Month: January 2011

By Adam Hewison – You only have to watch my earlier videos to see that it has performed very well this week in gold as well as the crude. In today’s short video I want to share an ETF that is setting up nicely and should be giving us a buy signal using the same strategy that we used in the earlier gold and crude oil videos.

This ETF which closely follows the Swiss Franc (symbol FXF) is one you may want to take a look at. As you may be aware, the Swiss Franc is independent of the euro zone and is a separate currency that is backed by the Swiss government.

I think you’ll enjoy this short lesson as it will reinforce the two previous lessons on how to use this indicator. In case you missed our earlier lessons, you can watch the gold and the crude oil videos on the INO Trader’s Blog.

As always our videos are free to watch and there are no registration requirements. Feel free to discuss them on the INO blog, Tweet them to your friends, and e-mail anyone that you think could benefit from these educational trading lessons.

All the best,
Adam Hewison
President of INO.com
Co-founder of MarketClub

By GCI Forex Research

Fundamental Outlook at 0800 GMT (EDT + 0400)

USD

The price action was relatively quiet during the Asia session as market participants digested yesterday’s developments inside the Eurozone. The euro surrendered some of yesterday’s gains however, and EURUSD traded 1.3082-1.3145. USDJPY traded 82.81-83.18. Australian jobs data disappointed, temporarily weakening AUDUSD. US equities closed almost 1% higher and a strong auction for a re-opened 10y issue helped bring Treasury yields back from earlier session highs. With few data releases, market participants focused on the Fed’s Beige Book and comments from Dallas Fed President Fisher, a 2011 FOMC voter. The Beige Book contained few surprises as, “Economic activity continued to expand moderately from November through December.” But there was a brighter note as officials noted that, “Lending activity remained stable across most Districts. Credit quality has been steady to improving.” Our economists believe even stabilization in lending is an improvement and provides an incremental boost to growth. Fisher again sounded cautious on QE2 and is wary of expanding the Fed’s balance sheet further. Similar to other Fed officials, he focused on the need for further fiscal/tax policy changes for additional stimulus but he did not sound ready to pull the plug on QE2 yet. Jobless claims are due and Fed Chairman Bernanke speaks at an FDIC panel on lending.
EUR

Belgium’s Prime Minister Leterme said that he does not think Belgium needs help from the stability fund, and that there is no justification for bond spread widening. He insisted he would do whatever it takes to defend the euro.
Portugal’s much-anticipated bond auction passed without incident yesterday. The bid-cover ratios were good though the yields remained elevated. The Portuguese Finance Minister said that 80% of the demand from the auction was from foreign sources. There were also headlines that Chinese officials remain interested in Eurozone sovereign bonds, including EFSF bonds, but the comments still sounded conditional.
German Chancellor Merkel said Germany would do what is needed to support the euro but a government spokesperson later said now may not be the time to discuss EFSF expansion. The European Commission’s Barroso said EU leaders may decide on potential EFSF changes in early February and a Bloomberg story specifically noted Greek bond purchases could be discussed at Tuesday’s Ecofin meeting, as part of plans to expand the size and scope of the EFSF. The story cites unnamed sources ‘with direct knowledge of the talks’.
German Finance Minister Schaeuble said European nations are working on a mid-term solution to the current debt crisis that could include a comprehensive package but that no agreement is expected at the next Eurogroup meeting, though a deal may be possible at an upcoming summit.
An internal EU report for the EU Commission (seen by Reuters) suggests that the European Stability Mechanism could take in contributions direct from financial institutions and it is in the interest of the financial system that institutions contribute to the safety net. Applying a banking tax of 0.2% of the Euro area bank assets would allow around EUR50 bn to be raised.
GBP

Our team does not expect a change in the BoE’s policy stance and as has been the case recently, the minutes will be key. MPC votes will likely show another three-way split but it will interesting to see how the sustained inflation levels are affecting their thinking.
CHF

SNB Vice President Jordan said Swiss franc strength poses a threat to growth but did not comment if the SNB would take action to weaken the currency. He did appear to be especially concerned about how the Eurozone crisis might unfold and what it might mean for the CHF. He dismissed the idea of pegging the CHF to the EUR. Jordan said the SNB would have to raise rates over the medium term to maintain price stability but that it had some flexibility over the timing of rate hikes.
AUD

The December employment report disappointed expectations. Employment rose by +2.3k (cons. +25k, prev. 54.6k). The unemployment rate fell to 5.0% (cons. 5.1%, prev. 5.2%), but this was largely due to a falling participation rate. Our analysts team continues to look for the next RBA hike in July.

