Forexyard Analysis

[forexyard]

Dollar Dives on Short-Covering and BIS Report

The US dollar appears to have lost modest ground against its primary currency rivals during short-covering at the end of last week's trading. The Bank for International Settlements (BIS) released a statement on Sunday declaring that while European banks have lowered their reliance on dollar-based assets, there is still a strong need to diversify portfolios even further. The call for diversification is not new, but this study may add pressure on the USD which has seemingly been absent during this period of risk aversion.

Read the complete in depth forex analysis of today at our forex news center

 

[forexyard]

Dollar Tumbles as Investors Turn to Riskier Assets

The Dollar slid against its major currency counterparts following a rally in global equity markets. The rally prompted investors to turn to higher yielding riskier assets and away from the USD. With recent market optimism, traders may continue to see a small downward trend in the U.S. Dollar as its positions are unwound in exchange for higher yielding assets.

Read the complete in depth forex analysis of today at our forex news center

 

[forexyard]

Euro Continues To Strengthen Against the Dollar as Risk Appetite Grows

After several weeks in which the Dollar appreciated repeatedly against the Euro, the Euro is showing its first signs of recovery. The rising risk appetite in the market is the main reason for the strengthening Euro, but will it continue?

 

[forexyard]

Crude Oil Trades Above $77 a Barrel

Despite a rise in U.S inventories last week, Crude prices rallied, boosted by strong equities and largely positive U.S economic data and demand figures.

Read the complete in depth forex analysis of today at our forex news center

 

[forexyard]

Euro Continues to Rebound on Successful Spanish Debt Auction; Swissie Soars

Risky currencies performed well yesterday following a successful auction of Spanish bonds that helped to ease fears of the euro zone fiscal crisis, prompting investors to take on riskier positions. The Swiss franc was a big mover after the Swiss National Bank declared it would end its efforts to weaken the currency.

Read the complete in depth forex analysis of today at our forex news center

 

[forexyard]

Yuan Speculation has Market in Frenzy; USD in Decline

Analysts have begun to make positive statements regarding China's latest announcement that it may consider an easing of the rigidness of their monetary policy. This could result in the Chinese yuan being allowed to appreciate normally and boost risk appetite and market optimism in regards to a speedier recovery. It appears traders are scanning the horizon for a silver lining and China is believed to have come to the rescue, finally. But has it?

 

[forexyard]

EUR/USD Nears $1.2500, but Declined Sharply Thereafter

The EUR/USD pair almost touched $1.2500 during yesterday's trading session, but declined sharply thereafter, following a rating downgrade. Fitch Ratings' downgraded French banking giant BNP Paribas from AA to AA-. The move increased analysts' concerns about the economy after the day passed with almost no major news events.

Read the complete in depth forex analysis of today at our forex news center

 

[forexyard]

Dollar Gains as Attention Turns to Fed Rates Meeting

The US currency recovered some earlier gains against the EUR yesterday as stocks turned notably lower in afternoon trading, indicating to fx traders that investors' appetite for riskier assets has diminished. The main piece of US economic news during today's session will be the Federal Funds Rate decision. At the end of their 2-day meeting Wednesday afternoon, the Federal Reserve is expected to keep interest rates at near-zero and to maintain its pledge to keep these low rates in place for an extended period of time.

Read the complete in depth forex analysis of today at our forex news center

 

[forexyard]

Dollar Weakens as Fed Leaves Rates at Record Low

The Dollar weakened on all fronts yesterday as the Fed kept rates lower than 0.25%. Today, another volatile trading session is expected as the U.S. Core Durable Goods Orders and the weekly Unemployment Claims are scheduled for 12:30 GMT. The end results are expected to be positive; will the Dollar erase its losses?

Read the complete in depth forex analysis of today at our forex news center

 

[forexyard]

Dollar Advances on Riskier Currencies Following Fed Statement

The U.S. dollar traded well against riskier currencies like the AUD and loonie in overnight trading, but at the same time, took some losses on currencies like the yen and euro. Investors are trying to digest the most recent Fed statement and how it reflects the current state of the global economic recovery. Traders can expect this trend to continue, as we are expecting little in the way of significant news events today.

