FOREXYARD: Forex News Blog | |
- EUR/NOK Stands at Reflection Point
- Irish Downgrade Sends Euro Lower
- USD/NOK Short on Breach of Support Zone
- Crude Oil Bouncing Off 50% Retracement Line at $90
- Majors Receive Injection of Volatility Ahead of Heavy News Day
- AUD/NZD Rally Looks to Continue
| EUR/NOK Stands at Reflection Point Posted: 09 Dec 2010 07:45 AM PST
The EUR/NOK looks to have a clear run lower should it breach its current rising trend line. Similar to its counterpart in the USD/NOK, the EUR/NOK continues its move lower in a correction of an intermediate uptrend that began in May. For the past two days the pair has failed to breach below the rising trend line that comes in at a price of 7.9500. Typically when a currency pair falls to its trend line this is a good spot to place a buy position. However, a quick glance at the weekly chart shows the long term trend is to the downside. A close below the trend line would signal an end to the uptrend and a further drop in the price of the pair. Supports are outlined on the daily chart below;t the September low of 7.8300, followed by the June low of 7.800, and finally the swing low on the daily chart at 7.6685. Resistance for the EUR/NOK comes in at 8.0390, followed by the October high at 8.2550.
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| Irish Downgrade Sends Euro Lower Posted: 09 Dec 2010 05:08 AM PST
A downgrade in the sovereign debt rating of Ireland by Moody's had traders selling the euro this morning. The Bank of England also held interest rates steady and did not change the Asset Purchase Facility. The euro was on its back foot following the downgrade of the sovereign debt rating of Ireland by Moody's Investor Services. European equities also turned south following the announcement. The decision does not come as a surprise given the 65 billion euro bailout, the Irish banking system that was backstopped by the government and a potential collapse of the Irish government. What is surprising is the rating of stable that was assigned by Moody's. As expected, the Bank of England kept the Official Bank Rate unchanged at 0.50 and held the Asset Purchase Facility at the previous level of 200 billion pounds. At lunchtime during the European session the EUR/USD was lower at 1.3220 after opening the day at 1.3313. The GBP/USD was trading lower at 1.5750 after beginning today's trading at 1.5827. The USD/JPY was higher at 84.05 from 83.73. Spot crude oil was down at $88.18 from $89.92. The main driver for the New York trading session will be US weekly unemployment claims that are scheduled to be released at 15:30 GMT. Expectations are for 426k new jobless claims. Judging from last week's disappointing Non-Farm Payrolls report, we may expect this number to come in on the downside. This may help support the euro and push the EUR/USD up to the resistance on the hourly chart at 1.3250. Should the report be released with a result that beats market expectation the EUR/USD could continue to fall today. Support comes in at the bottom of the recent consolidation patter at 1.3135. |
| USD/NOK Short on Breach of Support Zone Posted: 09 Dec 2010 03:45 AM PST
The USD/NOK shows a clear support zone that once broken may allow momentum to drop the pair back to its October low. Looking at the daily chart, the 5.9300 level has served as a major area of both support and resistance over the second half of the year. The failure of the pair to breach this level in August, the resistance from the double top in October (at the 5.7000 level), and now in early December gives traders a clear entry point short. A breach below 5.9300 may bring the pair to test the October low of 5.7017. A protective stop may be placed above yesterday's high at a level of 6.0500. This would give traders a respectable profit to risk ratio of 2:1
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| Crude Oil Bouncing Off 50% Retracement Line at $90 Posted: 08 Dec 2010 10:00 PM PST
The price of Crude Oil has been receiving support from the winter season in the northern hemisphere lately, but we are beginning to see technical indicators which suggest downward pressure. The most recent jump in value was towards $90 a barrel. As winter snow storms pound the American northeast, and recently arrive in Western Europe as well, heating fuel costs move upward for a cyclical, annual upturn. As we can see on the charts below, Crude Oil prices have indeed been moving upward cyclically, but also generally. Retracing the price's movement for the past few years allows us to see that the price has in fact reached the 50% retracement level on the weekly chart and should meet some serious resistance at the $90 level. The RSI on the weekly chart shows the price just inside the over-bought region, which suggests that downward pressure is mounting. We can also see that the most recent candlestick is a doji formation, which supports the bearish notion. |
| Majors Receive Injection of Volatility Ahead of Heavy News Day Posted: 08 Dec 2010 09:40 PM PST
Today promises to be a heavy trading session, as significant news out of the UK and US is set to create major market volatility. The GBP has recently seen some significant gains against its main currency rivals. Whether today’s news will help the pound increase its gains is still unknown. What can be said for sure is that traders will want to keep an eye on the day’s events. Here is a roundup of today’s main economic indicators: 12:00 GMT: GBP Official Bank Rate The Official Bank Rate is the national interest rate in England. Interest rates are considered one of the primary indicators of economic health, and traders can expect heavy volatility when the latest figure is released later today. While most analysts are not predicting a change in short-term interest rates from its current level of 0.50% that does not mean that the markets will not react to the news. Should the interest rates remain at their current level, investors could take that as a sign that the UK economy is not recovering quickly enough, which could lead to a drop for the pound. 13:30 GMT: USD Unemployment Claims The weekly US Unemployment Claims figure is widely considered to be one of the more significant events on the forex calendar. Unemployment remains a key stumbling block to economic recovery in the US. However, there had been some improvement in recent weeks; the most recent Non-Farm Payrolls came in well below expectations, badly affecting dollar values. Analysts are predicting today’s figure to come in slightly better than last week's. At the moment, forecasts are for around 426K. Should the unemployment number come in at or below this number, traders can expect the dollar to make some afternoon gains. |
| AUD/NZD Rally Looks to Continue Posted: 08 Dec 2010 01:22 PM PST
The dollar continued to gain against rivals on the heels of the tax compromise reached by the Obama administration and Congress. The USD/JPY put in another strong performance with the pair rising above the 84 level. The Kiwi was weaker following the New Zealand interest rate announcement. The boost in the dollar can be tied to a link in treasury yields that also rose on the back of the tax compromise. Some speculate the extension of income tax benefits may provide an extra stimulus for the US economy, allowing for the Federal Reserve to potentially reduce the amount of quantitative easing it recently announced. In late New York trading the USD/JPY was up at 84.00, after opening the day at 83.86. The EUR/USD was up slightly on the day at 1.3260 from an opening day price of 1.3231. The AUD/USD was even at 0.9790. As expected, the Royal Bank of New Zealand held its baseline interest rate steady at 3.00%. This sent the rate of the AUD/NZD soaring to a high of 1.3140. The pair is currently trading up at 1.3110 after opening the day at 1.3003. The AUD/NZD looks ripe for further gains as a breach of the 1.3140 level could take the pair higher to the October high of 1.3215. Tomorrow traders will be eyeing the British interest rate announcement as well as the Asset Purchase Facility numbers. No changes are expected in either but the announcement has the ability to continue the two week recovery in the GBP/USD past the resistance level of 1.5840 towards the next resistance level which is found at 1.5950. |
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