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Forex Market Updates & Commentary

Forex Market Updates & Commentary

Link to Forex News and Commentary by FXDD

GBPUSD makes new day lows but momentum fading

Posted: 14 Dec 2011 07:21 AM PST

ECB Coene says Eurozone leaders have done enough to sort out debt crisis

Posted: 14 Dec 2011 07:06 AM PST

Adds,

  • Belgium will contribute about 9.5 billion in loans to IMF

Meanwhile,

  • The Danish central bank will contribute up to 40 bln DKK to the IMF fund

 

 

USDJPY supported but still has hurdles ahead

Posted: 14 Dec 2011 06:40 AM PST

The USDJPY has been showing signs of support in trading today but still has some hurdles to overcome.

  • The pair corrected to the 38.2% of the move up from the Dec 8th low and bounced yesterday (see hourly chart below)
  • The low today held above the trendline resistance line which was also broken today. Currently the trendline comes in at 77.91. Staying above this level is needed to keep the shorter term buyers happy today. A move below and the good times may be over for now.
  • The price last week bounced off the 100 day MA rather convincingly (see blue line in the daily chart below). This bounce signalled a willingness to buy the pair.

 The hurdles ahead still remain a challenge.

  • The high today at 78.14 has found sellers. This level corresponds with the high from November 30th (see chart above)
  • The trendline off the April 2011 high on the daily chart below is approaching at the 78.25 area.
  • The 78.27 level was the high price at the end of November. This coupled with the trendline at the 78.25 level are key levels for the market buyers.  If they cannot push the price above these levels, look for sellers to re-emerge. 

 So although there are reasons for hope in the USDJPY, the bulls still need to exert their influence and push the pair above the key levels. 

 

Gold breaks below 200 day MA for first time since January 2009

Posted: 14 Dec 2011 06:18 AM PST

Gold has moved below the 200 day MA for the 1st time since January 2009. The 200 day MA comes in at the 1618.43 level today. The low has so far extended to the 1615 level. The next target is the October 2011 low which came in at the 1604 area. Below that the 1582  level and trendline support at the 1560 area (see yellow areas on the chart above). 

On the topside, a move back above the 1622 level (low from yesterday) will be needed to give any satisfaction to the dip buyers now.

EURUSD keeping the pressure on today

Posted: 14 Dec 2011 06:07 AM PST

The EURUSD remains under some pressure today after two sharp days lower. The pair is down on the day (close from yesterday was at the 1.30338 level. The pair is below the low from yesterday at the 1.3008 level.  The correction of the low today, retraced 38.2% of the days range and hs sold back off.   The range is still light at 99 pips from the high to the low.  This would suggest the possibility of an extension of the days range. The low is at 1.2964 and with the bearishness still prevalent in the market, it seems this is the path of least resistance for the pair.

What would change the bias? A move above the 1.3002-08 are would be step 1. This is the 38.2% of the days range and the low from yesterdays trade. Above that the close at the 1.30338 will be eyed and needed to be breached. On the downside, the 1.2942 is bottom trendline on the daily chart. The 1.2873 level is the low for 2011 (Jan 10 2011)

IMF Blanchard says European banks have to increase capital ratio

Posted: 14 Dec 2011 05:53 AM PST

  • Inability to contain Europe crisis can effect the world
  • Austerity to remain a major drag on Europe
  • US could suffer quite a bit from Eurozone crisis
  • Spain in no way in a fiscal crisis
  • Danger deleveraging will have major implications for Europe
  • Italy and Spain can address solvency issues with effort

Canada Leading Indicators Much Stronger and Manufacturing Sales Fall

Posted: 14 Dec 2011 05:32 AM PST

Leading Indicators:  Survey:  0.3%   Actual: 0.8%   Prior: 0.2%  Revised:  0.3%

Nov vs. Oct (Leading Indicator Components)
Housing Index:  -1.5%  vs  1.7%
Money Supply:  0.9%  vs  1.1%
U.S. Composite:  0.5%  vs  0.4%
Average Work Week:  0.5%  vs  0.5%
New Orders, Durables:   4.1%  vs  -5.8%
Shipment/Inventory:  0.02%  vs  -0.01%
Other Durable Sales:  0.7%  vs  0.7%

Manufacturing Sales(MoM):  Survey:  -0.6%   Actual: -0.8%     Prior:  2.6%

US Import Price Index Shows Slight Dip

Posted: 14 Dec 2011 05:31 AM PST

Survey 1.0%, Prior -0.6%, Actual 0.7%, Revised -0.5%

Bobbys Corner-Open Market-December.14.2011

Posted: 14 Dec 2011 05:28 AM PST

Good Morning:

The euro fell below $1.30 as Italian borrowing costs increased, and ECB borrowing for Spanish banks hit a 1 year high.  Continued political differences within the EU community have caused a negative scenario with the euro.
Lower European equity markets also caused the euro to lose steam.
The GBP was higher in overnight trading as lower equity markets had investors look for the safety of the GBP.

