Forexyard Analysis

[forexyard]

27/11/'07 - US National Housing Index & Consumer Confidence On Tap

Economic News

USD

U.S. stock prices declined yesterday as investors worried that rising mortgage defaults and credit market losses would have a drag on the economy. Analysts estimate that the biggest slump in real estate since 1991, turmoil in financial markets, and higher energy prices will probably slow the U.S. economy's growth rate to 1.5% during the 4th quarter of this year.

There is still a lot of fear because of the fact that this credit contagion is continuing to widen out, further supporting speculations that more Federal Reserve interest rate cuts are imminent. Futures on the Chicago Board of Trade show traders began speculating that the Fed will lower its target rate on Dec. 11. Traders estimate an 80% chance that rates will be cut to 4.25% at that meeting.

Meanwhile, the USD remained relatively unchanged following an uneventful return from the US Thanksgiving holiday weekend. The lack of economic data gave little directional bias to start the week's currency trading, but a busy US calendar certainly promises a pickup in volatility in the week ahead. Trading in coming days could well be driven by the housing data upon which the whole USD argument rests at the moment. If housing continues to deteriorate, it will put relentless pressure on the Fed to cut rates in December, as the EUR/USD is expected to hit the 1.500 barrier. As for today, traders are expecting the National Home Price Index to be released at 14:00 GMT. The forecast for the index is a slight decrease from -4.4% to -5.0%. Later today, the US Consumer Confidence data due to be released and is also expected to show relatively weak figures.

EUR

Worries about the U.S. economy and expectations for repeated Federal Reserve rate cuts are still preventing the U.S. dollar from accelerating vs. the EUR. Yesterday, in late afternoon New York trading, the EUR was up 0.2% at $1.4858, just within sight of the all-time high of $1.4966 set on Friday. We still suggest that from a fundamental perspective, the EUR/USD exchange rate is likely to breach the key psychological level of 1.50, which may even be this week. This, of cause, will depend on upcoming fundamental data, mainly from the U.S. markets. Once the EUR makes a sustained break through $1.50, the Forex market should be wetting its appetite for trade up to $1.55/EUR. European officials have increasingly expressed concern about the Euro's rapid rise and the potential drag on exporters. ECB Governing Council member Nout Wellink said yesterday that although the Euro's rise against the USD was not of "immediate concern", any further ascent would be "fairly worrying."

Meanwhile, the focus has been on the re-emergence of money market strains, with the ECB announcing measures to mitigate liquidity pressures. Yesterday, the European Central Bank sought to calm stressed money markets by promising banks extra money to help them cope with a possible year-end cash squeeze. There is not much on the Euro-zone calendar today, but Germany has IFO Business Climate Index due for release which is expected to be slightly weaker than its previous number.

JPY

Japanese stocks accelerated their advance yesterday, boosting hopes for new demand for the under performing market. The JPY strengthened against a basket of currencies as investors were prompted to diversify away from risky carry trades. The USD extended losses, falling to a fresh 2 1/2 year low against the JPY on Monday, as U.S. stock prices declined on credit market worries and expectations for repeated Federal Reserve rate cuts.

Looking ahead to today there is no major news expected to come from Japan apart from the Retail Sales, which are expected to be slightly better then the previous month's figure. The direction of the JPY may also depend on the performance of equity markets and their impact on carry trades. Key U.S. and European data release may cause some movement in the Japanese currency. Holding any existing long positions would be wise, as any fluctuation should be beneficial. The bulk of Japanese data is due out on Thursday, this is when we will see the Manufacturing PMI, Core CPI and the Core Tokyo CPI. Most of these numbers are expected to be relatively strong and likely to help the Japanese Yen.


Technical News

EUR/USD

A 1,2,3 wave structure is being established on the 4 Hour chart which suggests that this pair will test the 1.4900 Fibonacci level. If this level will breach, the next target price is 1.4940, if not this pair is expected to test the 1.4750 resistance level.

GBP/USD

There is a mild bearish channel on the 4 Hour chart that may imply an upcoming bullish trend; however this trend might take place later this week when the first target price is located at 2.0600. In case of a breakout, the next barrier will be located at 2.0720.

USD/JPY

The daily chart is showing a continuing bearish trend and we may see this pair consolidate at 107.20 within the next 2 days. Today, a bearish channel is establishing on the 4 hour chart which indicates the continuation of the current bearish trend and could break the 107.80 level. Going short seems like the preferable strategy.

USD/CHF

The pair established a strong support at the 1.0900 level, after failing to break through that level on Friday. There seems to be a local correction, and we might see the 1.1150 level again before the pair will resume the bearish trend. Selling on high key levels might be preferable today.


The Wild Card

Crude Oil

An upcoming bullish trend is expected as a reversal took place after it failed to break the 96.80 support level. There is a falling wedge structure on the 4 H chart which only strengthens the assumption that a bullish trend will take place. Forex traders have a good entry point to get into the the market and to leverage their profits.

 

[forexyard]

28/11/'07 - Core Durable Goods Orders, Home Sales May Define Greenback Direction

Economic News

USD

The greenback strengthened all across the board yesterday on the back of news that a major Abu Dhabi investment company bought a significant portion of Citigroup. Citigroup, which is a major financial institution in the U.S, was hit very hard by the recent subprime crisis and credit crunch. So this investment by the Abu Dhabi group sent out a strong signal to the market that the financial sector may be at the beginning of a recovery process and therefore this created positive sentiment for the greenback. The major U.S fianacial institutions have been exercising damage control ever since the subprime crisis began and so the fact that investors are showing renewed faith for these institutions is a very positive sign for the U.S financial sector. This news was the main driver of the greenback yesterday and although there was other negative data released it had little impact on the market. The U.S Consumer Confidence released below the expected figure of 91.5 at 87.3, but it nevertheless was unable to offset the positive momentum surrounding the greenback following the Citigroup news.

Looking ahead, today there is a string of significant data releases that investors should watch out for, kicking off with the Durable Goods figures. Both the headline and the core figures are forecasted to release stronger than the previous month and this will be a positive sign for the U.S manufacturing sector. This will be followed by the Existing Home Sales figure which will give the market another indication of whether the rate cut by the Fed is providing the struggling housing sector with some relief. Investors will also focus today on the Fed's Beige Book report for hints with regards to future monetary. If today's news suprises on the upside then the greenback may be able to hold off another downward slide, however it will take a lot to remove the grey cloud surrounding the greenback, so the overall trend is still bearish. Also if the Beige Book highlights a U.S economic slowdown then the greenback will face another steep decline.

EUR

After reaching a succession of record highs against the greenback, the EUR lost a small portion of its gains yesterday. A correction may be favorable to the European economy, as the ECB has made it clear that it views the EUR's sharp gains as undesirable. However in the meantime the bullish EUR has not created any noticeable negative impacts on the EU economy and many analysts believe that as soon as the EUR begins to dampen exports that the ECB will intervene in the currency markets. Also the German economy is one of the key players in the Eurozone and it is heavily reliant on exports but despite the strong EUR, German economic data is still positive. This fact was further reiterated yesterday by the release of the German Ifo Business Expectations and Climate Indexes, which both surprised on the upside. So in the meantime the ECB is sitting tight and observing whether the U.S economy will be able to avoid a recession. Therefore we believe that the ECB will likely keep interest rates unchanged in the near future, even though inflation risks are still on the upside as they would like to avoid strengthening the currency even further.

The only news to be released from the Eurozone today will be the German Consumer Confidence, which will give us another indication of how the German economy is fairing despite the strong EUR and we are also expecting the release of the M3 Money Supply. These figures should not have any impact on the market and the EUR movement today is likely to be dollar centric. Although the EUR slipped yesterday, investors are still favoring the European currency, so it will head back up after the correction loses steam.

JPY

The JPY fell noticeably against the greenback yesterday on the back of the Citigroup news. However since then the JPY has managed to rebound on speculation that later on today the Beige Book will highlight a U.S economic slowdown. The JPY has been on a very strong bullish path pretty much ever since the credit crisis spread globally, as investors avoided the so-called carry trade strategy and became more-and-more risk averse. However the bullish JPY trend may reverse as soon as the risk appetite in the market returns as the BoJ is unlikely to raise the interest rate in the near future as a result of deflation concerns. Also the correlation between the DJIA and the JPY is still very visible as carry trades resumed on the back of yesterday's sharp rally but there is still a strong possibility of renewed losses. The JPY is unlikely to be affected by this week's Japanese economic data but rather its direction will more likely depend on the state of the risk sentiment in the market.


Technical News

EUR/USD

The pair still floats within the range of 1.4800.4900 while the current move is up. The momentum is still bullish as clearly displayed by the Daily chart. The hourlies are showing RSI at the 50 level which indicates that we might see another upwards move quite shortly.

GBP/USD

The cable is trading in a very unstable and choppy manner in the past few days. The daily studies show a slight bullish momentum and the hourlies show mixed signals with a moderate bearish tendency. It would be preferable to stay out of the cable trading until the smoke clears.

USD/JPY

The pair is in the midst of a very accurate downwards channel, and is now testing the top barrier. The oscillators show that a positive breach is quite unlikely, and the daily chart is showing bearish momentum. Going short still might be a preferable strategy.

USD/CHF

On the 15 Min chart we see an ascending triangle which indicates on an upcoming positive breakout which will strengthen the greenback. On the 4 Hour chart the Slow Stochastic is on its way to the overbought territory and an upcoming reversal is expected. Going short from 1.1120 seems preferable today.


