FOREXYARD: Forex News Blog | |
- EUR Still Soft; USD Anticipating Volatile Week
- Forex: This Week’s Economic Calendar (Jan. 10-14)
- Gold and Silver – Weekly Forecast
- GBP/USD – Pressing Support Levels
- USD/CHF Testing 7-Month Trend Line
- EUR Forecasted to Enter Bullish Trend vs. GBP
- EUR/USD Falls To 1.2900 after U.S. Unemployment Rate Drops To 9.4%
| EUR Still Soft; USD Anticipating Volatile Week Posted: 10 Jan 2011 09:00 AM PST
The US employment reports from last Wednesday and Friday have had the effect of driving the US dollar higher prior to the closing of last week. As of today, this trend appears to be continuing, but only mildly compared with previous movements. The euro looked to be continuing its weakness in today’s trading as the EUR/USD flattened out near the 1.2925 price level, the EUR/JPY fell towards 107.00, and the EUR/GBP moved slightly bearish with a current price near the 0.8310 price level. With market news this week favoring European events until Friday, most traders are anticipating a high level of EUR and USD volatility prior to week’s end. The EUR, however, looks to continue trading softly against its primary currency rivals, as banking and debt concerns continue to plague the region. Portugal came under review in today’s European session, and the highlights to emerge from that session initially appear to have had a neutral effect. The EUR’s continued weakness, on the other hand, suggests that little optimism came from the event. |
| Forex: This Week’s Economic Calendar (Jan. 10-14) Posted: 10 Jan 2011 07:00 AM PST
The US dollar's recent bullish surge resulted largely from positive fundamentals in the American job sector last week. Wednesday's ADP Employment Change estimate showed private sector growth well above market forecasts. Friday's NFP, while below expectations, still highlighted the 100,000+ job growth in the world's largest economy. This week is lighter on the American side of economic news, with Europe leading the way, but the US will figure in as the week progresses. Below is a roundup of this week's primary market events. Tuesday: The day will be led primarily by early-hour figures released from Australia and Japan, though they will likely be less impactful than many would expect. Australia will reveal the monthly job advertisement indicator, which could potentially lift the AUD in the short-term. However, these gains could be offset by a shrinking trade surplus, expected to have diminished by 0.60B over the last 30 days. Japan's release of its leading indicators at 5:00 GMT will likely not affect the market too severely unless the report is well above or below the previous month’s reading. Wednesday: Australia will once again lead this day's market with an early housing report expected to show a decline in home loans at 00:30 GMT. The Aussie may turn down a bit if the report comes in line with expectations. Most other reports expected will likely have little impact on the market, especially considering the economic events being released Thursday. However, Wednesday's release of US Crude Oil Inventories has the potential to drive volatility in commodity trading and investors should take note of its release. Thursday: This will without a doubt be the most volatile trading day of the week with a series of reports expected out of Britain, the euro zone, and the United States, with Australia, once more, leading the way. At 00:30 GMT, Australia will be publishing its monthly employment figures, expected to show mixed results. Traders may digest this news and continue the week's momentum on the Aussie if the reports carry no surprises. Between 12:00 and 13:00 GMT, Britain and the euro zone will publish their latest decision regarding short-term interest rates, followed by statements from their respective central bank presidents. These decisions always drive heavy volatility in the forex market and traders will want to pay close attention to the comments from each bank president immediately following this publication. At 13:30, the United States will chime in with its weekly unemployment claims report, its latest PPI reading, as well as the US trade balance, which has been forecast to reveal a deepening trade deficit, likely brought on by the strengthening dollar. Fed Chairman Ben Bernanke will close out the day with a speech at 18:00 GMT titled "Overcoming Obstacles to Small Business Lending," to be delivered at the Federal Deposit Insurance Corp. Forum in Arlington, Virginia. Some volatility may be expected for the USD during this speech, but direction is unclear. Friday: The US dollar will become a major factor in Friday's trading. Britain will open the trading day with an early reading on its monthly PPI Input at 9:30 GMT. The US economy will take over the more relevant events on the calendar from then on, however. Starting at 13:30 GMT and lasting through 15:00 GMT, the US economy will publish a string of reports on CPI, Retail Sales, Industrial Production, and the University of Michigan's (UoM) Prelim Consumer Sentiment figures. Traders should anticipate heavy volatility in the USD during this period on Friday. |
| Gold and Silver – Weekly Forecast Posted: 10 Jan 2011 05:00 AM PST
Following last Friday's sharp jump in USD value, commodity prices took a dive. The price of Gold and Silver each dipped below their respective trend lines (as can be seen on the charts below). But the start of this week has brought the expected corrections and we may expect commodities to continue their bullish movement in the days ahead. This week's economic calendar appears biased towards Europe, with many important indicators emanating from the euro zone and Britain. The United States will also leave footprints this week, but the news will pale in comparison to last Friday's NFP. Looking at the charts below, there are two general trends to watch. First is on Gold, which shows a solid retracement back above its general trend line, and subsequent movement in a bullish direction. It appears as if Gold was only mildly turned back by the bullish USD, but has since found its feet and started hiking upward once more (see chart). Gold – Daily Chart The second trend is on Silver, and may be a little more interesting to watch. Silver significantly broke through its trend line last Friday and has yet to climb back into its previous channel (see chart). This may signify the start of a consolidation triangle pattern. If this analysis is correct, then we should see Silver's price attempting to crawl back into its channel near $30 an ounce, but failing. After bouncing off the $30 price mark, it may then dip back towards $28.50 as part a diminishing price range, leading to a point-price at $29 an ounce. Once the triangle consolidation trend is completed near this price level, traders may anticipate a continuation of the bullish channel, targeting the $31-32 price range over the next few weeks.
