FOREX TIPS: November 2010

Tuesday, November 30, 2010

FOREXYARD: Forex News Blog

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Euro Gives Back Early Gains; 50% Fib in Play
USD/JPY Looks to Correct Gains
USD Bullish on Euro Zone Woes, Korean Tensions

Euro Gives Back Early Gains; 50% Fib in Play

Posted: 29 Nov 2010 03:56 AM PST

London traders continued their assault on the euro following earlier gains in the 16-nation currency during the Asian hours. A key Fibonacci retracement may be reached before the end of today's New York trading.

A weekend announcement signaling an agreement by Ireland to accept financial aid generated interest in the euro at the opening of the Japanese trading session. Ireland is set to receive a bailout package worth 85 billion euros from the EU and IMF.

This helped the EUR/USD climb to an intraday high of 1.3300. However, support for the euro quickly faded as the European markets opened and the pair fell to its lowest level in three months. The EUR/USD is currently trading at 1.3170. Weakness in the euro was felt against the Swiss franc with the EUR/CHF trading at 1.3180, down from an opening day price of 1.3280.

The Irish acceptance of bailout funds reduces some pressure on the indebted nation that stems of the government's decision to guarantee failing Irish banks. But questions still remain how the Irish political landscape will look with the threat of a crumbling government coalition.

Other European nations also remain susceptible to rising national debts. The nations of Portugal, Spain and Italy are amongst the larger EU members with staunch fiscal problems. Recent headlines show EU institutions are attempting to convince Portugal to accept bailout funds before another financial crisis erupts in Europe.

A lack of economic data on the calendar should leave the European debt crisis firmly in the spotlight during today's New York trading session. Further euro weakness may be seen as a breach below the support level from September 19th at 1.3160 could propel the EUR/USD lower to the 50% retracement level of the June to November move at 1.3080.

EURUSD_Daily

USD/JPY Looks to Correct Gains

Posted: 29 Nov 2010 01:11 AM PST

The USD/JPY pair saw quite a consistent bullish trend during the past month. The pair gained about 400 pips during the last four weeks, rising from the 80.20 level up to the 84.20 level on Friday. However, after the pair failed to breach through the 84.20 level it began correcting gains, and is now trading near the 83.90 level. The bearish correction is likely to extend today, with potential to reach the 83.00 level.

• The chart below is the USD/JPY 4-hour chart by ForexYard.
• There is a very distinct bearish channel formed on the 4-hour chart, and the pair is now floating in its bottom.
• The pair recently reached as high as the 84.20 level, yet this appears to have initiated a mild bearish correction.
• The Slow Stochastic has just completed a bearish cross above the 80-line, indicating that a bearish correction might take place.
• In addition, the RSI is now pointing down, reaching towards the 70-line. If the RSI will cross the 70-line, it is likely to validate the bearish move.
• The next support levels are located at the 83.80, 83.50 and 83.00 levels.
• The next resistance levels are found at the 84.20, 84.90 and 85.30 levels.

USD JPY

USD Bullish on Euro Zone Woes, Korean Tensions

Posted: 28 Nov 2010 10:18 PM PST

Fresh indications of trouble throughout the euro zone's periphery sparked another wave of dollar positions, pushing the USD higher against most of its currency counterparts. The rising tensions on the Korean peninsula added to fears of impending crisis. Safe-haven buy-ins appear to have risen Friday before market closing, but today's news may bring some strength back to Europe.

Here is a roundup of today's leading events:

9:30 GMT: GBP – Net Lending to Individuals

This report measures the total change in net value for new credit extended to consumers. It is a monthly report which carries a referential impact on consumer spending, sentiment, and economic growth. If this figure grows as expected, the pound may see some recovery against its primary counterparts in the hours after this report is published.

This Week: USD – Treasury Currency Report

This report was initially scheduled to be published today, but sources indicate it may be postponed due to recent global tensions. It could be released sometime later this week, or as early as next week. It is a release published twice per year which provides a detailed overview of foreign exchange rate policies, economic outlook and conditions, as well as a recap of government actions taken globally over the past 6 months. The report tends to drive volatility during and after its release, but has no predictable impact on direction or valuation. This is a report forex traders will want to keep an eye on.

