Posted by TomShort on November 3, 2009 under daily technical anlysis | 
Kiwi Declines Against USD by GoLearnForex
NZD/USD:
The Kiwi declined the most against the Greenback last week, compared to the rest of the G-10. On October 28th the RBNZ kept rates on hold. More damaging to the Kiwi were the accompanying statements from the RBNZ in which they remarked that rates would likely remain on hold through Q2 of 2010.
Six days prior to that announcement NZD struck near the prior day’s high versus the dollar at .7606. Since that day the Kiwi has been in a tail spin. The Chart below is a daily Candle chart of NZD/USD.
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In the white circled area we have a Candlestick that traders refer to as a Hangman. There is a short candle body with a wick hanging down from it. When this is seen during price appreciation it may signal a possible reversal. The candles following the Hangman are lower and that could be confirmation enough to enter a short NZD position.
This pattern appearing out in front of a rate decision may have been traders signaling caution ahead of the announcement. In the end traders were correct and price has continued to decline. One last item to always keep an eye on are the daily Moving Averages. NZD is approaching a close below its 50 day MA. A close below the 50 day MA should put further pressure on the already battered NZD.
USD/CHF:
We have discussed correlations and their importance. Aside from straight technicals and fundamentals often what drives a currency might be its correlation to another instrument, product and or commodity. The Swiss Franc historically has had a very tight correlation to Gold, as one appreciates so does the other and vice versa.
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The Chart below shows the price movement of GOLD and CHF. During Gold’s most recent depreciation (as depicted between the 2 blue lines), you observe the strong correlative effect one exerts on the other. What should grab our attention as Gold has resumed its strength is that the Franc has not. As a trader you should wonder if Gold is overbought or the CHF oversold? Of course keep in mind it is not a perfect correlation of 1, meaning some variation is normal.
US Markets finish the Day Slightly Ahead by GoLearnForex
In Asia, Equity Markets were down while in London and in the U.S markets finished the day slightly ahead. This is coming on the heels of a horrendous close on Friday in the U.S and CIT’s bankruptcy filing over the weekend. Equity Futures in Asia are pointing to a slightly higher open for Tuesday while London Futures are modestly lower.
The Dollar was slightly off against the G-10 mirroring the DJIA small advance today of 77 points. Oil closed today mostly unchanged while Gold soared again to 1,054. In the U.S the ISM Manufacturing figures printed smartly better than expected coming in at 55.7 versus expectations of 53. In addition, the Pending Home sales figures surprised to the upside at 6.1% against expectations of 0%.
This is a busy week for economic data releases. Due out tomorrow will be the RBA Rate decision. The current rate holds at 3.25% and market consensus is looking a quarter point hike to 3.5%. In the U.S, Factory Order numbers are set to print. A positive show will confirm today’s ISM numbers while a below consensus read will cast doubt on the durability of the ISM figures from today.
Upcoming Forex Events for November 3, 2009
GBP Construction PMI Forecast 47.20 Previous 46.70
USD Factory Orders (MoM) Forecast 1.00% Previous -0.80%
AUD AIG Services Index Previous 49.30
GBP Nationwide Consumer Confidence Forecast 72.00 Previous 71.00
Analysis by http://www.golearnforex.net
Posted by TomShort on November 2, 2009 under daily technical anlysis |
GBP/USD:
The Pound has been range bound for some time. It is trading between 1.6650 and 1.61. Price action above or below those levels has lead to a number of false breakouts. Interestingly enough, if you draw a Fibonacci Retracement from the Pound’s high at 2.1160 in 2007 to the Pound’s low just below 1.35 in 2009, you will notice that the 38.2% Fibonacci level is at 1.6422.
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That level is significant because over the last 6 months we have had more candles extend through this level than above or below it. On the Chart is the 50 day MA in yellow which also had been hovering along the same Fibo line. In October the 50 day MA dipped below the 38.2% Fibo level but price has since recovered in the last week.
Typically price will either trend and break through various Fibonacci levels, or it will range in between 2 Fibonacci levels as it searches for direction. When price hugs a level for a considerable time you expect to see a breakout. We expect to see a shift in this pattern that will cause price to break free of the 38.2% Fibonacci level at 1.6422.
EUR/USD:
The EUR has been holding support at a level equal to its 50 day MA since April 30th. The EUR is now in range to test that level of support. Here is what we are looking for as confirmation of a real move lower.
