Posted by
BettyBoop on December 7, 2009 |
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Dollar Bear Ready for Hibernation? by GoLearn Forex
The Greenback has been offered across the board since March 2009. As long as risk did not rear its ugly head investors were
selling the dollar in favor of better yielding assets. When risk showed up at the Market’s doorstep the Dollar was right
there with it ready to regain market control. We saw this a week and half ago when Dubai spooked the market with a needed
debt restructuring.
The pattern we have seen for the last 9 months has been equities advancing as the dollar slides. Equities would advance on
positive (or at least less negative) economic data. The correlation between increasingly better news and the Greenback was
therefore negative. When normal markets are in control positive news typically strengthens a currency. What we witnessed
Friday may be an early indicator that the Dollar bear is finally ready to hibernate.
Friday brought us 2 very important prints from the U.S. The first was the Change in Nonfarm Payrolls and the Unemployment
Rate. The Change in Nonfarm Payrolls fell by just 11k and the Unemployment Rate fell from 10.2% to 10%. This is obviously
positive news for the U.S economy and the Global economy as well. Stock’s advanced, but this time the Greenback would not
yield any ground instead it posted gains on all its G-10 rivals. The Dollar move was positively correlated with the
economic news, something not seen in 9 months. There was a tangible shift in market sentiment regarding the timing of a
potential rate increase. Originally, forecasts were calling for an increase in Q4, however, analysts now think it may come
sooner.
It is not by coincidence that a number of pairs slid almost exactly to Support levels before firming against the Dollar. A
breakthrough of support would most likely trigger a massive Dollar rally, something the market is not whole heartily a
believer in at this point in time. Rather, the move on Friday was one of caution as it may be the first signal the Bull is
getting ready to run.
Let’s analyze current key technical levels and what the trading implications are:
EUR – Friday’s close put the EUR right at the 50 SMA. The 50 SMA has been holding as support for nearly 9 months. An
entire candle below the 50 SMA would trigger a Short EUR entry while a quick bounce off of support levels would trigger a
a resumption of our EUR Long
INSERT EUR CHART
AUD – Similar to the EUR, the 50 SMA has been holding firm support. Therefore, a Short AUD entry would be triggered
with the appearance of an entire candle below support. We would resume a Long AUD position with a bounce off of support.
INSERT AUD CHART
GBP – The Cable has been trading the range but has not dipped below the 50 SMA since mid September at which point it
gave up over 4.5% to the Dollar. As with the EUR and AUD, an appearance of entire candle below the 50 SMA would trigger a
Short GBP entry.
INSERT GBP CHART
Obviously one occurrence hardly represents an entire shift in trend, however, a shift in trend starts with one occurrence.
Continue to monitor the correlation between economic news and the Dollar. In addition pay special attention to support and
resistance levels on the majors, as a breach of S&R may signal future changes and should be capitalized on.
Good News for the Greenback Finally Pushes Gold Down a Few Pegs by GoLearn Forex
Gold tumbled on Friday as better than expected Unemployment and Nonfarm Payroll figures helped prop up the Greenback. Gold
fell 5.1% during intra-day trading to a session low of 1,150. Crude Oil was mixed on Friday as it originally bounced higher
on the positive news, however, it gave up its gains and then some as the Dollar firmed throughout the day. Both Gold and Oil
are quoted in Dollars ,so as the Dollar strengthens it sends commodity prices lower.
Global Equity Markets advanced Friday finishing the week in positive territory. The DJIA added 22.75 points to close at
10,388.90. At the moment Equity Futures are pointing lower ahead of the open. Economic data releases will be on the lighter
side for Monday although the remainder of the week will yield some interesting price action as Canada, New Zealand,
Switzerland, and the U.K are on deck for rate decisions.
The DXY soared to highs not seen since early November as the DXY touched 75.911 during the Friday session. Traders were
unwinding some bets and covering shorts as the positive employment data gave rise to concerns that the U.S Federal Reserve
may raise rates sooner then later. With little economic data due out today do not expect much price action.
