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Forex Market review – The Dollar Index’s lowest daily close in six weeks

admin — Sun, 27 Jun 2010 10:49:04 +0000

This Friday saw the Dollar Index’s lowest daily close in six weeks. The level of overall forex trading investor sentiment and the strength of the USD’s own fundamental backdrop will influence the Greenbuck, as both of these subjects are facing dramatic changes with a scheduled G20 meeting, deteriorating financial conditions in already unstable economies and the prominent risk of a negative nonfarm payroll reading on Friday.

While risk appetite level, the relative economic health and level of yields behind the greenback are in flux, the currency’s status as a safe haven can easily overwhelm most other concerns that develop along the way.

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GoLearnForex Technical Analysis 2-11-2009

TomShort — Mon, 02 Nov 2009 10:39:20 +0000

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 30^th. 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

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GoLearnForex Daily Technical Analysis

TomShort — Wed, 28 Oct 2009 13:05:22 +0000

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

Resistance	1.48	1.4842	1.489
Support	1.471	1.4675	1.465

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

Resistance	1.651	1.6575	1.6640
Support	1.6355	1.6285	1.6240

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

Resistance	91.3	91.75	92.1
Support	90.5	90.1	89.9

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	1.0855	1.0898
Support	1.068	1.063	1.0587

Research by http://www.ufxbank.com

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