XForex Daily Finance Briefing December 11th 2008

Mixed Fortunes For The Dollar

The dollar traded yesterday under a mixed trend against the Japanese yen. it strengthened modestly thanks to strong support at the level of ¥92 which the pair failed to break. Against the euro and the other European currencies the dollar traded under a weakened trend following rising risk appetite and after the gold price rose above the level of $800 per ounce.

The wholesale inventories in the US continued to drop into November by 1.12%, the largest drop since 200. The reduction in wholesale inventories was caused by a slowdown in consumption that has led to a reduction in demand.

Crude oil traded under the influence of the release of crude oil inventories in the US which showed a reduction below forecasts. During the day’s trading prices reached a high of $46 per barrel, after the announcement prices fell back before returning to a level around $45 per barrel.

The GBP-USD is under pressure from the global economic recession, and the recession in the UK in particular. The pair recorded gains yesterday and it seems that it is likely to test the resistance area at $1.50. If the pair succeeds in breaking this threshold it is likely to achieve a break out with a short term rally in the pair to over $1.55 likely. Significant support for the pair exists at the level of $1.45.

Today’s news announcements include the US trade balance and the jobless claim at 1.30pm GMT.

EUR
1.3280 1.3260 1.3220 1.3170 RES
1.2800 1.2830 1.2870 1.2920 SUP

JPY
94.20 93.90 93.50 92.90 RES
90.60 90.90 91.30 91.80 SUP

CHF
1.2110 1.2080 1.2050 1.2000 RES
1.1750 1.1770 1.1810 1.1870 SUP

GBP
1.5150 1.5110 1.5060 1.5000 RES
1.4690 1.4730 1.4780 1.4860 SUP

XForex Daily Finance Briefing December 9th 2008

The Dollar And The Yen Weaker Off Of Gains In Equities

The dollar and the Japanese yen weakened during yesterday’s trading against most of the majors due to rises in equities markets in the US. Markets were boosted after President Elect Barack Obama announced that he is intending to invest more in large scale infrastructure projects in the US. His words gave investors fresh reason for optimism and boosted risk appetite in the financial markets. The demand for safe haven currencies reduced off of the back of this.

The AUD and the CAD enjoyed support from rises in crude oil and commodities prices which strengthened yesterday following Obama’s announcement. The Bank of Canada is expected to announce a cut in interest rates of 0.5% to the level of 1.75%. The announcement is due at 2pm GMT.

The recession in European economies is continuing to deepen. In the Eurozone investor confidence dropped in September to a new low at the level of -42.6. In Germany, industrial production has also continued to decline falling by 2.1% in October. PPI in the UK, meanwhile, dropped by 0.7% in November the fourth consecutive cut.

The EUR-USD strengthened yesterday after comments from one of the members of the ECB board were viewed by the market as implying that a hold in interest rate cuts in January is a possibility. The pair traded yesterday around the level of $1.2970 and continued to trade in the range between $1.24-1.30.

Today’s news announcements include the UK trade balance at 9.30am GMT and pending homes sales from the US at 3pm GMT.

EUR
1.3080 1.3060 1.3000 1.2940 RES
1.2650 1.2680 1.2730 1.2790 SUP

JPY
94.70 94.40 93.90 93.50 RES
90.90 91.20 91.60 92.00 SUP

CHF
1.2310 1.2290 1.2230 1.2170 RES
1.1900 1.1940 1.1990 1.2030 SUP

GBP
1.5050 1.5010 1.4950 1.4890 RES
1.4620 1.4670 1.4700 1.4750 SUP

XForex Daily Finance Briefing November 25th 2008

The Dollar Weaker After Bullish Trade From Equities Markets

Yesterday stock markets in New York ended the day sharply up after the US government announced a rescue program valued at $300 billion for Citigroup. The last two trading days have witnessed the largest gains made by stock exchange in the US since 1987 as risk appetite has returned to the markets. The dollar has weakened against most of the majors off of the back of this trend.

