Month: August 2009

By Fast Brokers – The Cable is crashing after U.S. Core Durable Goods Orders data came in two basis points below analyst expectations, countering the positive U.S. consumer sentiment data we’ve received lately.  The GBP/USD is bearing the brunt of the sell-off since Britain won’t re-enter the economic data news stream until tomorrow’s Nationwide HPI and CBI Realized Sales releases.  The data releases couldn’t come at a better time since the Pound has suffered a relative weakness among its peers since the BOE’s surprise injection of liquidity.  Investors should keep in mind Britain’s economic data was coming in strong prior to the BOE’s monetary shock, so we are operating under the belief that tomorrow’s heavily-weighted British data could help buoy the Pound.  However, negative data releases from Britain may only exacerbate the Cable’s present selloff.

It seems the BOE may be getting what it wanted after all, a depreciation of the Pound.  We believe the BOE was concerned the rapid appreciation of the Pound would place its companies in a competitive disadvantage and stymie Britain’s economic recovery, hence the use of a monetary shock.  The Pound has responded by selling off sharply against both the Dollar and the Euro.  The GBP/USD seems to have given up on its psychological 1.65 level, dropping through 8/17 and 6/23 lows in the process.  The Cable is presently hoping to find a bottom along our 2nd tier uptrend line.  If this uptrend line doesn’t hold, the GBP/USD will look to our 1st tier uptrend line and July lows for technical support along with the highly psychological 1.60 level.  Hence, even though the present pullback may have some room to go, there are a few strong supports waiting in the wings.  As for the topside, there are multiple barriers beginning with our 1st and 2nd tier downtrend lines.

Present Price: 1.6203

Resistances: 1.6224, 1.6251, 1.6286, 1.6324, 1.6367

Supports: 1.6187, 1.6163, 1.6114, 1.6093, 1.6056

Psychological: 1.60, 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 USD/JPY moved higher after U.S. Core Durable Goods data printed two basis points below analyst expectations.  However, the currency pair is returning some of its gains in reaction to a better than expected showing from New Home Sales.  In addition to America’s wave of data today, investors should keep in mind Japan reported a weaker than expected Trade Balance late Tuesday in the wake of light demand for the nation’s exports.  The USD/JPY’s movement in reaction to this data flow tells us the currency pair is opting to participate in broad-based Dollar sentiment rather than comparative economic performances between the two countries.  However, DGO number is certainly capping gains in the USD/JPY since it only provides less incentive for investors to favor the Dollar over the Yen.  The weak Japanese export data is disconcerting and puts more pressure on the BOJ to stimulate the economy.  Although, the BOJ likely won’t act until it sees the results of Japan’s general election.  Japan’s election will be watched closely since a defeat of the LDP would likely present a fundamental shift in political and economic policy.  The LDP has run Japan for the past 50 years, so it will be interesting to see how the Yen reacts should the LDP lose as polls predict.

Japan will release more data tomorrow including Household Spending and the Tokyo Core CPI.  Beforehand, the U.S. and Britain will release heavily-weighted data points of their own.  We recognize multiple inflection points occurring in the USD/JPY, implying volatility could increase over the next 24-48 hours.  Meanwhile, the USD/JPY continues to balance along our 1st tier uptrend and 2nd tier downtrend lines as bulls fight to get the currency pair back above its psychological 95 level.  Broad-based appreciation of the Dollar continues to be the theme around the FX markets with sizable pullbacks occurring in both the GBP/USD and EUR/USD.  The Dollar’s overall strength is helping buoy the USD/JPY, and may result in nice pop tomorrow should the pattern continue with tons of economic data and heightened volatility.  If the USD/JPY’s upward momentum should carry it beyond 95, the currency pair will have to deal with our 3rd tier downtrend line next along with 7/31 highs.

Present Price: 94.42

Resistances: 94.53, 94.71, 94.95, 95.26, 95.54

Supports:  94.08, 93.88, 93.65, 93.42, 93.27

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.

