FOREXYARD: Forex News Blog | |
- EUR/SEK Likely to Drop Following Spike
- SEK Tumbles Against its Currency Rivals
- Is the U.S Housing Market Seeing a Long Awaited Recovery?
- British Pound Extends Gains after GDP Beats Targets
- SGX’s ASX Takeover Igniting Speculations of Further Mergers in the Region
- DAX 30 Index Reversals in the Making
- Forex News: USD Down despite Jump in Home Sales
| EUR/SEK Likely to Drop Following Spike Posted: 26 Oct 2010 08:58 AM PDT
EUR/SEK saw a massive spike of almost 1500 pips on Tuesday, following comments from Sweden’s central bank regarding future interest rate hikes. While the pair is still moving up, technical indicators are showing that a downward correction is likely to occur in the near future. Krona traders will want to pay close attention to the pair We will be looking at the daily chart for EUR/SEK provided by Forexyard. The technical indicators being used are the Williams Percent Range, Relative Strength Index (RSI) and MACD. 1. The Williams Percent Range is currently right above the -20 level. This is typically seen as a sign that the pair is in overbought territory and may correct itself in the near future. Should the indicator continue to move up, the bigger the chance that a reversal will take place. 2. The Relative Strength Index has not yet approached overbought territory, but appears likely to approach that area shortly. Currently the RSI is right around the 60 level. If traders see the indicator go above 70, it can be taken as a sign that downward pressure exists for the pair. 3. Finally, the MACD has formed a bearish cross, indicating that a reversal is likely to take place in the near future. Traders will want to watch out for a sudden correction for this pair, as significant profits can be made when the downward breach occurs.
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| SEK Tumbles Against its Currency Rivals Posted: 26 Oct 2010 08:49 AM PDT
The Swedish krona tumbled against all of its currency rivals in trading on Tuesday, following a statement from the Swedish Central Bank saying that national interest rates would remain at their current level for the near future. The statement cited limited global economic growth as the reason it would be leaving interest rates alone. Investors reacted to the statement by selling off the krona in large volumes, leading to strong gains for both the euro and US dollar. EUR/SEK shot up 1500 pips since the announcement was made, and is currently trading around the 9.3150 level. USD/SEK saw gains of over 1500 pips, and currently stands at the 6.7100 level. While the krona has taken significant losses today, a correction is likely to occur once market conditions slow down. The impending quantitative easing package the Fed is likely to implement in the US will almost certainly lead to heavy dollar losses. Furthermore, while recent euro-zone data has shown slight improvements in the economy, investor confidence in the overall pace of growth is still low. Traders will want to pay careful attention to both the EUR/SEK and USD/SEK pairs. Significant profits can be made once the downward breach occurs. Turning to the rest of the week, krone traders will want to pay attention to a number of US and European economic indicators that are likely to affect the Scandinavian currencies. On Wednesday, the main indicators to watch out for are the German Prelim CPI and French Consumer Spending figure. In addition, the US Core Durable Goods Orders and New Home Sales figures are likely to create heavy market volatility. The US will be also be releasing its weekly unemployment claims figure on Thursday, while the euro-zone unemployment rate will be announced on Friday. Should any of these releases come in below expectations, the Scandinavian currencies will likely see a boost as a result. |
| Is the U.S Housing Market Seeing a Long Awaited Recovery? Posted: 26 Oct 2010 08:03 AM PDT
With the upcoming Nov.2 -3 FOMC meeting and the speculation of expansion of quantitative easing by the Federal Reserve the main focus of the markets, this week's economic data is expected to have great effect on investors' expectations. The main indicators to watch are the Housing and Consumer Confidence publications. The housing market, which was at the heart of the financial crisis, remains a drag on the economic recovery of the U.S as well the poor consumer confidence, mostly driven by the relentlessly high unemployment rate. However, some stability may be finally evident in the embattled industry. According to Monday's report, the sales of U.S. existing homes rose in September by the most on record with purchases increasing 10% to a 4.53 million annual rate from 4.12 million in August. Further indication of a rebound in the housing industry may come from tomorrow's report of New Home Sales which is also expected to show an increase from the previous month. While the industry's recovery will likely be dragged as the unemployment rate is forecasted to remain above 9% throughout 2011, it seems that the industry has already hit bottom. Consumer confidence may also see some recovery this week as the CB Consumer Confidence which was released earlier today, rose more than expected. A similar rise in confidence is expected from the revised UoM Consumer Sentiment report, due Friday at 13:55 GMT. The increase in confidence may coincide with next week's mid-term elections which are expected to see Democrats losing their majority in Congress. The USD has been seeing a shaky recovery this week, aided by the positive data releases. A continuation of better than expected data releases throughout the week will likely boost the USD further, mainly by adding greater uncertainty to the quantitative easing expansion speculations. With the FOMC meeting minutes release on Nov. 2nd and the mid-term elections on Nov. 3rd, next week is expected to be very volatile for the USD and its crosses. |
