Author: FX_Trdr

Market Movers of the Day

Asia-Pacific

RBA meeting minuets

Europe

Swiss adjusted retail sales falling -1.6% YoY

UK Core CPI at 1.8% YoY

UK Retail Sales index falls -0.8% YoY slightly less than consensus

EU trade balance for September strong at €6.8B

Americas

US PPI lower by -1.9% weaker than expected

US Net TIC flows rising to $133.5B

US Industrial production disappointing with a gain of 0.1% MoM

US Capacity utilization at 70.7% rather flat MoM

The Overall Sentiment

Forex

After a rather long period of being under selling pressure the Greenback rebounded across the board largely due to remarks made by the Fed chairman a day before. In what investors consider to be a rather rare occasion the Fed chairman Bernanke commented on the Dollar exchange rate stressing the Fed is alert to the implications of the Dollar’s exchange rate. The Greenback pushed higher a head of the statement only to give back the gains a few minutes later in a rather volatile trade. However a day later as investors were able to spare one more moment of thought to the Chairman’s remarks, counter dollar bets moved to the red across the board with high yielding/commodity currencies retreating the most against. The Euro fell below the 1.49$ level, the Aussie sank below the 93 cents and the Dollar Swiss trade tasted the 1.02 area. The sterling and Yen traded rather flat as the elevated risk aversion supported the Yen and a slightly higher inflation figures in the UK snapped bets debasing(QE) of the sterling will continue by the BoE. The Sterling closed around 1.68$ and the JPY hovered around the 89¥ to the Dollar.

Equities

Wall Street ended the day rather flat as weak industrial production and PPI figures pointed economic weakness in the US. Although the weak data and the Strong Dollar weighed on the US stock market benchmark indexes eventually ended the day in the money. The Dow gained 0.29% and the S&P was up by a modest 1 point. One stock that drew attention was the Oil giant Exxon mobile, Berkshire Heathway the holding company controlled by the investment Guru Warren Buffet disclosed it holds a small number of Exxon Mobile shares, the stock gained close to 1% and closed above 75$.

Commodities

Although the Dollar had a relatively strong Day Commodities held rather well. Gold after reaching a record above 1140$ an ounce retraced a bit but held above 1130$ and silver retreated from 18.5$ but held above the 18$ key level. Oil failed to surge above the 80$ but held above the 79$.

The Day Ahead

In the London session market eyes will be focused on the Bank of England minuets as investors try to extract more on the BoE quantitative easing policy and hence to price the sterling amid weak economic environment on the one hand and sticky inflation on the other.UK industrial data will also gather at least some attention as policy markers seek for the UK industry to recover due to a weaker currency. Later in the day inflation figures from Canada and the US are due with both economies expected to show subdued inflationary pressures especially in the US where the weak Producer price index pointed deflationary pressures are at act rather than inflationary. The concluding data for the day will be the US housing start and building permits with looming worries weak US consumer and high unemployment could hamper the already fragile real estate market, consensus still predicts a rather flat gain MoM but any surprise for the downside could push investors to embrace safe haven bets once again.

Technical Analysis

USD/CHF Daily

Bullish Scenario– A close above 1.035 would signal the pair has broken the flat trend which dominated the pair in recent days and would provide the pair a strong upward momentum.

Target A-1.05

Target B-1.07

Bearish scenario– A break of the 1$ mark would pushed the pair to revisit the all time high around 0.96

Target A– 0.97

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 Jeff Reckseit

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.

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Large banks and more recently pension funds have suddenly become infatuated with gold.  They chant the mantras that gold bugs have known for years: gold is a store of value; owning gold is financial insurance; an ounce of gold will always buy a good suit.  The idea is that if the economy continues to weaken and share prices decline, a strategic allocation of the precious metal will hedge and offset some of the losses in the financial sector.

On the surface it seems to make sense and it’s hard to argue with the logic.  Even so, logic can sometimes get twisted, whereas facts cannot.  The evidence is found in the chart we describe as “All the Same Market.” Gold, stocks, currencies (versus the dollar), oil, grains, meats, softs, all decline in a deflationary environment.  As liquidity dries up and credit contracts, people, businesses, and institutions sell everything to get dollars.  Cash is once again king.  This is bearish for gold.