US existing homes sales data published yesterday continued to record a drop in October, above forecast, to a level of 4.98 million homes sold.

The euro and the British pound collected gains against the dollar yesterday after a reduction in the demand for greenbacks as a safe haven investment. The European current account deficit widened in September to the level of €10.6 billion. The recovery of the stock market in the US has weakened the Japanese yen against the majors. The Canadian dollar, meanwhile, strengthened against the dollar due to rising commodities prices in the world and a jump of over 9% in the crude oil price to the level of $54.5 per barrel.

The AUD-USD strengthened yesterday under the influence of increased risk appetite and recovering commodities prices and has returned to trade above the level of 0.6550. The pair appears to be building firm support at the level of $0.60. The pair is in a situation of overselling and there are estimates that it will continue to strengthen into the middle term. There is strong resistance at the level of $0.70.

EUR
1.3080 1.3040 1.3000 1.2950 RES
1.2660 1.2690 1.2750 1.2810 SUP

JPY
98.60 98.20 97.70 97.10 RES
94.40 94.70 95.20 95.80 SUP

CHF
1.2220 1.2190 1.2140 1.2080 RES
1.1800 1.1820 1.1880 1.1930 SUP

GBP
1.5350 1.5310 1.5270 1.5220 RES
1.4930 1.4960 1.5010 1.5090 SUP

XForex Daily Finance Briefing November 24th 2008

The Trading Week Opens With The Dollar Weaker

The trading week has opened with a tendency towards dollar weakness visible in the markets. This is a continuation from Friday’s trading session when the majors strengthened against the dollar against as sharp highs were reached in the New York stock exchanges. The news of the nomination of Timothy Geithner, as Secretary of the Treasury in the upcoming Obama administration sent equities higher and pushed the yen to a low against the majors.

Inflation in Canada continued to decline in October and is now standing at an annual level of 2.6% after the measure registered a level of 3.4% in September. The reductions in inflation are providing a green light for the Bank of Canada to undertake further interest rate cuts. At 6am GMT the USD-CAD was down 0.9% on the same period Friday morning.

The economy in Europe is continuing to worsen. In November the Eurozone economies contracted by the highest rate registered in the last decade. PMI manufacturing registered a drop in November above expectations to the level of 36.2 after registering 41.1 a month earlier. The economic data indicates that recession in Europe is deepening and is likely to spur the ECB to undertake further interest rate cuts. The EUR-USD has returned some of its losses over the last month although the signals continue worsen for the Eurozone economies. The pair has traded sideways since October and it appears that drops in equities markets and commodity prices are not dragging on the pair as much as previously. Strong support exists for the pair at the level of $1.24 in case this level should be broken the pair may drop down to $1.20 or even below. If the support point continues to hold, the trend is likely to change direction in the short term.

Today’s news announcements include the IFO survey from Germany at 9am GMT and at 3pm GMT in the US, Existing Homes Sales.

EUR
1.2820 1.2790 1.2730 1.2680 RES
1.2400 1.2430 1.2470 1.2540 SUP

JPY
97.60 97.30 96.80 96.20 RES
98.30 98.00 97.40 96.70 SUP

CHF
1.2390 1.2360 1.2310 1.2250 RES
1.1960 1.1990 1.2030 1.2080 SUP

GBP
1.5120 1.5090 1.5040 1.5000 RES
1.4700 1.4720 1.4790 1.4850 SUP

XForex Daily Finance Briefing November 20th 2008

The Dollar And Yen Stronger As Economic Fears In The US Continue

Investors’ risk aversion is causing a strengthening in the value of the dollar and the yen against the other major currencies. The dollar and the yen are strengthening on Thursday as fears over global recession and the impact of the credit crisis rebound in the currency markets. The uncertainty over the state of the US car manufacturing industry is further stoking this effect. The three major US car manufacturers are warning over the threat of bankruptcy, which would trigger a massive wave of manufacturing layoffs in the US.

