Dec 20, 2009

Forex Crunch Special Christmas Offer for Forex Crunch readers

Forex Crunch Special Christmas Offer for Forex Crunch readers

Special Christmas Offer for Forex Crunch readers

Posted: 20 Dec 2009 12:50 AM PST


The article about forex binary options as an alternative to the traditional stop loss caused interest last week. StartOptions, a company providing binary options, has agreed to give an extra $25 to new customers that arrive from Forex Crunch.

Click here to get started and get the promotion bonus.

Remember that forex binary options should be used for hedging forex trades. A small investment in options defends a large forex trade. The initial article explains it.

Disclosure: I’m affiliated with StartOptions.

EUR/USD Forecast – December 21-25

Posted: 19 Dec 2009 08:04 AM PST


The Euro had a terrible week, hit by bad news and losing major support lines. The upcoming week doesn’t have too many major indicators, but they could still move the Euro. Here’s an outlook for this week’s events, and an updated technical analysis for EUR/USD – the pair is in new ground.

EUR/USD chart with support and resistance lines marked on it. Click to enlarge:

EUR USD Forecast

The problems from Greece continued to hurt the Euro, and also the ZEW survey didn’t help. This week’s GfK Consumer Climate survey stands out. Let’s review the events. The extended technical analysis will follow:

  1. German GfK Consumer Climate: Published on Tuesday at 7:00 GMT. 2000 consumers are polled about their economic confidence. This index already reached 4.3 points in September, but deteriorated since then down to 3.7 points, as confidence is fragile. It’s predicted to tick down to 3.6 points this time.
  2. NBB Business Climate: Published on Tuesday at 14:00 GMT. Despite coming from one of the Euro-zone’s smaller countries, Belgium, this indicator is highly regarded, since it’s a wide survey of 6000 businesses. This indicator has improved in the past 7 months and even exceeded expectations, but it still remained in the negative zone. It reached -8.8 points last month. An improvement to -4.3 points is expected now.
  3. German Import Prices: Published on Wednesday at 7:00 GMT. In deflationary Europe, each price-related figure matters. Prices of imported good surprised with a rise of 0.5% last month, after falling in the previous month. This isn’t a very stable indicator. Prices are expected to rise by 0.2% this time.
  4. French Consumer Spending: Published on Wednesday at 7:45 GMT. The continent’s second largest economy has seen impressing growth in consumer spending in the past two months with a neat rise of 1.1% last month. In both months, spending has been far better than early expectations. Spending is expected to rise by 0.5% this month.
  5. Industrial New Orders: Published on Wednesday at 10:00 GMT. Although being a late figure, published almost two months after the measured month ended, this is still an important gauge for the economy. The last 4 months saw a strong growth in this indicator, that exceeded expectations each time. Last month saw the “weakest” growth, with a rise of 1.5% – but this was also far better than expected.

EUR/USD Technical Analysis

From the fragile close at 1.4625 last week, the Euro went under this minor support quite soon. It later made an impressive break under the very significant support region of 1.4444 – 1.4480 and fell as low as 1.4260 before closing at 1.4342.

Comparing to last week’s outlook, we have lots of new support lines, as the pair is in a totally different ground. Let’s start with the known lines, that turned from resistance to support lines.

1.4444 is the first resistance line, and it’s a major one. This is were the Euro got stuck in the summer, on its way up, before breaking higher. This line returns to that role. The other part of the area, 1.4480, is a minor resistance line.

Looking up, 1.4626, which very temporarily stopped the pair last week, is another minor resistance line. Further up, 1.48 was the bottom border of a range for a long time, and serves as a major resistance line.

Meet new support lines

1.42 worked as a support line before the Euro broke upwards, and now works again as a support line. It was tested also during this Friday. The pair was 60 pips away.

Further below, 1.40 is a round psychological number, and was also a stepping stone for the Euro when it went up. The round number makes it a strong support line.

The most important support line is much lower, at 1.3750. This was both a resistance line in the spring and later worked as a support line in June. Something really big has to happen before this line is breached.

I continue to to be bearish on EUR/USD.

My sentiment turned bearish on the pair last week. I believe that it will continue downwards, but probably won’t make such a strong move this week. The problems in the continent’s smaller countries make European growth seem fragile at the moment.

