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[FXInstructor]

Fri, 15th of May, 2009

By Setyo Wibowo (analyst@fxinstructor.com)

EURUSD Outlook
The EURUSD attempted to push lower yesterday, bottomed at 1.3525 but further bearish momentum was rejected as the pair whipsawed to the upside, hit the top at 1.3663 and closed at 1.3639. I think we are now in no trading zone area. Key support level is seen at 1.3525 and around trendline support area on hourly chart below. Break below that area could trigger further bearish momentum towards 1.3400. Initial resistance at 1.3736. CCI just cross the 100 line down on hourly chart suggesting a potential downside pressure.



EURUSD Daily Supports and Resistances:

S1= 1.3555
S2= 1.3471
S3= 1.3417
R1= 1.3693
R2= 1.3747
R3= 1.3831


GBPUSD Outlook
After corrected lower on Wednesday, yesterday the GBPUSD had a moderate bullish momentum. On hourly chart below we have “head and shoulders” formation which is technically considered as potential bearish reversal with neckline around 1.5050 area. Break below that area should trigger further bearish scenario. However the bias remains neutral in nearest term and I think we are now in no trading zone. Immediate resistance is seen at 1.5370. CCI about to cross the 100 line down on hourly chart suggesting a potential downside pressure.



GBPUSD Daily Supports and Resistances:

S1= 1.5114
S2= 1.4993
S3= 1.4927
R1= 1.5301
R2= 1.5367
R3= 1.5488

USDJPY Outlook
USDJPY was corrected higher yesterday. I think this is a normal correction movement after significant bearish since May 08. The bias is neutral in nearest term. Key resistance level is seen at 96.60/70. As long as the pair stay below that area we might see further bearish pressure, but break above that area would lead us into no trading zone. CCI in oversold area and heading up on daily chart suggesting a potential upside pressure.



USDJPY Daily Supports and Resistances:

S1= 95.30
S2= 94.84
S3= 94.57
R1= 96.03
R2= 96.30
R3= 96.76



USDCHF Outlook
The USDCHF made another boring market, still trapped in the rectangle area of 1.1104 – 1.1004. The bias remains neutral in nearest term. CCI just cross the -100 line up on hourly chart suggesting a potential upside pressure.



USDCHF Daily Supports and Resistances:

S1= 1.0404
S2= 1.0668
S3= 1.0311
R1= 1.0497
R2= 1.0854
R3= 1.0590

Have a great day!

[pinalli]

USD

The Dollar rallied late Wednesday after US retail sales showed a .4% decline against what was widely anticipated to be a flat outcome. The Dollar had been down most of the session after a report in the Financial Times said that the US could lose its AAA credit rating. However, renewed fears about the state of the economy were sparked by the sales data, pushing safe-haven flows back into the dollar and lifting the USD out of a four month low against a basket of currencies and a seven week slide against the Euro.

At 11:00PM GMT, the Dollar was up .4% to the Euro to 1.3592, down 1.2% to the Japanese Yen to 95.25, up .8% to 1.5152 versus the Sterling, up 1.16% against the Canadian Dollar to 1.1762 and up 1.75% to the Australian Dollar to .7515.

GBP

The Bank of England announced that they expect a slower recovery than originally predicted. The BOE revealed that inflation remains below the target level and that suggests that the loose monetary policy of the BOE will remain in effect for now. The figures showed a 4.5% decrease in economic activity for the second quarter and predict an early 2010 recovery. UK interest rates remain at a record low .5% and the British government recently expanded their asset purchasing program to 125 Billion Pounds, however Mervyn King, the BOE Governor said that the recovery will be slow and uncertain, highlighting this by declaring "We may get a recovery that will prove to be sustained and then again we might not."

At 11:20PM GMT, the Pound Sterling was down .4% to the Euro to .897, down .7% to the Swiss Franc to 1.6769, down 2.1% to the Japanese Yen to 144.33, up .2% to the Canadian Dollar to 1.78 and up .9% to the Australian Dollar to 2.0145.

[pinalli]

USD

The US Dollar fell on Friday across the board to its lowest level of 2009 after concerns emerged over the US’s “AAA” sovereign credit rating from both Moody’s and Standard and Poor’s. The drop in the Dollar, which was the largest in nearly two months, came after S&P announced they were reviewing the sovereign credit rating of England due to soaring fiscal deficits. With the US running a debt of 1.5 Trillion and a deficit of nearly 12 Trillion, investors feared the US might be next.

