Month: September 2009

Source: ForexYard

With mixed results versus its primary currency counterparts, the British Pound appears to be consolidating many of its trends towards a volatile movement; positioned to take place today, it appears. The Bank of England’s rate decision and policy statement at 11:00 GMT may be today’s leading news event and forex traders won’t want to miss out on the volatility which is sure to follow this release.

Economic News

USD – USD Down 3.7% against the EUR this Year

The Dollar Index traded near the weakest level in almost a year against the currencies of six major U.S. trading partners as record low borrowing costs encouraged investors to sell the greenback and buy higher-yielding assets. The index was at 77.002, after dropping yesterday as much as 0.7% to 76.803, the lowest level since Sept. 26, 2008.

The USD continues to suffer downward pressure as investors continue to anticipate that the global economy is emerging from recession, which makes them more willing to sell Dollars and invest in riskier currencies and commodities. At the same time, while the Fed’s program helped pull the U.S out of the recession, it also pumped a lot of Dollars into the economy and with the continuous rise in the unemployment rate it is unlikely the Fed will raise interest rates any time soon.

Abundance of supply of USD, and a very low return on Dollar denominated assets due to the low interest rate, makes the greenback highly unappealing to investors; possibly replacing the JPY as the carry trade currency of choice.

The release of the Trade Balance and the Unemployment Claims figures is due to be released today at 12:30 GMT. With the unemployment numbers expected to show some improvement, a worse than expected result might help reverse some of the Dollar’s recent losses.

EUR – EUR Maintains Momentum, Stays above $1.4500

The EUR has maintained its momentum Wednesday after breaking through its tight summer ranges on Tuesday, particularly the $1.4450 price level. The EUR continued to trade above $1.45 pushing briefly above $1.46; its highest level in more than nine months.

Late Wednesday, the EUR was at $1.4553 from $1.4499 late Tuesday. The EUR was at 134.02 Yen from 133.73 Yen. The U.K. Pound was at $1.6532 from $1.6499.

The EUR is benefiting from a belief that the Euro-Zone economy is improving at a higher pace than the U.S economy which lends support to the common currency. Furthermore, the EUR appears to be a popular choice as an alternative, higher yielding currency than the USD.

The U.K’s MPC rate statement and Official Bank Rate is expected at 11:00 GMT. While the rate is not expected to change, the statement is highly important and is likely to have great affect on the GBP. Last month’s surprise decision to increase the quantitative easing program set the GBP plummeting against its major currency counterparts. A similar announcement today could do the same.

JPY – Yen at Strongest Level in 7 Months against the USD

Japan’s currency gained 0.8% against the Dollar, trading at 91.61; the highest level since Feb.17. The Yen declined 0.2% against the EUR, to 133.98 per EUR. The Yen’s support arises from the fact that it is slowly being replaced by the Dollar as the preferred currency for carry trades.

However, as the Bank of Japan (BOJ) is hesitant about allowing the currency to appreciate without further substantial improvement in the economy, the Yen may have trouble’s remaining at such a high level since there isn’t much economic foundation behind this rise.

With no major news release from Japan today, the JPY’s movements will likely be determined by news from the U.S and Europe.

Crude Oil – OPEC to Maintain Production Quotas

Crude Oil’s price continues its advance for a fourth day with the contract for October delivery trading up 31 cents, or 0.4%, at $71.67 a barrel on the New York Mercantile Exchange (NYMEX) early morning trading today.

The advance was supported by OPEC’s statement to keep oil production quotas unchanged on an expectation that the world economic recovery will keep prices near $71 a barrel. It seems that both consumers and producers are quite comfortable with the $65 to $75 price range. The drop in Dollar value also helped boost oil prices since Crude Oil, which is Dollar denominated, is now cheaper for holders of other currencies. Oil also serves as a protective investment against inflation caused by a weaker Dollar.

Today’s release of Crude Oil Inventories is expected to show another drop of 1.5 million barrels, the third drop in four weeks. If results are better than expected we might see another boost for oil prices.

Technical News

EUR/USD

Short-term indicators on this pair do no seem to offer much direction. The price does, however, float in the over-bought territory on the 4-hour RSI, suggesting downward pressure. And there appears to be an impending bearish cross on the daily Slow Stochastic and 4-hour MACD, which suggests a downward correction may be imminent. Waiting for the downward swing and then going short may be a wise choice today.

