Month: August 2009

By Fast Brokers – The USD/JPY is logging huge gains to the upside as the broad-based appreciation of the Dollar continues in a big way.  The USD/JPY has finally woken from its hibernation after building strength along our 1st tier uptrend line.  There’s no news on the wire from Japan, indicating today’s movement is a continuation of the pattern we spotted yesterday.  The brisk appreciation of the Dollar and decline in gold comes after better than expected employment data from the U.S.  The depreciation of the Yen is great news for struggling Japanese exporters and manufacturers who have had to make do with an abnormally appreciated currency.  If the USD/JPY can piece together a solid rally, this could do wonders for Japanese economic data.

The S&P futures are reacting positively to today employment data, and are presently attempting to create some space between present price and their highly psychological 1000 level.  We are speculating the Greenback’s broad-based appreciation with rising equities may indicate a reversal in crisis-oriented correlations.  After all, the USD/JPY is breaking out with positive news from the U.S.  However, as we explained in our other FX commentaries today, we can’t make a conclusion of this magnitude based off of 1 day of movement. On the other hand, today’s activity is certainly intriguing and should be the topic of discussion among FX traders over the weekend.

Meanwhile, the USD/JPY has leapt beyond our 3rd tier downtrend line and July highs on a spike in buy-side volume.  Therefore, we could be witnessing the beginning of a new, sizable leg up in the USD/JPY.  The next barriers will be our 4th tier downtrend line, 3rd tier uptrend line, and June highs.  However, even if the USD/JPY can manage to take down these obstacles, the currency pair still has the highly psychological 100 level waiting in the distance.  Regardless, today’s movement in the USD/JPY is very encouraging and gives USD/JPY bulls something to cheer about.

Present Price: 97.35

Resistances: 97.37, 97.78, 98.09, 98.54, 98.90

Supports:  97.05, 96.74, 96.42, 96.02, 95.75

Psychological: 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 is reversing from our 2nd tier downtrend line and it appears the currency pair could have more immediate-term losses in store.  If August 3rd lows don’t hold we could witness a decline towards 1.66 and our 1st tier uptrend line.  Looking across the board, we see huge gains in the USD/JPY and large losses in the EUR/USD while gold heads south.  Additionally, the S&P futures are looking to break free of their highly psychological 1000 mark.  All of these movements indicate a broad based appreciation WITH key upward movements in U.S. equities. America released better than expected employment data today and investors are taking notice.  Rising unemployment has been the sore thumb in America’s economic recovery, so a big improvement in the non-farm employment change is very encouraging for U.S. equities.  However, the most notable development today is the reversal in correlation between the S&P and the Dollar.

The Dollar’s rapid appreciation across the board in light of today’s economic data gives us reason to speculate that the positive correlation between the GBP/USD and U.S. equities could be shifting.  Investors are putting a lot of faith in the U.S. economy today by betting on both U.S. equities and the Greenback.  We also notice a spike in volume to the sell-side in both the Cable and the EUR/USD, indicating investors are putting their weight behind today’s FX movement.  However, it would be unwise to make a conclusion based on one day of activity.  On the other hand, the clear reversal in today’s correlation should ignite a great debate.

Britain released data of its own today.  Britain’s PPI Input number came in much lower than expected, showing the UK is still experiencing deflationary pressures due to the decline in consumption.  Today’s PPI data tells us why the BOE added $84 billion to its QE package yesterday.  Inflation obviously isn’t a worry at the moment, and the BOE feels it’s suitable to inject more liquidity to keep credit flowing.    Meanwhile, investors should keep a close eye on the correlation between the GBP/USD and U.S. equities.  We are monitoring the reversal in correlation carefully, and will provide further observation-oriented analysis on Monday.

Present Price: 1.6712

Resistances: 1.6708, 1.6735, 1.6752, 1.6781, 1.6812

Supports: 1.6693, 1.6675, 1.6645, 1.6605, 1.6572

Psychological: 1.65

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 pullback in the EUR/USD is faring worse than we expected.  The currency pair is sinking quickly below our 1st and 2nd tier uptrend lines and is currently headed towards previous August lows.  The EUR/USD’s brisk decline is part of a broad-based appreciation of the Dollar in reaction to better than expected employment data from the U.S.  The Dollar’s broad strength is confirmed by a breakout in the USD/JPY.  The currency pair is normally dormant, so today’s movement should be on everybody’s radar.  The fact that the EUR/USD isn’t rising on the news is suspicious, and raises a red flag.  Yes, German Industrial Production missed expectations this morning, but one discouraging data point surely isn’t enough to send the EUR/USD tumbling like this.  The Industrial Production number is simply heightening the pullback.  So what message is the EUR/USD sending?  Are we witnessing a shift in correlation between the Dollar and U.S. equities?  While it’s certainly too early to make any conclusions, the discussion is at least warranted.

