Posted by TomShort on December 16, 2009 under daily forex analysis | 
Review Key Support and Resistance Levels for USD by GoLearn Forex
Key Support & Resistance (S/R) Levels:
As the Greenback continues to rally heading into the end of the year we thought it would be a good time to review a couple key S/R levels. Traders generate S/R based on a number of factors. One key factor is based on the tenor of the chart the trader is using. A trader using a tick or minute chart will be less concerned about S/R generated from a 4 hour chart that is 100+ pips from the current handle. However, that same trader will want to know where the longer term S/R levels sit. If price moves towards those points he can integrate them into his trading strategies thereby profiting and or avoiding losses.
GBP/USD:
The Cable is currently sitting below its 100 day MA which generates an already negative bias. A candle body below 1.6198 would generate the next Short entry point Near term profit taking would be the 200 day MA. If the 200 day MA is breached we would target the low of this range bound period near 1.5683 which also represents the Fibonacci 38.2% Retrace level. The 38.2% Retrace level was generated from the Sterlings turn around in January of this year.
AUD/USD:
The Aussie has shown great resilience and for good reason. The RBA had taken a hawkish stance on rates as it was amongst the first to raise rates. The Australian economy is in relatively good shape. Additionally, the AUD is a commodity currency and it has ridden the commodity rally. Currently the AUD is sitting just below the 50 day MA. A candle body appearing below .8944 equal to the Fibonacci 76.4% Retrace level, which also coincides with recent support levels would trigger a near term Short entry. We would increase the Short position with a close below the 100 day MA, currently holding at .8834. A long signal would be generated with a close well above near term resistance at .9325.
With the EUR taking a sharp nose dive yesterday it prompts us to look at recent relative price levels on the G-7. The EUR/USD is the most commonly traded pair in the world. The price of the EUR has broad implications on the relative value of other G-7 currencies. Although the below data can be shown graphically it is easier to view price differentials in a table. If the EUR is a leading indicator of relative value then the CAD, AUD, and GBP may be in for a minor drop.
Historical
Date EUR CAD AUD NZD JPY GBP
2009-10-02 1.4576 1.0797 0.8652 0.7160 89.8050 1.5946
2009-10-01 1.4545 1.0839 0.8697 0.7149 89.6050 1.5955
2009-09-30 1.4640 1.0695 0.8828 0.7232 89.7050 1.5982
2009-09-29 1.4587 1.0846 0.8703 0.7143 90.0885 1.5961
Current
Date EUR CAD AUD NZD JPY GBP
2009-12-15 1.4533 1.0611 0.9067 0.7224 89.6355 1.6272
US Producer Prices Climb by GoLearn Forex
Global Equity Markets were mixed on Tuesday as Dubai continues to sort out its debt repayment obligations. In the U.S Producer Prices climbed 1.8% which was more than double expectations. This caused stocks to retreat as it may engage the U.S Fed to raise rates out of necessity instead of a planned withdrawal from its current quantitative easing policies. The DJIA slid 49.05 points to close at 10,452. Ahead of the rate decision today traders have consolidated positions as markets may move drastically depending on what language the Fed uses.
There are a number of other economic data releases on the docket for today. Oil traders will be watching Crude Oil Inventory figures. CPI data as well as Housing Starts and Building Permits will also be on the wire today. In the U.K Jobless Claims will print although no major changes are expected. GDP in Australia has already printed slightly below expectations.
The Greenback continued to advance against its G-10 counterparts with the AUD giving up 1.15% for the day. The DXY closed above the 100 day MA to 76.961 helping to legitimizing the recent rally. Gold and Oil were essentially unchanged finishing the U.S session at 1.125.20 and 70.69 respectively.
Upcoming Forex Events for December 16, 2009
EUR CPI (YoY) Forecast 8.00% Previous 7.80%
USD Core CPI (MoM) Forecast 0.20% Previous 0.20%
USD CPI (MoM) Forecast 0.40% Previous 0.30%
USD Interest Rate Decision Forecast 0.25% Previous 0.25%
Posted by TomShort on December 15, 2009 under daily forex analysis |
NZD Beginning to Falter by GoLearn Forex
NZD/USD:
The New Zealand Dollar is starting to falter and like most of its G-10 counterparts it is holding at pivotal levels against the Greenback. One slip either way may send the currency tumbling or ready to resume its advance on the Dollar. We have mentioned the Kiwi in the past as we feel it may yield the biggest percentage loss when the Dollar does finally rally.
In the graph below we see the formation of a downward sloping Triangle beginning to emerge. The Kiwi has been riding the 50 day SMA as support on its path to .7600. You can observe that NZD peaked in late October but after 3 attempts it has failed to break the October high.
Short term support has been holding near .7100 represented by the bottom leg of the triangle. As the hypotenuse converges on near term support the more likely it is that a breakout will occur in the direction of the slope. We have also diagrammed a pattern we use often to identify trend and that is a step pattern whereby there are lower high’s and lower lows (or vice versa as the case maybe). Typically we like to see more obvious lower lows than what the Kiwi has shown us thus far.
The NZD is currently sitting below its 50 day MA, which we mentioned prior, represented support for the NZD’s move over the last 9 months. During the Dollar’s rally last week the Kiwi was able to bounce off of the 100 day MA but was not able to bounce back above the 50 SMA. As price action moves into the wedge of the triangle it may force price below the 100 SMA.