This pair enjoys excellent technical analyses on the web. Here are my favorites. Some were published a few days ago, and these authors will probably write an updated analysis soon:

  • Casey Stubbs discusses the dollar strength in this holiday rally.
  • The Geek Knows brings a weekly technical review on EUR/USD and looks forward.
  • James Chen talks about the bearish stance after the uptrend breakdown.

I’ll add more later on.

Further reading:

Want to see what other traders are doing in real accounts? Check out Currensee

GBP/USD Forecast – December 21-25

Posted: 19 Dec 2009 08:03 AM PST


The positive employment data helped the Pound against the Euro but not against the dollar. At lower ground, GBP/USD awaits final GDP results among other indicators. Here’s an outlook for the upcoming short Christmas week in Britain, and an updated technical analysis for GBP/USD, looking down.

GBP/USD chart with support and resistance lines marked on it. Click to enlarge:

GBP USD Forecast

Inflation picked up a little bit, while retails sales disappointed in a busy week in Britain. The big news was that Britain finally saw a dip in the number of unemployed people. This helped the Pound. Apart from final GDP, note the meeting minutes of the central bank – they might indicate the policy for 2010. Let’s start:

  1. Nationwide HPI: The exact release time is unknown at the moment. This report, by the Nationwide Building Society on housing prices is considered quite accurate and tends to move the Pound. It has shown higher prices in the past 7 months. The rises in the past two months have been moderate: 0.5% and 0.4%.
  2. Current Account: Published on Tuesday at 9:30 GMT. Britain traditionally suffers from a deficit in the Current Account, which includes services and money flows, in addition to goods that are reported in the trade balance release. Britain releases this figure every quarter, and this makes it rather “heavyweight”. In Q2, the deficit jumped from 4.1 to 11.4 billion, weighing on the Pound. It’s expected to ease to a 8.1 billion deficit this time.
  3. Final GDP: Published on Tuesday at 9:30 GMT. The British economy disappointed with an ongoing recession in Q3, while most of the world enjoyed new growth. The revised version showed a contraction of only 0.3%, contrary to the first release that showed a 0.4% drop. The final version is expected to be even better, but still negative – contraction of 0.1%. Could this number get close to the unofficial NIESR GDP that was positive?
  4. MPC Meeting Minutes: Published on Wednesday at 9:30 GMT. No surprises were seen in the last meeting. The interest rate and the Quantitative Easing programs remained unchanged. As we’ve seen in previous decisions, not all the decisions are made unanimously. If some members thought of expanding the QE program, this could weaken the Pound. Hints about rate hikes could help the Pound, but this is unlikely to happen.
  5. BBA Mortgage Approvals: Published on Wednesday at 9:30 GMT. The British Bankers Association, which covers two thirds of British mortgages, has shown an improved picture in the past months, but the last month saw a stall in growth, as the number of mortgages grew by only 100 houses. It’s expected to rise to 43,300 approvals.

GBP/USD Technical Analysis

GBP/USD managed to rise above 1.64 before tumbling down. 1.6260, which held strong last week, was broken. Also 1.6110, mentioned in last week’s outlook, was breached. GBP/USD reached 1.6052 before making a nice retrace on Friday to close at 1.6150.

1.6110 continues to be an important support line, as the pair managed to close above this point – this is a critical spot. If the pair stays above this line, it could move higher.

The first resistance line is at 1.6260, which was a support line just last week. Further above, 1.65 is another resistance line.

Looking down below 1.6110, I’ve added 1.60 as a minor support line. It serves as such a few months ago, and it’s also a round, psychological number.

Further below, 1.5720 continues to provide major support, last tested in October, before the comeback of the Pound began. Looking even lower, 1.5350 is the next support line, being a resistance line more than once at the beginning of the year.

I continue being bearish on GBP/USD.

While an improvement in the economy cannot be ignored, the heavy deficit and the strength of the dollar are stronger than the Pound.

Further reading:

Want to see what other traders are doing in real accounts? Check out Currensee

AUD/USD Forecast – December 21-25

Posted: 19 Dec 2009 08:02 AM PST


The Aussie had a bad week, suffering from a very disappointing GDP release, and losing a major support line. The outlook this week focuses on the technical analysis for AUD/USD, as the short Christmas week doesn’t provide too many indicators.

