Author: FX_Trdr

By Fast Brokers – The Cable has pulled back from yesterday’s highs after Britan’s Trade Balance came in much weaker than expected (-7.2 bill. Vs -6.1 bill forecast).  The Trade Balance number is a bit disappointing since it works against the recovery we’ve witnessed since January lows.  Furthermore, the rising trade deficit is concerning considering the recent improvement in Britain’s manufacturing production data.  Therefore, this implies that the cause for the rising trade deficit may be more of a symptom of rising imports rather than declining exports.  Either way, the combination of disappointing Trade Balance data along with broad-based strength in the Dollar has been enough to knock the Cable back below our 4th tier downtrend line.  On the other hand, the Cable has avoided a retest of 1.65, and the technicals appear to be working in favor of a near-term uptrend.  As a result, investors shouldn’t become too discouraged by today’s pullback.

Meanwhile, the EUR/USD is battling 1.50 while the S&P futures and gold battle their respective 1100 levels.  Furthermore, the USD/JPY continues to hover around its psychological 90 area.  Therefore, consolidation is the risk trade appears to be a sign of healthy hesitation in the wake of large gains and the face of important psychologicals.  Although the news wire should be pretty quiet in the U.S. today, activity in the FX markets could pick-up later when China releases a wave of economic data late Tuesday EST.   China will release Industrial Production, CPI, CPI, and Fixed Asset Investments.  Investors will likely be paying particularly close attention to China’s econ data since the nation’s economy has been an engine in the global recovery.  An outperformance in China’s data could give the risk trades a nice boost, whereas a cool down could result in further Dollar strength.  Britain will also keep its news flowing with the release of CCC data tomorrow morning along with the BoE inflation report.  BoE Governor King will address the general public as well and investors will be looking for hints of the BoE’s present monetary stance.

Technically speaking, the Cable faces topside technicals in the form of our 4th tier downtrend line, 11/09 highs, and the psychological 1.70 level.  As for the downside, the GBP/USD still has several uptrend lines serving as technical cushions along with 11/06 lows and the psychological 1.65 level.

Present Price: 1.6704

Resistances: 1.6714, 1.6730, 1.6761, 1.6797, 1.6812, 1.6838

Supports: 1.6688, 1.6662, 1.6615, 1.6598, 1.6574, 1.6530

Psychological: 1.70, 1.65, August 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 EUR/USD is pulling back from 1.50 and our important 2nd and 3rd tier downtrend lines as we witness a consolidation of the risk trade across the marketplace.  Investors are hesitating at significant levels in both the EUR/USD and the S&P futures as they approach their highly psychological 1.50 and 1100 levels, respectively.  Furthermore, we are witnessing a retracement in gold towards its own psychological $1100/oz level.  Such consolidation is healthy considering the relative lack of economic news along with the significance of these psychological levels in terms of future trends.  Although the news wire has been somewhat quiet so far today, the EU did release its ZEW Economic Confidence data.  The ZEW numbers printed roughly 10% below consensus estimates, deflating optimism generated from Germany’s positive Industrial Production release yesterday.  Although the ZEW data is continuing its decline from September highs, the slope is gradual and could be part of a healthy pullback.  Therefore, it may be too early to jump to any conclusions based off of this one data release.  Regardless, investors didn’t get the stream of positive data they were looking for, halting the EUR/USD ascent towards October highs.

Speaking of technicals, our 2nd and 3rd downtrend lines are still intact despite yesterday’s impressive rally.  These downtrends should be considered heavily-weighted since their run through October highs.  Therefore, a solid movement above these two trend lines could yield a nice near-term pop.  Meanwhile, the 1.50 level continues to play a lead role as far as resistance is concerned.  As for the downside, the EUR/USD still has multiple uptrend lines serving as technical cushions along with 11/09 and 11/06 lows.  Therefore, the EUR/USD has a solid support system in place.

Despite today’s calm thus far, activity could heat up late Tuesday EST with the release of key China econ data.  China will release Industrial Production, CPI, CPI, and Fixed Asset Investments.  Investors will likely be paying particularly close attention to China’s econ data since the nation’s economy has been an engine in the global recovery.  An outperformance in China’s data could give the risk trades a nice boost, whereas a cool down could result in further Dollar strength.

