Daily forex analysis 30-Apr-2009

Posted by admin as Daily forex analysis, Forex News

 Economic News 

USD Dollar Drops Against the Majors as Equities Rally The Dollar recorded an extremely volatile day of trading as a variety of factors helped push up the demand for riskier assets, whilst reducing the demand for safe-haven positions. Equity markets in the U.S. rallied as many companies in the U.S. recorded far better-than-expected results. These led to major banking shares, such as Bank of America and Citigroup making remarkable gains yesterday. The market also continued to move on the better-than-expected U.S. consumer confidence figures from Tuesday. The equity market surge and Dollar decline was also owed to Tuesday’s impressive U.S. Consumer Confidence figures.

The USD tumbled by more than 130 pips against the EUR in yesterday’s trading to close at 133.22. This is much owed to the fall in demand for safe-haven currencies, as it seems that the U.S. recession may be bottoming out. This is despite poor U.S. GDP figures that were released yesterday. The Dollar also made losses against the GBP to end the day down 125 pips at 148.30. However, versus the JPY, the USD finished higher 0.6% or 60 pips as the demand for the safe-haven Yen plummeted in yesterday’s trading. This was largely owed to news that the economic situation in Japan, China and the U.S. was starting to improve.

As of today, there are a number of important U.S. economic data releases that are set to be released. The most important of which are the Unemployment Claims, Personal Spending, and Personal Income figures that are set to be released at 12:30 GMT simultaneously. The market is likely to be very volatile on the release of these figures. Additionally, later on today, the market is likely to take into account the poor U.S. GDP figures that were released yesterday. Therefore, the USD may reverse some of the losses that it made yesterday against its major currency crosses as investors may return to the safe-haven Dollar. We could see the EUR/USD trading near the 1.3200 level by the end of the day. EUR EUR Soars Versus the USD The EUR experienced a bullish day of trading yesterday, mainly due to the European Consumer Confidence figures, showing its first month on month rise in 11 months. This added to the news from across the developed economies from the U.S. to Japan that the worst of the global economic recession may be over. The bullish equity markets in the Euro-Zone and in Britain were partly due to that of the U.S., partly due to the upgrade of British banks by brokers, and the fall in demand of safe-haven currencies. The EUR made its most notable gains against the USD in Thursday’s trading.

The EUR gained about 130 pips against the Dollar in Wednesday’s trading as demand for safe-haven currencies plummeted as the global economy begins to pick up. The pair closed at the 1.3322 level. The EUR/JPY cross rose by an impressive 210 pips to 129.90 as demand for the most safe-haven currency of all as of late plummeted as indicators from Japan showed that her economy had improved in April. Against the Pound, the EUR did make marginal gains as fears of a prolonged European recession dissipated slightly. The pair closed up 15 pips at 0.8980.

Looking ahead to today, the Euro-Zone and Britain are set to publish a number of important data releases. These include the British Nationwide HPI at 6:00 GMT and the Euro-Zone Unemployment Rate at 21:00 GMT. These figures are likely to determine the GBP and EUR’s strength going into end of week trading. Forex traders are also advised to closely follow statements coming from U.S. President Barack Obama and the U.S. Federal Reserve, as the forex market is likely to be very volatile to this.

JPY Yen Plummets as Economy Improves The Yen plummeted yesterday against its major currency pairs as the current economic recession in the world’s second largest economy seems to be bottoming out. The JPY slid over 60 pips Yen to 97.54 Yen per Dollar as the Yen’s demise was compounded by strong U.S. consumer confidence figures. Thus the most safe-haven currency as of late plummeted as a result of both improvements in Japan and America’s economy. The JPY also slid against the EUR, dropping a massive 210 pips to finish the day’s trading at 129.90. The Pound also made inroads into the JPY as the confidence of the U.S. equity markets swept Europe, and reduced demand for the safe-haven JPY.

As the Japanese equity markets reopened yesterday after a bank holiday, shares soared as the global economy showed signs of bottoming out. This is following good U.S. Consumer Confidence figures from Tuesday, European Consumer Confidence figures from yesterday, and positive Japanese data releases on Wednesday. The bearish JPY yesterday was compounded by impressive factory production figures, showing their first increase in 6 months. All these factors helped pour investors away from the Yen and into the riskier equity market. Today, the Household Spending and Unemployment Rate figures are likely to help determine the JPY’s strength in late trading. The USD/JPY could break the 98.00 resistance level by the end of today’s trading.

Crude Oil Jumps 4% The price of Crude Oil ascended by $2 or 4% yesterday to $51.44 a barrel. The increase comes despite the higher-than-forecasted Crude Oil Inventories data release. Much of the black gold’s bullishness was owed to the weak Dollar and optimism about a quicker than anticipated global economic recovery. Data coming from the U.S., Japan, China, and the Euro-Zone in the last 2 days helped bring back investors confidence into the equity and commodity markets

As a result of the renewed optimism, investors decided to return to the Crude Oil market. Moreover, the weaker Dollar added to the effects of Crude’s gains on Wednesday. What we will now have to see is can Oil maintain this bullish momentum? Maybe in the medium-term this may be possible. However, in the short-term high Oil prices are less likely, especially as the U.S. is expected to release poor Unemployment Claims data later on today. Traders may look for profit taking after yesterday’s bullish trading session. Crude could drop back to the $50.50 mark.  Technical News

 EUR/USD Yesterday’s bullish trading session may have strengthened this pair a bit too far. This could be inferred as the 4-hour chart shows the pair trading in the over-bought zone on the RSI. The chart also shows a bearish cross has formed on the Slow Stochastic. These two signals indicate an imminent downward correction. Traders may also notice the hourly chart’s Bollinger Bands tightening, indicating the potential for a violent breech. Going short could be the right play today.

