FOREX SYGNALS SYSTEM
Thursday, May 31, 2007
EUR/USD
The dollar advanced a little Vs the Eur on yesterday and the daily low has been set at 1.3406, not breaking the key support at 1.3410 yet. Support is currently noticed at 1.3410 backed by 1.3380 and 1.3350. Resistance emerges at 1.3440 followed by 1.3460, 1.3500 and 1.3520. Daily sentiment remains bearish, hourly momentum being slightly bullish at the time of this writing. The pair is closer and closer to the 1.33 area and it doesn't give any signs, yet, which may point our attention towards a potential Euro recovery. There are many important economic events during the upcoming trading sessions this week and we expect the pair to break the range of 1.3406-1.3520. If the dollar will resume its rise during the next hours, we will probably assist to a breakout which will accelerate the Euro decline towards the 1.3380 mark where an important fibonacci retracement is seen. Current quote is 1.3433 @ 06:04 GMT
Asian Market Update:
The dollar held near a seven-week high against the euro on Thursday as investors awaited several upcoming U.S. data that could further cool expectations for the Federal Reserve to trim interest rates later in the year. Revised U.S. data on first-quarter growth later in the session precedes several key indicators on Friday, including the May payrolls report and a snapshot of manufacturing activity that will show whether the economy is picking up.
The dollar has clawed back from a record low hit against the euro in April and a 26-year low against the pound as worries about the economy's health have eased, reducing speculation of lower rates that would erode the U.S. currency's yield appeal. Traders said that with many market players still holding hefty positions favouring the euro and sterling, the dollar may have more room to rebound if the upcoming data proves to be upbeat.
The euro was steady near $1.3430 after falling to $1.3406 the previous day, its weakest since mid-April. A break of $1.34 would likely trigger a deeper pull-back in the euro, traders said.
The dollar slipped to 121.51 yen from near 121.60 yen in late New York trade but was still near the 3-1/2-month high of 121.89 yen struck last week. The single European currency also dipped against the yen to 163.20 yen from 163.40 yen, holding near the all-time peak of 164.02 yen hit last week.
Minutes from the Fed's May meeting released on Wednesday showed that policymakers felt inflation was their main worry and that growth should recover as the year drags on. The Fed has held rates steady for nearly a year at 5.25 percent even as investors had expected the housing market
troubles to lead to a rate cut, and with the European Central Bank and Bank of England are seen raising rates further.
The yen gave up brief gains made on Wednesday after a 6.5 percent plunge in the Shanghai stock market stoked worries that market players would reverse carry trades funded in the low-yielding yen if the sell off reverberated to other markets around the world.
Technicals:
EURUSD
Prices are expected to remain steady above the 1.3405 support. However, the underlying tone is weak with a later break looked for. Resistance is up to 1.3460.
GBPUSD
Prices are steady ahead of important economic data. Support is at 1.9730 and resistance at 1.9828
USDJPY
Choppy price action remains capped beneath the 121,85 barrier, a break is not looked for. Some downside drifting is expected with the 121.30 low to attract.
EURJPY
Intraday price action remains choppy with downside pressure expected to increase. Support is at 162.95 with a break opening 162.45. Resistance is at 163.45 with a break exposing 163.70.
AUDUSD
Prices have reached the 0.8236 high of 24 May but the run is expected to be difficult to extend. Support is at 0.8210 with a break to steady above the 0.8175. Resistance is at 0.8270.
The dollar has clawed back from a record low hit against the euro in April and a 26-year low against the pound as worries about the economy's health have eased, reducing speculation of lower rates that would erode the U.S. currency's yield appeal. Traders said that with many market players still holding hefty positions favouring the euro and sterling, the dollar may have more room to rebound if the upcoming data proves to be upbeat.
The euro was steady near $1.3430 after falling to $1.3406 the previous day, its weakest since mid-April. A break of $1.34 would likely trigger a deeper pull-back in the euro, traders said.
The dollar slipped to 121.51 yen from near 121.60 yen in late New York trade but was still near the 3-1/2-month high of 121.89 yen struck last week. The single European currency also dipped against the yen to 163.20 yen from 163.40 yen, holding near the all-time peak of 164.02 yen hit last week.
Minutes from the Fed's May meeting released on Wednesday showed that policymakers felt inflation was their main worry and that growth should recover as the year drags on. The Fed has held rates steady for nearly a year at 5.25 percent even as investors had expected the housing market
troubles to lead to a rate cut, and with the European Central Bank and Bank of England are seen raising rates further.
The yen gave up brief gains made on Wednesday after a 6.5 percent plunge in the Shanghai stock market stoked worries that market players would reverse carry trades funded in the low-yielding yen if the sell off reverberated to other markets around the world.
Technicals:
EURUSD
Prices are expected to remain steady above the 1.3405 support. However, the underlying tone is weak with a later break looked for. Resistance is up to 1.3460.
