FOREXYARD: Forex News Blog | |
- USD/JPY – Entry Long to Post Intervention High
- Euro Continues To Weaken Amid Debt Contagion Concern
- EUR/USD Falling Wedge Pattern
- GBP/USD Finding Strong Resistance at 1.5820
- Forex: EUR/USD Pushed Lower by Ireland Downgrade
- 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
| USD/JPY – Entry Long to Post Intervention High Posted: 13 Dec 2010 12:24 AM PST
The USD/JPY is currently moving towards its recent high of 84.40. A close above this level shows limited resistance until the September high. Long term time frames also signal a continuation of the move. Following the pair's breach of the long term downward sloping trend line (1) on the daily chart the pair has risen to the 84.40 level (2). Clearly defined support and resistance levels appear on the chart and a buy signal is supported by a long term technical sign. An entry long may be initiated with a move above the 84.40 (2) level targeting the post intervention high at 85.90 (3). Further resistance at 88.10 (4) can be used as a long range target as resistance is lacking on both the daily and longer time frame charts. A long term downward sloping trend line on the weekly chart (not shown) may also provide resistance at 88.60. Support can be found at both 83.45 (5) and 82.30 (6), as well as the rising trend lines off the October and November lows.
The monthly chart provides a hint at the potential long term future price action with a rising stochastic oscillator.
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| Euro Continues To Weaken Amid Debt Contagion Concern Posted: 12 Dec 2010 10:06 PM PST
The main trend in the market continues to be the bearish euro. Over the past month, the EUR/USD pair dropped from the 1.4200 level, and reached as low as the 1.2970 level. The pair recently saw a technical correction, which took it up to the 1.3440 level, yet now the pair is trading below the 1.3200 level once again. The reason for the euro's bearishness is of course the broad concerns that another member of the European Union will seek financial aid, after Greece and Ireland. The countries which are considered to be at the higher risk-level to reach such a scenario are Portugal and Spain, and the biggest concern is that the euro-zone won't be able to deal with another financial bailout, which will lead to the end of the European joint currency. On December 16 a summit between European leaders will take place regarding the disturbing situation, and official statements from the summit are likely to create heavy volatility in the market. Until then, traders are advised to follow the updates regarding the European debt crisis, and to take under consideration that the euro might face further bearishness in the near-future. Here are today's leading news events: • 09:30 GMT, British Producer Price Index (PPI) Input – This report measures the change in the price of goods and raw materials purchased by manufacturers. It's considered to be a leading indicator of consumer inflation, and thus tends to have a large impact on the sterling. An end result greater than 1.0% might boost the pound. • 18:30 GMT, Europeans Central Bank President Trichet Speaks – Trichet is scheduled to deliver a speech at the Internationaler Club in Frankfurt. Trichet might discuss the ECB's ideas on how to deal with the current crisis, and heavy volatility is likely to take place during his speech. |
| Posted: 10 Dec 2010 07:48 AM PST
The EUR/USD continues to trade sideways and has created a falling wedge pattern on the hourlies. Looking at the hourly chart, traders may notice a falling wedge pattern developing. Typically a falling wedge will break to the upside (though this direction runs contrary to the current trend on the daily chart). Supports are found at 1.3050 as well as the bottom of the recent consolidation in the pair at 1.2970. Short term resistance levels are located at 1.3280 as well as 1.3400 and 1.3440.
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| GBP/USD Finding Strong Resistance at 1.5820 Posted: 09 Dec 2010 10:20 PM PST
The British pound's recent gains against the US dollar were short-lived yesterday as the pair found strong resistance at 1.5820. The Fibonacci retracement lines drawn on our daily chart suggest that this price level is actually a significant statistical barrier for the pair as the 61.8% line. We can see on the chart below that traders took profit at the 1.5820 level as the pair touched this Fibonacci line. Our Stochastic (slow) on the daily chart below also supports the notion that downward pressure is mounting. Traders may want to take advantage of these long-term fluctuations by entering short positions to capture the retracement back towards the 50% line at 1.5533. The fundamental side appears to support this downward notion as well. A Fitch downgrade of Ireland has put financial strain on the euro zone and UK, helping the US dollar gain ground against its Atlantic rivals. |
| Forex: EUR/USD Pushed Lower by Ireland Downgrade Posted: 09 Dec 2010 09:49 PM PST
The EUR/USD appears to be recovering mildly after yesterday's sharp plummet. Fitch Ratings agency downgraded Ireland's sovereign debt, pushing the euro to recent lows. The pair fell as low as 1.3163 yesterday before recovering back to the 1.3250 price level. If today's trade balance and consumer sentiment reports from the US and Canada come in as positive as expected, the US dollar could continue its bullishness against the EUR. Here is a roundup of today's leading events: 13:30 GMT: USD & CAD – Trade Balance The American and Canadian trade balance figures are set to be published today at 13:30 GMT and the news could help both currencies extend recent bullish gains made against their European counterparts if the reports come as expected. The trade balance measures the difference between imports and exports of a country and reflects levels of demand for the nation's goods. 14:55 GMT: USD – UoM Consumer Sentiment The University of Michigan (UoM) Consumer Sentiment report is a leading indicator of consumer sentiment and consumer spending. It surveys approximately 500 consumers regarding spending, outlook, and optimism regarding the future. If the report comes as expected, or higher, the USD could see some added bullishness before markets close for the weekend. |
| 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. |
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