Author: FX_Trdr

By Fast Brokers – The EUR/USD is under some selling pressure today after yesterday’s rally fueled by U.S. Prelim GDP data failed to overcome 10/27 highs, let alone our 1st tier downtrend line.  Additionally, yesterday’s buy-side volume came in well below Tuesday’s pop in sell-side activity.  As a result, a negative investor sentiment remains in regards to the performance of riskier investment vehicles.  The AUD/USD, Cable, and gold are also heading south while the USD/JPY trades higher, indicating a broad-based preference for the Dollar.  Although yesterday’s better than expected U.S. Prelim GDP data fueled a risk rally, the bulls were unable to gather enough momentum to overcome topside technical barriers across markets.

Altogether, the last two weeks of econ data has come in negatively mixed, overshadowing the flashes of recovery we’ve seen from Q3 earnings and encouraging EU PMI data.  The EU reported German Retail Sales today, which printed 12 basis points lower than analyst expectations.  Hence, yesterday’s drop in the German Unemployment Change didn’t translate into higher rates of consumption.  Furthermore, U.S. Personal Spending printed a basis point beneath expectations along with declining prices.  Investors should also keep in mind that yesterday’s Unemployment Claims number came in 8k higher than anticipated, yet was overlooked due to the optimism surrounding the GDP data.  In other words, indicators highlighting future economic performance in Western economies are implying a sluggish Q4.  As a result, the fundamental tools aren’t in place for investors to have enough confidence to lock the EUR/USD back into its uptrend just yet.

Technically speaking, this week’s sharp movement below the psychological 1.50 level is a discouraging sign for bulls.  However, there remain several uptrend lines we can form, meaning the EUR/USD has a few technical cushions to rely upon before investors can safely cry bear.  The EUR/USD has four uptrend lines to fall back on along with the psychological 1.45 level should the currency pair take a turn for the worst.  Our 2nd tier uptrend line seems to be a key technical since it runs through October lows and likely represents the support separating the EUR/USD from a retracement towards 1.45.  As for the topside, the EUR/USD now has multiple uptrend lines bearing down on price and the psychological 1.50 level becomes a technical barrier once again.  Overall, although the uptrend remains intact, investors should tread carefully since U.S. equities are facing headwinds.

Present Price: 1.4761

Resistances: 1.4783, 1.4819, 1.4844, 1.4863, 1.4890, 1.4925

Supports: 1.4727, 1.4700, 1.4671, 1.4638, 1.4608, 1.4578

Psychological: 1.50, 1.45

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 – A selloff is taking place in the riskier FX pairs and the USD/JPY is following suit, telling us investors prefer the Yen over the Dollar as a safe haven right now.  Today’s strength in the Yen also stems from the BoJ’s decision to end a couple of its bond purchasing programs in an effort to tighten liquidity.  Today’s monetary policy falls in line with the BoJ’s more conservative stance since the DPJ took office.  Furthermore, the BoJ was likely encouraged by the USD/JPY’s recent solid performance above its important 90 threshold.  However, today’s larger than expected decline in both the Tokyo Core CPI and Household Spending tell us the BoJ can’t be too conservative with its monetary policy since deflationary pressures are still bearing down on consumer prices.  Additionally, even though this week’s Industrial Production number printed better than analyst expectations, the 1.4% rate of growth is unsubstantial compared to the huge declines we witnessed during late 2008/early 2009.  Hence, Japan’s economy still faces a long path to recovery.

Meanwhile, investors should keep an eye on the S&P futures and monitor their ability to sustain yesterday’s rally.  The USD/JPY has been behaving in a more consistent, positive correlation with U.S. equities, although it’s uncertain how long this will last.  Therefore, investors can also compare the USD/JPY to the S&P’s stronger correlations, including the EUR/USD, AUD/USD, and gold.  Japanese markets will be closed on Monday for a banking holiday, meaning the Asia session trading could be light.  Techncially speaking, the USD/JPY’s inability to test 10/26 highs yesterday was a bit discouraging as far as a near-term uptrend is concerned.  However, the currency pair does have a couple more uptrend lines to fall back on along with 10/20 lows and the psychological 90 level.  As for the topside, our 2nd and 3rd tier downtrend lines bear overhead along with 10/26 and 9/21 highs.

Present Price: 90.86

Resistances: 91.22, 91.32, 91.44, 91.61, 91.78

Supports:  90.83, 90.68, 90.49, 90.34, 90.21

Psychological: 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.

