FOREX TRADING

FX Technical Commentary

Euro 1.4960

Initial support at 1.4833 (Nov 23 low) followed by 1.4802 (Nov 20 low). Initial resistance is now located at 1.4999 (Nov 23 high) followed by 1.5048 (Nov 11 high)

Yen 88.50

Initial support is located at 88.36 (Oct 9 low) followed by 88.01 (Oct 7 low). Initial resistance is now at 89.19 (Nov 23 high) followed by 89.75 (Nov 16 high).

(more…)

Daily Technical Analysis

EURUSD Outlook

The EURUSD made indecisive movement yesterday, formed a Doji on daily chart. Price attempted to push lower after made a false breakout from my bearish channel but found a support around 1.4887 area before closed higher at 1.4963. On my h4 chart below we can see that price still move in range area indicating consolidation and indecisive market and struggling around the upper line of the bearish channel. Given such fact, I think the bias should remains neutral since we have nothing significant technically.

The Dollar weakness seems limited so far, but overall the market sentiment remains negative for the Greenback although Geither and Trichet support a strong Dollar. Immediate resistance at 1.4990 – 1.5000 area. Break above that area should trigger further bullish momentum re-testing 1.5062 key resistance area. Break above 1.5062 area should confirm the bullish continuation targeting 1.5150 and 1.5300. However, note that from a longer term point of view, a failure to break above 1.5062 will potentially produce bullish exhaustion thus could trigger significant bearish momentum even a reversal scenario towards 1.4625 and 1.4450. On the downside, immediate support at 1.4887 (yesterday’s low) followed by 1.4820 area. Break below that area should trigger further bearish momentum.

(more…)

Fed releases FOMC meeting Minutes and New Projections for GDP, Unemployment, and Inflation

The Federal Reserve Minutes of FOMC meeting was released showing projections of the Federal Reserve governors along with Banks presidents about the future outlook for this year and the upcoming year, During the last FOMC Rate decision meeting the Fed kept the borrowing costs at record lows among 0.0% – 0.25% to stimulate economic growth.

The Federal Reserve focused on the future outlook for the world’s leading economy, regarding the challenges that currently pose a threat to economical recovery such as Unemployment, inflation and growth outlook along with other major concerns about the performance of company’s especially financial institutions and the effect of tight credit conditions on markets.

(more…)

Roller Coaster Major Pair Action

Overall, the market traded flat during the first part of the overnight session, but just ahead of the European open the majors started tumbling lower, extending the downtrend seen during the prior U.S. session. However, at the first support area that the major pairs hit, the market started reversing the initial Usd strength, and put the major pairs just below Tuesday’s opening price. Ahead, the U.S. market might become very active as investors prepare for the U.S. Preliminary GDP and for the Consumer Confidence reports.

Dollar Index Technical View: TheLFB Member Charts

(more…)

U.S. Third-Quarter GDP Growth Revised Down to an Annualized 2.8%

The second estimate of GDP growth for the third quarter was revised down to an annualized 2.8% from the first, or advance, estimate of a 3.5% increase. The third quarter continues to mark a return to positive growth after four quarters of decline. The downward revision was in line with expectations, which were lowered on the release of the worse-than-expected September trade numbers, construction spending and retail sales. Although the pace of GDP growth in the quarter represents a marked improvement from declines of 0.7% and 6.4% in the second and first quarters, respectively, it is indicative of an only modest recovery in economic activity.

The downward revision to overall growth came from three main areas — net exports, consumer spending and non-residential investment in structures — each reducing overall growth by 0.3 percentage points. Some offset was provided by slightly greater strength in capital spending on equipment and software (E&S) and government spending.

(more…)

European Market Update

German IFO survey hits 15 month highs; European bourses shakes off initial concerns over financial sector

ECONOMIC DATA

(MA) Malaysia Central Bank Interest rate maintains its overnight Rate at 2.00%; as expected

(RU) Russian Central Bank cuts its Refi rate by 50bps to 9.0%; In line with views

(FI) Finland Oct Unemployment Rate: 8.2% v 8.1%e

(GE) Germany GDP SA Q/Q: 0.7% v 0.7%e; Y/Y: -4.8% v -4.8%e; GDP NSA Y/Y: -4.7% v -4.7%e
(GE) German Q3 Final Private consumption: -0.9% v -0.4%e; Government Spending: 0.1% v 0.3%e; Imports: 5.0%e v 3.55e; Exports: 3.4% v 4.1%e

(SZ) Swiss Oct UBS Consumption Indicator: 0.867 v 0.671 prior

(FR) France Nov Business Confidence Indicator: 89 v 91e; Production Outlook: -9 v -9e; Own-Company Production: -3 v 1e
(FR) French Oct Consumer Spending M/M: 1.1% v 0.4%e; Y/Y: 3.5% v 2.3%e

