InvestMacro Forex News

By TraderVox.com

Tradervox.com (Dublin) – Economists are predicting that Italy will become the sixth country in the euro region to seek international bailout. Italy is the third largest economy in the euro area and it is a member of the G7 nations. However, the country has the third largest debt market with its debt-to-GDP ratio standing at 120 percent which is the goal set for Greece for 2020. Most of the economists are saying that Italy has escaped the spotlight only because investors are looking at Spain; but warned that with the ECB rate decision pending, Italy can easily slip into the limelight.

Italy’s efforts at the EU Summit indicate that the Prime Minister Mario Monti is worried about the state of the economy in his own country. Monti inherited a government in huge economic turmoil from Silvio Berlusconi in 2011 and embarked on a series of reforms that created some market confidence.

However, the country’s economy has since contracted by 0.8 percent in the first quarter as compared to stagnation of the euro zero. In addition, purchasing manager’s indicators in the country have shown a contraction in all sectors in the second quarter. In the past two months, the retail sales for the country have been below the expectation coming in at negative 0.8 and negative 1.6 respectively.
The country’s economy is slowing down as global economy worsens and the austerity measures in the region take effect. It is evident that the public is not supportive of Mario Monti’s actions and neither is the market. This is coming amidst great pressure as 10-year bonds shoot past 6 percent which is unsustainable given the growing contraction and the high debt-to-GPD ratio.

With these conditions, it is clear that Italy cannot meet its debt repayment obligations hence may request for bailout making it the sixth country in the region to do so. While Monti has some political support from parties in parliament, it will be hard for lawmakers to support further reforms which are needed to give Italy some relief from the market. Some of the reforms that are needed involve pension and labor reforms.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

Daily Market Analysis by Real-Forex

Tracking the EUR/USD pair

Date: 04.07.2012   Time: 16:04  Rate: 1.2516

Daily chart

Last Review

The price has descend to check the Bollinger moving average which is suppose to use as a dynamic support, in case it will actually become a support- the price should breach the 1.2750 price level since this level is the neckline level of the “Double bottom” pattern and its target is around the 1.3090 price level. On the other hand, if the price will not break the 1.2750 price level and go back under the 1.2436 level, it is possible to assume that in first stage the price will check the last low on the 1.2290 price level.

Current review for today

The price has descended under the Bollinger’s moving average and it looks like making its way towards the 1.2436 support level. In case the price will go down under the 1.2436 price level, it will be possible to assume that it will check the 1.2290 last low at first stage. On the other hand, breaching the 1.2750 price level which is the neckline of the “Double bottom” pattern will lead the price towards the 1.3090 price level, the pattern target.

You can see the chart below:

4 Hour chart

Date: 04.07.2012   Time: 18:11 Rate: 1.2519

Last Review

It looks like the price has stopped at the 38.2% Fibonacci correction level of the last uptrend (blue broken line) and it is possible to assume that its first target from this point is the 1.2690, while breaking this level will lead the price towards the last peak on the 1.2750 price level. On the other hand, proven breaking of the 1.2580 price level will probably continue the correction towards the 1.2550 and the 1.2516 price levels.

Current review for today

The price has corrected the mentioned move upwards (blue broken line) by two thirds (61.8%) by Fibonacci retracement. Breaking of this level will indicate that the price will reach at first stage the closest support at the 1.2440 price level, while its breaking will probably lead the price towards the last low at the 1.2290 price level. On the other hand, stoppage of the price at the current level and breaching the 1.2690 price level will indicate that the price is headed towards the last peak on the 1.2750 price level.

You can see the chart below:

GBP/USD

Date: 04.07.2012   Time: 18:24  Rate: 1.5590

4 Hour chart

Last Review

The price is clearly supported by the dynamic support in the shape of the Bollinger’s moving average which sharply goes upwards and brings power to the ascending move. Breaching the 1.5716 price level will probably lead the price to check again the last peak on the 1.5777 price level. on the other hand, breaking the 1.5660 price level will probably lead the price towards the closest support level at first stage.

Current review for today

The price has breached the 1.5650 support level and reached the 1.5576 price level, this is a 61.8% Fibonacci correction level of the last ascending move (blue broken line). Breaking of this level will probably lead the price towards the “Wolfe waves” pattern target on the crossing of the price with the line connecting between points 1 and 4, around the 1.5400 price level, while this will be used as a support level. On the other hand, stoppage of the price at the current area and breaching the 1.5716 price level will confirm that the current correction is over and its target will be the last peak on the 1.5777 price level.

