Thursday, March 31, 2011

EUR/USD 1,4172

The Euro holds steady after the release of the Irish Banks tests. The EUR/USD is trading barely below 1.4200 after finding support around the 1.4150 area while GBP/USD continues its recovery from 1.6015, daily low, and is trading back above 1.6050. USD/JPY remains moving in ranges below 83.00.

Commodity currencies are extending gains versus the Dollar. The Aussie is trading at fresh historic highs at 1.0370 while NZD/USD rose above 0.7640.

Greenback is also lower against the Canadian Dollar after being unable to hold to gains. USD/CAD retreated from 0.9725 and pulled back below 0.9700.


Wednesday, March 30, 2011

EUR/USD 1,4090

Euro pullback from 1.4125 high on Asian session has been contained at 1.4060 ahead of the European session opening, and the pair unable to regain 1.4100, remains trading sideways, half way through the week's range.

On the upside, immediate resistance lies at 1.4120, and above here, 1.4150 (Mar 29 high) and then at 1.4200/20 (Mar 23,24,25 highs). On the downside, support levels lie at 1.4050/60 (Mar 29 low/session), and below here 1.4020/25 (Mar 28 low/20-day SMA) and 1.3975 (Mar 18 low).

On a wider perspective the pair is developing a small triangle pattern between upside trending support line from Jan 10 lows, currently around 1.4025, and downtrend resistance from March 22 high. The Apex of the triangle would be on April 6.


Tuesday, March 29, 2011

USD/JPY 82.2601

The USD/JPY recently broke past resistance at 82.00, reaching a fresh 2-week maximum at 82.15 where it begins to stall at time of writing. The pair has been showing modestly bullish tendencies as of late, pulling back from lows seen around mid-March due to the catastrophe in Japan.

Stoyan Mihaylov of Deltastock reports: “The pair is in a downtrend from 94.96 high. Trading is situated below the 50- and 200-day SMA, currently projected at 82.25 and 83.95. Current bias is positive, but we favor an unsuccessful test of 82.00 resistance and a slide towards 80.50, en route to 79.61. Initial support on the downside remains 81.48.


Monday, March 28, 2011

European market

European markets have opened the week on a moderate upside tone, with the technological sector driving gains, favoured by Goldman Sachs Group's upgrade of Alcatel-Lucent SA and Nokia Oyj ratings. In currency markets, the Dollar is trading firmer across the board.

Eurostoxx 50 Index adds 0.3%, while the German DAX index edges 0.1% up and the French CAC, 0.2% higher. In the UK, the FTSE Index ads 0.2% two hours after the opening bell.

In absence of key macroeconomic date in the Euro Area, the technology sector is leading gains on Monday with Alcatel-Lucent and Nokia surging beyond 2% each after Goldman Sachs Group upgraded their ratings to "buy" from "neutral"

Dollar, steady at higher levels

EUR/USD retreat from 1.4220/40 highs last week extended on early Asian session to fresh 6-day lows at 1.4020, where the pair found support to attempt recovery although, so far, upside moves remain capped below 1.4070/85.

USD/JPY breakout from last week range 80.70/81.30 continued on Monday, with the pair bouncing at 81.30, which acted at support on early Asian session, to reach fresh one-week highs at 81.85.

GBP/USD retreat from multi-month high at 1.6400 extended below 1.6000 psychological level on early European session to hit a fresh 8-week low at 1.5935.


Friday, March 25, 2011

EUR/USD 1,4159

Euro recovery from 1.4050 low yesterday, was capped at 1.4220, and the pair has remained steady on Friday consolidating below 1.4200 , with downside attempts contained above 1.4140/50 support so far.

On the upside, immediate resistance lies at 1.4200/20 (Mar 23 high/intra-day resistance), and above here, 1.4250 (Mar 22 high) and then 1.4285 (November 2010 high). On the downside, support levels lie at 1.4140/50 (day lows) and below here, 1.4100 (intra-day support), and 1.4050 (Mar 23 low).

The pair, however, is engaged on a bearish pattern, according to Ron William, technical analyst at MIG Bank: " the move is still weighed down by the bearish (evening star) candle pattern beneath key resistance/confluence zone between 1.4270/1.4282 (Major downward trend-line/November 2010 peak). We remain short, favouring a break of 1.4059 (38.2% Fib), then back into that all-important psychological level at 1.4000."


Thursday, March 24, 2011

Gold near $1450

Re-ignited concerns regarding eurozone sovereign debt are once again buoying gold futures to the upside, with the most active contract for May delivery surging to a fresh historic high at $1448.60 a troy ounce over New York.

While tensions in the Middle East and Libya continue to support robust safe-haven demand, concerns over sovereign debt in the periphery of the European Union is once again rearing it´s ugly head following the collapse of the Portuguese ruling party yesterday. With the Parliament rejecting proposed austerity measures, analysts are now expecting the country to be forced to tap the EU´s revamped bailout fund, with pressure rising on other bigger community members including Spain.