At the close of daily fx market, the US Dollar was down .77% to the Euro to 1.3996, down .6% versus the British Pound to 1.5934, down 1.5% against the Canadian Dollar to 1.1193, down .8% to the Swiss Franc to 1.0851, down .57% to the Australian Dollar to .7825, and down 1.51% to the New Zealand Dollar to .62.

JPY

Japanese Finance Minister Kaoru Yosana said on Friday that intervention by the Central Bank into the currency markets was not a consideration at this time. There has been much fear as of late that one of the schemes the BOJ would use to shore up the ailing currency would be to purchase Yen en masse, however minister Yosana’s remarks soothed those fears and helped the Yen rebound a bit although it was down to most of the majors.

At Friday’s close, the Yen was trading up .4% to the US Dollar to 94.76 after hitting 93.86 earlier in the session. The Yen fell 1% to the British Pound to 151.01 and .95% to the Australian Dollar to 74.17. The Yen was also down 1.15% to the Euro to 132.67.

GBP

The news of the S&P downgrade did more to hurt the Dollar than it did the Pound which rebounded on Friday following the announcement. The Pound hit is highest mark against the USD since November of 2008 climbing above 1.59 and was on target for a 4.7% increase for the week – its best showing since February.

EUR

Eurogroup Chairman, Jean-Claude Juncker said in an Interview on Friday that a continued rise in the value of the Euro would only serve to hurt economic recovery in the Eurozone. Mr. Juncker also made a point to tell the Reuters reporter that a recovery is still quite a while a way. Despite this, the Euro had a mixed session but was up to most of the Majors.
Also, on Saturday European Central Bank President Jean-Claude Trichet said that allowing more inflation by injecting money into the economy and driving up national debts will not help the economy recover any quicker. The comments came during a speech in Rome to an audience at the G30 bankers and academics and were taken as a direct swipe to the US and British governments who have made it a policy to inflate the economy in order to stimulate growth.

** The US and British markets will be closed today, Monday, the 25th of May, for national holidays.

[pinalli]

Finexo Online Update: USD

Consumer confidence numbers were released on Tuesday after a long weekend in which the US trading community was digesting a possible rating decrease. The data came in strong rising above expectations and hitting levels unseen in eight months. This news coupled with a successful auction of 2 year treasury notes helped propel the Dollar versus the Yen and Euro and ease inflation fears that has plagued the Dollar since late last week. Despite poor housing numbers and rising unemployment, investors demonstrated that the US Dollar was still a factor in the market – if only for Tuesday.

At 11:40PM GMT, the Dollar was up .25% to the Euro to 1.3977, up .17% to the Yen to 94.97, down .1% to the Pound to 1.5922 after having been up nearly 1% earlier in the day, and down .6% to the Canadian Dollar to 1.1172.

Online Forex Views: EUR

More German data was released today that showed the largest European economy had shrunk at a pace that has been unseen since the 1990 reunification of Germany. Adding oil to the fire for the Euro was a comment by one of the German financial regulators who stated that the toxic assets held by German banks were a ticking time bomb, his exact words were in debate after reports quoted him as saying "it could blow up like a grenade." The drama drove the Euro to a lower session even against the higher yielding currencies as risk appetite improved with the news from the United States.

Behind the Data in Daily FX market

The Federal Statistics Office in Germany announced that GDP had fallen 3.8% in the first 3 months of 2009 and 6.7% year over year from first quarter 2008 to first quarter 2009. The data showed that decreases in exports and foreign investment had been the biggest factor in the sharp decreases

At 11:50PM GMT, the Euro was down .1% to the Japanese Yen to 132.78, down .33% to the British Pound to .8779, down .9% to the Canadian Dollar to 1.5622, down .8% to the Australian Dollar to 1.7772 and down .1% to the Swiss Franc to 1.5162.

[pinalli]

Volatile Trading in the Euro after ECB leaves rates Unchanged but Foresees Deeper Recession

EUR

The Euro rose on Thursday during a volatile session following the European Central Bank's decision to leave the core interest rate unchanged at a record low of 1.0 percent. Despite the ECB's announcement that they expect a much deeper recession in the European Union than previously predicted, ECB president Jean-Claude Trichet did not move on a more aggressive interest rate cut. The ECB also restated their intentions to purchase an additional 60 billion Euros in government and secured corporate bonds.

