FOREXYARD: Forex News Blog | |
- Dollar Strength Returns; Canadian Economic Data Approaching
- Crude Oil Hits a 2-Year High
- Crude Oil Approaching $89.70 Level
| Dollar Strength Returns; Canadian Economic Data Approaching Posted: 06 Dec 2010 05:07 AM PST
The dollar was stronger during the European trading session as Fed Chairman Ben Bernanke reassured investors over inflation concerns while Moody's downgraded the government bond rating of Hungary. Overall dollar strength was apparent in the forex market today as the dollar recovers from last week's losses due to weak employment numbers. At lunchtime during European trading the EUR/USD was trading lower at 1.3300, from an opening day price of 1.3413. The GBP/USD was down at 1.5675, after opening the day at 1.5773. The USD/CHF was up at 0.9850, following an opening day price of 0.9736. Commodities were little changed with spot crude oil trading at a 22-month high. In an interview during the weekend Ben Bernanke suggested the risk for a double dip recession in the US economy was unlikely while stressing investors had placed too much emphasis on higher future inflation. The focus was shifted back to Europe as the government bond rating of Hungary was downgraded by Moody's Investor Services. The rating was cut to Baa3, only two slots above junk status. The downgrade may highlight just how central Europe's fiscal issues are shifting to the outlier nations Europe. Major Canadian economic data will be released this afternoon with monthly building permits due at 13:30 GMT followed by the Ivey PMI at 15:00. Negative results for both may boost the greenback versus the Canadian Dollar. Last week the USD/CAD failed for the fourth time to close below the key 0.9980 level. Traders may want to be long on the pair with resistance at Friday's high of 1.0080, followed by 1.0140. |
| Posted: 06 Dec 2010 12:46 AM PST
By last week's Tuesday, a rumor has spread that the European Central Bank (ECB) is buying bonds, and as a result spurred a rally for the euro. In addition, dollar-dominated commodities, such as crude oil and gold strengthened as well. The bullish trend was significantly magnified on Friday, following the U.S. Non-Farm Payrolls release. The end result was rather disappointing, showing payrolls are increasing at a lower-than-expected pace. In addition, the national unemployment rate rose to 9.8%, for the first time since April. This has weakened the dollar further, and naturally boosted crude oil and gold. Crude oil peaked at a 25-month high of $89.60 a barrel. Gold has peaked at $1,415 an ounce, trading near an all-time high. Traders are advised to continue following the leading economic releases from the U.S., as well as updates regarding the European debt crisis. Special attention should be given to the today's meeting between European finance ministers in Brussels, as they might declare their desire to enlarge the region's bailout plan in order to fight debt contagion. Today, there aren't significant economic releases from the U.S. and the euro-zone, and traders may want to follow these reports from Canada: • 13:30 GMT, Canadian Building Permits – The report measures the change in the total value of new building permits issued during October. If the end result will be positive, the CAD is likely to strengthen as a result. |
| Crude Oil Approaching $89.70 Level Posted: 06 Dec 2010 12:41 AM PST
Crude oil prices rose above $89 a barrel today, despite an unexpected rise in US unemployment. Oil has made a significant upward correction, which can be directly correlated with the bullish trend of the EUR/USD cross. This recent activity has raised the stakes for traders. However, I will illustrate below that the oil may very well be heading for a reversal. From here on, the forex and commodity markets will see very high volatility indeed. • Below is the daily chart for crude oil by ForexYard. • The technical indicators used are the Slow Stochastic, Relative Strength Index (RSI) and Williams Percent Range. • Point 1: There is a "doji" candlestick that has formed on the chart, indicating that a reversal should take place. • Point 2: The Slow Stochastic indicates an impending 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, indicating downward pressure. • Point 4: The William's Percent Range also supports the downward direction. Crude Oil Daily Chart |
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