For good measure we added a Fibonacci Retrace starting back in March when the Kiwi dipped below .50 running through its most recent high in October when the NZD struck .7635. This data range produces the 23.6% Fibo Retrace at a handle of .6988. To trigger a strong short signal the Kiwi would need to take out the 100 day MA, near term support (the base leg of the triangle), and the Fibo 23.6% level, as we then target a .6500 handle. In order to resume a Long NZD position at this point the NZD would need to break north of the hypotenuse, the 50 day MA, and near term resistance at .7525.
Abu Dhabi Sending Financial Aid for Dubai World by GoLearn Forex
World Equity Markets gained some ground Monday amid assurances from Abu Dhabi that they would provide $10 billion in immediate financial aid to ensure Dubai World meets its $4.1 billion debt obligation due yesterday. The DJIA closed a shade above 10,500 after picking up 29.55 points.
The Greenback gave up a little ground yesterday as the DXY was down marginally to 75.352. Gold advanced slightly to 1,126.70 as the dollar showed some weakness. Oil was unchanged as it continued to hold below $70 a barrel.
In the U.K CPI data is set to print today. The Euro-zone’s Current Sentiment/Survey will publish today. In the U.S a number of economic releases are slated for today; Crude Oil Inventories, Gasoline Inventories, Total Net TIC Flows, Empire Manufacturing Index, and lastly PPI figures will print. In light of the Dollar’s recent rally expect that traders will be watching these numbers very carefully ahead of tomorrow’s FOMC rate decision.
Upcoming Forex Events for December 15, 2009
EUR German ZEW Economic Sentiment Forecast 50.20 Previous 51.10
CAD Leading Indicators (MoM) Forecast 0.60% Previous 0.70%
USD TIC Net Long-Term Transactions Forecast 43.00B Previous 40.70B
AUD GDP (QoQ) Forecast 0.40% Previous 0.60%
Analysis by http://www.golearnforex.net
Posted by TomShort on December 14, 2009 under daily forex analysis |
Euro – Headed for a Tailspin? By GoLearn Forex
EUR/USD:
The EUR is perilously close to falling into a tailspin. We have been stating for some time that a candle appearing below the 50 day Moving Average (MA) would generate a strong signal for a Short entry. As you can see in the Graph below that signal occurred last week, with the 50 day MA currently holding at 1.4880 while the EUR is trading at 1.46.
The EUR is now on the cusp of an even larger fall. It closed last Friday’s session at the 100 day MA an even more significant breach than the 50 day MA. Perhaps even more troublesome for the EUR is that it is just a hairsbreadth above 61.8% Fibonacci level at a handle of 1.4621.
INSERT CHART EUR
A close below the 61.8% Fibo level coupled with a close below the 100 day MA as they converge may equal real trouble for the EUR. The EUR has not been south of the 100 day MA since April 2009 which coincidently occurred when the 100 day MA and Fibo 23.6% level converged. The EUR proceeded to advance 14.6% from that point. We therefore target the 50% Fibo level with a handle of 1.4184 as the next support level should the EUR breach the 61.8% Fibo level.
USD/CHF:
The CHF is another currency holding at a very pivotal level. With Friday’s session closing just below the 100 day MA the CHF is trying to hold its ground against the Greenback. The Swiss Franc has been one of the benefactors of Gold’s jump in value. However, as the Dollar has rallied and Gold prices have begun to fall so has the CHF.
The Franc closed above its 50 day MA for the first time since August, representing only the 3rd such close since April of 2009. This coincided with it’s last close above the 100 day MA. The Franc has another issue to contend with and that is the 23.6% Fibonacci Retrace level created from the CHF low of 1.20 back in March of 2009.
INSERT CHART CHF
If the CHF closes above the 100 day MA and the 23.6% Fibonacci level at a handle of 1.0402 is breached then we would expect the CHF to test support at the 38.2% Fibo level or 1.0701.
Bona Fide Recovery Seems in Order by GoLearn Forex
Global Equity Markets closed higher as the prospect for a bona fide recovery now seems assured. The Markets were able to shake off credit fears and focus on continued positive economic data coming out of the U.S. On Wall Street the DJIA closed up 65.67 points to 10,471.50 on better than expected Advanced Retail Sales figures.
The Greenback continued it rally as it advanced on positive economic data, breaking the 9 month long “positive equities to poor dollar” correlation, for a second time in 1 week. The DXY touched 76.725 before retreating slightly to close at 76.573. Another positive session for the Greenback and it may take out the 100 day MA.
In the commodity space both Gold and Oil were down. Gold lost 15.60 to close Friday’s session at 1,115.40 while Oil closed just below $70 a barrel for the first time since September 29th. Gold has lost nearly 9.5% since its high on December 3rd and is just a few dollars away from closing below its 50 day Moving Average.
In the Euro-zone for Monday, Employment figures will be published on Tuesday. U.S. PPI numbers will print as well as the Empire Manufacturing data. In Australia, GDP numbers will hit the wire on Wednesday, as will Housing Starts and Building Permits in the U.S. However, investors will be tuned in on Wednesday to the FOMC rate decision. Although no change in rate is expected, traders are hoping for the accompanying statement to shed light on future rate hikes and economic policy as continued positive economic data continues to print.
Upcoming Forex Events for December 14, 2009-12-14
CHF PPI (MoM) Forecast 0.20% Previous -0.40%
EUR Industrial Production (MoM) Forecast -0.50% Previous 0.30%
CAD Capacity Utilization Rate Forecast 67.80% Previous 67.40%
AUD RBA Meeting Minutes
Analysis by http://www.golearnforex.net