Commodity and equity markets dropped after the FOMC yesterday stated that they are not looking to add any more stimulus to their easing policy.   The FOMC announced that the US economy is showing signs of growth (as slow as it may be)-which was their reasoning behind their no new stimulus approach.  Many investors were looking for a 3rd round of QE. 

World equity markets traded lower-and US Futures are lower at this time also.

Oil,Gold,Silver and commodities in general are lower across the board.

HAVE A GREAT DAY & GOOD LUCK

The NY Morning Forex Commentary for December 14th 2011

Posted: 14 Dec 2011 05:12 AM PST

Gold tests 200 day MA. Hasn’t closed below level since Jan 2009

Posted: 14 Dec 2011 04:47 AM PST

Gold has tested the 200 day MA at the $1618.49 level today. The low has come in at 1622.22 so far today. The price has not closed below the 200 day MA since January 2009. In September 2010, the price tested the level but bounced sharply higher.  Today, the price has found some buyers but the bounce is limited (so far). The price is also testing the 38.2% of the move up from the July 2010 low. That level comes in at 1628.92

One would think that gold would advance as a safe haven currency. However, the link as such has been dulled as recapitalization plans are likely resulting in the selling and profit taking of the high flier (Gold closed at $1418 on December 31st 2010). Last Friday, the price tested topside resistance, held and fell back below the 100 hour MA (blue line).  This week it has fallen sharply to the current key support level. 

I would expect that profit takers enter against the level on the 1st test. A break below should not be ignored and would likely solicit stops. The next major  target below would be trendline support (from the July 2010 low) at 1562.

Canada Leading Indicators & Manufacturing Sales Also Due at 8:30AM

Posted: 14 Dec 2011 04:34 AM PST

US Import Price Index Data Due at 8:30am

Posted: 14 Dec 2011 04:32 AM PST

NY Opening Review and Preview

Posted: 14 Dec 2011 04:22 AM PST

Stocks and Commodities

  • DJI -39
  • S&P -4
  • Nasdaq -11
  • German Dax -1.23%
  • France CAC -1.72%
  • UK FTSE-1.01%
  • China Shanghai Index -0.89% (lowest level since March 2009)
  • Nikkei Index -0.39%
  • Gold -$37
  • Oil -$1.37

Key events and releases

  • Japan Industrial Production MoM +2.2% vs +2.4% last month, Capacity Utilization +4.1% vs -3.6% last month
  • Italian sells 3 bln bonds at 6.47%, up from 6.29%. Highest since 1997. Parliament is preparing a 30 billion Euro emergency budget plan.
  • Spain’s banks borrowed an average of 98 billion euros from the ECB last month (most since Sep 2010).  This is indicative of a freezing up of liquidity to Spanish banks.
  • Swiss Producer and import prices fell by a larger -0.8% vs -0.2% expectations, YoY -2.4% vs -1.8% expected (lowest since 12/09)
  • UK  Jobless Claims rose by 3K MoM which was better than the 13.7K expected. The prior month was also stronger at 2.5k vs 5.3K. UnE came in at 8.3%
  • Swiss ZEW falls to -72 from -64.3 last month. Low for the year was -75.7 in September.
  • Eurozone industrial Production fell -0.1% vs 0.0%
  • US Mortgage Applications rose 4.1%

On tap for today:

  • 8 AM Germany Schaeuble, Weidmann speak
  • 8:30 AM Feds Lockhart speaks
  • 8:30 AM Canada Leading Indicators MoM 0.3%e vs 0.2% last month
  • 8:30 AM Canada Manufacturing Sales MoM -0.6% vs +2.6% last
  • 8:30 AM US Import Prices MoM +1.0% vs -0.6% last month
  • 4:30 PM New Zealand PMI Last 46.5. Below 50 is contracting economy
  • 6:50 PM Tanken Large Manufacturing Index, -2e vs +2 last month, Non Mfg 1 vs 1 last month

 

Eurozone Industrial Production falls 0.1% from prior month

Posted: 14 Dec 2011 03:05 AM PST

A gain of  0.1% was expected. Eur/Usd has declined steadily since news, seemingly primed to make another run at 1.3000.

The pair currently trades at 1.3020.

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