Forex Daily Review: EUR/USD $1 Billion Option Strike

spontaneous’ spike holds a great secret within its Japanese candlestick. $1.0 billion dollar option strike was placed a 1.3050 for yesterday’s New York (NY) cut at 14:00 GMT. The holder of the the option was said to be a large US investment house that was blamed for the tight range in Euro-dollar until the NY cut. EUR/USD spiked

View the Original article

Read More

Forex Daily Review: Hurricane Sandy and EUR/USD

29 Oct 2012• Matti Williamson, FX and commodities analyst      The Euronext's New York Stock Exchange

Forex traders woke up to the news that hurricane Sandy forced the closure of the US stock market for Monday and possibly Tuesday according to recent reports. The hurricane could harm the employees' safety and the major exchanges. The NYSE Euronext's New York Stock Exchange and the Nasdaq announced that the US stock market will be closed for today's session although there is still the option of activating al lelectronic trading for the US markets. Wall street is expected to open but with limited manpower.

Hurricane Sandy Effects on FX Markets

Hurricane Sandy effects may concern investors as extensive damage will not assist the local economies to battle with the current global crisis.

View the Original article

Read More

Forex Daily Review: EUR/USD Gains on Precautionary Conditioned Credit Line (PCCL)

17 Oct 2012• Matti Williamson, FX and commodities analyst      Moody's Credits the ECB

Moody's Investors Services affirmed Spain's Baa3 credit rating with a negative outlook. Moody's confirmed Spanish sovereign losing capital market access has been materially reduced as the European Central Bank (ECB) was willing to purchase Spanish bonds to limit price volatility.

EUR/USD stretched its gains above 1.3100 as the market was expecting Moody's to downgrade the Kingdom of Spain's sovereign rating. Speculations that Spain is to request a bailout via Precautionary Conditioned Credit Line (PCCL) fuelled the rally to 1.3117 but it does appear the bulls' are losing momentum ahead of the key daily resistance at 1.3140. If the daily resistance holds we may witness the formation of a double-top reversal pattern.

EUR/USD Technical Analysis

View the Original article

Read More

Forex Daily Review: EU Summit Possible Effects on EUR/USD

18 Oct 2012• Matti Williamson, FX and commodities analyst      S&P Downgrades Ahead of the Summit

Today's EU Summit is expected to draw the market attention in hopes that Spain may finally request financial aid to deal with its growing debts and perhaps Torika will surprise and announce Greece's problems are being resolved at a steady pace. Let's first recap what the market has to digest aside the EU Summit in Brussels.

S&P credit rating agency downgraded Madrid and Barcelona after country downgrade. Cyprus also took a hit from the US rating agency, reasoning the country's creditworthiness has deteriorated significantly. Cyprus' credit rating was downgraded from BB to B:

"We consider that deterioration in the banking sector's domestic loan book has increased uncertainties about the final cost of Cyprus' banking crisis, and the implications of this for the government debt burden. We are therefore lowering our long-term sovereign credit rating on the Republic of Cyprus to B from BB."

Greece and China GDP

It is also important to highlight that the Greek Finance Minister said the market should not keep its hopes high on today's EU Summit as an emergency meeting is due at the end of the month about Greece. China GDP came in as expected, which does not contribute to the positive sentiment in global markets as the GDP did contract from 7.6% to 7.4%.

There are really no major headlines that can assist the current uptrend in EUR/USD. Comments from EU leaders can generate bullish spikes in Euro-dollar but I would expect it to be short-lived as profit-taking is likely to materialize once the market is disappointed.
EU Summit Full Schedule

Below is the full timetable for the EU Summit for 18/10/12 - 19/10/12:

EU Summit Schedule for Thursday:

14:15-14:45GMT Arrival of members of the European Council at the Justus Lipsius building
15:00-15:30GMT Exchange of views with the President of the European Parliament Tour-de-table before the meeting
15:45-1800GMT First working session
18:00-2000GMT Working dinner
End of meeting Van Rompuy & Barroso press conference

EU Summit Schedule for Friday

07:15-07:45GMT European Council members arrive Justus Lipsius building
08:00-11:00GMT Second working session
End of meeting Van Rompuy & Barroso press conference
Followed by Working lunch of Heads of State or Government of Eurozone
End of meeting Van Rompuy & Barroso press conference

 

