FOREXYARD: Forex News Blog | |
- Choppy Market Expecting USD Gains after Friday’s GDP Report
- EUR/GBP- Technical Update
- Potential Reversal for EUR/CAD
- Major US News Likely to Shake Up Market Today
| Choppy Market Expecting USD Gains after Friday’s GDP Report Posted: 27 Jan 2011 07:05 AM PST
The events of this week have resulted in a rather sporadic and choppy trading environment. Dismal GDP figures from Britain pushed harshly on sterling's recent strength. Meanwhile, President Obama's State of the Union address left many investors optimistic about broader tax overhauls and a possible reduction in corporate taxes, but speculators have already begun to anticipate Congressional gridlock instead of the cooperation necessary to undertake such measures. Following today's surprise jump in US unemployment claims, the greenback's prices against the other major currencies appears uneasy. The EUR/USD was moving higher, breaching 1.3720 this morning, while the GBP/USD also rose towards 1.5980 before paring its recent gains and currently trading at 1.5955. Rising consumer confidence has helped lift risk appetite, leading many traders away from the greenback and precious metals and back into higher yielding assets such as the EUR and CHF. But many have stated that the recent rise of these riskier currencies was too rapid and a technical correction could be developing before the week's close. Tomorrow's Advance GDP publication from the United States (13:30 GMT) represents the only remaining figure to carry a significant impact on the major currencies this week. The median estimate among the Market News International survey of economists is for a growth of 3.5%, but other forecasts range from 2.9% to 5.4%. Most investors are expecting a moderate level of growth in the US economy, in line with Obama's overtures towards economic recovery in his State of the Union address this week. It is possible that such a positive level of growth could signal another buy-in to American equities, pushing the USD higher in the short-run prior to the week's end. This would also support the notion of a technical correction to the recent downturn in dollar values against most other currencies. |
| Posted: 27 Jan 2011 01:49 AM PST
A bullish movement in EUR/GBP has pushed a number of technical indicators into the over-bought territory. As I will demonstrate below, the EUR/GBP may very well be heading for a reversal, as a bearish cross has taken place on the Slow Stochastic. In addition, the Relative Strength Index (RSI) indicates that the price of this cross currently floats in the overbought territory, signaling downward pressure. Forex traders can take advantage of this impending movement by having their Entry Orders in place to capture this reversal. Don't forget your Stops and Limits!
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| Potential Reversal for EUR/CAD Posted: 27 Jan 2011 12:23 AM PST
The volatile of the EUR/CAD pair continues to be affected by the volatile forex market. The last two weeks has seen a lot of bullish strength in the EUR/CAD pair. However, as I demonstrated below, it seems that the pair's bullish run may have run out of steam, and a bearish correction could be underway soon. This might be a good opportunity for forex traders to enter the trend at a very early stage and at a great entry price. • Below is the 8-hour chart of the EUR/CAD currency pair. • The technical indicators that are used are the MACD, Relative Strength Index (RSI), and Slow Stochastic. • Point 1: There is a "doji" candlestick that has formed on the chart, indicating that a reversal should take place. • Point 2: The Slow Stochastic indicates a bearish cross, signaling that the next move may be in a downward direction. • Point 3: The Relative Strength Index (RSI) indicates that the price of this cross currently floats in the overbought territory, signaling downward pressure. • Point 4: The MACD indicates an impending bearish cross, signaling that the next move may be in a downward direction. EUR/CAD Daily Chart |
| Major US News Likely to Shake Up Market Today Posted: 26 Jan 2011 11:26 PM PST
After reaching above the 1.3700 level in overnight trading, the EUR/USD has fallen slightly and is currently trading at 1.3693. Today, a batch of US data is predicted to show a decline in several economic sectors. Traders can expect the USD to drop further unless the indicators come in significantly better than forecasted. Here is a roundup of the day’s main news events: 13:30 GMT-USD Core Durable Goods Orders This monthly figure is considered a key indicator of production levels in the United States, and is typically met with heavy market volatility. Analysts are currently predicting today’s figure to come in at 0.9%, which if true, would represent a significant drop from last month. Assuming analysts are correct, the USD is likely to fall following the release of the figure. 13:30 GMT- USD Unemployment Claims The weekly Unemployment Claims give traders a look at one of the key sectors of the US economy. Unemployment is one of the last things that are hampering the US economic recovery, and this figure always leads to significant dollar fluctuations. Analysts are predicting an increase in unemployment claims for this week, which if true, is likely to cause the dollar to drop once again against its main currency rivals. Traders are advised to go short on the greenback if the unemployment figure comes in at 407K or above. 15:00 GMT- USD Pending Home Sales The Pending Home Sales figure is expected to drop to its lowest level in 2 months when it is released today. Home sales are considered a critical part of US economic health. If today’s figure comes in at its predicted level of 0.9%, further bearish dollar behavior is likely to occur. |
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