Author: FX_Trdr

Europe

Germany’s CPI came out better than expected at 0.9%
Americas

Consumer confidence improved at a rate of 52.9

House prices increase 0.4%

Daily Market Review Dec 30, 09

It was another quiet session on Wall Street as the major indices bounced back and forth across their opening mark. As mentioned in previous reports, market activity is expected to be minimal this week, due to the holiday season.
Economic data had a minor affect on the intraday session, as the U.S released its home price index and CB consumer confidence. According to yesterday’s report, house prices increased yet again for the fifth month in a row. The closely watched S&P/CaseShiller home-price index increased 0.4 percent from the previous month on a seasonally adjusted basis, bringing the annualized drop in house prices to 7.3 percent, the smallest year over year decline in 12 months. Even though the numbers came out as expected and hinted towards a recuperating housing market, one must note that the recent bounce-back has been attributed to tax benefits supplied by the government.

Consumer confidence also surprised rising to 52.90, compared to November’s result of 50.6. The number pointed towards optimism among consumers, despite a lower than expected reading of 53.00 points.

From a technical point of view, the S&P500 finished yesterday’s session in red, the first negative session out of the last six. Energy was the lagging sector of the day, closing with a loss of -0.66%. Consumer Discretionary helped to balance out the session and finished with a 0.33% gain.
Forex

On the Forex market, the Dollar traded steady against its counterparts, with the index finishing the session around 77.9 points. Even though most of the individual pairs presented a lackluster session, the Dollar index dropped to approximately -0.5%, before finishing with a 0.3% gain.

The EUR/USD lost some strength during the session coming down to prior lows. Dollar strength was characterized during the session despite a better than expected CPI figure from Germany. Preliminary government data released showed that German consumer prices rose at a monthly pace of 0.9% in December, for a gain of 0.8% compared to the same month last year.

Moving on to other pairs, the USD/CAD took the spot light Tuesday, after presenting a possible reversal pattern. Even though no news came out from the Canadian side, the fundamental data from the U.S was enough to push this pair higher, allowing the pair to bounce off of trend line support. The USD/CAD formed a hammer candlestick yesterday around support, which led to higher levels during Asian hours. Considering the Dollar continues to gain strength the upper trend line could act as a target level.

The Day Ahead

Looking forward, the U.S will take the stage today releasing its Chicago PMI and crude inventory numbers. Economists are expecting a mild decrease to 55.20 from 56.1, while crude numbers should drop by 2 million barrels.

Daily Forex Market Analysis provided by eToro

Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.

© 2009 eToro Blog.

Written by ForexCycle.com

AUDUSD’s bounce from 0.8734 extended further to as high as 0.8992 level. Support is now located at the rising trend line on 4-hour chart. As long as the trend line support holds, the bounce is expected to continue and next target would be at 90.50 area. However, a clear break below the trend line will indicate that a short term cycle top has been formed and the rise from 0.8734 has completed, then another fall towards 0.8734 previous low is expected to follow.

By CountingPips.com

Home prices in the U.S. continued to improve in October according to the Standard & Poors/Case-Shiller Home Price Index released today. The S & P’s/Case-Shiller Index measures sales prices of existing single-family homes nationally and tracks 10-city and 20-city composite home price measurements. The report showed that the 10-city composite index increased by 0.4 percent in October while the 20-city composite also gained by 0.4 percent October on a seasonally adjusted basis. October marked the fifth straight month of gains in house prices.

On an annual basis, the 10-city composite fell by 6.4 percent in October from the October 2008 level while the 20-city composite is 7.3 percent lower than October 2008 level.

David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s, commented on the report saying, “The turn-around in home prices seen in the Spring and Summer has faded with only seven of the 20 cities seeing month-to-month gains, although all 20 continue to show improvements on a year-over-year basis. All in all, this report should be described as flat.”

Phoenix showed the largest monthly house price increase in October with a 1.3 percent increase while Tampa registered the largest decrease with a 1.6 percent decline.  On an annual basis, Denver house prices fared the best with only a 0.1 percent decrease from October 2008 to October 2009 while LasVegas had the largest house price decrease with an annual decline of 26.6 percent.

