading of the USD will focus on two pieces of fundamental data. Due to be released today is the core durable goods orders and new unemployment claims. Both indicators are expected to show sharp declines. This may hurt the Dollar in the short term, perhaps sending the EUR/USD higher to the 1.3200 mark by day's end.


EUR

Interest Rate Speculation Provides a Temporary Boost to the EUR

The EUR experienced high volatility in the wake of a speech by European Central Bank (ECB) President Jean-Claude Trichet. During a speech at the World Economic Forum (WEF) in Davos Switzerland, Trichet hinted that the ECB may hold interest rates steady for their upcoming policy meeting scheduled for Feb 5th.

The ECB has repeatedly reduced European interest rates in light of the economic recession in the Euro-Zone economy. Currently the Minimum Bid Rate stands at a record low 2.00%. Market analysts have forecast a rate cut of 0.50% during the ECB's next meeting. ECB board members must now balance the ability to ease monetary policy to fight the economic downturn in the Euro-Zone, while avoiding cutting rates too much too quickly. Policy-makers fear that a sharp drop in interest rates could lead to future inflationary pressures.

A report released today by the International Monetary Fund (IMF) was an updated economic forecast for the Euro-Zone economy. The IMF slashed its growth rate projection from a decline of 0.50% to a much larger contraction of 2.00%.

The Euro-Zone economy appears to be deteriorating faster then previously thought. But policy-makers may be sending mixed signals to the market. The ECB has not kept up with the Bank of England or the Federal Reserve in its mission to stem the tide of the economic downturn. Perhaps more aggressive moves are needed by the ECB. Then we may see some appreciation in the EUR.


JPY

Strengthening USD Puts Downward Pressure on the Yen

The USD/JPY was driven higher today on the Fed's comments and an increase in risk appetite. Fueling the appreciation of the Dollar was a rise in the Dow Jones Industrial Average. When U.S. equity markets rise, this pair tends to rise as well. Also fueling an increased risk appetite was the passage of Barack Obama's economic bailout plan by the U.S. House of Representatives. These factors helped to rally the USD/JPY to end the day at 89.68. The pair now stands at a one-week high.

The Yen is largely seen as a safe haven currency to be used during times of financial distress. As traders grow more comfortable taking on further risk, they will abandon their positions in the Yen for the USD and higher yielding currencies. Risk sentiment appears to be improving as the Federal Reserve and the Obama administration are teaming up to restore confidence and future prospects for a stable economic recovery. This may boost the USD/JPY in the near term and we may see the pair rise to the 91.00 level.


Oil

Crude Supplies Drop the Price of Oil

The price of Crude Oil dropped yesterday as U.S. Crude Oil Inventories were reported to be almost 2.5 times higher than forecasted. This helped to lower the price of Oil to end the day down at $41.51, though the drop in price was less significant than yesterday's plunge.

The rising inventories are an example of what is occurring in the market for Crude Oil. There is currently a glut of supply with wavering demand. Oil refineries have not cut production enough to arrive at equilibrium with demand. These market forces will settle once a return of confidence is seen in the global economy. Traders may look for further easing of the price of Crude Oil as the $40 mark could be in sight once again.


Technical News

EUR/USD
After witnessing a significant drop yesterday, this pair appears to have found a short-term equilibrium. The oscillators on all charts are indicating a lack of direction for this pair with the only useful information being given by the weekly chart's Momentum oscillator which shows that the downward movement may continue. Waiting for a clearer signal might be the right strategy today.


GBP/USD
It appears that the price is currently floating in the over-sold territory on the hourly chart's RSI indicating an upward correction may occur in the very near future. The price of this pair is also located near the lower border of the hourly chart's Bollinger Bands, which lends support to the notion of an imminent upward correction. Going long with tight stops might be the right choice today.


USD/JPY
The Slow Stochastic on the 4-hour chart is showing a bearish cross has just occurred and is pushing the pair further down. The weekly chart's Momentum oscillator also indicates a continuation of the downward movement. On the contrary, the hourly chart's Slow Stochastic may be forming a bullish cross in the near future, signaling the downward movement may witness an upward correction within a short time frame. Going long with tight stops might be a good strategy for the short-term today.


USD/CHF
The price of this pair appears to be floating in the over-bought territory on the 4-hour chart's RSI indicating a downward correction may be imminent. A bearish cross forming on the 4-hour chart's Slow Stochastic supports this notion. Going short might be the right choice today.


The Wild Card

Gold
The price of this commodity appears to be hovering near the over-sold territory on the hourly and 4-hour charts' RSI, signaling an upward correction may occur soon. The imminent bullish cross on the 4-hour chart's Slow Stochastic adds weight to this notion, while the weekly chart's Momentum oscillator also shows sharp upward pressure. As this commodity continues to surge upwards, forex traders have the potential to join the upswings by entering early at great prices and capturing their profits.

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Jan-29 market commentary and technical levels

Thu, 29th of January, 2009
By Setyo Wibowo (analyst@fxinstructor.com)

EURUSD Outlook
The EURUSD failed to continue it’s bullish correction scenario yesterday. The pair attempted to push higher, topped at 1.3326 but further bullish momentum was rejected as the pair closed lower at 1.3152. On hourly chart we have a double top formation and the bullish channel has been violated to the downside. The bias is bearish in nearest term targeting 1.2980. CCI in oversold area and heading up on hourly chart suggesting a potential upside pressure testing 1.3188 and 1.3240 resistance area.

eurusdhourly8

EURUSD Daily Supports and Resistances:

  • S1= 1.3060
  • S2= 1.2969
  • S3= 1.2836
  • R1= 1.3284
  • R2= 1.3417
  • R3= 1.3508

GBPUSD Outlook
The GBPUSD had moderate bullish momentum yesterday. The pair topped at 1.4374 but closed lower at 1.4245. Technically on 4h chart the price failed to break the trend line resistance and go lower. At the same time, CCI just cross the 100 line down suggesting a potential bearish scenario. The bias is bearish in nearest term targeting 1.4060. Immediate resistance is seen at 1.4280 area.

gbpusd4hchart4

GBPUSD Daily Supports and Resistances:

  • S1= 1.4121
  • S2= 1.3997
  • S3= 1.3871
  • R1= 1.4371
  • R2= 1.4497
  • R3= 1.4621

USDJPY Outlook
After breakout from rectangle area (of 90.20 – 88.20), the USDJPY had a bullish momentum. The pair topped at 90.74 and closed at 90.40. The bias is bullish in nearest term targeting 91.30 area. CCI in overbought area and heading down so watch out for a potential minor downside pressure testing 90.00-20 area.

usdjpy4hchart6

USDJPY Daily Supports and Resistances:

  • S1= 89.26
  • S2= 88.13
  • S3= 87.39
  • R1= 91.13
  • R2= 91.87
  • R3= 93.00

USDCHF Outlook
After breakout the rectangle formation (of 1.1430 – 1.1330) on hourly chart, yesterday the USDCHF had a bullish momentum. The pair topped at 1.1564 and closed at 1.1526. The bias is bullish in nearest term targeting 1.1650. CCI in overbought area and heading down on hourly chart so watch out for a potential minor downside pressure testing 1.1474 – 1.1510 area.

usdchfhourly3

USDCHF Daily Supports and Resistances:

  • S1= 1.1382
  • S2= 1.1238
  • S3= 1.1147
  • R1= 1.1617
  • R2= 1.1708
  • R3= 1.1852

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Wednesday, January 28, 2009
Jan-28 World Daily Markets Briefing
by: ADVFN Newsdesk


US Stocks at a Glance

US Stocks Open Higher As Banks Rally

Stocks are opening higher led by bank stocks reacting to a report the Obama administration is near a deal to buy illiquid or bad assets from banking firms. Bank of America is up 20%, Citigroup up 21% and Wells Fargo jumps 19%. The DJIA is up more than 100 points.

Reported Earlier:

US Futures Higher, Driven By Banks

U.S. stock futures pointed to a strong start for Wall Street on Wednesday led by financials after a report the Obama administration is nearing a deal to buy illiquid or bad assets from banking firms, while markets were also focused on a Federal Reserve meeting.

Financial stocks were up across Europe as well as a result.

S&P 500 futures (SPY) rose 22 points to 861.20 and Nasdaq 100 futures (QQQQ) added 28.25 points to 1,214.00. Dow industrial futures (DIA) added 149 points.

U.S. markets closed higher on Tuesday, wading through a heavy schedule of earnings results and taking cheer from a surprisingly positive report on the housing market. The Dow Jones Industrial Average rose 58.7 points, the S&P 500 rose 9.14 points and the Nasdaq Composite added 15.44 points.

