FOREX Daily Analysis - Currency Trading News 2012-02-01

Wall Street is starting to show more and more signals that a correction is about to come. Yesterday, the major indices open the trading day almost 1% up, but started falling after the release of the disappointing consumer confidence data. In total, January was the best month in the US stock markets since 1997, as they rose 10% during the month.
EUR/USD
The declines in the stock markets supported the USD against the major currencies, and the euro slid against the American dollar yesterday. The Greek problem has not been solved yet and this affects the EUR, which started correcting down since it reached the pick at 1.323 on Friday. The USD's correction will be determined by the employment data flow, which starts today with the ADP Non-Farm Employment Change and end with the official NFP on Friday.
On the technical aspect, the EUR is obviously overbought and the correction down might erase 30%-50% of the recent rally and therefore the Euro might retest 1.30 or even lower.

EUR/GBP
The GBP completed an amazing bullish session against the USD, which started on the middle of the month. This movement started as a "short-squeeze" that turned into a strong rally, in which the pound gained almost 500 pips against the USD. Now it is facing a resistance at 1.57 and might correct down from the current levels.
Both Euro and GBP rose sharply against the USD since the beginning of the month, though the EUR was relatively stronger and therefore the pair EUR/GBP rose as well. However, the general trend of this pair is bearish, so the GBP was likely to get stronger again against the EUR, as it did in the recent couple of days. The GBP broke the support of the channel and if it succeeds in completing the break-down, the price might fall to 0.82.

NZD/CHF
The NZD dollar does not stop strengthening against most of the currencies. Yesterday it looked like that the USD was about to correct against the NZD but the Kiwi made another wide bullish candlestick. On the other hand, the USD found a support against the CHF, and that give the NZD the ability to rise even more against the CHF. The current resistance is at 0.76 and a break-up there will be another step to the heights at 0.78.

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

USD/JPY Intraday Technical Level For January 9th / 2012

TODAY  TECHNICAL  LEVEL :

Resistance. 3 : 77.35.
Resistance. 2 : 77.20.
Resistance. 1 : 77.04.
Support. 1 : 76.86.
Support. 2 : 76.70.
Support. 3 : 76.55.

DESCRIPTION :

Please note for the levels of support. 3 (76.55) and Resistance. 3 (77.35), generally when a level is touched, the USD/JPY will turn around the opposite direction from the previous minimum of 10 to 20 pips, but if the levels are managed on a breakout over 50 pips then it would be a sign that these currencies have found trends today.

EUR/USD Intraday Technical Level For January 9th / 2012

TODAY  TECHNICAL  LEVEL :

Breakout BUY Level : 1.2749.
Strong Resistance : 1.2741.
Original Resistance : 1.2730.
Inner Sell Area : 1.2718.
Target Inner Area : 1.2688.
Inner Buy Area : 1.2658.
Original Support : 1.2646.
Strong Support : 1.2634.
Breakout SELL Level : 1.2629.

DESCRIPTION :

Today EUR/USD has support and resistance at 1.2646 and 1.2730 is accompanied by a strong support at 1.2634 and 1.2741 for the strong resistance; If today the EUR/USD can break out and close below the 1.2629 level then this indicates considerable Bearish strength, while if the EUR/USD today can break out and close above the 1.2749 level then this indicates considerable Bullish strength. Alternatively you can trade in a way to open BUY position at the level of 1.2658 and 1.2718 for SELL position in which case both targets are located at the 1.2688 level.

EUR/USD: Weekly Technical Levels for January 9 - 13, 2012.

Weekly Technical Levels:

Tip (s):

R3 and S3 are good indication for the maximum range for extremely volatile days but can be exceeded occasionally.
Pivot lines work well in sideways markets as prices will most likely range between the R1 and S1 line.
In a strong trend, price will be low through a pivot point line and keep going.
If there is significant news to influence the market price may go straight through R1 or S1 and reach even R2 & R3 or S2 & S3.

Time Frame: H1.

Drag your Fibonacci retracement levels from the lower to the higher of the last week from 2^nd of January to 6^th of January, 2011 in order to determine low and high price.

Average = (Higher - Lower) / 2
Average = 1.2887

• Range was: 381 pips.
• The value of 50% Fibonacci retracement levels is: 1.2887.
• 1.32 will be formed a strong resistance.
• 1.25 will be formed a strong support.
• Volatility is 409.00 so the market has called for a high volatile.
• It should be noted that the price has still been trapped between 1.26 and 1.32.

