FOREXYARD: Forex News Blog

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• Gold Hits near $1410 Level
• USD/JPY Approaches Significant Support Level At 81.60
• ForexYard Preview: Week of Feb. 28-March 4
• Silver Looks to Correct Gains; Might Reach $31.50
• Silver’s Price Moves: Anticipating a Fall?
• Spot Crude Oil Rises to Key Technical Level
• US GDP On Tap

Gold Hits near $1410 Level Posted: 25 Feb 2011 08:48 AM PST Gold rose as high as $1411 an ounce early today, which is largely owned to the EUR’s gains vs. the USD. In the past week, Gold has made a significant upward correction, which can be directly correlated with the bullish trend of the EUR/USD cross. This recent activity has raised the stakes for traders. From here on, the forex and commodity markets will see very high volatility indeed. Pivot: 1395.00 Our Preference: LONG positions above 1395 with targets @ 1408 & 1417. Alternative scenario: The downside breakout of 1395 will open the way to 1387 & 1382. Comment: as long as the price remains within its key upside channel, a further up move is expected to re-test 1417 after a pause. Trend: ST Ltd upside; MT Bullish Key levels Comment 1424* Fib projection 1417** Intraday resistance 1408** Intraday resistance 1404 Last 1395** Intraday pivot point 1387** Intraday support 1382** Intraday support

USD/JPY Approaches Significant Support Level At 81.60 Posted: 25 Feb 2011 06:51 AM PST The USD/JPY pair saw a very strong bullish trend in February, reaching as high as the 83.96 level. However, once the pair climbed towards almost 84.00, a sudden correction took place which was only stopped at the 81.60 level. Currently, the pair is once again testing the significant support level, if it falls below it, another sharp depreciation may take place. • The chart below is the USD/JPY 4-hour chart by ForexYard. • By February 4th the pair saw a strong bullish move, which was sharply reversed on February 16th. During the bearish correction, the pair has erased almost all of its gains. • The Slow Stochastic has lately completed a bearish cross, signaling that another downward movement could take place soon. • The RSI has recently climbed above the 30-line, just to fall below it again shortly after. This indicates that the bullish momentum was very poor, and that another bearish session is likely to take place. • There is a very strong support level placed at 81.60. If the pair will fall below the support level, it is likely to drop towards the 81.30 level, followed by the 81.10 level. • The next resistance levels are placed at the 82.00, 82.30 and 82.55 levels.

ForexYard Preview: Week of Feb. 28-March 4 Posted: 25 Feb 2011 06:00 AM PST The past week saw fairly dramatic developments in the forex market. While the Swiss franc approached record highs, the price of crude oil skyrocketed well past $100 a barrel. Next week promises to be equally volatile. In addition to the continuous developments unfolding in the Middle East, traders will want to take into account a number of potentially significant news events that are likely to shake up the market. Here is a preview of next week’s main economic indicators: Monday’s US Pending Home Sales figure is forecasted to come in significantly below last month’s. If true, traders are likely to use the report as further evidence that the US economic recovery is faltering which could result in another bearish day for the USD. Traders can expect a heavy day on Tuesday, with several significant indicators coming out of the UK. Both the Nationwide HMI and Manufacturing PMI are expected to come in below last month’s levels. The UK pound has been steadily rising against several of its main rivals as of late. If Tuesday’s figures come in as predicted, the currency could turn bearish. On Wednesday, all eyes will be on the US ADP Non-Farm Employment Change figure. The ADP number is a solid predictor of what the official Non-Farm figure will be, and is widely considered one of the leading indicators of economic health in the United States. Traders will want to pay attention to analyst predictions before this figure is released, as it is likely to generate heavy volatility. On Thursday, traders will want to pay attention to the ECB Minimum Bid Rate. There has been a lot of speculation as of late regarding when the ECB will raise interest rates. If that day happens to be on Thursday, the euro is likely to gain heavily as a result. Finally, Friday’s US Non-Farm Employment Change figure and Unemployment Rate are both expected to generate significant amounts of market volatility. The Non-Farm figure in particular always leads to heavy market activity. If the end result shows any improvement in the US economy the dollar may be able to rebound from its current bearish cycle.

