ForexYard's Commentaries - page 15
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28/02/'08 - USD Still Under Pressure.
Economic News
USD
Yesterday, the USD fell to a record low vs. the EUR on expectations that the Fed will cut Interest Rates aggressively, despite stubborn inflation. Momentum in the EUR/USD pushed the pair through the closely watched 1.50 level and quickly surpassed 1.51 in the same session. The U.S. currency traded at the 1.5108 level vs. the EUR at 12:45 p.m. in Tokyo, after earlier touching the 1.5144 level. The greenback retreated after Bernanke said that the Fed will act in a timely manner to support growth and to provide adequate insurance against downside risks. The Fed has lowered benchmark overnight interest rates to 3% from 5.25% since September and financial markets expect policy makers to lower them by a further 0.5 percentage point at their next meeting on March 18. Meanwhile, the bad news out of the U.S. continued to mount. Data out yesterday revealed that Durable Goods Orders fell 5.3% in January, the most in 5 months, compared with the 4% forecast. The report added fears of a U.S. economic slowdown at a time when rising Oil prices are pushing prices higher, leaving the Fed with the dilemma of whether growth or inflation is potentially the bigger problem. Looking ahead to today's U.S. calendar, the Preliminary GDP results will be released at 13:30 GMT, along with Unemployment Claims data for the month of January. Volatility will likely continue across domestic financial markets as today's fundamental data holds potential to drive sharp moves in the U.S. currency. The USD will probably trade around its record lows against the EUR during the day and may even record new lows as the week progresses. Look for new lows and technical trends as opportunities for profits.
EUR
The EUR advanced yesterday vs.10 of the 16 most-active currencies in the past 5 days after the ECB policy makers expressed concerns that inflation in the Euro zone may quicken. The ECB officials also indicated that there is no change in their hawkish stance on Interest Rates. Therefore the EUR is likely to strengthen. The EUR also continues to benefit from the faulty condition of the USD. Besides the overwhelming strength and confidence being shown by the currency, the European economic forecast continues to release positive data. Yesterday's German Import Price Index printed at 0.8%, much higher than the forecasted 0.2%, while the British GDP remained stable at 0.6% Analysts predict that the Fed will lower the Interest Rate target by at least another 0.5 percentage point at next month's FOMC meeting. Meanwhile, the EUR could test 1.52 -53 levels in the short-term. The Fed has already lowered its benchmark overnight lending rates by 2.25 percentage points to 3% since last September, while the ECB has kept its main rate at 4%. Given the rate difference between the Europe and the U.S., the EUR will stay high as long as the BOE will keep its Interest Rates unchanged. Today, ECB President Trichet is expected to deliver a speech at 14:15 GMT in the Netherlands. As head of the central bank's governing body, which is responsible for setting the Euro zone's short term Interest Rate, his speeches can sometimes cause market volatility as traders react to clues regarding future monetary policy. Today, the EUR is expected to trade around its current high levels, and if the U.S. fundamental data disappoints, the EUR might add another 100 pips.
JPY
The JPY rose against the EUR and 14 of the 16 most-active currencies as Asian stocks fell, encouraging investors to reduce holdings of higher-yielding assets funded with loans in Japan. It rose to 160.51 level against the EUR from 161.00 in New York yesterday. With stocks falling, the JPY is being propelled by risk reduction among investors. Japan's currency may move between 106 and 107 per USD for the rest of this week Japanese retail sales rose 1.5% in January from a year earlier, marking the sixth straight month of increases, according to the government report. There are several news releases expected to come from the Japanese market tonight, as the first will be the Manufacturing PMI at 23:15 GMT. With a forecast of 52.0, we can see that there is a positive view towards Japan's growth in the manufacturing sector and for its economy in general. Slightly later at 23:30 GMT the Core CPI is expected to be released with a forecast of 0.9%, and a previous release of 0.8%, we can see that Japan's inflation level should continue to be inline with expectation, proving that the journey towards a stronger and more stable economy continues full steam ahead. It appears that the JPY will continue to gain against most currencies in the near future, as it is consistently showing strong data and solid monetary policy, with the majority of the economic forecasts seeing the continuation of growth for 2008.
Speculate, don't Hesitate...
Technical News
EUR/USD
After peaking at the all time high of 1.5140 the pair now shows signs of bearish sentiment on the 4 hour chart. The daily chart still remains very bullish, which means that once the corrective move will consume its momentum, the bullish move will continue. Buying on dips might be a good choice of action before the weekend.
GBP/USD
The cable failed to breach through the 1.9950 level, which is a strong resistance and a key Fibonacci level. The bearish cross on the daily chart indicates on an upcoming corrective move that might take the cable below the 1.9750 on the local level. The 4 hour chart is giving mixed signals, which means that Forex traders must wait for a clear bearish signal on the hourly level before making an entry.
USD/JPY
The pair has made an aggressive bearish move within the flat channel of the daily chart, and is now approaching strong support. The 1 hour chart is showing local consolidation around the 106.20 level, and the bullish cross on the 4 hour chart is indicating that moderate bullish momentum is starting to form. Buying on dips could be a good strategy today.
USD/CHF
After the pair breached the strong key level of 1.0750, and validated the bearish move with a full bar beneath the breach level, it appears that the momentum is stronger than ever. Both the daily and the hourly studies are very bearish and a target price of 1.580 appears to be quite possible.
The Wild Card
Crude Oil
The 4 hour chart is showing a fresh upwards channel formation, as Oil now breached through the bottom barrier. forex traders must pay close attention to a possible break through the 99.00 level, as it is now a key level that might take crude oil to a very deep abyss. If a break will not occur, a moderate float within the channel is expected.
03/03/'08 - Greenback Bears Firmly On Top
Economic News
USD
The dollar began the new week in similar fashion to the way in which it closed last week; falling against most of it major currency rivals. Investors will now have to get used to the notion that the 1.50 key level for EUR/USD has been broken and will continue to rise. The major currency pair is currently above 1.5150 and looks to be set in its bullish trend, as data from the US continues to disappoint. The latest scare comes on investor worries regarding additional losses from banks that are under pressure from the subprime mortgage market. The housing and credit crisis has not subsided and is pushing investors away from the greenback.
The EUR is not the only currency to see record highs lately versus the dollar. Amongst a basket of common currencies that are seeing gains against the greenback, the JPY is the most notable. Currently floating around 103, the USD/JPY has plummeted to three year lows, and is growing ever closer to the key support level of 100.
