Monday, May 17, 2010

May 17 , 2010

Market Review - 15/05/2010 01:22GMT

Euro tanks on growth fears and breakup concern

The single currency penetrated last week's 14-month low of 1.2510 in Europe yesterday and tumbled below 1.2400 for the first time since November 2008 on lingering worries that austerity plans required by the EU/IMF 750 billion euro bailout package would stifle an 'already-weak' recovery in the 16-nation eurozone. Previous day's comments by Former Fed Chairman Paul Volcker that he was concerned the euro area may break up while ECB's Weber said dangers were still in the financial system and such risk should not be underestimated. German Chancellor Angela Merkel's comments that Europe is in a 'very, very serious situation' continued to weigh on the euro throughout European and U.S. sessions.

Euro bashing pressured the single currency on Friday as the pair was sold on every intra-day rebound. Despite brief bounce to 1.2576 near European opening on short-covering, euro tumbled again and fell below 1.2510 to 1.2432 in European mid-day. Although euro managed a modest recovery, renewed selling at 1.2534 pushed the single currency lower again and price nose-dived to a fresh 18-month low of 1.2354 in NY afternoon. Cross-selling in euro also weighed on price as eur/jpy plunged from 117.02 to 113.50 while eur/gbp fell sharply from 0.8620 to 0.8496. In other news, report showed French President Nicolas Sarkozy once threatened to pull out of the euro during the negotiation which led to the aforementioned bailout. In addition, Greece would submit a deficit-cutting progress report to EU this coming Saturday.

Although the British pound fell sharply from 1.4640 to as low as 1.4496 in tandem with euro on Friday, cross buying in sterling versus the single currency somehow limited cable's intra-day downside, the pound was more resilient than euro to selling pres sure and gyrated inside aforesaid range in NY session as the market focus on Friday was euro instead of cable.

Yen rallied across the board as Greek debt crisis sparked major broad-based risk aversion again, prompting investors to dump riskier assets like commodity currencies, stocks, oil and other commodities for yen and dollar as safe haven currencies, gold fell $30 from fresh record high of $1248.80 to $1218.10. Aud/jpy tumbled from 83.41 to 81.42 while gbp/jpy fell from 136.05 to 133.24 and usd/jpy also slumped from 93.10 to 91.80.

European and U.S. bourses all suffered heavy losses on Friday, FTSE closed down 3.15%, DAX down 3.12%, CAC 40 down 4.59% whilst DJI closed down 1.51% and S&P 500 down 1.88%.

Economic data to be released next week include : U.K. Rightmove house prices, Japan Domestic CGPI, U.K. CBI industrial trend, U.S. Empire state mfg., Net LT TIC flows and NAHB housing mrkt index on Monday, Japan Tertiary industry index, Consumer confidence, Machine tools orders, U.K. CPI, Germany ZEW index, EU Trade balance ,HICP, U.S. Building permits and PPI on Tuesday, Japan Capacity utilisation, Industrial production, Canada Wholesale sales, U.S. CPI and FOMC minutes on Wednesday, Japan GDP , Germany PPI, U.K. Retail sales, Canada Leading indicators and U.S. Leading indicators on Thursday, Japan Leading indicators, Germany GDP, PMI, EU PMI, Germany Ifo index, EU Current account, Canada CPI and Retail sales on Friday.

Weekly Technical Outlook on EUR/USD

Update time: 16/05/2010 23:40 GMT

EUR/USD - 1.2367.. Despite staging an impressive short-covering rally fm 1.2790 to 1.3095 last Monday after the announcement of an enormous 750 bln euro stability measure forged by EU/IMF to help eurozone countries to tackle their debt problems, euro bears quickly emerged, the single ccy remained under pressure on 5 consecutive days n penetrated May's 14-month low of 1.2510 on Friday n tumbled to a 19-month low of 1.2354.

Look at the chart, as daily indicators are still pointing hard down, sug- gesting MT downtrend fm 1.5145 (Nov 09') wud re-test Oct 08' low of 1.2329, below wud extend twd 1.2134, being a 'natural' 50% r of the LT rise fm 0.8228 (2000 low) to 1.6040 (Jul 08'), however, reckon psychological sup at 1.2000 wud hold on 1st testing n bring a much-needed minor correction later this week.

