Posted by
BettyBoop on December 14, 2009 |
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Euro – Headed for a Tailspin? By GoLearn Forex
EUR/USD:
The EUR is perilously close to falling into a tailspin. We have been stating for some time that a candle appearing below the 50 day Moving Average (MA) would generate a strong signal for a Short entry. As you can see in the Graph below that signal occurred last week, with the 50 day MA currently holding at 1.4880 while the EUR is trading at 1.46.
The EUR is now on the cusp of an even larger fall. It closed last Friday’s session at the 100 day MA an even more significant breach than the 50 day MA. Perhaps even more troublesome for the EUR is that it is just a hairsbreadth above 61.8% Fibonacci level at a handle of 1.4621.
INSERT CHART EUR
A close below the 61.8% Fibo level coupled with a close below the 100 day MA as they converge may equal real trouble for the EUR. The EUR has not been south of the 100 day MA since April 2009 which coincidently occurred when the 100 day MA and Fibo 23.6% level converged. The EUR proceeded to advance 14.6% from that point. We therefore target the 50% Fibo level with a handle of 1.4184 as the next support level should the EUR breach the 61.8% Fibo level.
USD/CHF:
The CHF is another currency holding at a very pivotal level. With Friday’s session closing just below the 100 day MA the CHF is trying to hold its ground against the Greenback. The Swiss Franc has been one of the benefactors of Gold’s jump in value. However, as the Dollar has rallied and Gold prices have begun to fall so has the CHF.
The Franc closed above its 50 day MA for the first time since August, representing only the 3rd such close since April of 2009. This coincided with it’s last close above the 100 day MA. The Franc has another issue to contend with and that is the 23.6% Fibonacci Retrace level created from the CHF low of 1.20 back in March of 2009.
INSERT CHART CHF
If the CHF closes above the 100 day MA and the 23.6% Fibonacci level at a handle of 1.0402 is breached then we would expect the CHF to test support at the 38.2% Fibo level or 1.0701.
Bona Fide Recovery Seems in Order by GoLearn Forex
Global Equity Markets closed higher as the prospect for a bona fide recovery now seems assured. The Markets were able to shake off credit fears and focus on continued positive economic data coming out of the U.S. On Wall Street the DJIA closed up 65.67 points to 10,471.50 on better than expected Advanced Retail Sales figures.
The Greenback continued it rally as it advanced on positive economic data, breaking the 9 month long “positive equities to poor dollar” correlation, for a second time in 1 week. The DXY touched 76.725 before retreating slightly to close at 76.573. Another positive session for the Greenback and it may take out the 100 day MA.
In the commodity space both Gold and Oil were down. Gold lost 15.60 to close Friday’s session at 1,115.40 while Oil closed just below $70 a barrel for the first time since September 29th. Gold has lost nearly 9.5% since its high on December 3rd and is just a few dollars away from closing below its 50 day Moving Average.
In the Euro-zone for Monday, Employment figures will be published on Tuesday. U.S. PPI numbers will print as well as the Empire Manufacturing data. In Australia, GDP numbers will hit the wire on Wednesday, as will Housing Starts and Building Permits in the U.S. However, investors will be tuned in on Wednesday to the FOMC rate decision. Although no change in rate is expected, traders are hoping for the accompanying statement to shed light on future rate hikes and economic policy as continued positive economic data continues to print.
Upcoming Forex Events for December 14, 2009-12-14
CHF PPI (MoM) Forecast 0.20% Previous -0.40%
EUR Industrial Production (MoM) Forecast -0.50% Previous 0.30%
CAD Capacity Utilization Rate Forecast 67.80% Previous 67.40%
AUD RBA Meeting Minutes
Analysis by http://www.golearnforex.net
Tags: daily foirex analysis, forex analysis
Posted by
BettyBoop on December 10, 2009 |
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he Gold & CHF Correlation by GoLearn Forex
USD/CHF:
The Swiss Franc has a positive correlation to Gold. Thus, as Gold appreciates so does the CHF and vice versa. When the Gold rush of 2009 began the CHF participated in the precious metal’s appreciation. However, the correlation broke down as Gold broke its all time high. In the below Chart the CHF hesitated as it broached Dollar parity while Gold enjoyed near new daily highs. We would have expected the CHF to enjoy new highs, in line with Gold, once breaking parity with the Greenback but that did not transpire.
INSERT CHART CORR
The CHF like most of the G-10 is currently holding at very volatile handles. During the Dollar’s initial rally the Franc closed just above the 50 day MA and has since surpassed it. Currently the CHF has breached S1 at 1.0278. In the Chart below we have drawn a Fibonacci Retrace from the CHF low on April 20th, then trading at 1.17. We used the CHF high on November 26th, with a handle at .9918 to complete the Fibonacci range.
INSERT CHART CHF
The Fibonacci Retrace puts the 23.6% retrace level at 1.0350. The 100 day MA is also converging on the same level. If the Swiss Franc takes out the FIBO 23.6% level and closes below the 100 day MA this would trigger an additional short CHF entry. A close below the 50 day MA at 1.0163 would generate a long CHF entry.
There are a number of moving parts to watch when trading this pair. Gold has been hit hard during this Dollar rally and most analysts felt a retrace was imminent given the metal’s stellar rise. However, most analysts also forecast Gold to retain most if it’s appreciation given the high level of demand. This view may shield the Franc from massive depreciation. However, if the CHF takes out the 100 day MA prior to Gold firming then we would expect to see significant price action.