GBP/USD The 4-hour chart shows the Cable trading in an overbought state on the RSI with a bearish cross on the pair’s Slow Stochastic Oscillator. This indicates the potential for a downward correction. The Bollinger Bands show the most recent price move has originated at the upper border, indicating the potential to go all the way to the lower border. Traders may want to be short on this pair.

USD/JPY Despite the pair failing to break the 98.00 mark, the recent upward correction that has occurred the past two days may have the potential to continue. The daily chart shows a bullish cross has formed on the Slow Stochastic Oscillator, indicating the upward momentum could continue. The price is also floating in the oversold region on the RSI. Going long might be a good strategy.

USD/CHF The recent volatile upward movement has pushed the price of this pair into the over-sold territory on the RSI of the 4-hour chart, indicating an upward correction may be in the works. The recent bullish cross on the hourly chart’s Slow Stochastic supports this notion. Going long might be wise decision today. 

The Wild Card

 Oil After yesterday’s bullish trading session, the commodity is showing strong bearish signals. The 4-hour chart shows a bearish cross has formed, pointing to a future downward correction in price. The same chart also has the price floating in the over-bought zone. This could give forex traders the opportunity to go short today on crude oil.

Daily forex analysis 29-Apr-2009

Posted by admin as Daily forex analysis, Forex News

 Economic News
 USD
 USD Consolidating towards Heavy Volatility After Monday’s sharp gains against the EUR, the U.S. Dollar experienced a steady depreciation against the 16-nation currency throughout Tuesday, declining back towards 1.3200 after seeing a weekly low of 1.2966. The USD also saw depreciation against almost all currency pairs, except the JPY.

Interesting to take note of is a few general trends in pairs, such as the GBP/USD and USD/CHF, which seem to be trading in a tightening range, indicating that there is an anxious anticipation for tomorrow’s interest rate decision from the US Federal Reserve Board. With a decision on the US Federal Funds Rate expected tomorrow at 18:15 GMT, traders may witness some sharp volatility in these pairs directly after the announcement. With the exceedingly positive figure seen in the CB Consumer Confidence report yesterday, mixed with some other general indicators which also point up, is there a possibility that the Fed would consider increasing interest rates?

Today will indeed be an interesting day to keep tabs on the movement of the greenback. Considering the Advanced GDP report is due, along with Crude Oil Inventories, which has had a moderate impact lately, the USD is due for heavy volatility. Traders will definitely need to program reminders into their schedule telling them to login to their platforms today and capture some of the sharp movements that many are expecting.

EUR
EUR and GBP Riding Favorable Winds So much positive economic data has been emerging in recent weeks that risk appetite seems to have made a moderate recovery. As a result, the EUR has posted steady gains over the past 24 hours. Building back up towards 1.3200 against the USD and 1.2700 against the JPY, the 16-nation currency appears to be on the receiving end of portfolio diversification and Euro-Zone confidence.

With a number of indicators showing a drastic increase in consumer confidence throughout the Euro-Zone’s largest economies, it comes as no surprise that the EUR is trending upwards against all of its currency rivals. However, as there appears to be hardly any news coming from Europe today, the EUR may be put on the back-burner as the US economy leads the pack in economic indicators. The U.S. Federal Funds Rate decision will be released tomorrow and no doubt will be one of the primary driving forces in today’s market.

While news regarding the EUR may be light this week, the British Pound will not go unnoticed. Much of the European news being released this week may show that the British economy is on track for recovery. It seems about time as Britain appeared to be one of the worst hit economies in this recent recession. If Britain is indeed recovering, the rest of Europe shouldn’t be much further off. Watching the indicators emanating from the UK may help traders gauge the direction of the prevailing winds over Europe. So far, European trends appear to be pointing up.
JPY
JPY Set Back from Increased Risk Appetite As world tourism faces a further set-back due to the outbreak of swine flu in 7 countries, the value of the JPY as a safe-haven from economic risks appears to have continued to drop. The rise in risk appetite, and a continuation of the negative outlook in Japan, has pushed the JPY lower against most of its currency rivals, save the USD. Dropping towards the 127.00 level against the EUR and the 141.00 level versus the Pound, the JPY appears like it may level off in the near future.

With a decision from a number of Pacific countries arriving this week on interest rates, traders have the potential to see a level of volatility in the JPY and NZD which is typically uncommon. Traders should look to the Reserve Bank of New Zealand (RBNZ) today, as it is set to announce a decision on its national interest rate. Most expectations are for a 50 basis point rate-cut. The Bank of Japan (BoJ) is also set to announce its latest monetary policy regarding interest rates on Thursday, although this decision will not likely carry much volatility as Japan has held its rates steady for some time now.
Crude Oil
Crude Oil Declines on Demand Concerns Crude Oil prices fell for a second straight day on concerns that the outbreak of swine flu would delay an economic recovery and further dampen energy demand. Fears of pandemics have slowed the global economy in the past and officials with the World Health Organization, while raising alert levels yesterday, and warned against overreacting. The fear is that the outbreak could discourage people from traveling, lead to closed factories and further hurt the economy and oil consumption.

