By Mercaforex
USD:
The USD gained on the major currencies Thursday as Wall Street declined. The equity markets have had a very strong run for months and yesterday’s action may only be interpreted as a respite. Though many questions abound about the value of shares it will take more than one negative day to signal a shift in sentiment. The Federal Budget Balance turned in a negative -176.4 billion dollar amount compared to the anticipated figure of -152.5 billion. The weekly Unemployment Claims figures were released also and turned in a slightly better than expected number with a 502K result compared to forecast of 512K. This outcome is not something most analyst will be willing to tag with a positive spin, because statistics show that a growing amount of the U.S. public are seeking part time work to overcome the employment problems that exist.
Today the U.S. will see the Prelim Consumer Sentiment reading from the University of Michigan. The projected number for the report is 71.1, which would be an improvement on the previous number. Also the Trade Balance data will be brought forth today. Both of these publications could provide the USD with impetus because investors are keen to gauge the spending habits of consumers and they want to weigh the impact of the declining value of the USD via international trade. The greenback did manage to push itself away from the cliff in yesterday’s trading but the question going into the weekend will be what Wall Street has in store for investors. Risk appetite continues to be the high octane that is driving the marketplaces and the USD will likely remain at its mercy until there is a shift of the gears.
EUR:
The EUR took a slight turn for the worse on Thursday but still finds itself within the upper reaches of its highs against the USD. The broad Industrial Production statistics were released yesterday and turned in a result of 0.3%, which was below the expectation of 0.6%. It is an important day of data for Europe with a parade of Preliminary GDP numbers coming from Germany, France, and Italy. The numbers are forecasted to show an improvement from these major countries. Also inflation figures from the French CPI are on the schedule today. In essence Friday’s numbers will give a chance to show that Europe’s biggest economies are experiencing real growth or are still merely showing stability and struggling. The German Prelim GDP carries a forecasted gain of 0.8% and the French number is estimated to be a positive 0.6%. The EUR did come off of its highest marks against the greenback on Thursday and it is possible that if the GDP data from the continent comes in around expectations, that the EUR may again find itself slightly stronger.
GBP:
On little economic data from the U.K. on Thursday, the Sterling found itself in fairly range bound trading. The comments from Bank of England Governor Mervyn King who proclaimed that a weaker GBP would be good for Britain continued to resonate, but trader essentially kept the Sterling in rather calm waters considering the BoE’s stated desire. It will be another day of light releases and the GBP might find itself caught in the greenback’s tide. The Sterling has had a strong run the past couple of weeks as it climbed back from the lower depths of its ranger versus the USD and found takers. Although the speeches of central bankers definitely have a short term affect on the currency markets, there are other strong influences on investment attitudes and traders will continue to examine their risk appetite accordingly.
JPY:
The JPY lost some ground to the USD on Thursday as the losses from Wall Street were worse than the losses coming from the Asian bourses. The JPY continues to hover within strong territory against the greenback but its recent trading has definitely been within a consolidated pattern. Asian bourses as a whole have provided investors with a wide range of gains the past half year but questions certainly abound regarding the quality of the move and whether it can be sustained. The JPY and USD are likely to continue their slow dance going into this weekend.
Technical Charting Mixed With Experience Can Save\Make You Money!
SPX/USD:
Every once in awhile it’s important for me to point out to my readers that I am doing things correctly, and today is such a case. Near the end of the day and we are seeing continued dollar strength and as such yesterday’s post rings very true “You may have noticed that over the last few weeks I often contradict myself when discussing the SPX. In many of my recent posts I point to the market having downside potential, and that it should break down, but to point out that regardless of what I believe, the charts point higher. Well once again, this post will repeat those same ideas. Whereas yesterday was a light volume day in the States due to a holiday, the market gapped higher, nearly filled the gap, and closed one point off the open. It looks a bit like an exhaustion gap and I am not certain we will be able to show much more momentum. In the meantime, I will not trade the open, as it’s necessary to gauge what this market really wants to do now that all traders are back at their desks. Support 1096.42, 1093.8, 1092.6, 1087.4, 1081.5, 1077, 1071.5.1059.3 1052.4, 1045.5, 1029.4, 1019.6, 1009.1, 992.25 Resistance 1101.4, 1105.4, 1132.2, 1153.8”
XAU/USD:
Again I would like to repeat yesterday’s post. It is very important to recognize when a market begins to run out of steam, even if it’s just temporary. Many traders can get chopped up, trying to trade days like today by jumping the gun, and getting into positions to early. “This precious metal continues to climb higher and higher. On the four hour we are currently holding the uptrend line. Be cautious of a speculative bubble in this market. In the mean time, look for a long entry anywhere near $1100, as we may finally start to consolidate here. After touching a high of 1122.82 it seems like this market may want to take a moment to catch its breath. Remember that the XAU has been giving us almost perfect trade setups, consolidation followed by breakout, and repeat. So until the chart shows us something different that will be our strategy. Support 1113.26, 1110.7, 1104.5, 1100, 1096.15, 1092.87, 1087.65, 1081.05, 1078.37, 1070.6, 1066.1, 1051.3, 1046.7 Resistance 1117.32, 1122.82….”.