Read the complete in depth forex analysis of today at our forex news center

 

[forexyard]

U.S. Non-Farm Payrolls Week Begins

After a relatively calm trading week, an extremely volatile session is expected starting today. Last week, the Dollar fell against most of the majors as poor housing data weakened the greenback; however this could all change following the U.S. employment data which is expected on Friday. Traders are also advised to follow the ADP forecast which is expected on Wednesday, as it is considered to be a reliable forecast for the real result that will be published on Friday. Will the Dollar Erase last week's losses?

Read the complete in depth forex analysis of today at our forex news center

 

[forexyard]

U.S. Consumer Confidence to Set the Level for the USD Today

Today, traders should pay close attention to the release of the U.S. Consumer Confidence report. This indicator always leads to extreme market volatility for the major currency pairs. Traders may find good opportunities to enter the market following this vital announcement at 14:00 GMT.

 

[forexyard]

Dollar Extends Gains against the Euro

The U.S currency rose Tuesday, extending gains, adding to investors' desire of safe havens amid worries over global growth prospects, this time stemming from data in China and concerns about the health of European banks.

Read the complete in depth forex analysis of today at our forex news center

 

[forexyard]

EUR/USD Spikes after European Banks Appear Stronger than Expected

The EUR/USD pair took off during yesterday's trading session. The rally was supported by low demand for loans offered by the ECB to European banks. Investors realized European banks might be in better financial conditions than previously thought and responded by buying the euro while selling other currencies. However, the rally halted following a disappointing U.S. private sector jobs report, and later by warnings from ratings agency Moody's that it will downgrade Spain's sovereign debt rating.

Read the complete in depth forex analysis of today at our forex news center

 

[forexyard]

Markets Await the Release of Non Farm Data

Today's release of the Non Farm Employment Data, which is due to be announced at 12:30 GMT, follows a week of negative economic data which raised concerns that the U.S economic recovery is stagnating. It is expected that payrolls fell by 100K in May, which if true, would likely put further pressure on the USD.

Read the complete in depth forex analysis of today at our forex news center

 

[forexyard]

Volatility Expected in First Day Back Following Long Weekend

The EUR dropped some of its gains against the dollar and the yen in thin trading as U.S. markets were closed yesterday. A lack of high impact data on the economic calendar kept currencies in a tight range. However, this should change today with influential economic data expected to be released from the U.S. and European interest rates due out.

 

[forexyard]

Can Spain's World Cup Victory Add to Risk Appetite?

The 1-0 over-time victory of Spain over the Netherlands in yesterday's World Cup Final has generated an interesting question among market analysts. Does this victory put optimism and positive sentiment back into Spain's crumbling economy? Can it boost short-term growth enough to add further momentum to the euro's latest gains against its primary rivals?

Economic News

USD - USD Sinking Under Weight of Risk Appetite

This past week witnessed the US dollar come down from its recent highs as risk returns to the market. With economic data showing improvements in various sectors around the globe, and with governments taking the necessary steps to reign in financial problems, investor sentiment seems to have returned to a temporary state of risk-taking.

Against the euro, the dollar has fallen to as low as 1.2700 this past week and looks to continue trading weaker as various reports show optimism throughout various European economies, albeit muted. The victory of Spain over the Netherlands in the World Cup yesterday may help to increase consumer spending across parts of Europe and lead to short-term growth. The boosted optimism also adds to the already-present risk appetite which has been returning slowly these past few days.

The greenback has been gaining against the Japanese yen, however, as the recent defeat of Prime Minister Naoto Kan's ruling party put the his financial policies at risk of being overturned. The yen has taken a modest bearish turn as a result. Should uncertainty remain about future Japanese monetary policy, the USD/JPY's bullish trend could continue.

As for today, the only major news that could affect the dollar directly is a speech being given by Federal Reserve Board Chairman Ben Bernanke about returning the flow of credit to small businesses at a forum in Washington D.C. If his statements reveal hawkish sentiment about measures to increase investment and credit flows to start-ups and other small businesses, then the USD could see some positive growth.

