AUDUSD broke below the rising trend line on 4-hour chart, suggesting that a short term cycle top is being formed on 4-hour chart. Range trading between 0.9123 and 0.9325 is expected. As long as 0.9123 support holds, we’d expect uptrend from 0.8734 to continue and one more rise towards 0.9404 (Nov 16, 2009 high) is still possible. However, a break below 0.9123 will indicate that the rise from 0.8734 has completed, then deeper decline could be seen to 0.9000 or even 0.8850.
By GCI Fx Research
€
The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4450 level and was capped around the $1.4520 level. The common currency was pressured during Australian dealing after a Chinese official reported the U.S. dollar has likely hit the bottom while adding the yen still had room to decline. There is growing dissent apparent at the Federal Reserve. Kansas City Fed President Hoenig reported the Fed should conclude in March its program to purchase mortgage debt, as planned, because the private securities market is “healing.” Hoenig is calling for a “modest” and “persistent” economy despite last week’s lackluster December non-farm payrolls number. In contrast to Hoenig, St. Louis Fed President Bullard – speaking in China – suggested the U.S. may want to continue some of its expansionary policies, including the securities purchasing programs. Bullard also noted U.S. interest rates “may remain low for quite some time.” Friday’s weaker-than-expected and disappointing U.S. December non-farm payrolls data dented the view that the Fed may raise interest rates by the middle of the year. European Central Bank President Trichet yesterday called on global governments to reduce excessive budget deficits to satisfy investors. Trichet noted he sees a “progressive normalization of the economy” but called on market participants to “strengthen risk management significantly.” ECB member Nowotny yesterday said new risk-taking by some market participants is a concern for central bankers and regulators and that risk-taking needs to be limited by increases in capital requirements. Nowotny also confirmed there will be “sluggish” economic growth in the eurozone this year. Data released in the eurozone yesterday saw French November industrial output climb +1.1% and October’s print was upwardly revised. In U.S. news, data to be released in the U.S. today include November trade balance figures with estimates running around –US$ 34.5 billion. Euro bids are cited around the US$ 1.3885 level.
¥/ CNY
The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥92.40 level and was supported around the ¥91.80 level. Traders moved out of yen after shares in Japan Airlines declined 45% on speculation that the ailing airline is to file for bankruptcy imminently. Data released in Japan overnight saw the November current account surplus expand 76.9% y/y to ¥1.103 trillion, better-than-expected. Also, December bank lending was off 1.3% m/m and 3.1% y/y. Bank of Japan official Shinobu Nakagawa yesterday reported it is “possible” that official Japanese interest rates will remain near zero per cent until 2011 on account of the poor economic outlook. Nakagawa also reported the appreciating yen helps to support demand for Japanese government bonds. There is increasing speculation BoJ could increase its bond purchase activity to avert a relapse into another recession. Currently, the central bank purchases around ¥1.8 trillion in Japanese government bonds every month and it may decide to up its purchases to counter intense deflationary pressures. A new announcement could be made as early as H1 2010. An anonymous Ministry of Finance official reported finance minister Kan and U.S. Treasury Secretary Geithner agree on exchange rate policy. New finance minister Kan last week said it is his responsibility to respond to moves in the currency market but added the markets should determine rates. Last Thursday, Kan indicated the yen should be weaker whereas his predecessor, Fujii, green-lighted a stronger yen when he first took office last year. Chief Cabinet Secretary Hirano said the government should not make any comments that could impact the markets. Prime Minister Hatoyama last week said rapid exchange rate moves are “not good” and “unwelcome.” Most traders believe the Japanese government will probably try to orchestrate a weaker yen to help counter deflationary pressures and stimulate foreign trade. The Nikkei 225 stock index climbed 1.09% to close at ¥10,798.32 yesterday. 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 ¥133.75 level and was supported around the ¥132.95 level. The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥147.65 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥90.20 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8275 in the over-the-counter market, up from CNY 6.8263. The pair was volatile overnight as a Chinese sovereign wealth fund official reported the U.S. dollar reached “rock bottom” but added the yen still has room to decline. The official quickly noted these were his own opinions and not official public policy. He did, however, suggest that both the U.S. and China are likely to raise rates in H2 2010. Last week, People’s Bank of China guided interest rate expectations higher by selling three-month bills at higher rates for the first time in nineteen weeks. This evidences the central bank’s attempt to tighten liquidity. PBoC-watchers believe the central bank may lift interest rates for the first time in three years by September. There is increasing speculation that China’s economy could slow dramatically this year. People’s Bank of China yesterday reported it will support “relatively fast” economic growth and manage inflation expectations. Additionally, PBoC noted it will target “moderate” loan growth in 2010.
