Interest rates could present the pull back

This
week’s trading sessions are going to be action packed, with Australia
scheduled first to take the stage. As all the central banks are
expected to hold this time round, intraday movements could present
traders with potential setups, especially for swing traders. In
addition to the rate decisions, GDP figures are expected to be released
in a few of the regions, while England will be releasing its inflation
numbers. Towards the end of the week the U.S will release the catalyst;
the NFP result- known to be a major market shaker. Non-farm payrolls
are expected to show a lower contraction compared to last month’s
figure while the unemployment rate is expected to jump to a whopping
9.2%.
It is important to note that even though the unemployment rate
has been increasing on a monthly basis, investors are pushing the data
aside, still heading back into riskier assets.
To view the full economic calendar click here.



 
Due
to recent price movement it now seems more important to ask when
economic data will start to show major improvement, giving the current
rally some major backing, driving it even higher.

Technical Analysis:

EUR/USD weekly chart




GBP/USD - weekly chart



AUD/USD- Weekly Chart



USD/JPY- Weekly Chart



*all charts are courtesy of netdania.com

*Powered by etoro.com

Read the full article at dodjit.com

Heading for a Chapter 11? | forex trading

The Pound is clinging on to $1.6

Even
though the economic calendar was relatively light on data yesterday the
various Forex pairs still presented a volatile session. The Dollar Index
jumped higher after three days of treading water, climbing to 81
points. One must note that the 80 point level will act as a
psychological support level, especially as the 80 points acted as a
critical pivot point in the past.

The Pound/ USD
continued higher though early morning hours but retraced after finding
resistance around $1.6. Today session started in a bearish mood as
sellers came back into the market. Even though indicators are showing
dramatic signs of overbought levels, current market conditions could
send this pair higher in the long term, especially as certain analysts
are still classing the pound as undervalued. Recent trend line
resistance could act as support on the way down, allowing bullish
traders more comfortable entry points.




The USD/JPY presented a massive turnaround during early morning hours
climbing by over 100 pips.  The main reason for the climb was risk
appetite as investors from across the globe, sold the low yielding
currency to buy the USD Dollar. According to recent comments from
Treasury Secretary Timothy Geithner, the economy is
making progress and “credit is starting to ease a bit”. According to
Bloomberg news; the U.S government’s current rating is still stable
despite recent problems in the economy.
Read the full article at dodjit.com

Will the EUR/GBP drop?

On the Forex Market the Dollar
index lost its strength during the session, as investors rushed back
into riskier assets. While there weren’t any major moves on the FX front, currency pairs continued to linger around critical levels, showing potential breakouts.

Over the last couple of weeks, the Euro and the Pound
have received a major boost as a higher equity markets have boosted
confidence among investors. While both economies are still showing a
dire situation, recent bank statements are mentioning that 2010 could
present a completely different picture.

While both the economies seem to be dealing with never ending problems, the Pound
has strengthened the most over the last couple of week despite a lower
yielding return. When observing the relative strength between the two,
one can see that the Pound has gained more in real value compared to
the Euro. From a trading point of view the EUR/GBP has dropped by an
enormous rate and is now trading on major support of 0.8740. One must
note that a clear break is required for short positions, especially as
the price pattern presented a false in the past.



Read the full articl at dodjit.com

 *courtesy of netdania.com

Dollar Comes Up for a Breather

After a battering week for the Dollar,
buyers came back into the market banking profits on short positions.
The index bounced higher off the 80 point psychological level as the
European market presented further problems during the session. GDP
results in Germany presented a disappointing figure, showing that the
Euro-zone’s largest economy is still feeling the depth of the current
recession.

GDP
figures for the first quarter showed a whopping -3.8% compared to its
previous -2.1%,while the yearly figure showed a -6.7% result. In
addition, Nonfarm payrolls from Switzerland missed expectations of
3.963m, coming out at 3.957.

Worse than expected data helped increase momentum during early morning hours, sending the Dollar higher against its counterparts.

Despite
today’s strength one must continue to observe the overall trend. By
taking a glance at the following chart, we can see that despite
intraday strength the EUR/USD is failing to break recent support. When
observing all the charts carefully it is important to note that current
movements haven’t caused dramatic change that is yet noticeable on the
charts.



Read the article at dodjit.com

Dollar Comes Up for a Breather

After a battering week for the Dollar,
buyers came back into the market banking profits on short positions.
The index bounced higher off the 80 point psychological level as the
European market presented further problems during the session. GDP
results in Germany presented a disappointing figure, showing that the
Euro-zone’s largest economy is still feeling the depth of the current
recession.