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| GBP/USD – Pressing Support Levels Posted: 10 Jan 2011 02:47 AM PST
The daily chart shows the GBP/USD has two key support levels to breach before a resumption of the long term downtrend. The GBP/USD has begun to fall from its November high and is currently approaching its recent low at 1.5340. Following a breach of this level, the next major support to come into play will be the September low at 1.5300. A close below this price may trigger a resumption of the long term downtrend. Resistance is found at the falling trend line from the November high which comes in today at 1.5640.
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| USD/CHF Testing 7-Month Trend Line Posted: 10 Jan 2011 12:44 AM PST
A sharp rise in the price of the USD/CHF has taken the pair above the intermediate trend line and has the price testing an 7-month trend line. With the breach of the December to January trend line last week, the pair may soon take out the downward sloping trend line that begins on June 1st, 2010 and served as support in early December. Should the pair close above this trend line the next resistance levels would be found at 0.9730, followed by 0.9915, and the December 1st high of 1.0065. Support comes in at 0.9500 and the low at 0.9300.
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| EUR Forecasted to Enter Bullish Trend vs. GBP Posted: 10 Jan 2011 12:04 AM PST
The last few days have seen the euro drop against most of its main currency rivals, including the UK pound. Since the 4th of January, the EUR/GBP pair has tumbled some 330 pips, and is currently trading at the 0.8303 level. Forex traders will want to pay attention to this pair, as technical indicators are currently showing that a significant bullish trend may occur in the near future. We will be analyzing the daily chart for EUR/GBP provided by ForexYard. The technical indicators being used are the Bollinger Bands, Williams Percent Range, Relative Strength Index (RSI) and Stochastic Slow. 1. The pair is currently trading just below the lower Bollinger Band, which is typically a sign that an upward reversal is likely to take place. 2. The Williams Percent Range is currently at the -100 level. Typically, when the indicator is between -80 and -100, it is a sign that the pair is oversold and that it may begin an upward trend. 3. The RSI is currently right on the border of being in the oversold region. Traders will want to pay particular attention to this indicator. When it crosses the lower support line, it will likely be a sign of an impending bullish move. 4. The Stochastic Slow is on its way to forming a bullish cross, in yet another sign that the euro is set to move up on its British counterpart. Now is a great time for forex traders to enter into buy positions for this pair, before the upward trend breaks out. |
| EUR/USD Falls To 1.2900 after U.S. Unemployment Rate Drops To 9.4% Posted: 09 Jan 2011 11:33 PM PST
Despite relatively disappointing Non-Farm Employment Change figures from Friday, the U.S. dollar continued to strengthen against the euro, and the EUR/USD pair is currently trading below the 1.2900 level, marking a 4-month low. The Non-Farm Employment Change report showed that 103,000 jobs were added during December in the U.S. economy, well below analysts’ expectations for gains of 159,000 payrolls. Nevertheless, the dollar continued to strengthen against the euro for two main reasons: 1. The Unemployment Rate, which measures the percentage of the total work force that is unemployed and actively seeking employment, has dropped to 9.4% – its lowest level since May 2006. As for today, the current trend is likely to proceed, and the EUR/USD pair might tumble further. Here are today's leading news events: • 08:00 GMT, U.K. Halifax House Price Index (HPI) – This report measures the change in the price of homes financed by the Halifax Bank of Scotland, and is considered to be a leading indicator of the housing industry's health. A positive end result is likely to support the pound. |
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