EUR/USD 1,4070

 Euro/Dollar has eased down to daily lows at 1.4075 after traders found a reason to squeeze early buyers following a headline from Dow Jones suggesting that Moody's will carry out a massive downgrade from Spanish banks tomorrow.

Before the news were released, bids from lows at 1.4077 had pushed the price as high as 1.4110 after the late sell-off from yesterday amid the collapse of the Portuguese government. The EU Summit that begins today is thought to focus on a bailout plan for the Iberian country.

“Based on all that’s happened in the EUR over the last 48 hours, and based on the fact that the EUR is already at reasonably high levels against the USD, GBP and the JPY for that matter, I’m surprised that the sell-off in the single currency isn’t more aggressive” said Sean Lee at Forexlive.

Technically, Valeria Bednarik from FXstreet adds: “Euro bounce from 1.4077 is still limited to the upside with 4 hours chart showing bearish momentum intact. Lose of mentioned low should trigger a spike towards the 1.4030 static support area, also ascendant trend line coming from March 11 daily low. Lose of this last should trigger further fall in the cross towards the 1.3950 strong Fibonacci support”.


Wednesday, March 23, 2011

EUR/USD 1,4170

The European shared currency weakened on Wednesday as worries about debt problems in Portugal and Ireland reemerged.

Mild profit-taking has taken place, ahead of Portugal's parliament vote on the government's latest austerity measures. The Prime Minister, Jose Socrates, has stated he will resign if the opposition fails to approve the bill.

EUR/USD has dropped toward the lowest price in 2 days at 1.4152 during the Asian session, although it has managed to bounce, trimming part of the previous losses. At time of writing, the cross is trading around 1.4175/80, 0.13% below its opening price.

From a technical perspective, Franco Shao, analyst at, said, "Being contained by 1.4281 (Nov 4, 2010 high) resistance, EURUSD pulled back from 1.4248, suggesting that a cycle top is being formed on 4-hour chart".

"Range trading between 1.4100 and 1.4248 is expected in a couple of days. However, the fall from 1.4248 is treated as consolidation of uptrend from 1.3752, another rise towards 1.4500 is still possible after consolidation, and a break above 1.4248 could signal resumption of uptrend", Shao added.


Tuesday, March 22, 2011

EUR/USD 1,4200

Majors are steady against dollar in this quiet American afternoon, with the greenback showing mixed intraday results, as market seeks for direction in a highly uncertain environment. EUR/USD holds around the 1.4210 area, barely below past Asian session opening, as investors had choose to take some profits out the table ahead of upcoming events in Portugal: the houses should decide if the bill with the austerity measures will be supported or not. Past Monday, the PM has stated that he is ready to quit if the bill is rejected.

According to Andrei Tratseuski from Forex Club, the EUR/USD may be possible forming a top near 1.4300, past year high, although he adds: “the pair needs to break through a 1.4300 level in order to sustain the current rally, while support lingers at 1st Standard Deviation at 1.4100. The currency pair must remain above 1st Standard Deviation to maintain its current uptrend and possibly test last year highs”.


EUR/USD 1,4242

The FX market has just taken a breather on Tuesday, ignoring the strong rise in Nikkei, which is trading over 3.8% up; the trade has been pretty quiet, not paying that much of attention to the military action in Libya and despite the nuclear crisis in Japan seems to be easing.

Overall, the Greenback still looks vulnerable. EUR/USD hovers near a 4-month high, and has traded into a tight range between 1.4200 and 1.4230 in Asia, while GBP/USD has moved slightly to the downside ahead of the CPI data, currently trading a few pips below 1.6300.

USD/JPY is almost unchanged on the day, presently at 80.95 , while USD/CHF is quoting little lower at the 0.9020 zone, after opening around 0.9045.

The currencies linked to commodities remain firm against the US dollar. AUD/USD holds onto gains near its weekly highs at the 1.0060 zone, while the Kiwi has advanced about half of a cent, reaching a fresh 5-day peak at 0.7390.


Monday, March 21, 2011

EUR/USD 1,4166

In a quiet Asian session, most pairs have consolidated near their NY closing levels after the big moves seen last Friday. However, the US dollar continues to be under pressure with Japan markets closed due to a national holiday, while engineers restored electricity to three reactors at the crippled Fukushima, easing concerns of a nuclear crisis.

Asian stocks gained for second day in a row and oil climbed after the military coalition launched air strikes in Libya.

EUR/USD moved higher during the interbank trade and reached a fresh yearly peak at 1.4194 before settling around 1.4170 where the pair has spent most of the Asian session.

The Australian dollar rallied over 60 pips against the Greenback on Monday, breaking above parity and reaching the highest price in 4 days at 1.0020, static resistance area. NZD/USD advanced 0.46% toward the 0.7340 area.

