Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Friday September 16 2011

The US dollar (USD) was seen moving lightly bearish late Thursday as investors sought the higher yielding assets from speculation on a minor market uptick following recent releases on inflation. A stronger-than-forecast uptick in US CPI data added to risk appetite for many investors, leading some to await today’s news before entering more strongly.

The downtick seen in the greenback was significantly milder than in other currencies, especially as its safe-haven appeal remains and the economy isn’t out of troubled water just yet. This may be partially due to the USD’s disconnection from some of the market turmoil, but it could also be from some optimistic data emerging from the economy lately.

Most significant on today’s calendar will be the US publication of its TIC Long-Term Purchases data and consumer confidence data. Should today’s news foreshadow a modest growth in the US investments, an assessment that does, however, seem less likely from data released these past few weeks, there is a possibility that more investment will get pushed towards the higher yielding abilities of the European currencies as investors seek to diversify their portfolios, which could also drop the USD in short-term trading.

The euro (EUR) was seen trading with largely mixed results yesterday as traders moved into and away from riskier assets across the region. Against the US dollar (USD) the euro was seen trading bullish in late trading as shifts away from the greenback, due to optimism about global inflation levels, caused several market participants to opt for other stores of value. The pair was last seen holding near 1.3500 in late trading Thursday.

The euro was recently seen dropping sharply against the USD following last week’s announcement regarding interest rates. Stuttering mildly ahead of the decision, there was an atmosphere of EUR avoidance in the market even prior to the statement by ECB President Jean-Claude Trichet. This week, however, the news appears to be favoring the EUR and today may not be much different, especially if the US TIC investment data beats forecasts.

With nearly every analyst failing to anticipate yesterday’s move, the market appeared set for some upheavals in value, with the EUR suddenly resurging and the greenback taking losses. For now, traders appear to be looking to a strengthening of the EUR through the remainder of the week.

The Japanese yen (JPY) was seen consolidating in an ascendant flat formation these past few days, as market reports showed modest declines across the boards. Despite recent reports on Japan’s shrinking housing sector, yesterday’s publication of Japanese bank lending and machinery orders showed a broadening contraction striking several sectors of the island economy.

 

Expectations for these reports were for modest growth from last month’s reading. The actual figures shrank below forecasts, however, leading to some odd downticks in JPY values amid an environment of risk aversion. National data on housing and manufacturing has somewhat halted the JPY’s ascent as many investors hesitate to move into the once-burgeoning JPY. This data, combined with the recent interventions by the BOJ, has so far caused the yen to weakly move bearish.

Crude Oil prices found support Thursday, moving towards $90 a barrel in late trading as sentiment appeared to shift in favour of a price increase following news that supply in the United States declined by 4 million barrels this week. With supply falling and manufacturing and industry in decline, the balance between supply and demand appear to be reaching agreement as the value of oil seems to be levelling out in recent trading, despite the recent swings in currency values.

As investors seek shelter from recent market uncertainty, the value of crude oil, which was seen holding steady all week, may see additional gains before today’s close. A sudden jump in dollar values due to a sudden return to risk aversion, as was expected following the recent interest rate announcements, could drive many investors into lower investments on physical assets; driving oil prices back downward by the middle of next week.

Jovi Overo

Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Wednesday September 14 2011

The US dollar (USD) was seen trading mildly bullish Tuesday as investors weighed the impact bond auctions in Greece and Italy will have on the euro zone. A sudden wave of risk aversion last week seemed to have helped the greenback surge, and pessimism about sovereign debt in Europe is supporting this pressure. The EUR/USD seems to be floating closer to 1.33 as technical pressures also begin to mount.

Data on American economic optimism yesterday also signalled an uptick in outlook from the previous month, as reported by IBD/TIPP. The news has done little to the forex market, however, though it could ripple through longer-term analyses on US financial markets should further dips in industry be reported. Manufacturing has been forecast to slump moderately going into the third quarter as most indicators revealed decreased demand. How this will affect the greenback in the weeks ahead is so far undetermined.

As for today, there will be a heavy string of US economic releases, with most news focused on retail sales and the producer price index (PPI). Liquidity will likely be much higher in today’s afternoon trading as these reports get published. With consumer confidence, inflation, and retail sales in focus this week, the picture on future demand and growth levels is expected to become moderately clarified and this could weigh heavily on currency direction in the short- and mid-term.