Oil prices rose sharply last month from $40 to above $54 taking their cue from a rally in equity markets. But a new sign of a prolonged recession which has crushed energy demand around the world is again pushing prices lower below the psychological price level of $50.  TechnicalNews 
EUR/USD The pair is continuing to provide mixed results, and is now trading around the 1.3190 level. The daily chart demonstrates a flat line ever since yesterday. The4 hour chart’s Slow Stochastic is showing no crosses, which indicate that the bullish trend may continue. Going long appears to be preferable today
GBP/USD The typical range trading on the daily chart continues. Both the hourly RSI and Slow Stochastic are floating in neutral territory. However, the hourly chart’s RSI is already floating in the oversold territory. It appears that the possible next move might be a bullish one. In that case traders are advised to swing in after the breach.
USD/JPY The 4 hour chart shows the pair does not have a distinct direction, since the chart appears to be quite horizontal. However, the beginning of a bearish move can be detected on the hourly chart, and the Slow Stochastic shows that the bearish momentum still has more room. Going short with tight stops appears to be preferable
 USD/CHF The typical range trading on the daily chart continues. Both the Daily RSI and the Slow Stochastic are floating in neutral territory. As well on the hourly charts the indicators are providing mixed signals with now specific direction. Good strategy might be to wait for a clearer sign before entering the market on this pair.  The Wild Card  Gold There is still a bearish configuration on the daily chart, indicating that the momentum is still down. However, hourly chart’s Slow Stochastic is about to enter an oversold territory, indicating that there might be a minor bullish correction before a broader bearish move resumes. forex traders can maximize profits by selling on highs and taking advantage of a general bearish trend

Daily forex analysis 28-Apr-2009

Posted by admin as Daily forex analysis, Forex News

Economic News

USD

Dollar Rises on Swine Flu and Lower Equity Markets

Yesterday’s trading in the currency market was highly influenced by the outbreak of swine flu in Mexico. Worries about a spreading outbreak drove losses in equity markets, and with that came forex traders buying safe haven currencies. As such, the Dollar and the Yen were the prime beneficiaries. The Dollar rose sharply against the EUR as comments by the European Central Bank (ECB) President sunk the European currency along with other risk sensitive currencies. However, the Dollar fell against the JPY.

The flu pandemic has been driving trading in the financial markets the past two days. A void of economic data has also created opportunities for markets to head south. Trading has been characterized as extremely risk averse. Losses in equity markets and moves to the Dollar and Yen were seen as an example of this trading behavior. However, this pattern may be only short lived as an important economic indicator is set to be released tomorrow.

The Conference Board will release its Consumer Confidence index at 2:00pm GMT. The survey is a leading indicator of consumer spending and is an excellent gauge of current economic conditions and the overall economic situation. The release of the survey typically creates a volatile trading environment, affecting not only the USD pairs but also the value of Crude Oil and Gold. A survey with a result greater than the forecasted value of 29.6 could send the EUR/USD below the 1.2950 mark.

EUR
ECB Remarks Punish the EUR

The EUR suffered its largest 1-day drop versus the Dollar in a month on comments from two members of the European Central Bank (ECB). ECB Governing Council member Ewald Nowotny remarked there is the potential to hold European Interest Rates at a low for the foreseeable future. Later in the day ECB President Jean-Claude Trichet declared that the ECB will announce at its next scheduled meeting on May 7th a new program of quantitative easing. This sent the EUR/USD plunging to 1.3024 from 1.3166. The EUR/JPY also suffered during yesterday’s risk adverse trading session, ending the day at 125.43 from 127.18.

It is expected that the ECB will lower Interest Rates by 25 basis points to 1.25% at their next meeting. No further comments were made by Trichet of the proposed unconventional measures for monetary policy. However, further weakening may be seen in many of the EUR pairs in the coming days. This is likely to be more apparent if traders continue to flock to safe haven currencies, such as the USD and JPY as the Swine Flue pandemic continues to spread.

Throughout the day today Preliminary Consumer Price Index numbers will be released. This data is the Euro-Zone’s earliest inflation numbers and could help to lower the EUR during today’s trading. The EUR currency crosses are also likely to be affected by important economic news events coming out of the U.S. and Britain. These include the U.S. CB Consumer Confidence at 2:00 pm GMT and the British CBI Realized Sales at 10:00 am GMT.

JPY
JPY Goes Bullish on Safe Haven Status

The Yen showed signs of a return to its risk haven status of old as fears of Swine Flu have traders moving out of riskier, higher yielding currencies into the safe haven of the Yen. The logic of this move is a wider outbreak of the flu may increase the amount of time the global economy will need to recover from the current recession. In light of these market conditions, the Yen continues to strengthen. The USD/JPY fell for a 9th day in a row to settle at 96.30 from 96.59. The Yen also climbed against the GBP, ending the day at 140.69 from 140.97.

Japanese banks will be closed for a Bank Holiday today. Major institutional banks are key contributors to liquidity in the forex market. With their closure, price moves can become exaggerated by currency speculators. This can provide ripe opportunities for forex traders to take advantage of the unusual price volatility today. Additionally, traders are likely to take advantage of this more during times of important data releases coming out of the key industrialized nations today.

Crude Oil Crude Oil Dips on Swine Flu Fears

The price of Crude Oil fluctuated greatly yesterday as worries of Swine Flu took hold of the market. Crude Oil dipped as low as $47.98, though it failed to break a key support level. The price finally settled at 49.37 from an opening price of $50.34. Worries that any economic recovery could be delayed due to transportation restrictions or the flow of human capital would severely hurt Crude Oil demand and sank the price of Oil yesterday.

The long term impact of Swine flu could have a muted impact. As such we could see a fair value of Crude Oil near the mid $40 range. Notably higher Crude Oil inventories during the warmer months is implying that fuel consumption will be significantly lower in the upcoming peak travel season. In the meantime, better-than-expected economic data from the U.S. and Euro-zone may help prevent Crude prices from slipping further into the red
.