Other majors remained steady: USD/JPY has spent most of the session into a 30-pip range below 81.00, while GBP/USD retreated slightly and currently is trading at 1.6210 after opening around 1.6230. USD/CHF quotes somewhat higher at the 0.9050 region.


Sunday, March 20, 2011

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Euro: Climbs To Fresh Yearly High

The coordinated efforts by the Group of Seven appears to have provided a short-term relief in the currency market, but global policy makers still face a heavy load of challenges as the uncertainties surrounding the world economy continues to bear down on investor confidence. As Japan struggles to contain the nuclear crisis, with the political turmoil in the Middle East heightening, the rise in risk appetite could be short-lived, and the flight to safety may gather pace over the following week as market sentiment remains battered. 
The Euro rallied to a fresh yearly high of 1.4138 on Friday despite the slew of dismal data coming out during the overnight trade, and the near-term rally in the EUR/USD may taper off ahead of the EU Summit later this month as the risk for contagion intensifies. European Central Bank board member Gertrude Tumpel-Gugerell argued that the region needs a “quantum leap” to strengthen its economic governance as European policy makers maintain a relaxed approach in addressing the sovereign debt crisis, and went onto say that the Governing Council will weigh the risk for inflation at the beginning of the following month while delivering a speech in Belgrade, Serbia. As the ECB maintains its one and only mandate to ensure price stability, market participants expect the central bank to combat rising price pressures by lifting the benchmark interest rate off the record-low next month, but the Governing Council may soften its outlook for inflation as the devastating earthquake in Asia/Pacific dampens the prospects for global trade. As the EUR/USD continues to retrace the decline from back in November, the pair may make a run at 1.4200 going into the following week, but we may see a short-term correction in the exchange rate as the relative strength index approaches overbought territory.
The British Pound fell back from a high of 1.6190 to maintain the range from earlier this week, and the exchange rate may continue to trend steady ahead of the Bank of England policy meeting minutes due out on March 23 as investors weigh the prospects for future policy. BoE board member Charles Bean showed an increased willingness to maintain the expansion in monetary policy as higher interest rates risks slowing the economic recovery, and endorsed the central bank’s wait-and-see approach as the economic outlook remains clouded with high uncertainty. With the BoE minutes on tap for the following week, comments from the central bank are likely to set the tone for future price action, and we may see a growing shift within the MPC as rising commodity prices continue to raise the risk for inflation. In turn, the GBP/USD should maintain its currency range going into the following week, but the policy statement could spur a breakout in the exchange rate as investors weigh the likelihood for rate hike within the first-half of 2011.
The U.S. dollar lost ground against most of its major counterparts following the rebound in market sentiment, and the rise in risk appetite may gather pace during the North American trade as global policy makers take extraordinary steps to stabilize the world financial system. As the economic docket remains bare for Friday, risk trends should dictate price action going into the end of the week, and the greenback may come under increased selling pressures as equity futures foreshadow a higher open for the U.S. market. However, the ongoing developments in the world economy could impede on investor confidence as the financial market remains in disarray, and the major currencies could face choppy price action throughout the remainder of the day as market liquidity thins ahead of the weekend.



Friday, March 18, 2011

EUR/USD 1,4054

he European shared currency is surging across the board as the risk on environment continues to dominate the trade. The currency has been boosted heavily by comments from FinMin Noda pointing that the ECB may be stepping in too and intervene on the EUR/JPY cross.

Investors quickly rushed off jumping on the EUR/USD on the speclation, driving the pair from an early low at 1.3980 to new 2011 highs at 1.4080. “Next reported orders are some sell orders at 1.4100/10” said Sean Lee at ForexLive. EUR/JPY also skyrocketed on the news, currently above 115.00 from a bottom at 106.55 yesterday, almost a 1,000 pips recovery.

Meanwhile, the Dollar/Yen has also begun to re-accelerate its travel north breaking 81.50 key resistance area to currently trade at 81.80. “The numbers being bandied about at the moment are about 2 trillion Yen already this morning in intervention; that’s about 25 billion USD/JPY bought by my reckoning” explained Mr. Lee.


Thursday, March 17, 2011

EUR/USD 1,4215

While the EUR/USD rallied to a fresh 4-month high above 1.4050 earlier, corrective movement brought it back to the downside of 1.4000 before support was found at 1.3980. In the last hour, the pair has bounced a firm 50 pips from that mark, reaching as high as 1.4028 before settling towards 1.4010 at time of writing.

While still in range to the recent maximum, immediate resistance above is placed at 1.4082 (21-Day Upper Bolli), 1.4085 (Daily High Nov 8) and 1.4249 (Daily High Nov 5). Support on the other side is placed at 1.3934 (10-Day MA), 1.3855 (Daily Low Mar 15) and 1.3841 (21-Day MA).

Regarding the strong macroeconomic data coming out of the US today, in particular both initial and continuing jobless claims dropped considerable under last week´s figures, while more recently the Philly Fed manufacturing survey surprised expectations and jumped to a strong reading of 43.4 in March compared to 35.9.


