Forexyard Analysis

[forexyard]

Economic News

USD

With the dollar barely moving now, this the 4th day in a row, many traders have begun asking themselves 2 questions: 1. What's holding the dollar up 2. What's the reasons which may cause the dollar to crumble under pressure again? Let's start with the basics: for starters, there are a lot of economic releases expected today and tomorrow ranging from inflation to employment data. The reason the dollar has barely moved is due to the fact that the market is awaiting these news releases. Will the dollar crumble thereafter? The real question is not this but rather will the dollar break record lows again? This question is on the minds of traders as we head to this Friday's Payrolls release, an indicator that has been known to topple the dollar in the past, especially when the American economy was seen as lackluster - as it is now.

The real worry for traders is today's GDP release. Traders should recall the previous release, on the 27th of April, which helped the dollar make its recent gains. It should also be noted that since that date, bonds, equities, and the dollar have all made significant gains. Today, however, with markets expecting a significant slide in the GDP figure, down to 0.7-0.8% (from 1.3%), this could well mark the end of the dollar's ride.

We look to this figure above all others as the sign of future bodings for the forlorn dollar. It may well be that it is overbought at this point and traders will look for bad news to dump the dollar and fast. We suggest alertness

EUR

The EUR/USD which is typically the most traded currency has become the most stagnant. The EUR/USD has been stuck within a 50 pips trading range for the past 24 hours and a quick look at the charts will reveal a tight trading range for the past week. With the European Central bank scheduled to meet on June 6, incoming economic data has done little to clarify whether the central bank will raise rates in June. Today the Euro-zone retail PMI dropped back into contracting territory. This suggests that consumer spending was very weak in April and possibly in May as well. In addition to that disappointment, M3 money supply which is an inflationary indicator also fell short of expectations, signaling that inflationary pressures may be abating. It may seem that data is beginning to weaken, but there are still a lot of data that could shift the outlook either way. In the next 24 hours, we are expecting German and French unemployment along with French PPI and Euro-zone consumer confidence. Meanwhile the Swiss franc is stronger against the Euro ahead of its first quarter GDP release tomorrow.

JPY

The Japanese Yen is stronger against all of the major currencies with the exception of the Australian and New Zealand dollars. Even though the US stock market has not responded negatively to the move in the Shanghai index, and actually made gains yesterday, carry traders need to be very careful in the weeks to come. If the Shanghai stock market rebounds and refuses to fall, the Chinese government will become even more anxious about cooling the stock market. As a result, they could take more aggressive measures which would only put further pressure on carry trades.

No economic releases are expected from Japan until next week so look for the JPY to trade based on the moves of the USD.


Technical News

EUR/USD

The pair recovered most of the losses after nailing a new low for its short-term downtrend. The pair should trade sideways to lower today. It has strong support at 1.3400. If this level breaks, look for a test of the support at 1.3375. Below this Fibonacci retracement level there is support at 1.3275. Immediate resistance is at 1.3460. Next resistance lies between 1.3520 and 1.3530. A close above 1.3545 would signal another attack on the upside to 1.3610, but this is unlikely.

GBP/USD

We have retraced to almost 78.6% of last week's rally at 1.9720, which is the support we mentioned yesterday. The Sterling should make a good effort to base here and try to rally back to 1.9900 and eventually 2.0000. We suggest to keep long position today, and be willing to re-buy on a drop to 1.9680 (last week's low) if stopped out today.

USD/JPY

Despite yesterday's fall to 121.16, the subsequent rebound after trading above indicated support at 120.85 has retained our consolidating view and above 121.89 resistance would confirm up move has resumed in final leg of Elliott Wave for marginal rise to 122.00 but this year's high at 122.20 should hold from here and bring a strong pullback later this week.

USD/CHF

If resistance at 1.2265 is broken today, the Swiss Franc will target the zone around 1.2309. If successful the upward trend will continue towards 1.2342. If dropping under the support 1.2323, the currency pair looks for the next support around 1.2185. If that level is broken, the downward trend will continue towards 1.2144.


