Month: December 2009

Source: ForexYard

The U.S. dollar continued to strengthen against the majors during Tuesday’s trading session. Driving the dollar higher was a rise in existing home sales for the month of November and Final GDP numbers for the 3rd quarter that suggest the U.S. economy is improving.

Economic News

USD – Dollar Moves Higher on Positive Economic Data

Yesterday’s trading had the dollar climbing higher against a basket of currencies after data released from the States suggest the U.S. economy may be on the path to recovery. Driving the dollar’s trading was the release of U.S. existing home sales and GDP data. The upbeat release of 6.54M homes sold on expectations of only 6.29M during the month of November helped boost an appetite for the dollar, as did the final GDP numbers. A revised 2.2% for the 3rd quarter was enough to spur more buying of the dollar against its rivals.

The EUR/USD finished the day trading at 1.4253, down from an opening day price of 1.4285. The dollar was also stronger versus the GBP as the GBP/USD was trading down at 1.5969 from the day’s earlier price of 1.6053.

Today’s New York trading session will be highlighted by the release of the U.S. new home sales numbers. Market economists have predicted a rise of 442K new home sales during the month of November. This indicator has the ability to add momentum to the recent trend of a strengthening dollar. We could see the EUR/USD trading lower on better than expected results, perhaps close to the 1.4190 price level.

EUR – Sovereign Debt of Greece Downgraded

With the dollar’s rally, the EUR has been in a slump. The EUR is currently trading at its lowest level in the past three and a half months. Yesterday was no different as the EUR traded lower versus the dollar, though the Euro-zone currency was higher versus the pound and the yen.

The EUR/GBP was trading higher at 0.8923, from an opening price of 0.8896, as was the EUR/JPY at 130.87 from yesterday’s price of 130.09.

Market sentiment has turned against the EUR as the U.S. economy may be recovering faster than the Euro-zone. Also the assumption the Federal Reserve will begin to raise interest rates sooner than expected is helping the momentum. A sign of a weak European economy raised eyebrows today as Moody’s Investor Service downgraded the sovereign debt rating Greece. The ratings service also noted it is unlikely for the European Central Bank to step in and help Greece meet its debt obligations.

Traders should be looking towards the release of the French consumer spending numbers today. A release of better than expected data from the Euro-zone’s second largest economy may spur further buying of the EUR against the Pound. Traders should also be following the MPC Meeting Minutes from the Bank of England. We’ll be looking for signs of the Bank to begin to tighten monetary policy for England.

JPY – Yen at Seven Week Low Versus the Dollar

The Yen is currently sitting at a seven week low versus the USD. This will be looked on positively by both the Japanese Ministry of Finance and Japanese industry who depend on a weak yen to make their goods more competitive in the global market place.

Currently the USD/JPY is trading at 91.64 from an opening day price of 91.06. We’ve seen heavy buying of pair close to the 91 price level.

Japanese banks are closed today for a holiday today. Therefore, large bloc trades may have an extra high impact on today’s prices as liquidity is tight as we approach the holidays and trading desks are operating on skeleton staffs. With a significant amount of money sitting on the sidelines, this could give smaller traders opportunities to take advantage of the volatile price swings in the yen. Those who can find them may have larger potential opportunities in this type of market.

Oil – OPEC Holds Output Firm as Spot Crude Oil Prices rise.

As expected, OPEC agreed yesterday to hold its production quota steady for member nations, though a call was made for its members to comply with previously agreed production cuts. The price of crude oil is currently trading near $74.25 level after an opening day price of $73.70.

The member nations would like to see a drop in the supply of crude oil as the current price sits at a much more comfortable level for member nations who depend on the export of crude to drive their one dimensional economies. As demand for crude oil weakens, OPEC fears if production cuts are not met, there may be a lack of equilibrium for the supply and demand of crude oil, which could drive down the price. OPEC member nations are notorious for failing to meet their production cuts. Research shows OPEC nations fulfill only 60% of their declared production cuts.

Those traders who see the long term fundamental view of excess supply in the market may see an entry price of $75 to go short.

Technical News

EUR/USD

The EUR/USD has gone increasingly bearish in the past month, and currently stands at the 1.4245 level. However, the RSI of the daily chart shows the pair floating in the oversold territory, indicating that an upward correction will happen anytime soon. Going long with tight stops might be a wise choice.

