Friday, February 25, 2011

FOREXYARD: Forex News Blog

FOREXYARD: Forex News Blog

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Spot Crude Oil Leaps above the $100 Barrier

Posted: 24 Feb 2011 04:33 AM PST

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In early European trading the price of spot crude oil eclipsed the psychological barrier amid global supply concerns and continued violence in Libya.

The price of spot crude oil climbed rapidly this morning to a high of $103.34 before falling back to the $101.00 level. The commodity opened the day trading at $98.64.

Strong bids were given early in the day as violent protests in the Middle East continue in the nations of Libya and Bahrain. Expectations of sustained turmoil in oil producing nations may cause a disruption in crude oil supplies, potentially derailing global economic growth.

The rise in spot crude oil prices may have technical implications as today's high price coincides with a 61.8% Fibonacci retracement from the collapse of crude oil prices over the second half of 2008.

Trading in the major currency pairs has also been volatile this morning with the EUR/USD a one point falling as low as the 1.3700 level before rising to 1.3800. Currently the pair is trading near its opening day price 1.3775. Resistance is found at 1.3860 with support at1.3560 at the rising trend line from the February 14th low.

The pound is trading lower across the board with the GBP/USD near its daily low at 1.6157 from 1.6238. Support is found at Tuesday's low of 1.6000 with resistance at yesterday's high of 1.6275.

This afternoon at 13:30 GMT US weekly unemployment claims are expected to show 403K new jobless claims. The previous week posted 410K. Also on the US data calendar are monthly core durable goods orders and new home sales.

The current trend of strong US economic data has not allowed for US dollar strength with positive data feeding in to the USD selling. Expectations for a weaker dollar remain as European interest rates look to rise in the near term and risk aversion remains high.

Technical Tip – EUR/USD – Moving Averages Signal Further Gains

Posted: 24 Feb 2011 01:01 AM PST

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The crossing of the 50 and 100-day moving averages hints at an extension of the current move.

As the EUR/USD continues to rise, the major moving averages are providing support for the move. Yesterday the 50-day simple moving average (green line) crossed above the slower 100-day moving average (red line), a signal many trending strategies use to identify the direction for trades.

Following this cross, the moving averages are now aligned in a perfect order, with the 20-day moving average above the 50, 100, and 200-day. This indicates a strong trending environment. As such, traders should be looking for further gains in the pair.

First resistance comes in at yesterday's high of 1.3780. The next resistance level is found at the February high of 1.3860. The trend line falling off of the January 2010 line may come into play down the road. Today that level stands at 1.4150. The November 2010 high of 1.4280 would be a long term target.

Support is found at the rising trend line which comes in today at 1.3560, followed by the February low at 1.3430, and the rising trend line off of the June and January lows.

EURUSD_Daily

US Dollar Heading for Recovery, or Further Bearishness?

Posted: 23 Feb 2011 10:34 PM PST

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Today promises to be a heavy trading session, as significant news out of the US is set to create major market volatility. The USD has recently seen some significant losses against its main currency rivals. Whether today’s news will help the greenback recover some of its losses is still unknown. What can be said for sure is that traders will want to keep an eye on the day’s events.

Here is a roundup of today’s main economic indicators:

13:30 GMT: USD Core Durable Goods Orders
This report is a measure in the percentage change in value of purchase orders with durable goods manufacturers, excluding the transportation industry. This report acts as a leading indicator of production as it represents the latest update on manufacturing demand in the market for the past month. Should this figure come in at or above expectations, traders may take this as a sign of a strengthening US economy and buy back into the USD prior to week's end.

13:30 GMT: USD Unemployment Claims
The weekly US unemployment claims figure is widely considered to be one of the more significant events on the forex calendar. Unemployment remains a key stumbling block to economic recovery in the US.

Analysts are predicting today’s figure to come in slightly better than last week's. At the moment, forecasts are for around 403K. Should the unemployment number come in at or below this number, traders can expect the dollar to make some afternoon gains, possibly recouping some of its latest losses.

Swiss Franc, Oil Remain Bullish Amid Libyan Unrest

Posted: 23 Feb 2011 01:58 PM PST

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The political turmoil engulfing Libya continues to weigh in on investor decisions in the forex market. Investor fears that the unrest could impede oil supplies out of the Middle East have sent the price of the commodity soaring in recent days. Today, oil shot up well over $4, reaching as high as $99.70 a barrel before staging a slight downward correction. Crude is currently trading around the $98.75 level, still within range of the psychologically significant $100 a barrel mark.

Meanwhile, the flight to so called “safe-haven” currencies continues, with the Swiss franc clearly the biggest benefactor of the conflict in Libya. The USD/CHF continues to tumble, and the pair is currently trading near record lows at 0.9330. Against the euro, the franc gained about 75 pips today. The EUR/CHF is currently trading at 1.2830.

Traders looking for possible ways that the US dollar could recoup some of its recent losses will want to pay attention to several market events scheduled to be released on Thursday. First and foremost, the weekly US Unemployment Claims figure has proven to generate heavy volatility among dollar pairs. Analysts are predicting tomorrow’s figure to be slightly lower than last week’s. If true, that would be good news for the US economy and may result in a boost for the greenback. Additional attention should be given to the US Core Durable Goods Orders and New Home Sale figures. Any improvements in either of these figure is likely to lead to short term gains for the greenback.

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