We can derive a few reasons behind today’s rapid appreciation of the Dollar in the wake of encouraging U.S. employment data.  Either we are witnessing a reversal in correlation, or the EUR/USD is indicating a sizable pullback in U.S. equities.  The answer could come from the S&P’s reaction as holds strong just above its highly psychological 1000 level.  A reversal in correlation could be a key development.  This would indicate investors believe the U.S. economy should outperform both the EU and Britain on a fundamental basis.  Since the large pullback in the EUR/USD comes in reaction to much better than expected U.S. data combined with recent disappointing EU data, the reversal in correlation is a more plausible argument.  However, like we said, it’s too early to jump to any conclusions about today’s movement.  The positive correlation between the Dollar and U.S. equities could just be out of whack today with a return to normalcy next week.  We will have to wait and see how U.S. equities behave in relation to the Dollar over the next few trading sessions.

Meanwhile, today’s decline in the EUR/USD comes on large sell-side action, indicating there is weight behind the movement.  Despite today’s deterioration, the EUR/USD still has our 1st tier uptrend line and August lows to fall back on.  If these cushions don’t hold, the currency pair can rely upon the bottom of its 7/20-7/28 trading range with the psychological 1.40 relaxing in the distance.  Investors will need to keep a close eye on the EUR/USD as well as the S&P futures to see where the currency pair can bottom and build a new base.

Present Price: 1.4233

Resistances: 1.4252, 1.4278, 1.4294, 1.4324

Supports: 1.4225, 1.4214, 1.4200, 1.4168, 1.4152

Psychological: 1.40

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.

Just a brief post going into the NFP data release in 70 minutes.

EUR/USD has been in a very small range since yesterday afternoon; the coil is being wound up and getting ready to spring. I was thinking this morning that it has been a while since any talking head has had anything but a long bias towards EUR/USD. Nobody says that being short is a good idea. I seem to be one of the last commentators to side with the Long EUR/USD crowd when we turned our outlook positive on July 20 and put on our long position July 30.

So the concern is that no one is short. No one is out there worried about covering a short position if EUR/USD gaps higher after the data release. No one will be desperate to buy back their EUR/USD position regardless of price. There will be no Dealing Desk Managers shouting at their dealing team to “Lift every Offer You See!!”

Conversely, if EUR/USD starts to tumble after the data release, there are a lot of long EUR/USD positions that got to the party late and are barely above (or maybe below) their entry point. These are the players that may be spooked easily by a drop in EUR/USD. And remember the biggest short-term players in this market (large dealing desks) need transactions to make money. Their goal is to drive the market into action.

So without commenting on the actual data release (estimates range from -150k to -475k jobs)we focus on the market action and will lighten up our position before the data release this morning. If we are right with our call for a 1.47xx handle sometime in the next 5 weeks, then there is still a lot of room on the upside to participate and re-enter our full long position.

Stay Nimble!

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

ource: ForexYard

The U.S. Dollar is expected to go extremely volatile today on the release of the ever so important U.S. Non-Farm Employment Change at 12:30 GMT. The other releases that are expected to drive trading between the USD and its main crosses today are the British PPI Input at 08:30 GMT, the U.S. Unemployment Rate at 12:30 GMT, and the Canadian Unemployment Rate at 11:00 GMT. Forex traders are advised to open their USD positions now, prior to the release of the vital economic data from the leading economies.

Economic News

USD – Dollar Climbs on Increased Risk Aversion

The U.S Dollar rose broadly yesterday against the GBP and EUR, due to uncertainty about the global economic outlook, and a renewed bout of risk aversion ahead of a key government report on the U.S. labor market due today. By yesterday’s close, the USD rose against the GBP, pushing the oft-traded currency pair to 1.6769. The Dollar experienced similar behavior against the EUR, and closed at 1.4360.