The Wild Card

Crude Oil

On the daily chart we can see the Slow Stochastic having a negative slope and still having place headed to oversold territory, however the 4 Hour chart indicates on an upcoming reversal when Slow stochastic was crossed at 6 which is clearly oversold as RSI and momentum having positive slope which support the upcoming bullish trend. Today, Forex traders may seek for enticing entry point for long position which seems to be preferable.

 

[forexyard]

29/11/'07 - Will GDP Data Trigger Another Bearish Greenback Wave?

Economic News

USD

As the month of November comes to end, talks of the Federal Reserve cutting interest rates have done nothing but gain steam. The rumors have has so much weight that the Dow Jones and most other Wall Street outlets saw gains yesterday just from the notion that such cuts might eventually come. Yesterday the Fed's second in command, Vice Chairman Donald Kohn noted that ''flexible and pragmatic policy making'' was key in turning around the US economy and that the Fed would "act as needed" in cutting interest rates, if such measures were needed.

The release of the Beige Book yesterday further solidified the expectations of Government intervention in the economic "crisis" taking place now. The Beige Book identified that there was in fact growth in US districts, however tedious it might have been. The report touched on how US consumers have reacted to economic uncertainty with "relatively soft retail spending" in the beginning of holiday shopping. The Beige Book goes on to note how the ongoing credit crisis has created "barriers for some buyers" in the real estate market as available homes are on the rise. Manufacturing and products and services from food and energy inputs rose significantly according to the Fed report.

The events from yesterday have continued to contribute to the glairing uncertainty in the US, even so much as to produce completely different opinions from members of the same governing body. Kohn's remarks yesterday contradicted those of member from his own board. Such indecisiveness within the Fed could be disastrous as most of the positive movement that the greenback is seeing, is coming from expectations of Federal intervention. As we look ahead to today, the US news schedule is once again full of significant information. Annual GDP and GDP deflators, along with unemployment claims will precede the 15:00 GMT release of the New Home Sales report. Rounding out the day we will here words from Fed Governor Mishkin, who many hope will reiterate Donald Kohn's call for swift and necessary intervention.

With a full calendar aside from US events, it will be intriguing to see what trends the greenback develops over the course of the day.

EUR

The EUR continues to impress, even on days where it sees sharp drops against its major counterparts. Yesterday, while falling to 1.4712 against the greenback, the 13 nation currency bounced back to once again flirt with 1.50 levels.

The Euro zone economy has encountered a bit more stress in these times, as prices for goods and services have skyrocketed compared to the dollar and now European businesses are beginning to feel the effects. With immensely clean track records and better value due to the currency crisis, US companies are simply becoming more affordable. Today should prove to be a significant one, as amidst the very tight economic calendar, EU news will have a very large role in that it will be missing from the equation. Outside of the release of German unemployment rate and several related topics concerning the UK, the news will be dominated by US, UK and Japanese news.

It is safe to assume that even amongst losses in the EUR against it counterparts, the EUR will continue to make gains as was proven yesterday.

JPY

The JPY traded yesterday, at its lowest rates in a week, mostly due to the rise in the US stock market. Investors, brimming with positivity from early Dow Jones gains, began borrowing the Japanese currency to secure high-yielding assets. Carry Trades were the name of the game, as the Aussie dollar and other "carry trade friendly" currencies flourished. In what has been described by some as "turbulent" markets, the JPY has been the focal point of much investor speculation. With its dependence toward foreign news being the main accelerator of movement within the currency, the JPY has found itself in the midst of major currency action.

Today's calendar began last night for Japan, as the release of Industrial production numbers came back higher than initially expected. With Manufacturing PMI, Core CPI numbers and Core Tokyo CPI numbers today could prove to be an important one for the land of the rising sun. It will be interesting to observe the status of the JPY before it gets to the 23:30 release of most of our news. It seems that the negative greenback sentiment may be on the brink of reversing, so this may finally halt the bullish JPY momentum.


Technical News

EUR/USD

The pair is still floating in the range of 1.4800.4900 while the current move is up. On the 4 hour chart, the Slow stochastic and RSI have a positive slope suggesting that the uptrend has much room left to go. The upcoming bullish trend is expected to test the 1.4900 level, and in case of a breach we expect this pair to test the 1.4950 resistance level. It appears that going long might be preferable today.

GBP/USD

The pair is floating in a relatively wide range for several days with a slight bullish tendency, as can be seen on the 4 Hour chart. No significant break through the 2.0400/2.0900 range has occurred, and the hourlies continue to deliver mixed signals. The daily chart is giving a moderately bullish sentiment with a bit more room to run. The 2.0800 is a key level, that if breach will validate the next bullish move.

USD/JPY

The downtrend the pair is going through seems to be very strong and the daily chart validates that there is still room to run. The daily chart is confirming that the momentum down is still quite strong and that 109.00 is a valid next target. On the hourlies studies we see that there is a local correction that might end at the 110.70 peak. Selling on highs might be preferable today.

USD/CHF

The volatility has decreased and the USD\CHF is in a bearish configuration on the daily studies. After a touch at the 1.0900 zone, the pair corrected to the 1.1135 level. The bullish momentum is fading away, and looks like a matter of short time before the bearish trend will resume.


The Wild Card

Crude Oil

The strong bullish channel has been breached through the bottom barrier which started a strong bearish correction into the 92.00 zone. Oscillators show that the bearish momentum created by that breach is diminishing. This creates a great long entry point for Forex traders, as the journey to the $100 will probably be back on track soon.

 

[forexyard]

03/12/'07 - Reversal on the way?!

Economic News

USD

As we enter the month of December, it is safe to be said that the erratic month of November could get a run for its money. December is usually laced with all kinds of unique and volatile economic news, which drives global economies mad. The closing out of Q4, massive retailer expectations for holiday shopping, the ever so unpredictable US consumer base and to top it all off in 2007, the expected interest rate cuts by the Federal Reserve.

As the month of November closed on Friday, the greenback saw recognizable gains against its major currency counterparts as the Dow Jones shot up nearly 60 points at week end. Figures released from several US consumer reports last week showed that consumer and construction spending actually slowed during October, which would normally lead to somewhat of a letdown in dollar strength. The greenback now faces all new adversity as the December 11th date, expected by most to be the time of further slicing of interest rates looms heavily over the global market. Towards the end of last week Federal Reserve Chairman Ben Bernanke, came under some scrutiny regarding the differing opinions of his own Board of Governors regarding Government intervention in the latest round of uncertainty in the US economy. The discussion now has become not only if interest rates should be cut, but by how much. While most believe we will see another quarter point drop (much like that last month) there is now serious speculation of a half point drop. It will be a very strenuous waiting period for investors as they prepare for years end.

The world economic news calendar is jam packed this week, with important data from nearly every region and currency home. In the US, news regarding Consumer Sentiment, Average Hourly Earnings and a basket of Nonfarm data, as well as Unemployment figures are to be released. This will be preceded by today's release of the ISM Manufacturing Index and Price figures, coupled with remarks about sub prime mortgages from Boston's Fed President Eric Rosengren. It will be the first speech by an FOMC member in December, thus setting the tone for any new monetary policy on tap.

EUR

November certainly ended on different terms than the rest of the month for the Euro. After seeing strong rallies throughout last month, the 13 nation currency found itself reeling against the dollar on Friday. European economists received quite a wakeup call, as the greenback proved that no matter how maligned the status of its economic outlook is, it is still the primary news maker in the global economy. Despite the strength of the Euro lately, the positive move in the Dow on Friday pushed it down under the 1.47 level to end the trading week.

Amidst the highest Euro-zone consumer spending numbers in 6 years, up 3% in November, consumer confidence faltered. The weakened growth numbers spurred investors to question again whether or not the ECB will have to hike interest rates, putting the ECB in the precarious situation of having to "wait and see" what goes on in the market this week. Today, ECB President Jean-Claude Trichet will address the Eurofi conference in Brussels, with a speech titled “Achieving the Integration of European Financial Markets in a Global Context”. Trichet will be a figure on the podium this week quite a bit, as most of the relevant European economic news this week, will come from his comments.

The significant question this week is whether or not the Euro will be able to avoid testing the 1.45 level and continue its strength while entering the closing month in 2007. Also it is important to circle Thursday December 6th on the calendar, as the European interest rate announcement is expected.

JPY

As the first week of December starts, the JPY has been connected with the Moody Investors' Service, as the credit giant is planning its biggest cuts since the subprime mortgage defaults unsettled financial markets. The JPY continued early this week what it had started at the end of November, gaining against the major 16 currencies, as carry trades were once again popular.

As the Asian trading week opened, BoJ Governor Fukui was adamant about his skepticism toward risks in overseas economies like the US. He went on to warn of the continued instability of global financial markets due to the ongoing subprime loan crisis. He was quoted as saying that "Given the continued rise of consumer spending and capital investment, albeit at a slower pace, we believe that the possibility is high that the US economy will eventually achieve a soft-landing and stable growth," The Japanese also joined the ongoing sentiment felt by the US and EU that China must allow their fragile Yuan to appreciate quicker, in order to ease strain on its greenback reserves.

In the week's Japanese economic calendar, we will see the release of GDP numbers as well as several industrial figures. Overnight the Capital Spending figures were released with better than expected results at -1.2%, from -2.5% while expectations had it at just under -5%.Amidst a volatile week of interest rate speculation from the US and EU, we will want to keep an eye on the JPY to determine how it will be "used" by investors.


Technical News

EUR/USD

The pair has been ranging in the past few days but it still gained no distinct direction. The daily studies are showing bearish signals and the hourlies are currently neutral. On the daily chart, observe a forming Eliot wave structure. A preferable strategy might be to wait for the hourlies to deliver a positive signal, and look for a good entry point for a short position.