The Great Britain pound (GBP) is expected to be seen trading with bullish results this week ahead of a slew of reports on the country’s manufacturing, housing, and service sectors. Against the US dollar (USD) the pound has actually been trending upwards despite the greenback’s bullish moves against its other currency rivals.

A mildly pessimistic sentiment towards investing in the euro at the moment has many investors on edge when considering regional investments. An embattled euro zone is sending financial ripples through its neighbours and some are concerned it could pull growth down across the entire continent. With yesterday’s inflationary data out of Britain, this doesn’t seem to be the case, at least for the island economy north of Western Europe. Housing data seemed a bit pessimistic, but consumer prices are indeed growing at a healthy rate in the UK.

Sentiment across the region may have turned negative, with many analysts and economists expecting moves towards safety by traders this week, but the GBP could see a solid weathering of this financial storm so long as data remains bullish. Great Britain appears positioned for a relatively better quarter than its southerly neighbours. The pound could see some bullish movement this week as a result of this overall sentiment.

The New Zealand dollar (NZD) was seen trading mildly higher versus most other currencies this morning as its value responded to recent challenges with relatively more optimism than some had anticipated. Data in New Zealand has been mixed lately with some indications that inflation is not rising as strongly as in other economies, but perhaps in a good way. Food prices fell 1.3% this month, which could produce bearish pressure on the NZD, but should prove to be a boon for consumers in times of economic stress.

The latest movements of the Kiwi are causing some concerns, however, as many speculators are anticipating a bearish turn following recent surges in risk aversion. With interest rate decisions out later this evening, investors are waiting to see what the Reserve Bank of New Zealand (RBNZ) will do. A strengthening Kiwi has benefits for the buying power of the island economy, though its dependence on exports makes a strong NZD unfavourable for longer-term growth in New Zealand’s economy.

Crude Oil prices held steady Tuesday as sentiment appeared to favour a mild uptick in global stocks following reports of monetary moves being made by several central banks. Data releases out of Europe and the US last week are still driving many investors back into safe-haven assets as many reports suggested a surprise downtick in growth among global industrial output and consumer spending.

An expected spike in dollar values due to this week’s risk sensitive environment has prevented many investors from taking positions on physical assets, creating a consolidation pattern on oil charts, but with the USD’s gains not materializing in large enough numbers early this week, sentiment appears to have the price of crude oil holding steady. Should Crude Oil sentiment continue to flatten this week, oil prices may reach a decision point which forces a wide swing later in the trading week.

Jovi Overo

Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Tuesday September 13 2011

The US dollar (USD) was seen trading only mildly bullish early Tuesday morning as investors remained pessimistic about growth in Europe and Asia. A sudden wave of risk aversion seemed to have lifted the greenback following a move by the Swiss National Bank (SNB) to peg the CHF to the value of the EUR at 1.20, and by central banks to stall any monetary moves.

Data on the American budget today may continue to indicate pessimism that could drive the greenback even higher. Recent news has done little to alter the current direction of the forex market, though news could hold values steady should they come in near forecasts. Inflation is forecast to hold steady in several nations this week, which could have the effect of lifting the value of riskier assets, though this will need further data to be confirmed.

As for today, there will be few US economic releases, with most news focused on British inflation. Liquidity will likely be higher in today’s early trading as these data points are published, though the impact of news on Great Britain alone may not be enough to force a surge in any direction on USD pairs and crosses. Inflation and consumer confidence are in focus this week and traders will want to pay attention to the latter in the case of mounting pessimism and its affect on dollar values.

The Great Britain pound (GBP) is expected to be seen trading with bullish results this week ahead of a slew of reports on the country’s inflation and housing sectors. Against the US dollar (USD) the pound has actually been trending upwards despite the greenback’s bullish moves against its other currency rivals.

Traders are looking for a way to balance a renewal of risk aversion with continued shakiness in global markets. A mildly pessimistic sentiment towards investing in global stocks at the moment has many investors on edge and looking for safety. An embattled euro zone, fending off market bears amid turmoil in its peripheral nations, also looks to be losing ground in financial markets as safe haven assets such as the Swiss franc (CHF) and Japanese yen (JPY) take losses due to recent moves by their central banks.