The Wild Card

CRUDE OIL

With support firmly in place at 62.6 and above this at 62.8, forex traders may find themselves at a loss as whether OIL will drop again. Most indicators point to NO, and the recent buy signal based by the MACD nearly confirms this. Look for support by the EMA to place BUYS.

Written by FOREXYARD

 

[free4440273]

...quite a good analysis here. be nice to have this as an open, continuous thread from hereon in. thank you

 

[forexyard]

thanks for the feedback....i'll be posting reports daily, so watch this space for updates. you an active trader? anything else you'd like to see posted?

FOREXYARD.com

 

[free4440273]

...'active' would be not be a word i use. currently trading dow futures but, funds providing, would like to spreadbet on forex also (pound/dollar being the most obvious 'casualty')

 

[forexyard]

lets not talk of casualties just yet :cheesy: i dont have much experience with dow futures, but im sure the transition to forex will not be too much of a problem...might be an enjoyable challenge. as i said, i'll be posting daily so feel free to ask questions or request advice. and if you want to delve into forex, we can help you out there too

 

[free4440273]

...thank you. very kind sir

 

[forexyard]

04/06/'07 - The Market Calms Down After Friday's Nonfarm Payrolls.

Economic News

USD

On Friday, we saw the release of the Nonfarm Payrolls which came out stronger than the expected 135K at 157K. The strong figure immediately triggered high levels of USD volatility, especially against the EUR, making it almost impossible to trade the NFP session. USD/JPY behavior was much calmer, as the pair barely reacted to the extremely high release. The ISM Manufacturing on Friday was also released above expectations of 54.0 at 55.0 which helped to send the USD up, but only at the local level, as it was not enough to keep it high for a long time due to fact that the rest of the news releases came out weaker than expected. Core PCE Price Index came out at 0.1 which was lower than the expected 0.2. Personal Income Plummeted to negative -0.1% as Personal Spending increased to 0.5% creating a very wide gap between them which means that it's becoming harder for consumers to spend more with lower income levels. As for today, the US calendar is empty and seems to be very light for the rest of the week. We should expect US Retail Sales, PPI, and CPI starting on Wednesday. It looks as if a slight positive wind is blowing at the USD's and it remains to be seen whether it will continue as the rest of the week unfolds.

EUR

The EUR was one of the only currencies that could sustain the blow taken from the release of the Nonfarm Payrolls and came back exactly to where it started prior to the release. What caused the strong EUR behavior was probably the extremely strong German Retail Sales release which was expected to get out of negative territory of -0.1% into positive 0.1% and instead soared to 2.6%. Today the Euro-Zone PPI is expected be released at 10:00 GMT with a consensus of 0.3%. The highlight of this coming week will surely be the ECB Rate decision which is widely expected to hike 0.25% to 4.00%. If indeed the ECB will hike the rate we expect local appreciation for the EUR this week.

JPY

Carry trades continue with full steam as the JPY is trading at record levels against most major currencies. The JPY is traded at 242.00 against the GBP, 164.10 against the EUR, and 122.00 against the Greenback, very impressive figures on any scale. The Japanese market started this week with some positive figures as the JPY Monetary Base went up to -5.7% from a previous figure of -12.2, and the JPY Capital Spending went down from 16.8% to 13.6%. As for the rest of this week, there is no significant news events expected to be released from the Japanese market, and carry trades will probably continue to take the JPY lower to the next record low.


Technical News

EUR/USD

The pair is consolidating around 1.3450 which is a very important key level and a low point in the recent downtrend. The Daily charts are bearish, as the hourlies support the notion that the continuation of the downtrend is on the way. A correction up might happen but if a break through 1.3450 is made, then the right direction is certainly down.

GBP/USD

After touching the 1.9770 bottom on Friday, the pair seems to be forming an uptrend and is now floating around 1.9840. The hourlies are bullish, and the dailies support with the RSI indicating that the momentum is growing for the trend to grow stronger. The next target price is around 1.9920.