GBP/USD

After losing more than 500 pips during the last two weeks, the bearish sentiment seems to carry on. The daily charts are showing that there is still more room to run and the hourlies are showing a light oversold status. A preferable strategy might be to look for a good short entry point.

USD/JPY

The uptrend for the pair could not be any clearer, and all studies indicate there is still more room to run. The pair now floats at the bottom of the upwards channel, indicating a further move up is coming up.

USD/CHF

The Daily and the 4 Hour charts are implying a bullish trend continuation before a reversal will take place. In the long run, the pair is expected to test the 1.1300 Fibonacci level and in case of a breakout, the next target would be the 1.1340 Fibonacci level. It seems that going long will be a preferable strategy in the upcoming few days.


The Wild Card

Silver

There is still a bearish configuration on the 4 Hour chart, indicating that the momentum is still down. The RSI is floating around 50, which supports the notion that there is still room to run. This provides Forex traders with a great opportunity to go short on a very solid downtrend.

 

[forexyard]

04/12/'07 - Greenback Expected to Float in Range Today.

Economic News

USD

The US dollar is weaker across the board as the members of the Gulf Cooperation Council debate their Dollar Pegs. The two largest economies in the region, the UAE and Saudi Arabia are divided on whether they should abandon the dollar in favor of a basket peg or to continue to ride out the move and risk taking a further hit to the value of their reserve holdings. The UAE is in favor of a currency basket similar to the one that Kuwait has, while Saudi Arabia dismissed this possibility. A revaluation will be negative for the US dollar, but if things stay status quo and Saudi Arabia wins out, then we could see the dollar bounce. Uncertainty about the outcome of the meeting is keeping the dollar under pressure. Also, Federal Reserve officials continue to grow increasingly dovish. Rosengren who is typically a more modest central banker warned that foreclosures is likely to get worse and the US economy will grow 'well below' potential in coming quarters. With such gloomy outlooks, the Federal Reserve will have to continue lowering interest rates. The futures market is still pricing in a 40 percent chance of 50bp rate cut. Meanwhile the ISM manufacturing survey was right in line with forecasts yesterday, which was a bit of a disappointment because the rise in the regional indices signaled a stronger increase. What's more, a new multi-month low in the employment reading at 47.8 may suggest a dour long-term outlook on demand and production as employers try to trim costs through layoffs and reduced capital spending. US factory ISM edged down to 50.8 in Nov. Production up, orders steady and jobs down were the three main drivers of the essentially unchanged ISM factory reading last month. 50.8 is the lowest reading the ISM has seen since it dipped below 50 a couple of times, once late last year and again in Q1 this year. That suggests a level of manufacturing activity somewhat weaker than in several of the regional factory surveys (especially New York and Philadelphia), albeit still positive. Notable in the detail (but not part of the composite headline) are the consistently solid export readings, a function of US dollar weakness, and the reacceleration in the prices measure, a function of the oil price.

EUR

Yesterday the EUR traded relatively uneventfully all across the board but it continued to weaken against the USD. In Europe, markets are likely to take direction from interest rate decisions due from the European Central Bank and the Bank of England on Thursday and U.S. jobs data due on Friday. The EUR/USD traded at a low of 1.4621 and a high of 1.4708 before closing the session at 1.4659 at the end of the New York session yesterday. .

According to the latest weak market data, there is very little upside potential for the European GDP to go forward, therefore, even if the U.S. lowers its rates in December it's very unlikely that the ECB is going to increase rates any time soon. The EUR is losing some of its buoyancy because of that. In the following days, traders attention will be focused on Jean Claude Trichets' speech in the post announcement press conference. While no one expects the ECB to hike rates this Thursday, traders will be listening with care to his statement. As for today, there are only the EUR Producer Price Index and the GBP Construction PMI expected to be released, both of a minor importance. Without further news expected from the European markets today we should see the weak EUR momentum continues.

JPY

The yen rose across the board yesterday as continued uncertainty over fallout from U.S. subprime mortgage market turmoil caused investors to reduce exposure to risky carry trades. By early morning in New York; the USD was down 0.7% at 110.33 against the JPY. The EUR was up 0.5% at 161.81. In addition, the economic data out of Japan was mixed, with industrial production and retail sales proving to be better-than-expected. Industrial production in Japan rose 1.6% to a record in October to meet demand from China and Europe, suggesting that a slowdown in the US will not hinder growth in the Japanese economy. This week, economic data out of Japan is expected to reflect improvements in third quarter capital spending and labor cash earnings. However, these "improved" figures are also likely to remain negative. Unless capital spending can surprise to the upside, the fundamental picture for Japan remains bleak. Nevertheless, the JPY may have an opportunity to gain this week, as risk aversion trends remain the primary driver of the low-yielding currency. As a result, traders should keep an eye on global stock markets, as a plummet in equities could push USD/JPY back down towards 109.00.

Technical News

EUR/USD

There is a very solid downward channel forming on the 4 hour chart, as the pair now floats on the upper level. The RSI indicates a bearish momentum towards the bottom of the channel at 1.4550. a breach through that level will unleash an additional bearish move.

GBP/USD

The cable has been trading in a wide range for a while now, and is showing moderate bearish momentum. There is a bearish cross forming on the 4 hour chart, which indicates that the next move might take the cable to the 2.0480. Going short might be preferable today.

USD/JPY

After a touch at the upper level of the 4 hour channel, the pair appears to be back to the bearish route. The slow stochastic indicates that there is still much more room to run, and we might see the 109.00 levels, sooner than we thought.

USD/CHF

The pair has made a corrective move to the very strong resistance level of 1.1300. There was a very strong bearish cross on the 4 hour chart, which shows that the correction move might be over, and that the pair is now ready to continue the strong bearish move. Next target price appears to be around 1.1200.


The Wild Card

Crude Oil

The bearish channel on the 1 hour chart has failed to breach again. A bearish momentum is being created as the RSI clearly indicates. That is a great opportunity for Forex traders to enter the bearish correction move at a very good stage of the trend.

 

[forexyard]

05/12/'07 - US Non-Farm & Non-Manufacturing Figures On Tap

05/12/'07 - US Non-Farm & Non-Manufacturing Figures On Tap

Economic News

USD

Yesterday was void of any significant news from the U.S, so the greenback did not experience much movement against the EUR. However the greenback did strengthen noticeably against the CAD on the back of the unexpected Canadian interest rate cut to 4.25%. The main market movement yesterday was still driven by comments by the Fed that the subprime crisis will have a significant drawback on U.S growth. This attitude by the Fed has unsettled the financial markets again and shoved global stocks lower, leading to a risk-averse attitude by investors and a subsequent reversal of carry trades. Therefore the USD saw most of its action yesterday against the high yielding currencies, where it gained noticeable ground on the back of the carry trade reversal. On the other hand the greenback lost ground against the JPY as the increasing concerns about the credit crisis prompted investors to cut back on risky positions.

Looking ahead, today is filled with significant U.S data which may prompt some dollar movement. The most important news out today will be the ADP Nonfarm Employment Change which is expected to release well below its previous figure of 106K at 50K. This figure will be closely watched by investors for an indication of where Friday's all important NFP report will release, even though the accuracy of the ADP remains questionable. If this figure surprises on the upside the dollar could claw back some lost ground against the EUR. However although there is a string of data releases expected today it seems that the market will remain cautious ahead of Friday's NFP report, but is also important to note that the increasing speculation of an aggressive rate cut by the Fed could shove the greenback onto its recently familiar slippery slope.

EUR

The only news released from the Eurozone yesterday was the PPI which came in at 0.6%, beating the expected figure 0.4%. However this news was not expected, and it did not, have any impact on the EUR. The EUR remained stable against the USD, but it did experience sharp movement against the high yielders and the JPY on the back of the carry trade reversal. Investors will be tentative of ahead of Thursday's ECB Interest Rate Decision, which is expected to keep interest rates on hold at 4.00%. However this will be a very tricky decision by the ECB as Trichet has reiterated over-and-over again that short term inflation risks are still on the upside and therefore the ECB are currently struggling to balance slower growth with higher inflation. A rate cut by the ECB at this stage is unlikely, as although it will stimulate Eurozone growth it could spike inflation which is already a major concern.

In the Eurozone news today we are expecting the Retail Sales, Services PMI and German Services PMI figures. These figures could cause some movement but investors will be cautious to buy the EUR ahead of Thursday's difficult ECB decision. The current sentiment surrounding the EUR remains positive but when the full impact of the U.S housing crisis on the Eurozone will be revealed, this sentiment could change quickly.

JPY

The JPY continued to gain all across the board yesterday as the increasing concerns over the credit turmoil has driven investors away from the so-called carry trade strategy. The JPY bounced back from a two week low against the greenback on the back of an announcement by Moody's that it was preparing the largest credit-rating cuts since the subprime crisis shook the financial markets. The stress in the credit markets is continuing and it does not seem that there is relief in sight, so the JPY will continue to get stronger as risk aversion persists. The JPY rose to 110. 22 against the greenback from Friday's 111.12, and it may even hit 109.00 by the end of the month if risk aversion persists.


Technical News

EUR/USD

On the 4 Hour chart, we should note that the bearish trend continues to push forward as volatility is increasing. The price should continue to move downwards to a range of 1.4800 to 1.4650. As it stands, the bearish pressure will continue to gather momentum on the EUR/USD today as well.

