From my yesterday’s post on Boston Properties, Inc. or BXP in the New York Stock Exchange (click here to see it), I mentioned that the stocks are more likely to breakdown from the 1-year uptrend and it did. The stock price gapped down during the opening of yesterdays trading session and declined by 3.1% to $72.34. It nearly tapped the $70.00-71.00 support. If the $70.00-71.00 price mark gets cleared out, the Boston Properties stocks could further slide to the $61.50 support. However, anything could happen and the stocks could ascend. In case it does, the current resistance could be the former uptrend. Once that hurdle is cleared out, the next resistance could be the red dotted line.
Archives for June 2010
Hello once again forex fans! Earlier today, I presented the recent price action of the Aussie-USD pair. Now, it’s the Kiwi’s turn to be on the spotlight. On this canvas is an update of the NZDUSD pair which I posted yesterday (kindly click here to see my blog yesterday). It turned out that the Kiwi lost sight of the “KitKat” that I was talking about yesterday when it broke down from a rectangle pattern. As I had mentioned, a break of the range;s support would likely send it back down towards the double bottom’s neckline – and that is exactly what transpired. Yesterday’s fire sale caused the Kiwi to be dropped like it’s hot with the NZDUSD sliding from 0.7065 to close at 0.6923. But unlike the AUDUSD in my other post today, the NZD’s double bottom lifeline has not yen been breached, giving it a higher chance of surviving the next couple days. With the stochastics in the oversold area, the pair could bounce back until it meets some resistance at the former support of the rectangle. A break of the 0.6900 psychological barrier, on the other hand, could send it down at the trough of the double bottom which is around 0.6575.
Yesterday’s breakdown was due to the downbeat results from China’s leading economic indicators. China recent leading barometers failed to impress with only a 0.3% gain after printing a surge of 1.7% during the previous month. This result sparked some fears that the present global growth may not be as robust. Remember that China is the number 2 largest economy in the world. With the US already slowing down, a cool down in China’s growth would further cap the world’s economic growth. Remember also that China sources its raw materials like commodities from countries like Australia and New Zealand. A drop, therefore, in China’s production would also limit their need for these input materials.
China’s manufacturing PMI is on deck tomorrow (July 1) at 1 am GMT. China’s manufacturing index is seen to have dipped slightly to 53.2 from 53.9. Such would add some confirmation that China’s economy has indeed cooled down a bit. If the index comes in as expected or worse, the higher yielding currencies like the NZD could suffer again. An upside surprise, on the one hand, could give the Kiwi some support. Let’s all hope for that.
Good day forex people! Here’s an update of the AUDUSD pair which I posted back on June 22 (click here to see my previous entry). Anyway, the Aussie bullish run was cut short last night due to a slide in the global equities markets. The Aussie skidded from 0.8709 to settle at 0.8463 against the greenback in yesterday’s bloodbath. Looking at the pair’s 4-hour canvas, you can see that it has retreated even past the neckline support of its previous double bottom after reaching a high of 0.8859. The only net that is keeping it afloat now, in my view, is the 0.8500 psychological support. If this number gives way, the Australian dollar could further return its gains over the USD and the pair could fall towards 0.8300 or 0.8100. However, given the oversold conditions, traders could view the AUD as ‘cheap’ which could lead them to push it back higher. If the fear in the market dissipates and buying resumes, the pair could at least reach for the resistance just below 0.8800.
The Aussie’s slide yesterday was due China’s leading economic indicators for April cooled down 0.3% after posting a jump of 1.7% during the month prior. This unexpected figure stirred some concerns that the present global growth may not be as strong. Remember that China, as of now, is the world’s second largest economy. With the ongoing fiscal crisis in Europe and the US’s mixed economic standing, a dip in China’s economy could further add a lot of bearish pressure on the markets.
China also has a big impact on Australia because the latter is one of the former’s major trading partners. A dip in China’s economy could mean lesser exports, hence, lesser growth for Australia. Tomorrow (July 1), China is set to publish its latest manufacturing PMI figure. The index is also seen to have cooled to 53.2 from 53.9. If such decline indeed happens, the Aussie could once again take a hit. On separate news, Australia will likewise release its May building approvals and retail sales. Building approvals are projected to hold steady after falling sharply by 14.8% the other month. Retail sales on the other hand, are expected to have gained again by 0.3% on top of the 0.6% rise in April. Upbeat figures from these two accounts could support the Aussie while bleak numbers could obviously push it lower.