GBP/USD

The price appears to be floating in the over-bought territory on the 4-hour RSI, and just entering the over-bought territory on the daily RSI, which suggests strong downward pressure. With a bearish cross forming on the 4-hour MACD, a downward move may indeed be imminent. Going short could be a good strategy today.

USD/JPY

There appears to be a fresh bullish cross on the 4-hour MACD, suggesting an upward correction may be due. The price also sits inside the over-sold territory on the 4-hour and daily RSI, which supports this notion. Going long with tight stops might not be a bad idea.

USD/CHF

There seems to be bullish crosses on the hourly and 4-hour MACD, and an impending bullish cross on the daily Slow Stochastic, all of which suggests the next movement may be in an upward direction. Going long appears to be today’s preferable strategy for this pair.

The Wild Card – GBP/CHF

After a sustained downward movement, this pair is now testing the significant resistance level of 1.7200. With the price floating in the over-sold territory on the 4-hour RSI, and a fresh bullish cross on the 4-hour Slow Stochastic, this pair is facing an impending upward correction which may turn out to be a reversal. Forex traders can benefit from this movement by going long on this pair and 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.

Market Movers of the Day

Asia – Pacific

*Australian Retail Sales dropped 1.0% in July

*Australian Home Loan Approvals fell 2.0% in July

*Australian Consumer Confidence gained 5.2% (Sep)

*Japan’s Leading Economic Index climbed to 83.0 in July

*New Zealand’s central bank left its benchmark interest rate unchanged at 2.5%

*New Zealand’s Terms of Trade Index dropped 9.0% (2Q)

Europe

*German Consumer Price Index fell 0.1% in July on an annualized basis

*UK Trade Balance in July worse than expected at -₤6.5B

*UK Total Trade Balance, worse expected -₤2.4B

*UK NIESR GDP Estimate increased 0.2% (Aug)

Americas

*Canadian Housing Starts in August better than expected at 150.4K on an annualized basis

*US Fed’s Beige Book

The Overall Sentiment

US stock markets ended on the positive side and the Dollar continued to weaken as the Fed’s Beige Book business survey indicated that most regions of the country show signs of stabilization or improvement. The Canadian dollar advanced as Canada’s Housing Starts in August came better than expected but ended little changed as the market awaits the BoC’s meeting and interest rate decision. The Pound weakened against the Euro as UK’s Trade Balance showed a widened deficit for a second month adding signs that the recession hasn’t ended for the British economy. In the Asia-Pacific region New Zealand’s central bank kept its benchmark interest rate unchanged and the New Zealand dollar’s rally of the past days lost some strength as New Zealand’s Terms of Trade Index fell to its lowest levels in almost three years. The Australian dollar dropped as Retail Sales disappointed with an unexpected decline and Home Loan Approvals surprised for the worst overshadowing the positive Consumer Confidence data. The Yen continued to strengthen as Japan’s Leading Economic Index climbed in July more than forecasted.

The Day Ahead

The day will start in Australia with the Melbourne Inflation Expectation presenting the consumer expectations of future inflation during the next 12 months and Australia’s Employment Change for August which is followed by traders as it has an impact on consumer spending, labor conditions, and overall economic activity. In the UK the Bank of England will announce its monetary policy decision where a large market consensus points to the benchmark interest rate remaining unchanged at 0.5% and no modifications in the BoE’s asset-purchase program. Nevertheless, the bank can always surprise as it did in its last meeting by unexpectedly increasing its Quantitative Easing program. It will be a big day for the Canadian dollar with the release of Canada’s International Merchandise Trade figures and the Bank of Canada’s interest rate decision where market estimations point to an unchanged rate of 0.25%. In the US Initial Jobless Claims are expected to fall as an additional sign that the US economy is improving. Some volatility for the Yen is likely at the end of the day with the release of Japan’s GDP figures.

Technical Analysis

AUD/JPY DAILY

AUD/JPY has traded in range for the last three weeks developing a channel with supports at 76.50 and an upper boundary just below 80.  With an additional day where it failed to break above 80 and a lower closing than a day before the cross is confirming the opportunity to enter a Short position that we indicated a couple of days ago. Stop Loss should be set above 80 and entering a Long position should be considered if that resistance is breached.