A leading indicator released yesterday from the U.S was the Unemployment Claims report. Data showed a drop in U.S. weekly jobless claims failed to support expectations that the labor market and the economy were stabilizing. The report showed claims fell by 38000 to 550000 last week, the fifth straight time claims were under 600000, after being above that level since January.

The other factor that led to the bullish Dollar yesterday was that U.S stocks fell, which boosted demand for the USD as a safe-haven currency. Moreover, renewed demand for the Dollar comes after a sharp drop earlier in the week, when the greenback hit multi-month lows versus the EUR, as investors favored foreign currencies and other riskier assets such as equities.

Looking ahead today, the news event that may have a very large impact on the Dollar and its main currency pairs in today’s trading is the Non-Farm Employment Change at around 12:30 GMT. This report is very important as it is likely to impact Dollar volatility. 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 Falls against the USD on Interest Rate Decision

The EUR finished yesterday’s trading session with mixed results versus the major currencies. The 16-nation currency extended gains versus the Pound Sterling during yesterday’s trading session, to trade above 0.8560 amid a broad sell-off in the GBP. This was largely owed to the Bank of England (BoE) increasing quantitative easing to ₤175 billion from ₤125 billion. The EUR did see bearishness as well, as it lost over 50 pips against the USD, and closed at the 143.60 level.

A leading indicator released yesterday was the EUR Minimum Bid Rate. The European Central Bank (ECB) left Interest Rates at a record low of 1%, as it tries to get credit flowing again to strengthen an economy that may return to growth this quarter. Some reports show the outlook is brightening for the Euro-Zone. Economic confidence rose to an eight-month high in July, and the contraction in the region’s manufacturing and service industries has slowed. In Germany, Europe’s largest economy, Factory Orders posted their biggest gain in two years in June.

As for today, the most important economic indicator scheduled to be released from the Euro-Zone is the German Industrial Production at 10:00 GMT. Traders will be paying close attention to today’s announcement as a stronger than expected result may boost the EUR in the short-term. Traders are also advised to follow the Non-Farm Employment Change figures coming out of the U.S at 12:30 GMT, as this result may set the EUR’s main currency pairs for the day.

JPY – JPY Set to Move on Key Economic Data

The Yen completed yesterday’s trading session with mixed results versus the other major currencies. The JPY was broadly unchanged versus the EUR yesterday and closed its trading session at around the 137 level. The JPY experienced bullishness against the GBP as it jumped around 250 points to close at the 159.86. This behavior comes about as exports improve and manufacturers boost production. However, deflation may escalate as households, whose spending accounts for more than half of the nation’s GDP, delay purchases on the expectation that goods will get cheaper, restraining a recovery in the world’s second-largest economy.

The JPY’s trends will be affected by the rallies of its primary currency pairs today. It seems that the USD and EUR are expected to continue a volatile trading session today, especially against the Japanese currency. Traders should keep a close look on the news coming from the U.S. and Europe as these economies will be the deciding factors in the JPY’s movement today, especially the U.S. Non-Farm Employment Change at 12:30. It is also advisable for traders to follow any unexpected comments coming from key Japanese governmental figures, as this is also likely to lead to further JPY volatility.

Crude Oil – Oil Prices Stabilize Near $72

Crude Oil ended yesterday’s trading below $72 as equities declined and the Dollar strengthened, undermining the need to use commodities as an alternative investment. Crude dropped to an intra-day low of $70.24 a barrel before rebounding to the settlement level of 71.55, which was little changed compared with the previous session.

Oil prices were pressured by the weaker equity markets and the strong Dollar yesterday, as the USD strengthened against the EUR and GBP, limiting the demand for Crude Oil as an alternative investment. Today, the U.S monthly Non-Farm Employment report will likely determine Crude’s next moves, with any mildly positive elements within the data is likely to keep the Crude price in an upwards direction.

Technical News

EUR/USD

The EUR/USD cross experienced much bearishness in yesterday’s trading. The pair is now trading at the 1.4355, and the technical indicators signal that there is much bearishness that may take place in this pair today. The daily and weekly chart’s Slow Stochastic shows that the pair is in the overbought territory, and a downward move may be expected for today. This is also supported by the chart’s 4-hour MACD. Going short with tight stops may turn out to pay off today.