₤
The British pound depreciated sharply vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.6060 level and was capped around the $1.6120 level. Many data were released overnight. First, the December RICS house price balance declined to +30 from +35 in November, the first decline since February. Second, BRC December retail sales surged to a five-month high. Third, RICS reported house prices moderated last month. BCC noted the U.K. economy is improving but is “struggling to enter a recovery phase.” Former Bank of England Monetary Policy Committee member Buiter yesterday reported the central bank may start to raise interest rates by the middle of the year, possibly taking the Bank Rate to 0.75% to 1.00%. Buiter suggested the BoE’s rate hike could come before the European Central Bank contemplates one. The big news in the U.K. remains the general election that is scheduled to be called before June. Prime Minister Brown is attempting to rally the Labour Party following widespread discontent from within his own ranks. Tory opposition leader Cameron is pledging earlier and deeper deficit reductions. Cable bids are cited around the US$ 1.5730 level. The euro gained ground vis-à-vis the British pound as the single currency tested offers around the ₤0.9010 level and was supported around the ₤0.8995 level.
CHF
The Swiss franc depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.0205 level and was supported around the CHF 1.0150 level. Data released in Switzerland yesterday saw November real retail sales up 0.6%. Swiss National Bank is expected to keep interest rates unchanged for at least the next couple of months. U.S. dollar offers are cited around the CHF 1.0615 level. The euro moved higher vis-à-vis the Swiss franc as the single currency tested offers around the CHF 1.4765 level while the British pound moved higher vis-à-vis the Swiss franc and tested offers around the CHF 1.6400 figure.
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 CountingPips.com
The United States trade deficit increased in November with the help of a rise in imports according to a release by the Commerce Department today. The U.S. trade deficit rose by 9.7% percent to $36.4 billion in November following a revised deficit of $33.2 billion in October. The November deficit increased by more than expected as market forecasts were expecting that the deficit would rise to approximately $34.9 billion for the month.
Contributing to the increased deficit level was an increase in November imports by 2.6 percent to a total of $174.6 billion. Imports of petroleum products jumped by 7.3 percent for the month. U.S. exports also rose for the month to a 
total of $136.2 billion worth of exports which was an increase of 0.9 percent from October’s total.
The U.S. trade deficit with China fell in November, despite the overall deficit increase. The deficit with China decreased to $20.2 billion in November from a deficit of $22.7 billion in October while other notable U.S. trade deficits were with the European Union at $6.4 billion, Japan at $5.4 billion, Mexico at $5.1 billion, OPEC at $6.1 billion and Canada at $1.4 billion.
U.S. trade surpluses with other countries for November included Australia at $1.0 billion, Hong Kong at $1.4 billion, Singapore at $0.7 billion and Egypt at $0.2 billion.
US Dollar mixed in Forex Trading.
The U.S. dollar has been mixed in forex trading today against the other major currencies. The dollar has gained today versus the Canadian dollar, New Zealand dollar and the Australian dollar while falling against the euro, Japanese yen and the British pound at 12:15 pm EST according to currency data by Oanda. The dollar is trading virtually unchanged against the Swiss franc from today’s opening rate.
The U.S. stock markets have been negative so far today with the Dow Jones falling by over 40 points, the Nasdaq decreasing over 20 points and the S&P 500 down by over 8 points. Oil has edged down by $0.98 to $81.54 while gold is unchanged to trade at the $1,150.00 per ounce level.
GBP/USD 1H Chart – The British Pound Sterling increasing versus the US Dollar today in forex trading. The GBP/USD ascended to the 1.6195 level today to establish its highest trading level since January 4th when the pair topped out at 1.6241.
