Asia Session – December 24, 2009 12:44 AM
December 24, 2009
We just witnessed another day in Asia where the trading was light and thus, this wrap up will be light as well. Japanese manufacturing data came in better than expected but had no impact on the comatose trading today. With most markets in holiday mode the majors played it tight to the chest in small ranges and sluggish moves. Most majors gained on the US dollar for the day, but with most of the London session on holiday the moves were mostly last minute position squaring. The table is clear of any data until later in the US when durable goods and unemployment are due up, both top tier data releases. Although most of the world will be out tomorrow for the Christmas Holiday, be aware Japan will still be open for business. Happy Holidays….. Full text »
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12/27/2009 – USD recovery may reverse into year-end
December 23, 2009
* USD recovery may reverse into year-end
* CAD strength still in infancy stage
* Treasury supply could send USD/JPY higher still
* Key data and events to watch next week
Note: This week’s report has been finalized earlier than normal (late Wednesday afternoon) due to holiday scheduling. As such, readers should be aware that we do not have the benefit of knowing the weekly closing price levels, and any price points we cite should be interpreted in light of those closing levels.
The USD has seen its correction extend further this past week, but critical resistance levels (EUR/USD support levels) we highlighted in last week’s issue appear to be exerting some influence. The 1.4250 level has held as support on a daily closing basis thus far, and the more significant 1.4170/90 area remains untouched. In USD/JPY, the pair finally broke above the Ichimoku cloud, but has since stalled just below the key 92.00/50 area, with rumored large supply (selling interest) at 92.00. Should USD/JPY break above the 92.00/50 resistance zone, we would expect gains to continue toward the 94.50/95.00 area in coming weeks.Full text »
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U.S. Dollar and the Stock Market
December 23, 2009
Is greenback ready to rise in forex trading in tandem with equities?
For quite some time, the U.S. dollar in currency trading has been moving opposite to the stock market. However, with some looking toward economic recovery — and improved fundamentals — it appears that there is some expectation that the greenback in forex trading will begin moving with stocks.
GFT’s Kathy Lien reports in FX360 on the possibility of seeing tandem moves between the dollar and U.S. equities:
There is an expectation that the U.S. dollar and stocks will rise in tandem on the belief that investors in both markets are banking on an accelerating U.S. recovery. It also means that the dollar is keying off U.S. fundamentals and not risk appetite as stronger U.S. data bolsters the confidence and attractiveness of dollar denominated assets.
Even though major currencies are rangebound for now, it will be interesting to see if this holds going forward, and whether or not economic recovery ends up boosting the dollar in currency trading.
See Also
- Looking for Forex Trading Trends
Currency trading on the FX market
Rangebound Forex Trading Characterizes Overnight on the Currency Market
December 23, 2009
Currency trading on the FX market
Overnight, the forex trading was relatively quiet. Small changes were made in most major currencies pairs, but, really, just about everything was rangebound on the FX market.
The euro made very small gains against the U.S. dollar, while the pound lost ground to the greenback. The moves were tiny, though, and little significance has been attached to them.
Indeed, as the end of this holiday week approaches, trading is thin and irregular. There is some optimism that economic recovery will be approaching, and that is pressuring gold prices to a certain degree and expected to help the U.S. dollar. But for now, small movement is all that is expected.
See Also
- Looking for Trends in Forex Trading
Currency trading on the FX market
London Session – December 23, 2009 5:47 AM
December 23, 2009
Price activity may not be anything to write home about this morning but there are still some interesting themes playing out in the fx market. EUR/CHF has dropped lower to the 1.4930 area today as traders continue to play chicken with the SNB. Signs that the Swiss economy continues to improve has strengthened the notion that the SNB will allow the CHF to appreciate vs the EUR. However, no one has the confidence to expect that the SNB will step away from the market completely suggesting it is likely that the market will run out of nerve ahead of the EUR/CHF1.4900 level. Full text »
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Asia Session – December 23, 2009 1:25 AM
December 23, 2009
Today in Asia it became clear that holiday trading has taken hold of the markets. With Japan out for the Emperor’s Birthday holiday, the moves were slight with the exception of the early moves in the Kiwi Dollar. New Zealand GDP was released at the crack of dawn in Asia, coming in at 0.2%, which fell short of 0.4% expectations. The NZD/USD proceeded to nosedive from 0.7020 levels to hit lows near 0.6970 in a stop driven move. AUD/NZD popped from 1.2465 to just over 1.2545 on the data. Near the day’s end in Asia, the Kiwi dollar remains at its lows. Full text »
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New York Session – December 22, 2009 5:58 PM
December 22, 2009
The US dollar continued its upward climb for all intents and purposes in NY trading. Economic data was mixed but the more contemporary reports ruled out. The final cut of 3Q US GDP showed a surprise downward revision to 2.2% from 2.8%, but existing home sales came in much better at 6.54m vs 6.25m and elicited a nice rebound in risk. Once again, the buck rallied in tandem with stocks and we’ll have to reserve judgment as to whether this is indeed a shift in the correlation that dominated all 2009 (higher stocks, lower dollar) or whether it is a low-liquidity year-end phenomenon. Full text »
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Looking for the Santa Rally in Forex Trading
December 22, 2009
Currency trading with the U.S. dollar
One of the more interesting trends in stock investing is known as the Santa Rally. This is when the U.S. stock market rallies during the week between Christmas and New Year. But does it hold up for the U.S. dollar?
GFT’s Kathy Lien decided to take a look at the Santa Rally, and see whether the U.S. dollar saw such a trend. As you can see, it really doesn’t hold for the U.S. dollar. But maybe this year will be different, since the economic climate has created a number of breaks with tradition, and the euro looks ready to break lower. Here is what Lien points out in FX360:
We decided to take this same idea and apply it to the currency market to see how the Santa Claus rally affects the U.S. dollar. Based upon our calculations and as indicated by the chart below, the dollar weakened against the euro 8 out of the last 10 years between Christmas Eve and the first two trading days in January. Against the Japanese Yen, it weakened 7 out of the last 10 years. Statistically these numbers are significant and suggest that the dollar could give back its gains over the next 2 weeks as the stronger performance in equities fuel risk appetite. However we all know that this year is unlike any other and so there is a good chance that this pattern may not be repeated. For the first time since the Lehman Brother’s bankruptcy, the strength in the dollar and the strength in stocks could be a sign that the dollar is finally trading on fundamentals and not risk appetite.
See Also
- Trading Trends: U.S. Dollar
Looking for trends in forex trading
Is The Euro Ready to Break Lower in Forex Trading?
December 22, 2009
Currency trading with the euro
The euro may be ready to break lower in forex trading on the currency market. While the euro still remains up against the U.S. dollar, the fact remains that the 16-nation currency is posting lower highs this session.
Euro appears to be paring recent gains, and currency trading strategy should take this into account. Things are likely to remain in train, since the recent revised GDP for the U.S. economy‘s third quarter wasn’t awful.
It will be interesting to see how things go moving forward. The sterling continues to struggle, and the euro is making gains against the British currency. Even the dollar is gaining against the sterling in forex trading.
See Also
- Euro in Forex Trading
Currency trading on the FX market
London Session – December 22, 2009 6:14 AM
December 22, 2009
Cable tested the water below the USD1.600 level this morning. Sterling’s plunge followed the disappointing final UK GDP number though the economic outlook had been undermined by a gloomy economic outlook from the CBI and by yesterday’s news from S&P on UK banks. A host of comments from the BoE’s Posen early in the session had little sterling impact. However, Posen’s prediction that the UK is more likely to undershoot than exceed its GDP forecast could be taken as sterling negative.
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