Forex News Blog
Back to The Headlines
Thursday August 9, 2007 - 09:59:57 GMT
Share This Story
ACM - www.ac-markets.com
Market is looking for direction and risk appetite possible return
By Jean-Claude Braha - ACM Advanced Currency Markets, Geneva, Switzerland
News and Events:
The yen fell broadly on Wednesday after a Federal Reserve statement tempered fears about the impact of US credit troubles on the wider economy, boosting stocks and other risky assets. Signs of a recovery in investor appetite for risk, underscored by rising stocks, weighed on the low-yielding yen, a favorite vehicle for carry trades.
In carry trades, investors borrow in low-interest-rate currencies such as the yen so they can invest in assets denominated in higher-yielding currencies such as the Australian dollar.
The dollar declined against other major currencies after Tuesday's Fed statement gave no indication of any near-term interest rate action, contrasting with the European Central Bank and the Bank of England, which have signaled rate rises this year.
Analysts said "The Fed did a pretty good job of calming the market down a bit yesterday" adding that "They didn't show any signs of panic, which has helped Equities recover and move us back into carry trades".
Yesterday, UsdJpy was up 0.56% at 119.73, more than 2.5 yen up from this week's four-month low 117.18. The EurJpy was up 0.92% at 165.24.
On Tuesday, the Fed left interest rates on hold at 5.25%, as expected, and acknowledged that financial markets have been volatile and credit conditions are becoming tighter for "some households and businesses". But the statement said that, despite the increase in risks to growth, the US economy was still likely to expand at a moderate pace in coming quarters. That sent stocks higher, US government bonds down, and emerging market spreads tighter.
US Treasury Secretary Henry Paulson also weighed in on the credit market crisis. In an interview with the CNBC financial television channel on Wednesday, Paulson was upbeat, saying "the fundamentals of the economy are very solid". He added that US exports would be "kicking in" to boost economic growth.
The EurUsd rose 0.35% to 1.3802, less than half a cent below a record high hit in July. Analysts said the dollar will likely continue to lose its interest rate advantage in coming months, with the ECB having already signaled a rate increase in September. GbpUsd was up 0.62% at 2.0362 after a quarterly report from the Bank of England suggested UK interest rates may have to rise more to combat inflation. The Australian dollar also rose, up 0.65% against the US dollar at 0.8633 after the Reserve Bank of Australia raised rates a quarter point to 6.5 percent.
Today's Key Issues (time in GMT):
09.30 GB June Trade Balance Â£-6.5B vs -6.29B
09.30 GB June Trade Balance Non-EU Â£-3.5B vs -3.48B
12.30 CAD New Housing price Index 0.7% vs 1.1%
12.30 US weekly initial claims 310k vs 307k
18.00 US Fedâ€™s Stern speaks on economic education, Minneapolis
The Risk Today:
EurUsd is correcting from Monday 1.3840 high erasing parts of Fridayâ€™s rebound. A return under 1.3750 last week initial resistance will put the recent positive trend on hold. Further decline will open the way toward 1.3610 late July low. Initial resistance holds 1.3852 late July high. Renewed uptrend may refocus the way upward 1.3925 and 1.3986 resistances. Market is turning around 1.3750 Pivot point.
GbpUsd found strong resistance at 2.0463 (Friday and Monday high) and corrected down to 2.0188 low Tuesday. Further weakness may open the door toward new low at 2.0138 (50% retracement of 1.9623 â€“ 2.0654 advance). Downtrend looks limited as market may find support around 2.0200 before looking at 2.0100 support (former trend resistance). A break there will open the door back down to 2.0000 pivot point.
UsdJpy Strongly rebounded on Monday from 117.19 (3-month low) and added advance up to 119.84 yesterday. Market is going away from further downtrend and 116.58 Trendline support. Initial resistance holds 119.50 end of July high.
UsdChf tested 1.1881 8-month low on Friday and broke that support level trading down to 1.1819 on Monday. Pressure remains below 1.2091 (23.6% retracement of 1.2771 â€“ 1.1881 decline). Current down trend, may shift on 1.1742 May 2005 low support and 1.1483 March 2005 low. Trendline resistance hold 1.2016 at very short term before 1.2050 strong resistance (retracement of 1.2771 â€“ 1.1819 decline).
Resistance and Support:
|S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot |
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
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:
Register To Test Your Amazing Trader
- Actionable trading levels delivered to YOUR charts in real-time.
- Live trading strategy sessions.
- Market Updates with Trading Tools.
Trading Ideas for 18 October 2017
Register for the Amazing Trader
Amazing Trader EVENT RISK Calendar:
Wed 18 Oct /ul>
12:30 US- Housing Starts & Permits
14:30 US- EIA Crude
Thu 19 Oct
01:30 AU- Employment
08:30 GB- Retail Sales
12:30 US- Weekly Jobless
Fri 20 Oct
12:30 CA- Retail Sales & CPI
14:00 US- Existing Homes Sales
John M. Bland, MBA
- POTENTIAL PRICE RISK: HIGH Tue-- 08:30 GMT GB- CPI top tier confirmation of Inflation.
- POTENTIAL PRICE RISK: Medium Tue-- 09:00 GMT DE- ZEW Survey second most important German monthly Survey.
- POTENTIAL PRICE RISK: Medium Tue-- 09:00 GMT EZ- final HICP revision to flash report. Revisions are usually minor.
- POTENTIAL PRICE RISK: Medium Tue-- 13:15 GMT US- Industrial Production. Top output indicator.
- POTENTIAL PRICE RISK: Medium Wed-- 12:30 GMT US- Housing Starts and Permits revision to flash report. Useful housing leading indicator.
- POTENTIAL PRICE RISK: Medium Wed-- 14:30 GMT US- EIA Crude. Top WTI inventory measure.
- POTENTIAL PRICE RISK: Medium Thu-- 01:30 GMT AU- Employment. Top economic indicator.
- POTENTIAL PRICE RISK: Medium Thu-- 02:00 GMT CN- GDP. Top economic indicator.
- POTENTIAL PRICE RISK: HIGH Thu-- 08:30 GMT GB- Retail Sales. Top consumption indicator.
- POTENTIAL PRICE RISK: Medium Thu-- 12:30 GMT US- Weekly Jobless. Employment Indicator.
co-founding Partner, Global-View.com
EXCLUSIVE: Global-View Daily Trading Chart Points Updated
EXCLUSIVE: Global-View Free Forex Database updated
TRADER ADVOCACY ARTICLES
Trader's Advocate Articles..