Month: June 2009

Gold is stepping up casually from yesterday’s lows in reaction to a broad-based depreciation of the greenback.  However, volume is declining to the upside, while the precious metal hasn’t managed to get back above our 2nd or 3rd tier trend line or into the thick of the trading range from last week.  Therefore, the outlook for gold still has a negative tint to it, especially since crude and equities are presently trading in disadvantageous positions.  On the other hand, the Cable and EUR/USD have made encouraging pops over the past 24 hours, giving some hope to gold’s uptrend since they are positively correlated.  In all, gold is trading in a confusing range, and seems undecided as far as which direction to head in.  The mixed performance of gold’s correlations shows that it’s best to be in a neutral position as the markets sort themselves out.  The U.S. will report some key economic data today along with the Fed’s monetary policy decision.  Hence, we could get a clearer picture by tomorrow.  We maintain our negative outlook trend-wise on gold for the time being since the downside still has momentum on its side.

Present Price: $927.30/oz

Resistances: $931.41/oz, $935.62/oz, $939.82/oz, $941.85/oz, $943.88/oz

Supports: $923.96/oz, $927.40/oz, $920.95/oz, $917.49/oz, $914.99/oz

Psychological: $950/oz, $900/oz

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers – The USD/JPY continues to head south from our 2nd tier uptrend line as the Yen participates in a broad depreciation of the Dollar.  The Yen is also experiencing strength after Japan reported a higher than expected Trade Surplus, showing the Japanese export-reliant economy may be bottoming out.  Japan’s economy is being supported by a comparatively stable level of export demand from China.  Hence, as long as the prospect of GDP growth improves in China, Japan should benefit directly.

We believe leaving behind the 2nd tier uptrend line could prove to be a key technical move for the USD/JPY, possibly resulting in a decline towards our 1st tier uptrend line.  The USD/JPY is beginning to test the patience of its uptrend.  Should the currency pair fall beneath May lows towards our 1st tier uptrend line, the uptrend would be hanging on by a piece of thread.  Therefore, the USD/JPY is entering a critical zone, and investors should keep a close eye on the technicals.  Meanwhile, the USD/JPY may experience an increase in volatility today since the U.S. is reporting some key economic data along with the Fed’s monetary policy decision.  Additionally, three sets of trend lines are reaching their respective inflection points.  Hence, the environment exists for a substantial move in the USD/JPY today.

Present Price: 95.12

Resistances: 95.20, 95.82, 96.33, 96.90, 97.45

Supports: 94.45, 93.76, 93.32, 92.69, 92.04

Psychological: 90, 95, 100

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers – The Cable has propelled through our 3rd tier downtrend line on moderate volume as the greenback depreciates across the board.  Investors are divesting from the dollar ahead of the Fed’s decision on monetary policy later today.  Investors believe the FOMC remains in an adverse position in regards to its ability to reign in the large amount of liquidity circulating in the market place.  Since the U.S. is more exposed monetarily than the rest of the globe, the Dollar is being punished by investors.  The Pound is benefiting more than the Euro since a majority of Britain’s economic data continues to stream in at or above analyst expectations, including today’s CBI realized sales figure.  The CBI data point met analyst expectations, showing that although the British consumer is still struggling, at least retail is declining at a more reasonable rate than before.  However, the GBP/USD is mostly benefiting now from dwindling investor confidence in the U.S. Dollar.

Meanwhile, the Cable is attempting to leave behind our heavily weighted 3rd tier downtrend line, and is presently re-approaching previous June highs.  If the GBP/USD can climb above June 3rd highs and our 1.6698 resistance, near-term gains could accelerate.  Investors should keep a close eye on volume, for if volume matches excitement to the upside then the Cable’s uptrend could reactivate rather quickly.  As for the downside, investors should keep a watch on U.S. economic data this morning followed by the conclusion of the FOMC meeting.  If S&P and crude futures continue their downturn the GBP/USD may be inclined to follow suit due to their positive correlation.  Volatility should increase today, and it is uncertain how the Dollar will react to the Fed’s decision.  Regardless, the GBP/USD has made some encouraging moves to the upside over the past 24-48 hours, and we are tempted to reinitiate our positive outlook trend-wise on the Cable.  A move above the aforementioned technical barriers would be a concrete move for the GBP/USD’s uptrend.