GBP/USD

The pair went through much bearishness in yesterday’s trading, despite much bullishness in the week prior to this. It seems that the pair may be oversold, according to the chart’s main oscillators. The 4-hour Stochastic Slow signals a bullish correction for today. This is also backed up by the chart’s 1-hour MACD and Slow Stochastic. Entering this trend at an early stage may turn out to pay off in today’s trading.

USD/JPY

The USD/JPY pair has been range trading for the past several days between the 94.30 and 95.60 levels. The chart’s oscillators seem to be showing mixed signals. On one hand, the daily chart’s MACD indicates an upward trend for today. On the other hand, the hourly chart’s MACD indicate that there may be a bearish trend in today trading. Entering the pair when the signals are clearer may turn out to be a wise choice today.

USD/CHF

The pair currently stands at the 1.0646 level after experiencing much bullishness in the past 2 days. It seems that this trend may be under threat, as the chart’s 4-hour RSI signals that the cross has run out of steam, and that a bearish correction is imminent. Today’s possible bearish correction is also supported by the hourly chart’s MACD. Going short with tight stops may turn out to pay off as the trading week comes to a close.

The Wild Card – Crude Oil

Crude Oil has experienced much bullishness in the past week-and-a-half of trading, as it now stands at the $71.78 level. The daily chart’s MACD and Bollinger Bands signal that there may be some bullishness left in the pair for the coming day. The chart’s weekly Bollinger Bands and MACD also support this view. Going long with tight stops may turn out to pay off today for forex traders.

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 CountingPips.com

Today’s economic news centered around the interest rate decisions coming from the Bank of England and the European Central Bank.

The Bank of England announced the decision to hold its interest rate at its lowest standing in the bank’s history at 0.50 percent as widely expected. The BOE had last reduced its interest rate by 50 basis points on March 5th and also cut its rate by the same amount in each of January and February. The notable news from the bank statement today was that its members “voted to continue with its programme of asset purchases financed by the issuance of central bank reserves and to increase its size by £50 billion to £175 billion” that was first announced on March 5th.

The European Central Bank, meanwhile, also held its interest rate today at its lowest standing in the banks history as widely expected.  The ECB last reduced its interest rate by 25 basis points on May 7th to its current level of 1.00 percent. The ECB also had reduced the rate in April by 25 basis points and by 50 basis points in March.

Jean-Claude Trichet, the President of the ECB, commented on the economy in his press conference today saying that, “The data and survey information that have become available since our meeting on 2 July 2009 have broadly confirmed our previous expectations. While uncertainty is still high, there are increasingly signs that the global recession is bottoming out. As regards the euro area, recent surveys suggest that the pace of contraction is clearly slowing down. However, economic activity over the remainder of this year is expected to remain weak. Looking ahead into next year, after a phase of stabilisation, a gradual recovery with positive quarterly growth rates is expected.”

US Dollar gains in forex trading.

The U.S. dollar has been stronger in forex trading today against the other major currencies after the interest rate announcements.  The euro, British pound, Swiss franc, Australian dollar, Canadian dollar and Japanese yen have all declined versus the American currency.

The EUR/USD pair has declined from today’s opening rate of 1.4400 dollars at 00:00GMT to trading to 1.4350 at 3:47 pm EST in the afternoon of the U.S. trading session according to currency data by Oanda.

The GBP/USD has declined from today’s opening level at 1.6980 as this currency pair trades at 1.6774. The US dollar has increased against the yen as the USD/JPY opened today at 95.06 and has advanced to trading at 95.42.

The dollar is increasing today versus the Swiss franc as the USD/CHF has gone from the 1.0622 opening rate to trading at 1.0648 while the dollar has also advanced today against the Canadian loonie as the USD/CAD has risen to trading around the 1.0772 level today after opening at 1.0712.

The Australian Aussie has fallen versus the US dollar today as the AUD/USD has declined to the 0.8388 level after opening at 0.8418. The New Zealand kiwi has been almost unchanged against the dollar as the NZD/USD has reached the 0.6703 level today after opening the day at 0.6697.

GBP/USD Chart – The British Pound falling against the US Dollar today in forex trading after the BOE increased its asset purchase program.