Boston Properties, Inc. or BXP in the New York Stock Exchange owns and develops office properties in the United States. Chart-wise, their stocks had been moving in a 1-year uptrend and from my last post about it (kindly click here to see my previous entry), it successfully bounced off its trend line and avoided a breakdown. However, the Asian markets were down by more than 1% during earlier’s trading session. The European markets and the US market’s futures are also pointed downwards. In that case, BXP stocks are more likely to break below it’s uptrend today. In case it does, the price could be pushed lower to the $70.00-71.00 support levels. If those price marks still don’t hold on, the next support could be $61.50. On the upside, if Boston Properties, Inc. bounces back up, it could aim for the current resistance. Once that hurdle is cleared out, the next resistance could be the 1-year high at $83.42. For the mean time, as long as the uptrend remains intact, the stocks could be headed north.
The stock value of Ameriprise Financial, Inc. or AMP in the New York Stock Exchange had been going up from March of 2009 up to May of this year. After that, it broke down from its uptrend and could now be setting up a head and shoulders formation. In case the AMP stock value breaks down from the neckline of the possible head and shoulders formation, it could slide all the way to the $33.66-34.14 support levels. If that support doesn’t hold on, the stock price could drop to the $30.00 psychological support. If the stocks start to ascend, $41.06 could be the immediate resistance. Upon clearing that price mark, the next resistance could be $49.54.
Hiyo FX fans! On this post is an update of the NZDUSD pair which I posted on June 22 (kindly click here to see my previous entry). Now, perhaps you are asking what’s up with my title. Well, it’s exactly what it is cause if you check out the 4-hour canvas of the pair, it has since consolidated within a rectangle or a box after breaking out from a double bottom and a symmetrical triangle. In a consolidation phase, especially when it is coming off an uptrend, traders are silently accumulating the currently. Hence, whenever a security or an asset is ranging, it can be used as a first indication of a likely surge in volatility sooner or later. If the pair breaches the range’s resistance around 0.7150, it could lunge itself past the double bottom’s minimum upside target towards 0.7275, where the KitKat is, figuratively. On the low side, a break below the range’s support could push it lower back to the neckline of the double bottom. Though as mentioned, since the pair is on an uptrend at least in this time frame, a move north is more likely.
No major economic updates are due from New Zealand for the rest of the week which means that the Kiwi could continue ranging until the end of the week. The building approvals and retail sales reports from Australia, however, could cause the NZD to sway. The Kiwi and the Aussie are highly correlated given since the two countries are merely neighbors with more or less the same industries. Both currencies also have the highest interest rates with the former having 2.75% and the latter with 4.50%, making the two more attractive than their peers especially when there is a lot of risk taking in the market.
In any case, Australia’s building approvals is expected to come in at 0.0% in May after dipping sharply by 14.8% during the other month. Despite the RBA’s previous interest rate hikes and April’s dip, the account is still projected to grow by 32.5% from a year earlier which is way better than the 21.3% that was printed the other month. Moreover, the expected 0.3% rise in Australian retail sales for the same month after already gaining by 0.6% during the month prior could support the Aussie as well as its cousin, the NZD, at least in the short term. Better than anticipated results, of course, could push the higher yielding currencies higher.
Good day forex peeps! Here’s an update on the USDCHF which I published back on June 21 (kindly check my previous post here). As you can see from its chart, the pair has continued to drop and has even slipped past the 61.8% Fibonacci retracement level that I drew. Now, the only obvious support that is preventing it from declining further is the neckline of the former inverted head and shoulders pattern. With the stochastics in the oversold region, the US dollar could soon again take the driver seat away from the Swiss franc. Though, it is also possible that the pair would trade sideways for awhile before moving higher. Once it does, it could aim for its recent high at 1.1731. On the negative side, if and when the 1.0800 support and the former neckline give way, the Swissy could further trump the greenback and the pair could fall and revisit its previous low at 1.0435.
On the fundamental side, the Swissy’s gain was mostly due when the Swiss National Bank stated that the risk of deflation in the country is fading away. The bank’s statements then sparked some speculations that it would refrain from meddling in the market to purposely weaken the CHF.
For this week, though, the market will focus on the release of the grand daddy of economic reports, the US’s NFP report. For the month of June, US firms are sen to have slashed about 103,000. This marks the first job decline in the Us four months. Such drop would reflect to an uptick in the country’s unemployment rate to 9.8% from 9.7%. Now, consumption takes up about 70% of the US total output. With declining jobs, naturally, the people’s aggregate spending would dip as well because of their lesser total income. This scenario could then fuel some risk aversion in the markets, which could consequently lead to an increase in the safer assets like the USD.
