FOREXYARD: Forex News Blog | |
- Crude Oil Prices Fail to Breach $90
- Gold Sees Dramatic Shifts in Today’s Session
- EUR/SEK Bullish Reversal On The Horizon
- Irish Debt Crisis Leads to Big Gains for Krona
- 2011 Gold Forecast – Benefits and Risks
- EUR/CAD Revealing Potential Head-and-Shoulders Formation
- Debt Concerns and Flight Delays Lead this Week’s Market News
| Crude Oil Prices Fail to Breach $90 Posted: 21 Dec 2010 07:17 AM PST
Traders look to compound on yesterday's gains as the spot crude oil approaches the $90 level. However, the rise in price may be capped by the psychological price level as low liquidity in the markets impact volatility and another round of negative news from the euro zone may strengthen the dollar. At the opening of the New York trading session, the price of spot crude oil was trading lower at $89.30 after opening at $89.38. The commodity was building on yesterday's gains that saw the pair close above of a consolidation pattern for the first time since early December. Spot crude oil rose to a high of $89.91 during European trading before heading lower in the New York trading session. This highlights the resistance that is building at the $90 level. Big round numbers sometimes have a psychological impact as traders amass their limit or stop orders near these numbers. Also impacting the price of spot crude oil has been the steady stream of negative news from Europe. Worries of sovereign debt downgrades have moved through the market the past two days with Belgium and France the newest targets of the rating firms. Despite the negative news from Europe, the dollar is little changed over the past two days with the EUR/USD trading in a tight range between 1.32 and 1.31. This may have limited the downside in spot crude oil as a stronger dollar typically weakens the price of spot crude oil. The tight range for the EUR/USD also exemplifies the lack of liquidity in the markets as the holidays draw near. This increases price volatility as large swings in the price of spot crude oil and other commodities such as silver and gold have been registered over today's trading. As such, large price moves may be exaggerated. A near term target for spot crude oil may be the December 7th high at $90.75. |
| Gold Sees Dramatic Shifts in Today’s Session Posted: 21 Dec 2010 07:10 AM PST
Gold has had a mixed trading session so far today. At one point the commodity cleared the 1390.00 level, and then proceeded to tumble close to 1000 pips in a matter of minutes. Analysts attribute the erratic behavior to the low level of liquidity in the market place. Technical data is providing some information for gold traders at the moment. While the direction gold will be taking is not entirely clear, based on its recent movements it can be assumed that the price shifts will be dramatic. We will be looking at the 8-hour chart for gold, provided by Forexyard. The technical indicators being examined are the Relative Strength Index, Stochastic Slow and Williams Percent Range. 1. Currently, the Relative Strength Index is trading in neutral territory. That being said, the indicator is currently pointing up. Should it continue in its current direction, and breach the 70 level, it would signal a possible impending downward trend. 2. The Stochastic Slow supports this theory. In what is the clearest sign of upcoming movement, a bearish cross has formed. This usually means that a downward correction is likely to take place. 3. The Williams Percent Range, while not quite in overbought territory, is very close to it. Should the indicator break the -20 level, it would lend further evidence to our theory of upcoming downward movement. Traders will want to keep a close eye on the indicator to wait for the breach. |
| EUR/SEK Bullish Reversal On The Horizon Posted: 21 Dec 2010 03:49 AM PST
With some exceptions, the EUR/SEK pair has been in a continuous downward spiral for the last few weeks, dropping over 1900 pips. Technical indicators are now showing that a bullish correction may occur in the near future. This presents Forexyard traders with an excellent opportunity to enter into buy positions at a great starting price. We will be analyzing the daily chart for EUR/SEK, provided by Forexyard. The technical indicators being looked at are the Relative Strength Index, Stochastic Slow and Williams Percent Range. 1. As can be seen, the Relative Strength Index is currently floating right above oversold territory. Should the indicator cross the lower support line, it would be a clear sign that the pair may stage a reversal. 2. A bullish cross has formed on the Stochastic Slow, in a clear sign that the pair is oversold. This further supports our theory that an upward correction is likely to take place soon. 3. The Williams Percent Range is currently right around the -80 level. Typically, anything below -80 indicates that the pair is in the oversold region, and that an upward correction is imminent.
