Author: FX_Trdr

Asia – Pacific

Japan’s Monetary Base came out lower than its last result at 4.5%

Europe

England’s Construction PMI was Weaker than expected at 46.2%

England’s Nationwide Consumer Confidence hit expectations at 72.00

Americas

America’s Total Vehicles Sales increased by 10.5M

The Overall Sentiment

Equities

After dropping at the start of the session, the major U.S stock indices managed to find support and climb back into positive territory. Investors experienced a volatile session yesterday as sentiment quickly flip-sided due to Buffets new transportation deal and upbeat results from Ford and GM. The major indices closed the session with an average gain of 0.3%

In one of his largest acquisitions ever, the market guru, Warren Buffet purchased the railway company Burlington Northern Santa Fe for $100 per share. Even though Buffet already had 22.6% of the company’s shares, he decided to go forward and purchase the remaining 77.4% for a whopping $44 billion.

The auto industry also showed positive signs yesterday as Ford sales increased by 2.6% thanks to its new fuel efficient cars. General Motors sales increased by 4.7%. Even though the auto industry helped to boost yesterday’s session, one must note that the recent figures were influenced by the cash for clunkers program.

From a technical point of view, the transportation index, known as a market leader, showed an enormous turnaround and climbed higher throughout the session. When taking a glance at the chart below one can see the enormous bullish candle accompanied by high volume. Even though yesterday’s session is classed as a positive sign for a broader market continuation, resistance lies at key levels, which could prevent the market from immediately climbing higher.

Forex

On the Forex market, Dollar bulls encountered a volatile session as the Dollar Index retraced all of its early morning gains. Even though most of the individual pairs traded around recent levels, the Dollar experienced selling pressure, due to a spike in Gold.

This inflation hedge commodity, increased dramatically during yesterday’s session as the Reserve Bank of India purchased over 200 tons of Gold. According to Bloomberg news this was one of the largest purchases in over 30 years. Even though India is known to be a large purchaser of Gold, primarily in the form of Jewelry, this time round analysts are speculating that the buying was due to investment diversification.

Gold soared higher yesterday to close the session just off the 1085 mark.

The Day Ahead

The heat should rise over the next couple of trading days as the Federal Reserve’s policy statement will be released today, followed by the governments ADP report.  Furthermore New-Zealand will release its unemployment result, one that is expected to show an increase of job losses to 6.4%. Apart from today’s expected volatile session one should take into consideration tomorrow’s interest rate decisions and Friday’s NFP result, all expected to have an impact on the markets.

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.

The forex market awaits the results of the ADP Non-Farm Employment Change from the U.S. at 13:15 GMT. The publication will be crucial in determining the value of the U.S. Dollar as end-of-week trading approaches. The forecast is 188,000 people, significantly better than the previous result of 254,000 people. A result similar or better than forecast could lead to a mass sell-off of the safe-haven USD, as investor confidence in a continuing global economic recovery increases.

As of now, the Dollar is trading 30 pips lower against the European currency at the 1.4762 mark. As a result of very optimistic British Services PMI earlier today, the GBP has risen by over 100 pips vs. the USD to the 1.6530 level. The U.S. currency is also trading lower against the Canadian Dollar, as a sell-off of the USD today is already underway. As the trading day passes by, much of today’s trends are likely to continue.

Forex traders are encouraged top take advantage of the weak Dollar, as big money can be made in the next few days. Highly desirable crosses seem to be the GBP/USD, EUR/USD and USD/JPY. Very popular commodities remain to be Gold and Crude Oil. These commodities will be very volatile in the coming hours, as vital U.S. data is set to be published. This includes other publications, such as the ISM Non-Manufacturing PMI, Federal Funds Rate and the Crude Oil Inventories.

Since yesterday afternoon, USD trading has been dominated mainly by the rebound in U.S. Factory Orders. The market reacted very strongly, as new orders for manufactured goods jumped by 0.9% in September. This is remarkable compared to the 0.8% decline in August. This is good news for the U.S. economy, as we have seen a string of positive news in the past week. As for today, the greenback is trading lower against its most traded currency crosses.

