Author: FX_Trdr

By CountingPips.com

The Reserve Bank of Australia increased its interest rate by 25 basis points for the third consecutive month today. Today’s decision to raise the cash rate to 3.75 percent was generally expected by market forecasters. Australia became the first G20 economy to increase its interest rate since the financial crisis in October as the Australian economy has been picking up steam. The October rate increase was the first rate change since April 2009 when the RBA decreased the rate by 25 basis points to the 3.00 percent level, a 49-year low.

Australia’s Glenn Stevens, Governor of Monetary Policy, said in his policy statement that, “The global economy has resumed growth.  With economic policies remaining expansionary, growth is likely to continue next year, though it will probably be modest in the major countries, due to the continuing legacy of the financial crisis. In China and Asia generally, where financial sectors are not impaired, recovery has been much quicker to date and prospects appear to be for good growth in 2010.”

Australia’s economy handled the economic crisis better than most others as a technical recession was avoided with government stimulus as well as strong demand for Australian goods from China helping the economy avert a deep downturn. In 2009, the GDP of Australia rose for the first half of the year with a 0.4 percent increase in the first quarter followed by a 0.6 percent gain in the second quarter.

Stevens commented on the Australian economy today saying that, “In Australia, the downturn was relatively mild, and measures of confidence and business conditions suggest that the economy is in a gradual recovery. The effects of the early stages of the fiscal stimulus on consumer demand are fading, but public infrastructure spending is starting to provide more impetus to demand. Prospects for ongoing expansion of private demand, including business investment, have been strengthening.”  Stevens also said that inflation has continued to be moderate and that unemployment has likely peaked at a level that is lower than previously predicted.

The Australian dollar has been mixed today in forex trading after the interest rate announcement.  The Aussie has gained against the US dollar, euro and Japanese yen while declining versus the New Zealand dollar and Canadian dollar according to currency data from Oanda at 12:52pm EST.

AUD/USD Chart – The Australian dollar gaining versus the US dollar in forex trading today after the RBA increased its interest rate for the third month in a row. The AUD/USD had fallen below 0.9000 last week on risk aversion after Dubai’s economic troubles came to light but has headed higher so far this week.

By Adam Hewison – Well here we are in the month of December and things can get pretty tricky this month. For this reason, I wanted to produce a video that I thought would be helpful to you during this time.

In my new video I show you the exact points that we’re looking at for a major trend change in the S&P 500. I also point out the exact number that will show an exit point, but not a major trend change, in this same index.

Watch the New Video Here…

As always our videos are free to watch and there is no need to register and we look forward to your comments.

Adam Hewison
President, INO.com
Co-creator, MarketClub

By Anton Eljwizat – Scandinavian markets were greatly affected by global events this past week. Swedish Krona headed for its second monthly depreciation versus the EUR, falling 0.5% to 10.4946 per EUR yesterday after Dubai’s government said Dubai World’s debt is not yet assured. The Krona also dropped 0.5% today to 6.9987 per Dollar.

Sweden’s economic activity declined by 5% in the 3rd quarter as business inventories exhibited a larger than expected drop. The result also weighed on the currency against the Dollar and EUR. The country’s gross domestic product however, grew by 0.2%. Overall, Sweden’s economy is now starting to stabilize.

Norway’s Krone also fell on concerns over Dubai’s plan to postpone debt repayments, posting its first monthly decline versus the EUR since June. The Krone fell 1.3% against the EUR in November and 0.6% against the Dollar in the month.

Technical analysis

• The chart below is the daily chart of the EUR/NOK currency pair.

• The indicators used are the Slow Stochastic, MACD/OsMA, and RSI.

• Point 1: The Slow Stochastic indicates a bearish cross, signaling that the next move may be in a downward direction.

• Point 2: The RSI signals that the pair sits near the upper border, suggesting a downward correction may be imminent.

• Point 3: The MACD indicates an impending bearish cross, which may signal a downward movement is going to occur in the near future.

EUR/NOK Daily Chart

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.

