Author: FX_Trdr

Written by ForexCycle.com

EURUSD stays below a falling trend line on 4-hour chart and remains in downtrend from 1.5140, and the fall extends further to as low as 1.4218 level. Deeper decline is still possible and next target would be at 1.4150 area. Resistance is at the falling trend line on 4-hour chart now at 1.4325, as long as this level holds, we’d expect downtrend to continue. However, above 1.4325 could indicate that a short term cycle bottom has been formed and minor consolidation in a range between 1.4200 and 1.4415 could be seen to follow.

By CountingPips.com

U.S. Existing Homes sales rose more than expected for the month of November according to the monthly report produced by the National Association of Realtors. The NAR report showed that existing-home sales including single family homes, co-ops and townhouses increased 7.4 percent in November to a seasonally adjusted annual rate of 6.54 million units. October’s existing-homes sales also surged higher with an increase by 10.1 percent.

Market forecasters had predicted the sales data would rise by 2.5 percent for the month to a 6.25 million unit sales pace.

The median sales price for existing homes in November was $172,600, a 4.3 percent decline from the November 2008 median sales level. Total housing inventory decreased in November by 1.3 percent to a total of 3.52 million homes.

NAR chief economist Lawrence Yun commented in the report about the increased sales figures, “This clearly is a rush of first-time buyers not wanting to miss out on the tax credit, but there are many more potential buyers who can enter the market in the months ahead.”. “We expect a temporary sales drop while buying activity ramps up for another surge in the spring when buyers take advantage of the expanded tax credit, which hopefully will take us into a self-sustaining market in the second half of 2010. In all, 4.4 million households are expected to claim the tax credit before it expires and balance should be restored to the housing sector with inventories continuing to decline.”

GDP revised lower for 3rd Quarter.

The U.S. economy grew by less than previously estimated in the 3rd quarter of 2009 according to by the U.S. Commerce Department. The government’s third estimate released today showed that the U.S. Gross Domestic Product grew at an annual rate of 2.2 percent in the July to September quarter following a  0.7 percent contraction in the 2nd quarter. The first estimate of the 3rd quarter GDP released in October had measured a 3.5 percent economic expansion while the second estimate showed a 2.8 percent increase in GDP from the previous quarter.

The economy had declined by 6.4 percent in the 1st quarter and contracted for four straight quarters before the third quarter economic growth. The 3rd quarter GDP increase was the best quarter for U.S. GDP since the 3rd quarter of 2007 (3.6%).

US Dollar gains in trading today.

The US Dollar has been on the rise today in forex trading against most of the other major currencies for the second straight day. The dollar has been gaining ground today versus the euro, British pound, Australian dollar, New Zealand dollar, Swiss franc and the Japanese yen while falling versus the Canadian dollar at 1:33 pm EST in the afternoon of the US trading session according currency data by Oanda.

The US stock markets, meanwhile, have also traded higher today with the Dow Jones gaining by over 45 points, the Nasdaq increasing over 10 points and the S&P 500 advancing by over 3.50 points at the time of writing.  Oil has traded higher to around $74.28 while gold has fallen by $5.40 to trading around the $1090.00 per ounce level.

USD/JPY Houly Chart – The US Dollar gaining today versus the Japanese Yen in Forex Trading.  The USD/JPY is trading at the top of the recent price channel above 91.50 and has been on a bullish run since hitting a 2009 low point of 84.82 on November 26th.

By Fast Brokers – Gold has dropped below the psychological $1100/oz level as the Dollar’s recent strength seems to finally be taking its toll on the precious metal due to their usual negative correlation.  Gold’s bull run continues to unwind as investors lock in profits and shuttle money back into the Dollar.  That being said, gold does have a few more near-term uptrend lines we can form.  However, should our new 1st tier uptrend line give way, gold could potentially be in for a more protracted pullback towards the highly psychological $1000/oz level.  Meanwhile, investors should monitor the ability of the EUR/USD and GBP/USD to consolidate and form new bases following their December downturns.  Should the Dollar consolidate and top out, gold may hit bottom nearby.  That being said, the EUR/USD and GBP/USD have both dropped beneath key uptrend lines in the past week, implying the Dollar could be in for more gains over the medium-term.  Investors will now focus in on today’s release of U.S. Existing Home Sales followed by tomorrow’s New Home Sales.  Additionally, the BoE will release its Monetary Policy Minutes.  Hence, the FX markets could be in for more volatility before Christmas.  Should upcoming data points exceed analyst expectations, investors may snap up the Dollar and continue to take profits in gold, and vice versa.

