FOREX TRADING

Forex Technical Analysis for Major Currencies :

EURUSD

The Euro versus dollar pair confirmed the exit from the ascending channel as seen in the above image, changing the intraday trend to the downside confirmed by momentum indicators that have given bearish signs. The medium and short term trend are still to the upside yet on the intraday basis, the pair needs to correct to the downside targeting the 23.6% correction for the ascending channel at 1.4630 and perhaps extend to the 38.2% correction at 1.4540. Trading below 1.4740 is vital for the decline to remain intact.

The trading range for today is among the key support at 1.4330 and the key resistance at 1.4985

The general trend is to the upside as far as 1.4135 remains intact with targets at 1.6000

Support: 1.4650, 1.4630, 1.4565, 1.4540, 1.4465
Resistance: 1.4715, 1.4740, 1.4810, 1.4880, 1.4910

Recommendation: Based on the charts and explanations above, our opinion is selling the pair from 1.4695 to 1.4565 and stop loss above 1.4740 might be appropriate.

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Oversold Greenback Gains

The dollar rose after finding some support against most major currencies on Friday. Risk aversion increased overnight on Chinese and UK bank worries. Still, the S&P 500 was up a modest 2.81 to 1,068.30 in narrow trading range despite today’s quadruple witching. The yen fell modestly. Japan’s Finance Minister Hirohisa Fujii said exchange rates should reflect economic fundamentals, in an attempt to downplay his earlier support for a strong yen. The euro saw some profit taking following 10-day gains. Sterling fell and broke the 1.64 support on reports Lloyds Banking Group Plc failed to raise enough capital to meet the FSA stress test. The Australian and Canadian dollars were overbought and pressured by lower commodity prices.

The dollar index rose today after hitting support at 76.00 yesterday. Highly correlated with equity markets, the dollar index dropped the last two weeks as US stock prices rallied. The dollar is extremely oversold and traders are very short the dollar. Still, we would like to see a break of the downtrend before deciding to turn bullish on the dollar; hopefully, it will not be on a stock market decline.

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Forex Technical Analysis for Major Currencies :

EURUSD

The Euro versus Dollar pair touched the key support for the short term ascending channel currently at 1.4705 as seen in the above image. The daily close above the previously breached key resistance at 1.4715 keeps the uptrend valid therefore we expect the pair is to incline on the intraday basis targeting 1.4875 as an initial target as far as 1.4650 remains intact. We may witness volatility around the mentioned support in an attempt to gather bullish momentum.

The trading range for today is among the key support at 1.4330 and the key resistance at 1.4985

The general trend is to the upside as far as 1.4135 is intact with targets at 1.6000

Support: 1.4705, 1.4650, 1.4610, 1.4565, 1.4515
Resistance: 1.4765, 1.4810, 1.4875, 1.4910, 1.5000

Recommendation: Based on the charts and explanations above, our opinion is buying the pair from 1.4705 to 1.4875 and stop loss below 1.4610 might be appropriate.

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UK: Government Budget Deficit Widens to Most Since 1993

The United Kingdom continues each day to try and rise from recession that has been ravaging the nation heavily while today we saw that the government’s budget deficit widened to most since 1993 as a result of lower tax receipts and rising welfare costs, and this is just another woe the nation faces.

Public finances for the month of August today were released showing that the budget deficit widened to 10.4 billion pounds from the revised prior deficit of 1.7 billion pounds from 0.2 billion pounds while the markets were expecting 14.5 billion pounds. (more…)

Japan’s Central Bank Hold Rates Steady And Improve Its Economic Forecasts

Japan’s economy released today some new improved data indicating that the economy is recovering from the worst global financial crisis, determining Japan’s central bank to hold rates steady for the ninth consecutive month at 0.1%.

The Tertiary Industry Index that evaluates the monthly change in output produced by the service sector in the country therefore it’s a key indicator of domestic activity, rose by 0.6% in July from the previous revised reading of 0.2%, while markets expected it to rise only by 0.5%. (more…)

Forex Technical Analysis for Major Currencies :

EURUSD

The Euro versus Dollar pair corrected to the downside to build a base at 1.4655 before rebounding to the upside and near our suggested target at 1.4765. Trading within a minor bullish channel as seen in the above image is continuing the short term uptrend where it is expected to face a resistance at 1.4875. The upside trend remains as far as 1.4650 is intact with targets at 1.4875 and 1.5000

The trading range for today is among the key support at 1.4330 and the key resistance at 1.4985

The general trend is currently to the downside as far as 1.4725 remains intact with targets at 1.2120

Support: 1.4705, 1.4650, 1.4610, 1.4565, 1.4515
Resistance: 1.4720, 1.4765, 1.4810, 1.4875, 1.4910

Recommendation: Based on the charts and explanations above, our opinion is buying the pair from 1.4705 to 1.4875 and stop loss below 1.4610 might be appropriate.

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Walking The Interest Rate Tightrope – Massive Currency Impacts

The market is preparing for two interest rate decisions on Thursday, coming from the Bank of Japan at some time from around 23:00 EDT, and from the Swiss National Bank at 08:00 EDT.