Market Analysis provided by eToro

Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.

© 2009 eToro Blog.

By CountingPips.com

The US Dollar, fresh off yearly lows in yesterday’s trading, continued to slide in forex trading today against most of the major currencies. The dollar has lost ground to the euro, British pound, Australian dollar, Swiss franc, Japanese yen while trading higher versus the Canadian dollar and almost unchanged versus the New Zealand dollar at 4:03pm EDT according currency data by Oanda.

The stock markets had another positive session today with the Dow gaining by almost 50 points, the Nasdaq increasing over 22 points and the S&P 500 showing almost an 8 point gain.  Oil traded almost unchanged to $71.29 while gold traded down $7.10 to $990.80 per ounce.

Major economic news releases today showed that July retail sales out of Australia fell unexpectedly by 1.0 percent versus forecasts expecting a 0.5 percent rise.  Australian home loans declined by 2.0 percent in July while investment lending also fell by 4.0 percent.  New Zealand’s interest rate announcement is scheduled for release at 21:00 GMT with expectations for a rate hold at the current 2.50 percent.

Out of Europe, Germany’s consumer prices increased by 0.2 percent in August. The United Kingdom’s trade deficit registered £2.4 billion in July, more than forecasts expected but virtually unchanged from June’s deficit.

Today’s EUR/USD Chart – The euro continued its upward climb versus the dollar in today’s trading as the EUR/USD pair trades above the 1.4550 level and made a fresh 2009 high.  The euro has gained over 250 pips against the dollar from the beginning of the week and looks to be on its way to test the December 2008 resistance level around the 1.4700.

By Nico Isaac

In recent months, Elliott Wave International President Bob Prechter has become something of a household name. In the final two days of August 2009 alone, Bob was mentioned by several news outlets from MarketWatch to the New York Times. The claim to his “fame” —

EWI was one of the only technical analysis firms to anticipate a sharp rally in U.S. stocks as they circled the drain of a 12-year low this spring, a feat made ever more exceptional considering the widespread image of Bob as being the ultimate “Big, Bad Bear.”

The lesson? Believe in the facts, not in the “widespread image.”

Bob Prechter has always said that successful forecasting should look to the current wave count (and various other technical measures) for direction. He has never permanently tied himself to the mast of definition — i.e. “bull” or “bear.”

For this reason, EWI’s team of analysts have been able to stay one step ahead of the biggest turning points in the Dow Jones Industrial Average, from the very start of the index’s historic 2007 reversal.

To wit: This two-year chart of the Dow incorporates several calls from our past publications as they coincided with the market’s most memorable peaks and troughs:

——————————————————————
For more analysis from Robert Prechter, download a free 10-page July issue of Prechter’s Elliott Wave Theorist.
——————————————————————

The chart above presents the abstract details of our past analysis. Here is the expanded version of those insights as they appeared in real-time:

July 17, 2007 TheElliott Wave Theorist:

“Aggressive speculators should return to a fully leveraged short position now. We may be early by a couple of weeks, but the market has traced out the minimum expected rise, and that’s enough to act on.”

Soon after, as the DJIA neared its own historic Oct. 11, 2007 apex, the Oct. 9 and 10 Short Term Update amped up the urgency of its analysis and wrote:

“Odds have increased that a market high is in place. The structure, coupled with turns in the other markets, suggests a top is in place. The potential, at the least, is four a large selloff… Watch Out! The market faces a stout correction.”

Before landing at its March 10, 2008 bottom, the March 5 Short Term Update afforded respect to a bullish alternate count and wrote: “Prices should carry above the wave a high (13165) before it ends.”

At its four-month high, the March 16 2008 Elliott Wave Theorist went on high, bearish alert and wrote: The DJIA is entering “Free Fall territory.”

One week before the U.S. stock market landed at its 12-year low of March 9, our Feb. 27, 2009 Short Term Update utilized a traditional turning pattern to outline a specific time window for the onset of a major upside reversal. In STU’s own words:

“By all indication, this pattern is back on track… the turn will come on or near March 10, 2009. Anywhere in this time period may mark a turn, which will obviously be a market low.”