The EUR/USD pair is currently trading higher by 30 pips at the 1.4760 level. The GBP/USD cross is trading higher by 60 pips at the 1.4682 level. You should follow this pair very closely, as Britain is set to publish the Services PMI at 09:30 GMT. The Dollar is also trading lower against the CAD and CHF. However, it is currently trading higher vs. the JPY. Later today, this cross will be under pressure, as we await the Japanese Monetary Policy Meeting Minutes at 23:50 GMT.

In the coming hours, there will be some crucial data that will be published from the U.S. economy. The ADP Non-Farm Employment Change will be released at 13:15 GMT, the Federal Funds Rate and FOMC Statement at 07:15 GMT, and the Crude Oil Inventories report at 15:30 GMT. The results of these publications are set to mostly affect Crude prices, Gold, the EUR/USD and GBP/USD crosses. Open your positions in these now, as you have the opportunity to make big profits today.

By CountingPips.com

The Reserve Bank of Australia increased its interest rate by 25 basis points today to 3.50 percent and raising its rate for the second meeting in a row.  Today’s decision to raise the cash rate was expected by market forecastors after last month Australia became the first G20 economy to increase its interest rate since the financial crisis. 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 policy settings likely to remain expansionary for some time, the recovery is likely to continue during 2010 and forecasts have been revised higher. The expansion is generally expected to be modest in the major countries, due to the continuing legacy of the financial crisis.”

Australia’s economy weathered the economic crisis better than most others as a technical recession was averted and government stimulus as well as strong demand for Australian goods from China has continued to help boost the economy. 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, “Economic conditions in Australia have been stronger than expected and measures of confidence have recovered. Some spending has probably been brought forward by the various policy initiatives. With those effects now diminishing, these areas of demand may soften somewhat. Some types of capital spending are likely to be held back for a while by financing constraints, but it now appears that private investment will not be as weak as earlier expected.”

By Adam Hewison – In our last video on the S&P 500 (10/27), we indicated that this market may have topped out for the year. Today’s action puts in place a weekly “Trade Triangle” which indicates that a temporary or a permanent top is now in place for this market.

In this latest video, I share with you some of the ideas that I think could potentially come into play for this market. Not only do I have some downside targets in mind, but I also see a pattern that could evolve in the next several weeks which will confirm that we’ve made a serious high in this market.

Watch the New S&P500 Video for Free Here….

All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub

By Greg Holden – It seems last week’s rise in Norwegian interest rates had the expected effect of raising the value of the NOK in the short run. However, cautionary statements about decreased growth resulting from a strong Kroner helped push the currency back down against the USD. The peak price levels experienced by the Scandinavian currencies against the greenback have fallen off this week, with most returning to levels unseen since September.

The sudden rise in risk aversion has pushed many investors back into the safety of the Dollar, with the Scandinavian Kroner experiencing a minor setback as a result. Norway appears on track to raise its interest rates steadily in the coming months, which lends weight to the notion that the NOK may rise steadily through to mid-2010.

Investors are still less certain about the Swedish Kroner (SEK), but a return to risk appetite could help boost the SEK to last week’s peak levels in no time. Denmark may still be under pressure to adhere to EU legal and monetary standards, but the pressure does not seem to be affecting its currency value and the DKK is largely following suit with the other currencies of the northern region.

Technical Analysis

– The chart below is the 4-Hour chart for the USD/SEK currency pair from ForexYard.

– The indicators used are the Bollinger Bands, the MACD/OsMA, and the Williams Percent Range.

– Point 1: The price is currently sitting near the upper border of the Bollinger Bands which indicates that there may be moderate downward pressure.

– Point 2: There appear to be a number of bearish crosses on the MACD which signals an impending downward move.

– Point 3: The Williams Percent Range has peaked at the 0 marker and has turned bearish, this means that there may actually be a strong level of downward pressure.