But banks took the stage after the close of trade Tuesday, CNBC reported that Obama was nearing a "bad bank" plan and Bloomberg News reported on Wednesday that the Federal Deposit Insurance Corp. may manage the plan. Some estimates are that the government could take on $1 trillion of bad assets.

Traders sold the dollar and the yen on reports of the plan, and also left the safe haven of gold, where futures tumbled $13 to $886.50 an ounce.

Citigroup (C) surged 21% in pre-open deals and Bank of America (BAC) rose 19%. Wells Fargo (WFC), which reported a $2.55 billion quarterly loss and said Wachovia's quarterly loss was over $11 billion, rose more than 15% in pre-market trade. Wells Fargo is maintaining a 34 cents a share dividend.

Barclays (BCS) was one of several European lenders to advance, with the U.K. bank rallying 21% in pre-market trade. The pan-European Dow Jones Stoxx 600 advanced 2.1%.

Asia shares were trading higher with indexes in South Korea and Singapore posting catch-up gains after a long holiday break.

Another focus for U.S. markets Wednesday will be the U.S. Federal Reserve meeting, with a statement due at 2:15 p.m. Eastern. Some economists are calling for the Fed to push the Federal funds rate -- already effectively at zero -- deeper into negative territory. They want the Fed to demonstrate it's pulling out all the stops on the economy.

"The Fed's job is going to be to convince markets and the broader public that they can still support the economy .. even with the funds rate at zero," said Al Broaddus, the former president of the Richmond Fed, in a television interview.

Elsewhere, General Electric (GE) was flat as Moody's Investors Service moved a step closer to downgrading its Triple-A credit rating, which is vital for the group's financial arm.

Of high-profile earnings, Boeing (BA) swung to a $56 million loss after a strike, while AT&T's (T) profit dropped 23% to edge just under analyst estimates. Legg Mason (LM) shares dropped 20% after reporting a $1.4 billion loss.

At 10:30 a.m. Eastern, weekly energy inventories will be released. Crude-oil futures slipped 20 cents a barrel. Among the companies expected to see active trading in Wednesday's session are Yahoo Inc. (YHOO), Sun Microsystems Inc. (JAVA) and Wells Fargo & Co. (WFC).

Yahoo rose 6.1% to $12.03 in premarket trading after the Internet giant said cost cuts enabled it to post better-than-expected fourth-quarter pro-forma earnings on revenue in line with reduced Street expectations. The company's first-quarter revenue guidance of $1.53 billion to $1.73 billion was in line with analysts' estimates.

Money-losing Sun Micro swung to a fiscal second-quarter loss on $222 million in restructuring charges and sagging sales. But Sun's numbers topped Wall Street's low expectations for the long-struggling company, and showed rapid growth in sales of some hardware and software products. Shares rose 8.8% to $4.34 premarket.

Wells Fargo & Co. (WFC), which reported a $2.55 billion quarterly loss and said Wachovia's quarterly loss was over $11 billion, rose 21% to $19.55 in premarket trading. The bank is maintaining its 34-cent dividend.

Legg Mason Inc. (LM) swung to a fiscal third-quarter net loss on more than $2.3 billion in charges as the money manager reduced its exposure to structured investment vehicles and acted to support its money market funds. The company also announced plans for a "major reorganization" of its U.S. mutual fund portfolio, saying it will examine liquidating certain products. Shares dropped 16% to $16.25.

Moody's Investors Service said it was reviewing for possible downgrade the coveted long-term AAA credit rating on General Electric Co. (GE) after the conglomerate's fourth-quarter loss on concerns about the strength of GE Capital. GE responded, saying it hopes to work with Moody's to maintain its rating and reiterating that it has adequate liquidity and is working to strengthen it. Shares fell after-hours but gained 1.5% to $13.25 in premarket trading.

E*Trade Financial Corp.'s (ETFC) fourth-quarter net loss narrowed as the lender and online broker shrank its bank-loan portfolio during the period, but delinquent loans and charge-offs continued to rise amid a drop in deposits. Shares jumped 13% to $1.24 premarket.

Emulex Corp.'s (ELX) shares fell 3.2% to $6.76 in late trading after the company's second-quarter results came in below analysts' expectations. It also forecast third-quarter results below the Street's view.

Gilead Sciences Inc. (GILD) reported its fourth-quarter net income leaped 42% as the biopharmaceutical company managed once again to top Wall Street's expectations. Its HIV treatments continued to show resistance to the downturn in broader spending. Shares fell 2.8% to $46.90 in late trading as the company's revenue came in slightly below analysts' estimates.

Several banks were among the highest gainers in premarket trading amid reports President Obama was nearing a "bad bank" plan. Some estimates are that the government could take on $1 trillion of bad assets. Citigroup Inc. (C) and Bank of America Corp. (BAC) traded higher, up 23% to $4.35 and 19% to $7.73, respectively. U.K. banks Barclays PLC (BCS), Lloyds Banking Group PLC (LYG) and Royal Bank of Scotland Group PLC (RBS) jumped as some traders returned to the companies on the belief the U.K. government won't fully nationalize them. Barclays rose 21% to $6.28, Lloyds gained 41% to $5.40 and RBS soared 23% to $5.45 premarket.

Watch List:

DeVry Inc.'s (DV) fiscal second-quarter net income grew 20% on strong enrollment growth. Stryker Corp.'s (SYK) fourth-quarter net income rose 0.6% as the company faced headwinds from a slowdown in hospital spending and the stronger dollar.

Norfolk Southern Corp. (NSC) posted a 13% increase in fourth-quarter net income as growth in coal-shipping revenue offset smaller losses in the intermodal and general merchandise segments. C.H. Robinson Worldwide Inc.'s (CHRW) fourth-quarter net income rose 4.3% on a jump in margins. Earnings grew in most of the company's segments.

Altera Corp.'s (ALTR) fourth-quarter net income climbed 27% as cost-cutting more than offset a decline in sales, but the chip maker forecast first-quarter revenue below Wall Street's expectations.


Forex

FOREX-Yen, dollar in retreat as focus turns to Fed

LONDON - The dollar and yen fell broadly on Wednesday, with rallying world share prices reflecting a cooling of risk aversion as investors turned their attention to the U.S. Federal Reserve's policy meeting later in the day.

Positive earnings on Wall Street the previous day helped to drive up European and Asian shares, while a key U.S. Senate panel expanded a proposed economic stimulus package to about $887 billion on Tuesday.

The euro found support as consumers in France and Germany showed surprising resilience to widespread business pain with confidence indicators bucking dire expectations.

Although U.S. policymakers seem to have run out of interest rate ammunition with the benchmark rate already targeted at zero to 0.25 percent markets will be looking for any announcement of new policy measures, such as purchasing long-dated Treasuries.

Such a move would lower borrowing rates, seen as vital to stabilising the recession-hit U.S. economy. "Everyone is quite rightly expecting something -- especially as the Treasury started talking about buying purchasing mortgage backed securities, which they already started doing, and evaluating the merits of buying Treasuries," said Chris Turner, head of FX research at ING in London. "Maybe they have to show more details -- they can't just say they are still evaluating," he added.

Turner also said that markets would be expecting more from new Treasury Secretary Timothy Geithner on the proposed stimulus package and talk that the U.S. will set up a "bad bank" to mop up toxic assets. By 1210 GMT the euro was up 0.7 percent against the dollar at $1.3273 and 1.1 percent versus the yen at 118.52 yen. The dollar gained 0.3 percent to 89.25 yen.

The pound bounced after its slump to a 23-year low last week, hitting a one-week high of around $1.4325. The euro lost 0.4 percent against sterling to 92.77 pence.

Mirroring ebbing risk aversion, world stocks rose 0.9 percent on the day.

Investors were taking heart from positive signs on U.S. President Barack Obama's planned stimulus plan to stem the recession in the U.S., with Democrats hopeful they have enough votes to push it through.

But analysts warned that the global economic outlook remained bleak and that slightly more positive sentiment seen this week could quickly turn.

"Global growth and demand are still the key and confidence is shot," IDEAGlobal strategist Maurice Pomery said in a note to clients. "The bigger themes remain and I still believe the dollar will do well and yen strength with continue".

The International Monetary Fund (IMF) is due to release revised forecasts later in the day, and a Group of 20 finance official told Reuters on Monday the fund would slash its projection for 2009 global growth to 0.5 percent from 2.2 percent in its last economic outlook in November.

The Swiss franc fell to its lowest level so far this year against the euro after the key KOF economic barometer on Switzerland fell to its lowest since the series began in 1991. The euro hit its highest since late December at 1.5156 Swiss francs.

Meanwhile, data out of Australia overnight showed consumer prices fell by their biggest amount in a decade during the fourth quarter, justifying talk of another aggressive interest rate cut next week. The Australian dollar initially dipped after the data, but the higher-yielding currency later recovered, helped by the pick-up in equities. It was last trading up 1 percent at $0.6691 versus the U.S. dollar.