Present Price: 1.6569

Resistances: 1.6574, 1.6624, 1.6698, 1.6768, 1.6851

Supports: 1.6532, 1.6472, 1.6412, 1.6371, 1.6315 1.6263

Psychological: 1.65, 1.70

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers – The EUR/USD has successfully surpassed the psychological 1.40 level and our previous 3rd tier downtrend line on substantial volume.  Therefore, the currency pair may have what it takes to buck the near-term downtrend.  The EUR/USD is strengthened despite disappointing PMI data from the EU yesterday.  The GBP/USD is also climbing while the USD/JPY declines towards our 1st tier uptrend line.  Hence, it appears the EUR/USD is benefitting from an exodus from the Dollar as the FOMC monetary policy decision approaches.  Most analysts predict the Fed will signal little change in its monetary policy since inflation doesn’t appear to be an immediate concern.  However, investors believe the inability of the Fed to tighten its monetary policy due to the fragile state of the U.S. economy may harm the U.S. economy in the future.  Furthermore, the longer such a massive amount of liquidity remains in the marketplace, the longer the Dollar will suffer.  The Dollar is depreciating across the board due to this premise, and the EUR/USD is tagging along for the ride.

Despite the broad weakness of the Dollar, the EUR/USD isn’t benefitting as much as it could due to the recent disappointing economic data.  In addition to yesterday’s subpar PMI data, the EU reported a higher current account deficit than analysts expected.  The current account data confirms that demand for EU exports is not recovering as quickly as analysts had hoped, creating a drag on manufacturing and production.  By running a higher current account deficit, the EU is flooding the marketplace with more Euros, placing the currency in a comparatively weak position.  Regardless, the EUR/USD is making encouraging progress to the upside from a technical standpoint.  If the currency pair can climb above our new 3rd tier downtrend line on sizeable volume, we may be comfortable with reinitiating our positive outlook trend-wise.  After all, the EUR/USD’s medium-term uptrend has been intact the entire time, the currency pair may just not make as large of a retracement as we anticipated.  However, we remain in a cautious stance, and we will have to wait and see how the Dollar reacts to today’s important economic data from the U.S. combined with the Fed’s policy decision.

Present Price: 1.4084

Resistances: 1.4112, 1.4147, 1.4186, 1.4225, 1.4229

Supports: 1.4052, 1.4028, 1.3978, 1.3947, 1.3894

Psychological: 1.40, 1.45

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By CountingPips.com

The Swiss franc has depreciated heavily in forex trading today as there is speculation (Bloomberg story) that the Swiss National Bank has intervened in the market.  The SNB has sold Swiss francs in the forex market this year to great effect in order to halt the rise in value of the franc against the euro and US dollar in an effort to control price stability.

Today, the euro has spiked higher against the franc by approximately 300 pips from the opening rate of 1.5020 at 00:00 GMT to trading at 1.5334 in the afternoon of the US trading session at 12:48pm ET.  The US dollar has also spiked higher by 300 pips from the 1.0662 opening to trading at 1.0971.

Previous articles on SNB intervention:

March 12th

April 17th

April 28th

EUR/CHF Forex Chart -Euro spiking higher today versus the Franc as the SNB may have intervened in the market to sell the Franc.

This article is part of a syndicated series about deflation from market analyst Robert Prechter, the world’s foremost expert on and proponent of the deflationary scenario. For more on deflation and how you can survive it, download Prechter’s FREE 60-page Deflation Survival eBook, part of Prechter’s NEW Deflation Survival Guide.

The following article was adapted from Robert Prechter’s NEW Deflation Survival eBook, a free 60-page compilation of Prechter’s most important teachings and warnings about deflation.

By Robert Prechter, CMT

I am tired of hearing people insist that the Fed can expand credit all it wants. Sometimes an analogy clarifies a subject, so let’s try one.

It may sound crazy, but suppose the government were to decide that the health of the nation depends upon producing Jaguar automobiles and providing them to as many people as possible. To facilitate that goal, it begins operating Jaguar plants all over the country, subsidizing production with tax money. To everyone’s delight, it offers these luxury cars for sale at 50 percent off the old price. People flock to the showrooms and buy. Later, sales slow down, so the government cuts the price in half again. More people rush in and buy.