– Traders should expect a strong bearish correction from the current price 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.

By Russell Glaser – Oil prices have been falling during today’s trading as a significantly stronger dollar has weighed on the market. During the Asian and European trading sessions, the commodity fell 1.3%, dropping to a low of $77.

The dollar is up against the euro by nearly 1%, trading at 1.4650 from 1.4783. The price of crude oil typically falls as the dollar gains in strength. European stocks were down more than 2% as a reorganization plan of the British banking system was announced. Assets that have been divested from some of Britain’s largest banks will be grouped together to form a separate banking entity. Traders were less than pleased with the government’s plan and bid down European equities.

Much of crude oil’s price movement may be attributed to the negative correlation to the dollar. There is also speculation that the price of crude is fundamentally overvalued. Oil refineries are continuing to cut production. Despite the excess slack created, oil and gas inventories have steadily risen.

Contrary to the negative fundamental data, strong manufacturing numbers were reported from the U.S. yesterday, along with positive economic news from Europe and China. Crude oil prices jumped with this news.

Tomorrow traders will be looking for two key market events; the release of the weekly crude oil inventory numbers and the FOMC rate statement. Keep an eye to the result of the change in gasoline stocks. The markets have been focusing on this data piece when evaluating the worthiness of this economic report. The accompanying Fed rate statement will proved significant volatility as the expected statement may include future U.S. interest rate policy, a key factor when valuing the dollar.

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 USD is likely to move on the U.S. Factory Orders publication today at 15:00 GMT. The reason why this release is so important is due to Monday’s releases that showed the U.S. economy is on a rapid road to recovery. Therefore, a similar result today could lead to very high volatility in the forex market, and a possible mass sell-off of the Dollar. In order to make some decent profits today, you should open large positions in the EUR/USD, GBP/USD and USD/JPY pairs now.

Economic News

USD – Dollar Slides on Global Economic Recovery

The U.S. Dollar slid against the EUR and CHF on Monday, as positive manufacturing data and surprising earnings from Ford pushed confidence back into the forex market. The ISM Manufacturing PMI rose to 55.7 vs. the 53.1 forecast. Moreover, both U.S. Pending Homes Sales and Construction Spending rose far higher than many analysts expected. On top of this, Ford announced a surprising, but optimistic $997 million 3rd quarter profit. All of these factors helped U.S. equities rise, which in turn resulted in the rise in value of the EUR/USD pair.

The EUR/USD cross rose by 40 pips to the 1.4800 level. This was despite being as high as the 1.4840 mark in Monday’s trading. The USD/CHF fell to as low as the 1.0165 mark yesterday, as traders continued to ditch the USD for the Swiss currency. This is despite the USD making inroads into the CHF last week. However, with regards to the GBP/USD pair, the greenback made significant gains. This was largely owed to the stock market rally in Britain on Monday, which was initiated by both the U.S. economic news and the optimistic British manufacturing data.

Looking ahead to the day ahead is the U.S. Factory Orders at 15:00 GMT, which is set to be the most important indicator of American economic health. Therefore, it is highly advised that you follow top economic news releases from the leading industrialized nations. In addition, it is a wise choice to follow any surprise speeches from President Obama, as he is set to continue to have important speeches relating to the economy. Therefore, any such speech is likely to lead to very high volatility in the forex market. Consequently, it is recommended that you open your positions in the USD crosses as soon as possible.

EUR – Pound Plummets on Optimistic Manufacturing Data

The Pound plummeted against its major currency pairs yesterday, as the British economy published the best manufacturing data in 2 years. The British Manufacturing PMI rose to 53.7 in October from 49.9 in September. This is far better than the forecast of 53.1. This was great news compared to the 0.4% GDP decline in the 3rd quarter. Top economists say that this result of this indicates that the British economy may rise out of recession in the 4th quarter of 2009. The GBP’s losses were exasperated, as British equities rallied due to both data from both Britain and the U.S.

