Month: March 2010

By Fast Brokers – The USD/JPY is shooting higher again today in response to stronger than expected U.S. Non-Farm Employment Change and headline Unemployment Rate data.  Today’s reaction shows the USD/JPY is more vulnerable to U.S. data releases than most currency pairs at the moment.  Volatility in the USD/JPY likely stems from a combination of oversold conditions and the realization that the Fed will likely tighten before the BoJ.  The DPJ continues to pressure the BoJ to loosen liquidity further, yet the central bank is bucking back.  On the other hand, today’s solid U.S. employment data stirs speculation that the Fed could tighten alternative liquidity measures sooner than anticipated.  Despite today’s pop, the USD/JPY still does face considerable downward forces considering the extent of its decline so far this year.  Additionally, the currency pair must wrestle with its key 90 area one again.  Japan will reenter the fray on during Wednesday’s Asia trading session with the release of Core Machinery Orders.  Additionally, China will be releasing some important data week and these figures could have a considerable influence on the Yen since China is Japan’s top trading partner.  Investors will be looking to see if tighter liquidity measures in China had an impact on economic growth.

Technically speaking, this week’s recovery is a welcome development considering the USD/JPY’s recent downturn.  In fact, the USD/JPY almost tested 88 before jolting back up above 89.  However, the USD/JPY still faces multiple downtrend lines along with February highs and the highly psychological 90 level.  As for the downside, the USD/JPY does have multiple uptrend lines serving as technical cushions along with 2/24 and 2/8 lows.  Additionally, the psychological 90 level could have an influential role over near-term price action.

Present Price: 90.20

Resistances: 90.26, 90.35, 90.43, 90.56, 90.65, 90.81

Supports: 90.11, 89.95, 89.81, 89.73, 89.64, 89.54

Psychological: 90 March highs

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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 holding strong despite an intraday retest of 1.50.  The Cable reacted badly to stronger than expected U.S. employment data this morning.  However, the Dollar rally is fading and the risk rally is coming back with the Euro and Aussie also firming.  Strong U.S. employment data spurs speculation that the Fed could tighter sooner than expected, resulting in the Dollar rush we just witnessed.  Investors are now choosing the risk trade instead since continual improvement in the U.S. economy could result in stability throughout the globe.  That being said, it will be interesting to see how the trading session plays out considering this morning’s volatility.  Data is complete for the week, meaning investors will continue to work off of today’s releases.  UK PPI printed in line with analyst expectations today, reassuring investors that inflation is under control.  Meanwhile, the Pound is still enjoying a little relative strength derived from this week’s encouraging Services PMI data.  The UK will start next week with BRC Retail Sales Monitor and RICS House Price Balance releases.  However, these data points likely won’t be big market movers, meaning the FX markets could begin the trading week on a quiet note.  However, there remains the possibility of a psychological flare up concerning UK and EU debt levels.  Additionally, a considerable downward pressure is still weighing down on the Cable, meaning the Cable could need a big jolt to get out of its slump.  Meanwhile, it will be interesting to see if the Cable can continue to build a base above 1.50 and March lows.

Technically speaking, the Cable has our 1st and 2nd tier uptrend lines serving as technical cushions along with intraday and 3/3 lows.  Additionally, the psychological .150 level could work in the Cable’s favor shout it be retested.  As for the topside, the Cable faces multiple downtrend lines.  Our top tier downtrend line does run through 2/26 highs, meaning a breakout could yield substantial near-term gains should fundamental and psychological factors work in the Cable’s favor.