GDP
figures for the first quarter showed a whopping -3.8% compared to its
previous -2.1%,while the yearly figure showed a -6.7% result. In
addition, Nonfarm payrolls from Switzerland missed expectations of
3.963m, coming out at 3.957.

Worse than expected data helped increase momentum during early morning hours, sending the Dollar higher against its counterparts.

Despite
today’s strength one must continue to observe the overall trend. By
taking a glance at the following chart, we can see that despite
intraday strength the EUR/USD is failing to break recent support. When
observing all the charts carefully it is important to note that current
movements haven’t caused dramatic change that is yet noticeable on the
charts.

forex and stock video briefing

dodjit's forex and stock video briefing fo 04-25-09 from dodjit on Vimeo.

Stocks continue to linger at their highs

Over the last couple of months FX
traders have become accustomed to a situation whereas the Dollar and
equity indices have traded in a negative correlation. Prior to the
month of March the Dollar index was classed as a safe haven, as
investors preferred the world’s currency compared to a risky stock
market. Many trends or counter trends where characterized by the same
type of situation;

As stocks rose, the Dollar lost its strength.
As stocks dropped the Dollar gained strength as a safe haven.

This
week the correlation between the two weakened significantly as stocks
pulled back but the Dollar failed to gain strength, dropping rapidly
against its counterparts. By taking a glance at the chart below one can
see the movements from last week’s session. As the major indices
corrected, so did the Dollar index.


  *courtesy of netdania.com
Read the full article at dodjit.com

Euro soars as a preferred alternative

Over on the Forex market,
the Dollar index continued lower during yesterday’s session as
investors ran for safe-haven seeking other currencies. After a slight
pull back during the first half of the day, the Dollar dropped lower to find support on 80.50 points. 

On
individual pairs the EUR/USD soared higher as investors poured their
money into this high yielding currency. Once must remember that despite
all the rate cuts the Euro-zone is still maintaining a high yield
compared to the U.S and the U.K.



Over
in England, economic news had a major effect as results and headlines
showed mixed signals. Retail sales for the month of May showed a
whopping increase, as the figure jumped by 0.9% compared to an expected
0.5%. Despite the slight improvement, the money supply showed a huge
drop in percentage while Standard and Poor’s shifted their outlook
regarding the economy from “stable” to “negative”.  Investors are now
concerned that due to the depth of the problems in the UK, the economy
could be downgraded from their AAA status.

Read the full article at dodjit.com

Dollar Falls Off the Cliff

Despite the negative momentum during the second half of the trading session the Dollar collapsed following the FOMC’s minutes dropping to a record low of 80.79 points, one only seen last before February. This time round traders didn’t find interest in the Dollar as a safe-haven, preferring bonds, Gold and other currencies. Gold climbed during the session and closed with a daily gain of 1.36%.

On individual pairs, the GBP/USD failed to follow through during early morning hours as the money supply in England showed a major drop, while business investment dropped by a whopping -5.50%, compared to an expected -4%. The economy’s retail sales increased by 0.9%, showing that parts of the economy are beginning to show a mild recovery. The ONS noted that all sectors, apart from household goods and non-store retailing, showed a monthly rise.

Over in the European market the EUR/USD climbed higher, following yesterday’s momentum. After breaking resistance of $1.3739 the Euro followed through propelled by today’s data. Germany’s services PMI exceeded expectations coming out at 39.10, while Europe’s overall services PMI showed a 44.70 result compared to an expected 44.4 points. In addition manufacturing PMI results both showed a slight improvement.

Is the USD/CAD going to finally drop?

Could 2009 be the end of the current recession?

According the RBA, the Australian economy is dealing relatively well with the current crisis due to the structure of their financial system. Governor Glenn Stevens stated yesterday that the pace of contraction is slowing in their region and that they do expect 2010 to be a better year for their economy.

The AUD/USD and the NZD/USD both increased during the session, propelled by the bank’s comments and an overall weakening Dollar. One should note that the NZD/USD is still fighting with major resistance of $0.6000.
The Dollar index also took a major dive yesterday, dropping by 0.75% to reach 82 points. Even though there wasn’t any major movement on any of the traded markets, risk appetite continued to dominate the markets, as investors are still speculating that the worst of the current crisis is now behind us.