You can see the chart below:

AUD/USD

Date: 04.07.2012   Time: 16:45  Rate: 1.0282

4 Hour chart

Last Review

The price breached the 1.0278 price level and currently going back to check whether this level can switch its role from a resistance to a support. In case it will, the first target will be the 1.0326 price level. On the other hand, breaking of the 1.0224 price level will probably lead the price to a correction towards the 1.0170 price level at first stage, this is a 38.2% Fibonacci correction level of the last move upwards (blue broken line)

Current review for today

The price has reached the 1.0326 target (minus 6 pips) and went back to the 1.0278 support level. its descend under this level and under the Bollinger’s moving average will indicate that it will perform a correction in size of between a third and two thirds of the last ascending move (blue broken line), meaning between the 1.0195 and the 1.0119 price levels. On the other hand, breaking of the 1.0326 price level will lead the price towards the next resistance on the 1.0474 price level.

USD/CHF

Date: 04.07.2012   Time: 16:52  Rate: 0.9593

4 Hour chart

The price has breached the 0.9564 price level and reached the 0.9594 resistance level. Breaking of this level will probably lead the price north towards the next resistance on the 0.9653 price level. On the other hand, stoppage in the current area and its descend under the 0.9513 price level will indicate that the price is headed towards the next support on the 0.9463 price level.

You can see the chart below:

USD/JPY

Date: 04.07.2012   Time: 16:57  Rate: 79.80

4 Hour chart

The price is trying to get support above the 79.80 price level, while breaching of the 80.15 price level will lead the price at first stage towards the last peak on the 80.60 price level. On the other hand, descend of the price under the 78.80 price level will indicate that the price will probably descend to check the last low on the 77.66 price level.

You can see the chart below:

Daily Market Analysis by Real-Forex

By Central Bank News
    The European Central Bank (ECB) cut its benchmark repurchasing rate (repo rate) by 25 basis points to a record low 0.75 percent to aid a weak economy in the euro area that is keeping inflation in check.
    ECB President Mario Draghi said the economy in the 17-nation euro area continued to remain weak with heightened uncertainty weighing on confidence and sentiment.
    “The risks surrounding the economic outlook for the euro area continue to be on the downside, Draghi told a news conference in Frankfurt.
    “The main downside risks relate to the impact of weaker than expected growth in the euro area. Upside risks pertain to further increases in indirect taxes, owing to the need for fiscal consolidation, and higher than expected energy prices over the medium term,” he added.
    
     Draghi said it was essential for banks in the euro area to strengthen their balance sheets so they can provide loans to businesses and consumers.
     Looking beyond the short-term, he expects the recovery to be weighed down by tensions in government bond markets, high unemployment and the need to pay down debt by both the financial and the non-financial parts of the economy.

Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.

Source: ForexYard

The euro fell against most of its main currency rivals yesterday, as expectations that the European Central Bank will cut euro-zone interest rates today weighed down on the currency. The price of crude oil also fell yesterday, as tensions between Iran and Western countries decreased. Turning to today, in addition to the euro-zone Minimum Bid Rate, traders will also want to pay attention to the US ADP Non-Farm Employment Change figure, scheduled to be released at 12:15 GMT. The ADP figure is considered an accurate predictor for Friday’s all important Non-Farm Payrolls figure, and consistently leads to market volatility.

Economic News

USD – ADP Non-Farm Employment Change Could Generate Dollar Volatility

The US dollar saw gains against several of its main currency rivals yesterday, as risk aversion due to poor euro-zone and British news boosted safe-haven assets. The GBP/USD fell close to 100 pips during the European session, following the release of a worse than forecasted British Services PMI. The pair eventually reached as low as 1.5580. The EUR/USD also dropped some 90 pips yesterday, eventually reaching the 1.2507 level.

Today, dollar traders can anticipate heavy market volatility, as a batch of significant euro-zone and US news is set to be released. Analysts are forecasting that the European Central Bank is getting ready to cut euro-zone interest rates when they meet today at 11:45 GMT. If true, the dollar could extend its recent gains against the euro. At 12:15 GMT, the ADP Non-Farm Employment Change figure is set to be released. With analysts forecasting the figure to come in below last month’s result, the greenback could see some losses against its safe-haven rival, the Japanese yen, during afternoon trading.