Sentiment across the euro zone has turned negative, with many analysts and economists expecting moves towards safety by traders this week. Great Britain, however, appears positioned for a relatively better quarter than its southerly neighbours. With major inflationary reports expected all week and most expecting bullish figures, the GBP is in a position to either continue its recent streak, or take heavy losses should inflation be shown in a downturn.

The Japanese yen (JPY) was seen trading mildly lower versus most other currencies this morning as its value as an international safe haven was being challenged by an air of impending intervention by the Bank of Japan (BOJ). Being linked to international risk sentiment, the yen has experienced an expected uptick during a period when shifts away higher yielding assets became prominent. The JPY has been experiencing several long strides lately from the various shifts into riskier assets.

 

The latest moves of the yen are causing some concerns, however, as many speculators are anticipating another round of intervention by the BOJ. With industrial production data out this week, traders are waiting to see what the BOJ will do in the face of a downturn. A strengthening yen has benefits for the buying power of the island economy, though its dependence on exports makes a strong yen unfavourable for longer-term growth in Japan’s current financial model. As the island currency remains bullish, the pressure begins to mount for the expected bank move to lower its currency strength.

Crude Oil prices held steady Monday as sentiment appeared to favour a mild downtick in global stocks following policies of monetary stagnation being executed by several central banks last week. Data releases out of Europe and the US are still driving many investors back into safe-haven assets as many reports suggested a surprise downtick in growth among global industrial output and consumer spending.

An expected jump in dollar values due to this week’s risk sensitive environment has helped many investors ram up their short-taking positions on physical assets, but with the USD’s gains levelling off this morning, sentiment appears to have the price of crude oil holding steady near $86 a barrel. Should Crude Oil sentiment continue to flatten this week, oil prices may reach a decision point which forces a wide swing by mid-week.

Jovi Overo

Beta 2 Ltd, Jovi Overo, Beta 2 Ltd, Thursday September 8 2011

The US dollar (USD) was seen trading mildly bearish early Tuesday as investors balanced risk sentiment ahead of this week’s series of interest rate announcements. A sudden wave of risk appetite seemed to have dropped the greenback following a move by the Swiss National Bank (SNB) to peg the CHF to the value of the EUR at 1.20 on Tuesday. Wednesday, however, saw the greenback paring some of those earlier losses and consolidating near 1.4000 against the EUR in late trading.

Optimistic data from the Canadian manufacturing sector yesterday also signalled an uptick in output from the previous month in the North American region. The news has done little to the forex market; however, though it could ripple through longer-term analyses on capital markets should they come into play later on. Most traders seemed to be awaiting further rate decisions, however, prior to making any sizeable bets.

With today’s releases revolving around European and British interest rate decisions, most traders appear to be on edge. The consolidation trends witnessed as forming in the major crosses are part and parcel of this anxiety. Many are anticipating dovish sentiment to emerge from the euro zone following mixed fundamental signals and recent talks about Italy’s austerity budget and Greece’s sovereign debt crisis. The US will also release its trade balance, though that news is likely to be overshadowed by Europe’s news.

The direction of the British pound (GBP) is lacking uniformity among speculators as the Bank of England’s (BOE) rate decision approaches. Against the US dollar (USD) the pound has actually been trending upwards despite the greenback’s bullish moves against its other currency rivals. But the pound has seen some setbacks brought about by poor regional fundamentals and a general atmosphere of risk flight.

Traders are looking for a way to balance a renewal of risk aversion with continued shakiness in global markets. A mildly pessimistic sentiment towards investing in the US dollar at the moment has many investors on edge. An embattled euro zone, fending off market bears amid turmoil in its peripheral nations, Italy flaring up recently, also looks to be losing ground in financial markets. With today’s rate statements on tap, wide swings in value and intense volatility should be anticipated.

Sentiment in Britain appears to have turned negative this week, with many analysts and economists expecting moves towards safety by traders following the BOE’s rate statements. An attitude of dovishness has gained traction and investors are worried that a continuation of low rates, coupled with the possibility of a rate reduction in Europe in 2012, could diminish currency values as we get deeper into the third quarter.