This week is jam packed with important economic data from all over the world. The US will have its share of important data as we expect figures from Nonfarm Employment Change, Unemployment Rate, ADP Nonfarm Employment Change, Non Manufacturing ISM, Factory Orders, and Pending Home Sales. These events will be preceded by today's 15:00 GMT release of ISM Manufacturing Prices and Index. Expectations are understandably low, as are most of the forecasts for US data in the coming week. The week's economic data will be coupled with a long list of speeches by important economic policy makers in the US, as the likelihood of more Fed intervention is gaining steam. The contrasting views amongst the economic elite in the US are only contributing to the lack of confidence investors currently have in the dollar. Look toward Tuesday' remarks by Fed Chairman Ben Bernanke to get a good sense of the US monetary outlook. As data in the US does not look positive for the near future, expect the greenback to continue its epic slide.
EUR
The EUR has become the beneficiary of the latest USD woes, as it once again gained significant ground against its American rival last week. In total the Euro gained over 2% on the greenback in February, its biggest gain since September of last year. As the EUR grows against the dollar, investors should begin to take into consideration a Euro interest rate cut. ECB President Jean-Claude Trichet has been adamant in keeping with his hawkish monetary policy, however the growing divide between the EUR and the dollar is taking its toll on the whole of the Euro-zone economy. The already tense European import/export industry is now faced with even more hurdles as it cannot compete globally with such inflated prices due to its currency strength.
The 15 nation currency has seen gains against a majority of its most traded currency rivals, outside of the JPY, whose current strength cannot be rivaled. The Euro-zone has the opportunity within the coming months, assuming that there is a change to monetary policy, to flourish and allow its currency growth to come naturally and not from pure trading momentum or Dollar fears. The importance behind EU economic data moving its own currency is critical in convincing wary dollar investors that the growth is real.
The economic calendar this week from the Euro-zone holds several key events. We expect that Thursday morning's scheduled Interest rate statement will involve a small cut in the interest rate. This will be followed by remarks by Trichet who normally triggers some market fluctuation in and around his speeches. Today we expect the release of German Manufacturing PMI and CPI figures, both of which are forecasted to come back with similar numbers to their last release. Either way, they should not effect market movement, as we expect rises in the EUR sans EUR/JPY to continue.
JPY
The trading week opened today with the JPY gaining against most of the traded currencies. At 7:00 GMT, The JPY obtained a fresh three-year high against the USD as it traded at 102.90 JPY. The JPY also gained 0.55% against the EUR and 0.92% against the GBP. The JPY rally against the USD is mainly a result of the growing worries about the health of the US economy after dismal reports from last week's U.S economic session which showed the sharp impact of the credit crisis.
We are nearing a key support level in the USD/JPY of 100. History has shown us that upon approaching this level the currency pair springs back up to make significant gains. Not since the mid-90's have we seen the support level broken, and even then it was short lived.
Last Thursday there was a surprising increase in the Japanese consumer spending and rising consumer prices. Those positive indicators assisted in the JPY's bullish behavior. The assumption behind most investors is that the Japanese economy is growing at a steady pace and will continue to do so for most of 2008. Today, as a result of those positive figures from last week, The Japanese currency is likely to remain bullish. There is no important economic news expected to be released in Japan, however, today should see active JPY trading in response to key U.S and Euro-zone data releases.
Technical News
EUR/USD
The pair opened this week's trading session with strong bullish momentum, and is now traded at all time high levels around 1.5230. The 1 hour and the 4 hour chart are indicating on additional bullish momentum, and the daily chart is showing that a potential corrective move might not occur before the pair hits 1.5290.
GBP/USD
The pair opened this week's trading session with strong bullish momentum, and is now traded at all time high levels around 1.5230. The 1 hour and the 4 hour chart are indicating on additional bullish momentum, and the daily chart is showing that a potential corrective move might not occur before the pair hits 1.5290.
USD/JPY
The pair is going through a massive bearish trend, as the daily chart shows 6 consecutive sharp falling bars. There is a bullish cross forming on the daily chart, yet it's still in early stages. The 4 hour chart indicates on the continuation of the bearish trend locally, making it preferable for Forex traders to buy on dips.
USD/CHF
The pair has been dropping constantly since the local consolidation around 1.0900, and is showing no signs of a halt. There are now the first signals of a corrective move on the daily chart which shows a strong bullish cross on the slow stochastic. The hourlies are floating in neutral territory, and a preferable strategy might be to keep out of this one until a clear signal will appear on the 4 hour chart.
The Wild Card
Crude Oil
Oil is going through a very strong uptrend within a much defined bullish channel. After a local corrective move, we can now see the bullish momentum growing stronger again. This could be a great opportunity for Forex traders to enjoy a very distinct technical formation, with potential for a bullish break beyond the upper section of the channel.
04/03/'08 - Credit Crisis Continues to Hurt the Greenback
Economic News
USD
Yesterday, escalating fears of a recession in the U.S., hammered global stocks and sent the USD to record lows against the EUR for the 5th consecutive day. The greenback's drop to an all time low yesterday came after the ISM Manufacturing report showed that U.S. manufacturing diminished for the second time in 3 months. The ISM index, which measures the activity level of purchasing managers in the manufacturing sector, dropped to 48.3 in February from 50.7 in January. This unfortunately, is not the only trace of the U.S. economic slowdown, as all signs continue to hint that the economy is slipping into a 'mild' recession. HSBC yesterday, announced huge losses, due to credit issues, as they reiterated the uncertain future of the US economy in their official statement. The Housing Crisis is having an impact on the broader economic picture, and the ramifications could be disastrous for the future. Declining Home Constructions are already dragging on growth, undermining consumer spending, which accounts for two-thirds of the economy. Americans are in the precarious position of feeling less wealthy and in turn buying fewer goods. Such an economic environment provides a heavy burden on the U.S. currency, keeping it where it is now, floating around record lows. Fed Chairman Ben S. Bernanke recently stressed that the Fed will not hesitate to ease rates further if the economic outlook deteriorates. Now, traders are betting that the Fed will be forced to reduce its benchmark interest rate by 0.75% at its March 18 meeting. During the following days, these bets will most likely be priced in by the market and we might see the greenback stabilizing ahead of the FOMC Interest Rate announcement in 2 weeks. As for today, there is not much on the U.S. economic calendar. Fed officials Bernanke, Fisher and Mishkin, all are expected to deliver speeches on economic issues during different events today. Traders may expect another weak USD trading session. It is likely; the greenback will stay low and continue to deteriorate on expected positive European data.
