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September 30, 2010

Rehn: No plans for IMF/EU mission to Dublin

Filed under: Central Banks — Tags: , , , , — admin @ 5:28 pm

The EU economy czar says that there are “no plans” for a joint IMF/EU mission to Dublin. Ireland said earlier today that it will be able to fund its bank bailout package alone and will not need European or International assistance.

Asked about currencies, ECB chief  Trichet said “when we have something to say, we say it.”

Essentially, Trichet has taken a miss on an opportunity to talk down the euro…

USD/CAD – Looking to Break Consolidating Rectangle

Filed under: Technical Analysis — Tags: , , , , — admin @ 4:54 pm

Price action on USD/CAD (a 4-hour chart of which is shown) as of Thursday (9/30/2010) has been entrenched within a tight sideways consolidation between the 1.0200 and 1.0350 price regions for the past two weeks. This occurs within the context of a longer-term sideways consolidation that has characterized this currency pair since the last quarter of 2009. For more technical analysis on this currency pair, please click here for Thursday’s (9/30/2010) Chart of the Day.

James Chen, CTA, CMT

* For information on my DVD set, High-Probability Trend Following in the Forex Market, please click here.
* For information on my book,
Essentials of Foreign Exchange Trading (Wiley), please click here.
* For information on my new book, Essentials of Technical Analysis for Financial Markets (Wiley), please click here.

GBPUSD moves sideways

Filed under: Forex News — Tags: , , — admin @ 3:11 am

GBPUSD moves sideways in a range between 1.5719 and 1.5894. The price action in the trading range is treated as consolidation of uptrend from 1.5296. Support is at the lower border of the rising price channel, now at 1.5690, uptrend is expected to resume after touching the channel support. However, a clear break below the lower border will indicate that the uptrend from 1.5296 has completed at 1.5894 already, then the following downward move could bring price to re-test 1.5296 previous low support.

gbpusd

Daily Forex Reports

The dollar continues to fall

Filed under: Technical Analysis — Tags: , , — admin @ 3:11 am


Quote of the day: Don’t gain the world and lose your soul, wisdom is better than silver or gold. — Bob Marley

EURUSD

Trading strategy: long at 1.3510, stop at 1.3440(0.5% risk), 1st objective at 1.3560, 2nd objective at 1.3650

The dollar stays weaker against its counterparts and the euro managed to break above 1.3500, reaching session highs around 1.3600 at time of writing. Buying on breaks higher, as planned yesterday, should remain the preferred strategy for now. Also buying on a pullback is probably a good idea – and such levels to look for support are seen at 1.3510 and 1.3400 – both former resistances. Now that the 50% of 1.5145-1.1875 at 1.3510 is breached – next objective comes at 1.3900, which is the 61.8% of said move, followed by 1.4300. Current exchange rate is 1.3585 @05:30 GMT

Support: 1.3510, 1.3400/20, 1.3285/00, 1.3230 and 1.3185/00
Resistance: 1.3600, 1.3700 and 1.3800
Market sentiment: long term – bearish, medium term – bullish, short term – bullish, intra-day – bullish

EURUSD 4hrs chart 9-29-2010
EURUSD 4hrs chart 9-29-2010

More trading setups

GBPUSD

GBPUSD 4hrs chart 9-29-2010
GBPUSD 4hrs chart 9-29-2010

EURCHF

EURCHF 4hrs chart 9-29-2010
EURCHF 4hrs chart 9-29-2010

NZDUSD

NZDUSD daily chart 9-29-2010
NZDUSD daily chart 9-29-2010

Gold

XAUUSD 4hrs chart 9-29-2010
XAUUSD 4hrs chart 9-29-2010

Have a great day!