Once the bullish winds of change had turned, the March 16 Short Term Update wrote:

“When the market speaks, it behooves us to listen. The implications of this are that the… major stock indexes are in the initial stages of a multi-month advance.”

Finally, the April 2009 Elliott Wave Financial Forecast calculated a specific target range for the Dow’s rally: the 9,000-10,000 level.

So, now that the upside objective is met, where are prices set to go next? For more analysis from Robert Prechter, download a free 10-page July issue of Prechter’s Elliott Wave Theorist.

Source: ForexYard

With recent market volatility, the price level for a few currencies and commodities have begun to see prices not seen since last year. For instance, the USD fell to its lowest in almost a year during yesterday trading session after gains in global stocks. Gold has also shocked the market lately with continues uptrend, rising above $1000 for the first time since March 2008. With rallies this large, the forex market becomes more predictable, and traders can reap the benefits!

Economic News

USD – The Dollar Tumbles to 2009 Low !

The U.S. dollar fell to a new yearly low against the EUR and dropped against other major rivals Tuesday as investors continued to show a rising appetite for risk. Better economic data from Germany and Britain also supported investors’ risk appetite at the margin. The U.S. dollar, seen as a safe-haven in uncertain times, usually tends to fall when hopes of a global recovery rise.

The greenback’s weakness came against a backdrop marked by a push higher in equities and improving economic data abroad, as well as renewed questions about the role of the Dollar as the world’s premier reserve currency. The greenback was universally sold on reignited concerns about the capacity of the U.S. dollar to retain its global reserve status. The USD even lost ground to another safe-haven, the Japanese yen, suggesting the selling was more than just a shift to risk. The Dollar was down at 92.30 yen, having shed nearly 0.8% on Tuesday.

Renewed concerns about the status of the U.S dollar as the world’s reserve currency sparked by a United Nations agency report on Monday and news out of China expressing concern about printing money to fund Treasury purchases have also weighed on the Dollar. The USD was pushed lower by several news headlines with the UN report and the China news, analysts said. All these things are dollar negative. This is a reminder that the U.S. dollar is poised for some weakness in the months ahead.

EUR – EUR Rises Above $1.45 as Risk Appetite Returns

The European currency rose toward a 9 month high against the U.S dollar before a government report forecast to show French industrial production increased, boosting demand for higher-yielding assets. The EUR extended gains versus the Dollar on Tuesday amid a rise in global stocks and commodities. The currency advanced against the Yen for a 5th day as investors forecast consumer confidence in Japan climbed to 40.2 in August from 39.7 in July, boosting demand for higher-yielding assets.

The EUR is also benefiting from uncertainty about the U.S. economy. The Euro-Zone is likely to see a hike in Interest Rates before the U.S. does. The Euro-Zone currency also advanced as economists said the Paris-based statistics office Insee may report factory output in France gained 0.4% in July after rising 0.3% in June. The data is due Thursday.

The GBP saw a big jump, meanwhile, rising 0.9% against the U.S dollar to trade at $1.6530, as U.K. manufacturing output for July came in much stronger than forecast. The British pound dropped against the Yen for a second day amid speculation the Bank of England (BOE) this week will expand its asset-purchase program, adding to signs the economic recovery will be sluggish. The Bank of England is scheduled to announce its monetary policy decision on Thursday with the central bank widely expected to keep Interest Rates unchanged.

JPY – Yen Extends its Bullish Run against the Dollar

The Japanese yen rose against the EUR and U.S dollar before a government report that economists say will show U.K. industrial production grew in July at a slower pace, boosting demand for Japan’s currency as a refuge. The Yen also strengthened after the Ministry of Finance said Japan’s current-account surplus fell to 1.27 trillion yen ($13.7 billion) in July from a year earlier.

The Yen has already risen above levels expected by major manufacturers for the current fiscal year, and is showing signs of strengthening again. If the U.S dollar falls below 92 yen the impact may be big and such concerns are weighing on stocks, analysts said.

Crude Oil – Oil Jumps above $71 on Eve of OPEC Meet

Crude prices rallied more than 4% Tuesday, as sharp weakness in the U.S. dollar boosted commodities, and as energy traders looked ahead to the upcoming meeting of the OPEC oil cartel. The gains came as the U.S dollar slumped to its lowest level in almost a year against a basket of currencies and gold rallied above $1,000 an ounce, its highest since March 2008.