GBP/USD

On the 4 Hour chart, a rising wedge (bearish) is forming which may imply a continuation of the bearish momentum. It's recommended to time the entrance into market with short term charts as 2.0650 looks to be a possible strong entry point. At the moment GPB/USD is being traded at around the 2.0750 to 2.0450 range. The volatility is high and we should expect to see bearish pressure today on the GBP. The downtrend should continue to the 2.0500 support level.

USD/JPY

The USD/JPY broke the 109.60 resistance level yesterday. USD/JPY is in a downtrend trend, supported by 1 Hour exponential moving averages as volatility is low and Bollinger bands are tightened. We should expect to see throughout the day, a continuation of the bearish configuration correction for this pair. 1 Hour and 4 Hour Elliott patterns imply that the USD/JPY will continue to gather momentum. The target is expected at 110.00 for today, as it is recommended to take in to consideration the long run weakness of the Japanese currency against the American Dollar for future positions.

USD/CHF

The USD/CHF is in a bearish configuration as volatility is decreasing. USD/CHF moves without trend and swings around exponential moving average (EMA 50 and 100). Bollinger bands are tightened and 1 Hour and 4 Hour Elliott patterns imply a continuation of the bearish pressure on the currency pair. The target is expected to touch in and around the 1.1130 level.


The Wild Card

Gold

Gold broke the 800 resistance level and is in an uptrend supported by 1 Hour exponential moving averages. The volatility is low and the Bollinger bands are tightened, as we should expect to see a bullish configuration. 1 Hour and 4 Hour Elliott patterns are implying that Gold should gather momentum today, which provides Forex traders with a great opportunity to go long. The target is expected at around 810.

 

[forexyard]

10/12/'07 - All Eyes On US Rate Statement Tomorrow.

Economic News

USD

We begin this trading week with tremendous speculation over how the greenback will perform ahead of Tuesday's interest rate statement. Last week, the dollar bounced back against the Euro due to surprising figures from ADP and Non-Farm data. Combined with the surprise cut in UK interest rates the dollar strengthened against its major counterparts, before re-adjusting itself back to levels of above 1.46 against the Euro prior the close of trading on Friday.

Most indications are that the Federal Reserve will once again cut interest rates by a quarter of a percent from 4.50% to 4.25%, making it twice in the last two months that the Fed has had to step in to control the dwindling dollar. The interest statement, set to be released on Tuesday, December 11th at 13:30 GMT is one of many pertinent economic news events on schedule this week. The US will see the release of discount rates, Import Price Indices, Retails Sales, Core Retails Sales, PPI, Core CPI, and Industrial Production numbers. The aforementioned news will be overshadowed of course by the Trade Balance numbers on Wednesday and the Interest Rate statement on Tuesday. On tap for today's economic calendar are the monthly Pending Home Sales numbers. The figures are expected to be down a bit over 1 percentage point from 0.2% to -1.0%. It should be said however that last week's forecasts were way off, so we should wait and see.

This should be an important week for the greenback as it will have to react strongly to rates cuts in order to set a corrective trend as we grow even closer to 2008. One should be wary of how the Dow Jones performs as well this week to gage how much confidence is still behind the greenback.

EUR

The European community was hit with quite a stunner, as the British unexpectedly cut interest rates to spark even further gains to the dollar in the early part of last week. What had already been a slow week for the Euro, turned into quite a scare, as the dollar exhibited some of its old school dominance in the marketplace. The Euro, which had been above levels of 1.47 quickly dropped to under 1.46, before correcting itself by week's end.

ECB President Trichet noted at a press conference shortly after EU interest rate statements, that there was talk of an interest rate hike at ECB meetings, but that "The reappraisal of risks in financial markets is still evolving and is accompanied by continued uncertainty about the potential impact on the real economy, and that is the reason why we consider that it is not opportune to decide today (to hike rates)".

The EU Economic calendar is reserved with several indicators of little to no significance. Of the 15 or so events due up, only the ECB Monthly Bulletin and German ZEW Sentiment are of any real consequence. The fate of the 13-nation currency will rest heavily on trader response to US interest cuts and the invigorating progress coming from the Dow.

JPY

The Japanese Yen has watched along as the Dow Jones has begun to recover some ground, thus forcing the inevitable drop in carry trading. The Yen's lucrative position on carry trades has left it dependent on outside factors, with the most pertinent information being that from the US. Last week, the USD/JPY rose steadily as investors foresaw the Dow movement and began to abandon high yielding assets. The currency pair jumped from 109 support levels to over 111 as early morning trade in the Far East began.

The economic calendar for Japan this week stays somewhat dull as the only real highlight should be that of the Tankan Large Manufacturers Index. The index measures the general business conditions of large manufacturers and is important to be noted that traders pay special attention to the Tankan survey because it's one of the few growth indicators produced directly by the BoJ. It looks as if the JPY will continue to float on a moderate bearish notion, at least until the end of this trading week.


Technical News

EUR/USD

A bearish channel is establishing On the 4 Hour chart that might take the pair to the 1.4500 - 1.4560 levels. The first target price is located at 1.4615 (Fibonacci 38.2%) and the second target price located at 1.4579 (Fibonacci 23.6%). If the 1.4660 level will not be breached, then going short looks like a preferable strategy for today.

GBP/USD

On the 4 Hour chart a falling wedge structure is establishing and in case of a completion, we might see the pair relocated at 2.0100. The Slow Stochastic has crossed the 82 level and momentum has a negative slope that supports the upcoming bearish trend. It looks as if the bearish trend might continue for the short run.

USD/JPY

The pair's massive correction from the 107.00 level continues, as we now see the second bearish cross on the daily slow stochastic. Together with the Doji formation there is a great possibility of a local bearish move that might take the pair back to the 110.50 level.

USD/CHF

The pair's movement is quite moderate and characterized by relatively low liquidity, with a slight bullish move. Indicators on the 4 hour level shows mixed signals, as the daily studies are still a bit bullish. Waiting for a clear signal on the hourly level before entering the market might be wise.


The Wild Card

Crude Oil

The bearish trend continues at full steam, as all oscillators show that there is still more room to run probably into the 86.00 levels on the next local move. This is a great opportunity for forex traders to use the strong bearish momentum and take profits on the short run.

 

[forexyard]

11/12/'07 - US Interest Rate Statement On Tap

11/12/'07 - US Interest Rate Statement On Tap

Economic News

USD

The USD depreciated against most major currencies on Monday for the 3rd consecutive session, ahead of today's widely expected FOMC Interest Rate Statement. Also, yesterdays' data on U.S. Pending Home Sales for November showed an unexpected gain and gave the greenback a modest boost.

Markets have recently pared back aggressive U.S. rate cut forecasts, with analysts citing more optimism that the Feds' action will be enough to prevent severe fallout from market volatility. Analysts estimate that the U.S. economy will slip into a ``mild'' recession next year, essentially predicting a downturn for the world's largest economy. Nevertheless, it is expected to pick up as early as the second half of the next year. Meanwhile, the depreciating dollar has helped American exports rise to record highs in the last 7 months. The U.S. trade deficit narrowed to $56.5 billion from the record $67.6 billion in August 2006 as a falling dollar made American goods cheaper in foreign markets.
Today, all eyes will be on the Interest Rate Statement from the Federal Reserve. Futures fully reflect a 0.25% point easing in the Fed funds rate to 4.25% from 4.50%. Chances of a bigger move have shrunk following a string of somewhat stronger-than-expected economic data. However, lower expectations for such a big rate cut have left the USD back in a downward trend.

To summarize, the market is already reflecting the expectation that the Fed is going to cut. Given all of the dovish potential surrounding the upcoming FOMC meeting, we expect the USD to remain relatively weak before the rate decision.

EUR

The EUR continued its rally yesterday as traders were looking ahead to today's U.S. Interest Rate Statement. During yesterdays' late New York session, the EUR was up 0.4% at $1.4712.

The EUR got a boost last week as comments by ECB President Jean-Claude Trichet left open the possibility of higher rates next year as a result of growing inflation. Comments made yesterday by ECB policy makers, to the affect that the Euro-zone inflation could be higher in 2008, as remarks once again reaffirmed the view that the European Central Bank is not likely to ease current trends in the near future. The EUR is also benefiting from these inflation risk warnings, as we can recall in the month of October, exports actually hit a record high in Germany, bringing the EUR above 1.45 for the first time. Today, we await the release of the German ZEW survey, which is expected to drop to a new 15-year low.

JPY

Yesterday, the JPY traded close to a one-month low vs. the USD and the EUR on speculation that the Fed will cut interest rates today, encouraging investors to buy higher-yielding assets funded by loans in Japan. The Japanese currency yesterday touched the weakest point since Nov. 9 against both the EUR and USD as it traded at 111.71 per USD and 164.35 per EUR at 16:00 p.m. in Tokyo.

Today's' Fed announcement might be a very critical inflection point for the rest of the year. If worries of a global growth slowdown resume, we could see a renewal of the equity sell-off and JPY crosses could come under pressure again. On the other hand, if a deeper U.S. downturn will be avoided; further gains of higher-yielders are likely to be spurred. The only news to be released from the Japanese calendar today will be the Corporate Goods Price and Current Account indices data. Both of the indicators are of a relatively minor importance and will probably not have a significant impact on its currency. Instead, traders' attention will be focused today on the U.S. Interest Rate announcement and on its possible outcomes.


Technical News

EUR/USD

There is a bullish configuration forming on the 4 Hour chart. The volatility is high and the EUR/USD is in a consolidation stage, especially after the pair broke the 1.4740 resistance level. The price should continue to move upwards in the 1.4700-1.4800 range. As it seems, the bullish pressure will continue to gather momentum at least until the weeks end.