Spain Bond Auction

Forex traders will focus on the upcoming debt auction from Spain. Off-the-run 3-year 4.00% 2016 Bono, 4.25% 2016 Bono and 10-year benchmark 5.85% 2022 Obligaciones will be issued for between

View the Original article

Read More

Forex Daily Review: EUR/USD Intraday Bearish Correction

15 Oct 2012• Matti Williamson, FX and commodities analyst      Spain Bailout Request, Not Before October 21st

Forex traders dismissed the strong trade balance data from China over the weekend and sold EUR/USD through the Asian session as Spain disappointed the market by refusing to ask for a financial bailout. It is possible that Spain will wait for October 21st regional elections before requesting financial aid from the EU. Market talk suggests Angela Merkel wishes to include Spanish bailout funds with Greece's next tranche at the same time in a 'huge' financial package. Focus this week will be on the US earnings report where 80 companies traded in S&P500 are expected to publish their reports. Citigorup and Charles Schwap Corp will kick-start the US earnings for S&P500 companies in today's session.

Euro-spiked higher at the time of this writing on EU Rehn comments.

According to the news, EU Rehn confirmed that more time for Greece is being considered. It is important to highlight the market speculations from last Friday which indicated that Greece may receive a 2-year extension to meet its fiscal goals, which may be officially confirmed in this week's EU economic summit.

EUR/USD Technical Trading Strategy

View the Original article

Read More

Forex Daily Review: GBP/AUD Skimmed the Target, EUR/USD is Observed

09 Oct 2012• Matti Williamson, FX and commodities analyst      EUR/CHF 'Mysterious' Gain

What may have left certain traders puzzled is EUR/CHF unexpected bullish spike, perhaps thought to be a minor FX intervention by the Swiss National Bank (SNB):

View the Original article

Read More

Forex Daily Review: EUR/USD Bullish Correction, When Will it Begin?

EUR/USD was gunned down by the bears as Bloomberg mistakenly posted the wrong yields for Spain 10-year benchmark, causing heavy selling in EUR/USD. The weakness continued into the US session despite Bloomberg notifying all its clients of the error. Euro-dollar neared its support at 1.2830, implying a bullish correction may be seen in today's session as mentioned in yesterday's market review (GBP/AUD analysis acquired its bearish target).

The economic calendar is relatively light for today's session but the center of attention will be the Spanish Prime Minister, Rajoy's meeting with French President Hollande in Paris. The G7 meeting tomorrow in Tokyo should also support the risk sentiment in global markets aside the strong US earnings data released in yesterday's session. Alcoa Q3 sales were $5.83 billion versus $5.54 billion (market expectations). Yum! also topped expectations and posted strong Q3 results, which favors a scenario where the market bulls sweep the markets through the European and US session.

The Deutsche Finanzagentur

European traders will focus on the German auction where the Deutsche Finanzagentur is expected to re-open its 5-year benchmark, 0.50% October 2017 for up to

View the Original article

Read More

Forex Daily Review: Don't be Fooled by EUR/USD Ambiguous Trend

Academy > Trading Basics > Seasoned Trader > Currency Insights > Special Insights for Traders > Trading Tips > Currency Pairs > Recommended Resources > 5 Insights

View the Original article

Read More

Forex Daily Review: Mind the Bearish Gap in EUR/USD

28 Sep 2012• Matti Williamson, FX and commodities analyst      Spain Budget For 2013 Summary

The market is in love with Spain's budget for 2013. New fiscal group will now monitor Spain's budget, ministerial spending will be lowered by 8.9% (approx) and spending will be reduced by EUR 40 billion. Tax revenues are expected to rise by 3.8% to EUR 175.2 billion as Spain is convinced it will meet its 6.3%/GDP debt target by 2012. Spain is expected to be in recession in 2013 but hopes the new spending cuts will ensure it may be the last recession the Spanish region will see.

Egan Jones Downgrade Spain

View the Original article

Read More

Forex Daily Review: EUR/USD Trend in the Fundamental Chaos

My target for AUD/USD was missed by the market but nevertheless a decent decline was noted. Unconfirmed speculations that the Chinese Securities Regulatory Commission (CSRC) will hold a press conference at 08:00am GMT with 'positive news.' This prevents the risk-aversion mode to completely engulf AUD pairs and crosses so weakness could resume after 08:00am GMT. If China doe surprise gains may reach the resistance at 1.0443. The price is expected to cap further gains, I would look for the downtrend to continue towards my predetermined target at 1.0295. To recap, there is a fair possibility the Reserve Bank of Australia (RBA) may cut its cash rate by 25bps in next week's monetary policy meeting.

