US Morning Notes - Dollar index trades at lowest level since September 2008

Posted by admin as Forex News

FX Highlights

• USD is trading at its lowest level since September 2008 as the UN calls for replacement of the USD with a new global currency, crude prices surge, equities rally, and gold trades above 1,000 an ounce, Australia’s business confidence rises to a six year high, and UK manufacturing output rises more than expected, commodity currencies supported by the surge in price of gold, improving business confidence from Australia and rising risk appetite as Asian equity markets trade to the years high and emerging equity markets trade above pre-Lehman highs
• Focus turns to today’s release US consumer credit and Canada’s building permits
• Australia’s August NAB business confidence rose to its highest level in six years up 8 points to 18, AUD trades near one year high
• Japan’s August service sector sentiment fell to 41.7 from 42.4 in July, August money supply rises 0.3%, bank lending falls 0.1% current account widens to 1.27 trln JPY, Japanese government sees economy improving but warns that rising unemployment clouds economic outlook, UK Times reports that DPJ policies could lead to fiscal collapse in Japan, JPY higher
• UK August BRC retail sales fall 0.1%, UK manufacturing output for July rises 0.9% and July industrial output rises 0.5%, UK equities rise to 11 month high, GBP higher
• German July industrial output falls 0.9%, German economic minister says industry output is expected to rise in Q3, EUR higher
• Swiss unemployment rate rose to a six-year high at 4%, CHF higher
• Economist Roubini says USD will weaken and is at risk of a crash if deficits are not controlled and debt reduced, he does not see the risk of USD crash in the near term but expects the USD will weaken over time on a trade weighted basis
• OPEC meet Wednesday, no production change is expected
• US equity markets set to open higher, European equities 0.5% higher, Nikkei closed 73 points higher

Upcoming Events

• US- Tuesday, July consumer credit will be released expected at -4.5 bln compared to -10.3 bln last month
• CAN- Tuesday, July building permits expected at 1.5% compared to 1% last month

EU Morning Report – Yen gains against the euro and the dollar

Posted by admin as Forex News

The yen is stronger against the euro and the dollar ahead of a government report forecast to show UK industrial production grew in July at a slower pace.

• Speculation that the Bank of England will expand its asset-purchase program this week weakened the sterling against the yen for a second day.  The pound fell almost 200 pips from yesterday’s high to 151.32.  If industrial production comes in weak and the Bank of England increases their monetary easing, it would boost risk aversion.
• The Bank of England has cut interest rates from 5.75% to a record low of 0.5% and has taken additional steps for example buying bonds in the past one and half years to sustain economic growth.
• The Aussie was close to its highest level in a year against the greenback on speculation Federal Reserve officials will this week signal they plan to hold down borrowing costs.  The Australian dollar rallied to 0.8577 against the dollar yesterday, this morning the AUDUSD eased down to 0.8528 as the Australian dollar slipped 0.4% against the yen.
• According to the Saudi Arabian Oil Minister Ali al-Naimi, the global crude oil markets is in “good shape” with prices between and a barrel and should be satisfactory for both consumers and producers.  The Oil Minister also stated that the “market is well supplied,” as he arrived in Vienna for tomorrow’s OPEC meeting, where the group is expected to leave output quotas unchanged.
• Today, at the end of the Asian session gold broke above the 1000 mark for the first time since late February, spurred by inflation fears.  The all time high is just above 30/oz.

Currency to watch out for: EURUSD & GBPUSD

• The EURUSD pivot point is at 1.4285 with a preference to enter into long positions at 1.4295
• The GBPUSD pivot point is at 1.6300 with a preference to enter into long positions at 1.6310

Today’s calendar and market movers:

• UK Manufacturing Production month on month expected to drop to 0.3%
• German Industrial Production month on month expected to rise to 1.5%
• Canada Building Permits month on month expected to drop to 0.5%

Stocks:

• The US markets were closed yesterday in observance of Labor Day.  As of 06:05 GMT the Nikkei is trading at 0.7% and the Hang Seng at 0.62%.

