Month: January 2011

By Russell Glaser

As the US trading session nears, traders are anticipating the FOMC statement as well as US crude oil inventories. Prior to the releases both the euro and crude oil are trading higher on expectations for the Fed to follow through on their $600 Bn quantitative easing program.

Earlier in the day the Bank of England released its monetary policy meeting minutes that showed another member of the policy committee has come out in favor of raising the benchmark interest rate for Britain. This is the second consecutive day the UK has surprised the markets following yesterday’s significantly weaker than expected 4Q GDP numbers which posted a 0.5% contraction.

Today traders responded to the announcement from the BOE by bidding the pound higher versus the dollar as the GBP/USD corrected more than 50% of yesterday’s declines. At lunchtime of the European trading session the GBP/USD was up at 1.5875 from 1.5814. The EUR/USD was higher as the pair pushed above the 1.3700 before falling back to its opening day price of 1.3691. Spot crude oil was up at 86.73 from 86.52.

Markets have quieted prior to the release of the FOMC meeting minutes at 19:15 GMT. Most economists expect the Fed to announce its intention to follow through on the QE II program and purchase $600 Bn of treasuries. A positive surprise from the meeting minutes may be an upgrade to the Feds outlook on the US economy. A quiet Fed meeting may allow for current market trends to extend themselves further and the EUR/USD could push above 1.3700 to the Nov 22nd pivot at 1.3780.

US crude oil inventories are due to be released today at 15:00 GMT with market expectations for an increase to inventory numbers by 0.9 Mn barrels. Spot crude oil prices appear to have found support at the 100-day simple moving average where the price has turned higher. A larger than expected draw down will be a positive for spot crude oil prices with short term resistance located at $87.00 followed by $88.80.

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.

As the US trading session nears, traders are anticipating the FOMC statement as well as US crude oil inventories. Prior to the releases both the euro and crude oil are trading higher on expectations for the Fed to follow through on their $600 Bn quantitative easing program.

Earlier in the day the Bank of England released its monetary policy meeting minutes that showed another member of the policy committee has come out in favor of raising the benchmark interest rate for Britain. This is the second consecutive day the UK has surprised the markets following yesterday’s significantly weaker than expected 4Q GDP numbers which posted a 0.5% contraction.

Today traders responded to the announcement from the BOE by bidding the pound higher versus the dollar as the GBP/USD corrected more than 50% of yesterday’s declines. At lunchtime of the European trading session the GBP/USD was up at 1.5875 from 1.5814. The EUR/USD was higher as the pair pushed above the 1.3700 before falling back to its opening day price of 1.3691. Spot crude oil was up at 86.73 from 86.52.

Markets have quieted prior to the release of the FOMC meeting minutes at 19:15 GMT. Most economists expect the Fed to announce its intention to follow through on the QE II program and purchase $600 Bn of treasuries. A positive surprise from the meeting minutes may be an upgrade to the Feds outlook on the US economy. A quiet Fed meeting may allow for current market trends to extend themselves further and the EUR/USD could push above 1.3700 to the Nov 22nd pivot at 1.3780.

US crude oil inventories are due to be released today at 15:00 GMT with market expectations for an increase to inventory numbers by 0.9 Mn barrels. Spot crude oil prices appear to have found support at the 100-day simple moving average where the price has turned higher. A larger than expected draw down will be a positive for spot crude oil prices with short term resistance located at $87.00 followed by $88.80.

By Anton Eljwizat

Gold prices have mostly fallen for the past week, and an ounce of gold was trading for as low as $1,322. Currently, as a bullish cross takes place on both the 8-hour chart’s MACD and Slow Stochastic, the bullish move looks to be expected today, with potential to reach $1,345 an ounce. This might be a great opportunity for forex traders to join a very popular trend.

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

After a 0.5% decline in the quarterly Prelim GDP report from the UK, the pound experienced a strong bearish session, falling greatly against all of its currency counterparts. The news trickled into European trading by holding the euro steady against a number of its regional rivals as well. Traders will be eyeing today’s Monetary Policy Committee (MPC) statements for a glimpse into the Bank of England’s (BOE) response to yesterday’s news.

Economic News

USD – USD Slumps from Heightened Risk Appetite

The US dollar experienced bearish movement against almost every major currency counterpart yesterday, with the exception of the British pound (GBP). The EUR/USD was trading higher at a price just under 1.3700, up from 1.3575. The USD/JPY moved downward yesterday, hitting a low of 81.97 before rebounding back to 82.20; the pair now looks to be continuing downward as of this morning.