AUD/USD chart with support and resistance lines marked on it. Click to enlarge:

AUD USD Forecast

Apart from the small growth in GDP, the meeting minutes that followed the third consecutive rate hike hinted that the next won’t be very soon. Let’s start:

  1. New Motor Vehicle Sales: Published on Monday at 00:30 GMT. For Australia, this figure is of importance and can move the currency. Sales of new autos have grown in the past 3 months, with an accelerated growth rate of 3.7% last month.
  2. CB Leading Index: Published on Monday at 23:00 GMT. Although many of this indicator components have already been released, this figure has an impact and is often revised afterwards. In the past four months, this index posted gains, but the pace has slowed down recently. There’s is a doubt if a rise will be reported this time as well.

AUD/USD Technical Analysis

The Aussie began the week with a dip under the minor 0.9090 support line, and continued with a total collapse – it lost the 0.8950 support, which was a huge support and resistance line many times in recent months.

So now, 0.8950 turns into a resistance line, as it did in the summer. Further above, 0.9090 is a minor resistance line, and so is 0.9210. Both served as support and resistance line recently, but they are now very weak.

Further above, 0.9327 is already a major resistance line. It served as such 3 times during October and November.

Looking down, I’ve added more lines on last week’s outlook. The nearest support is at 0.8800. This is where the Aussie stopped this week, and it also stopped at this line in September.

Further down, the area of 0.85 provides very strong support. 0.8477 stopped the Aussie several times on its way up. After it broke above this line, 0.8536 was where it bottomed out.

I became neutral on AUD/USD.

Although Australian employment is doing really great, the bulls where stopped by the bad GDP and the greenback’s huge strength. Australia’s strength is enough for not falling further, but not for making gains.

Further reading:

Want to see what other traders are doing in real accounts? Check out Currensee

USD/CAD Forecast – December 21-25

Posted: 19 Dec 2009 08:01 AM PST


The Canadian dollar stood rather strong against the huge greenback strength and didn’t give to major technical lines. The upcoming short week includes only two releases, both important. Here’s an outlook for the upcoming week in Canada, and an updated technical analysis for USD/CAD.

USD/CAD chart with support and resistance lines marked on it. Click to enlarge:

USD/CAD Forecast

Strong inflation figures supplied most of the loonie’s strength. Mark Carney’s BOC might need to raise the rates earlier than expected. It also depends on the GDP in the upcoming week. Let’s start:

  1. Retail Sales: Published on Monday at 13:30 GMT. Canada’s retail sales have expanded in the past two months, as the economy is out of recession. Last month’s 1% rise was stronger than expected, and also the revision of the previous month helped the loonie. Core Retail Sales which exclude the most volatile items, are no less important. Also here, a strong 1.1% gain was reported last time, with a revision of the previous month as well. Retail Sales are expected to rise by 0.9% and Core Retail Sales by 0.5% this month.
  2. GDP: Published on Wednesday at 13:30 GMT. Canada is unique with the monthly release of GDP. The last release was for the month of September, the last of the third quarter. It showed that Canada is out recession, with a 0.4% gain. This was 0.1% less than predicted and slightly hurt the Canadian dollar. A growth rate of 0.3% is predicted this month.

USD/CAD Technical Analysis

USD/CAD traded between 1.0550 to 1.0746 this week, in a higher range. The 1.0750 resistance line, mentioned in last week’s outlook, was successfully tested and is now a strong resistance line.

Above 1.0750, 1.0850 is the next line of resistance, being a peak in November. Looking further up, 1.1130 is a major resistance line that was tested in August a few time.

Looking down, 1.04 remains a strong support line. Even lower, a raging loonie would meet the year-to-date low of 1.02. Parity probably won’t be reached this year.

I continue being neutral on USD/CAD.

Good news didn’t stop coming from Canada after the great employment numbers and great housing figures. If it wasn’t for the greenback’s strength, I would be bearish – pro Canadian dollar.

Further reading:

Want to see what other traders are doing in real accounts? Check out Currensee
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