At 11:30PM GMT, the Euro was up .855 to the Japanese Yen, up 1% to the British Pound at .8755, up .2% to the US Dollar to 1.4176 and up .2% to the Swiss Franc to 1.5161. The Euro fell and .15% to the Australian Dollar to 1.7654.

CAD

The Canadian was down broadly in early Thursday trading after the Bank of Canada kept their core interest rates unchanged as expected, however they acknowledged that there was concern about the recent rise in the Canadian currency and how it would affect the overall economy. The Canadian dollar rebounded late in the session after no comments came from the Central Bank that they were looking at a quantitative easing plan such as buying government debt by printing money, leading traders to believe that the CCB does not feel a need for further stimulus measures.

At 11:40PM GMT, the Canadian Dollar was up 1.3% to the US Dollar to 1.0964, up 1.1% to the Euro to 1.5553, up 2.1% to the British Pound to 1.7748 and up just over 1% to the Australian Dollar to .8803

Source: * Finexo | Forex Online

[pinalli]

USD

The Dollar dropped across the board on Tuesday, after Russian President Dmitry Medvedev expressed a need for a global reserve currency other than the greenback. Reduced demand for the Dollar as a safe haven currency also figured into Tuesday’s decline, after data showed a rebound in new housing projects and a surprising rise in producer prices.

However, it was Russia's comments about the Dollar that dominated the market, just one day after the country's finance minister; Alexi Kudrin, backed the Dollar's role as the world's reserve currency.

At 10:34 PM GMT, the Dollar was down 1.4% to the Japanese Yen to 96.47, down .66% to the British Pound to 1.6427, up .06% to the Canadian Dollar to 1.1341, down .15% to the Australian Dollar to .7958, and down .25% to the New Zealand Dollar to .6326.

EUR

The Euro gained on Tuesday, after a German think-tank, Z.E.W., said that their economic sentiment index rose sharply to 44.8 in June from 31.1 in May. The jump exceeded expectations which were set at 35.0 and suggested that there is good market optimism for a recovery later on this year.

The Euro was also helped by data that showed Euro zone inflation at zero and that pay wages had increased in the first quarter of 2009 at the same rate that it did in 2008. Despite heavy unemployment rates, the two releases gave rise to hope that an end is near for the recession.

At 10:50 PM GMT, the Euro was trading up .23% to the Dollar to 1.3834, down 1.23% to the Japanese Yen to 133.39, down .31% to the British Pound to .8429, up .38% to the Canadian Dollar to 1.5703, up .4% to the Australian Dollar to 1.7428, and up .22% to the Swiss Franc to 1.5061.

[pinalli]

Dollar makes gains after Fed meeting, Euro falls on ECB intervention

USD

The US Federal Reserve left interest rates unchanged on Wednesday, a move that was widely anticipated, and removed the low-inflation warning that they had put on in their meeting in March.

This latter news sent the Dollar higher against a basket of currencies, amid hopes that the Fed has the US monetary system balanced and under control. The Dollar was also helped by the Swiss National Bank, which tried to stem the rise of the Franc by buying Dollar and Euros as well.

At 11:30 PM GMT, the Dollar was up 1.02% to the Euro to 1.3932, up .39% to the Japanese Yen to 95.57, up .17% to the British Pound to 1.624, up .5% to the Canadian Dollar to 1.1549, down .3% to the Australian Dollar to .7963, up .006% to the Kiwi to .6394 and up over 3% to the Swiss Franc to 1.0982.

EUR

The Euro fell broadly on Wednesday, after The European Central Bank injected over 400 Billion Euros into money markets on Wednesday, its biggest monetary injection ever. The enormous loan immediately sent bank-to-bank borrowing costs to record lows.

The ECB hopes the money will give banks enough financial securityת enabling them to make more long-term corporate and consumer loans. The amount of money put into play beat expectations of 300 Billion Euros, and was the largest ECB allotment on record, beating the 349 Billion Euros push in December of 2007.

The move sent the LIBOR rates down 2.6 basis points to 1.185% and sent the Euro spiralling down, as Forex online traders realized how dire the true state of European Banks were.

At 11:45 PM GMT, the Euro was trading down .65% to the Yen to 133.17, down .83% to the Pound to .8483, down .5% to the Canadian Dollar to 1.611, down 1.4% to the Australian Dollar to 1.7489 and up 1.9% to the Swiss Franc to 1.53.