Present Price: 1.5038

Resistances: 1.5044, 1.5060, 1.5074, 1.5092, 1.5108, 1.5121

Supports: 1.5031, 1.5016, 1.5003, 1.4991, 1.4975, 1.4960

Psychological: 1.50, March lows

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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 heading lower in the wake of stronger than expected U.S. employment data.  The Non-Farm Employment Change came in at -36k, 20k above expectations.  Additionally, the headline Unemployment Rate held steady at 9.7% while analysts were expecting a basis point increase to 9.8%.  The initial reaction was a Dollar positive since improvements in U.S. employment stokes speculation that the Fed could tighten sooner rather than later.  However, investors are supporting the risk trade right now and it will be interesting to see how the trading session plays out.  Meanwhile, tensions are building in Greece as the government looks to pass its aggressive austerity package.  Although most of the EU has welcomed Greece’s intent to reduce its debt, Merkel is still not wavering.  Hence, even though investor uncertainty is beginning to subside the political conflict is still disconcerting.  German Factory Orders data was impressive today, printing 2.7% hotter than anticipated.  More positive EU economic data helps cool the flames created by Greece and other fiscally troubled European nations.  The EUR/USD has managed to hold above its psychological 1.35 level thus far, and it will be interesting to see if the currency pair can continue to form a base above February lows.  Data is done for the week, meaning currencies will likely play off of U.S. employment data for the remainder of the trading session.  The EU will start off the week with Industrial Production on Monday.  Though the next week is relatively light on the data front, there remains the possibility of new psychological flares from indebted nations.

Technically speaking, the EUR/USD faces multiple downtrend lines along with 3/3and 2/26 highs.  As for the downside, the EUR/USD has several uptrend lines serving as technical cushions along with 3/3, 2/26, and 3/1 lows.  Meanwhile, the psychological 1.35 area could continue to have an impact on price movements.

Present Price: 1.3554

Resistances: 1.3557, 1.3574, 1.3589, 1.3606, 1.3619, 1.3654

Supports:  1.3542, 1.3528, 1.3511, 1.3494, 1.3460, 1.3436

Psychological: February Lows, 1.35

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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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By Nico Isaac

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The Chinese Prime Minister Wen Jiabao in his speech to the Chinese nation reiterated that Yuan exchange rate will be kept stable and stressed that more internal consumption is needed for a full recovery. The Prime minister pledged to keep monetary conditions easy to support growth while providing a rather carful outlook for the Chinese economy and the global economy as a whole. The Chinese Yuan has been kept by the Chinese authorities at around 6.82 per Dollar to support Chinese exports the main engine of Chinese growth. Lately the Chinese central bank raised the reserve requirements for banks in china to curb credit lending and trim inflation within the 3% target. As Real-Estate prices spur fears of reaching bubbly zone many investors were betting on a Yuan appreciation to ease the bubbly pressures. However the Chinese prime minister stated Yuan will be kept stable in spit the fact that the Chinese economy grew in 2009 more than the 8% , signaling Chinese policy makers are still cautious on the global economy. The Yuan exchange rate is controlled by the Chinese government and does not trade openly like other currencies in developed economies. Investors see the Yuan exchange rate as an indicator of Chinese economic strength and the region as a whole. Hence persistence by Chinese authorities to keep Yuan stable might signal recovery is still fragile thus raising questions on investors’ bets on the currencies linked to China’s growth such as the Aussie and the Kiwi.

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.

By Yan Petters – After 3 weeks on which the EUR/USD pair was traded within a very restricted range of about 300 pips, a major data release from the U.S. economy threatens to end the range-trading. The market has been extremely calm over the past 18 hours, and it seems that everyone waits for the end result of the Non-Farm Employment Change report before making their next move. Here is a technical perspective that might help you reach a better decision regarding your trading.

• The chart below is the EUR/USD 4-hour chart by ForexYard.
• The technical indicators used are the Bollinger bands, the Slow Stochastic, the MACD/OsMA and the Relative Strength Index (RSI).
• The chart shows consecutive “ups and downs” for the past 3 weeks, on which the EUR/USD pair was traded between the 1.3430 and the 1.3735 levels.
• In particular, it can be noted that all the last 4 candles are all dojis, reflecting the high tension that exists in the market at the moment, due to the expected Non-Farm Payrolls release.
• It can also be noted that the two major technical indicators are providing contradicting forecasts. A bullish cross of the Slow Stochastic suggests that the news release will create a bullish tend, whereas a bearish cross of the MACD indicates the opposite.
• Traders should take under consideration that all forecasts are worthless as soon as the real result is announced. Nevertheless, considering the current recent momentum of the Dollar, it seems that the end result will likely boost the Dollar and take the EUR/USD pair below the 1.3430 level.
• However, a very surprising release could reverse the trend, with enough potential to reach the higher level of the range.

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.

Source: ForexYard

The forex market is bracing itself for some heavy volatility as the U.S. Non-Farm Payrolls figure is set to be released today. The monthly report is one of the most significant market indicators and will heavily impact Dollar pairs.