GBP/USD:
I am surprised by how well the Sterling has managed to hold yesterday. Considering the strong rally in the Greenback, and the losses taken by the equity and gold market, this is one of the few currencies that is able to maintain its value against the dollar.
“For a person who likes to trade trends the British Pound has been quite frustrating. Even though the rational side of my brain keeps me very cognisant that we are trading within a trading range, there is always a glimmer of hope that we are going to break out of it. And yet, with each attempt at a push past strong support or resistance we see how the market pulls back to within the comfortable confines of the trading channel. Keep trading the channel as such, buying support, and selling resistance. Support 1.6485, 1.6249, 1.6119, 1.5776 Resistance 1.6600, 1.6636, 1.6743, 1.6842, 1.7042”
EUR/USD:
Where the Pound showed Moxy, the Euro tripped and fell like a clumsy 13 year old going through puberty. Yesterday’s post about future short term dollar strength was right on the money! “The Euro was unable to break through resistance yesterday as the US dollar started trading lower early on, but was able to make a comeback later on in the day. We formed a decent selling tail and are currently trading lower. This failed push higher suggests that we may see some dollar strength in the near future which could put some brakes on the rallies we are seeing in the Gold and Equity markets. If we cannot hold support of 1.4918, and push towards 1.4844, I expect this currency to trade all the way back to 1.4449. However, since I know that dollar strength on a long term basis has a lower probability of happening, I am not going to become heavily invested on the short side of the euro. For those of you who are willing to take greater risk let’s consider it a scalping trade that might last a few days! For those of you who want to play it safe, buy support with tight stops of about 35 pips, but wait to see confirmation that the market is holding, be it through dollar weakness or even just holding support. Support 1.4918, 1.4844, 1.4810, 1.4701, 1.4683, 1.4449 Resistance 1.5020, 1.5062, 1.5144, 1.5284, 1.5343, 1.5462”
USD:
The USD gained on the major currencies Thursday as Wall Street declined. The equity markets have had a very strong run for months and yesterday’s action may only be interpreted as a respite. Though many questions abound about the value of shares it will take more than one negative day to signal a shift in sentiment. The Federal Budget Balance turned in a negative -176.4 billion dollar amount compared to the anticipated figure of -152.5 billion. The weekly Unemployment Claims figures were released also and turned in a slightly better than expected number with a 502K result compared to forecast of 512K. This outcome is not something most analyst will be willing to tag with a positive spin, because statistics show that a growing amount of the U.S. public are seeking part time work to overcome the employment problems that exist.
Today the U.S. will see the Prelim Consumer Sentiment reading from the University of Michigan. The projected number for the report is 71.1, which would be an improvement on the previous number. Also the Trade Balance data will be brought forth today. Both of these publications could provide the USD with impetus because investors are keen to gauge the spending habits of consumers and they want to weigh the impact of the declining value of the USD via international trade. The greenback did manage to push itself away from the cliff in yesterday’s trading but the question going into the weekend will be what Wall Street has in store for investors. Risk appetite continues to be the high octane that is driving the marketplaces and the USD will likely remain at its mercy until there is a shift of the gears.
EUR:
The EUR took a slight turn for the worse on Thursday but still finds itself within the upper reaches of its highs against the USD. The broad Industrial Production statistics were released yesterday and turned in a result of 0.3%, which was below the expectation of 0.6%. It is an important day of data for Europe with a parade of Preliminary GDP numbers coming from Germany, France, and Italy. The numbers are forecasted to show an improvement from these major countries. Also inflation figures from the French CPI are on the schedule today. In essence Friday’s numbers will give a chance to show that Europe’s biggest economies are experiencing real growth or are still merely showing stability and struggling. The German Prelim GDP carries a forecasted gain of 0.8% and the French number is estimated to be a positive 0.6%. The EUR did come off of its highest marks against the greenback on Thursday and it is possible that if the GDP data from the continent comes in around expectations, that the EUR may again find itself slightly stronger.