The stocks of Microsoft Corporation (MSFT) broke down from a double top formation as what I had reported back in my May 25 post. After the break down, it continued to drop until it reached the $24.00 support. It then ranged for weeks and consolidated within a bearish flag formation. Currently, it seems to have already broken down from the said formation (indicated by the red circle) and could decline further. Once the $24.43 support gets cleared out, it could slide all the way to the next support at $22.00. On the positive note, if the shares of Bill Gates are able bounce off from their current support and start to ascend, they could move even higher until they meet some selling pressure at $26.00-27.00. Though its bearish reversal as exhibited by its breakdown from a double top, it now has a higher chance of moving south than north.
Apartment Investment and Management Co. (Aimco) or AIV in the New York Stock Exchange owns and operates approximately 870 residential communities comprising nearly 133,000 units in 44 states in the US. Anyway, their stock value is currently moving in a 1-year uptrend and could ascend further. In case it pushes upwards, it could meet some resistance at $22.72. Once that price mark gets cleared out, the next hurdle could be at $24.21. On the flip side, in case the shares of Aimco weaken and slide, the present uptrend that it is trekking should keep it afloat. But if this uptrend breaks, AIV could decline further towards at least at $19.27. In any case, as long as the uptrend remains intact, its stocks should continue moving upwards.
Hello to you all! Today’s blog is actually my first post regarding the US equities market, specifically the US’s Dow Jones Industrial Average. The DJIA’s price chart, as you can see, is very similar to the one of the S&P 500 which my colleague published earlier (see his post here). Basically, the Dow is a price-weighted average of the 30 significant stocks that are traded on the New York Stock Exchange and the Nasdaq. Moreover, to technical analysts, the Dow is used as a leading barometer of the US’s economy. Well, if this is the case then we all should be worried. The ^DJI, together with the S&P 500, are both showing some signs of a possible reversal to the downside. Notice that the DJIA is also forming a potential head and shoulders pattern. A break of the formation’s neckline just below 9,750.00 would send it all the way down to 8.250.00. Both the MACD and the RSI are also giving bearish signals with the former’s histogram just about to turn negative. The latter, on the one hand, had already crossed below the 50-line, indicating that the index’s momentum is weakening. On the positive note, if the neckline holds, the Dow could once again reach the high at 10,593.86 or even revisit its 2010 high at 11,258.01.
Just recently, the US’s House of Congress and Senate reached an agreement regarding the finalized financial reform bill. The bill, which is expected to be signed into law in the days to come, will ban banks from trading for their own account and making risky bets with their own money. This, of course, would naturally limit risks, and prevent a similar financial meltdown that occurred back in ’08 though it will likewise place a cap on the banks’ and their shareholders’ potential income. So coming into this week’s G20 meeting, US President Barack Obama urged the rest of G20-member countries to do the same. His position, however, was met with some resistances as the countries which have budget deficits raised that they to to address the imbalances first before overhauling their systems. As the meeting goes along, any disparity among the leaders on how to support the global recovery could send the DJI lower.
Another high impact report that could possibly weigh on the DJI is the upcoming US NFP report. US firms are projected to have slashed for the first time in four months a total of 103,000 employees in June, possibly causing the country’s unemployment rate to worsen to 9.8% from 9.7%. Such scenario, if deemed accurate, could cause some risk aversion. And since the Us is the world’s largest economy and the most followed one, a slide in its major indices could send negative shock waves across the globe. Most of the anti-dollar currencies would likely lose some support as well against the safer USD and JPY if and when a breakdown happens.
Here’s an update on the price of gold from my previous most last June 10. As you can see, the price of gold has skyrocketed over the last couple of months and has yet again registered a new all-time high of $1,265.05 per ounce last June 21. It could aim for a new high in the coming days since its short term uptrend line is still well intact. Though, since its stochastics are still far from the oversold area, it could range for awhile or even retrace back to the support at $1,160.00 or at the long term uptrend line. In any case, the price of gold would likely continue to move higher in the longer term until it breaks its uptrend and reverses.
The increase in the demand for gold in the last several months is primarily due from both price speculation and market fear. It is important to note that gold bares no interest and dividends to its investors but given its intrinsic value, its one of the best assets out there that protects the investors money from inflation. Given the ongoing debt crisis in Europe and now the weak economic data from the world’s biggest economy, the US, fear is slowly making a a comeback. With the Fed’s near zero interest rates and its recent dovish comment regarding the US’s economy and their future policy, it’s no wonder why investors seek gold as a safe haven. Given the uncertainties in the market, both in Europe and in the US, any downbeat developments could send the price of gold higher. Such, though, could benefit the mining industry, specifically the gold miners. The commodity dollar like the Aussie, Kiwi, Loonie, and Swissy could also get some support with the increase in the price of gold.