GBP/USD

The price of this pair appears to be floating in the over-sold territory on the daily chart’s RSI indicating an upward correction may be imminent. The upward direction on the 4-hour chart’s RSI also supports this notion. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.

USD/JPY

The hourly chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, there is a fresh bearish cross forming on the 4-hour chart’s Slow Stochastic indicating a bearish correction might take place in the nearest future. Going short might be a wise choice.

USD/CHF

The bullish trend is loosing its steam and the pair seems to consolidate around the 1.0490 level. The daily chart’s RSI is already floating in an overbought territory suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

The Wild Card – CAD/JPY

CAD/JPY sustained upward movement has finally pushed its price into the over-bought territory on the daily chart’s RSI. Not only that, but there actually appears to be an impending bearish cross on the Slow Stochastic pointing to an imminent downward correction. Forex traders have the opportunity to wait for the downward breach on the hourlies and go short in order to ride out the impending wave.

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.

Europe

U.K’s GDP came out worse than expected at -0.2%

Americas

GDP disappointed, coming out at 0.4%

Existing home sales jumped by 6.54m

Daily Market Review Dec 23, 09

It was a GDP day yesterday, as two of the largest economies showed their growth results. The U.K took the stage first, showing negative growth of -0.2%. Even though the result didn’t deviate too much from the expected result of -0.1%, it was still better than the 2^nd quarter’s result of -0.3%. The mild increase in economic growth was attributed to construction, which had increased in the third quarter.

The U.S also grabbed the spot light, prior to the opening bell, releasing their GDP and existing home sales figures. The final estimate for real GDP in the third quarter came in under expectations of at 2.2%, 0.6 percentage points lower than the preliminary estimate and an even more significant 1.3 points below the advance estimate. The details of the report revealed weakness in personal consumption, investments and government consumption. One must note that the two numbers from the U.S and the U.K spooked investors as the results showed that the largest economies are still dealing with a slow recovery.

Furthermore, the U.S released its existing home sales, showing that prices are now on the rise. The numbers jumped by 8.5%, 6.54M, presenting a sizeable increase, similar to October’s increase of 9.5%. It is important to note that when excluding one month of declines the housing market has been recuperating at a steady pace since April.

U.S stocks continued their climb higher despite the worse than expected GDP number and finished the session with gains. AIG increased by over 10% after it decided not to pursue an IPO for Chartis, its property and casualty division. Once again, yesterday’s session was characterized by a bounce at the start of the session, which then led to consolidation. Even though stocks continue to show resilience, gains are due to spikes at the start of the session and not continuous buying throughout the intraday sessions.

This time round, the Technology led the way higher, increasing by over 0.80%, while utilities dragged on the session, closing with a loss of -0.83%. The S&P500 finished the day with a gain of 0.36%.

Forex

On the Forex market, the Dollar index continued to gain strength, as investors saw further strength in the recent Dollar rally. Investors are now beginning to price in a change in the Fed’s policy, which is reflecting a stronger Dollar. Yesterday’s existing home sales number only strengthened recent thoughts, knowing that an improving economy will eventually lead to rate hikes.

On individual pairs, the EUR/USD and the AUD/USD continued their way lower, while the GBP/USD broke support and headed to lower ground. To date the GBP/USD seems to be heading towards its prior support level, located around $1.68.

The NZD also felt pressure as additional Dollar strength and a worse than expected GDP figure, pushed the NZD/USD lower. New Zealand reported that their economy had expanded less than expected at a rate of 0.2%, compared to an expected 0.4%. According to the Financial Times, economists noted there had been a particularly sharp fall in residential building in the latest quarter and that business investment and manufacturing had also been weak.

The Day Ahead

On the data front, further market movers will be released today by different economies; Canada, England and the U.S all taking the stage. The BOE is scheduled to post its minutes and is expected to leave its monetary decisions unchanged. Throughout the session Canada will release its GDP figure while the U.S will release personal spending and new home sales. While investors are expecting a lower GDP rate from Canada, similar to other economies’ recent data, the U.S new home sales could surprise, showing an increasing number of 439.00k

Daily Forex 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.