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President, INO.com
Co-Creator, MarketClub

Source: ForexYard

Later afternoon trading saw the price of Crude Oil take a nose dive as traders took profit. The price of Oil stalled at the $75 resistance level and fell significantly following the failed breach. Today traders will be tracking the release of the U.S. Crude Oil Inventories data along with the New Home Sales numbers for today’s market direction.

Economic News

USD – Dollar Sees Mixed Results against the Majors

Yesterday, the Dollar saw mixed results against its major currency rivals. Against the EUR, the Dollar began the trading session with sharp drops, yet it managed to fully recover later on. The Dollar saw mixed result against the Yen as well.

The Dollar’s recovery came as a result of the better than expected Conference Board Consumer Confidence report. The report showed that the U.S. consumers’ confidence has increased in August, largely due to the labor market recovery. The report rose to 54.1, making the first gain in three months, from 47.4 in July. The most significant outcome of this result is that it shows that consumers feel their financial outlook is secure and thus allow themselves to spend more. Eventually this has the potential to elevate the economy as analysts expect.

Looking ahead for today, a batch of data is expected from the U.S. economy. Two main publications are expected to create large volatility in the market – the Durable Goods Orders indices and the New Home Sales. The Durable Goods Orders indices are expected at 12:30 GMT. Investors hold great importance to their results as they are leading indicators of production, especially the core report. The New Home Sales is scheduled for 14:00 GMT. This is one of the highest indicators of the housing sector, and thus has an immense impact on the Dollar. Analysts forecast 393K new single-family homes were sold during July, and if the end result will be similar it has the potential to boost the Dollar’s recovery.

EUR – German Business Climate on Tap

During yesterday’s trading the EUR saw volatile activity against the major currencies. The Euro saw mixed results against the Dollar and the Yen, beginning the day with rising trends yet dropping later on. However against the Pound, the Euro continued the bullish trend from the last few days.

The EUR’s rise in early trading came as a result of the positive data published from the Euro-Zone. The German Final Gross Domestic Product showed a 0.3% rise in the inflation-adjusted value of all goods and services purchased by the German economy, marking the first positive results in 5 months. This continued the recent positive figures from both Germany and France, the two largest economies in the Euro-Zone. Also yesterday, the Belgium Business Climate report delivered a better than expected figure after dropping 18.2 points, beating expectations for a 19.7 drop. This also supported the EUR during yesterday’s trading.

As for today, two main publications are expected from the German economy, the German Import Prices and the German Business Climate. The German Business Climate, published by the Institute for Economic Research, is expected to create a large impact on the EUR. It is considered to be a leading indicator of economic health because business is known to react quickly to market conditions. A positive result is likely to increase hope for an early economic recover, which has the potential to strengthen the EUR.

JPY – Yen Recovers against the Major Currencies

The Yen saw a mixed trading day during yesterday’s session. The Yen began with bearish trends against both the Dollar and the EUR. However, later on it managed to recover back to previous rates. Against the Pound, the JPY continued to strengthen and the GBP/JPY is currently traded around the 153.40 level.

The Yen recovered due to concerns that financial losses will delay a recovery in the global economy, increasing demand for the Yen as a refuge. Currently, many analysts claim that the outlook for economies around the world is still doubtful. This situation is known to create risk aversion, which leads to the purchase of the Yen.

During late trading, the Japanese Trade Balance report was released, delivering a poor result of 0.19T, lower than the 0.35T expected. The Japanese economy largely relies on its exporting, and thus this result has the potential to halt the Yen’s recovery.

As for the day ahead, no imported data is expected from the Japanese economy. Traders are advised to follow the leading publications from the U.S and the Euro-Zone as they are likely to set the tone in today’s trading.

Crude Oil – Crude Oil Drops to $71 a Barrel

Crude Oil fell close to $3 a barrel during yesterday’s trading, to the lowest price in a week, seeing the first decline in six days.