Looked at another way:  as the dollar advances from its lows, things denominated in dollars lose value against the dollar.  As long as the dollar remains the global senior currency, assets will depreciate:  not just stocks and commodities but residential and commercial property, works of art, collectible cars, pretty much everything.  Of course, this outlook presumes a deflationary environment and that’s been our view for quite some time.  But that’s another conversation.  The topic here is stocks down/gold up – or not.

The long-time editor of the Elliott Wave Financial Forecast Short Term Update, Steven Hochberg summed it up succinctly in a recent issue:

“The other important aspect to a dollar bottom is the implication to all the other markets that have been moving opposite to this senior currency. The start of a major dollar rally should roughly coincide with a turn down in stocks, commodities, oil and the precious metals. So there are likely to be important trend reversals across nearly all major markets.”

Don’t fall into the trap of group-think.  If investing was that easy we’d all have (insert your own private fantasy).

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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 Fast Brokers – The USD/JPY is bouncing between our 1st and 2nd tier uptrend lines as investors digest the latest wave of U.S. econ data.  Today’s U.S. data printed negatively mixed once again, with TIC Long-Term Purchases proving to be the only winner.  Meanwhile, investors shouldn’t forget that Japan’s Prelim GDP topped expectations by 5 basis points to kick off the week.  Therefore, one may expect investors to send the USD/JPY lower due to a more favorable outlook for the Yen as compared to the Dollar.  However, the USD/JPY is proving to be resilient above our 1st tier uptrend line since the currency pair is drifting closer to a retracement towards October lows.  Meanwhile, it seems are paying closer attention to the S&P’s ongoing interaction with its highly psychological 1100 level.  The USD/JPY’s correlative behavior has been erratic lately, making this major Dollar cross a tougher read these days.  Regardless, there is still a long-term downtrend at play and our technical cushions are wearing thin.

Technically speaking, the USD/JPY is presently fighting to stay above our 1st and 2nd tier uptrend lines.  Should our 1st tier give way, the currency pair still has 10/2 lows along with October lows serving as technical cushions.  As for the topside, the USD/JPY faces multiple downtrend lines along with the highly psychological 90 level.  Therefore, quite a few topside challenges are in place.  Meanwhile, the U.S. will release CPI and Building Permits data on Wednesday, meaning overall activity in the FX market could pick up.

Present Price: 89.23

Resistances: 89.31, 89.41, 89.54, 89.68, 89.83, 89.89, 90.07

Supports:  89.15, 88.99, 88.85, 88.73, 88.58, 88.44

Psychological: 90, November 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 – Gold is pulling back from intraday highs after trading at new record levels just above $1140/oz.  Present weakness stems from a combination of profit taking and broad-based strength in the Dollar.  However, despite today’s slight pullback, there remains little reason to be technically negative on gold due to the lack of historical perspective to the topside.  Investors would likely need to witness significant strength in the Dollar in order to make a noteworthy dent in gold.  After all, gold has proven to be more closely correlated to the Dollar than U.S. equities.  Therefore, investors should keep an eye on current weakness in the EUR/USD and AUD/USD and monitor whether any key supports are taken out in these currency pairs.

Meanwhile, U.S. economic data continues to print negatively mixed, including today’s disappointing PPI data.  The disappointing Core PPI number further supports the Fed’s plan to maintain its loose monetary policy for the foreseeable future.  The Fed’s dovish attitude implies the continuation of a broad-based weakness in the Dollar.  Therefore, gold’s downside movements have been limited today, and the potential for further near-term gains remains.

Technically speaking, we’re still unable to install a downtrend line on our chart due to a lack of historical perspective.  Therefore, it’s difficult to find any topside technical barriers besides gold’s potentially psychological $1150/oz level.  As for the downside, gold has multiple uptrend lines serving as technical cushions along with 11.16 lows and the psychological $1100/oz level.

