FOREXYARD: Forex News Blog | |
- Crude Oil Expecting an End-of-Year Bullish Leap?
- Gold Looks To Correct Gains; Could Reach $1,315
- GBP/USD Confirms Short-Term Downtrend
- USD/CAD Awaits Wholesale Sales with Bearish Sentiment
- Gold Prices Falling as Year End Approaches
- USD/CHF Short from Downward sloping Trend Line
- EUR/CHF – Another Bearish Session Expected
- European Economic Data Leads Today’s FX Trading
- German Ifo Business Report May Boost Euro Today
| Crude Oil Expecting an End-of-Year Bullish Leap? Posted: 20 Dec 2010 09:00 AM PST
The price of Crude Oil has been rising over the past few weeks, but the corrective retracements have many analysts wondering what forces are affecting the market. The strong winter storms in Europe and the United States have many commodity speculators anticipating a rise in oil futures as driving demand increases from sudden flight delays and cancellations during the holiday season. The oil contracts expiring in January rose over the last few trading days, hitting a recent high at $89.16 a barrel. However, the ebb and flow of tensions on the Korean peninsula have pushed USD pairs into consolidation trends, driving oil prices into a similar rise-and-stall pattern. The price of oil, after hitting that recent high, quickly sunk to as low as $87.71 per barrel on a resurgent dollar. Now that prices appear to be leveling off, and tensions in Korea have eased somewhat, oil prices are back into an upward price movement, placing the current price at $88.59 near the closing of the NY trading session. Technical Analysis The chart below shows a consolidation pattern which has been forming for the past several trading days. While the overall trend appears bullish, there is a case to be made that bearish pressure may be mounting. On the technical side of the equation the price of Crude Oil looks poised for a downward correction. However, the fundamental side seems to be anticipating a bullish spike, similar to the ones seen at the end of October and November. The MACD has a fresh bearish cross, supporting the downward notion, but it must continuously be pointed out that it has been doing so throughout the past few months amid these upward spikes. Traders should always remember that technical analysis loses the battle against fundamental news events over the direction of the market 9 times out of 10. A price of $90 may be too rich for many investors, who could try to push the price lower if it comes to that, but the market appears to be favoring a third bullish run at the end of this month, similar to the ones seen previously. Crude Oil – Daily Chart |
| Gold Looks To Correct Gains; Could Reach $1,315 Posted: 20 Dec 2010 06:26 AM PST
It was less than a couple of weeks ago that gold rallied to an all-time nominal record high of $1,431 an ounce. However, as the past has taught us many times already – unusual uptrends are usually followed by technical correction. Gold is already in the midst of just such a technical correction, and is currently trading near $1,385 an ounce. Moreover, there are several technical indications that gold might drop further, with the potential to reach $1,315 an ounce. From the chart below it can be seen that after gold completed its rally, and reached as high as $1,431, it has since corrected its gains little-by-little. The Stochastic (slow) has completed a bearish cross lately, suggesting that the pair's bearish movement still has momentum. The MACD is approaching a bearish cross as well, further strengthening the bearish notion. If the MACD will complete its bearish cross, it will likely validate the bearish progression. The RSI has dropped below the 70-line, providing a strong indication that the bearish movement still has more room to go.
Traders are advised to pay attention to the '1' and '2' points on the chart, as they provide us with very similar circumstances to what we're experiencing right now. On both occasions, gold was just after a swift bullish run. On both occasions, the Stochastic (slow) and the MACD had completed a bearish run. And most importantly, on both occasions the RSI had dropped below the 70-line. These were the only two times that the RSI dropped below the 70-line in the last 18 months. The outcome, of course, was a rather significant bearish correction. At point '1' gold dropped 1,800 pips. At point '2' gold dropped 1,100 pips. The next support levels are placed at: $1,375, $1,360, $1,330 and $1,315. The next resistance levels are at: $1,395, $1,420 and $1,431. Happy trading! |
| GBP/USD Confirms Short-Term Downtrend Posted: 20 Dec 2010 03:30 AM PST
The GBP/USD confirmed a downtrend this morning with a bounce off the significant resistance level at 1.5560. Lower-than-expected mortgage approvals in the United Kingdom had a dampening effect on the pound sterling’s appeal, pushing the pair down to a current price near 1.5530. As you can see below, this marks the third peak of a short-term downward trend, signifying that the pair may have additional downward mobility as the week moves ahead. GBP/USD – Hourly Chart |
| USD/CAD Awaits Wholesale Sales with Bearish Sentiment Posted: 20 Dec 2010 03:30 AM PST
Ahead of the Canadian monthly wholesale sales report (13:30 GMT), it appears the USD/CAD is building towards a decision point. On the shorter time-scale, we can see the pair stagnating between the 38.2% and 50% Fibonacci retracement levels, suggesting trader indecision prior to this release. Expectations are for an increase of 0.8%, up from last month’s reading of 0.4%, which appears to be forecasting a drop in the pair as the loonie gains in value against the USD. The technical indicators below support this downward sentiment. If Wholesale Sales come as expected, traders should anticipate a downward move towards 1.0100. If the figure disappoints, we could see some upward movement. USD/CAD – 4-Hour Chart |
| Gold Prices Falling as Year End Approaches Posted: 20 Dec 2010 03:01 AM PST