Consumer Confidence increases in December Survey.

Consumer confidence increased for the second straight month according to a report released today by the Conference Board, which produces the Consumer Confidence Index. In a survey of 5,000 households, the index showed that consumer confidence increased by 2.3 points from 50.6 in November to standing at 52.9 in December.  The Expectations index also rose in December to 75.6 from 70.3 in November while the Present Situation index declined from 21.2 in November to 18.8 in December.

The Director of the Conference Board Consumer Research Center Lynn Franco talked about the newest survey saying, “Consumer Confidence posted yet another moderate gain in December as expectations for the short-term future increased to the highest level in two years (Index 75.8, Dec. 2007). The Present Situation Index, however, continued to lose ground and remains at a 26-year low (Index 17.5, Feb. 1983). A more optimistic outlook for business and labor market conditions was the driving force behind the increase in the Expectations Index. Regarding income, however, consumers remain rather pessimistic about their short-term prospects and this will likely continue to play a key role in spending decisions in early 2010.”

According to the survey, consumers saw a more negative outlook in December for the present-day conditions and for business conditions. In the short-term, consumers felt that business conditions will improve while the outlook in the labor market is also seeing improvement in the eyes of consumers.

US Dollar mixed in Forex Trading.

The US Dollar has been mixed in forex trading today against the major currencies with the American currency gaining ground against the European currencies but losing ground to the Pacific currencies. The dollar increased today versus the euro, Swiss franc, British pound and the Japanese yen while falling against the Australian dollar and the New Zealand dollar.  The Canadian dollar made early gains versus the dollar today but has given most of those back to trade virtually unchanged later today at the end of the U.S. session at 4:35pm EST.

The US stock markets had a losing session today with the Dow falling by 1.67 points, the Nasdaq decreasing 2.68 points and the S&P 500 down by 1.59 points.  Oil traded lower to $78.72 while gold lost $10.20 to trade at $1097.00 per ounce.

By Fast Brokers – Gold has popped back above the highly psychological $1100/oz level, which could turn out to be a hard fought battle since the area does carry some extra psychological weight.  Gold is finding its strength in Dollar weakness as we witness pops and consolidation in the EUR/USD and AUD/USD.  However, weakness in the Cable and strength in the USD/JPY is likely tempering gains in gold along with the gravitation force of $1100/oz.  Meanwhile, activity should remain at a subdued level since we’re in another holiday-shortened week.  The U.S. will release some key economic data this week, beginning with today’s CB Consumer Confidence and S&P HPI figures.  More mixed U.S. data could yield additional Dollar weakness as investors lock-in recent Greenback gains, a positive catalyst for gold due to their negative correlation.  That being said, markets could move a bit should upcoming data surprise in either direction.

Technically speaking, gold has multiple uptrend lines serving as technical cushions along with 12/18 and 12/23 lows.  As for the topside, gold faces technical barriers in the form of 12/21,12/15, and 12/7 highs along with the psychological $1150/oz level.

Present Price: $1106.20/oz

Resistances:  $1110.77/oz, $1115.27/oz, $1118.69/oz, $1123.03/oz, $1128.35/oz, $1134.16/oz

Supports: $1104.51/oz, $1100.58/oz, $1094.14/oz, $1088.30/oz, $1082.58/oz, $1079.61/oz

Psychological: $1100/oz, $1150/oz, $1075/oz

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 consolidating with an upward bias despite pops in both the EUR/USD and GBP/USD.  Hence, the USD/JPY seems to be trading on its own fundamentals rather than its correlation with the Dollar.  That being said, the USD/JPY is likely deriving its strength from last week’s statement from the BoJ implying that the central bank plans on maintaining its loose monetary policy for the foreseeable future, or at least until there is a considerable recovery in prices.  Hence, last week’s -1.9% Tokyo Core CPI reading indicates investors likely won’t see tightening from the BoJ for quite some time.  Meanwhile, investors are expected the Fed to begin reigning in its alternative liquidity measures next year, giving the Dollar a relative strength over the Yen for the time being.  However, mixed U.S. econ data last week is holding back the USD/JPY’s rally as investors lose a bit of confidence in the U.S. recovery and take this as an opportunity to lock-in recent Dollar gains.  As a result, the USD/JPY is deadlining until we receive some more U.S. econ data.  The U.S. will release some HPI and CBI Consumer Confidence today, which would normally be market movers.  However, activity around the FX market is subdued right now since we’re in another holiday-shortened week.