EUR – EUR Could Extend Bearish Trend Today

The euro fell against several of its rivals yesterday, including the Australian dollar and Japanese yen, as expectations that the ECB will cut euro-zone interest rates weighed down on the common-currency. The EUR/AUD fell some 85 pips during the European session, eventually hitting the 1.2165 level by the afternoon session. Against the JPY, the euro dropped some 70 pips over the course of the day, eventually reaching 99.78 before staging a very slight upward correction.

Today, the euro-zone Minimum Bid Rate at 11:45 GMT, followed by the ECB Press Conference at 12:30, is likely to be the most significant news events. Given the impact the euro-zone debt crisis has had throughout the region, analysts are forecasting that the ECB will cut interest rates today from 1.00% to 0.75%. If true, the euro may extend its bearish trend going into the rest of the week. That being said, depending on the outcome of Friday’s all important US Non-Farm Payrolls figure, the euro could recoup some of its recent losses before markets close for the weekend.

Gold – Gold Resumes Bearish Trend as USD Strengthens

A strengthening US dollar caused the price of gold to fall during trading yesterday. A bullish USD means that gold becomes more expensive for international buyers, and typically causes prices to drop. Gold fell close to $8 an ounce over the course of the day, eventually reaching as low as $1611.29 before staging a moderate upward correction and stabilizing around the $1615 level.

Today, gold traders will want to pay attention to the US ADP Non-Farm Employment Change figure. The figure is considered an accurate predictor of Friday’s Non-Farm Payrolls indicator. Should today’s news come in below analyst expectations, the USD could turn bearish which may help gold recoup yesterday’s losses.

Crude Oil – Oil Takes Moderate Losses as Iran Tensions Calm

The price of oil fell just over $1 a barrel yesterday, as tensions between Iran and the West calmed down and supply side fears among investors eased. Crude fell as low as $86.46 before staging a slight upward correction during the afternoon session, to reach as high as $87.37.

Turning to today, crude oil could resume its downward trend if the European Central Bank decides to cut euro-zone rates and investors shift their funds to safe-haven assets. That being said, any escalation in the conflict over Iran’s disputed nuclear program could lead to significant gains for crude.

Technical News

EUR/USD

The Williams Percent Range on the weekly chart is approaching oversold zone. If it continues moving down, it may signal a possible upward correction in the coming days. This theory is supported by the MACD/OsMA on the same chart, which has formed a bullish cross. Going long may be the wise choice for this pair.

GBP/USD

Most long-term technical indicators place this pair in neutral territory, meaning that no defined trend can be predicted at this time. Taking a wait and see approach may be a wise choice, is a clearer picture is likely to present itself in the near future.

USD/JPY

The MACD/OsMA on the daily chart appears close to forming a bearish cross, signaling a possible downward correction in the near future. That being said, most other technical indicators show this pair range trading. Taking a wait and see approach may be the best option at this time.

USD/CHF

The Williams Percent Range on the weekly chart has almost crossed into overbought territory. Furthermore, a bearish cross has formed on the daily chart’s MACD/OsMA. Traders may want to go short in their positions ahead of a possible downward correction.

The Wild Card

AUD/JPY

The Slow Stochastic on the daily chart appears close to forming a bearish cross, indicating that downward movement could occur in the near future. This theory is supported by the Williams Percent Range on the same chart, which has crossed into overbought territory. Forex traders may want to open short positions ahead of a possible downward breach.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Article by Investment U

In focus this week: a very cheap oil play that is already rebounding, timber and farmland, and the SITFA.

One of the largest independent oil producers in the world is really cheap! CNOOC Limited (NYSE: CEO).

The U.S. ADR is off 25% since the start of the big sell-off in oil, but despite the continued slide in oil prices, CNOOC has actually been rebounding.

David Hurd of Deutsche Bank said the early recovery in price is due to bargain hunters going after returns and operating margins that are, as he described them, head and shoulders above their international peers.

A Macquarie analysis shows CNOOC with enough cash to easily cover their costs and still pay their 3% dividend. And, the current stock price has already been discounted enough to allow Brent crude to drop to $70 from its current price near $100.

According to Barron’s, this story gets better with the fact that their P/E is a skimpy eight down from its historic level of 11.5 and well below the rest of the industry at 12.

CNOOC production is 78% oil, which is higher than its competitors, and two thirds of its reserves are oil, not natural gas, which will be a huge boon when oil recovers, which it will.

Goldman upgraded the stock to a conviction “Buy” and also sees oil prices rebounding on Asia and Chinese demand. They have Brent running back to around $120 per barrel this year.

