FOREXYARD: Forex News Blog | |
- Spot Crude Oil Prices Recovers
- Silver Breaches Support – Further Declines Expected
- GBP/CHF Meeting Resistance at 1.5388
- US Growth Creates Volatility for USD and Crude Oil
| Spot Crude Oil Prices Recovers Posted: 21 Jan 2011 07:28 AM PST
Spot crude oil prices have come off of their lows from Thursday following strong economic data. A day after spot crude oil prices dropped 2.75%%, traders were posting strong bids for oil which helped to put a stop in the slide of the price. Spot crude oil was trading higher on the day at $89.60 from an opening day price of $89.41. Helping to support the commodity was better than expected Canadian core retail sales. Core retail sales for the month of December grew by 1.0%. Economists had forecasted an increase of only 0.6%. Also helping to support the price of crude oil was the expiration of the New York Mercantile Exchange February futures contract. Prices look to have stabilized following the sharp declines on Thursday after China reported stronger than expected GDP. This leads economists and traders to expect further monetary policy tightening by China that could reduce demand for crude oil. However, it appears that crude oil bulls are expecting the global economy to pick up the pace of growth in 1Q 2011. The Bundesbank has recently increased its economic forecast for Germany, raising 2011 expectations to 2.3% from 1.8%. Other central banks may begin to do the same which would further support crude oil prices. Resistance for spot crude oil is found at Wednesday's high of $93. Support is the January low at $87.20. |
| Silver Breaches Support – Further Declines Expected Posted: 21 Jan 2011 04:33 AM PST
Yesterday's blog revolved around the drop in spot gold prices and the head and shoulders reversal chart pattern that was completed. However, spot silver has also displayed similar characteristics with a breach of the $28 support line. Given the high correlation between the two commodities, it is not surprising to see a sharp drop in spot gold prices accompanied by a fall in the price of spot silver. Last year there was a 0.92 correlation between the two commodities. While the daily chart of spot silver does not contain a head and shoulders pattern similar to the daily chart for spot gold, the silver chart does show a defined support line at $28 that was breached yesterday. After yesterday's 4.7% decline in the value of the spot silver, the commodity continues to fall today. Further declines in the price may be expected with support levels found at $26.40 and $25. Resistance levels will be this week's high at 29.50, the bullish trend line from the late August which comes in today at $30.60, followed by that all-time high at $31.21.
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| GBP/CHF Meeting Resistance at 1.5388 Posted: 20 Jan 2011 11:30 PM PST
The British pound has had difficulty breaching the 1.5388 price barrier against the Swiss franc lately. Over the past several days the GBP/CHF has attempted a breakthrough beyond this border, but has met staunch resistance each time. As we can see on the chart below, most technical indicators allow us to see why the pair is struggling at this price. The price of 1.5388 represents the significant 61.8% Fibonacci retracement level for this pair. The MACD/OsMA reveals a high-rise, bearish cross followed by a descending movement in the oscillator's directionality. This suggests not only an impending bearish movement, but significant pressure resting atop the pair, deterring bullishness. The Stochastic (fast) oscillator, typically an excellent gauge of short-term directionality, also provides an imminent bearish cross. These two indicators together highlight the level of technical resistance pushing down on the GBP/CHF. Combined with the Fibonacci level drawn on the chart below, it appears this pair, if able to break beyond this border, will likely take off in a sharp bullish run. But chances are this pair will continue to meet resistance and retrace lower towards the 1.5200 price level over the coming weeks. GBP/CHF – 8-Hour Chart |
| US Growth Creates Volatility for USD and Crude Oil Posted: 20 Jan 2011 11:00 PM PST
The U.S. dollar experienced one of its most bullish trading days in recent weeks on Thursday after a batch of U.S. data largely came in better-than-expected, reassuring investors that the U.S. economy continues to recover. The USD made significant gains against many of its most traded currency pairs, such as the JPY, GBP and CHF. The price of crude oil fell 2% to $89.40 yesterday, extending hefty losses from the previous session as rising stockpiles of U.S. crude outweighed positive economic data. Today, crude oil is set to be in the spotlight again with important publications from U.S. and Europe. Here is a roundup of today's leading events: It is a survey of about 7,000 businesses who are asked to rate their current business conditions, and their expectations for the next 6 months. If the end result will beat expectations for 110.50points, the Euro might strengthen as a result. 9:30 GMT: British Retail Sales This monthly report measures the change in the total value of sales at the retail level. This release will no doubt have a heavy effect on the value of the GBP. If the end result will be better than the forecast, the GBP might strengthen as a result. However, a disappointing result could send GBP/USD below the 1.5820 support level. Traders should make sure to protect their positions for GBP pairs today and expect sharp movements in the market. |
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