Archive for December 14th, 2009
GoLearn Forex Analysis 14/12/2009
Euro – Headed for a Tailspin? By GoLearn Forex
EUR/USD:
The EUR is perilously close to falling into a tailspin. We have been stating for some time that a candle appearing below the 50 day Moving Average (MA) would generate a strong signal for a Short entry. As you can see in the Graph below that signal occurred last week, with the 50 day MA currently holding at 1.4880 while the EUR is trading at 1.46.
The EUR is now on the cusp of an even larger fall. It closed last Friday’s session at the 100 day MA an even more significant breach than the 50 day MA. Perhaps even more troublesome for the EUR is that it is just a hairsbreadth above 61.8% Fibonacci level at a handle of 1.4621.
INSERT CHART EUR
A close below the 61.8% Fibo level coupled with a close below the 100 day MA as they converge may equal real trouble for the EUR. The EUR has not been south of the 100 day MA since April 2009 which coincidently occurred when the 100 day MA and Fibo 23.6% level converged. The EUR proceeded to advance 14.6% from that point. We therefore target the 50% Fibo level with a handle of 1.4184 as the next support level should the EUR breach the 61.8% Fibo level.
USD/CHF:
The CHF is another currency holding at a very pivotal level. With Friday’s session closing just below the 100 day MA the CHF is trying to hold its ground against the Greenback. The Swiss Franc has been one of the benefactors of Gold’s jump in value. However, as the Dollar has rallied and Gold prices have begun to fall so has the CHF.
The Franc closed above its 50 day MA for the first time since August, representing only the 3rd such close since April of 2009. This coincided with it’s last close above the 100 day MA. The Franc has another issue to contend with and that is the 23.6% Fibonacci Retrace level created from the CHF low of 1.20 back in March of 2009.
INSERT CHART CHF
If the CHF closes above the 100 day MA and the 23.6% Fibonacci level at a handle of 1.0402 is breached then we would expect the CHF to test support at the 38.2% Fibo level or 1.0701.
Bona Fide Recovery Seems in Order by GoLearn Forex
Global Equity Markets closed higher as the prospect for a bona fide recovery now seems assured. The Markets were able to shake off credit fears and focus on continued positive economic data coming out of the U.S. On Wall Street the DJIA closed up 65.67 points to 10,471.50 on better than expected Advanced Retail Sales figures.
The Greenback continued it rally as it advanced on positive economic data, breaking the 9 month long “positive equities to poor dollar” correlation, for a second time in 1 week. The DXY touched 76.725 before retreating slightly to close at 76.573. Another positive session for the Greenback and it may take out the 100 day MA.
In the commodity space both Gold and Oil were down. Gold lost 15.60 to close Friday’s session at 1,115.40 while Oil closed just below $70 a barrel for the first time since September 29th. Gold has lost nearly 9.5% since its high on December 3rd and is just a few dollars away from closing below its 50 day Moving Average.
In the Euro-zone for Monday, Employment figures will be published on Tuesday. U.S. PPI numbers will print as well as the Empire Manufacturing data. In Australia, GDP numbers will hit the wire on Wednesday, as will Housing Starts and Building Permits in the U.S. However, investors will be tuned in on Wednesday to the FOMC rate decision. Although no change in rate is expected, traders are hoping for the accompanying statement to shed light on future rate hikes and economic policy as continued positive economic data continues to print.
Upcoming Forex Events for December 14, 2009-12-14
CHF PPI (MoM) Forecast 0.20% Previous -0.40%
EUR Industrial Production (MoM) Forecast -0.50% Previous 0.30%
CAD Capacity Utilization Rate Forecast 67.80% Previous 67.40%
AUD RBA Meeting Minutes
Daily Review 14/12/2009
USD Dollar (USD)
The Dollar continued rallying versus most majors on Friday after Retail Sales and Michigan\’s Consumer Sentiment came out stronger than expected signaling economy is recovering improving Fed Rate Outlook. NASDAQ ended almost flat with -0.03% change and Dow Jones gained by 0.63%. Crude weakened by -1.39% dropping below 70$ for the first time since October closing at 69.87$ a barrel and Gold (XAU) dropped by -0.91% closing at 1114.55$ an ounce on a stronger Dollar. No economic data expected today.