Technically speaking, gold has multiple uptrend lines serving as technical cushions along with 11/05 and 11/03 lows.  As for the topside, gold faces topside technical barriers in the form of intraday, 12/21,12/15, and 12/7 highs along with the psychological $1100/oz and $1150/oz levels.

Present Price: $1093.10/oz

Resistances: $1096.47/oz, $1100.15/oz, $1105.05/oz, $1110.77/oz, $1115.27/oz, $1123.03/oz

Supports: $1088.30/oz, $1082.58/oz, $1079.61/oz, $1074.96/oz, $1070.53/oz, $1063.56/oz

Psychological: $1100/oz, $1075/oz, $1150/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 has popped past our 4th tier downtrend line as the currency pair continues to log encouraging gains above the psychological 90 level.  Investors snapped up the Yen after BoJ Shirakawa stated the central bank will keep its benchmark rate near zero until there is a considerable recovery in prices.  The DPJ has stressed its disapproval of deflation, and it seems the BoJ is falling in line with the Finance Ministry’s desires.  The concept of a very dovish monetary stance from the BoJ combined with an improving outlook for U.S. economic performance has led investors to favor the Dollar over the Yen.  However, the USD/JPY is trading off of intraday highs right now after U.S. Final GDP printed 6 basis points below analyst expectations.  Should today’s U.S. Existing Homes Sales data also disappoint, investors may be encouraged to lock in profits on the USD/JPY as investor confidence in the U.S. confidence takes a step back.  On the other hand, impressive housing data may allow the USD/JPY to piece together further intraday gains.  The U.S. will release more housing data tomorrow in the form of New Home Sales along with the release of Britain’s Monetary Policy Minutes.  Hence, we may witness further volatility in the FX markets due to the combination of key econ data releases and lower volume as investors take off for Christmas vacation.

Technically speaking, the USD/JPY’s movement above our 4th tier downtrend line is an encouraging development since it runs through 8/13 levels, or the psychological 95 area.  Meanwhile, the USD/JPY does face topside technical barriers in the form of our 5th tier downtrend line, 10/30 highs, and 10/26 highs.  Furthermore, the psychological 90 area could still play a role considering how tough the trading zone has been to overcome in the past.  As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with 12/21, 12/18, and 12/14 lows.  Meanwhile, the psychological 90 level should serve as a technical cushion.

Present Price: 91.53

Resistances: 91.59, 91.71, 91.94, 92.04, 92.17, 92.35

Supports: 91.22, 91.05, 90.94, 90.76, 90.58, 90.36

Psychological: 90, December 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 has dropped below our 2nd tier uptrend line and the psychological 1.60 level as the Dollar strengthens across the board.  We recognize solid gains in the USD/JPY coupled with weakness in the gold, indicating investors continue to favor the Greenback in light of America’s economic recovery picking up steam.  The UK released Final GDP data which printed one basis point higher than Prelim, yet one basis point below analyst expectations.  However, the more important data figure was Britain’s Current Account Balance, which came in much stronger than anticipated.  Hence, it seems global demand for UK goods and services is improving, a positive signal for the economy.  While some may expect relative strength in the Pound in reaction to healthy Current Account data, we’re witnessing exactly the opposite since it seems America’s recovery story is in the forefront right now.  Furthermore, it may be deduced that part of the reason behind today’s narrowing in the Current Account Balance likely comes from recent weak UK consumption data.  Meanwhile, investors will likely have their attention focused on Wednesday’s BoE monetary policy meeting minutes.  Due to recent improvements in unemployment and prices, the BoE may deem it appropriate to exert a more hawkish tone in its monetary policy statement.  Hence, volatility in the Cable could pick up a bit before Christmas as investors react to the BoE’s decision.  For the time being, investors should monitor the Dollar’s broad-based reaction to upcoming Final GDP and Existing Home Sales from the U.S. since the Cable will likely correlate well with the Dollar until tomorrow’s BoE meeting.