Sunday, November 28, 2010

FOREXYARD: Forex News Blog

Silver Falls but Remains Inside Continuation Chart Pattern

Posted: 26 Nov 2010 12:32 PM PST

Silver prices finished down this week largely tracking the price of gold lower.

While the long term upward trend remains firmly intact the price may have arrived at an attractive level for entering into the trend.

Silver prices quietly moved lower throughout the week as the Thanksgiving holiday approached. With US markets being closed yesterday, silver prices were relatively unchanged. However, today the commodity fell sharply, dropping to the minor support level at $26.40, and is currently trading at $26.65. This takes the price of spot silver down 2.2% on the week.

The fall in the price comes in line with a sharp drop in the value of gold. The price of gold finished lower today at $1363.43, after opening the day at $1372.73.

Worries over the spread of the European sovereign debt crisis sank both commodities and equities.

The price of silver continues to trade inside a triangular consolidation pattern that begins at the all-time high for the pair at $29.34 and extends higher from the long term rising trend line originating in late August.

Silver_Daily

Saturday, November 27, 2010

FOREXYARD: Forex News Blog

Black Friday May Add Strength to Gold Over Weekend
Gold Has Strong Support at $1365, Silver Remains above $27.00
Silver Trading Update
Head and Shoulders Reversal for Gold?
Silver Hits $27.55 an Ounce
Gold Looks To Drop towards $1,350 an Ounce

Black Friday May Add Strength to Gold Over Weekend

Posted: 26 Nov 2010 06:24 AM PST

Gold prices appear to be ending the week with little change since Monday. While the precious metal climbed over $30 in value by mid-week, the price had tumbled back to $1353 an ounce as of this afternoon.

The trend for Gold appears to remain bullish despite this recent corrective movement. However, we should also note that the retracement experienced since Wednesday could be part of a larger cyclical downturn with take-profit targets at $1340, $1310, and $1280. If holiday shopping picks up over the weekend from Black Friday in the United States, then there is the possibility of a quick rebound in precious metals at the start of next week.

If retail sales enter their holiday upswing, we could see demand for jewelry-linked commodities (Gold, Silver, and Platinum) experience a bullish spike as well. The retracement period on Gold appears to be shrinking, which means the target of $1310 may be the lowest Gold reaches before extending its bullish trend further. Traders may want to keep an eye on retail sales and consumer spending figures emerging from the US during the post-Thanksgiving/pre-Christmas shopping period.

We can see on the chart below that Gold may be entering the final phase of a head-and-shoulders candlestick pattern, with a target around $1310, and perhaps even as low as $1280.

Gold – Daily Chart
Gold - Daily Chart

Gold Has Strong Support at $1365, Silver Remains above $27.00

Posted: 26 Nov 2010 12:26 AM PST

Gold continued its decline in European trading today, dropping to $1365 an ounce from an overnight price of $1372. The decline came as the dollar strengthened further versus the euro, as the ERU/USD pair reached a two week low of 1.3260.

The drop came as concerns intensified that Ireland's debt problems will widen to Portugal and Spain. Though Gold prices still receive support from the euro-zone debt crisis as investors turn to the precious metal as an alternative investment, the strong dollar reduces the appeal of the metal as it makes it more expansive.

It seems that Gold has a strong support at $1365 an ounce, as the euro-zone debt concerns persist and the tension between North and South Korea remain in the background. Trading returned to normal market conditions today as U.S banks open after yesterday's holiday, however, the lack of major news events will likely keep the markets subdued ahead of the weekend. Gold will likely remain between $1365 and $1372 for the remainder of the day.

Silver continues to follow Gold's trading pattern, also seeing a decline in today's trading, albeit it still remained within its recent range. Silver for immediate delivery declined to $27.25 an ounce, after briefly dropping to a low of 27.02. Silver, however, is still up overall this week. The price reached $29.36 an ounce on Nov. 9, the highest level since 1980.