EURO (EUR)
The Euro continued falling versus the Dollar reaching a 2 month low below the 1.46 support level as better economic data in the US led investors to expect a near rate increase. Ireland and Greece are facing major debt concerns that may lead to their exit from the Euro-Zone. Overall, EUR/USD traded with a low of 1.4586 and with a high of 1.4776. Today, Industrial Production is expected with -0.6% versus 0.3% prior.
EUR/USD – Last: 1.4620
|
Resistance |
1.4700 |
1.4775 |
1.4825 |
|
Support |
1.4585 |
1.4535 |
1.4470 |
British Pound (GBP)
The Pound dropped slightly versus the Dollar after PPI Input and Output came out weaker than the forecast. The UK budget deficit keeps growing as the government keeps spending money to spur the economy preventing the Pound from gaining back. Overall, GBP/USD traded with a low of 1.6196 and a high of 1.6338. Today, RICS House Price Balance is expected with 39% versus 34% prior.
GBP/USD – Last: 1.6200
|
Resistance |
1.6275 |
1.6340 |
1.6380 |
|
Support |
1.6160 |
1.6120 |
|
Japanese Yen (JPY)
The Yen weakened versus the Dollar and the Euro as economic conditions improve and a future rate increase in the U.S seems more likely. Overall, USD/JPY traded with a low of 88.26 and a high of 89.81 and EUR/JPY traded with a low of 129.97 and a high of 131.59. No economic data expected today.
USD/JPY-Last: 88.40
|
Resistance |
89.30 |
89.85 |
90.10 |
|
Support |
88.25 |
88.00 |
87.75 |
Canadian Dollar (CAD)
The Canadian Dollar weakened versus the Dollar as Crude dropped beneath 70$ a barrel on stronger Dollar sending the high yield commodity related Australian and Canadian Dollar lower. Overall, USD/CAD traded with a low of 1.0484 and a high of 1.0623. No major economic data expected today.
USD/CAD – Last: 1.0610
|
Resistance |
1.0630 |
1.0650 |
1.0690 |
|
Support |
1.0540 |
1.0500 |
1.0480 |
Things to Look Out For While Choosing a Low Spread Forex Trading Platform
When a trader is trading in the Forex Market, he or she will observe that the Forex Brokers do not charge any commissions for the services they provide, as well as, they do not offer their services for free. Instead of the commissions, the brokers make money by charging a spread from the traders. Spread is nothing but the difference between the prices bided and the price asked for a particular currency that is being traded. Therefore, it is very important for the Forex Traders to find the Forex Trading Platforms which is asking for a low spread, in order to earn a high income from the trading business, because the lower spread a platform is asking for, the higher gain the trader would receive.
There is one really good thing about the spread which is that the trader only needs to pay it only when he or she is buying the currency and not while selling the currency. The popular currency pairs that have the lowest spreads in the Forex Market are EUR/UDS and GBP/USD. Some of the Forex Brokers offer varying spreads for varying types of accounts. The obvious fact is that when the spread on currency pairs are small, the better will be the conditions for the traders. One can find lots of online sites which offers different platforms for Forex Trading and through these platforms, the trader will be able to buy or sell the Forex. The only thing that the trader needs to do is to identify the low spread Forex Trading Platforms from the various available platforms. One way to identify the best Forex Trading Platforms among the other platforms available on the internet is by the feature that shows live prices at which the trader can actually trade at. Therefore, the platforms providing this feature can be rated as the best Forex Trading Platforms.
There are four important factors that a trader should consider while selecting the best Forex Trading Platforms. The four factors are listed below.
1. Platform Execution, which is nothing but the speed and consistency of the execution of the trades.
2. Fractional Trading, which is defined as the feature to allow the trader to trade on the basis of fractional trading. That is, it allows the trader to trade in units.
3. The platform should be user friendly. The trading platform should be easy to use and understand for the Forex Traders. As well as, the platform should be reliable when the markets are moving fast.
4. There should be minimum investment. That is, the platform should offer a minimum amount of money needed to open an account in the Forex Trading.
Thus, having the above four features in mind, a trader can always select the best Forex Trading Platforms offering a low spread.
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