Thread: Forexpros Daily Analysis - 23/11/2009

Forexpros Daily Analysis Nov 23, 2009

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Fundamental Insight:

Traders await tomorrow's release of the Ifo Business Climate Index by the German Institute for Economic Research.
The index is concluded from survey of about 7,000 businesses, and determines the business sentiment and conditions in the Euro-zone.
A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.
Analysts expect tomorrow's reading to stand at 92.50, and increase from last month's 91.90.

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Euro Dollar:

The Euro dropped and broke the specified support in Friday’s report 1.4877, successfully reaching the first suggested target 1.4820. But it stayed above the most important support 1.4786. Short-term support is provided by the rising trendline from Friday’s low on intraday charts, and if broken we will get another chance to test 1.4786 after Friday’s attempt that stopped at 1.4800. The above mentioned support will stay the most important, especially with the rising line from August 17th low getting close to this level. Short-term resistance is 1.4952, and if it is overtaken, then the technical outlook will have the strength to reach 1.5018 first, and if this is broke we have the right to expect 1.5082 for the first time this year.

Support:
• 1.4881: the rising trendline from Friday’s low on intraday charts.
• 1.4820: November 13th low.
• 1.4786: Fibonacci 61.8% for the rising move from 1.4625, the most important support for the medium-term.

Resistance:
• 1.4952: the falling trendline from 1.5047.
• 1.5018: Nov 9th & 10th high.
• 1.5082: previous resistance from 2008.

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USDJPY:

Dollar-Yen moved in a very tight range on Friday, without any technically significant moves! The down movement has slowed down, drawing our attention to what could be a wedge pattern, which is a pattern that could limit the current drop to the bottom of this pattern, or a support that is close to it, and could push price higher on the short-term. If this scenario turns out to be right, we will rise and break short-term resistance 89.05 where there is the moving average SMA100, and we will witness a rising move targeting the falling trendline from October 26th top, and the upper limit of the above mentioned pattern at 89.71 first, and if broken we could see a jump to 90.73. On the other hand, if the short-term support at 88.72 is broken, we will target 88.13 which is the last significant support before the last 15 years low 87.10

Support:
• 88.72: Nov 17th low.
• 88.13: Oct 13th low.
• 87.10: Jan 12th low.

Resistance:
• 89.05: the moving average SMA100.
• 89.71: the top of the supposed wedge formation.
• 90.73: intraday top.

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Forex Trading Analysis, by Forexpros

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Disclaimer
Trading Futures and Options on Futures and Cash Forex transactions involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

Economists bullish -- but not about jobs
Despite recent fears of another recession, survey finds top economists predicting stronger growth in 2010. But job gains aren't likely until the spring.
NEW YORK (CNNMoney.com) -- Despite rising fears of the U.S. falling into another recession, a survey of top economists found them more optimistic about growth in the fourth quarter of this year and throughout 2010. But job seekers will have to wait a little longer for employers to start hiring again.

According to the November survey by the National Association of Business Economics, 48 top forecasters now expect the economy to grow at a 3% annual rate during the last three months of this year, up from their prediction of 2.4% growth in October.

The economists also raised their forecast for growth during every quarter of 2010. They now expect a 3.2% rise in economic activity over the course of the next four quarters, up from their previous estimate of 3%.

But the outlook isn't as good for the record 31 million Americans unable to find full-time jobs.

The economists pushed back their expectations for when U.S. payrolls will start to grow again to the second quarter of 2010. They previously had predicted a gain of 12,000 jobs a month in the first quarter.

The nation's unemployment rate hit 10.2% in October -- higher than expected. The continued problems in the labor market, combined with disappointing reports about housing and retail sales recently, have raised concerns about a so-called "double dip" recession.
Despite this, the majority of experts surveyed by NABE said they felt the economy was on track and did not additional help from the government.

Asked if there should be another round of economic stimulus, only 15% said that would be appropriate, while 40% said they would leave the stimulus package approved early this year unchanged.

