FOREXYARD: Forex News Blog | |
- USD Set to Make Gains on Aussie
- Weekly Commodities Outlook for Feb. 7-11
- EUR/CAD- Technical Update
- FOREX: EUR/USD Retracing Head-and-Shoulder Surge?
- Nasdaq 100 Set for Bearish Correction
- Dollar Rally Gains Traction, Temporarily
- FX Weekly Preview
- EUR/AUD Likely to See Upward Reversal
- Euro Slumps, AUD Shines Prior to Payrolls Release
- US Non-Farm Payrolls to be Released Tomorrow!
| USD Set to Make Gains on Aussie Posted: 07 Feb 2011 09:29 AM PST
Following more than a week of prolonged upward movement, it appears that the AUD/USD may be due for a downward correction. Technical data on the daily chart for the pair is showing that an impending bearish move is likely to occur. The next major support line for the pair stands at 0.9930. If this level is breached, further downward pressure could occur. Traders will want to note that both the Relative Strength Index and Williams Percent Range are currently in overbought territory, while a bearish cross has formed on the Slow Stochastic. Now may be a great time to open up sell positions at a great entry price for some potentially significant profits. |
| Weekly Commodities Outlook for Feb. 7-11 Posted: 07 Feb 2011 08:49 AM PST
Following strong US employment news late last week, analysts are forecasting a drop in the price of commodities over the next few days. The dollar has remained largely bullish to start off the week, which has lessened appetite for alternative investments like crude oil, gold and silver. This is likely to be especially true for oil, which has dropped close to $3 since the latest US unemployment rate was released last Friday. Both gold and silver have traded relatively flat since the news release as investors continue to test the market to see where currencies like the euro and dollar are heading. Typically, a strong greenback lessens demand for commodities which are priced in dollars and are therefore less attractive to international buyers. This week, commodities traders will want to tune in to Wednesday’s testimony from US Fed Chairman Bernanke. Investor confidence in the US economic recovery went up last week, boosting the dollar in the process. Should Bernanke’s testimony point to future growth in the American economy, the dollar will likely maintain its current trend. As a result, gold, silver and oil may turn bearish. In addition, attention should be given to the UK’s MPC Rate Statement set for Thursday. At this time analysts are predicting the UK to maintain their current interest rates. Unless the MPC indicates prospects for long term growth in the British economy, currencies like the euro and sterling are likely to go down, which may also cause commodities to remain bearish. |
| Posted: 07 Feb 2011 03:08 AM PST
The EUR has dropped significantly versus the CAD in the last week, and it is currently traded around 1.3440. And now as evident in the data, the 8-hour chart is giving bullish signals, indicating that EUR/CAD pair might go up, as a bullish cross has taken place on the Slow Stochastic and the cross may raise another 50-100 pips in the coming 2 days. Traders are strongly advised to take advantage of the trend at an early stage. Therefore, why not open long positions at an excellent price? • The next resistance levels are found at the 1.3470, 1.3500 and 1.3530 levels.
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| FOREX: EUR/USD Retracing Head-and-Shoulder Surge? Posted: 07 Feb 2011 01:30 AM PST
Expectations this week for the world's primary currency pair, the EUR/USD, may be summed up by viewing the daily chart's technical formation. Beginning with last year's record low price of 1.1875, this pair has been developing a long-term, upward angled, "head-and-shoulders" candlestick formation. As this formation appears to have finalized over the last few trading days, can we now expect a long-term retracement back towards the 38.2% Fibonacci support line at 1.3034? If you look at the chart below, it is possible to see supporting indicators of such a move. The MACD/OsMA reveals a clear bearish cross near the 0.0100 level, typically a solid indication of an impending downward turn. The Relative Strength Index (RSI) and Stochastic (slow) also show a sharp cascading price movement, suggesting added momentum to last week's bearishness. What is worth noting, however, is the speed of the descent being experienced in these latter two indicators. This movement will likely see both indicators reaching the over-sold territory rapidly, adding upward pressure to this downward correction and potentially halting the long-term retracement expected from the head-and-shoulders formation. If we are to understand this expected technical move, we may be better off breaking it into two phases. The first phase may see the price of the EUR/USD descending to the 50% Fibonacci level at 1.3391, at which point it is going to meet strong support. This phase should see some range-trading behavior between 1.3390 and 1.3500 over the course of several days as major investors test the resolve of the head-and-shoulders pattern. If the bears can outbid the bulls during this first phase, then we should see the head-and-shoulders formation continue for the next few weeks as the price retraces towards the neckline (highlighted on the chart below). The 38.2% Fibonacci support level represents the long-term target of this pair. But short-term traders should keep their trades focused on the first phase, which will no doubt be shakier than the second. EUR/USD Daily Chart |
