FOREXYARD: Forex News Blog | |
- Dollar Sell-Off During European Trading
- USD/SEK’s Bearish Momentum
- Swedish Krona Reaches 10-yr High vs. EUR
- Technical Analysis – USD/CHF
- Dollar May Rebound Today
| Dollar Sell-Off During European Trading Posted: 01 Feb 2011 03:45 AM PST
The greenback was on its back foot today as traders sent the US dollar lower versus the majors for the second day in a row following better than expected European economic data. At lunchtime during the European trading session, the dollar was lower across the board as equities moved higher. Strong gains have been booked at the expense of the greenback after a smaller than expected drop in British home prices and a better than forecasted German unemployment rate. The best performers versus the dollar have been the Japanese yen and the Aussie dollar. The USD/JPY is down sharply at 81.50 from an opening day price of 81.90. Selling in the pair accelerated following a breach of the 81.80 support line. Earlier in the day the Royal Bank of Australia left its benchmark interest rate unchanged at 4.75% while the RBA reaffirmed that its monetary policy is appropriate for the current market. Growth rates should be maintained and the economic damage from the Queensland floods will be negligible. The AUD/USD continues a two day rally into today and rose as high as the 1.0075 resistance level after opening the day at 1.0035. The dollar selling may continue into the US trading session as traders eye the release of US manufacturing data later today. The EUR/USD is pushing higher and has risen above last week's high of 1.3770. Limited resistance stands in the way of the pair moving higher towards the November high of 1.4280. The next resistance is found at the November 22nd high of 1.3785, followed by 1.3970. Support comes in at this week's low of 1.3570. |
| Posted: 01 Feb 2011 03:31 AM PST
As we can see from the chart below (provided by ForexYard), the USD/SEK has been trading within a major downtrend for some time now. The current reading has pushed below the Sept. 2009 price, making this a 2-year low price mark. Moreover, as we can see from the Relative Strength Index (RSI) the price remains in neutral territory and does not show any accumulation of technical pressure to the upside. The Stochastic (slow) on our weekly chart, however, does reveal what appears to be an impending bullish cross. There appears to be several days or weeks before this cross occurs, on the other hand, which means the bearish momentum remains dominant for the time being. Technical analysts have said they expect some level of retracement in the USD/SEK towards 6.5000 by mid-February, likely assisted by a boost to the USD from Valentine's Day retail sales growth. The peaking SEK values are also expected to start cutting into corporate profits in Sweden over the next several months and at least a few forecasts are beginning to reflect this expected shrinkage. For the moment, however, traders may expect a continuation of bearishness in the USD/SEK as the pair seems to retain solid downward momentum heading into the first week of February. USD/SEK – Weekly Chart |
| Swedish Krona Reaches 10-yr High vs. EUR Posted: 01 Feb 2011 03:30 AM PST
The Swedish economy has been outperforming many of its regional neighbors over the past few years and traders are beginning to see a signal that its currency is breaking barriers. The krona (SEK) touched a 2-year high against the US dollar (USD) yesterday, a high of 6.3886. As a recent safe-haven away from the sovereign debt crisis of the euro zone, the SEK also pushed towards a 10-year high against the euro (EUR), reaching 8.7830 before bouncing back to its recent price near 8.8200. Sweden's relative growth was highlighted by December's trade surplus figures, revealing an expansion beyond the expected 7.9B SEK to a whopping 10.9B SEK. Growth in Sweden's large telecom industry, with Ericsson leading the way, helped boost Swedish exports and drive the trade surplus to this December reading. Swedish fashion retailer H&M, however, experienced a mild dip in Q4 profits, but announced its plans to open another 250 stores in fiscal 2011, citing market optimism. The stronger SEK has begun to gouge Sweden's retail industry by increasing the price of domestic goods, but the impact has so far not been dire enough to dampen Sweden's economic growth forecasts. |
| Posted: 01 Feb 2011 12:38 AM PST
The January candlestick on the USD/CHF monthly chart shows two contrasting signals that could be interpreted as either bullish or bearish. However, bias remains to the downside. An argument for a rally in the pair holds water as the January candlestick closed as an inverted hammer. This minor reversal pattern requires confirmation in the form of a move above the January close at 0.9415. First resistance comes in at the lower channel line that comes in this month at 0.9440, followed by the January high of 0.9780, and finally by the November and December highs near the 1.0070 mark. However, bias is to the downside as the past monthly chart shows, 5 of the last 8 monthly bars have been declines with the long term trend to the downside. Supporting a continuation of the downtrend is the January close that failed to end the month above the lower channel line that comes off of the 2008 low. Support is found at the January 2010 low at 0.9320 followed by the all-time low from the November candlestick at 0.9300.
|
| Posted: 31 Jan 2011 10:28 PM PST
After taking some losses against its major currency rivals in overnight trading, the US dollar will have plenty of opportunities to rebound today, as a number of news events are set to shake up the market. Chief among these indicators is manufacturing data from the UK and US. The following is a summary of the day’s main economic indicators: 09:30 GMT- GBP Manufacturing PMI The Manufacturing PMI is a survey of 600 British purchasing managers who are asked to rate a number of business conditions in the UK. The survey is considered a key indicator of economic health, with a score above 50 signaling expansion in the manufacturing industry. This month, analysts are predicting the PMI to come in around 58.0. If true, it would represent a slight drop from last month’s figure of 58.3. That being said, the predicted level would still signal industry growth and will likely lead to healthy gains for the UK pound. If the PMI unexpectedly comes in well below expectations, sterling may have a bearish day. 15:00 GMT- USD ISM Manufacturing PMI Like the UK Manufacturing PMI, the US PMI is a survey of American purchasing managers who are asked to rate a number of business conditions in the United States. Volatility among USD pairs is often experienced following this report, so traders will want to keep a close watch on the end result. Predictions are calling for the PMI to come in around 57.8, which would be a sign of expansion in the US manufacturing industry. Still, it would also represent a somewhat significant drop from last month’s figure of 58.5. Should the PMI come in above its forecasted level today, the USD may see some short term bullish movement. |
| You are subscribed to email updates from Forex Trading Education : Forex Trading Blog by FOREXYARD To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
No comments:
Post a Comment