My last post on the S&P 500 explained that its chart could possibly be setting up the right shoulder of the head and shoulders formation (click here to see it). Now, the pattern looks clearer and if the price breaks below the neckline, the formation would be confirmed. Once the breakdown occurs, the value could slide all the way to the next support at the 1,000.00 psychological level. However, if the index changes direction and starts heading north, the immediate resistance it could encounter is 1,131.23. If that resistance gets cleared out, 1,219.80 could be the next.
Hello peeps! I haven’t much about the EURJPY as of late so here it is now. On its daily canvas, you can see that it has failed to move past the resistance around 113.40 for the last couple of weeks. Interestingly, this mark happens to fall in line almost perfectly with the 38.2% Fibonacci retracement level that I drew. Presently, the pair is trading around 110.00. In my view, it is on track to meet its 2010 low again. A presence of a bearish divergence, where the price registers lower highs and the stochsastics go higher and higher, also suggest a likely down-move. Judging by the height of its present range, it could fall by another 400 pips if it manages to break the 108.00 support. On the positive note, a break above the 38.2% Fib could send it a bit higher towards to 50% level.
The general prices of equities and currencies generally have been stuck within a range this week due to the mixed results from the economic data that came out of the US. US home sales were and durable goods were actually unexpectedly weaker than anticipated which added some concerns that the present global recovery is not that strong as initially thought. In any case, no other major economic reports are on deck today as the US leaders already managed to agree on their plan to overhaul the country’s financial system. The US’s final GDP for the 1Q is set to be released to no changes on the previous tally are expected. If, however, the account surprises us on the downside, the safer currencies like the yen and the USD would likely get some favor from the traders. If not, most major pairs would more likely just trade in a range until they sway in either direction in the coming week.
Hi there my avid readers! On this blog is an update of the USDX chart which I presented last June 15. Back then, the US dollar index has weakened after reaching a new high of 88.708. At present, the index is trading just below [Read more…] about Is the Green Back? – June 24, 2010
Hello Forex peeps! Here’s an update of the EURCAD that I posted last June 10. As you can see, the pair continued to slide along a nice descending channel which began November of 2009. As I have mentioned in my previous post, the pair indeed rallied a bit after marking a new 2010 low of 1.2447. At that time, conditions were already overbought and those who had shorted the euro may have covered at least part of their positions to pocket some profits.
At present, the pair is trading around the 1.2750 area. In my view, it still has room to move up since the stochastics is not yet in the overbought area. Though, if it rises, it would likely meet some selling pressure right at the resistance of the descending channel. The presence of a bearish divergence, where the price registers lower highs and the stochs marks lower lows, likewise indicates a possible turnaround soon. If and when it slides and weakens, it could revisit its 2010 low yet again. So as long as the channel remains in tact, the pair would likely continue its journey down south.
Fundamentally, both equities and the higher yielding currencies retreated yesterday when the US Federal Reserve cautioned the market that the recovery in the US economy is “uneven” due to the developments oversees, implying the debt crisis in Europe. The US’s latest housing figures proved to be weak which prompted the central hold their accommodative monetary policy. Today, the higher yielding currencies like the Canadian dollar could once again weaken if the US’s durable goods orders and unemployment claims figures fail to impress. The core durable goods orders for the month of May is seen to have grown by 1.1%, though, its headline number is projected to have wilted by 1.2%. Its initial jobless claims for the week ending June 19, on the other hand, will likely post a 461k tally.
Hiyo people! I’m pretty sure that everyone knows what the Coca-Cola Company produces. Fine, for those who don’t, they are the ones that produce the world’s most famous soft-drink, Coca-Cola or Coke. Since the start of the year 2010, the shares of Coca-Cola or KO in the New York Stock Exchange has been moving in a descending channel and could continue to head that direction. Currently, a clear support can be seen at $49.94. Once the price slips below that number, its shares could head down to the descending channel’s support. However, if Coca-Cola makes a turnaround (in that case they need to force more people to drink Coca-Cola… kidding!) and starts to ascend, it could aim at least for the $53.80 marker. Once that price mark is cleared out, the next resistance could be at $55.00-$56.00.
The Home Depot, Inc. or HD in the New York Stock Exchange is the largest home improvement retailer in the United States. They sell construction products which consist of mainly building and garden materials. They also provide a number of services like heating and air conditioning installations. Their stores are mostly in the U.S. territories and Canada and some in Puerto Rico, Mexico and China. For 2009, their net income was $2.26 billion.
