FOREXYARD: Forex News Blog

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• Volatility Expected Following Thursday’s US Unemployment Claims
• Spot Gold: Will A Double Top Pattern Take Place?
• CHF/JPY Looks to Correct Losses, Might Reach 86.40
• GBP/USD Targets the 1.5640 Level
• Danish Kroner Set to Correct Losses against Dollar
• Kroner Remains Bearish Against USD
• AUD/USD – Bearish Correction Looks To Continue
• GBP/CHF – Testing 1.5039 Resistance
• Canadian Housing Starts Report May Boost CAD
• EUR/USD Aims for the 1.3000 Level

Volatility Expected Following Thursday’s US Unemployment Claims Posted: 11 Jan 2011 09:30 AM PST The employment situation in the United States is fragile at best. While last week’s Non-Farm payrolls showed that the US added jobs in December, the number was less than analysts had originally predicted. Dollar trading was mixed following the report, with the USD making small gains against the euro while it took losses against the safe haven JPY. This week, traders will want to pay attention to the US Unemployment Claims figure, set to be released at 13:30 GMT on Thursday. Early predictions are calling for a number of around 405K, which if true, would represent a small decline in the number of new people seeking unemployment benefits from last week. A figure at or below 405K is likely to further boost confidence in the US economic recovery and lend support to the US dollar, especially against the riskier euro and UK pound. At the same time, analysts are warning that unemployment statistics are notoriously hard to predict. A number of 410K or above is likely to cap the recent string of positive news the US economy has seen. Investors will likely begin to doubt the strength of the US economy, in which case the EUR/USD is likely to trade above the 1.3000 level again and may even touch the 1.3100 resistance line. Whatever happens, it is important not to underestimate the importance of US employment statistics, and the potential impact they could have on the market.

Spot Gold: Will A Double Top Pattern Take Place? Posted: 11 Jan 2011 06:52 AM PST Gold has failed to break a new all-time high last week, and only reached as high as $1,423 an ounce. As a result of the failed attempt, a bearish correction took place, and gold fell to $1,352 an ounce within three trading days. Nevertheless, the 4-hour chart shows that a double top pattern is forming meaning that gold may reach $1,410 an ounce before the end of the week. • The chart below is spot gold 4-hour chart by ForexYard. • There is a very distinct bearish channel forming on the chart. The channel reached its bottom yesterday after falling to the $1,352 level. • During today's trading session spot-gold managed to correct some of its losses, and is currently trading near the $1,382 level. • In addition, there seems to be a double top pattern forming on the chart. If the formation appears, gold has the potential to bounce back towards $1,410 an ounce. • In addition, a bullish cross on the MACD further shows that another bullish session may occur. • However, the Slow Stochastic is about to complete a bearish cross and the RSI is on the verge to fall below the over-bought zone. This means that if gold will fail to cross the $1,390 resistance level, a bearish correction might take place.

CHF/JPY Looks to Correct Losses, Might Reach 86.40 Posted: 11 Jan 2011 03:56 AM PST The CHF/JPY pair is in the midst of a bearish trend, and has recently dropped to the 85.20 level. Nevertheless, technical analysis indicates that a bullish correction may be impending, as a bullish cross has taken place on both the Slow Stochastic and the RSI. In addition, the Bollinger Bands have tightened, suggesting that a sharp move should take place soon. The next resistance level is located at the 85.90 level. If the pair will manage to cross the resistance level, it looks to reach the 86.40 level.

GBP/USD Targets the 1.5640 Level Posted: 11 Jan 2011 03:53 AM PST The GBP/USD pair has been range-trading for the past week, staying within the 1.5400 and the 1.5640 levels. Currently, the pair seems to be on its way towards the upper boarder of the range. The next significant resistance level is placed at the 1.5600 level. Considering that both the RSI and the Slow Stochastic are providing bullish indications, the pair seems likely to cross the resistance level, and reach the 1.5640 level. As the Bollinger Bands are tightening, this move might take place soon.

Danish Kroner Set to Correct Losses against Dollar Posted: 11 Jan 2011 03:34 AM PST Over the last week, the US dollar has moved up more than 2000 pips against its Danish counterpart, largely due to positive fundamental data that has caused investors to flock to the greenback. At the same time, technical data is now showing that the pair’s bullish run may be coming to an end. We will be looking at the daily chart for USD/DKK, provided by ForexYard. The technical indicators being examined are the Bollinger Bands, Relative Strength Index (RSI), Stochastic Slow and Williams Percent Range. 1. We can see that the last several price ticks are right along the upper Bollinger Band. This is typically a sign that a downward trend is likely to occur in the near future. 2. While the Relative Strength Index is not currently in overbought territory, it is pointing upward and seems poised to breach the upper resistance line. When it does, a bearish correction is likely to occur. 3. The Stochastic Slow has formed a bearish cross and is already pointing downward. Traders can take this as a clear sign that downward pressure exists for this pair. 4. The Williams Percent Range is currently right around the -10 level. Typically when this indicator is above -20, it is a sign that the pair is overbought and likely to correct itself.