Crude Oil dropped from $75 a barrel to $71.20 on signs that reduced lending in China deceased demand for the world’s fastest-growing, energy-consuming county. Another reason for oil’s weakness is the recovering Dollar. Because Oil is valued in Dollars, the fluctuations in the Dollar’s value tend to affect oil as well. During yesterday’s trading, a U.S. Consumer Confidence report was released, providing a better than expected figure, which promptly strengthen the Dollar. This eventually had an impact on Crude Oil’s value, and led to the sharp drop.

As for today, the U.S. Crude Oil Inventories is scheduled at 14:30 GMT. This report measures the change in number of barrels of crude oil held in inventory by commercial firms during the past week. Its result tends to have an immense impact on oil’s value, and traders are advised to follow this report with extra caution.

Technical News

EUR/USD

The bearish cross on the daily Slow Stochastic has just been completed and the pair now appears poised for the subsequent downward movement. The bearish cross on the 4-hour MACD supports this notion. Going short might be wise today.

GBP/USD

The downward movement over the past few days has finally resulted in a bullish cross on the 4-hour Slow Stochastic and the hourly MACD, indicating an impending upward correction. The price also floats in the over-sold territory on the 4-hour RSI, which supports this notion. Going long with tight stops might be the preferable strategy today.

USD/JPY

With most oscillators floating in neutral territory, this pair seems to be consolidating towards the 94.00 price level. With a doji candlestick formation on the weekly chart, there is a possibility that this pair is due for an upward correction. Waiting for the breach and then joining the trend as soon as possible would be a smart tactic today.

USD/CHF

This pair is giving off a few mixed signals. The price floats in the over-bought territory on the hourly RSI, suggesting downward pressure in the short-term. On the other hand, the daily chart’s RSI is showing over-sold, and has a fresh bullish cross on the daily Slow Stochastic. Traders should watch for the small impending downward movement, but be on guard for the longer-term bullishness today.

The Wild Card – NZD/USD

A fresh bearish cross has recently formed on the hourly, daily and weekly charts’ Slow Stochastic, indicating strong downward pressure on this pair. The price also floats in the over-bought territory on the daily and weekly charts’ RSI, strengthening this notion. Forex traders may not want to miss out on this opportunity by entering the downward movement at a great entry price.

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.

During yesterday’s trading, Crude Oil dropped to $71.20 a barrel. This was largely due to the recovering Dollar. The Dollar recovery took place after a better-than-expected Consumer Confidence in the U.S. which showed that Americans consumers are regaining faith that their financial condition is likely to improve during the next few months. If the Dollar will continue to strengthen today, it could turn Crude Oil to drop below $70 a barrel.

Today’s leading publications:

German Ifo Business Climate (08:00 GMT) – This indicator is used to measure the current market conditions by asking about 7,000 businesses to rate the relative level of current business conditions and expectations for the next 6 months. If the actual result is as high as expected, it is likely to strengthen the EUR.

Durable Goods Orders indices (12:30 GMT) – These indices are used to measure the production condition in the U.S. The Core Report doesn’t include transportations items. Because orders for aircraft are volatile and can severely distort the underlying trend, investors tend to relay a greater importance to this core report, rather than the regular Durable Goods Orders report.

New Home Sales (14:00 GMT) – This report is a prime indicator for the housing sector. As you probably know, this entire crisis began due to a real-estate bubble that was shattered in the U.S. Many analysts believe that only positive result from the housing sector will truly show that the economy is recovering, and thus a positive figure from this report might boost the Dollar.

Crude Oil Inventories (14:30 GMT) – Like every week, this is one of the most impacting news event. Its publication has an immediate reaction on Oil prices, which is followed by a sharp change in currency values as well. Traders should not miss out on this publication, especially those who trade Crude Oil.