USD/JPY

The pair is peaking at 122.05 and is in the midst of a very strong uptrend which was initiated at the beginning of March. As for now all indicators support the bullish notion, together with bullish signals from the Daily studies. The hourlies are a bit overbought which indicates that buying on dips might be a preferable strategy today.

USD/CHF

There is an upwards channel pattern forming on the daily chart and the pair is now floating at the upper level of it. It looks as if the pair might test the bottom level at 1.2260 before the uptrend continues. If a break will occur on either side of the channel, we expect an additional 80 pip move.


The Wild Card

CAD/CHF

After a very impressive uptrend that started three months ago, the pair shows no signs of a stop. There is a price consolidation on the 1.1610 level, which provides forex traders with the opportunity of a great entry point for a swing trade. It looks as if the next price target is 1.1700.

 

[free4440273]

...as always, really useful and insightful analysis, thank you. just one thing if you don't mind: was it deliberate that you started a new post here, as opposed to not continuing with your previous forex thread from last week? it just makes easier for me to follow (rather than subscribing to new threads). sorry, did not mean to be pedantic.
sterling/dollar seems to have shot up in the last hour - amazing!

 

[forexyard]

I'm glad you're finding our analysis useful. I posted a new thread as I realised that this specific forum page is more suitable for my analysis. sorry for any inconvenience

if you would like to get the full version of our analysis, including information tables, you can save the following link to the analysis page on our website:

http://www.forexyard.com/en/market-analysis/

alternatively you could register with us and receive the analysis direct to your inbox every morning. don't hesitate to ask if you need anything else...

good luck with sterling/dollar, sounds like things are moving in your favor! :cheesy:

Hugh

 

[free4440273]

...really kind of you. yeah, but unfortunately i have been paper trading the pound/dollar. have a position on the dow at the moment and am not able to open up new positions until this closes. thanks, great stuff here

 

[forexyard]

our pleasure mate, let us know when you're ready to open another position

 

[JTrader]

our pleasure mate, let us know when you're ready to open another position

Hi FY

I visited your companies website.
The first thing i look at in a forex broker to gage the value of their spreads are EURUSD - yours is an expensive 3 pip spread.
Furthermore, visiting your companies website made my PC freeze and need to be restarted, after it tried installing a java applet - not good .

 

[forexyard]

jtrader

regarding your computer freezing, this is the first time we have had such a complaint, and we have had thousands of java downloads to date. so it sounds to me like you have some problem with your computer. i am surprised by this complaint, as someone with your amount of postings is clearly an experienced computer user and one would expect a certain level of tech know-how, so i sincerely hope that you are not just posting negative comments in order to influence other readers. with regard to our spreads, we are not outside of the average spread range, and although some brokers might offer better spreads on selected pairs, they do not necessarily beat us on other pairs or aspects of service. furthermore, depending on your trading volume and frequency, forexyard can offer tailor made positions.

 

[JTrader]

jtrader

regarding your computer freezing, this is the first time we have had such a complaint, and we have had thousands of java downloads to date. so it sounds to me like you have some problem with your computer. i am surprised by this complaint, as someone with your amount of postings is clearly an experienced computer user and one would expect a certain level of tech know-how, so i sincerely hope that you are not just posting negative comments in order to influence other readers. with regard to our spreads, we are not outside of the average spread range, and although some brokers might offer better spreads on selected pairs, they do not necessarily beat us on other pairs or aspects of service. furthermore, depending on your trading volume and frequency, forexyard can offer tailor made positions.