Economic News

USD – USD May See Gains Following NFP Report

The U.S. Dollar, coming off a fairly bearish week, may see a reversal of fortunes today with the Non-Farm Payrolls Report set to be released at 13:30 GMT today. EUR/USD saw some heavy fluctuations throughout the week, with the Euro making gains as of late based new plans to cut Greek deficits. Similarly, GBP/USD was fairly bullish as risk taking among investors returned. Currently, the pairs are trading at 1.3597 and 1.5057 respectively.

The Non-Farms Payroll figure is forecasted to show that the U.S. economy shed approximately 56K jobs last month. The figure is higher then last month, which at first glance might mean the Dollar could turn bearish in trading today. That being said, the U.S. economy has shown impressive signs of growth lately. A NFP figure that meets or exceeds expectations will likely increase investor confidence in the U.S. economy, and could lead to major gains for the greenback.

In addition to the NFP report, the official U.S. unemployment rate will also be published at 13:30 GMT. While this is generally seen as a lagging indicator, the figure could influence USD for the foreseeable future. This is especially true as next week does not have a lot of major USD news events.

EUR – Investors Stay Clear of EUR Ahead Of NFP Report

The Euro appears to have entered a bearish trend in overnight trading as risk appetite has subsided ahead of a key U.S. employment report. Earlier this week, the Euro was able to see some significant gains following a more detailed plan for a Greek bailout. Following the European Central Bank decision to keep interest rates at their record lows, as well as the announcement from the head of the ECB that EU growth would be uneven, the Euro began its downward descent.

EUR/USD is currently trading at around the 1.3590 level, down almost 90 pips from yesterday afternoon. EUR/GBP is also down significantly, having dropped almost 40 pips since yesterday to its currently level of 0.9034.

In addition to the Non Farm Payrolls report, Euro traders will also want to pay attention to the British PPI Input figure set to be released at 09:30 GMT. The report is a leading indicator of consumer inflation in the U.K. Analysts are forecasting a low figure of around 0.1%, which could help the Euro make some much needed gains against Sterling.

JPY – Yen Takes Losses Against USD

Following a fairly bearish week for USD/JPY, it appears that the Yen has steadily reversed courses against the greenback. Beginning yesterday afternoon, the pair shot up almost 90 pips to reach its current level of 89.22. The Yen has faired better against the Euro as of late with the EUR/JPY falling over 70 pips in trading yesterday. The pair has bounced back slightly, and is currently trading at the 121.28 level.

Today, Yen levels will likely be determined by the result of the U.S. Non-Farm Payroll Report. If the figure comes in as forecasted, the Dollar will likely make gains on JPY. That being said, if this does occur, both the Euro and Pound will likely drop. The Yen should be able to capitalize on the fall of its European rivals.

OIL – Crude Prices Fall Ahead of U.S. Jobs Report

While the price of crude marginally increased in overnight trading, the commodity is still down over 30 cents from yesterday morning. This is largely due to the strong Dollar and the relatively low demand among U.S. consumers. Currently, the commodity is trading around the 80.57 level.

The U.S. Non Farm Payrolls could play a significant part in determining crude prices for the near future. Analysts are predicting that worse then expected NFP figures would likely be bad for the price of crude. High unemployment generally leads to low demand as consumers try to conserve their disposable income. Should the NFP report come in better then expected, demand should increase and drive up prices.

Technical News

EUR/USD

The pair has shown a lack of a trend this week, range trading with significant support and resistance levels at 1.3430 and 1.3680. The 4-hour chart shows the price has dropped from the Bollinger Band’s upper border and crossed below the 20-day moving average line. Traders could go short today, using the lower Bollinger Band as a price target, with a secondary support level at 1.3430.

GBP/USD

The strong bearish trend continued yesterday after a brief correction earlier in the week. Those traders that missed the breakout yesterday can still enter into the market at a relatively good price. The 4-hour chart’s MACD shows a down-sloping histogram and a potential bearish cross forming. Traders may want to wait for the cross and enter the market short with a target at 1.4880.

USD/JPY

Traders may find a good setup on the 4-hour chart. After a quick correction to the bearish trend, the price has risen to a resistance level of 89.35 and failed to break this mark. One of the best times to enter into the market is at a resistance level. A bearish cross may be forming on the chart’s Slow Stochastic Oscillator, indicating the potential for a downward price movement. Going short seems to be the right play today.

USD/CHF

The daily chart shows a channel has formed, beginning on Feburary 19th. The price has made contact with the downward sloping lower border three times, making this a significant continuation pattern. Traders may want to go long on this pair with a price target at 1.0880, the upper border of the channel.