Present Price: $1131.95/oz

Resistances: $1134.71/oz, $1138.63/oz, $1143.16/oz

Supports: $1127.24/oz, $1124.42/oz, $1122.54/oz, $1117.87/oz, $1114.39/oz, $1111.49/oz

Psychological: $1100/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 Cable is experiencing a little selling pressure after briefly trading beyond November highs.  The Cable added onto gains since our last post as the currency pair followed U.S. equities higher.  Britain re-entered the news wire today with the release of CPI and RPI data.  Both data points printed a basis point hotter than analyst expectations.  As a result, the BoE has gained a little breathing room in regards to its upcoming monetary policy decision by avoiding a movement below 1%.  Meanwhile, the U.S. released PPI data which came in short of analyst expectations.  The most disconcerting number was the -0.6% Core PPI reading (minus food and energy).  The -0.6% number is the weakest since November 2006, indicating the Fed’s alternative liquidity measures haven’t relieved deflationary pressures resulting from a decline in consumption.  Today’s negative pricing data further supports the Fed’s decisions to maintain its loose monetary policy stance for the foreseeable future.

The positive pricing data from Britain combined with weak pricing data from the U.S. would normally lead investors to expect a decline in the Dollar.  However, the Dollar as shown a muted reaction thus far as investors await additional U.S. economic data.  On the other hand, the combination of British and U.S. pricing data is giving the Pound a bit of relative strength, as highlighted by a pullback in the EUR/GBP.  Britain will release its CBI Industrial Order Expectations on Wednesday along with central bank meeting minutes.  Investors will likely be paying close attention to the meeting minutes to see whether there are any hints in regards to the BoE’s outlook for future monetary policy decisions and well as their opinion of the overall economy.

Technically speaking, the Cable’s move beyond our 4th tier downtrend line could prove to be an important near-term move considering the trend line runs through 11/09 highs.  The GBP/USD faces light near-term historical resistance between present price and the psychological 1.70 level.  In fact, we had to trace back to 2003 levels to find more substantial resistances.  Hence, the Cable could be in for more extensive topside movements should fundamentals and U.S. equities cooperate.  However, the Cable has drifted back below 11/09 highs, meaning there’s a potential for downward forces to kick in.  As for the downside, the Cable still has multiple uptrend lines serving as technical cushions along with 11/16 and 11/12 lows.  Furthermore, the psychological 1.65 level could work in the Cable’s favor should conditions deteriorate.

Present Price: 1.6790

Resistances: 1.6808, 1.6828, 1.6849, 1.6875, 1.6896, 1.6913, 1.6935

Supports: 1.6790, 1.6730, 1.6694, 1.6664, 1.6615, 1.6594

Psychological: 1.65, 1.70, November and August Highs, November 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 trading lower this morning as the S&P futures consolidate just above 1100.  The EU is relatively quiet on the data front right now, making the EUR/USD’s present movements more reliant the Dollar’s reaction to upcoming economic data.  Thus far we received slightly better than expected CPI and RPI data from Britain earlier in the session followed by weak PPI numbers from the U.S.  The most disconcerting release was the -0.6% Core PPI reading (minus food and energy).  The -0.6% decline is the largest in the Core number since November 2006.  The setback in producer prices adds onto the sluggish EMI, Business Inventories, and Core Retail Sales data investors received yesterday.  In other words, prices are declining while manufacturing slows and inventories rise, not to mention retail sales minus autos are weak as well.  Hence, the Fed just received more evidence which may support its continued loose monetary policy stance.  As a result, one would expect the Dollar to decline and the EUR/USD to benefit after such news.  However, we will have to wait and see how the rest of today’s data pans out.

Meanwhile, the EUR/GBP is experiencing further downward pressure today as investors continue to disfavor the Euro based off of Friday’s disappointing GDP numbers.  The EU won’t have much data this week to improve investor sentiment besides tomorrow’s Current Account release.  Investors are expecting an account surplus of 0.6 billion Euros.  An optimistic Current Account number could help out the Euro since an increase in exports implies a stronger currency.  The U.S. will release CPI and Building Permits data on Wednesday as well, meaning the Dollar could be in for further volatility.

