FOREXYARD: Forex News Blog | |
- Swedish Krona Rallies
- Silver Hits $34.40 Level
- British Housing and Inflation Data Driving Today’s Market
| Posted: 01 Mar 2011 02:12 AM PST
Both the USD/SEK and the EUR/SEK have fallen to new lows as central bank comments show the Riksbank attempting to rein in inflation in light of rising commodity prices and strong GDP growth. Hawkish comments from the Riksbank caused yesterday's surge in the value of the krona with tougher talk on inflation coming from the central bankers during the last monetary policy meeting on February 14th. The bankers suggested what might motivate them to increase the base interest rate more than the typical 25 bp. During the previous meeting the monetary policy committee increased Sweden's repo rate by 0.25% to 1.5%. At the previous meeting, the Riksbank stressed growth in Sweden remains strong but has slowed recently due to the rise in commodity prices. The central bank also noted noticeable improvement in the US economy has helped the Swedish economy. However, uncertainties remain in the euro zone. The current inflationary target for the Riksbank stands at 2.0% but in January the rate of inflation rose 2.5% when measured on a yearly basis. In December the rate of inflation measured 2.3%. The next meeting for the monetary policy committee will take place on April 19th with the results of the meeting to be released the following day. Here the Riksbank may once again increase interest rates to stymie persistent inflation, further boosting demand for the krona. On the heels of the release of the meeting minutes, the Swedish krona surged to new highs versus both the dollar and the euro, shrugging off negative retail sales data that came in below forecasts, -0.1% on expectations of a 0.7% increase. The USD/SEK made two significant technical moves yesterday, falling below the support line at 6.3540 and holding at the 6.2890 level. The move is a breach below the falling wedge pattern that has held since October 2010. A close below the lower line of the wedge may incite further selling of the pair. Resistance is found at this week's high at 6.4450 and the February high of 6.5400.
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| Posted: 28 Feb 2011 11:49 PM PST
Silver prices rose significantly in the past month and peaked at $34.40 an ounce. However, the daily chart is suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. Forex traders involved with commodities like this can take advantage of this knowledge by going short on silver now, and at a great entry price! • Below is the 4-hour chart for silver by ForexYard. • The technical indicators used are the Slow Stochastic, RSI and Williams Percent Range. • Point 1: The Slow Stochastic indicates a bearish cross, signaling that the next move may be in a downward direction. • Point 2: The Williams Percent Ranges is showing that this pair is heavily over-bought and may be experiencing strong downward pressure. • Point 3: The RSI signals that the price of this pair currently floats in the over-bought territory, suggesting downward pressure.
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| British Housing and Inflation Data Driving Today’s Market Posted: 28 Feb 2011 10:00 PM PST
The theme in the past week continued to be a weaker dollar. Not all currencies enjoyed this equally – the Aussie and the euro are the big winners, while the British pound and the Canadian dollar are enjoying modest gains. Today, the focus will be around data from Britain and Europe. 7:00 GMT: GBP – Nationwide HPI Surprisingly, the British housing sector has begun to show signs of decline over the winter months. This housing sector figure is likely to show a continuation of this shift, with a slightly worse -0.2% decline this month. This may be positive for risk aversion in the forex market and could help reverse some of gains seen in the GBP/USD. 10:00 GMT: GBP – Inflation Hearing Reports Volatility is often experienced during the announcement of this report as traders attempt to decipher interest rate clues. This could bring further easing in the pound. The GBP/USD is currently trading above the 1.6275 resistance level and may traders may therefore be anticipating a corrective move today. A retracement below this line could take the pair to the next target at 1.6100, especially if risk aversion rises from below-forecasts data in Britain and Europe. |
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