Written by ForexCycle.com

EURUSD stays below a falling trend line on 4-hour chart and remains in downtrend from 1.5140, and the fall extends further to as low as 1.4218 level. Deeper decline is still possible and next target would be at 1.4150 area. Resistance is at the falling trend line on 4-hour chart now at 1.4325, as long as this level holds, we’d expect downtrend to continue. However, above 1.4325 could indicate that a short term cycle bottom has been formed and minor consolidation in a range between 1.4200 and 1.4415 could be seen to follow.

By CountingPips.com

U.S. Existing Homes sales rose more than expected for the month of November according to the monthly report produced by the National Association of Realtors. The NAR report showed that existing-home sales including single family homes, co-ops and townhouses increased 7.4 percent in November to a seasonally adjusted annual rate of 6.54 million units. October’s existing-homes sales also surged higher with an increase by 10.1 percent.

Market forecasters had predicted the sales data would rise by 2.5 percent for the month to a 6.25 million unit sales pace.

The median sales price for existing homes in November was $172,600, a 4.3 percent decline from the November 2008 median sales level. Total housing inventory decreased in November by 1.3 percent to a total of 3.52 million homes.

NAR chief economist Lawrence Yun commented in the report about the increased sales figures, “This clearly is a rush of first-time buyers not wanting to miss out on the tax credit, but there are many more potential buyers who can enter the market in the months ahead.”. “We expect a temporary sales drop while buying activity ramps up for another surge in the spring when buyers take advantage of the expanded tax credit, which hopefully will take us into a self-sustaining market in the second half of 2010. In all, 4.4 million households are expected to claim the tax credit before it expires and balance should be restored to the housing sector with inventories continuing to decline.”

GDP revised lower for 3rd Quarter.

The U.S. economy grew by less than previously estimated in the 3rd quarter of 2009 according to by the U.S. Commerce Department. The government’s third estimate released today showed that the U.S. Gross Domestic Product grew at an annual rate of 2.2 percent in the July to September quarter following a  0.7 percent contraction in the 2nd quarter. The first estimate of the 3rd quarter GDP released in October had measured a 3.5 percent economic expansion while the second estimate showed a 2.8 percent increase in GDP from the previous quarter.

The economy had declined by 6.4 percent in the 1st quarter and contracted for four straight quarters before the third quarter economic growth. The 3rd quarter GDP increase was the best quarter for U.S. GDP since the 3rd quarter of 2007 (3.6%).

US Dollar gains in trading today.

The US Dollar has been on the rise today in forex trading against most of the other major currencies for the second straight day. The dollar has been gaining ground today versus the euro, British pound, Australian dollar, New Zealand dollar, Swiss franc and the Japanese yen while falling versus the Canadian dollar at 1:33 pm EST in the afternoon of the US trading session according currency data by Oanda.

The US stock markets, meanwhile, have also traded higher today with the Dow Jones gaining by over 45 points, the Nasdaq increasing over 10 points and the S&P 500 advancing by over 3.50 points at the time of writing.  Oil has traded higher to around $74.28 while gold has fallen by $5.40 to trading around the $1090.00 per ounce level.

USD/JPY Houly Chart – The US Dollar gaining today versus the Japanese Yen in Forex Trading.  The USD/JPY is trading at the top of the recent price channel above 91.50 and has been on a bullish run since hitting a 2009 low point of 84.82 on November 26th.

By Fast Brokers – Gold has dropped below the psychological $1100/oz level as the Dollar’s recent strength seems to finally be taking its toll on the precious metal due to their usual negative correlation.  Gold’s bull run continues to unwind as investors lock in profits and shuttle money back into the Dollar.  That being said, gold does have a few more near-term uptrend lines we can form.  However, should our new 1st tier uptrend line give way, gold could potentially be in for a more protracted pullback towards the highly psychological $1000/oz level.  Meanwhile, investors should monitor the ability of the EUR/USD and GBP/USD to consolidate and form new bases following their December downturns.  Should the Dollar consolidate and top out, gold may hit bottom nearby.  That being said, the EUR/USD and GBP/USD have both dropped beneath key uptrend lines in the past week, implying the Dollar could be in for more gains over the medium-term.  Investors will now focus in on today’s release of U.S. Existing Home Sales followed by tomorrow’s New Home Sales.  Additionally, the BoE will release its Monetary Policy Minutes.  Hence, the FX markets could be in for more volatility before Christmas.  Should upcoming data points exceed analyst expectations, investors may snap up the Dollar and continue to take profits in gold, and vice versa.

