InvestMacro FX

Source: ForexYard

US Dollar strength continues into the new week of trading as events surrounding Ireland and Greece push FX traders into safe-haven positions on the greenback.

Economic News

USD – Strong Data Helps Dollar

The dollar was supported not only by resurgence of the European fiscal crisis but also due to the release of better than expected US retail sales data yesterday. Traders were seen posting strong bids for the dollar following the retail sales reports. The report posted an increase from October of 1.2% on expectations of a rise of only 0.7%. This is the fourth consecutive rise in the report and the largest gain since March.

The September numbers were also revised upward to 0.7% from a previous 0.6%. Leading the data in the retail sales reports were strong auto sales and parts along with a rise in building materials.

At the close of the trading day, the EUR/USD was trading lower at 1.3586, down from an opening day price of 1.3690. The GBP/USD was lower on the day at 1.6050, after opening the day at 1.6112. The USD/JPY was trading higher at 83.10, following an opening price of 82.52.

Today traders will be eyeing more economic data from the US. The most important releases on the day will be US PPI and TIC Long-Term Purchases. This inflationary data is too early to show the effects of the Fed’s second round of quantitative easing, but should go a long way to give both economists and traders a basis for judging future inflation expectations. The TIC report may also show recent inflows of US asset purchases.

Support and resistance for the EUR/USD come in at 1.3500, the 50% Fibonacci retracement from the September to November move, along with yesterday’s high of 1.3750.

EUR – European Fiscal Crisis Returns

Tensions are rising in the European Union (EU) as Greece and Ireland continue to struggle with their debt loads. Yesterday, Greek Prime Minister George Papandreou struck out at Germany’s stance that private investors should suffer the consequences of a future bailout of Greece. The Greek Prime Minister is of the view that this would create a situation of higher interest rates for those nations that are already cash strapped resulting in an unnecessary burden on those states.

The Prime Minister’s statements reflect two different positions in Europe over how a default by an EU member nation should be handled; should the EU use taxpayer euros to bail out other member states that cannot finance their debt’s, or should private investors bear the burden of a haircut on the bonds they hold, or at worse a flat out default?

The euro continues to weaken on the backdrop of EU fiscal troubles and is trading lower versus the dollar, and also against most of the other majors. The EUR/GBP is down at 0.8460, down from an opening day price of 0.8489. The EUR/CHF is lower at 1.3370 after trading as high as 1.3468. The EUR/JPY is also down at 112.89, following an opening day price of 112.97.

Significant economic data will be released today with the German ZEW economic sentiment. The report is expected to come in at -5.9. However, estimates could be on the low side and a worse than expected report may lead to further losses in the euro.

JPY – Q3 GDP Comes in Above Expectations

Yesterday the Japanese received some surprising economic news; Q3 GDP rose 0.9% while the market had only expected growth of 0.7%. The major driver of growth was consumer spending. However, the positives may mask other difficulties as net exports did not contribute to the overall calculation. Also many of the consumer goods that were purchased have government subsidies attached to them, helping to ease the burden on consumers.

For the past week the yen has experienced a bit of respite as the dollar gained ground against a basket of currencies. This has allowed for the USD/JPY to rise to a level not seen since early October.

Yesterday the USD/JPY ended trading at 83.00 up from an opening day price of 82.52.

Traders will want to follow the major data releases from the US and Europe for direction of the Japanese pairs. The next target for the USD/JPY may be the pre-intervention high at 85.90.

Crude Oil – Crude Oil Falls from 2-Year High

Spot crude oil prices were quiet today, trading in a tight range and finishing the day relatively unchanged. The commodity was unable to make a move in either direction as conflicting economic reports held spot crude oil prices in check.

The price of oil finished the day at $84.80, up from an opening day price of $84.61. Prices are off of last week’s high when the price of spot crude oil climbed to its highest level in two years.

Earlier in the trading day, the US released positive retail sales numbers that had traders putting in solid bids for crude oil. However, traders were dissuaded from placing too large of positions with the release of a worse than expected Empire State Manufacturing Index.