(SP) Spain Oct Producer Prices M/M: 0.0% v 0.8%e; Y/Y: -4.2% v -3.1%e

(SZ) Swiss Q3 Employment Level Y/Y: 0.2% v -0.8%e; 3.96M 3.94Me

(NV) Netherlands Nov Producer Confidence: -5.6 v -6.5%e

(SW) Sweden Oct PPI M/M: -0.4% v -0.1%e; Y/Y: -1.8% v -1.6%e

(GE) Germany Nov IFO Business Climate: 93.9 v 92.5e (15 month high); Current Assessment: 89.1 v 88.0e; Expectations Survey: 98.9 v 97.3e

(NO) Norway Q3 GDP Q/Q 0.9% v 0.8%e; Mainland GDP Q/Q: 0.5% v 0.8%e

(UK) Q3 Total Business Investment Q/Q: -3.0% v -5.0%e; Y/Y: -21.7% v -22.9%e
(UK) BBA Loans for House Purchase: 43.2K v 44Ke

(SA) South Africa Q3 GDP Annualized: 0.9% v 0.5%e; Y/Y: -2.1% v -2.6%e

(EU) Euro-Zone Sept Industrial New Orders M/M; 1.5% v 1.0%e; Y/Y: -16.5% v -17.3%e

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities: Following a strong Monday session in which a three day downward trend was snapped, European markets gapped down in line with their Asian peers. Asian trading, specifically out of mainland China, was broadly negative as rebuttals from financials regarding capital raise speculation failed to restore confidence. Commentary from the Chinese Academy of Social Sciences supporting stronger capital controls fueled concern. Follow-through from this concern has hit the European financial sector with the large cap banks leading the downward trend.

(more…)

Daily Technical Analysis

EURUSD Outlook

The EURUSD had a bullish momentum yesterday, slipped above my bearish channel but price retreat to the downside indicating bullish continuation scenario is potential but don’t be too optimistic yet. We only have 2 options regarding the bearish channel break, whether it is a true breakout or a false breakout. If today price made another bullish above 1.5000 area, I will consider the breakout is valid and bullish momentum should continue testing 1.5062, but if today price fall below 1.4920, I will consider it as a false breakout which lead to significant bearish momentum re-testing 1.4850/20 area. If you follow my daily analysis during the last two weeks, you may know that for me only movement above 1.5062 can be considered as bullish continuation scenario confirmation targeting 1.5150 and 1.5300. Below 1.5062, nothing is confirmed and bearish reversal scenario is still wide open. I still believe so

(more…)

FX Technical Commentary

Euro 1.4965

Initial support at 1.4802 (Nov 20 low) followed by 1.4786 (0.618 of 1.4624-1.5049). Initial resistance is now located at 1.5016 (Nov 16 high) followed by 1.5048 (Nov 11 high)

Yen 88.95

Initial support is located at 88.36 (Oct 9 low) followed by 88.01 (Oct 7 low). Initial resistance is now at 89.19 (Nov 23 high) followed by 89.75 (Nov 16 high).

(more…)

USD Lower, Existing Home Sales Rise 10.1%

• USD: Lower, Fed’s Bullard says Fed will maintain stimulus, existing home sales surge 10.1%
• JPY: Higher, Tokyo markets closed for holiday, gains limited by surging equity markets
• EUR: Higher, EU manufacturing and services PMI rise, ECB begins unwinding stimulus
• CHF: Higher, supported by improving risk sentiment, surge in equity markets and record price of gold
• GBP: Higher, supported by improving risk sentiment
• CAD and AUD: AUD & CAD higher, gold at record high, Australia’s auto sales & Canada’s retail sales rise

Overview

The USD starts the week sharply lower as equity markets rally and gold trades at a new record high. The initial catalyst for the surge in the equity markets and gold were linked to dovish comments from the Fed’s Bullard. Bullard called for the Fed to extend its asset purchase plan beyond Q1 2010. Bullard’s comments were seen as dovish and an endorsement of the Feds maintaining stimulus. In addition, the IMF says the global economy has passed the worst of the crisis.

(more…)

Dollar Index Drops as Shares Advance

Positive equity and commodity markets had a strong influence in the foreign exchange arena on Monday, sending the dollar index down to the 75.00 support area once again during the overnight session. The major currencies posted some small declines around the Sunday open, but soon afterwards the market reversed tack and since then the majors have moved almost exclusively higher. The only exception is the yen, which attempted to break below a 6-week old support area, but failed to find momentum to hold below 88.50.