| British Pound Extends Gains after GDP Beats Targets Posted: 26 Oct 2010 07:13 AM PDT
The British pound rose broadly on Tuesday versus its major counterparts, after government data showed much stronger than expected GDP growth in the 3rd quarter and boosted demand for the currency. The sterling advanced against all 16 of its most-traded rivals and appreciated 1.1% against the euro and 1% against the U.S. dollar. Furthermore, the nation's credit outlook was raised at Standard & Poor's providing another boost for the pound later in the session. The agency, which affirmed its AAA rating on U.K. debt today, restored its outlook to "stable" from "negative" bringing more good news for the U.K. currency. In this environment, further sterling appreciation is likely as investors now see less of a chance that the Bank of England will announce more monetary stimulus next month. Sterling will likely continue to advance and take advantage of the poor U.S. economy. Confidence in the UK economy will likely remain firmer in the near term, although there are still some risks which should not be ignored and are liable to increase again over the next few weeks. Trends in risk appetite will remain important and sterling will gain immediate support from the increased investor confidence. The next resistance line for the GBP/USD pair is around the 1.60 level. |
| SGX’s ASX Takeover Igniting Speculations of Further Mergers in the Region Posted: 26 Oct 2010 06:25 AM PDT
Yesterday's formal announcement of Singapore Exchange's takeover of ASX has been stirring Asian markets while making both investors and policy makers uneasy. ASX ended down 7.4% in Sydney Tuesday while SGX shares slumped the most in two years yesterday. Investors' opposition comes from the assumption that the price offered by SGX was too high, almost twice the average for takeovers of financial companies worldwide in the past year. Such a high premium comes as a surprise as Australia is a mature market and does not provide the high growth potential emerging markets do. The main opposition, however, comes from policy makers who are reluctant to see such a big portion of the Australian economy in foreign hands. The merger will have to face tough regulatory and parliamentary approval, raising doubts the deal can go through. While the Stock Exchanges involved in the merger dropped, other Asian Exchanges saw steep rises. The proposed merger is likely to draw greater investor attention to the region. Asia is a fast growing market place with many U.S and European based exchanges looking for exposure in the region. The Hong Kong Stock Exchange is currently the largest exchange in the world. The recent deal ignited speculations of the possibility of further exchange consolidations in the region. Whether or not this deal will actually be approved it appears as though the Asian markets will the focus in the near future as investors move from established, slow growing markets to the faster growing emerging ones. |
| DAX 30 Index Reversals in the Making Posted: 26 Oct 2010 01:02 AM PDT
The DAX 30 Index has recorded much bullish behavior in the past several days. However, the technical data indicates that this trend may reverse anytime soon. For example, as I demonstrate below, the 8-hour chart signals that a bearish reversal is imminent. This might be a good opportunity for CFD traders to enter the trend at a very early stage and a great entry price. • Below is the 8-hour chart for DAX 30 Index by ForexYard. • The technical indicators used are the Slow Stochastic, RSI and Williams Percent Range. • Point 1: There is a "doji" candlestick formed in the chart, indicating that a reversal should take place. • Point 2: The Slow Stochastic indicates a bearish cross, signaling that the next move may be in a downward direction. • Point 3: The RSI signals that the price of this pair currently floats in the over-bought territory, suggesting downward pressure. • Point 4: Williams Percent Range also supports the downward direction. DAX 30 Index 8-Hour Chart |
| Forex News: USD Down despite Jump in Home Sales Posted: 25 Oct 2010 11:34 PM PDT
The US dollar traded lower yesterday contrary to the positive data releases coming from the American housing sector. The greenback pushed its way back to 15-year lows against the Japanese yen, and saw declines against the Aussie dollar and euro as well. Traders are anticipating a monetary easing policy by the Fed and this has pressure pushing against any positive news from the US. Here is a roundup of the events to watch for today: 8:30 GMT: GBP – Prelim GDP q/q British GDP has been steady for the past few months, but growth remains slow and inflation persists in being a concern for British policy-makers. Today's figures should show positive growth in this quarter's GDP, but may indicate a general slow-down. The pound is likely to see some downward movement if the figure comes out as low as forecasts, but should remain bullish against the US dollar due to speculation of a Fed monetary move in the near future. 14:00 GMT: USD – CB Consumer Confidence The Conference Board (CB) is set to publish its consumer confidence figures for October today. This figure has been in a gradual decline for the past few months, but expectations are for a minor increase this month. If the figures come out much better than expected, then the USD may get a respite from its latest downturn. Traders should bear in mind, however, that speculation still has the greenback bearish in expectation of a money printing policy being enacted by the Fed after their next policy meeting on November 2-3. |
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