FOREXYARD: Forex News Blog | |
- Gold Prices Set to Decrease
- Analyzing Gold’s Latest Price Movements
- FX Traders Prepare for QE II
- Silver Could Test Support at $24.00 an Ounce
- Volatile Trading Expected Due to Heavy News Day
- SEK, NOK Losing Momentum from Monetary Policy Statements
| Posted: 03 Nov 2010 08:21 AM PDT
Gold prices rose significantly in the last three months and peaked at $1352.60 per barrel. However, the weekly chart is suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. Forex traders involved with commodities like this can take advantage of this knowledge by going short on gold now, and at a great entry price! • Below is the weekly chart for gold by ForexYard. • The technical indicators used are the Slow Stochastic, RSI and Williams Percent Range. • Point 1: The Slow Stochastic indicates a bearish cross, signaling that the next move may be in a downward direction. • Point 2: The RSI signals that the price of this pair currently floats in the over-bought territory, suggesting downward pressure. • Point 3: Williams Percent Range also supports the downward direction. Gold-Weekly Chart |
| Analyzing Gold’s Latest Price Movements Posted: 03 Nov 2010 05:06 AM PDT
ForexYard will be publishing a number of informative articles on the subject of gold trading for the next few weeks as part of a campaign to promote our newest feature: ForexYard's Gold Trading Account! Take a look at the chart below and see for yourself what has been happening lately with the price of Gold. We've been experiencing a secular bull market for the last few years with this precious metal, and this technical analysis will demonstrate why it's likely to continue in the near-term. As you can see, the price of Gold has been rising sharply since July, but took an even steeper path beginning in late September. You can see in the Stochastic (slow) indicator at the bottom that the price was being over-bought throughout that steeper rise, resulting in a breach of that sharper uptrend. Now what we are seeing is known as a "consolidation triangle." The previous trend was broken, but the price remains within a larger uptrend, and is even consolidating towards a decision point in the trend. Following this analysis puts the price of Gold most likely at a rate of $1,340 an ounce sometime in the next few trading days. Upon reaching that price level, we should see Gold receiving a modest level of support, and then a continuing of its previous long-term uptrend. Gold – Daily Chart By opening a Gold Trading Account with ForexYard, you can take advantage of this impending price movement. With the high value of trading Gold, you can make significant profits by joining these trend fluctuations. So don't miss out on this once-in-a-lifetime opportunity! |
| Posted: 03 Nov 2010 03:41 AM PDT
US Dollar weakening is taking place in the hours leading up to the Federal Reserve Open Market Committee meeting where the Fed is expected to begin another round of quantitative easing. This key event is overshadowing most other events that have taken place or those that will occur over the remainder of the week. Yesterday the Aussie dollar shined following the surprise decision by the Reserve Bank of Australia to raise interest rates 25 bps to 4.75%. This sent the AUD/USD soaring, climbing above the parity level versus the greenback. Traders seem to love big round numbers and it doesn't get any more round than 1.0000. The election in the US appears to have weakened the greenback as the Republicans took control of the House of Representatives while reducing the Democrat's majority in the Senate. Today the pound is higher versus the dollar following release of better than expected Services PMI data. The survey came in at 53.2 on expectations of 52.4. Traders have bid the cable to its highest level since the end of January. Later today the payrolls firm ADP will release their version of the Non-Farm Payrolls. This is typically considered a preview of the Labor Department's report to come on Friday. Also due to be released today is the ISM Manufacturing PMI. And finally we've arrived at the highlight of the week, if not the year; the Fed's announcement on quantitative easing. A majority of economists polled by Bloomberg expect the Fed to announce a $500 billion asset buying program. How and when the Fed will implement the program remains to be seen, as does the direction of the dollar following the announcement this afternoon. Much of the QE II has been priced into the EUR/USD already. There is a risk that the initial announcement may disappoint traders and the dollar may strengthen following. But the continued loosening of US monetary policy cannot be ignored and the dollar should weaken versus the EUR/USD. Daily support for the EUR/USD rests at 1.4000, the upper boundary of the triangle pattern on the daily chart. Resistance is found in the range of 1.4080 – 1.4100. |
| Silver Could Test Support at $24.00 an Ounce Posted: 02 Nov 2010 11:13 PM PDT