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By Fast Brokers – The Cable’s rally in reaction to yesterday’s positive U.S. Prelim GDP has hit a wall at our 2nd tier downtrend line.  As with the EUR/USD, the GBP/USD failed to receive any abnormal topside volume yesterday, indicating bulls weren’t fully behind the risk rally.  The lack of topside conviction likely stems from the disappointing U.S. Unemployment Claims number which was overshadowed by optimism surrounding GDP data.  Furthermore, Britain released an HPI number today which printed three basis points below expectations and five lower than its previous release.  The impressive recovery in Britain’s housing market has been at the heart of the nation’s broader economic stability.  Therefore, any week housing data carries a little extra weight in Britain.  Regardless, the Pound continues to enjoy its relative strength, as exhibited by the large pullback in the EUR/GBP.  Despite today’s HPI number and last Friday’s disappointing GDP data, Britain’s forward looking econ data has been printing positive.  Therefore, Sterling investors are taking a wait and see approach to analyze not only what Britain’s Q4 performance looks like, but also how the BoE stands in regards to upcoming monetary policy.

Speaking of British econ data, Britain’s news wire will heat up next week beginning with more HPI data on Monday along with Manufacturing PMI.  However, investors will likely be more focused on Wednesday’s Services PMI data.  Since services comprise nearly 70% of Britain’s GDP, investors will be looking to see if the previous Services PMI release was a sign of more positive things to come.  The U.S. will be releasing some Manufacturing PMI data of its own on Monday to go along with Pending Home Sales.  Therefore, it looks like we’ll have an active kickoff next week.

Technically speaking, the Cable’s inability to test 10/23 highs has dragged the currency pair into a wedge pattern.  Fortunately for bulls, the Cable is finding some strength above 1.65, meaning the psychological level could work in the GBP/USD’s favor.  Furthermore, the Cable as multiple uptrend lines to rely upon.  On the other hand, there’s still a medium-term downtrend at work, meaning the Cable has its work cut out for it to the topside.

Present Price: 1.6507

Resistances: 1.6562, 1.6585, 1.6605, 1.6635, 1.6676, 1.6704

Supports: 1.6506, 1.6468, 1.6431, 1.6397, 1.6356, 1.6326

Psychological: 1.65, 1.60

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 had a nice little pop yesterday as investors exited the Dollar in reaction to stronger than expected U.S. Prelim GDP data.  However, as with the EUR/USD and GBP/USD, gold’s positive momentum fell short of important topside technical barriers, mostly notably $1050/oz and our 3rd tier uptrend line.  Investors are now exiting their risk trades today as optimism wanes in the face of negatively mixed data.  The S&P futures are also trading off by over -1% and crude over -2%.  Gold is following its positive correlations to a tee today and is heading back below our 2nd tier uptrend line.  Hence, markets are showing us that investor uncertainty is outweighing optimism.  The positive Q3 earnings season has been priced in, and investors are now looking towards Q4 fundamental economic performance.

Despite today’s pullback in gold, the precious metal still has our 1st tier uptrend line to fall back on along with 10/27 and 10/28 lows.  As for the topside, gold is facing a newly formed downtrend line along with its psychological $1050/oz level and 10/26 highs.  Meanwhile, investors should monitor the EUR/USD’s ability to hold above its technical cushions along with the S&P’s battle at 1050.  A large technical setback in either could drag gold lower due to their positive correlations.

Present Price: $1039.60/oz

Resistances: $1043.60/oz, $1046.91/oz, $1049.98/oz, $1053.76/oz, $1058.26/oz

Supports: $1036.03/oz, $1032.01/oz, $1029.41/oz, $1024.44/oz, $1018.53/oz

Psychological: $1050/oz, $1000/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 Adam Hewison – The five ETFs that we are referring to are going to play a major role in the future and you need to know about them today.

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All the best,

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Co-creator, MarketClub

Whichever model of the Blackberry you own, you’ll already know about all the fantastic features packed into its modern ergonomic design. The large screen and great quality camera, together with constant connectivity means you’ll never want to put it down! And now there’s another reason to keep your Blackberry close at hand:

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For most traders, getting into the market is a process that requires seeing an opportunity to enter, or reading about breaking news and jumping on it. This requires opening a position at that time and being physically in front of their computer or on their mobile. What if there was a way to get into the market when you’re away from your trading station?

What if your technical analysis shows the EUR/USD will fall once the pair reaches a specific price level? The ForexYard trading platform has the tools to get you into the market; however, many traders are reluctant to use these options at their disposal.

By using the tools below, a trader can enter the market when a certain price is reached without having to be at their computer to do so.

An Entry Limit Order is used when a trader would like to enter the market at a price below the current market price for a Buy, or above the market price for a Sell order.

In other words, an Entry Limit Order is used when a trader believes the price will reverse its direction once a certain price level is reached.

For example, if a trader believes the EUR/USD is overvalued at the price of 1.5000, and the current market price is 1.4950, he can place an Entry Limit Sell order. When the price hits the 1.5000 mark, his order will be executed.