Technically speaking, the EUR/USD faces multiple downtrend lines along with the highly psychological 1.50 level and previous November highs.  However, and a breach beyond our 3rd tire downtrend line could result in a retest of November and October highs with the possibility of more accelerated immediate-term gains.  Unfortunately for bulls, the EUR/USD was negated by our 3rd tier downtrend line and 1.50 yesterday, telling us the 1.50 zone continues to have a psychological impact on the currency pair.  As for the downside, the EUR/USD has built up a solid support system considering the rally since November lows.  Therefore, the EUR/USD has multiple uptrend lines serving as technical cushions along with 11/12 and 10/27 lows.  Meanwhile, investors should keep an eye on the S&P’s interaction with its psychological 1100 level because a topside breakout in the S&P could bring the EUR/USD along for the ride due to their positive correlation.

Present Price: 1.4886

Resistances: 1.4905, 1.4919, 1.4941, 1.4967, 1.4992, 1.5018

Supports: 1.4883, 1.4856, 1.4827, 1.4813, 1.4792, 1.4770

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.

By Russell Glaser – The Swedish krona continues to be one the strongest performing currencies against the dollar. Since the beginning of the month, the krona has climbed over 2.5% on the greenback. Last week the outlook for the economic recovery in Sweden was updated as signs the global economic crisis is weakening. This was a catalyst for the krona as the currency further strengthened, particularly against the dollar.

The economic output of Sweden is predicted to fall by 4.9% this year while growing by 2% in the following year. This is according to the Sweden Ministry of Finance. The previous forecasts were slated to be a contraction of 5.2% for the current year and growth of 0.6% in the following year. Unemployment forecasts were also reduced for next year to 10.7% from 11.4%.

The revised forecasts were followed by strong comments from the Swedish Finance Minister, Anders Borg. Borg would like to see further economic policy enacted to assist in the expansion of the Swedish economy. Along with a government stimulus package and spending on new infrastructure projects, the government is in the position to further cut taxes.

These economic measures bode well for the Swedish economy and in particular the krona. It may explain why traders have bid up the price of the krona in recent trading. As the dollar continues to fall against the major currencies and the Swedish government continues to submit favorable legislation on the part of the economy, being short on the USD/SEK is preferred.

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

• The chart below is the 4-hour EUR/NOK chart by ForexYard.

• The technical indicators used are the Slow Stochastic, MACD, and Williams Percent Range.

• The Slow Stochastic shows a bullish cross followed by an upward cascade price movement. This suggests that there is momentum behind the current upward correction.

• The MACD indicates an impending bullish cross, signaling that the next move may be in an upward direction.

• The Williams Percent Range shows that this pair was heavily over-sold peaked near the highest mark it could reach, and then turned a corner and now stands in a bullish posture.

• This might be a good opportunity for forex traders to enter the trend at a very early stage and a great entry price.

EUR/NOK 4-Hour 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.

Source: ForexYard

The Producer Price Index (PPI) is expected to be the main driver of USD trading for Tuesday. The other major releases from the U.S. that forex traders are advised to follow are the TIC Long-Term Purchases, Core PPI and Industrial Production.

Economic News

USD – Dollar Tumbles on All Fronts

The U.S. Dollar fell against all of its major currency pairs yesterday. This was in response to traders dropping the USD, as stocks climbed after U.S. Retail Sales rose more than predicted, and Asian governments pledged to uphold their economic stimulus spending. In October, Retail Sales rose 1.4 %, vs. forecasts of a 0.9 % rise. The equity market rally sent the Standard & Poor’s 500 index to a 13-month high, as it rose 1.2% to over 1,105. What is impressive is that according to the U.S. Commerce Department, Retail Sales climbed from a 2.3 % dip in September.

The Dollar fell to a 15- month low against currency pairs such as the Pound. This is as the pair rose by as much as 165 pips to the 1.6876 level. The USD/JPY cross also dropped significantly yesterday by 52 pips to the 89.04 mark. The EUR/USD pair rose by 20 pips to the 1.4985 level. In addition, the greenback lost ground against the Canadian Dollar as the trading day dragged on. The U.S. Dollar Index, which tracks the currency vs. America’s largest trading partners, fell by 0.7 % to 74.834, after reaching 74.679. This was the lowest level since August 2008.