The New Zealand dollar fell, however, ahead of a Reserve Bank of New Zealand rate decision overnight, where analysts expect a large rate cut, possibly of 100 basis points, from the current level of 5.00 percent.
The currency was last quoted at $0.5298 versus its U.S. counterpart.


Europe Shares

European Shares Climb On Hopes For Banks

European stocks advanced on Wednesday, with advancers far outnumbering decliners as banks grew on hopes that bad assets would be taken off the books of U.S. peers and that European governments wouldn't nationalize them.

The pan-European Dow Jones Stoxx 600 climbed 1.6% to 191.22, with most sector indexes advancing.

Banks were particularly strong, with Lloyds Banking Group (LYG) advancing 40%, Deutsche Bank (DB) adding 13.6% and BNP Paribas rising 11.9%.

The gains came as Bloomberg News reported that the Federal Deposit Insurance Corp. may manage the so-called bad bank that the Obama administration is likely to set up. A bad bank would absorb the troubled assets from banks' balance sheets.

It also comes as nationalization fears receded. "I think what we are seeing is a retreat of the nationalization fears which gripped markets last week, people are buying into what they see as opportunity," said Patrick Gordon, a market strategist at the U.K. brokerage Killik & Co.

By region, the U.K. FTSE 100 rose 1.7% to 4,265.80, the German DAX 30 added 2.7% to 4,441.09 and the French CAC 40 climbed 2.4% to 3,023.96.

SAP (SAP), which reported a 13% profit rise on in-line license sales growth, said it would cut 3,000 jobs. Shares of the Oracle rival climbed 6%.

Microchip maker STMicroelectronics (STM), which reported a $366 million loss, said it would cut 4,500 jobs. Shares of the Texas Instruments rival slipped 0.1%.

"It will be crucial for ST how fast the company will be able to reduce its high operating expenses following the recent acquisitions," analysts at UniCredit said in a note to clients.

Novartis (NVS) shares fell 3.3% as the group's operating profit didn't rise as fast as analysts forecast. Novartis also pushed back its plan to submit a vaccine for approval.

"What is concerning about Novartis growth is that it mostly stems from older products that will soon lose patent protection," said analysts from Swiss brokerage Sarasin.

Tate & Lyle shares dropped 4.5% as results for the year to March 31 will be at the lower end of market expectations, which the company blamed on its U.S. ingredients arm and to a lesser extent on ethanol demand.

Rio Tinto (RTP) dropped 6.2% as the miner admitted it may sell shares to help cut its debt by $10 billion.


Asia Markets

Asian Shares End Up;Chip Stks Lift Kospi 5.9%; Nikkei Higher

Asia shares ended mostly higher Wednesday, with indexes in South Korea and Singapore posting large catch-up gains after an extended holiday break.

Tokyo and Sydney were also higher, as semiconductor makers, banks and mining companies benefited from some improvement in investor sentiment. But the markets' gains trailed Tuesday's strong performance in Tokyo, Sydney and Mumbai.

Trading volume in the region was light, with markets in China, Hong Kong and Taiwan still shut for the extended Chinese New Year break.

Japan's Nikkei 225 ended 45.22 points higher, or 0.6%, to 8106.29, building on Tuesday's 4.9% rally. Turnover was moderate at just over 1.9 billion shares.

South Korea's Composite index jumped 5.9% to 1157.98, while Singapore's Straits Times Index surged 4.8% to 1766.08. Wednesday's session was the first day of trade for both markets since Friday.

Sydney's S&P/ASX 200 index closed up 51.5 points, or 1.5%, at 3495.50, easing back slightly after hitting a five-day high of 3505.9. New Zealand's NZX-50 was up 0.4% at 2747.90, India's Sensex added 2.8% to 9257.47 and Malaysia's Composite was up 0.8% at 879.63.

Thailand turned higher to add 0.8%, but shares in the Philippines were down 0.6% while those in Indonesia fell 1.1%.

Investors were awaiting the outcome later Wednesday in the U.S. of a meeting of the Federal Open Market Committee. Economists weren't expecting a change in interest rates, though the post-meeting statement would be closely watched for any comments on the U.S. economic outlook, or any indication the Fed would buy long-term Treasurys.

For now, despite gains over the past two days, investors remained cautious and some analysts suggested caution. "We believe any gains will likely be capped given the rising global job cuts," said Westcomb research head Goh Mou Lih in Singapore. "We would advise investors to sell into strength."

South Korean markets were led by chip stocks as investors there had their first chance to react to Friday's news that German memory chip maker Qimonda had filed for insolvency as the global slump in memory chip prices scuppered a bailout plan.

Investors viewed this as likely to reduce oversupply and bid up shares in the sector, though analysts at UBS said "we believe stability in demand is a prerequisite to an industry recovery."

Samsung Electronics gained 10.5% and Hynix Semiconductor had risen by its daily limit of 15%. In Japan, Tokyo Electron was up 7.9%. Shares of Advantest were 5% higher ahead of its earnings release. After the market close the maker of testing equipment for use in the semiconductor industry said it posted quarterly loss of $87.5 million.

Financial stocks gained in Tokyo with hopes for U.S. action to support its banking sector and thus inject confidence into global markets. Sumitomo Mitsui Financial Group was up 1.2% and Mitsubishi UFJ Financial Group ended 1.2% higher.

But Sumitomo Mitsui said after the close of trading that its net income in the April-to-December period tumbled 74% because of losses from equity holdings and higher credit costs. Also, Nomura Holdings fell 2.2 % after saying Tuesday it lost nearly $3.8 billion in the quarter ended December, partially due to losses from Icelandic investments and financier Bernard Madoff's alleged Ponzi scheme as well as weak financial markets.

Car makers were largely flat in Tokyo after some recent gains, with Toyota Motor ending little changed at 2,980.00 yen.

In Sydney, bank and mining shares were mostly higher. Westpac rose 5.2% and ANZ up 3.9%. Lihir Gold gained 4% after its fourth quarter report surpassed market expectations.

But mining giant Rio Tinto fell 3.9% after it said it wouldn't rule out a potential equity issue to help pay down its debt. Property company Westfield Group shares fell 1% after it warned its 2009 earnings were likely to be flat at best amid deteriorating retail conditions in many of its key markets.

And building products maker Boral dropped 15% after it slashed its annual earnings guidance 40%, pointing to worsening housing market conditions in the U.S., Australia and Asia. That weighed on its peers with James Hardie Industries down 6.6%.

Australia stocks were also boosted by expectations the Reserve Bank of Australia will further loosen money policy next week after data Wednesday showed consumer prices dipped 0.3% in the fourth quarter, marking the first deflation two years.

"It looks like they are headed for their first recession in 18 years. They are clearly feeling the drag from lower global export demand," said David Cohen, director of Asian forecasting at Action Economics in Singapore, referring to the Australian economy.

In currency markets, the dollar remained weaker against the euro, with the shared currency fetching around $1.32, and moved further south against the yen to around 89.23 yen. Other Asian currencies were mostly higher.

Spot gold was down $1.90 at $895.800 a troy ounce from New York levels. March Nymex crude oil futures gained 33 cents to $41.91 a barrel on the Globex platform, after sliding $4.15, or 9.1%, in New York.

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Jan-28 Daily Forex Analysis
by: Forexyard


Economic News

USD

Will U.S. Interest Rates Hit Zero Today?

The Dollar was little changed against most of its major counterparts during yesterday's trading session. As traders awaited the end of a Federal Reserve meeting in which the central bank may announce new efforts to thaw frozen credit markets, the USD began to stabilize, ending yesterday at 1.3262 against the EUR and 1.4255 against the Pound.

The most influential economic data coming from the U.S. yesterday was the consumer confidence report. The impact of the financial crisis over the last several months has clearly taken a toll on consumers' confidence. In assessing current conditions, consumers rated the labor market and business conditions much less favorably. President Barack Obama is trying to drum up support for quick passage of a stimulus plan that aims to create jobs, cut taxes and boost infrastructure spending.

Looking ahead, consumers are extremely pessimistic, and a significantly larger proportion than last month foresees business and labor market conditions worsening. Investors put aside any fears they may have of a deep worldwide recession even after U.S. consumer confidence fell to an all-time low in January.

As for today, a few indicators are expected from the U.S. economy. These figures are expected to set the tone for the USD's pairs and crosses. Special attention should be given to the U.S. Federal Reserve's meeting on short-term interest rates. Traders pay close attention to this figure as it has a strong correlation with the value of the U.S. Dollar. If rates are cut, an increase in the amount of USD in circulation will weaken the Dollar. If rates are increased, the exact opposite happens. Dollars are taken out of the economy to help contain inflation and strengthen the value of the USD.