The British pound grabbed Forex trader’s attention yesterday as inflation data showed that the U.K economy is still not feeling major inflationary pressures. CPI (yy) showed a 2.3% figure, down from last month’s 2.9%, while the monthly figure showed a mere 0.2% compared to its expected 0.4%. The GBP/USD sparked a major intraday rally after breaking resistance of $1.5356, making a new high for the year.

GBP/USD daily chart

The Dollar Drifted Lower

Even though equities showed a dramatic turnaround yesterday, finishing the session with gains of over 2.5%, the Dollar index failed to present any major move. The Dollar continued to linger around recent levels closing the session just off 83 points.

On individual pairs the GBP/USD climbed during the session continuing in the direction of its current major trend. The pair did finish the session higher but failed to break resistance of 1.5372. When observing the chart more carefully one can see that trend line resistance has now converged with resistance of 1.5372, forming a level that the Pound might find hard to break.

Please note; while volatility on this pair could pick up today, due to scheduled inflation numbers, GDP figures are scheduled to be released at the end of the week.

GBP/USD- Daily Chart (*courtesy of netdania.com)


 
Following yesterday’s video report, the NZD/USD made an impressive turnaround climbing higher throughout the session. As stated on the report current levels of $0.5967 should be taken into consideration, especially as the pair bounced off its lower support level of $0.5833. While there is no major data coming out from New-Zealand this week, overall market strength could continue to drive this pair higher. For further information feel free to take a look at yesterday’s video analysis.

Rea the full article at Dodjit.com

India's elections lift market, May boost global trade talks

By Don Miller
India’s Prime Minister Manmohan Singh’s Congress Party decisively won nationwide elections over the weekend, sending India’s benchmark stock index up a record 17% and triggering circuit breakers that halted trading.
By handing Singh’s Congress Party a clear victory over the opposition Communists, India’s voters also may have given a boost to the Obama administration’s hopes for world trade talks that have been stalled by fears of rising protectionism.

The Bombay Stock Exchange halted trading within seconds of the market’s opening after shares of the Sensitive Index, or Sensex, breached a limit set by the market regulator. Two hours later trading resumed and stocks jumped further, exceeding limits determined by the Securities and Exchange Board of India, triggering an automatic shutdown for the rest of the day for the first time ever.

“Markets are euphoric,” Rahul Chadha, the Hong Kong-based head of Indian equities at Mirae Asset Global Investment, with $46 billion in global equities told Bloomberg News. “The focus by federal and state governments on development will lead to a structural re- rating of India.”

The election results lit a fire under Indian financial markets, boosting investment categories across the board. The rupee climbed 3% against the dollar, the biggest gains in two decades, and the benchmark bond yield fell 12 basis points as prices rose.

The Sensex increased its year-to-date gain to 48%, up from 26% on Friday.  It moved ahead of Brazil, Russia and China among the BRIC countries, and the index now stands second only to Peru among global benchmarks.  The Indian market now trades at 15.6 times earnings, more than double the 7.7 price-to-earnings ratio (P/E) of November, Bloomberg data shows. That’s still lower than China, at 26.8 times, or Brazil.

Morgan Stanley (NYSE: MS) raised Indian stocks to “overweight” from “underweight,” and said its model had never before recommended overweighting India. The brokerage boosted its forecast for economic growth next year to 5.8%, from 4.4%.

“The election result is extremely positive and very, very bullish,” Madhusudan Kela, head of equities at Mumbai-based Reliance Capital Asset Management, the nation’s largest money manager overseeing $18 billion of assets, told Bloomberg. “This will provide a government which is stable and has powers to take decisions.”

Singh’s party won the most seats since 1991, when the government rejected Soviet-style state planning and instituted free-market reforms that helped India’s economy quadruple in size.

Now that the Congress Party holds almost twice as many seats as the communists, Singh may further reduce barriers to foreign investment in insurers and retailers, reforms that had been held back by communist lawmakers.
The decisive victory may have also created a chance to break a deadlock in negotiations on global trade that were hampered last year by a U.S.-Indian dispute over farm trade, as it coincides with signs that U.S. President Barack Obama’s administration is moving towards finalizing a World Trade Organization (WTO) accord.

On a visit to Geneva last week, U.S. Trade Representative Ron Kirk said Washington was committed to the success of the 2001 Doha trade agreements and wanted to preserve progress already made instead of starting over from scratch.

