FOREXYARD: Forex News Blog | |
- Disappointing Jobs Report Boosts Gold Prices
- AUD/USD to Continue Upward Movement
- Crude Oil Trading Opportunity
- Selling Euro Strength
| Disappointing Jobs Report Boosts Gold Prices Posted: 03 Dec 2010 07:41 AM PST
The New York trading session began with a jobs report that had high expectations but failed to live up to the hype. Following the report the euro continued its move higher and the price of gold surged. The US Department of Labor released its monthly Non-Farm Employment Change that fell short of the market's high expectations. The jobs report for the month of November showed only 39k new jobs were added to the US economy. Economists surveyed had largely expected an increase of 143k. The unemployment rate also crept up unexpectedly, rising to 9.8% from October's reading of 9.6%. This helped the euro continue its bullish correction against the dollar with the EUR/USD rising as high as 1.3373, a level that coincides with the 38.2% retracement from the June to November move. The pair began the day trading at 1.3203. Traders looked to have moved into safe haven assets after the disappointing jobs report. This may explain the rise in the price of gold and the Japanese yen. Spot gold prices were significantly stronger today, rising to $1407 from an opening day price of $1389.91. The yen was up on the dollar as the USD/JPY is trading lower at 82.88 after opening the day at 83.65. The jobs report left traders with little room to cheer as high expectations had been building. Previous job reports had all shown improving employment numbers. This week's ADP job report surprised to the upside also increased market expectations. The negative data should push the trend of the last three days further with a recovery of the euro and rising gold prices. |
| AUD/USD to Continue Upward Movement Posted: 03 Dec 2010 04:18 AM PST
After falling from a new high the Aussie dollar appears to have finished a correction to the intermediate trend line. Looking to the daily chart of the AUD/USD, the intermediate trend line (1) has taken the pair from a June low to a new record high in early November. After reaching a new all-time high of 1.0181 (2) the pair has corrected to the intermediate trend line which coincides with the pair's low of 0.9535 (3). A short term downward sloping trend line (4) has been drawn off of the recent highs. This trend line was breached during today's European trading session. We can expect resistance to come in at 0.9950 (5) along with the all-time high of 1.1081 (2). Should the upward trend fail to materialize, support is found at the double top of last November at 0.9400.
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| Posted: 03 Dec 2010 03:39 AM PST
Crude oil is set close a bullish trading week. Crude began this week's session at about $83.00 a barrel and is currently trading near $88.00 a barrel. However, both the 4-hour and the 8-hour charts are providing solid indications that a bearish correction is impending. A bearish cross has been completed on the Slow Stochastic of both charts – above the 80 line – which usually detects overbought conditions in the market. In addition, the RSI on both charts is pointing down. If the RSI will drop below the 70-line, it would further support the bearish prediction.
Despite the technical predictions, traders should also take into account that today at 13:30 GMT the U.S. Non-Farm Payrolls release is scheduled. This is one of the most significant news events of the month, and usually causes unusual volatility. The repercussions are extremely difficult to predict, and the risk of keeping an open position at this time is high. Analysts are forecasting that payrolls have increased by 143,000 in November. Conventional wisdom suggests that if the actual figure will be higher, crude oil prices will rise. If the end result will be negative, crude might face a sharp bearish correction. |
| Posted: 02 Dec 2010 10:37 AM PST
The announcement by ECB President Jean-Claude Trichet to extend ECB liquidity provisions helped to continue the mini euro rally into today. Trying to decipher if the rally has legs or is simply a technical correction may be more complicated. Following the release of the Minimum Bid Rate which as expected was held steady at 1.00%, European Central Bank President Trichet announced the intention of the ECB to continue its program of buying European sovereign debt. Many traders were disappointed that Trichet did not implement extra provisions to tackle the European debt crisis. Speculations were for an increase in bond purchases by the ECB of those financially troubled nations or potential quantitative easing measures. However, only the decision to maintain current levels fo bond purchases was announced, something that lacked the shock and awe approach the Federal Reserve takes to stimulate a reaction from financial markets. The announcement did help to boost the euro versus the dollar with the EUR/USD rising to a high of 1.3246 from an opening day price of 1.3105. One hypothesis for the euro rally may be traders closing out profitable shorts in the EUR/USD. If this is the case then market participants will be waiting for future opportunities to short the euro, selling into any rally such as the one we've seen over the past 48 hours. Good short opportunities may be found tomorrow with the release of US Non-Farm Payrolls. Resistance for the EUR/USD comes in at 1.3330, the rising trend line from the June to November move. This level also bears significance as it coincides with the August high. Any rally to this level should be sold into. Traders may want to target the 61.8% Fibonacci retracement level from the June to November move as well as the bottom channel line which has supported bearish moves in the pair both in mid-November as well as the recent low.
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