EUR
Yesterday, the EUR ended its trading session 0.3% higher, closing at 1.5223 vs. the USD. Earlier, the currency pair had hit a record peak of $1.5275, after Warren Buffet speculated that the U.S. economy is already deep in a recession. European Manufacturing PMI was unchanged yesterday at 52.3, signaling that the growth of the European manufacturing sector is slowing down. Along with record energy costs, the soaring EUR has made European exports less competitive, adding pressure on the Euro zone economy. Additionally, the European CPI, which measures the rate of inflation, remained yesterday at a record high level of 3.2%. Unlike the Federal Reserve, ECB President Jean-Claude Trichet is placing greater emphasis on inflation rather than on growth. Therefore, following the latest inflation data, the ECB is widely expected to keep Interest Rates unchanged at 4.00%. Recent economic data gives the ECB all the justification that it needs to remain hawkish, especially as commodity prices climb to record highs. As for the mid-term forecast, here is the equation; as long as 'inflation pressure' prevents the ECB from slashing its Interest Rates, the European currency is expected to stay elevated. Toady's European economic calendar will be relatively quiet with only the PPI and the GDP figures on tap, both of which are of minor importance to market movement. If these indices will bring stronger figures than forecasted, the EUR/USD may press even higher and any retracement should be seen as an opportunity to add to long positions.
JPY
The JPY breached below the 103.00 level against the USD, and reached 102.62 for the first time since 2005 after the ISM report showed that the U.S. manufacturing contracted once again. The Yen also gained on the back of stronger Japanese economic data. Yesterday's Japanese Average Cash Earnings, an indicator which measures the monthly change in the wages paid to jobholders, jumped 1% in the month of January which suggests that the Japanese economy may be accelerating. The JPY gained against about a dozen of the most traded currencies as Credit Market losses prompted investors to reduce holdings of higher yielding assets financed with loans from Japan, a strategy called the Carry Trade. The rapid upward movement in the JPY against the USD is fueling speculation of a breach to the key 100.00 level for the first time since 1995. At the mid term, we believe that the combination of deteriorating U.S. data and a speeding up in the Japanese economy, may indeed deliver such a result. As for the short term forecast, today's Japanese economic calendar will be quite empty with only Capital Spending data due to be released. This quarterly indicator measures the total amount of new capital expenditures by private businesses. The market is expecting a low release, signaling less business investments during the last quarter; however it is expected to generate relatively small interest in the market. Today, there probably will not be too much volatility in the wake of Friday's Interest Rate Announcement and the BoJ Monthly Report. The JPY looks prime for another day of range trading.
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Technical News
EUR/USD
The strong bullish momentum is calming and the pair is finding consolidation at 1.5180. The slow stochastic on the 4 hour chart is showing a negative slope, which indicates that a corrective move might be quite imminent. Going short with tight stops might be a good decision today.
GBP/USD
The daily chart is showing that the cable is trading in a range with no specific direction for the past 6 trading days. The very strong resistance level of 1.9900, and the bearish cross on the daily slow stochastic indicates that a local bearish move might take the cable back to the 1.9800 levels as a first target price.
USD/JPY
After bottoming at 102.60 the pair shows fresh bullish momentum and is now floating around 103.20. The cross on the daily slow stochastic is very strong and will most likely cause a local technical corrective move. The RSI which has crosses the 20 level from above support the bullish notion, and it appears that although the USD/JPY will likely range trade, being on the buy side of such activity might be a preferable strategy.
USD/CHF
The failure to breach beyond the 1.0300 level on the daily chart establishes a very strong support level at that point. A bullish cross on the daily slow stochastic indicates an upcoming move that might take the pair to the 1.0500 zone quite quickly. Going long might be preferable today.
The Wild Card
Crude Oil
There is a very clear narrowing bullish channel forming on the 4 hour chart as the pair now floats at the bottom level of it. The inability to breach through the 101.70 level will validate the channel and will probably take Oil beyond the 102.00 levels again. This should be a great opportunity for Forex traders to be in the bullish move at a relatively good entry point.
05/03/'08 - US ADP Data on Tap
Economic News
USD
Yesterday the greenback remained range bound against the EUR and the GBP, failing to breach new lows. However the greenback did lose some ground against the JPY and the CHF after Fed Chairman Bernanke painted a gloomy picture of the struggling U.S housing sector in his speech yesterday. He mentioned that mortgage foreclosures are likely to remain on the increase coupled with falling home prices and therefore an active policy will be needed by the Fed in order to provide this failing sector with some stability. These comments added to the rising fears of a recession in the U.S and there are already some key investors such as Warren Buffet who believe that the U.S economy has already crossed that line. Yesterday was a day full of speeches by key U.S Fed Officials which included Fed Governor Mishkin and Dallas Fed President Fisher. Mishkin's comments were still in accordance with the majority opinion in the Fed, which is that growth is the main concern with inflation expected to ease in the medium term. On the other hand Fisher continued on his one man crusade against inflation in the US, saying that slower growth was preferable to higher inflation. These comments however did not really manage to cause any significant volatility. Looking ahead, the main news from the U.S today will be the ADP report which is forecasted to release at 10K, significantly lower than last months figure of 126K. This figure has some predictive value with regards to Friday's key NFP report and it should cause some volatility. However traders' main focus is Friday's NFP report and this will cause a heightened level of caution, so investors will be hesitant to drop the greenback any lower ahead of Friday, unless the ADP springs a major surprise. The longer term picture remains gloomy for the greenback as the poor U.S. economic outlook will keep the Fed on its interest rate slashing path.
EUR
The EUR had a stable trading session all across the board yesterday. The EUR has reached a new all time highs against the greenback on each of the last five consecutive days. However this record setting trend was halted yesterday by comments from leading European Finance Ministers ahead of the ECB meeting on Thursday. Chairman Juncker of the Eurogroup of finance ministers mentioned his concern about the current excessive exchange rate volatility and this gave the greenback some reprieve. The only news coming in from the Euro-zone yesterday was the GDP and PPI figures, which released inline with expectations at 0.4% and 0.8%, respectively. This news did not have any effect on the EUR, which continued to remain solid throughout the day.
Looking ahead to today, we expect the Euro-zone Services PMI and Retail Sales figures. However these figures will not impact the EUR, which may slip slightly versus the greenback today as traders exercise caution ahead of Friday's NFP report. However the broader EUR outlook is still very bright as no ECB rate cut is expected any time soon, while the Fed is expected to cut rates by at least 0.5%. Many analysts believe that the EUR will target the 1.5500 level against the greenback.