Present Price: 1.4956

Resistances: 1.4966, 1.4981, 1.4999, 1.5019, 1.5037, 1.5049

Supports: 1.4947, 1.4923, 1.4905, 1.4887, 1.4873, 1.4856

Psychological: 1.50, October 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 Adam Hewison – The Dow jumped to new highs for the year, extending its gains from the lows seen in March.

What does this mean for the future?

The Dow is now within 100 points of being into thin air as it has retraced close to 50% of its down move. The NASDAQ has already done this, and the S&P 500 has come very close to achieving this goal. Clearly the trend continues to be positive for the Dow with today’s new highs. The other two indices, while closing very well and on an upbeat note, must clear their previous highs to start another push to the upside. It remains to be seen whether or not that will take place.

Clearly this is an emotional market that’s been driven more by sentiment then hard economic news.

Having said that, one must take into consideration the perception of the marketplace, and as of right now that perception continues to be friendly towards the long side of these markets.

In my new video I show you some of the key points to look at in terms of where these markets could potentially break down, and possibly reverse to the downside.

Watch the New Dow Video Here for Free…

All the best,

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

By Greg Holden – Following last week’s employment data from the United States it appears as if the US Dollar has entered a free-fall and many other global currencies are reaping the benefits. The Scandinavian currencies have largely entered bullish trends against the greenback, but also surprisingly against the EUR.

While some analysts were concerned about a swift Swedish recovery due to the Baltic crisis, most countries in the northerly region have seen strong and steady growth. Norway’s economy has benefited largely from climbing Crude Oil prices and Denmark’s debate about entry into the EU’s legal regulations has helped its economy find direction.

The NOK, SEK and DKK have all climbed to 2-week highs versus the USD, as well as a near-2-week high against the EUR. Following Norway’s decision to hike interest rates recently, the region appears to be on the receiving end of recent risk appetite. If this continues, Scandinavia may find itself leading the broader region out of this economic downturn.

Technical Analysis

– The chart below is the 2-hour EUR/SEK chart by ForexYard.

– The indicators used are the Relative Strength Index (RSI) and the Stochastic (slow).

– Point 1: The RSI shows that this pair is currently over-sold and experiencing upward pressure.

– Point 2: The Stochastic (slow) shows a deep bullish cross followed by an upward cascading price movement. This suggests that there is momentum behind the current upward correction.

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 Yan Peters – Looking at the EUR/CAD 4-hour chart, it appears that the uptrend may have reached its peak at the 1.6000 level. The chart provides several signals for a trend reversal, and an opportunity to open a short position might be getting closer.

• The chart below is the EUR/CAD 4-hour chart by ForexYard.
• The technical indicators used are the Bollinger Bands, the Slow Stochastic, the MACD/OsMA and the Relative Strength Index (RSI).
• It can be noted that the pair had several failed attempts to test the 1.6000 level in the past month.
• A sequence of bearish crosses can also be observed in the Slow Stochastic, indicating that the bullish momentum might have reached its end.
• The MACD is also providing a bearish cross at the moment. If a sharp drop will be followed, the pair is likely to go in the same direction.
• The RSI has recently reached above the 70 line, in what is known as the Over-Bought zone. The RSI then dropped back down, signaling a trend reversal.
• There appears to be two significant support levels on the chart. The nearest one is located at the 1.5765 level. If the pair will breach through this level, it is likely to reach the next one which is located at the 1.5650 level.

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 Dollar is expected to be the driver of the forex market today. This is following yesterday’s bearish session for the U.S. currency. Traders will be very mush focused on Federal Reserve Bank of Atlanta President and key Federal Reserve FOMC (Federal Open Market Committee) member Dennis Lockart’s speech at 14:15 GMT, and the IBD/TIPP Economic Optimism release at 15:00 GMT. It is encouraged that you traders open big positions in the USD now.

