InvestMacro FX

Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.

Source: ForexYard

The EUR/USD spent much of yesterday range trading, as investors were fearful of opening fresh buy positions ahead of possible Greek news. The market place is not forecasted to be nearly as quiet today, as euro-zone and British interest rate decisions and press conferences are forecasted to generate significant volatility. Should any of the news turn out to be negative, investors are likely to revert back to safe-haven assets which could cause the euro and GBP to drop.

Economic News

USD – US Unemployment Claims may Boost Dollar

The US dollar spent much of the day yesterday range trading against most of its main currency rivals, including the euro, British pound and Swiss franc. Traders were hesitant to bet against the greenback ahead of possible news on a Greek debt swap deal. The one exception was against the Japanese yen. The USD/JPY took moderate losses throughout much of the day before stabilizing around 76.80 during the evening session.

Turning to today, market sentiment will likely be determined by a combination of international news indicators. First, traders will want to pay attention to interest rate decisions from both the UK and euro-zone. While no changes are forecasted for either rate, the press conferences that follow the indicators are likely to shed some light on the current state of the British and euro-zone economies. Any positive sentiment could result in risk taking, which will likely cause the dollar to drop.

Later in the day, traders will want to pay attention to the weekly US Unemployment Claims, scheduled for 13:30 GMT. The figure will shed some additional light on the current employment situation in the US, following last week’s positive Non-Farm Payrolls report. A lower than expected unemployment figure may help the greenback during the evening session.

EUR – Euro-Zone Minimum Bid Rate Set to Generate Volatility

The euro saw very little movement for much of the day yesterday, as traders were reluctant to open fresh positions ahead of possible developments regarding the Greek debt crisis. The EUR/USD was able to maintain, but not extend, its gains from the previous day, and spent most of the session range trading around the 1.3250 level. Against the Japanese yen, the euro took some slight losses after traders began trimming some of their long positions. That being said, the EUR/JPY was able to stabilize around the 102.00 level in the evening session.

Turning to today, traders will want to focus on the British Official Bank Rate and European Minimum Bid Rate figures and the press conferences that follow each indicator. While no official change to either interest rate is forecasted, the press conferences serve as a good opportunity to gauge the current state of the UK and euro-zone economies. Should either press conference indicate the possibility of a future increase in interest rates, risk taking will likely take place which could boost the euro.

CHF – Franc Recoups Losses against Euro

After taking some mild losses against the euro during the morning session yesterday, the Swiss franc was able to stage a recovery which brought the EUR/CHF pair to 1.2100 toward the end of the European session. The markets were fairly subdued otherwise for much of the day, as traders were eagerly awaiting any news regarding a possible Greek debt swap deal.

Turning to today, traders can expect a much more volatility, as indicators from the UK, euro-zone and US are all forecasted to generate heavy trading. The franc will likely see significant gains should any of the news indicate the global economic recovery is not going proceeding at a quick enough rate. Traders will want to note the economic outlooks from both the British MPC and European ECB. Negative outlooks from either may cause traders to revert their funds to safe-haven currencies like the franc.

Crude Oil – Crude Oil Extends Gains Approaching $100

Crude oil saw dramatic gains during trading on Wednesday, and throughout yesterday’s session. Crude’s bullishness was largely attributed to increased demand out of the US and optimism that a Greek debt swap agreement will finally be put into place. The commodity briefly went above the psychologically significant $100 a barrel level yesterday, before staging a minor downward correction.

Turning to today, crude oil may see additional gains providing that British and euro-zone economic indicators are positive. Additionally, should the US Unemployment Claims figure come in above expectations, risk taking may take place, which could give oil an additional boost as we begin to close out the week.

Technical News

EUR/USD

Long term technical indicators are showing that this pair is range trading, meaning that major market movements are not forecasted at this time. The one exception is the Williams Percent Range on the daily chart, which is currently in overbought territory. Traders will want to keep an eye on the daily chart for indications of a possible downward correction.

GBP/USD

Both the Relative Strength Index and Williams Percent Range on the daily chart show this pair in overbought territory, meaning that a bearish correction could take place in the near future. Traders may want to open short positions ahead of a downward breach.

USD/JPY

Most technical indicators show this pair trading in neutral territory, meaning that no major movements are forecasted for the near future. The one exception is the Stochastic Slow on the daily chart, which has formed a bearish cross. Traders will want to take a wait and see approach for this pair, as a clearer picture may present itself later on.

USD/CHF

The Bollinger Bands on the daily chart are narrowing, indicating that a major price shift may occur in the near term. The Williams Percent Range on the same chart is currently in oversold territory, which can be taken as a sign that the shift will likely be bullish. Traders may want to go long in their positions.