Daily Forex Outlook - Global Stocks Extend Rally

Posted by admin as Forex News

CURRENCY TRADING SUMMARY - 8^th September (00:30GMT)

U.S. Dollar Trading (USD) continued to be sold on Monday although the market kept to tight ranges as the US was away on Holidays. Asian and European stocks rallied on the lead from US stocks Friday and commodities ended unchanged to slightly higher although Oil was sluggish once again. Looking ahead, July Consumer Credit forecast at -Bn vs. -Bn previously.

The Euro (EUR) continued to be buoyant as fresh gains in Asian stocks sent EUR/JPY higher and Economic data in Europe underpinned gains into the 1.4300’s. July German Industrial Orders at 3.5% vs. 2% forecast. EUR/GBP was supported on GBP concerns ahead of the UK rate decision Thursday. Overall the EUR/USD traded with a low of 1.4288 and a high of 1.4362 before closing at 1.4335. Looking ahead, July German Trade Balance forecast at 11.4bn vs. 11bn previously. Also released, July German Industrial Output forecast at 1.5% vs. -0.1%.

The Japanese Yen (JPY) the Yen was sold across the board as the weekend affirmation by the G20 to continue with global stimulus helping to keep risk appetite and the re-inflation trade going. GBP/JPY gains were unsustainable and USD/JPY ended at the 93 Yen figure roughly were it began. NZD/JPY and AUD/JPY held onto modest gains. Overall the USDJPY traded with a low of 92.82 and a high of 93.31 before closing the day around 93.05 in the New York session.

The Sterling (GBP) had a large bounce going into Europe as news of a bn takeover offer of Cadbury from Kraft led to speculation of substantial M&A buying. This enthusiasm waned as the offer was rejected and attention turned to the MPC rate announcement on Thursday which has the potential to create further GBP downside if the Asset Purchase program is increased again from the current 175bn pounds. Overall the GBP/USD traded with a low of 1.6327 and a high of 1.6444 before closing the day at 1.6340 in the New York session. Looking ahead, July Industrial Output forecast at 0.2% vs. 0.5% previously. Also released, Manufacturing Production forecast at 0.3% vs. 0.4% previously.

The Australian Dollar (AUD) opened at year highs and continued upward with the major technical break of 0.8480 fueling fresh buying from multiple sources. Strong Gold and stocks helped to underpin with the only concern being continued weakness in Oil. Overall the AUD/USD traded with a low of 0.8507 and a high of 0.8578 before closing the US session at 0.8350. Looking ahead, August NAB Business Confidence previously at 10.

Gold (XAU) kept in a tight range holding above 0 an ounce with the market consolidating recent ranges just under the key 00 an ounce level. Overall trading with a low of USD9 and high of USD6 before ending the New York session at USD5 an ounce.

TECHNICAL COMMENTARY

Euro - 1.4335
Initial support at 1.4178 (Sept 1 low) followed by 1.4046 (AUG 17 low). Initial resistance is now located at 1.4407 (Aug 27 high) followed by 1.4447 (Aug 5 high)

Yen - 93.05
Initial support is located at 91.74 (July 13 low) followed by 90.54 (February 13 low). Initial resistance is now at 94.07 (August 28 high) followed by 95.06 (Aug 14 high).

Pound - 1.6350
Initial support at 1.6237 (Sept 3 low) followed by 1.6114 (Sept 1 low). Initial resistance is now at 1.6546 (Aug 24 high) followed by 1.6665 (Aug 26 high).

Australian Dollar - 0.8555
Initial support at 0.8379 (Sept 4 low) followed by the 0.8239 (AUG 27 low). Initial resistance is now at 0.8694 (Aug 28 2008 high) followed by 0.8813 (AUG 22 2008 high).

Gold - 995
Initial support at 944 (Aug 31 low) followed by 939 (Aug 24 low). Initial resistance is now at 997 (Sept 3 high) followed by 1000 (Psychological Round Number).

EU Morning Report – Euro advances higher as more signs point to a recovery

Posted by admin as Forex News

The euro climbed over 140 pips from Friday’s lows ahead of a report forecast to show European investor confidence rose to the highest level since July 2008.