An Entry Stop Order is used when a trader would like to enter the market at a price above the current market price for a Buy or below the current market price for a Sell.

In other words, an Entry Stop Order is used when a trader believes the price will continue moving in the same direction once a specific price is reached.

For example, if the price of gold is trading at $975 and a trader believes that if gold crosses the psychological price level of $1000, the price will continue to rise. The trade to make is an Entry Stop Buy at, or slightly above $1000.

These tools can be used for a number of reasons; whether you’re away from your trading station because you’re at work, or sleeping, you can always open a position. If through your technical analysis, you believe a currency pair is going to break out when it arrives at a specific price, place an entry order to get into the market!

Source: ForexYard

The Dollar is set to be at the forefront of forex trading today. This is after the USD fell against its major counterparts on Thursday, after a string of gains in recent trading sessions. Yesterday’s behavior was the results of the confirmation that the U.S. economy returned to growth in the 3rd quarter, boosting investor optimism, leading to the equity market to rally, and curbing the need for the greenback’s relative safety.

Economic News

USD – Dollar Slides on Better than Expected U.S. GDP

The USD headed for a 4th monthly drop against the EUR, its longest stretch since 2004, as America’s return to growth renewed optimism that a global recovery will quicken, aiding demand for higher-yielding assets. The Dollar weakened as much as 1% to $1.4859 per EUR in the biggest intraday drop since September 8.

The U.S Dollar rose against the EUR in the previous three sessions as evidence of a stalled U.S. economic recovery, including an unexpected decrease in New Home Sales in September reduced demand for riskier assets. The greenback dropped against the EUR for the first time in 5 days, as investors saw data showing the U.S. economy returned to growth in the third quarter. U.S. Gross Domestic Product (GDP) grew at a 3.5% annual rate in the 3rd quarter, after shrinking in the previous four quarters, the U.S. Commerce Department reported.

The solid Gross Domestic Product reading renewed optimism about a global economic recovery, prompting traders to buy higher-yielding currencies, eroding the greenback’s safe-haven allure. The U.S Dollar will be under heavy pressure on Friday, as investors may continue selling-off the USD on Thursday’s optimistic news. Traders are advised to follow key U.S. releases later today, such as the Chicago PMI and Revised UoM Consumer Sentiment report. These publications will be crucial in determining the USD’s key crosses today.

EUR – European Currency Remains in the Uptrend

The EUR traded higher against the U.S Dollar and the JPY after a report showed German unemployment unexpectedly fell in October to 8.1%. The nation’s economy, the Euro-Zone’s largest, returned to growth in the 2nd quarter. The currency rose for the first time in 4 days to $1.4859 vs. USD compared to $1.4713 late Wednesday.

The EUR was also supported by other economic data. The European Commission’s economic sentiment indicator posted a bigger-than-expected October rise. The index for the 16-nation Euro-Zone rose to 86.2 from 82.8 in September, compared to expectations for an increase to 84.5.

The 16-nation currency may rise for the first time in 4 days against the British Pound today on speculation that a German report will show retail sales rebounded in September, adding to signs the recession in the 16- nation region is over. Retail sales in Germany, Europe’s largest economy, rose 1% in September after a revised 2.4% decline in August, signaling a recovery in the Euro-Zone economy.

JPY – Yen Records Mixed Results against the Majors

The Japanese Yen is set for the biggest monthly slide against the EUR since May, after a government report showed Japan’s jobless rate unexpectedly dropped for a 2nd month, reducing demand for the relative safety of the Japanese currency. The Japanese Yen has been the most sensitive to risk aversion trading, falling when investors are more interested in riskier assets such as equities. Against the Dollar, the JPY slid to 91.27 Yen, from 90.33 Yen on Wednesday.

The Yen extended gains vs. the Australian and New Zealand Dollars, as investors took profits on a number of growth-linked trades that had been in vogue in recent months. Both currencies have been favored plays against the low-yielding Japanese Yen this year as investors have anticipated higher Interest Rates in economies seen as recovering faster from the global downturn. The JPY hit a 3-week high of 80.85 per Australian Dollar, before trimming gains to 81.05 Yen. Against the NZD, the Japanese Yen rose 0.8% to 64.80 Yen.

Crude Oil – Oil Gains Due to Optimistic U.S. GDP

Crude prices rallied more than 4% Thursday, briefly lifting the price of a barrel above $80, as confirmation the U.S. economy returned to growth boosted optimism over energy demand. Crude Oil rose by $2.91, or 4%, to $79.97 a barrel, after rising as high as $80.43. It last traded above $80 a barrel on October 23.