Technical News

EUR/USD

Since the beginning of the week the pair has entered a bearish trend, dropping from 1.3300 down to 1.3000. And now, as all the oscillators on the 4-hour chart are pointing down, it appears that the bearish movement might have more room to go.

GBP/USD

The 4-hour chart shows that the cable has been range-trading for over a week now, failing to breach through the 1.4500 level. However, a bearish cross on the daily chart’s Slow Stochastic suggests that the breach might happen today, with the potential of falling to the 1.4400 level.

USD/JPY

There is a very distinct bearish chart forming on the daily chart, as the pair is now floating in the middle of it. The pair is now testing the 95.50 level, and if it falls below this level, it might reach as low as 93.80.

USD/CHF

The pair saw an extremely bullish session yesterday, as it climbed almost 250 pips. Currently, A double doji formation on the 4-hour chart indicates that a sharp move is expected, and as the MACD is giving bullish signals, it seems that
going long could be the right choice today.

The Wild Card

Gold

After peaking at almost $920 an ounce, gold has entered a bearish momentum once again, and is currently trading for about $897.00 an ounce. Currently, as a bearish cross is taking place on the daily chart’s Slow Stochastic, it appears that the bearish trend has more steam in it. This might be a good opportunity for forex traders to join a very popular trend.

Swine Flu puts Downward Pressure on the USD and Tourism

Posted by admin as Daily forex analysis, Forex News

The U.S. Dollar appeared to be losing ground against all of its major currency counterparts towards the end of last week’s trading. It dropped to one-week lows against its rivals, falling to 1.3300 against the EUR, 1.4750 against the Pound, and 96.65 against the JPY last Friday. Apparently a number of news events, not wholly related to economic fundamentals, made an impact on the value of the USD last week.

With Ecuador claiming that they will continue to use the USD as their currency, the greenback received a modest level of support from the southern Hemisphere, not necessarily unrelated to President Barack Obama’s recent meeting with South American leaders.

In other news, fears of the recent outbreak of swine flu put a major dent in the Dollar as traders began speculating that U.S. tourism would drop in the coming months as a result, and therefore pulled out from the greenback in exchange for an alternative safe-haven. Also, the run-up to the latest round of G7 and IMF meetings put a slightly positive spin on world stocks and the idea of a balanced investment portfolio. This lent weight to the notion of pulling money away from the USD.

The good news for the USD is that it has begun an across-the-board correction during today’s early trading hours due to a number of Dollar-positive news events. Recent announcements that Chrysler, an American auto giant, may not need to declare bankruptcy has returned some confidence to the U.S. currency. The impending light news week also has the Dollar prepared to take a seat on the bench for the days ahead. Without driving its own market, the USD is more susceptible to world trends and may therefore be at the mercy of the EUR and JPY this week. With a few potentially damaging reports due, the USD may climb back towards 1.3000 against the EUR and 97.50 against the Yen over the next few days

Weekly Prediction: Crude Oil, Gold, Silver

Posted by admin as Daily forex analysis, Forex News

Gold
Gold, which has registered 4 straight sessions of gains, has risen 5% over the past week and is 8% below an 11-month high above $1,000 hit in February. On Monday, Gold jumped to its highest in almost 4 weeks as fears of global flu pandemic prompted investors to seek safer assets in precious metals.

Gold hit an intraday high of $918.25 an ounce, its highest since April 2 after China said last week its gold reserves had risen. The metal later slipped to $914.30, still $3.20 higher than New York’s notional close.

Analysts said that it looks like the market has moved out of the 2-month downtrend and perhaps Gold could head very much higher. The increase in Chinese reserves also did play a part in Gold resent up trend, and market players expected Gold to face resistance around $932 an ounce, an intraday high seen in early April.

Silver

Silver gained 1.6% to $13.08 an ounce after climbing as high as $13.26, may rise for another day to post its longest winning streak since December as falling equities increase the metal’s appeal as an alternative investment.

On Thursday Silver rose after data showed a big increase in claims for U.S. unemployment benefits, raising economic worries and increasing the precious metals’ value as a safe asset.

Oil
Crude prices gained last week as stock markets climbed amid optimism that the world is past the worst of the recession. However, oil prices fell as much as $2.90, or 5.6%, to $48.65 a barrel on Monday on concern the U.S. economy will keep shrinking and the swine- flu outbreak will curtail air travel.

Analysts said that the commodity markets today are dominated by fear, as investors are concerned that the spreading of swine flu in Mexico may severely damp hopes of an economic recovery. As a result of this instability in the market the oil price is expected to move sideways, with some volatility between $45 and $55. Given that oil market fundamentals are still weak, downside risks prevail at the moment.

Daily forex analysis‏ 24-Apr-2009

Posted by admin as Daily forex analysis, Forex News

=> Economic News

USD
Dollar Foresees a Bearish Trading Session
The U.S currency continued to slip against the EUR yesterday, dropping 1.1% to as low as 1.3150. It also lost ground against many of its other major currency pairs as investors continue to worry about the depth of the U.S. recession. Analysts anticipate the Dollar to slip further and to make a correction against the major currencies in the short-medium term as many forex traders believe that the USD is overvalued.

The release of the U.S. Existing Home Sales Report yesterday added to downward pressure on the USD. The report showed that sales of U.S. existing homes fell by 3% in March to a 4.57 million-unit annual rate. This data confirms that the U.S. housing market is still weak. Another report showed the number of Americans filing first-time claims for unemployment insurance rose by 27,000 last week to 640,000 as forecast, while total benefit rolls reached a record, indicating the continuous deterioration of the U.S. labor market.