The Organization of Petroleum Exporting Countries, which accounts for about one-third of the world’s oil production, is scheduled to meet Wednesday in Vienna. Analysts expect the cartel to keep its production quota unchanged while pressuring member countries to comply with their current production limits.

Oil prices, which fell 6.5% last week, have been trading in a range between $65 and $75 a barrel since the start of August, with prices swinging on economic data as investors seek clues about the speed of a recovery from the recession. Investors will be on watch for inventory data, delayed by a day this week due to Monday’s holiday. The U.S. Energy Information Administration report will be issued Thursday at 15:00 GMT.

Technical News

EUR/USD

The price of this pair appears to be floating in the over-bought territory on the 4-hour chart’s RSI indicating a downward correction may be imminent. The downward direction on the daily chart’s Slow Stochastic also supports this notion. Going short might be a wise choice.

GBP/USD

The hourly chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, there is a bearish cross forming on the daily chart’s Slow Stochastic indicating a bearish correction might take place in the nearest future. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

USD/JPY

The cross has experienced much bearishness in the last two days, and currently stands at the 92.25 level. There is much evidence in the chart’s oscillators that supports a possible bullish correction today. This is supported by the 4-hour chart’s RSI. Going long might be a wise choice.

USD/CHF

The pair has recorded much bearish behavior in the last week. However, the technical data indicates that this trend may reverse anytime soon. For example, the 4-hour chart’s RSI signals that a bullish reversal is imminent. Going long with tight stops may turn out to pay off today.

The Wild Card – Crude Oil

Crude Oil prices rose significantly yesterday and peaked at $71.40 per barrel. However, the 4-hour chart’s RSI is floating in an overbought territory suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. This might be a good opportunity for forex traders to enter the trend at a very early stage.

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.

The Forex market Goes Nuts, Pairs Present Phenomenal Rallies

This time it started on the Forex market, as Dollar counterparts climbed higher throughout the session. Already during Asian hours investors were showing their confidence in the current recovery driving the indices and currency pairs higher. Throughout the session the Dollar index dropped dramatically from its recent support level, coming down to 77.1 points.

On individual pairs, the AUD/USD led the rally higher, breaking major resistance already during Friday’s session. The EUR/USD presented a massive turnaround and closee the day above its high of $1.4445. Even though this pair is now presenting an intraday technical continuation pattern, one must note that economic data could linger on this pair causing it to retrace and test its break out. When taking a glance at the chart below one can see the intra trend line resistance that must be broken to follow through.

EUR/USD

The Dollar/Yen also presented a phenomenal drop during yesterday’s session, backed by a weak Dollar. One must note that even though Japan’s economic data is still showing that the economy is deteriorating, price movement on this pair was caused yesterday due to a weak Dollar. Lending grew at the slowest pace in eight months in August as companies continued to cut spending. While the move might have been profitable for certain traders, the current price of the Yen is yet again causing problems for Japanese exporters. Yesterday’s price movement sent the USD/JPY down to critical support of ¥92. One must note that even though this pair is showing signs of a possible bounce, further overall Dollar weakness could have a further impact on this pair, sending it to lower levels. Key levels to watch out for are a break of either ¥93.31 or ¥92.

Stock Bounce Higher but Loose Their Steam

Stocks continued higher yesterday backed by Gold’s rally and overall momentum. Gold climbed throughout the session, breaching the $1000 mark, but failed to hold on to its gains. In addition, the G20 meeting added some spark to the session, as the leaders agreed that stimulus would continue to remain, helping the global economy, until countries are showing more signs of recovery. G20 leaders agreed that in due time they will engage in monetary tightening, using various exit strategies to rid the markets from excess cash.

From a technical point of view, the indices gapped up at the start of the session and climbed throughout the first few minutes. Even though they lost their steam during the day, the indices managed to find support as investors pushed them up to close around their highs of the day. Looking forward, even though the strong close gave investors confidence that the rally could continue, one must note that the major indices are now trading around critical resistance levels, ones that could prevent an immediate break.