Sales again slow, so it lowers the price to $900 each. People return to the stores to buy two or three, or half a dozen. Why not? Look how cheap they are! Buyers give Jaguars to their kids and park an extra one on the lawn.

Finally, the country is awash in Jaguars. Alas, sales slow again, and the government panics. It must move more Jaguars, or, according to its theory — ironically now made fact — the economy will recede. People are working three days a week just to pay their taxes so the government can keep producing more Jaguars. If Jaguars stop moving, the economy will stop. So the government begins giving Jaguars away. A few more cars move out of the showrooms, but then it ends. Nobody wants any more Jaguars. They don’t care if they’re free. They can’t find a use for them. Production of Jaguars ceases. It takes years to work through the overhanging supply of Jaguars. Tax collections collapse, the factories close, and unemployment soars. The economy is wrecked. People can’t afford to buy gasoline, so many of the Jaguars rust away to worthlessness. The number of Jaguars — at best — returns to the level it was before the program began.

The same thing can happen with credit.

It may sound crazy, but suppose the government were to decide that the health of the nation depends upon producing credit and providing it to as many people as possible. To facilitate that goal, it begins operating credit-production plants all over the country, called Federal Reserve Banks. To everyone’s delight, these banks offer the credit for sale at below market rates. People flock to the banks and buy. Later, sales slow down, so the banks cut the price again. More people rush in and buy. Sales again slow, so they lower the price to one percent. People return to the banks to buy even more credit. Why not? Look how cheap it is! Borrowers use credit to buy houses, boats and an extra Jaguar to park out on the lawn. Finally, the country is awash in credit.

Alas, sales slow again, and the banks panic. They must move more credit, or, according to its theory — ironically now made fact — the economy will recede. People are working three days a week just to pay the interest on their debt to the banks so the banks can keep offering more credit. If credit stops moving, the economy will stop. So the banks begin giving credit away, at zero percent interest. A few more loans move through the tellers’ windows, but then it ends. Nobody wants any more credit. They don’t care if it’s free. They can’t find a use for it. Production of credit ceases. It takes years to work through the overhanging supply of credit. Interest payments collapse, banks close, and unemployment soars. The economy is wrecked. People can’t afford to pay interest on their debts, so many bonds deteriorate to worthlessness. The value of credit — at best — returns to the level it was before the program began.

See how it works?

Is the analogy perfect? No. The idea of pushing credit on people is far more dangerous than the idea of pushing Jaguars on them. In the credit scenario, debtors and even most creditors lose everything in the end. In the Jaguar scenario, at least everyone ends up with a garage full of cars. Of course, the Jaguar scenario is impossible, because the government can’t produce value. It can, however, reduce values. A government that imposes a central bank monopoly, for example, can reduce the incremental value of credit. A monopoly credit system also allows for fraud and theft on a far bigger scale. Instead of government appropriating citizens’ labor openly by having them produce cars, a monopoly banking system does so clandestinely by stealing stored labor from citizens’ bank accounts by inflating the supply of credit, thereby reducing the value of their savings.

I hate to challenge mainstream 20th century macroeconomic theory, but the idea that a growing economy needs easy credit is a false theory. Credit should be supplied by the free market, in which case it will almost always be offered intelligently, primarily to producers, not consumers. Would lower levels of credit availability mean that fewer people would own a house or a car? Quite the opposite. Only the timeline would be different.

Initially it would take a few years longer for the same number of people to own houses and cars – actually own them, not rent them from banks. Because banks would not be appropriating so much of everyone’s labor and wealth, the economy would grow much faster. Eventually, the extent of home and car ownership – actual ownership – would eclipse that in an easy-credit society. Moreover, people would keep their homes and cars because banks would not be foreclosing on them. As a bonus, there would be no devastating across-the-board collapse of the banking system, which, as history has repeatedly demonstrated, is inevitable under a central bank’s fiat-credit monopoly.

Jaguars, anyone?

……….

