InvestMacro FX

The greenback remained under pressure on Wednesday especially versus the single currency as investors and traders are expecting a prompt decision of raising interest rates by European Central Bank to address the region’s inflation.

The euro gained to 1.3861 against the US dollar on Wednesday as compared to 1.3777 on Tuesday’s North American trading session. The single currency however posted losses in Asian trading session versus the greenback. The Euro is expected to find support at 1.32 against the US dollar however its resistance is expected at 1.40.

Moreover key meeting of ECB is also expected on Thursday in which it is expected the region’s central bank will announce to keep its interest rate at 1 percent which happens to be the lowest in history. However many expect a substantial interest rate hike in coming months for the euro zone.

Chief executive of IG Markets Dan Cook commented, “If oil prices stay dramatically higher for another three or four months, then we might see a hike, It’s just a matter of time before we see those things come back into the headlines and the economy isn’t strong enough.”

The dollar index DXY which measures the US dollar performance versus its six major currency rivals dropped to 76.685 on Wednesday’s North American trading session as compared to 77.049 on late Tuesday.

The British Pound also gained against the US dollar to 1.6329 as compared to 1.6260 on Tuesday late trading hours.

The US dollar also declined 0.4 percent against the Swiss franc on Wednesday. Against the Japanese Yen the greenback witnessed the correction to 81.90 on Wednesday as compared to 81.93 on Tuesday.

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Daily forex trading news written by Rehan from DailyForexTrade.com

On the daily graph the price ranges between 0-78.6, from this point forward  a break out will lead its way automatically to the level of 127.2.

At the lowest point – break down of 0.8350 will bring to a target of 0.8180.

At the highest point – break out of 0.8600 will bring to a target of 0.8760.

Due to the fact that the price is in the middle, the stop loss will be decided only after a clear movement to one of the sides from the Fibonacci levels.

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Since the start of 2011, the EUR/CAD has been fluctuating within an ever-tightening range. The consolidation point for this trend appears to be just below 1.3600.

Looking over the technical indicators it seems worthwhile to point out that current momentum is bullish and we have what appears to be a relatively clear target at 1.3600 prior to any sharp movements.

This price target is well within reach today. Given the flurry of events on today’s calendar, especially out of the euro zone, there is a strong possibility that the EUR will gain the needed boost to touch this consolidation point.

The Stochastic (slow) on the chart below shows a cross just above the over-sold region, making it a weaker indication of upward mobility, but a bullish signal nonetheless.

The MACD also reveals what could be a bearish cross, countering the limited upward strength shown on the Stochastic indicator.

Since the price is within 100 points of its consolidation target, these conflicting signals make sense. There is enough data to support the upward move towards this point, but not enough to justify breaching that target.

It seems more likely that traders will witness a downturn in the pair once the consolidation price target is reached today. This is also supported by rising Crude Oil prices, which often support the value of the Canadian dollar (CAD).

EUR/CAD – Daily Chart

USDJPY is in consolidation of downtrend from 83.96. As long as 82.23 resistance holds, downtrend could be expected to resume, and another fall towards 81.13 previous low support is possible. However, a break above 82.23 key resistance will indicate that a cycle bottom has been formed on 4-hour chart, and the fall from 83.96 has completed, then the following upward movement could bring price back to 93.00 zone.

Forex Signal

Options Report

B&G Foods (BGS) shares are higher on Wednesday after the food producer reported that fourth quarter earnings surged higher on prices increases and volume growth. Net income increased to $14.3 million, or 29 cents per share, versus $1.3 million, or 3 cents per share in the same period a year ago, beating eastimates.

Stocks managed to climb back into positive territory, despite another spike in oil prices. The ADP Employment Report showed a solid growth last month, with the private sector adding 217,000 jobs on a seasonally adjusted basis.

The gold and silver markets rallied dramatically to the upside as concerns and worries over oil supplies, inflation, and general nervousness in the world markets pushed both metals into new high ground.

