Forex & Financial Market Update: Levels & Technical Analysis

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Source: ForexYard Following today’s sharp appreciation ofthe New Zealand dollar the AUD/NZD made a breach below a key support level. Expanding on this morning’s Wild Card selection from the FOREXYARD Daily Analysis, the AUD/NZD has hastily fallen from its early May high and this morning the pair has moved below the significant 1.3190 support level from the [...]]]>

Source: ForexYard

Following today’s sharp appreciation ofthe New Zealand dollar the AUD/NZD made a breach below a key support level.

Expanding on this morning’s Wild Card selection from the FOREXYARD Daily Analysis, the AUD/NZD has hastily fallen from its early May high and this morning the pair has moved below the significant 1.3190 support level from the mid-April low. The AUD/NZD briefly fell below the psychological support level of 1.3100 but was unable to hold this mark after the European open.

Downward pressure is building on the pair after the breach and the selling may continue. Initial support is found at the trend line off of the November and January lows which comes in today at 1.3015. A breach here and the AUD/NZD would target a range between the January pivot at 1.2775 and 1.2470, the latter being the 61.8% retracement level from the 2010 low to the May 2011 high. The November low at 1.2640 would be a last stand for the Aussie dollar.

To the upside, the mid-April low will now switch from support to the first resistance level followed by the mid-May low at 1.3350. The pivots from May and March also deserve a mention at 1.3700 and 1.3790 respectively.

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GBP/USD Forex Technical Analysis Strategy The GBP/USD has broken and closed below some critical support levels into last week, reaching lows of 1.5570 before stalling. This downside momentum is expected to continue next week as prices have failed at the 50% Fibonacci retracement of the daily downtrend and trendline support on the hourly charts has [...]

January Crude Oil closed lower for the second consecutive week but losses could have been worse if not for a strong comeback on Friday. The primary reason for the weakness throughout the week was concern that the European debt crisis would trigger the start of a global recession. As bearish conditions spread throughout the Euro Region, traders pressured the Euro, driving up the U.S. Dollar and lowering demand for the dollar-based crude oil market.

The soft crude oil market firmed up on Friday on the news that violence had erupted in Saudi Arabia. With unrest already taking place in Egypt and Yemen, the news that it had spread to Saudi Arabia led to speculation that an escalation of events may destabilize the country. Egypt and Yemen are small players in the oil game while Saudi Arabia is the world’s biggest crude oil exporter. Increased violence in this country would drive oil prices sharply higher on the fear that supply would be reduced.

Movement in the crude oil market is coming down to simple supply and demand analysis. If the Euro Zone problems continue to expand beyond the peripheral nations such as Greece, Italy and Spain then demand is likely to fall for crude oil, sending prices lower. “Risk-off” sentiment continues to drive investors into the U.S. Dollar, making crude oil more expensive to foreigners.

Since the markets are being driven primarily by the headlines from Europe and the Middle East, the impact of positive economic news from the U.S. has been diminished. This condition is likely to continue until Europe comes to a concrete agreement on how to manage its sovereign debt crisis. Up until now it’s been “all talk and no action”. Until this mind set changes, positive U.S. economic news is likely to have effect on the price of crude oil in my opinion. From now until the end of the year, Europe and other outside events are likely to set the tone in the market.

From a supply perspective this means that inventories are likely to remain high if Euro remains the key issue. If the emphasis shifts to the potentially explosive situations developing in the Middle East then the only thing that can be guaranteed is extreme volatility. What this market has come down to is this. If traders focus on Europe, the market is likely to weaken due to the stronger Dollar. If traders lean toward the possibility of supply disruptions in the Middle East then look for the market to rise.

In addition to the eruptions of violence in Egypt, Yemen and Saudi Arabia, traders shouldn’t forget about Iran. Last week the U.S. announced a plan to sanction Iran because it is producing military grade uranium in its nuclear plants. Late in the week, France called for a European embargo on crude supplies. With Iran controlling the Strait of Hormuz, oil prices could soar if there is a military confrontation.

Factors Affecting Crude Oil This Week:

Supply and Demand: The U.S. supply and demand situation comes down to which set of fundamentals speculators decide to follow. If they follow the headlines out of Europe and decide to trade on a weaker Euro/stronger Dollar scenario, then look for oil prices to weaken. If the events in the Middle East escalate into full-blown confrontation then look for higher prices because of supply disruption concerns.