Technically speaking, the Home Depot’s stock value has recently broken down from its 1-year uptrend during yesterday’s trading session. Now, this is a bad sign for those who are long on this stock since it could now be headed lower and reach the next significant support at $29.44. Once the price slides below the $29.44 price mark, it could fall down to the support at $27.19. Nonetheless, the HD could still move higher although it could now find some resistance at the broken trend line.
The Philippine Stock Exchange index (PSEi) has been testing it’s 2-year resistance for the past few months. From my previous post, the PSEi looked to have broken above that resistance but then, it went back in. However, a break above 3,300 would be more convincing for the index to continue its ascend all the way to the 3,514.74 resistance. Once 3,514.74 is cleared out, the next resistance could be 3,667.74. As of now, the support is at 3,219.46. If the value drops below the 3,219.46 price mark, the uptrend could serve as the next support. But as long as the uptrend remains intact, I’d bet on the upside.
Like the NZDUSD pair in my other post today, the AUDUSD had also broken out from a double bottom formation. After doing so, it then consolidated within an ascending triangle before moving north again. And like the New Zealand dollar, the Aussie made a runaway gap over the dollar as well to start this week’s trading. Now, a bullish runaway gap is a gap on the price chart that occurs during strong bull movements. It usually occurs near the middle of the identified uptrend and can be seen as a signal of an increase in the trend’s intensity. With an overbought condition, the pair could, however, consolidate for awhile again or even retrace before continuing its trek upward. If the Aussie weakens, it could fall back to the bottom of the gap before aiming for its minimum upside target, which is computed by projecting the height of the double bottom from the point of breakout, near 0.9050.
As I’ve mentioned in my other post, this week’s gap among the higher yielding currencies like the AUD was due to the news that China would make its currency, the Yuan, more flexible. At present, the Yuan is pegged to the USD, making its value artificially low. Now, a weak currency is in a sense good as it makes a country’s exports relatively cheaper. It’s no wonder why China was able to post a 50% year-over-year jump in their exports last month. Moving to a more flexible currency policy would negatively impact China’s exports but the flip side is it would make the ones priced in other currencies (products from S. Korea, Germany, the UK, the US) more competitive in global trade. Once this happens, China’s economy would move to a more balanced one and the Western’s exports industry would improve.
Sentimentally, this would be positive for the likes of the Aussie. Fundamentally, however, it would such would be bearish on it. Why? Well, Australia is one of China’s biggest supplier of raw materials. If China’s exports dip, its demand for raw materials would decline as well. But that’s over the long term.
In the mean time, the Aussie could get some lift today if at least one of the high impact reports from Germany, Canada and the US prints an upbeat figure. Germany is slated to report is Ifo business climate today which is seen to taper a bit to 101.2 from 101.5. Canada’s inflation numbers are also due with the core account projected to rise again by 0.3% and the headline figure to post a modest gain of 0.1%. Back stateside, the US will then make public its latest existing home sales which is expected to have reached 6.17 million during the last month. Stay tune for these updates!
Like what I said in my previous blog about the NZDUSD pair last June 17, the could be a short term buy on it. At that time, the pair had already broken out from a double bottom pattern. It then continued to consolidate within a symmetrical triangle before breaking out again. Furthermore, it also gapped up to begin this week’s trading. Presently, the pair is trading around 0.7100. However, I think that the New Zealand dollar will pare some of its gains over the greenback for awhile and consolidate probably within some continuation pattern (triangle or box) or even retrace given its overbought conditions before moving up again. If it slips, it could fall back to the bottom of this week’s gap before making a move towards its minimum upside target just above 0.7200.
Fundamentally, news that China will shift its currency policy from being fixed and pegged to the USD to a more market oriented one sent the higher yielding currencies higher and the US dollar weaker during for the most part of yesterday’s trading. However, the early rally was not sustained and the Kiwi manged to close only with a modest gain. In any case, the forecasted improvement in New Zealand’s current account balance from -NZ$3.57 billion to 0nly -NZ$ 0.30 billion could support the NZD. The result of this will be billed tomorrow. However, today’s big time economic updates from the euro zone, Canada, and the US could definitely sway the currency’s valuation especially if there are any deviations between the actual result and the market’s forecast. Germany will report the latest result of the Ifo business climate survey which is seen to cool off a bit to 101.2 from 101. while Canada is set to release its inflation figures for the month of May with its headline number projected to print a modest 0.1% gain from last month’s 0.3%. The US, on the other hand, is anticip[ating a 6.17M number from its May exiting home sales. An upside from any of these accounts would likely spur some risk taking which would consequently lift the NZD.