Market Data to Watch Out For

The U.S will be the first to take the stage today, followed by New-Zealand and Australia. The U.S is scheduled to release its closely watched Beige Book and housing starts. One must note that housing start results have gained extreme interest among investors over the past year, due to the economic recession. In addition, New-Zealand will release its rate decisions, currently expected to hold at 2.5%.  Even the decision could cause intraday volatility; many will be looking towards the statement that follows. Australia will finish off the session by releasing its employment data, something that could give a clue as to whether the RBA will consider increasing its central rate at its next meeting.

Market Analysis provided by eToro

Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.

© 2009 eToro Blog. Powered by Etoro Forex News.

By GCI Fx Research

€

The euro moved sharply higher vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4535 level and was supported around the $1.4330 level.  Today’s intraday high represented the pair’s strongest print since 18 December 2009.  Traders are talking about a few key factors. First, trading desks resumed normal operations today after the summer and long U.S. holiday weekend.  Second, one ongoing theme involves the record amount of U.S. Treasury supply projected for this year and its impact on the U.S. dollar.  The Obama administration today sought an increase in the debt ceiling so that more supply can be issued and a major concern among traders is that the value of the U.S. dollar will be eroded.  The United Nations was on the tape over the weekend suggesting Special Drawing Rights should replace become another major global reserve currency alongside the U.S. dollar.  China, which holds an appreciable amount of U.S. dollars, has been very vocal saying the U.S. must protect the value of the U.S. dollar.  Third, it is unlikely the Federal Reserve is going to raise interest rates anytime soon.  While some of the Fed’s quantitative easing programs will expire on their own, the Fed is likely to maintain an ultra-accommodative monetary policy for at least the next couple of business quarters.  In eurozone news, European Central Bank member Weber reported the central bank is closely examining developments in money and credit aggregates.  Weber added “When upward risks to medium-term price stability become apparent, then the time has come to raise the level of monetary policy restriction.  The negative late effects of the preceding (economic) downturn, in particular rising unemployment, have at this point not fully cropped up.”  Weber sees a “gradual” withdrawal from the ECB’s quantitative easing.  German finance minister Steinbrueck today said German gross domestic product growth is likely to contract by between 5% and 6% in 2009.  Data released in Germany today saw July industrial production fell 0.9% m/m and 17% y/y while the July trade surplus rose to €13.9 billion from €12.1 billion.  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 ¥92.00 figure and was capped around the ¥93.10 level.  The main catalyst was a considerably weaker U.S. dollar that fell relative to most other major currencies.  The Japanese government kept its economic assessment unchanged today, noting the economy is “picking up” while reducing its view of the labour market on account of record unemployment.  Economists cite declining income and spending as ongoing risk factors.  Data released in Japan overnight saw August economic sentiment decline to 41.7 from 42.4 in July, the first decline in eight months and the 29th consecutive month the index has been below the neutral 50.0 level.  Other data saw August corporate bankruptcies up 2.4% y/y while bank lending growth decelerated to +1.8% y/y.  Additionally, the August M3 money supply index was up 2% and the unadjusted current account surplus was off 19.4% y/y at ¥1.266 trillion.  Some Japan-watchers believe the new Democratic Party of Japan government may worsen Japan’s finances despite the DPJ’s statements that they’ll do not plan to dramatically increase supply of Japanese government bonds.  The Nikkei 225 stock climbed 0.70% to close at ¥10,393.23.  U.S. dollar offers are cited around the ¥94.75 level.  The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥133.85 level and was supported around the ¥132.80 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥151.30 level while the Swiss franc moved higher vis-à-vis the yen and tested offers 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 6.8231 in the over-the-counter market, down from CNY 6.8245.  People’s Bank of China adviser Fan Gang yesterday reported “macroeconomic policies must be preemptive. Some PBOC-watchers believe China is unlikely to lift interest rates or reserve requirements within the next six months.