Hello FY

i have done your company a favour by pointing out problems that i encountered with your companies website. You respond offensively by questioning my honesty & integrity. This is not the way to attract new clients :!::!:

In fact, the first 6 currency pairs that your company quotes on its homepage, are available with cheaper spreads from other brokers :!:

 

[forexyard]

no offense was intended by my reply. thank you for pointing out the problem you had, but honestly we have never encountered a problem with our java download, certainly not one that led to a system failure, so this is why i was skeptical. technical issues such as this can not be verified and so they are often the easiest means to paint a product in a bad light within forums. as i am sure you are aware and can appreciate, there are many people within every forum with their own agendas, so it is also in our interest to point this out. my sincere apologies if you felt i was accusing you falsely.

regarding spreads, clients are free to shop around, something we highly recommend before opening an account.

please contact our support team if you require any assistance with the java applet.

 

[forexyard]

05/06/'07 - Fed Governor Warsh speaks today.

Economic News

USD

Yesterday, Monday, the dollar weakened due to weaker-than-expected factory orders in the United States. The EUR climbed to $1.3488 from $1.3443 on Friday after the U.S. Commerce Department reported orders to factories rose less than expected in April. Orders were up 0.3%. It was the weakest result in three months and less than half of the 0.8% increase that analysts expected. Markets are closely watching U.S. economic data for signs of future Federal Reserve interest rate decisions. The Fed has left its key interest rate unchanged at 5.25% over recent months, even as the European Central Bank has raised the cost of borrowing seven times since December 2005. Analysts expect the ECB to raise the rate to 4% when it meets Wednesday.

In other trading, the Canadian dollar continued its climb against the greenback after breaching 94 cents Friday for the first time in 30 years. The U.S. dollar bought 1.0588 Canadian dollars late Monday after hitting a low of 1.0547, however eventually the U.S. dollar bought 1.0618 Canadian dollars in the late Friday.

Analysts speculate that the Canadian currency will equal 1 U.S. dollar by year's end. The dollar also weakened against the Swiss franc, falling to 1.2235 from 1.2303.

Today the ISM Non-Manufacturing Index is due to be out and 55.3 figure is expected a slightly weaker figure from the last month's 56.0. Despite this, it seems that the greenback will keep its strengthening during the next 2 weeks or so.

EUR

After two days of releases on Thursday and Friday, yesterday proved more of a quiet day with very little of note being released. In the U.K. the May Construction PMI which came in lower at 58.0 and much below forecasts of 59.5 effects almost immediately on the market . Future business activity dipped to 71.8. While the numbers still show an expanding market the pullback following the softer house price numbers is bringing a hint that construction companies are slowing their expansion with the risk of a correction to the price bubble.

Inflation pressure is still in focus and some economists believe that an interest hike is inevitable. By hiking rates by 0.5% this coming Thursday, inflationary pressures might be forgotten, however the interest rate is unlikely to be changed by as much as 0.5% and likely not at all.

Euro-zone April PPI rose by 0.4% MoM and 2.4% YoY. This is slightly above forecasts of +0.3% and +2.3% respectively but with the annualized rate declining from 2.7% in March and retaining a downward path for the fourth consecutive month. The recent increase in oil prices clearly had an effect though the overall number still maintains a basically benign inflationary picture.

Even if inflation is under control the repeated comments from ECB board members remains hawkish with both Trichet and Weber commenting that Euro interest rates are still too low. Not that the market hasn't heard them before but it does make sure that everyone is agreed that the ECB will hike rates again this week to 4.0%.

Stateside April's Factory Orders were up by +0.3% MoM and Inventories by +0.5%. Forecasts had centered on numbers closer to +0.4% and +0.6% respectively. Orders excluding transport were up by a solid +0.7% and ex-defense by a lower +0.3%. Durable goods were reported as rising by +0.8%. The numbers are basically not too bad and while they are not about to excite the market they do tend to confirm the general strengthening in factory data.

JPY

Finally Fuji from Japan's MOF commented that he still sees Japan's corporate sector remaining solid and expects that confidence to spread into households at some point. However, there is one big 'but' to the scenario and that is the fact that consumers face an approximate rise in tax of 15% this year. FY 2006-2007 saw the revenue authorities providing a 10% rebate in tax while this year the adjustments in tax revenue between the national income tax and local inhabitants tax will increase national pension and health insurance payments that should amount to close to 5%. Corporate tax remains steady but profits are not being fed through to wages. It is difficult to imagine too much of a 'feel good' sensation spreading into households.

