FOREXYARD: Forex News Blog | |
- EUR/NOK Momentum Continues to the Downside
- Swedish Interest Rate Decision
- AUD/USD Poised for Downward Correction
- Heavy News Day Set to Impact Majors
| EUR/NOK Momentum Continues to the Downside Posted: 14 Dec 2010 07:01 AM PST
In staying with the previous analysis, the EUR/NOK has broken below its rising intermediate trend line on the daily chart and continues to move lower towards its year low. Following a sharp drop in the value of the pair, the EUR/NOK breached its intermediate rising trend line that extends off of the lows in May and September of this year. The pair has continued to move lower making its way to the 7.8900 level today. Technical studies show more moves to the downside may be in store for the pair. Momentum is falling and the EUR/NOK has closed below both the 100 and 200-day simple moving averages. Previously identified support levels remain intact beginning with 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 comes in at the 8.000 level and the October high of 8.2540.
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| Swedish Interest Rate Decision Posted: 14 Dec 2010 06:56 AM PST
Tomorrow will bring interest rate decisions from both Norway and Sweden. However, the two countries differ as Sweden is expected to raise its benchmark rate while Norway will most likely hold interest rates steady. Economists forecast Sweden's Riksbank will increase its repo rate by 0.25 basis points to 1.25%. Norway's Norges Bank is expected to maintain its deposit rate at 2%. One reason for the expected rise in the Swedish interest rate is the spike in housing prices. For the past 18-consecutive months housing prices have risen. Over the last 3-months alone housing prices are up 5%. Housing prices in Norway have also turned sharply higher rising 6.2% this year. The spike in housing prices may have been caused by interest rates being held too low by both nations during the financial crisis of the past 2.5 years. A sharp jump in housing prices has been accompanied by lower than expected inflation as the Riksbank targets annual inflation of 2% while the Norges Bank targets 2.5%. As both countries move towards a tighter monetary policy both the Norwegian and Swedish krona may benefit as the interest rate differential widens between the Nordic countries and the rest of the world. Currently the ECB has interest rates set at 1.00% while the US keeps its interest rate below 0.25% along with engaging in further loosening of monetary policy. |
| AUD/USD Poised for Downward Correction Posted: 14 Dec 2010 12:17 AM PST
Over the last several weeks, the Australian dollar has been able to capitalize on the poor economic situation in the United States and make substantial gains against the USD. Since the beginning of the month, the AUD/USD pair has moved up some 400 pips. Forexyard traders will be interested to know that the pair may be due for a downward correction. Technical data indicates the cross is currently in overbought territory, meaning bearish movement is likely. We will be looking at the 8-hour chart for AUD/USD, provided by Forexyard. The technical indicators being used are the Williams Percent Range, Stochastic Slow, and Relative Strength Index. 1. Typically when the Williams Percent Range is over -20, it is a clear indication that the instrument is overbought. Here, we can see the indicator is right around the -5 level, meaning a downward correction may take place. 2. Traders will want to keep a close eye on the Stochastic Slow, as it is currently showing the pair approaching the overbought region. Should the two lines intersect above the 80 level, it can be taken as a clear signal of impending bearish pressure. 3. Finally, the Relative Strength Index is currently right around the 75 level. Anything above 70 is usually taken as a sign that the pair could experience downward movement. Now may be a great time for traders to enter into sell positions at a great entry price, in order to capitalize on the coming trend. |
| Heavy News Day Set to Impact Majors Posted: 13 Dec 2010 10:57 PM PST
With an unusually large number of news events coming from the euro-zone and United States today, forex traders have been in a frenzy to place their bets before the trading day gets underway. Trading during these news events, which typically carry a lot of market volatility, is a fast way to double your forex trading balance. Special attention should be paid to the German Economic Sentiment report at 10:00 GMT, the U.S Retail Sales at 13:30 GMT, and Federal Funds Rate at 19:15 GMT. Will you take advantage of the impending volatility, or sit on the sidelines and miss out? 10:00 GMT- German Economic Sentiment • It reflects the level of diffusion index based on surveyed German institutional investors and analysts. 13:30GMT- US Retail Sales • It reflects the change in the total value of sales at the retail level. 19:15 GMT- U.S Federal Funds Rate |
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