JPY
The JPY strengthened slightly against the greenback yesterday on the back of Bernanke's negative U.S housing outlook and recommendation of active policy in order to stabilize the sector. However it lost some of these earlier gains towards the end of the European trading session. Many analysts believe that the JPY will breach the 100.00 level against the greenback in the near term. The main reason for this is because the JPY is benefiting from risk aversion, which is a product of weakness in the equity markets across the globe. Another reason for the rosy JPY outlook is the fact that there is developing now a substantial interest rate compression between the USD and the JPY. Therefore the USDJPY has lost the status as the “King” of the carry trades, leading to a sharp depreciation of this pair. The only news released out of Japan earlier today during the Asian trading session was the Capital Spending figure, which measures the total amount of new capital expenditures by private businesses. This figure surprised on the downside releasing at -7.7%, which was well below the forecasted figure of -2.4%. However it did not have any effect on the Japanese currency which is mainly affected by risk sentiment.
Technical News
EUR/USD
The pair continues to consolidate around 1.5180, and moderate bearish momentum is being created on the 4 hour chart. The daily slow stochastic is showing a bearish cross, and the correction towards the 1.5100 appears to be imminent. Going short with tight stops, might be a good choice today.
GBP/USD
The cable has made the first step of the bearish correction move and appears to be continuing with that notion. The slow stochastic of the 4 hour chart is showing negative slope, and the RSI is floating on the 50 level, which indicates that the pair still have much more room to run. The first target price might be 1.9700.
USD/JPY
After bottoming at 102.50 the pair is gaining in a moderate corrective move and is now floating around 103.60. There is a very bullish structure forming on the slow stochastic of the 4 hour chart, and the momentum is high. Going long appears to be the preferable strategy today.
USD/CHF
After a moderate bullish correction, the pair is heading south again and is now traded around 1.0400. The 4 hour chart is showing growing bearish momentum, and the daily study supports the bearish notion. The estimated target price for the next move should be around 1.0340.
The Wild Card
Gold
There is a very clear and distinct channel forming on the daily chart, as gold now floats at the middle level of it. Oscillators are showing bearish momentum, and it appears that we might see gold touching 960.00 before the weekend. This is a great opportunity for Forex traders to enjoy a very clear and strong technical entry point.
06/03/'08 - European Interest Rate Announcement on Tap
Economic News
USD
The greenback continued to experience losses yesterday, as the US currency could not rebound even amidst positive economic data. The release of surprisingly positive ISM service sector data had some investors convinced that the dollar would rise; instead it floated dangerously low versus a basket of major currencies. Most notably, was another record low versus the EUR as the major pair hit the 1.53 key level, spurring investors into even more aggressive bearish behavior regarding the dollar.
ISM Non-Manufacturing Composite and Activity data is a measure of the activity within the service sector of the US. Though yesterday's figures did produce positive results, (composite data rose to 49.3 from 44.6 and activity data from 41.9 to 50.8) traders learned quickly that the harsh truth is that the overall economic outlook in the US is poor and recession is inevitable. The manufacturing and service sectors as a whole have suffered from the credit crisis in the US, experiencing one of the smallest consumption periods for some time. Unemployment is rising and can only hurt the already ailing economy. This should be a sign as to the direction of the dollar ahead of Friday's Non-Farm Payrolls, which is one of the more important figures to be released on the US calendar.
Today, as we prepare for tomorrow's end of week news events, we will have a relatively quiet news day from the US. Unemployment Claims and Pending New Home Sales are the only significant events on the schedule, and will likely not be enough to reverse the bearish trend of the greenback, assuming the figures return on a positive note. The assumption according to historical evidence is that we should expect a big loss in the Non-Farm payroll tomorrow, as it has had similar results to ISM figures released in the past. Investors should look for more drops in the dollar price as there does not seem to be anything that prevents the detrimental fall of the greenback.
EUR
The EUR had a fabulous day of trading yesterday, as anyone focused on bullish EUR trends was successful. The 15-Nation currency hit record highs versus the dollar and used that momentum to do so against the GBP as well. Mentioned earlier, the EUR touched the 1.53 level versus the greenback and then climbed to an all-time high against the sterling at just above 0.7685. This activity came mainly as a result of PMI and retail sales figures returning better than initially forecasted. German PMI, which measures the activity level of purchasing managers in the manufacturing sector, came back at 52.2 up from its previous mark of 49.2 as retail sales rose by 0.4%.
Yesterday's events all but solidified the ECB's hawkish monetary policy, as many believe that ECB President Trichet will do nothing regarding the interest rate. The biggest issue facing the Central Bank is controlling the rising inflationary pressures brought on mostly by rising global food and oil prices. As we await words from Trichet tomorrow , expect the market to react positively regarding the EUR.
Apart from the expected interest rate statement and Trichet's speech, we will see French Budget Balance released today, as it should not contribute to any real market movement. Investors in the EUR should look for another day of gains, as the major currencies competing against the Euro-zone currency are currently involved in a swing of negative data.
JPY
In direct response to a boost in stocks on Wall Street, the JPY successfully gained against a basket of its crosses yesterday. The JPY has been the beneficiary of dollar woes lately, however now it is beginning to take its toll on the Japanese business sector. A large group of Japanese businesses are now losing significant profit due to low USD prices against the Yen. A major source of the Japanese income comes from import/export relationships with the US. Low dollar prices have forced Non-US manufacturers to lower prices in order to facilitate the needs of the worlds biggest consumer market.
Yesterday saw no news from the Japanese economy, as the currency moved according to world news events. Amongst, the big currencies, only the EUR has performed with real consistency lately, however the Yen is slowly showing its rejuvenation as investors expect Japanese growth to continue throughout 2008.
Today we are slated to see the release of Leading Index and Machine Tool Orders. The two are not expected to contribute much to the movement of JPY, as most JPY enthusiasts will stay tuned to stock prices and EUR and USD news. As we await words from BoJ Governor Fukui on Friday regarding the outlook of the Japanese economy, expect the JPY to range trade throughout the day.
Technical News
EUR/USD
The pair breached the 1.5300level which validated the next bullish move, as we now see a consolidation around that Fibonacci level. the pair is moving strongly with the trend although we might see a moderate bearish correction today.
GBP/USD
The 4 hour chart indicates that the bearish trend has not yet said its last word. the slow stochastic is showing a classic positive slope structure which indicates upcoming incresing momentum. The daily chart shows an incresing direction, as no clear reversal cross is in sight.