The latest moves of the Japanese yen (JPY) are causing some concerns among investors as many speculators are anticipating another round of intervention by the Bank of Japan (BOJ). With interest rate decisions out yesterday morning, traders appeared to show zero surprise in the announcement that rates would be held near zero. A strengthening yen has benefits for the buying power of the island economy, though its dependence on exports makes a strong yen unfavourable for longer-term growth in Japan’s current financial model. As the island currency remains bullish, the pressure begins to mount for the expected bank move to lower its currency strength.

The yen was indeed seen trading mildly lower versus most other currencies this morning as its value as an international safe haven was being challenged by an air of impending intervention by the BOJ. Being linked to international risk sentiment, the yen has experienced an expected uptick during a period when shifts away higher yielding assets became prominent. The JPY has been experiencing several long strides lately from the various shifts into riskier assets.

Crude Oil prices held steady Wednesday as sentiment appeared to favour a mild uptick in global stocks following reports of monetary moves being made by several central banks. Data releases out of Europe and the US last week are still driving many investors back into safe-haven assets as many reports suggested a surprise downtick in growth among global industrial output and consumer spending.

An expected dip in dollar values due to this week’s risk sensitive environment has helped many investors ram up their long-taking positions on physical assets, but with the USD’s losses not materializing in large enough numbers, sentiment appears to have the price of crude oil holding steady. Should Crude Oil sentiment continue to flatten this week, oil prices may reach a decision point which forces a wide swing by mid-week.

Jovi Overo

 

 

Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Tuesday August 16 2011

The US dollar (USD) was experiencing short swings yesterday as investors anticipate what impact this week’s housing data will have on the weakened US economic outlook. The greenback had found moderate strength in the morning hours, but soon pared its gains as investment data turned sour. The value of safe-haven assets like the Swiss franc (CHF) and Japanese yen (JPY) have been buoyed by a shift away from higher yielding assets, though the Swissie’s value was gouged by recent talk of capping its strength.

With the economies of Europe and the US posting little positive news on yesterday’s calendar, the amount of pessimism surrounding the forex market, particularly in the fragile United States and euro zone, appears to have grown, further dampening the strength of the EUR, GBP, and AUD. The dollar has seen mild gains as it tends to do when risk aversion grows, though its value rests on shaky ground considering recent financial manoeuvres currently underway.

With a heavy news day expected today, however, traders are sure to see a return of portfolio adjustment as volatility becomes elevated. The US economy will be publishing several reports on housing and one industrial production figure alongside the capacity utilization rate indicator. Should today’s news disappoint, there is a possibility that more investment will get pushed towards the safety of the Swissie and yen, driving USD values lower in the process.

The Great British pound (GBP) has been seen trading with largely bearish results so far this week as traders assess the risk sentiment across the region. The Cable was seen trading bearish in late trading as shifts into the greenback, due to uncertainty about a recent deal struck over the debt ceiling in the United States and subsequent ratings downgrade, caused a stir in the foreign exchange market.

News of debt contagion spreading across the euro zone also has several economists worried that a toppling of consumer confidence may be up next. Whether Great Britain is affected by this regional tug is a matter for speculation at the moment, however. Should today’s reports on inflation indicate a downturn in growth and thus demand there is a chance that traders will take the news to mean the pound sterling will meet further resistance in the near future.

On tap today, traders will witness the release of moderately significant reports on inflation at the consumer and retail level in the UK at 9:30 GMT. Should the figures reveal stagnation in inflationary growth, we could see heftier flights to safety in the days and weeks ahead. This would likely push the value of the GBP lower over the long-haul as traders continue to flee risk in larger numbers.

The Australian dollar (AUD) was trading mostly weaker versus its currency counterparts yesterday after data releases have begun to shift traders back into safety. The Aussie has been losing momentum these past few weeks as risk aversion becomes predominant in the global market. Fears emanating from the current market environment have led many to seek safety.

This movement has gouged the AUD against all of its currency rivals, especially against safe-havens like the Swiss franc (CHF) and Japanese yen (JPY). With significant reports released this morning, forex traders are highly likely to see heavy movement by the Aussie in today’s trading hours. News out of Japan yesterday is also expected to hike volatility throughout the Pacific countries of China, New Zealand and Australia. Pacific traders should be cautious in today’s trading.