EUR - Does Spain's Victory in the World Cup Help the EUR?

The 1-0 over-time victory of Spain over the Netherlands in yesterday's World Cup Final has generated an interesting question among market analysts. Does this victory put optimism and positive sentiment back into Spain's crumbling economy? Can it boost short-term growth enough to add further momentum to the euro's latest gains against its primary rivals?

Theoretically, anything is possible. Does the World Cup affect currency prices directly? Not likely. But can it affect optimism, outlook, and risk appetite? Absolutely. All of these things affect currency values, the bigger question is: By how much?

Since last week the euro has climbed against the US dollar from as low as 1.2200 to a recent high of 1.2720 by Friday's closing hours. The euphoria from having two European teams playing in yesterday's final likely boosted retail sales and other consumables by significant quantities in the short-term, now analysts wonder how long this sentiment will last.

Looking forward to today's news, there is not much to look forward to in terms of data. Britain will release its Final GDP figures for the second quarter of 2010. The forecast is for a 0.3% growth. Outside of this data, little else will be published from Europe.
JPY - Kan's Democratic Party Defeat Saps JPY Strength

The Japanese yen has been plunging this morning against the majority of its currency pairs. The reason is currently being explained as the defeat of Prime Minister Naoto Kan's ruling Democratic Party in recent elections. PM Kan had put forth policy initiatives to reign in Japan's massive debt risk; his defeat puts those policies at risk of being overturned and has caused the yen to experience some uncertainty.

Against the US dollar, the JPY has fallen to as low as 89.10 from its recent high of 87.00 just last Thursday. Versus the euro, the yen has fallen to 112.15 from its 2-week high of 107.50. Unless the political situation in Japan receives further clarity, the Japanese yen could continue to experience weakness from uncertainty.
OIL - Chinese Imports and Weak USD Boost Oil above $76

The price of spot crude oil has climbed since last Friday above $76 a barrel on increased Chinese oil imports. The heightened demand emanating from China has helped support the price of oil to its latest high mark and the market currently appears to be appeasing this move with a complimentary decrease in value for the US dollar.

The USD has been trading lower these past few trading days as market sentiment favors risk taking over safe-havens. The price of the greenback has fallen and commodities - which were falling steadily just last week - are now returning to a stable bullish pattern. This week's data on the strength of the dollar and on China's latest surge in imports will determine the week's movements.

Technical News

EUR/USD

The price of this pair appears to be floating in the over-sold territory while the hourly chart's RSI is indicating that an upward correction may be imminent. The upward direction on the 4-hour chart's Momentum oscillator also supports this notion. When the upward breach occurs, going long with tight stops appears to be the preferable strategy.

GBP/USD

Narrow range trading continues as the pair did not make any significant move in either direction. The daily chart is showing signs of a bearish momentum. The Bollinger Bands are tightening and a breach might be imminent to any side. A good strategy might be to wait for the signal and ride the momentum.

USD/JPY

On the daily chart the moderate bullish price movement continues within the upwards channel which still has yet to be breached. The 4-hour chart is also joining that notion with the Slow Stochastic pointing to the continuation of upwards momentum. Next testing point should be around 90.50. Going long appears to be preferable today.
USD/CHF

Friday's appreciation in the pair may have created a selling opportunity. The pair is trending sharply lower, both on the weekly chart and on the daily chart as the price is trading in a perfect order, below the 200, 100, 50, 20, and 10-day simple moving averages. Traders should be short and can target the low of the bearish trend as the first support line.

The Wild Card

Oil

Crude oil has rallied last week, rising from a low of $71 to a high of $76.40. Following the bullish run, a buy signal has recently been triggered as the 5-day simple moving average is crossing above the 20-day simple moving average. This signal works well in a trending market. CFD traders may target the resistance line just below $80.

Read further in depth analysis in our forex news center.

 

[forexyard]

Will The U.S. Trade Balance Report Support The Dollar Today?