Kirk repeated that any trade agreement is contingent on major emerging economies, including China, India and Brazil opening up their markets to more American exports. Moving a WTO bill through a trade-wary Democratic Congress will be difficult without clear benefits for U.S. businesses.

Although the Obama administration has not set a date for concluding a U.S. trade policy review, some analysts see the results of the Indian election as a chance to advance global trade that can’t be wasted.

“Washington should not squander the opportunity for an early understanding with a more market-friendly Indian government,” trade expert Paul Taylor wrote in a column for Reuters.

Protecting developing nations like China and India from a surge of agricultural imports and U.S. government subsidies to the cotton industry are the biggest remaining obstacles to a WTO agreement, Taylor wrote.

Dollar isn’t climbing on safe-haven

Dollar isn’t climbing on safe-haven
by dodjit.com
The Dollar Index climbed higher on Friday but failed to break recent trend line resistance. The index is currently trading around 83 points, a level that could act as major resistance, especially as that same level acted as support in the past. 
 


On individual pairs the EUR/USD dropped at the start of this trading week but has gained strength during today’s early trading hours. When observing the chart carefully one can see that even though the direction of the chart has turned slightly bearish, possibly forming a double top scenario, one must note that overall recent bullish momentum could prevent this pair from declining. For further information see the weekly report.

Over in the U.K “modest improvement” in housing activity was stated on Bloomberg earlier this morning as U.K home sellers raised asking prices in May, the most in more than a year. While some are claiming that the increase in price is being caused by the lack of supply, some analysts are claiming that the U.K economy could be showing signs of a minor recovery.  On the Forex market the Pound/USD held its ground around resistance levels last week. Even though indicators are pointing to overbought conditions compared to previous price action, the GBP/USD is failing to present a deep correction. Major resistance lays at 1.5347.

Read the Ful Article at dodjit.com

Trendlines

Minor Movement on the Dollar

On the Forex market the Dollar traded mixed during yesterday’s session as individual pairs stayed around their current levels.  Economic data was mainly released from the U.S yesterday, therefore after the result, Forex traders began to prepare for today’s session, one that could spark major volatility.

In overnight trading the New-Zealand Dollar presented some movement after their retail sales tumbled presenting a -0.4% figure. From a technical point of view the NZD/USD found support yesterday after presenting a bearish like engulfing candlestick on the daily chart. The pair dropped during the intraday session but found support on recent resistance of 0.5924. When observing the chart more carefully, the pair is now trading in tight range around its 32.8% Fibonacci level. Movement today could spark a deeper correction if the Dollar sees overall strength. In addition relative strength indicators are still showing negative divergence.

*courtesy of netdania.com

The Dollar is fighting for Strength

On the Forex market the Dollar index managed to gain some strength during yesterday’s intraday session but failed to show any signs of a change in trend. One must note that despite a declining equity market, caused by increasing fear that the economic recession isn’t going to end in 2010, the Dollar safe haven is failing to show any major strength.

As one may recall, the Dollar has been classed as a safe haven over the last couple of months. Recent price action from equities hasn’t caused a major shift back into Dollar safe haven assets, which is so far signaling that the current declining pattern in equities could only be a mere correction.

Economic data and news event should be observed carefully, as current sentiment levels could easily be dragged down, considering data doesn’t show an improvement. This situation could weigh on the recent rally extending the current correction much further than what is normally classed a healthy one.

On individual pairs the EUR/USD managed to hold its ground during yesterday’s session, despite the selling pressure. This pair is now trading just below its prior high of 1.3735 after forming a bearish engulfing like candlestick. When observing the price pattern more carefully one can see that this pair is still trading within its secondary bullish trend. 


 
The USD/CAD made an impressive turnaround yesterday, bouncing off recent support. From a low of 1.15, the Dollar/ Cad pair has now retraced back to the 1.1732 level. Even though this pair is showing mild strength, resistance of 1.1769 should be taken into consideration.

The USD/JPY is still trading above its neckline support, further information can be found on yesterday’s report.

The Pound lost its steam during yesterday’s trading day as Governor Mervyn King said that the economy will probably face a slow recovery. He also mentioned that the economic outlook still remains uncertain and GDP results will probably show depressing figures.

Read the full article at Dodjit.com

Market Data to Watch Out For

With all the various currency pairs trading at critical levels, it will be interesting to see which piece of data will spark major movement, especially as this week’s economic calendar is relatively light on data. The BOE is expected to release it inflationary report later during the session, while the U.S is scheduled to release its retail sales for the month of April. Recent data including comments from market gurus have stated that the worst of the economic crisis is now behind us. Despite that fact upcoming reports aren’t expected to show a dramatic improvement.