Wednesday, March 16, 2011

European market

The moderate risk appetite seen at opening times has faltered through the session and European equity markets have turned to negative territory. In currency markets Dollar and Yen are bouncing higher against Euro and Pound.

Eurostoxx 50 Index is trading 0.85% lower while the German DAX Index dips 0.25% and the French CAC 1.0% down. In the UK, the FTSE Index trades 0.75% down.

The Yen has ticked higher as risk aversion increased, and USD/JPY pushed to day lows right above 80.60 support area, which , so far, remains firm. EUR/JPY EUR/JPY has pulled back from 113.30 on early European session, to day lows at 112.40, while GBP/JPY rejection from 130.50 extended to day lows at 112.50.

EUR/USD has been rejected again at 1.4000 area, retested at European session opening, and the pair dipped to session lows at 1.3925.

GBP/USD recovery from 1.5975 low yesterday has been capped at 1.6135 and the Pound lost the 1.6100 level, dipping to 1.6055, yet above day low 1.6050


Tuesday, March 15, 2011


Investors were on the edge this Tuesday, as a global sell-off triggered by Japan's nuclear crisis led financial markets to move south very heavily. Nikkei tanked -10.55%. It was a flight to disaster at one stage instead of a flight to safety. Yen and Swissy finished as the strongest currencies, while the Dollar made significant progress although failed to keep-up the pace in America.

Asian session – Nikkei annihilated, Dollar and Yen surge

Volatility was extremely high, leading to panic and emotional selling in Japan after the nuclear crisis worsened. Japan's PM Kan alerted the possibility of leakage coming out of the damaged reactor at Fukushima after a third explosion in four days. People from a 30Km radius were being evacuated.

The Japanese Yen strengthened across the board, and despite the BoJ injected further liquidity into the market to ease jitters and guarantee stability, that alone could not avoid the Nikkei falling by -10.55%, adding to the 6% losses seen on Monday. The rest of market fell by 3% on average. The RBA minutes was suggested no rate rises in foreseeable future.

European session – European stocks on sell off mode, Yen and Swissy reign

Risk aversion continued to pick up further pace, leading European stocks to tumble drastically too, although ended off session lows. EUR/USD was down at 1.3880 from early 1.3930, having been as low as 1.3852. USD/JPY fell to 81.35 from early 81.55. USD/CHF down at .9210. Cable down a full cent to 1.6000.

German economic sentiment index 14.1, down from 15.7 in Feb. The situation in the Fukushima Dai-Ichi nuclear plant remained highly fluid, however fears eased slightly after weather agencies said Japan winds were dispersing radioactive material over ocean, no danger for Japan or region.

American session – Fed statements gives minimal clues, Dollar retreats

The FOMC gave little indications on where it might be heading in terms of monetary policy; no mention of QE3, QE2 to end on schedule, the Fed also upgraded its outlook to say that the economy is firmer, while rates to stay low for a considerable period. The only new remarks refereed to rise in commodity prices. Fitch downgraded Bahrain to BBB from A- after a 3-month state of emergency was imposed.

In the forex market, the Dollar gave back gains against the Euro, with the latter threatening 1.400 again. GBP/USD approached 1.6100. The Aussie regained 0.9900, while the Yen and Swissy extended gains, the second made new record lows at 0.9138. S&P 500 fell 1.1%, trimming early 3.75% losses. Oil declined $3.50 to $97.66, CRB down 3.5%; Gold fell $27 to $1397. US 10-yr notes fell 5 bp to 3.31%; off 3.21% intraday lows.


Monday, March 14, 2011

EUR/USD 1.4002

Euro has managed to extend gains against greenback, as fears over sovereign euro zone debt eased on recent euro zone competitive pact, with investors again subduing sovereign debt woes; US yields sinking and pressuring dollar helped the cross to hit an intraday high around 1.4002 with the pair currently consolidating barely below that level.

Technically speaking immediate resistance area comes at 1.4036 past week and yearly high, followed later by 1.4085, November 8th daily max; supports for the upcoming hours are located at 1.3980 past Asian session high, and 1.3950 static Fibonacci area.

Asian markets

Asian markets are mixed, with the Nikkei plummeting on its first trading day after an earthquake and a following tsunami devastated large areas of the country. In currency markets, the Yen has pulled back after rallying at the opening.

Japanese Nikkei Index has plunged 6.2%, while Australian ASX index sheds 0.4%. On the positive side, the Hong Kong Hang Seng Index edged 0.1% up, and the South Korean Kospi Index rose 0.8%. In China, the Shangai Composite Index remains practically flat.

Market sentiment remains weighed, with Japan struggling to avoid a nuclear catastrophe, with the Bank of Japan taking additional monetary easing measures, while Japanese Finance Minister Noda affirms its commitment to watch Forex markets closely to avoid yen speculation.