The price of precious metals, such as Gold and Silver, have been rising steadily for the past several months with what appears to be no end in sight. However, Silver is beginning to give off a few indications that it could correct downwards over the next few trading days and test its uptrend's primary support level near the $24 mark. The chart below is the Silver daily chart provided by ForexYard. We can see on the chart that the uptrend has been confirmed multiple times and has sustained itself for months. The trend line drawn on the chart indicates where the price is likely to meet support. As we can see, there is a recent doji candlestick formation from yesterday, and today appears on track to form a second doji candlestick. A doji is typically representative of an impending reversal in direction, however temporary the reversal may be. The MACD and Stochastic (slow), shown at the bottom of the chart, each have fresh bearish crosses, suggesting an imminent downward corrective movement has begun to develop. The first support level to be tested will be reached at the $24.50 price level, and represents contact with the trend line. If the price of Silver behaves similar to other commodities, such as Crude Oil, we could see a minor breach of the trend line as the pair forms either a flag or pennant consolidation trend over the next few weeks. If the price reaches $24 an ounce, this may well be the case. Silver – Daily Chart |
| Volatile Trading Expected Due to Heavy News Day Posted: 02 Nov 2010 10:18 PM PDT
The U.S. dollar fell against most of its major counterparts yesterday. The dollar fell due to speculations regarding asset purchases by the Federal Reserve, as investors believe this move will spur inflation in the U.S. The Fed is expected to announce its stimulus by tomorrow, and traders are advised to look for the update on the matter as it is likely to have a large impact on the market. In addition, today's main focus will be on the U.S. Congressional Elections results. The releases of the results are likely to create a ripple effect that will seep into currencies' trading as well. It is recommended to follow the news regarding the elections during today's trading. In addition, many news publications, especially from the U.S., are scheduled for today. Here are the leading releases: • 09:30 GMT – GBP: British Services Purchasing Managers' Index (PMI) – It is a survey of purchasing managers who are asked to rate their current business conditions. If the end result will beat the projection for 52.4, the pound is likely to gain as a result. • 12:15 GMT – USD: U.S. ADP Non-Farm Employment Change – ADP will release its forecast for the Non-Farm Payrolls report which is scheduled for Friday. Their estimation is that jobs have increased by 21,000 in October. Such a result is likely to support the dollar. • 14:00 GMT – USD: ISM Non-Manufacturing PMI – Very similar to the British report. Economists have forecast that the end result will be 53.5 points. Such a result will indicate that the industry is expending, and is likely to support the dollar. • 18:15 GMT – USD: U.S. Federal Funds Rate – This is the U.S. interest rate announcement for November. Analysts expect that the Federal Reserve will leave rates at a record low of less than 0.25%. However, if the Fed will decide to manipulate rates, heavy volatility is likely to take place as a result. |
| SEK, NOK Losing Momentum from Monetary Policy Statements Posted: 02 Nov 2010 11:16 AM PDT
Scandinavian interest rate decisions have been affecting the SEK and NOK heavily these past few trading days. Sweden decided to lift interest rates by 25 base points last Tuesday, following a fiery speech by the deputy governor of the Riksbank a week prior. However, the bank's official statements portrayed a slightly more conservative estimate for future rate hikes and growth, leading to some dampening investment in the nation's currency. The Swedish krona (SEK) began to trade lower against most of its currency counterparts as a result. The USD/SEK rose sharply from 6.5348 to as high as 6.7955 before settling near 6.6133 as of Tuesday afternoon. The EUR/SEK also rose from 9.1552 to a high of 9.4258 before paring some of its gains to currently trade near 9.3120. Norway, on the other hand, decided not to lift interest rates and offered a somewhat sobering assessment. Norges Bank announced it would hold rates at 2.0% and forecasted a holding steady of Norwegian interest rates for the next few quarters until economic conditions would permit a more steady return to normalcy. The Norwegian krone (NOK) held steady against its currency counterparts following the announcement, however. The rising price of crude oil has helped to maintain stability for the NOK, and the growth forecasts still paint a more optimistic picture than many of Norway's economic rivals. Technical Analysis The chart below is the daily chart for the USD/NOK by ForexYard. We can see from the Fibonacci retracement lines that the pair is currently holding steady in a consolidation pattern between the 23.6% level and 38.2% level. The bigger picture seems to also highlight a larger consolidation trend with a pivot point near the tip of the small-scale consolidation pattern occurring over the last few weeks. A break-out should occur in the next few trading days if the consolidation comes to an end at its tip near the price mark of 5.8500. The prices to watch after the break-out are marked with red lines. If the price breaks the red line above the current price, we may expect a break-out in a bullish direction with a target near the 50% retracement level at a price near 6.1100. Likewise, if we see the lower red line get touched then we can expect a breakout towards the second lower red line at a price of 5.6000, and possibly lower. Technical analysis seems to suggest that the downtrend of this pair is only experiencing a mild pause before it continues to run bearish. |
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