Economic News

USD – Dollar Falls on Higher Risk Appetite

The Dollar fell dramatically on Monday against a basket of currencies on higher risk appetite. This included slipping to a 3-month low vs. the GBP. The greenback’s weakness was due to forecasts that U.S. Interest Rates will be low for the foreseeable future. The other factor playing on optimism yesterday was the recent G20 Meeting in St. Andrews on the weekend in which it was discussed that the global stimulus will only be withdrawn when a solid economic recovery is maintained. This led to an equity market rally in the U.S, which therefore pushed traders to sell-off the USD as the trading day dragged on.

The Dollar finished trading against the GBP lower at the 1.6750 level. This was despite hitting a 3-month low of 1.6842. The USD also lost considerable ground against the European currency in yesterday’s trading. The EUR/USD cross closed higher by 40 pips at the 1.4978 level. However, the pair did hit as high as 1.5018 on Monday. The USD/CAD lost considerable ground, as it sunk by 100 pips to the 1.0580 level. The greenback also went bearish against both the Yen and the Swiss Franc.

Looking ahead to today’s trading, we have many exciting events. The most significant publication from the U.S. will be the IBD/TIPP Economic Optimism at 15:00 GMT. Also significant will be Federal Reserve Bank of Atlanta President and key Federal Reserve FOMC (Federal Open Market Committee) member Dennis Lockart’s speech at 14:15 GMT. Traders will be very much focused on these 2 events, as they are set to be the primary determinants in the USD’s strength on Tuesday. It is encouraged that you open big positions in the EUR/USD, AUD/USD, GBP/USD and USD/JPY crosses now.

EUR – Pound Climbs to 3-Month High vs. Dollar

The British Pound climbed to a 3-month high vs. the Dollar in Monday’s trading. This came about as the British stock market rose for a 4th consecutive day. Both of these factors were driven by the weakness of the USD and the initial equity market rally on Wall Street. With regards to the EUR, it soared against the Dollar, due to Optimistic German industrial Production data on Monday. The strong EUR is a concern for the Euro-Zone, as it hurts the region’s exports to trading partners, such as the U.S. and China.

The EUR/USD cross went bullish in yesterday’s trading, as the pair rose by 40 pips to the 1.4978 level. The Pound rose to as high as the 1.6842 mark vs. the USD, as traders were very bullish on the Pound yesterday. However, the pair closed at around the 1.6750 level. Looking at the EUR/GBP cross, it rose only 7 pips, as both the British and Euro-Zone currencies were strong yesterday. It will be difficult for the Euro-Zone policy makers to weaken the EUR, due to choosing a tight monetary policy from the beginning of the financial crisis.

Tuesday’s trading offers promising opportunities with regards to both the EUR and GBP’s. The main releases that are set to be published from Britain are the Trade Balance at 09:30 GMT and the CB Leading Index at 10:00 GMT. From the Euro-Zone, the French Industrial Production will be published at 07:45 GMT and the German ZEW Economic Sentiment will be released at 10:00 GMT. These publications are set to be crucial in determining the strength of the GBP and EUR crosses, as mid-week trading approaches.

JPY – Yen Goes Volatile against the Majors

The Japanese Yen went extremely volatile against its major currency pairs yesterday. The Yen closed 15 pips higher vs. the USD at the 89.95 level. This was despite the pair trading significantly lower throughout much of Monday’s trading. The GBP/JPY and EUR/JPY moved a lot in yesterday’s trading. However, both of these pairs finished trading virtually unchanged from yesterday’s opening.

Last night, the Japanese economy released some important data. This included both the Current Account and the M2 Money Stock. The former was worse than forecast, and the latter was better than forecast. Results such as these explain the mixed feelings of traders towards the JPY. The most important release that investors need to follow from Japan later today is the Core Machinery Orders at 23:50 GMT.
Crude Oil – Oil Jumps on Weak Dollar

Crude Oil climbed for a second consecutive day, as the Dollar continued to tumble. This behavior was initiated by the weekend’s G20 meeting in which it was agreed that the financial stimulus will only be withdrawn once we see a solid recovery. Also, the U.S. signaled that Interest Rates will be kept low for the foreseeable future. All this led to a U.S. equity rally, and traders dropped the USD and bought-up Crude Oil.

Crude finally closed higher at $79.08, as investors attempted to use the black gold as a hedge against inflation. This comes as the Dollar continues to show much weakness. As today’s trading commences, Oil will continue to be the most traded commodity. In addition, Crude prices will continue to be highly correlated with the USD. Therefore, open your positions in Crude whilst trading volume is still low.

