FOREXYARD: Forex News Blog | |
- Euro Remains Well Bid
- Crude Oil Slips on Firmer Dollar
- Ireland in Bailout Negotiations with EU/IMF Delegation
- Euro Recovers on Irish and EU/IMF Talks
- Dollar Stronger and Crude Oil Weaker After Morning Trading
- EUR/USD – Where Does the Pair Go from here
- Dollar Rebounds Strongly against Turkish Lira
- Safe Haven Currencies on the Rise
- Asian Slowdown Sparks Dollar Rally
- GBP/JPY Looks to Correct Gains
| Posted: 19 Nov 2010 04:52 AM PST
The euro continues to be bolstered by talks of Ireland's willingness to accept aid in order to save its faltering banking system while Fed Chairman Ben Bernanke came out swinging against critics of QE II and Asian countries weak currency policy. Traders continue to bid the euro higher in morning trading of the European session. Fueling the euro buying are prospects of Ireland's acceptance of a bailout from a joint EU/IMF fund. It remains unclear if Ireland will tap the European mechanism for nations struggling to pay their sovereign debts. Details of the proposed agreement have yet to be finalized. Ben Bernanke came out swinging in a speech today in Frankfurt Germany. In his sharpest criticism of Asian nations that are artificially holding their currencies low to increase exports, Bernanke claimed that China and Singapore were the worst offenders. These nations are fueling uneven economic recoveries in the varying economies of the world. The Fed Chairman's speech also addressed the criticism the Fed has encountered over the second round of quantitative easing. Currently the EUR/USD is trading at 1.3690, up from an opening day price of 1.3586. The GBP/USD is trading at its opening day price of 1.6029 after trading as high as 1.6093. The USD/JPY is even for the day at 83.40. The euro is trading with a high amount of volatility today and should continue to do so going into the US trading session. Traders should be following the Irish and EU/IMF negotiations as the economic calendar is absent of any noteworthy news events remaining for the day. Support and resistance for the EUR/USD come in at 1.3660 on the hourly chart and last Friday's high of 1.3770. |
| Crude Oil Slips on Firmer Dollar Posted: 18 Nov 2010 02:50 AM PST
The Oil prices are once again dropping, and it is currently traded around $82 level. However, there is much technical data that supports a bullish move for today as described below. Forex traders involved with commodities like this can take advantage of this knowledge by going long on Crude Oil now, and at a great entry price! • Below is the 8-hour chart of the Crude oil. • The technical indicators used are the Slow Stochastic, Relative Strength Index (RSI) and MACD. • Point 1: The Slow Stochastic shows a bullish cross, signaling that the next move may be in an upward direction. • Point 2: The Relative Strength Index (RSI) indicates that the price of this cross currently floats in the oversold territory, signaling upward pressure. • Point 3: The MACD indicates an impending bullish cross, which may signal a upward movement is going to occur in the near future. • The volatile downward movement which occurred prior to this upward correction has generated these indicators, and there appears to be room for this correction to continue. Crude Oil 8-Hour Chart |
| Ireland in Bailout Negotiations with EU/IMF Delegation Posted: 18 Nov 2010 01:45 AM PST
Headlines today are reporting a joint EU/IMF proposal to save the Irish banking system in order to prevent a spread of panic to the rest of the euro zone. This is despite public statements from the Irish government that is determined not to cede control over its finances to outside influences. The bailout may be enough to prop up Ireland but may not save periphery Europe from further contagion problems which would be a negative for the euro. A packaged deal by the EU/IMF to support the collapsing Irish banking system is being strung together in negotiations with Irish government officials. The EU/IMF bailout would come on top of the already 50 billion euros ($67 billion) aid package the Irish government has pledged to prop up its banking system. The largest Irish banks are crumbling due to poor performing property loans. Officials are currently examining the finances of Irelands banking system to identify those banks that will need more funding as the EU/IMF is of the opinion that the present Irish bailout plan will not be sufficient. However, the 750 billion euro EU