Later today, there are several important economic data releases coming out of the U.S. The most important of these publications is the Core Durable Goods Order indicator at 12:30 GMT. The release is expected to be lower than the previous figure, meaning the USD could continue its bearish behavior today. Traders should pay close attention to the market as there is an opportunity for traders to capitalize on the fluctuations which are likely to follow this release.
EUR
EUR Soars vs. the Dollar
The EUR rallied yesterday against the Dollar as encouraging news about the European economy and banking system sparked hope that the 16-country Euro-Zone may be emerging from the depths of recession. The EUR touched a one-week high versus the Dollar and closed at 1.3150. The European currency finished 100 pips higher against the JPY to finish yesterday’s trading session at the 128.00 level. The Euro-Zone’s manufacturing and services sector recorded their best performance in 6 months, while industrial orders fell by less than analysts had anticipated. The survey showed a significant improvement, thereby boosting hopes that the rate of decline in the Euro-Zone economy is now moderating after a particularly torrid 4th quarter of 2008 and 1st quarter of 2009. The reduced contraction in manufacturing activity in April suggests that the sector is starting to benefit from the massive de-stocking that has taken place.

Today, there are many news events coming out of the Euro-Zone and Britain. From the Euro-Zone, investors are advised to follow the French Consumer Spending and German Ifo Business Climate figures that are set to be released at 6:45 and 8:00 GMT respectively. Britain is also set to release Retail Sales figures at 8.30 GMT. The results of these data releases are likely to set the pace for the EUR and Pound in today’s trading.

JPY
Yen Declines as the Japanese Economy Plummets
Japan sank deeper into recession in the 1st quarter since Toyota, Honda and Nissan, Japan’s three biggest automakers, slashed production last month. Japanese automakers have pared production as the global recession and rising unemployment sap demand for vehicles worldwide. Having reduced inventory, and with governments taking steps to revive demand, some carmakers, including Toyota and Nissan, are now planning to ease cuts. As a result of negative economic news that came out of Japan yesterday, the JPY finished yesterday’s trading session lower against several of its major currency pairs. This was seen against the EUR, pushing the EUR/JPY pair to 128.55. Also, the Yen fell against the GBP, as the pair closed at 0.8960. Looking to today, the Yen may continue its downward slide against its major currency pairs as Japanese investors seek short-term profits from the Japanese stock market.
OIL
Crude Oil Eyes $50 a Barrel
Crude Oil rose 1.6% yesterday as the Dollar dropped against its major currency pairs, bolstering the appeal of commodities. In addition, Oil’s gains came despite swelling U.S. crude inventories, which hit a fresh 19-year high last week. Prices rose around $1 to $49.70 per barrel, but have dropped from last week’s high of above $52 a barrel. The Energy Information Administration (EIA) stated that Crude Oil supplies rose by 3.9 million barrels in the week ending April 17, marking the sixth weekly gain in a row.

Over the past four weeks, Americans consumed on average of 18.5 million barrels a day of petroleum products, a decline of 6.5% from the same period a year earlier, despite the dramatic plunge in Oil prices from peaks above $147 a barrel in July 2008. If demand of Crude continues to decline, then this will lead to continuing downward pressure on the price of Crude in the short-medium term

=> 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 hourly chart continues. Both the hourly RSI and Slow Stochastic are floating in neutral territory. However, there is a fresh bearish cross forming on the 4 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 finally ceased range-trading and has recently moved downward; however, the price currently floats in the over-sold territory on the hourly and 4-hour chart’s RSI, signaling an upward correction may be imminent. Going long with tight stops might be the right choice today.
USD/CHF
The bearish momentum the pair has shown since the breach of the channel on the daily chart continues. The 4-hour chart’s Slow Stochastic is showing the continuation of the trend, and the hourly studies also confirm the bearish notion. Going short might be the right choice today.
=> The Wild Card

Silver
It seems that the bullish momentum is still relevant, and that Silver is heading up with plenty of room to run. The Bullish correction which took place 4 days ago seems to have larger potential as all oscillators on the daily and the hourly charts are showing a continues upward momentum. forex traders have a great opportunity to join the bullish move at a very early stage and with a great entry price

Daily forex analysis 23-Apr-2009

Posted by admin as Daily forex analysis, Forex News

=> Economic News

USD
Dollar Goes Volatile on U.S. Banking Worries
The Dollar experienced a very volatile day of trading on Wednesday as a number of different factors helped determine the closing rate of the Dollar versus its main currency crosses. The main factor that helped determine the greenback’s strength in yesterday’s trading was the banking worries led by Morgan Stanley and Wells Fargo. This came about despite the Dow Jones rallying earlier in the day. This came to people’s dismay as Morgan Stanley produced positive figures in the previous quarter and the U.S. housing market posted some impressive figures on Wednesday.

The Dollar rose by a massive 160 points versus the British Pound, as investors dropped the GBP and put their money into equities rather than gamble on the Pound Sterling. The pair ended down at the 144.60 level. Against the JPY the USD slid by 50 points to 97.62, as traders responded positively to the recommendation by major banks of the positive Japanese financial sector, and that the worst of the economic decline in Japan may be over. The Dollar fell by 40 points to 1.2992 versus the EUR, as Europe’s financial sector edged higher yesterday. This marks an end to the EUR’s losing streak against the USD.