The two central banks share the same atypical characteristic: they both are struggling to devalue their national currency but apparently, they have not as yet succeeded in doing so. Actually, both currencies are among the best performing majors in the recent periods of trade, with the yen gaining 5% over the last month, the best performance of any major currency in the forex market. (more…)

Dollar Weakening As Foreign Investment Declines

Overall, the market saw some excitement during the day from pairs that normally are not so exciting, namely the aussie which advanced 1.31 percent and the cad which strengthened by 0.62 percent. Several key reports were released during the U.S. session, most notably was the fact that foreign investment flowing into the country has declined substantially.

The euro (Eur/Usd 1.4735) steadily gained on the day after a brief retracement to test the area near the neutral pivot point at 1.4635. The pair then broke above the R1 level at 1.4709 and used it as support in the late U.S. session. Overall the pair gained 70 pips or 0.48 percent on the day. (more…)

Unemployment Stabilizes In South Korea Amid Recovery In Economic Activities

The stimulus plans adopted by the South Korean government played a main role into the balanced economic performance that the country presents, which was reflected on the labor market as the unemployment rate remained unchanged during the month of August.

The unemployment rate in South Korea reached to 3.8% during the month of August, matching the previous reading seen in July. The improvement in companies performance determined them to refrain from reducing their work staff, especially after domestic consumption was supported by the stimulus plans. (more…)

Forex Technical Analysis for Major Currencies :

EURUSD

The Euro versus Dollar pair reached our suggested target yesterday at 1.4685 as it maintained trading around this level where we believe the pair is to gather bullish momentum to relieve indicators. We may witness slight volatility with a downside correction to reach 1.4640 before rebounding back to the upside on the intraday basis targeting 1.4865 as far as 1.4545 is intact.

The trading range for today is among the key support at 1.4330 and the key resistance at 1.4865

The general trend is to the downside as far as 1.4725 remains intact with targets at 1.2120

Support: 1.4640, 1.4585, 1.4515, 1.4465, 1.4410
Resistance: 1.4700, 1.4720, 1.4765, 1.4865, 1.4910

Recommendation: Based on the charts and explanations above, our opinion is buying the pair from 1.4640 to 1.4765 and stop loss below 1.4545 might be appropriate.

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Dollar Weakens Late In The Session

Overall, the price action seen during the U.S. session was fairly muted despite numerous high level reports being released. The only pairs to make significant changes on the day were the cad, which strengthened by 0.79 percent, and the pound which weakened by 0.55 percent. Manufacturing in the New York region has increased during September while retail sales surged during August, exceeding analysts’ initial forecasts.

The euro (Eur/Usd 1.4663) bumbled along the neutral pivot point at 1.4595 for most of the U.S. session. However, the dollar started to weaken near the middle of the session which pushed the euro above the recent ceiling at 1.4652 to test the R1 level at 1.4673. The pair was rejected shortly thereafter and began using the previous resistance at 1.4652 as support. (more…)

Retail Sales Increase on Cash for Clunkers, While Inflation Ease over a Slowing Pace!!!

Retail sales in the United States jumped in August by the most in three years due to a jump in auto sales, as consumers used the government’s “cash for clunkers” program, meanwhile inflation continued to show easing signs though the pace of drop eased noticeably compared with last year, as seemingly the recent rise in economic activity will prevent the economy from a disinflationary phase.

Retail sales increased in August by 2.7% more than estimates of 1.9% and following a revised 0.2% drop back in July, while retail sales that exclude autos increased by 1.1% more than estimates for a flat estimate following a 0.5% drop back in July, as auto sales increased by the most in 8 years. (more…)

New Zealand’s Manufacturing Sales Grew Yet It Does Not Support Growth

The manufacturing sector in New Zealand saw a rise in its annual sales for the first time in six quarters, but since many sectors continue to face challenges, the manufacturing sector improvement will not be enough to support growth in New Zealand’s economy that remains into recession during the second quarter of this year.

The overall activity of New Zealand’s manufacturing sector declined during the second quarter by – 4.8% after falling the previous month by 0.9%, on the other hand the volume of sales rose by 1.8% compared with the first quarter of this year. While the indicator that excludes meat and dairy sales fell by 2.8%.

The surge in meat and dairy sales is what supported the manufacturing sector sales during the second quarter of this year, but on the other hand, the government usually takes into consideration the indicator that excludes those parts, in order to have a better view of the manufacturing sector performance. (more…)

Forex Technical Analysis for Major Currencies :

EURUSD

The Euro versus Dollar pair was able to find a strong base at the 23.6% correction at 1.4530 which resulted in a rebound to the upside to trade within a minor bullish channel as seen in the above image. The short term trend is still to the downside yet we expect a slight downside correction towards 1.4585 before rebounding back to the upside with enough bullish momentum to breach 1.4685 in an attempt to target levels above 1.5000. The incline remains as far as 1.4360 is intact.

The trading range for today is among the key support at 1.4330 and the key resistance at 1.4865

The general trend is to the downside as far as 1.4725 remains intact with targets at 1.2120

Support: 1.4585, 1.4515, 1 .4465, 1.4410, 1.4360
Resistance: 1.4685, 1.4725, 1.4765, 1.4865, 1.4910

Recommendation: Based on the charts and explanations above, our opinion is buying the pair from 1.4585 to 1.4685 and stop loss below 1.4515 might be appropriate.

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