Today traders will be looking to the TIC Long-Term Purchases report along with the German ZEW Economic Sentiment report for direction. Wednesday will bring the release of the weekly US crude oil inventories report.

Support and resistance levels for spot crude oil come in at $80.40 and the high from November 11th at $88.62.

Technical News

EUR/USD

A falling momentum oscillator on the weekly chart points to further weakness in the pair. Traders may want to target the rising trend line from the June and September lows. Short term support may come in at 1.3500, the 50% Fibonacci retracement from the September to November move.

GBP/USD

The pair is finding support at the rising trend line from June 8th and the September low as well as the 20-day simple moving average. Traders should be long with a target at the swing high of 1.6300

USD/JPY

A bullish trend is developing on the daily chart and momentum is increasing now that the pair has closed above the pivot from mid-September. The next short term target may be the 100-day simple moving average at 83.85, followed by the pre-intervention high at 85.90.

USD/CHF

A nice bullish uptrend has developed with 8 consecutive days of gains for the pair and a close above the 50-day simple moving average. A rising momentum oscillator hints at further gains in the pair. The next target rests at the November high of 0.9970.

The Wild Card

Crude Oil

Spot crude oil looks to have found support from the 20-day simple moving average. Forex traders can use this to their advantage by going long with a target on the swing high on the daily chart at $88.60 and a stop below the moving average line.

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.

NZD/USD

Daily graph: http://www.real-forex.com/charts-daily/November2010/NZD_DAILY_161110.JPG

The uptrend started a few weeks ago is clearly observable. However, there is a technical correction started about 5 sessions ago.

Please give attention to the following observations:

–        The hammer appeared during the last sessions.

–        The fact the pair corrected exactly 50% of the previous trend

–        The almost instantaneous increase just after the pair reached those 50% correction.

These 3 points let us anticipate the renewal of the uptrend, creating the opportunity to go “Long”. However, a confirmation of the new orientation requires confirmation trough an increasing configuration on 1H graph.

Potential trade

1H Graph: http://www.real-forex.com/charts-daily/November2010/NZD_1H_161110.JPG

The required confirmation should appear once the pair will cross the resistance level at 0.7777. Once crossed, a market order can be entered. Following is one option:

–  “Limit” order on “Long” position 10 pips above the resistance mentioned earlier, meaning: 0.7787.

–  “Stop Loss” on the last dip point reached, meaning: 0.7745.

–  1^st degree for “Take profit” on the following resistance: 0.7811

USD/CHF

Daily graph: http://www.real-forex.com/charts-daily/November2010/CHF_DAILY_161110.JPG

Friday’s session saw the pair to clearly cross the resistance of 0.9781 and to close above it. Actually the pair is on its way to the following resistance at 0.9931.

According to the candles appeared during the last few sessions, the bulls have the power over the bears and no one can stop them. In other words, we do not expect any soon reversing trend.

When the pair will reach that resistance it can have three different behaviors.  Each one indicates a specific potential trade and soon trend:

1)      Test of the resistance èindication of close reversal, potential for “Short” trades.

2)      Stop on the level. It could be better waiting for a “Parking” of about a session and a half, and then entering a “Short” order.

3)      Clear and sharp breach of the resistance è It could be safer waiting for a small correction and after the identification of a increasing configuration on 1H graph, go “Long” along with the new trend.

Have a profitable day!

Real – Forex team

By CountingPips.com

Today’s Important News Releases – Tuesday, November 16, 2010

• Australia, reserve bank November minutes

• United Kingdom, consumer price index

• United Kingdom, retail price index

• Eurozone, consumer price index

• Eurozone, Germany ZEW Sentiment Survey

• United States, producer price index

• United States, net long-term TIC data

• United States, industrial production

• United States, ABC consumer confidence

See Full Economic Calendar here

USDCHF’s rise from 0.9548 extended further to 0.9870 level. Support is at 0.9795, as long as this level holds, upward move is expected to continue and next target would be at 0.9850-0.9900 area. However, a breakdown below 0.9795 will suggest that a cycle top is being formed on 4-hour chart, then pullback to 0.9650 area could be seen to follow.