Looking ahead to today, we may see a strong Dollar as Britain and Europe react negatively to the late negative financial news that came out of the U.S. yesterday, as toxic debt and banking liabilities from the banking sector reach the forefront again. Britain and the Euro-Zone have been very susceptible to negative financial news coming out of the U.S. since the start of the financial crisis. There are a number of economic data releases that may help determine the Dollar’s value later today. The 2 most important of these are U.S. Unemployment Claims at 12:30 GMT and Existing Home Sales at 14:00 GMT. If the economy continues showing bearish figures, the USD may respond in kind.
EUR
Pound Slumps as Financials Climb
The Pound dropped as Britain and European Banks climbed in yesterday’s trading session. The FTSE, DAX and CAC 40’s gains were led by the top financial institutions. The most notable increases were held by the major British and European banks, including HSBC, Barclays, Lloyds, and Deutsche Bank. This was partially owed to helpful words from U.S. Treasury Secretary Timothy Geithner. However, on the negative side for the Pound was the gloomy budget released by Britain’s Chancellor of the Exchequer Alistair Darling. This comes about as he revealed that income taxes will increase, government spending will swell, and Britain’s debt will climb.

As a result of the slump in the British economy, and traders opting to drop the Pound for the equities market, the Pound made terrible losses in Wednesday’s trading. The British currency fell by a massive 230 points versus the Japanese currency to close at 141.26. Against the EUR, the Pound plummeted by 150 points as the EUR/GBP started to move higher again resulting from the Euro-Zone economy showing some positive economic advances. The GBP/USD pair finished lower by over 230 points at 141.21, as traders fear the mounting debt of the British economy and prefer the safe-haven U.S. Dollar.

Today, the Pound is likely to continue to deteriorate as Britain reacts to the banking worries from the U.S. The most significant data release from Britain later today will be the CBI Industrial Order Expectations at 10:00 GMT. The British currency is also likely to react to the other spattering of news events coming out of the Euro-Zone and the U.S. These include various manufacturing data from France and Germany, and U.S. Existing Home Sales later in the afternoon. The Pound’s currency crosses are also likely to be determined by unexpected speeches by U.S. Treasury Secretary Timothy Geithner and British Prime Minister Gordon Brown later today.
JPY
Yen Climbs against Majors
The Yen rose against most of its major currency pairs in yesterday’s trading, as the JPY’s safe-haven status returns to the forefront. The Yen’s gain against the Dollar in late trading is largely owed to fears that the stress tests for U.S. banks from the Obama administration are likely to reveal great losses in the U.S. banking sector. The USD/JPY currency pair finished lower by 50 points at 97.62. The JPY also made some impressive gains against the Pound to close up by over 230 points at 141.21. This comes about before a report showing that the British economy shrank for the 3rd successive quarter. However, the Yen fell by 10 points against the EUR to close at 126.91.

The Yen seems to be trading on unsteady ground as uncertainty in the financial world reappears on center stage. Just as things seemed to be improving, the Obama administration has set new hurdles for U.S. banks, which is likely to reveal further losses. However, this is likely to show pessimism in the second largest economy. When it comes to the forex market, however, the Yen is likely to benefit from its safe-haven status. This will in-turn go against the Japanese government and Bank of Japan (BoJ) as they desire a weak Yen in order to increase exports and recover from the current financial crisis relatively faster.
Crude Oil
Crude Oil Prices Stable near $48.50
The price of Crude Oil slipped slightly as U.S. Crude Oil Inventories rose higher than expected. The price of the black gold slid by 30 points to $48.43 a barrel. Crude Oil didn’t slide as much as people thought it would following the release of this important data, as stock markets across the globe made some gains, thus spurring equities and commodities upwards. Crude Oil seems to have reached its equilibrium as prices have not slipped below the $48 mark in more than 3 weeks.

In order to see a vast improvement in Crude prices in the coming weeks, we will need to see a string of positive economic data releases from the world’s leading economies. Truth be said though, a full-fledged global economic recovery is unlikely to occur before the middle of 2010. However, in the short-medium there is some leeway for the price of oil to hit $60 a barrel, provided demand can support this price.

=> Technical News

EUR/USD
After breaking out of its latest range-trading pattern, this pair may now be on track to discovering a new range. After yesterday’s volatile upward movement, the pair has now leveled off and all oscillators are indicating neutrality. However, there does appear to be a recent bullish cross on the daily chart, signaling further upward mobility. Going long with tight stops might be a wise choice today.
GBP/USD
There appears to be a bearish cross forming on the Slow Stochastic on the hourly chart, signaling an impending downward movement. However, the daily chart’s Slow Stochastic shows a recent bullish cross, indicating that the longer-term trend may be bullish. Waiting for the downward correction to finish and then going long might be a wise strategy today.
USD/JPY
This pair appears to be range-trading with no clear indication of direction. The RSI on the daily chart shows that this pair was recently over-sold, signaling that there may be more of an upward correction later in the day. Trading within the range may be a wise choice today; buying on lows, selling on highs.
USD/CHF
The Bollinger Bands on the hourly chart appear to be tightening, signaling that a volatile movement may be imminent. However, all oscillators show the price floating in neutral territory, and the daily chart indicates a clear range-trading pattern in a bullish channel. Buying on lows and selling on highs within this channel might be a wise choice today.

=> The Wild Card

USD/SEK
The price of this pair appears to be floating in the over-sold territory on the RSI of the 4-hour chart, signaling upward pressure. The recent bullish cross on the 4-hour chart’s Slow Stochastic supports this notion. Forex traders can take advantage of the impending upward movement by placing early long positions and riding out the wave.

