Posted by
BettyBoop on November 18, 2009 |
No comments
USD/JPY:
The Yen has lost ground to every other currency in the G-10 except the Dollar, since March of 2009. The BOJ has always favored a weak currency as it supports their large export business which accounts for over 20% of their GDP.
INSERT CHART a
The Chart above is a daily JPY chart looking back through this past March. Although the Yen trended down it was extremely volatile through August. After mid August it continued a less volatile trend towards a handle of 88.00 before retracing to 92.00. Since mid October it has been struggling to breach near term resistance at 88.00.
On the daily JPY chart below you can see we added Bollinger Bands (BB). BB are very good during range trading and very dangerous during trending markets. BB are best understood as a mean or avg as indicated by the yellow dotted line. The red lines represent a standard deviation from the mean. In short you expect price to be somewhere between the 2 red lines. When price nears one of the bands you expect it to return toward the mean, what traders call a reversal.
INSERT CHART b
Notice that from March through August the same period of time shown on Chart A above that price moves precisely the way we expect with BB. The green swing line shows price moving from one band to the next. However, towards the end of August price does not move towards the mean as the JPY has started to trend. This is why BB are difficult to use during trending markets as we do not expect price to move back towards the mean.
There are a number of tools available to you via your charting platforms that can help you isolate when to expect the BB reversal versus a false reversal signal. On the lower half of Chart b the Relative Strength Index (RSI) helps traders identify when a trend is strong and may continue. The red vertical line that runs through the false reversal signal also shows that the RSI indicates we are in the footholds of a strong trend. Typically an RSI descending after breaching 70 (over bought) or ascending after breaching 30 (oversold) indicate a weakening trend.
Currently the JPY is sitting on the lower band of the BB and the RSI reads low in terms of trend strength. Additionally, the Yen is bumping up against R1 and R2 is fairly close as well. For now it appears that the trend has slowed.
Analysis by http://www.golearnforex.net
Tags: daily forex analysis, forex analysis
Posted by
NigelGee on November 18, 2009 |
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USD Dollar (USD)
The Dollar gained versus most majors as Industrial Production came out weaker, lowering risk appetite. Industrial Production came out 0.1% versus 0.4% expected. PPI came out weaker with 0.3% versus 0.6% forecast. TIC Long-Term Purchases came out better with 40.7B versus 27.3B expected. NASDAQ and Dow Jones rose slightly by 0.27% and 0.29%. Crude gained by 0.68% closing at 79.44$ a barrel and Gold (XAU) remained almost unchanged with 0.16% change closing at 1140.5$ an ounce. Today, Building Permits are expected higher with 0.59M versus 0.57M prior and Core CPI is expected with 0.1% versus 0.2% prior. Housing Starts are expected higher with 0.61M versus 0.59M and Crude Inventories are expected with 1.2M versus 1.8M prior.
EURO (EUR)
The Euro weakened versus the Dollar and the Pound as risk appetite weakened and ECB\’s president Trichet said a strong Dollar is important for the world economy. European Trade Balance came out better than expected with 6.8B versus -0.9B expected. EUR/USD traded with a low of 1.4806 and with a high of 1.4998. Today, European Current Account is expected with 0.6B versus -1.3B prior. ECB President Trichet will speak in Frankfurt.
EUR/USD – Last: 1.4870
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Resistance
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1.4900
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1.4925
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1.4955
|
|
Support
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1.4810
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1.4740
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1.4703
|
British Pound (GBP)
The Pound remained almost unchanged versus the Dollar as CPI figures came out better than expected but Industrial Production in the U.S lowered investors Risk Appetite. CPI came out 1.5% versus 1.4% expected and RPI came out -0.8% versus -0.9% expected. Overall, GBP/USD traded with a low of 1.6755 and a high of 1.6872. Today, MPC Meeting Minutes will be released. CBI Industrial Order Expectations are expected with -47 versus -51 prior.
GBP/USD – Last: 1.6800
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Resistance
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1.6850
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1.6900
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1.6955
|
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Support
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1.6750
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1.6670
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1.6625
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Japanese Yen (JPY)
The Yen gained versus the Euro and weakened versus the Dollar as risk appetite lowered after Industrial Production in the U.S came out weaker than expected. Overall, USD/JPY traded with a low of 88.73 and a high of 89.53 and EUR/JPY traded with a low of 132.44 and a high of 133.58. Today, All Industries Activity is expected with -0.1% versus 0.9% prior.
USD/JPY-Last: 89.17
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Resistance
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89.65
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90.00
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90.18
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Support
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88.80
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88.60
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88.25
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Canadian dollar (CAD)
The Canadian Dollar dropped as Risk Appetite weakened following U.S production data. Overall, USD/CAD traded with a low of 1.0464 and a high of 1.0617. Today, Canadian CPI is expected with 0.2% versus 0% prior and Core CPI is expected with 0% versus 0.3% prior.
CAD/USD – Last: 1.0535
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Resistance
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1.0620
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1.0680
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1.0735
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Support
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1.0475
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1.0450
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1.0425
|
Research by http://www.ufxbank.com
Tags: Daily Forex Review, forex review
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