Due to renewed concerns regarding the Euro-Zone's debt crisis and due to the beginning of earning season in the U.S, the Dollar slightly strengthened against the Euro yesterday. However, what will determine the direction of the Dollar today is likely to be the economic data which is expected from the U.S. and the Euro-Zone, especially the U.S. Trade Balance report. Will the Dollar see another day of rising trend?

Economic News

USD - Dollar Strengthens As Second-Quarter Earnings Season Begins

The Dollar rose against most of its major counterparts during yesterday's trading session. The Dollar strengthened against the Euro and the Pound, and the GBP/USD pair dropped to the 1.4950 level.

The Dollar gained against most of the major currencies as renewed concerns regarding European debts drove investors to look far safer assets such as the Dollar and the Yen. In addition, the start of the U.S. second-quarter earning season has supported the Dollar as well. There is currently pessimism about corporate outlooks as U.S. companies begin reporting second-quarter results this week. The combination of concerns regarding the economic condition of several Euro-Zone nations, combined with the pessimism in U.S. corporations' profits has reduced risk appetite in the market. This was concluded with modest gains for the Dollar.

Looking ahead to today, many interesting publications are expected from the U.S. economy. The report which might have the strongest impact on the market seems to be the Trade Balance. The Trade Balance measures the difference between imported and exported goods and services. Analysts have forecasted that the U.S. trade deficit has narrowed to 39.3B during May, from 40.3B on April. If the end result will beat expectations, the Dollar could rise further. In addition, traders are advised to follow the Federal Budget Balance. Current expectations are that the federal government's deficit narrowed to 70.0B on June, from 135.9B on April. If the actual result will be similar, the Dollar might strengthen as a result.

EUR - Euro Tumbles on Concerns Stress Tests Won't Ease Investors

The Euro weakened on Monday against most of the major currencies. The Euro dropped against the Dollar and the Pound and saw a 100 pips loss against the Yen, as the EUR/JPY pair fell to the 111.20 level.

The Euro dropped yesterday on speculations that tests that are made to demonstrate the resilience of the Euro-Zone's banking system will fail to ease investors. The biggest concerns regarding the stress tests results appear to be about the transparency of the data. Investors fear that they will not receive the details that they're looking for. This boots the already high uncertainty that exists in the markets, and turns investors to look for safer assets, such as the Dollar and the Yen. The main issue continues to evolve around the Euro-Zone's debt problems. It seems that until investors will receive solid data to believe that economies such as Greece and Spain will manage to recover, the Euro might see further bearishness.

As for today, a batch of data is expected from the Euro-Zone. The most intriguing economic publications will probably be the German ZEW Economic Sentiment which is scheduled for 09:00 GMT. It is a survey that asks German institutional investors to rate the next 6-month economic outlook for Germany. Analysts have forecasted that the German Economic Sentiment has dropped in June to 25.2 from 28.7 on May. If the actual result will be similar, this will mark the third consecutive drop of this survey, and has potential to weaken the Euro further.

JPY - Yen Rises as Risk Aversion Increases

The Yen rallied yesterday against most of the major currencies. The Yen gained about 70 pips against the Dollar and about 120 pips against the Euro and the Pound, correcting some of last week's losses.

The Yen strengthened yesterday on concerns that the Euro-Zone's deficit may worsen. There are speculations that the stress tests that are made to check the European banking system's condition will lack to deliver all the required data, and as a result will fail to assure investors. This has reduced risk appetite in the market, and has supported the Yen, which is considered to be a relatively safe asset. It currently seems that for as long that the Euro-Zone will fail to deliver recovering signals, and for as long that the U.S. economy will provide negative data, the Yen might appreciate further.

Looking ahead to today, the Yen will be absent from the economic calendar. Traders are advised to follow Japanese equity markets as they are highly correlated with Yen movements. Traders should also follow the main publications from the U.S. and the Euro-Zone as negative data has potential to boost the Yen further.

