InvestMacro FX

The US dollar has gained ground against the Indian rupee in the forex market for a second straight day as the dollar rose broadly today in trading on better than expected US private employment numbers.

The USD/INR currency pair opened the day near the 45.74 exchange rate and rose to touch its highest exchange rate since December 20th at the 46.03 exchange rate, according to currency data from Oanda. The pair’s price action encountered resistance right above the 200-day moving average at the 46.00 exchange rate.

The pair currently trades above the 45.80 exchange rate in the afternoon of the US session.

USD/INR Forex Chart – The Dollar/Rupee currency pair tested and hit resistance at the 200-day simple moving average (red line) in today’s trading as the dollar has risen for a second day against the Rupee.

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FxNewsIndia.com – Indian Rupee Forex News

By Forex Signs, Inc.

The U.S. dollar may expect a bullish sentiment in the trade today against its European contender as the Federal Reserve remains confident on pace and scale of quantitative easing 2. The QE2 scheme was announced in early November. Despite various doubts on the efficiency of the scheme, the Fed remains firm on their stand that QE2 will work. Further, the balance of economic data has gone beyond expectations since then, with most indicators pointing to an acceleration in the recuperation. This recommends to critics of the Fed plan that it may not have been necessary in the first place. However, at their December 14 meeting, most Fed officials appeared strong-minded to maintain QE2 as it situates, unless there is a much more dramatic pick-up in the US economy. During the meeting, Fed also discussed about the recovery’s pace; it is likely to remain modest, with unemployment and inflation deviating from the committee’s objectives for some time.

The unity displayed by the Fed may likely reflect optimism in the trade of the U.S. dollar. Traders will most probably take this opportunity to buy USD as FOMC Meeting Minutes benefit the currency.

Criscross Patern for AUDUSD

A further decline is expected to incur in the AUDUSD trade as the pair is currently engineering a downward trend in H1 time frame. The pair opened at price level 1.0054 with a bullish candle stick. At the time of writing, AUDUSD already broke initial support key level of 1.0007. With this, a strong bearish force is likely to transpire in the trade. Small bullish corrections eventuate every after a steep bearish candle, it is suggested to watch closely the chart while trading. A similar scenario occurred yesterday. The pair began with a bullish candle; price level is at 1.0157. Slight bullish corrections were seen almost every after 2 bearish candles. At the end of the day, the pair still lost roughly 100 pips. Again, declines may still place as technical indicators were implying so. CCI (14) at the moment is observed loitering at below -100 level. This implies that the AUDUSD pair is oversold. CCI (14) in H1 time frame dropped to as low as -175.113 then it created zigzag movements going up yet it has not reach beyond oversold parity of -100. At the same time, %R (14) is doing the same. Crisscross motions were distinguished which means bullish corrections were made yet these corrections were not strong enough to break the downward trend. With the pair having frequent corrections, it is best to set volatility at 90 pips only. However, there is also a slight chance that the AUDUSD pair might take a u-turn. If the Alligator’s lips become too close to the teeth, this might indicate that the trend may neutralize, thus a possibility of a reversal. So far, the teeth and lips are significantly distant from each other.

About the Author

Forex Signs, Inc., Founded in 2006 in Wall Street, New York City, FSI relentlessly strives to be the premier Forex brokerage company in the industry by providing exclusive and unmatched trading and investment related services while constantly developing innovative solutions that cater to the vast requirements of both individual and institutional market participants.

By J.W Jones, OptionsTradingSignals.com/profitable-options-solutions.php

By Jared Levy, Editor, Smart Investing Daily, taipanpublishinggroup.com

According to the International Business Times, the stocks below were the worst performers (in the S&P 500) in 2010.

Before you scan the list, let me say most of these stocks’ deplorable performance can be explained easily if you simply look at what they do. Others may require some deeper analysis. If you review the financial statements of most of these companies, you might also see the reason for the corrections in price.

Weyerhaeuser, who supplies wood and new homebuilding products around the world, may have been in the wrong business in 2010 as the housing market continued to struggle, but there is more to that story, we will get to that in just a second.

Dean foods, the dairy giant who brings us foodstuffs with brands like Land O’ Lakes, Silk Soymilk and Horizon Organic products, among others, also suffered with higher commodity prices and production costs. When you combine higher costs with moderate consumer demand and steady consumer prices, it can be tough to grow earnings.

Is Now the Time to Buy These Stocks?

