Equity Markets Steady to Better ahead of Bernanke Testimony
stock index futures are trading steady to better ahead of this afternoonâ€™s
testimony by Fed Chairman Ben Bernanke. Shortly before testimony is to begin,
investors will have the chance to react to earnings reports from Morgan
Stanley, Wells Fargo and Starbucks. This morningâ€™s pre-opening gains are being
attributed to yesterdayâ€™s report of better-than-expected earnings from tech
giant Apple, Inc.
After earnings are released before the opening this morning,
investors will shift their focus to Bernankeâ€™s monetary report to the U.S.
Senate Banking Committee. Bernanke is expected to be grilled about the recent
bout of weak economic data that could result in the Fed beginning another round
of quantitative easing. Investors will be tuned into the testimony in hopes of
hearing clues about the possibility of a double-dip recession. Last week in its
FOMC minutes, the Fed lowered its forecast for GDP and employment. Bernanke may
attempt to further explain the reasoning behind the Fedâ€™s downward shift in its
outlook for the economy.
Bernanke is scheduled to speak at 1 p.m. Central time which
gives investors plenty of time to react to this morningâ€™s earnings report.
Treasury futures are also expected to react strongly to
Bernankeâ€™s testimony as what he says will dictate the future direction of
interest rates. A dovish tone in his testimony is likely to underpin the
futures markets which are trading lower because of this morningâ€™s strength in
the equity markets.
The Euro is under pressure this morning following reports of
a leak in the release of the European bank stress test data which was
originally scheduled to be revealed on Friday. The leaks revealed that Spanish
and Greek banks are expected to pass the tests which raised concerns among
investors about the stringency of the tests.
At first the Euro rallied on the news, but selling pressure
quickly hit the Euro as investors questioned how rigorous the tests are. The
most pressure hit the Euro following the news that the nationalized German
lender Hypo Real Estate revealed a possible capital shortfall. Even though it
was just one financial institution, investors turned negative on the Euro.
Strong gains in metal and energy stocks helped turn U.S. equity
markets higher, erasing early session losses. Stock futures clawed back to
positive after opening sharply lower this morning. Equity markets were already
trading down because last night IBM and TI reported lower than expected revenue
figures when Goldman Sachs said that its second-quarter profit tumbled 82%.
More pressure came shortly before the opening following a weaker than expected
U.S. Housing Starts report.
By mid-session, the September E-mini S&P 500 was trading
higher after testing a 50% level at 1051.00 and holding 1050.75. This move was
enough to attract bargain hunters who triggered the start of a short-covering
rally. The strong gain on Tuesday retraced most of the recent four day break.
After the markets closed, the markets rallied further, bolstered by a bullish
earnings report from Apple.
equity markets plunged in pre-market trading following a weaker than expected
U.S. Housing Starts report. It was reported that in June housing starts fell to
a 549,000 pace, a 5% drop and an 8-month low. The Dollar and Treasury
instruments rose on the news as traders became risk adverse, shifting their
interest to lower yielding assets.
The inability of the September Treasury Bonds to reach a new
contract high following the bad housing report may also be a sign that stocks
have reached an oversold level and Treasuries, an overbought area. Treasury
Bonds and Treasury Notes struggled to hold on to their early session gains. The
sharp rise in the equity futures pressured the Treasury instruments into the
close, setting up a possible break tomorrow.
August Gold traded weaker because of falling stocks and a
rising Dollar early in the session. The slow down in housing starts was another
indication of a weakening economy. This is likely to pressure consumer
confidence and spending, leading to more weakness in consumer prices and
inflation. A turnaround in the equity markets helped turn gold higher, leading
to the possibility of a minor closing price reversal bottom.
The Australian Dollar rebounded on Tuesday following a
three-day setback boosted by stronger U.S. equity markets and increased
demand for currency-linked commodities. Speculation mounted that the central
bank would raise interest rates before the end of the year following news that
the Asian Development Bank increased its growth forecast for China. This encouraged investors to
buy the Aussie in anticipation of improved economic conditions because of
increased demand for Australian raw materials.
Technically, the September Australian Dollar maintained its
uptrend despite the short-term correction to .8632. The strong move on Tuesday
puts the Aussie in a position to take out the swing top at .8870 and the .618
retracement level at .8883. A penetration of these two levels is likely to
trigger an acceleration to the upside.