Crude Oil prices held steady Monday as sentiment appeared to favour a mild uptick in global stocks following reports of monetary moves being made by several central banks. Data releases out of Europe and the US last week are still driving many investors back into safe-haven assets as many reports suggested a surprise downtick in growth among global industrial output and consumer spending.

An expected dip in dollar values due to this week’s risk sensitive environment has helped many investors ram up their long-taking positions on physical assets, but with the USD’s losses not materializing in large enough numbers, sentiment appears to have the price of crude oil holding steady. Should Crude Oil sentiment continue to flatten this week, oil prices may reach a decision point which forces a wide swing by mid-week.

Jovi Overo

 

 

Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Wednesday July 27 2011

The Congressional Budget Office informed the GOP that the plan presented by Speaker of the House John Boehner would only cut $850 billion from the budget deficit. Boehner himself had pledged to initially cut $1.2 trillion in spending over the next 10 years. In a blow to Republicans the bill will be sent back for rewriting and throw a wrench in a potential solution to raise the US debt ceiling.

While the debt ceiling negotiations takes the limelight US data yesterday showed disappointing data that fed into USD selling. Housing data continues to drag with the S&P Case-Shiller HPI showing a dip in housing prices by -4.5%. New home sales fell short at 312K on expectations of 321K while the Richmond Manufacturing Index declined to -1 from 3. A bright spot in yesterday’s data were increasing consumer confidence numbers but the three previous negative data releases combined with a very public debt ceiling fight had the greenback on its back foot.

Strong gains were booked against the dollar by all of the G7 currencies with significant moves in the dollar block currencies. Pressures in the financial markets are predominantly felt in the USD with the dollar index falling to a low of 73.446. The last time the dollar index traded this low was in May. Despite the USD weakness it appears that real money portfolio managers are expecting a positive outcome from the debt ceiling struggles as the yield on the 10-year note actually fell yesterday back below the 3% level. 30-year Treasuries also strengthened. If markets were forecasting a US default, pressures would be felt in the US government bond yields.

Sterling performed well yesterday after Q2 GDP numbers came in line with consensus forecasts at 0.2%. Traders were largely expecting a more disappointing figure. While growth of 0.2% is nothing to brag home about and does signal a stagnant UK economy, a figure that came in below this level may have supported additional asset purchases by the BOE. The GDP report does not rule out more quantitative easing but sets the bar a bit higher for additional easing of monetary policy. While the British pound is certainly no prize, in a contest of the least ugly with the dollar and the euro, it may just be pulling ahead.

The GDP data helped cable climb to its highest level since mid-June, rising above the previously broken trend line from the May 2010 low. The next resistance for the GBP/USD is found at the end of May high at 1.6550. Support is located at this week’s low at 1.6220.

The dollar block currencies were the strongest performers yesterday versus a weak US dollar. The AUD was supported by both comments from RBA Governor Stevens who suggested the Australian economy is improving and talked down a potential interest rate cut this year. Inflationary pressures also supported the AUD. Q2 inflation climbed 0.9% on consensus forecasts of 0.7%. Following the data release this morning traders pushed the AUD/USD to a 30-year high. The next target for the AUD/USD is the big round number at 1.1100.

 

The Kiwi is also trading at a 30-year high after strong business confidence numbers helped to boost the New Zealand dollar. Tonight the RBNZ is expected to keep the cash rate steady at 2.50% but the accompanying rate statement could contain more hawkish language given the strong GDP the New Zealand economy produced in H1. Any hint of an interest rate increase could boost the NZD/USD to the next big round number at 0.8800.

Spot gold climbed to a new all-time high at $1,625. This is the second consecutive day the price of spot gold has reached a new high as traders worry over the US debt ceiling crisis. Spot gold may also be receiving a bid due to the potential for the US to lose its AAA rating. S&P has warned its highest rating could be in jeopardy if the US doesn’t cut $4 trillion from the debt. On Monday President Obama warned the US could lose its rating for the first time in history. More gains in the commodity could be booked should Congress and the President fail to come to an agreement over the debt ceiling.

Jovi Overo

 

Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Thursday July 14 2011

Federal Reserve Board Chairman Ben Bernanke released a statement yesterday which hinted that the Fed may consider another round of monetary easing should the beleaguered economy continue to worsen. The news has delivered a significant impact on the value of the US dollar (USD) which was seen in decline for the first time since the middle of last week.