The GBP/USD pair fell by about 60 pips to the 1.6390 level. The EUR/GBP pair rose by over 50 pips to the 0.9024 level. This came about as the Euro-Zone data wasn’t as good as Britain’s. Additionally, equities markets across the Euro-Zone failed to rally like their British and American counterparts. Thus the result was traders dropping both the USD and GBP, and buying up of higher-yielding assets, such as the EUR, Crude Oil and Gold. With regards to the EUR/USD pair, it finished trading at about the 1.4800 level, the second consecutive day gain for the pair.

Today, there is some very important news that is set to come out of Britain and the Euro-Zone. From Britain, there will be the Construction PMI publication at 09:30 GMT. A better than forecast result for this release could help the British Pound in today’s trading, as investors look to make some big profits. From the Euro-Zone, there will be the speech by Bundesbank President Axel Weber at 17:00 GMT. This speech is crucial, as Weber is also a member of the ECB (European Central Bank) Governing
Council. Therefore, traders will be looking for some clues about future Interest Rates. For that reason, volatility will be very high surrounding this event.

JPY – JPY Loses Ground on All Fronts

The Japanese currency lost ground on all front on Monday, as Japan’s bank holiday left the JPY on the backburner. The result of this was an extremely bearish trading session. The JPY lost much strength against virtually all of its currency pairs. The USD/JPY cross rose by 25 pips to the 90.31 level. The EUR/JPY cross soared by 70 pips to the 133.65 level. The Yen also lost much ground against the NZD.

Tuesday’s trading offers many important opportunities with regards to the JPY’s key crosses. There is much crucial data later today form the U.S., Britain and the Euro-Zone. Therefore, the Yen will be on the backburner again for much of today. However, at 23:50 GMT the Japanese Monetary Base data will be published, which is vital as it is a key measure of Japanese economic health. As a result, positive results could help the JPY in late trading today.

Crude Oil – Oil climbs on Optimistic U.S. Data

Crude Oil made significant gains on Monday, as much positive data was released from the U.S. economy. The most important of these was both manufacturing and housing data. This resulted in a U.S. stock market rally and a selling-off of the greenback. The effect of this was a rally in Crude Oil, which lasted throughout much of yesterday’s trading. Crude closed higher by around $0.80 at the $78.28 level.

Today offers much important opportunities for Crude Oil traders. There is the opportunity to make big profits, as traders seek o take advantage of the optimism on the back of a global economic recovery, led by the U.S. A fall in the USD today could further help Crude Oil prices yet again today. For now, it is advised that you open your positions in Oil, whilst volatility is still low.

Technical News

EUR/USD

Narrow range trading continues as the pair did not make a significant move in either direction, and is currently traded around the 1.4790 level. The weekly chart’s Slow Stochastic is showing a bearish cross suggesting that downwards correction might take place in the nearest time frame. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

GBP/USD

The typical range trading on the hourly chart continues. The daily chart RSI is floating in neutral territory. 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 might be the right strategy today.

USD/JPY

The daily chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, the weekly Chart’s RSI is already floating in the oversold territory 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.

USD/CHF

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.

The Wild Card – Gold

Gold prices rose significantly yesterday and peaked at $1063.45 for an ounce. However, the daily chart’s 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 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

Asia-Pacific

*New Zealand Wages rose 0.4% in the third quarter, more than market estimations

Europe

*German PMI Manufacturing in October at 51.0 as expected

*Euro-zone PMI Manufacturing in October at 50.7 meeting market expectations

*UK PMI Manufacturing in October better than expected at 53.7

Americas

*US Pending Home Sales rose 6.1% in September

*US ISM Manufacturing climbed to 55.7 in October beating all market forecasts

The Overall Sentiment

Equities

US stock markets advanced boosted by better-than-expected manufacturing and housing figures. The ISM Index climbed to its highest level in three years showing encouraging signs of improvement in the manufacturing sector. US equities gave up some gains as financial stocks declined on comments from a Fed official about the banking system being ‘far from robust’ but managed to close on the positive side with the S&P gaining 0.7% and the Dow Jones adding 0.8%. The UK manufacturing sector surprisingly expanded as well adding to the positive sentiment and the FTSE 100 closed up 1.2% driven by gains from mining companies. In Japan a negative reaction caused by worse-than-expected earnings reports sent the Japanese Nikkei 225 down 2.3%, its biggest decline in a month.