By GCI Fx Research

€

The euro moved higher vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4335 level and was supported around the $1.4250 level.  While there are growing indications the global economic freefall may be abating, there is now some talk that the global economy may have come too far, too fast and resulted in overvalued equities markets.  The euro has been highly correlated with equities prices and a move lower in share prices could put the common currency on the backfoot. Data released in the eurozone today saw German second quarter gross domestic product growth expand 0.3%, confirming the provisional estimate from 13 August.  These data followed four consecutive months of contraction and reflected a 0.4% increase in government spending and a 0.7% increase in private consumption.  Yesterday, it was reported that eurozone industrial new orders registered their strongest gain in nearly nineteen months in June.  As a whole, EMU-16 GDP growth was off 0.1% in Q2.  European Central Bank policymakers continue to manage expectations regarding the sustainability of a broad economy recovery in the eurozone.  ECB rate-setters will next convene on 3 September and are unlikely to change monetary policy at that time.  One month EONIA interest rate futures prices have a downward slope between the front-month August 2009 contract and the July 2010 contract and this indicates the market anticipate a small degree of monetary tightening between now and then.  This weekend, European Central Bank President Trichet was rather cautious in his remarks at the Kansas City Federal Reserve’s annual Jackson Hole symposium.  Trichet reported “we see some signs confirming that the real economy is starting to get out of the period of freefall” but added this “does not mean at all that we do not have a very bumpy road ahead of us.”  Some ECB policymakers are thought to be questioning the sustainability of the recent improvement in eurozone economic data.  ECB’s Liikanen this weekend said there is “no need” for the ECB to reassess its policy stance and added unemployment will rise more. ECB’s Nowotny suggested the ECB won’t reverse its policy stance anytime soon.   Likewise, ECB’s Gonzalez-Paramo reported “the situation is still very uncertain” and called EMU-16 interest rates appropriate.  ECB member Mersch warned against “succumbing to optimism” about the economic recovery.  In U.S. news, it was reported the Obama administration will nominate Fed Chairman Bernanke for a second term atop the Federal Reserve. Bernanke’s star has risen in recent months as some U.S. economic problems have moderated but it does not mean he will not face a contentious fight during his congressional approval hearings.  Data released in the U.S. today saw the June S&P/ Case-Shiller home price index off 14.92% from a revised 19.11% while August consumer confidence rallied to 54.1 from a revised 47.4.  Also, the August Richmond Fed manufacturing index was unchanged at +14 and June house prices were up 0.5% m/m from a revised +0.6% in May.  Euro bids are cited around the US$ 1.3900 figure.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥93.80 level and was capped around the ¥94.60 level.  The yen was stronger across the board as risk appetite weakened on escalating concerns that some asset prices are overvalued.  China Construction Bank Chairman Guo Shuqing reported excess cash has resulted in asset bubbles.  Traders also pared risk after Atlanta-based SunTrust Banks warned U.S. financial institutions may report additional credit losses stemming from commercial real estate. A greater resumption of risk appetite could result in more demand for short yen carry trades in which the yen is used as a financing vehicle to invest in assets with greater yield spreads.  Vice finance minister Tango yesterday reported Japan needs to limit Japanese government bond sales as much as possible.  Tango’s comments are topical because the Liberal Democratic Party of Japan may lose this weekend’s general election with the Aso government conceding the LDP’s stronghold on power to the rival Democratic Party of Japan.  DPJ leader Hatoyama was on the tape yesterdat saying the DPJ does not plan to increase JGB issuance, contrary to public chatter that the liberal DPJ will expand public works projects.  Bank of Japan Governor Shirakawa spoke at the Fed’s Jackson Hole symposium this weekend and said monetary policy “should avoid inflating asset bubbles by keeping interest rates low for too long.”  The Nikkei 225 stock index lost 0.79% to close at ¥10,497.36.  U.S. dollar offers are cited around the ¥104.15 level.  The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥133.95 level and was capped around the ¥135.25 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥153.60 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥88.30 level. In Chinese news, the U.S. dollar lost ground vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8267 in the over-the-counter market, down from CNY 6.8267.  Chinese Premier Wen yesterday said the markets need to avoid being “blindly optimistic” about the global economic recovery and added China must maintain its “moderately loose” monetary policy and “active” fiscal policy.  PBoC reported it will ensure “reasonable and ample” liquidity.