Kroner Remains Bearish Against USD Posted: 11 Jan 2011 03:30 AM PST 2011 has seen a series of positive fundamental indicators out of the US that have boosted the greenback against most of its main currency rivals, including the Scandinavian kroner. As the employment and manufacturing sectors in the United States have steadily been improving, confidence in the dollar has rebounded. In the last week alone, the USD/DKK has gone up more than 2000 pips, while the USD/NOK and USD/SEK have both increased close to 1900 pips. Against the euro, the kroner have had significantly better luck. Renewed euro-zone debt worries, this time out of Portugal, have caused the 17-nation common currency to tumble over the last week. Investor concerns with the euro-zone combined with the generally positive data out of the US have led to a fairly bleak picture for the euro. Both the Norwegian and Swedish currencies have capitalized on the euro-zone debt issues, and have gone up around 1000 pips against the troubled currency in the last week. Turning to the rest of the week, traders will want to pay attention to the main publications out of the US, including the latest Unemployment Claims figure and Retail Sales report. Early forecasts are calling for slight improvements in both indicators. If the predictions are true, traders can expect the kroner to maintain its current bearish trend against the US currency. With regards to the euro, kroner traders will want to keep up with the latest news regarding Portugal and any possible bailout if may receive. Any positive news out of the euro-zone is likely to be to the detriment of the kroner.

AUD/USD – Bearish Correction Looks To Continue Posted: 11 Jan 2011 01:58 AM PST The AUD/USD pair has reached an all-time high on December 31, after climbing to the 1.0255 level. However, the inevitable outcome wasn't late to come, and a bearish correction promptly took place. By now, the pair dropped about 400 pips and is currently trading near the 0.9840 level. As technical analysis shows, the bearish correction did not reach its end quite yet. • The chart below is the AUD/USD 4-hour chart by ForexYard. • It can be seen that the bullish move which was initiated at December 17 has completely erased by now, and the pair resumed to its former levels. • A second consecutive bearish cross of the Slow Stochastic indicates that the bearish momentum is still strong, and that further bearishness should be expected. • In addition, the MACD has lately completed a bearish cross as well, also suggesting that another bearish move might be impending. • The pair recently saw a failed attempt to cross the 0.9800 support level. It now seems that another attempt to breach the support level will take place soon. If the pair will fall below the 0.9800 level, it has potential to drop towards the 0.9750 level, and even the 0.9670 level. • Nevertheless, if the pair will see another fail attempt to cross the support level, a bullish move might be triggered as a result. • On this case, the pair could climb towards the 0.9885 resistance level. • The next resistance levels are located at the 0.9930 and 0.9980 prices.

GBP/CHF – Testing 1.5039 Resistance Posted: 11 Jan 2011 12:00 AM PST The GBP/CHF, after experiencing a moderate upturn, appears to be leveling off as it meets its first significant resistance level at 1.5039. The pair has breached beyond this resistance price but, as can be seen on the chart below, the price has begun to turn somewhat flat; indicating a test of this resistance is underway. Fundamentals look favorable for the British pound, which suggests the pair will indeed breach this level. However, the Swiss franc's growing strength over the past several months has many speculators concerned that it will continue to move bullish absent a significant appeal from the Swiss National Bank (SNB) to address its currency's unnatural growth. Looking at the chart below also shows an immense amount of technical pressure mounting against the pair's recent bullishness. The Stochastic (slow) shows a high-peaking bearish cross, and the Williams Percent Range has almost touched the 0 mark, suggesting an imminent reversal to the latest movement. GBP/CHF – Daily Chart

Canadian Housing Starts Report May Boost CAD Posted: 10 Jan 2011 11:30 PM PST Today will be a quiet news day for the U.S. and Europe as there are no major economic data releases on the calendar from either. However, Canada appears to be releasing one significant figure, which means we may see a day of trading with low liquidity among the majors and therefore increased volatility. Day-traders can take advantage of these intense trading days by swinging within the larger-than-normal price fluctuations. Another developing trend is the recovery of crude oil. Oil prices rose more than 1% on Monday, after a weekend leak shut the Trans-Alaska Pipeline and forced producers to cut output to about 5% of their daily average of 630,000 barrels. Moreover, since the Dollar began dropping against the majors, crude has risen further and further. Currently trading around $89.35 a barrel, if the Dollar will continue to drop, crude could reach above $90 a barrel by the end of the day. Here are today's leading events: 13:15 GMT: Canadian Housing Starts The Housing Starts report provides the number of new residential buildings that began construction during the previous month. As a leading indicator of housing and construction growth, this report has a direct correlation with the strength of the Canadian economy. If the end result will beat forecast for 179K housing starts, then the Canadian dollar (CAD) is likely to strengthen.

EUR/USD Aims for the 1.3000 Level Posted: 10 Jan 2011 10:29 AM PST The EUR/USD pair saw a bullish correction today, and climbed from the 1.2870 level to 1.2960. Currently, the pair is trading above the Bollinger Bands' higher band, signaling that the bullish move has more steam in it. In addition, the Slow Stochastic, the MACD and the RSI are all pointing up, suggesting that further bullishness could be expected, with potential to reach the 1.3000 level.

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