daily fundamental analysis
GoLearnForex
Kiwi Declines Against USD by GoLearnForex
NZD/USD:
The Kiwi declined the most against the Greenback last week, compared to the rest of the G-10. On October 28th the RBNZ kept rates on hold. More damaging to the Kiwi were the accompanying statements from the RBNZ in which they remarked that rates would likely remain on hold through Q2 of 2010.
Six days prior to that announcement NZD struck near the prior day’s high versus the dollar at .7606. Since that day the Kiwi has been in a tail spin. The Chart below is a daily Candle chart of NZD/USD.
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In the white circled area we have a Candlestick that traders refer to as a Hangman. There is a short candle body with a wick hanging down from it. When this is seen during price appreciation it may signal a possible reversal. The candles following the Hangman are lower and that could be confirmation enough to enter a short NZD position.
This pattern appearing out in front of a rate decision may have been traders signaling caution ahead of the announcement. In the end traders were correct and price has continued to decline. One last item to always keep an eye on are the daily Moving Averages. NZD is approaching a close below its 50 day MA. A close below the 50 day MA should put further pressure on the already battered NZD.
USD/CHF:
We have discussed correlations and their importance. Aside from straight technicals and fundamentals often what drives a currency might be its correlation to another instrument, product and or commodity. The Swiss Franc historically has had a very tight correlation to Gold, as one appreciates so does the other and vice versa.
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The Chart below shows the price movement of GOLD and CHF. During Gold’s most recent depreciation (as depicted between the 2 blue lines), you observe the strong correlative effect one exerts on the other. What should grab our attention as Gold has resumed its strength is that the Franc has not. As a trader you should wonder if Gold is overbought or the CHF oversold? Of course keep in mind it is not a perfect correlation of 1, meaning some variation is normal.
US Markets finish the Day Slightly Ahead by GoLearnForex
In Asia, Equity Markets were down while in London and in the U.S markets finished the day slightly ahead. This is coming on the heels of a horrendous close on Friday in the U.S and CIT’s bankruptcy filing over the weekend. Equity Futures in Asia are pointing to a slightly higher open for Tuesday while London Futures are modestly lower.
The Dollar was slightly off against the G-10 mirroring the DJIA small advance today of 77 points. Oil closed today mostly unchanged while Gold soared again to 1,054. In the U.S the ISM Manufacturing figures printed smartly better than expected coming in at 55.7 versus expectations of 53. In addition, the Pending Home sales figures surprised to the upside at 6.1% against expectations of 0%.
This is a busy week for economic data releases. Due out tomorrow will be the RBA Rate decision. The current rate holds at 3.25% and market consensus is looking a quarter point hike to 3.5%. In the U.S, Factory Order numbers are set to print. A positive show will confirm today’s ISM numbers while a below consensus read will cast doubt on the durability of the ISM figures from today.
Upcoming Forex Events for November 3, 2009
GBP Construction PMI Forecast 47.20 Previous 46.70
USD Factory Orders (MoM) Forecast 1.00% Previous -0.80%
AUD AIG Services Index Previous 49.30
GBP Nationwide Consumer Confidence Forecast 72.00 Previous 71.00
Analysis by http://www.golearnforex.net
GoLearnForex Technical Analysis 2-11-2009
GBP/USD:
The Pound has been range bound for some time. It is trading between 1.6650 and 1.61. Price action above or below those levels has lead to a number of false breakouts. Interestingly enough, if you draw a Fibonacci Retracement from the Pound’s high at 2.1160 in 2007 to the Pound’s low just below 1.35 in 2009, you will notice that the 38.2% Fibonacci level is at 1.6422.
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That level is significant because over the last 6 months we have had more candles extend through this level than above or below it. On the Chart is the 50 day MA in yellow which also had been hovering along the same Fibo line. In October the 50 day MA dipped below the 38.2% Fibo level but price has since recovered in the last week.
Typically price will either trend and break through various Fibonacci levels, or it will range in between 2 Fibonacci levels as it searches for direction. When price hugs a level for a considerable time you expect to see a breakout. We expect to see a shift in this pattern that will cause price to break free of the 38.2% Fibonacci level at 1.6422.
EUR/USD:
The EUR has been holding support at a level equal to its 50 day MA since April 30th. The EUR is now in range to test that level of support. Here is what we are looking for as confirmation of a real move lower.
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We want to see at least a whole candle including its wicks fall between the 50 day and 100 day MA. Additionally, the last lower low we had was at the 1.45 handle. If we break that level we would increase the short position.
If the short entry presents itself we would take PNL at the 1.4225 handle and reevaluate the markets and our positions at that time.
GoLearnForex Fundamental Analysis 2-11-2009
Global Equity Markets were net losers last week. In the U.S the DJIA slid nearly 250 points on Friday. Financials were hit the hardest, lead by concerns over CITI’s balance sheet and CIT’s inability to repay debt and probable bankruptcy filing. An additional behind the scenes market mover was Friday’s fiscal year end for many Mutual Funds.
The Dollar finished the week gaining on 8 of the G-10 currencies with Kiwi the big loser, down 3.96% for the week. Gold finished the week up less than 1% while silver dropped by 4.56%. Oil closed the week at $77 a barrel, roughly $4 off its high.
There are a number of important economic data releases due out this week. 4 major Central Bank will meet this week; the FED, RBA, BOE, and ECB. Only the RBA is expected to raise rates. All eyes will be watching the accompanying statements of Central Bankers. For Monday, ISM Manufacturing numbers in the U.S are set to print. The market is anticipating a slightly higher read for October at 53 versus 52.6 in September.
Upcoming Forex Events for November 2, 2009
CHF SVME PMI Forecast 55.10 Previous 54.30
EUR Manufacturing PMI Forecast 50.70 Previous 50.70
USD ISM Manufacturing Index Forecast 53.00 Previous 52.60
AUD Interest Rate Decision Forecast 3.50% Previous 3.25%
Analysis by http://www.golearnforex.net
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