TECHNICAL OUTLOOK
USDCAD holds above 0.9825.
EURUSD BEARISH Currently holds support at 1.2867 ahead of 1.2796 Fibonacci level. Resistance is at 1.3170.
USDJPY NEUTRAL 83.67 and 82.63 mark the near-term directional triggers.
GBPUSD BULLISH Sharp rise through 1.5709 has exposed 1.5822 ahead of 1.5911; support at 1.5583 yesterday’s low
USDCHF BULLISH Upside potential with focus on 0.9852 ahead of 0.9916. Support is at 0.9605.
AUDUSD BEARISH The pair found support at 0.9804 ahead of 0.9753; resistance at 1.0015.
USDCAD BEARISH Lower boundary of 0.9889/25 support area holds; a break here would expose 0.9712.Resistance is at 0.9951.
EURCHF NEUTRAL Rise through 1.2726 has exposed 1.2797; initial support at 1.2517.
EURGBP BEARISH Violation of 0.8285 would expose 0.8252; resistance at 0.8339.
EURJPY BEARISH As long as resistance holds at 110.24, expect losses to target 106.83 ahead of 105.80/44 support zone.

Forex 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 Anton Eljwizat

The volatile of the GBP/JPY pair continues to be affected by the volatile forex market. The last two weeks has seen a lot of bullish strength in the GBP/JPY pair. However, it seems that the pair’s bullish run may have run out of steam, and a bearish correction could be underway soon, as a bearish cross has taken place on the Slow Stochastic. In addition, the Relative Strength Index indicates that the price of this cross currently floats in the overbought territory, signaling downward pressure. This might be a good opportunity for forex traders to enter the trend at a very early stage and at a great entry price.

The next support level is located at the 130.30 level.

Forex Market Analysis provided by ForexYard.

© 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

Crude oil prices rose significantly in the last week and peaked at $92.30 per barrel. However, the 8-hour chart is suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. Forex traders involved with commodities like this can take advantage of this knowledge by going short on crude oil now, and at a great entry price!

• Below is the 8-hour chart for crude oil by ForexYard.

• The technical indicators used are the Slow Stochastic, RSI and Williams Percent Range.

• Point 1: There is a “doji” candlestick formed in the chart, indicating that a reversal should take place.

• Point 2: The Slow Stochastic indicates a bearish cross, signaling that the next move may be in a downward direction.

• Point 3: The RSI signals that the price of this pair currently floats in the over-bought territory, suggesting downward pressure.

• Point 4: Williams Percent Range also supports the downward direction.

Crude Oil 8-Hour Chart

Forex Market Analysis provided by ForexYard.

© 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

A positive element to emerge from yesterday’s economic events from the United States was a reduction in the Federal Budget Balance, from a deficit of $150.4B to a deficit of $80.0B. Following this news, the USD began a retracement against its primary counterparts, but has so far only been able to recapture a small percentage of yesterday’s market movement.

Economic News

USD – Shrinking US Deficit Boosts USD in Short-Term

Following yesterday’s moderate downturn, the US dollar now appears on track to be making positive corrections against most of its currency counterparts in today’s trading. The EUR/USD, as of this morning, had already recovered 34 points to trade at the 1.3110 price level. Against the British pound, the USD experienced a similar retracement which was limited in scope and duration.

One positive element to emerge from yesterday’s economic events from the United States was a reduction in the Federal Budget Balance, from a deficit of $150.4B to a deficit of $80.0B. Following this news, the USD began its retracement, but has so far only been able to recapture a small percentage of yesterday’s market movement.

Today’s news is expected to be significantly more impactful. The euro zone and Britain will each be releasing their decisions on short-term interest rates, which always tend to increase market volatility. Additionally, the US will be publishing its trade balance figures, which are expected to reveal a deepening of America’s trade deficit, signaling a reduction in exports from a gradually strengthening currency.

If the trade deficit has indeed widened, there is a possibility the USD could see a minor downturn through today’s trading. However, most of today’s trading volume and volatility will more likely be generated from the news coming out of Europe and Britain.