Yen highly volatile

USD/JPY decline from 83.30 high on Friday extended on Asian session opening to 80.60 low, and bounced after BoJ increased its bond buying programme to JPY10 Tr, and injected record funds in the banking system. The pair bounced up and consolidated above 82.00 ahead of the European session.

EUR/USD bounced up strongly on Friday after bottoming at 1.3750, one-week low, and the pair extended to 1.3985 high on Asian session opening, to consolidate between 1.3915 and 1.3985 ahead of the European session opening.

GBP/USD retreat from 1.6345 high last week bottommed at 1.5975 low on Friday, and the pair bounced up, to regain 1.6000, and capped at 1.6100on early Asian session, ease to 1.6045 ahead of the European session opening.


Sunday, March 13, 2011

Japan faces its worst crisis since 1945

In response to the fact that many financial institutions located in the disaster-hit area conducted their business in order to respond to withdrawal of deposits smoothly, the Bank of Japan, Head Office and some of its branches, responded to cash withdrawal by the financial institutions to support such initiatives.

The BoJ said in a statement on Sunday that it has extended a total of 55 billion yen to 13 financial institutions in the quake-struck northeast of Japan since Saturday to help them secure enough funds to meet deposit withdrawals.

"The Bank will continue to grasp the situation of the financial markets and business operations of financial institutions, and to stand ready to respond and act as necessary. The Bank will do its utmost to continue ensuring stability in the financial markets and securing smooth settlement of funds, including provisioning liquidity.", said the official statement.

The Bank, Head Office and all of its branches, will conduct its ordinary business operations on Monday, March 14, 2011.

Possible large-scale power outages

Prime Minister Kan Naoto Kan said Sunday night in a televised press conference that Japan faces large-scale power outages, with lack of supplies of gas, water and other essentials.

The Minister also asked the citizens to work toghter to 'build a new Japan'. Kan also said Japan is now facing its biggest crisis since World War II after last week's earthquake and tsunami.

Nuclear power authorities here are working to avert a nuclear crisis after last week's massive earthquake damaged cooling systems in several reactors, two of them seriously.


Saturday, March 12, 2011

Markets on alert

The Yen finished the week with gains across the board, rising sharply on Friday after an earthquake hit northern Japan. The catastrophic event triggered a decline in Asian and European markets but in Wall Street stocks finished Friday slightly in positive, but in negative for the week.

The earthquake was followed by a devastating tsunami. The Yen reacted to the downside initially but afterwards jumped in the market, erasing weekly losses. The damage and consequences of the catastrophic event are not yet know and the situation in affected areas is still dramatic. A nuclear emergency has been declared and several big aftershocks shook Japan.

Market participants will focus over Japan during the weekend. The Bank of Japan announced that next Monetary Policy Meeting, to be held on Monday will finish on the same day, and not on Tuesday as it was previously schedule. Once open on Monday, markets will have a better analysis of earthquake’s impact.

Euro jumps on agreement
The Euro rose sharply across the board in the last hours of trading on Friday after leaders of the Eurozone agree on a pact that will probably be officially sign during a European Union summit on March 24. The “pact for the euro” is designed to coordinate economic policies across the region and to improve its competitiveness. If signed, the road would be clear for an agreement over the next rescue fund, that will replace in 2013 the current European Financial Stability Facility.

The EUR/USD rose from 1.3775 reaching levels on top of 1.3900 at the end of the session while EUR/CHF erased losses and soared to 1.2925, after having reach a 1-week low at 1.2825.

Following the 8.9 magnitude earthquake and as a tsunami of 10 meters that engulfed towns along the northern coast that hit Japan early Friday, most of the risk aversion, come from the fact that the Fukushima No. 1 power nuclear plant was on fire; Japanese officials have admitted that a key cooling system at a nuclear reactor was not working properly, with the country declaring a nuclear power emergency; latest news worsen the picture as fire has come out of control as the cooling system of the plant failed along with the backup system.

In a desperate attempt to solve the problem, Japanese authorities will release radioactive vapors into the atmosphere to prevent a nuclear power plant from exploding; the country's nuclear safety agency says pressure inside the reactor at the mentioned power plant has risen to 1.5 times the level considered normal.

The yen gained the most against greenback since past August, with the cross below the 82.00 mark as investors speculate insurance companies and investors will have to buy back yen to pay for damages.

Meanwhile the situation seems to have eased in the US west coast, as the expected giant waves predicted to inundate beaches after the Japanese earthquake failed to materialize. Evacuated residents in Hawaii are now allowed to return home, after waves up to 8 feet high caused some damage in Hawaii, but the surge was much lower than expected.


Friday, March 11, 2011

EUR/USD 1,3830

The Euro is heading higher in Asia, knocking the price back up from an open at 1.3796 to just hit new daily highs at 1.3830, old support now acting as new resistance, also 38.2% fib from yesterday's big drop.

The rise comes after the Euro hit a one week low at 1.3774 on Spanish downgrade, panicking investors who quickly got rid off long positions in the shared currency as renewed concerns surrounding European periphery debt woes return.

