G3 Forex

USD Dollar (USD) – Independence Day in US led the Dollar to advance against major competitors as the market was characterized with low volatility and small moves. Stock Markets in US were closed hence no change was posted in the NASDAQ and the Dow Jones. Crude Oil declined for a sixth day in a row closing below 72$ a barrel. Gold (XAU) declined and closed at 1208$ an ounce. Today, The ISM Non – Manufacturing Index is expected at 55 vs. 55.4 previously.

Euro (EUR) – The euro weakened against the Dollar while trading in a tight range. The Retail Sales came out 0.3% better than expected -0.1%. Breaking the support level of 1.2470 turns the momentum to negative for the pair. Overall, EUR/USD traded with a low of 1.2508 and with a high of 1.2563. No economic data is expected today.

EUR/USD – Last: 1.25

British Pound (GBP) – The pound fell versus the Dollar after disappointing Service PMI data which came out 54.4 worse than expected 55.2. Breaking the support level of 1.5120 turns the momentum to negative for the pair. Overall, GBP/USD traded with a low of 1.5088 and with a high of 1.5202. Today, the Nationwide Consumer Confidence is expected at 64 vs. 65 previously.

GBP/USD – Last: 1.5125

Japanese Yen (JPY) – The Dollar has moderately gained versus the Yen as due to the Independence Day in US the pair traded in a tight range. Breaching the 87.8 level will turn the momentum to positive for the pair. Overall, USD/JPY traded with a low of 87.61 and with a high of 87.98. No major economic data is expected today.

USD/JPY-Last: 87.55

Canadian dollar (CAD) – Canada’s dollar weakened against the American Dollar for a second day as Crude Oil, Canada’s biggest export also declined. . Trading above the support level of 1.0530 keeps the momentum positive for the pair. Overall, USD/CAD traded with a low of 1.0575 and with a high of 1.0675. Today, the Building Permits are expected at -0.4% vs. 5.4% previously.

USD/CAD-Last: 1.0656

EUR/USD – Last: 1.4860

GBP/USD – Last: 1.6621

USD/JPY-Last: 89.87

CAD/USD – Last: 1.0742

Research by http://www.ufxbank.com

Kiwi Declines Against USD by GoLearnForex

NZD/USD:

The Kiwi declined the most against the Greenback last week, compared to the rest of the G-10.  On October 28^th the RBNZ kept rates on hold.  More damaging to the Kiwi were the accompanying statements from the RBNZ in which they remarked that rates would likely remain on hold through Q2 of 2010.

Six days prior to that announcement NZD struck near the prior day’s high versus the dollar at .7606.  Since that day the Kiwi has been in a tail spin.  The Chart below is a daily Candle chart of NZD/USD.

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In the white circled area we have a Candlestick that traders refer to as a Hangman. There is a short candle body with a wick hanging down from it.  When this is seen during price appreciation it may signal a possible reversal.  The candles following the Hangman are lower and that could be confirmation enough to enter a short NZD position.

This pattern appearing out in front of a rate decision may have been traders signaling caution ahead of the announcement.  In the end traders were correct and price has continued to decline.  One last item to always keep an eye on are the daily Moving Averages.  NZD is approaching a close below its 50 day MA.  A close below the 50 day MA should put further pressure on the already battered NZD.

USD/CHF:

We have discussed correlations and their importance.  Aside from straight technicals and fundamentals often what drives a currency might be its correlation to another instrument, product and or commodity.  The Swiss Franc historically has had a very tight correlation to Gold, as one appreciates so does the other and vice versa.

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The Chart below shows the price movement of GOLD and CHF.  During Gold’s most recent depreciation (as depicted between the 2 blue lines), you observe the strong correlative effect one exerts on the other.  What should grab our attention as Gold has resumed its strength is that the Franc has not. As a trader you should wonder if Gold is overbought or the CHF oversold?  Of course keep in mind it is not a perfect correlation of 1, meaning some variation is normal.

US Markets finish the Day Slightly Ahead by GoLearnForex

In Asia, Equity Markets were down while in London and in the U.S markets finished the day slightly ahead.  This is coming on the heels of a horrendous close on Friday in the U.S and CIT’s bankruptcy filing over the weekend.  Equity Futures in Asia are pointing to a slightly higher open for Tuesday while London Futures are modestly lower.

The Dollar was slightly off against the G-10 mirroring the DJIA small advance today of 77 points.  Oil closed today mostly unchanged while Gold soared again to 1,054.  In the U.S the ISM Manufacturing figures printed smartly better than expected coming in at 55.7 versus expectations of 53.  In addition, the Pending Home sales figures surprised to the upside at 6.1% against expectations of 0%.

This is a busy week for economic data releases.  Due out tomorrow will be the RBA Rate decision.  The current rate holds at 3.25% and market consensus is looking a quarter point hike to 3.5%.  In the U.S, Factory Order numbers are set to print.  A positive show will confirm today’s ISM numbers while a below consensus read will cast doubt on the durability of the ISM figures from today.

Upcoming Forex Events for November 3, 2009

GBP Construction PMI  Forecast   47.20   Previous 46.70

USD  Factory Orders (MoM) Forecast  1.00%   Previous  -0.80%

AUD AIG Services Index  Previous   49.30

GBP Nationwide Consumer Confidence  Forecast  72.00   Previous  71.00

Analysis by http://www.golearnforex.net