The strong rise in the Australian Dollar along with talk of
another interest rate hike by the Reserve Bank of Australia triggered a strong rally
in the New Zealand Dollar. With the Aussieâ€™s likely to hike rates before the
end of the year and the Bank of Canada setting its benchmark rate 25 basis
points higher this morning, Kiwi investors gained confidence that the Reserve
Bank of New Zealand
would be next in line to adjust interest rates higher.
Technically, the September New Zealand Dollar rebounded
after testing the 50% level of the .6794 to .7303 range. The main trend is up,
but the market may run into minor resistance at .7166 to .7198.
After trading in a tight range most of the morning, pressure
from rising equity prices and commodities finally ignited a rally in the
September Canadian Dollar. Early this morning, the Bank of Canada hiked its
benchmark interest rate by 25 basis points. This increase was in line with
expectations, but the dovish tone of the policymakerâ€™s statement helped hold
the Dollar/CAD inside a tight range most of the morning. Once U.S. equity markets rebounded from
a weaker opening, traders aggressively bought the Canadian Dollar.
Technically, the September Canadian Dollar is still locked
inside of two ranges. The broad range is 1.0064 to .9208 with a mid-point of
.9636. The narrower range is .9208 to .9857 with a mid-point of .9533.
Currently this pair is trading between the mid-points of each range.
A rumor of a possible intervention by the Bank of Japan
helped pressure the September Japanese Yen on Tuesday. A turnaround in the
stock market pressured demand for lower yielding currencies, thereby adding to
the bullishness of the Dollar/Yen. Although an intervention from the BoJ is possible,
traders are taking a precautionary approach to the long side due to the fact
that the strength in the Yen has been caused by a weakening U.S. economy and not excessive
speculation. The BoJ is worried that the strengthening Yen will lead to
decreased demand for Japanese exports. Investors are likely to remain long
until the swing bottom at 1.1225 is violated. A breakout below this point will
turn the main trend to down, setting up a possible decline to 1.1074.
The British Pound rebounded against the Euro after Hungaryâ€™s
smaller-than-expected debt auction renewed sovereign debt concerns in the Euro
Early in the session the British Pound was under pressure
due to concerns about the economic recovery triggered by a weaker-than-expected
budget deficit and lower mortgage approvals.
Technically, the September British Pound survived a two-day
break while keeping the main up trend in tact. Tuesdayâ€™s strong upside momentum
indicates the market may have enough power to test the last swing top at
1.5471. A new main bottom at 1.5152 may also form, adding to the Poundâ€™s
growing series of higher bottoms.
The biggest concern facing the Pound at this time is whether
economy can strengthen enough to trigger a rate hike by the Bank of England.
Traders are extremely worried that the economy will weaken further because of
the newly approved austerity measures.This would make the U.K.â€™s
debt rating vulnerable to a downgrade by the ratings agencies.
The September Euro traded lower, pressured by sovereign debt
concerns in Europe following poor demand for Hungaryâ€™s debt. Profit-taking ahead
of Fridayâ€™s release of the European bank stress tests results added to the
weakness. Traders are nervous about what the report will reveal. Some feel the
test wasnâ€™t stringent enough; others feel that it will show several banks need
to raise more capital.
After testing a Fibonacci retracement level at 1.2998 and
trading all the way to 1.3028, the Euro posted a daily closing price reversal
top on Tuesday. This is the second such reversal in two days signaling
increasing selling pressure. A follow-through to the downside is needed to
confirm the reversal. Watch for weakness to develop if the 50% level at 1.2783
fails to provide support.
Over the near-term, stronger demand for higher risk assets
is likely to continue to underpin the commodity-linked currencies.
Profit-taking is expected to continue to pressure the Euro as traders await
Fridayâ€™s European bank stress test results.
Forex Trading News
Daily Forex Market News Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Forex News Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."
Elevate Your Trading With The Amazing Trader!
The Amazing Trader includes:
Actionable trading levels delivered to YOUR charts in real-time.
POTENTIAL PRICE RISK: HIGH to Medium- Wed --14:15 GMT-- US- Industrial Production
POTENTIAL PRICE RISK: HIGH- Wed -- 15:00 GMT-- CA- Bank Of Canada Decision
John M. Bland, MBA co-founding Partner, Global-View.com
Max McKegg's Daily Forex Trading Forecasts
Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.
looking for your first broker or do you need of a new one? There are
more critical things to consider than you might have thought.
We were trading long before there were online brokers. Global-View
has been directly involved with the industry since its infancy. We've
seen everything and are up-to-data with recent regulatory changes.
The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.
The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.
Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.
The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.
Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.
Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.
Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.
WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES
CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN
EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE
PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE
INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC
REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL
SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR
SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.