The US stock market dropped sharply last Friday as violent clashes in Egypt rocked the global financial markets. [Read more...]
Violent Clashes In Egypt Rocked The Dow And The Euro
Weakness Seen In The US Dollar
Much attention was given to the stock market for the past couple of weeks. Today, however, I’d like to divert your minds for a while towards the almighty US dollar. [Read more...]
Easy 100 Pips In The Euro Against The US Dollar!
Good day forexers! In my technical analysis, there could be a symmetrical triangle forming in the [Read more...]
New Zealand Dollar Looking To Revisit Its All-Time High Against The Greenback
The New Zealand dollar versus the US dollar (NZD/USD) is currently at 0.7770. In simple terms, 0.7770 USD is equal to 1.00 NZD. [Read more...]
The Australian Dollar At A New All-time High!
The holiday season must have really great for those who are long on the Australian. The month of November was not particularly well since the AUDUSD pair has slid by 640 pips after marking a historical high at 1.0183 and [Read more...]
The New Zealand Dollar (Kiwi) Breaks Down!
Happy Holiday’s FX friends! Hope your trades are giving you dividends especially these days. Anyway, those who are long on the New Zealand dollar or the Kiwi as what investors call it in the street, should start thinking about lightening your positions. Why? Well, if you look at its daily chart, you will see that it has recently broken down from a head and shoulders pattern. In the process, it has also breached its uptrend line. As some of you might know, a break down from such pattern signals a bearish reversal. So if the NZDUSD pair fails to go over the formation’s neckline at 0.7400, it could fall all the way down to just above 0.6800 (computed by projecting the height of the pattern from the point of break down). On the flip side, a successful move above 0.7400 could send the pair at least back in sideways motion. [Read more...]
Bullishness Seen In The Aussie!
Hello guys! Welcome to another day of forex trading. My forex pick for the day is an update on the Australian dollar against the US dollar currency pair (AUDUSD) or as some may call it “Aussie”. During my last post on this (kindly check here), I mentioned it could head north once again after a possible rebound from its 7-month trend line seen in the daily chart. Gladly, as the AUDUSD touched the trend, [Read more...]
The New Zealand Dollar To Drop Against the US Dollar?
Hi guys, my forex pick is the NZDUSD pair (New Zealand dollar vs US dollar) or “kiwi” as some may call it. This currency had been going up since May of this year but after making a 2-year high of 0.7976 last November, it started dropping. Right now, I’m bearish on this currency pair as it could break down from a head and shoulders formation in the daily chart with the neckline at [Read more...]
The Aussie Could Head North Once Again
Hey guys, here’s my technical analysis update on the Australian dollar against the US dollar (AUD/USD) or the “Aussie” as some people call it. The Australian and US dollar were at par last month (kindly check this) then an all-time high of 1.0183 was made on November 5. However, the Aussie started declining by a thousand pips to an 8-week low of 0.9584 because of the Ireland banking crisis then followed up by the potential North-South Korea war last week. Fortunately for [Read more...]
EURO Still On An Uptrend Against The US Dollar
Hello traders from all parts of the world! My forex pick for the day is the EURUSD pair or “fiber” as many would call it. As you can see, the Euro has been strong against the greenback since it broke out from the cup and handle formation last September (kindly check here). Afterwards, a bullish symmetrical triangle formed, broke out to follow through the upward momentum and reach the 1.4282 9-month high last November 4 (kindly see it here). However, the Euro now sank against the US Dollar dropping by a thousand pips since the beginning of this Month. Key factors highly involved in demoting the pair’s value include the [Read more...]
The Geppy’s Bearish Setup
Hello forex friends! What I have here is the daily chart of the British Pound versus the Japanese Yen (GBP/JPY) or Geppy as its nickname). In my technical analysis, this currency pair is leaning towards the bearish side as it has been declining in a downward channel for a certain time now. Furthermore, there is a descending triangle formation setting up inside the channel and could be bound for a breakdown soon. If the Geppy breaks below the support of the said triangle, the pair could duck dive and tap my conservative target price of 120.00. If it further drops below 120.00, the next marker could be the downward channel’s support. On the bullish note, if the descending triangle seen on the Pound versus the Yen fails to breakdown but instead breaks out on the upside, it could rise and hit my target price of 140.00. This however is less likely to happen as the pattern is coming from a downtrend and descending triangles are naturally bearish. In any case 140.00 gets cleared out, the next resistance could be 145.00.
USD and Its Last Wall of Defense Against the Swissy – June 29, 2010
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.
Is the Euro-Yen Poised for Another Drop? – June 25, 2010
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.
Is the Green Back? – June 24, 2010
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...]
The Loonie to Trump the Euro Once Again – 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.
Aussie: A Pause Before Another Leg Higher – June 22, 2010
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!
The Kiwi to Move Up Some More? – June 22, 2010
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.