| Nasdaq 100 Set for Bearish Correction Posted: 06 Feb 2011 11:50 PM PST
Nasdaq 100 rose significantly in the past week and peaked at 2339 level. However, the 8-hour chart is suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. Forex traders can take advantage of this imminent downward movement by entering short positions at an excellent entry price. • Below is the 8-hour chart for Nasdaq 100 by ForexYard. • The technical indicators used are the Slow Stochastic, Relative Strength Index (RSI) and Williams Percent Range. • Point 1: There is a "doji" candlestick that has formed on the chart, indicating that a reversal should take place. • Point 2: The Stochastic Slow signals further bearishness, which in turn indicates further downward pressure to occur anytime soon. • Point 3: The RSI signals that the price of this pair currently floats in the over-bought territory, indicating downward pressure. • Point 4: The Williams Percent Range has peaked near at the 0 marker, which means that there may actually be a strong level of downward pressure. Nasdaq 100 8-Hour Chart |
| Dollar Rally Gains Traction, Temporarily Posted: 06 Feb 2011 11:23 PM PST
Beginning on Wednesday traders began to unwind short dollar positions with the dollar buying increasing as the week went on, culminating in significant gains for the greenback after the release of the US unemployment numbers. The cause of the strengthening dollar may be linked to comments by ECB President Jean-Claude Trichet who attempted to play down the market's expectations of two ECB rate hikes in 2011. One note that has gone quietly unnoticed was Fed Chairmen Ben Bernanke's speech on Thursday underpinning the Fed's loose monetary policy. The Fed's commitment to fighting deflation and its full implementation of QE II may prevent the dollar from sustaining any serious rally versus the euro and the majors. Today's Key Data Releases: EUR – German Factory Orders m/m – 11:00 GMT Germany, the workhorse of the EU economy continues to show signs of increased growth. The market may be surprised by this data release and a result the euro could receive strong bids. The EUR/CHF has experienced a period of consolidation over the past 3-weeks but is now approaching a trend line that falls off of the October and November highs. The trend line comes in today at 1.3090. A move above this line could take the pair to the 1.3230 resistance. JPY – Japanese Current Account – 23:30 GMT The USD/JPY reached the bottom channel line of the current downtrend and reversed its direction a full 180 degrees. A move below the channel line will target the 2011 low of 80.90. Resistance will be found in a range between the early December low of 82.30 and Friday's high of 82.50. Further resistance is located at the falling trend line off of this year's highs. The levels of 83.70 and 84.50 also stand out. |
| Posted: 04 Feb 2011 01:15 PM PST
An analysis of the major FX pairs for the coming week. EUR/USD While it may be premature to call a top in the euro's recent rally, the failure of the pair to move above the 1.3860 combined with falling momentum point to further declines in the pair. Support will be found at the 1.3540 mark, not far from the 100-day moving average. A natural target for the decline may be 1.3480 which is the 38.2% Fib retracement from this year's bullish move. This level looks to be bolstered as it coincides with the mid-December high. Should the pair continue to fall, the next target would be the 61.8% Fib at 1.3250. GBP/USD The failure of the GBP/USD to close above the downward sloping trend line on the weekly chart does not bode well for the pair. However, the daily chart shows the pair found support at the 1.6040 level. The rising short term trend line from the late January lows should also prove supportive. A breach below this could take the pair to the late January pivot at 1.5750. Resistance will be the 2011 high at 1.6280.
USD/JPY The pair reached the bottom channel line of the downtrend and reversed its direction a full 180 degrees. A move below the channel line will target the 2011 low of 80.90. Resistance will be found in a range between the early December low of 82.30 and Friday's high of 82.50. Further resistance is located at the falling trend line off of this year's highs. The levels of 83.70 and 84.50 also stand out.