funding mechanism for member states is designed to be activated once a state requests aid. Ireland has been adamant in its refusal to accept outside aid while ceding control of their financial destiny. The EU/IMF has an interest in arriving at a deal with Ireland to prevent contagion. The longer the crisis carries on, the greater the chance market fears will spread to other EU periphery states such as Spain, Italy, and Greece. Should the Irish banking/debt crisis carry on it will weigh on the EU and be a negative for the euro. Technical studies suggest the EUR/USD is in line for a bearish correction with the next price target for the pair resting at 1.3270. Traders should remember the previous fiscal crisis with Greece led to the EUR/USD trading as low as 1.1875. |
| Euro Recovers on Irish and EU/IMF Talks Posted: 17 Nov 2010 10:01 PM PST
Slight optimism is apparent in the markets this morning as European Union and International Monetary Fund officials travel to Dublin to discuss a possible aid package for the nation's troubled banking sector. The Irish debt crisis is expected to be the center of attention for the rest of the week and traders are strongly advised to follow any developments from the region. Traders are also advised to follow any economic data released from the US as this will likely shed further light on the prospects for the Fed's plan to buy additional $600 Billion in bonds. Some of today's major events: Retail Sales – GBP – 9:30 GMT This is the primary gauge of consumer spending, which accounts for the majority of overall economic activity and is therefore a valuable tool for measuring economic recovery. Unemployment Claims – USD – 13:30 GMT Unemployment remains the most highly watched economic factor in the U.S as it seems to be stagnating around a very uncomfortably high level. After a surprise decline the previous week, this week's number is expected to show an increase in unemployed. This result will undoubtedly weigh on the USD. Philly Fed Manufacturing Index – USD – 15:00 GMT This is a leading indicator of economic health as increased manufacturing means increased consumption and employment, both crucial for economic recovery. |
| Dollar Stronger and Crude Oil Weaker After Morning Trading Posted: 17 Nov 2010 03:52 AM PST
Markets were quiet this morning during the European session as Ireland is in the midst of talks with the EU and the IMF. This follows yesterday's gains in the dollar and pullbacks in equities and commodities. Talks began this morning between Ireland and delegations from the EU and the IMF. The discussions surround a potential bailout for Irish banks that are teetering on the edge of insolvency and could push the Irish government into default. An aid package is expected to be pieced together to prevent a default by the banks or by Ireland. Despite the bailout talks, the EUR has seen little support as the EUR/USD is trading lower at 1.3490. Yesterday the EUR/USD lost almost 1% and closed at the 1.3505 level for the first time since September. Equities were also down sharply with the Dow Jones Industrial Average losing 1.59%. Spot crude oil plunged 2.6%. During the upcoming New York trading session traders will be eyeing the Irish bailout talks as well as US economic data set to be released. US Core CPI is due to be released at 13:30 GMT with market expectations set for a rise of barely 0.1%. The weekly crude oil inventory report is also on tap for 15:30 GMT. The government's report has the ability to support the price of spot crude that is trading lower on the day at $82.10. |
| EUR/USD – Where Does the Pair Go from here Posted: 17 Nov 2010 03:10 AM PST
Looking at the daily chart a few major Fibonacci numbers stand out and may provide the next target for the EUR/USD. Following a breach below the rising support line off of the October lows, the EUR/USD switched from a consolidation phase and into a new downtrend. From September to November the EUR/USD made a strong bullish move from the level of 1.2643 to a height of 1.4281. A Fibonacci retracement shows the pair has already used both the 38.2% level as a resistance and the 50% retracement level as a support. Judging from this price behavior it is reasonable to assume that the pair will continue lower to the 61.8% retracement level which lies at a price of 1.3270. The August high of 1.3330 should stand out as a significant support level on the way as well as the rising trend line from the June and September lows.