© liviu for innerfx.com, a Forex Analysis blog, 2010. | Article Source | Post tags: eurchf, eurusd, gbpusd, gold, nzdusd

Daily Economic Roundup – September 29, 2010

Filed under: Currency Charts — Tags: , , , , — admin @ 1:29 am

What’s on the Economic Horizon

Gfk Consumer Confidence Survey on Deck
Japan’s Retail Sales Seen to Increase 4.6%
Swiss KOF Leading Indicators Expected to Show Improvement

United States

Does the dollar love Ester Dean’s tune or what? It kept on droppin’ it low against its major counterparts yesterday, with EURUSD soaring to 1.3579 after it had dipped to an intraday low of 1.3381. Meanwhile, USDJPY had dropped to near the pre-BOJ intervention levels at 83.69 before it leveled off to close at 83.95. More…

Euro zone

Bow chicka wa wa! The euro sexily strutted its stuff yesterday as it walked up the charts to create new highs against the Greenback and the yen. EURUSD zoomed up from 1.3471 to hit an intraday high of 1.3596 while EURJPY rose from 113.45 to peek at 114.03. More…

United Kingdom

Say hello to yesterday’s big loser! The pound made losing look easy as it fell hard against the USD. Though the UK printed positive reports, GBPUSD slipped from its opening price of 1.5850 to land at 1.5793. More…

Japan

*Sniff sniff* Do I smell another currency intervention? Okay maybe not, but with all the relatively good economic data from Japan highlighting the bad ones in the US, it might just be around the corner! More…

Canada

It looks like the Loonie was unable to find direction again yesterday as it ended the day barely changed against the Greenback. After it had opened the Asian trading session at 1.0283, USDCAD rose merely 19 pips to close the New York trading session at 1.0302. More…

Australia

And it’s at it again! Even without any economic data from Australia, the Aussie was still the cream of the FX crop yesterday when it made new highs against its US counterpart. AUDUSD rocketed to its intraday high of .9687 before closing at .9676. More…

New Zealand

“Yeeeeeeah man!” The Kiwi couldn’t help but quote the words of the great Usher as it celebrated another victory against the USD. After opening at .7346, NZDUSD jumped to hit a high of .7405 before it finally settled at .7392. More…

Switzerland

Thanks to the combination of an optimistic reading on the UBS consumption indicator and the increasing likelihood that the Fed will provide additional stimulus to the US economy, the Swissy was able to shine across the boards yesterday. USDCHF had gone as low as .9738, its lowest level in more than two and a half years, before closing the New York trading session at .9766.Man, the Swissy is on fire! More…

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Get Used To Slower Growth!

Filed under: Business — Tags: , , — admin @ 12:30 am

It is no great secret that economies around the globe are slowing.  Those countries with heavy debt burdens have been challenged to find growth, while emerging economies and export-driven countries continue to thrive.   Such is life in the global marketplace.

Overnight, the Japanese Tankan Sentiment survey rose the least in nearly 18 months as manufacturers were more pessimistic about economic prospects due to the rising Yen.  This may put additional pressure on the BOJ to continue with intervention measures, especially now that Yen is creeping higher at 83.5.

In the Euro zone, economic confidence figures came in higher than expected in stark contrast to Japan, which has helped push the Euro higher.

In the UK, mortgage approvals fell from last month as the housing market is showing signs of slowing, though the figure came in slightly higher than analyst expectations.  In addition, service industries contracted in July.

The US dollar is trading at 8-month lows vs. a basket of currencies that comprise the US dollar index.  Overnight, markets were mixed as the Nikkei closed higher but European stock markets are slightly lower and the US is set to open slightly lower as well.

However, today can be characterized as neither risk-taking nor risk-aversion as the fundamentals are driving today’s early market action.

In the forex market:

Aussie (AUD):   The Aussie is higher as an index of leading economic indicators rose .8% and Barclay’s put out a report saying the RBA may hike rates 2 more times this year, which could put interest rates at 5%.

Kiwi (NZD):  The Kiwi is lower as New Zealand’s trade deficit widened due to declining exports which reached a 9-month low.  This may cause the RBNZ to refrain from hiking rates for the rest of the year.