₤

The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.6340 level and was capped around the $1.6425 level.  Sterling has been weaker for three consecutive trading days and has fallen from its perch above the $1.70 handle this month. Sterling is still on the defensive after minutes from Bank of England Monetary Policy Committee’s meeting from August revealed BoE Governor King voted unsuccessfully in the minority to expand its bond-buying program by ₤75 billion to ₤200 billion.  Instead, the central bank voted to expand the quantitative easing operation by ₤50 billion to ₤175 billion.  August GfK consumer confidence will be released on Thursday.  Cable bids are cited around the US$ 1.6215 level.  The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.8745 level and was supported around the ₤0.8705 level.

CHF

The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.0570 level and was capped around the CHF 1.0640 level.  Swiss National Bank Governing Board member Hildebrand said the derivatives market needs to be regulated better.  Swiss National Bank’s next interest rate decision is expected on 17 September. The three-month Swiss franc Libor target is currently at 0.325 and the front-month September 2009 futures implied rate is trading at 0.290.  Data released in Switzerland yesterday saw the July UBS consumption indicator fell to 0.77 from a revised 0.95 in June.  UBS warned “unemployment is likely to continue to increase significantly in the coming months.”  U.S. dollar offers are cited around the CHF 1.0670 level.  The euro moved lower vis-à-vis the Swiss franc as the single currency tested bids around the CHF 1.5150 level while the British pound came off vis-à-vis the Swiss franc and tested bids around the CHF 1.7325 level.

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 CountingPips.com

U.S. Consumer Confidence rose more than forecast after two months of declines according to the Conference Board Consumer Confidence Index released today. The consumer index, representing responses from 5,000 U.S. households, showed that consumer confidence increased to a 54.1 score this month following a revised 47.4 score in July. The increase easily surpassed market forecasts that were expecting consumer confidence to post a 47.9 score for the month.

The other two parts of the survey also saw increases in August.  The present situation section of the index increased to 24.9 from 23.3 in July while the expectations index jumped from 63.4 in July to 73.5 this month.

Lynn Franco, the Director of The Conference Board Consumer Research Center commented in the report on the increased readings, “Consumer confidence, which had posted back-to-back monthly declines, appears to be back on the mend. The Present Situation Index increased slightly, mainly the result of an improvement in consumers’ assessment of the job market. The Expectations Index improved considerably and is now at its highest level since December 2007 (Index, 75.8). Consumers were more upbeat in their short-term outlook for both the economy and the job market in August, but only slightly more upbeat in their income expectations. And, as long as earnings continue to weigh heavily on consumers’ minds, spending is likely to remain constrained.”

Also released out of the US today was the Standard & Poors/Case-Shiller house price index.  The results for the second quarter of 2009 showed that while house prices have still declined at a high rate, the pace of decline has cooled off compared to the previous quarter.  The April to June quarter house prices fell by 14.9 percent after a decline of 19.1 percent in the first quarter.

On a monthly basis, both the 10-city composite index and the 20-city composite index increased by 1.4 percent in June after gaining by 0.5 percent in May. On an annual basis, the 10-city composite index fell by an annual 15.1 percent and the 20-city composite index declined by an annual 15.4 percent. The decreases were slightly better than forecasts were expecting and marked the second straight month of improvement in prices after a run of 16 straight months of new record lows.