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| Irish Debt Crisis Leads to Big Gains for Krona Posted: 21 Dec 2010 03:39 AM PST
Investor fears that the euro-zone will be unable to successfully combat the Irish debt crisis have caused the euro to tumble against all of its main currency rivals, including the Scandinavian kroner. While the ECB has laid out a broad plan to combat Irish debt, strong obstacles remain before any action can be taken. Monetary policy within the Scandinavian countries has also contributed to the krona’s bullish run. Sweden recently signaled it was raising a key interest rate, causing the SEK to spike in value. In the last week, the EUR/SEK pair has tumbled close to 1500 pips. In addition, Norway’s central bank has signaled that its plan to raise interest rates as soon as this summer has not changed, leading to a jump for the NOK. In the last week, the EUR/NOK pair has fallen close to 600 pips. Currently the pairs are trading at 8.9805 and 7.8624, respectively. The next week may hold further gains for the krona, as the Christmas and New Years holidays are likely to lead to a low volatility situation in the marketplace. With little significant fundamental news on the horizon, investors are unlikely to return to risk taking in the near future. Scandinavian traders can bet that the krona will continue its current trend, at least until the ECB comes up with a more focused plan for debt relief. |
| 2011 Gold Forecast – Benefits and Risks Posted: 21 Dec 2010 02:00 AM PST
The dominant story regarding Gold is the bullish run we’ve experienced since the financial crisis of 2007-2008. More recent news shows a continuation of this trend, but how do we interpret the widening fluctuations in price over the past two months? Starting July 28th the price of Gold began a sharp bull run that saw little to no retracement. On October 15th the price came down sharply, marking the first retracement since late-July, moving from $1385.15 to $1315.30 over a 7-day period. Ever since, we’ve seen the price of Gold move within a broadening range, but still bullish. Three explanations have been circulating. The first argues that the approach of the holiday season brings wider price swings as currency values get boosted by increased retail sales and heightened travel among consumers. These price swings begin to compete with the rising price of Gold, creating broader movements. The second takes the same approach, but downplays the holiday aspect. As winter months approach in the Northern Hemisphere, a natural increase in commodity prices (particularly Crude Oil and Natural Gas) occurs, which affects US dollar values, which in turn affects Gold. These first two explanations mirror each other rather well and there doesn’t seem to be any indication that they both can’t be right. The third explanation has to do with end-of-year profit-taking and forecasting. The close of any calendar year brings forth article after article forecasting what will be in the new year, economically speaking. These forecasts bring with them portfolio adjustments by most traders, hedge funds, and investment firms which leads to the closure of existing positions, increased spending from year-end holiday bonuses, and a shift in exposure. As a result, we see wider fluctuations among prices as traders anticipate the unchanging yet so-called “forecast to change” market. But what’s changed? Gold prices are still moving up and forecasters are expecting them to continue unabated in 2011. Some estimates put the price near $1800 an ounce by this time next year. Without taking a stance as to the validity of these positions, one is reminded of the same attitude towards the housing market pre-2007. Are we seeing the formation of a Gold Bubble? No doubt long-term Gold traders made lucrative profits over the last two years. Such confidence building stability makes me suspect that their confidence in Gold won’t likely waver in the months ahead. But wasn’t that one of the many causes of our current economic situation: blind confidence in an asset which proves profitable time and time again? After all is said and done, Gold still looks to continue rising in 2011. Traders may expect some downward retracements at the starting months of 2011 from a post-holiday/post-winter cooldown in spending combined with an eventual warming temperature. But overall, the adage “the trend is your friend” seems to apply. |
| EUR/CAD Revealing Potential Head-and-Shoulders Formation Posted: 20 Dec 2010 10:29 PM PST
One of the less-frequently analyzed pairs is providing us with signs of an impending bearish run. The EUR/CAD appears to be forming what looks like a head-and-shoulders pattern on the daily chart, suggesting we could see long-term bearishness as we head into 2011. The pair's steep decline over the first half of 2010 led to a record low of 1.2466 in early June, but it looks to have been recovering since. What we see now, however, looks to be signaling that the down-trend was not actually over, but stalling within a larger cycle. If what is shown on the chart below turns out to be a head-and-shoulders formation, then traders should look to see the pair finding support at the 23.6% Fibonacci line and moving up towards the 1.36-37 range before entering another steep decline with targets near the record low of 1.2466. EUR/CAD – Daily Chart |
| Debt Concerns and Flight Delays Lead this Week’s Market News Posted: 20 Dec 2010 10:00 PM PST
The main development yesterday was the depreciating euro. The euro's bearish movement against currencies, such as the Swiss franc, came on fears of further credit rating downgrades in Europe while global stocks wavered and investors fled from riskier assets to the safety of bonds and gold. Another developing trend is the recovery of crude oil as bitterly cold weather in Europe and the United States boosted expectations of rising heating fuel demand and higher gasoline usage due to flight delays over the Christmas holiday. As for today, oil is set to be in the spotlight again with important publications from Canada, Japan, and Europe and it has the potential to reach $95 a barrel before year end. Here are today’s leading news events: 07:00 GMT, German Consumer Climate – This survey measures about 2,000 businesses who are asked to rate their current business conditions, and their outlook for the next 6 months. If the end result will beat expectations for 5.8 points, the euro might be strengthened somewhat as a result. 09:30 GMT, British Public Sector Net Borrowing – This indicator measures the difference in value between spending and income for public corporations, the central government, and local governments during the previous month, and is considered to be the broadest measure of economic activity. If the end result will show a figure lower than the forecast 16.8B, then the Pound could receive a boost. 12:00 GMT, Canadian Core Consumer Price Index (CPI) – The CPI measures the change in price of goods and services purchased by consumers. It is a leading measure of inflation and tends to have large impact on the market. Analysts have forecast that inflation in Canada remained stable during November. If the end result will be similar, the CAD isn’t likely to be largely affected by it. |
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