The FX Buzz

Last week ended with a rather negative tone as debt problems in Dubai caused worries over the economic recovery to refloat once more but most importantly it spurred rumors there is more Dubai like bubbles awaiting to be burst. It seemed that the positive sentiment which fed markets only a few days before faded rather quickly moving investors to re-price risk in their positions. But not all investors were on the red, the FX market was in the eye of the storm and on the centre of the Buzz, investors who reacted quickly to the rumors echoing from Dubai were those who closed their positions in the money. Traders who bought the Dollar above 1.51 per Euro and the Yen above 150¥ per Sterling last week, were able to Sell both substantially higher having juicy profits even before the week ended. Meanwhile the Strom in Dubai has eased somewhat after UAE central bank pledged to assist distressed banks in the region. However the past week made one thing clear, when market Buzz is dominant market volatility is prominent, and with volatility comes opportunities. We therefore have decided to prepare for you a few update on the latest FX Buzz and some suggestion on how you should react to them.

The Buzz: Will the SNB (Swiss national bank) intervene with the CHF rate?

Lately investors are betting more and more on an intervention by the SNB to contain the strength of the Franc. Why then if Swiss export held well does the SNB need to intervene? The reason is carry trades , Eastern Europe Real Estate ventures barrowed heavily from Banks in Switzerland in Swiss Francs and whenever the Franc gains strength those borrowers have a hard time paying the debt placing strong pressure on the Swiss banking system.

So what should you look for?

The Swiss GDP is due today with investors expecting a 0.3% Growth QoQ any surprise downwards will signal the Swiss economy is having a hard time dealing with a Strong Franc, spice it a little with a CHF close to 1$ trading around 1.5CHF per Euro and you get a perfect recipe for rumors on an SNB intervention to start floating. In this case the classical rule goes Buy USD/CHF, EUR/CHF on rumor sell on fact.

The Buzz: Will the BOJ (Bank of Japan) come to the rescue?

Many ask themselves what is the factor that eventually led the Japanese Yen to break the 87 support against the Dollar? The answer is deflation, Japanese CPI figures published just before the dawn of the 27 of November pointed inflation in Japan is -2.5% YoY. This caused investors to move quickly into Japanese Government bonds for safe haven, folding counter Yen bets and pushing the Yen to a 14 Year high against the Dollar. The record high Yen against the Dollar which is the main export zone for Japan is burdening on Japanese exporters  generating an increasing tension between the government which wants more of an active intervention and the Central bank which is reluctant to do so.

So what should you look for?

The BOJ can either interfere directly in the FX rate, the USD/JPY encounters strong demand under 85¥. The BOJ can also purchase corporate Bonds to ease credit conditions (effectively print money). Look for any hints on BOJ statements of assets purchases. A large scale of asset purchasing by the BOJ can push the Yen lower very rapidly.

The Technicals:

USD/CHF Daily

Bullish Scenario-A daily close above 1.0250 would move the pair to retest the 1.035 resistance.

Bearish Scenario- Since the pair is still in a bearish trend line the downside risk is still higher. Another failure to break the 1.02 resistance will pull back to retest the 0.99 very quickly.

EUR/CHF Daily

Bullish Scenario- The pair is currently just 85 pips short of the 1.5 key level making it a good risk reward trade with a potential target at 1.5250.

Bearish Scenario- A Daily close below 1.4900 could push the pair to retest the 1.45 support.

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.

Source: ForexYard

The Dollar declined slightly against most rivals in today’s early trading, as concerns over Dubai’s debt repayment problems eased, boosting demand for higher yielding currencies and commodities.

Economic News

USD – Dollar Declines as Concerns over Dubai Ease

The Dollar declined slightly against higher yielding currencies in today’s early trading as concerns over credit losses in Dubai eased and better than expected economic data signaled the global economy is on the way to recovery, boosting demand for riskier assets. The Dollar weakened to $1.5013 per EUR from $1.5005 yesterday in New York. The greenback lost 1.9% in November overall. The Dollar was at Y86.45 from Y86.75 yesterday.

