FOREXYARD: Forex News Blog | |
- Awaiting Japan’s Retail Sales Data
- US Consumer Spending Sluggish, Inflation Rising
- New Zealand Trade Surplus Shrinking
- No News from Greece is Good News from Greece
- COT Data Shows Traders Now Bearish on CAD
- Weekly Technical FX Preview – GBP Under Pressure
| Awaiting Japan’s Retail Sales Data Posted: 27 Jun 2011 06:49 AM PDT
Traders are anticipating the release of Japan's retail sales data later this evening. The island economy witnessed a sharp downturn in sales, year-on-year, back in April, dropping over 8%. Each month since, the nation has halved this decline, with only a 4% decline in May and expectations for a 2% drop in June. If the early morning data can meet or exceed this forecast, traders may see a silver lining in Japan's currently bleak economic landscape. Given the sluggishness of the global manufacturing sector, however, many economists have expressed pessimism that Japan will meet the negative 2% target. Read more forex trading news on our forex blog. |
| US Consumer Spending Sluggish, Inflation Rising Posted: 27 Jun 2011 06:46 AM PDT
This afternoon's publications out of the United States served to underline the slowdown in American consumer spending and personal income levels. One note of confidence rang out amid the bearish figures, however, in the form of mildly heightened consumer inflation. The Bureau of Economic Analysis published its monthly Core Personal Consumption Expenditures (PCE) Price Index today. The results came in higher than expectations, with consumer inflation, excluding food and energy, rising 0.3% in June. This number is rumored to be the primary gauge used by the Federal Reserve to measure inflation, despite being released 15 days after the Core CPI report, which tends to receive the most attention by traders and brokers alike. Even though spending and confidence are in decline, the inflation report gives cause for optimism as higher prices tend to translate into growth during sluggish economic periods. Read more forex trading news on our forex blog. |
| New Zealand Trade Surplus Shrinking Posted: 27 Jun 2011 06:42 AM PDT
New Zealand's economic agency, Statistics New Zealand, published their recent findings on the New Zealand trade balance. The report revealed a sharp decline from the previous month's growth, and shrinkage far beyond that expected by professional forecasts. The island economy's trade balance for the past three months had reported gradual growth to just beyond NZ$ 1.1B in surplus. Forecasts for June had anticipated a mild downturn from that recent peak, but actual results saw the number dropping rapidly to slightly higher than NZ$ 600M in surplus. This slowdown is happening alongside consumer fears that the New Zealand government will have difficulties rebuilding Christchurch due to a sluggish economy. As a result, the NZD has seen steady declines for the past three trading days. Read more forex trading news on our forex blog. |
| No News from Greece is Good News from Greece Posted: 27 Jun 2011 05:35 AM PDT
The dollar rallied in the Asian trading session versus the euro only to see those gains dissipate during European trading as no news from Greece is good news from Greece. At the market's open the greenback was trading stronger but as expectations improved for a positive outcome in Greece's austerity vote on Wed the euro received a small bid. Currently in Greece the majority the PASOK party maintains in the Greek parliament will allow for the passage of the legislation the unity within the party is fading as some deputies consider not voting in favor for the upcoming medium-term fiscal plan. Approval of the plan is a requirement for Greece to receive the next tranche of funds from the EU/IMF. Sentiment could begin to deteriorate should further setbacks take place as the key vote nears. Near-term support for the EUR/USD comes in at 1.4070 followed by the May low at 1.3970. While market sentiment appears to be against the euro, any upside to the EUR/USD could be held near 1.4360 at the upper boundary of the current consolidation pattern. The yen hit its lowest level versus the dollar in one week as the broad dollar rally continues. Moody's comments' on the failure of the Japanese government to follow up on its promise to announce a long-term fiscal plan by June 20th also contributed to overall yen weakness today. This is a negative for the yen as the event, "does not anchor government finances", and leaves open the possibility of an increased national debt. Following the announcement the USD/JPY climbed as high as 80.87, though any further advances may be capped at the 81 resistance while the downside appears to be based at 80 yen. Read more forex trading news on our forex blog. |
| COT Data Shows Traders Now Bearish on CAD Posted: 27 Jun 2011 02:03 AM PDT
Data from this past week's CFTC Commitment of Trader's Report (COT) shows leveraged money traders have an overall short position in the Canadian dollar for the first time in a year. Data from this past week's CFTC Commitment of Trader's Report shows leveraged money traders have an overall short position in the market for the Canadian dollars for the first time in a year. The Commodity Futures Trading Commission’s Commitments of Traders (COT) report shows long positions in the Canadian dollar have been exhausted and the market is now positioned short on the CAD. Net Noncommercial Positions on the IMM stand on the short side of the CAD by 9011 contracts versus last week's bullish positioning of 10429. The last time the COT showed the market was positioned against the CAD was in August of 2010 when the USD/CAD traded as high as 1.6050. This Friday the pair closed at 0.9869.
An analysis of the open interest also displays some interesting points. We can see that the open interest has fallen dramatically to 87905, the lowest level of contracts open since early July. This tells us that the recent rise in the price of the USD/CAD may be due to shorts covering their positions and is a bearish indicator (for the Canadian dollar). Given the flip in market positioning of leveraged traders to being short the CAD as well as a subsequent drop-off in open interest, I'm skeptical of the long term trend downtrend resuming in the near term.
Read more forex trading news on our forex blog. |
| Weekly Technical FX Preview – GBP Under Pressure Posted: 26 Jun 2011 11:32 PM PDT
EUR/USD Momentum has now turned lower as falling stochastics appear on the monthly, weekly, and daily charts. Initial support comes in at the June low of 1.4075 and the May low of 1.3970. A break here and technical traders will target the 200-day moving average at 1.3860. While the 8 cent decline from the May high is a sharp drop, traders should keep in mind that the correction the pair is currently undergoing is just that, a correction. Buyers may be lurking at the rising trend line from the June 2010 low. Resistance comes in at the recent high of 1.4440 where the 50-day and 20-day moving averages are floating.
GBP/USD The GBP/USD has broken a significant technical barrier at the neckline from a head and shoulders pattern which measures a target at 1.5370. Monthly and weekly stochastics are turning lower so traders may expect further declines. Support is located at the March low at 1.5935 followed by the late January low at 1.5750. To the upside the neckline from the head and shoulders pattern at 1.6120 could offer traders a level to enter short as many times in a head and shoulders chart pattern the pair will revert back to the neckline only to head lower from there.
USD/JPY Yen bears are making a stand at the 80 level. A previously broken trend line from the April high comes in at this level and will also support the bears. However, once this last bastion of support is broken the fallout could be similar the price action in March. Should the move higher continue, resistance is found at 81 and 81.75.
USD/CHF The previous resistance at 0.8550 held and the all-time low at 0.8325 is continually being pressured so a break here may be in the works. An absence of supports or trend lines below this level makes it difficult to predict how low the pair could go.
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