EUR

EUR Leveling-Off from Unexpected Confidence Boost

The EUR saw very little change in its overall value against the other currencies yesterday, as it continues with its recent downward trend. Overall there seemed to be a lack of impactful data releases coming out of the Euro-Zone compared to the average week. Despite the fact that most important economic indicators came out slightly better than forecasted, especially the German Ifo Business Climate report, the EUR continued to fall from the economic weakness and recession. The EUR ended up around the 1.3260 price level against the USD yesterday, and lost ground to the GBP to close at 0.9302.

German corporate sentiment unexpectedly rose for the first time in eight months in January, suggesting interest rate cuts and billions of EUR in fiscal stimulus are boosting recovery hopes in Europe's largest economy. Moreover, an improved business climate in Europe's biggest economy is a very important factor for the EUR.

Today, the most important economic news event coming out of the Euro-Zone is the GfK German Consumer Climate release at 7:00 GMT. If the release is higher than the 2.0% forecast, a bullish correction in the EUR may occur. On the other hand, if the results are the same, or less than forecasted, this is likely to lead to an even more bearish EUR versus its major currency rivals. Traders are also advised to pay close attention to the U.S. Federal Reserve, which is due to release its decision on short-term interest rates at 19:15 GMT.


JPY

JPY Value Relatively Flat Recently

The Yen completed yesterday's trading session with mixed results versus the other major currencies. The JPY was broadly unchanged versus the EUR and USD yesterday and closed its trading session at around 118.30 and 89.30 respectively. The JPY also saw bearishness against the GBP as the pair jumped around 100 pips and closed at 126.80.

The low Japanese interest rate helped hold the value of the JPY lower than other currencies as traders used the JPY to fund the purchase of higher yielding assets. However, with global interest rates being slashed, the value of these carry trades have declined and traders have been unfolding them in exchange for more safe-haven investments.

As for today, the only indicator being released is the Japanese Retail Sales report. Analysts forecast the figure to decrease from its previous reading. This indicator typically generates small amounts of volatility. However, the USD appears to be clutching the reins of today's market. Traders would be wise to note the Dollar's future direction as it usually carries a heavy impact on the other currencies.


Oil

Another Day of Falling Crude Oil Prices

Crude Oil prices fell more than $4 a barrel, the most drop in three weeks, as U.S. consumer confidence and home prices tumbled; signs that the recession in the biggest oil consuming country may be deepening. Oil declined around 9.5% today after reports showed that consumer confidence sank to the lowest level on record in January as home values dropped and unemployment appears to be climbing.

Traders should be eyeing news of key U.S. economic indicators, including a government report on Crude Oil Inventories due today. Moreover, worries that weakened international economic growth will depress Oil demand remains a key dampening influence on Oil prices. If the global economic condition deteriorates more aggressively, Crude Oil prices may extend their decline.


Technical News

EUR/USD
After last week's volatility, this week appears to be mild by comparison. This week's gentle uptrend for this pair has the price floating in the over-bought territory on the 4-hour chart's RSI, indicates that a downward correction may occur soon. The imminent bearish cross on the hourly chart's Slow Stochastic supports this notion as well. Going short with tight stops might be a wise choice today.


GBP/USD
There appears to be a bearish cross forming on the hourly chart's Slow Stochastic, signaling downward pressure on this pair. The 4-hour chart's RSI also shows the price floating in the over-bought territory, and the weekly chart's Momentum oscillator is pointing down. Going short might be the right choice for today.


USD/JPY
The pair continues to trade in a rather stable wide range without giving any indication of direction. The RSI on every chart shows the price floating in neutral territory and this pair appears to be floating near the midline of the Bollinger Bands on all charts as well. However, the weekly chart's Momentum oscillator still shows steep downward pressure. Traders are advised to wait for clearer indications on the hourly level before joining the trade.


USD/CHF
The price of this pair appears to be floating in the over-sold territory on the 4-hour chart's RSI indicating an upward correction may be imminent. The upward direction on the weekly chart's Momentum oscillator also supports this notion. Going long with tight stops might be the right choice today.


The Wild Card

Oil
The price of this commodity appears to be floating in the over-sold territory on the hourly chart's RSI, signaling an imminent upward correction. The recent bullish cross on the 4-hour chart's Slow Stochastic adds weight to this notion, while the weekly chart's Momentum oscillator continues to show upward pressure. After yesterday's price drop, this commodity appears poised for an upward correction. Forex traders can benefit from this imminent upward movement by setting buy positions at the current price.

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Jan-28 market commentary and technical levels

Wed, 28th of January, 2009
By Setyo Wibowo (analyst@fxinstructor.com)

EURUSD Outlook
The EURUSD didn’t make a significant movement yesterday. The pair attempted to push higher, topped at 1.3328 but further bullish momentum was rejected as the pair closed lower at 1.3183. The bias is neutral in nearest term. On hourly chart we can see that the pair is moving in rectangle area of 1.3328 – 1.3136 indicating that the pair is in consolidation phase after some bullish correction momentum. A break from the rectangle formation should give us a clearer direction. A breakout from the rectangle could be a sign of the bullish correction continuation towards 1.3500 area. Be patient at this phase. Former trend line resistance is now have to do a new task as a support. Initial support is seen at 1.3050 – 1.3100 area. CCI in neutral area on both hourly and daily chart.

eurusdhourly7

EURUSD Daily Supports and Resistances:

  • S1= 1.3103
  • S2= 1.3023
  • S3= 1.2911
  • R1= 1.3295
  • R2= 1.3407
  • R3= 1.3487

GBPUSD Outlook
The GBPUSD had a bullish momentum yesterday. The pair topped at 1.4240 but closed lower at 1.4156. We still have bullish channel on hourly chart, but at the same time a rectangle formation, indicating a consolidation phase. The bias is neutral in nearest term but bullish correction scenario still intact. A break from the rectangle formation should give us a clearer direction. CCI in overbought area and heading down on 4h chart suggesting a potential downside pressure.

gbpusdhourly8

GBPUSD Daily Supports and Resistances:

  • S1= 1.3976
  • S2= 1.3796
  • S3= 1.3664
  • R1= 1.4288
  • R2= 1.4420
  • R3= 1.4600

USDJPY Outlook
The USDJPY failed to continue it’s bullish momentum yesterday. The pair made an indecisive movement by opened and closed at almost the same price (89.06 and 89.12). On 4h chart we can see that the pair is trapped in rectangle formation between 90.20 – 88.20 area since January 21. Former trend line resistance is now become an important support. The bias is neutral in nearest/medium term. Immediate support is seen at 88.50. Initial resistance at 89.50.

usdjpy4hchart5

USDJPY Daily Supports and Resistances:

  • S1= 88.63
  • S2= 88.14
  • S3= 87.43
  • R1= 89.83
  • R2= 90.54
  • R3= 91.03

USDCHF Outlook
After corrected lower on Monday, yesterday the USDCHF made a moderate bullish movement. On hourly chart we can see that after had a bearish correction momentum, the pair is now trapped in rectangle formation (of 1.1430 – 1.1330) indicating a consolidation phase. The bias is neutral in nearest term. A break from the rectangle formation should give us a clearer direction. CCI in neutral area on daily chart.

usdchfhourly2

USDCHF Daily Supports and Resistances:

  • S1= 1.1340
  • S2= 1.1267
  • S3= 1.1221
  • R1= 1.1459
  • R2= 1.1505
  • R3= 1.1578

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Jan-27 World Daily Markets Briefing
by: ADVFN Newsdesk


Forex

FOREX-Euro's rally on Ifo loses steam

LONDON - The euro ceded earlier gains after hitting a one-week high versus the dollar and the yen on Tuesday after a surprise rise in German corporate sentiment, with bleak underlying economic conditions reasserting themselves.

Trade was volatile as short-term players took profits after the euro had gained sharply since the start of the week as a rise in financial shares had boosted risk sentiment. "One spot of good news cannot make up for headlines showing dire economic conditions," said Geoffrey Yu, currency strategist at UBS, noting that economic and corporate data for the final quarter of 2008 are showing extremely weak readings. "Short-term players are taking profits and it is still not the best environment for risk-taking."

Data from Germany's Ifo economic research institute showed its index for business climate index rose to 83.0 in January from an upwardly revised 82.7 in December, rising for the first time in eight months.

"The sharp sentiment deterioration is close to a bottoming out. Nevertheless, the hard facts are still less encouraging," said Carsten Brzeski, economist at ING Financial Markets. Economists expect the German economy to contract by around 2 percent this year.

By 1220 GMT, the euro was flat against the dollar at $1.3160 after hitting a high of $1.3328 shortly after the Ifo data was released.