GBP/USD

In the past few days the pair is going through a choppy session, and is giving mixed signals on the hourly level. The daily chart is showing massive bullish formation, and it looks as if the pair is heading toward 2.0500 again. A preferable strategy might be going long for the short run.

USD/JPY

A bullish flag is forming on the 4 Hour chart which might take this pair to 112.00. Slow Stochastic shows a positive divergence which strengthens the possibility of an upcoming bullish trend.

USD/CHF

The pair shows consolidation around the key level of 1.2010 which has proven to be a very significant level. A preferable strategy might be to wait for the oversold hourly levels as traders should pay close attention to the 1.1300 level to unwind before taking a long position.


The Wild Card

Gold

Gold broke the 812.30 resistance level. Gold is in an uptrend supported by 1 Hour exponential moving averages as the volatility is high. Bollinger bands are tightened. We should expect to see a bullish configuration today. 1 Hour and 4 Hour Elliott patterns are implying that Gold should gather momentum today. The target is expected to hit 810. This provides forex traders with a great opportunity to go long on a very healthy uptrend.

 

[forexyard]

12/12/'07 - US Trade Balance On Tap

Economic News

USD

The greenback experienced some volatility yesterday on the back of the much anticipated U.S Interest Rate Statement. The Federal Reserve cut its benchmark short-term interest rate yesterday by a quarter of a percentage point, to 4.25%, and suggested that it would lower rates again if the credit crisis continued to damage not just housing, but the rest of the economy as well. Since the credit crisis erupted in August, the Fed has shaved a full percentage point from the federal funds rate, which is what banks pay to borrow from each other overnight. However many analysts believed that the Fed would cut the interest rate by at least 0.5% in order prevent the U.S economy from slipping into a recession. Therefore the Fed's decision to cut the interest rate by 0.25% is a positive indication to investors that the Fed believes that the economy is still well clear of a dreaded recession. Policy makers also cut the discount rate yesterday, which is what banks pay to borrow directly from the Fed. The quarter-point cut, to 4.75%, was less than what the market had been expecting, and that triggered a selling spree that sent the Dow Jones Industrial Average (DJIA) on a freefall. On the back of the sharp equity market fall, Fed officials hinted to the market that the Central Bank could inject more funds into the banking system before the end of the year. However the statement by Fed Chairman Bernanke, that followed the interest rate announcement, left the impression that the Fed's policy makers were done with their rate cuts. Although the Fed rate cut caused the greenback to falter slightly it did manage to recoup most of the losses it suffered in the dollar sell-off leading up to the interest rate announcement. The Fed also shyed away from hinting further rate cuts, so this was taken as a positive signal by investors as it seems that the Fed now believes that it has done enough for the economy to now repair itself and we could see the greenback begin a steady recovery. However in order for the greenback to leap onto a sustained bullish path, it will need a string of strong data to indicate to the market that U.S growth and inflation are heading in the right direction. Looking ahead to today, the only news expected from the U.S will be the Trade Balance and the Import Price Index figures. The Trade Balance is expected to release lower than last month's figure of -56.5B, at -57.3B. However we could see this figure surprise on the upside, as the recently weak dollar should have boosted exports thereby reducing the current trade deficit.

EUR

EUR The EUR did strengthen temporarily against the greenback on the back of the Fed rate cut, however as the market settled the EUR lost a large portion of its earlier gains. There was negative news for the EUR as the German ZEW Economic Sentiment, which measures institutional investor sentiment, released well below the expected figure of -34.5, at -37.2. The EUR slipped 0.4% yesterday against the greenback, touching the 1.4655 level. The EUR slip can mainly be attributed to the Fed's modest discount rate cut, as many analysts were expecting at least a 0.5% rate cut. Also the EUR fell sharply against the JPY on the back of the collapse of the equity markets yesterday which caused carry trades to unwind. The EUR lost 1.3% against the JPY and it slipped to the 162.15 level. We could see the Eurozone sentiment begin to change to a more bearish outlook, even though the ECB predicts steady growth, as liquidity is still a major headache for the European economy and as long as it persists it will be forced to keep interests rates on hold. Looking ahead to today we are expecting the Eurozone Industrial Production and Employment Change figures. These figures are not expected to be market moving and we should see the EUR consolidate today after yesterday's losses.

JPY

The JPY came out firing on the back of yesterday's U.S Interest Rate announcement which caused carry trades to collapse, thereby driving a carry trade unwind. The JPY gained all across the board, particularly against the high-yielders, which is a reflection of increased risk-aversion by investors as a result of a falling stock market. The JPY surged to the 110.92 level against the greenback and to the 2.0340 mark versus the Sterling, gaining 0.6% on the day against both the currencies. Earlier today during the Asian trading session the Japanese CGPI figure, which measures the rate of inflation experienced by corporations when purchasing goods, released better-than-expected at 2.3%. There was more positive news for the JPY as the Current Account also released better-than-expected at 2.56T. However these figures had little effect on the JPY movement, which is likely to remain in strong correlation with the performance of equity markets, particularly with U.S stocks and the Nikkei.


Technical News

EUR/USD

A widening bearish channel and a bearish head & shoulders structure are establishing on the 4 Hour chart both indicates on an upcoming bearish trend, however only if the current trend won't be able to break the1.4715 resistance level. Today, going short with the trend seems to be preferable.

GBP/USD

The cable is going through a strong downtrend, and we can see new momentum on the hourly charts growing stronger. The daily chart indicates that the next target price might be around 2.0320.

USD/JPY

A bullish channel is establishing on the 4 Hour chart, the Slow Stochastic crossed at 26, Momentum and RSI both having a positive slope which implying that much more room is left for the current bullish trend. Today, going long with the trend seems to be the preferable strategy.

USD/CHF

In the past few days the pair is going through a choppy session, and is giving mixed signals on the hourly level. The daily chart is showing bullish formation, and it looks as if the pair is heading toward 1.1350 again. A preferable strategy might be going long for the short run.


The Wild Card

Gold

A bullish channel is forming on the 4 Hour chart supported by the Slow Stochastic which having a positive slope. An ascending triangle is establishing on the 15 Min chart, indicates on 803.92 as a possible entry point for long position which forex traders may take advantage of.

 

[forexyard]

13/12/'07 - US Retail Sales And PPI On Tap

Economic News

USD

The USD fell vs. the EUR on Wednesday after the previous day's 0.25 point rate cut from the Federal Reserve disappointed investors hoping for more aggressive action to help the economy and credit markets. It actually looks as if the Fed delivered the bare minimum of what was possible. Some investors expected a larger reduction of a 0.5 point to stave off a recession. The Fed's board also reduced the discount rate, covering direct loans to banks, by 0.25 point to 4.5%, half of what many economists predicted. In addition, a joint decision by the U.S. Federal Reserve and other major central banks to increase liquidity available to private institutions also helped to ease fears over the current credit market crisis. The Federal Reserve plans to reduce the "elevated" short-term funding pressures by injecting cash to banks through auctions and providing $24 billion in currency swaps.

This negative USD momentum was further exacerbated yesterday by the weaker than expected U.S. trade balance with the final figure of -57.8B.

Today's the US calendar is expected to be more supportive of the USD. The most significant news coming out of the US will be the Retail Sales and the PPI. Both of these indicators are expected to fair better than in the previous month figures.

EUR

The EUR made strong gains against some of the majors yesterday, particularly against the USD and the JPY. The EUR gained against the JPY as there was a resurgence of risk-appetite among investors thereby bringing the carry trade strategy back into action. The EUR rose from 1.4639 to 1.4748 against the greenback during the European trading session. This sharp rise against the USD was mainly driven by the negative sentiment surrounding the greenback in the aftermath of the disappointing 0.25% rate cut by the Fed. Many investors felt that a 0.5% discount rate cut, which is the rate that banks pay to borrow directly from the Fed, would have been more adequate in terms of alleviating the credit crisis. Therefore the EUR gained strongly yesterday as the dollar sell-off continued.

The main news yesterday was the Fed's decision to make up to 24 Billion dollars available to the ECB in order to increase the supply of dollars in the Eurozone and help alleviate the current credit squeeze. Analysts still view the European economy as being robust, but the ECB has been struggling to balance inflation versus growth, nevertheless yesterday's decided cash injection was seen as a positive sign for the Eurozone as it will provide credit relief . This will also set up a potential interest rate hike for the ECB, whose hands have been tied with regards to raising the interest rate at its last meeting because a rate hike would have caused further credit problems. There was more positive news for the Eurozone yesterday as Industrial Production released better-than-expected at 0.4%, thereby indicating an increase in the total value of output produced by factories, mines, and utilities.

Looking ahead to today, there is a string of news events to be released from the Eurozone and they are not expected to be market moving, however they will provide investors with another piece in the complex puzzle that is the state of the European economy. The greater outlook for the EUR remains bullish and yesterday's strong momentum could push the EUR up further today but traders should be cautious of an intraday correction as the EUR has lost some steam since its peak yesterday.

JPY

Amidst the release of the US Interest Statement yesterday, the Yen rose from a one-month low against the greenback. Speculation by investors was that growing losses in the credit market would trigger investors to shy away from high-yielding assets funded by Japanese loans.

The JPY posted a strong Wednesday as it gained versus 15 of the 16 most-actively traded currencies on the market, as the BoJ announced its attention to sufficiently fund its currency until years end, as its own exporters once again began to settle payments by way of the JPY.