Investors also appeared hesitant ahead of this week’s U.S. and Euro-Zone economic data as well as interest-rate decisions by several major central banks, therefore limiting their risky positions. Throughout the economic crisis, the U.S. Dollar has tended to fall on improved economic outlook and equity gains. The Federal Reserve’s policy of near-zero interest rates has which the U.S. Dollar one of the lowest yielding currencies in the world also adds to the negative pressure on the Dollar against riskier, higher yielding currencies such as the EUR. Giving a lift to sentiment Monday and weighing on the USD, the Chicago PMI showed more businesses in the Chicago region were expanding in November. The business activity index rose to 56.1% this month, the highest since August 2008.

Looking ahead to today investors should follow the release of the ISM Manufacturing PMI and Pending Home Sales due to be released at 15:00 GMT. A continuation of the optimistic data will likely continue putting pressure on the greenback.

EUR – EUR Boosted by China’s Manufacturing Data

The EUR was little changed against the Dollar following a report that showed China’s manufacturing growth maintained its fastest pace in 18 months. The EUR was at $1.4990 from $1.4955 late Friday and at Y130.50 from Y129.71. Expectations that German Retail Sales expanded in November also helped boost risk appetite.

This week investors will be weighing in on key economic data from Europe and the U.S, including today’s release of Euro-Zone Manufacturing data and Friday’s U.S. Non-Farm Payrolls. The European Central Bank will announce Thursday whether it will raise its key interest rates. While The ECB is not expected to change rates, investors will be paying attention to any comments regarding the timing and exit strategy of the current monetary policy.

JPY – Yen Steady against the Dollar

The Yen fell for the first time in six days against the EUR on optimism regarding Dubai World debt issues. The safe haven Yen also remained up against the Dollar, despite the cautious move back to riskier assets.

The move to safety followed the news of a payment freeze on the $60 billion debt of Dubai World. The Yen traded at 86.44 per Dollar from 86.41. The Yen was at 129.77 per EUR from 129.64. The Yen seems to be able to hold on to the gains it makes during flights to safety by investors during days of poor financial sentiment.

Crude Oil – Crude Prices Up on Improved Economic Outlook

Crude for January delivery rose $1.23, or 1.6%, to end at $77.28 a barrel on the New York Mercantile Exchange Monday. Further boost to Oil prices came after the Institute for Supply Management Index for the Chicago area climbed to 56.1, the highest level since August 2008. Furthermore, China’s manufacturing growth maintained the fastest pace in 18 months in November.

The Oil market was also supported by tensions with Iran, as the country announced over the weekend its intention to build 10 uranium-enrichment plants. Iran is the world’s fourth-biggest Oil producer.

Technical News

EUR/USD

The pair currently sits near the upper border of the 4-hour chart’s RSI, suggesting a downward correction may be imminent. The downward direction on the weekly chart’s RSI also supports this notion. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

GBP/USD

The pair has been range-trading for a while now, with no specific direction. The Daily chart’s Slow Stochastic providing us with mixed signals. The 4 hour charts do not provide a clear direction as well. Waiting for a clearer sign on the hourlies chart might be a good strategy today.

USD/JPY

The USD/JPY cross has experienced a bullish trend yesterday, and currently stands at the 87.30 level. The daily chart’s Slow Stochastic supports this currency cross to rise further today. However, the hourly chart’s RSI signals that a bearish reversal will take place today. Entering the pair when the signs are clearer seems to be the wise choice today.

USD/CHF

The hourly chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, the pair currently sits near the bottom border of the weekly chart’s RSI, indicating that a bullish correction might take place in the nearest future. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.

The Wild Card – Gold

Gold prices rose significantly in the last month and peaked at $1178.60 an ounce. However, the daily charts’ RSI is floating in an overbought territory suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. This might be a good opportunity for forex forex traders to enter the trend at a very early stage.

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.

Market Movers of the Day

Europe

*UK Gfk Consumer Confidence worse than expected at -17

*EU CPI better than expected at 0.6%

Americas

*Canada’s GDP (3Q) lower than forecasted at 0.4% annualized

*US Chicago PMI above estimations at 56.1

The Overall Sentiment

Equities

US stock markets closed the day with modest gains as worries about Dubai’s debt started to lighten. Equities fell on early trading hours as the results of the Black Friday’s sales disappointed investors but managed to recover the losses as Dubai World stated it started negotiations with creditors. The S&P advanced 0.4% and the Dow Jones added 0.3%. In Europe, however, the risk of a potential default from Dubai World still weighed on the markets as most of the debt is owed to European banks. The British FTSE 100 and the German DAX index lost 1.1% each.