By Fast Brokers – Gold is bouncing between our 2nd and 3rd tier downtrend lines as the Dollar appreciates across the board.  Investors are reacting to the BOE’s decision to administer a monetary shock by injecting another $84 billion into its QE package.  The GBP/USD is under considerable pressure, hampering any excitement over lower than expected weekly Unemployment Claims.  Meanwhile, the S&P futures continue to battle with their highly psychological 1000 level.  It appears bulls may be running low on energy, implying consolidation in gold is the result of overbought conditions.  We wouldn’t be surprised to see the precious metal continue its consolidation as the S&P deals with 1000.  The bulls have been on a huge run lately, so it’s only healthy that the markets experience some profit taking and consolidation.  Regardless, momentum is clearly in favor of the uptrend since economic data continues to outperform while 2nd quarter earnings season has exceeded expectations.

Meanwhile, gold is trading back above August 3rd highs with the psychological $950/oz level far out of reach.  However, if the precious metal can’t hold our 2nd tier downtrend line, it may defect towards our 1st tier downtrend line and our bottom-end support.  As for the topside, gold’s immediate barriers are our 3rd tier downtrend line and Tuesday’s highs.  If the precious metal can get above these two obstacles, gold could accelerate towards $980/oz.

Present Price: $966.90/oz

Resistances: $966.91/oz, $968.60/oz, $970.04/oz, $971.44/oz, $972.83/oz

Supports: $965.26/oz, $963.81/oz, $962.24/oz, $961.00/oz, $959.34/oz

Psychological: $950/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 EUR/USD is continuing its pullback as anticipated, stumbling towards our 3rd tier uptrend line as it appears the bulls have exhausted themselves.  The ECB kept its monetary policy unchanged, also as anticipated.  However, the BOE increased its QE package by $84 billion in order to try and counter deflationary forces.  The BOE’s move is spooking FX markets a bit, appreciating the Greenback across the board.  Furthermore, gold is consolidating while the S&P hovers around 1000 despite lower than expected weekly unemployment claims.  The S&P’s lack of reaction to the Unemployment Claims number shows the present run is just about out of gas.  Therefore, continued consolidation with a downward sloping pattern is likely as investors take a deep breath and recoup.  However, the break may not last so long since both Britain and the U.S. will release more important economic data tomorrow along with Germany’s m/m Industrial Production number.

Speaking of data, a much better than expected Factory Orders number from Germany flew under the radar with the central banks grabbing the spotlight.  The return to growth in German Factory Orders is holding steady, an encouraging sign for the EU economy as a whole.  The EU is getting a positive piece of data at just the right time considering the underperformance of EU economic Data as of late.  A positive German Industrial Production number tomorrow could help the EUR/USD build some relative strength.  After all, the ECB is the central bank sticking to its guns while Britain digs deeper into its pockets to increase liquidity.  However, the Euro’s comparative strength may not last long since the BOE’s injection should wear off rather quickly.  Furthermore, regardless of any pullbacks, the momentum is still in favor of the uptrend since news and data out of the U.S. and Britain has been resoundingly positive over the past month.

As for the immediate-term, the EUR/USD may experience a little more selling pressure with investors cashing in on mixed global data.  Therefore, we wouldn’t be surprised to see the currency pair duck down towards our 3rd tier uptrend line.  Speaking of which, the EUR/USD is trading above all three of our uptrend lines with only a makeshift 3rd tier downtrend line clamping down the currency pair.  The EUR/USD remains comfortably above June 3rd and July 28th highs.  Hence, the uptrend is clearly in control in the moment, and it would take a large technical downward movement to dislodge the EUR/USD’s upward momentum.

Our 3rd tier downtrend line and the psychological 1.45 level appear to be the only near-term barriers separating the EUR/USD from a retest of December 18th highs.  The other factor capping the EUR/USD’s upward mobility is the S&P’s interaction with 1000.  The 1000 area should prove to be a challenging obstacle.  The S&P’s ability to leapfrog 1000 should play an important role in the EUR/USD’s ability to overcome its own barriers to the topside.  Therefore, investors should keep a close eye on U.S. equities and Friday’s key employment data.  If either the U.S. Unemployment Rate or Non-Farm Employment Change are higher than anticipated the EUR/USD may experience heightened volatility to the downside.  On the other hand, positive employment data would likely provide a strong counterbalancing force.
Present Price: 1.4363