Technically speaking, the USD/JPY is encountering some key downtrend lines.  Our 2nd and 3rd tier downtrend lines run through April and August highs, respectively.  Hence, should the USD/JPY clear these two downtrend lines, we could see the USD/JPY extend its present uptrend towards the highly psychological 100 level again over the medium-term.   Meanwhile, the USD/JPY faces addition topside technical barriers in the form of October and September highs.  As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with 12/24 and 12/21 lows.  Furthermore, the highly psychological 90 level could serve as a strong support area should it be tested.

Present Price: 91.78

Resistances: 91.80, 91.94, 92.04, 92.17, 92.35, 92.49

Supports: 91.60, 91.43, 91.25, 91.08, 90.92, 90.76

Psychological: 90, October and September Highs

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 trading back below its psychological 1.60 level today despite pops in both the EUR/USD and AUD/USD.  It’s difficult to determine exactly what’s driving the Pound lower today, as exhibited by a strong upward movement in the EUR/GBP.  There’s limited news and data flows around Western economies as the markets enter another holiday shortened week.  Furthermore, there’s limited data from the UK until Thursday’s Nationwide HPI release.  Hence, the Pound’s relative weakness today may be carrying over from last week’s cautious BoE Meeting Minutes which indicated that the central bank is not likely to take any monetary action until February’s meeting as governors assess the impact of recent QE measures.  Meanwhile, the U.S. will light up the data wire today with the release of CB Consumer Confidence and HPI figures.  More mixed data from the U.S. could weaken the Dollar further as investors lock-in profits derived from investor confidence in the U.S. economy, a positive catalyst for the Cable.  On the other hand, strong U.S. econ data should keep the Cable subdued around 1.60 and previous December lows.

Technically speaking, the Cable’s large pullback this month has sent the currency pair below some key technical levels.  Hence, it’s possible the Cable could be entering a more protracted downturn.  However, we’ll have to see whether the Dollar’s present weakness can accumulate and send the Cable back above some downtrend lines.  If not, the Cable does have some technical supports in the form of September and October lows.  As for the topside, the Cable faces multiple downtrend lines along with 12/18 and 12/16 highs.

Present Price: 1.5996

Resistances: 1.6005, 1.6023, 1.6045, 1.6071, 1.6096, 1.6132

Supports: 1.5972, 1.5943, 1.5917, 1.5899, 1.5875, 1.5845

Psychological: 1.60, 1.65, September and October lows

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 climbing on tepid volume despite light EU econ data as we enter another holiday-shortened week.  Regardless, the EUR/USD is recording solid gains today and we notice a sizable pop in the AUD/USD as well.  However, the Cable is declining, resulting in a strong upward movement in the EUR/GBP.  It’s unclear exactly what is giving the Euro its relative strength over the Pound, yet topside participation in the AUD/USD indicates investors may be reacting to a negative development in the UK.  That being said, investors will receive some key HPI and CB Consumer Confidence data from the U.S.  Should U.S. data continue last week’s weak performance, then the EUR/USD may log further gains as the Dollar’s rally unwinds.  Meanwhile, the EU will release Germany’s Prelim CPI today followed by tomorrow’s M3 Money Supply.  However, reaction to these data points may be limited as investors enjoy the holidays.

Technically speaking, the EUR/USD faces multiple downtrend lines along with the psychological 1.45 level and 12/16 highs.  Hence, some challenging near-term topside technicals are in place due to the EUR/USD recent deterioration.  As for the downside, the EUR/USD has technical cushions in the form of our two uptrend lines along with intraday and 12/22 lows.