Major market moving data will be released towards the end of the week, as Europe is scheduled to release its GDP figure, a result which could present major movement on Euro crosses. In addition the U.S is scheduled to release it inflation numbers on Friday showing that prices are beginning to stabilize.
 

Currency Pair of the Day – EUR/USD

Comment – The EUR/USD is now trading at major resistance. Today’s retail sales figure could spark movement on this pair.

Market Pivot Points

Read the Full Article at Dodjit.com
 

Stocks are Still Clinging on to Their Highs.

USD/JPY completed it Head and Shoulders pattern, will it break its neck line?
 

The Forex market presented an interesting session yesterday, as economic data had its affect on the various currency pairs. The GBP/USD continued to climb higher as industrial production showed a better than expected result, contracting for the month of March by only -0.1%, much less than the expected -0.8%. In addition, Germany showed that their economy could start to be feeling recent ECB monetary actions. Their wholesale price index showed an increase of 0.1%, compared to its previous negative result, while inflation showed that the bank’s efforts aren’t stirring major inflationary problems. The consumer Price index showed a 0.7% figure, as expected.

Earlier during the session, leading economic indicators showed a surprising figure from Japan as the result showed a 2.1 reading. Even though Japan’s economy is far from showing a healthy status the result had a minor affect on investor’s sentiment, helping to drive the Yen higher during the intraday session. The USD/JPY dropped dramatically during the session as a combination of economic data and a mixed session in the U.S, sent carry traders cashing in on recent gains. 

From a technical point of view the Dollar/Yen pair is now trading on neckline support. Generally, such a formation indicates towards a change of trend, but due to the recent change in sentiment driving equities higher, the current down trend could be limited. 
 

Commodities

Crude oil continued on its climb higher, finishing its 5th straight session in green. The black gold managed to break psychological resistance of $60 during the intraday session, but gave back its strength to close the session at $59.30 per barrel.

Gold also had an impressive day closing with a 1.12% gain.
 

Read the full article at Dodjit.com

Dollar Bounced Back

Yesterday’s move sparked Dollar buying on the different currency pairs as a situation of profit taking on recent trends sent investors back into the Dollar. The USD/CAD bounced off major support, retracing most of Friday’s losses. Even though Dollar strength was felt across the board, further devaluation could occur should the risk-appetite return. One must note that all rallies contain counter trends that are normally characterized by profit taking along the way.

FX moves

The major mover of the day was the USD/JPY, completing a right shoulder of its head and shoulder pattern. Even though there wasn’t any major event which sparked the selling pressure, this pair dropped significantly during the session, coming close to test the patterns neck line. As stated in previous articles the lower high that had formed already last week, indicated relative weakness. Yesterday’s U.S equity session sparked the sell-off, sending this pair tumbling.

Read the full article at Dodjit.com

Will the U.S Follow Through Today?

The Dollar Finally Dropped

Not only the U.S showed better than expected data, Canada showed a 35.9k expansion in the job market with an unemployment rate unchanged at 8%. The Data had a major impact on the Canadian Dollar crosses, as the Loonie increase dramatically against its counter parts.

From a technical point of view the Canadian Dollar is now trading around major support. A break of current levels could lead to a major plunge especially as the next major support level lies at 1.0927. A clear break is necessary, as indicators are pointing to oversold conditions.

Read the full article at Dodjit.com

Will Anything Stop the Current Trend?

Neither stress test results nor unemployment figures stopped the bulls last week from driving the major indices higher. Forex traders also partied on certain currencies, as counterparts rallied against the U.S Dollar.

Trading was capped most of last week, as traders were preparing for a volatile Thursday and Friday. The BOE was the first to approach the stage, during Thursday’s session, releasing its interest rate decision for the month of May. Governor Brown and his administration decided to keep a firm 0.5% this time round, but mentioned that they might decide to buy £50 billion worth of assets, to help further stabilize the economic situation. The statement that followed the decision showed a fragile situation as comments showed that even though GDP had decreased sharply during the first quarter of 2009, the housing sector showed minor signs of an improving situation. Even though the central bank decided to refrain from taking any monetary action, the GBP/USD failed to maintain its strength as further comments showed that the Bank is quite uncertain as to when the U.K will make a full recovery.

Read Full Article at Dodjit.com