The euro was also flat at 117.24 yen after hitting the day's high of 119.45 yen, a level last reached on Jan. 19. The euro was also hurt as European shares fell more than 1 percent on the day, and on dovish comments by an European Central Bank official.

ECB Governing Council member Guy Quaden was quoted as saying in a Belgian newspaper on Tuesday that the ECB is probably prepared to cut interest rates again.

"We are probably ready to cut further. But I am launching an appeal to the banks to pass on the impact on rates that they impose on investors and consumers," he was quoted saying at an event on Monday. [nBRE001565]

Sterling rose against the dollar, climbing some one percent to $1.4100 while it was also 0.7 percent higher against the euro at 93.57 pence.

Earlier, the yen had stumbled broadly on improving risk demand after Japan launched a $16.7 billion scheme to buy shares in firms whose future has been threatened by the financial crisis.

"The news from Japan is positive for risk appetite, and has provided a firm undertone in the market," said Anders Soderberg, chief currency strategy at SEB Merchant Banking in Stockholm.

The low-yielding yen often takes its cue from perceived swings in investors' risk appetite and has tended to fall against higher-yielding currencies when risk tolerance increases.

The dollar was broadly flat as markets awaited the U.S. Federal Reserve's two-day policy meeting ending on Wednesday. With rates already near zero, the Fed is expected to say it will keep rates low for the time being, and focus is on which instruments the U.S. central bank will purchase to boost ease strained credit conditions.

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Jan-27 market commentary and technical levels

Tue, 27th of January, 2009
By Setyo Wibowo (analyst@fxinstructor.com)

EURUSD Outlook
The EURUSD was corrected higher yesterday. 2 Hammer candlestick formation I showed yesterday now followed by a bullish candle. A break above trend line resistance and 23 Fib retracement (of 1.4719 – 1.2764) should confirm the bullish reversal scenario targeting 1.3500 area. The bias is bullish in nearest term but major bearish scenario remains valid. Immediate support is seen at 1.3150 followed by 1.3050. Initial resistance at 1.3250 area. A consistent move above that level could trigger further bullish momentum. CCI just cross the 100 line down on hourly chart suggesting a potential downside pressure testing support areas.

eurusddaily3

EURUSD Daily Supports and Resistances:

  • S1= 1.2966
  • S2= 1.2726
  • S3= 1.2592
  • R1= 1.3340
  • R2= 1.3474
  • R3= 1.3714

GBPUSD Outlook
The Hammer candlestick formation gave us a valid warning of a potential bullish reversal yesterday. GBPUSD was corrected higher, topped at 1.4060 and closed at 1.4008. The bias is bullish in nearest term with 1.4210 as bullish correction target, but major bearish scenario remains valid. CCI just cross the 100 line down on hourly chart suggesting a potential downside pressure testing 1.3940 and 1.3800 support areas.

gbpusddaily3

GBPUSD Daily Supports and Resistances:

  • S1= 1.3683
  • S2= 1.3358
  • S3= 1.3170
  • R1= 1.4196
  • R2= 1.4384
  • R3= 1.4709

USDJPY Outlook
The USDJPY made a moderate bullish correction yesterday. The pair topped at 89.68 and closed at 89.07. Beside CCI divergence seen on 4h chart, the violated bearish channel and CCI just cross the 100 line up should support the bullish view. The bias is bullish in nearest term targeting 90.90. CCI just cross the -100 line up on daily chart suggesting a potential bullish view.

usdjpy4hchart4

USDJPY Daily Supports and Resistances:

  • S1= 88.32
  • S2= 87.57
  • S3= 86.89
  • R1= 89.75
  • R2= 90.43
  • R3= 91.18

USDCHF Outlook
The USDCHF failed to continued it’s bullish scenario yesterday. The bearish channel on 4h chart has been violated to the downside. We might have another bearish correction today testing 1.1200 area. The bias is bearish in nearest term but major bullish scenario can not be said over. Immediate resistance is seen at 1.1450 followed by 1.1500. CCI just cross the -100 line up on hourly chart suggesting a potential upside pressure testing resistance areas.

usdchf4hchart12

USDCHF Daily Supports and Resistances:

  • S1= 1.1237
  • S2= 1.1125
  • S3= 1.0923
  • R1= 1.1551
  • R2= 1.1753
  • R3= 1.1865

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Monday, January 26, 2009
Jan-26 Daily Forex Analysis
by: Forexyard


Economic News

USD

U.S. Dollar Starts the Day Strong Ahead of Busy Week

Pushing below 1.2800 against the EUR last Friday, the USD has seen some intense ups and downs ever since. In early trading hours Friday, the USD saw some significant gains against its primary European counterpart, but then turned around to lose it all, ending the day at 1.2970. Today, however, the USD appears to be back on the upswing. Starting the trading day with a sharp 50 pip gain against the EUR, the USD appears to be on track to recover the position it was heading for during Friday's early trading hours.

As confidence in the European markets dwindles, the U.S. Dollar appears more and more to be the safe-haven currency of choice for most investors. Despite the continuing downtrend in important economic sectors, such as housing - which has dropped consecutively for months now - the U.S. economy remains the king which many believe must be saved in order to rescue the entire system. As such, we see large investors bailing out of other currencies and shoring up their positions within the USD regardless of fundamental data.

This week will no doubt see high volatility in USD pairs as the U.S. economy is set to receive one of its busiest news weeks. On top of all of the information regarding Barack Obama's economic stimulus package being released, we also have a number of significant indicators coming out this week. Of primary importance is the first meeting for the Federal Reserve Board in 2009; they will be discussing the possibility of cutting the Federal Funds Rate even lower than its present target rate.

Moreover, two important pieces of information regarding the U.S. housing sector will be released Monday and Thursday. We also have the Advanced GDP report for the 4th quarter of 2008 coming out this Friday. Forex traders should mark these events in their calendars as they will no doubt generate exceedingly high volatility in the market, especially surrounding USD pairs and crosses.


EUR

Credit Downgrades of Smaller Euro-Zone Economies May Weaken EUR

The EUR has been experiencing some interesting price swings these past few trading days. With sharp fluctuations against the USD, JPY, and GBP, the 16-nation currency is poised for an important news week. Ending last week against the USD at 1.2970, the pair currently sits around the 1.2900 level as the greenback made strong gains earlier today, but is currently losing steam. Moreover, against the GBP, the pair is continuing to move steadily towards parity, with a current price of 0.9475.

As the economies in Portugal, Spain, Greece, and Italy are all experiencing a credit downgrade, some analysts are beginning to wonder what the benefit of multi-billion EUR bailout packages will offer when their focus is almost exclusively on France and Germany, leaving the countries on the periphery out to dry.

A type of "save the king" mentality may be present in the Euro-Zone, which believes that rescuing France and Germany will help stimulate the others to return to growth. However, the decentralized economic system in Europe, in a way, prevents such top-down overflow from occurring. The two economic giants will use bailout funds to shore up their assets and ensure the safety of their system, but possibly too late to effectively rescue these other countries before they are forced to declare bankruptcy and exit the European Monetary Union (EMU). This does not bode well for the Euro-Zone regional economy.

Looking ahead this week, the 16-nation Euro-Zone is anticipating important consumer data which will lend a better understanding as to how much confidence Europeans have in their economic system. With the regional unemployment rate reaching almost as high as 8%, and sales decreasing consistently, it may be right to assume that this consumer data will no doubt show a lack of trust in the EMU. It may be wise for forex traders to look for an unwinding of EUR positions as these consumer reports weaken the EUR in the coming days.


JPY

Yen Remains Strong; Japanese Economy Weakened

The Japanese Yen continues to gain in relative strength to its currency counterparts as the recent lowering of European interest rates has made the Japanese-funded carry trade less relevant. This comes as bad news for the Japanese economy. As its currency becomes stronger; its ability to sell goods overseas decreases, which further weakens its economic strength.

This week will highlight more specifically the negative impact the recent economic downturn and subsequent strengthening Yen has on the Japanese economy. With an unusually high number of economic indicators being delivered this week, the JPY could see one of its worst economic data releases since the financial crisis of the late-1990s. Every single figure to be given throughout this week is forecasted to be lower than the previous release, signaling very clearly how bad Japan's economy has gotten since this crisis started. Without a major market event to turn things around, Japan's economy, and currency, could face more difficult times up ahead.


OIL

Iraq Increases Oil Production by 8%; May Drive Oil Prices Lower

After making a sharp increase during the final hours of last week's trading, the price of Crude Oil appears to be stabilizing near $45.75 a barrel. Last Friday, the price of Crude Oil remained steady around $43 a barrel until the final hours of trading when the price jumped to reach almost as high as $47 a barrel prior to market close. However, most economists remain steady with their forecasts that the price of Crude Oil will continue downward once these small corrections lose momentum.