Loonie (CAD):   The cost of raw materials in Canada rose higher than expected which could foreshadow inflation and cause the BOC to raise rates.  In addition, a report out from the Bank of Nova Scotia said that Canadian interest rates should be one full percentage higher than where they currently are, citing the Taylor rule which uses historical economic data to project rates.

Euro (EUR):   The Euro is higher as business climate and sentiment figures came in higher than expected, despite the strikes taking place around the region to protest austerity measures.  This also flies in the face of the potential debt problems in Ireland and Portugal.  (Click chart to enlarge)

eurusd0929.JPG

Pound (GBP):  The Pound is lower as mortgage approvals fell and the services industries contracted as economic growth begins to slow.  This has prompted policy-maker Adam Posen to call for more quantitative easing to support economic growth.  While this most likely not going to happen, it should come as no surprise to anyone that Posen is actually an American citizen.

Dollar (USD):   The US dollar is weak, weak, weak; falling to 8-month lows vs. a basket of currencies.   The threat of further quantitative easing by the Fed and weakening economic conditions has driven dollar sentiment.  However, I wonder if further quantitative easing (QE2) would actually be seen as a negative and push the Dollar HIGHER, as the flight to safety trade takes place.  Or this could just be a lot of hot air intended to jaw-bone the dollar lower.

Yen (JPY):  The yen has been trading in a tight range and has been maintaining relative strength despite the threat of further intervention by the BOJ.  The Tankan Survey and CapEx figures came in worse than expected showing signs that economic sentiment is deteriorating.  The commitment of the BOJ to halt a rising Yen will be tested shortly.  (Click chart to enlarge)

usdjpy0929.JPG

Manipulating one’s currency is an “easy” way to attempt to fix structural economic problems.  There are three basic “manipulations” going on in the currency market place.  The first is quantitative easing, whereby a Central bank prints money out of thin air and buys bonds in an attempt to increase the money supply to devalue a currency.  This is the preferred method in the US and UK.

The second way is through actually currency intervention, whereby a Central bank sells its own currency and buys the currency of other countries in massive amounts, attempting to influence prices directly.  We have seen both the Swiss and more recently the Japanese do this in 2010.

The last way is by creating a currency peg, whereby a Central bank controls the exchange rate of the currency and does not allow it to float freely in the market.  This creates an unfair advantage as it restricts trade imbalances from leveling out.  This is the preferred method of the Chinese.

As long as these “beggar thy neighbor” policies exist around the globe, world economic growth will continue to slow.  So prepare yourself now by learning how to avoid and profit from these manipulations by learning how to trade the forex market today!

To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!

To follow these events live with a free, real-time practice account, click here!  Don’t miss out on the world’s fastest growing market!

Tags: account, AUD, Aussie, blog, cad, course, currenc, currencies, currency, currency trading, dollar, dow, EUR, Euro, forex, forextrading, fx, fxedu, gbp, Il, interest, jpy, market, Mike Conlon, nzd, practice, ssi, time, trade, USD, Yen

Senate OKs stop-gap spending, ready to go home

Filed under: Business — Tags: , , , , — admin @ 12:22 am

WASHINGTON (CNNMoney.com) — The Senate on Wednesday passed a measure to fund the federal government another two months, the last major legislative action before lawmakers shut down and return to the campaign trail for the Nov. 2 elections.

The Senate voted 69-30 to pass and send to the House a stop-gap effort that effectively keeps the light on at agencies and major federal programs until Dec. 3. The tab for the 64 days tops $219 billion, meaning the overall budget for the new fiscal year will be $219 billion lighter, a congressional aide explained.

The move marks Congress’ second major accomplishment since returning from summer break in September. Congress also passed a bill giving tax breaks to small businesses. The Senate was also expected to confirm two of three nominees to the Federal Reserve board of governors, a seven-member board which has been operating short by three members.

“We may not agree on much,” said Majority Leader Harry Reid, D-Nev., who is facing a tough re-election fight. “But with rare exception, all 100 senators want to get out of here and get back to their states.”

The House was expected to pass the funding measure late Wednesday evening.

