forex commentary

Daily Forex Commentary 2.26.09

Posted in commodities, euro, fast brokers, forex, forex commentary, futures trading, usd on February 26th, 2009 by Fast Brokers News – Comments Off

EUR/USD Daily Commentary for 2.26.09

The Euro depreciated against the Dollar on Thursday, relinquishing all of its weekly gains.  The selloff in the EUR/USD came in response to weakening equities amidst discouraging housing data.  Investors will get another dose of economic data on Thursday as the U.S. releases more housing, unemployment, and durable goods numbers.  EUR/USD will be paying close attention to what ECB President Trichet has to say.  It is likely he will forewarn of an upcoming monetary shock considering the EU and Eastern European economies are weakening further.  Even though Germany’s Unemployment Change was lower than expected Thursday, the EU money supply was a full a percentage point lower than expecting.  Therefore, a substantial rate cut at the ECB’s next meeting seems imminent.  This detracts from the attractiveness of the long rate payoff of the EUR/USD.  Even though the EUR/USD has stabilized above February lows, the currency pair still faces multiple downtrend lines to the upside.  If the S&P futures should fall below 2008 lows, then the EUR/USD will likely follow suit.  Consequently, we maintain our negative outlook on the EUR/USD.  Fundamentally, we find support of 1.2758 with 2nd tier and bottom-end supports resting at 1.2690 and 1.1.2655, respectively.  To the topside, we see resistances of 1.2806, 1.2836, 1.2883, 1.2946.  The 1.30 area will continue to serve as a psychological barrier.  The EUR/USD is currently exchanging at 1.2770.

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GBP/USD Daily Commentary for 2.26.09

The Cable sold off sharply on Wednesday, following their positive correlation with U.S. equities.  On a positive note, the Cable still has found support on the 12/12-12/20 trading base, and is currently strengthening from our 1st tier downtrend line.  Whether the base holds will likely depend on the upcoming economic data coming from the U.S. today.  If the data is worse than expected, the S&P futures could decline, sinking the Cable with them.  However, we foresee a retest of our 2nd tier downtrend line in the near term with U.S. equities pointing positive in the pre-market.  If the Cable should fall below the 12/12-12/20 trading base, we could see a heightened selloff with a possible retest of January lows.  Britain’s Nationwide HPI showed a greater decline than analyst expectations this morning.  Therefore, Britain’s house prices are falling in lockstep with that of the U.S.  Since the global recession began with the crumbling housing market, these data points prove very negative.  Meanwhile, BOE Governor King will address the public today and investors will see if he hints at any future monetary policy.  Fundamentally, our 1.4328 and 1.4392 supports turn resistance while we hold our resistances of 1.4505 and 1.4569.  To the downside, we maintain our supports of 1.4242 and 1.4142 with fresh supports of 1.4069 and 1.3973.  The 1.45 level still serves as a psychological barrier to the upside with 1.40 serving as a cushion to the downside.  The GBP/USD is currently exchanging at 1.4269.

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USD/JPY Daily Commentary for 2.26.09

The USD/JPY continues to surge higher and is presently approaching our previous top-end resistance of 98.25.  The strength comes as investors eagerly await the flood of economy data from both Japan and the U.S.  Investors will want to see if Japan’s economy continues to fare worse than America’s in order to determine whether to send the USD/JPY above the highly psychological 100 level.  The Carry Trade has unwound, and investors are now pricing the currency based on comparing economic fundamentals between the two nations.  While it’s easy to get carried away and be highly optimistic on the USD/JPY, we must remind ourselves of how far the USD/JPY has fallen throughout the economic crisis.  Hence, there are multiple webs of resistance which can easily wrap up the USD/JPY and send it tumbling lower.  As we mentioned previously, the psychological 100 level will prove crucial.  We added two more downtrend lines to gauge key walls the currency pair must face.  If the S&P futures should rise and Japanese economic data plummet, we could see the USD/JPY continue its amazing run.  In the meantime, the USD/JPY will try to stab above 2/17 lows.  Fundamentally, we maintain our resistance of 98.25 with fresh resistances of 99.05, 99.64, and 100.30.  To the downside, we find supports of 97.66, 97.22, 96.56, and 95.96.  The USD/JPY is currently exchanging at 97.92.