Technically speaking, gold has multiple uptrend lines serving as technical cushions along with 11/05 and 11/03 lows.  As for the topside, gold faces topside technical barriers in the form of intraday, 12/21,12/15, and 12/7 highs along with the psychological $1100/oz and $1150/oz levels.

Present Price: $1093.10/oz

Resistances: $1096.47/oz, $1100.15/oz, $1105.05/oz, $1110.77/oz, $1115.27/oz, $1123.03/oz

Supports: $1088.30/oz, $1082.58/oz, $1079.61/oz, $1074.96/oz, $1070.53/oz, $1063.56/oz

Psychological: $1100/oz, $1075/oz, $1150/oz

Market Commentary provided by Fast Brokers.

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

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

By Fast Brokers – The USD/JPY has popped past our 4th tier downtrend line as the currency pair continues to log encouraging gains above the psychological 90 level.  Investors snapped up the Yen after BoJ Shirakawa stated the central bank will keep its benchmark rate near zero until there is a considerable recovery in prices.  The DPJ has stressed its disapproval of deflation, and it seems the BoJ is falling in line with the Finance Ministry’s desires.  The concept of a very dovish monetary stance from the BoJ combined with an improving outlook for U.S. economic performance has led investors to favor the Dollar over the Yen.  However, the USD/JPY is trading off of intraday highs right now after U.S. Final GDP printed 6 basis points below analyst expectations.  Should today’s U.S. Existing Homes Sales data also disappoint, investors may be encouraged to lock in profits on the USD/JPY as investor confidence in the U.S. confidence takes a step back.  On the other hand, impressive housing data may allow the USD/JPY to piece together further intraday gains.  The U.S. will release more housing data tomorrow in the form of New Home Sales along with the release of Britain’s Monetary Policy Minutes.  Hence, we may witness further volatility in the FX markets due to the combination of key econ data releases and lower volume as investors take off for Christmas vacation.

Technically speaking, the USD/JPY’s movement above our 4th tier downtrend line is an encouraging development since it runs through 8/13 levels, or the psychological 95 area.  Meanwhile, the USD/JPY does face topside technical barriers in the form of our 5th tier downtrend line, 10/30 highs, and 10/26 highs.  Furthermore, the psychological 90 area could still play a role considering how tough the trading zone has been to overcome in the past.  As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with 12/21, 12/18, and 12/14 lows.  Meanwhile, the psychological 90 level should serve as a technical cushion.

Present Price: 91.53

Resistances: 91.59, 91.71, 91.94, 92.04, 92.17, 92.35

Supports: 91.22, 91.05, 90.94, 90.76, 90.58, 90.36

Psychological: 90, December Highs

Market Commentary provided by Fast Brokers.

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

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

By Fast Brokers – The Cable has dropped below our 2nd tier uptrend line and the psychological 1.60 level as the Dollar strengthens across the board.  We recognize solid gains in the USD/JPY coupled with weakness in the gold, indicating investors continue to favor the Greenback in light of America’s economic recovery picking up steam.  The UK released Final GDP data which printed one basis point higher than Prelim, yet one basis point below analyst expectations.  However, the more important data figure was Britain’s Current Account Balance, which came in much stronger than anticipated.  Hence, it seems global demand for UK goods and services is improving, a positive signal for the economy.  While some may expect relative strength in the Pound in reaction to healthy Current Account data, we’re witnessing exactly the opposite since it seems America’s recovery story is in the forefront right now.  Furthermore, it may be deduced that part of the reason behind today’s narrowing in the Current Account Balance likely comes from recent weak UK consumption data.  Meanwhile, investors will likely have their attention focused on Wednesday’s BoE monetary policy meeting minutes.  Due to recent improvements in unemployment and prices, the BoE may deem it appropriate to exert a more hawkish tone in its monetary policy statement.  Hence, volatility in the Cable could pick up a bit before Christmas as investors react to the BoE’s decision.  For the time being, investors should monitor the Dollar’s broad-based reaction to upcoming Final GDP and Existing Home Sales from the U.S. since the Cable will likely correlate well with the Dollar until tomorrow’s BoE meeting.