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We want to see at least a whole candle including its wicks fall between the 50 day and 100 day MA. Additionally, the last lower low we had was at the 1.45 handle. If we break that level we would increase the short position.
If the short entry presents itself we would take PNL at the 1.4225 handle and reevaluate the markets and our positions at that time.
GoLearnForex Fundamental Analysis 2-11-2009
Global Equity Markets were net losers last week. In the U.S the DJIA slid nearly 250 points on Friday. Financials were hit the hardest, lead by concerns over CITI’s balance sheet and CIT’s inability to repay debt and probable bankruptcy filing. An additional behind the scenes market mover was Friday’s fiscal year end for many Mutual Funds.
The Dollar finished the week gaining on 8 of the G-10 currencies with Kiwi the big loser, down 3.96% for the week. Gold finished the week up less than 1% while silver dropped by 4.56%. Oil closed the week at $77 a barrel, roughly $4 off its high.
There are a number of important economic data releases due out this week. 4 major Central Bank will meet this week; the FED, RBA, BOE, and ECB. Only the RBA is expected to raise rates. All eyes will be watching the accompanying statements of Central Bankers. For Monday, ISM Manufacturing numbers in the U.S are set to print. The market is anticipating a slightly higher read for October at 53 versus 52.6 in September.
Upcoming Forex Events for November 2, 2009
CHF SVME PMI Forecast 55.10 Previous 54.30
EUR Manufacturing PMI Forecast 50.70 Previous 50.70
USD ISM Manufacturing Index Forecast 53.00 Previous 52.60
AUD Interest Rate Decision Forecast 3.50% Previous 3.25%
Analysis by http://www.golearnforex.net
Posted by TomShort on October 29, 2009 under daily technical anlysis |
AUD/USD:
The AUD continues its recent retrace. Many traders use different time frames for different currency pairs. The longer the time frame the more valid the pattern you are charting is. Moving Averages are basic tool that even the most sophisticated trader needs to always be cognizant of. The markets tend follow the moving averages generated off of the daily charts.
In Chart below I use a moving average from an 8 hour chart. I strongly encourage traders to be vigilant of at least checking a weekly, daily, 8 and or 4 hour chart and then any time frame less than 4 hours that you may want to look at.
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You can see that the yellow line representing the SMA 50 was breeched and prices continued a steady fall (The Red line is the 100 SMA). There are also a number of near candle formations that support this price depreciation.
Circled in blue is a near Falling Three Candle pattern. Typically you have a red candle followed by 3 or so small green candles that are contained by the original red candle. Following the last green candle is another red candle with price closing below the original red. The Falling Three pattern is nearly followed by Three Black Crows. This candle pattern forms when you have the candles each open in the midsection of the proceeding candle but also close lower than the proceeding candle. This pattern nearly forms between the 2 white lines.
GBP/USD:
This pair has been range bound since May. When a pair trades in a range, price is confined to a narrow margin of highs and lows. In the Chart below the 2 red lines represent the range support and resistance lines.
The 2 red boxes indicate when minor breakouts have occurred. The tops and bottoms of the boxes would be your absolute stops depending on the handle you entered the trade at. Another point of consideration is the 50 SMA and 100 SMA. You can see that the SMA’s are also moving sideways. Price typically pops when it passes above/below a significant SMA. With SMA moving into a sideways march we are approaching congestion on this pair and that should signal another breakout. Obviously if the dollar continues to strengthen as it has GBP should be headed south.
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Analysis by http://www.golearnforex.net
Posted by TomShort on October 28, 2009 under daily technical anlysis |
USD/CAD:
We have noted several times a formation we refer to as a Step pattern. More commonly this is identified by Lower Lows and Lower Highs and vice versa. We picked up on this pattern emerging on a 4 hours chart. We identified the possible start of this pattern shortly after the BOC publicly declared it’s sentiment for a “weak Canadian Dollar”. We assured you that there would still be time to catch this move even if you could not trade the actual news.
We suggested that you wait for the Step to appear and buy on the dip which was a confirmation of our pattern formation. On the graph that it is depicted near the 3 and a yellow circle. The exit for taking PNL we had at 1.0660 a prior support resistance point.
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EUR/USD:
The Squeeze Play. We talked about this move where we are seemingly forced into a breakout. In one of our earlier pieces we mentioned that our experience told us not to bet on the Squeeze Play, meaning trade against the direction of the existing trend. I must admit we got carried away by the hoopla of crossing 1.50.
