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On Lightened Trade, Currencies Exposed to Intraday Price Swings

thanhlangtu — Thu, 22 Dec 2011 09:23:36 +0000

Although yesterday’s price action in the Euro was quite bearish, with the market unable to hold onto gains towards 1.3200 and sharply reversing course to close lower on the day back in the mid-1.3000’s, we would not give the developments too much consideration in the current market environment. All of the major players have abandoned their desks for the holidays and market volumes have dropped off dramatically. Technically, we still do not rule out the possibility for a Euro rally into year end, with the market well capable of pushing back into the 1.3300’s while still being confined to the underlying bearish trend. But our recommendation is to stay put on the sidelines for now and wait until normal market conditions return in early January.

In the interim, it could be worth keeping an eye on some interesting Euro cross rates which all seem to be overextended and potentially at risk for reversals. EUR/JPY has stalled out yet again by multi-year lows and ahead of key psychological barriers at 100.00, while EUR/AUD trades by +20 year lows and could also be looking to carve some form of a base. Meanwhile, EUR/GBP has been under some intense pressure in recent trade, and threatens a retest of its 2011 lows from early January.

Looking ahead, the Italian austerity package will head to the Senate for final vote, while on the economic calendar, Italian retail sales, and UK current account and GDP highlight the European docket. Things could pick up into the US with the final revisions to US Q3GDP due, along with initial jobless claims, Chicago Fed national activity index, leading indicators, the house price index and Michigan confidence. US equity futures and oil prices trade relatively flat, while gold looks to be rolling back over.

ECONOMIC CALENDAR

TECHNICAL OUTLOOK

EUR/USD: The market has finally taken out the key October lows at 1.3145 to confirm a lower top by 1.3550 and open the next downside extension towards the 2011 lows from January at 1.2870. Daily studies are however looking a little stretched and at this point we could see some corrective action before the market resumes its downward trajectory. Look for any rallies to be well capped in the 1.3300 area from where the next lower top will be sought out.

USD/JPY:The market has managed to successfully hold above the bottom of the daily Ichimoku cloud to further strengthen our constructive outlook and we look for the formation of a inter-day higher low by 76.55 ahead of the next major upside extension back towards and eventually through the recent multi-day highs by 79.55. Ultimately, only a close back below the bottom of the Ichimoku cloud would negate outlook and give reason for pause, while a daily close back above 78.30 accelerates.

GBP/USD: Rallies have been very well capped ahead of 1.5800 and it looks as though a lower top has now been carved out by 1.5780 ahead of the next major downside extension back towards the October lows at 1.5270. Key support comes in by 1.5400 and a daily close below this level will be required to confirm bias and accelerate declines. Ultimately, only back above 1.5780 would negate bearish outlook and give reason for pause.

USD/CHF: The recent break above the critical October highs at 0.9315 is significant and now opens the door for the next major upside extension over the coming weeks back towards parity. A confirmed higher low is now in place by 0.9065 following the recent break over 0.9330, and next key resistance comes in by 0.9785. Ultimately, only back under 0.9065 would delay constructive outlook.

source form: dailyfx

EUR/USD Classical Technical Report 12.22

thanhlangtu — Thu, 22 Dec 2011 09:23:33 +0000

source form: dailyfx

USD/JPY Classical Technical Report 12.22

thanhlangtu — Thu, 22 Dec 2011 09:23:32 +0000

source form: dailyfx

GBP/USD Classical Technical Report 12.22

thanhlangtu — Thu, 22 Dec 2011 09:23:32 +0000

GBP/USD:Rallies have been very well capped ahead of 1.5800 and it looks as though a lower top has now been carved out by 1.5780 ahead of the next major downside extension back towards the October lows at 1.5270. Key support comes in by 1.5400 and a daily close below this level will be required to confirm bias and accelerate declines. Ultimately, only back above 1.5780 would negate bearish outlook and give reason for pause.

source form: dailyfx

US Dollar Poised to Fall Further Ahead of Critical NFPs, ECB Decision

thanhlangtu — Sat, 29 Oct 2011 06:32:44 +0000

The Dow Jones FXCM Dollar Index (ticker: USDOLLAR) saw its largest single-week loss since early 2009, sold off sharply as the S&P 500 finished its biggest monthly advance in nearly 25 years. Traders aggressively shed US Dollar-long positions against the Euro and other major counterparts following the announcement of aggressive new aid for Greece and other troubled Euro Zone governments. Overall trends favor further USD declines, but it will be critical to watch major event risk in the week ahead and its effects on broader financial market sentiment.