Technical News

EUR/USD

There is a fresh bearish cross forming on the daily chart’s Slow Stochastic indicating a bearish correction might take place in the nearest future. The downward direction on the 4-hour charts also supports this notion. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

GBP/USD

The bullish trend is loosing its steam and the pair seems to consolidate around the 1.6620 level. The daily chart’s Slow Stochastic is showing a bearish cross suggesting that downwards correction might take place in the nearest time frame. Going short with tight stops might be a wise choice.

USD/JPY

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/CHF

The 4-hour chart is showing mixed signals with its Slow Stochastic fluctuating at the neutral territory. However, a bullish cross forming on the daily chart’s Slow Stochastic implies that upwards correction might take place in the nearest time frame. Going long with tight stops appears to be preferable strategy.

The Wild Card – Gold

Gold sustained upward movement has finally pushed its price into the over-bought territory on the daily chart’s RSI. Not only that, but there actually appears to be a bearish cross on the Slow Stochastic pointing to an imminent downward correction. Forex traders have the opportunity to wait for the downward breach on the hourlies and go short in order to ride out the impending wave.

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

Asia-Pacific

ANZ Job advertisement at -1.7%

Australian Home loans rise 5.1% in September

Australian investment lending fall -0.1%

Japanese Trade balance strong at ¥599.2B

Japanese Adjusted current account at ¥1338B

Japanese M2 money supply rising 3.3% at October

Europe

German Industrial production better than expected rising 2.7% MoM

German Trade balance slightly disappointing at 10.6B

EU Sentix indicator confidence falling -7.0

Americas

Canadian Housing starts rise 157.3K YoY better than expected

The Overall Sentiment

Forex

Green was the ruling color in markets as risk appetite returned aggressively fueled by the statements echoing from the G-20 that all members will keep stimulus in the Economy to keep supporting growth. Most high yielding currencies gained strongly with the Aussie trading at 83.8¥ against the Yen and the Kiwi hovering slightly under 75 cents. Unlike the broad sentiment the Greenback was on the red as expected, the Euro hiked once again to the 1.5$ mark and the Sterling advanced to the 1.68 zone.

Equities

With the possibility stimulus is here to stay for a while bets on bottom line growth were on, with almost all major benchmark indexes in the money. In the US the Dow was up by 2% and the S&P advanced by 2.22%. Among the out standers were Las Vegas Sands the casino giant which gained 9.4% in trading amid improved funding outlook and Bank of America which was higher by 4.8%.Gold miners also drew attention as the record in Gold prices is expected to improved margins for the industry. In Europe the FTSE was higher by 1.8% and the DAX gained strongly with 2.4% advance, supported by the overall positive sentiment but also from German industrial production which continues to rebound, rising 2.7% MoM.

Commodities

Gold surpasses the 1100 mark trading at a record high; this was the dominant headline not only for the metal space but for the entire commodity arena, as gold continues to glitter against other commodities. The Dollar weakness alongside a brighter outlook on growth especially in Asia has helped the Yellow metal to surge above its record high once again. After peaking around 1107$ gold settled lower but held well above the 1100 milestone. Silver continued to lag behind trading around 17.7$ still under the 18$ and oil topped around 80.3$ a barrel before sliding lower to the 78 zone.

The Day Ahead

Strong gains from the Day before could provide a good reason for profit taking in some risk trades but not necessarily, the Sterling is expected to gather much attention with mixed data on the UK. The housing and retail sales indicators coming from the UK just this morning, surprised for the better with UK retail sales rising strongly and Housing prices also rising amid difficulties in home supply. On the other hand Fitch the credit rating company has stated in its press release the UK is at the highest risk of losing its AAA rating from all major economies. Market will have to decide how to digest the mixed news with the Sterling’s proximity to the 1.68 leaving higher risk to the downside. Other important economic indicators due are the CPI figure coming from Germany, the ZEW sentiment in Germany and the EU which will be closely watched and the ABC/Washington post consumer confidence reading which will gather much attention as all consumer related data gathers in the US.