Forex

The dollar weakened against higher-yielding currencies as concerns about Dubai’s debt eased and positive US economic data boosted risk appetite. EUR/USD advanced in early hours topping around 1.5080, correcting as the day advanced but managing to close above the 1.50 mark. The pound declined against all the majors as UK Consumer Confidence unexpectedly disappointed and the Dubai situation continued to worry investors as around 40% of the Dubai World’s debt is owed to UK banks. GBP/USD fell below 1.65 settling around 1.6450. The Canadian dollar closed the day rather flat at around 1.0550 against its US counterpart after battling between gains and losses as Canadian GDP reported lower-than-expected figures but confirmed that Canada came out of recession in the third quarter. The Aussie dollar traded sideways around 0.9150 as investors remained expectant ahead of the RBA’s interest rate decision. USD/JPY continued to trade in a volatile manner without taking any definite side away from the 86.50 area.

Commodities

Gold closed slightly below $1180 recuperating from the huge sell-off on Friday as Dubai’s debt worries eased. Silver advanced as well modestly surpassing $18.40. Crude Oil rallied above $77 on reports about Somali pirates capturing a tanker that was carrying oil from Saudi Arabia to the US.

The Day Ahead

The day will start with the Reserve Bank of Australia’s interest rate decision. The RBA has already raised interest rates two months in a row and investors expect a further quarter percentage point increase to 3.75% as the Australian economy continues to grow. The European session will be filled with data starting with a 0.3% expected expansion for Switzerland’s GDP quarterly figures and a 0.6% gain forecasted for German Retail sales in October. Germany and the EU will release their PMI manufacturing numbers as well as Unemployment data. The UK’s PMI manufacturing is also due for release. In the US, the ISM Manufacturing Index is expected to fall to 54.8 from 55.7 the previous month.

Read more about the Aussie interest rate decision

Technical Analysis

GBP/JPY DAILY

When GBP/JPY broke above the wide 139-144 range it quickly climbed almost 1000 pips. After trading around 150 for some time the cross corrected back inside the range. The next sessions should be closely followed expecting a potential break above 144 that could send GBP/JPY to the 150 surroundings once again, where a drop below 139 could be the trigger to a big bearish move.

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.

By Fast Brokers – Gold has strengthened well from Friday’s selloff, popping back above the psychological $1175/oz level as the EUR/USD and AUD/USD move higher.  Investors seeming to be brushing aside the Dubai debt issue, and are reacting by challenging 1100 again in the S&P.  Gold is finding comfort in the preference for risk amid an increase in global uncertainty.  That being said, there are quite a few key data releases coming from China, the UK, and the U.S. over the next 24 hours which could move the markets.  Therefore, gold may be looking to the upcoming fundamental releases before deciding whether to tackle $1200/oz, or submit to recent downside pressure resulting from risk-aversion and profit-taking.  Regardless, gold’s impressive uptrend is alive and well with multiple positive technical forces working in its favor.

Gold has quite a few uptrend lines in place and the $1150/oz level could prove to be a technical cushion along with 11/27 and 11/17 lows should they be tested.  As for the topside, we’re unable to place a downtrend line until we have a bit more track record to use.  Therefore, the $1175 and $1200/oz levels serve as technical barriers along with 11/26 highs.  For the time being, investors should monitor the EUR/USD’s interaction with our trend lines along with the S&P’s ability to climb back above 1100.  A breakout in either could help boost gold due to correlative forces.