Silver Looks to Correct Gains; Might Reach $31.50 Posted: 25 Feb 2011 04:39 AM PST During the past month, silver prices climbed steadily and spot-silver peaked at $34.30. However, the commodity then entered a moderate bearish correction, which took it down to $31.70 an ounce. Currently, silver has stabilized around the $32.70 level. Nevertheless, technical analysis now suggests that another bearish correction might be in place, with potential to take silver as low as $31.50 an ounce. • The chart below is the spot-silver 4-hour chart by ForexYard. • There is a very distinct bullish channel which was formed on January 30th, and ended around February 13th. During this time, silver climbed from $26.35 to the $30.85 level. • Afterwards, silver entered an even sharper bullish channel, which only ended on February 20. By then, silver reached as high as the $34.30 level. • Later on silver saw flat trading around the $33.50 level, and then began trading within a restricted range between the $31.70 and the $33.00 level. • Currently, silver is trading near $32.80 an ounce, and appears to be on its way towards the bottom of the range. • The MACD has recently completed a bearish cross, at a very high level. This indicates that the bearish move is likely to continue. • Silver began to fall once the RSI fell below the 70-line. The RSI continues to point downwards, also signaling that the bearish move may be extended. • The next support levels are located at the $32.00, $31.70 and $31.50 levels. • The next resistance levels are at: $33.10, $33.75 and $34.25.

Silver’s Price Moves: Anticipating a Fall? Posted: 25 Feb 2011 03:00 AM PST After this past week's surging price of precious metals, traders appear to be expecting some level of retracement in value for Silver. In an earlier article it was argued that Silver prices may outpace the spiking price of Gold, which has so far panned out. Gold reached just shy of its all-time nominal high, whereas Silver jumped to a 30-year peak and held steady, for the most part. As of yesterday, however, Silver prices appear to be coming back down. So far, it seems, there appear to be two fundamental factors and one technical aspect fueling this retracement. First, profit-taking among the precious and noble metals yesterday constituted the bulk of the sudden plummet in Silver prices. As several industries which apply Silver in their production posted above-expected profits in Q4, many analysts seem to be anticipating a pull-back as part of an impending cyclical downturn. Second, the flaring tensions in Libya, which have driven oil traders bonkers this week, have also created a capital shift towards safe-haven stores of value, like Gold. Gold's upward mobility pulled other associated metals higher along with it, but Silver's spike was given impetus by a multitude of other factors associated with growth among industry and hi-tech. As long as Libya's president, Muammar Qaddafi, fights to hold onto power, commodity prices will likely continue to find support. But traders should be cautious since revolutions like those spreading throughout the Middle East may end as abruptly as they began, creating a whiplash turnaround in market activity. Australia's central bank governor, Glenn Stevens, warned of such sentiment recently by calling on markets to begin pricing in the impending correction to the latest surge in asset prices. Gov. Stevens' concern is connected to the fact that Australia's economy is closely aligned with the value of precious metals and an overextension of investment could create a nasty backlash on the Economy Down Under. The technical factor is, as usual, a theoretical prediction. The daily and weekly charts on Silver show what may end up being the first shoulder and the head of a head-and-shoulders formation. If true, we may expect a retracement back towards $27 before a secondary surge, likely reaching as high as $31. If it does end up being such a formation, we may see Silver prices breaking out of its uptrend over the next few months, possibly falling back into the low $20s. Silver – Weekly Chart

Spot Crude Oil Rises to Key Technical Level Posted: 24 Feb 2011 11:15 PM PST The rise in spot crude oil prices may have technical implications as this week's high coincides with a key Fibonacci level. Following the collapse of crude oil prices over the second half of 2008 where the price fell from $147 to $33, prices have steadily climbed back, albeit slowly. This week's rally to $103 has completed a 61.8% retracement of the June 2008 to January 2009 price drop. Should the commodity continue to move higher, resistance is found at this week's high at $103, followed by $110 and $122, as well as the all-time high near $147. Support should be found at $93, with further support at $83 and $73. The rising trend line off of the February 2009 low may also prove to be supportive.

US GDP On Tap Posted: 24 Feb 2011 10:28 PM PST With an abnormal number of news events coming from the Euro-Zone and the United States today, forex traders have been in a frenzy to place their bets before the trading day gets underway. Trading during these news events, which typically carry a lot of market volatility, is a fast way to double your forex trading balance; the wise trader knows this. Special attention should be paid to the Europe M3 Money Supply report at 9:00 GMT and the U.S Prelim GDP at 13:30 GMT. 9:00 GMT: EUR M3 Money Supply This monthly report measures the change in total quantity of domestic currency in circulation and deposited in banks. If the end result will beat expectations for 2.1 percent, the Euro might strengthen as a result. 13:30 GMT: USD Prelim GDP This is the broadest measure of economic activity and the primary gauge of the economy’s health. U.S economic growth has been stagnating for the past few quarters, prompting the Federal Reserve to embark on a bond purchasing program in order to stimulate growth. This number is highly important as the Fed's move received much criticism from home and abroad. The number is expected to show a slight improvement from the previous reading, 3.3% instead of 3.2%. If the result is as expected or higher it will likely boost the dollar, possibly pushing the EUR/USD below $1.3750 and the USD/JPY to 83.00 yen.

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