Daily forex analysis 22-Apr-2009

Posted by admin as Daily forex analysis, Forex News

Economic News

USD
Greenback Advanced vs. the EUR on Crisis Concerns
The Dollar rose to a 5-week high against the EUR as concern the global financial crisis will worsen. This fear boosted demand for the U.S. currency. Renewed worries over the financial turmoil are making investors risk-averse again. In the market’s current direction, the Dollar and the Yen are likely to be favored by the investors, analysts said. The USD traded at $1.2899 per EUR as of 9:13 a.m. in Tokyo from $1.2921 in New York yesterday.

The U.S. currency declined however more than 1% versus the Australian and New Zealand dollar and CHF on reduced concerns about bank balance sheets. This may prompt investors to shift funds to higher-yielding assets. The Dollar has lost more than 10% in the past 2-months against the AUD and NZD on signs the global economic slump may be weakening.

The USD also weakened after Treasury Secretary Geithner said that the vast majority of U.S. banks still have sufficient capital, thus reducing the greenback’s risk haven appeal. The market is awaiting the outcome of the U.S. authorities’ stress tests on banks. The U.S. Treasury Secretary said most U.S. banks had enough capital to keep lending but a pile of bad debts are fostering doubts about their health and slowing a recovery. The Federal Reserve plans to release its test results on May 4. The tests are being used to determine whether the companies have enough capital to cover losses over the next 2 years should the recession worsen.
EUR
EUR Rebounds on Positive German Sentiment
The EUR advanced for the first time in 4 days against the Yen after a report showed German investor confidence in April increased to its highest level in almost 2 years. The European currency has also climbed slightly against the U.S Dollar after the ZEW index rose to 13, from minus 3.5 in March. The currency rose 0.3% to 126.84 Yen, and to $1.2957, from $1.2921 yesterday, and after reaching $1.2990 earlier.

The currency market is highly volatile at the moment, reversing steep moves from one day to the next, and the EUR gained on Tuesday as an improvement in German investor confidence lifted stock markets and helped pull commodity currencies higher. However the EUR gains might be limited and needs to be treated with caution. The Euro currency continues to suffer from risk aversion and expectations of a major change in European Central Bank (ECB) monetary policy, largely imposed on the central bank by deteriorating internal and external conditions.

Any gains in the EUR will likely be limited and the currency may trade as low as $1.24 by the end of the month. This is due to the uncertainty over what unconventional policy steps the European Central Bank may adopt next month. The central bank is expected to cut Interest Rates below their current 1.25%. Analysts also expect the ECB to have to resort to flooding the banking system with money to promote lending and growth, though what method the ECB might use remains in doubt.
JPY
Yen Bullish Day on Strong Export Numbers
The Japanese currency rose against 15 out of 16 most-traded currencies after Japan’s Ministry of Finance said custom-cleared exports declined 45.6% in March from a year earlier, following a record drop of 49.4% in February. The trade balance data seem to suggest that Japan’s economic slump may also ease somewhat in the last quarter. The Yen climbed against the Dollar and the EUR after a government report showed exports fell at a slower pace; spurring speculation the worst of the nation’s recession may be over. The JPY climbed to 98.29 per USD from 98.73 yesterday. Against the EUR, Japan’s currency advanced to 127.09 from 127.81.
OIL
Oil Continues to Trade on Under Stress
Crude Oil prices finished largely unchanged after an industry report showed U.S. stockpiles fell, raising optimism that fuel demand has increased as the economic crisis abated. The gains came as U.S. stock markets rose roughly 1% after industrial bellwether United Technologies posted results that beat Wall Street expectations and bank shares rebounded. The price of Crude plunged as low as $46.70, only to rebound as the gains in U.S. stock markets occurred. Oil prices have been tracking moves in equities closely in recent months as traders look for signs of a recovery from the economic slowdown that has curbed global demand for Oil for the first time in a quarter century.

Crude prices have been trading in a range between $46 and $55 for the past month, after rallying steadily since February from $33 a barrel, helped by hopes of economic recovery and OPEC’s compliance with agreed supply cuts. The producer group has already cut member output quotas by 4.2 million barrels per day since September.
=> Technical News
EUR/USD
The pair has been trading within a restricted range lately, and is currently traded at the 1.2940 level. a double dojy formation on the daily chart indicates that a strong movement is expected, and as a bullish cross takes place on the Slow Stochastic, it appears that an upward move could be imminent. Going long with tight stops might be the right strategy today.
GBP/USD
The daily chart shows that the bearish channel was breached as the cable is currently traded for 1.4640. Furthermore, on the 1-hour chart, the RSI has bottomed beneath the over-sold boarder, and is currently pointing up, suggesting that the bullish trend might continue farther. Going long appears to be the preferable choice today.
USD/JPY
The pair is continuing its bearish momentum as it is traded now around the 98.30 level. A bearish cross on the 4-hour chart’s Slow Stochastic suggests that the bearish move may have more room to go, with the potential of reaching as low as the 97.60 level.
USD/CHF
The trend-line has been relatively flat for the last few days, as the pair is currently traded around the 1.1680 level. A triple doji formation on the 4-hour chart indicates that a sharp movement is expected, and as the MACD is pointing down, it appears that going short could be the right choice today.
=> The Wild Card

EUR/JPY
The bearish trend is showing signs the end may be nearing as the daily chart shows a bullish cross has formed on the slow stochastic, signaling the pair could reverse shortly. This is reinforced as the price is trading in the undervalued zone on the chart’s Relative Strength Index. This could be a good opportunity for forex traders to get out in front of the pair’s correction.