As the year comes to an end, spot gold prices are down the past two weeks as traders and institutional investors take profit on long positions in the commodity that has appreciated over 25% this year alone. Over the past two weeks the price of gold has fallen from an all-time high of $1431.00 to $1371.05, for a decline of almost $60 or 4.1%. The declines may be worrisome to traders as a two week decline in the price of gold may have pushed many short term traders out of the market. However, long term instructional traders may be in a better position to absorb a 4% decline in the price as the price declines barely put a dent in the uptrend when looking at the longer time frames such as the weekly and monthly charts. Can the recent declines in the price of spot gold be attributed to end of year profit taking on a commodity that is up 26% the year? Looking back, it is not surprising the rise in the price of spot gold. What is surprising is the extent of the gains. An environment with ultra-low interest rates may have sparked long term inflation fears, driving traders into what George Soros called, "The ultimate asset bubble." Despite repeated calls for declines in the price of spot gold that did not occur from analysts, economists, and traders alike, what conditions would make for an environment suitable to falling gold prices? It is fair to assume that this asset bubble may pop when global interest rates begin to rise and inflation expectations are subdued. However, when looking at the monetary policy of the larger developed economies; the US continues to employ loose monetary policy with just last month announcing measures to increase liquidity with a second quantitative easing program. The ECB would like to raise interest rates but doing so could drive the European fiscal crisis deeper in some financially troubled countries. Japan is fighting deflation and is in no position to raise rates. China on the other hand has begun tightening monetary policy. This could be the first sign that the global economy is beginning to make a change in its stance on inflation which could influence global inflation expectations. |
| USD/CHF Short from Downward sloping Trend Line Posted: 20 Dec 2010 01:01 AM PST
The USD/CHF has broken out of a previous rising channel line and then retraced back to the lower line. For traders who missed the previous entry opportunity, a new setup has emerged as the pair is moving lower from the current trend line. After the pair reached an all-time low in October a bullish channel emerged with the USD/CHF rising to a high of 1.0065 in early December. Since then the downtrend has once again established itself as the moving averages are now trading in a perfect order. A perfect order occurs when the moving averages appear according to their time frame; the 200-day simple moving average above the 100, followed by the 50, 20, and 10 (not shown). Also signaling the downtrend is the trend line beginning on December 1st with a contact point in mid-December. An ADX of 31 also identifies a strong trending environment. Today's price action shows the pair falling from two key points which provide resistance for the pair; the falling trend line and the 10-day exponential moving average. Traders may find an entry point short near this level which comes in today at 0.9715. Stops can be placed above the resistance level of .09730 Additional resistance may be found at 0.9850. A target for this trade may be found at Friday's low of 0.9560.
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| EUR/CHF – Another Bearish Session Expected Posted: 20 Dec 2010 12:51 AM PST
After a couple of weeks that the EUR/CHF pair has consolidated around the 1.3000 level, and saw very little volatility, the bearish trend has resumed, and the pair is currently trading near the 1.2730 level. In addition, several technical indications suggest that the pair's bearish move is likely to proceed, with potential to reach the 1.2600 level by the end to today's trading session. • The chart below is the EUR/CHF 4-hour chart by ForexYard.
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| European Economic Data Leads Today’s FX Trading Posted: 19 Dec 2010 10:24 PM PST
As we start off the week, the market is somewhat subdued, as a lack of significant news events has created a low liquidity environment. Still, the US dollar has managed to make up some of the gains it made last week in overnight trading. Despite the lack of news, there are still ample opportunities for traders to make profits today. Particular attention should be paid to news out of the euro-zone, particularly in reference to the Irish bailout. Any word that the bailout will proceed as planned will likely help the euro throughout the day. Here is a roundup of today’s main news: 09:00 GMT: EUR Current Account The Current Account figure measures the difference in a number of economic transfers over the last month, including imports and exports, as well as income flows. Last month’s figure came in well below expectations and led to a short term drop for the euro. Today, analysts are predicting a figure of around -6.2B, which if true, would be a marked increase over last month. The Current Account figure could help the euro recover some of its earlier losses when it is released later today. |
| German Ifo Business Report May Boost Euro Today Posted: 16 Dec 2010 09:37 PM PST
As we close out another week today, all eyes are on the EU Economic Summit, currently in its second day. The euro has gone up marginally against its main currency rivals following news that the EU may implement a permanent stability mechanism in order to prevent any further euro zone debt crises. Whether or not the euro can maintain its overnight gains will largely depend on today’s sole significant economic indicator, the German Ifo Business Climate. 9:00 GMT: EUR German Ifo Business Climate This indicator is considered to be one of the leading signals of economic health in the euro zone. The Ifo Business Climate is a survey of various businesses in Germany. As businesses are typically the first to react to any economic changes, traders will want to pay careful attention to today’s figure. Furthermore, German economic indicators tend to create heavy volatility among euro pairs, largely because Germany is the biggest euro zone economy. Last month, the survey came in well above analyst predictions, leading to a healthy boost for the euro. Should a similar occurrence happen today, traders may be able to capitalize on an impending bullish session for the 16-nation single currency. Currently, forecasts are calling for a figure of around 109.2. Anything at or above this level may lead to significant gains for the euro to close out the week. |
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