Author: FX_Trdr

GBPUSD stays in a falling trend line on daily chart and remains in downtrend from 1.6456. As long as the trend line resistance holds, downtrend could be expected to continue and deeper decline to 1.4600 area is possible. However, next cycle bottom on daily chart is nearing, a clear break above the trend line resistance could indicate that a cycle bottom has been formed and the fall from 1.6456 has completed.

For long term analysis, GBPUSD is in bearish movement from 1.7042. Move to 1.4500 area is expected in next several weeks.

Weekly Forex Analysis

By GCI Forex Research

Fundamental Outlook at 1500 GMT (EDT + 0500)

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The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3630 level and was supported around the $1.3530 level.  The common currency continued to scale back recent losses as dealers reacted to greater optimism concerning the likelihood that Greece’s financial problems can be managed without precipitating a national default.  German Chancellor Merkel met with Greek Prime Minister Papandreou today and there was little indication that Germany is preparing to provide financial assistance to Greece.  Papandreou reported Greece has not asked for financial aid and European Union official Junckers said he hopes the markets will quiet down once more details about Greece’s fiscal austerity plans are revealed.  One alternative plan is said to involve European Union members providing rescue financing to Greece.  Data released in the eurozone today saw German factory orders climb 4.3% m/m in January, up sharply from December’s upwardly revised -1.6% m/m print, while the year-on-year increase was 19.6% y/y.  European Central Bank member Paramo called on distressed Spanish banks to assume losses on their balance sheets when they occur and determine if they need to tie-up with stronger financial institutions.  ECB member Weber said the common currency will not become a weak currency.  In U.S. news, data released today saw weekly non-farm payrolls decline 36,000, off from the -26,000 January revision, while the February unemployment rate printed at 9.7%, below expectations.  February manufacturing payrolls actually evidenced 1,000 in job gains, down from the upwardly revised +20,000 result for January.  Other data released today saw February average hourly earnings increase 0.1% m/m and 1.9% y/y – both below expectations – while February average weekly hours worked ticked higher to 33.8.  The Fed reported January consumer credit expanded US$ 5 billion.  Chicago Fed President Evans said additional indications of a sustainable economic recocery are required before there’s more monetary tightening.  Euro bids are cited around the US$ 1.3335 level.

¥/ CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥90.60 level and was supported around the ¥88.95 level.  The pair moved higher on speculation Bank of Japan would move to expand its credit easing policies further despite months of wrangling between the central bank and the government.  Some BoJ-watchers are now reporting the central bank will ease further at its next meeting on 16-17 March despite comments from BoJ officials about the need to maintain fiscal discipline.  Others think the BoJ could ease in April when two Policy Board meetings are planned.  March Japanese government bond futures traded as high as 140.19 today, their highest level since 22 December 2009.  Shirakawa will attend the Bank for International Settlements meeting in Basel in Basel next week.  The Japanese government reportedly increased its allowance for foreign exchange intervention in the draft budget for its next fiscal year that starts at the end of this month.  Some dealers suggest the new government may have as much as ¥145 trillion with which to intervene.  Bank of Japan Policy Board member Noda this week reported “Maintaining fiscal discipline, in other words showing a road map and implementing it decisively in a timely manner, is critical” to keep interest rates low.  Noda also added deflation will continue through fiscal year 2011 and said overseas economies are Japan’s largest risk factor.  The Nikkei 225 stock index climbed 2.20% to close at ¥10,368.96.  U.S. dollar offers are cited around the ¥94.75 level.  The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥123.30 level and was supported around the ¥120.85 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥137.05 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥84.30 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8265 in the over-the-counter market, up from CNY 6.8264.  Prime Minister Wen said the government wants to keep the Chinese yuan stable and improve the exchange rate mechanism.  China’s National People’s Congress started today and traders will pay close attention to any policy announcements.  Options traders have become considerably bullish on the prospect on additional yuan appreciation.”  PBoC is expected to raise banks’ reserve requirements further this year.

Forex Daily Market Commentary provided by GCI Financial Ltd.

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DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

By CountingPips.com

U.S. Nonfarm Payrolls employment data released today showed that jobs fell in the month of February by less than expected while  January’s jobs data was revised slightly higher. The Department of Labor nonfarm payrolls report showed that employment fell by 36,000 workers in February to total of 14.9 million unemployed workers following January’s revised job loss of 26,000 workers. The jobs data was better than expected as market forecasts were predicting a decrease by approximately 68,000 workers for the month.

The unemployment rate remained steady at 9.7 percent after dropping from 10 percent in December to January. Market forecasts were predicting the rate to rise to the 9.8 percent level.

January’s employment totals were revised from an original estimate of 20,000 jobs lost to 26,000 jobs lost for the month.

In the two years since the recession began in December 2007, the number of unemployed workers has increased by 8.4 million and the unemployment rate has advanced from 5.0 percent to 9.7 percent.

The goods-producing sector was the hardest hit by job losses for the month as this sector lost 60,000 total jobs with the construction sector losing 64,000 jobs. The manufacturing sector, meanwhile, added 1,000 jobs in February.

The service-providing sector gained 42,000 total workers in February as the education & health services sector added 32,000 jobs and the professional and business services sector increased by 51,000 jobs. Transportation and warehousing lost 12,000 jobs while financial activities shed 10,000 workers. Government hiring decreased by 18,000 workers in January.