As the JPY started yesterday's trading day it was slowly weakening its position against its major counterparts until just around 14:00 GMT shortly after the US Trade Balance was released to relatively expected results, when it saw a significant drop. EURJPY quickly went from 164.00 to just over 165, GBPJPY climbed from 228.30 to 230.25. Finally, the USDJPY jumped from 111.44 to hit a one month low of 112.47. The JPY than turned around and posted steady gains for the rest of the trading day, recovering from what at the time was unexpected price change.

On tap today in the Japanese economic calendar is the release or the Tankan Large Manufacturers and Non-Manufacturers Indices. The figure is expected to show that business confidence regarding profit and credit is dwindling. Indices are expected to be released at 23:50 GMT.


Technical News

EUR/USD

After a very choppy trading day yesterday, the pair now consolidates around 1.4710 as the volatility goes down. The daily chart is bullish as the RSI is floating at the 60 level, which indicates that the momentum is still up. The hourlies are showing mixed signals with a slight bullish tendency. Traders should wait for a clear signal on the hourly level before entering the market today.

GBP/USD

The cable spiked to 2.0570 on yesterday's peak point, and has been correcting to 2.0425 since. The momentum appears to be bearish on the hourlies and mildly bullish on the daily chart. It looks as if the next target price on the short run should be around 2.0400.

USD/JPY

The bearish channel on the daily chart has been breached yesterday, and the direction appears to be up. Next target will be 112.00 and if breached will validate the final stage of the bullish move that might take it to the 113.00 levels. Going long appears to be preferable today.

USD/CHF

The correction move that was initiated at 1.0900 continues with full momentum, as the daily chart is showing that there is still much more room to run. The bullish notion is supported by the 4 hour chart which shows the RSI at the 50 level and ads to the ongoing bullish move. Next target price might be around 1.1400.


The Wild Card

Crude Oil

The bullish move has returned with full power, as Crude Oil now consolidates around 94.00. All oscillators are in a bullish formation, and forex traders now have a great opportunity to re-enter the very expected move up again to the 99.00-100$ a barrel. Being on the buy side appears to be very lucrative in the near future.

 

[forexyard]

17/12/'07 - Greenback Appreciates Ahead of Christmas.

Economic News

USD

Last week's trading session ended on a tremendous high note for the greenback as it steadily gained against 14 of the 16 major currency pairs. As economic data continued to surprise forecasters, the dollar gained on its major counterparts, going so far as to post record gains, not seen since late 2004 against the EUR. When trading came to a close on Friday, the dollar found itself under the 1.45 support level, a level most thought was far from being reached.

The unexpected positive results originated from a host of US economic data begining early last week, ahead of the Tuesday December 11th interest rate cuts by the Federal Reserve. Most were convinced that the rate cuts would be the driving force in amending dollar positions, instead the change began on Thursday December 13th, as a wide range of Retail and PPI numbers were released far and above the anticipated marks. The dollar then began its move, gaining on the GBP, CHF, JPY and EUR especially, posting its biggest single day rally since spring 2005. Inflationary concerns also spurred on the bullish dollar behavior.

There were several moves within the private sector that allowed for a boost in the greenback as Lufthansa, the German airline giant bought a significant stake of US budget airline JetBlue. Friday, than followed with surprisingly positive Consumer Price Indices and Industrial numbers, allowing the dollar to post its record gains. As consumer purchasing power is high now during the holiday season, and continues to contribute to sales within US businesses, many awaited a possible correction of prices upon return to the new week of trading. However, Sunday night saw the dollar correcting below the 1.44 level to return to trading at 143.89, extending the growing possibility that a correction might be further off than expected.

This week's economic calendar is rich with US news, which has suddenly become even more intriguing. Housing Starts, GDP figures, Unemployment Claims and Personal Spending figures are to be released. Today, we will see the early afternoon (GMT) publication of TIC Net Long-Term Transactions and the Empire State Business Conditions Index. It will be wise to watch if and when the greenback reverts back to its latest spell of mediocrity.

EUR

The Euro found itself in a precarious position at week's end, as the dollar achieved significant growth, shattering the 1.45 support level. Euro-zone data regarding consumer prices and growth came back higher than initially expected and still was not able to combat the dollar's ttireless push toward record high rallies. The big difference between the two currencies is the importance which the ECB gives to certain economic figures that are considered the less significant in the Federal Reserve's mind. The attention paid toward headline prices versus that of core prices is what has made the ECB stand out in past months

Economic figures have all been on target, and generally positive from the Euro-zone, which leads some to believe that most of the movement will once again fall on the greenback and its surrounding data.

The German IFO report, Euro-zone PMI, Trade Balance and Production Prices are the key economic events on this week's calendar. Still though, how much will these reports affect the outlook of the Euro currency pairs, especially versus the greenback? As we saw towards the end of last week, the hawkish economic mentality regarding the 13-nation currency has prevented it from reflecting any of its inspiring economic data. Expectations are that all the aforementioned data will return positively, and still skepticism regarding dollar strength can be felt.


JPY

Japanese stocks fell for the fourth straight session on Monday, tracing falls on Wall Street after fresh data pointed to a surge in U.S. inflation, on concern accelerating inflation in the U.S. and Europe will curb spending and limit further interest-rate cuts. Against the JPY, the USD rose 1.1%to 113.46, after rising to a five-week peak at 113.59. Also yesterday, Japan's tertiary index, which measures spending in the services sector, rose 1.1% in October from the previous month as the cold weather buoyed spending on winter clothing, according to a Ministry of Economy report.

In the week ahead, the Japanese economic calendar is ostensibly busy, while the markets have shown few noteworthy reactions to the JPY economic data. A December 20th Bank of Japan interest rate announcement could prove to be the exception to the rule. The bank is very widely expected to leave rates unchanged at 0.50%, but any noteworthy shift in rhetoric could potentially spark JPY volatility.


Technical News

EUR/USD

The pair is deep in the bearish trend that was initiated at the end of November, and shows no sign of a cool down. The momentum in the 4 hour chart is strong, and the slow stochastic is pointing at another bearish burst quite soon. 1.4350 appears to be next target price.

GBP/USD

The cable is heading back to the 2.0000 level with full energy, creating a very impressive channel on the daily chart. The next significant key level will be 2.1000, as a break through that level will validate the next move that will probably end the 2 USD per Pound, at least for the short run.

USD/JPY

After the bearish channel on the daily chart was breached, it unleashed a strong bullish move, as the pair now floats around 113.00. Range trading within the new bullish channel is expected to dominate, and a breach through 114.05 will validate a stronger bullish move.

USD/CHF

The pair is still in the bullish trend which started at 1.0900, and appears to be heading to the 1.1700 level at full throttle. All daily oscillators are pointing north, and are support by very bullish hourly studies. A breach through 1.1505 will validate the move to 1.1700.


The Wild Card

Gold

There is a very distinct bullish flag pattern on the daily chart, as Gold now floats around 793.00 which is the bottom barrier of the flag. If a breach will not occur at this level, it will strengthen the notion that the flag is indeed valid, which will create a great opportunity for Forex traders to enjoy the break of the bullish move.

 

[forexyard]

18/12/'07 - US Housing Data On Tap.

Economic News

USD

The greenback continued Friday's robust bullish run yesterday and it strengthened all across the board. The main driver of the bullish greenback has been the recent speculation that U.S inflation figures will be on the rise and may cause the Fed to be more dovish with regards to cutting interest rates at its next meeting. On Friday, both the headline and core CPI figures released significantly higher than last month and well above expectations. Therefore this upside inflationary surprise has got many investors believing that the Fed's interest rate cuts have taken there toll on the market and that now inflation will begin to spike. The dollar has been booming on the back of these inflationary expectations, as now many analysts believe that the Fed may keep its key benchmark rate unchanged at its next meeting. Although the greenback's yield advantage has suffered this year with the string of successive interest rate cuts by the Fed, it seems that going into the New Year the dollar could be in a strong position as the global growth concerns may prompt other major central Banks to cut rates or to at least leave them unchanged.

The greenback was given another boost yesterday by more favorable data as the TIC report, which measures the monthly difference in cross-border foreign and domestic purchases of long-term securities, released at 114.0B which was significantly more than the forecasted figure of 49.0B. This upside surprise elevated the greenback as it gave investors a good indication that there is rising foreign demand for the dollar. In other U.S news, the Current Account also released at a beating expectations figure of -179B which can mainly be attributed to the recent weakness of the greenback that has caused exports to increase significantly. Another dominant reason for the strong greenback yesterday can be attributed to the squaring off of year-end transactions, which is now driving dollar buying.

Looking ahead to today, we are expecting the U.S Housing Starts and Building Permits figures. These figures are expected to release lower than last month and they will be closely watched by investors for an indication as to how much the Fed rate cut has assisted the struggling housing sector. In recent months the housing figures have been on a downward trend and many analysts believe that it could still take a few months before the impact of the Fed rate cut is fully felt by the housing sector. Therefore the greenback may correct from its bullish path today if the housing figures disappoint. Nevertheless there are positive signs beginning to appear for the greenback, and today's housing figures followed by Thursday's GDP figures will paint a clearer picture of the state of the U.S economy.