The EUR/USD was seen moving back towards 1.4100 yesterday while the GBP/USD inched just above 1.60. Data from the American economy was largely bullish, however, which may also have helped spark some risk-taking among investors, pulling additional capital away from the greenback. A reduction in the Federal budget deficit also added a modicum of confidence that the US is addressing its budget shortfalls.

Increased market volatility is on today’s forecast with a significant news day ahead. Most importantly, the US economy will be publishing a string of reports concerning producer inflation, unemployment claims, and retail sales.

Should today’s news foreshadow a dismal outlook, there is a possibility that more investment will get pushed back towards the safety of the greenback, driving USD values higher. The possibility also exists that a downturn in fundamental data will only reinforce Bernanke’s statement, leading to analysts to further anticipate another round of monetary easing by the Fed.

The euro (EUR) has been trading bearish these past several trading days on recent shifts in investor risk appetite. News that Italy is struggling has opened the door to additional bailouts being required across the euro zone, which ominous foreshadow a debt contagion dragging the region down with it. The EUR was able to get some relief yesterday after US Federal Reserve Board Chairman Ben Bernanke testified that the Fed may consider another round of monetary easing if economic conditions in the US don’t improve.

The news was positive for risk taking, as was much of the data released by the American economy prior to Bernanke’s testimony. The EUR moved above 1.41 against the USD before the market came to a close yesterday, but it continues to struggle against its regional currency counterparts, particularly the British pound sterling (GBP). With inflationary news on tap today, forex traders should receive ample data to fill in part of the growth outlook which is missing for the month of July.

Today’s market should be highly volatile and traders will want to be on guard as they traverse today’s investment landscape. The most impactful news of the day will come from the United States which is publishing a series of reports ranging from retail sales and unemployment claims to PPI and oil inventories. With France inactive today due to the observance of National Day, the euro zone may have relatively lower volume. However, the EUR does appear set to continue its gains against the dollar regardless of today’s data outcomes.

The New Zealand dollar (NZD) was seen trading with largely neutral results versus most other currencies yesterday following this morning’s less-than-surprising GDP report. As was reported this week, regional growth in the Pacific has been only mildly better than forecasts, and in several instances worse. The Australian dollar (AUD) was seen in decline for the past two weeks after several data sets revealed an economic slump was underway.

This week’s news has so far weakened the Kiwi and Aussie, fuelled by poor fundamental data from the world’s leading economies and a general sentiment of risk aversion among investors. With this morning’s release of New Zealand’s GDP data, many were expecting the island nation to begin addressing its growth outlook. As the NZD gains from external factors affecting its value, primarily a boost in Chinese retail sales, investors begin to speculate what an interest rate hike might do should the Reserve Bank of New Zealand (RBNZ) choose to enact one in light of today’s GDP figure So far, the Kiwi looks to be holding its ground amid the recent flurry of speculation about a downturn across the Pacific.

Crude Oil prices found support near $96 a barrel Wednesday as sentiment appeared to favour a mild growth in global industry alongside a potential uptick in demand for the black gold. Data releases out of the US and China yesterday were driving many investors back into riskier assets as most reports suggested a surprise flattening out in growth among global industrial output and consumer spending.

As investors sought higher yields, the value of crude oil, which has been seen swinging widely all week, in fact rose to a weekly high of $96.15 a barrel. A sudden slump in dollar values due to yesterday’s statement by Fed Chairman Ben Bernanke sparked an environment that was more conducive to risk-taking and growth. The value of oil, therefore, found modest support and began to make strides. If this sentiment can persist, the value of Light, sweet crude may continue to gain through the rest of the week, targeting $98 a barrel.

 

Jovi Overo

Beta 2 Forex News, Lane Clark, Beta 2 Ltd, Friday July 1 2011

Cable traded below the 159.40 level on both Monday and Tuesday but managed to only move lower by 20 ticks, making a double bottom at 1.5912-13 which is now key short term support. A break below here and further losses down to 1.5820 and then 1.5750 are expected. The previously broken head and shoulders neckline today comes in at 1.6140. As long as the market fails to close above here on a daily basis then technically the market still has a bearish outlook.