For more on deflation, download Prechter’s FREE 60-page Deflation Survival eBook or browse various deflation topics like those below at www.elliottwave.com/deflation.

• What happens during deflation?
• Why is deflation bad?
• Effects of deflation
• Deflationary spiral
• And much more in Prechter’s FREE Deflation Survival Guide.

The US Federal Reserve prints it’s FOMC statement tomorrow at 2:15pm EST. After the Fed’s last FOMC announcement, we saw the futures markets price in a much higher expectation of the Fed increasing US short term interest rates by the end of 2009. Without going into the mechanics of futures, US Treasuries and the USD, the result of this move by traders caused he USD to weaken. EUR/USD moved higher by approx 10 big figures in the month that followed; USD/JPY dropped approx 6 big figures in the following three weeks.

However, in the last few weeks that increased expectation of higher interest rates has tailed off. Futures markets show a lower level of participants believe that the Fed will increase rates in 2009. We have seen the USD strengthen, or at least halt its losses in the last two weeks. The market is still positioned slightly in the belief that the US Fed will increase rates this year, though we at Back Bay FX do not believe that to be the case. So tomorrow’s announcement by the US Fed will have a lot of traders worried about their position on US short term interest rates, and therefore the USD. Any hints that the Fed is not going to raise interest rates, potentially in the form of commentary about increasing the Fed’s US Treasury debt buyback program, will cause traders caught the wrong way to cover their positions and this will strengthen the USD.

So the largest of dealing desks know that there is a significant number of market participants who are short USD. What would cause the most amount of transactions (read as “revenues to dealing desks”) to take place? A move higher in USD would cause those who are short to cover their shorts and then create a long position for themselves. Any move lower in USD would not create nearly the amount of trading volume that a higher USD move would create. If USD moves lower, then the majority of market participants (who are short USD) can sit back and count their money. Therefore a move lower in USD would be muted compared to the strength of any move higher in USD.

Our playbook for tomorrow is as follows:

1) Flat positions in USD pairs going into the US Fed announcement

2) Look or comments that imply short term interest rates will remain low. Either directly discussing the economy’s lack of growth or discussing an increase in the Fed’s US Treasury bond and note buyback program. If heard, look to buy USD by shorting GBP/USD and EUR/USD

3) Positive comments on the economy will have less of a market moving impact than negative comments on the economy.

Stay Nimble!

Stephen Leahy
Back Bay FX Services, LLC
www.backbayfx.com

Source: ForexYard

The market is expected to be very volatile today, as the U.S. announces the Federal Funds Rate at 18:15 GMT, which specifies U.S. Interest rates. The other factor that which is set to affect both the USD and Crude Oil is the publication of the U.S. Crude Oil Inventories at 14:30 GMT. In order for traders to start making profits today, it is recommended that they open their USD and Crude Oil positions as the trading day gets under way.

Economic News

USD – USD Under Pressure Ahead of Interest Rate Announcement

The U.S. Dollar went bearish against most major currencies on Tuesday, as uncertainty ahead of today’s Federal Funds Rate announcement put the USD under strong selling pressure. The greenback fell the most in 2 weeks against the EUR as European Central Bank (ECB) council member Axel Weber said policy makers have already used up their room to cut borrowing costs, indicating the Euro-Zone’s Benchmark Rate will stay higher than the equivalent U.S. rate

The Dollar did rise against the Yen, to finish trading at the 95.54 level. This was despite U.S. data showing sales of previously owned homes in the United States rose less than expected in May. However, the Yen’s losses may have been extended in late trading due to mixed data from Japan’s economy.

Today, the Federal Open Market Committee (FOMC) is widely expected to leave its fed funds Rate target in a range of 0% to 0.25%. Investors will be watching to see whether the Federal Reserve unveils any changes to its Treasury and mortgage asset-purchase program to further boost liquidity.

The U.S Dollar has come under pressure in recent weeks as more upbeat U.S. economic data fueled hopes that a global economic recovery was on track. The USD may extend its declines after this week’s Federal policy meeting, according to analysts.

EUR – EUR Rises to a 2 Week High vs. the USD

The EUR rose 1.6% against the Dollar to $1.4075 in late afternoon trading yesterday, after hitting a session peak of $1.4109. It was the biggest one-day percentage gain since May 8. The EUR also gained 0.9% against the Japanese Yen to finish trading at the 134.61 level.