The Euro Bears in Town? – June 21, 2010
Here’s an updated chart of the fiber or EURUSD pair. In my blog back in June 12, I noted that the pair could fall after finding some resistance at the support of the descending traingle which was also almost in line with the 38.2% Fibonacci retracement level that I marked. Notice, however, that at that time, the stochastics were still far from the overbought area, giving the pair more room to move higher. Over the next succeeding days, theeuro indeed continued to rise over the greenback, supassing both the 38.2% and 50% Fibs. At present, the fiber is trading around 1.2400. And with the stochstics now in the overbought territory, it could soon resume its journey south. The presence of a bearish diveregence, where the price marks lower highs and the oscillator prints higher highs, also suggest a likely downmove any time soon.
If the EUR indeed loses its suppotr and falls, it could revisit its 2010 low at 1.1876. On the slightly positive note, a break of the 61.8% fib and the short term downtrend line could possibly send it back up to 1.3300, giving the euro bulls something to cheer about. While such price action does not necessarily lead to a bullish reversal, such would still allow those who are long to close at least part of their positions at a better price.
On the economic front, several market moving economic reports are due this week in the euro zone. Germany’s Ifo business climate survey, which is seen to have cooled a bit to 101.2 from 101.5, and the euro zone’s current account balance, which is likewise projected to have lessened a bit to €1.3 billion from €1.7 billion, will be on tap tomorrow (June 22). The latest manufacturing and services PMI from from, Germany, and the euro zone itself, most of which are expected drop slightly from their previous readings, will be on deck the next day. So the anticipated fall from these accounts plus any surprise downside from the high impact reports from the other nations like Canada’s infaltion and retail sales reports, the US’s home sales and Federal rate decision, New land’s 1Q GDP report, could fundamentally weaken the euro. On the flip side,the projected gain from the euro zone’s industrial new orders (seen to grow by another 1.6%) plus any upside from the repots from the other major countries could lift the currency again.
The Swissy on Track for Wave 5 – June 21, 2010
Welcome to another week of forex trading my friends! Today, I present to you an updated daily chart of the USDCHF pair. From my post about it exactly a month ago back in May 21, I mentioned that the USD is bound to give up some of its gains back to the Swiss franc after the pair had reached a high of 1.1731 in June 1. At that time it was pretty clear that it was already losing its upward momentum. Stochastics was also in the extreme overbought region, suggesting a likely turn around soon. Indeed, it started to reverse and head south after just a couple of days, marking the wave 4 of a 5-wave cycle according to the Elliot Wave Theory.
At present, the pair is below 1.1100 which is, by the way, just around the 50% Fibonacci retracement level that I drew. Now, it could use this mark as a support to propel itself back up but if this mark does not hold, the pair could slide further down to 61.8% Fib or even back at the neckline of the inverted head and shoulders. In any case, in my opinion, the pair looks primed for another up move anytime soon given its oversold condition. A bullish divergence, with the price making higher lows and the stochastics registering lower lows, is likewise present, sggesting that traders could pick the dollar back up in exchange of the Swissy. So if and when it moves higher, it could aim at least for its 2010 high at or even reach the minimum upside target its previous breakout from an inverted head and shoulders at around 1.1900. Such move would then mark its wave 5 of the cycle.
Fundamentally, the Swiss National Bank (SNB) said last week in its Libor rate decision that it would not hesitate to interevene in the forex market to weaken the CHF if any risk of deflation in Switzerland returns. Note that the country’s month-over-month CPI had unexpectedly dropped by 0.1% in May. Another slide perhaps during this month or in the next would place a lot of pressure on the central bank to further ease its currency’s valuation to fight a probable deflation. On top of this, any suprise downside from any of the high profile economic reports (German Ifo business climate, Canadian inflation and retail sales, US home sales and Federal funds rate, New Zealand GDP) would likely cause some risk aversion, benefitting the safer currencies like the USD.
The Return of the Aussie Bulls? – June 19, 2010
In my blog last June 15, I asked whether the AUDUSD will head lower or higher. It turned out that the pair had moved north, at least for the time being, against the odds. As you can see, the pair had previously slid from a double top formation. Even before reaching its minimum downside target, it had already rallied and broken back above the pattern’s former neckline. This week’s price action which started on a very bullish note with a gap up confirmed its breakout from a shorter term double bottom. But withthe stochstics now in the extreme overbough area, the pair coul range fo awhile above the necklines of the double bottom and top before making a move for its minimum upside target (calculated by projecting the height of the double bottom formation from the point of breakout) somewhere at 0.9050. On the sour side, it could revisit this year’s low if and when it breaks below the neckline supports. In any case, this week’s moves are probably the first indication that the Australian dollar could be back on the hunt.
On the fundamental front, no major economic updates are due in Australia this week. Though, the high profile events in the other major countries would more likely influence the Aussie’s price action. On tap this week are Germany’s Ifo busines climate survey, Canada’s inflation and retail sales figures, New Zealand’s current account and 1Q GDP numbers, and the US’s FEderal funds decision and durable orders along with its weekly unemployment claims. Upbeat marks from any of these accounts could spur risk appetite, benefitting the higher yielding currencies like the AUD.
