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Wednesday, 24 Mar 2010

EUR/CHF Reaches All-Time Low!

Investors saw mixed signals regarding the Greece bailout plan. However, the European Union (EU) meeting on Thursday may end the uncertainty surrounding the aid program. Meanwhile the EUR has hit an all time low against the Swiss Franc, down more than 100 pips yesterday; currently the pair is trading at 1.4230, down from 1.4614 less than two weeks ago, and marking a record low point for the pair.

EUR/USDGBP/USDUSD/JPYUSD/CHFAUD/USDEUR/GBP
Daily Trenddowndownupupdowndown
Weekly Trenddownnonononodown
Resistance1.35451.508591.751.07200.92650.9065
1.35051.504091.351.06850.92300.9030
1.34501.500091.001.06500.91900.9000
Support1.34001.494590.301.05900.91100.8925
1.33601.490590.051.05500.90750.8890
1.33151.487589.701.05150.90400.8855

Economic News

USD - Existing Home Sales Falls in February; Stocks End Higher

The greenback ended stronger yesterday against the EUR, after the EUR made an attempt to rebound a day before yesterday and the EUR/USD pair is now currently trading at 1.3451.

The support to the USD against other currencies came as a result of approving the health reform and putting and end to political uncertainty which was driving investors out of the market. The USD was slightly up against the Yen; currently the pair is trading at 90.54. The USD was almost unchanged against the AUD, ending the trading day at 0.9173.

The strength of the greenback came in contrast to the decline in the Existing Home Sales report. After falling for the third month, the report has put doubts over economic recovery. Therefore, investors will be looking closely on the New Home Sales report, due later today at 14:00 GMT for an indication of the housing market's recent direction. Lower than expected results may cause the USD to decline against other major currencies.

EUR - EUR Looking to End Uncertainty Soon

The uncertainty surrounding the Greece bailout program has continued to influence traders' willingness to hold the EUR. Remarks made by Germany, regarding the best way to help Greece, sent the EUR down against the USD earlier yesterday. Other posts made by France helped lift it up from a daily low. The volatile pattern of the EUR/USD will remain at least until Thursday's European Union (EU) summit.

The EUR/CHF fell yesterday to 1.4230, which is an all time record low for the pair. It would be interesting to follow the Swiss National Bank (SNB) response, after previously making remarks that it would act to prevent further appreciation of its currency against the EUR. A strong CHF may hurt the Swiss economy by increasing the operating costs of Swiss companies.

Later today France (at 08:00 GMT) and Germany (at 08:30 GMT) should release Manufacturing and Services PMI reports. Better than expected results should lift the EUR against other major currencies, especially the USD. A positive German Business Climate report, published at 09:00 GMT, should also support the EUR.

JPY - Yen Slides as Risk Appetite Grows

The Japanese Yen traded calmly for most of yesterday's trading, almost unchanged against the other major currencies. The main currency to decline against the JPY was the EUR, which came as a result of the Euro's recent volatility against all major currencies, rather than any economic news. The EUR/JPY is currently trading at 121.87, 60 pips down from the day's opening, after trading even lower during yesterday's trade.

Just before the end of yesterday's trading, at 23:50 GMT, Japan published its trade balance figures, which came out better than expected. Japanese exports grew in February at their fastest pace in 30 years. After the report was published, the JPY climbed against the USD. The report is showing an increase in exports both to the U.S. and Asia. This is a healthy signal about the global economy, pointing to the fact that consumers are slowly picking up demand around the globe.

Crude Oil - Spot Crude Oil Prices Continue to Rise

Spot Crude Oil is currently trading just over $81 a barrel, after visiting higher prices during yesterday's trading. The US Existing Home Sales report helped lift oil prices, after analysts were pleased that the report showed only a slight decline in home sales. However, during after-hours, the price pared a portion of its gains.

Crude Oil's price, recently, is moving within a very narrow range of $77-$83 a barrel. Investors appear nervous about the recovery of the global economy. Ending the uncertainty about Greece may also lift oil prices. Today, however, traders will pay attention to this week's U.S. oil inventory data, due at 14:30 GMT. The forecast is for an increase of 1.3M barrels, any figure below the forecast should influence the price higher.

Technical News

EUR/USD

The cross has been dropping for the 2 days now, as it now stands at the 1.3410 level. The Slow Stochastic of the daily chart shows a bullish cross has recently formed, indicating that an upward correction is imminent. This view is also supported by the RSI of the hourly chart. Going long might be a wise choice

GBP/USD

The pair is continuing its bearish trend with the daily chart's Slow Stochastic providing us with mixed signals. The oscillators on the 4-hour chart do not provide a clear direction either. Waiting for a clearer sign on the hourlies might be a good strategy today.

USD/JPY

The hourly chart displays a price move that has originated at the lower border of the Bollinger Bands and has the potential to appreciate all the way to its upper border. Going long with tight stops may be the popular choice today

USD/CHF

The bullish trend is loosing its steam and the pair seems to consolidate around the 1.0615 level. The 4-hour Chart's RSI is already floating in the overbought territory indicating that downwards correction might take place in the nearest time frame. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.

The Wild Card

EUR/JPY

After a sustained downward movement, this pair is now testing the significant resistance level of 121.00. With the price floating in the over-sold territory on the 4-hour RSI, and a fresh bullish cross on the daily Slow Stochastic, this pair is facing an impending upward correction which may turn out to be a reversal. Forex traders can benefit from this movement by going long on this pair and at a great entry price!

Current Time: 08/28 12:34 GMT
# Time $€£¥ Event Per. Prev. Fore. Act. Imp.
08/28
13:30CAD+ Current Account-12.4B-11.4B-11.9B3
13:30USD+ Prelim GDP q/q4.0%3.9%4.2%5
13:30USD+ Unemployment Claims 298K299K298K5
13:30USD+ Prelim GDP Price Index q/q2.0%2.0%2.1%1
15:00USD+ Pending Home Salesm/m-1.1%0.6%-5
15:30USD+ Natural Gas Storage 88B79B-1
23:45NZD+ Building Consents m/m3.5%*-3
00:05GBP+ GfK Consumer Confidence-2-1-3
00:30JPY+ Household Spendingy/y-3.0%-2.7%-3
00:30JPY+ Tokyo Core CPI y/y2.8%2.7%-3
00:30JPY+ National Core CPI y/y3.3%3.3%-1
00:30JPY+ Unemployment Rate3.7%3.7%-1
00:50JPY+ Prelim Industrial Production m/m-3.4%1.4%-3
00:50JPY+ Retail Sales y/y0.6%-0.1%-3
08/29
02:00AUD+ ANZ Business Confidence39.7*-5
02:30AUD+ Private Sector Credit m/m0.7%0.5%-1
06:00JPY+ Housing Startsy/y-9.5%-10.5%-1
07:00EUR+ German Retail Salesm/m1.0%0.1%-3
08:00CHF+ KOF Economic Barometer98.197.9-3
09:00EUR+ Italian Monthly Unemployment Rate12.3%12.2%-1
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