Nov 9, 2011

Forex Crunch EUR/USD Loses Critical Support – Downfall Accelerated

Forex Crunch EUR/USD Loses Critical Support – Downfall Accelerated


EUR/USD Loses Critical Support – Downfall Accelerated

Posted: 09 Nov 2011 03:26 AM PST

Euro/dollar finally lost the critical support line and its losses are accelerating quite rapidly. The move that began with the margin raise for Italian bonds and turned into a full scale sell off of Italian bonds is now taking a bigger toll on EUR/USD.

The pair breached support at 1.3650 and is now at 1.3625, falling quickly after this line is lost. Further support is at 1.36, but this is minor.

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Mama Mia! EUR/USD Falls to Critical Support as Italian Yields Scream

Posted: 09 Nov 2011 02:45 AM PST

Italian 10 year bond yields are at 7.34%, crossing the 7% Rubicon that means a bailout. EUR/USD certainly reacted with a drop, but it still manages to hold on to critical support and remains in the range that characterized it.

Berlusconi’s tentative resignation didn’t help. When LCH Clearnet SA announced that margins would be raised, yields jumped. 10 year benchmark yields stood on “only” 6.80% before the declaration. Note that the margin requirements take effect only tomorrow.

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GBP/USD Extends Falls on Huge Deficit

Posted: 09 Nov 2011 01:34 AM PST

The deficit in the UK’s trade balance leaped to 9.8 billion pounds, much worse than 8 billion that was expected and 7.8 initially announced last month. The figure for last month was revised to a higher deficit of 8.6 billion.

This high deficit in September 2011 tops the 9.7 billion deficit recorded in December 2010. This makes it the worst deficit in many years.

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EUR/USD Nov. 9 – Falls as Italian Yields Aim for 7%

Posted: 09 Nov 2011 01:20 AM PST

Euro dollar is falling in range after the relief from Berlusconi’s tentative departure faded away. Market pressure continues, with LCH Clearnet SA raising margins. Will the ECB enhance its bond buying program to stabilize Italy? Bernanke will speak later on today, but the focus is still on Rome.

Here's a quick update on technicals, fundamentals and what's going on in the markets.

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Berlusconi down – markets up

Posted: 09 Nov 2011 12:31 AM PST

It's a damning indictment of what low regard politicians are held in when for the second time in a week we've seen markets rally on the resignation of a prime minister (first Greece, now Italy).  And not just domestic markets; even US stocks squeezed out a 0.5% rally on the news.  From here, it's a question of whether a change of captain can steer the ship away from the rocks, or whether the vessel remains doomed.

For sure, the Berlusconi administration was often steering the wrong course, with the captain in the cabin rather than on the bridge, but the numbers remain the same.  Italian yields are pushing 7% on the 10yr bond, growth has been anaemic for years (averaging 0.7% since start of EMU) and debt remains 120% of GDP.  Furthermore, the lifeboat (the EFSF) is insufficient to perform a successful rescue. We remain in very testing times, but the euro itself also remains relatively resilient.  The impact on Italian bonds is being overshadowed by the increase in margins from one of the main clearers, which makes it even more costly to hold Italian debt.

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AUD/USD: Trading the Australian Employment Change

Posted: 08 Nov 2011 02:30 PM PST

The Australian employment change is an important leading indicator which often has a significant impact on the markets. Traders and analysts carefully examine employment figures in trying to determine consumer spending and the health of the economy.  If the Employment Change figure is better than forecast, this is bullish for the Australian dollar.

Here are the details and 5 possible outcomes for AUD/USD.

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Forex Daily Outlook November 9 2011

Posted: 08 Nov 2011 02:00 PM PST

Fed Chairman Bernanke Speaks in Washington DC and Trade Balance in the UK are the main events today.  Here is an outlook on the market-movers awaiting us

In the US, Ben Bernanke, Federal Reserve Chairman, is due to lecture in Washington DC

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Berlusconi Still Insists on Staying – Yields Show Him the Door

Posted: 08 Nov 2011 09:19 AM PST

Italy’s Prime Minister Silvio Berlusconi will meet the president, but doesn’t plan on resigning. He is clinging to power despite not receiving an absolute majority in parliament and after his main coalition partner told him to go. The markets want him out.

Ten year Italian bond yields are once again at a record high of 6.77% in a clear vote of no confidence. Also in the short term, the charts are screaming: 6.38%.

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Evolution of the Forex Market

Posted: 08 Nov 2011 05:20 AM PST

It’s no secret that the forex market has evolved rapidly in the past few years. The financial crash of 2008 opened the door for many traders and investors into currency markets.

Saxo Bank visualizes this growth with a nice infographic and a video. The numbers provided here show the huge growth, which continues. The recent turmoil in markets will certainly lift the numbers once again.

So, here is the video:

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