David M. Blitzer, Chairman of the Index Committee at S & P, commented in the report saying, “The U.S. National Composite rose in the 2nd quarter compared to the 1st quarter of 2009. This is the first time we have seen a positive quarter-over-quarter print in three years. Both the 10-City and 20-City Composites posted monthly increases, as did most of the cities. As seen in both seasonally adjusted and unadjusted data, as well as the charts, there are hints of an upward turn from a bottom. However, some of the hardest hit cities, especially in the Sun Belt, show continued weakness.”

US Dollar mixed in Forex Trading today.

The U.S. dollar has been mixed today in forex trading against the other major currencies since the start of the day at 00:00GMT. The American currency has been trading higher versus the British pound, Canadian dollar and Japanese yen while trading lower versus the euro and Swiss franc.  The dollar is trading virtually unchanged against the Australian dollar and New Zealand dollar at 2:36pm ET according to currency data from Oanda.

GBP/USD Chart – The British Pound continued to fall today versus the US dollar in forex trading and decreased to trading under the 1.6350 exchange rate. The GBP/USD had reached a high of 1.7043 on August 5th before retreating lower.

By Fast Brokers – The EUR/USD is recovering from earlier losses, bouncing from our 2nd tier uptrend line as the S&P futures float well above their psychological 1000 mark.  The Euro has exerted incredible relative strength lately, exhibited by the breakout in the EUR/GBP.  Euro bulls were inspired by Friday’s EU PMI data coupled with yesterday’s better than expected Industrial Production release.  Industrial Production registered its strongest level of growth since August 2007 as global stimulus packages and auto purchase programs ignite EU factories.  However, despite the EUR/USD’s resilience, the currency pair still faces our 2nd-4th tier downtrend lines.  We believe out 4th tier downtrend line should be a key player since it runs through August highs.  Hence, if the EUR/USD can take our 4th tier downtrend line, the currency pair will likely continue its upward momentum by retesting its previous 2009 highs.

Although we are receiving some important housing and consumer confidence data from the U.S. this morning, investors may wait until tomorrow’s German Ifo Business Climate release before dislodging the EUR/USD from its recent consolidative pattern.  In addition to tomorrow’s Germany Ifo number, the U.S. will release Durable Goods Orders and New Home Sales.  The Durable Goods Orders data could have a large impact on the EUR/USD since it implies consumption and demand for the EU’s durable goods.  Since manufacturing plays such a large role in both the German and French economies, better than expected durable goods data could send the EUR/USD past our 4th tier downtrend line, and vice-versa.

Meanwhile, economists are cautioning of asset bubbles caused by the global injections of liquidity, keeping the Dollar at bay and U.S. equity gains capped despite better than expected global economic data.  However, although the liquidity measures surely pose a longer-term threat, we believe the immediate and near-term economic data releases should continue their theme of recovery and slight expansion.  On the other hand, liquidity injections could come back to haunt the FX markets at the end of the 3rd quarter since investors will expect a growth in corporate earnings and  shouldn’t be too impressed by gains from cost-cutting.

In all, investors should keep a close eye on the currency pair’s interaction with our downtrend lines.  Near-term momentum remains to the upside despite investor uncertainty since economic data points have been outperforming expectations.  However, if this week’s economic data comes in shy of analyst expectations the EUR/USD may opt to test the patience of our 1st tier uptrend line.

