FOREXYARD: Forex News Blog

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• Swedish Krona Rallies
• Silver Hits $34.40 Level
• British Housing and Inflation Data Driving Today’s Market

Swedish Krona Rallies 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.

Silver Hits $34.40 Level 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.

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 Expectations: -0.2%. Previous -0.1%. 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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FOREXYARD: Forex News Blog

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• Daily Chart Indicates – The Price of Silver Is Expected To Continue To Rise
• Aussie Dollar Testing Resistance Level Prior to RBA Interest Rate Announcement
• AUD/USD- Technical Update
• Weekly Commodity Outlook
• AUD/USD Likely to Turn Bearish
• U.S. Pending Home Sales on Tap

Daily Chart Indicates – The Price of Silver Is Expected To Continue To Rise Posted: 28 Feb 2011 11:26 AM PST After three weeks on which silver climbed about 8,000 pips, silver prices have stabilized, and for the past week have been trading around $33 an ounce. Nevertheless, there are currently several bullish signals on the 1-day chart, which indicate that another bullish movement might take place soon. Such a movement has potential to boost silver prices into a new record high. • The chart below is the spot-silver daily chart by ForexYard. • There was a very accurate bullish channel which was formed on the chart since January 27th, and until February 21st. • Ever since February 21st silver prices have begun range-trading between the $31.70 and the $34.30 levels. • Currently, a bullish cross of the Slow Stochastic signals that another bullish session might be imminent. • The MACD, which has accurately predicted the recent bullish move, continues to point up, suggesting that the bullish momentum has more steam in it. • The RSI has failed to drop below the 70-line, and is once against pointing upwards, further indicating that the bullish move has more room to go. • The next resistance levels are located at the $34.00, $34.30 and the $35.00 levels. • The next support levels are at: $33.20, $32.50 and the $31.70 levels.

Aussie Dollar Testing Resistance Level Prior to RBA Interest Rate Announcement Posted: 28 Feb 2011 06:18 AM PST A pause in rising Aussie interest rates has yet to cause a severe decline in the value of the Aussie dollar. The Reserve Bank of Australia has increased interest rates seven times since October of 2009 through November 2010. Currently the RBA Cash Rate stands at 4.75%. A majority of economists do not expect the RBA and Governor Glenn Stevens to increase interest rates tomorrow. Most estimates are for an adjustment to the Cash Rate to come in the end of the third quarter as the RBA will resist increasing the interest rate in order to promote higher rates of growth in Australia. Factors working against an expanding economy have been steps by China to tighten its grip on inflation and the recent geopolitical concerns in the Middle East. Also floods and a cyclone have severely damaged Queensland, limiting growth from the region. However, inflationary concerns remain strong. Rising growth from the mining sector has expectations for 0.6% first quarter growth. Wages have also steadily moved higher. Tomorrow's RBA comments addressing the timing of the next interest rate hike will be key to the AUD/USD. An increase in interest rate expectations will be a catalyst for the Aussie dollar. Despite the pause in rising Aussie interest rates, the AUD/USD has held its own and is encroaching on a key resistance level at 1.0200. A breach of this price will then test the pair's all-time high at 1.0250. Support for the pair is found at the rising trend line off the November low which comes in today at 1.0000. Further support levels can be found at last week's low of 0.9960, followed by the January low at 0.9800, and the November low at 0.9530.

AUD/USD- Technical Update Posted: 28 Feb 2011 05:11 AM PST A bullish movement in AUD/USD has pushed a number of technical indicators into the over-bought territory. As I will demonstrate below, the AUD/USD may very well be heading for a reversal, as a bearish cross has taken place on the Slow Stochastic. In addition, the Williams Percent Range and Relative Strength Index indicates that the price of this cross currently floats in the overbought territory, signaling downward pressure. Forex traders can take advantage of this impending movement by having their Entry Orders in place to capture this reversal. Don't forget your Stops and Limits!

Weekly Commodity Outlook Posted: 28 Feb 2011 01:50 AM PST Crude oil Crude oil rose, capping the biggest weekly gain in two years, on concern that the turmoil in Libya will spread to Middle East petroleum producers. Grains jumped, driving a measure of raw materials up to a record. The standoff between an increasingly isolated Libyan strongman Muammar Gaddafi and rebel factions now in control of oil-rich eastern Libya has cut output in the world’s No. 12 crude exporter by at least 25%, or 400,000 barrels a day. Last week, oil jumped 14%, the most since late February 2009. The price has climbed 25% in the past 12 months. As for the week ahead, traders' attention should be devoted to all developments from the Middle East, as this is likely to continue to play a leading role in commodities trading. Traders should take under consideration that as long as the unrest in the region remain, crude prices might be further supported. Gold Spot gold inched up on Monday, heading for its best month since last August, boosted by fears over the deteriorating situation in Libya and spreading violence in the region, supported by rising oil prices. Political turmoil in the region has been supportive of gold prices in recent weeks. Gold was poised to stage a monthly gain of 6%, its best since last August. Spot gold inched up 0.3% to $1,416 an ounce, extending gains from the previous session. Scenes in Libya, where protesters intensified their campaign to force Muammar Qadafi to quit, have encouraged some safe-haven buying of gold, although this support is unlikely to last long.

AUD/USD Likely to Turn Bearish Posted: 28 Feb 2011 12:09 AM PST After spending the last week in a prolonged upward trend, it appears that the AUD/USD pair may have finally hit a significant resistance line. Technical indicators are showing that the pair is likely to turn bearish in the near future, providing forex traders with an excellent opportunity to jump on this trend from the beginning. We will be looking at the 8-hour AUD/USD chart provided by ForexYard. The technical indicators being examined are the Williams Percent Range, Relative Strength Index and Stochastic Slow. 1. The Williams Percent Range is currently approaching the 0 level, indicating that the pair is well into the overbought zone. Typically this is a sign that a downward correction is forthcoming. 2. The Relative Strength Index, currently just below the 80 line, has just crossed into overbought territory. This lends further evidence to our theory that a bearish move is likely to occur. 3. Finally, the Stochastic Slow has formed a bearish cross. With both indicator lines pointing downward, it appears that a downward correction may occur very shortly.

U.S. Pending Home Sales on Tap Posted: 27 Feb 2011 10:47 PM PST As we start a new week, the main issue that occupies the market remains the violence in Libya. The unrest has already compelled the nation to cut two thirds of its crude oil output. Despite the decrease in oil supplies, the market's real concern is that the turmoil which began in Tunisia, continued to Egypt and currently takes place in Libya will proceed to other countries in the Middle East and North Africa. In the case that violence spreads to other oil-producing countries in the region, $100 for a barrel of crude oil may turn out to be a bargain. Another "winner" of the ongoing violence in the Middle East is the Japanese yen. The yen is known as a safe-haven currency, and whenever uncertainty in the market grows, the Japanese currency tends to strengthen. Here are today's leading news events: • 13:30 GMT, Canadian Gross Domestic Product (GDP) – The GDP measures the change in value of all goods and services produced by the economy, and is considered to be the broadest measure of the economy's health. If the end result will beat forecast for a 0.3% rise, the CAD is likely to appreciate against its major rivals. • 15:00 GMT, U.S. Pending Home Sales – This report measures the change in the number of homes under contract to be sold but still awaiting the closing transaction. If the end result will show a 2.2% decrease, as expected, the USD could weaken further against the major currencies.

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