₤

The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.6495 level and was supported around the $1.6485 level.  Chancellor of the Exchequer Darling reported now is not the correct time to reduce U.K. fiscal spending.  Data released in the U.K. overnight saw like-for-like retail sales off 0.1% y/y in August, in contrast to overall retail sales growth of 2.2%.  NIESR reported the U.K. economy returned to growth in the three months ending in August with GDP up 0.2% from a 0.3% decline in the three months to July.  Other data saw July manufacturing output up 0.9% m/m and off 10.1% y/y.  Cable bids are cited around the US$ 1.6030 level.  The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.8790 level and was supported around the ₤0.8730 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

The US Dollar reached yearly lows against the euro, Swiss franc, Australian dollar and New Zealand dollar in forex trading today as money pored out of the dollar and into the so-called risk currencies. Gold soared to over $1,000 per ounce for the first time since February 20th, coinciding with gains in the stock market and in crude oil.  The dollar also saw losses against the Japanese yen and British pound while gaining versus the Canadian dollar.

The dollar fell to over the 1.4500 dollars per euro level today to mark the lowest exchange rate since December 17th of 2008 when the EUR/USD pair reached as high as 1.4720. The EUR/USD had reached a yearly low of 1.2456 on March 2nd before embarking on an uptrend that has continued through today’s high.

The Australian “aussie” dollar has also continued to soar since March and reached its highest exchange rate versus the USD since August 2008 at 0.8658.  Last year, the aussie flirted with parity against the dollar, reaching as high as 0.9849 aud per usd before a sharp decline going into the global financial crisis.

The New Zealand dollar broke the 0.6980 level today against the USD for the first time since late August of 2008.  The NZD/USD pair reached a low of 0.4894 in March of this year before starting its upward trend.

The dollar fell to it lowest exchange rate against the Swiss franc since December 28th of 2008 today at 1.0432.  The USD/CHF had reached a high around 1.1950 earlier this year.

By Adam Hewison – I believe the action in gold should be looked at seriously as it pushes the gold market to its best level in almost 3 months.

In my new video, I show you what I think is going to happen to this market in the near term and the long term. I also discuss energy fields as they pertain to gold, and where our Trade Triangles are positioned in the yellow metal.

There is no need to register for this video and of course you can watch it with my compliments. I highly recommend watching this video today otherwise you risk missing out on what could be the move of the year.

Enjoy the video.

Watch the New Video Here…

All the best,

Adam Hewison
President, INO.com
Co-creator, MarketClub

By Fast Brokers – The USD/JPY’s bounce ran out of steam as we anticipated and the currency pair was deflected by our 1st tier uptrend line today after buy-side volume proved insufficient.  We recognize a rise in sell-side activity with investors exiting the Dollar amid fear that America’s liquidity measures will result in a broad-based devaluation over the medium-term.  Both the EUR/USD and GBP/USD are experiencing a rapid appreciation against the Dollar as well today.  We cautioned that a strong downward force is still bearing down on the USD/JPY with our 2nd tier downtrend line and makeshift 1st tier uptrend line fading into the distance.  Investors are clearly favoring the Yen over the Dollar with important data from Japan, China, Britain and the U.S. on the way.

While investors will surely be scrutinizing Japan’s Core Machinery Orders data tomorrow, Thursday will be the center of attention with a monetary policy decision from the BOE coupled with key economic data from China.  China’s data will be important for the Yen since Japan is much more reliant on its exports to the communist nation with consumption damaged in the West.  Weak data from China and the U.S. could mitigate losses in the USD/JPY and help the currency pair keep its head above water.  However, the combination of strong Industrial Production from China coupled with weak U.S. data would likely result in an aggressive appreciation of the Yen vs. the Dollar.  Considering the downward pressure on the USD/JPY and topside breakouts in the EUR/USD and GBP/USD, it seems the USD/JPY’s pullback may have quite a ways to go over the near-term.

Technically speaking, the immediate-term key will be for the USD/JPY to stay above September lows.  If not, we should see a quick test of July lows.  Beneath these levels, the currency pair does have historical consolidation dating back to January and February trading ranges.  Furthermore, the USD/JPY has the highly psychological 90 level to fall back on should the downturn pick up speed again.  As for the topside, the USD/JPY needs to climb back above our 1st tier uptrend and 2nd tier downtrend lines along with previous September highs in order to save face.

Present Price: 92.14

Resistances:  92.27, 92.37, 92.54, 92.67, 92.76

Supports:  92.05, 91.95, 91.79, 91.64, 91.50

Psychological: 90

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.