One of the reasons analysts claim the price of oil will sink in the coming days is because Iraq's oil producing and exporting capabilities has begun to increase these past few months. Increasing production by over 8% last month, Iraq, which remains outside of OPEC quotas while rebuilding its infrastructure, may actually put increased downward pressure on the price of Crude Oil unless the remaining OPEC countries cut their production to compensate for Iraq's sudden surge of oil surplus. Traders may want to look for the price of Crude Oil to continue on its downward slide.


Technical News

EUR/USD
After several failed attempts to breach the1.2750 support level on the 4 hour chart, the pair is now consolidating around 1.2900 price level. The hourly studies show mixed signals, and the daily charts support that notion as well. 4 hour charts' Slow Stochastic is showing a bearish cross suggesting that a downwards correction might take place in the nearest time frame. Going short with tight stops appears to be preferable strategy.


GBP/USD
The Cable has resumed its downtrend and is attempting to breach the 1.3550 level. The daily chart shows that the current price has dropped beneath the Bollinger Band's lower border, indicating that the bearish move is gathering more steam. Should the breach take place, the pair might further extend its bearish run, with a potential price target of 1.3500.


USD/JPY
The pair has made a substantial bearish correction, and is now floating around a key Fibonacci level 88.80. The hourly chart is showing a bearish cross which indicates that if a bearish breach through that level will occur; we shall probably see the bearish trend continue. Traders are advised to hold for the breaching attempt before making an entry.


USD/CHF
The bullish momentum the pair has shown since the breach of the channel on the daily chart continues. The daily Slow Stochastic is showing the continuation of the trend. It seems that the pair could face another bullish session today. Going long might be the right choice.


The Wild Card

OIL
The Crude Oil prices are once again increasing, and a barrel of Crude Oil is currently trading around $45.50. Now, all oscillators on the 4 hour chart are providing bullish signals, indicating that Crude prices will probably continue its upward momentum. This might give forex traders a great opportunity to enter a very popular trend.

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Jan-26 market commentary and technical levels

Mon, 26th of January, 2009
By Setyo Wibowo (analyst@fxinstructor.com)

EURUSD Outlook
The EURUSD attempted to push lower on Friday, bottomed at 1.2764 but further bearish momentum was rejected as the pair closed more than 200 pips higher at 1.2973. Although we are still in major bearish scenario, we have 2 Hammer candlestick formation on daily chart indicating a potential exhausted bearish power and a warning of bullish reversal. However, long trade position is not recommended. The bias is neutral in nearest term. Immediate support is seen at 1.2850 followed by 1.2750. Initial resistance at 1.3000 followed by 1.3150. CCI about to cross the -100 line up on daily chart suggesting a potential upside pressure.

eurusddaily2

EURUSD Daily Supports and Resistances:

  • S1= 1.2813
  • S2= 1.2654
  • S3= 1.2544
  • R1= 1.3082
  • R2= 1.3192
  • R3= 1.3351

GBPUSD Outlook
Similar with EURUSD, the GBPUSD attempted to push lower on Friday, bottomed at 1.3503 but closed higher at 1.3799. We also have 2 Hammer candlestick formation on daily chart indicating a potential exhausted bearish power and a warning of bullish reversal. However, long trade position is not recommended. The bias is neutral in nearest term but major trend remains bearish. Immediate support is seen at 1.3503 (Friday’s low). Initial resistance at 1.3750. A break above that level could trigger further bullish correction towards 1.3900 area. CCI in oversold area and heading up suggesting a potential upside pressure.

gbpusddaily2

GBPUSD Daily Supports and Resistances:

  • S1= 1.3571
  • S2= 1.3343
  • S3= 1.3183
  • R1= 1.3959
  • R2= 1.4119
  • R3= 1.4347

USDJPY Outlook
The USDJPY made indecisive movement by open and closed at almost the same price (88.85 and 88.74). Although the major scenario remains bearish, we have CCI divergence on 4h chart suggesting a potential upside correction scenario at this phase. Immediate resistance at 89.50. Break above that level could trigger further bullish correction towards 90.90 area. CCI about to cross -100 line up on daily chart suggesting a potential upside pressure.

usdjpy4hchart3

USDJPY Daily Supports and Resistances:

  • S1= 87.94
  • S2= 87.14
  • S3= 86.30
  • R1= 89.58
  • R2= 90.42
  • R3= 91.22

USDCHF Outlook
The USDCHF attempted to push higher on Friday. The pair topped at 1.1714 but closed lower at 1.1539. We still have a valid bullish channel on 4h chart. The bias remains bullish still targeting 1.1800. Only a breakdown from the bullish channel could be a potential violation to the current bullish scenario. Immediate support is seen at 1.1550 followed by 1.1470. CCI heading up towards 100 line on 4h chart suggesting a potential upside pressure.

usdchf4hchart11

USDCHF Daily Supports and Resistances:

  • S1= 1.1467
  • S2= 1.1395
  • S3= 1.1272
  • R1= 1.1662
  • R2= 1.1785
  • R3= 1.1857

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Friday, January 23, 2009
Jan-23 Daily Forex Analysis
by: Forexyard


Economic News

USD

Dollar Remains Bullish Despite Negative Data Releases

Despite a slumping U.S economy, the Dollar continued to perform well against most of its major currency pairs on Thursday. The Dollar shrugged off more poor disappointing economic data from the U.S. yesterday, appreciating against the EUR and the GBP. The U.S. Census Bureau reported yesterday that building permits missed analyst's forecasts while U.S. new Unemployment Claims rose by 44,000 more than forecasted.

The EUR/USD ended the day down at 1.2940, while the GBP/USD fell to 1.3752. Since the New Year, the GBP has depreciated more than 5% against the Dollar and 10% vs. the EUR. The GBP has suffered lately, with most of the Sterling's losses occurring after the British government announced a second financial bailout package after large asset write-offs were reported by U.K. banks. Much of the Dollars' gains were viewed as providing a safe-haven from British and European economic woes.

The Dollar received additional support yesterday as the New York Federal Reserve Bank President Timothy Geithner moved one step closer to a successful appointment to Treasury Secretary. Geithner stated in his speech on Thursday that a strong Dollar was in the interests of the United States. This therefore led to the assumption by investors that Barack Obama's economic policy will be largely based on making the Dollar a strong safe-haven currency.

There is a fair possibility that the greenback will strengthen against its major currency crosses. For example, fundamental data due to be released today from Great Britain may help to continue the Dollar's bullish run on the week, as Britain is set for several highly significant data releases. The most important are British Preliminary GDP and Retail Sales reports at 9:30am GMT time. The results of these data releases are likely to determine the GBP's strength vs. the USD going into next week.


EUR

Rating Downgrade hurts the EUR

The struggles that the Euro-Zone economy is currently facing continue to put pressure on the EUR. Disappointing economic indicators have helped to bid down the EUR against the USD as investors view the EUR as a riskier currency. Therefore, from the point of view of traders, the Euro is starting to lose status as a safe-haven. Moreover, if the EUR continues to decline vs. the USD, then medium-long term safe-haven status may return to the U.S. Dollar.

Some of the recent declines in the EUR have been due to downgrades of the EUR's debt ratings. Both Greece and Spain were the main culprits, as they had their ratings lowered by Standard & Poor's (S&P). The two countries of the single currency have both been downgraded by the rating firm in less than 1-week. This is continuing to stir up renewed fears of a distressed Euro-Zone economy, and it is highly likely to raise the cost of borrowing for the two European Union members.

The rating downgrades are likely to weigh down on the EUR into next week. In addition, a prolonged economic downturn may further hurt other European nations, thus leading to a depreciating of the EUR against its major currency pairs. For today, traders are advised to follow economic data releases closely today. Poor economic news coming out of the Euro-Zone may push the EUR/USD to the 1.2850 level by the end of the day. In regards to the EUR/GBP, traders are advised to follow the release of Britain's quarterly GDP figures at 9.30 GMT. The result of this release is likely to determine the EUR/GBP rate going into next week.


JPY

Yen Rallies on Economic Data and Risk Aversion

The Yen continued its rally yesterday against the EUR and USD, as poor economic data from the U.S. and the Euro-Zone exemplified the down-ridden global economy, fueling trader's risk-aversion. The Yen has seen large gains as traders pour into the Yen, fleeing higher-yielding currencies. Its important to note that Japanese banks have not been hit as hard as American and European banks during this financial crisis, and a large amount of government foreign reserves has helped support the Yen. Some of the Yen's gains came late in Thursday's trading, as traders digested words from U.S. Treasury Secretary Nominee Timothy Geithner. He spoke about different issues relating to the global slump. However, this led investors to have less confidence in the USD vs. the Yen.