The US Dollar continues to track movements in the Dow Jones Industrial Average with near-perfect accuracy, and we expect the Greenback to respond to any major shifts in broader market sentiment. With a US Federal Reserve interest rate decision and a US Nonfarm Payrolls report on tap, volatility is virtually guaranteed. And though it may seem counterintuitive at first, we might expect strong US data to drive stocks higher and the domestic currency could actually decline.

Consensus forecasts call for unchanged interest rates from the US Fed and a fairly lackluster gain in October US Nonfarm Payrolls data. Dour economic forecasts make it surprising to see such large advances in the US S&P 500 and general improvements in risk sentiment. Yet we believe that recent rallies in the Dow and simultaneous US Dollar tumbles are a function of short-covering. That is to say, traders are covering previous DJIA-short positions and closing US Dollar-long positions—forcing stocks higher and the safe-haven Greenback lower.

For evidence of such, we only need to look at the recent rate of change in stock markets. In “normal” bull market conditions, price will tend to trend modestly higher while downside corrections are swift and sharp. Fear is a much stronger emotion than greed; price tends to fall much more rapidly than it rallies as traders are likely to head for the exits in a panic. Yet we have most recently seen the opposite; the extreme rallies emphasize that market conditions are far from normal and traders holding short positions are liquidating in a hurry.

We look to the coming days with great interest as the first week of the month often sets the pace for the remainder of the trading period. Thus it will be critical to watch whether the S&P 500 can post further explosive gains and continue its uptrend through the month of November.

Persistent breakdowns in the Dow Jones FXCM Dollar Index suggest that traders are likely to send the USD to fresh lows against major counterparts through the week ahead. This implies that the EURUSD could yet break towards September highs of $1.4280 and perhaps even test key trendline resistance near $1.4400. Of course such moves will greatly depend on the outcome of key event risk—especially with the European Central Bank to deliver a contentious interest rate decision on Thursday.

We anxiously await the first trading week for November. Recent trends suggest the Greenback may continue lower, but key event risk could just as easily drive major price shifts and changes in direction. – DR

source from: dailyfx

Return to 61.8% could see shorting opportunities in EURUSD

thanhlangtu — Sat, 29 Oct 2011 06:32:38 +0000

Yesterday saw a relief rally in EURUSD following news out of Europe. Hindsight is always easy and finding the turning or stopping point in any market on days like that is a hard task. The price shot through the 50 percent Fib level of the May highs and October lows and and stopped on the preferred 61.8 percent level. Since then we have seen a fall away in the price. We may soon see a return to that level, which could offer an opportunity to take a short ahead of a Friday profit taking rally.

source from: tradingfloor

Basics Currency Trading

admin — Sat, 18 Jun 2011 13:40:33 +0000

Investors and traders around the world are looking to the Forex market as a new speculation opportunity. But, how are transactions conducted in the Forex market? Or, what are the basics of Forex Trading? Before adventuring in the Forex market we need to make sure we understand the basics, otherwise we will find ourselves lost where we less expected. This is what this article is aimed to, to understand the basics of currency trading.

There is no two ways about it-if you want to profit from the currency market, you’ve got to know the basics currency trading. Currency trading is not about spur of the moment decisions and uninformed choices; though some experts would have you believe that. Are you doing any of the following? These practices could prevent profits for you and even result in huge losses-

All currency trades involve the buying of one currency and the selling of another, simultaneously. Currency quotes are given as exchange rates; that is, the value of one currency relative to another. The relative supply and demand of both currencies will determine the value of the exchange rate.if you are in the currency market- you will suffer losses at some point of time! If you stick to a bad position- you will just cough up losses in the long term. Get smart- remember that it is just a trade and don’t commit permanently to a position!Concentrate on suitable stop losses at every point and just relax- you CANT control the market beyond that!

