FOREXYARD: Forex News Blog

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• GBP/JPY Looks to Correct Gains
• NOK Vulnerable to European Debt Concerns
• Forex: Dollar Rises on European Woes

GBP/JPY Looks to Correct Gains Posted: 16 Nov 2010 02:23 AM PST The GBP/JPY pair recently saw an extraordinary bullish trend, gaining almost 700 pips and peaking at the 133.77 level. However, the pair saw several failed attempts to reach to the 134.00 level, and a bearish correction appears to be imminent. • The chart below is the GBP/JPY 8-hour chart by ForexYard. • There is a very notable bullish trend line, which took off at October 27, and has peaked on November 12, at the level of 133.77. • However, the pair saw about 4 failed attempts to cross the 133.80 level, indicating that the bullish pressure is losing steam. • Currently, a bearish cross has been forming on the Slow Stochastic, suggesting that a bearish move might be impending. • In addition, the RSI is now pointing down, also indicating that a bearish move could be imminent. If the RSI will fall below the 70-line it might validate the bearish correction. • The next support levels are located at 132.85, 131.90 and 130.95 • The next resistant levels are located at 133.80 and 135.00

NOK Vulnerable to European Debt Concerns Posted: 15 Nov 2010 11:29 PM PST The pressure being placed on Ireland to accept a bailout of its financial institutions has been weighing on risk appetite throughout the region. Traders appear weary of taking on too much risk, which has pulled funds away from the higher yielding assets. One result has been a weakening Norwegian krone (NOK). Norway's central bank remarked on October 26 that it would be waiting until mid-2011 to continue its monetary tightening policies. The dovish statement made clear that Norway was awaiting further recovery in other economies before attempting to expand more aggressively. As a result, the NOK has become vulnerable to risk aversion, which appears to have spiked in recent weeks. Meanwhile, Sweden's krona (SEK) is expected to gain from this influx of risk aversion. Analysts are forecasting a rise in capital inflows over the next few months for Sweden as its hawkish bank statements and monetary tightening appear to increase its appeal. The SEK has, in fact, been the second highest performing currency in 2010, only slightly behind the Australian dollar. USD/NOK Breaches Resistance at 5.9825 The current price of the USD/NOK around the 5.9965 level shows a price which has recently breached the significant 38.2% Fibonacci retracement line. On the chart below, we can see that the MACD and RSI both show additional room for upward mobility since neither has yet entered their respective over-bought regions. As with the above analysis, if pressure continues to mount throughout Europe due to Irish debt concerns, risk aversion will likely continue to loom large. With the current stance of Norgesbank, the NOK is open to downward pressure from the fundamental side. We can also see that the pair has yet to meet any significant resistance on the technical side, and appears to have the momentum to continue towards 6.1500, indicated by the 50% Fibonacci retracement line. USD/NOK – Daily Chart

Forex: Dollar Rises on European Woes Posted: 15 Nov 2010 10:46 PM PST The greenback continues to receive support from both positive US data and the debt strapped nations in Europe. As Ireland, Greece, and Portugal make waves with their struggles to repay their oversized national debts the dollar is the main benefactor. Traders will want to follow the following events today: GBP – CPI y/y – 09:30 GMT Expectations: 3.1%. Previous: 3.1%. Runaway inflation is a concern in the British economy. Today's release will be a good basis to judge just where British inflation stands. The GBP/USD is finding support at the rising trend line from June 8th and the September low as well as the 20-day simple moving average. Traders should be long with a target at the swing high of 1.6300. EUR – German ZEW Economic Sentiment – 10:00 GMT Expectations: -5.9. Previous: -7.2. Estimates could be on the low side and a worse than expected report may lead to further losses in the euro. Support and resistance for the EUR/USD come in at 1.3460, the 50% Fibonacci retracement from the September to November move, along with yesterday's high of 1.3750. USD – PPI m/m – 13:30 GMT This inflationary data is too early to show the effects of the Fed's second round of quantitative easing, but should go a long way to give both economists and traders a basis for judging future inflation expectations. The USD/CHF has a rising momentum oscillator that hints at further gains in the pair. The next target rests at the November high of 0.9970.

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