Resistances: 1.4391, 1.4441, 1.4476, 1.4506, 1.4546

Supports: 1.4348, 1.4305, 1.4266, 1.4242, 1.4225

Psychological: 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 Fast Brokers – The BOE delivered a monetary shock today, increasing its QE package by $84 billion despite our belief the central bank would refrain from injecting more liquidity.  After all, we’ve seen very encouraging data from Britain covering services, manufacturing, housing and unemployment.  However, it appears the BOE wants to be on the safe side, taking rampant optimism as an opportunity to deliver a blow to the Pound.  The GBP/USD has been on a tear lately, placing the exportation of British manufacturing and services industries at a competitive disadvantage.  Hence, the BOE is doing what it can to even the table.  One worrying side-effect of today’s injection of liquidity is that Britain’s credit rating has been questioned over the past couple months due to a deteriorating governmental balance sheet.  Therefore, even though Britain’s economy is on the path to recovery, additional debt runs the risk of compromising the nation’s credit rating if the global economy should experience a sizable setback.

The BOE’s injection of liquidity is having its desired effect, knocking the GBP/USD below our previous 3rd tier uptrend line on climbing sell-side volume.  We believe the Cable could have quite a bit of room to the downside if it doesn’t recovery above our now 2nd tier uptrend line in a hurry. The next worthy supports to the downside appear to be August lows and October 30th highs.  Therefore, a retracement towards 1.67 may be in the works.  In the meantime, the GBP/USD may not get much immediate-term assistance from the S&P futures since they’re having a difficult time with 1000.  The S&P futures aren’t reacting to the lower than expected weekly unemployment claims, showing bulls may be worn out and ready for more profit taking.  However, more positive employment data from the U.S. and a better than expected PPI release from Britain tomorrow could help counteract the present pullback and get the GBP/USD back on track.

Meanwhile, investors should avoid having short-term memory loss right now.  Economic data from Britain has been overwhelmingly positive lately, and the 2nd quarter earnings season has fared better than analyst expectations.  Therefore, there’s little reason to be fundamentally negative on the GBP/USD.  While the Cable has quite a bit of mobility to the downside due to its recent strong run, today’s monetary shock from the BOE should only prove temporary.  Today’s injection of liquidity shouldn’t have the power to derail the GBP/USD’s medium-term uptrend on its own.  Hence, investors should return to their senses after today’s shock wears off.  As for the upside, the Cable will have to deal with our new 1st tier uptrend line along with August highs, our 2nd tier downtrend line and the psychological 1.70 level.  It seems the GBP/USD will have to consolidate and build a new base before it can think about reattempting these barriers.

Present Price: 1.6809

Resistances: 1.6837, 1.6851, 1.6874, 1.6895, 1.6910

Supports: 1.6791, 1.6775, 1.6735, 1.6708, 1.6693

Psychological: 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 USD/JPY is popping off our 1st tier uptrend line and is trading back above the psychological 95 level as we type.  Today’s move higher is clearly an act of correlation.  There’s no game-changing news on the wire from Japan, and the Dollar is appreciating rapidly against the Pound after the BOE’s injection of liquidity.  We notice a broad-based appreciation of the Dollar as well as negative consolidation in both gold and the S&P futures.  Hence, it seems investors are making a little run to safety in light of the BOE’s cautious stance at today’s monetary policy meeting.  We believe the USD/JPY’s solid move higher clarifies this assumption as the currency pair benefits from a return to the Dollar.

Meanwhile, the USD/JPY is experiencing considerable strength along our 1st tier uptrend line.  The USD/JPY has been resilient as of late, meaning the currency pair may have what it takes to test our 3rd tier downtrend line.  Our 3rd tier downtrend line is the next blockade to the upside.  Therefore, a test is likely as long as the USD/JPY creates some space between price and our 1st tier uptrend line.  On the other hand, we’ve seen the USD/JPY make promising moves time and again, only to revert to its old consolidative habits and retrace back beneath our 1st tier uptrend line.  Hence, bulls shouldn’t get their hopes up yet.

Present Price: 95.55

Resistances: 95.83, 96.16, 96.33, 96.77, 96.96

Supports:  95.41, 95.22, 94.99, 94.71, 94.46

Psychological: 95

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.