Archive for December 8th, 2009
GoLearn Forex Analysis 8/12/2009
What If the Dollar Takes Off? By GoLearn Forex
NZD/USD:
We are not suggesting the Dollar bulls are running wild, however, every rally in hindsight has a defining moment. Every trader on the street is aware that when the Dollar bulls get set free they are going to come charging. Even if you are a skeptic to the end just the mere massive unwinding of the carry trade would rocket the Greenback.
Our pick would be the NZD and here 3 reasons why:
Performance – Going back to March 9th, 2009 through December 7th, 2009 the top performing G-10 currency (on a percentage basis) against the Greenback has been the Kiwi. It is up 47.24% which is quite shocking given the New Zealand economy is not among the largest of the G-10. To put some perspective on it the EUR is only up 19.59% and the GBP 20.57%
INSERT CHART A
Technical – There are 2 obvious technical reasons that stand out to us. A) A pattern we look for are lower lows and lower highs and vice versa. In the chart below we have depicted the initial emergence of this pattern. B) The Kiwi is already trading below its 50 day MA and on the verge of taking out its 100 day MA, a more significant breakout level than the 50 day MA, which many other G-10 currencies have yet to crack.
INSERT CHART B
Commodities – The Kiwi benefits from rising commodity prices as it is a commodity currency. Commodity prices are quoted in USD so as the Dollar strengthens commodity prices cheapen. If commodity prices cheapen so will the NZD.
Combine these three factors and you may see significant price action on this pair. Of course if the Dollar rallies all currencies will be on their heels but as a trader you are looking for the best trade, and this may be it. We define the best trade as the one with the best risk to return ratio.
Market Flat on Monday by GoLearn Forex
Global Equity Markets were off slightly Monday. A combination of light volume and a lack of any real economic data releases left markets essentially flat as traders continue to be risk averse heading into year end. The Dollar had looked to continue its rally until Fed Reserve Chairman Ben Bernanke’s comments regarding U.S rates remaining low for an “extended period of time” and his seemingly unimpressed manner regarding unemployment put the rally on hold.
The Dollar held its gains from Friday as the DXY closed down only a couple points to 75.757. Gold finished modestly lower to 1,158.10 while Oil gave up a little over a 1.50 a barrel to finish the day at 73.93.
The CAD moved into positive territory as Building Permits jumped 18%. This once again reaffirmed that Canada is in the midst of substantive recovery. This news comes on the heels of the BOC Rate decision today. Mark Carney, Governor of the BOC, has already expressed his commitment to keep rates on hold at least through mid 2010. In Japan, GDP figures are set to print and in the U.K. Industrial Production number are due out. We expect a good amount of volatility in the market today given recent events and today’s prints.
Upcoming Forex Events for December 8, 2009
CAD Interest Rate Decision Forecast 0.25% Previous 0.25%
GBP NIESR GDP Estimate Previous -0.40% Your browser may not support display of this image.
JPY GDP (QoQ) Forecast 0.90% Previous 1.20%
AUD Home Loans (MoM) Forecast -1.80% Previous 5.10%
Analysis by http://www.golearnforex.net
Daily Review 08/12/2009
USD Dollar (USD)
The Dollar continued Friday’s momentum and gained versus most majors after no major news was released. Chairman Bernanke said the weak employment and tight credit will cause a slow expansion. NASDAQ and Dow Jones ended almost flat moving by -0.22% and 0.01% respectively after Chairman Bernanke said it is too early to declare the recovery will last. Crude weakened by -1.96% closing at 73.99$ a barrel as OPEC ministers flag steady output and Gold (XAU) dropped by -0.22% closing at 1158.8$ an ounce on a stronger Dollar. Today, IBD/TIPP Economic Optimism is expected with 49.5 versus 47.9 prior.
EURO (EUR)
The Euro reached a monthly low versus the Dollar breaking below the 1.48 support level but unable to keep below it. The pair has crossed and remained below the 50 day moving average for the first time in 8 months supporting the Dollar rebound. German Factory Orders came out weaker with -2.1% versus 0.6% expected. Overall, EUR/USD traded with a low of 1.4755 and with a high of 1.4904. Today, German Industrial Production is expected with 1.1% versus 2.7% prior.
EUR/USD – Last: 1.4840
|
Resistance |
1.4900 |
1.4970 |
1.5020 |
|
Support |
1.4775 |
1.4735 |
1.4685 |
British Pound (GBP)
The Pound remained unchanged versus the Dollar and gained slightly versus the Euro as investors await Wednesday announcements from Bank of England. Overall, GBP/USD traded with a low of 1.6312 and a high of 1.6515. Today, Manufacturing Production is expected with 0.5% versus 1.7% prior. Industrial Production is expected with 0.5% versus 1.6% prior. NIESR GDP estimate will be released.
GBP/USD – Last: 1.6460
|
Resistance |
1.6500 |
1.6550 |
1.6600 |
|
Support |
1.6390 |
1.6330 |
1.6275 |
Japanese Yen (JPY)
The Yen gained versus the Dollar as slight declines in world markets along with the Dollar rally lowered risk appetite. Japanese Current Account came out weaker with 1.38T versus 1.6T expected. M2 Money Stock came out weaker with 3.3% versus 3.5% expected. Overall, USD/JPY traded with a low of 89.04 and a high of 90.42 and EUR/JPY traded with a low of 132.36 and a high of 134.36. Today, Final GDP is expected with 0.8% versus 1.2% prior.
USD/JPY-Last: 89.35
|
Resistance |
89.75 |
90.10 |
90.75 |
|
Support |
89.00 |
88.50 |
88.00 |
Canadian Dollar (CAD)
The Canadian Dollar gained versus the Dollar after Building Permits jumped by 18% versus 1.1% expected. Overall, USD/CAD traded with a low of 1.0482 and a high of 1.0649. Today, Bank of Canada will announce the Interest Rate Decision expected to remain at 0.25%. Housing Starts are expected with 159K versus 157K prior.
USD/CAD – Last: 1.051
|
Resistance |
1.0585 |
1.0645 |
1.0690 |
|
Support |
1.0480 |
1.0450 |
1.0430 |
Research by http://www.ufxbank.com
Advantage of using day trading software
In the old days, investors have a very difficult job. Can you imagine spending too many hours and days pouring over Forex charts, data and statistics to be able to take some trading investment decisions? It is not just time consuming but also very tough and stressful. The data is not always precise to start with. One of the reasons why Forex trading becomes so famous is that anybody is able to take part in it. You no longer require having such an in-depth background in finance as well as investing.
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You may be retired and Forex trading business by using stock trading market software provides you a way of making money and not spend your free time doing so. There are few individuals, who are involved in day trading as they have a lot of money and free time to enjoy it.
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