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.  The Cable has now dropped below our 2nd tier uptrend line with our 1st tier uptrend waiting far below (Off Chart).  That being said, the fact we are now using March lows, or the 1.40 area, to create uptrend lines gives investors an idea of the extent of the damage inflicted by the Cable’s December pullback.  Meanwhile, it will be interesting to see if the Cable can stabilize today and stick around the psychological 1.60 level.  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: 1.5990

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

Supports: 1.5972, 1.5948, 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 fighting to consolidate above Friday lows with the intention of a building a new base following last week’s heavy pullback.  The EU’s GfK Consumer Confidence data printed roughly 10% below analyst expectations earlier in the session, sighting consumer concern over rising energy prices and high unemployment.  Today’s setback in consumer confidence marks the 3rd straight drop from September highs.  However, it remains to be seen whether the downturn in consumer confidence is a symptom of a slow recovery or the beginning for a more lasting contraction.  While today’s weak GfK number would presumably result in further EUR/USD losses, the currency pair is holding up relatively well since U.S. Final GDP just printed 6 basis points below analyst expectations.  Should U.S. Existing Home Sales also disappoint, then we may witness a broad-based pullback in the Dollar as confidence surrounding America’s economic recovery takes a bit of a hit.  The EU will enter the data wire again tomorrow with the release of French Consumer Spending.  However, investors will likely be focused on the BoE’s monetary policy minutes followed by U.S. New Home Sales and Personal Spending.  That being said, we could witness some volatility in the FX markets due to a combination of key data releases and lower volume as investors take off for Christmas vacation.

Technically speaking, we’ve readjusted our downtrend lines to compensate for the EUR/USD’s most recent pullback.  As we mentioned previously, if the currency pair doesn’t pop back above our 2nd tier uptrend line, we could be witnessing a technically significant reversal since our 2nd tier runs through July lows.  Hence, the EUR/USD could be in the midst of a more protracted downturn towards the psychological 1.40 level.  As for the topside, the EUR/USD faces multiple downtrend lines along with technical barriers in the form of the psychological 1.45 level and 12/16 highs.

Present Price: 1.4303

Resistances: 1.4316, 1.4335, 1.4365, 1.4386, 1.4412, 1.4430

Supports: 1.4286, 1.4266, 1.4249, 1.4232, 1.4217, 1.4205, 1.4187

Psychological: 1.45, 1.40, 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.

Source: ForexYard

The Dollar gained against almost all of its major counterparts on speculation the Federal Reserve is getting ready to withdraw the stimulus and tighten monetary Policy. Fueling investors’ expectations that U.S. interest rates to rise sooner than expected is a continually brightening U.S economic outlook.

Economic News

USD – Dollar Continue to Strengthen Against Rivals

The Dollar was up again most major rivals Monday on expectations of continuing improvement in the U.S economy ahead of this week’s data release. The Dollar rose to a six week high versus the Yen and traded near a three and a half month high against the EUR. The Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 78.059 from 77.758.

The Dollar has been gaining in recent sessions, as concerns over Greece’s government deficit have weighed on the EUR as well as upbeat economic data from the U.S which is prompting investors to reassess when the Federal Reserve will begin tightening the U.S. monetary policy.

While a slow news day is expected today ahead of the Holliday weekend, the release of the Existing Home Sales at 15:00 GMT is expected to provide some volatility to the Dollar, with better then expected results intensifying the Dollar’s recent upward trend.

EUR – EUR Trades near a 3 Month Low versus the USD

The EUR traded yesterday near a 3 month low versus the USD as the European Commission expressed concerns about a strong EUR. Monday, the EUR was at $1.4283 from $1.4335 late Friday and at Y130.25 from Y129.57. The U.K. Pound was at $1.6051 from $1.6127.

The Swiss Franc touched its strongest level since March against the EUR extending its advance past the 1.50 level on speculation the Swiss National Bank has relaxed its resistance to gains in the currency.

A slow news day is expected today from the Euro-Zone today ahead of the long holiday weekend, the release of the British Current Account and Final GDP at 9:30 GMT will likely provide some volatility for the GDP with

JPY – Yen Down versus USD and EUR

The Yen was at 91.06 against the USD from 91.17 yesterday and at 130.09 per EUR from 130.18. The Japanese currency received some support from a report that showed Japan posted a wider than expected trade surplus in November. The surplus came to 373.9 billion Yen, greater than the 319.2 billion Yen expected by economists.

Recent economic data released from Japan, including the merchandise trade data and the current-account surplus, is pointing towards economic improvement and an upward trend, which will likely put upward pressure on the Yen in the longer term, possibly reversing the recent losses.