As said, solid resistance now lies at 1.3830, only clearance off this level will open the gates for further gains towards 1.3855/70 level ahead of a broader recovery to 1.3920. On the downside, watch for support at 1.3770/50, the lose of this figure will improve the likelihood of prices dropping to 1.3740 with final target at 1.3710.

Wednesday, March 9, 2011

EUR/USD 1,3908

Wall Street is mixed so far with the DOW rising 0.05% but the NASDAQ and the S&P 500 are losing 0.45% and 0.15% respectively. Markets in Europe finished in red: FTSE 100 -0.63%; CAC 40 -0.55% and DAX -0.46%. Crude oil is moving sideways around $105 a barrel (WTI) and gold is also rangebound, currently hovering around $1,430 an ounce.

Currencies are relatively calm, moving in ranges. EUR/USD and GBP/USD are struggling to hold above 1.3900 and 1.6200 respectively. The Yen is posting small gains for the American session supported by a rally in Treasuries. USD/CHF failed to rise above 0.9300 and is slowly approaching daily lows. Currencies tied to commodities retreated from the highs after Wall Street opening and since then are consolidating.


EUR/USD 1.3860

Euro recovery attempt has been capped at 1.3910 at European session opening, and the pair, weighed under reemerging concerns about Eurozone peripherals' debt , has pulled back to retest support at 1.3860.

On the downside, below 1.3850/60 (Feb 28/Mar 1 high), the pair might find support at 1.3830 (Mar 3 low) and 1.3735 (Mar 2 low/20-day SMA). On the upside, immediate resistance lies at 1.3810/25 (day high/intra-day resistance), and above here, 1.3990/05 (Mar 4/8 highs) and 1.4037 (Mar 7 high).

Near-term outlook remains negative, according to Slobodan Drvenica, technical analyst at Windsor Brokers Ltd, while daily studies remain bullish: " Near-term outlook, however, remains negative, favoring break below 1.3860, to open way for further weakness towards 1.3830/00, before bulls re-assert for fresh push higher, as bullish daily studies keep focus at 1.4000/35, break of which to expose 1.4280/1.4307."


Tuesday, March 8, 2011

EUR/USD 1,3903

Greenback weakened in the last hours against commodity currencies and erased previous gains. Currently is trading near daily lows as risk appetite increased the demand for higher yield currencies. Stocks in the US extended gains.

Stocks rise further

The Dow Jones Industrial Average is rising 150 points to 12.235 or 1.18% and the NASDAQ gains 1.00%. Stocks in Europe erased losses in the last hours of trading and posted small gains. In London the FTSE 100 rose 0.02%, in Germany the DAX gained 0.04% and in France the CAC 40 finished 0.64% higher.

Crude oil prices are moving sideways on Tuesday, retreating after reaching fresh highs since September 2008. The barrel (WTI) is hovering around $103 - $105. Gold is pulling back from record highs and fell below $1,430 an ounce.

Dollar losses upside momentum

Greenback is retreating across the board after hitting daily highs before Wall Street opening. Once the American session started, Dollar lost momentum and pulled back amid an increase in risk appetite.

AUD/USD found support at 1.0050 and bounced rising 70 pips to 1.0115, to the same price level it had at the beginning of the day.

USD/CAD hit fresh lows at 0.9706 after moving in ranges most of the day below 0.9745.

NZD/USD moved off session highs, trimming gains and currently is struggling to hold above 0.7400. The Kiwi outperformed its rivals during the Asian session but on American hours pulled back.

Greenback also moved off session high against the Euro, the Pound and the Yen.


Asian markets

Most Asian markets have traded on a slight positive tone, on a cautious session, with investors concerned about rising oil prices and their potential effects on the weak and uneven global economic recovery. In currency markets the Dollar has trimmed recent losses.

Japanese Nikkei Index rises 0.2%, while the Hong Kong Hang Seng Index added 0.4%, and South Korean Kospi Index 0.8% up. The Australian ASX index rose 0.2%, while in China, the Shangai Composite Index lost 0.3%.

Risk appetite has remained subdued in Tuesday despite the slight decline on oil prices, front month light sweet crude price eased USD0.58 in Asian session to USD104.86 while Brent crude prices dipped USD0.64 to USD114.40 per barrel.

Investors remain spooked with oil prices above USD100, considered detrimental to global economic recovery, while increasing volatility in Middle East countries, has increased aversion to risk and fears of disruptions on oil supply.

Dollar trims losses

EUR/USD remains strong across the board, as the markets increased their expectations on an imminent rate hike by the ECB. The pair's rally from 1.3430 extended yesterday to 1.4030, 4-month high, to ease below 1.4000 and consolidate above 1.3955 in Asia.

GBP/USD launched an assault to 13-month high at 1.6345, and the pair reached 1.6343 high where it was capped before plunging to consolidate around 1.6200 during Asian session.