Today, euro extended Friday's downtrend to a fresh 2010 low of 1.2339 in NZ n as long as res area at 1.2432/39 holds, weakness to 1.2300 is seen, however , o/sold condition wud limit weakness to 1.2282, being equality measure. of 1.26 85-1.2432 proj. fm 1.2535. Abv 1.2450 may risk recovery to 1.2500/10 b4 down.

Click here to enlarge chart

Weekly Technical Outlook on USD/CHF

Update time: 17/05/2010 00:11 GMT

USD/CHF - 1.1350..Euro's resumption of its MT downtrend Friday helped dlr to penetrate this month's 2010 high of 1.1245, price climbed to 1.1336 in NY n then rose to 1.1356 in Asian trading, suggesting the erratic uptrend fm 0.9910 (Nov 09') wud push price to 1.4424/25 soon, being 100% measurement of 0.9910-1.0 899 measured fm 1.0435 as well as 61.8% proj. of intermediate rise fm 1.0435 to 1.1245 measured fm 1.0924.

Looking at the daily chart, the early rally abv 1.0899 (Feb 24 high) sig- nals aforesaid rise fm 0.9910 has resumed, upside targets are pointing at 1.1424 , then 1.1657 (1.236 times extension of 0.9910 to 1.0899 fm 1.0435), the rising daily indicators add credence to this bullish view, however, chf's strength on crosses esp. vs eur shud prevent strg gain beyond there th is week.

Today, intra-day dlr's broad-based rally (except vs yen) suggests the pair shud ratchet higher twd 1.1386 (61.8% r of 1.2298-0.9910), as the hourly oscilla tors readings wud be in o/bot territory on such move, reckon 1.1424/25 wud hold on 1st testing. Only below 1.1245 confirms temp. top n risks 1.1190/95 b4 up.

Monday, May 3, 2010

May 03 , 2010

Hai Traders ....

Here is some forecast from Ace Trader for your reference ...

Market Review - 30/04/2010 22:14GMT

Euro rises on hopes of Greek aid package announcement

The euro extended its previous day's advance against the dollar on Friday on expectation that debt-strapped Greece might reach an agreement on its budget cuts and would receive a potential $159 billion in financial assistance.

The single currency traded sideways in Asian session after Thursday's rebound to 1.3279, renewed buying at 1.3225 lifted price and the pair quickly climbed above 1.3279 at European opening. Intra-day buying gathered momentum partly on short-covering, euro subsequently rallied to as high as 1.3343 in New York before dipping briefly to 1.3255 but price rebounded on news EU finance ministers were summoned to attend a special meeting on Sunday, market speculated details of an aid package for Greece will be announced this weekend.

Versus the Japan ese yen, the greenback moved narrowly in Asia initially but then rallied to 94.59 in European afternoon after triggering stops above 94.35 and 94.45 together with active cross selling in yen. However, the pair pared all early gains later and ended the day down 0.1% from the previous close after a government report showed the U.S. economy grew at a slightly slower-than-expected pace in the first quarter. Earlier in Asian mid-day, Bank of Japan announced it had kept its overnight call rate unchanged at 0.10%. The statement of BOJ also indicated its policy board instructed staff to examine steps to support private banks on fund supplies, this would leave open the possibility that the BOJ may take steps to further bring down TIBOR, an interest rate banks use to set lending rates on corporate loans.

The British pound extended its previous day's short-covering rally as short-term speculators bought sterling after latest election poll results showed the opposition Conservat ive party had a lead after Thursday's 3rd and final televised election debate between the 3 main parties, consensus showed Tories' David Cameron put on the best performance over the Liberal Democrats' Nick Clegg and Labour's Gordon Brown. Cable rose to 1.5366 in Australia before retreating in tandem with euro to 1.5316 in Asia but renewed buying at European opening pushed price to an intra-day high of 1.5390, however, when buying fizzled out, sterling retreated sharply in New York trading to 1.5253 as short-term speculators squared their long positions ahead of a 3 day long weekend.

