FOREX TRADING

At earlier this week, President Obama formally nominated Ben Bernanke to a second four-year term as Chairman of the Federal Reserve Bank’s Board of Governors. The response was comparatively quiet, maybe because most pundits had already expected the news. Bernanke himself likely sealed his own re-appointment with the public relations campaign he embarked on last month, ostensibly to offer a rationale for his response to the credit crisis. “In a profound departure from the central bank’s tradition as an aloof and secretive temple of economic policy, Mr. Bernanke has plunged into the public spotlight to an extent that none of his predecessors would have contemplated.” (more…)

Greenback gained ground Wednesday versus the EUR and the British pound, after strong data on orders for new U.S.-made durable goods and new home sales comforted anticipations of an improvement in the economy. The US Dollar traded higher after the durable-goods orders report said orders for July arose by 4.9%, the largest growth in 2 years. Investors will be watching for the new U.S. jobs report today before making significant moves. (more…)

The Euro may see selling pressure in European hours with Germany’s Consumer Price Index expected to show that the annual inflation rate fell for the second straight month in August. UK Nationwide House Prices are also on tap, with forecasts calling for home values to fall the least in 16 months.

Key Overnight Developments

• New Zealand Trade Deficit Narrowed in July as Imports Tumbled

• Australian Business Investment Trumps Expectations in Second Quarter (more…)

Here are Forex Technical Analysis for daily trading :

EUR/USD

Current level-1.4236

EUR/USD is in a broad consolidation, after bottoming at 1.2331 (Oct.28,2008).
Technical indicators are neutral, and trading is situated above the 50- and 200-Day SMA, currently projected at 1.4134 and 1.3523.

Yesterday’s test of 1.4350 resistance provoked a sharp sell-off to 1.4209 support zone.
Current rebound is corrective in nature and we expect it to be limited below 1.4280 before next leg downwards, to 1.4123. (more…)

Later afternoon trading saw the price of Crude Oil take a nose dive as traders took profit. The price of Oil stalled at the $75 resistance level and fell significantly following the failed breach. Today traders will be tracking the release of the U.S. Crude Oil Inventories data along with the New Home Sales numbers for today’s market direction. (more…)

EUR/USD

Current level-1.4324

EUR/USD is in a broad consolidation, after bottoming at 1.2331 (Oct.28,2008). Technical indicators are neutral, and trading is situated above the 50- and 200-Day SMA, currently projected at 1.4087 and 1.3463. (more…)

It is good to say that the opposite correlation observed between the US Dollar (and also the Yen) and global equities is mostly a product of the carry trade. “The U.S. stock market bottomed and the U.S. Dollar Index peaked nearly at the same time in March. When U.S. stocks are up more than 50% in that time, the Dollar Index (which measures the greenback’s value against the euro, the yen, the British pound, the Canadian dollar, the Swedish kroner and the Swiss franc) is down closely 12%,” observed one analyst.

Upon one level, this represents a return to 2008, before the explosion of the credit crisis, when carry trading was THE dominant theme in forex markets. Nonetheless, there’s one significant difference. When the Dollar and Yen were the funding currencies then and now (due to their low interest rates), there has been a slight shift in the currencies selected for the opposing/long end of the trade. (more…)