Present Price: 1.4433

Resistances: 1.4467, 1.4495, 1.4519, 1.4543, 1.4560, 1.4581

Supports: 1.4408, 1.4372, 1.4348, 1.4322, 1.4298, 1.4266

Psychological: 1.45, 1.40, December and September Lows

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 Greg Holden – Headline news this week seems to be the expectation of a vastly improving Swedish Krona. Analysts and investors from large firms such as UBS AG, UniCredit SpA, Danske Bank A/S, and Deutsche Bank AG all suggest going bullish on the SEK through the first and second quarters of 2010.

The logic behind this sentiment is the understanding that the SEK is undervalued, that its exposure to the Baltic region has finally been contained, and that its economy should pick up faster than others once demand for manufacturing goods picks up.

After dropping against the EUR to over 10.50, it has swung back up against the 16-nation currency and currently trades near 10.37. A few investment firms estimate that the SEK’s value should climb at least 3.3% against the EUR in the first quarter of 2010 alone.

Similar sentiment remains present around the Norwegian Krone as well. The NOK has held its ground as one of the stronger regional currencies throughout the past two quarters. In fact, Norway is the only country to raise interest rates while others are holding theirs at record lows.

With commodity prices rising, and Norway’s economy being directly linked to crude oil prices, the logical step isn’t that hard to make. The NOK remaining bullish is actually being called the one “sure thing” investment of the first quarter of 2010 by many investment firms and other forex analysts.

Technical Analysis

– The chart below is the daily USD/SEK chart by ForexYard.

– The indicators used are the Bollinger Bands, the Relative Strength Index (RSI), and the Stochastic (Slow).

– Point 1: The Bollinger Bands appear to be tightening on the chart, indicating a volatile movement is expected in the days ahead. Also, the price is in a downward posture and the next significant resistance line is just above 7.1000.

– Point 2: The RSI has recently exited from the over-bought territory and is cascading downward, indicating a level of downward momentum.

– Point 3: The Stochastic (Slow) is also showing the price moving in a downward move, highlighting the strength of the bearish momentum.

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

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

Source: ForexYard

With a slow trading day expected today, investors will likely keep there eyes on the U.S. Dollar and whether it can maintain its recent upswing going into the New Year. Set to be released later today, the U.S. Consumer Confidence report should give traders a good idea about the general direction of the greenback as 2009 draws to a close.

Economic News

USD – Consumer Confidence Report Likely to Impact Greenback

Light trading on Monday, mainly due to low liquidity in the market, gave the Dollar a slight advantage over its major counterparts. After breaching the 1.4400 level against the Dollar yesterday, the Euro subsequently fell and is currently trading at the 1.4365 level. Against the Yen, the greenback advanced slightly, and is now trading around the 91.75 level.

Traders should note that most analysts do not see these Dollar increases as signs of a continued trend. With many investors on vacation for the holidays, USD gains may have just been a result of low liquidity and a slow news day on Monday. Traders will want to pay attention to the U.S. Consumer Confidence report set to be released at 15:00 GMT today.

A higher number then last month is forecasted for the report, which if indeed comes true, will likely support the Dollar. Most analysts are saying that the American people are slowly regaining faith in the U.S. economy. If the consumer confidence figure reflects that sentiment, it could be an early sign as to where the Dollar is headed in 2010.

EUR – Euro Slips against Major Currencies

The U.S. Dollar was not the only currency to see gains against the Euro in the last 24 hours. The Canadian Dollar rallied against the Euro in early morning trading and even hit its highest level since November 2008, at 1.4977. The pair has since corrected itself and has currently returned to its normal levels of around 1.4990. Still, traders may want to keep an eye out for any unusual activity from this pair. It appears that exciting things can happen on the market despite slow trading.

Despite a predicted slow news day for the Euro today, there are still a few things that may inject some volatility into the market. Chief among these is the German Prelim CPI, the Euro-Zone’s earliest consumer inflation report. Consumer inflation can play a direct role in interest rate levels which directly impact currency values. With a forecasted increase of 0.6%, the Euro may receive a much needed boost providing the predictions are correct.

Traders may want to take into account the results of the German Prelim CPI when looking at the U.S. Consumer Confidence report. If both come out as predicted, the EUR/USD pair may take some interesting turns in trading today.