By Fast Brokers – The USD/JPY is dropping like a rock today in a delayed response to the recent return to the risk trade we mentioned in yesterday’s commentary. After printing strong Trade Balance data, China announced its second measure this week to tighten liquidity by increasing its rate of required reserves by 50 basis points. China’s effort to curtail its economic growth tells us its economy may be speeding ahead faster than anticipated, a positive sign in regards to Japan and developing nations as a whole. However, China’s more hawkish approach monetarily could curtail global growth in the medium-term should China up its measures over time. Meanwhile, Japan Airlines tumbled 45% during the Asia trading session after it became clear the company would have to file for bankruptcy. Japan Airline’s pending bankruptcy could be a driving force behind a stronger Yen, though this seems counterintuitive. That being said, investors should keep an eye on broad based activity in the Dollar since today’s pullback in the USD/JPY could be foreboding of a pop in the EUR/USD and Cable. Investors are anticipating tomorrow’s Core Machinery Orders data along with the release of the Fed’s Beige Book. However, focus remains primarily on Thursday’s U.S. Retail Sales data since a recovery in U.S. consumption bodes well for Japanese manufacturers and exporters.
Technically speaking, the USD/JPY’s has sunk beneath previous our 4th tier uptrend line and previous January lows, a negative development trend-wise. The next test will be our 3rd tier uptrend line and 12/24 lows. Should these cushions give way the USD/JPY’s downward momentum could accelerate towards the highly psychological 90 trading range. As for the topside, the USD/JPY faces multiple downtrend lines along with 1/06, 1/04, and 1/08 highs.
Present Price: 91.13
Resistances: 91.22, 91.45, 91.61, 91.88, 92.13, 92.30
Supports: 90.96, 90.80, 90.54, 90.24, 90.05, 89.90
Psychological: 95, 90, January highs
(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.
By Fast Brokers – Gold is hovering back around its psychological $1150/oz level in reaction to consolidation in the EUR/USD and GBP/USD. However, gold has gained some nice upward momentum so far this month after separating itself from the highly psychological $1100/oz area. Meanwhile, we notice trend line inflection points approaching in both the EUR/USD and GBP/USD. Hence, despite present inactivity the FX markets could be headed for some volatility. That being said, investors should monitor for any trend-setting movements in the major Dollar crosses, primarily the EUR/USD, GBP/USD, and AUD/USD, while keeping gold’s negative correlation with the Greenback in mind. The Fed will release its Beige Book tomorrow followed by key employment data from Australia during the Asia trading session. Furthermore, we’ve got U.S. Retail Sales and an ECB meeting coming on Thursday. Therefore, activity in the markets could heat up for the first time in 2010.
Technically speaking, gold has multiple uptrend lines serving as technical cushions along with intraday, 1/8, 12/30, and 12/22 lows. Meanwhile, gold’s psychological $1150/oz area could continue to play a role for the near-term. As for the topside, gold faces technical barriers in the form of 12/7 and 11/18, 11/23, and 11/27 highs along with the psychological $1175/oz level.
Present Price: $1147.20/oz
Resistances: $1153.92, $1157.68/oz, $1162.07/oz, $1165.20/oz, $1169.27/oz, $1173.66/oz
Supports: $1146.72/oz, $1143.90/oz, $1138.57/oz, $1134.50/oz, $1130.43/oz, $1126.36/oz
Psychological: $1175/oz, $1150/oz, January and December highs, January 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.
By Fast Brokers – The Cable is consolidating above our uptrend lines and the psychological 1.60 level as the EUR/USD experiences similar activity. Investors seem a bit indecisive as they digest liquidity tightening in China along with a downbeat earnings report from Alcoa. Meanwhile, Britain’s Trade Balance printed in line with analyst expectations, continuing a theme of strong UK data. However, more attention will likely be placed on tomorrow’s Manufacturing Production number. A solid Manufacturing Production figure could key a pop in the Pound since UK data has been encouraging so far this month. Hence, investors should keep an eye on activity in the EUR/GBP for a directional movement. Meanwhile, the highlight of the week is still on deck with U.S. Retail Sales and an ECB policy meeting on Thursday. Strong U.S. Retail Sales could deflate recent strength in the Cable, while a weak number would likely entice investors to sell off the Greenback and head for the risk trade again. Any dovish language from the ECB could create speculation that the BoE will approach its monitory policy with a similar attitude, a positive catalyst for the Cable. Overall, the contrasting headwinds are keeping the Cable and EUR/USD at bay and we will have to wait and see how upcoming data and news impact the Dollar.