Source : forexsecretexposed

European Inflation Quickens on Oil; Business Confidence Drops

thanhlangtu — Fri, 29 Apr 2011 09:56:27 +0000

European inflation accelerated to the fastest pace in two and a half years and confidence in the economic outlook declined as surging energy prices threatened to undermine growth.

Inflation in the 17-nation euro region quickened to 2.8 percent in April from 2.7 percent, the European Union’s statistics office in Luxembourg said today in an initial estimate. Economists had expected inflation to remain unchanged, according to the median of 34 forecasts in a Bloomberg News survey. An index of executive and consumer sentiment slipped to 106.2 from 107.3 in March, the sharpest drop since May 2010, and unemployment held at 9.9 percent, separate reports showed.

Crude-oil prices have soared 38 percent in the past six months, pushing inflation above the European Central Bank’s 2 percent limit and prompting policy makers to raise interest rates this month for the first time in almost three years. At the same time, higher raw-material costs are weighing on consumption and company profits, just as governments across the region cut spending to narrow budget deficits.

“Business confidence is starting to come down from very high levels, signaling that growth momentum will ease gradually,” said Marco Valli, chief euro-area economist at Unicredit Global Research in Milan. “The main headwinds are high oil prices. While inflation will probably stabilize in the next few months, it could accelerate to 3 percent at the end of summer.”

German Output

The euro was little changed after the data were released, trading at $1.4854 at 11:02 a.m. in Brussels, up 0.2%.

European services and manufacturing growth unexpectedly accelerated in April, driven by higher output in Germany and France, the region’s largest economies. Still, European investor confidence declined as faster inflation and higher interest rates may hurt the recovery. Euro-region growth will slow to 1.6 percent this year from 1.8 percent in 2010, the European Commission forecast last month.

A gauge of sentiment among euro-region manufacturers slipped to 5.8 in April from 6.7 in the previous month, the European Commission said today. Services confidence dropped to 10.4 from 10.8 and an index of consumer confidence eased to minus 11.6 from minus 10.6. Sentiment among builders rose to minus 24.2 from minus 25.4.

Debt Crisis

Capacity utilization rose to 81.3 percent in the second quarter from 80.3 percent in the previous three months, the commission said.

As governments from Ireland to Spain cut spending to contain a sovereign debt crisis, eroding consumer and investment spending, European companies have relied on faster-growing markets to bolster sales. Volkswagen AG (VOW), Europe’s biggest automaker, this week reported record operating profit in the first quarter on stronger demand from China.

An indicator of manufacturers’ export order books jumped to 0.6 from minus 0.7 in March while a gauge of production expectations slipped to 15.7 from 17.9. Companies’ confidence in their ability to hire workers eased, with a gauge of employment expectations dropping to 7.2 from 8.6.

About 15.6 million people were unemployed in March, down 9,000 from the previous month, today’s report showed. In the 27- nation EU, unemployment remained at 9.5 percent. At 20.7 percent, Spain had the highest jobless rate and the Netherlands the lowest, with 4.2 percent. Nine EU member states reported a drop from a year earlier, while four had an increase in unemployment.

‘Significant Sales’

Closely held automotive supplier ZF Friedrichshafen AG plans to create 5,000 jobs by the end of this year, including 2,000 in Germany, on expectations of “significant sales and profit growth,” Chief Executive Officer Hans-Georg Haerter said on April 21.

Puma AG, Europe’s second-largest sporting-goods maker, is targeting revenue of 3 billion euros ($4.5 billion) after first- quarter profit rose 7.2 percent, the Herzogenaurach, Germany- based company said on April 26. Puma will raise prices in the fourth quarter to adjust for higher raw-material costs, Chief Executive Officer Jochen Zeitz said.