Investors were also buying the EUR ahead of the European Central Bank’s (ECB) first-ever one-year refinancing operation on Wednesday, aimed at encouraging banks to lend again. The European currency also rose against the British Pound to 0.8557 yesterday by the most in almost 3 weeks after Bank of England (BoE) Chief Economist Spencer Dale said a weaker currency was a key channel to spur economic growth.

Markets will be watching for the Federal Reserve’s outcome today, as low Interest Rates would hurt the Dollar, and any move to expand the Fed’s $300 billion Treasury buying program to keep long rates low could raise inflation concerns, undermining foreign appetite for U.S. assets.

JPY – Yen Falls against the USD on Economic Concerns

The Japanese currency fell sharply on Tuesday, falling against most of its major currency pairs, tumbling from creeping doubts about the sustainability of any economic recovery. The JPY fell 0.3% vs. the greenback to 95.54 Yen. The JPY also slipped against the EUR by over 250 pips to 134.61 Yen, as investors continued to cut bets on low-yielding assets, and sold-off the Yen against other major currencies.

Traders were also cautious ahead of a U.S. Federal Reserve policy decision on Wednesday, and this week’s record $104 billion sale of U.S. debt. This has meant that renewed concerns about the global economy have actually fed through more into a weaker Yen than a weaker Dollar, analysts said.

Crude Oil – Crude Oil Inventories Data to Drive Oil Trading Today

Crude Oil prices rose nearly 4% on Tuesday to $68.59, as the U.S Dollar weakened and disruptions from OPEC member Nigeria stoked supply concerns. Crude prices also rose on expectations that Crude Oil Inventories in the U.S., the world’s biggest consumer of Oil have fallen. Oil rose yesterday as the U.S. currency slipped the most in 2 weeks against the EUR on speculation that the Federal Reserve will temper expectations of an Interest Rate increase this year.

Inventories expectations and the weak Dollar are helping Crude Oil, analysts said. Commodities’ trading was choppy with all the news ahead, such as inventories and the Federal Reserve’s decision later today. Analysts expect the data to show U.S. commercial Crude stocks dropped 1.2 million barrels, according to a survey of analysts. Traders are also awaiting the Federal Reserve’s statement at the end of its two-day meeting later today.

Technical News

EUR/USD

The pair reached as high as the 1.4100 level today, before dropping down to the 1.4080 level. This recent bullishness may continue according to the weekly chart’s MACD and RSI. However, the chart’s hourly RSI and 4-hour Stochastic Slow signal that the pair may be overbought, and that a bearish correction may be under way anytime soon. It may be wise to enter the pair when the signals are clearer.

GBP/USD

The GBP/USD pair has been very volatile lately. Nonetheless, the current upward trend may be under threat, as the chart’s hourly MACD indicates that the pair is overbought. Additionally, the chart’s hourly and daily RSI support a possible downward trend for today. Going short with tight stops may not be a bad choice at all today.

USD/JPY

The pair’s recent downward trend seems to have reversed since mid-trading yesterday, as the pair now eyes the 96.00 level. The hourly chart supports the pair going higher, as it approaches the upper barrier of the hourly chart’s Bollinger bands. The hourly chart’s MACD also supports further bullishness for the short-term. Going long with tight stops may be a wise choice today.

USD/CHF

The pair’s recent bearishness may be running out of steam, as weekly chart’s Stochastic Slow signals that the pair is in oversold territory. A bullish move is supported by the chart’s hourly RSI and weekly MACD. When the pair breaches the 1.0680 level, going long with tight stops may not be a bad bet at all.

The Wild Card – Crude Oil

The recent downward trend of Crude Oil may have come to an end, as the black gold benefited from the weak USD in the forex market yesterday. The upward trend is supported by the weekly chart’s Stochastic Slow. On the other hand, the chart’s RSI and the daily chart’s MACD indicate that there is much bearishness ahead for Crude. Entering Crude Oil before the downward breach occurs may be a wise choice today.

Forex Market Analysis provided by Forex Yard.

© 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.