USD/JPY
After the familiar tight range we saw the pair trading in, it continues with an uncertain trend. We might see a correction upwards today. Due to no significant signal, JPY traders may look to the interesting candle formation on the weakly chart which may be signally a reversal.
USD/CHF
There is a very interesting cross on the daily slow stochastic chart which might indicate an upcoming move. However we are still in a bullish momentum. It appears that going long would be preferable today.
The Wild Card
Crude Oil
After spiking to the very impressive $104 level, it seems that Oil is the center of Forex trader's focus today. The inability to breach that level violenty, together with many bearish indications by various oscillators is strengthening the notion that a sharp correction move is quite imminent. Going short with tight stops and limits might contain high profit potential.
11/03/'08 - US Trade Balance
Economic News
USD
The greenback slipped lower against the JPY yesterday as U.S stocks tumbled on the back of heightened recession speculation. Therefore carry trades continued their sharp unwind as “riskier” positions were pared off by investors. However the greenback did manage to consolidate nearly all across the board today, in particular against the EUR on the back of comments from President Trichet that the ECB is concerned about the recent exchange rate volatility. Nevertheless, despite the greenba's slight recovery today most analysts believe that it will continue its bearish path, at least over the next few months. Investors are now ready for another rate cut by the Fed after the recent string of negative U.S economic data which was topped off on Friday by the surprisingly weak NFP report. With the constantly increasing recession fears it also now seems likely that the Fed could make another emergency rate cut ahead of its next scheduled meeting on March 18th. If this occurs, then we will see the greenback fall much steeper far quicker than anticipated.
Yesterday there was no real market moving news released from the U.S economy and the dollar movement was mainly EUR news related. Looking ahead to today, we expect the U.S Trade Balance and a speech from Fed Governor Kroszner. The U.S Trade Balance, which measures the difference in value between imported and exported goods and services, is forecasted to release lower than last month at -59.5B. However this figure is likely to surprise on the upside as the recent sharp deprecation of the greenback should have boosted U.S exports but there may be a lagging effect. If the Trade Balance comes out strong today then the greenback should be able to sustain yesterday's consolidation and it may even trigger a rally. However the near term outlook for the greenback remains dismal in particular with the potential for upcoming Fed rate cuts. In addition the relentless stream of weak U.S data should keep the U.S currency on its back foot.
EUR
The EUR dropped slightly lower yesterday on the back of comments from ECB President Trichet warning of excessive volatility in the currency markets. The EUR hit a record high against the greenback last week touching the 1.5459 level after the ECB held Euro-zone interest rates firm at 4.0%. However the EUR now seems to be correcting on the back of Trichet's comments. Nevertheless, analysts expect this correction to be short lived as these comments were still perceived as relatively dovish. In addition further inevitable weak U.S data will give the EUR an offensive edge against the greenback.
There was a string of European data released yesterday and most of the figures surprised on the upside. The most significant data to note is the better-than-expected release of the German Trade Balance, which is still on the increase despite the appreciation of the EUR. Looking ahead, the most important news to be released today will be the German ZEW Economic Sentiment which measures institutional investor sentiment in the German Sector. The German economy is one of the key players in the EU and is heavily reliant on exports. Therefore the ZEW Economic Sentiment will shed more light for investors as to how the German economy is holding up despite the sharply appreciating EUR. The EUR may still continue yesterday's correction but it is more likely to resume its bullish surge against the greenback on the basis of further expected weak U.S data. However traders holding long positions on the EUR should remain weary of the upcoming U.S Trade Balance figure which may trigger a USD rally.
JPY
The JPY was one of the few currencies to strengthen against the greenback yesterday as U.S stocks fell on the back of increased recession fears. The JPY traded near an eight-year high against the greenback as widening losses in credit markets prompted investors to trim holdings of higher-yielding assets funded by loans in Japan. The JPY will continue to appreciate against the greenback for as long as “risk phobia” maintains its stranglehold over investors. Also positive Japanese news ensured that the JPY remained well supported as Private Sector Machinery Orders unexpectedly surged a seasonally-adjusted 19.6% in January from the previous month, the fastest gain since August 2000. The JPY will now head towards the $100.00 level and although Japanese corporations are suffering, according to the latest Tankan Survey, it is unlikely that the BoJ will intervene.
Technical News
EUR/USD
After a very strong bullish trend the pair is showing some consolidation on the past few days. There is a bearish cross forming on the 4 hour chart which indicates a possible upcoming reversal move. The 1 hour RSI is support the bearish notion, and Forex traders are advised to wait for the break and swing in the trend.
GBP/USD
The cable is floating around 2.0060 which is a key 38.2% Fibonacci level of the 2.1130/1.9400 move. If a breach through that level will be validated with a full bar on the daily chart, we should see a stronger bearish move continue until the 1.9900 zone, and it would be advisable to enter the market with a short position.
USD/JPY
After a touch at the 101.50 level, the pair now shows its first signs of a bullish movement. The 4 hour chart is showing the formation of a strong bullish cross, and together with the RSI at the 50 level, we should probably see a moderate corrective move in the next 48 hours.
USD/CHF
The pair is showing some consolidation at the very deep abyss of 1.0200 after a sharp drop for the past two weeks. The daily chart is still very bearish, yet the 4 hour chart is showing hints of a local correction. Selling on highs might be a good strategy for today.
The Wild Card
Gold
There is a very distinct downwards channel forming on the 4 hour chart. The slow stochastic is floating at the 40 level with a negative slope. This could be a great opportunity for Forex traders to enjoy a strong signal for the continuation of the bearish corrective move.
12/03/'08 - Can the Dollar Rally?