EUR – European Interest Rates to Generate Heavy Volatility

The euro, along with its British counterpart, is expected to drive market volatility today with a series of important publications. The European Central Bank (ECB) will be releasing its latest decision on short-term interest rates, a move which historically increases EUR volatility through portfolio adjustments made in response to the announcement.

Britain will also be publishing its decision on interest rates, as well as its Asset Purchase Facility, and is expected to carry a similar impact on the GBP. The Bank of England’s (BOE) announcement will come 45 minutes prior to the euro zone’s release, but the close proximity of these announcements to one another will no doubt lead to sharp movements in EUR and GBP pairs.

American markets will contribute to this highly volatile environment with employment and trade balance data at 13:30 GMT, but traders will likely pay closer attention to what is happening in Europe. Should any surprises be published out of the euro zone, or any changes made in monetary policies, the adjustment of currency values and portfolio exposure will either drive these currencies to new highs against their rivals, or reverse yesterday’s gains.

JPY – JPY Strength Persists, Weakening Japanese Exports and Manufacturing

The JPY continues to trade in a wide range against the US dollar, suggesting a balancing act between two dominant safe-havens. Against other currencies, however, the Japanese yen appears to be losing some ground. The EUR/JPY moved back above 109.00 today before descending mildly to a current price near 108.80. The GBP/JPY saw similar movements, with a current price of 130.85.

The persistent strength of the yen has pushed Japanese exports lower, driving machine orders down 3.0% over the past month. Japanese consumer sentiment appears to be rising, likely due to the new buying power of Japanese consumers, but this may be tempered with a decline in bank lending and a coinciding reduction in the money supply, which will likely only drive JPY values higher in the long-run, further harming Japanese exports.

Crude Oil – Oil Prices Climb above $92 as USD Declines

The price of Crude Oil is once more on the rise as the US dollar takes a dive from positive economic reports in Europe. Italian industrial production had increased 1.1% over the previous month, with the euro zone’s regional industrial output also climbing from 0.7% growth last month to 1.2% growth this month.

The subsequent boost in the EUR has pushed the greenback down somewhat modestly, giving commodities added momentum to rise further. The price for a barrel of Light, Sweet Crude rose from a low near $90.80 yesterday to a current price of $92.02. If the USD continues losing ground against its European counterpart today, Crude Oil will likely continue its bullishness.

Technical News

EUR/USD

The price of this pair appears to have recently entered the over-sold region on the weekly Relative Strength Index (RSI), suggesting upward pressure building on the pair. A fresh bullish cross on the daily Stochastic (slow) supports this notion. Going long appears preferable today.

GBP/USD

Yesterday’s bullish movement has not yet pushed this pair’s oscillators into over-bought territory, but most appear to be approaching that region. The daily Williams Percent Range does, however, reveal a highly over-bought price, suggesting a moderate level of downward pressure. Going short with tight stops may be a good decision today.

USD/JPY

The daily Williams Percent Range on this pair appears to be exiting the over-bought territory, suggesting a diminished amount of sell pressure. However, the bearish cross on the daily Stochastic (slow) still appears to be affecting the pair in a bearish direction. Going short appears to be the wiser choice, but a flattening out of the pair may be impending.

USD/CHF

The price of this pair appears to be cascading downward out of the over-bought region on the daily Williams Percent Range, highlighting this pair’s downward momentum. A fresh bearish cross on the daily Stochastic (slow) supports this notion. Going short may turn out to be a profitable tactic in today’s trading.

The Wild Card

AUD/JPY

The Australian dollar appears to be coming under moderate sell pressure these past few days, while the JPY looks to continue gaining strength against most of its rivals. This pair’s indicators appear to be in support of this supposition. The weekly Stochastic (slow) and daily MACD both reveal fresh bearish crosses and a downward descending price. It appears forex traders may have a good opportunity today to gain from the AUD’s impending descent by going short on this pair today.

Forex Market Analysis provided by ForexYard.

© 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.

USDCHF may be forming a cycle top at 0.9783 level on 4-hour chart. Key support is at 0.9604, a breakdown below this level will confirm the cycle top and indicate that the rise from 0.9300 had completed, then the following downward move could bring price back to 0.9400-0.9500 area. Resistance is at 0.9783, only break above this level could trigger another rise to 9900 zone.

