Tuesday, March 29, 2011

Defining Market Outlook 03.29

Defining the true colors of the Forex market will come within the week's reports starting of with Germany's Consumer Price Index, UK GDP, the US Consumer confidence figures, and of course the US Change in NFP, plus the unemployment figures for March. As the market searches for some fresh incentives to revitalize liquidity and volatility in the market place.

As some investors and traders have been quite reluctant to create newer positions as adjustments in the closing for the 1st quarter draws this week's closing. Although, these reports are expected to be mix, apparently a friendlier USD reaction would be the norm as the 1st two weeks of the new month would be a pivotal point for the US dollar to recover. No real incentives are shown as of this writing except for the technicals that it is pointing to.

On the technical perspective, the market on the USDX is poised to recover simply based on it cyclical pattern for the second quarter of the year. Others may disagree, somehow the much anticipated recovery would only be seen after the fact. Prevailing USDX price level is currently at the 76.29 from a low of 75.25 basis point. The key price to follow and keep a watchful eye on is the 77.05 1st resistance levels followed with the 78.05-35 range; a significant recovery from its previous low would only mean that there is enough room to rally. The only visible evidence would be an increase in volumes and funds flow out of the Gold and commodities markets. A convincing shift of market sentiments may prove to provide some legs for the USD to recover with the backing of some fresh fundamentals coming from investors sentiments.
Refer to our complete report and analysis on our website: http://www.megatrade101.com/

Tuesday, March 22, 2011

Market Analysis for the week 03-26

The Foreign Exchange Market has never been as volatile especially combined with major participants not to mention the concerted efforts of worldwide banks assisting the Bank of Japan in its quest to stabilize market conditions. The ripple effects of the disaster and crisis that followed have become a venue for investors in the market to shift funds overseas and back in Japan's domestic market.
Although, during such process of repatriation and position adjustments have made the USDJPY strengthen to its lowest levels of 76.70 in value. Prompting the USDX retreating to the 75.32 as of this writing. There are no real signs any serious recovery as the range levels for the USDX as we mentioned now is reaching its 74.17 second to the lowest levels compared with the 70.79 basis point since March of 2008. And these are exceptional times with a lot more fundamentals involved in the market place. Such political unrest and weather or environmentally related issues are the majority factors that influences the market as against the normal business cycle in the world market.
With that said, the USDJPY price movement has influenced the cross rates of the GBPJPY, EURJPY and literally the USDCHF that made their respective lows during the relatively volatile day last week. Taking that into consideration a retracement back near the lows would not be discounted. With the continuing USD still lower and the European currencies gaining its strength has limited any serious recovery. Although, the concerted efforts of Central Banks intervention whenever needed will now be at the back of the minds of every trader. Unless, a certain challenge would happen like the last time a few decades ago wherein speculative trades have been overwhelming such bank interventions.
But the recent Yen movement have been in part speculative-loss liquidation for long carry-trades rather repatriation made by Japanese investors. Others may tend to disagree but these markets are played contrary to the market expectations. The behavior of the cross rates like the GBPJPY and the AUDJPY after the dropp ahve made its continuing recovery that eliminated long positions on the two cross rates.
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Monday, March 14, 2011

Ripple effects in the FX Market

The center stage is still focused on the Japanese crisis that has been the highlights in all the financial markets. Not withstanding the blow of the earthquake and the tsunami but including the nuclear meltdown currently occurring in the already damaged nuclear facilities near the epic center of Sendai in the Northeast side of the Japanese capital in Tokyo.
Although, the first immediate reaction of the FX market for the yen to have gained strength against a possible loss in value is now being supported by the BOJ infusion of liquidity in Yen value to sustain the market's jittery reaction to the drop on the Nikkei stock market. Understandably, the aftermath of these occurrences have to lead to a recession-like for Japan in the next few months. Until such time that they do have a stronger grip of the situation regarding containing the probable nuclear fallout from the nuclear reactors.
Although, BOJ and its Finance ministry would not allow this to happen in an abrupt manner, though the eventuality would still be the same. the overall market reactions from the foreign exchanger market has been a mixture of market prices behaving rather irrationally. As the prospects for a USD led recovery has been slowed even further with the third largest economy dampening slower growth across the board.
So what does this mean for the Forex market?
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Monday, March 7, 2011

Trending the FX Majors

Today we'll make our market analysis based mainly on the market price behavior and what it is being influenced by. The two main issues here is simply the fundamentals that have sparked renewed confidence on the Euro rally that has been given a boost from the expected interest rate increase and the continuing deterioration of the USD. As the majority of influential factors have been from the rising oil prices steamed forward by major market players which obviously is due to the continuing battleground in Libya. Not to mention the erratic Gold prices marking its highs recently and a corrective move lower to make certain price adjustments every time market funds from major players shift its course every now so often.
These are the behind the scene scenarios that may or may not be reported on the front page of the financial news as far as institutional and hedge fund managers shifting and re-adjusting the position trades which would be played along before the end of this 1st quarter's trading. Now relatively with the USDX has reached its low levels at 76.10 basis point and has started to recover slightly back to the 76.50 which may not be as significant until any fresh incentives would be identified. Although, whatever news that may prove to be more friendly for the USD may still be overwhelmed with the current situation. However, we are waiting for a more surprising report that may be unexpected that may trigger a bit of a frantic rally for the USD. However, the transitional period we have been mentioning for the past couple of weeks has been extended, until when? is the 100k dollar question.
The technical perspective would be viewed on our website for further market analysis.