Thursday, January 7, 2010

The Advisor Weblog

The Advisor Weblog

Majors’ hourly perspective for U.S. session

Posted: 07 Jan 2010 06:35 AM PST

BOE’s Live coverage about to start

Posted: 07 Jan 2010 03:44 AM PST

I will be away from the blog as I will be covering Live the BOE’s data, ad Fxstreet.com home page.

 See you there, or back here in about an hour!

 

Best pair to trade now: USD/CHF

Posted: 07 Jan 2010 03:41 AM PST

More bad data in Europe

Posted: 07 Jan 2010 03:07 AM PST

German Factory Orders were revisited to the upside previous month, form -2.1% to -1.9%, yet las month increase was just of about 0.2% against 1.6% expected. Euro remains under pressure and at a daily low of 1.4335. Pound is also falling pretty fast, testing 1.5910 levels.

Gold and Oil

Posted: 07 Jan 2010 02:13 AM PST

Commodities keep falling a bit more strongly now, with oil losing almost $ 1.00, while gold is $ 10.00 down testing the $ 1130/oz area after reaching a $ 1140 high yesterday. Euro and Pound are losing ground and as expected USD/JPY keeps rising approaching to the 93.00 area. Seems volume is back after holidays, and traders are ready to move.

EUR/USD still in range and looking bearish

Posted: 07 Jan 2010 02:07 AM PST

EUR/USD continues falling pushed lower by falling gold prices and quite negative Retail Sales in the euro zone, that printed a -1.2% against a 0.00% past month, and following German data. 4 hours charts had turned also bearish thus we remain ranging around the flat 20 SMA, meaning still no real strength either way; however, indicators are giving some shy bearish signals suggesting some downside continuation. Immediate support lies at the 1.4320 area, ahead of 1.4270 level, and 1.4220, past month low. Under that, I can see a quite strong zone around 1.4180, that should cap the downside, at least today, as is the 50% retracement of the monthly rally 1.60/1.23. Resistances remain at 1.4400, 1.4440 and 1.4485 area, this week high. Above it strong level to watch is 1.4515.

Gbp/Usd ahead of BOE

Posted: 07 Jan 2010 01:07 AM PST

Ahead of BOE’s meeting, market is waiting for no changes in current monetary policy:  the Bank increased  the amount of QE applied from 175 billion to the current 200 billion (after the United Kingdom economy continued to shrink in the third quarter) and it will be next month, when  they must decide whether to extend the asset purchase plan, under which they will have completed 200 billion pounds worth of purchases; the benchmark interest rate is also expected to remain at a record low of 0.5%.

So in general we can say that the central bank is expected to announce the end of QE next month, before inflation is triggered in the U.K., yet the report will also reveal the outlook for economic growth and inflation; so if it first one is poor and inflation remain subdue, more QE could take place? Will market be betting on that? probably.

However, Pound is now falling big, testing the 1.5920 level. We could be well seeing the famous sell the rumor, by the fact. I was thinking yesterday that, if dollar remains weak and commodities strong, and BOE’s make no movement, Pound could rise after the news. At current levels seems more unlikely, but not impossible.

Anyway and from a technical point of view, 4 hours charts show the pair remains bearish and with room enough to extend the fall. We have a pretty static support zone around 1.5910, so any confirmation under it, will likely send the pair to test next strong level, around 1.5860, followed by the 1.5820/30 area; under it, 1.5770 is next zone to consider; to the upside, resistances lie at 1.5965, 1.6000, 1.6060 and then 1.6100 area.

 

 

Majors’ sentiment for today

Posted: 07 Jan 2010 12:02 AM PST

Here is majors’ sentiment for today:

Eur/Usd: Slightly Bearish

Gbp/Usd: Bearish

Usd/Chf: Slightly Bearish

Usd/Jpy: Bullish

Eur/Gbp: Bullish

Eur/Jpy:  Bullish

Gbp/Jpy: Slightly Bullish

Starting the day

Posted: 06 Jan 2010 11:42 PM PST

Hi everyone and welcome back! Asian opening bring some follow trough yo past American session risk appetite and dollar weakness, helped by an improvement in Australian Retail Sales and Trade Balance, that send AUD/USD  to test the 0.9270 area. As commented on the Asian update, Pound spike to the 1.6060 resistance area, yet was unable to follow trough, while EUR/USD retested the 1.4440 area yet also gave up. Both pairs gains had remained capped this week, probably waiting for today’s BOE decision, and better, tomorrow U.S. employment data.  I will comment about BOE’s perspective later here, and even cover it Live! at Fxstreet.com home page, as usual.

Anyway, as also commented here and in past Asian session Daily Wrap up Webinar, New Japanese Finance Minister is a weak Yen supporter, and an hour ago, USD/JPY jumped to the upside around 70 pips as Minister Kan holds first briefing in new post; Kan says he wants “the yen to weaken a bit further”. Pair is at the 92.60 area, correcting slightly the rally, yet seems we are ready to extend the upside there.

At the time being, both gold and oil retreated slightly from yesterday’s high, still holding weekly gains and close to highs. We must keep an eye on then.

Early news in Europe show German Retail Sales fell 1.1% m/m while previous month reading was revisited to the downside, printing 0.0%. No good news for Euro, that is testing the 1.4365 support zone. We have plenty of data today to watch yet market final reaction likely to come with BOE. Anyway here is the link for today’s calendar:

http://www.fxstreet.com/fundamental/economic-calendar/

Have a great day!
Posted by at 5:46 PM

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