On the economic front, U.S. Q1 GDP rose by 3.2% (economists' forecast was 3.4%) whilst Q1 PCE price index increased by 1.5% versus the expectation of 1.6%. University of Michigan Survey's of Consumers' final April consumer sentiment fell to 72.2 (versus forecast of 71.0) from 73.6 in the March final reading. However, Chicago PMI rose in April to 63.8 (versus consensus 60.0 and 58.8 in Mar ch), which is the highest since April 2005. The eurozone March unemployment was 10.0% as widely expected whilst the April inflation estimated at 1.5% y/y versus 1.4% in March.

In other news, Switzerland’s central bank President Philipp Hildebrand stated the central bank would counter any 'excessive' appreciation of the franc against the euro, citing the debt woes across the EU zone prompted investors to shift their money into the Swiss franc.

Economic data to be released next week include: Financial markets in Japan and U.K. will be closed on Monday. Australia House price index, Swiss PMI, Germany Manufacturing PMI, EU Manufacturing PMI , U.S. PCE index, Personal income and ISM manufacturing are out on Monday, Australia RBA rate decision, Germany Retail sales, U.K. Manufacturing PMI, EU PPI , U.S. Durable goods, Pending home sales and Consumer confidence on Tuesday, U.K. N'wide Consumer Confidence, Germany Services PMI , EU Services PMI, U.K. PMI constr uction and U.S. ISM non-manufacturing on Wednesday. New Zealand Unemployment, Australia Retail sales, Australia Trade balance , Swiss CPI , U.K. Services PMI , Germany Factory orders, EU ECB rate decision, U.S. Jobless claims, Productivity, Canada Ivey PMI and Building permits on Thursday. Swiss Jobless rate,Retail sales, Retail sales, Germany Industrial production, Canada Unemployment rate, U.S. Non-farm payrolls and Unemployment rate on Friday.

Weekly Technical Outlook on EUR/USD

Update time: 02/05/2010 23:51 GMT

EUR/USD - 1.3323.. Despite resumption of MT downtrend fm 1.5145 (Nov 09') to a fresh one-year low of 1.3114 last Wed. following downgrades of debt ratings of Portugal, Greece n Spain by S&P, euro managed to ratchet higher to 1.3343 as news of coordinated financial aid package by EU & IMF prompted short-covering.

As the low at 1.3114 was accompanied by bullish converging signals on the hourly oscillators, subsequent rise abv the hourly signal line by the macd sug- gests a temporary low is made n choppy consolidation is seen with upside bias, however, reckon 1.3471 (61.8% r of 1.3692-1.3114) wud limit present rebound n bring strg retreat but below nr term good sup area at 1.3184-93 needed to signal downtrend has resumed n yield 1.3076 (adjust this lvl if euro moves abv 1.3365). Looking ahead, only abv 1.3692 wud 'violate' the series of lower lows n lower highs n confirm low has been formed.

Intra-day, euro has eased after initial rise to 1.3365 in Australia after announcement by EU & IMF to offer aid package to Greece, below 1.3295 needed to signal upmove fm 1.3114 has ended, 1.3256, then later twd 1.3205/10.

Click here to enlarge chart

Weekly Technical Outlook on USD/CHF

Update time: 03/05/2010 00:15 GMT

USD/CHF - 1.0787.. Despite resuming its MT upmove fm 0.9910 (Nov 09') to a 2010 high of 1.0925 on the back of euro's decent to a fresh one-year low of 1.3114 last Wed., profit-taking knocked dlr to as low as 1.0748 in Friday's NY session, price extended nr term decline to 1.0732 in early Australian trading.

Looking at the daily chart, as long as 1.0680 holds, being 50% r of the intermediate rise fm 1.0435 to 1.0925, outlook remains mildly bullish for afore- said upmove fm 0.9910 to bring re-test of 1.0925, a firm breach of 1.0860/69 res wud add credence to this view n yield further headway twd daily chart objective at 1.1026 (Jun 09') later this week. On the downside, below sup at 1.0700 wud confirm top is in place n risk stronger correction twd 1.0537, being a 'minimum' 38.2% r of the entire rise fm 0.9910.

Intra-day, as dlr has rebounded after initial euro-led weakness to 1.0732 in Australia n upside bias remains for gain to 1.0812/15, break wud signal pull- back fm 1.0925 has ended n yield further headway twd 1.0869. Only below 1.0732 defers bullishness n risks weakness to 1.0700 b4 prospect of another strg bounce.