JPY – Yen Sinks against Dollar

Early morning trading saw the Yen drop to a 5-day low against the U.S. Dollar, reaching 91.79. The Dollar appears to be finishing 2009 with a 1% gain against the Yen, a far cry from the roughly 19% loss recorded in 2009. The greenback may see further gains against the Yen in trading today, providing that U.S. consumer confidence increases as expected. If not, the JPY may be able to reverse some of its recent losses.

With no major news events coming out of Japan for the rest of the week, the Yen’s value will likely be influenced by news from America and Europe. The relatively slow trading ahead of the New Year appears to be negatively impacting the Yen, but traders should note that any negative economic indicator to come out of Europe or the U.S. will likely result in Yen gains.

Crude Oil – Oil Prices Up Ahead of New Year

Crude oil prices rose to a near 5-week high on Monday, trading at $78.73 at the close of the market amid optimism of the global economic recovery. Prices have since dropped to around $78.45, but could easily gain traction again after the release of the U.S. Consumer Confidence report. A positive figure from the report would likely increase investor confidence, thereby boosting prices.

Several other news events may also be impacting oil prices. Political unrest in Iran, the world’s second largest Oil producer, appears to have driven prices up. Furthermore, severe winter weather in the U.S., the world’s largest Oil consumer, has caused Oil consumption to rise, which has also caused prices to rise. With a slow trading week for currencies, it appears that Crude Oil may be injecting some much desired volatility in the market.

Technical News

EUR/USD

The daily chart’s RSI is floating in the oversold territory with the MACD exhibiting an impending bullish cross. Going long for the day may be advised.

GBP/USD

The pair seems to be exhibiting some mixed signals with the 2 hour RSI floating in the overbought territory and the 4 hour’s Slow Stochastic is showing a bearish cross. However, the daily RSI is floating in the oversold territory. Going short with tight stops might be advised for today.

USD/JPY

The pair may experience a downward correction today as the hourly, 2 hour and 4 hour RSI is floating in the overbought territory, with the daily chart’s Slow Stochastic exhibiting a bearish cross. Going short for the day may be advised.

USD/CHF

It appears as the pair’s downward trend is likely to continue as the 2 hour chart’s Slow Stochastic as well as the daily MACD are exhibiting fresh bearish crosses. Going short for the day may be advised.

The Wild Card – GBP/CAD

The pair’s recent bearish trend may be experiencing a correction soon as the 8 hour and daily RSI is floating in the oversold territory and the daily chart’s Slow Stochastic is exhibiting a bullish cross. The 8 hour MACD is also exhibit an impending bullish cross. Forex traders may be advised to go long for the day.

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.

Housing Prices could be an eye opener

Housing data in the U.S could add to the holiday spirits this week, as house prices are expected to drop by -7.10%, compared to a previous -9.36%. Even though parts of the housing market are now showing minor improvement – housing starts recently increased, showing impressive figures, other results such as New-Home Sales have sharply declined. Single-family homes declined 11.4% in November to a seasonally adjusted annual rate of 355,000 units.

One must note that recent improvement in leading parts of the economy have been fueling the Dollar rally, driving it to higher levels against counterparts, but as mixed signals continue to show a fragile housing market, investors will scrutinize the upcoming data, as a worse than expected figure could put pressure on the Greenback.

Consumer confidence is on the rise

In addition U.S consumer confidence is expected show a 52.7 figure, compared to a previous 49.5. Usually released on the last Tuesday of the month, investors watch this number closely as increasing confidence, often leads to personal consumption. Recent figures have been bouncing around the 50 mark, as Main Street remains dubious about the recent recovery. A higher than expected reading is normally considered to be bullish for the USD.

Technical Analysis – A Possible Trade Opportunity

USD/JPY- Daily Chart

Bullish Scenario – A Break above trend line resistance could present the start of a new bullish trend.

Target A – 93.6

Target B – 94.5

Bearish Scenario – A Bounce off resistance could lead to a drop to prior support around

Target A – 89.60

Target B – 88.0

Daily Forex Market Analysis provided by eToro

Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.

© 2009 eToro Blog.