Technical Analysis

GBP/USD

Market Update: Downside risk for the pair has risen substantially in the last two days; although the pair could rally towards 1.71 the upside potential currently looks limited.

Bearish scenario– After failing to break the 1.68-1.69 zone the pair is expected to test the 1.625 Fibonacci support with a close under the major support pushing to a steeper price adjustment.

Target A– 1.575

Target B-1.53

Bullish Scenario– A close above of the 1.68-1.69 would push the pair to a test of the 1.7-1.71 resistance.

Target- 1.7

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.

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By Fast Brokers – Gold has finally broken past its psychological $1100/oz level after a week-long debate.  The precious metal is finding strength from a broad-based weakness in the Dollar as the Aussie, Euro, and Pound all log solid gains against the Greenback.  Furthermore, India’s large purchase of IMF bullion is probably increasing speculation that global central banks are beginning to diversify their reserves and decrease their reliance on the Dollar.  Gold is a direct beneficiary of such a trend since it is a notorious safe haven asset.  Meanwhile, we also notice sizable topside movements in both crude and the S&P futures, indicating today’s activity in Gold’s correlations are all creating an environment supportive of the precious metal’s psychological breakout.

Gold’s near-term reaction should remain reliant on the Dollar’s reaction to upcoming econ data.  In focus will be tomorrow’s EU ZEW Economic Sentiment number followed by a wave of Chinese data late Tuesday EST.  If tomorrow’s econ releases should impress and the Dollar reacts negatively, gold would likely be a beneficiary, and vice versa.  Technically speaking, gold’s movement beyond $1100/oz is another key uptrend statement from the precious metal.  Although there’s the possibility gold may retrace towards the upper end of the $1100/oz psychological zone, the precious metal’s technicals are still supportive of its medium-term uptrend.  It’s difficult to place too many topside resistances until gold cools down, while the precious metal has multiple uptrend lines along with 11/6 lows serving as technical cushions.

Meanwhile, investors should keep an eye on the EUR/USD’s interaction with its highly psychological 1.50 level along with our 2nd and 3rd tier downtrend lines.  Gold has been strongly correlated with the EUR/USD lately, meaning a topside breakout in the Euro could push gold highs, adding more weight to tomorrow’s ZEW data.

Present Price: $1106.80/oz

Resistances: $1108.20/oz, $1110.59/oz

Supports: $1103.64/oz, $1100.97/oz, $1098.11/oz, $1094.78/oz, $1090.71/oz, $1088.55/oz

Psychological: $1100/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 trading lower today in what appears to be a broad-based sell-off of the Dollar.  The combination of weak unemployment data and the G20 stating that central banks will maintain their respective loose monetary policies (see EUR/USD commentary) has led investors away from the Dollar and towards riskier assets.  Today’s trend is a negative catalyst for the USD/JPY since the currency pair has been negatively correlated with the risk trade.  Furthermore, the DPJ’s more conservative fiscal policy is leading investors to believe that the BoJ will not intervene at present levels.  Data-wise, Japan will release Core Machinery Orders late Tuesday night EST along with a wave of Chinese econ data.  Therefore, volatility could pick up in the next 24-48 hours, especially if the Asian data points outperform expectations.  While analysts are expected continual growth in Japan’s CMO data, China’s numbers could have a larger impact considering it is Japan’s largest trading partner.  Further strength in China’s economy implies greater demand for Japanese goods, thereby strengthening the Yen.  On the other hand, weak Chinese econ data could rattle markets and send the USD/JPY back above 90.

Technically speaking, the psychological 90 area is proving to be a tough psychological area once again.  The USD/JPY continues to gravitate towards 90 despite recent hints of a topside breakout.  The currency pair is currently trading back below 90, yet is holding above our 1st and 2nd tier uptrend lines.  Hence, there are a few more technical cushions separating the USD/JPY from a retest of October lows.  As for the topside, the USD/JPY faces multiple downtrend lines along with 11/6 and 11/4 highs.

Present Price: 89.74

Resistances: 89.88, 90.03, 90.27, 90.38, 90.50, 90.64

Supports:   89.61, 89.44, 89.30, 89.15, 88.97, 88.82, 88.73

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.