Daily Analysis - Forex Currency Trading News 2012-01-18

The US stock market opened the trading week with a bullish momentum, in spite the weakness of the financial sector, which caused by Citigroup's reports that missed analysts' expectations. The stock fell 8% by the end of the day.

The S&P 500 rose tried to break-through the resistance of the round number 1300 points but turned over after a false-break. However, if today's reports of Goldman Sachs bit Wall Street estimations, the S&P might try to break-through 1300 points again.

GBP/USD

The risings in Wall Street helped the GBP to rise until the middle of the day but eventually it resumed falling against the USD on the second half of the day. Today is published the Claimant Count Change data, which will give indication regarding the employment situation in Britain.

Last Friday, we demonstrated how dangerous it was to try opening a short-position under the support of 1.527. The pair made a false-break and started correcting up almost 150 pips, which probably stressed many armatures that had to close their losing positions.  The recent candlesticks have up-tails, which indicated that a bearish reversal might occur around these levels. Therefore, a break-down of 1.53 might be a second attempt of breaking down the daily low, on the way to 1.50.

EUR/NZD

The pair EUR/USD reached the lower boundary of the channel that we analyzed on the weekly analysis and it made the expected correction there. However, the NZD keeps strengthening against the USD and therefore the pair EUR/NZD remains in the downtrend.

The pair is obviously oversold and it might make an aggressive short-squeeze, if it breaks-through 1.60. However, the Kiwi is in a middle of a powerful momentum against most of the currencies, so the pair might break the support of 1.59 and fall to 1.57 or even below that.

NZD/JPY

This pair's daily chart reminds the daily chart of the NZD/USD. The reason for this is the fact that the JPY is stamping against the USD and the NZD is strengthening against it. The outcome is a very similar daily chart of the NZD/JPY and the NZD/USD, which will continue to remain similar until the Yen makes any significant movement.

The pair broker through the bullish pattern of the "cup & handle" at 61.0 and it is heading towards the 200 SMA at 63.0. The 20 EMA crossed above the 50 EMA, which is a strong bullish signal for the NZD against the JPY.

Today is published the important data of the CPI in New Zealand, which might affect the NZD's pairs during the day.

Risk Disclosure

Trading and the execution of transactions in currencies, commodities,CFD  indexes and other financial products with or without using  high financial leverage, is speculative trading of high risk and may cause substantial gain or loss proportional to the size of the collateral, up to the total loss of the collateral sum in a very short period. The fluctuation of the prices and rates in the currency markets, commodities, CFD ,indexes and other  financial derivatives are often volatile and there is no accurate   forecasting as per the size of the change, its direction and the time frame in which it occurs.You must consider carefully and seriously if this type of financial activity fits your needs, your financial resources and personal circumstances. Since the risk of losing some of the invested funds or all the funds in a relative short period is high; it is recommended that you use for that purpose funds which you designated for speculative financial transactions of high risk.

 You acknowledge and fully understand that there may be more and other risks which are not detailed or not cotained above