I have just completed a new short video where I share with you my upside target zones for gold. The video only takes a few minutes to watch and emphasizes how important technical analysis is in the gold market. Our weekly Trade Triangles have been long gold from $1,368 and it looks as though that position is going to work out well.

We also refer back to a video that I made on September 20th last year, which underscores the importance of cyclic work in the gold market and, how if these same cycles hold true, can predict with a fair degree of certainty when the next cyclic high is going to occur.

I reveal all of this in this new short video that I think you’ll find both informative and educational. Take a look at the short video here:

If you’d like to share this video with your friends, please feel free to do so.

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

By CountingPips.com

U.S. employment data released today in the form of the ADP private employment report showed that private companies hired a total of 217,000 workers in the month of February. This data surpassed the market forecasters and follows a revised gain of 189,000 workers in January. The original January report had shown a rise of 187,000 workers.

Market forecasters and economists were expecting the jobs report to come in with a gain of approximately 185,000 jobs for the month. The advance in private February jobs pushed the streak of service-sector gains to thirteen consecutive months of increases and the goods-producing sector to the fifth straight month of gains.

The service sector saw an increase of 202,000 workers in February and the goods-producing sector registered a gain of 15,000 workers. Manufacturing jobs rose by 20,000 workers while the construction sector declined by 9,000 workers. The financial sector was virtually unchanged in February.

Large businesses added 13,000 workers for February while medium-size businesses hired 104,000 workers. Small businesses or companies with less than 50 workers also saw employment payrolls climb by 100,000 workers for the month.

The market-moving US nonfarm government payroll report is scheduled to be released on Friday at 13:30 GMT. Early forecasts are looking for the payrolls report to increase by 182,000 workers and the unemployment rate to level at 9.1 percent.

Forex: US dollar on the defensive as Stocks rise

The US dollar has mostly lower against the other major currencies in the forex markets today. The dollar has lost ground on the day versus the euro, Japanese yen, Swiss franc, Australian dollar, Canadian dollar and the British pound sterling while gaining on the New Zealand dollar.

The US stock markets, meanwhile, have been on the uptick in morning trading today with the Dow Jones industrial average increasing by over 40 points while the NASDAQ has been higher by over 20 points and the S&P 500 has increased by roughly 6 points at time of writing.

In commodities, oil has edged up slightly by $0.23 to the $99.86 level while gold futures have been virtually unchanged at the $1,430.70 level so far today.

By Greg Holden

For those watching, the persistent rise of the Australian dollar (AUD) was given impetus recently by soaring commodity prices. With Australia’s economy linked with the price of precious metals, the climb in Gold and Silver has been met by a rise in the Aussie as well.

What is interesting to note is where the Aussie has reached against a number of its currency rivals. Three pairs stand out in particular: AUD/USD, AUD/CAD, and AUD/CHF (see charts below).

These pairs are all testing price parity (the AUD/CHF is not necessarily testing it, but is close enough to warrant interest). Both the AUD/USD and AUD/CAD reached this price mark in October 2010 and have been flirting with this level ever since. The AUD/CHF reached it much sooner, but has since fallen below parity due to the Swiss franc’s rising appeal over the second half of 2010.

What is worth noting for the first two – but not necessarily the third – is that parity against the USD and CAD represents a price range which has historically lacked sufficiently sustainable support. The question then to ask is, Can the AUD hold its gains against these monetary giants?

The CAD is linked with Crude Oil prices which makes its decline versus the AUD somewhat intriguing. The fundamental support doesn’t appear as strongly in that pair, but the AUD is rising relatively faster regardless.

Making a speculative assessment, it seems the AUD is bouncing within a price range against a few of its primary rivals that has been historically difficult to break beyond. So long as precious metals continue to climb, which appears a given in today’s market, the AUD should continue to find support.

This makes it interesting to wonder why its value hasn’t climbed well beyond parity against these currencies. It may be even more interesting to ask about what forces are holding it back.

AUD/USD – Weekly Chart

AUD/CAD – Weekly Chart

AUD/CHF – Weekly Chart

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

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