Economic News
USD
The greenback rose all across the board yesterday after the Fed announced new methods to inject liquidity into the financial markets. The US Federal Reserve, European Central Bank, Bank of England, Swiss National Bank and the Bank of Canada all announced provisions of additional liquidity in an attempt to once again shore up confidence in the money markets . The greenback drew comfort from this announcement because the Fed's acceptance of mortgage-backed securities could ease some of the problems in the US mortgage market and therefore reduce the risk of a severe US recession. This news also led to speculation that the Fed is more likely to cut the interest by 0.50% next week, instead of the more aggressive 0.75% which was expected previously. Therefore the market reacted to the lower probability of an aggressive move by the Fed next week and risk appetite was partially restored among investors causing the dollar to soar against the low yielding JPY. The greenback also managed to reverse the EUR's bullish surge, gaining back a lot of lost ground. There was more positive news for the greenback yesterday as the U.S Trade deficit increased to $58.2 B, instead of the forecasted $59.5 B. This gave investors another strong indication that the weak dollar is managing to significantly boost exports, which will in-turn stimulate growth. Many analysts believe that yesterday's dollar rally will be short lived as the market will come to the realization that the Fed's new measurement of liquidity injection does not solve the problems of the of a weak housing market, a capital deficient financial system and deteriorating corporate credit quality. U.S stocks also surged yesterday as the DJIA gained almost 300 points after the Fed said it will expand its securities lending program to loan up to $200 billion Treasury securities under a new Term Securities Lending Facility. Looking ahead to today, the only significant news expected from the U.S will be Crude Oil Inventories which measures the weekly increase in barrels of commercial crude oil held in inventory by U.S firms. At the moment crude oil is trading near all time highs so investors will be closely monitoring this data because the level of inventories influences the price of petroleum products, which can have an impact on inflation and other economic forces. Today the greenback may give up some of its gains as the market digests yesterday's Fed announcement. However the greenback may rally again leading up too next week's rate cut as the market is now expecting less aggressiveness from the Fed.
EUR
The EUR retreated from its all time high against the greenback yesterday on the back of the Fed announcement of its new measurements to inject funds into the money market. However there was positive news for the EUR yesterday, which pushed the EUR to a new record high, as both the German and Euro-zone ZEW Economic Sentiment surprised on the upside. Analysts believe that the firmer-than-expected reading indicates that investors in the German economy are becoming slightly more optimistic that they can avoid the worst of the fallout from the US slowdown. Nevertheless, this positive data which pushed the EUR upward was not enough to cushion the EUR's fall against the greenback. Also earlier ECB Member Weber hinted in a statement that the ECB was not in a position to lower interest rates due to the rising German inflation fears. The ECB has kept its key benchmark rate unchanged at 4.00% since the credit crisis erupted and it has since then stressed that inflation remains its primary concern. However the strong EUR should dampen exports which will slowdown growth and place the ECB under pressure to lower rates. Nevertheless, the central bank remains optimistic as 50% of European exports are within the EU and so far economic indicators have not shown any clear signals of a significant slowdown. The EUR will remain resilient due to improved German GDP expectations and it should resume its bullish movement against the greenback after yesterday's sharp fall.
JPY
The JPY slipped all across the board yesterday, in particular against the high yielders and coming off an eight-year high against the dollar as a sharp rally in U.S. stocks encouraged investors to re-enter risky carry trades funded by cheap borrowing in the Japanese currency. U.S stocks leaped upwards yesterday and the DJIA gained nearly 300 points after the Federal Reserve said it will expand its securities lending program to loan up to $200 billion of Treasury securities. The Fed also said it will lend the Treasuries for 28 days instead of overnight and will increase currency swap lines with the European Central Bank and the Swiss National Bank. If the freshly surfaced “risk appetite” among investors is able to hold out as the market digest yesterd's news, then the JPY will continue to depreciate at rather rapid rate. However most analysts believe that the rally in U.S stocks will be short lived as yesterday's Fed announcement is still not a solution for the deteriorating housing market. Therefore the JPY should begin to claw back some lost ground today as the market comes to this realization and carry trades ease off.
Technical News
EUR/USD
The pair has been quite choppy in the past two days yet no clear direction was seen. The daily chart is showing moderate bearish signals as the 4 hour chart is still quite bullish. The very wide doji formation on the daily chart indicates that a break might be imminent, so traders are advised to wait for the breach and swing.
GBP/USD
The cable is showing strong bullish momentum on the daily chart and on the 4 hour chart with plenty of room to run. The hourly is showing a moderate bearish signal which might make it wise for Forex traders to buy on dips. Next target price might be 2.0210.
USD/JPY
After bottoming at 101.50 and bouncing back to 103.00, the pair is resuming the bearish movement. The slow stochastic of the 4 hour chart is showing a strong bearish cross, and it looks as if the strong support of 101.50 might be breached before the weekend.
USD/CHF
There was a short bullish corrective move after the very strong bearish trend, as the pair now appears to ct be consolidating around 1.0300. The 4 hour chart is showing a bearish cross, and with a very bearish daily chart, the right direction appears to be down.
The Wild Card
Gold
The ongoing bullish bonanza continues with no indication of a stop. All oscillators on all time scales are showing one unified bullish direction. Forex Traders are advised to use that strong bullish momentum and swing into the most current lucrative trend in the Forex market.
19/03/'08 - Dollar Bounces Back After Rate Cut
Economic News
USD
Yesterday, the greenback rose all across the board after that the Federal Open Market Committee (FOMC) voted to lower the US Interest rate by 75 pts to 2.25%. The Fed announcement, which returned below the expected 100 point cut, set the USD on a bullish run as it appreciated against most of the major traded currencies particularly the EUR/USD pair which dropped close to 150 pips. The FOMC decision came as a last hope to help the US economy and the greenback recover from what has looked to be recessionary behavior. Following the announcement, Philadelphia Fed President Charles Plosser made it public that he voted against the 75pt cut as he preferred less aggressive action at the Fed meeting. Investors felt a boost of confindence yesterday in regard to the severity of the financial difficulties in the US, as the combination of the lower cut and general objections by some of the board, may indicate that the economic outlook is not as bad as once expected. It certainly seems that the USD and the US economy have recovered from what had been some of its worst results since 1945.
Yesterday also saw the release of PPI figures as they rose 0.3% in February following a 1% increase in January. Core inflation rose 0.5% for the month, the largest gain since November 2006. The extremely high inflation in the US has increased speculations and worries that the country is heading toward a period of stagflation, a period characterized by economic slowdown and a rise in inflation. Another result of the 75pt cut yesterday was a sell-off on commodities. Gold and Oil prices depreciated yesterday after trading in and around all time highs last week. Gold lost $35 per ounce roughly 3.2% down from the day before and closed the trading session at a rate of 986.50. Crude Oil lost almost $5 per barrel losing 4.1% from its Monday value. Today the US is absent from any significant scheduled news events, as Crude Oil Inventories are the only news in tap, and should not contribute to volatility. Forex traders should follow indicators coming from the Euro zone, the United Kingdom and Japan.
EUR
Yesterday, the Euro-zone was absent from the economic calendar and most of the Euro movement was contributed to the dominance of the Dollar yesterday. The EUR depreciated yesterday against the greenback on the back of key interest rate cuts in the US. The EUR retreated from its all time high at the rate of 1.5850 from last week as the pair closed the trading session down 150pts. However, looking ahead long term, the EUR is expected to recover and gain back some of its losses from yesterday, mainly as a result of the continuing positive indicators being released from the Euro-zone. Meanwhile the GBP appreciated against the USD and peaked at a three days high at the rate of 2.0255 in the first half of the day. However, after the Fed's key interest cut, the GBP lost most of its gains and closed the trading session at the rate of 2.0080.