Crude Oil – Oil Down on Strengthening Dollar

Crude futures fell Monday as the Dollar strengthened, offsetting gains on colder weather expectations and geopolitical worries. Light, sweet crude for January delivery settled 89 cents lower at $72.47 a barrel on the New York Mercantile Exchange, after touched an intraday high of $74.32 a barrel. The contract expired on Monday. Crude for February delivery settled 70 cents, or 0.9%, lower at $73.72 a barrel. Oil prices were supported recently by the massive snowfall in the U.S and Europe as well as geopolitical concerns in Iraq and Nigeria.

Today investors should pay attention to the Organization of Petroleum Exporting Countries (OPEC) meeting in Luanda, Angola, where they will discuss production levels. While quotas are expected to stay unchanged this might still affect negatively on Oil levels as supply is still abundant.

Technical News

EUR/USD

The pair has recorded much bearish behavior in the past several days. However, the technical data indicates that this trend may reverse anytime soon. For example, the daily chart’s Stochastic Slow signals that a bullish reversal is imminent. An upward trend today is also supported by the RSI. Going long with tight stops may turn out to pay off today.

GBP/USD

The cross has been dropping for the past month now, as it now stands at the 1.6060 level. However, the 4-hour Chart’s RSI is already floating in the oversold territory indicating that a bullish correction might take place in the nearest future. Going long with tight stops may turn out to be the right choice today.

USD/JPY

The price of this pair appears to be floating in the over-bought territory on the 4-hour chart’s RSI indicating a downward correction may be imminent. The downward direction on the hourly chart’s RSI also supports this notion. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

USD/CHF

The USD/CHF cross has experienced a bullish trend for the past month. However, it seems that this trend may be coming to an end. The RSI of the daily chart shows the pair floating in the overbought territory, indicating that a downward correction will happen anytime soon. Going short with tight stops might be a wise choice.

The Wild Card – Gold

Gold prices are once again dropping, and it is currently traded around $1092.25 per ounce. And now, the daily chart’s Slow Stochastic is giving bullish signals, indicating that gold prices might go up. This might give forex traders a great opportunity to enter a very popular trend.

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 Anton Eljwizat – Gold is now trading nearly 11% below record highs hit earlier in the month. Gold has made a significant downward correction, which can be directly correlated with the bearish trend of the EUR/USD cross. Analysts said gold could test lows in the near term after breaking $1,100 as investors close positions before the end of the year, but their appetite to buy bullion on dips would support the market. From here on, the forex and commodity markets will see very high volatility indeed.

Pivot: 1120.00
Our Preference: SHORT positions below 1120 with 1085 & 1070 in sight.
Alternative scenario: The upside penetration of 1120 will call for 1130 & 1142.
Comment: the downside breakout of 1096 is a negative signal. Moreover, the 60 min RSI is capped by a declining trend line.
Trend: ST Bullish; MT Bullish
Key levels Comment
1142*** Horizontal resistance
1130** Horizontal resistance
1120** Intraday pivot point
1094 Last
1085** Horizontal support
1070** Horizontal support
1060*** Horizontal support

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.

Written by ForexCycle.com

USDCHF has found support at the lower border of the rising price channel on 4-hour chart. Sideways movement between 1.0387 and 1.0507 is expected later today. As long as 1.0387 support holds, we’d expect uptrend to continue and another rise towards 1.0550 area is still possible. However, below 1.0387 will indicate that a short term cycle top has been formed at 1.0507, and the uptrend from 0.9959 has completed, then deeper decline could be seen to 1.0300 zone.

Source: ForexYard

Despite a moderate upturn in today’s early hours, the EUR continues to trade within its bearish trends versus most of its major counterparts. As we approach the holidays Christmas and New Years, many markets will experience a level of thin trading which could intensify market movements over the next week and a half. The EUR’s upward tick in today’s market may be a result of this thin trading since its upward move did not seem to coincide with any events which would cause it.

The USD will also be on shaky ground, but most analysts are continuing to claim that the greenback is on path to climb even further going into 2010. Where Dollar news is most important is in commodity trading.

The prices of Gold and Silver both seem to be reacting in a very predictable manner in regard to the value of the dollar, but Crude Oil seems to be acting contrarily to market perceptions. Many explanations are put forth, but the truth is that it’s irrelevant considering this correlation will likely continue through to January 1st and traders can benefit from this behavior by trading accordingly.

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.