The Wild Card

USD/SEK

Technical indicators on the daily chart show that this pair is oversold, and could see an upward correction in the near future. The Stochastic Slow has formed a bullish cross, while the Williams Percent Range is currently at -95. Forex traders may want to go long in their positions ahead of a possible upward correction.

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.

Source: ForexYard

The Russian ruble (RUS) has been getting hit by a market environment thick with risk aversion. Heightened sensitivity brought on by a German court ruling, Italy’s debate over an austerity package, and peripheral discussions over Greek debt have all led many investors away from the riskier currencies, including the ruble.

Moreover, as a bittersweet pill taken by the Russian economy lately, the Bank of Moscow (BoM) received a 14 billion ruble bailout from state-backed loans as part of a portfolio diversification program aimed at revamping the lender’s development initiatives following the ouster of its former president, Andrei Borodin, in a hostile takeover by VTB. Borodin has fled to London in fear that he may face jail time due to his connection to $415M in loans issued to the wife of Moscow’s mayor as part of a private real estate project.

The bank will be issuing 100 billion rubles in new shares to its primary shareholder, VTB, this year in connection with this latest move. The issuance of these shares was not expected until the end of 2012, but recent market downturns have moved deadlines forward. The bank seeks to increase and enhance its credit portfolio from a current volume of 30 billion rubles to roughly 200 billion rubles by expanding participation from small and midsized businesses.

Read more forex trading news on our forex blog.

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.

Source: ForexYard

In an age where central bankers are attempting to increase transparency in the policy making decision process the Brazilian central bank gave a prime example of how not to conduct monetary policy communications when it unexpectedly slashed interest rates by 0.50%.

Leading up to today’s 50 bp interest rate cut the Central Bank of Brazil had increased interest rates in its last five consecutive meetings to a rate of 12.5%. The central bank cited the risks for lower potential growth in the global economy which could bring a bout of disinflationary forces. Copcom said the “moderate adjustment” in the interest rate is consistent with inflation expectations in 2012.

When comparing today’s move with those of the world’s two leading central banks the Fed and the ECB the contrasts are startling. Central bank policy is sometimes compared to that of an aircraft carrier making a 180 degree turn rather than a two propeller speed boat. Wording is carefully chosen. Former Fed Chairman Alan Greenspan was famous for hour long speeches which could leave analysts guessing if the Fed chief’s wording hinted at a hawkish or dovish monetary policy. Ben Bernanke learned the hard way early in his tenure as Fed Chairman when an off the cuff comment at a dinner to Maria Bartiromo caused the stock market to tumble once his comments were published. The ECB is famous for its traffic light system indicating its intention to adjust interest rates.

In a day and age when the Federal Reserve Chairman has increased transparency by opening the floor to questions from reporters, how does the Central Bank of Brazil explain its preemptive strike in the currency war from a tightening cycle to a loose monetary stance without providing the markets with any warning? Both FX and rates traders will have to wait for the release of the central bank’s meeting minutes to get a glimpse in the Copcom’s thinking. Until then more volatility may be seen in both the yield curve and in the rate of the Brazilian real. A couple assumptions can be taken from this policy move; inflation expectations are declining in both developed economies (UK) and in the emerging economies (Brazil). Perhaps Brazil is betting on a global recession in which inflationary pressures play second fiddle to that of steady growth rates.

Read more forex trading news on our forex blog.

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.

Source: ForexYard

Although Japan’s preliminary gross domestic product (GDP) data for the second quarter of 2011 revealed mild contraction, its GDP Price Index underscored sharp declines in prices across the island economy. The data, presented in an annualized format, revealed a 2.2% reduction in prices from this time last year.

Used as a primary measure of inflation by the Bank of Japan (BOJ) the GDP Price Index is one of the broadest measures of the nation’s inflationary growth or contraction. This month’s report revealed significant contraction in inflationary growth, which may lead to a deflationary trap if measures are not taken. Traders will want to watch the BOJ in the coming days as strong moves should be expected.

Read more forex trading news on our forex blog.

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 TraderVox.com

The Euro surged during the Asian session on the hopes of Greek deal. The pair went above 1.3300 levels to print a high of 1.3311. But in the early hours of European session, it has lost the steam and come below 1.3300 levels on news that Greek unions have announced a strike of 2 days from Friday in protest of austerity measures in the swap deal proposed by troika. It is currently trading at 1.3270, marginally up from yesterday’s open. The support may be seen at 1.3270 and below at 1.3230. The resistance may be seen at 1.3300 and 1.3330.