Present Price: 1.4325

Resistances: 1.4327, 1.4347, 1.4360, 1.4375, 1.4405

Supports: 1.4315, 1.4304, 1.4294, 1.4272, 1.4254

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 Fast Brokers – The Cable is recovering above 8/17 lows as investors headed to the Dollar with uncertainty rising in reaction to the words of caution from economists around the world.  The Pound has been under considerable relative weakness the last week.  Investors continue to punish the Pound amidst the confusion surrounding the BOE’s decision to inject 50 billion more into its QE package, not to mention King’s vote to tack on an addition 25 billion to the tab.  However, the Pound may experience a reversal in fortune with some key British economic data on the way.  Britain hasn’t released very much economic data since the BOE’s monetary policy decision, so investors seem to have forgotten that British economic data was beating analyst expectations before the BOE delivered its monetary shock.  In fact, analysts were caught a bit off-guard by the BOE’s decision since Britain’s data had been encouraging.  Our reaction to the BOE’s policy decision was one of belief that the central bank is attempting to devalue the Pound to keep currency from getting ahead of economic growth so as not to place British companies at a competitive disadvantage.  Today’s BBA Mortgage Approvals number beat analyst expectations, supporting the argument that Britain’s housing market is in the midst of a remarkable recovery.  Investors also shouldn’t forget Britain’s employment market has made vast improvements from the height of the economic downturn.

Though Britain won’t release anymore economic data today, we will receive Nationwide HPI and CBI Realized Sales on Thursday followed by Revised GDP on Friday.  All of these data points are normally market-movers, allowing investors to value the Pound more on fundamentals than the negative psychological impact of the BOE’s injection of liquidity.  We expect Britain’s data to continue to outperform, re-energizing the Pound and sending the Cable back towards the lid of its 8/13-8/21 trading range.  However, if British and U.S. economic data underperforms the GBP/USD could test the patience of 8/17 lows.  In the meantime, 1.65 should continue to have a psychological impact on the Cable as the currency pair waves between 1.64 and 1.66.

Present Price: 1.6399

Resistances: 1.6407, 1.6430, 1.6458, 1.6508, 1.6544

Supports: 1.6380, 1.6366, 1.6342, 1.6311, 1.6278

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 – Investors are nibbling on the USD/JPY after America’s HPI data came in nine basis points ahead of analyst expectations.  The USD/JPY has experienced encouraging support in our 1st tier uptrend and 2nd tier downtrend lines while bulls work to avoid a retest of July lows.  It remains to be seen whether the USD/JPY will opt to participate in a broad-based depreciation of the Dollar or choose to recover with U.S. equities.  The decision will likely depend on the comparative performance of U.S. and Japanese economic data.  Thus far, America’s economic data hasn’t been faring much better than Japan’s.  Therefore, the Yen has appreciated against the Dollar despite breakouts in the S&P futures.  Speaking of which, the S&P futures are separating themselves from 1000, and it will be interesting to see if the USD/JPY participate to the topside should U.S. equities continue their impressive climb.

Japan will release its Trade Balance during America’s evening session, creating the possibility of heightened volatility in the USD/JPY.  Japan will also deliver Household Spending and its Tokyo Core CPI data points on Thursday.  Investors will be eyeing tonight’s Trade Balance data to see whether there is a noticeable improvement in demand for Japan’s exports.  A larger than expected surplus coupled with an outperformance in exports could help fuel an immediate-term global equity rally.  However, it remains to be seen whether stronger Japanese data would have a positive or negative impact on the USD/JPY.  While investors would expect the USD/JPY to exhibit a positive correlation with U.S. equities should Japan’s data beat expectations, investors could opt to favor the Yen over the Dollar instead.  On the other hand, underperformance of Japan’s economic data coupled with rising U.S. equities would likely result in a healthy rise in the USD/JPY.

Meanwhile, the USD/JPY faces sizable medium-term downward pressure considering all of our downtrend lines the currency pair faces, not to mention the highly psychological 100 level waiting patiently in the distance.  If our 1st tier uptrend line doesn’t hold, the USD/JPY could experience another leg down.  As for the topside, bulls are hoping to get the USD/JPY back above its psychological 95 level.  Regardless, we anticipate heightened near-term volatility with the flood of economic data.  Our prediction is reinforced by the inflection points of our 1st tier uptrend and 2nd tier downtrend lines and our 2nd tier uptrend and 3rd tier downtrend lines.

Present Price: 94.22

Resistances: 94.53, 94.71, 94.95, 95.26, 95.54

Supports:  94.08, 93.88, 93.65, 93.42, 93.27

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.