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Daily Forex Commentary 2.24.09

Posted in forex, forex commentary, gbp, japanese yen, usd on February 24th, 2009 by Fast Brokers News – Comments Off

USD/JPY Daily Commentary for 2.24.09

The USD/JPY is continuing its incredible surge to the upside as the Yen loses its luster as a safe haven.  The Carry Trade has obviously unwound, and investors are beginning to judge the currency based on the comparative health of the two economies.  With Japan being the poorest performing economy in the world at present, the U.S. Dollar is experiencing a rapid appreciation against the Yen.  Paradoxically, the depreciation of the Yen provides a much needed relief for Japanese manufacturers and exporters.  Since these companies compose the heart of Japan’s economy, the rise of the USD/JPY greatly aides Japan.  Therefore, if the U.S. economy continues to destruct while the USD/JPY rises, we may see an improvement in Japan and a subsequent stabilization of the currency pair.  Considering the breakout in the USD/JPY, we maintain our positive stance until the currency pair reaches another stabilization point.  Fundamentally, we find resistances of 96.71, 97.22, 97.66, and 98.25.  To the downside, we see supports of 95.95, 95.43, 95.02, and 94.56.  The USD/JPY is currently exchanging at 96.48.

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EUR/USD Daily Commentary for 2.24.09

The EUR/USD sold off on Monday, exercising its positive correlation with U.S. equities.  However, the currency pair found comfort in our previous 1.2669 bottom-end support.  The EU released a plethora of economic data on Tuesday.  While the German Ifo Business Climate was worse than expected, the EU’s Current Account came in strong.  However, it remains to be seen if the better than expected Current Account balance was more a result of rising exports or declining imports.  While rising exports could indicate an upturn in global demand and consumption, dwindling imports would forewarn of an increasingly cash-strapped consumer.  Since Germany is the largest economy of the EU, the fact business managers are increasingly pessimistic is a discouraging sign.  Therefore, a substantial rate cut at the ECB’s next meeting seems imminent.  This detracts from the attractiveness of the long rate payoff of the EUR/USD.  Even though the EUR/USD stabilized above February lows, the currency pair still faces multiple downtrend lines to the upside.  Furthermore, if the S&P futures should fall below 2008 lows, then the EUR/USD will likely follow suit.  Consequently, we maintain our negative outlook on the EUR/USD.  Fundamentally, we maintain our supports of 1.2725 and 1.2669 with fresh bottom-end support of 1.2596.  To the topside, our 1.2725 support turns resistance, with additional resistances of 1.2806, 1.2846, and 1.2883.  The 1.30 serves as a key psychological barrier.  The EUR/USD is currently exchanging at 1.2720.

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GBP/USD Daily Commentary for 2.24.09

The Cable failed to reach our 3rd tier resistance on Monday as crashing U.S. equities dragged the currency pair lower.  The GBP/USD is presently dropping below our 2nd tier downtrend line despite better than expected housing and consumer spending data.  The downturn of the Cable while ignoring positive data shows the currency pair is expressing concern over the condition of the U.S. economy.  Since the British and American economies are so intertwined, particularly in the financial industry, further deterioration in America should ultimately bleed into Britain.  Therefore, all eyes will be on U.S. equities to see if the S&P’s 2008 lows can hold.  However, considering our negative outlook for the S&P futures, we maintain our negative stance on the GBP/USD.  On a positive note, the Cable still has the 12/12-12/20 base to fall back on to the downside.  Fundamentally, we find resistances of 1.4505, 1.4569, 1.4660, and 1.4742.  To the downside, we see supports of 1.4392, 1.4328, 1.4242, and 1.4142.  The psychological 1.40 area is turning into a cushion while 1.45 serves as a strong barrier to the upside once again.  The GBP/USD is currently exchanging at 1.4402.

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