Forex

An inconsistent day for the Dollar started with weakness against the Euro as the positive European manufacturing figures triggered appetite for riskier currencies. The rally reversed however when the associate director of the Fed’s bank-regulating division stated that the current situation of the banking system is ‘far from being robust’ spurring investors’ demand for the Dollar’s safe-haven properties. Nevertheless, sentiment inverted once again as strong US manufacturing and housing figures shifted attention to higher-yielding assets sending the EUR/USD to the 1.48 area in late trading hours. The Canadian dollar advanced the most in a gaining session for commodity-linked currencies with a 0.7% appreciation against the greenback. The Aussie dollar traded around 0.9080 ahead of the RBA rate decision. The Pound had a choppy session versus its US counterpart and declined against most majors as the uncertainty grows around this week’s BoE rate decision. The Yen weakened for a second day versus most currencies as risk appetite makes a comeback fuelled by renewed beliefs that global economy is improving.

Commodities

Gold made a strong advance of around $20 reaching $1064 an ounce and rapidly approaching its highest level of $1070.80. Silver climbed above $16.60 but still has much territory to cover to return to last month’s highs on the $18 area. Crude Oil had a volatile session following the intraday swings of the equity markets and closed up about a dollar to trade slightly above $78.

The Day Ahead

The day will start with the highly expected RBA rate decision. Australia’s central bank is likely to raise its benchmark interest rate by a quarter percentage point to 3.5% from 3.25% amid strengthening national economy, although some analysts forecast a half-point increase based on concerns about medium term inflation pressures. In the UK positive figures are expected for the PMI Construction report and the US Factory Orders will complete a day with a thin stream of economic data being released ahead of a loaded calendar for the rest of the week.

Technical Analysis

EUR/GBP DAILY

EUR/GBP has been following a downward channel for the last three weeks. After the last bearish wave the cross stalled at the lower boundary of the channel and started to change direction once again presenting the opportunity to enter a Long position to take advantage of a new bullish impulsion.

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 recovered nicely from Friday’s slight pullback in the face of a stronger dollar and sliding equities.  The precious metal has since plowed past the psychological $1050/oz level and our 1st tier downtrend line after U.S. ISM Manufacturing PMI and Pending Home Sales data points knocked aside analyst expectations.  We recognize strength and stability in the EUR/USD and AUD/USD as well, gold’s stronger positive correlations.  In fact, the EUR/USD and AUD/USD held up relatively well on Friday considering the extent of the selloff in U.S. equities.  As a result of present activity, gold’s momentum has suddenly swung to the positive side.  The final technical barrier separating the precious metal from a retest of previous 2009 highs seems to be our 2nd tier downtrend line hanging nearby.  Therefore, although downward pressure does have a chance of kicking back in, technicals are suddenly working in favor of the topside once again.  As for the downside, gold now has multiple uptrend lines serving as technical cushions and the psychological $1050/oz level is working the precious metal’s favor now.

Meanwhile, investors should keep an eye on the EUR/USD and AUD/USD and monitor their ability to break through their respective Friday highs.  Furthermore, investors should track the S&P’s present interaction with its own psychological 1050 level.  It seems we should be in for another volatile week considering the amount of econ data we have to go along with Fed, BoE, and ECB monetary policy decisions.  Therefore, investors should exercise caution and monitor the markets carefully since surprising news could shift sentiment rather quickly.

Present Price: $1060.65/oz

Resistances: $1062.54/oz, $1065.38/oz, $1067.72/oz, $1069.89/oz, $1075/oz

Supports: $1059.19/oz, $1055.69/oz, $1053.76/oz, $1051.51/oz, $1048.50/oz

Psychological: $1050/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.