OIL - Crude Oil Drops To $75.50 a Barrel

Crude oil tumbled during yesterday's trading session. Crude oil began this week's trading at $76.30 a barrel. However on Monday oil saw a sharp drop and a barrel of oil was traded at a daily low of $74.50.

The main reason for the depreciation of crude oil seems to be the strengthening Dollar. Crude oil is valued in Dollars, and thus whenever the Dollar strengthens, crude oil tends to fall as a result. In addition, the renewed concerns regarding the Euro-Zone's debt crisis have created speculations about a reduced demand for energy, which also weighed on crude oil.

As for today, traders are advised to follow the main publications from the U.S. and the Euro-Zone, as they tend to have a large impact on crude oil trading. Traders should pay attention to the U.S. Trade Balance report and the German ZEW Economic Sentiment, as these publications look to have the largest affect on the market today.

Technical News

EUR/USD

The price of this pair appears to be floating in the over-bought territory on the daily chart's RSI indicating a downward correction may be imminent. The downward direction on the hourly chart Slow Stochastic also supports this notion. When the downwards breach occurs, going short with tight stops appears to be preferable strategy

GBP/USD

The 4-hour chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, there is a fresh bearish cross forming on the hourly chart's Slow Stochastic indicating a bearish correction might take place in the nearest future. Going short might be a wise choice.

USD/JPY

The pair is floating at the key level of 88.55, which is a very strong support level on the 4 hour chart. If the pair will manage to breach through that level, a much stronger bearish move is likely to break forth, with a target potential of 87.95. Going short with tight stops might be the right strategy today.

USD/CHF

There is a very distinct bearish channel forming on the 4H chart as the pair is now floating in the middle of it. A double doji formation on the daily chart is suggesting that another sharp movement is forthcoming. Traders should wait for the breach and swing.

The Wild Card

Crude Oil

This commodity is giving a strong bearish signal on the 4 H and hourly charts. The negatively sloped RSI and Momentum support this bearish notion. The Slow Stochastic is also giving a strong signal that this Crude's next move will probably be bearish. Therefore this gives forex traders the perfect opportunity to catch an early downward correction on an early stage.

 

[Redbrick]

Impact of trade deficit

The trade deficit reached $42.3bn, significantly higher than the $39.3bn expected. This is the highest trade deficit since november 2008.

This is a good sign of recovery for the US economy, and the stock markets seem to benefit from this figure. On the other hand, the USD highly suffered from this news: while the pair was following a descending range from 12GMT, the announcement at 13:30 had quickly weakened the USD.
The pair broke out of the range and skyrocketed from 1.2580 to 1.2630.

The EURUSD should quickly reached 1.2650 where a resistance will probably slow down the USD drop.

 

[forexyard]

Risk Taking Still Predominant Trend for Second Day Straight

Risk taking took over the marketplace yesterday, as the euro hit a two-month high against the U.S. dollar. A solid day for the global stock market as well as a successful bill auction in Greece, were the main factors causing investors to dump their safe-haven assets in favor of more volatile currencies and commodities.

Economic News

USD - USD Continues to Fall Against Its European Counterparts

Following the most recent return to risk taking among investors, the dollar fell against most of its main currency rivals, including the U.K. pound and euro. While an increase in the stock market is being cited as the main reason for the dollar's decline, it is also worth noting that the U.S. Trade Balance figure came in below expectations yesterday. Furthermore, strong U.K. CPI and German Economic Sentiment figures helped bring the greenback lower.

GBP/USD has shot up around 200 pips in the last 24-hours. Although a moderate correction has taken place, the pair appears to be holding around the 1.5200 level going into today's trading. EUR/USD hit a 2-month high in trading yesterday. The pair has risen around 175 pips over the last day, and is currently at the 1.2720 level.

Today, USD traders will want to watch out for several U.S. economic indicators that are likely to create market volatility. The Core Retail Sales, as well as the Retail Sales reports are set to be released at 12:30 GMT. Both are forecasted to show negative figures and could negatively impact the dollar. At the same time, should either figure unexpectedly come in above 0%, the greenback may receive a boost in afternoon trading. At 18:00 GMT, the Federal Open Market Committee is scheduled to release its latest meeting minutes. This usually provides investors with a solid indication about where the U.S. economy currently stands. USD could experience some volatility depending on the statement.