USD/CHF The Swissie has come off its 2011 high and the USD/CHF and is currently pressing the 0.9590 level that coincides with a long term trend line which falls from the May 2010 high. A breach of the trend line next week will first target 0.9690, followed by 0.9780. Should the pair fall in-line with the long term trend line this week's low of 0.9320 will be in play.
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| EUR/AUD Likely to See Upward Reversal Posted: 03 Feb 2011 11:45 PM PST
The EUR/AUD pair has experienced much bearishness in the last few days as it currently trades at 1.3380. The current bearish trend is expected to come to an end anytime soon, and a bullish correction may be in the making. I will illustrate below that the EUR/AUD may very well be heading for a reversal. Traders are strongly advised to take advantage of the trend at an early stage. • Below is the 4-hour chart of the EUR/AUD currency pair. • The technical indicators that are used are the William Percent Range, Relative Strength Index (RSI), and Slow Stochastic. • Point 1: The Slow Stochastic indicates a bullish cross, signaling that the next move may be in an upward direction. • Point 2: The RSI signals that the price of this pair currently floats in the over-sold territory, suggesting upward pressure. • Point 3: The Williams Percent Ranges is showing that this pair is heavily over-sold and may be experiencing strong upward pressure. • The volatile downward movement which occurred prior to this upward correction has generated these indicators, and there appears to be room for this correction to continue. EUR/AUD 4-Hour Chart |
| Euro Slumps, AUD Shines Prior to Payrolls Release Posted: 03 Feb 2011 11:24 PM PST
A two day drop in the value of the EUR/USD may have set the stage for the next rally in the pair while the AUD/USD quietly climbs on increased Aussie GDP expectations. Should today's US Non-Farm Payrolls data disappoint investors and fall below expectations of 138K new jobs, the euro may resume its run higher that has characterized this year's trading. A rising support line underneath the late January lows looks to have held the declines in the pair, making an a trade setup long on the EUR/USD with a stop below this level and a first target this week's high of 1.3860. 1.4000 could also be reached in the near term. The major economic events of the day: GBP – Halifax HPI m/m – 08:00 GMT The GBP/USD is currently testing the resistance level of 1.6300, a price last seen in November. A breach of this level would then set the stage for a test of the 2010 high of 1.6460. CAD – Employment Change – 12:00 GMT The CAD continues to strengthen versus the US dollar. The 2011 low of 0.9888 is in play today. USD -Non-Farm Employment Change – 13:30 GMT The 4-day rally in the AUD/USD has been flying underneath the radar as Cyclone Yesterday Cyclone Yasi wreaked havoc on Queensland. Today the RBA upgraded its GDP forecast to 4.25% from 3.75%. The Aussie dollar looks to hold above the parity level and could move higher than the 2010 high of 1.0250. |
| US Non-Farm Payrolls to be Released Tomorrow! Posted: 03 Feb 2011 04:51 AM PST
With tomorrow’s US Non-Farm Payrolls figure set to create major volatility across the forex marketplace, now may be a good time to look at what analysts are predicting the employment number will be, and how it could potentially affect the USD. At the moment, most forecasts are saying that the US added approximately 133K jobs in January. If true, the number would signal a marked increase over December’s figure of 103K, and would add further support to the notion that the US economy is recovering. How the potentially positive number could affect the forex market and the US dollar in particular, is the subject of some debate. On the one hand, a solid US employment number would do a lot to boost investor confidence in the global economic recovery. This would in turn increase risk taking among investors which could potentially put pressure on the safe haven dollar while causing currencies like the euro and sterling to turn bullish. On the other hand, positive news out of the US could potentially cause investors to return to the greenback, providing that faith in the US economy goes up as a result. At the moment, the first possibility appears to be the most likely. Throughout the last week, both the euro and UK pound have been bullish, while safe haven currencies like the dollar have gone down. This is despite positive US indicators, like Wednesday’s better than expected US ADP Non-Farm Employment Change. It appears that investors are looking for reasons to bet on higher yielding currencies, and tomorrow’s news may be the catalyst they need. Experienced traders know that the Non-Farm’s figure is notoriously difficult to predict. That being said, if Wednesday’s ADP figure is any indication, the employment situation in the US is turning positive. Still, careful attention should be given to tomorrow’s news. The Non-Farm data is considered the most significant news release of the month, and heavy market movements are guaranteed to occur. |
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