Technically speaking, the Cable’s large pullback this month has sent the currency pair below some key technical levels.  Hence, it’s possible the Cable could be entering a more protracted downturn.  The Cable has now dropped below our 2nd tier uptrend line with our 1st tier uptrend waiting far below (Off Chart).  That being said, the fact we are now using March lows, or the 1.40 area, to create uptrend lines gives investors an idea of the extent of the damage inflicted by the Cable’s December pullback.  Meanwhile, it will be interesting to see if the Cable can stabilize today and stick around the psychological 1.60 level.  If not, the Cable does have some technical supports in the form of September and October lows.  As for the topside, the Cable faces multiple downtrend lines along with 12/18 and 12/16 highs.

Present Price: 1.5990

Resistances: 1.6005, 1.6023, 1.6045, 1.6071, 1.6096, 1.6132

Supports: 1.5972, 1.5948, 1.5917, 1.5899, 1.5875, 1.5845

Psychological: 1.60, 1.65, September and October lows

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 fighting to consolidate above Friday lows with the intention of a building a new base following last week’s heavy pullback.  The EU’s GfK Consumer Confidence data printed roughly 10% below analyst expectations earlier in the session, sighting consumer concern over rising energy prices and high unemployment.  Today’s setback in consumer confidence marks the 3rd straight drop from September highs.  However, it remains to be seen whether the downturn in consumer confidence is a symptom of a slow recovery or the beginning for a more lasting contraction.  While today’s weak GfK number would presumably result in further EUR/USD losses, the currency pair is holding up relatively well since U.S. Final GDP just printed 6 basis points below analyst expectations.  Should U.S. Existing Home Sales also disappoint, then we may witness a broad-based pullback in the Dollar as confidence surrounding America’s economic recovery takes a bit of a hit.  The EU will enter the data wire again tomorrow with the release of French Consumer Spending.  However, investors will likely be focused on the BoE’s monetary policy minutes followed by U.S. New Home Sales and Personal Spending.  That being said, we could witness some volatility in the FX markets due to a combination of key data releases and lower volume as investors take off for Christmas vacation.

Technically speaking, we’ve readjusted our downtrend lines to compensate for the EUR/USD’s most recent pullback.  As we mentioned previously, if the currency pair doesn’t pop back above our 2nd tier uptrend line, we could be witnessing a technically significant reversal since our 2nd tier runs through July lows.  Hence, the EUR/USD could be in the midst of a more protracted downturn towards the psychological 1.40 level.  As for the topside, the EUR/USD faces multiple downtrend lines along with technical barriers in the form of the psychological 1.45 level and 12/16 highs.

Present Price: 1.4303

Resistances: 1.4316, 1.4335, 1.4365, 1.4386, 1.4412, 1.4430

Supports: 1.4286, 1.4266, 1.4249, 1.4232, 1.4217, 1.4205, 1.4187

Psychological: 1.45, 1.40, October Lows

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.

Source: ForexYard

The Dollar gained against almost all of its major counterparts on speculation the Federal Reserve is getting ready to withdraw the stimulus and tighten monetary Policy. Fueling investors’ expectations that U.S. interest rates to rise sooner than expected is a continually brightening U.S economic outlook.

Economic News

USD – Dollar Continue to Strengthen Against Rivals

The Dollar was up again most major rivals Monday on expectations of continuing improvement in the U.S economy ahead of this week’s data release. The Dollar rose to a six week high versus the Yen and traded near a three and a half month high against the EUR. The Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 78.059 from 77.758.

The Dollar has been gaining in recent sessions, as concerns over Greece’s government deficit have weighed on the EUR as well as upbeat economic data from the U.S which is prompting investors to reassess when the Federal Reserve will begin tightening the U.S. monetary policy.

While a slow news day is expected today ahead of the Holliday weekend, the release of the Existing Home Sales at 15:00 GMT is expected to provide some volatility to the Dollar, with better then expected results intensifying the Dollar’s recent upward trend.