Oil rose sharply due to optimistic U.S. GDP data, which in turn raised hopes that economic conditions will improve and raise demand for petroleum products. The U.S. economy data was higher than expected, leading to a rebound in the commodities market. The focus now is on potential economic growth, which may support the Crude prices further.

Technical News

EUR/USD

The daily chart is showing mixed signals with its RSI fluctuating in the neutral territory. However, the 4-hour chart’s Slow Stochastic is indicating a fresh bearish cross suggesting that a downwards correction might take place in the nearest time frame. When the downwards breach occurs, going short with tight stops appears to be the preferable strategy.

GBP/USD

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

USD/JPY

The typical range trading on the hourly chart continues. The daily chart’s Slow Stochastic is floating in neutral territory. However, the 4-hour chart’s Slow Stochastic is indicating a fresh bullish cross, suggesting that an upwards correction might take place in the nearest time frame. When the upwards breach occurs, going long with tight stops appears to be the preferable strategy.

USD/CHF

There is a fresh bullish cross forming on the 4-hour chart’s Slow Stochastic, indicating bullish correction might take place in the nearest future. The upward direction on the weekly chart’s Momentum oscillator also supports this notion. Going long with tight stops might be the right strategy today.

The Wild Card – Gold

Gold prices rose significantly yesterday and peaked at $1049 an ounce. And now, all oscillators on the hourly chart are giving bearish signals, indicating that Gold prices might go down. This might give forex traders a great opportunity to enter a very popular trend.

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Market Movers of the Day

Asia-Pacific

*Japanese Jobless Rate unexpectedly fell to 5.3% in September

*Japanese National CPI in September at -2.2%, in line with market expectations

*Japanese Tokyo CPI in September worse than expected at -2.4%

*Japanese Overall Household Spending in September slightly worse than expected at 1.0%

Europe

*EU Consumer Confidence in October at 18 as expected

*Euro-zone Economic Confidence better than estimated at 86.2 in October

*German Unemployment Rate surprised for the better falling to 8.1% in October

Americas

*US GDP annualized for 3Q much better than expected at 3.5%

*US Personal Consumption Expenditures for 3Q better than forecasted at 3.4%

*US Initial Jobless Claims worse than expected at 530K

*Continuing Jobless Claims worse than estimated at 5797K

The Overall Sentiment

Equities

US Gross Domestic Product figures for the third quarter came much stronger than expected at 3.5% against forecasts of 3.2% showing US economy returned to growth spurring a renewed wave of risk appetite all across the board. US equities rallied with the S&P advancing 2.3% and the Dow gaining 2.1%. Canadian stocks rallied as well led by gains from gold and energy companies with better-than-estimated earnings reports. In the UK the benchmark FTSE 100 Index rose 1.1% and the German DAX Index added 1.7%.  Japanese Nikkei 225 advanced 1.3% as Japan’s Jobless Rate surprised for the better falling for a second month in September.

Forex

The positive US GDP figures ignited demand for higher-yielding currencies and pushed the Dollar and the Yen lower. EUR/USD erased yesterday’s losses coming back to the 1.4850 area. The Pound also gained against the greenback with an intraday high slightly above 1.66. Commodity-linked currencies as the Aussie and New Zealand dollar were the best performers of the day against its US peer advancing around two full cents each. The Yen was the biggest loser of the day weakening against all its major counterparties.

Commodities

Commodities came back with strong gains as the weakening Dollar spurred demand for alternative investments. Gold advanced over $15, its biggest daily gain in three weeks, to trade over $1045. Silver climbed above $16.60 regaining most of yesterday’s losses. Oil added almost $3.5 surpassing the $80 mark.

The Day Ahead

The day will start in the UK with the Gfk Consumer Confidence Survey shedding light on consumers’ sentiment about economic conditions and potential impact on consumer spending. In Japan the BoJ will release its Interest Rate Decision where analysts expect no changes for the 0.10% rate. For German Retail Sales market estimations point to a rebound in September to a positive 1.0% after a 2.4% drop the previous month. Euro-zone CPI Estimate is expected to improve to -0.1% from a previous reading of -0.3% and EU’s Unemployment Rate is forecasted to rise to 9.7%. Great activity is expected for the Canadian dollar with the release of Canada’s GDP where a 0.1% growth is forecasted. Finally, an important stream of data will be coming from the US with the release of Personal Consumption Expenditures, Chicago PMI and Michigan Consumer Sentiment Index making it an interest session for the Dollar after the surprising US GDP.

Technical Analysis

SILVER DAILY

After topping just above $18 and trading in range for two weeks Silver corrected to stall slightly above $16. The first gaining session after five losing ones in a row came in line with the bullish trend that set the tone for the last three months. The Silver market presents the opportunity to open a Long position to take advantage of a fresh round of buying power in an attempt to reach higher highs once again.

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.