GBPUSD
Prices are steady ahead of important economic data. Support is at 1.9730 and resistance at 1.9828
USDJPY
Choppy price action remains capped beneath the 121,85 barrier, a break is not looked for. Some downside drifting is expected with the 121.30 low to attract.
EURJPY
Intraday price action remains choppy with downside pressure expected to increase. Support is at 162.95 with a break opening 162.45. Resistance is at 163.45 with a break exposing 163.70.
AUDUSD
Prices have reached the 0.8236 high of 24 May but the run is expected to be difficult to extend. Support is at 0.8210 with a break to steady above the 0.8175. Resistance is at 0.8270.
Friday, May 11, 2007
Asian Market Update:
The Yen was steady in Asian trading holding onto its gains against major currencies as investors trimmed short positions on caution that a fall in US stocks could filter into Asian equity markets and prompt more risk-cutting.
In New York the Dow Jones industrial average fell over 1% yesterday, falling along with other major stock indexes on disappointing retail sales and a widening trade deficit that prompted worries about the economy.
Tokyo’s benchmark Nikkei share fell 0.8% in early Friday trade.
Traders said falls in the Euro and Sterling against the Dollar after key central bank meetings this week also prompted investors to sell those currencies against the Yen.
The head of a forex desk at a Japanese bank said investors will watch how Asian stocks perform on Friday to decide whether to cut positions in carry trade, in which low-yielding currencies like the Yen are used to fund investment in high-yielding currencies and assets.
The Euro is trading at 161.60 Yen after falling to 161.28 Yen earlier. The single currency is trading at $1.3480 after falling to a one-month low around $1.3465.
The Dollar is trading around 119.90 Yen after hitting 119.71 Yen earlier in the session. It marked a 2-1/2 month high of 120.54 Yen in the previous session.
US Treasury debt prices rose on Thursday after data showed sluggish sales by retailers and a trade deficit hinting the economy grew at a slower than estimated pace in the first quarter.
The stock sell-off also contributed to Treasuries’ rise, although gains were capped by a surprisingly weak 30-year bond auction.
The benchmark 10-year note traded 7/32 higher in price for a yield of 4.64% compared with 4.67% late on Wednesday.
Brent crude held above $65 a barrel on Friday as renewed supply distribution from Africa compounded worries about inadequate gasoline stock levels in the US, just a week ahead of peak summer driving season.
London Brent crude for the June contract was up 1 cent at $65.80 a barrel. It rose 59 cents on Thursday after a fire shut down a Congolese oilfield and more violence in Nigeria raised supply risks there.
US light crude fell 6 cents to $61.75.
Technicals:
EURUSD
Downside pressure remains highlighted with next support at 1.3464 and then 1.3428. Resistance at 1.3514 and 1.3545.
GBPUSD
Bearish with next support level at 1.9795 and then 1.9725. Resistance at 1.9840 and 1.9875.
USDJPY
Prices are moving lower with 119.64 in sight. A break there will lead to 119.55. Resistance at 120.10.
EURJPY
Bearish with next support at 161.24 and then 161.00. Resistance at 161.95.
AUDUSD
Bearish with next support at 0.8260 and then 0.8239. Resistance at 0.8300.
In New York the Dow Jones industrial average fell over 1% yesterday, falling along with other major stock indexes on disappointing retail sales and a widening trade deficit that prompted worries about the economy.
Tokyo’s benchmark Nikkei share fell 0.8% in early Friday trade.
Traders said falls in the Euro and Sterling against the Dollar after key central bank meetings this week also prompted investors to sell those currencies against the Yen.
The head of a forex desk at a Japanese bank said investors will watch how Asian stocks perform on Friday to decide whether to cut positions in carry trade, in which low-yielding currencies like the Yen are used to fund investment in high-yielding currencies and assets.
The Euro is trading at 161.60 Yen after falling to 161.28 Yen earlier. The single currency is trading at $1.3480 after falling to a one-month low around $1.3465.
The Dollar is trading around 119.90 Yen after hitting 119.71 Yen earlier in the session. It marked a 2-1/2 month high of 120.54 Yen in the previous session.
US Treasury debt prices rose on Thursday after data showed sluggish sales by retailers and a trade deficit hinting the economy grew at a slower than estimated pace in the first quarter.
The stock sell-off also contributed to Treasuries’ rise, although gains were capped by a surprisingly weak 30-year bond auction.
The benchmark 10-year note traded 7/32 higher in price for a yield of 4.64% compared with 4.67% late on Wednesday.
Brent crude held above $65 a barrel on Friday as renewed supply distribution from Africa compounded worries about inadequate gasoline stock levels in the US, just a week ahead of peak summer driving season.