EUR/USD

EUR/USD recovery will be put to the test around 12:00pm GMT when Spain will announce its preliminary budget report for 2013. So far Spain retail sales for August continue to plummet, posting -2.1% y/y. This is the 26th consecutive month of falls in the Spanish retail sales. EUR/USD did not appreciate the decline and reacted by dropping to 1.2884 at the time of this writing. The big fish however is due Friday when Spain finally releases its stress test results for the banking sector.

View the Original article

Read More

Forex Daily Review: The Netherlands 2012 Elections Effects on EUR/USD 1.2900

13 Sep 2012• Matti Williamson, FX and commodities analyst     

Following the 2012 Dutch elections, exit polls suggest that Mark Rutte's party (Party for Freedom and Democracy) is in the lead with 41 seats out of the 140-seats in Parliament. The victory however is limited as the left Labour Party, led by Diederik Samsom is expected to receive 40 seats. If that is the case it will be very difficult to build a coalition between the center-right and the center-left. This could actually weigh on the financial markets but the US Federal Open Market Committee (FOMC) announcement of a possible QE3 at 16:30 GMT with a press conference at 18:15 GMT could prevent deep losses across the board. EUR/USD is currently maintaining its gains above 1.2900. Traders should ask themselves for how long this may be in light of the Netherlands elections.

Fed QE3 or Empty Words?

As the market prepares for Ben Bernanke's press conference, the Wall Street Journal (WSJ) survey shows that 34 out of 47 analysts believe there will be QE3 today but the majority are skeptical whether it will actually have any benefits on the economy. The Fed in my opinion is likely to extend its low-rates pledge into 2015. If any QE3 is introduced, I will not rule out the possibility of any sterilization to the fresh funds, which may actually strengthen the US dollar rather than weaken the world's reserve currency.

SNB and Italy Bond Auction

At 07:30am GMT the Swiss National Bank (SNB) will announce its monetary policy with faint speculations that the central bank wishes to raise EUR/CHF 1.2000 floor. Following the SNB interest rate announcement, Italy's Dipartimento del Tesoro is due to tap its 3-year benchmark, 4.50% July 2015 for between

View the Original article

Read More

Forex Daily Review: EUR/USD Broke 1.2800, What's Next?

Academy > Trading Basics > Seasoned Trader > Currency Insights > Special Insights for Traders > Trading Tips > Currency Pairs > Recommended Resources > 5 Insights

View the Original article

Read More

Forex Daily Review: German Court Ruling at 08:00am GMT, Watch EUR/USD

12 Sep 2012• Matti Williamson, FX and commodities analyst      To QE3 the Market? Ask Moody's

In a relatively peaceful European session EUR/USD was refuelled through the US session. Although many traders believe the US dollar is weak due to the upcoming decision on the ESM by the German Constitutional Court or a possible QE3 by the Fed however, Moody's credit rating agency appears to be the main cause for the EUR/USD mayhem. In a statement Moody's warned that the US budget negotiations at the end of the year will determine the US credit rating. The pressure on the Fed members to launch QE3 is now higher, the market is reacting in accordance.

"If those negotiations lead to specific policies that produce a stabilization and then downward trend in the ratio of federal debt to GDP over the medium term, the rating will likely be affirmed and the outlook returned to stable...If those negotiations fail to produce such policies, however, Moody's would expect to lower the rating, probably to Aa1." (Moody's).

The 'fiscal cliff' is currently assisting the selling of the US dollar but I wonder when that reverse risk-aversion will dominate the financial markets. Forex traders anticipate the Fed to initiate QE3 in a dovish statement. The market is pricing in the probability for QE3 but do not be surprised if strong profit-taking materialize shortly after the Fed's announcement. Please do not be surprised if QE3 will not be on the tables. A clear signal there is still a great concern for QE3 is gold (XAU/USD) failing to post strong gains with the leading indices and USD pairs and crosses in the Forex market.

German Court Verdict Due at 08:00am GMT

The German Constitutional Court will give its verdict in the morning (CEST) on the ESM and Fiscal Compact Treaty and may surprise the market by limiting Germany's liabilities. The court is expected to publish their verdict at 08:00am GMT.

EUR/USD Technical Trading Strategy



View the Original article

Read More