Looking ahead to today, the only news expected from the European economy will be the Trade Balance. This figure is considered insignificant to Forex market movement and should not have any impact on EUR behavior today. Meanwhile, the MPC Meeting Minutes from the Bank of England (BoE) is expected to be released in the United Kingdom. The minutes are forecasted to show that 8 BoE members voted to hold the interest rate and 1 BoE member voted to cut it. Forex traders should follow this figure because it could have an extreme effect on the GBP behavior during the day.
JPY
Yesterday, Asian markets saw a steady rise on the back of the US Interest Rate cut. Scheduled economic figures from Japan were limited to the All Industries Activity Index yesterday. This had little to no impact on JPY behavior. JPY movement was dominated by the bullish greenback as it slipped all across the board, against all traded currencies. The JPY lost 3% of its value against the USD and the GBP and 2% of its value against the EUR and the AUD. The 75pts cut in the key interest of the US encouraged investors to re-enter risky carry trades funded by cheap borrowing in the JPY as well as going long with the USD/JPY, EUR/JPY, and GBP/JPY pairs. Today, BoJ Governor Fukui is expected to give a speech at 10:00 GMT in Tokyo. Forex traders should expect to see some indication regarding the BoJ economic policy for the near future. The JPY is expected to continue to be extremely sensitive in relation to the USD behavior. Toshihiko Fukui's five-year term set to expire on Wednesday. The Japanese government is set to present a new nominee, though there should not be much change in the overall outlook of Japanese economic policy. Today will be an interesting one for the JPY as it will be pulled between bearish behavior in the Forex market and bullish behavior in the stock market; it is safe to say that range trading should be expected.
Technical News
EUR/USD
After bottoming out at 1.5620 after the Fed rate cut turmoil, the pair appears to be resuming its familiar bullish path. The daily chart is showing a bullish cross on the slow stochastic as the hourlies are still moderately bearish. Buying on dips looks to be an excellent choice today.
GBP/USD
The cable is floating between two major Fibonacci key levels with bullish momentum on the daily chart. The 4 hour RSI is floating on the 50 level with a positive slope which indicates that we might see a test of the 2.0230 level before the weekend. Being on the buy side appears to be preferable.
USD/JPY
The 4 hour chart is showing that the bullish corrective momentum has diminished and is now slightly bearish. The bearish cross on the slow stochastic strengthens the bearish behavior of the pair, and could see a valid target price at 98.10.
USD/CHF
After a very sharp drop and a test of the 0.9630 level, the pair has shown a moderate correction. The daily chart is giving mixed signals, and the 4 hour chart is slightly bearish. Forex traders are advised to wait for a clearer signal before entering the market with that pair.
The Wild Card
Gold
There is a very distinct bullish channel forming on the daily chart as Gold is now floating on the bottom part of the channel. The momentum is now bullish again as indicated by all oscillators. This is a great opportunity for forex traders to rejoin the very strong bullish trend at an excellent entry point.
25/03/'08 - Greenback Goes Down Again
Economic News
USD
Yesterday's trading session was characterized by low liquidity as US markets were closed due to the Easter holiday. The greenback was consolidating yesterday against most currencies and showed no distinct trending. The calm status changes later on the overnight trading session as the greenback started to gain all across the board in a quite aggressive manner probably due to speculation that the Fed will continue to ease interest rates in order to try and salvage the ruins of the US economy.
"There are a variety of reasons for the dollar's general weakness. The major ones are the bearish outlook on the economy and expectations of more rate cuts. The Fed may cut rates by half a percentage point next month and another quarter point in June” said the head of economic strategy of Bank of America
Despite the unexpected rise in existing home sales of 2.9% which was the biggest jump in a year, the greenback continued to linger in bear territory.
As for today, there are two major events expected to come from the US. The first is the Yearly National HPI Composite index which measures the annual change in the average price of a single-family home in 20 metropolitan areas. And is expected at 13:00 GMT The index is expected to be released at -10.5% and has a previous figure of -9.1%. A bit later at 14:00 GMT, the Consumer Confidence is expected to be released with a forecast of 73.5 which is slightly lower than last month's release of 75.00.
The expectations for weak US data will most probably help to push the greenback further down, and it appears that the short breath of fresh air which caused the greenback to gain against most currencies is probably over.
EUR
After last Tuesday's Federal Reserve's cut of the US key interest by 0.75%, the EUR began the trading week yesterday in a relatively bearish notion. The 15-nation currency saw no major movement after the day's first half, mainly due the lack of important figures release from both coasts of the Atlantic. However, later, the EUR sharply appreciated against the greenback adding 1.4% to its value in a couple hours.
The EUR pushed back from its bearish stance, which characterized it at the end of last week, mainly as a result of oncoming worries of another Interest Rate cut by the Fed attached with near term US recession speculations. Moreover, the positive economic signals released from the US yesterday, such as the Existing Home Sales report, did not helped the USD weakening move and the EUR/USD ended the trading session with an appreciation of more than 200 pips.
As seen on last week's German reports, the strong EUR keeps damaging the Euro-zone exports. This fact, combined with the high inflation rate seen recently in the Euro-zone, does raise speculations of ECB interruption to try relaxing the volatility of the market.
Today, there is no expected important news release from the Euro-zone. However, for the CHF investors, the Swiss Consumption Indicator for the previous quarter is expected to be released. The EUR will most probably keep its bullish trend for the short term, especially due to the fact that the US's Consumer Confidence release today is not expected to bring the USD to recovery.
JPY
Eight of the 10 most-traded Asian currencies outside Japan climbed as demand for higher-yielding assets increased after sales of existing homes in the U.S. unexpectedly rose last month and after JP Morgan raised its bid for Bear Stearns Cos. It appears that The consistent cuts in the US interest rate have diminished the carry trade cycles to a non existing status.
The JPY reacted relatively softly in relation to other currencies as the USD/JPY dropped less than 80 pips, whereas most of the other currencies appreciated much more against the USD.
There are two events expected to come from Japan, as both are considered to have moderate importance and effect on price movements. The first one is the Corporate Services Price Index (CSPI) which measures the rate of inflation experienced by corporations when purchasing services, and has a forecast of 0.7%. The second event and the slightly more important one is the Japanese Trade Balance which has a forecast of 0.77T and a previous release of 0.86T. It appears that the JPY will continue to gain today, especially on the back of the struggling US economy, and the stable Japanese monetary policy.