Almost everything is pointing to a good recovery in oil and CNOOC.

Watch this one!

Timber and Farmland Up Next

According to the Journal, there’s a race on worldwide to convert paper money into hard assets, and timber and farmland are where a lot of it is heading.

Dennis Moon, of U.S. Trust’s Specialty Asset Management division, says there has been a big uptick in the rush to farm and timberland as investors, who do not need liquid assets, look for places to avoid everything from inflation to a depression.

Moon said, “We are buying dirt with a long history of stability despite everything that has happened in the world economy.”

Returns on timber and farmland come from two sources: the gross cash generated by the production on the land and the long term appreciation of the land itself. The total long-term return is in the low double digits.

That beats a 10-year Treasury at 1.6%, and without the guaranteed sell-off in treasuries that has to come soon.

And, according to Moon, despite the worldwide housing crunch driven sell-off in timber, the long-term returns on timber are about the same as farmland.

Timber however doesn’t produce any annual income as farmland does. Timber is more of a big payday down the road investment, so you have to be able to live without the income during what Moon described as a 10- to 15-year investment.

As the dollar and the euro continue their money printing driven race to what appears to be a collapse, hard assets like land will become even more valuable as a real safe haven. Land that can produce an annual income, farmland, will be in very high demand.

It isn’t for everyone, but it’s definitely something we should be looking at as a defensive play.

Now, the SITFA

This week it goes to those people who thought there was a real estate crisis in California.

The Journal had a recent article about a three-bedroom, two-bath, 1,700 square-foot home, just down the street from FB headquarters, that’s selling for, I hope you’re sitting down, $1.295 million. You heard me right, million!

Are you kidding me? What happened to being under water in the golden state, and evictions, these folks just bought the house in 2007 for $985,000 and it already has a contract for more than the asking price.

This is a nice house, what we would call a starter, nothing special, just nice, but $1.295 million!?!

I’m sorry, my starter home was $37,500 and was almost identical to this one; a rancher with a two-car garage. Even with inflation since 1983, when I bought my first house, it can’t be that much for a rancher.

I hope the folks buying this house have received big bonuses, they’ll need it.

I wonder what the taxes are in this neighborhood for a $1.295 million house? I wonder if they have even thought about it.

See you all next week.

Article by Investment U

Source: ForexYard

The early afternoon release of Canada’s GDP data revealed an economy in modest stability. The release of a nation’s gross domestic product report is a strong indicator of that nation’s economic health and well-being. Today’s release revealed to investors that Canada’s economy is stronger than previously assumed.

The forecasts for today’s numbers were for a mildly sluggish publication of 0.2%, below last quarter’s 0.3% growth. The actual reading of 0.3% has given traders cause to look over their numbers once again and revalue their Canadian dollar (CAD) positions. Look to the CAD making decently bullish moves throughout the week as one result of today’s numbers.

Read more forex trading news on our forex blog.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Source: ForexYard

This morning’s early publication of Japanese housing starts portrayed a capital economy in deep contraction heading into the end of 2011. Housing starts are an indicator of the number of private homes starting construction, making it an early gauge of domestic capital investment and early consumer spending and optimism.

The indicator was expected to show a modest uptick of approximately 8.3% this month. The shocking 10.8% contraction in housing starts has riled several large investors. The Japanese yen (JPY) was trading with mixed results as a consequence and some are wondering what impact this will have on yen values as the year comes to a close.

Read more forex trading news on our forex blog.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Source: ForexYard

The euro zone continues to struggle with economic data heading into the fourth quarter of 2011. This morning’s publication of Germany’s retail sales revealed even more sluggish growth in the region’s largest economy.

The report was expected to show a healthy month-on-month growth of 1.1%, a solid uptick from last month’s 2.7% contraction. The actual reading, while far better than last month’s, was still shy of the mark with only 0.4% growth being reported. The impact has been a mild downward tug on the EUR since the data’s release.

Read more forex trading news on our forex blog.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Source: ForexYard

This morning’s publication of Switzerland’s KOF Economic Barometer revealed an economic outlook that has dipped somewhat since last month’s reading. A combination of economic indicators is now portraying economic conditions slightly more pessimistically than before.

The measure only fell by approximately 0.2 points from 1.00 to 0.80, a measure that still falls within optimist territory, but only slightly. The Swiss economy has fared relatively well over the last several years, only recently falling from a gouging effect brought on by an artificially strong currency.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.