Archive for December 15th, 2009
GoLearn Forex analysis 15/12/2009
NZD Beginning to Falter by GoLearn Forex
NZD/USD:
The New Zealand Dollar is starting to falter and like most of its G-10 counterparts it is holding at pivotal levels against the Greenback. One slip either way may send the currency tumbling or ready to resume its advance on the Dollar. We have mentioned the Kiwi in the past as we feel it may yield the biggest percentage loss when the Dollar does finally rally.
In the graph below we see the formation of a downward sloping Triangle beginning to emerge. The Kiwi has been riding the 50 day SMA as support on its path to .7600. You can observe that NZD peaked in late October but after 3 attempts it has failed to break the October high.
Short term support has been holding near .7100 represented by the bottom leg of the triangle. As the hypotenuse converges on near term support the more likely it is that a breakout will occur in the direction of the slope. We have also diagrammed a pattern we use often to identify trend and that is a step pattern whereby there are lower high’s and lower lows (or vice versa as the case maybe). Typically we like to see more obvious lower lows than what the Kiwi has shown us thus far.
The NZD is currently sitting below its 50 day MA, which we mentioned prior, represented support for the NZD’s move over the last 9 months. During the Dollar’s rally last week the Kiwi was able to bounce off of the 100 day MA but was not able to bounce back above the 50 SMA. As price action moves into the wedge of the triangle it may force price below the 100 SMA.
For good measure we added a Fibonacci Retrace starting back in March when the Kiwi dipped below .50 running through its most recent high in October when the NZD struck .7635. This data range produces the 23.6% Fibo Retrace at a handle of .6988. To trigger a strong short signal the Kiwi would need to take out the 100 day MA, near term support (the base leg of the triangle), and the Fibo 23.6% level, as we then target a .6500 handle. In order to resume a Long NZD position at this point the NZD would need to break north of the hypotenuse, the 50 day MA, and near term resistance at .7525.
Abu Dhabi Sending Financial Aid for Dubai World by GoLearn Forex
World Equity Markets gained some ground Monday amid assurances from Abu Dhabi that they would provide $10 billion in immediate financial aid to ensure Dubai World meets its $4.1 billion debt obligation due yesterday. The DJIA closed a shade above 10,500 after picking up 29.55 points.
The Greenback gave up a little ground yesterday as the DXY was down marginally to 75.352. Gold advanced slightly to 1,126.70 as the dollar showed some weakness. Oil was unchanged as it continued to hold below $70 a barrel.
In the U.K CPI data is set to print today. The Euro-zone’s Current Sentiment/Survey will publish today. In the U.S a number of economic releases are slated for today; Crude Oil Inventories, Gasoline Inventories, Total Net TIC Flows, Empire Manufacturing Index, and lastly PPI figures will print. In light of the Dollar’s recent rally expect that traders will be watching these numbers very carefully ahead of tomorrow’s FOMC rate decision.
Upcoming Forex Events for December 15, 2009
EUR German ZEW Economic Sentiment Forecast 50.20 Previous 51.10
CAD Leading Indicators (MoM) Forecast 0.60% Previous 0.70%
USD TIC Net Long-Term Transactions Forecast 43.00B Previous 40.70B
AUD GDP (QoQ) Forecast 0.40% Previous 0.60%
Daily Review 15/12/2009
USD Dollar (USD)
The Dollar weakened slightly versus the majors as the Dollar rally took a relief. NASDAQ and Dow Jones gained by 0.99% and 0.28% respectively as Dubai\’s bailout calmed investor fears. Crude weakened for the 9th straight day lowering by -0.43% closing at 69.57$ a barrel. Gold (XAU) gained by 0.54% closing at 1123.30$ an ounce. Today, PPI is expected with 0.8% versus 0.3% prior. Industrial Production is expected with 0.6% versus 0.1% prior. TIC Long Term Purchases is expected with 38.3B versus 40.7B prior.
EURO (EUR)
The Euro gained slightly versus the Dollar as Dubai World\’s bailout eased banks concerns of major write downs. Industrial Production came out as expected with -0.6%. Overall, EUR/USD traded with a low of 1.4607 and with a high of 1.4685. Today, German ZEW Economic Sentiment is expected weaker with 50.1 versus 51.1 prior.
EUR/USD – Last: 1.4655
|
Resistance |
1.4685 |
1.4775 |
1.4825 |
|
Support |
1.4585 |
1.4535 |
1.4470 |
British Pound (GBP)
The Pound gained slightly versus the Dollar but is still unable to break above or below the 1.6350 and 1.62 range. RICS House Price Balance came out weaker with 35% versus 39% forecast. Overall, GBP/USD traded with a low of 1.6188 and a high of 1.6324. Today, CPI is expected with 1.8% versus 1.5% prior.
GBP/USD – Last: 1.6300
|
Resistance |
1.6340 |
1.6380 |
1.6425 |
|
Support |
1.6250 |
1.6190 |
1.6150 |
Japanese Yen (JPY)
The Yen gained versus the Dollar and other majors after Tanken Manufacturing Index came out stronger than expected. The Yen is set to replace the Dollar in the Carry Trading as borrowing costs in Japan became almost as cheap as U.S loans. Overall, USD/JPY traded with a low of 88.32 and a high of 89.29 and EUR/JPY traded with a low of 129.18 and a high of 130.64. Today, Tertiary Industry Activity is expected with 0.5% versus -0.5% prior.
USD/JPY-Last: 88.75
|
Resistance |
89.00 |
89.25 |
89.85 |
|
Support |
88.35 |
88.00 |
87.40 |
Canadian Dollar (CAD)
The Canadian Dollar remained unchanged versus the Dollar as no major news was released and Crude prices were merely changed. Overall, USD/CAD traded with a low of 1.0484 and a high of 1.0623. Today, Leading Index is expected with 0.6% versus 0.7% prior and Labor Productivity is expected with -0.4% versus 0.0% prior.
USD/CAD – Last: 1.0580
|
Resistance |
1.0635 |
1.0670 |
1.0700 |
|
Support |
1.0550 |
1.0515 |
1.0480 |
Research by http://www.ufxbank.com
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