EUR – EUR Trades near a 3 Month Low versus the USD

The EUR traded yesterday near a 3 month low versus the USD as the European Commission expressed concerns about a strong EUR. Monday, the EUR was at $1.4283 from $1.4335 late Friday and at Y130.25 from Y129.57. The U.K. Pound was at $1.6051 from $1.6127.

The Swiss Franc touched its strongest level since March against the EUR extending its advance past the 1.50 level on speculation the Swiss National Bank has relaxed its resistance to gains in the currency.

A slow news day is expected today from the Euro-Zone today ahead of the long holiday weekend, the release of the British Current Account and Final GDP at 9:30 GMT will likely provide some volatility for the GDP with

JPY – Yen Down versus USD and EUR

The Yen was at 91.06 against the USD from 91.17 yesterday and at 130.09 per EUR from 130.18. The Japanese currency received some support from a report that showed Japan posted a wider than expected trade surplus in November. The surplus came to 373.9 billion Yen, greater than the 319.2 billion Yen expected by economists.

Recent economic data released from Japan, including the merchandise trade data and the current-account surplus, is pointing towards economic improvement and an upward trend, which will likely put upward pressure on the Yen in the longer term, possibly reversing the recent losses.

Crude Oil – Oil Down on Strengthening Dollar

Crude futures fell Monday as the Dollar strengthened, offsetting gains on colder weather expectations and geopolitical worries. Light, sweet crude for January delivery settled 89 cents lower at $72.47 a barrel on the New York Mercantile Exchange, after touched an intraday high of $74.32 a barrel. The contract expired on Monday. Crude for February delivery settled 70 cents, or 0.9%, lower at $73.72 a barrel. Oil prices were supported recently by the massive snowfall in the U.S and Europe as well as geopolitical concerns in Iraq and Nigeria.

Today investors should pay attention to the Organization of Petroleum Exporting Countries (OPEC) meeting in Luanda, Angola, where they will discuss production levels. While quotas are expected to stay unchanged this might still affect negatively on Oil levels as supply is still abundant.

Technical News

EUR/USD

The pair has recorded much bearish behavior in the past several days. However, the technical data indicates that this trend may reverse anytime soon. For example, the daily chart’s Stochastic Slow signals that a bullish reversal is imminent. An upward trend today is also supported by the RSI. Going long with tight stops may turn out to pay off today.

GBP/USD

The cross has been dropping for the past month now, as it now stands at the 1.6060 level. However, the 4-hour Chart’s RSI is already floating in the oversold territory indicating that a bullish correction might take place in the nearest future. Going long with tight stops may turn out to be the right choice today.

USD/JPY

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 hourly chart’s RSI also supports this notion. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

USD/CHF

The USD/CHF cross has experienced a bullish trend for the past month. However, it seems that this trend may be coming to an end. The RSI of the daily chart shows the pair floating in the overbought territory, indicating that a downward correction will happen anytime soon. Going short with tight stops might be a wise choice.

The Wild Card – Gold

Gold prices are once again dropping, and it is currently traded around $1092.25 per ounce. And now, the daily chart’s Slow Stochastic is giving bullish signals, indicating that gold prices might go up. This might give forex traders a great opportunity to enter a very popular trend.

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 Anton Eljwizat – Gold is now trading nearly 11% below record highs hit earlier in the month. Gold has made a significant downward correction, which can be directly correlated with the bearish trend of the EUR/USD cross. Analysts said gold could test lows in the near term after breaking $1,100 as investors close positions before the end of the year, but their appetite to buy bullion on dips would support the market. From here on, the forex and commodity markets will see very high volatility indeed.

Pivot: 1120.00
Our Preference: SHORT positions below 1120 with 1085 & 1070 in sight.
Alternative scenario: The upside penetration of 1120 will call for 1130 & 1142.
Comment: the downside breakout of 1096 is a negative signal. Moreover, the 60 min RSI is capped by a declining trend line.
Trend: ST Bullish; MT Bullish
Key levels Comment
1142*** Horizontal resistance
1130** Horizontal resistance
1120** Intraday pivot point
1094 Last
1085** Horizontal support
1070** Horizontal support
1060*** Horizontal support

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.