Mixed economic reports show growth in American consumer confidence, but a mild decrease in manufacturing and a composite housing index. Growing consumer confidence may explain a large portion of the USD’s bearishness yesterday since investors took the optimism as a sign to invest in riskier assets, thereby pulling away from their safe-haven USD positions.

Today’s news appears to be anticipating a continuation of the current trends. The Federal Open Market Committee (FOMC) will release its latest decision today regarding short-term interest rates – also known as the Federal Funds Rate. Rates are expected to remain unchanged, but recent figures of consumer optimism may pressure committee members to issue hawkish statements about future monetary policy. Traders should anticipate heavy USD volatility as a result.

EUR – EUR Trading Higher, but British GDP Weighs on Regional Data

The EUR experienced moderately positive results in yesterday’s trading sessions. Both significant economic events released from the euro zone yesterday proved bullish for the 17-nation common currency.

The EUR/USD moved upward, climbing temporarily above 1.37 before retracing some of its movement. The pair currently trades just under 1.3690 as of this morning. The EUR/GBP underwent a rapid bullish run following Britain’s publication of a less-than-forecast GDP report.

After a 0.5% decline in the quarterly Prelim GDP report from the UK, the pound experienced a strong bearish session, falling greatly against all of its currency counterparts. The news trickled into European trading by holding the euro steady against a number of its regional rivals. The Scandinavian currencies outpaced the EUR while the EUR/CHF finished the day even.

With most of today’s economic indicators coming out of Britain and the United States there is a good chance the EUR will take a back seat to today’s movements. However, additional negative indications from Britain could keep the EUR’s gains to a minimum as the region suffers under further economic woes.

JPY – JPY Mixed as Risk Appetite Surges

The Japanese yen underwent mixed results in yesterday’s trading. The USD/JPY moved bearish as the dollar slumped from a boost in risk appetite. However, the same move away from safe-haven investments also pulled some investment out of the JPY, leading the island currency to move down against a number of its higher yielding currency rivals.

The Bank of Japan (BOJ) held Japanese short-term interest rates steady yesterday and statements by the BOJ appear to hint at a continuation of such a policy so long as the yen remains stronger than Japan desires. A few indicators from equity analysts, however, did hint at modest growth among exporting industries in Japan despite the rising value of the yen, suggesting Japan’s economy is on better footing than many forecasts had provided.

OIL – Commodity Prices Still Falling Despite Weakening Dollar

Despite a falling US dollar, commodity prices have continued to move bearish. A number of analysts had forecast a rising value among commodities such as Crude Oil and Gold as the greenback moved downward, but this has so far not come to fruition.

The shift into riskier assets may also have driven many investors away from physical assets like commodities. This may explain the depressed value of commodities in the short-term, but a sustained downward movement hints at a more fundamental shift tied with supply and demand.

Traders may want to follow more closely what is happening with inventory levels for Crude Oil. A rise in inventories could represent a plummet in global demand, thus driving prices lower. Warmer weather in the Northern Hemisphere may also have pushed the price of heating oil lower. Either way, the falling price of the USD will eventually be priced-in to commodities and traders will want to be on the lookout for that swing in value.

Technical News

EUR/USD

A high-rise bearish cross in the 8-hour chart’s MACD of this pair suggests an impending downward correction to yesterday’s upward spike. A fresh bearish cross in the daily Stochastic (slow) supports this notion. Going short with tight stops might be a wise decision today.

GBP/USD

This pair appears to be moving in a bearish direction with few indications of change. The daily MACD reveals what looks to be an impending bearish cross, indicating a continuation to yesterday’s bearishness. Traders may want to hold onto their short positions today for a bit longer.

USD/JPY

Most indicators on this pair show the price floating in neutral territory. The Stochastic (slow) and Relative Strength Index (RSI) on both the daily and weekly chart show the price evenly between the over-sold and over-bought region, suggesting a lack of direction heading into today’s morning hours. Traders may want to wait for a clearer signal today on this pair.

USD/CHF

A very shallow bullish cross on the daily MACD highlights a mild level of upward pressure on this pair, but few other indicators reveal any clear directionality. The current trend is bearish, but technical sentiment appears to be shifting directions. Traders may want to wait for a clearer signal on the daily chart before making any long-term moves on this pair.

The Wild Card

Gold

The sustained downward movement on Gold has pushed a few indicators into revealing a potential reversal to the recent bearishness. The daily MACD has the price approaching a bullish cross, suggesting an impending upward tick in the next day or two. An impending bullish cross on the weekly Stochastic (slow) supports this notion and forex traders would definitely not want to miss out on the great opportunity to catch a large swing in the price of Gold. Going long on Gold appears to be offering a lucrative possibility this week.