The question is if the poor performers of 2010 can put some dollars in our pocket in 2011. Not all of last year’s duds will recover this year, but out of this top 10, here are my two stock picks from this list you may want in your portfolio this year.

Micron (MU) Technical Stock

A technical stock with some interesting technical indicators. Micron has been battered this year, mainly after their May 2010 acquisition of Numonyx Holdings, but now may be a stock to consider buying at these levels.

Looking at the chart daily chart for 2010, you will see the triangle or wedge pattern consolidating into the year-end. This formation generally leads to a big move either up or down. In this case, the move was higher, and there are two specific reasons why MU could continue climbing. MU not only broke the wedge to the upside (which is bullish), but cleared its 50 and 200 day exponential moving averages. This adds strength to the bull case. Secondly, note the fresh upward cross in the stochastic, which was in the oversold area early last week. This also indicates a start of a bullish trend. Many traders use the 200-day moving average as an indicator of trend; if the stock were above it, you would maintain your long position, if it drops below, sell.

The stock breaking above that large moving average is a good sign and it’s doing so without being in an overbought condition, which leads me to believe some real sturdy support may be here for the stock around the $8.25 and $8.00 level (the 200 day EMA).

Fundamentally, the stock is extremely cheap, trading at 4 times its trailing earnings. The consensus of analysts that follow MU have rate it as a buy, although Citigroup downgraded its earnings estimates last week when the stock was at $7.75 (nice job guys).

2010 was certainly a tough year for their earnings, but I believe that they will get costs under control and continue to grow their sales in the niche market of memory in its many different forms and applications.

View larger chart

(By the way, investing doesn’t have to be complicated. Sign up for Smart Investing Daily and let me and my fellow editor Jared Levy simplify the market with our easy-to-understand articles.)

Weyerhaeuser (WY) Homebuilding Products

The number one worst selloff on the list may be a good place to “house” some of your investment dollars in 2011. What the International Business Times and Barron’s didn’t disclose in their headlines about Weyerhaeuser was the one time special dividend of stock and cash that caused the stock to drop by the amount of the dividend, so in reality WY didn’t do that bad at all.

Weyerhaeuser manages over 22 million acres (owns 6.6 million acres) of forest and has recently morphed into a REIT structure. What this means for you as a potential investor is favorable tax treatment and the potential for increased dividend payouts.

The simple way to think about this is that most companies pay taxes on what they earn, and then when they distribute dividends, you (the investor) have to pay taxes on those dividends. In a REIT format, the company distributes 90% of its earnings to the shareholders and drastically reduces the net tax implications for both them and potential investors (they do not have to pay taxes on the distributions).

A REIT is a common structure for many traditional real estate management and/or development companies. It’s a way for a large amount of investors to lump their money together and receive relatively large dividends (if the investments are profitable of course). Check out REIT.com for a list of publicly traded REITs.

WY has been stripping down its business to focus on land ownership and forestry. Their Timberlands segment is their main business, but they also provide real estate, materials, shipping and packaging services and products. Don’t forget that about 80% of its business is tied closely to the housing market, which may continue to struggle, but the dividend story is a nice fallback while we watch the slow recovery.

You must remember that this is a bottom fishing, global story in a sustainable forestry company. There are also investment crossovers into wind, geothermal, mineral rights, biomass and other “green” options with regard to their massive land ownership. Weyerhaeuser may be a place to earn a decent dividend yield (currently about 3.5%) while you wait for more profits to roll in.

Investments Bottom Line

Choosing to invest in any stock that seems cheap and has had some fundamental issues can be a great opportunity to be in on the ground floor of a turnaround. However, there is risk, you must look at not only the future prospects of the company’s business model, but its management and sector strength. You don’t want to invest in something that will continue to struggle. I feel both of these companies have upside potential in 2011.

About the Author

Jared Levy is Co-Editor of Smart Investing Daily, a free e-letter dedicated to guiding investors through the world of finance in order to make smart investing decisions. His passion is teaching the public how to successfully trade and invest while keeping risk low.

Jared has spent the past 15 years of his career in the finance and options industry, working as a retail money manager, a floor specialist for Fortune 1000 companies, and most recently a senior derivatives strategist. He was one of the Philadelphia Stock Exchange’s youngest-ever members to become a market maker on three major U.S. exchanges.

He has been featured in several industry publications and won an Emmy for his daily video “Trader Cast.” Jared serves as a CNBC Fast Money contributor and has appeared on Bloomberg, Fox Business, CNN Radio, Wall Street Journal radio and is regularly quoted by Reuters, The Wall Street Journal and Yahoo! Finance, among other publications.