Important Forex Events for December 7, 2009
EUR ECB President Trichet Speaks
CAD Building Permits (MoM) Forecast 1.00% Previous 1.60%
USD Fed Chairman Bernanke Speaks
AUD Current Account Forecast -17.00B Previous -13.30B
Analysis by http://www.golearnforex.net
Tags: daily forex analysis, forex analysis
Posted by
NigelGee on December 7, 2009 |
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USD Dollar (USD)
The Dollar rallied versus all majors after Nonfarm Payrolls came out better than expected with -11K versus -119K expected and -111 K prior. The reverse correlation between U.S economic data and the Dollar prices seems to have ended. The U.S jobs market is improving and the Federal Reserve is expected to raise the rates if the improvement continues. Unemployment Rate came out 10% versus 10.2% expected and prior. NASDAQ and Dow Jones gained by 0.98% and 0.22% respectively after the better employment data. Crude weakened by -1.29% closing at 75.76$ a barrel and Gold (XAU) dropped by -3.99% closing at 1160.2$ an ounce on stronger Dollar and weaker inflation fears. Today, Federal Reserve Chairman Bernanke will speak in Washington. Consumer Credit is expected with -9.6B versus -14.8B prior.
EURO (EUR)
The Euro fell as the Dollar rallied after Nonfarm Payrolls data showed a massive improvement raising expectations for a rate increase in the Dollar, lowering the demand for the Euro. Overall, EUR/USD traded with a low of 1.4821 and with a high of 1.5090. Today, German Factory Orders are expected with 0.6% versus 0.9% prior. ECB President Trichet will speak in Brussels.
EUR/USD – Last: 1.4870
|
Resistance
|
1.4925
|
1.4970
|
1.5000
|
|
Support
|
1.4800
|
1.4765
|
1.4735
|
British Pound (GBP)
The Pound slid versus the Dollar after the better than expected employment data in the U.S raised expectation for a future rate increase in the Dollar. Overall, GBP/USD traded with a low of 1.6422 and a high of 1.6673. Today, Halifax House Price Index is expected with 40.50 versus 40.90 prior.
GBP/USD – Last: 1.6470
|
Resistance
|
1.6525
|
1.6590
|
1.6620
|
|
Support
|
1.6390
|
1.6357
|
1.6275
|
Japanese Yen (JPY)
The Yen plunged versus the Dollar and the Euro after better than expected U.S employment data led to less demand for the Yen as a Safe Haven as economic conditions improved. Overall, USD/JPY traded with a low of 87.99 and a high of 90.76 and EUR/JPY traded with a low of 132.49 and a high of 134.56. Today, Japanese Current Account is expected with 1.6T versus 1.34T prior. M2 Money Stock is expected with 3.5% versus 3.3% prior.
USD/JPY-Last: 90.25
|
Resistance
|
90.75
|
91.35
|
91.65
|
|
Support
|
89.70
|
89.154
|
88.75
|
Canadian Dollar (CAD)
The Canadian Dollar remained almost unchanged versus the Dollar after better than expected employment data in the U.S and Canada left the pair unchanged. Canadian Unemployment Rate came out 8.5% versus 8.6% expected and Employment Change showed a surprising rise of 79.1K more workers versus 15K expected. Overall, USD/CAD traded with a low of 1.0433 and a high of 1.0595. Today, Building Permits are expected to rise by 1.1% versus 1.6% prior.
CAD/USD – Last: 1.0565
|
Resistance
|
1..0615
|
1.0645
|
1.0690
|
|
Support
|
1.0515
|
1.0480
|
1.0460
|
Research by http://www.ufxbank.com
Tags: Daily Forex Review, forex review
Posted by
BettyBoop on December 7, 2009 |
No comments
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Tags: Forex Trading, fx trade, Trading Forex