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.

The British Pound declined versus the US dollar on Tuesday on lower than expected UK’s Gross Domestic Product growth figure. The lower than expected UK’s GDP figure creating much uncertainty among the investors. The pair GBP/USD declined 1.09 percent to 1.5814 on Tuesday. The pair is likely to experience support at 1.5725 while could find resistance at 1.6018 which also happens to be Tuesday’s high.

The British Pound also declined versus the Euro and the Yen as the EUR/GBP gained 1.37 percent to reach 0.8647 whereas the pair GBP/JPY declined 1.45 percent to 130.02 on Tuesday.

The Australian dollar reported the fall of 0.44 percent to 0.9930 versus the US dollar on Tuesday. The pair AUD/USD can find support at 0.9833 and is likely to find resistance at 1.0022. The pair EUR/AUD advanced 0.44 percent to reach 1.3736 whereas the pair AUD/JPY declined 0.85 percent to 81.61.

The Euro on the other hand remained strong and jumped up 0.33 percent to 1.3683 versus the greenback on Tuesday. The pair is EUR/USD is expected to find support as 1.3397 and is likely to find resistance at 1.3687. The Euro also remained strong versus the British Pound as the pair EUR/GBP surged 1.40 percent to 0.8650.

The US dollar declined versus the Japanese Yen on latest data of consumer confidence released by United States. The pair USD/JPY is expected to find support at 81.98 whereas its resistance level is expected around 83.13. The greenback also remained weak versus the single currency and declined 0.45 percent to 1.3699 during the American trading session whereas the pair GBP/USD declined 0.97 percent to 1.5832 on Tuesday’s North American trading session.

About the Author

Daily forex trading news written by Rehan from DailyForexTrade.com

The US dollar remained mixed against its currency counterparts on Tuesday’s trading session. The Greenback however strongly advanced versus the British Pound on the lower than expectations UK’s economic data.

United Kingdom’s gross domestic product fell by 0.5 percent for the fourth quarter as compared to the prior quarter. An unexpected decline in Britain’s GDP created uncertainty among investors about the country’s economic outlook.

In opinion of the experts UK is already dealing with an inflation rate of 4 percent which has resulted in more tightened fiscal policy. The combination of lower interest rates, rising inflation and lower GDP growth rate is highly unsupportive for the currency.

The British Pound declined to 1.5816 versus the US dollar on Tuesday’s North American trading session as compared to $1.6003 on Monday.

The Euro remained strong versus the greenback and reached its highest in two months to 1.3702 however settled to $1.3682 later in trading session as compared to $1.3647 on Monday. Despite strong US consumer confidence the greenback remained under pressure versus the single currency as the successful action of European Rescue Fund bonds boosted investors’ confidence in euro zone’s economy. The Euro also advanced 1.3 percent against the British Pound.

The dollar index DXY which measures the US dollar’s movement against its six major rivals declined to 77.973 as compared to 78.013 on Monday’s late trading session.

The US dollar also declined versus the Japanese Yen to 82.23 as compared to 82.54 on Monday’s late trading session. The traders were remained optimistic as the Central Bank of Japan decided to keep its key overnight call rate around 0 to 0.1 percent as expected.

The dollar also extended losses against the Japanese yen as Treasury yields fell, weighing on the index.

About the Author

Daily forex trading news written by Rehan from DailyForexTrade.com

AUDUSD moved sideways in a trading range between 0.9803 and 1.0076. Lengthier consolidation in the range is expected in a couple of days. Key support is at 0.9803, a breakdown below this level will indicate that the downtrend from 1.0255 has resumed, then deeper decline could be seen to 0.9600 area. Key resistance is at 1.0076, above this level will suggest that the fall from 1.0255 had completed at 0.9803 already, then the following upward movement could bring price to 1.0200 zone.

Forex Signals

By Zac, CountingPips.com

Today, I am pleased to share a forex interview/commentary on this week’s major events and forex trends with quantitative analyst at DailyFx.com, David Rodriguez. David’s specializes in statistical studies in currency trading markets and algorithmic trading systems for the Managed Accounts Programs offered by parent company, FXCM.

There is a busy news schedule this week for the US Dollar with Wednesday’s Federal Reserve interest rate meeting and Friday’s 4th Quarter GDP release being obvious highlights.

Q: Do you feel there is a chance forex traders will see the Federal Reserve meeting having an effect on the dollar’s direction?