EUR

The EUR lost ground today against some of the majors, particularly against the greenback as investors paired off year-end transactions. The EUR also weakened noticeably against the JPY as the recent widespread carry trade unwind was once again favoured by traders. However it was not all gloom for the EUR because as a result of this heightened risk-aversion among investors the EUR strengthened against the high yielders. The EUR reached a low of 1.4330 against the greenback yesterday and will be in the interest of the ECB to let the 16-nation currency continue its long overdue downward correction. The main reason for this is because a very strong EUR could have long term implications on exports which will in turn affect manufacturing and growth. However the EUR should not be discounted so soon as there is a good possibly that we could see it once again trading at its all time high levels if the ECB decides to raise the interest rates at its next meeting. Nevertheless ECB President Trichet's hands remain tied as long as inflation risks are still on the upside. The only news that came out of the Eurozone today was the Manufacturing and Services PMI figures, which disappointed slightly. These figures were not expected to cause market movement, but they provided another indication to investors that they may be some slight cracks in the Eurozone economy.

Looking ahead to today, the only Eurozone news will be the Trade Balance which is expected to release lower than last month's figure of 3.9B, at 3.1B. This once again can be attributed to the sharp rise of the EUR over the last few weeks, as it has dampened European exports. We may see the EUR consolidate today after the last two day's sharp losses, as news from the U.S is expected to be negative.

JPY

The JPY strengthened all across the board yesterday, particularly versus the high yielders as carry trades once again began to unwind. The JPY recovered some of its recent losses against the greenback yesterday as risk-aversion was once again the preferred strategy by investors. The JPY rose to 113.20, on the back of weaker U.S equities coupled with rising inflation and dropping holiday retail sales speculation. The Bank of Japan will probably refrain from raising interest rates on Thursday after a drop in business confidence signaled that companies are bracing themselves for slower economic growth. The interest rate is expected to remain at 0.5%, which is the lowest among the major currencies making it a key player in the carry trade strategy. The direction of the JPY will heavily depend whether risk-appetite will return to the market, in the meanwhile it seems that carry trades may continue to unwind so the JPY could pullback some more of its recently lost ground.


Technical News

EUR/USD

The corrective move continues at full steam, and the pair appears to be heading to 1.4350 and will probably look for support there. The hourly studies are still bearish, as the dailies are slowly shaping into neutral form. A break through the 1.4350 will validate a bigger bearish move to the 1.4270.

GBP/USD

The cable continues to have quite choppy trading sessions with the pair's direction downward. The volatility range is around 40 pips in width and the movement is revolved around 2.0200. Both hourlies and dailies are floating in neutral territory, which means that traders must look for entry points on the 15 minute chart and try to take short term positions.

USD/JPY

The pair has been on a steady robust uptrend over the last 2 weeks and the bullish rampage is refusing to let up. Bollinger bands have widened indicating increased volatility. Therefore traders can expect today movement to be sharp. It appears that the USD/JPY is heading towards 114.00.

USD/CHF

There is a steady upward channel appearing on the daily chart. The pair will once again target the 1.1600 level and if breached we could see another sharp move north. The hourly charts are also bullish, with a local resistance at the 1.1550 level that if breached will carry the pair into the 1.1620 on that move's momentum.


The Wild Card

Gold

There is a very impressive flag on the daily chart, as the final triangle is now forming. Gold is floating at the bottom of the flag indicating that the bullish break is imminent. This is a great entry point for forex traders, who wish to use a very strong and classic technical pattern that might produce high profit potential.

 

[forexyard]

20/12/'07 - US GDP & Unemployment Claims - On Tap.

Economic News

USD

As 2007 draws to a close, the USD is making a nice comeback. Yesterday the greenback continued to gain ground against most of the majors. Even though the Fed estimates that the economic growth will be weak into next year, the USD was bought anyway as risk aversion continues to seep through the market.

The U.S. currency appreciated against the EUR and surged to a 3 month peak against the GBP amid signs that the financial market turmoil was starting to threaten economic growth beyond U.S. borders. In mid-afternoon trading, the USD was 0.3% higher at $1.4365. Analysts say that the greenback continues to draw strength from last week's unexpectedly strong U.S. Retail Sales and inflation data that was seen limiting the need for the Federal Reserve to cut interest rates further next year.

Meanwhile, the U.S. Financial markets are continuing to be a significant source of uncertainty. The Federal Reserve warns that the overall economic growth will be slowed down into next year as the housing market is set to keep contracting. Home construction and sales are also unlikely to bottom out before the middle of the next year and it is most likely that housing will continue to be a drag on growth well into 2008.

Looking ahead to today's' fundamental offerings, there are far more scheduled indicators in the lineup. The final readings on the 3rd quarter GDP could see small modifications as the GDP numbers are final figures with no further revisions expected. Therefore the figure will probably not move the market. GDP annualized is expected to hold unchanged at its 4 year high. Later, the Philadelphia Fed's factory activity survey is expected to slip slightly. Trading volumes are foreseen to be typically light ahead of year-end.

EUR

The EUR was down yesterday after an index of German business sentiment came in close to a one-year low, prompting investors to increase year-end dollar buying. The EUR last traded 0.4% down at $1.4345 after earlier dipping to a session low of $1.4327 in overnight trade.

The weak Business Confidence reading in Germany highlighted the difficult situation which the ECB is going to face in the medium term: a slowing Euro zone economy and rising price pressures, suggesting that the ECB may have a tough time raising rates any time soon.

Today will be light on market moving news from the Euro-zone. The British Current Account is on tap today along with the GDP. The GDP figure is expected to stay unchanged while the Current Account might drop to its half a year low.

JPY

Investors refrained from aggressive trade ahead of the Bank of Japan's monetary policy meeting. The USD was nearly unchanged at 113.43 Yen after earlier dipping to a session low of 112.75 Yen on a brief re-emergence of risk aversion.

Today, the Bank of Japan will be announcing their interest rate decision. The market largely expects that the BoJ will forego hiking interest rates at its policy meeting as it needs more time to assess the impact of the credit crisis. Moreover, with recent economic data still reflecting a weak economy, the Bank of Japan does not have any room to raise rates especially at a time when central banks around the world are pumping liquidity into the financial system.

At its last meeting in November, the policy board left Japan's key interest rate on hold for the 11th straight time, with only one board member proposing a rate hike to 0.75%. Analysts estimate that given the uncertainty inside and outside Japan, the BoJ will not be able to hike interest rates anytime before the end of the current fiscal year in March 2008.


Technical News

EUR/USD

A falling wedge structure is forming on the 4 hour chart which might take the pair to test the bottom barrier which is located at 1.4330. However, there is an upcoming reversal expected as indicated by the daily RSI and therefore going long from 1.4330 seems to be a preferable today.

GBP/USD

A bearish channel structure is establishing on the daily chart as the cable is expected to test the lower end today and in case of a breakout the next target price is located at 1.9890. All oscillators support the bearish notion on all time scales, especially on the hourlies.

USD/JPY

The pair is still in the midst of a very strong bullish move that was initiated at the end of November. The daily chart is showing a certain slowdown in the trend's momentum, indicating that the move might come to a halt soon. That notion is supported by a bearish cross in the 4 hour slow stochastic. Waiting for a clearer signal might be a smart move today.

USD/CHF

The pair's massive correction move shows no signs of a stop. The daily chart is still quite bullish and the 4 hour chart is showing that there is much more room to run, making 1.1700 a very solid target price for this trading week. Going long appears to be preferable.


The Wild Card

Silver

There is a very distinct bullish flag on the daily chart, and Gold is floating around the upper level of it. This could be a great opportunity for forex traders to catch a very strong possible trend in case of a violent breach beyond the 800 level. If a break will occur Gold might get to 825 levels quite quickly.

 

[azrie77]

thanks

 

[forexyard]

You're welcome

 

[forexyard]

24/12/'07 - Will The Greenback Have A Happy New Year?

24/12/'07 - Will The Greenback Have A Happy New Year?

Economic News

USD

Yesterday the US dollar continued its bullish movement against most of the major currencies. The dollar strengthened mainly against the EUR and the GBP especially after the ECB reported that inflation risks remain on the upside. While the British are experiencing a drop in inflation after their recent rate cut as indicated by yesterday's lower CPI figures, which could now also be a concern. The EUR was traded on $1.4360 against the US dollar during the early trading hours in Europe, down from $1.4390 in New York late Wednesday, and has reached 1.4313 during noon hours in Europe. The greenback strengthened extremely into the London open with the Cable losing another 100 pips as the pair reached a low of 1.9877. The Sterling sided below 2.0000 per US dollar for the first time since September, decreasing to $1.9869 from $2.0133. The Sterling fell after a government report showed the current account-deficit widened to a record 20 billion Sterling, or 5.7% of GDP in the third quarter. As it stands at the moment, the Bank of England is on the way to another rate cut in January. However as the CPI figures indicated yesterday, falling inflation will be problematic and could halt any further rate from BoE.

The US dollar has rebounded from a record low of $1.4967 per euro last month, paring its yearly drop to 8.5 percent. The dollar has advanced against all of the 16 most actively traded currencies this month, reversing its earlier negative sentiment. U.S. growth slowed this quarter to a 1% annual rate from a 4.9% rate in July to September. Fed bureaucrats forecasted already last month that the growth would slow down to as little as 1.8% by the end of next year. The Labor Department report showed that more people signed up for unemployment benefits last week, suggesting that the job market is softening. Meanwhile, this week the and Federal Reserve Bank of Richmond President Jeffrey Lacker said that the U.S. economy will be very weak in 2008 mainly regarding the housing market contracts. The Fed still makes a massive effort to moderate the economy from the worst housing recession in 16 years, cutting its key interest rate 1% in the last three months to 4.25%, the most significant since the last recession in 2001. However the string of Fed rate cuts this year has provided the housing and credit markets this year with some reprieve. So although U.S growth is expected to slowdown, we may still see underlying strength in the U.S economy which should create positive sentiment for the greenback in the New Year. Many analysts believe that we may see the greenback rebound to the 1.3500 in the next few months.