Despite weakness seen in the sterling currency in recent weeks the recent run up in stocks going into the end of the quarter has lead to some weakness in the dollar as risk assets have seen a sharp bid. Sterling against the Euro is still very weak and the recent bounce in Cable seems more to do with the weakness in the Dollar rather than Sterling strength. The market is still currently trading below the 1.6110 level and the aforementioned neckline. If we do continue to bounce and break above these levels then the next area of interest is 1.6260-80 with 1.6310 providing key resistance.

Cable does still seem to be suffering from a fear of more QE by the Bank Of England and still looks weak across the board. However moves today and early next week may be dictated by market sentiment elsewhere. If we see an unwind in some of the ‘window dressing’ moves we have seen in the equity markets the past few days that could lead to a weakening of risk assets including Oil, which would lift the Dollar against the major currencies. If however the moves we have seen recently are the start of a more protracted move higher in the equities then expect Cable to see some more gains in the coming sessions.

Lane Clark

Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Tuesday June 28 2011

The growing consensus yesterday was that European banks were moving towards a partial voluntary restructuring of Greek debt. There are many questions still to be answered, not least how US banks will be involved and how rating’s agencies will view the arrangements with regards to default. This allowed for some partial relief during Monday’s session, with EUR/USD putting on nearly two big figures from the lows near the 1.41 level seen during Asian hours. However, as we detail below, one can’t help thinking that we’ve come full circle, with the rates, terms and political interference leading to the current deal looking very much like the actions that kicked things off four years ago in the US sub-prime market.

The US dollar was seen in decline in trading yesterday as traders began to seek risk after a solid US stock market open. The EUR/USD was seen moving towards 1.4275 yesterday before settling mildly below this mark at day’s close. The GBP/USD was also in a bullish channel, with a high of 1.6002 touched prior to getting tested by technical traders and finishing mildly lower than its daily high.

Yesterday’s bullish consumer inflation data out of the American economy has so far helped to lift the value of riskier assets as investors seek higher growth in their portfolios. The EUR, GBP, and SEK were each appreciating against the US dollar throughout Monday’s session, with mild downturns coming towards the day’s closing.

With a heavy news day expected, traders are sure to see heightened volatility. Most significantly, the US economy will be publishing its CB Consumer Confidence report alongside an S&P/CS Composite-20 HPI figure. Analysts are expecting no change in consumer confidence from last month, but bearish sentiment is getting priced-in to the house price index by S&P and Case-Shiller. If risk appetite continues to grow ahead of the vote on Greece’s austerity budget, we may see the USD continue to decline.

The British pound (GBP) was seen trading with mixed results yesterday following news of heightened risk appetite across the region as well as inflation and manufacturing concerns in the United Kingdom. The UK Office for National Statistics is set to publish several data reports today, focusing intently on the macro side of the British economy.

Regional investors are expecting a technical downturn for the pound this week after several reports showed the currency breaking out of a long-term bullish channel. Lying behind the turning point is several months’ worth of bearish manufacturing reports and a concern that inflation may become flattened out through the summer. A deep-seated structural deficit in the UK jobs market also carries some of the blame.

Today’s macro data will help many forex investors get a feel for how well the structural challenges in the UK labour market have been addressed and whether the island economy will see growth this quarter. Final British gross domestic product (GDP) figures will get published at 9:30 GMT today alongside the latest reading on the country’s Current Account, a measure which reports on the difference between imports and exports. The Monetary Policy Committee (MPC) of the governor of the Bank of England (BOE) will be testifying on the state of the economy and inflationary expectations. Overall, traders appear to be anticipating bearish pressure on the pound.

The Japanese yen has undergone swings between bullish and bearish since late last week as traders attempt to get a feel for global risk appetite. By focusing on the Japanese economy itself today, many investors appear tuned in to go long on the JPY out of an expectant growth on the consumer side of the equation with the country’s retail sales report.

The Japanese economy has witnessed a sharp downturn in retail sales, year-on-year, since back in April, when it dropped over 8%. Each month since, the nation has halved this decline, with only a 4% decline in May and expectations for a 2% drop in June.

