FOREX TIPS: January 2012

Tuesday, January 31, 2012

FOREXYARD: Forex News Blog

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Dollar Stages Upward Correction Following Poor Euro-Zone News

Posted: 30 Jan 2012 08:44 AM PST

The USD came off a six-week high against the euro in trading today, after news that Greece had once again failed to come to reach a debt swap deal with its creditors. Earlier in the day, the EUR/USD reached as high as 1.3231 before investors began selling off the pair. The AUD/USD also saw a substantial drop, falling well over 100 pips during the European trading session. The greenback failed to move up against the yen, as investors chose to keep their funds with the safe-haven Japanese currency.

Turning to tomorrow, dollar pairs are likely to be influenced by any announcements out of the euro-zone which may lead to further risk aversion. Traders will want to pay particular attention to any news out of Greece. While a Greek debt swap deal is likely to be finalized by the end of the week, safe-haven currencies may continue to go up until a final agreement is announced.

With regards to the rest of the week, traders will want to keep in mind that a batch of US data is forecasted to have a significant impact on the markets. Wednesday's ADP Non-Farm Employment Change figure, as well as the ISM Manufacturing PMI are both considered valid indicators of the current state of the US economy. Furthermore, a speech from the Fed Chairman on Thursday, followed by the Non-Farm Employment Change figure on Friday, are both likely to generate substantial market activity.

Friday, January 27, 2012

FOREXYARD: Forex News Blog

Fed Decision Turns USD Bearish

Posted: 26 Jan 2012 09:34 AM PST

The US dollar turned overwhelmingly bearish throughout yesterday's trading session, following the Fed announcement that US interest rates would remain at their current levels for at least the next two years. The greenback took further losses after the weekly US Unemployment Claims came in higher than forecasted. The news brought the EUR/USD to a five-week high, while the USD/JPY reversed gains made earlier in the week and tumbled close to 80 pips.

As we close out the week, analysts are forecasting the USD to maintain its current bearish trend. The surprising decision from the Fed caused investors to question the pace of the US economic recovery. This sentiment was reinforced by several economic indicators out of the US yesterday that came in below expectations. Traders will want to note the results of the Advance GDP figure today, scheduled to be released at 13:30 GMT. A positive number may give the dollar a temporary boost before markets close.

Traders will not want to forget that next week the US will release its monthly Non-Farm Payrolls (NFP) figure. The NFP is widely considered the leading economic indicator on the forex calendar and consistently leads to market volatility. Should the NFP show further growth in the US employment sector, riskier currencies like the euro may see upward movement.

Thursday, January 26, 2012

FOREXYARD: Forex News Blog

USD Turns Bullish Following EU News

Posted: 25 Jan 2012 08:43 AM PST

The US dollar had a particularly strong day today following negative news out of both Japan and the euro-zone. News that Japan has logged in a trade deficit for the first time since 1980 caused the USD/JPY pair to jump more than 100 pips throughout the day. Meanwhile, fresh concerns regarding Greece's sovereign debt drove EUR/USD down, virtually erasing gains made at the beginning of the week.

Meanwhile, investors largely shrugged off news that the US Federal Reserve is unlikely to hike interest rates until the beginning of 2014. The dollar has found significant support as of late, largely because of negative international indicators. Investors continue to view the USD as a safe-haven asset. With the euro-zone still in extremely fragile position, traders can expect the dollar to remain at its current level for the near future.

Turning to tomorrow, a batch of news out of the US may generate significant market volatility. Traders will want to pay attention to this week's Unemployment Claims figure and the most recent New Home Sales report for clues as to the state of the US economic recovery. With both indicators predicted to come in positive, the greenback may be able to extend its current bullish run as we begin to close out the week.

Wednesday, January 25, 2012

FOREXYARD: Forex News Blog

Positive Euro-Zone Indicators Fails to Boost EUR

Posted: 24 Jan 2012 08:11 AM PST

Ongoing concerns regarding the prospect of Greece defaulting on its debt, as well as fresh worries regarding Portugal's debt caused the euro to tumble vs. the US dollar in today’s trading. Investors once again reverted back to the safe-haven dollar as it became clear that the euro-zone crisis is far from over. Despite better than expected euro-zone manufacturing indicators, the EUR/USD once again dropped below the 1.3000 level. Although the pair is still well above its recent 17-month low, analysts are quick to warn that further negative European news could bring it down further.

Turning to tomorrow, euro traders will want to pay attention to the German Ifo Business Climate figure at 9:00 GMT. The indicator is forecasted to come in above last month's, which if true, may help the common currency against some of its main rivals, like the JPY and CHF. At the same time, it will likely take significantly better euro-zone news before the EUR/USD is able to break the 1.3100 resistance level. Additionally, traders will want to note the results of the UK Prelim GDP figure. The results should gauge risk appetite in the markets, with a better than expected number likely to boost the euro.

Tuesday, January 24, 2012

FOREXYARD: Forex News Blog

Greenback Bearish Ahead of Fed Meeting

Posted: 23 Jan 2012 08:30 AM PST

Following the losses the US dollar took during the European trading session today, investors will be eagerly watching for news out of the two-day Federal Reserve Policy Meeting scheduled to start tomorrow. The USD started off the week on a bearish note following an increase in risk taking due to apparent signs of a euro-zone economic recovery. The trend brought the EUR/USD above the 1.3000 for the first time in nearly three-weeks, while the AUD/USD shot up over 100 pips over the course of the day.

Whether the greenback will maintain its downward trend for the rest of the week will largely be determined by the results of the Fed meeting. While the Federal Funds Rate is not expected to go up when the indicator is announced on Wednesday, investors will be watching the meeting closely for clues as to when US interest rates will go up. Should the Fed decide to maintain its current policy of record low interest rates for the near future, traders will likely take it as a sign that the US economy still has a long way to go toward full recovery. Such an event may lead to further losses for the greenback.

Saturday, January 21, 2012

FOREXYARD: Forex News Blog

EUR/USD Above 1.29 Ahead of Possible Greek News

Posted: 20 Jan 2012 04:26 AM PST

As investors cautiously await any news regarding a Greek debt swap deal, the EUR/USD has slipped following last night’s bullish run. That being said, the pair has managed to stay above the 1.2900 level, well above the 17-month low hit last week. The EUR/USD saw significant upward momentum yesterday following successful debt auctions from both Spain and France. While the pair was not able to break the psychologically significant 1.3000 level, the positive news boosted investor hopes that the euro-zone may be slowly heading toward some kind of recovery.

As we close out the week, traders will want to pay attention to any developments regarding Greece’s efforts to avoid defaulting on its debt. While positive news is likely to boost the common currency, it should be noted that the euro-zone is still in an extremely fragile place, and that full recovery is still no where in sight. Additionally, traders may want to note the result of the US Existing Home Sales figure, set to be released at 15:00 GMT. A better then expected figure may boost investor risk taking, which could also benefit the euro in evening trading.