If Congress fails to pass the funding bill, the federal government shuts down Friday, the first day of fiscal year 2011. That would be tough for lawmakers to defend on the campaign trail.

The funding actually shaves $8.2 billion from current levels, due to savings in the Census Bureau and and military base closings. Most government agencies and programs will be funded at current rates.

And a few agencies are due to get a bit more funding, including $23 million for an agency that oversees offshore drilling and $700 million for a Pakistan counterinsurgency program.

Congress also plans to keep in place, through next Sept. 30, higher limits on the mortgages backed by Fannie Mae and Freddie Mac. The limits range up to $729,750 for pricey areas.

The measure also will maintain loan limits for federally insured reverse mortgages for pricey areas at $625,500. And it will extend loans insured by the Federal Housing Administration.

All the loan limits were set to expire at the end of the year.

The extended loan limits particularly irked Republicans, who generally stuck together to try to block the funding bill.

“Fannie and Freddie are synonymous with mismanagement and waste, and have become the face of Too Big to Fail,” said Sen. John McCain, R-Ariz.

Late night scramble

The 11th-hour scramble occurred because lawmakers failed to approve a federal budget in time for the new year.

It’s hardly the first time. In fact, tardy federal budgets have been par for the course for most of the past 35 years.

The continuing resolution — a “CR” in congressional lingo — authorizes the heads of government agencies to obligate money they need to spend to carry out their agencies’ work, whether through signing contracts, making purchases or hiring people.

While it’s not unusual for Congress to turn in a federal budget past the deadline, there’s a somewhat new twist in the old procrastination dance this year.

That’s because neither the House nor the Senate have even passed a formal budget resolution, which typically is done in the spring before the appropriations committees decide how to allocate federal funds.

The budget resolution sets caps for spending, establishes revenue targets and generally serves as a five- to 10-year blueprint of congressional priorities for the appropriations and tax committees to follow.

To date, the House has passed two of the 12 appropriations bills for 2011. The Senate hasn’t passed any, but 11 of the 12 spending bills have been approved by the Appropriations Committee.

But it’s a long way to the finish line for legislators. And there is still no consensus within or between the House and Senate on what the specific cap should be on discretionary spending for next year.

All told, the CBO estimates that the 2011 budget will total $3.7 trillion based on policies that were in place this summer. A little less than a third of that would go to discretionary spending and the rest would go to entitlement programs such as Medicare and interest on the country’s debt. To top of page

September 29, 2010

Stocks Fall; Gold Stays Above $1,300

Filed under: Investing — Tags: , , , , , — admin @ 11:59 pm

By Jonathan Cheng

Stocks stumbled modestly as declines in the materials and financial sectors offset a boost in oil prices and energy stocks.

The Dow Jones Industrial Average lost 22.86 points, or 0.21%, to 10835.28, while the Standard & Poor’s 500-stock index slipped 2.98 points to 1144.72 and the Nasdaq Composite dropped 3.03 points to 2376.56.

With just one day left in the month, all three indexes have posted strong returns, and remain on pace for the best September in decades. The Nasdaq, in particular, is 12.4% higher on the month.

“There haven’t been any thematic changes in the state of the economy, and I think that’s what was holding us back today,” said David Kelly, chief market strategist for J.P. Morgan Funds, adding that investors remained concerned about a raft of remaining overhangs, from upcoming elections and tax policies to Treasury buying by the Federal Reserve. “That’s the problem: all this uncertainty about Washington drags on the economy and on the stock market.”

Still, Mr. Kelly said that September’s strong gains—including the Dow’s 8.1% advance—reflected a belief that double dip fears were “overblown.”

The materials sector was the biggest drag on the market Wednesday, with DuPont, Dow Chemical and Alcoa falling 2.5%, 1.7% and 1.1%, respectively, amid the lingering uncertainties.

Financial stocks were also weak as the government made steps towards exiting its investments in Citigroup and American International Group, made during the height of the financial crisis. Shares of Citigroup and AIG pared strong intraday gains to finish higher by 1% and 0.4% respectively. But J.P. Morgan Chase lost 2.2% and Bank of America shed 1.2%.

