Saturday, January 8, 2011

FOREXYARD: Forex News Blog

FOREXYARD: Forex News Blog

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Technical Update – EUR/USD Breaches 200-Day Moving Average

Posted: 07 Jan 2011 03:15 AM PST

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Yesterday's closing price for the EUR/USD had significant technical ramifications.

The EUR/USD closed below the rising support line from the November and December lows and finished the day well below the 200-day moving average. The selling of the pair was capped at 1.2970, the November 30th low which is the first support level. A breach below this level would open the door for further declines, with support coming in at the September 6th high at 1.2920, followed by the 61.8% Fib retracement form the June to November move at 1.2800.

The rising support line should now turn into a resistance level. This comes in today at 1.3110. Further resistance is found at the top of the December to January consolidation pattern at 1.3440.

EURUSD

Gold Is Approaching 3rd Attempt to Test $1,360 Support Level

Posted: 07 Jan 2011 12:03 AM PST

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Gold has failed to mark a new all-time high this week, and only reached as high as $1,423 an ounce. This has triggered a sharp bearish move, which is by now reflected in a 6,000 pips decline. Gold has already seen two failed attempts to drop below the $1,360 level, yet it currently seems that a third attempt is impending.

• The chart below is the spot gold 8-hour chart by ForexYard.
• The horizontal lines drawn on the chart represent the support\resistance levels of gold trading.
• It can be seen that after gold has failed to breach through the $1,423 resistance level, it has fallen steadily, and reached as low as $1,363 an ounce.
• Currently, a bearish cross of the Slow Stochastic indicates that another bearish session might be impending.
• In addition, the MACD continues to point down and the RSI continues to float below the 30-line, in the over-sold section. Both indicating that the bearish move still has more room to go.
• The next significant support level is placed at $1,360 an ounce. If gold falls below this level, it has the potential to reach $1,350, and afterwards $1,340 an ounce – before today's trading ends.
• Nevertheless, in case that gold will fail to cross the $1,360 level, it might bounce back up, and reach $1,382 an ounce.

gold 07 01

US Non-Farm Payrolls May Boost US Dollar

Posted: 06 Jan 2011 10:00 PM PST

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Following Wednesday's surprisingly bullish employment figures from the ADP report, the market witnessed some heavy volatility in favor of the US dollar. With today's Non-Farm Payroll (NFP) expected to show similar positive growth, we could see another rally in the greenback later today.

Here is a roundup of today's leading events:
12:00 GMT: CAD – Employment Change and Unemployment Rate

- Prior to the release of the American employment change reports, Canada is due to release similar figures regarding the number of jobs gained over the previous month and the correlated national unemployment rate. Canada's employment change report is forecast to show growth in its job market, but the national unemployment rate is expected to increase.

13:30 GMT: USD – Non-Farm Employment Change (NFP)

- The most impactful employment report released each month is the US Non-Farm Payrolls (NFP) figures. This represents the number of jobs added or lost during the previous month and is a leading indicator of economic growth in the world's largest economy. As mentioned above, Wednesday's ADP report measuring employment change in the private sector showed significant growth well above forecasts. If today's release comes in line with ADP's bullish forecast then the USD could see significant growth later in the day.

Dollar Advances Prior to Jobs Report

Posted: 06 Jan 2011 01:35 PM PST

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The US dollar continued to rise against the majors with sharp gains being booked against the euro as traders position themselves for tomorrow's non-farm payrolls report. A stronger dollar also fed into losses for crude oil.

On the day before the US releases the December jobs report, the greenback continued its post New Years bullish move, gaining ground versus the major currencies. The largest gains were booked against the euro and the pound. Traders were bidding the dollar higher following a weak British Services PMI and US weekly unemployment claims that were slightly worse than economists' expectations.

Near the end of the US trading session the EUR/USD was down sharply at 1.3010 after opening the day at 1.3139. The GBP/USD was trading lower at 1.5470 from its opening price of 1.5503. The JPY/USD was up at 83.33 but still within yesterday's trading range. The Swiss franc also stabilized, trading at its opening price of 0.9664, following a sharp appreciation in the price the previous two days.

Crude oil was down significantly as a strengthening dollar fueled the price declines. Spot crude oil finished the day down at $88.15 from $90.23

The post New Years trend is decisively in the favor of the dollar. However, risks do remain with the release of tomorrow's payrolls report. Economists are forecasting a strong report with new jobs coming in at 159k. Expectations will be high as the US has consistently put out improving economic numbers since November with the lone exception the November non-farms report.

Many large institutional market participants may be waiting for the outcome of the jobs report before entering into the market which could disrupt the post New Years dollar rally.

If the jobs report comes in near the upper range of market estimates the dollar buying should continue and traders will push the EUR/USD lower.

Near term support is found at the November low of 1.2970, followed by the September – October consolidation pattern at 1.2915. A breach below this level would bring the 61.8% Fib retracement into play from the June to November move. Resistance comes in at 1.3250.
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