Commodities in a Slump by GoLearn Forex
It was a mixed day on Wall Street following a continued selloff in the Asian and London sessions. The DJIA closed the day at 10,337.05 up 51.08 points. It saw modest gains as analysts upgraded their ratings on 3M and Sprint Nextel.
The Greenback gave up some gains from its 3 day rally as the DXY closed down slightly to 76.038, but still above the 50 day MA. The big winner on the day was the Kiwi, as it advanced 1.81%. The RBZ held rates at 2.5% but improved their forecasts to include a possible rate hike in mid 2010. Additionally, Governor Bollard added the Bank’s expectation now looks for a significant rise in GDP.
Commodities continued their slump as Oil closed the session down 1.75 to 70.87. Corn, Wheat, and Soybeans sold off as the dollar held firm most of the day. Gold finished the day essentially unchanged to close at 1,128.60
Thursday will see a lot of price action as Unemployment figures is Australia print. Consensus expectations are looking for a modest rise to 5.9%. Obviously a print above or below will advance or plummet the AUD as the market looks for direction in this Dollar rally. The SNB will make its Interest Rate decision, although widely expected to keep rates on hold. Traders will focus their attention to accompanying language from the Central Bank. In the U.K the BOE will announce their interest rate decision and although they are expected to keep rates on hold at .5% it will be the Central Banks accompanying statements that have the chance to stir the market. Lastly, in the U.S, Trade Balance figures will print as will Jobless Claims. Traders will be watching carefully to see where Jobless Claims print as they seek to confirm last week’s NFP numbers. A significantly higher print may put an end to the Greenbacks rally while a better than expected print will affirm the Dollars new levels.
Upcoming Forex Events December 10, 2009
CHF Interest Rate Decision Forecast 0.25% Previous 0.25%
GBP Interest Rate Decision Forecast 0.50% Previous 0.50%
CAD Trade Balance Forecast -0.50B Previous -0.90B
USD Trade Balance Forecast -36.50B Previous -36.50B
Analysis by http://www.golearnforex.net
Tags: daily forex analysis, forex analysis
Posted by
BettyBoop on December 9, 2009 |
No comments
Pound Range Bound Since May by GoLearn Forex
GBP/USD:
The Greenback continues to rally and we are approaching pivotal handles across the G-10. The GBP has been range bound since the end of May, so much so, that it is the worst performing currency against the Dollar amongst the G-10 since May 25th. Currently the 100 day MA is sitting above the 50 day MA which is indicative of a falling price environment.
The Pound is currently trading at 1.6276 and the 50 SMA is sitting at 1.6404. A close below the 50 SMA generates a strong Short entry signal. In addition, using the Fibonacci Retrace from the Cable’s low on March 11th at 1.3657 to the Cable’s high at 1.7043 on August 5th brings to the forefront some important levels.
INSERT CHART A
The 23.6% Retrace level sits at 1.6244 just 30 pips from the current mark. The close today likely below the 50 SMA coupled with a breach of the 23.6% level may send the GBP free falling to the next Fibo level of 38.2% or 1.5749.
There are a number of trading indicators that are used for ranging markets versus trending markets. The MACD is a common and important tool for traders as it more easily identifies momentum and changes thereto. In the Chart below the red vertical line highlights the crossover of the Average versus the MACD, representing a shift in momentum.
INSERT CHART B
Another indicative technical pattern we use are lower lows, lower highs and vice versa. As you see on the chart above we have been trending down within the range. More importantly we have reached a succession of lower high and lower lows. The more the pattern repeats itself the greater the confirmation of the move and the more likely it is to continue.
The combination of MA’s, Fibonacci’s, MACD, and technical patterns identifies potential entry points, momentum, and profit targets.
Gold Continues Sell-off by GoLearn Forex
Global Equity Markets slumped on Tuesday as a wave of poor economic news and lowered rating caught the market off guard. In Japan, GDP printed less than forecasted, coming in at 1.3%. Fitch lowered its rating on Greece. In Dubai, the main developer reported a $3.65 billion loss contributing to the market’s woes. The DJIA finished the session down 104.14 points to close at 10,287.97
The Dollar continued its rally feeding off the poor equity performance as risk aversion remained in firm control. The DXY closed at 76.31, a level not seen since early November. Gold continued its selloff as it closed the day down $30 to 1,128.40. Oil was not far behind finishing the day down $1.31 to 72.62 a barrel.
The BOC left rates unchanged at .25. In Switzerland, Unemployment printed as expected for November at 4.2%. Later today the RBZ will announce its Interest Rate decision. They are widely expected to keep rates on hold, currently at 2.5%. With no relief insight we expect the dollar rally to continue in to today.
Upcoming Forex Events for December 9, 2009
CHF Unemployment Rate Actual 4.10% Forecast 4.20% Previous 4.10%
EUR German CPI (MoM) Actual -0.10% Forecast -0.20% Previous -0.20%
NZD Interest Rate Decision Forecast 2.50% Previous 2.50%
AUD Employment Change Forecast 6.00K Previous 24.50K
Analysis by http://www.golearnforex.net
Tags: daily forex analysis, forex analysis