A: The Fed is exceedingly unlikely to make any changes in policy, but this does not rule out any post-meeting volatility. Federal Open Market Committee voting rights will rotate to several new members—those of which are perceived to be more hawkish than those who leave their posts. If we see any particularly notable dissents on the FOMC’s decision it could spark considerable US Dollar moves.

Q: How big of a driver can we expect the GDP release to be on the US dollar in the days and weeks ahead?

A: We have already seen through the British Pound what effects a miss in GDP results can have on a specific currency. The US Dollar should be no exception—especially as consensus forecasts call for a significant bounce in quarterly growth rates. It will be important to watch for significant surprises in GDP data.

Q: There will also be interest rate decisions out of Japan and New Zealand taking place this week with both central banks widely expected to keep rates steady. Is there anything to watch for regarding these events or are these basically non-events at this time.

A: Both the Reserve Bank of New Zealand and Bank of Japan are widely expected to leave rates and policy unchanged, but said fact does not rule out any post-event moves. The interest rate-sensitive New Zealand Dollar could particularly react to any surprising guidance on the future of RBNZ policy moves. Though the central bank is unlikely to raise rates through the near future, market expectations call for hikes in late-2011. There is distinct risk that the bank could quash such speculations and thereby force NZD declines.

Q: The EUR/USD’s uptrend persisted throughout last week and broke above the 1.3500 level with investors seemingly less worried about the sovereign debt issues in the Eurozone. With mostly minor Eurozone economic releases this week, do you feel the outlook is for more upside momentum for this currency pair?

A: We’ve thus far seen the EURUSD break its significant highs and threaten further advances. Yet early-week indecision suggests that the single currency may be running out of steam, and it will be critical to watch the next days of price action. This is particularly true given that the month of January tends to predict February-December performance with nearly 70 percent accuracy. The next week could be pivotal for Euro trends.

Thank you David for taking the time for participating in this week’s forex interview. To read David’s latest currency analysis and trading strategies you can visit DailyFx.com.

By CountingPips.com

The United Kingdom Gross Domestic Product declined unexpectedly in the fourth quarter of 2010 and the British pound sterling has fallen sharply in forex trading on the news. The first report for the U.K. fourth quarter GDP data showed that economic activity fell by 0.5 percent in the October through December quarter following an advance by 0.7 percent in the third quarter of 2010, according to the latest report by the Office of National Statistics.

The GDP decline was worse than expected as forecasts were looking for a 0.5 percent rise in the GDP numbers for the quarter.

On an annual basis, the fourth quarter GDP rose by 1.7 percent from the level of the fourth quarter of 2010 following a third-quarter increase in GDP by 2.7 percent. The annual data was also worse than economic forecasts which were expecting the annual GDP rate to increase by approximately 2.6 percent.

Contributing to the decline in GDP for the fourth quarter was a decrease in total services output by 0.5 percent while construction output fell by 3.3 percent in the quarter.

British pound tumbles in forex trade

The British pound has felt the effects of the news and has fallen versus most of the major currencies in forex trading today. The pound has been declining sharply against the euro, US dollar, Japanese yen, Swiss franc, Canadian dollar and the Australian dollar.

GBP/USD Chart – The British Pound Sterling edging back a little higher in forex trading versus the US Dollar today after a sharp drop on the worse than expected GDP report. The GBP/USD is down by over 150 pips since the day’s opening.

By Adam Hewison

Most people immediately think about the dollar when Forex markets are mentioned. Sadly, the main reason is its declining value against the other major currencies. There are several ways to look at the foreign exchange markets and one of them is to compare other major currencies. For example, you could be looking at the euro against the Japanese yen or any number of combinations in between.

In today’s short video we will be looking at the Swiss franc versus the Japanese yen over the past 12 months. I’m going to be showing you a very simple, yet very effective, approach that has proven to be 72% accurate in 2010-2011 when trading this particular cross-rate.

In fact, using this easy to understand approach, you would have made just seven trades in approximately 12 months. As you can see, this is not a hyperactive approach. However, it will put the odds of making money on your side if you stick to the game plan. As in all trading, having a game plan in foreign exchange is extremely important.

If after watching this video you would like to receive the game plan template I use to help me organize and develop my strategies, just contact us by phone at 1-800-538-7424 or via email.

I hope you find this video informative and educational. As always our videos are free to watch and there are no registration requirements. All we ask is that you let us know what you think by leaving a comment, talk about us on your blog, Tweet to a friend or share us on Facebook.

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

To see more of Adam’s Videos click here or sign up for Adam’s Free 10-part Professional Trading Course.