• The European investor confidence is based on a survey of about 2,800 investors and analysts and the index is considered to be a leading indicator of economic health.  If today’s data is realized it would add to signs that the region’s recession is easing.
• The 16-nation currency also advanced against the Japanese yen on expectations a German report will show factory orders expanded in July for a fifth month.
• Over the weekend, the G-20 finance chiefs pledged to maintain global stimulus measures, stating that it would be premature to start unwinding record-low interest rates and more than trillion in fiscal stimulus.
• The AUDUSD advanced over 150 pips touching a high of 0.8538, the highest level since September 2008, after a report showed the nation’s economic growth unexpectedly accelerated last quarter.
• Crude oil prices hold near a barrel ahead of OPEC’s meeting this Wednesday in Vienna.  According to OPEC’s President, who is also Angola’s oil minister, the 12-member group will likely keep output quotas unchanged.  In the past year oil prices has been very volatile, reaching 7 a barrel in July 2008 before diving to a barrel in February.
• On Friday, The NFP report showed that US companies cut payrolls by 216,000 in August, fewer than economists had forecast and following a 276,000 reduction in July.  The unemployment rate rose to 9.7% from 9.4%, the highest level in 26-years.

Currency to watch out for: EURUSD & AUDUSD

• The EURUSD pivot point is at 1.4285 with a preference to enter into long positions at 1.4295
• The AUDUSD pivot point is at 0.8470 with a preference to enter into long positions above 0.8470

Today’s calendar and market movers:

• EU Investor Confidence expected to rise to -13.5
• German Factory Orders is expected to report a 2% gain in July after rising 4.5% in June.
• U.S. and Canadian banks will be closed in observance of Labor Day

Stocks:

• US stocks closed higher on Friday with the Dow up 1%, the S&P up 1.3% and the NASDAQ higher by 1.8%
• As of 06:10 GMT the Nikkei is trading at 1.33% and the Hang Seng at 1.37%

Weekly Outlook - US Unemployment Jumps to 26 Year High.

Posted by admin as Forex News

Last week’s currency trading review

The Dollar lost ground against risk currencies as the jump in US Unemployment was shrugged off on Friday and stocks finished on a positive note. Some big moves were seen on Tuesday as the stock market took a dive and the Dollar benefited from safe haven flows. The rest of the week saw a return to USD weakness as equities recovered. August Unemployment Rate Jumped to 9.7% vs. 9.4% previously and the net change was -213K vs. -225k forecast. August Manufacturing PMI jumped above the expansionary 50 level to 52.9 vs. 48.9 previously. The Euro was hurt by cautious comments from ECB President Trichet on Thursday after the ECB held at 1.0%. Trichet commented that the EU faced a bumpy and uneven recovery and this was highlighted by the Unexpected fall in July retail Sales down -0.2% vs. +0.2% forecast. EUR/JPY buying on Friday helped the pair close at the 1.4300 figure with 1.4200 supporting on both Thursday and Friday. The EUR/USD fell -0.02% closing at 1.4299, after opening the week at 1.4302.

The Japanese Yen tested fresh multi-month lows on the back of the Tuesday US stock correction, trading at 92 Yen on the USD/JPY. The rest of the week saw a cautious recovery on crosses and improving risk sentiment saw the Yen finish on the back foot for the first time in 4 weeks. GBP/JPY found support 150, EUR/JPY at 131.50 and AUD/JPY at 76.50 Yen. The USD/JPY closed down -0.66% at 92.98 after opening the week at 93.59. The GBP finally gained some traction after falling from the 1.700 handle in August. Direction was taken from stocks and the pair rallied from weekly lows at 1.6110 to finish just under 1.6400. EUR/GBP continued to flirt with 0.8800 but finished under the level as the recent rally on the cross ran out of steam. GBP/USD gained +0.76% closing at 1.6391 after opening at 1.6267. The AUD was the strongest currency in the market breaking out the range seen over the past 2 months between 0.8150-0.8480. Strong data during the week allowed the pair to break higher on the back of Friday’s non farm action. A break and close above 0.8500 leaves the Aussie in a bullish position especially with Gold flirting with 00 an ounce. The AUD/USD closed up 1.11% at 0.8503 after opening at 0.8409.