The euro and the dollar both registered one week lows against the yen on Wednesday. The yen’s strengthening is occurring mainly as a consequence of the further unwinding of carry trade positions where high yield assets are bought with the low yielding yen. It is possible that the dollar will continue to weaken against the yen as earnings announcements from US companies are being accompanied with increasing anxiety over profit levels. In addition, expectations of a looming interest rate cut by the Fed which will take rates below the current level of 1% is also having its effect.

In other news, light sweet crude oil prices have fallen below the level of $53 per barrel on Thursday. Oil’s decline is being influenced by a decline in equities in Europe and in the US in particular, where indices registered a five years low yesterday. This came after US CPI data revealed a sharp decline in October to the level of -1%. Silver prices followed oil down, and were down -3.2% in 24 hours at 6am GMT. Gold prices were less affected and were up 0.2% in the same period. The commodity dollars also suffered. The USD-CAD was up 1.9% in 24 hours at 6am GMT, the AUD-USD was down 1.5% in the same period.

Today’s news announcements include retail sales in the UKL at 9.30 am GMT and at 3pm GMT in the US leading indicators index.

EUR
1.2740 1.2650 1.2580 1.2530 RES
1.2300 1.2360 1.2410 1.2460 SUP

JPY
98.10 97.30 96.20 95.60 RES
93.00 93.80 94.60 95.00 SUP

CHF
1.2260 1.2230 1.2170 1.2120 RES
1.1870 1.1890 1.1940 1.2000 SUP

GBP
1.5180 1.5150 1.5090 1.5040 RES
1.4790 1.4820 1.4860 1.4910 SUP

XForex Daily Finance Briefing November 19th 2008

Money Markets Calmer As Traders Look For New Direction

The dollar traded yesterday without any major movements against major currencies whilst US stock markets looked to stabilize and the currencies market sought direction. The drop in PPI in the US in October came in above expectations, at 2.8%, after a month earlier the measure dropped by 0.4%. Core PPI (excluding energy and food) rose in October by 0.4% to an annual level of 4.4%. It is clear that headline inflation figures are being heavily influenced by changes in energy prices, stripping these away inflation still persists in the US, despite the onset of recession.

The Japanese yen has retained its recent gains despite stock markets in New York closing up yesterday. At 6am GMT the USD-JPY was down 0.1% on 6am GMT Tuesday. The drop in crude oil prices below $55 per barrel, meanwhile, has caused the Canadian dollar to weaken modestly against the dollar. At 6am GMT the USD-CAD was down 0.4% on 6am GMT Tuesday.

The recent modest strengthening of the British pound was stopped in its tracks yesterday after CPI in the UK recorded its sharpest drop in the last 11 years. The index recorded a drop to an annual rate of 4.5% from the level of 5.2% in September. Estimates that a sharp reduction in the interest rates of the UK in the coming month is likely are being further reinforced as UK inflation plummets. Another negative record breached in October came from annual retail sales index which recorded the highest drop since 1993 from 5% to 4.2%. Cable (GBP-USD) was down 0.3% at 6am GMT this morning in 24 hours.

The US Secretary of the Treasury, Henry Paulson, stated yesterday that the Federal bailout program has the capacity to resolve the financial crisis although it is unrealistic to believe that the bailout package will resolve all difficulties. As pressure builds within Congress for the remit of the package to be extended Paulson warned that no solution exists that will effect a complete economic recovery in the US and that funds must be channeled narrowly.

The EUR-USD traded without significant change as the pair continues to build stability, perhaps in advance of initiating an uptrend. In the long run, however, the trend appears to be in the dollars direction. Support exists for the pair around the area of $1.24 with resistance around $1.30.

Today’s news announcements include both CPI data and Housing Starts from the US at 1.30pm GMT.