Looking ahead to today, there is much exciting economic news that is set to be published from the U.S. The most significant of these will be the PPI and Core PPI at 13:30 GMT, the TIC Long-Term Purchases at 14:00 GMT and the Industrial Production publication at 14:15 GMT. All of these releases are set to have a very high impact on both the volatility and strength of the USD. The forex market is expected to go extremely volatile before, during and after these publications. Therefore, it is advised that you open your positions in the Dollar whilst the opportunity is available to make big returns today.

EUR – GBP Climbs as Optimism Kicks In

The British currency made significant gains during Tuesday’s trading day against its most traded currency counterparts. This was in part sparked by the optimism coming out of the British property market. Britain’s 2 largest property companies, British Land and Land Securities, are expected to announce higher than expected gains in the coming days. This helped produce much optimism in the British currency, which is very important, as the British economy is highly dependant on the British property market.

The British economy made significant gains against its major currency counterparts. The GBP/USD cross finished yesterday’s trading higher by a whopping 117 pips at the 1.6828 level. The British currency made significant inroads into the EUR, as the pair fell by 53 pips to the 0.8900 level. With regards to the EUR/USD pair, it rose by 20 pips to the 1.4985 level. Much of this behavior was due to a global stock market rally that was boosted by impressive U.S. Retail Sales figures. As was seen, riskier currencies such as the Pound were the main benefactors of this.

Today, there is scheduled to be much market moving data that will be released from both Britain and the Euro-Zone. From Britain, there will be the CPI and RPI at 09:30 GMT. From the Euro-Zone, there will be the publication of the Trade Balance figures at 10:00 GMT. Better-than-expected results are likely to boost both the GBP and EUR significantly. Also, it would be wise for traders to open large positions in GBP and EUR crosses as soon as possible. Doing so would ensure maximum market participation for Tuesday’s trading.

JPY – Yen Soars against the Dollar

The Yen soared against the Dollar in Monday’s trading, due to the GDP (Gross Domestic Product) of Japan (the second biggest economy) growing by 4.8 % in the 3rd quarter. This was the second consecutive increase since the start of the nation’s deepest postwar recession. The Yen also jumped due to Asian leaders promising to maintain the economic stimulus packages during a meeting in Singapore yesterday.

The Yen rose by 52 pips against the USD to close at the 89.04 level. The JPY also made impressive gains vs. the European currency. It seems that we are seeing evidence that the economic stimulus has helped Japan exit the recent recession. It is expected that the demand in Japan’s economy will eventually pick up. As a result, the Japanese economy and the Yen will continue to build on recent gains.

OIL – Crude Oil Rises by Most in 6 Weeks

Crude Oil rose by the most in 6-weeks on a weak USD and a stock market rally in the U.S. As a result, this boosted investor’s confidence that energy demand will increase significantly in the coming months. Crude Oil closed at $79.46 from an opening of $77.22. Crude was helped as traders bought-up the commodity as an alternative investment, due to the mass sell-off of the USD.

It seems that traders are optimistic about the U.S. and global economy. This has really helped Crude prices. However, the commodity may only rise significantly above $80, if we see more impressive data and significantly higher demand too. It seems that the Organization of Oil Petroleum Exporting Countries (OPEC) is happy with the current prices levels. They expect prices to rise in the very near future.

Technical News

EUR/USD

The hourly chart is showing a bullish cross has formed on the pair’s Slow Stochastic Oscillator, indicating the potential for an upward price movement. As the pair fluctuates, it has been trading in the lower half of its Bollinger Bands. It appears the 20 day moving average is a significant resistance level. Traders may want to use the middle line as a level to take profits.

GBP/USD

The GBP/USD is displaying bearish signals. The 4-hour chart has a bearish cross which has formed on the Slow Stochastic Oscillator, indicating the potential for a downward price movement. This is supported by the Relative Strength Index, floating in the overbought zone, lending further support for potential price depreciation. Traders may want to be short on this pair today.