Yesterday the USD/JPY closed 46 pips lower at 88.60. This shows that the Dollars decline against the Yen is likely to continue, as currency pair is off nearly 2% for the year. More strengthening of the Yen could lead to increased intervention by the Japanese government to weaken the value of the Yen. A strong Yen is not good for the country's exports and the government is threatening to sell Yen in the open market, in order to drop the value of the nation's currency. If a further inclination and fear of risk ensue, traders may see more weakening of the USD/JPY to a level of 88.00 by the week's end.


Oil

Crude Oil Drops as Global Recession Deepens

Yesterday the price of Crude Oil dropped as investors digested more poor economic data and looked to the new U.S. economic stimulus package for supporting Crude. The U.S. Energy Information Administration released U.S. Crude Oil inventories data showing inventories were more than 6 times the level forecasted by analysts. Later in the day, Crude showed signs of a rally as traders found a bright spot in the quick passage of President Obama's economic plans quick passage in the U.S. House of Representatives.

Crude Oil finished the day down at $43.01, down 57 Cents. The price of Crude Oil is likely to decline in the coming days. This is due to the likelihood of demand continuing to weaken and the supplies of Crude Oil likely to grow in the short-medium term, as was seen in the inventories data. This trend is expected to continue for at least the next six months. Demand will only grow, when the leading economies recover from the global recession. Look for Crude to finish the week down further, perhaps at the $41.00 mark.


Technical News

EUR/USD
The 4 hour chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, the daily chart's RSI is already floating in the 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.


GBP/USD
As a result of a significant downward movement yesterday, the pair has been pushed into the over-sold territory on the daily chart's RSI, indicating that an upward reversal may occur later today. The hourly chart's Slow Stochastic also appears to be showing an imminent bullish cross, which supports this notion. Going long with tight stops might be the right choice today.


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
Narrow range trading continues as the pair did not make a significant move in either direction, and is currently traded around the 1.15 level. The daily chart RSI is already floating in the overbought territory. It appears that the possible next move might be a bearish one. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.


The Wild Card

Gold
After a moderate bullish correction, this commodity is heading $857.08 per ounce. The daily chart is showing growing bearish momentum. This may prove to be a good opportunity for forex traders to join a potentially strong uptrend that might yield high profits.

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Jan-23 market commentary and technical levels

Fri, 23th of January, 2009
By Setyo Wibowo (analyst@fxinstructor.com)

EURUSD Outlook
The EURUSD didn’t make significant movement yesterday. On hourly chart we can see that the pair trapped in choppy market between 1.3082 – 1.2906 indicating a consolidation phase. The bias remains neutral in nearest term. We still have a valid bullish minor channel on hourly chart but the major trend in longer term remains bearish. Immediate resistance is seen at 1.3100 followed by 1.3250. Initial support at 1.2920. A break below that support level could trigger a further bearish momentum targeting 1.2750 area. CCI in neutral area both on hourly and 4h chart.

eurusdhourly6

EURUSD Daily Supports and Resistances:

  • S1= 1.2921
  • S2= 1.2825
  • S3= 1.2745
  • R1= 1.3097
  • R2= 1.3177
  • R3= 1.3273

GBPUSD Outlook
As I had expected, the GBPUSD had another bearish momentum yesterday. The pair hit my short target at 1.3700, bottomed at 1.3689, but closed higher at 1.3884. On hourly chart we can see that the pair has been moving in rectangle area between 1.4025 - 1.3690 since January 21. The bias is neutral in nearest term but major bearish scenario still intact. Immediate support is seen at 1.3750. Initial resistance at 1.3890 followed by 1.4050.

gbpusdhourly7

GBPUSD Daily Supports and Resistances:

  • S1= 1.3709
  • S2= 1.3534
  • S3= 1.3380
  • R1= 1.4038
  • R2= 1.4192
  • R3= 1.4367

USDJPY Outlook
The USDJPY made a moderate bearish movement yesterday. The pair bottomed at 88.06 but closed higher at 88.86. We still have a valid bearish on 4h chart. The bias is neutral in nearest term but still bearish in longer term. Only a breakout from the bearish channel could be considered as a potential violation to the current bearish outlook. Immediate resistance is seen at 89.90. Initial support at 88.40. CCI just cross the -100 line up on 4h chart suggesting a potential upside pressure.

usdjpy4hchart2

USDJPY Daily Supports and Resistances:

  • S1= 88.09
  • S2= 87.33
  • S3= 86.60
  • R1= 89.58
  • R2= 90.31
  • R3= 91.07

USDCHF Outlook
The USDCHF made another indecisive movement yesterday, formed another Doji candlestick formation on daily chart. We have a rectangle formation between 1.1595 – 1.1508 on hourly chart indicating a consolidation phase. A break from the rectangle formation should give us a clearer direction. The bias is neutral in nearest term but bullish major scenario targeting 1.1800 is still intact. Immediate resistance is seen at 1.1650. CCI just cross the 100 line down on 4h chart suggesting a potential downside pressure testing support at 1.1410.

usdchfhourly1

USDCHF Daily Supports and Resistances:

  • S1= 1.1495
  • S2= 1.1458
  • S3= 1.1408
  • R1= 1.1582
  • R2= 1.1632
  • R3= 1.1669

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Thursday, January 22, 2009
Jan-22 World Daily Markets Briefing
by: ADVFN Newsdesk


US Stocks at a Glance

US Jobless Claims +62K To 589K In Jan 17 Wk; Survey +26K

WASHINGTON -- The number of U.S. workers filing new claims for state unemployment benefits soared last week to match the quarter-century high reached in December, suggesting layoffs continued unabated into the new year.

Initial claims for jobless benefits jumped 62,000 to 589,000 after seasonal adjustments in the week ended Jan. 17, the Labor Department said in a weekly report Thursday. That matches the highest level since November 1982, when claims were above 600,000. Claims were also at 589,000 in the Dec. 20, 2008 week.

Economists surveyed by Dow Jones Newswires had expected claims would only rise by 26,000 last week. The four-week average of new claims, which aims to smooth volatility in the data, was unchanged at 519,250.

A Labor Department analyst noted that claims tend to be volatile from November through January. Indeed, after falling over 100,000 at the end of December and into the first week of January to below 500,000, jobless claims have regained all those losses in the last two weeks alone.

Last week was the first of the November-January period in which government statisticians expect a large drop in unadjusted claims. That type of decline didn't materialize, hence the rise in seasonally-adjusted figures. The Labor analyst said administrative backlogs at state offices may have been a factor.

The data come after 12 months of declining nonfarm payrolls. Employers slashed payrolls at a rate of about half a million per month in the final four months of 2008, and another drop of that magnitude seems likely this month.

The latest initial-claims data include the survey week for the January payroll report. When employers are surveyed for the monthly employment report, they are asked about staffing levels for the pay period that includes the 12th day of the month. For that reason, many economists pay close attention to the jobless-claims data for that week.

Meanwhile the tally of continuing claims, those drawn by workers collecting benefits for more than one week in the week ended Jan. 10, swelled 97,000 to 4,607,000. The four-week average was the highest since November 1982, suggesting it is getting very tough for the unemployed to find new work.

According to Thursday's report, the unemployment rate for workers with unemployment insurance held steady at 3.4%.

Not adjusted to reflect seasonal fluctuations, Michigan reported the largest jump in new claims during the Jan. 10 week, 34,639, due to an increase in layoffs in automobile and manufacturing industries.

South Carolina reported the largest decrease, 2,682, due to fewer layoffs in the industrial machinery, transportation equipment and manufacturing sectors.


Forex

Key US Dollar Libor Rises As Liquidity Dries Up

LONDON - The cost of borrowing longer-term U.S. dollars in the interbank market rose Thursday as funding conditions in the money market continued to deteriorate amid concerns over the financial sector.

Analysts at Royal Bank of Scotland said the realization of tight short dated cash and minimal term liquidity has sunk in, adding term liquidity for most names was "almost non-existent at any level."

Market sentiment remained poor, said RBS, but should the upturn in global equity markets prove durable, it could stop the tone from worsening further.

Data from the British Bankers' Association showed three-month U.S. dollar Libor, seen as a key gauge of the effectiveness of the Federal Reserve's monetary policy, rose to 1.15938% from Wednesday's fixing of 1.125%.

The rate has fallen significantly, aided by aggressive monetary easing by the Federal Reserve, since peaking at 4.81875% on Oct. 10.

The one-month Libor rate rose to 0.38938% from Wednesday's 0.35625%. Meanwhile, the overnight rate climbed to 0.21% from 0.1875%. The Fed funds target range now stands at zero-to-0.25%.

The three-month BOR/OIS spread, a gauge of stress in the money markets, widened to 94.9 basis points from around 93 bps Wednesday.

The spread has tightened significantly from its widest point of 366 bps, seen on Oct. 10 when interbank market tensions peaked.