EUR
1.2830 1.2790 1.2750 1.2690 RES
1.2430 1.2470 1.2520 1.2580 SUP

JPY
98.80 98.50 98.00 97.40 RES
94.80 95.20 95.60 96.10 SUP

CHF
1.2260 1.2230 1.2170 1.2120 RES
1.1870 1.1890 1.1940 1.2000 SUP

GBP
1.5180 1.5150 1.5090 1.5040 RES
1.4790 1.4820 1.4860 1.4910 SUP

XForex Daily Finance Briefing November 18th 2008

Gains For The Majors Against The Dollar, Yen, In Early Trade ON Tuesday

The yen weakened against the dollar, Tuesday, but has been supported by the risk aversion evident amongst investors as the Nikkei registered declines following the downtrend visible in US indices, yesterday. The Australian dollar weakened on Tuesday after statements from the Reserve Bank of Australia were interpreted as suggesting that further interest rate cuts are looming from the bank. The November meeting of the members of the bank has revealed an increase in fears over the state of business and consumer sentiment in the country.

Sterling regained some ground against the dollar in early trading, Tuesday. At 6am GMT this morning cable (sterling-dollar) was up 1.7% on 6am GMT Monday. The EUR-USD also recorded some positive momentum, up 0.5% in the same period. The USD-CAD recorded a drop in early morning trading, down 0.8% on 24 hours.

Oil is trading above $55 per barrel on Tuesday, after hitting a 22 month low, on fears that aggravation in global recession will lead to a cut in oil demand. Oil has registered a price decrease of 60% from the highs registered in July when it reached $147 per barrel. Since September OPEC, which controls more than a third of the global oil supply, has cut supplies to oil markets by 2 million barrels per day, several of the OPEC members are now calling for additional cuts.

Today’s news announcements include UK CPI at 9.30am GMT. Forecasts indicate a decrease to 0.1% against 0.5% in the previous month. At 1.30pm GMT PPI data is published in the US.

EUR
1.2790 1.2750 1.2710 1.2660 RES
1.2360 1.2390 1.2450 1.2500 SUP

JPY
99.40 98.50 97.60 97.00 RES
94.70 95.20 95.80 96.40 SUP

CHF
1.2180 1.2150 1.2100 1.2030 RES
1.1740 1.1760 1.1810 1.1880 SUP

GBP
1.5400 1.5220 1.5060 1.5000 RES
1.4650 1.4720 1.4860 1.4940 SUP

Daily Technical Analysis From XForex.com

XForex A Technical Point of View

This week is beginning with news from the USA on manufacturing and industrial production figures. As the global economic crisis remains at the front of most traders’ minds the news might not trigger a major move. The general consensus is that this recession will be long, deep, slow and global. So our major weapon is technical analysis.

Here is today’s technical analysis.

USD/JPY 4 Hour Chart

This pair is in a down trend and has been for some time. After last week’s consolidation we have a pennant that may be worthwhile trading either way, if it breaks out. The safer trade would be to go with the trend. A break below the 95.80 level can take the pair towards 95.40 and then to 95.00 levels. If the bears push further we have 94.70 – 94.40 levels as lower targets. If this trade goes our way we should move stops as prices go down as the market is very unpredictable. An up break may take the price to 98.20 – 99.40 levels. The last bar shown is 4 am GMT.

USD/JPY 4 Hour Chart

 

GBP/USD 4 Hour Chart

This pair is going lower and lower. Currently the pair is in a side range on the 4 hour chart. A break to the down side, below the 1.4550 will let the market test 1.4500 before any further moves lower and if bears are on top then we may see a further move to 1.4400 – 1.4360 levels. A move to the upside needs more attention since it will be against the trend. Keep a close eye on your trade if a break to the upside occurs and you decide to go long. A near target for long would be 1.5100. The last bar shown is 4 am GMT.

GBP/USD 4 Hour Chart

 

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XForex Daily Finance Briefing November 17th 2008

The Dollar Up Equities Down As The Week Gets Underway

The week opened with a continuation of Friday’s trends in money markets. The dollar continued to build positive momentum in the currency market against a background of strong downtrends in stock indices and following the release of weak growth data from Europe. Retail sales in the US, meanwhile, dropped below forecast for the fourth month in a row, a drop of 2.8% in October. At the weekend G20 summit the chairman of the Federal Reserve Ben Bernanke stated that global central banks are ready and prepared for additional action to shore up the global financial system and signaled that further reductions in global interest rate levels can be anticipated.