Technically speaking, yesterday’s rally has created some breathing room between present price and the psychological 1.60 level once again. However, the Cable still faces multiple downtrend lines along with previous January highs. Furthermore, the 12/9-12/15 trading range could prove to be a solid barrier should it be reached. Therefore, quite a few obstacles remain considering the extent of December’s downturn. As for the downside, the Cable has multiple uptrend lines serving as technical cushions along with the psychological 1.60 level and previous January lows. Meanwhile, our 3rd tier uptrend line and 1st tier downtrend line are headed for a collision and we notice a similar occurrence in the EUR/USD. Hence, the FX markets could be in for some volatility soon.
Present Price: 1.6135
Resistances: 1.6162, 1.6181, 1.6219, 1.6246, 1.6286, 1.6318
Supports: 1.6108, 1.6071, 1.6052, 1.6028, 1.5991, 1.5950
Psychological: 1.60, January highs and lows, December lows, September 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.
By Fast Brokers – The EUR/USD is moderating around 1.45 as the wires begin to heat up for the first time this with an ECB policy meeting and U.S. Retail Sales headlining on Thursday. The ECB is expected to keep its monetary policy intact despite a bit of discouraging data as of late. The ECB may tighten its language a bit with the lingering possibility of an announcement concerning the removal of an alternative liquidity measure due to the confident language emitting from central bank representatives. Meanwhile, U.S. Retail Sales could print well on Thursday since today’s U.S. Trade Balance showed imports outpaced exports. For the time being, investors are digesting news that China is increasing its level of required reserves for banks. Today’s announcement coincides with an 8 basis point increase in the yield for 1-month bonds. Hence, governmental authorities are sending a clear message to financial institutions that they better ease up on loan issuance. That being said, China will release New Loans data in the coming days. Extra emphasis could be placed on this data point since the term ‘overheating’ has become synonymous with China. Along with news from China, earnings from Alcoa kicked off the earnings season on a sour note. However, earnings won’t shift into first gear until next week. As for the EU, the wires should be quiet until the ECB meeting on Thursday. As a result, the EUR/USD’s movements between now and then could be tied closely to the currency pair’s Dollar correlation.
Technically speaking, we’ve readjusted our downtrend lines to compensate for yesterday’s nice topside breakout. That being said, the EUR/USD does have quite a bit of room to make up for considering the extent of December’s decline. Therefore, the EUR/USD does have some more obstacles to overcome, including 12/16, 12/14, and 12/11 highs. Meanwhile, the EUR/USD has broken through previous January highs after building a solid based above December ’09 lows. The EUR/USD has bought some more breathing room to the downside in the process, including multiple uptrend lines along with 1/8 and 12/22 lows.
Present Price: 1.4479
Resistances: 1.4499, 1.4520, 1.4555, 1.4573, 1.4599, 1.4634
Supports: 1.4477, 1.4460, 1.4425, 1.4388, 1.4363, 1.4334
Psychological: 1.45, December highs and January 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 Vadim Pokhlebkin
The following article is provided courtesy of Elliott Wave International (EWI). For more insights that challenge conventional financial wisdom, download EWI’s free 118-page Independent Investor eBook.
————-
Of the many forward looking market indicators we at EWI employ, one of the most interesting tools (and least discussed in the financial media) is the DJIA priced in gold — “the real money,” as EWI’s president Robert Prechter calls it.
We’ve been tracking the Dow/Gold ratio for many years and it has serves our subscribers well. It’s not a short-term timing tool, yet in the longer term, as our January 6 Short Term Update put it, “the nominal Dow eventually plays catch up to what is transpiring in the Dow/Gold ratio.”