The other 45% said they would like to see a cut in the stimulus money already approved but not yet spent. Along those lines, 55% of the economists said they are extremely concerned about the amount of federal debt over the next five years

Still, the economists surveyed were slightly more optimistic about a recovery in housing and the likelihood that consumer spending would increase. They were also more bullish about the stock market, forecasting that the S&P 500 will reach 1,199 at the end of 2010, a gain of about 10% from Friday's closing level.

Forexpros Daily Analysis Nov 24, 2009


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Fundamental Insight

The US Census Bureau will release the Monthly New Home Sales Report tomorrow (Nov 25th).

The report helps analyze the strength of the US housing market, and the economy as a whole, by measuring the annualized number of new residential buildings that were sold during the previous month.
The new home sales report is quite volatile and subject to huge revisions.
A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.
Analysts expect last month’s measure of 402.00K to rise to 408.00K.

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Euro Dollar

Although it broke the resistance at 1.4952, The Euro was unable to surpass 1.50. The sharp drop that followed made 1.4875 the most important support for the short-term. This support, could reverse this drop, and initiate a rising move. But if it is broken, the drop coming from 1.4997 will continue, targeting 1.4820 first, and then the most important support for the time being at 1.4786. On the other hand, short-term resistance is 1.4951, and if it is overtaken, then the technical outlook will have the strength to reach 1.5018 first, and if this is broke we have the right to expect 1.5082 for the first time this year.

Support:
• 1.4875: Fibonacci 61.8% for the short-term.
• 1.4820: November 13th low.
• 1.4786: Fibonacci 61.8% for the rising move from 1.4625, the most important support for the medium-term.

Resistance:
• 1.4951: short-term resistance.
• 1.5018: Nov 9th & 10th high.
• 1.5082: previous resistance from 2008.

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USD/JPY

Dollar-Yen moved in a tight range again, but it dropped to 88.54 this morning which is the same level that stopped yesterday's drop! The down movement has slowed down, drawing our attention to what could be a wedge pattern, which is a pattern that could limit the current drop to the bottom of this pattern, or a support that is close to it, and could push price higher on the short-term. If this scenario turns out to be right, we will rise and break short-term resistance 88.97 where there is the moving average SMA100, and we will witness a rising move targeting the falling trendline from October 26th top, and the upper limit of the above mentioned pattern at 89.71 first, and if broken we could see a jump to 90.73. On the other hand, if the short-term support at 88.72 is broken, we will target 88.13 which is the last significant support before the last 15 years low 87.10

Support:
• 88.56: short-term support.
• 88.13: Oct 13th low.
• 87.10: Jan 12th low.

Resistance:
• 88.97: the moving average SMA100.
• 89.71: the top of the supposed wedge formation.
• 90.73: intraday top.

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Forex Trading Analysis by Forexpros.

Forexpros brings you technical analysis on major currency pairs including USD/CHF.

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Disclaimer
Trading Futures and Options on Futures and Cash Forex transactions involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.
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Dollar hits 6-week low against yen
The yen strengthens on dour U.S. economic reports as investors seek safe-haven currencies.
NEW YORK (Reuters) -- The dollar fell to a six-week low against the yen Tuesday after a mixed bag of U.S. data kept worries about an economic recovery alive, enhancing the safe-haven appeal of the Japanese currency.

The greenback, however, held steady against the euro as declines in the U.S. stock market dented risk appetite and investors were reluctant to place big bets before the Thanksgiving holiday on Thursday.

The U.S. economy grew more slowly than first thought in the third quarter, the Commerce Department said. In another report from the Conference Board, a private research group, the consumer confidence index edged higher, but still pointed to weak sentiment about the labor market.

Kathy Lien, director of research at GFT Forex in New York, said the mixed economic reports this morning have "instilled a negative tone across financial markets."

But overall, "the markets are very hesitant to take the dollar to any fresh lows, particularly against the euro and the other key currencies," she added.

In afternoon trading, the dollar fell 0.5% to 88.48 yen, after hitting a session low at 88.36, the lowest in about six weeks, according to Reuters data.

