FOREXYARD: Forex News Blog | |
- Gold-Technical Update
- Danish Krone Bearish after Moody’s Downgrade
- British Pound Outshining Euro in Forex Trading
- NZ Quake and Technical Pressure Weighing on Kiwi
- NZD/USD Tumbles in Wake of New Zealand Earthquake
- Crude Oil Soars To $95.45 a Barrel
| Posted: 22 Feb 2011 06:09 AM PST
Gold prices rose significantly in the last few days and peaked at $1410 an ounce. And now, there appears to be a recent bearish cross on the daily chart's Stochastic (slow), highlighting significant downward momentum building on this commodity's price. In addition, the Williams Percent Range and Relative Strength Index have the price floating in the over-bought region, suggesting that more pressure is on the way. Forex traders may want to take this opportunity to catch the downward correction on gold, which appears to be imminent.
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| Danish Krone Bearish after Moody’s Downgrade Posted: 22 Feb 2011 03:30 AM PST
Last week's downgrade of five top-listed Danish banks by Moody's Investor Services has put moderate sell pressure on the krone (DKK). After touching its Feb. 9 low of 5.4333, the USD/DKK pushed back towards 5.5000 following the risk adjustment by Moody's. The New York-based investor service provider downgraded Danske Bank A/S, Erhvervsbank A/S, BankNordik P/F, Spar Nord Bank A/S and Ringkjoebing Landbobank A/S after the Danish government dropped the losses suffered by the bailout of Amagerbanken A/S onto senior creditors. Further downgrades may take place later in the month as three other top Danish banks will be up for review by Moody's in the near future. On the chopping block are Nordea Bank AB's Danish unit, Sydbank A/S and Jyske Bank A/S. The failure of Denmark's fifth largest lender, Amagerbanken A/S, on February 6 represents the eighth bank bailout since 2008, and the first bailout since the new government ruled in favor of dropping its blanket guarantee of deposits and senior debt. The resultant pressure on the Danish krone appears to have been expected, but took place prior to the cyclical uptick within its current consolidating pattern. The pair now appears poised to climb towards 5.5500 before meeting any resistance. USD/DKK's Latest Uptick Part of Long-Term Consolidation Trend On the bright side of Denmark's latest lending woes is the fact that the krone appears to be trading within a clearly defined consolidation pattern against the US dollar. As can be seen on the chart below, the pair has been trading within a long-term downtrend since last June. The recent upsurge resisting this long-term trend, begun in early November of 2010, has pushed the pair into a consolidation pattern, with its tip at 5.5500. The downgrade by Moody's pushed the DKK lower against the dollar, lifting the pair before it could reach the lower border of its consolidation pattern. Additional upward mobility is expected since both the Stochastic (slow) and MACD reveal fresh or impending bullish crosses. It may be reasonable to expect the pair to climb towards 5.5500 before meeting any resistance. Whether or not it can break past that point is up for debate, however, since that price level has historically generated strong profit-taking behavior from Scandinavian currency traders. USD/DKK – Daily Chart |
| British Pound Outshining Euro in Forex Trading Posted: 22 Feb 2011 01:00 AM PST
A slew of recent analyses have shown mixed results for the EUR over the past several days, brought on by speculation surrounding Mid-East unrest; but how has the EUR compared with its British counterpart? Despite Britain's recent inflationary woes, the UK pound has actually remained relatively bullish versus most of its currency counterparts. The GBP/JPY was up this morning, trading near 134.80 before correcting back towards 134.55 prior to the opening of the European session. The GBP/NZD was also trading much higher, though analysts expect this to be a result of the recent earthquake in New Zealand and not a signal of any particular strength in the sterling. Looking at the pound in comparison with a number of other currencies, on the other hand, shows a weakening trend in GBP values. The pound has experienced declines against the Swiss franc (CHF), Canadian dollar (CAD), and recently the US dollar (USD). Across the English Channel, the euro, while expected to actually benefit from the turmoil spreading throughout the Middle East, appears bearish versus the pound. The rapid buy-in on commodities, particularly Crude Oil, has the US dollar weakening, thus driving its Atlantic rival, the EUR, higher. Positive data out of the euro zone has also given impetus to a relatively stable EUR, despite periodic, short-term downturns. If we look closer at the EUR/GBP we can see that the pound does in fact appear to be outpacing its European neighbor. The pair has been trading within a long-term consolidation pattern, with a consolidation point residing between 0.8400 and 0.8450. After falling below its 38.2% Fibonacci support line at 0.8480, the pair has seen continuous losses, pushing towards the subsequent Fib level near 0.8320. Given the historic strength of the consolidation pattern, which has been in development since last June, we can expect this pair to find solid support above the next Fib line, potentially bouncing back towards its consolidation zone after touching 0.8350. This gives forex traders a great opportunity for setting entry positions around the expected targets. The short-term downward target for this pair appears to be 0.8350, with a bounce back target near 0.8450. EUR/GBP – Daily Chart |
| NZ Quake and Technical Pressure Weighing on Kiwi Posted: 21 Feb 2011 11:30 PM PST
Following yesterday's earthquake in New Zealand – which some expect will claim upwards of 70 lives – the Reserve Bank of New Zealand (RBNZ) appears poised to reduce interest rates in order to ease concerns. New Zealand stocks also plummeted yesterday as a result of the 6.3-magnitude quake. Further weighing on the Kiwi, however, are a number of technical indicators which seem to show additional bearishness for the NZD ahead of a potentially wide swing in value. As we can see in the chart below, the AUD/NZD appears to have formed a clear head-and-shoulders pattern. What is worth highlighting is the shoulder line. As shown, the pair still has some room to run before touching the shoulder line of this chart formation, meaning traders may want to speculate on further bearishness for the Kiwi this week. To support this notion we can also see on the MACD that the bearish cross is near completion, but not yet fully formed (i.e. the cross has not yet crossed). The Stochastic (slow) also appears to have fallen below the over-bought 80 line, hinting that technical pressure may have eased, allowing the pair to continue rising to at least 1.3400, and perhaps a bit higher, before meeting solid resistance. If this head-and-shoulders pattern comes to fruition, the downward retracement should see the pair falling towards a range near 1.2950 over the subsequent weeks. But traders should also note the historically significant level at 1.3050 which has caused halting movements in both directions over the past year. AUD/NZD – Daily Chart |
| NZD/USD Tumbles in Wake of New Zealand Earthquake Posted: 21 Feb 2011 11:00 PM PST
The Kiwi was sharply lower following an earthquake that measured 6.3 on the Richter scale and sent buildings tumbling. The NZD/USD is currently testing the 0.7500 support line. A move below this level could trigger further selling to the 0.7350 mark. Commodities such as gold, silver, and crude oil are higher across the board following violence in Libya, Bahrain, Yemen, and Iran, with increased risk of protests spreading to other nations in the region. Today's calendar events: GBP – Public Sector Net Borrowing – 09:30 GMT CAD – Core Retail Sales – 13:30 GMT USD – CB Consumer Confidence – 15:00 GMT |
| Crude Oil Soars To $95.45 a Barrel Posted: 21 Feb 2011 11:05 AM PST
In light of recent developments in the Middle East, crude oil prices climbed today to $94.45 a barrel. Moreover, the 4-hour chart below indicates that the bullish move still has potential to extend further. The Slow Stochastic, the MACD and the RSI continue to point up, despite their relatively high levels. In addition, the chart remains above the upper Bollinger Band, also indicating that the bullish move has more steam in it.
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