Silver Trading Update

Posted: 25 Nov 2010 11:38 PM PST

Typical of a sustained movement, similar to what silver prices have been experiencing, there eventually arrives a decision point. Concerning the price of silver, that point may have arrived. We've seen silver prices climbing steadily these past few weeks as concerns over the Euro-Zone's sovereign debt crisis and Ireland default have pushed many investors out of currency safe-havens and into commodities such as silver.

What we see now in the charts is silver prices hitting a potential breaking point. The $29.30 price level appears to represent a strong resistance line for silver prices. It is only natural then that our technical indicators, displayed below, are showing an impending downward correction. But is the price of silver really ready to halt its upward mobility?

• The chart below is the silver weekly chart by ForexYard.

• The indicators used are the MACD, Stochastic (slow), and the Fibonacci Retracement lines were also drawn.

• Point 1: Here we see that the price has reached a significant resistance point, represented by the 100% Fibonacci Retracement line.

• Point 2: The Relative Strength Index (RSI) indicates that the price of this cross currently floats in the overbought territory, signaling downward pressure.

• Point 3: There is an impending bearish cross on the MACD which highlight a downward movement is going to occur in the near future.

Silver Weekly Chart silver 26-11-2010

Head and Shoulders Reversal for Gold?

Posted: 25 Nov 2010 07:42 PM PST

A bearish chart pattern signals a potential drop in the price of gold.

The head and shoulders top can be identified with the left shoulder taking shape on 10/14, the head is located at 11/9, and the right shoulder at 11/23. A break below the rising neck line would signal a completion of the reversal pattern with a potential move of $100 from the breach below the neck line.

Today's economic events:

CHF – KOF Economic Barometer – 10:30 GMT
Expectations: 2.09. Previous: 2.17.
The Swiss franc has slipped against the dollar as the USD/CHF is trading back above 1.00. Further gains may be booked should the KOF report come in below expectations. Traders should be targeting the 50% retracement from the August to October move at 1.0040, followed by the 61.8% retracement at 1.0175.

Support for the EUR/USD comes in at 1.3080, the 50% retracement level for the June to September move. Resistance is found at 1.3360, the 61.8% retracement for the June to September move.

Silver Hits $27.55 an Ounce

Posted: 25 Nov 2010 10:54 AM PST

Silver was little changed on Thursday, lacking strong impetus due to the U.S. Thanksgiving holiday but backed up by some safe-haven buying amid Europe’s debt crisis and heightened tensions between North and South Korea. However, there is much technical data that supports a bearish move for today as described below.

• The technical indicators used are the Slow Stochastic and MACD.

• Point 1: The Slow Stochastic shows a fresh bearish cross which may indicate an impending bearish movement.

• Point 2: There are multiple bearish crosses on the Stochastic (slow) which highlight an impending downward correction.

• The volatile upward movement which occurred prior to this downward correction has generated these indicators, and there appears to be room for this correction to continue.

Silver Daily Chart
silver 25-11-2010

Gold Looks To Drop towards $1,350 an Ounce

Posted: 25 Nov 2010 09:45 AM PST

For the past few weeks gold is seeing quite unusual and remarkable trading. It was only two weeks ago that gold reached an all-time nominal high of $1,424 an ounce. This was soon corrected and gold prices fell to as low as $1,329 an ounce. By now gold resumed its uptrend, and is currently trading near $1,375 an ounce. However, there are several technical indications that gold is about to face yet another bearish correction.

• The chart below is spot gold 4-hour chart by ForexYard.
• It can be seen that since November 16 gold prices are gradually advancing, until a recent high of $1,382 an ounce.
• However, gold has failed to breach through the $1,385 level, and sees rather flat trading ever since.
• The RSI has recently reached above the 70-line, in what's known as the "Over-Bought" section. Moreover, it is now pointing back down, indicating that a bearish correction is impending.
• Lately the MACD has completed a bearish cross, also suggesting that a downward move is likely to take place.
• Nevertheless, the Slow Stochastic continues to point up. A bearish cross of this oscillator might validate the bearish move.
• The next support levels are located at $1,367, $1,356 and $1,355.
• The next resistant levels are found at $1,380, $1,385 and $1,390.

gold 25 11