USD/JPY retreat from 83.05 high on Friday, found support at 81.95 on Monday, and the pair picked up, to consolidate between 82.20 and 82.40 on Asian session.


Monday, March 7, 2011

Forex Daily Outlook

The Dollar ended on a strong footing, paring early losses after an impressive rebound during American hours. The Japanese yen performed quite nicely amid geo-political tensions. The Swiss Franc did not live up to the expectations on its safe-haven role. Euro held firm, while Pound fell sharply. Oil continued at 30-month highs, while metals made new gains but failed to hold them on Dollar strength.

Asian session – Fears of civil war in Libya undermine risk appetite

Reports out of Libya suggesting the country may be edging closer to a civil war boosted nymex oil prices above $105/bbl. In Saudi Arabia, tensions were also running high. Amid this scenario, investors flocked out to the Japanese Yen and the Dollar, but overall the movements lacked any momentum.

EUR/USD was marginally lower around 1.3975, USD/JPY came into close contact with 82.00. AUD/USD was also taken lower to 1.0115. New Irish government vowed to seek EU/IMF renegotiation. Australian new job ads +1.2% MoM. Japanese PM under strong political pressure. Silver and gold made new highs. Regional bourses fell sharply, Nikkei down 2%.

European session – A soft Dollar to start the week

The Dollar extended losses against peers, falling to new lows against the Euro at 1.4033, while testing its recent monthly bottom vs the Pound at 1.6340. USD/JPY fell to 81.95, AUD/USD erased losses from Asia to regain 1.0150. USD/CHF was unchanged around 0.9250.

Moody’s downgraded Greece, to B1 from Ba1, negative outlook. The Greek FinMin felt the downgrade totally unjustified. Euro zone sentix index rose to 17.1 in March from 16.7 in February. Regional stockmarket lower, FTSE down -0.28%.

American session – Dollar recovers despite surging oil prices

The US Dollar enjoyed a healthy recovery as stocks slipped down, tracking losses from Europe. By session end, a strong bounce in equities appeased the early sell-off. GBP/USD never found momentum to make new highs, resulting on a sharp fall in the British Pound, from highs at 1.6340 to make new weekly lows under 1.6200. Against the Euro, the revived Dollar managed to pare losses, ending at 1.3970. AUD/USD was easier too, finishing just above 1.0100, USD/JPY regained 82.20 area.

Fed’s Fisher commented that he will vote to curtail or end QE2 if it proves counter-productive. Portuguese yields were taken to new psot-Euro life-time highs, while Greek credit default swaps were also at record highs of 1036 bp. US DefSec was seen quotig that any US military action in Libya should have international support. Bloomberg was carrying a story saying China may hike reserve ratios again shortly.


EUR/USD 1.4035

The Euro is moving further away from 4-month highs that lie at 1.4035 as the Dollar gains momentum across the board. EUR/USD broke below 1.3990 and tumbled to 1.3970 hitting the lowest price since early European hours after being unable to rise above 1.4015.

According to Andrei Tratseuski from Forex Club the EUR/USD happens to be in extreme uptrend, “yet is beginning to look like as being overbought with a possible correction due”. He locates current resistance at 1.4050 and support at the 1st Standard Deviation at 1.3900.

Despite falling versus the Dollar, the Euro reached fresh daily highs against commodity currencies amid a decline in US stocks.


Asian markets

Asian markets have opened the week on a negative tone, as fears about turmoil in Libya intensify, pushing oil prices higher. In Currency markets, Euro and Pound consolidate at Friday's levels, while the Dollar lost ground against the Yen.

Japanese Nikkei Index plunged 1.8%, after the resignation of the country's foreign minister, while the Hong Kong Hang Seng Index eased 0.3%, and South Korean Kospi Index dropped 1.2%. The Australian ASX index lost 1.3% and Chinese Shangai Composite Index advanced 1.3%.

Stock markets have opened the week with high risk aversion, as oil prices continue escalating, with April crude rising to USD104.42 in New York on Friday, buoyed on concerns about conflict in Libya and the possibility of unrest spreading through the middle East.

Euro and Pound, in range, Yen higher

USD/JPY rose above 83.00 on Friday, following better then expected US Non-farm payrolls data, although, capped at 83.05, the pair lost ground through the US session, to extend losses on Monday's Asian session, to hit 82.15 low so far.

EUR/USD rally from 1.3430 area on Mid February extended on Friday to a fresh 4-month high above 1.4000, although, unable to hold above the mentioned psychological resistance level, the Euro has been trading between 1.3960 and 1.3995 in Asia.

GBP/USD rally from 1.6000 area on late February, was capped last week at 1.6345, and the pair eased below 1.6300, to perform a choppy consolidation between 1.6230/40 and 1.6300 on Friday and Monday's Asian session.


Sunday, March 6, 2011


All major pairs are trading near their NY closing levels from Friday, after having a very quiet start of the week in the interbank trade. EUR/USD is marginally higher but still capped by 1.4000, AUD/USD sits at 1.0140, USD/JPY can be found at 82.30, GBP/USD stays at 1.6270.