Speculation that the Fed will take further steps to spur the economy has pushed the dollar lower in recent days, and the dollar stumbled again Wednesday. The U.S. Dollar Index, which measures the greenback against a basket of six currencies, hit its lowest level in eight months.

The dollar sank to as low as 83.51 yen in intraday trading, its lowest level since Japanese authorities intervened in currency markets two weeks ago. The euro edged up against the dollar, piercing the $1.36 barrier after the European Commission proposed legislation that would strengthen its control over the economic policies of EU member states, including fines for breaching budget rules.

Gold futures hit another high as the dollar continued its slide, with the yellow metal finishing at $1,308.50 an ounce.

Treasurys were modestly lower, with the yield on the benchmark 10-year note creeping back above the 2.50% mark, to 2.506%.

The Dow was able to mount a midday rally after the Department of Energy said crude-oil stockpiles fell by 475,000 barrels to 357.9 million barrels, more than an expected 300,000-barrel decline. The steep drop, which follows a summer of unusually high levels of stockpiling, helped oil prices jump briefly over $78 a barrel after falling as low as $75.60 a barrel earlier in the morning.

Energy stocks benefited from oil’s climb, as Sunoco rose 3.4%, Chevron added 0.5% and BP rose 1.8% after incoming Chief Executive Officer Bob Dudley said he would restructure BP’s upstream business and create a new safety division, with the power to audit any part of the company’ operations. Exxon Mobil finished lower, off 0.8%.

But the rising crude prices weighed on consumer-discretionary stocks. Urban Outfitters dropped 8.4% and Starwood Hotels & Resorts shed 2.7%.

“For consumers, this is a huge part of their pocketbook,” said Thomas Villalta, portfolio manager at Jones Villalta Asset Management in Austin, Texas, referring to rising oil prices.

Technology stocks inched upwards, helped by a 2.2% gain at Hewlett-Packard after the company said revenue for the fiscal year would be between $131.5 billion and $133.5 billion, a range that compared favorably with the consensus forecast of $131.6 billion.

Shares of Green Mountain Coffee Roasters tumbled 16% after the firm said the Securities and Exchange Commission was investigating its revenue-recognition practices.

Family Dollar Stores rose 1.6% after the discounter topped the consensus earnings forecast and announced plans to buy back up to $750 million of its shares.

Nintendo dropped 9% after the Japanese gaming company cut its profit and sales outlook, citing the strong yen and weaker-than-expected sales of its video-game consoles.

Write to Jonathan Cheng at jonathan.cheng@wsj.com

Rosengren: Warm up the chopper

Filed under: Central Banks — Tags: , , — admin @ 5:30 pm

Let’s but Boston Fed president Rosengren firmly in the QE camp. He wants the to “vigorously and creatively” use its policy options to combat the slow recovery. Current US economic conditions constitute a serious problem, he says. The recovery is too slow to reduce the unemployment rate and inflation is undesirably low, he says. The Fed has options.

EUR/USD is trading near session highs around 1.3645, just below a 1.3650 barrier.

GBP/USD – Consolidation within Bullish Trend Channel

Filed under: Technical Analysis — Tags: , , , , , — admin @ 4:46 pm

Price action on GBP/USD (a 4-hour chart of which is shown) as of Wednesday (9/29/2010) has stalled in its bid to target 1.6000, though it could be on the potential path to do so. The pair is currently entrenched within a parallel uptrend channel extending back to the September lows. For more technical analysis on this currency pair, please click here for Wednesday’s (9/29/2010) Chart of the Day.

James Chen, CTA, CMT

* For information on my DVD set, High-Probability Trend Following in the Forex Market, please click here.
* For information on my book,
Essentials of Foreign Exchange Trading (Wiley), please click here.
* For information on my new book, Essentials of Technical Analysis for Financial Markets (Wiley), please click here.

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