The forex trading week preview

In the States; light data week with Thursday’s Trade Balance the first key piece of data. July Trade Balance forecast at -26.8bn vs. -27b previously. Weekly Jobless claims forecast at 555k vs. 570k also released on Thursday. Crude Oil Inventories will be released on Thursday due to the labor holiday on Monday. On Friday, September University of Michigan forecast at 67.3 vs. 65.7 previously. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone; On Monday, German factory Orders are forecast at 2% vs. 4.5% previously. On Tuesday Industrial Production forecast at 1.6% vs. -0.1% previously. Finally on Friday, German August WPI is forecast at 0.0% vs. 0.5% previously. In the UK; big week for the GBP with the BOE on Thursday the highlight expected to hold at 0.5% but with attention turning to comments about the QE program. On Tuesday, July Industrial Production is forecast at 0.2% vs. 0.5% previously. Also released Manufacturing Production forecast at 0.3% vs. 0.4% previously. On Wednesday, July Trade Balance is forecast at -2000m vs. -2176m previously. We will provide our previews and reviews of these data releases in the daily summary.

In Japan; On Tuesday, July Trade Balance forecast at 495b vs. 600b. On Thursday, Core Machinery Orders are forecast at -3.1% vs. 9.75 previously. On Friday Q2 GDP is forecast to be finalized at 0.9% unchanged from initial readings. We will provide our previews and reviews of these data releases in the daily summary.

In Australia; On Wednesday, July Retail Sales are forecast at 0.5% vs. -1.4% previously. On Thursday, RBNZ meet and are expected to hold at 2.5%. Also on Thursday, Australian August Employment Change forecast at -15k vs. 32k previously. We will provide our previews and reviews of these data releases in the daily summary.

TECHNICAL COMMENTARY

Euro - 1.4325
Initial support at 1.4178 (Sept 1 low) followed by 1.4046 (AUG 17 low). Initial resistance is now located at 1.4407 (Aug 27 high) followed by 1.4447 (Aug 5 high)

Yen - 93.15
Initial support is located at 91.74 (July 13 low) followed by 90.54 (February 13 low). Initial resistance is now at 94.07 (August 28 high) followed by 95.06 (Aug 14 high).

Pound - 1.6405
Initial support at 1.6114 (Sept 1 low) followed by 1.6034 (Jul 13 low). Initial resistance is now at 1.6381 (Aug 28 high) followed by 1.6546 (Aug 24 high).

Australian Dollar - 0.8530
Initial support at 0.8239 (AUG 27 low) followed by the 0.8156 (AUG 17 low). Initial resistance is now at 0.8694 (Aug 28 2008 high) followed by 0.8813 (AUG 22 2008 high).

Gold - 992
Initial support at 944 (Aug 31 low) followed by 939 (Aug 24 low). Initial resistance is now at 997 (Sept 3 high) followed by 1000 (Psychological Round Number).

Daily Forex Outlook - US Unemployment rises to 9.7%

Posted by admin as Forex News

CURRENCY TRADING SUMMARY - 7^th September (00:30GMT)

U.S. Dollar Trading (USD) was volatile as usual for a non farm payroll event but immediate strength after the release of the Unemployment data was reversed as US stocks turned higher from the open. Risk was put back on and the USD/JPY managed to hold above 93 Yen. August Non Farm Payrolls at -216k vs. -225k forecast with an Unemployment Rate at 9.7% vs. 9.5% forecast. Crude Oil was up {content}.06 to close at .07. In US share markets, S&P ended +13 points (1.31%) at 1016, NASDAQ ended +35 points (1.79%) at 2018 and DOW JONES ended +96 points (1.03%) at 9441. Looking ahead, Holiday in the US today.

The Euro (EUR) tested 1.4200 before bouncing above 1.4300 in a bullish reversal as EUR/JPY buying led the Euro higher. The market is still contained within the recent ranges but the market has been selling rallies which give the preference of buying dips for an eventual breakout on the topside. Overall the EUR/USD traded with a low of 1.4190 and a high of 1.4327 before closing at 1.4311. Looking ahead, July German industrial Orders forecast at 2% vs. 4.5% previously.

