FOREXYARD: Forex News Blog | |
- USD/JPY – Declining Wedge Pattern
- Swiss KOF Barometer on Tap Today
- Crude Oil – Range Trading Continues
| USD/JPY – Declining Wedge Pattern Posted: 29 Sep 2010 08:22 AM PDT
A distinct declining wedge pattern has formed on the monthly USD/JPY chart that could signal a reversal of the downward trend. The wedge pattern is defined as a triangle pattern with both trend lines that are pointed in the same direction. This falling wedge has both lines pointed to the downside with the upward boundary line falling at a faster slope than the lower boundary. When a declining wedge pattern forms, it indicates the shorts are weakening in strength and perhaps the bulls will take over with a reversal of the trend. Because this is a declining wedge, we should expect the price to breakout to the upside. As the long term trend is clearly to the downside, traders will need to be extra patient before taking a long position. There is a need to wait for a clear signal that a breakout to the upside has occurred. Next month the price could test the resistance level at 90.80. A close above this on a monthly basis would confirm the breakout. However, there is always a chance the pair will surprise the market and break to the downside. Traders should eye a breach below the 82.80 level for a sign of a continuation of the downtrend.
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| Swiss KOF Barometer on Tap Today Posted: 29 Sep 2010 12:32 AM PDT
The US dollar continued to trade bearish against its main currency rivals yesterday, as worse than predicted economic indicators renewed suspicions that the Fed will soon begin a stimulus program to boost the greenback. Following the disappointing news, the USD/CHF pair fell to its lowest level since March of 2008. Today, news from both Switzerland and the US may give the dollar a chance to recoup some of its earlier losses. Here is a roundup of the day’s main news events: 09:30 GMT: CHF KOF Economic Barometer The KOF Economic Barometer is a monthly indicator designed to predict the direction the Swiss economy will take over the next six months. It is widely considered to be a highly significant economic release, and consistently leads to volatility among CHF pairs. This month, analysts are forecasting a slightly lower figure from last month’s release. Should the barometer come in around its predicted level 2.12, the greenback may be able to regain some of the substantial losses it took against the franc yesterday. 14:30 GMT: USD Crude Oil Inventories After seeing some fairly significant gains last week, crude prices have fluctuated over the past few days. Today’s US inventory figure may help oil prices move up again. Most analysts are forecasting a decrease in US stockpiles from last week, which if true, means that demand is up. Typically higher demand equals higher prices. Should the report come in at its predicted level of around -0.4M, traders may want to enter into some long positions with oil. |
| Crude Oil – Range Trading Continues Posted: 29 Sep 2010 12:27 AM PDT
For the past 3 weeks crude oil prices have been fluctuating between $73.50 a barrel to $78.00 a barrel. This means that the market has acknowledged that for the time being, this price represents the real value of crude oil. Currently, crude oil is floating in the middle of the range, trading at $76.60 a barrel. • The chart below is the crude oil 4-hour chart by ForexYard.
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