The euro rose 0.1% to $1.4975 in choppy trading, but fell 0.5% to 132.49 yen.

In its second estimate of third-quarter gross domestic product, the Commerce Department said on Tuesday that the economy expanded at an annual rate of 2.8%, rather than the 3.5% pace it estimated last month.

"This (GDP) number is slightly negative for risk appetite because of the downgrade in the personal consumption number," said Jacob Oubina, senior currency strategist at Forex.com in Bedminster, New Jersey.

Separately, the Conference Board's index of consumer attitudes increased slightly to to 49.5 in November from 48.7 in October, while the Standard & Poor's/Case-Shiller index of home prices in 20 metropolitan areas rose 0.3% in September.

The dollar showed little reaction to the minutes from the Federal Reserve's November meeting.

Fed officials are increasingly confident in a durable recovery for the U.S. economy, even though they do not see employment picking up soon.

The diminished appetite for risk also pressured higher-yielding currencies. The Australian dollar fell 0.5% to US$0.9191, while the New Zealand dollar slid 1.1% to US$0.7247.

Oil falls 2% on GDP
Prices fall near $76 after weaker reading on U.S. economic activity and ahead of inventory reports.
NEW YORK (Reuters) -- Oil prices fell 2% Tuesday after data showed the U.S. economy grew at a slower-than-expected pace last quarter and ahead of weekly U.S. inventory data expected to show crude stocks rose.

A slower recovery from the worst U.S. recession in seven decades may hurt demand for crude. The world's largest economy grew at an annual rate of 2.8% last quarter, the Commerce Department said, revising downward its earlier estimate of 3.5% growth.

Consumer spending, which typically accounts for more than two-thirds of U.S. economic activity, also lagged behind estimates last month, the Commerce Department said.

"We don't like the GDP figures, and we're worried about a potential build in crude stocks," said Tim Evans, oil analyst with Citi Futures Perspective in New York. "Consumer spending is weaker than expected -- and that's where we hoped to see a pickup in petroleum demand."

U.S. crude for January delivery fell $1.54, or 2%, to settle at $76.02 a barrel.

Data may show that U.S. crude oil and fuel stocks rose last week, as Gulf of Mexico production recovered after a tropical storm shut platforms in the previous week.

Crude stocks likely rose 1.2 million barrels in the week to Nov. 20, while stocks of gasoline likely rose slightly and distillates fell slightly, according to the average analyst estimate in a Reuters poll.

Inventory data from the private industry group American Petroleum Institute was due at 4:30 p.m. EST Tuesday, followed by official data from the Department of Energy early Wednesday.

Oil prices have risen from below $33 a barrel last December, although they are still around 48% lower than a record above $147 reached in July 2008.

Prices have risen amid rallying stock markets and a weaker U.S. dollar, which makes crude cheaper for holders of foreign currency. The S&P 500 index rose into positive territory in late trade after falling earlier Tuesday. The dollar index was slightly stronger.

Global oil demand growth will outpace new oil supplies in 2010, eroding stockpiles of crude that have risen during the economic crisis, according to a Reuters survey Tuesday.

The poll of 10 top oil-tracking analysts and organizations forecast oil demand to rise by 1.3 million barrels per day next year.

U.S. consumer confidence rose in November, after an unexpected drop in October, industry group The Conference Board said Tuesday.

But analysts remain worried about the pace of fuel demand recovery.

U.S. retail gasoline demand fell 1.6% last week versus the previous week, and it was down 1.4% from the same week of 2008, according to a report from MasterCard SpendingPulse on Tuesday.

OPEC, the exporters' group that pumps one in three barrels of oil worldwide, must be careful not to collapse oil prices by oversupplying the market, Nigerian Oil Minister Rilwanu Lukman told reporters in Washington on Tuesday.

Members of the Organization of the Petroleum Exporting Countries next meet to discuss output policy in Angola on Dec. 22. The group has not changed its production targets this year.