Observation (s):

• If the strength of the trend for pair is an uptrend, then the strength of the currency: EUR is an uptrend and USD is a downtrend.
• Most of traders use the Fibonacci retracement to determine accurate psychology level of support and resistance.
  
• Volatility Formulas: Variation = Average * (Higher - Lower).

Daily Analysis 2012-01-09

The US stock market opened the year on the green territory as the major indices rose 1.7% during the week. The S&P 500 is approaching the resistance at 1300 points and NASDAQ is heading towards 2400 points. A break-up of these important resistances might help the indices to rise up to the 52-weeks highs.

The most important and encouraging event during last week was the Non-farm payroll change data that showed an increase of 200K jobs in the US economy, whereas the expectations were an increase of 152K new jobs. In addition, the unemployment rate was down by 0.2% to 8.5%. This surprising news regarding the American unemployment status launched the stock markets and supported the US dollar against most of the currencies.

EUR/USD

Unlike the US, the news from Europe is still bad. Hungary's rank was downgraded to junk due to the policy of its prime minister. Other countries are still struggling with their huge debts and the EUR keeps loosing points.  All of these political crises are pulling the Euro down and the investors are running away from this currency, but the ECB press conference on Thursday will try to change that. The minimum bid rate is expected to remain unchanged.

 

On the technical aspect, the EUR broke down the support at 1.285, which we analyzed last week, and it is sliding downwards to 1.25. Pay attention to the stochastic oscillator, which indicates that the EUR is oversold and might correct-up any day.

 

GBP/USD

The 50 EMA has been following the pair for several weeks and it plays the role of a resistance. Each time the pair touched the 50 EMA it immediately turned over and started a bearish session. So did happen on Tuesday when the pair hit the resistance at 1.566 and slid down to the support of 1.54. The next support is at 1.53 and a break-down there might take the pound down to the psychological number 1.50.

The official bank rate will be published this Thursday, 45 minutes before the European bid rate is published. There are not any surprises expected regarding the interest level and therefore the MPC rate statement will be in the center.

USD/JPY

The pair reached the support at 76.5 and started correcting from this point, as we anticipated on the previous weekly analysis. Two signals suggest that the Yen might keep strengthening. First, the 20 EMA crossed below the 50 EMA, and second, Friday's candlestick ended-up red with a tail upwards. If the price slides under Friday's low, the pair will try to break-down the support at 76.5 again, and if it succeeds, it might fall to 75.5.

However, as we mentioned before, the USD is in a bullish momentum so it might try to climb to 78.0. In order to do that, it will have to break-through Friday's high at 78.3.0

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

FOREX Daily Analysis 2012-01-06

The ADP non-farm payroll data beat the estimations yesterday and lifted the stock markets. The number of continuing jobless claims was less than analysts' expectations and this contributed to the positive atmosphere in Wall Street. Nevertheless, the investors have been waiting the whole week for the official Non-farm payroll data that is published today. The NFP is the most important indicator regarding the US economy, and has the highest impact on all of the financial markets around the globe.

The reason for this is that this information tells the story about the most important thing regarding  the US economy these days- the unemployment status. A growth in the NFP data will support the assumption that the US economy has started to pull itself out of the deep recession. However, disappointing results might cause an aggressive reaction by the financial markets and crash them down.

EUR/USD

The better than expected economic data helped the USD to continue its bullish momentum. The investors, who see the news regarding the ADP NFP change, figure that the US economy is in a better condition than many other developed countries and therefore the USD made an impressive movement yesterday, in spite of the rising of the stocks.

The first week of 2012 tells us that the investors do not see a bright future for the European economy and they sale Euros in every opportunity they get. The pair successfully broke-down the psychological support of 1.30 and it is now heading towards 1.25. If the EUR keeps losing points so fast, we might see it at 1.15 within just few months.

GOLD

The metals have started 2012 with a bullish momentum but it is hard to tell in this point if this can mean anything about the trends of the year. The precious metals closed 2011 with sharp declines, which we knew how to take profits of, and therefore the recent up-correction was expected in the technical point of view.

 The gold reached the 200 SMA, which was the target we set for the current correction, and it might continue rising towards $1650-$1700 if the positive atmosphere in the stock markets remains.  Likewise, the 200 SMA might be a strong resistance that will force the gold to reverse down from this point.

SILVER

The silver is trying to retest the break-down area of $30, which it broke three weeks ago. The metal made the double-bottom pattern on the support of $26, but this bullish pattern does not necessary mean that the silver is going to continue rising. A break-up of the resistance at $30 might cause a short-squeeze that can take the price up to $31.5, but stochastic levels indicate that the current bullish correction is about to over, so a bearish reversal is possible here.

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