USD/JPY

The long term downward sloping trend continues today as the pair has fallen for the last 3 consecutive trading days. Per the hourly chart, the pair has been experiencing range trading between the price levels of 89.15 and 89.00. For the traders that recognize this established zone, significant profits can be made by placing stops and limits at these price levels.

USD/CHF

The hourly chart shows the pair has crossed back into its upper Bollinger Band after an earlier breakout. A bearish cross has formed on the Slow Stochastic Oscillator, indicating the potential for a downward price movement. Traders may want to catch the downward fluctuation that is in the same direction as the long term trend.

The Wild Card – Crude Oil

Crude Oil is displaying significant bearish signals after yesterday’s failed breach of the $80 price level. The 4-hour chart has the pair trading in the overbought zone on the pair’s Relative Strength Index, indicating a possible move lower. The chart also shows a bearish cross has formed on the Slow Stochastic Oscillator that may support this downward move. Forex and commodity traders may want to be short on Crude Oil today as a significant price move may be in the making.

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

*EU Consumer Price Index worse than expected at 0.2%

*EU Core Consumer Price Index at 1.2%, in line with market estimations

Americas

*US Retail Sales at 1.4%, better than forecasted

*US Retail Sales ex. Autos below expectations at 0.2%

*US Empire State Manufacturing Survey worse than expected at 23.5

*US Fed’s Chairman Bernanke speech

The Overall Sentiment

Equities

US stock markets rallied boosted by better-than-expected Retail Sales figures and the assurance of Asian countries to keep stimulus policies in place. The Dow advanced 1.3% and the S&P added 1.5% reaching its highest level in 13 months. Energy companies were on the driver’s seat as oil climbed the most in four weeks. The positive sentiment was felt all across the globe as the APEC members expressed their commitment to maintain stimulus measures to support the recovery of their national economies. In Europe the DAX advanced 2.1% and the FTSE 100 rose 1.6% hitting a 14-month high. Japanese Nikkei 225 gained 0.3%.

Forex

The Dollar continues to weaken remaining slightly above 15-month lows against its major counterparts. During Europe’s trading hours the greenback remained little changed even with the release of a weak CPI for the Euro-zone. Later on, as chairman Bernanke reassured the Fed’s commitment to a strong Dollar the greenback spiked. The move was rapidly reversed as Bernanke’s pessimistic views about a slow economic recovery was interpreted by traders as grounds for the US central bank to keep low interest rates and quantitative easing policies for as long as possible. The EUR/USD jumped to an intraday high above 1.50 but corrected to remain expectant slightly below this psychological level. The Pound was the best performer of the day versus its US peer trading above 1.68, its highest levels in 3 months. The currencies tied to commodities advanced as Oil rallied and Gold hit a new record high. The Aussie dollar briefly topped above 0.94 reaching a fresh 15-month intraday high but corrected to settle around 0.9360 ahead of RBA’s Monthly Minutes. USD/JPY lost strongly consolidating around 89, its lowest level in a month.

Commodities

Gold hit a new record once again trading above $1143 as investors turn to alternative investments to the weakening Dollar. Silver soared to top above $18.40 reaching its highest level in 15 months. Crude Oil rallied touching the $80 mark to finally close around $79.50.

The Day Ahead

The day will start with the Reserve Bank of Australia’s Monthly Minutes which will be followed by traders to assess the pace of rate hikes and removal of monetary stimulus. During the European session Swiss Retail Sales and UK CPI figures will be released followed by the Euro-zone Trade Balance, in which better-than-expected numbers could send the EUR/USD to test the 1.50 once again. Moving to the US, Produce Price Index, Treasury International Capital Flows report and Industrial Production are due for release.

Technical Analysis

NZD/USD DAILY

After topping at 0.7629 NZD/USD corrected finding support just below 0.71. It regained strength developing a new bullish attempt to reach for higher highs. The following sessions should be closely followed for the opportunity to join the uptrend wave or the chance to go Short if the break fails and a double-top formation appears.

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.