It is an important day for sterling pound because Bank of England is meeting this afternoon for interest rate decision and asset purchase program. Trade data from UK came below expectation at -3.748 billion pounds against the expected figure of -4.950 billion pounds. Industrial production came better than expected at 0.5% against the expected production of 0.2%. So it is a jam packed day for the pound. It is currently trading at 1.5835, up about tenth of a percentage for the day. The support may be seen at 1.5800 and below at 1.5750. The resistance may be seen at 1.5840 and above at 1.5870.

SECO consumer climate data came out of Switzerland better than expected at -19. The expected data was -25. Positive data along with Greek deal hopes propelled the Swiss frank against the US dollar. The pair is trading at 0.9115, almost flat for the day. It went below the 0.9000 level to form a low of the year at 0.9090. The support now lies at 0.9115 and below at 0.9070. The resistance may be seen at 0.9150 and 0.9200.

The USD/JPY touched a resistance of 77.24 but failed to break it. It is currently trading at 77.15, up about 0.15%. The resistance of 77.24 still remains strong while support may be found at 77.

The Australian dollar gave up an important 1.0800 level during the Asian session when Chinese inflation soared to 4.5%. It formed a low of 1.0738. But the pair managed to gain the levels and is currently trading above 1.0800 levels at 1.0810. Support lies at 1.0800 and below at 1.0770. The resistance may be seen at 1.0860 and 1.0900 levels.

The dollar index is trading at 78.60.

Article provided TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

Bloomberg reported that in Manhattan, U.S. District Judge Kevin Castel ruled that Bank of America Corp. (NYSE:BAC) investors can proceed as a class action in their lawsuit claiming the company misled shareholders about the acquisition of Merrill Lynch & Co.Bank of America (NYSE:BAC) has potential upside of 10.7% based on a current price of $7.97 and an average consensus analyst price target of $8.83.

Indonesia’s central bank, Bank Indonesia, cut the BI rate by 25 basis points to 5.75% from 6.00% previously.  The Bank said [translated]: “This decision was made as a further step to boost Indonesia’s economic growth amidst decreasing performance of the global economy, with the priority remains on achieving inflation target and exchange rate stability. With this BI rate decision, the lower and upper bounds of interest rate corridor of Bank Indonesia’s monetary operation becomes 3.75% for overnight deposit facility (deposit facility rate) and 6.75% for overnight lending facility (lending facility rate), respectively.”

The Bank held its rate unchanged at its January meeting, and cut the interest rate by 50 basis points at its November 2011 meeting, and also cut the key monetary policy rate (the BI Rate) by 25 basis points to 6.50% at its October meeting.  Previously the Bank raised the BI rate by 25 basis points to 6.75% in February 2011.  Indonesia reported annual inflation of 3.7% in January, down from 4.1% in November, down slightly from 4.61% in September, compared to 4.79% in August and July, 4.61% in June, 5.98% in May, 6.16% in April, and 6.65% in March, and just below the inflation target of 5% +/-1% in 2011 (which changes to 4.5% +/-1% in 2012).  

Bank Indonesia has previously forecast GDP growth of 6.3-6.8% in 2011 and 6.4-6.9% in 2012 for the Indonesian economy, meanwhile Indonesia reported annual GDP growth of 6.5% in the June quarter last year. The Indonesian Rupiah (IDR) has weakened by about 1% against the US dollar over the past year, and the USDIDR exchange rate last traded around 9,118.

Source: ForexYard

Platinum Reaches 5 month High

I always go on about Gold and Silver but never give enough respect to Platinum.

Currently rising to a 5 month high due to strikes in South Africa’s’ Rustenburg Mine, which happens to be the world’s largest Platinum mine.
The strike is set to go on for another week, and we cannot rule out the prospect of other workers striking in the surrounding South African mines.
Due to its solid upward performance over the months, Platinum has now closed the gap on its rival Gold.

Below you will find the Platinum Daily Chart:

As you can see, the thick yellow trend line indicates the solid uptrend over the months.

As long as the strikes continue , platinum may remain on the up.

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.

The National Bank of the Republic of Belarus cut its refinancing rate by 200 basis points to 43.00% from 45.00%, reversing a string of aggressive rate hikes.  The Bank said [translated]: “In recent months, there are persistent positive trends in the economy and the monetary sphere. Inflationary processes slowed the growth of consumer prices in December 2011 – January 2012 fell to about two percent per month. As a result of increasing the supply of foreign currency on the domestic foreign exchange market has remained stable rate of the Belarusian ruble. There has been steady growth in ruble deposits in banks, first of all, time deposits.”

The bank last hiked the rate by 500 basis point for the third time in a row in December last year.  The bank increased the rate a total of 3450 basis points in 2011.  Belarus reported consumer price inflation at hyperinflationary levels of 109.7% in January this year, up from 92.3% in October, up from 79.6% in September, and 36.2% in the year to June, according to the National Statistic Committee.