London Brent crude for the June contract was up 1 cent at $65.80 a barrel. It rose 59 cents on Thursday after a fire shut down a Congolese oilfield and more violence in Nigeria raised supply risks there.
US light crude fell 6 cents to $61.75.
Technicals:
EURUSD
Downside pressure remains highlighted with next support at 1.3464 and then 1.3428. Resistance at 1.3514 and 1.3545.
GBPUSD
Bearish with next support level at 1.9795 and then 1.9725. Resistance at 1.9840 and 1.9875.
USDJPY
Prices are moving lower with 119.64 in sight. A break there will lead to 119.55. Resistance at 120.10.
EURJPY
Bearish with next support at 161.24 and then 161.00. Resistance at 161.95.
AUDUSD
Bearish with next support at 0.8260 and then 0.8239. Resistance at 0.8300.
Thursday, May 10, 2007
European Market Update:
Published: 5/9/2007
The dollar was a touch weaker against the euro and yen on Wednesday as investors braced for policy announcements from central banks in the United States, Britain and the euro zone.
The Fed is expected to keep rates at 5.25 percent Wednesday afternoon but investors will look to the policy statement and whether officials address signs of slower U.S. growth to gauge the chances of rate cuts later this year.
The Bank of England, meanwhile, is seen raising rates to 5.5 percent on Thursday, while the European Central Bank is expected to keep rates on hold at 3.75 percent but signal a rate hike of its own in June.
Midmorning, the euro was trading at $1.3558 , up 0.1 percent from late Tuesday. The dollar was 0.25 percent weaker at 119.70 yen.
Analysts said investors were generally taking risk off the table ahead of the announcements, a strategy that was providing a modest boost for the yen.
Investors often borrow the low-yielding yen to fund purchases of higher-yielding assets, a strategy known as the carry trade.
Sterling was up 0.4 percent at $1.9970, boosted by speculation the BoE could surprise markets by hiking rates by a half percentage point to 5.75 percent, instead of a quarter point rise to 5.5 percent.
First up, though, will be the Fed. At its last meeting in March, the Fed scrubbed the statement of a reference to possible future rate hikes and acknowledged that economic data had been mixed but stressed that price pressure remained the
biggest policy concern.
A spate of soft economic data has since helped push the dollar to record lows against the euro and 26-year lows against sterling, and a statement that dwells on signs of slower growth would likely renew a dollar decline.
The euro zone and UK economies are still showing signs of growth at a time when the U.S. economy is slowing, increasing the relative appeal of the euro and sterling over the dollar.
The dollar was a touch weaker against the euro and yen on Wednesday as investors braced for policy announcements from central banks in the United States, Britain and the euro zone.
The Fed is expected to keep rates at 5.25 percent Wednesday afternoon but investors will look to the policy statement and whether officials address signs of slower U.S. growth to gauge the chances of rate cuts later this year.
The Bank of England, meanwhile, is seen raising rates to 5.5 percent on Thursday, while the European Central Bank is expected to keep rates on hold at 3.75 percent but signal a rate hike of its own in June.
Midmorning, the euro was trading at $1.3558 , up 0.1 percent from late Tuesday. The dollar was 0.25 percent weaker at 119.70 yen.
Analysts said investors were generally taking risk off the table ahead of the announcements, a strategy that was providing a modest boost for the yen.
Investors often borrow the low-yielding yen to fund purchases of higher-yielding assets, a strategy known as the carry trade.
Sterling was up 0.4 percent at $1.9970, boosted by speculation the BoE could surprise markets by hiking rates by a half percentage point to 5.75 percent, instead of a quarter point rise to 5.5 percent.
First up, though, will be the Fed. At its last meeting in March, the Fed scrubbed the statement of a reference to possible future rate hikes and acknowledged that economic data had been mixed but stressed that price pressure remained the
biggest policy concern.
A spate of soft economic data has since helped push the dollar to record lows against the euro and 26-year lows against sterling, and a statement that dwells on signs of slower growth would likely renew a dollar decline.
The euro zone and UK economies are still showing signs of growth at a time when the U.S. economy is slowing, increasing the relative appeal of the euro and sterling over the dollar.
Wednesday, May 9, 2007
Asian Market Update:
The Dollar was steady in Asian trading against major currencies as market players looked to see whether the Federal Reserve would signal concern about weaker US growth that could be a precursor to an interest rate cut.
The Fed is widely expected to keep rates unchanged at 5.25% and many analysts believe the central bank will emphasize in its post-meeting statement that worries about inflation pressures outweigh the economy’s housing slowdown.
The Euro fell broadly yesterday as investors took profits on the single currency’s gains before a European Central Bank policy meeting tomorrow.
The ECB is widely expected to suggest that a rate increase to 3.75% from the current 3.5% is coming in June, while the Bank of England is seen as almost certain to lift rates to 5.5% from 5.25%.