Some encouraging news from the US this afternoon: 297k new jobs were created in December according to new figures released by ADP (Automated Data Processing.) This number absolutely pole vaults expectations of a 100k increase and marks the single biggest rise in ADP history.

Following the release the euro fell 1.15% against the US dollar to 1.3152 while sterling fell 0.60% to 1.5491.

The US has seen a slew of positive releases in the last weeks. Its manufacturing sector expanded at its fastest pace in 7 months in December according to figures released on Monday, while Non-Farm Payroll figures released on Friday are expected to be positive.

So what do you think? Is the US economic slump over? Can citizens there look forward to more jobs and more prosperity, or is the outlook bleak in spite of this positive data? Let us know in the comments.

by Peter Lavelle with foreign currency dealer Pure FX.

Gold steadied on Wednesday, a day after its largest sell-off in nearly two months, buoyed by consumer demand, which helped offset the potentially negative impact of a stronger dollar following fresh upbeat U.S. data.

A ray of sunshine for investors, however, is the predictable bouncing behavior we should see in gold prices for the next month or so. I’d expect to see gold bouncing against the $1360 price mark at least one time before continuing a strong uptrend. Entry orders for long positions around that price are to be expected; I would be surprised to see a major breach below that point as a result.

Below is the daily chart of gold provided by ForexYard. I’ve drawn Fibonacci retracement lines over the chart to illustrate the support and resistance levels relevant. It’s clear that at the 23.6% retracement level we have a very solid support line which has been tested in the last month. This line is also on the price of $1360 an ounce which, as mentioned earlier, represents the lower border of our range-trading trend.

Once again when the rising trend has been identified, traders should only be long on gold. Entries and exit strategies should then be identified from the hourly charts.

Gold Daily Chart

By CountingPips.com

U.S. employment data released today in the form of the ADP National Employment Report showed that U.S. private employment increased by much more than expected in the month of December. The nonfarm private employment report rose by 297,000 workers in December following the revised increase of 93,000 jobs in November. This is the largest monthly increase in private payrolls on record for the report with data that goes back to 2000. ADP employment levels have now shown positive growth for 11 straight months.

The December report easily surpassed the market forecasts which were expecting an approximate increase of 100,000 jobs.

The service-providing sector led the job creation with an increase of 270,000 jobs in December while the goods-producing sector rose by 27,000 jobs. Manufacturing had a gain of 23,000 jobs while construction jobs were unchanged for the month.

All size of businesses added jobs in December as large businesses increased by 36,000 jobs, medium sized businesses added 144,000 jobs and employment by small businesses rose by 117,000 jobs.

The market-moving US Nonfarm Payrolls report for December is to be released Friday at 13:30 pm GMT with early market forecasts predicting a potential gain of 140,000 jobs and with the unemployment rate dipping to 9.7 percent.

By Dan Eduard

After tumbling close to 100 pips in yesterday’s trading session, the AUD/JPY appears to be on the verge of an upward correction. Currently trading just above the 82.00 level, technical indicators are currently showing that a bullish move is likely to occur in the next 24-hours.

We will be looking at the daily chart for the AUD/JPY, provided by ForexYard. The technical indicators being examined are the Bollinger Bands, Williams Percent Range and Relative Strength Index.

1. As seen in our chart, the Bollinger Bands have begun to widen, which is typically seen as a sign of an upcoming reversal. Furthermore, the price ticks are well below the lower band, indicating that the reversal is likely to be upward.

2. The Williams Percent Range is currently right around the -90 level. Usually, anything below -80 is a sign that the instrument is in oversold territory. This appears to be the case at the moment, and is another sign that a bullish move is on the horizon.

3. The Relative Strength Index is currently well below the lower support line, indicating that a reversal may occur in the near future. Now may be a great time for forex traders to go long in their positions at a great entry price.

Forex Market Analysis provided by ForexYard.