If the early morning data can meet or exceed this forecast, traders may see a silver lining in Japan’s currently bleak economic landscape. Given the sluggishness of the global manufacturing sector, however, many economists have expressed pessimism that Japan will meet the negative 2% target. Such a result could lead to heightened risk aversion and also feed into the yen, albeit for different reasons.

Crude Oil prices dropped sharply towards $92 a barrel Monday as sentiment appeared to favour a downturn in global industry. The sudden halt to this downward movement came as a result of several forces Tuesday morning. Primarily leading the rebound in oil prices was a sense that risk appetite was on the rise and a favourable vote for an austerity budget in Greece could whip traders back into a buying frenzy on high-growth assets like oil.

Faltering dollar values may have also helped many investors pause on their short-taking positions on physical assets. Crude Oil witnessed a mild uptick in yesterday’s late sessions while Gold and Silver began to largely see sideways movement. Should sentiment hold steady this week, oil prices may continue to find support near its current price, but with reluctance and weakness underlining any upward movement.

Jovi Overo

 

 

Beta 2 Forex News, Jovi Overo, Beta 2 ltd, Monday June 27 2011

The US dollar was seen in ascent against several currency rivals this morning as the hesitation among global traders pushed much of the day’s volume into safety. The EUR/USD was among the hardest hit by the concerns, with the pair dropping towards 1.4115. Forex traders have witnessed significantly softer data than was forecast six months ago.

Reports released at the start of the year were expecting a moderate bounce-back by mid-2011. The inability of consumer sentiment to weather the storm of sovereign debt woes in Europe, and what is deemed an inappropriate growth policy by the Fed among domestic consumers, has worn on economic growth across the globe. Investors are pricing in a downturn for the second quarter and the ripple effect generated has been a move away from higher yielding assets and into safe havens.

With the United States being the only economy publishing significant news today, most investor sentiment will be derived later in the week. Today, forex market participants should be on the watch for any shift towards economic softness similar to that of recent weeks. The US reports on personal spending and income will only serve to underscore the data derived earlier in the month and not likely have much of an impact today.

The euro has been experiencing moderate swings following last week’s series of mixed economic reports. Traders appear to have growing concerns with the potential Greece implosion as it erupts in more unrest from imposed austerity. The Greek government won a victory last week in its vote of confidence which saw parliamentarians voting along party lines, but so far little has been done to address the shift in risk sentiment towards safety.

Debt concerns have taken centre stage in the euro zone, with higher yielding assets like the GBP and EUR positioned to lose significant value if authorities fail to address the ominous drift to caution and reluctance among regional investors.

As for Monday, the euro looks to be anticipating mixed results against the other major currencies with mild bias to the downside. The euro zone will be absent from today’s economic calendar with the US publishing the only news of the day. Tuesday’s data releases will focus more on Great Britain alongside a German report on consumer sentiment at 7:00 GMT. Trading volume will pick up as the week progresses, but today may see minor swings as investors await more in-depth data.

The New Zealand dollar (NZD) was seen trading significantly lower this morning as last night’s trade balance data revealed a sharp decline in the island economy’s trade surplus. The report marks a significant turning point in the nation’s trade balance. New Zealand has witnessed steady increases to its surplus, topping last month at NZ$ 1.14B.

Expectations were for a mild decline from this recent peak to a level just near NZ$ 1.0B. The actual report unveiled a stark decline, however, to just over NZ$ 600M. The wide short-fall generated much concern that New Zealand may be witnessing a downturn from the soaring value of its currency, known colloquially as the Kiwi. Concern that this downturn may threaten the nation’s rebuilding efforts after the devastating earthquake in Christchurch appears to also be pushing down heavily on the Kiwi’s value, which saw its third day of bearishness this morning.

Crude Oil’s value entered a price slide this morning with the $90 price level approaching at a faster pace than last week. Data releases out of the US today are driving many investors away from physical assets in expectations of a decline in growth among the world’s largest economy. Manufacturing sluggishness is driving more than a few investors into a state of bearishness on the black gold as demand outlook appears to be slowing.

The value of the US dollar versus the euro in recent trading has also risen towards a six-day high of 1.4115, which has helped push oil prices lower. With today’s steady downward movement, traders appear likely to see oil rebounding mildly over the next twenty-four hours as technical traders test the current price level, but little seems to be in the way of further decline this week.

Jovi Overo