Lending rates in other currencies were lower across the board Thursday. Three-month sterling Libor fixed at 2.20125%, down from Wednesday's 2.2125%, while the one-month rate fell to 1.61875% from 1.63813%.

The three-month rate has fallen steadily since peaking at 6.3075% on Oct. 1.

Meanwhile, overnight sterling Libor slipped to 1.575% from Wednesday's 1.605%, remaining above the Bank of England's Bank Rate, currently 1.50%.

Market expectations of further monetary easing by the BOE remained intact. Barclays Capital revised its U.K. interest rate call Wednesday, and now expects the BOE to cut its Bank Rate to zero by May.

According to Sonia rates, the Bank Rate is expected to fall to 1.0% in February, and to base around 0.75% by mid-year.

Euro Libor fixings were lower across all tenors Thursday. The key three-month rate fell to 2.25313% from Wednesday's fixing of 2.3075%, while the one-month dropped to 1.89875% from 1.95%.

Meanwhile, the overnight rate tumbled to 1.15375% from 1.40625%, below the ECB's refinancing rate of 2.0%, and approaching the ECB's new deposit rate facility at 1.0%.


Europe Shares

European Shares Advance; Banks Lead

Banks led an advance for European shares on Thursday, as the beaten-down sector regained some poise after this week's sharp sell-off, although worse-than-expected results from Nokia took the shine off early gains.

The pan-European Dow Jones Stoxx 600 index advanced 0.4% to 185.26, rising after three straight sessions of losses.

Banks weighed on the market in the early part of the week as investors fretted that deteriorating trading conditions will force lenders to write down more assets.

"What has bought us under stress in the last couple of trading days is the fear that the financials' equity position will suffer as there will be further attempts to nationalize banks or further capital injections," noted Gerhard Schwarz, strategist at UniCredit.

However, the sector took back some of those losses on Wednesday afternoon and again on Thursday, with Societe Generale shares up 5%, Credit Suisse (CS) shares up 9.3% and Santander (STD) shares up 3.2%.

"After the sell-off, prices might bounce back from severe losses, and there is also the hope that there will be some new help provided which might not be as negative for existing shareholders as capital injections," said Schwarz.

KBC Group shares stood out on Thursday, up 37.9% in Brussels, after the lender said that it has arranged to receive 2 billion euros of capital from Flemish government but that the deal won't dilute existing shareholders.

On a national level, the French CAC-40 index rose 0.8% to 2,928.89, the German DAX 30 index climbed 1.2% to 4,312.52 and the U.K. FTSE 100 index rose 1.2%, to 4,108.50.

Oil producers were strong as well in Europe, with BP (BP) shares up 1.7% and Total (TOT) shares up 2.3% as light sweet crude oil futures traded over $44 a barrel in electronic trading.

However, shares were off early highs in Europe as Nokia Corp. (NOK) shares dropped 6.6% after reporting a 69% drop in fourth-quarter earnings. Nokia also shaved its estimates for margins and industry-wide mobile sales in 2009. "We must expect that the economic weakness will bite on corporate profitability," noted Schwarz at UniCredit.

"Now the hope is probably that the worst momentum of the downturn is where we are right now. The critical thing is to bridge the time until we see the trough in leading indicators. There might be some rocky times over the next couple of weeks," he added.

BT Group details charge

Fiat shares also fell sharply on weak numbers, down 10.3%. It now only expects a group net profit of over 300 million euros in 2009, after dramatically slashing its target for trading profit - or operating earnings before asset disposals, restructuring costs or other one-time items - to 1 billion euros from a previous target range of 3.4 billion euros to 3.6 billion euros. The firm also cut its 2008 dividend and halted its share buyback program.

BT Group shares dropped 10.9% as it's going to take a 340 million pound ($471.7 million) charge in its global services unit as a result of financial and contract reviews.

Shares of low-cost airline easyJet climbed 11%. First-quarter revenue rose 32% to 550 million pounds after a strong performance across its network. First-half revenue is expected to exceed guidance, the firm added.


Asia Markets

Asian Shares End Higher; Banks, Japan Real Estate Cos Up

Asian stocks ended higher Thursday, with financials trading on a firmer note, while real-estate developers were standouts in Tokyo after the Bank of Japan released details of its plan to inject liquidity into the economy.

Analysts said stocks were rebounding from oversold conditions, with direction provided by U.S. gains overnight, although volume was limited ahead of the Lunar New Year holiday. "I think it's just a trading market, concerns over the economy will remain for some time," said Marco Mak, head of research at Tai Fook Securities in Hong Kong.

Citigroup cautioned in a research note Thursday that corporate earnings globally are in the early stages of a recession that could last four to six quarters before recovering. "We are in the midst of what will probably be the deepest global earnings recession in over 40 years," wrote Citi strategists.

Mitsubishi Estate was part of a broad rally in the Japanese real-estate sector after the Bank of Japan said it will accept bonds issued by real estate investment trusts, or REITs, as collateral for loans. The announcement came as the BoJ's policy board vote unanimously to keep interest rates unchanged at 0.1%. Mitsubishi Estate shares ended 5.4% higher.

South Korea's Kospi Composite ended up 1.1%, while Australia's S&P/ASX 200 added 1.3% and New Zealand's NZX-50 gained 1.1%. Hong Kong's Hang Seng Index finished 0.6% higher. Markets in Taiwan were closed for a public holiday.

Japan's Nikkei 225 ended up 1.9% after a choppy session which saw the index fall nearly 1% at one point. "(Foreign exchange) concerns will continue to limit the Nikkei's upside" with the yen solidly higher for January, said Yumi Nishimura, a market analyst at Daiwa Securities SMBC. A stronger yen makes Japanese goods less competitive on global markets.

Among Japanese exporters, Toyota Motor fell 4.2%, Nissan Motor 3.6% and Canon 1.7%, with data showing exports in the country sank 35% in December from a year earlier, the third-straight month of declines.

The BoJ's announcement that it would buy up to 3 trillion yen ($33.5 billion) of commercial paper and asset-backed commercial paper through the end of fiscal year in March helped spark late-afternoon support for the Nikkei.

Overall volume for Asia was low. "The overnight gain in the U.S. markets seemed to be a technical rebound, and is likely to have a limited positive impact on local stocks," said Lee Jin-woo at Mirae Asset Securities in Korea.

EBay however dropped 5.8% in late trade as its fourth-quarter net income fell 31%. The online auctioneer issued a first-quarter view below analyst estimates. "We remain bearish on risky assets in the near term. We think weak economic data globally and poor profit reports will continue to weigh" on sentiment, said analysts at Calyon.

Banking stocks were a bright spot in Asia. In Australia, National Australia Bank gained 2.8% and Westpac Banking 3.3%. Japan's Nomura Holdings added 4.3% while South Korea's KB Financial rose 4.2%.

In India, ICICI Bank was up 2.8%. In Hong Kong, HSBC added 3.6%, after falling 26% over the eight previous sessions.

Sony fell 2.6% in Tokyo as the company said it would close one of two domestic TV manufacturing plants. After trading closed, the company said it now expects a group net and operating loss for this fiscal year, and it cut its planned capital spending, citing a strong yen.

Gains in South Korean shares were limited by data showing the economy put in its worst performance in almost 11 years in the fourth quarter. Gross domestic product fell a seasonally adjusted 5.6% from the previous three months.

Kia Motors fell 2.5% even as fourth quarter net profit jumped 97% from a year earlier, helped by a weaker won. Hyundai Motor lost 2.9% with its fourth quarter net profit falling 28% from a year earlier to 243.6 billion won ($170 million), lower than 569.8 billion won forecast in a Dow Jones Newswires poll.

LG Electronics shed 3.7% after it swung to a fourth-quarter net loss, weighed down by hefty declines in its flat-screen panel unit. The 671.3 billion won loss at Korea's second-largest electronics maker was worse than the market expected.

In Hong Kong, markets were higher but trade was winding down before the Chinese New Year holiday next week. "Trading interest is unlikely to be strong and investors may sell into strength if stocks shoot up after their recent sharp declines," said Conita Hung at Delta Asia Securities.

The Shanghai Composite Index added 1%, with gains in healthcare stocks after Beijing said it would spend more than $120 billion over three years on the sector. Shinva Medical Instrument added 7.7%.

Markets in China shrugged off news that the economy grew 6.8% in the fourth quarter of 2008, the lowest quarterly growth rate in seven years.

India's Sensex was up 0.3% in late trade as Reliance Industries traded basically flat before its third quarter results later Thursday.

Singapore's Straits Times Index was 0.3% higher with Malaysian shares up 0.6%, stocks in the Philippines 1.3% higher and Indonesia easing 0.2%. Thai shares were up 2%.

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