The Japanese Yen (JPY) was sold in the US session as the market found itself quite long the Yen after days of buying. USD/JPY led the charge higher but AUD/JPY provided strong support. The markets preference to sell USD/JPY on rallies along with the crosses will be tested this week. Helping the mood was news from China that bank controls will not be implemented this year. Overall the USDJPY traded with a low of 92.30 and a high of 93.26 before closing the day around 92.99 in the New York session.

The Sterling (GBP) followed the Euro gyrations lower than higher but enjoyed support from improved risk appetite. 1.6400 proved solid resistance but the pullback into the weekend was very shallow. GBP/JPY traded above 152 Yen as the recovery extended from the key 150 earlier in the week. Overall the GBP/USD traded with a low of 1.6288 and a high of 1.6410 before closing the day at 1.6395 in the New York session.

The Australian Dollar (AUD) broke out of a 3 month range between 0.8480 and 0.8180 on the topside as the Aussie surged back into favor. AUD/JPY continued to recover and could test the critical 80 Yen level. Positive China news and strong Gold prices led to a strong undercurrent of support on dips. Overall the AUD/USD traded with a low of 0.8380 and a high of 0.8535 before closing the US session at 0.8306. Looking ahead, NAB Business Confidence previously at 10.

Gold (XAU) pulled back from the high 0’s and did not challenge the 00 level. Overall trading with a low of USD5 and high of USD7 before ending the New York session at USD2 an ounce.

TECHNICAL COMMENTARY

Euro - 1.4325
Initial support at 1.4178 (Sept 1 low) followed by 1.4046 (AUG 17 low). Initial resistance is now located at 1.4407 (Aug 27 high) followed by 1.4447 (Aug 5 high)

Yen - 93.15
Initial support is located at 91.74 (July 13 low) followed by 90.54 (February 13 low). Initial resistance is now at 94.07 (August 28 high) followed by 95.06 (Aug 14 high).

Pound - 1.6405
Initial support at 1.6114 (Sept 1 low) followed by 1.6034 (Jul 13 low). Initial resistance is now at 1.6381 (Aug 28 high) followed by 1.6546 (Aug 24 high).

Australian Dollar - 0.8530
Initial support at 0.8239 (AUG 27 low) followed by the 0.8156 (AUG 17 low). Initial resistance is now at 0.8694 (Aug 28 2008 high) followed by 0.8813 (AUG 22 2008 high).

Gold - 992
Initial support at 944 (Aug 31 low) followed by 939 (Aug 24 low). Initial resistance is now at 997 (Sept 3 high) followed by 1000 (Psychological Round Number).

GBPUSD: Strength Sees The 1.6622 Level Being Targeted

Posted by admin as Daily forex analysis

As strong upside gains continues to be seen pushing GBP higher in early trading today, the pair now runs the risk of further upside targeting its Aug 21′09 high at 1.6622. With its counterpart EUR currently seen taking out its YTD high at 1.4446 and across the board Dollar weakness…

EURUSD: Breaking Higher With Attention On The 1.4446 Level

Posted by admin as Daily forex analysis

A clear breakout seen in early morning trading today has increased the risk of further strength towards its YTD high at 1.4446. As highlighted in our special focus, the bigger picture remains higher medium term and attacking the upside with an eventual break of 1.4446 will activate that uptrend towards…

Technical Analysis Daily: USD/JPY

Posted by admin as Daily forex analysis

Dollar/Yen was trading hesitantly on Monday, forming divergence on the daily chart. The main trend should continue to be descending, but be aware for possible upwards correctional turn if yesterday’s top and first resistance for today at 93.30 is broken. Break above this level could also be seen as a…

Currency Technical Report

Posted by admin as Daily forex analysis

Euro moved sideways yesterday as US markets were closed. Today starts positive and euro is moving higher above 1.4400 towards 1,4440-50 tops, which is now a possible target. As we mentioned in our analysis yesterday, new tops are likely to be formed and a move towards 1.4500-20 is possible.