Present Price: $1176.70/oz

Resistances: $1178.54/oz, $1182.37/oz, $1186.5/oz, $1194.82/oz

Supports: $1173.02/oz, $1170.16/oz, $1165.57/oz, $1161.90/oz, $1156.88/oz, $1149.37/oz

Psychological: $1175/oz, $1200/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 is consolidating well above Friday lows after tipping over in reaction to the news from Dubai combined with last week’s solid Japanese econ data.  Meanwhile, the USD/JPY is fighting to get back above December 2008 lows as U.S. equities and crude turn positive.  Japan’s Industrial Production number came in well below analyst expectations, allowing investors to buoy the Yen against the Dollar.  Although neither the BoJ nor the Finance Ministry have made any more aggressive comments in regards to an intervention, it seems investors are already pricing in the potential of governmental action considering how close the USD/JPY is getting to its all-time lows.  For the time being, we’ll just have to wait and see how investors decide to move forward with the Dubai debt issue in succession with key econ data from China, the U.S. and UK.  China will release its Manufacturing PMI data late Monday EST followed by an RBA rate decision.  On Tuesday investors will receive HPI and PMI data from the UK followed by America’s own Manufacturing PMI release.  Therefore, the FX markets could be in for an active 24 hours.  Should the approaching wave of econ data print positively, investors may be willing to wade back into the risk trade while balancing the USD/JPY.  However, negative fundamental results could add onto the negative psychological impact from Dubai and unwind the risk trade, sending the USD/JPY lower as a result.

Technically speaking, 85 appears to be the new psychological benchmark with 90 hanging far overhead.  It’s a bit troublesome to place supports on our chart right now due to limited historical reference.  However, we can tell you that the 82.50-85 area proved to be a strong support area during the Spring/Summer of 1995.  Therefore, the USD/JPY could experience similar support should the currency pair’s the downturn continue.  As for the topside, there are multiple downtrend lines serving as technical barriers as the long-term downtrend bears down on price.  Therefore, the USD/JPY will likely need strong support from the bulls to stage a noteworthy rally.

Present Price: 86.55

Resistances: 86.57, 86.81, 87.04, 87.22, 87.46, 87.72, 87.82

Supports: 86.34, 86.20, 85.99, 85.74, 85.51, 85.22, 84.84, 84.60

Psychological: 85, 80, 90

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 has recovered well from Friday lows, propelling from our 2nd tier downtrend line before fading beneath Wednesday highs.  The EUR/USD is now hovering back around its highly psychological 1.50 level as investors continue to dissect news concerning Dubai.  Regardless, the currency pair is back in its safe zone following Friday’s scare and the EU econ data wire is relatively quiet until Thursday’s ECB meeting.  Although Trichet and the ECB have used more aggressive language in regards to their intent to begin winding down some alternative liquidity measures, there is a bit of uncertainty concerning how the ECB will behave come Thursday due to the incident in Dubai coupled with mixed global econ data.  That being said, the ECB did release a Flash CPI today which was one basis point hotter than expected (0.6% vs. 0.5%).  Therefore, consumer prices seem to be picking back up with all of the liquidity washing around.  The EU will also release German Retail Sales tomorrow along with Germany’s Unemployment Change and the headline EU Unemployment Rate.  These data points follow potential market movers in the form of China’s Manufacturing PMI and the RBA’s monetary policy decision.  As a result, we could see activity heat up in the next 24 hours.

Meanwhile, the Euro’s present relative strength is helping the currency pair hold up strong around its 1.50 level while creating some space between present price and our uptrend lines.  Last Wednesday’s surge past October lows was a very bullish move, allowing the EUR/USD to weather the Dubai storm thus far.  As a result, both the EUR/GBP and EUR/AUD are performing rather well.  However, the EUR/USD may be forced to follow suit should equities and other major Dollar crosses take a turn for the worst.  That being said, investors should keep an eye out for our 1st tier uptrend line should it be tested.  Our 1st tier runs through November lows.  Hence, a movement below the 1st tier may indicate a more protracted pullback towards the 1.460 area.  As for the topside, the EUR/USD faces our 3rd tier downtrend line along with previous November highs the psychological 1.50 level.

Present Price: 1.5000

Resistances: 1.5021, 1.5036, 1.5049, 1.5071, 1.5082, 1.5097, 1.5117

Supports: 1.4992, 1.4979, 1.4961, 1.4937, 1.4920, 1.4903

Psychological: 1.50, November Highs and 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.