So the question you all should pose” is why in this case do you bet against the trend when one of the number one rules of technicians is never bet against the trend”. The answer is based on the number two rule of technicians and that is; trade for the outcome that has the highest statistical probability of occurring. To explain this further lets pose a question. Why didn’t the market make this move a while ago similar to the recent strong moves in CHF & AUD?
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The answer is the Strength of the move was deteriorating in advance of 1.50. Every trader had their eye on 1.50, but obviously no one was a real buyer (for now) otherwise at 1.4830 when momentum started to stall we would have had traders continuing to bid up the EUR. Lastly, when price action was negligible on the big cross of 1.50 that should have been another tip that there were no big orders lined up to continue buying north of 1.50.
We added a MACD to indicate when the momentum started to wane. There are number of overbought tools on your platforms that you can use, from Stochastics and Oscillators to something as simple as the RSI.
Analysis by http://www.golearnforex.net
USD Dollar (USD)
The Dollar rose across the board. A rise in risk aversion following an unexpectedly drop in New Home Sales sent stocks lower worldwide. The Dow Jones fell for the 4th consecutive session and ended at 9,763.The Standard & Poor’s 500 Index dropped 2% on concern a rally in equities this year outpaced the prospects for economic growth. New-home sales unexpectedly fell last month to an annual rate of 402K, from a revised 417K pace in August. Crude oil fell from $79 a barrel to $77.20 on stronger Dollar. Gold (XAU) continues to move away from the highs of the year and fell to test levels below $1,030 an ounce. Today, The Gross Domestic Product (GDP) is expected at 3.1% vs. -0.7% previously. The Initial Jobless Claims are expected at 520K vs. 531K previously.
EURO (EUR)
The Euro kept weakening versus the Dollar for the 4th day in a row. The currency slumped against Dollar and Yen, reaching a 2 week low against both safe havens. The German Consumer Price Index (CPI) came out as expected at 0.1%. Overall, EUR/USD traded with a low of 1.4690 and with a high of 1.4840. Today, The German Unemployment Change is expected with 15K vs. -12K previously. The German Unemployment Rate is expected at 8.3% vs. 8.2% previously.
EUR/USD – Last: 1.4700
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Resistance
|
1.48
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1.4842
|
1.489
|
|
Support
|
1.471
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1.4675
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1.465
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British Pound (GBP)
The Pound failed to hold above 1.6400 versus the Dollar finding support only at 1.6360 following economic data in the U.S and Dollar\’s strength. GBP/USD peaked at the highest price for the current week but it was unable to hold versus the strengthening Dollar. Overall, GBP/USD traded with a low of 1.6285 and with a high of 1.6466. Today, Net Lending to individuals is expected unchanged at 0.7B. The Mortgage Approvals also expected unchanged at 52K.
GBP/USD – Last: 1.6368
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Resistance
|
1.651
|
1.6575
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1.6640
|
|
Support
|
1.6355
|
1.6285
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1.6240
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Japanese Yen (JPY)
The Yen rose sharply versus most majors as weak economic data sent world stocks lower fueling risk aversion. The Yen reached the highest in 2 weeks against the Euro amid signs the global economic recovery is losing steam, damping demand for higher-yielding assets. Industrial Production came out 1.4%better than 1.1% expected. Overall, USD/JPY traded with a low of 90.54 and with a high of 91.80. Today, Household Spending is expected lower with 1.2% versus 2.6% and Tokyo Core CPI is expected with -2.0% versus -2.1% prior.
USD/JPY-Last: 90.42
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Resistance
|
91.3
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91.75
|
92.1
|
|
Support
|
90.5
|
90.1
|
89.9
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Canadian dollar (CAD)
Canada’s currency depreciated against its U.S. counterpart to the lowest level in more than three weeks as declines in crude oil, the nation’s largest export, and stocks damped demand for higher-yielding assets. Overall, USDCAD traded with a low of 1.0636 and with a high of 1.0810. Today, The Raw Materials Price Index (RMPI) is expected at 1% vs. 3.7% previously.
CAD/USD – Last: 1.0790
|
Resistance
|
1.08
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1.0855
|
1.0898
|
|
Support
|
1.068
|
1.063
|
1.0587
|
Research by http://www.ufxbank.com