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| Dollar Rebounds Strongly against Turkish Lira Posted: 16 Nov 2010 11:24 PM PST
Following with the pattern of growing USD strength, it appears the Turkish lira can be added to the list. The USD/TRY has risen 0.5% over the past few days following a move by Ankara to curb liquidity by raising bank reserve requirements from 5.5% to 6.0%. Bank lending in Turkey has grown at an average of 0.8% per week since January and there is a growing concern that banks may be overextending themselves in an effort to fuel growth. The result of this latest move by Turkey's central bank was a sharp depreciation of the lira against the dollar. The pair has moved from a price of 1.4008 just two weeks ago, upward to a current price of 1.4616. We can see on the chart below that the pair reached a significant support level near 1.4012, but failed to breach. The RSI and Stochastic (slow) both recently displayed bullish indicators and are currently both moving in a bullish direction, which suggests growing upward momentum for the pair. If we follow the signals being shown on this chart, and support it with the fundamental devaluation taking place in Turkey, we can assume that this pair will be targeting the 50% Fibonacci level near a price of 1.4804 over the next few trading days. If momentum remains constant beyond that level, we could also see an extension of these bullish gains upward into the 1.50's. USD/TRY – Weekly Chart |
| Safe Haven Currencies on the Rise Posted: 16 Nov 2010 10:55 PM PST
Safe haven currencies, like the U.S. dollar, experienced one of the more bullish trading days in recent weeks yesterday. The USD and JPY made significant gains against many of their most traded currency pairs, such as the GBP and EUR. The price of crude oil fell 3% to $83.00 yesterday, extending hefty losses from the previous session as economic concerns sent investors into safer investments. Today, crude oil is set to be in the spotlight again with important publications from U.S. Here are today's leading events: 13:30 GMT: USD – U.S. Building Permits • This indicator reflects the annualized number of new residential building permits issued during the previous month. • This indicator reflects the change in the price of goods and raw materials purchased by manufacturers. |
| Asian Slowdown Sparks Dollar Rally Posted: 16 Nov 2010 12:06 PM PST
Fears of Asian governments putting the brakes on their economies to ward off inflation hit markets today driving equities lower and the dollar higher against the major currencies, especially the euro. Commodities also suffered a tough trading day falling sharply. The greenback was stronger today as traders preferred the dollar versus the other major currencies while selling equities at the same time. The Dow Jones Industrial Average fell the most in a month as the index briefly traded below the 11000 level. The Dow finished the day lower by 1.65%. The cause of the drop in equities is due to fears of the Chinese government taking moves to slow the growth rate in the world's hottest economy and to stem rising inflation. South Korea also raised its benchmark interest rate 25 basis points. The Federal Reserve has come under heavy scrutiny from both the private sector and those in the US government for the Fed's quantitative easing program. This leads some economists to predict a scale back of the Fed's quantitative easing program. However, today US PPI for the previous month rose by 0.4% on expectations of a rise of 0.9%. This underscores just how close the US economy is from a state of deflation. Following the Chinese slowdown fears and criticism of the Fed, the dollar put in a strong trading day against the majors today. The EUR/USD broke below the psychological 1.3500 level and traded as low as 1.3460, a level that coincides with the 50% Fibonacci retracement level from the September low to the November high. The GBP/USD traded as low as 1.5840 where the pair found support from a short term trend line that extends higher from the mid-September and October lows. The USD/CHF is pressing the 0.9970 level, the height from the previous bullish correction in October. Gold and spot crude oil are also down sharply with spot gold falling to $1,330 and spot crude oil lower at $82.60. Spot crude oil found support at a previous channel line running down from the October highs. |
| GBP/JPY Looks to Correct Gains Posted: 16 Nov 2010 02:23 AM PST
The GBP/JPY pair recently saw an extraordinary bullish trend, gaining almost 700 pips and peaking at the 133.77 level. However, the pair saw several failed attempts to reach to the 134.00 level, and a bearish correction appears to be imminent. • The chart below is the GBP/JPY 8-hour chart by ForexYard.
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