Today the Japanese May MOF Capital Expenditures Survey due to be out at 10.5% however it likely won't effect the market in any noticeable manner. The JPY still seemed to be traded at short range how ever the economy leaders in Japan are believing on the economy recovery of Japan.


Technical News

EUR/USD

On the 4 H chart we notice that the bullish trend is running out of steam and the short time scale charts are already showing a reversal signal. The Slow Stochastic is clearly overbought (crossing at 90) which only verifies our suspicions. Going short would seem to be preferable.

GBP/USD

On the 4 H we can see a bullish pennant which may imply a continuation of the bullish trend. RSI at 84 and Slow Stochastic cross at 92 only verify the overbought status.

Preferable strategy is to wait for a significant signal for going long so; traders, meanwhile, please hold your breath.

USD/JPY

In the last 10 days this pair has been traded in bullish channel (121.16 - 112.18) there is no signs of reversal yet, however a breach of the upper barrier may count as a verification of an upcoming bearish trend. Waiting for a positive signal would be the right thing to do.

USD/CHF

The 4 H chart implies of an upcoming reversal but not just yet, this pair is on its way to oversold territory while Slow Stochastic is crossing at (14). However, lack of technical patterns which is missing on these charts, prevents us of making recommendations.


The Wild Card

AUD/USD

This forex pair is clearly in overbought territory while RSI at 92 and Stochastic Slow is crossing on 86. The preferable strategy today would be going short. Forex traders have the opportunity of a great entry point for a swing trade. It looks as if the next price target is 0.8320.

Written by FOREXYARD.com

 

[free4440273]

thanks, informative as always.

 

[forexyard]

hi "free4440273".....thanks for the feedback

 

[forexyard]

Forexyard Daily Analysis

Edited by rossored

Thread deleted from 06/06 to 19/06. We do not permit advertising on the forums.

We do not permit URLs in signatures either, so yours has been removed.

I have reopened the thread following a discussion with the vendor in question. No more URL's, links, invitations to anything etc. - and if you're asked a question please respond, otherwise the thread will be closed again permanently.

 

[forexyard]

Daily analysis, link free.

19/06/'07 - Will key housing data cap recent USD losses?

Economic News

USD

Yesterday the greenback continued to extend its losses against the EUR and the sterling as the USD has been under pressure since Friday's release of weaker-than-expected US core CPI data, which caused market players to scale down their expectations for US interest rates. The negative impact of the weak inflation figures was further exacerbated by the release of weaker than expected industrial production. The EUR traded around the 1.34 level against the USD and failed to gain further ground after touching 1.3417 as traders are still hesitant to drop the dollar lower after its recent bullish surge where it reached the 1.3265 level. The only news coming out of the US yesterday was the US housing market index from the National Association of Home Builders which fell in June for the fourth straight month to the lowest point since 1991. It seems that housing developers are being pressured by the existing tighter lending conditions for borrowers trying to obtain mortgage loans. So the only way developers can respond is by cutting prices and offering incentives to buyers so that they can cope with the ever-increasing supply of unsold homes. In a week light on US news the lower-than-expected housing market index seems to be one of the main factors that were responsible for yesterday's continued dollar slide and this is rather disappointing for the USD as a positive figure would have surely capped the dollar losses.

Today all focus will shift to the release of US Building Permits and Housing Starts figures for the month of May. Since this week is relatively void of significant news events, the release of these figures is expected create some market movement. The Building Permits figure is a leading indicator for the housing sector as it measures the number of new intended constructions and it should once again provide a glimpse into whether US housing weakness is subsiding as the economy shows signs of recovery. The market is expecting a figure of 1.47M which is an improvement on last months figure of 1.46M but nevertheless this is still a slowdown relative to recent months. On the other hand Housing Starts is expected to be released significantly weaker at 1.48M from last months figure of 1.53M. The Building Permits and Housing Starts figures are released simultaneously but traditionally Housing Starts is the more pivotal of the two and if it surprises on the upside with a release above 1.6M then the greenback should pullback some of its recent losses. However soft housing data could do further damage to the dollar over the short term, but with a lack of major data releases this week the tone is likely to one of a drift lower rather than a major decline in the currency.