Chart Analysis: EURJPY

The EUR/JPY reversed strongly Wednesday, after treading slightly lower. The technical’s here are still bearish, though after the sequence above 135.00 failed to hold. And signals from the interest rate market suggest that EUR/JPY should be trading much lower.

The Federal Open Market Committee meeting ended with strong support in the bond market and stocks easing lower, and we saw the EUR/JPY selling on investor impulse once again. We need to see a close through the rising trend line, in order to confirm the bearish scenario.

[pinalli]

USD

China has reportedly announced that it wants an open and public debate on a new global reserve currency at the G8 summit next week. This news caused the Dollar to fall mostly across the board and helped it slide to a new three week low against the Euro.

Not helping the Dollar on Wednesday was a data release of private sector jobs which lost roughly 470,000 jobs. This preamble to the ever anticipated non-farms payroll report, which comes out later on today, stunned economists as it came in higher than expected and set the stage for a disappointing non-farm payroll figure.

At 11:30 PM GMT, the Dollar was down 1.1% to the Canadian Dollar to 1.1496, down .21% to the Australian Dollar to .8078, down .2% to the British Pound to 1.6498, down 1.08% to the Swiss Franc to 1.0745 and up .3% to the Yen to 96.64.

EUR

The Euro spent most of the day up broadly on Wednesday, after positive manufacturing data helped drive hope that the slow and long journey back to stability was beginning in the Euro Zone - Good news for the Euro in the Forex online markets out there.

The news came 1 day ahead of the European Central Bank’s policy meeting, in which it is expected that they will leave rates unchanged and disclose more information about their asset buying program which, has been shroud in secrecy for months.

At 11:40 PM GMT, the Euro was up .82% to the US Dollar to 1.4146, up 1.14% to the Japanese Yen to 136.73, up .7% to the British Pound to .8582, up .56% to the Australian Dollar to 1.7482, down .2% to the Swiss Franc to 1.5201 and down .3% to the Canadian Dollar to 1.6257.

TIPS FOR TODAY

The US non-farm payroll report is due out today and it is widely expected that the US will shed 363,000 jobs in June, however it is likely that this number will be higher based on the ADP (Automated Data Processing) estimates that the US economy cut 473,000 jobs.

The ADP report is an informal report released by the largest payroll processing service and usually has a good insight into the employment status.

Keep in mind when trading that the US markets are closed on Friday in advance of the US Independence Day celebrations. One other thing to consider is the global political situation in advance of the July 4th US holiday, with North Korea threatening, Al Qaeda hinting and Honduras about to explode.

[pinalli]

G8 focus on debt brings safe-haven bids to the Yen

YEN

The yen surged to a five-month high against the dollar on Wednesday, as fading investor optimism weighed on risky assets and boosted haven demand for the Japanese currency. The yen’s haven credentials were underlined by data showing the fifth consecutive improvement in Japan’s current account surplus in May.

By days end in New York (11:00 PM GMT), the Yen was up 1.7% against the Dollar to 93.11 which is the highest level since February. The Yen also rose 2 % versus the Euro to 129.17 and up 2.3% to the British Pound to 151.66.

USD

The Dollar’s gained slightly on Wednesday, as the meeting of G8 leaders in Italy got under way. One bright spot for the Dollar was the departure of the Chinese President, Hu Jintao, to China and so a debate on the reserve status of the Dollar did not happen.

Germany however, seemed to take a swipe at the USD, saying the focus of recovery efforts should not be spending based but on the contrary, debt reduction.

Although the Dollar and Yen have found safe-haven support from the uncertainty in the global markets, it has been balanced by fears that the Dollar’s status as a reserve currency might be discussed at the summit. As a result, the Dollar stagnated then gave way for the Yen to become the safe-haven choice for Forex online investors.

At 11:15 PM GMT, the Dollar was up .35% to the Euro to 1.3874, up .2% to the British Pound to 1.6047, up .1% to the Canadian Dollar to 1.1675, up 1.3% to the Australian Dollar to .7783 and up .1% to the Swiss Franc to 1.0905.

Chart: EUR/SEK

The EUR/SEK flies above the 11.00 handle on the latest trouble in the Baltics. The pair has a recent history of breaking to new highs, but then not being able to hold them. So first we watch the 10.9675 level for support and then the 11.15 area as the next important resistance. The structural support remains the key 200-day moving average.