Over the weekend, the new Irish government vowed to seek a fresh EU/IMF bailout deal. BoE's King remains a ‘hawk’ on inflation, the governor told the Daily Telegraph in an interview. Rumours intensify that Portugal's 7% borrowing cost is too much of a burden and that a rescue package may be negotiated within weeks.


Thursday, March 3, 2011

EUR/USD 1,3964 OMG Oo!

The Euro was the best performing currency, skyrocketing against any rival as Trichet signaled that a rate hike is getting closer. Safe haven assets fell on risk appetite. Stocks around the world had nice rallies, especially in Wall Street where the Dow was up 200 points.

Asian session – Boredom ahead of big risk events

Very quiet session with no movements worth highlighting through the Asian trade, all of the majors were stuck in tight 25 pip ranges ahead of the ECB rate decision later today and the Non-Far Payrolls on Friday. AUD/USD was the only pair offering some modest action, testing support at 1.0150.

Australian January balance goods/services +A$1.875 billion, while Building approvals sharply lower, -15.9%. UK wages showed sharp increase. RBNZ predicted to cut rates by 50 bps: Reuters Poll. Regional stockmarkets rose by up to 1% after upbeat US jobs report.

European session – Trichet sounds hawkish, Euro skyrockets

Market had geared up for a big day of flows and there was certainly no disappointment for those wanting high volatility. At the ECB monetary policy meeting, the bank left rates unchanged at 1%, but the renewed hawkish language from Trichet signaled a rate hike looms near. Euro went ballistic against all peers and stocks surged.

German January prelim retail sales +1.4% m/m, +2.6% y/y, stronger than median forecasts +0.5% m/m, +1.6%. Euro zone February final services PMI 56.8, below flash estimate of 57.2. Euro zone Q4 growth confirmed at +0.3% q/q, UK February services PMI 52.6, down from 53.6 in January.

American session – Safe haven assets find no love; risk appetite picks up

Safe-havens, CHF, JPY, XAU were on a retreat today, while the Euro extended gains. Focus stood on the rate hike talk in Europe and the jobs recovery in America, shifting the attention away from surging oil prices. The rumour among traders for tomorrow's non-farm payrolls is a rise of not less than 200k.

Initial jobless claims in the US fell by 20K to 368K, while the ISM Non-Manufacturing stood at 59.7, 0.2 points below expectations. Fed’s Lockhart told reproters he sees a gradual reduction of the dollar on its role as world's reserve currency but expects to remain dominant. Obama said Gaddafi must leave. Wall Street rallied strongly.



EUR/USD has had a quiet session, although it has lost some ground amid mild profit-taking ahead of the European Central Bank meeting on Thursday.

EUR/USD has fallen to a low of 1.3846 during the Asian session, after closing in NY around 1.3870. EUR/USD is currently trading at 1.3855/60, slightly lower since opening.

Traders are expecting the ECB will move toward an eventual rate hike, so there is risk the hegemonic currency weakens if they get disappointed.

In a deeper analysis, the Reuters Insiders Team reported, "Bullish on the Euro, traders bet the European Central Bank will signal a rate hike later today. They are expecting Jean-Claude Trichet to sharpen his anti-inflation rhetoric as oil prices continue to soar. Immediate resistance is seen at 1.3900 where it has option related offers but further resistance is seen at 1.3947".


Tuesday, March 1, 2011

Asian markets

Asian markets have traded on a positive tone on Tuesday, with investors sentiment lifted by steadier oil prices and Chinese manufacturing figures which have eased concerns about further monetary tightening. In currency markets, the Dollar picked up against the Yen.

Japanese Nikkei Index advanced 1.1% while the Hong Kong Hang Seng Index added 0.1% and Australian ASX Index edged 0.1% lower. Chinese Shangai Composite Index rose 0.6%. Markets in Taiwan, Singapore and India have traded higher, while the South Korean Kospi Index was closed for bank holidays.

On the macroeconomic front, Chinese Manufacturing PMI eased to 59.2 in February from 59.9 in January, while the HSBC PMI for February dropped to 51.7 from 54.5. A significant slowdown on manufacturing activity, which suggest that Chinese government's efforts to cool off the country's economy might be starting to catch up.

Dollar ticks up against Yen

USD/JPY retreat from 84.00 area last week extended to 81.60 area, to test uptrend support line from November lows, where the pair found demand to puck up on Asian session, returning above 82.00 to reach 82.25 high ahead of Europe.

EUR/USD bounced yesterday at 1.3710 support area and the pair rose on European session, favoured by higher inflation in the Euro Area, to cap at 1.3860 resistance area, and consolidate at 1.3800/30 during Asian session.

GBP/USD retreat from 1.6275 high last week found support on Friday at 1.6030 low, and the Sterling soared on Monday to retrace the previous three days' decline and consolidate below 1.6300 during Asian session.