Archive for November 26th, 2009
November 26, 2009 at 11:42 am
Greenback Makes Headlines by GoLearn Forex
The U.S Dollar made headlines yesterday unfortunately for the Greenback it was not positive. The DXY, an index weighted basket of currencies against that Dollar, hit a low for the year touching just below 74.20 before a mild retreat. EUR and CHF both took out near term resistance with the EUR touching an intra-day high of 1.5145 and the CHF dropped below Dollar parity to .9920.
Global Equity Markets were mostly up as the DJIA closed its session ahead 30.69 points to 10,464.40 before the U.S Holiday. Gold struck 1,192 and Oil briefly crosses $78 a barrel before leveling off, as Crude Oil inventories in the U.S were reported to be on the rise.
There are a number of economic data releases due out in Japan and the Euro-zone. The ones to watch will be the CPI from the Euro-zone and the Jobless Rate in Japan. Today is a U.S Holiday, so expect lighter than normal volumes across all markets.
Upcoming Forex Events for November 26, 2009
GBP CBI Distributive Trades Survey Forecast 11.00 Previous 8.00
EUR German CPI (MoM)
Forecast 0.00% Previous 0.10%
JPY Tokyo Core CPI (YoY) Forecast -2.00% Previous -2.20%
NZD Inflation Expectations (QoQ) Previous 2.30%
GoLearn Forex Year End Review
Year End:
Thanksgiving in the U.S marks the beginning of the Holiday Season. The day after Thanksgiving known as Black Friday marks the commencement of the Holiday shopping season. Many analysts view this particular season as one of the most important shopping seasons in recent history. The idea is simple. If the consumer stays home and sales are down significantly it may be the final nail in the coffin for many retailers who are still struggling from sluggish sales and hard to find credit.
The following are some important economic data releases to watch heading into the final month of 2009. Economic data releases related to the Consumer, Housing, and the Federal Reserve will capture forex trader’s attention the most. Let’s take a brief moment and highlight the key releases under those 3 sectors.
Consumer – “Retail Sales” will enable traders to gauge consumer spending and the impact on the retail market and its trickle-down effect. The “Unemployment Rate” will be a good indicator of whether the consumer will derail, assist, or possibly be neutral in a pending recovery.
Housing – “Home Sales” both new and existing will continue to be very important as this is the sector that nearly caused the financial collapse. As many as 1 in 4 home owners are underwater so it is vital that home sales and home prices stabilize.
Federal Reserve – comments, minutes, and meetings dictate financial policy. Any speculation of a possible rate increase will strengthen the Greenback. The reason behind why the FED may want or need to raise rates will be secondary to the actual intimation of a hike.
An additional variable to consider heading into year-end will be liquidity. There are many ingredients that feed into this equation. Many funds are up huge this year and want to lock in profits for their year-end closing of the books. This is very important given last year’s massive losses. Therefore you can expect typical end of year slack in volume. Another factor that affects liquidity will be the actual hoarding of cash by corporations and banks in order to shore up balances sheets before they report their financials. To this effect, we have already seen the 3 month T-Bill turn a negative yield as these institutions sock cash away.
Barring some catastrophic event most analysts believe that the Dollar will continue to depreciate. Here are some suggestions for trading the market. Firstly, let’s look at today (Nov. 25th) we had positive prints for Jobless Claims and New Home Sales. Positive means that things are less negative. The economy is losing fewer jobs but still not adding any new ones either. The Dollar tanked on the news (see chart below) as its G-10 rivals advanced smartly.
INSERT CHART
Until the news turns truly positive (and not just less negative) it allows traders to take risks. Traders view the economy as stabilizing but not to the extent that the FED can raise rates. When data releases are negative the impact is measured in “derailments”. Derailments are defined as the potential to slow or even reverse a global recovery. In summary, go short on the Dollar on news which is positive (meaning less negative than the prior month). Go long the Dollar against the currencies that appreciated the most against it when truly negative data prints.
Analysis by http://www.golearnforex.net
November 26, 2009 at 11:30 am
USD Dollar (USD)
The Dollar fell across the board after the Federal Reserve said the global recession is reaching its end and signaled it will tolerate a weaker Dollar, which encouraged investors to buy riskier assets. Unemployment Claims came out batter than the forecast at 466K vs.500K forecast and New Homes Sales climbed more than forecast at 430K vs. 408K forecast. NASDAQ and Dow Jones rose by 0.32% and 0.29% respectively, crude oil jumped by 2.6% closed nearly to 78$ a barrel and Gold (XAU) rose by 1.8% reached to a new record high during the day (above 1190$ ) but finally closing at 1187$ an ounce . No economic data expected today.
EURO (EUR)
The Euro surged to a 15 month high against the Dollar after the Federal Reserve refrained from voicing concern over the U.S. currency’s decline. GFK German Consumer Climate came out at 3.7 vs. 4.2 forecast. Overall, EUR/USD traded with a low of 1.4955 and with a high of 1.5144. Today, German Prelim CPI is expected at 0.0% vs. 0.1% prior and M3 Money Supply is expected at 0.7% vs. 1.8% prior.
EUR/USD – Last: 1.5102
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Resistance
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1.5144
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Support
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1.5095
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1.5040
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1.5000
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British Pound (GBP)
The Pound rose versus the Dollar after the GDP report data was released and showed the UK economy shrank less than previously estimated in the third quarter, coming out at -0.3%, bringing the longest recession on record closer to an end. Overall, GBP/USD traded with a low of 1.6574 and with a high of 1.6744. Today, CBI Realized Sales is expected at 12 vs. 8 prior.
GBP/USD – Last: 1.6654
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Resistance
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1.6724
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1.6820
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Support
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1.6643
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1.6503
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1.6472
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Japanese Yen (JPY)
The Yen continued to strengthen versus the Dollar after breaking below 88 for the first time in 10 months as the Federal Reserve’s signal that it will tolerate a weaker Dollar encouraged investors to buy assets outside America. Overall, USD/JPY traded with a low of 87.21 and with a high of 88.63, trade balance came out better than expected at 0.42T vs. 0.31T forecast. No economic data expected today.
USD/JPY-Last: 86.51
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Resistance
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87.48
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88.37
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89.13
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Support
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86.29
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Canadian dollar (CAD)
The Canadian Dollar strengthened to the highest level in a week versus the Dollar after Russia’s central bank said it will add the currency to its reserves and as copper rose and gold headed for the longest string of gains in almost three decades. Overall, USD/CAD traded with a low of 1.0449 and with a high of 1.0583. No economic data expected today.
CAD/USD – Last: 1.0500
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Resistance
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1.0526
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1.0642
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1.0726
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Support
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1.0450
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Research by http://www.ufxbank.com
November 26, 2009 at 10:49 am
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