Here’s a good example. Remember when the nominal DJIA hit its all-time high? October 2007, just above 14,000. At that time, most investors expected new highs still to come. But our Elliott Wave Financial Forecast warned five months prior, in May 2007:
One key reason [for a coming top in the DJIA] is the undeniable bear market status of the Dow Jones Industrial Average in terms of gold, the Real Dow…
Notice, by contrast, the relative strength of the Real Dow versus the nominal Dow, the index in terms of dollars, from 1980 to 1982. By August 1982 when the Dow denominated in dollars bottomed, the Real Dow was rising strongly from its 1980 low… The nominal Dow soon played catch-up, and they both rallied more or less in sync until 1999.
Now, instead of soaring the Real Dow is crashing relative to the nominal Dow. In fact, it’s barely off its low of May 2006. This dichotomy reveals the weakness that underlies the financial markets’ push higher. When mood turns and credit inflation reverses, the ensuing drop in the nominal value of the market should be dramatic.
“Dramatic drop” did indeed follow: Between October 2007 and March 2009, the DJIA lost 53%, high to low.
For more information, download Robert Prechter’s free Independent Investor eBook. The 118-page resource teaches investors to think independently by challenging conventional financial market assumptions.
By Greg Holden – The Norwegian Krone has continued its bull run against the Euro. Hitting fresh multi-week highs against the 16-nation currency, the NOK currently trades near 8.1550 versus the EUR. While the US Dollar made hefty gains versus the NOK in recent weeks, it appears that the Krone is back on its way to erasing those gains as of this week.
The NOK climbed as high as 5.5383 against the greenback before dropping as a result of the Dollar’s year-end run. As of this morning, the USD/NOK is reaching back towards 5.6200 with few signs of a correction impending.
Sweden’s currency, on the other hand, doesn’t seem to be fairing as well as its Norwegian neighbor. The Swedish Krona experienced similar losses against the greenback during its bullish run in December, but its ability to regain those losses appears muted.
It had reached as high as 6.7833 before plummeting against the buck, but has regained less than half of the price which it lost. However, the SEK was able to regain all of its losses made to the EUR at year-end, which seems to suggest that the SEK’s inability to regain losses made against the Dollar may be due more to the American economy than Sweden’s.
Price targets for the Swedish and Norwegian Kroner against the USD seem somewhat straight forward. Both appear to be on a bullish run against the greenback and may continue doing so for the coming week. A target of 100-150 pips from current price levels could be a safe bet. Against the EUR, on the other hand, both appear to be giving off hints of a downward correction and traders should anticipate this movement before going long on the Kroner against its European counterpart.
Technical Analysis
– As mentioned above, the SEK and NOK are giving off hints of a downward correction versus the EUR. This technical analysis will highlight those indications for the EUR/NOK pair.
– The chart below is the EUR/NOK daily chart by ForexYard.
– Point 1: A doji candlestick formation has apparently taken place yesterday, indicating a reversal may be imminent.
– Point 2: The Relative Strength Index (RSI) is showing that this pair is heavily over-sold and may be experiencing strong upward pressure.
– Point 3: There is a fresh bullish cross on the Stochastic (slow) which highlights the impending bullish move. The Stochastic also appears to have turned upwards, meaning this movement may in fact be underway.
Forex Market Analysis provided by Forex Yard.
© 2006 by FxYard Ltd
Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.
By Brad Stafford – Brad Stafford here in place of Adam Hewison and I have a great new video for you. I’m sure many of you read that title and your mind went in the gutter, but today I’m going to show you a whole new meaning for this acronym and how it applies to gold, silver, and platinum.
These three markets have a lot of volume, government implications, and technicals lining up for potentially great trades. Gold makes a record high, then pulls back. Silver is inching towards an all-time high level and platinum is making people rethink their decision to go with a white gold wedding band.
Where do you stand in these markets and maybe more importantly, where should you stand?
Click here to find out what W.T.F. really stands for and what does it have to do with gold, silver, and platinum?
You’ve got to watch the video to find out.
Brad Stafford
Director of Marketing
INO.com & MarketClub