GBP:
On little economic data from the U.K. on Thursday, the Sterling found itself in fairly range bound trading. The comments from Bank of England Governor Mervyn King who proclaimed that a weaker GBP would be good for Britain continued to resonate, but trader essentially kept the Sterling in rather calm waters considering the BoE’s stated desire. It will be another day of light releases and the GBP might find itself caught in the greenback’s tide. The Sterling has had a strong run the past couple of weeks as it climbed back from the lower depths of its ranger versus the USD and found takers. Although the speeches of central bankers definitely have a short term affect on the currency markets, there are other strong influences on investment attitudes and traders will continue to examine their risk appetite accordingly.
JPY:
The JPY lost some ground to the USD on Thursday as the losses from Wall Street were worse than the losses coming from the Asian bourses. The JPY continues to hover within strong territory against the greenback but its recent trading has definitely been within a consolidated pattern. Asian bourses as a whole have provided investors with a wide range of gains the past half year but questions certainly abound regarding the quality of the move and whether it can be sustained. The JPY and USD are likely to continue their slow dance going into this weekend.
Technical Charting Mixed With Experience Can Save\Make You Money!
SPX/USD:
Every once in awhile it’s important for me to point out to my readers that I am doing things correctly, and today is such a case. Near the end of the day and we are seeing continued dollar strength and as such yesterday’s post rings very true “You may have noticed that over the last few weeks I often contradict myself when discussing the SPX. In many of my recent posts I point to the market having downside potential, and that it should break down, but to point out that regardless of what I believe, the charts point higher. Well once again, this post will repeat those same ideas. Whereas yesterday was a light volume day in the States due to a holiday, the market gapped higher, nearly filled the gap, and closed one point off the open. It looks a bit like an exhaustion gap and I am not certain we will be able to show much more momentum. In the meantime, I will not trade the open, as it’s necessary to gauge what this market really wants to do now that all traders are back at their desks. Support 1096.42, 1093.8, 1092.6, 1087.4, 1081.5, 1077, 1071.5.1059.3 1052.4, 1045.5, 1029.4, 1019.6, 1009.1, 992.25 Resistance 1101.4, 1105.4, 1132.2, 1153.8”
XAU/USD:
Again I would like to repeat yesterday’s post. It is very important to recognize when a market begins to run out of steam, even if it’s just temporary. Many traders can get chopped up, trying to trade days like today by jumping the gun, and getting into positions to early. “This precious metal continues to climb higher and higher. On the four hour we are currently holding the uptrend line. Be cautious of a speculative bubble in this market. In the mean time, look for a long entry anywhere near $1100, as we may finally start to consolidate here. After touching a high of 1122.82 it seems like this market may want to take a moment to catch its breath. Remember that the XAU has been giving us almost perfect trade setups, consolidation followed by breakout, and repeat. So until the chart shows us something different that will be our strategy. Support 1113.26, 1110.7, 1104.5, 1100, 1096.15, 1092.87, 1087.65, 1081.05, 1078.37, 1070.6, 1066.1, 1051.3, 1046.7 Resistance 1117.32, 1122.82….”.
GBP/USD:
I am surprised by how well the Sterling has managed to hold yesterday. Considering the strong rally in the Greenback, and the losses taken by the equity and gold market, this is one of the few currencies that is able to maintain its value against the dollar.
“For a person who likes to trade trends the British Pound has been quite frustrating. Even though the rational side of my brain keeps me very cognisant that we are trading within a trading range, there is always a glimmer of hope that we are going to break out of it. And yet, with each attempt at a push past strong support or resistance we see how the market pulls back to within the comfortable confines of the trading channel. Keep trading the channel as such, buying support, and selling resistance. Support 1.6485, 1.6249, 1.6119, 1.5776 Resistance 1.6600, 1.6636, 1.6743, 1.6842, 1.7042”
EUR/USD:
Where the Pound showed Moxy, the Euro tripped and fell like a clumsy 13 year old going through puberty. Yesterday’s post about future short term dollar strength was right on the money! “The Euro was unable to break through resistance yesterday as the US dollar started trading lower early on, but was able to make a comeback later on in the day. We formed a decent selling tail and are currently trading lower. This failed push higher suggests that we may see some dollar strength in the near future which could put some brakes on the rallies we are seeing in the Gold and Equity markets. If we cannot hold support of 1.4918, and push towards 1.4844, I expect this currency to trade all the way back to 1.4449. However, since I know that dollar strength on a long term basis has a lower probability of happening, I am not going to become heavily invested on the short side of the euro. For those of you who are willing to take greater risk let’s consider it a scalping trade that might last a few days! For those of you who want to play it safe, buy support with tight stops of about 35 pips, but wait to see confirmation that the market is holding, be it through dollar weakness or even just holding support. Support 1.4918, 1.4844, 1.4810, 1.4701, 1.4683, 1.4449 Resistance 1.5020, 1.5062, 1.5144, 1.5284, 1.5343, 1.5462”