European Sovereign Debt: Last week Portuguese and Hungarian debt was downgraded to junk status. In addition, the European Central Bank’s Italian bond buying campaign seems to have failed. With European leaders unable to come up with a plan to manage the spiraling debt situation, the problems are likely to worsen. Europe seems to be facing either a sovereign debt default or a major bank collapse. It is likely to be both. This would plunge the region into a recession and perhaps the world greatly lowering demand for crude oil.

U.S. Economy: If Europe falls, the U.S. is likely to face another recession. The Fed has done just about all it can to keep the economy afloat but there are some things it has no control over. U.S. economic news is not as important at this time and is not likely to move the market. Traders are focusing on Europe and the Middle East.

Middle East Conflicts: Egypt, Yemen, Saudi Arabia and Iran. What is it going to take to draw the U.S. into any one of these conflicts? While unlikely to move on the events in Egypt and Yemen, the U.S. has direct interests in Saudi Arabia and Iran. These scenarios have to power to drive oil prices sharply higher.

Source: http://oilprice.com/Energy/Oil-Prices/Crude-Oil-Analysis-for-the-Week-of-November-28-2011.html

By. Oilprice.com

Adam Hewison’s Afternoon Financial Market Update & Technical Analysis

11-4-11 Adam Hewison’s Afternoon Financial Trading Update & Technical Analysis

Adam Hewison’s Afternoon Financial Trading Update & Technical Analysis

Cross Currency Analysis – A look At The Price Action Today.

The market gave an interesting technical setup today which may have escaped the attention of some technical traders out there.  This brief post will look at the price action today and how cross currency correlations can be used to filter trades.

The three pairs below are GBP/USD, EUR/USD and USD/CHF.  If you look carefully you can see that the EUR and CHF had broken recent range high/lows respectively while GBP/USD was still lagging and trading near resistance. On top of this the dollar index had broken strong support so we knew it was a bearish dollar day at that moment in time.

Look back over your charts and these setups can often be found where the majors leave one pair behind.  Maybe open a seperate demo trading account and only take technical setups when you see this happen.  You may find the results are of interest.

Going to the lower timeframe chart we can see cable has a trendline breakout forming.  Knowing what we do at this stage regarding the other majors after our cross currency analysis could we have considered a long?

This currency pair did break higher…  The dollar bears could not hold price at GBP/USD and this was the end result.  If you like this post drop by to our site for further Forex market analysis. We cover currency correlation and relative strength in regular updates.

Any information or views found in this post are provided for educational reasons and do not in any way represent investment advice. The article author doesn’t guarantee the accuracy or completeness of this or any other information provided. Forex-FX-4X or the post authors will not accept liability for any losses arising directly, indirectly or because of reliance on any of the trading setups or associated analysis in any way. Be carefull out there.

XAU/USD 7/9/11

Gold has dropped today as global equity markets rallied and a “risk on” sentiment prevailed.  Our analysis yesterday called for a short term drop after a new record Gold price high was printed and the RSI 14 formed a divergence on the daily chart.  The CME’s recent increase in Gold trading margins could also now be having some kind of impact on the price of Gold.

XAU/USD daily chart shows bearish RSI divergence

• Our longer term outlook is for further Gold gains in excess of $2000 if current market conditions persist.  The increase in gold buying by private entities and central banks continues to drive price higher.   A range-bound consolidation period would not be unusual at this stage though after the huge recent gains on XAU/USD.
• Price is currently located at the 50 % retrace of 1703.1 > 1920.8.  This level is also aligned with the prominent 11/8/11 swing high and was our initial target in yesterdays Gold analysis post which stated “A correction to the 1815 area, which is the  50% retrace of 1702.67 > 1917.82 and is aligned with price structure support, may be seen in the near term”.
• The ascending trend line which held the last major drop is relatively close to the 61.8% retrace of  1703.1 > 1920.8.  This technical area of confluence could see a reaction as  Gold bulls look to rejoin the longer term trend to the upside.
• Today’s candle , with a range of 189% of the ADR, is however warning of further potential downside to come;  this move represents a near 3% drop on the day and the largest drop in two weeks.  A wait-and-see approach could be wise at this stage as these strong down days often see follow through.

Further analysis at http://www.forex-fx-4x.com

XAU/USD 4 hour chart