Written by ForexCycle.com

By forex-metal.com

An exciting market with enormous money making potential, Forex trading is extremely popular all over the globe. You can make money trading forex even if you do not have a Wall Street experience. You can access forex trading and make money via online brokers anywhere in the world as long as you have Internet connection. However, it is important to know what restrictions (if any) are placed on forex trading in your country. This article will explore forex regulations in Nigeria and provide a short guide to what Nigerians should consider when choosing a forex broker.

Unlike some other countries, forex industry in Nigeria is not over-regulated. It enjoys a truly free market economy environment. According to the Central Bank of Nigeria, everyone can participate in foreign exchange trading as long as the trading is conducted via a bank or a broker. There is no specific registration required for forex brokers who want to operate in Nigeria, therefore many well- known brokers accept Nigerian customers.

It is impossible to underestimate the importance of doing the due diligence when selecting a forex broker. One should look for reputable brokers with at least several years of market experience   and check the conditions offered to see if they suit your trading needs and meet your trading goals. Check the currency pairs offered and the spreads. Lower spreads mean higher profit for you. Professional brokers always offer low spreads on majors: less than 2 pips on EURUSD, the most popular currency pair.

Using a market maker allows you to choose the best conditions for trading, to use the quotes    available, and enter large transactions with a minimal initial outlay. Usually, you are able to buy/sell currency contracts equal to $100,000 with only $1000 used as a margin, in other words, use the 1:100 leverage. However, some brokers provide leverage of up to 1:500. Higher leverage is riskier, but it gives greater trading flexibility and increases potential profit.

One should also pay attention to country-specific nuances. In addition to the general rules described above, every Nigerian trader should pay attention to the following:

Check Customer Support Hours

You obviously do not want to be in a situation when you need help and you are unable to get it. You want to receive quality help and attention from your broker whenever you need it, even if you are in a different time-zone. Your best option is to sign up with a broker that has support staff available to help you anytime you have a question or a problem. Remember: services provided by reputable brokers are backed by free 24-hour support on weekdays, when the market is open. Check if they offer Skype, ICQ, online chat support in addition to basic phone and email support.

Check Payment Options available to Nigerians

Most forex brokers accept deposits by bank wires and credit cards. In addition to that, many brokers will allow you to fund your trading account via PayPal, Moneybookers, and various e-currencies, such as Liberty Reserve, pecunix, c-gold, etc. With so many funding options available, you may think that any broker will be convenient for a Nigerian trader. You are mistaken. First of all, you would be surprised at how many brokers accepting credit cards will not allow Nigerian traders to use cards for account funding. Secondly, Nigerians either simply do not have access to some payment options offered by a broker (PayPal, for example) or find them expensive to use (international bank wire).

If you are in Nigeria, your best bet is to find a forex broker accepting e-currencies for deposits. It is faster (even instant with some brokers) and cheaper than bank wires.  If you want to use your credit card, make sure you ask your broker in advance if they accept credit cards from Nigerians.

Get information about the fees involved:  ask if you will be charged a fee for funding your account and for getting the funds out. Find out how long it usually takes to fund your trading account and to process your withdrawal request. Ask if there’s a minimum amount required to make a withdrawal.

Education

The size and volatility of forex market provides excellent opportunities for making profits, however one should always remember about the risk factor when entering the foreign exchange market and understand the importance of forex education. You need a broker providing free educational tools, economic calendar, real-time exchange rates, forex market analysis, charts, and forecasts. Many brokers will allow you to sign up for free online seminars, also called “webinars”, and some may even hold free educational seminars in your country.