The Wild Card

OIL

The daily chart shows some resistance. Both the 14-day RSI and the 7-Day RSI have crossed back below the overbought region, indicating sell signs. The MACD histogram is downward sloping, indicating a weakening trend. The MACD lines also appear headed for a bearish cross. Forex traders may want to scale back any long positions they may have and go short on crude oil today.

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

EURUSD continues to move sideways in a range between 1.3435 and 1.3838. As long as 1.3838 resistance holds, the price action in the trading range is treated as consolidation of downtrend from 1.4579 and one more fall to 1.3300 is still possible. However, a break above 1.3838 resistance could indicate that the fall from 1.4579 has completed at 1.3435 already.

Daily Forex Forecast

By CountingPips.com

U.S. Pending Homes sales fell more than expected in the month of January, according to the monthly report released by the National Association of Realtors (NAR) today. The NAR report showed that pending home sales contracts signed by buyers fell by 7.6 percent in January following December’s 0.8 percent revised decrease. On an annual basis, pending home sales were still 8.8 percent above the January 2009 sales level.

The January’s sales decline was worse than the approximately 1.0 percent increase that the market forecasts were expecting.

NAR chief economist Lawrence Yun commented on recent pending home sales levels saying, “January pending sales, though still higher than one year ago, remain much lower than expected given that a large number of potential buyers are eligible for the expanded home buyer tax credit. Moreover, the abnormally severe and prolonged winter weather, which affected large regions of the U.S., hampered shopping activity in February.”

Pending home sales in the Northeast decreased by 8.7 percent in January while the Midwest saw a decline of 8.9 percent. Sales in the South edged down by 2.1 percent and sales in the West decreased by 13.2 percent for the month.

On an annual basis, all four areas were above the January 2009 sales level with the Northeast showing an annual gain of 20.5 percent, the Midwest showing a 11.8 percent annual rise, the South showing a 18.0 percent increase and the West showing a 1.4 percent annual advancement.

Weekly Jobless Claims fall by 29,000.

A separate government release by the U.S. Labor Department showed that weekly U.S. jobless claims decreased in the week that ended on February 27th. New jobless claims fell to a total of 469,000 unemployed workers, a decrease over the prior week by 29,000 workers. The 4-week moving average of unemployed workers fell by 3,500 from the prior week to a total of 470,750.

Meanwhile, workers seeking continuing claims for unemployment benefits for the week ending February 20th also decreased for the week. Continuing claims fell by 134,000 workers to a total of 4,500,000 unemployed workers. The four week moving average of continuing claims dropped by 29,250 to 4,575,750.

The Aussie is fluctuating within a solid trading range right now as the currency pair battles its psychological .90 level again.  The AUD/USD did peak past our 2nd tier downtrend line yesterday, a key movement since it runs through 1/20 highs, or the .92 area.  Hence, the Aussie could be on the verge of a sizable topside breakout should fundamental and psychological factors work in the currency pair’s favor.  Meanwhile, the Aussie is still outperforming and has been a bed rock of consistency due to a tight stance from the RBA and encouraging Australia data sets.  Speaking of which, Australia’s Trade Balance revealed a smaller than anticipated deficit, signaling demand for the country’s commodities is still strong.  Additionally, Australia’s GDP printed in line with analyst expectations earlier this week.  Therefore, the RBA has fundamentals backing its hawkish monetary policy.  The Aussie is struggling a bit today though as the risk trade reacts badly to a poor U.S. Pending Home Sales figure.  However, the damage hasn’t been significant at this point in time.  The U.S. will also release Non-Farm Employment Change and headline Unemployment Rate numbers tomorrow, meaning volatility could pick up in the major Dollar pairs as the trading week comes to a close.  Additionally, investors should keep an eye out for any developments in the EU since there will be a highly publicized meeting between Greece and Germany tomorrow.

Technically speaking, the Aussie has multiple uptrend lines serving as technical cushions along with intraday, 3/2, and 3/1lows.  As for the topside, the Aussie has multiple downtrend lines serving as technical barriers along with March highs and the highly psychological .90 level.

Price: .9012

Resistances: .9011, .9025, .9041, .9057, .9074, .9090

Supports: .8993, .8981, .8965, .8950, .893, .8923

Psychological: .90, March highs and lows

(click to enlarge)

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.