EUR - Euro Continues to Gain on Safe-Haven Dollar and Yen

Following a significant jump in the global stock market yesterday, the euro made substantial gains on most of its main currency rivals. EUR/USD hit a 2-month high before making a slight downward correction. Currently the pair is trading around the 1.2720 level. Against the yen, the euro moved up well over 200 pips during the last 24 hours. Currently EUR/JPY is trading steadily around the 113.10 level.

Today, traders will want to pay attention a number of U.S. news events, as well as several European ones. Euro-zone CPI and Industrial Production figures, set to be released at 09:00 GMT, are forecasted to come in above last month's levels. If this is indeed the case, investor confidence in the global economic recovery is likely to increase further. This would likely elevate the euro against the dollar, yen and British pound. Furthermore, several U.S. economic indicators are predicted to come in below last month's figures. Should the American economy show further signs of deterioration, the dollar will likely continue to suffer against the euro as a result.

JPY - Yen Tumbles Following Gains in the Stock Market

JPY fell against virtually all of its major rivals throughout the day yesterday, and in overnight trading. The USD/JPY has gone up some 80 pips over the last day, while GBP/JPY rose an astonishing 270 pips during the past 24-hours. The reason behind the Japanese currency's drop is largely the gains made on the global stock market. As investor confidence in the global economic recovery increases, safe-haven currencies like the dollar and yen typically drop as a result. As long as the stock market continues to see gains, traders can expect the yen to drop against more volatile currencies.

Today, the JPY value will largely be determined by U.K. and euro-zone economic indicators. Traders will want to pay attention the U.K. Claimant Count Change as well as European industrial production figures. Both are forecasted to show improvement over the previous month's results. If analysts' predictions are true, investor confidence will likely continue to rise. In this case, traders can expect the yen to drop further.

OIL - Oil Prices Shoot Up as Investor Confidence Rises

As investor confidence has risen over the last few days, oil prices continue to go up. The price of crude has shot up some 265 pips over the last 24-hours, ahead of today's U.S. inventory report. The weekly report is forecasted to show that U.S. inventories have increased over the last week. Typically this means that demand is low and prices fall as a result.

That being said, oil has seen substantial gains due to the rise in stocks over the last several days. Should indices continue to move up today, traders can expect oil prices to rise as well. Attention should be given to both European and U.S. economic indicators to see where investor sentiment stands throughout the day. Positive data out of Europe will likely lead to higher oil prices.

Technical News

EUR/USD

Yesterday's appreciation in the pair has allowed for a breach of the daily chart's long term downward sloping trend line that began in December of 2009. Supporting the shift in the trend is the positive sloping 20-day and 50-day simple moving average. This signals a shift to the upside for the trend. As such, traders should be trading with the trend and going long.
GBP/USD

A false breakout has been displayed on the daily chart as the pair previously breached below the rising channel lines beginning on June 8th. Yesterday the pair broke higher to the resistance level of 1.5240 which brings the pair back into the channel to confirm the false breakout. The pair could target the next resistance levels of 1.5380 and 1.5520 respectively.

USD/JPY

The pair is testing the 89.15 resistance level and is showing strong momentum to the upside as the Relative Strength Index (14) is sloping sharply higher. A breach above the resistance level could take the pair higher to 89.75 where a reversal to the downside may be possible.

USD/CHF

The sharp downward trend that began in early June is seeing some consolidation near the 61.8% Fibonacci retracement level from the downtrend's peak. The pullback to this level makes for a good entry back into the downtrend as today's daily high ran into resistance at the 10-day simple moving average line. The next price target is the lows from this week at 1.0480.

The Wild Card

Oil

Spot crude oil prices continue to rise following the buy signal displayed on the daily chart. A cross of the 5-day simple moving average above the 20-day simple moving average could signal the beginning of a new bullish trend. CFD traders may want to enter long with a target of $80 in the near term.