By GCI Fx Research

€

The euro rallied sharply vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4105 level and was supported around the $1.3830 level.  The common currency’s climb was precipitated by increasing speculation the Federal Open Market Committee will try to manage expectations about a possible interest rate increase later this year.  There is a growing market view the Fed’s federal funds target rate will remain between 0% and 0.25% for the remainder of the year.  Some traders believe the Fed will try to signal an eventual end to its quantitative easing policy while others believe the Fed will extend its US$ 300 billion U.S. Treasury purchases program.  Fed funds futures are currently pricing in about a 42% chance the Fed will raise its fed funds target rate to 0.50% by December, down from a 49% chance one week ago.  Data released in the U.S. today saw May existing home sales rise 2.4% to an annualized 4.77 million annual rate from 4.66 million in April.  Other data saw the Richmond Fed’s June manufacturing shipments index decline to +2 from +9 in May while the headline manufacturing index improved to +6 from +4 in May.  In eurozone news, European Central Bank policymaker Weber reported policymakers have already reduced interest rates as much as possible, an indication the ECB is probably more hawkish than the Fed at this time.  Weber also said policymakers would “have to bypass the banking sector” if it is unable to provide the real eurozone economy with ample credit.  This suggests the ECB could extend its plan to purchase up to €60 billion in covered bonds to ease market interest rates.  Weber also said the economic growth forecasts for 2011 are “relatively modest.”  ECB member Nowotny added there is “justified hope that at least the financial markets have the worst behind them.” Similarly, ECB policymaker Quaden said the eurozone’s economy will be “less bad” for the rest of the year and then progressively improve in 2010.  Additionally, ECB policymaker Noyer said the ECB “must stand ready to absorb excess liquidity as soon as necessary. Today, there is no need to start or even prepare for an imminent start.”  Noyer added “Monetary policy must be eased without jeopardizing price stability.  If we had a de-anchoring of inflation expectations, we would have durably slower growth or even economic stagnation.”  Data released in the eurozone today saw the June EMU-16 composite Purchasing Managers Index improve to 44.4 from 44.0 in May, below expectations.  Moreover, the German July GfK consumer confidence index improved to 2.9 from 2.6 in June.  Euro bids are cited around the US$ 1.3435 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥94.85 level and was capped around the ¥95.95 level.  Finance minister Yosano reported the government will maintain its pledge to reduce public works spending by 3%.  Also, it was reported the Aso government wants budget ceiling guidelines next week and Aso’s Cabinet approved the fiscal policy outline for next year.  Most traders expect the Bank of Japan will keep the overnight call rate target unchanged at 0.10% for the foreseeable future.  The Nikkei 225 stock index lost 2.82% to close at ¥9,549.61.  U.S. dollar offers are cited around the ¥104.15 level.  The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥134.40 level and was supported the ¥131.40 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥156.85 level while the Swiss franc moved higher vis-à-vis the yen and tested bids around the ¥89.45 level. In Chinese news, the U.S. dollar came off vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8338 in the over-the-counter market, down from CNY 6.8345.

Daily Market Commentary provided by GCI Financial Ltd.

GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.

DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

By Fast Brokers – Gold is fighting back from Monday lows, which almost saw a retest of the psychological $900/oz level.  However, volume to the upside has been weak, indicating bulls don’t feel too confident about the near-term future of the precious metal.  We view yesterday’s pullback as a significant movement since it occurred at the collision point of two important uptrend lines.  Therefore, it seems a retest of $900/oz is imminent.  Investors should keep an eye on U.S. equities.  Gold may take its cue from the behavior of the S&P futures since the precious metal is heading towards a highly psychological zone.  If the S&P futures can’t hold onto their own psychological 900 level, then gold may find the momentum to head south of $900/oz due to their positive correlation.  Encouragingly, the Dollar is depreciating across the board right now, which is normally positive for gold.  We maintain our negative near-term outlook on gold due to the aforementioned analysis.

Present Price: $922.40/oz

Resistances: $923.96/oz, $927.40/oz, $931.41/oz, $935.62/oz, $939.82/oz

Supports: $920.95/oz, $917.49/oz, $914.99/oz, $911.14/oz, $908.25/oz

Psychological: $950/oz, $900/oz

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.