EUR

Europe's 13-nation currency has dropped by 1.8% versus the US dollar as business confidence in Germany, Europe's principal economy, fell to the lowest in approximately two years in December and did not appear to benefit from an unexpected rise on Thursday. Any economic slowdown would increase the European Central Bank's justifiability to raise interest rates from their current rate of 4 percent. The EUR may weaken to a two-month low of $1.4160 against the dollar should it stay below so-called support at about $1.44, according to Bank of Tokyo-Mitsubishi UFJ Ltd. The ECB is expected to hold rates steady at 4 percent that has been a sharp contrast to that of the U.S. Federal Reserve, which has already cut rates twice to 4.25 percent to try to constrict an economic slowdown from the subprime crisis. Elsewhere the Cable fell to fresh three-month lows versus the US dollar as the fallout from Wednesday's dovish Bank of England minutes continued. The minutes showed the nine-member Monetary Policy Committee voted collectively to cut key interest rates by a quarter point to 5.50%. The news caused the Cable to fall below the key psychological 2.0000 per US dollar level, which marks transfer in sentiment. The cable has hit a fresh three-month low of 1.9878 versus the US dollar. Today the UK Retail Sales are expected to register another uninspiring reading but the report has actually surprised to the positive aspect in the last 3 out of 4 months. So we could see the Sterling consolidate today after its recent pitfalls.

JPY

Yesterday the Japanese central bank kept the key interest rate at 0.5 percent, and as stands, the BOJ will probably remain quit passive through the first quarter of 2008.The decision to keep the interest rate fixed was commonly expected by the policy board as the effects of the U.S. subprime mortgage crisis keep on resounding in the global markets and darken the outlook for Japan's economy. Many investors believe that the central bank will not increase key interest rates until the middle of next year. Nevertheless the JPY remained high after the Bank of Japan Governor Toshihiko Fukui said the central bank will raise rates slowly but surely as the U.S. economy slows. Data on Thursday showed Japan's exports are still growing in November from a year earlier but economists said they may be losing momentum, probably due to the credit crunch. Wages have barely risen this year despite strong corporate earnings and tight labor markets. In addition, yesterday the JPY rose against the EUR and the US dollar on speculation that the widening credit-market losses and slow economic growth will carry away demand for higher-yielding assets. Yesterday the JPY press forward against all its 16 most activated currencies as investors reduced carry trades. The yen rose to 162.18 against the EUR from 163.13 yesterday, and climbed to 113.19 against the US dollar from 113.43. The JPY rose to 97.23 against Australia's dollar, from 97.43 yesterday, and got stronger to 85.46 against the NZD from 85.69. It seems that JPY will maintain its bullish momentum today as carry trades continue to unwind.


Technical News

EUR/USD

The Pair was range trading yesterday between a support level of 1.4310 and a resistance level of 1.4380. Should the pair trade today above the pivot level of 1.4400, then we may see a slight correction before another break downwards. Therefore traders should wait for this pair to rise some more before entering an early short.

GBP/USD

The 4 hour chart indicates a continued bearish trend as the long term Moving Average (Weighted 21) crossed by a bearish bar. Additionally the ADX (Average Directional Movement) also strengthens our opinion while the DI- is on its way to crossing the DI+ from above which is considered a bearish signal. However this pair currently seems to have bottomed out, so there should be a rise before the cable breaks down again.

USD/JPY

This pair now seems to be leveling out after a steady uptrend. It is in the middle of a flat channel, so if there is a breach of the key 112.80 support level then we could see another sharp move downward. On the other hand, a breach above the 113.50 could indicate another bullish trend. Traders should be cautious and await further movement for a clearer signal.

USD/CHF

This pair is in the midst of a very strong uptrend which is slowly appearing to be leveling out. The hourly charts are showing that a certain correction is imminent, while the daily charts are showing an intensive bullish sentiment. It looks as if this pair could drop below the 1.1500 before we see another sharp bullish move.


The Wild Card

Gold

This commodity is giving a strong bullish signal on the 4 H and daily chart. The positively sloped RSI and momentum support this bullish notion. The Stochastic Slow is also giving a strong signal that this pair's next move will be bullish. Therefore this gives Forex traders the perfect opportunity to catch an early uptrend.

 

[forexyard]

Holiday & New Year Analysis notice

Holiday & New Year Analysis notice

Please note that due to holidays and the New Year period, the FOREXYARD analysis will not be posted on a daily basis. Regular posting will resume during the first week of January.

In the meantime, please click here to visit the FOREXYARD on-site analysis page.

Wishing you a happy New Year!

Regards,
FOREXYARD

 

[shadowninja]

Merry Christmas and Happy New Year to you, too. Your analyses have been interesting over the last year.

 

[forexyard]

Your most welcome Ninja...

 

[forexyard]

07/01/'08 - Is the US Heading for a Recession?

Economic News

USD

As we begin the second week of the New Year, the greenback will look to curb what has continued to be a weakening position against most of its major counterparts. Amidst a host of negative economic figures over the last few weeks, there is growing speculation that last years Federal interest rate cuts are sure to see the light of day once again. As the Federal Reserve managed to avoid recession upon the completion of 2007, the economic forecast in the US stays relatively grim. Friday saw the release of a set of important economic indicators from the US, most of which came back lower than initially weak expectations. This was highlighted by Non-Farm Payrolls dropping to 18K, far off the expected rate of 70K, which was already in itself, highly disappointing.

Political turmoil throughout the global village has not helped either. The political unrest following Pakistan directly affected the dollar and continues to do so, along with the escalating situation in Kenya. The greenback continues to drop against its most staunch rival, the Euro, as it broke the 1.47 barrier and continues to make its way toward 1.50. As problems within the various American stock exchanges continue, other more volatile currency pairs are also seeing gains against the greenback. The Dow recorded its worst week of trading in nearly 100 years, as it was continually hit with bad economic data. The unemployment rate also took saw a slight bump hitting 5.0%, up from its previous figure of 4.7%.

As we look ahead toward Presidential primaries, the US economy and in turn the dollar, will be the focus of tremendous scrutiny if it cannot recover from the failing credit and housing markets. A Thursday speech by Fed Chair Bernanke will precede Friday's release of the US Trade Balance, as we should have some indication by then about the timetable being used by the Fed regarding interest rate cuts. Tomorrow we will expect to see negative Pending Home Sales numbers as we enter Monday with no important economic events on tap.

EUR

The Euro continues to benefit from the faulty condition of the dollar. Besides the overwhelming strength and confidence being shown by the currency, the European economic forecast continues to release positive data. The hike in US unemployment was met by lows in German unemployment, and the same can be said for a host of economic data; Bad in the US, Good in Europe.

Investors look keen to keep up with the same trends as the 13 nation currency has shown only brief spells of weakness while we ease are way into '08. As the two major currencies continue to move in different directions, look for the European Central Bank to remain hawkish in dealing with it economic policy regarding currencies and interest rates.

With the deterioration of the Dow in recent weeks the European currency could thrive no matter what data is released from the region. Up against a significant share of its currency counterparts the EUR looks to perform very well in January.

As we creep toward the 1.50 EUR/USD rate, look for the 13-Nation currency to dominate, much the same as it has been doing in recent history.
Today, we will see unemployment rates, monthly PPI and Consumer Confidence figures from the EU, none of which should have any real bearing on the days trading.

JPY

The JPY finished off trading last week, lower than it started as investors looked across the water to Europe and the US to find more attractive returns on their money.

As the Japanese begin 2008, there looks to be no change in site for the interest rate and that could affect the volume of JPY being bought or held in the market. As trading closed out last week, the JPY found itself at just above 160.00 against the EUR and creeping back toward 109.00 against the dollar. Mutual funds have moved out of Japan toward foreign markets as the year begins, and we should continue to see the same, if no clear cut changes are made.

The Japanese are absent from any significant calendar events this week, as its main focus will be on behavior within the global stock exchanges and if investors will continue to trade with more high-yielding assets. It appears that most of the price moving will come from Europe and the US that also have a light calendar but have two rate statement and trade balance which might inject high price action that effect the JPY movement against the majors.


Technical News

EUR/USD

There is a tight opening channel forming on the 4 hour chart as the pair floats on the bottom barrier. Oscillators show that the momentum is bearish and a breach through 1.4700 will validate a bigger bearish move into the 1.4600 levels again.

GBP/USD

The cable is in the middle of a very intensive downtrend that started in the beginning of November and shows great momentum that on a bigger scale appears to have more room to run. In the shorter time frame a bullish cross on the 4 hour indicates that there might be a small correction before the bearish move resumes. Selling on highs appears to be preferable today.

USD/JPY

After failing to breach through the 107.00 barrier in November, the pair seems to be heading that way again, and has established that level as a very strong key support. The 4 hour indicators show that a test of 107.50 is quite imminent, and that the overall momentum is bearish. If the pair will manage to breach the 107.00 level, a much more intensive bearish move will initiate, and might take the pair to very deep places.

USD/CHF

The pair dipped to the 1.1000 level for a short while, and is now correcting back to the 1.1120 zone. There is an interesting channel on the 4 hour chart that indicates a stronger bullish move if the 1.1150 level will be breached. The daily chart is also a bit bullish, and the correction up appears to continue.


The Wild Card

Crude Oil

The very distinct upwards channel on the 4 hour chart has been breach violently at its bottom barrier. That means that Oil still has at least another 100 pips to cover the channel's height. This is a great opportunity for forex traders to enjoy a strong correction move, before the journey to $100 returns.