Looking for a forex broker welcoming Nigerian traders? Check out Forex-Metal  at http://forex-metal.com

By CountingPips.com

US retail sales increased by more than expected in August and advanced by the largest amount in seven months. The advance estimate of the US monthly retail sales, released by the US Commerce Department, showed that sales increased by 1.2 percent to $373.1 billion in October from September. The data almost doubled the market expectations that were predicting a 0.7 percent rise for the month. September’s sales data was revised higher to an increase of 0.7 percent after an originally reported 0.6 percent advance.

On an annual basis, the retail sales data increased by 7.3 percent above the October 2009 sales level following September’s annual increase of 7.4 percent. Core retail sales, excluding automobiles, rose by 0.4 percent in October following a 0.5 percent increase in September and matched economic forecasts that were expecting core sales to rise by 0.4 percent.

Contributing to the higher sales level for October was a rise in automotive sales by 5.0 percent while building material, garden and supply stores increased by 1.9 percent for the month. Gasoline stations and nonstore retailers both increase by 0.8 percent in October while food and beverage store sales rose by 0.3 percent.

US Dollar mixed in Forex Markets, Stocks higher, Gold up

The US dollar has been mixed today in the forex markets against the other major currencies after the US retail sales release. The American currency has gained ground today versus the euro, British pound sterling, Japanese yen and the Swiss franc while declining against the Australian dollar, New Zealand dollar and the Canadian dollar in today’s fx trading action.

The U.S. stock markets, meanwhile, have been higher today with the Dow Jones increasing by over 70 points, the Nasdaq up by approximately 10 points and the S&P 500 rising by over 5 points in the middle of the US trading session.

Oil has edged higher by $0.22 to the $85.10 level while gold has increased by $5.30 to trade at the $1,370.70 level.

By Adam Hewison – A week ago everyone was cheering as gold and other commodity markets were making new highs. Last week however, things changed as everyone seemed to want to jump through the same door, at the same time, putting a great deal of downside pressure on many markets.

This phenomenon sometimes happens when people have multiple positions in multiple markets in the same direction. When they start to take profits, there is no one left to buy.

In today’s short video on gold, we show one of the clues that was given by this market all the way back in May of this year. The video runs about 4 minutes and will give you a very good idea of exactly what I’m talking about. As you know, we took profits on a 52-week rule on Tuesday around the $1,416 level and we also exited with a daily “Trade Triangle” signal on Friday at the $1,382 level.

I think traders of all skill levels will get a lot out of this short video.

Enjoy the gold video.

Watch the New Video Here Now..

All the best,

Adam Hewison
President of INO.com
Co-founder of MarketClub

By Chris Vermeulen, GoldAndOilGuy.com.

By Greg Holden – Ireland’s insistence to resist taking funds from the European Financial Stability Facility over the weekend has stirred the euro in today’s trading. While the US dollar has been gaining against its rivals due to European instability and a recent wave of quantitative easing (QE2), this sovereign debt issue now facing the euro zone has caused a few setbacks in euro trading.

The concern is over the widening of yield spreads for euro zone debtors – mainly Spain and Portugal. If Ireland refuses to take funds, it risks allowing these yield spreads to widen further, putting additional strain on the already-struggling Spanish and Portuguese economies. If Ireland, does take the funds, however, it allows itself to become further indebted in a time of crisis.

Not taking part, it seems, would be beneficial for Ireland, but allowing the European Facility to bail its institutions out would diminish some of the pressure which has been mounting throughout the region.

Countries like Germany, to say nothing of Spain and Portugal, would like to see Ireland get bailed out for a number of reasons, including that mentioned above. But also because Germany would like to see the Facility become a more permanent feature of the European financial system. Such a safety net would allow more flexibility and less uncertainty during times of crisis.

Since the start of these recent debt concerns, we’ve seen the EUR plummet against its primary counterpart – the USD – from a high of 1.4281 to its current price, over 600 pips lower, near the 1.3625 level. We can see in the chart below that a significant psychological barrier is approaching at the 1.3500 price level. Should it breach this region, we could see a wave of profit-taking push the pair lower in the short-run, with a potential target near 1.3350, and room for additional bearishness.

EUR/USD – Daily Chart

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.