| Daily Forex Technicals | Written by FOREXYARD | Dec 10 08 09:18 GMT | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
HeadlinesDollar Expects Low Volatility Today Today there is likely to be less volatility in the greenback as little news from the U.S. is expected to be released. Nevertheless, Crude Oil Inventories, Federal Budget Balance, and Wholesale Inventories are expected to see gains today, but are unlikely to contribute to USD volatility. Market Trend
Economic NewsUSD - Dollar Likely to Move Little against its Currency Pairs Today The U.S. Dollar suffered additional losses against most of its major currency pairs yesterday. This occurred despite the better than expected figures (-0.7%) that were released from the Pending Home Sales Indicator for October. Traders witnessed the USD fall against the EUR; closing at around 1.2930. The USD also took a small dive against the Yen and the Pound Sterling. The recent reassurances to rescue the U.S. economy by Obama have provided hope that the U.S. downturn will be met by aggressive government intervention. This talk has coincided with bleak U.S. economic data and recent profit warnings from major U.S. companies, which has recently tempered market sentiment. Analysts say that the weakness in the USD yesterday may be due to fears that the U.S. economy will be hit more negatively in comparison to other developed economies. Today the greenback is likely to experience less volatility than yesterday, as little news is expected to be released from the United States. The release of economic news, such as Crude Oil Inventories is unlikely to have an impact on the USD. EUR - EUR Gains on German Economic Sentiment Indicator Release The EUR experienced a bullish trading session yesterday, as it appreciated against most of its major currency pairs. The EUR gained about 100 points versus the USD during yesterday's trading session, and closed at 1.2945. The major economic event that came out of the Euro-Zone yesterday was the German ZEW Economic Sentiment, which was slightly higher than analysts had forecasted, and in turn boosted the EUR. German Economic Sentiment rose slightly to -45.2 points in December from the -53.5 points reported in November. The improvement in this consumer sentiment signals that the worries about a further aggravation of the economic recession through 2009 may be limited. Outside of Euro-Zone economic news, Britain experienced further negative news as its manufacturing production level came out lower than expected, and demand for British exports has apparently declined. These past weeks, the UK has been provided with a stream of data which has pushed the Bank of England (BoE) closer to adopting the EUR as its official currency. Coupled with the possibility of other countries, such as Iceland, Bulgaria, and other East European countries, also joining the EUR, investors may see a sudden reemergence of the EUR as a powerful currency capable of becoming the main contender with the USD as the safest safe-haven. Looking at today, however, low volatility is expected in EUR trading as there is little economic news scheduled to be released. Traders would be wise to take early sell positions in anticipation of the Swiss National Bank's Libor indicator tomorrow, which is predicting an Interest Rate cut from 1.00% to 0.50%, making the CHF take on the lowest short-term interest rate in the European Union. JPY - Yen Experiences Mixed Result against Major Currency Rivals Japan sank deeper into recession in the 3rd quarter and is reportedly considering $216 billion in new stimulus spending to prevent the country's fall further into economic turmoil. This is in response to yesterday's news that Japanese electronics giant Sony Corp. said it will cut 8,000 jobs as part of a restructuring effort to save $1.1 billion in costs. Also, Citigroup reported that it will cut 1,000 jobs in Japan. In response to the news, analysts expect that investors may be deterred from investing in Japan. This may in turn reduce the demand for the JPY. As a result of negative economic news that came out of Japan yesterday the JPY finished yesterday's trading session with declines against several of its major currency pairs. This was seen against the EUR, pushing the EUR/JPY pair to 119.85. Also, the Yen fell against the CHF, as the pair closed at 76.80. Looking to today the Yen may fall slightly against its major currency pairs as Japanese investors may seek short-term profits from the Japanese stock market. This might occur as analysts say that the stock market is likely to rise on yesterday's news of expected bailouts of the auto industry. Therefore, today traders may possibly trade the Yen for other currencies, such as the USD and EUR. Nevertheless, Forex traders are recommended to follow economic data releases as they come out of the developed economies. Crude Oil - OPEC Meeting May Reverse the Crude Oil Slump The price of Crude Oil dropped by a small margin during yesterday's trading session and closed at about $43.30 a barrel. Crude's small dip was owed to the U.S. forecast that annual demand will decline for the first time since 1983. The recent slide in Crude prices is expected to be addressed at the meeting of the Organization of the Petroleum Exporting Countries (OPEC) ministers on December 17 in Algeria. The ministers are expected to agree to reduce the production of Oil by 2-2.5 million barrels a day. Global Oil consumption is forecasted to average 85.75 million barrels a day by the end of 2008, down 50,000 barrels from 2007. Analysts predict that Crude prices may hold between the $40- $50 level until the end of the month. Technical NewsEUR/USD It appears that the pair has fully resumed its upward trend and is currently testing the 1.3000 level. If the breach will indeed take place, another bullish movement is likely to take place, with a target price of 1.3100. Going long might be the right choice today. GBP/USD The pair is in the midst of a very strong bearish move, as it dropped almost 100 pips for the past couple of days. As of now, the Bollinger Bands on the 1 hour chart are tightening, indicating that a violent move is quite impending, and a bearish cross on the 4-hour chart's Slow Stochastic is taking place, suggesting that bearish move might extend further. USD/JPY The pair is still range-trading without making a significant breach, and was last traded around the 92.90 level. However, a bullish cross on the daily chart's Slow Stochastic suggests that a bullish momentum is building up. Going long with tight stops seems to be the right strategy today. USD/CHF After a few failed attempts, the pair has successfully breached the 1.2100 level. However, the recent upwards momentum is currently losing steam and the pair has dropped below the 1.2050 level again. Should another breach of the 1.2120 level occur, it might be a sign for another strong bullish leap. Traders are advised to wait for the breach and swing. The Wild CardEUR/GBP The fresh bullish rally that was initiated yesterday shows no signs of detention. The hourly, 4 hour and daily charts oscillators are pointing up and the momentum might be even stronger. This is an excellent opportunity for forex traders to join a strong trend that still has a steam in it. Indicators
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Wednesday, December 10, 2008
Daily Forex Analysis
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