Dollar Index Technical View: TheLFB Member Charts

(more…)

European Market Update

USD finds it hard to be loved; Gold hits fresh all-time highs near $1,1170/oz; Stocks aided by rising risk appetite

ECONOMIC DATA

(HU) Hungary Sept Retail Trade Y/Y: -7.3% v -6.8%e

(TT) Taiwan Oct Industrial Production Y/Y: 6.6% v 5.6%e; Export Orders Y/Y: 4.4% v 4.0%e
(TT) Taiwan Oct Unemployment rate: 6.0% v 6.1%e

(FR) France Nov PMI Manufacturing: 54.2 v 56.0e; PMI Services: 60.4 v 57.8e

(SZ) Swiss Oct Money supply M3 Y/Y: 7.7% v 7.7% prior

(GE) Germany Nov Advanced PMI Manufacturing: 52.0 v 51.6e; PMI Services: 51.5 v 51.2e

(IC) Iceland Oct Wage Index M/M: 0.3% v 0.3% prior; Y/Y: 1.9% v 1.9% prior

(EU) EU Nov Advanced PMI Manufacturing: 51.0 v 51.2e; PMI Services: 53.2v 52.9e; PMI Composite: 53.7 v 53.4e

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities: European markets have entered the abbreviated US week on a light tone. Rebounding from last week’s equity declines, markets have been supported across the board by the ‘global recovery’ story and new multi-year and all time highs in commodity prices. Corporate news, much like trading volumes have been thin with a relatively quiet weekend and pre-market session. Lloyds [LLOY.UK] announced the completion of the first stage in its multi-stage capital raise plan and Heritage Oil [HOIL.UK] confirmed sale of certain Ugandan license stakes to Italian firm ENI [ENI.IT]. Following commodity rises, basic resources and heavy industrial names have been the outstanding players throughout the session.

(more…)

Daily Technical Analysis

EURUSD Outlook

The EURUSD made another rejection to consistently move below 1.4820 key support level on Friday. This fact surely keep the major bullish scenario intact, but the bearish reversal scenario warning showed by double top pattern with peaks around 1.5062 area is also still valid and the bias should remains neutral as market is consolidating now. Overall, this pair has been indecisive in the last two weeks and we need a significant movement above 1.5062 to continue the bullish continuation towards 1.5150 and 1.5300 or consistent move below 1.4820/00 area to confirm further bearish pressure towards 1.4625 and 1.4450 area. Immediate resistance at 1.4965 and the upper line of my bearish channel, which vulnerable to be tested today after rejection below 1.4820. A violation to the bearish channel should be seen as potential threat to the bearish reversal scenario re-testing 1.5062 area.

On fundamental side, we will have many news from Euro zone today (manufacturing and services PMI) and Trichet is going to make another statement which potentially move the market significantly, especially if we have big surprise whether in the numbers or Trichet’s comment. We know the he support a strong Dollar, but the market respond has been mixed so far.

(more…)

USD Carry Trade Under Threat

U.S. Dollar Trading (USD) finished the weak on a strong footing with fresh multi-week highs against the Euro, GBP and AUD. Talk in the markets is of traders closing out short USD positions ahead of the end of the year and that weakness in global stock markets is souring the investors mood. In US Stocks, DJIA -14 points closing at 10318, S&P -3 points closing at 1091 and NASDAQ -10 points closing at 2146. Looking ahead, October Existing Home sales are forecast at 5.7Mln vs. 5.57Mln previously.

The Euro (EUR) tested the noted 1.4800 support level before recovering late in the US session with stock markets also rising off lows. October German PPI was at 0.0% vs. 0.1% forecast. EUR/JPY came under increasing pressure as the technical picture continues to weaken testing 132 supports. Overall the EUR/USD traded with a low of 1.4800 and a high of 1.4935 before closing at 1.4859. Looking ahead, November PMI Manufacturing is forecast at 51.2 vs. 50.7 whilst PMI services is forecast at 52.8 vs. 52.6 previously.

(more…)

FX Technical Commentary

Euro 1.4850

Initial support at 1.4802 (Nov 20 low) followed by 1.4786 (0.618 of 1.4624-1.5049). Initial resistance is now located at 1.4966 (Nov 19 high) followed by 1.5016 (Nov 16 high)

Yen 88.85

Initial support is located at 88.64 (Nov 19 low) followed by 88.36 (Oct 9 low). Initial resistance is now at 89.75 (Nov 16 high) followed by 90.61 (Nov 12 high).

Pound 1.6475

Initial support at 1.6402 (Nov 4 low) followed by 1.6263 (Nov 3 low). Initial resistance is now at 1.6750 (Nov 19 high) followed by 1.6878 (Nov 16 high).

(more…)

This Week’s Market Outlook

Highlights

• Currency markets to remain beholden to the risk trade
• Bullion’s bull-run still intact
• Sterling takes a hammering, focus on 3Q GDP and public finances
• Key data and events to watch next week

Currency markets to remain beholden to the risk trade

The moves this week should convince anyone that had any doubt, that the correlation between equity markets and currencies remains alive and well. It was a rollercoaster, with EUR/USD oscillating between 1.4800 support and 1.5000 resistance for the better part of the week. The S&P 500 meanwhile continued to find interest on either side of the pivotal 1100 level. It seems that EUR/USD 1.50 and the S&P 1100 go hand in hand as both remain extremely challenging technical and psychological levels. Indeed, both have only closed above those crucial levels three times this year – euro in October and stocks just this week. It should not surprise anyone that the correlation between these two since the beginning of the second half of 2009 has been a stellar 92%. Don’t look for much to change on this front anytime soon.

(more…)