Daily forex analysis 21-Apr-2009

Posted by admin as Daily forex analysis, Forex News

Market Trend EUR/USD GBP/USD USD/JPY USD/CHF AUD/USD EUR/GBP Daily Trend Weekly Trend Resistance 1.3030 1.4635 99.15 1.1765 0.7105 0.8965 1.3010 1.4615 98.95 1.1745 0.7085 0.8945 1.2980 1.4585 98.65 1.1715 0.7055 0.8915 Support 1.2920 1.4525 98.05 1.1625 0.6995 0.8855 1.2890 1.4495 97.75 1.1595 0.6965 0.8825 1.2870 1.4475 97.55 1.1575 0.6945 0.8805

=> Economic News

USD
Drop in Equities Leads to a Higher Dollar
The Dollar continued its bullish run yesterday, appreciating for the 6th day in a row against the EUR as the pair reached a one-month low. Driving the Dollar’s gains were losses in U.S. equity markets which were sparked by renewed banking fears and worries of a delayed U.S. economic recovery. At the end of the day Monday, the EUR was at $1.2907 from 1.3008. The British Pound was at $1.4482 from 1.4470

The greenback appreciated during most of the day’s trading, but the gains accelerated after first quarter earnings reported from Bank of America sparked renewed tension in the banking sector. Heavy losses were seen in U.S. equity markets as the Dow Jones Industrial Average fell 3.56%. This prompted traders to move from positions of higher yielding currencies to more safe-haven bets such as the U.S. Dollar and the Japanese Yen.

The losses seen in the Dollar as the Fed unveiled its quantitative easing program have been erased as the Dollar experiences another bullish run under a period of less risk taking. Higher equity losses have reduced trader’s appetite for riskier currencies, lending strength to the Dollar. This trend could see its first reversal today as Treasury Secretary Geithner is scheduled to speak at 2:00pm GMT. Testimony from Geithner often leads to periods of high volatility in the forex market. The EUR/USD could strengthen above the 1.3000 mark again later today after his speech.
EUR
EUR Continues to Decline Against the Pound and Dollar
The EUR continues to weaken amid further loses in equity markets and reduced risk levels in the currency market. The EUR/USD has now shed all of its gains since the U.S. Federal Reserve began its program of quantitative easing 1-month ago. Some market analysts believe the depreciation of the EUR coincides with the strengthening of the corporate bond market that also occurred three weeks ago. For the past three weeks the EUR has shed 4% against the Dollar and 2% against the GBP.

This losing trend for the EUR versus the Pound could continue today as key economic data is due to be released from both the Euro-Zone and Britain. German ZEW Economic Sentiment is forecasted to make a large improvement from the previous reading while important inflation data will be eyed from England. Yearly CPI is measured against the target rate of inflation set by the Bank of England (BoE). The BoE appears to be ahead of the curve in setting monetary policy. The inflation numbers may come in line and help to strengthen the Pound today, perhaps to the 0.8825 level.
JPY
Less Risk Taking Helps the Yen Rise Across the Board
The Japanese Yen was a big benefactor from yesterday’s flight to safety as the JPY made considerable gains against its major crosses. Declines in U.S. equities had traders scrambling to readjust their positions as market participants sold higher yielding currencies for the safety of the Japanese Yen. This sank the USD/JPY to 97.78 from 99.30. The GBP/JPY fell to 141.64 from 146.69. The EUR/JPY also dropped to 126.21 from 129.29.

Two scenarios could play out in the trading of the Yen today. If declines in equity markets continue for the second day in a row, these may again lower trader’s appetite for riskier currencies and boost the Yen. However, yesterday’s gains may be short lived due to the release of the Japanese Trade Balance. This economic indicator may show worse than expected results as the Japanese export industry has been severely hurt during the economic recession. Past indicators have shown export numbers dropping dramatically. This has the potential to weaken the Yen in the short term horizon.
Oil
Oil Plunges on Renewed Economic Concerns
The price of Crude Oil plunged today on fears of a deepening economic recession in the U.S. The dramatic sell-off occurred after the release of first quarter earnings from Bank of America. The day ended with the price of Crude Oil trading at $48.64. This was 7% lower than today’s opening price.

The sell-off was very characteristic of traders fleeing riskier investments for those that are considered safe havens. Currencies such as the Dollar, the Japanese Yen, and commodities such as Gold and Silver experienced sharp appreciation yesterday. Such a sharp drop in price may have left Crude Oil in an oversold position. The $50 mark may leave some room for profits in Oil trading.

=> Technical News

EUR/USD
The price of this pair appears to be floating in the over-sold territory on the daily chart’s RSI indicating an upward correction may be imminent. The upward direction on the 4-hour chart’s Momentum oscillator also supports this notion. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.
GBP/USD
The hourly 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 over-sold territory, suggesting an upward correction may be imminent. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.
USD/JPY
The typical range trading on the hourly chart continues. The daily chart Slow Stochastic is floating in neutral territory. However, the pair currently sits near the bottom border of the 4 hour chart’s RSI, suggesting an upward correction may be imminent. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.
USD/CHF
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. The downward direction on the 4-hour chart’s Momentum oscillator also supports this notion. When the downward breach occurs, going short with tight stops appears to be preferable strategy.
=> The Wild Card

Crude Oil
Oil prices have dropped significantly yesterday and peaked at $ 48.60 per barrel. However, on the 4 hour chart RSI is floating in an oversold territory suggests that a bullish correction is impending. This might be a great opportunity for forex traders to enter the trend at a very early stage

US Dollar Could Resume Uptrend on Safe-Haven Demand This Week

Posted by admin as Forex News