US Treasuries were steady yesterday with traders cautious of taking a position ahead of the Federal Reserve’s policy meeting later today.
Benchmark 10-year notes traded 1/32 lower in price for a yield of 4.64% from 4.63% late on Monday.
Any move by the central bank to back away from a tightening bias in its policy statement would likely boost bond prices, especially impacting short-dated debt.
Technicals:
EURUSD
The support at 1.3514 and resistance at 1.3575 seem hard to break. In case of a break of 1.3514 prices will move towards 1.3479.
GBPUSD
If 1.9880/65 stays intact, the next level to look out for would be 1.9924 and then 1.9950. A break of 1.9865 will lead to 1.9840.
USDJPY
Bearish with next support at 119.53 and 119.08. Resistance at 120.18 and 120.45.
EURJPY
162.60 seems to be a barrier. Next support at 161.85, 161.65 and 161.24.
AUDUSD
Bullish with next resistance at 0.8330/38. Support at 0.8261.
FX Overview
The Fed is widely expected to keep rates unchanged at 5.25% and many analysts believe the central bank will emphasize in its post-meeting statement that worries about inflation pressures outweigh the economy’s housing slowdown.
The Euro fell broadly yesterday as investors took profits on the single currency’s gains before a European Central Bank policy meeting tomorrow.
The ECB is widely expected to suggest that a rate increase to 3.75% from the current 3.5% is coming in June, while the Bank of England is seen as almost certain to lift rates to 5.5% from 5.25%.
US Treasuries were steady yesterday with traders cautious of taking a position ahead of the Federal Reserve’s policy meeting later today.
Benchmark 10-year notes traded 1/32 lower in price for a yield of 4.64% from 4.63% late on Monday.
Any move by the central bank to back away from a tightening bias in its policy statement would likely boost bond prices, especially impacting short-dated debt.
Technicals:
EURUSD
The support at 1.3514 and resistance at 1.3575 seem hard to break. In case of a break of 1.3514 prices will move towards 1.3479.
GBPUSD
If 1.9880/65 stays intact, the next level to look out for would be 1.9924 and then 1.9950. A break of 1.9865 will lead to 1.9840.
USDJPY
Bearish with next support at 119.53 and 119.08. Resistance at 120.18 and 120.45.
EURJPY
162.60 seems to be a barrier. Next support at 161.85, 161.65 and 161.24.
AUDUSD
Bullish with next resistance at 0.8330/38. Support at 0.8261.
FX Overview
US Fed faces tough balancing act
The dollar will be in a much stronger position to sustain a correction if there is a sustained improvement in growth data. The US currency will face tough barriers to sustained gains unless there is evidence of significant deterioration in Euro-zone growth.
The US currency again tested record lows early in May before staging a corrective recovery after the US economic data was generally stronger than expected. The Euro found good support below 1.3550 against the US dollar as US currency sentiment remained fragile, but has struggled above the 1.36 level. The Euro was subjected to a correction against the yen which also restrained it against the dollar.
The US ISM index for the manufacturing sector recovered to 54.7 in April from 50.9 the previous month with the orders, employment and prices indices all rising strongly. There was a similar result for the services-sector index with an increase to 56.0 for April from 52.4.
The ADP report recoded a subdued 64,000 increase in employment for April. Jobless claims, however, fell to 305,000 in the latest week, a four-month low. There was an 88,000 increase in non-farm payrolls for April while unemployment rose to 4.5% from 4.4%.
As far as inflation is concerned, the core PCE inflation index was unchanged in March with the annual rate dropping to 2.1% from 2.4%. The first-quarter increase in unit labour costs was held to 0.6%, but the increase for the fourth quarter of 2006 was revised up to 6.2% from 3.8%. Hourly earnings rose 0.2% in April in the monthly payroll data.
The US currency again tested record lows early in May before staging a corrective recovery after the US economic data was generally stronger than expected. The Euro found good support below 1.3550 against the US dollar as US currency sentiment remained fragile, but has struggled above the 1.36 level. The Euro was subjected to a correction against the yen which also restrained it against the dollar.
The US ISM index for the manufacturing sector recovered to 54.7 in April from 50.9 the previous month with the orders, employment and prices indices all rising strongly. There was a similar result for the services-sector index with an increase to 56.0 for April from 52.4.
The ADP report recoded a subdued 64,000 increase in employment for April. Jobless claims, however, fell to 305,000 in the latest week, a four-month low. There was an 88,000 increase in non-farm payrolls for April while unemployment rose to 4.5% from 4.4%.
As far as inflation is concerned, the core PCE inflation index was unchanged in March with the annual rate dropping to 2.1% from 2.4%. The first-quarter increase in unit labour costs was held to 0.6%, but the increase for the fourth quarter of 2006 was revised up to 6.2% from 3.8%. Hourly earnings rose 0.2% in April in the monthly payroll data.
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