The recession in Europe is continuing to deepen. Growth contracted by 0.2% in the second consecutive month of negative growth from the Eurozone. Analysts estimate that the economic situation in Europe will continue to worsen into the fourth quarter and that meaningful growth is not set to return to the economic zone until the tail end of 2009. Another recession signal emanating from the Eurozone is the drop in annual CPI to the level of 3.2% in October after standing at the level of 3.6% in September.

The USD-JPY dropped on Friday following weakness in equities markets. The pair is moving in a negative correlation with stock markets that have been in a downtrend recently, this is causing the dollar to weaken against the yen. In order for traders to become more bullish on the pair stock markets will need to break their recent downtrends. The Japanese economy, meanwhile, has now entered recession after GDP in the third quarter dropped by -0.4% against a forecast of 0.3% growth. This is the second consecutive quarter of contraction for Japan which puts the country within a recession for the first time since 2001.

Today’s news announcements include the announcement of the trade balance in Europe at 10am GMT.

EUR
1.2790 1.2750 1.2710 1.2660 RES
1.2360 1.2390 1.2450 1.2500 SUP

JPY
99.40 98.90 98.30 97.80 RES
94.70 95.20 95.80 96.40 SUP

CHF
1.2180 1.2150 1.2100 1.2030 RES
1.1740 1.1760 1.1810 1.1880 SUP

GBP
1.4950 1.4910 1.4860 1.4800 RES
1.4510 1.4550 1.4580 1.4630 SUP

XForex Daily Finance Briefing November 13th 2008

Oil And Sterling Down Sharply As Economic Outlook Continues To Darken

The dollar weakened against the yen on Wednesday as risk aversion soared in the markets after US Secretary of the Treasury Henry Paulson voiced further concerns over the state of the US economy. In the wake of Paulson’s comments negative sentiment built which stoked a global sell off of equities. The USD-JPY was down 2.1% at 6am on GMT against the previous 24 hours.

The pound plunged to its lowest level in 6 years against the dollar and has reached an all time low against the euro after the BOE (Bank of England) warned that the British economy will contract significantly next year. According to the report published by the bank the UK economy will shrink in the beginning of next year and inflation will drop below the level of 1%. The governor of the central bank, Mervyn King, has also acted to raise expectations of additional aggressive interest rate cuts from the bank. At 6am GMT cable (sterling-dollar) was down 3.5% on the previous 24 hours.

The battered Australian dollar bounced slightly from its lowest level on Thursday after the RBA (Reserve bank of Australia) announced that it had intervened in order to support the weakening currency. The last time that the central bank intervened in currency markets was at the end of October when the dollar touched the level of 0.6000. At 6am GMT the AUD-USD was down 2.7% on the previous 24 hours.

The declines which were registered in equities markets yesterday have also spread to commodities. On Thursday oil hit a 22 month low as Light Sweet crude prices dropped below $55 per barrel. Oil has dropped five percent overnight in a third consecutive day of price declines, despite comments from OPEC announcing further cuts in supply at the end of November. Oil prices are continuing to fall over fears that the weakening international economy will drive oil consumption down. Metals prices are following oil downwards. At 6am GMT the gold price was down 3.1% and the silver price down 5.3% on the previous 24 hours.

At 12.30pm GMT the trade balance is published in the US and at 7pm GMT the Federal budget is published.

EUR
1.2680 1.2600 1.2520 1.2450 RES
1.2150 1.2200 1.2280 1.2400 SUP

JPY
99.00 97.20 96.50 95.80 RES
93.20 93.80 94.60 95.10 SUP

CHF
1.2200 1.2130 1.2050 1.1980 RES
1.1600 1.1680 1.1750 1.1870 SUP

GBP
1.5250 1.5180 1.5050 1.4920 RES
1.4460 1.4570 1.4650 1.4800 SUP