An indicator measuring households’ assessment of price developments over the coming 12 months remained close to the highest level in almost three years, easing to 30.7 from 30.8, the commission said. A gauge of consumers’ willingness to spend on big-ticket items dropped to minus 25.4 from minus 24.1 and households grew less confident in their ability to save money. A gauge of euro-region manufacturers’ selling-price expectations slipped to 21.5 from 24.4.

Wage Demands

ECB officials are worried that workers will demand higher wages in compensation for rising costs. Germany’s Ver.di services union seeks 6.5 percent more pay for workers in the state of North Rhine-Westphalia, the country’s most populous.

At their May 5 meeting, the ECB’s Governing Council will have to weigh threats to economic growth with the risks of faster inflation and decide whether to signal an interest-rate increase in June. The Frankfurt-based central bank last month forecast euro-region inflation to average about 2.3 percent this year and 1.7 percent in 2012.

“The ECB’s benchmark rate is still too low in light of economic growth and inflation expectations,” Andrew Bosomworth, a fund manager at Pacific Investment Management Co., wrote in a guest commentary for Germany’s Boersen-Zeitung yesterday. “The ECB has to raiseinterest rates higher than markets expect to damp increasing inflation pressure in the euro region.”

Economists forecast two more quarter-point increases in the ECB’s benchmark rate to 1.75 percent this year, the median of 29 forecasts in a Bloomberg News survey shows. Eurostat will release a breakdown of April consumer prices including core rates excluding volatile costs on May 16.

source from: bloomberg

Grains – let the battle begin!

thanhlangtu — Fri, 01 Apr 2011 04:10:46 +0000

The U.S. Department of Agriculture will release its long awaited report today about U.S. farmers’ planting intentions for the 2011/12 crop season. Given the current tightness in supply, in especially corn and soybeans, this report could set the tone for price developments over the next couple of months until weather becomes the sole focus ahead of the autumn harvest.

Below are the current consensus estimates and previous results. Total acreage is expected to increase by almost 9 million acres, or 4%, to 239 million acres. Some commentators have argued that such an increase would be very difficult to achieve and this increases the uncertainty ahead of the release.

With stocks to use at historically tight levels, an increase of this magnitude is required to avoid prices moving higher. Alternatively, prices will have to move even higher, especially on soybeans and corn, in order to ration demand.

More will follow later once the report is out.

source from: tradingfloor

USD/JPY Weekly Outlook

admin — Sat, 09 Oct 2010 21:08:50 +0000

USD/JPY Weekly Outlook

USD/JPY broke intervention low of 82.86 to resume recent down trend and reached as low as 81.71 so far. Initial bias remains on the downside this week with 82.55 minor resistance intact. Current fall should now target 61.8% projection of 92.87 to 82.86 from 85.92 at 79.73, which is close to 79.75 low. On the upside, above 82.55 minor resistance will turn intraday bias neutral first. But break of 83.15 resistance is needed to be first signal of bottoming. Otherwise, outlook will remain bearish.

In the bigger picture, the break of 82.86 support indicates that USD/JPY has not bottomed yet. Whole decline from 124.13 is still in progress and should now target 1995 low of 79.75. Also, considering that monthly MACD has crossed below signal line again, suggesting that USD/JPY is rebuilding downside momentum. 79.75 low would probably be taken out. Though, note that Japan could intervene any time to slow of USD/JPY’s fall and hence, the path would likely be very choppy. In any case, break of 85.92 resistance is needed to be the first sign of medium term bottoming while break of 94.97 is needed to confirm reversal. Otherwise, outlook will remain bearish.

In the long term picture, there is no indication of trend reversal yet and USD/JPY’s long term down trend could still extend further to 1995 low of 79.75. We’d anticipate some strong support from 79.75 initially to bring rebound. Focus will be on whether 79.75 would hold or USD/JPY is indeed resuming the multi decade decline that started back in the 80′s.

Source actionforex