Daily Forex Signals

Basic Energy Corporation or BSC is one of the publicly listed firms in the Philippines that is engaged in the development of alternative and renewable energy. In a disclosure that was published back in April 2010, the company said that it was looking for partners that would develop and further explore the Mabini, Batangas geothermal area. Based on the study that the company made, the field has a potential capacity to produce 20 megawatts (MW) of electricity. The good news is that the presence of ample infrastructure, demand for power in the area, and the close proximity of transmission lines would allow it to be developed in just 2 to 3 years. BSC, however, does not have enough funds to solely finance the project.

Now, it is no secret that at least three major corporations in the country are starting to heavily invest in the energy sector. San Miguel Corporation, in fact, already started with its $500 million bond road show today. The proceeds of  SMC’s bond issuance will be infused in its energy unit. Aboitiz Power (AP), aside from its coal plants, is also into renewable energy. Last year, it opened a 42.5-megawatt (MW) Sibulan hydropower plant in Davao del Sur. Additionally, First Philippine Holdings (FPH), said last December that it will put up a total of $750 million in renewable energy projects.

So you see, at least three big companies (SMC, AP, and FPH) are aggressively putting money in renewable energy. With the apparent viability of BSC Mabini field, looking for a partner may not be that hard. Such could, of course, fast track the field’s development and in the same way speed up the project’s future cash in flows.

On the technical note, BSC shares have in hibernation for quite some time already. In fact, since late 2008, it has been moving sideways in a very boring fashion. Though it appears that BSC has been consolidating into an ascending triangle which could potentially swing it higher. A break, therefore, of the PHP 0.19 resistance could push BSC towards it upside target of PHP 0.28.

By the way, some people might say that this stock is very illiquid. For the most part since 2008 it has been so but does CYBR ring a bell? CYBR for the most part of its consolidation has been trading very thin as well but when it broke out, trading volume also spiked. The same way could happen with BSC especially if a big company like SMC, for example, comes into the picture.

More on LaidTrades.com …

The US dollar has lost ground against the Indian rupee in the forex market for a third straight day and currently trades near the 45.50 exchange rate at the end of the US trading session.

The USD/INR pair had a few spikes in price action today and continues to encounter heavy selling resistance at the 200-day moving average at the 46.00 exchange level.

The USD/INR currency pair opened the day at the 45.58 exchange rate, registering a high for today at the 46.04 exchange rate and was sold lower while touching a low of 45.07. The pair currently trades near the 45.50 exchange rate at the end of the US session, according to currency data from Oanda.

USD/INR Forex Chart – The Dollar/Rupee currency pair tested and hit resistance at the 200-day simple moving average (red line) again today and was rejected lower.

About the Author

FxNewsIndia.com – Indian Rupee Forex News

By CountingPips.com

The US dollar has been lower in forex trading today against the other major currencies on a day without major news releases. The dollar has been losing ground to the European common currency as the EUR/USD pair is close to touching the 1.3150 exchange rate for the first time in almost a week and has popped its head back above the 200-day moving average.

The dollar has been also trading lower versus the British pound sterling, Japanese yen, Canadian dollar, Australian dollar, Swiss franc and the New Zealand dollar in today’s forex action, according to according currency data by Oanda.

The US stock markets, meanwhile, had a winning session today with the Dow gaining by approximately 83 points, the Nasdaq increasing 20 points and the S&P 500 up by over 11 points at the end of the US trading session.  Oil has edged higher to $91.73 per barrel while gold futures have ticked up by $1.30 to $1385.30 per ounce.

There were no major economic releases scheduled today so most eyes were on the Portuguese bond auction that wound up seeing healthy demand and a total of $1.62 billion of bonds sold. The better than expected bond sales boosted the euro against most of its currency rivals and helped to soothe some Eurozone contagion debt fears, at least temporarily.

Michael Wright, analyst at DailyFX commented on today’s movements saying, “Portugal’s successful bond auction today helped equity prices continue their northbound journey. The Portuguese government sold 1.25 billion euros in 3 and 10 year bonds which exceeded the amount offered, indicating investor appetite was positive. However, it is worth noting that the 5.4 percent yield was higher than the previous auction. Going forward, market participants will closely monitor the debt auctions in Spain and Italy which are set to offer 3 and 6 billion euros respectively on Thursday.”

Forex Chart – EUR/USD Daily

The euro has traded higher versus the dollar in trading for three straight days after a sharp decline last week . The EUR/USD pair reached a high today of 1.3144 before retreating a bit lower and now holds near the 1.3135 level.  The EUR/USD has managed to pop back over the significant 200-day moving average (red line) in today’s ascension.