EUR

There was no significant news coming out of the Eurozone yesterday but the EUR continued its bullish surge against the greenback and the JPY following hawkish comments by various European Central Bank members as they reportedly continued to warn on inflation risks and reiterated that monetary policy remains on the accommodative side. The EUR should continue rising against the USD on speculation that the ECB will raise borrowing costs to tame inflation. Investors are bullish on the EUR as they strongly believe that the ECB is heading for higher rates, possibly 4.5 by the end of the year, while in contrast Japan is keeping rates very low and the US is holding rates unchanged.

The most significant European news being released today is the German ZEW Economic Sentiment which measures institutional investor sentiment. The market is expecting a figure of 29.0, which is a decent improvement to last month's figure of 24.0. Today if the ZEW releases positively as expected coupled with soft US housing data then we may see the EUR charge to the 1.3460 level against the greenback. It may also rise to 166.30 versus the Yen as there is no sign of carry trades unwinding in the near future.

JPY

The JPY was the weakest performer yesterday as it hit fresh 4 -1/2 year lows against the greenback touching the 123.66 mark. It also slid to a new record low 165.69 versus the EUR and weakened significantly against the sterling. The Japanese currency came under renewed pressure on Friday after a dovish speech from Bank of Japan Governor Toshihiko Fukui suggested interest rates will not rise again any time soon, while gains on equity markets overnight caused the yen to add to its losses. Also the fact that US core inflation released weaker at a time when all other data is suggesting that the US economy is recovering should rally equities and commodities which will in turn spur on carry trades.

There was no significant economic news coming out of Japan yesterday and today is also void of data so we should see the JPY continue on its bearish path, with most yen crosses expected to rise as the carry trade unwind is nowhere to been seen and to the contrary all signs are for carry trades increases, at least in the near future.


Technical News

EUR/USD

On the 4 H chart we notice that the bullish trend is running ahead. The volatility is increasing, especially after the pair has broken the 1.3405 support level. The price should continue to move upwards in a range of 1.3400 to 1.3515. As it stands, the bullish pressure will continue to gather momentum on the EUR USD today as well.

GBP/USD

On the 4 H chart, a rising wedge (bullish) is forming which may imply a continuation of the bullish momentum, it's recommended to time the entrance into market with short term charts, 1.9860 seems like a strong entry point. At the moment GPB USD is being traded around 1.9820 to 1.9950 range. The volatility is high and we should expect to see today bullish pressure on the GBP. The uptrend should continue to the 1.9885 resistance level.

USD/JPY

The USD JPY broke the 123.69 support level. USD JPY is in an uptrend supported by 1H exponential moving averages. The volatility is low. Bollinger bands are tightened. We should expect to also see today a continuation of the bullish configuration. 1H, 4H Elliott pattern imply that the USD JPY will continue to gather momentum. The target is expected at 124.00

USD/CHF

The USD CHF is in a bearish configuration. The volatility is decreasing. USD CHF moves without trend and swings around exponential moving averages (EMA 50 and 100). Bollinger bands are tightened. 1H, 4H Elliott pattern imply a continuation of the bearish pressure. The target is expected at 1.2340


The Wild Card

EUR/GBP

On the 4 H chart, a rising wedge (bullish) is forming which may imply a continuation of the bullish momentum, 0.6795 seems like a strong entry point. At the moment EUR GBP is being traded around 0.6740 to 0.6840 range. The volatility is high and we should also expect to see today bullish pressure on the EUR GBP. This forex uptrend should continue to the 0.6770 resistance level.