© 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 GCI Forex Research

Fundamental Outlook at 0800 GMT (EDT + 0400)

USD

The dollar continued to strengthen during the Asia session, as equity markets lost their upward momentum, and commodities suffered losses, hurting the AUD in particular. EURUSD traded 1.3264-1.3331, USDJPY 81.53-82.28. Gold and oil stabilised after yesterday’s heavy falls, and are respectively trading at $1383.45/oz and $89.19/bbl at the time of writing. The Dec. 14 FOMC minutes contained no negative dollar surprises as officials “felt that the change in the outlook was not sufficient to warrant any adjustments to the asset-purchase program, and some noted that more time was needed to accumulate information on the economy before considering any adjustment.” Officials did not seem concerned with the rise in Treasury yields leading up to the meeting, noting that yields are still “lower than would otherwise be the case” if asset purchases were not being undertaken. Factory orders, turned positive in November coming in at +0.7% (cons. -0.1%). But with payrolls and Chairman Bernanke’s testimony still ahead, risk-seeking remains in check as market participants, like Fed officials, want more data points to gauge prospects for the US recovery and the dollar.
EUR

China’s Vice Premier Li pledged to “buy more” Spanish government bonds “depending on market conditions”.
ECB Governing Council member Mersch called on governments to withdraw economic stimulus measures “at a moderate but steady pace” so that public finances can be brought back “onto a sustainable track”. He noted that fiscal surpluses would eventually be needed “to erode massive debt mountains”. Not doing so, he said, could lead to “sovereign debt crises in yet more countries”.
Greek Finance Minister Papaconstantinou said Greece would qualify for the next EU/IMF bailout tranche as reforms are on schedule. He also said talks with China on buying Greek bonds are progressing, although the amount and timing are not publishable yet. Papaconstantinou said he is confident the EU will agree on Eurobonds in the near future and said there are no discussions on potential debt restructuring.
The preliminary reading for Eurozone CPI was higher than forecast at 2.2% y/y for December, above the ECB’s target rate of 2% for the first time in over 2 years. While this is largely due to the temporary impact of rising energy prices, questions over the timing and extent of an ECB exit strategy are likely to weigh heavy if above-target readings continue.
German unemployment rose by a seasonally adjusted 3 mn versus expectations of a slight decrease. Our European economists note however, that this was probably due to the cold winter weather and is therefore a temporary diversion. Spanish unemployment figures were more promising, with the non-seasonally adjusted measure contacting by 10.2k m/m in December. Our team of analysts notes that the Spanish labour market is beginning to stabilize, although the absolute level is structurally high.
German manufacturing PMI was softer than expected at 60.7, however the factory jobs index came in at 57.1, the highest in the survey’s 14-year history. Other Eurozone PMI and industrial new orders are due
GBP

The PMI manufacturing reading for December was strong at 58.3, with the headline figure at its highest level since 1994. The forward-looking new orders balance also rose to its highest level since May, offering a positive view on the UK manufacturing industry.
Mortgage approvals were also fairly strong at 48k versus consensus at 16.5k. Our analysts note however that, with the long-run average up at 95k, the reading is still at an unusually low level.
AUD

The local press quoted RBA board member McGauchie as saying that monetary and fiscal policy are working against each other in Australia. He said that “we are spending money on fiscal stimulus and other things we shouldn’t be spending money on and that means higher interest rates than we would otherwise have”.

TECHNICAL OUTLOOK
EURCHF support at 1.2402
EURUSD BULLISH Momentum is positive; break of 1.3433 would expose 1.3499. Support at 1.3216
USDJPY BEARISH The outlook remains bearish; focus is on 80.93 ahead of 80.54. Resistance is at 84.51
GBPUSD NEUTRAL The 1.5345 support remains intact, a break here is required to confirm a resumption of the bear trend. Resistance is at 1.5775
USDCHF BEARISH Bearish outlook remains; focus is on 0.9301 ahead of 0.9202; initial resistance is at 0.9734
AUDUSD BULLISH Momentum is slowing; targets 0.9988 ahead of 0.9951/18 while resistance is at 1.0256
USDCAD BEARISH Bearish outlook; targets 0.9889/25 support zone. Initial resistance is at 1.0073
EURCHF BEARISH Outlook remains bearish; break of 1.2402 would expose 1.2283; resistance at 1.2714
EURGBP BULLISH Upside momentum with focus on 0.8692, a break here exposes 0.8777. Support at 0.8503
EURJPY BEARISH Support holds at 107.61, break here would expose 105.80. Resistance at 110.82.

Forex Daily Market Commentary provided by GCI Financial Ltd.

GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.

DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

By Dan Eduard

While the UK pound has been steadily moving up against the kiwi over the last few days, technical indicators are now saying that the trend is likely to end in the near future. Not only is there a bearish cross forming on the 8-hour chart’s Stochastic Slow, but both the RSI and Williams Percent Range are in overbought territory. Traders will want to keep a close eye on the pair as a downward trend is likely to occur.

Forex Market Analysis provided by ForexYard.

© 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.