Technical News
EUR/USD
The pair corrected to the 1.5300 levels which is a key Fibonacci level yet failed to make a bearish breach. There is a bullish cross forming on the daily chart, and together with a sharp bullish spike it appears that there is now more room to run upwards. Next target price might be 1.5660.
GBP/USD
The cable is in the middle of a bullish trend which according to the daily chart has positive momentum. The RSI is floating at 50 and the slow stochastic is showing no reversal crosses. It appears that the bullish trend might continue with a target price of 2.0070.
USD/JPY
There is a very distinct narrowing bullish channel forming on the 4 hour chart as the pair now floats on the bottom barrier of it. The slow stochastic is showing a triple top formation with a positive slope, which indicates that the continuation of the bullish trend is quite imminent. Going long might be the right way to go today.
USD/CHF
The bullish channel which was initiated at 0.9800 continues with full momentum. The Slow Stochastic of the 1 hour chart implies on an additional bullish move, and the RSI is showing that there might be a breach through the upper level of the channel in the next 48 hours. Going long with tight stops might be preferable today.
The Wild Card
Gold
Gold has been showing a very strong and violent bearish trend which started at the peak price of 1026.00 and bottomed at 909.00. The 4 hour chart is starting to show fresh bullish momentum, and the cross on the daily slow stochastic directly indicates a bullish corrective move. This could be a great opportunity for forex traders to be on the buy side again, at a very low entry price.
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07/04/'08 - USD Goes Up Despite Weak Jobs Report
Economic News
USD
The USD pared its gain against the EUR on Friday as investors digested the U.S. March Unemployment Report and the Nonfarm Employment Change figures. Last Friday's Payrolls hit the -80K mark, marking the biggest decline in 5 years. Unemployment also spurred downside risks for the economy as it rose to 5.1% from 4.8%, and heightening the bearish sentiment for the U.S. economy in general. In fact, Fed Chairman Bernanke acknowledged last week that the economic expansion may slow down significantly, as homebuilding, employment and spending deteriorate. As for the USD, it will probably continue to move lower in the next couple of months, until the U.S. economy improves. Fed Chairman Bernanke, for example, expects a return to trend growth as early as 2009. Export, is another key economic factor. By now, exports are really keeping the U.S. economy from falling into a much deeper recession. The export boost provided by a weaker dollar, which makes American-made goods less expensive for overseas buyers, is helping to avert a deeper slump in manufacturing. This week's Trade Balance figure may show the trade deficit shrank to $57.5B in March from $58.2B the prior month. Looking ahead, this week will be quite an eventful one as 3 major central banks - BoJ, ECB, and the BoE will meet to set their monetary policies. On Tuesday, Pending Home Sales are expected to fall, further dragging the U.S. economy down. The Consumer Sentiment report for this month is also expected to drop its lowest in 16 years. Today, however, we do not expect major price action in the USD as the Consumer Credit index is the only U.S. data to be released. The volatility is expected pick up on Tuesday as the FOMC will release their Minutes report at 18:00GMT.
EUR
The EUR declined last week against most of the major currencies on speculation that European economic growth will continue to slow. The single currency dropped 0.4% to the 1.5737 level vs. the USD, from 1.5796 a week earlier. In the past week, something went wrong with the EUR. Consumer Confidence within the Euro zone has fallen; Consumer Spending is contracting while German factory orders dropped 0.5%. The ECB is scheduled to meet on Thursday to discuss monetary policy and even though they are not expected to lower Interest Rates, there is a chance that Trichet will officially acknowledge the recent slowdown in growth. If that will happen, the EUR/USD will continue to lose height due to a tumbling sentiment. Given the recent turn in the European fundamental data, the next move by the ECB is a rate cut and the fate of the Euro will be determined by how quickly that happens. Looking ahead to today, we expect the Euro-zone GDP figures. However the figure is not likely to impact the EUR, which may slip slightly vs. the greenback today as traders exercise caution ahead of tomorrow's U.S. Pending Home Sales report.
JPY
Downward pressure on the USD intensified after the U.S. Employment data increased recessionary concerns, and spurred many investors to dump their holding of the troublesome currency. Last Friday, the JPY traded 0.5% higher against the USD at 101.86, but was still on track for its biggest weekly loss since 2004. The reason is the economy. One should keep in mind that there was a slowdown in Japanese business investment which in all circumstances remains a key driver of the economic growth. To make matters more difficult, Goldman Sachs Investment bank has decided to downgrade the Japanese car manufacturing industry. The bank fears that the major Japan industry might suffer from a decline in U.S. demand. As a result, the JPY will probably continue to lose ground against the USD.
On Wednesday, the Interest Rate Announcement will be followed by the BoJ's Monthly Monetary Report. With interest rates already at 0.5%, there is not much room for the central bank to move.
There is no important economic news expected to be released in Japan, however, today we should see active JPY trading in response to key U.S and Euro-zone data releases. The near term outlook for the JPY remains pretty bearish as a U.S economic redemption is unlikely to occur anytime soon and recession fears will continue to drive risk aversion.
Technical News
EUR/USD
The pair is floating between two key Fibonacci levels and is now showing bearish price movement. The 4 hour chart is showing a distinct bearish cross, and the daily RSI is floating around 50 which indicates that the bearish trend might continue. Next target could be 1.5620.
GBP/USD
The bullish trend on the 4 hour chart was stopped by a moderate corrective move which took the pair to the 1.9900 level again. There is a bullish cross forming on the 4 hour chart which indicates that the bullish reversal is quite imminent. Going long with tight stops might be a good strategy today.
USD/JPY
There is a very distinct bullish channel forming on the 4 hour chart as the pair now floats in the middle of it. The bullish momentum is back, and the slow stochastic is showing that there is still much more room to run up. Next target price might be 103.10.
USD/CHF
The pair has been traded in a range for a while now, and no distinct signal has been received on the daily level. The 4 hour chart is showing mixed signals yet the Bollinger Bands are getting much tighter which indicates on a possible close break. Traders are advised to wait for a significant breach and swing in on any direction.
The Wild Card
Gold
After the sharp bearish move which ended at 870.00, gold is now making a bullish comeback and is forming a tight bullish channel on the 4 hour chart. The RSI is strengthening the notion that the bullish move will continue which provides forex traders with a great opportunity to enter the market with a long position at a great entry price.