The Aussie has climbed back above its psychological .90 level and is testing previous March highs as the risk trade rallies in reaction to better than expected U.S. employment data.  The Aussie is enjoying the development in particular since the RBA just raised rates again and Australia’s economic data has been altogether solid.  The Aussie has broken above our key 2nd tier downtrend line again in the process.  Our 2nd tier runs through the .92 level.  Hence, a confirmation through our 3rd tier downtrend line could signal a more lasting near-term rally towards the .92 area.  Meanwhile, we recognize strong price action in gold and the USD/JPY, positive developments for the risk trade as well.  Data is done for the week, meaning the remainder of the trading session will likely feed off of today’s U.S. employment figures barring any psychological developments.  Australia will kick off next week with job advertisements and business confidence data.  However, the more influential releases will likely be Chinese new loans and trade balance data along with Australia’s home loans figure due Wednesday.  For the time being it will be interesting to see if the Aussie can break through previous March lows and solidify.

Technically speaking, the Aussie has multiple uptrend lines serving as technical cushions along with intraday and 3/3lows.  We’ve kept our trend lines intact to give investors an idea of the relevance of today’s topside movement.  As for the topside, the Aussie has multiple downtrend lines serving as technical barriers along with March highs and the highly psychological .90 area.

Price: .9081

Resistances: .9090, .9104, .9120, .9134, .9146, .9160

Supports: .9072, .9054, .9038, .9021, .9008, .8993

Psychological: .90, March highs and 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.

Gold is climbing back towards previous March highs after U.S. employment data printed stronger than analyst expectations.  Although the Dollar initially climbed in reaction to the news, the risk trade has since posted a solid rally amid an improving global economic landscape.  Uncertainty is cooling in the ECB and the impact from the possibility of a hung UK parliament has sunk in.  Therefore, the focus is on today’s improvement in the U.S. labor market and the impact this could have on U.S. consumption.  Meanwhile, gold remains in a favorable position with only our two makeshift downtrend lines running through March highs.  The more substantial uptrend lines are long gone, meaning gold’s topside obstacles could be far and few between should global economic fundamentals continue to improve.  The data wire will begin the week relatively quiet, though data flows will pick up with key China releases on Wednesday and Thursday.  For the time being gold may continue to follow a positive correlation with the risk trade barring a negative psychological development in the EU or UK.

Technically speaking, we’ve formed two new makeshift downtrend lines running through 3/3 levels to give investors an idea of present resistance.  Gold is still well above downtrend lines running through 2/19 and 1/11 highs, meaning there aren’t any foreseeable noteworthy downtrend lines in play right now.  As for the downside, gold has multiple uptrend lines serving as technical cushions along with 3/2 lows.  Additionally, the highly psychological $1100/oz level could serve as a reliable technical cushions should it be tested.
Present Price: $1138.55/oz

Resistances: $1138.68/oz, $1140.96/oz, $1143.46/oz, $1146.29/ oz, $1149.24/oz, $1151.54/oz

Supports: $1135.10/oz, $1133.06/oz, $1131.07/oz, $1128.97/oz, $1126.71/oz, $1123.03/oz

Psychological: $1100/oz, $1150/oz, January Highs, 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 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.

Free video tutorial available to all Club EWI members

By Nico Isaac

For over ten decades, the mainstream financial world has embraced the view that external news events drive trend changes in the markets. In less than ten minutes, EWI’s senior tutorial instructor Wayne Gorman shatters that very idea into a fine dust, swept away into thin air.

In part one of his exclusive, three-part Club EWI video series “Why Use The Wave Principle,” Wayne first assesses the pitfalls of relying on macroeconomic models to forecast; namely: “An investor is lured into the market at just the worst time, when it’s time to sell, and forced out just at the best time to buy.”

As for real world examples of this happening, Wayne spans three hundred years of financial history to reveal how the most pivotal economic, political, and environmental events failed to alter the course of their respective markets. Here, the free video includes groundbreaking charts on these (and more) well known episodes:

• The S&P 500 and Enron from 2000-2002: The stock market ROSE and continued to proceed upward AFTER the largest US corporate scandal and bankruptcy ever (at the time).
• The Dow Industrials and GDP quarterly data from 1970 to early 2000s: After the release of major negative GDP numbers, the market for the most part ROSE, just the opposite of what most market analysts and investors expect.
• The Dow and profound political events over the last 80 years: In the 1930s and 1940s, a series of negative incidents — i.e. Hitler rising to power, World War II, and the Holocaust — preceded a powerful uptrend in stocks all the way into the 1960s.
• Stock market charts of the five countries most affected by the 2004 Indian Ocean Tsunami (India, Indonesia, Malaysia, Sri Lanka, and Thailand). Four out of the five ROSE after the natural disaster…

Believe it or not, we’ve only scratched the surface. In his myth-busting, free video “Why Use the Wave Principle,” Wayne Gorman presents a total of 40 charts that capture failed fundamental analysis of the world’s leading financial markets. Wayne recalls this expression from a famous, Nobel Prize winning economist:

“Economic reasoning will be of no value in cases of uncertainty.”

And he offers this response:

“But isn’t that what we have in financial markets: cases of uncertainty? We need a different type of reasoning, one that will help us to avoid the pitfalls shown on the previous charts. That’s why the Wave Principle is so important. It offers a unique perspective and a market discipline of rules and guidelines that help investors avoid buying at tops and liquidating at bottoms. It helps to explain and understand trends before they happen.”

The flaw in Economic 101, cause-and-effect theory is one of the easiest things to prove. But it’s also one of the hardest things for many investors to accept. Now is the time to do so. Watch the free “Why Use the Wave Principle” video in its entirety today at absolutely no cost. Simply sign on to join the rapidly expanding Club EWI and take advantage of the amazing educational benefits membership has to offer.

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

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