Chart Analysis: USD/JPY

The JPY remains the highest beta currency as the JPY crosses are reversing higher just as quickly as the sold off in recent days as the US GDP triggered a move higher in bond yields. Note that the USD/JPY found support right on the 21-day moving average, which has been an important Moving Average on several occasions over the recent cycle. For resistance, we'll watch the 91.54 retracement level and the 92.00-area daily Ichimoku cloud resistance. The JPY will need new local lows in bond yields to work back below 90.00 in the USD/JPY.

Dollar Gains again on Weak Numbers

USD

As with the disappointing consumer confidence numbers earlier in the week, the US housing market experienced a setback on Wednesday, as data showing an unexpected decline in US home sales was released.

The poor numbers came after an on-target durable goods report and helped the Dollar maintain its safe-haven flow intake. Forex analyst consensus for the housing numbers was an increase from September of 23,000 to 440,000; however the actual data showed a drop of 15,000 to 402,000.

At 10:15PM GMT, the US Dollar was trading up .63% to the Euro to 1.4709, up .02% to the British Pound to 1.6388, up 1.35% to the Canadian Dollar to 1.0791, down 1.11% to the Japanese Yen to 90.76, and up .47% versus the Swiss Franc to 1.0264.

AUD

The Australian Dollar suffered its worst trading day in close to four months, falling broadly and sharply to many currencies.

After a rally that has lasted several months, spurred on by positive growth and an apparent emergence from recession, the Aussie retreated after a data release showed that Australian consumer price inflation rose more than expected in the last quarter.

The Reserve Bank of Australia is meeting next week on interest rate policy, however the data does not seem likely to spur them to tighten already low interest rates.

At 10:20PM GMT, the Australian Dollar was trading down 2.25% to the US Dollar to .8967, down 1.55% to the Euro to 1.6397, down 3.25% to the Japanese Yen to 81.41 and up .17% to the New Zealand Dollar to 1.2335.

Chart Analysis: USD/NOK

It would seem that if we are moving into a bit larger correction mode here, then the likes of NOK might be a higher beta currency and see an especially sharp correction vs. the greenback due to the popularity of carry trades pairing the USD with commodity currencies.

A squeeze in the short term could introduce surprising volatility to the upside in the short term. The JPY/NOK might even be a bigger mover if bonds find encouragement after today's US auction results.

Chart Analysis: GBP/CHF

There is not a specific currency pair in focus today, but the recent moves in this currency pair are a great example of the 0.618 Fibonacci in action. First we had a major low established recently and then we saw a very strong rally taking out some key resistance levels followed by a sell-off that exactly bottomed out at the 0.618 Fibonacci of the first corrective wave. The outlook looks higher from here as long as we maintain above the 1.6380 area low.

Pound takes a Pounding after GDP Data!

GBP

As Forex online investors expected the UK economy to turn out of recession and into mild growth, the Bank of England announced that the economy had in fact contracted by .4%, making this the longest recessionary period since the 1950’s.

As a result, the British Pound suffered broad losses on Friday and rekindled fears that the BOE would expand its emergency asset purchasing program in November.

At the close, the Pound was down 2.1% to the US Dollar to 1.6304, down 1.3% to the Euro to .9202, down 1.7% to the Swiss Franc to 1.646 and down 1.3% to the Japanese Yen to 149.93.

JPY

The Japanese Yen also suffered a dismal day on Friday, after Japanese Banking Minister, Shizuka Kamei, said that the economy needed an infusion of about 10 Trillion Yen in order to help lift the island nation economy out of the steep slowdown.

This prompted fears of out of control debt similar to that of the US economy and took away safe-haven appeal for the Yen.

At the close the Yen traded down 1.1% to the US Dollar to 91.92, down 1.23% to the Euro to 138.02, down .89% to the Australian Dollar to 84.58 and down .87% to the Swiss Franc to 91.08.

Dollar falls again on Interest rate Worries

The Dollar retreated yet again on Wednesday as continued doubts over a US recovery focused attention on stagnant interest rates.

Forex Analysts have been speculating that the world’s major economies are winding down their stimulus programs and gearing up to raise rates amidst optimistic signs that a recovery is at hand.

Yet recent words from key US figures like Fed Chairman Bernanke and Treasury Secretary Geithner suggest that the US is a long way from raising their core rates which are hovering near zero. This inaction would diminish demand for the Dollar as yields around the world would prove more profitable for traders.

At 1040PM GMT, the US Dollar was down .47% to the Euro, breaking through the technical 1.50 mark to hold at $1.5013. The Dollar was also down .64% against the Canadian Dollar to 1.0426, down .42% to the Aussie to .9275, down 1.35% to the Kiwi to .7594 and down .55% versus the Swiss Franc to 1.0059. The Dollar was up against the Yen, rising .18% to hold in at 90.92.

Dollar rebounds after Asian and European concern over its Weakness

USD

After hitting a 14 month low against a basket of currencies on Monday, the Dollar rallied on Tuesday after Henri Guino, a top French economic advisor said that the weak Dollar is a disaster for the Eurozone.

The sentiment in the Forex market was also echoed by a top Chinese official who is concerned with the recent strength of the Yuan versus the USD and was quoted as saying that there needs to be a turnaround for the Dollar soon or it will adversely affect the Chinese economy.

China is the largest US debt holder and as such has been vocal about bringing about a change in the reserve system. However, Tuesday’s comments showed how susceptible the Chinese economy is to a weak Dollar, quelling, for the moment, talk of ditching the Dollar.

At 10:00 PM GMT, the USD was up .21% to the Euro to 1.493, up .15% versus the Japanese Yen to 90.7, up .32% to the British Pound to 1.6366, up .73% against the Australian Dollar to .9222 and up .07% to the Swiss Franc to 1.012.

CAD

The worries about Dollar weakness have also seemed to affect policymakers to the North as the Bank of Canada left interest rates unchanged, a move that prompted traders to punish to Canadian Dollar on Tuesday.

The US and Canadian Dollars closed last week off near parity, and as a result, it appears from the BOC’s statements that this level helped shape their decision to leave interest rates at a record low .25 percent.

At 10:10PM GMT, the Canadian Dollar was down 2.05% to the US Dollar to 1.0492, down 1.92% to the Euro to 1.5672, down 1.45% versus the Australian Dollar to .9688, down 1.58% to the Japanese Yen to 86.44 and down 1.72% against the British Pound Sterling to 1.7175.

Chart: GBP/USD

There has been much talk about the GBP/USD Tuesday with its move through the trend-line resistance.

The big support at 0.9080 was also in play in the EUR/GBP. The Bank of England’s leader, Mervyn King could either confirm or spoil the technical break Wednesday. From a fundamental perspective, it's tough to see what the driver should be for a further appreciation in the GBP/USD.

Forex News by Finexo.com

USD

Friday’s US data and Q3 earnings reports probably gave us a timely reminder of how fragile and patchy the economic rebound really is and markets tended to favour the “risk-off” trade heading into the weekend. While the industrial production and capacity utilization data looked solid on the headline, the current need to adjust numbers for the impact of the one-off cash-for-clunkers vehicle sales. In essence, the improvement of +0.7% was only +0.4% ex-vehicles, and still showed a 6.1% year-on-year decline. The preliminary University of Michigan confidence index was also significantly lower coming in at 69.4 versus 73.1 expected and 73.5 last. On the Q3 earnings front, Bank of America cast a cloud over earlier more-buoyant results when it revealed a larger-than-expected loss of rising consumer defaults.

CNY and EUR

China was hitting the headlines on Friday, and over the weekend, as the US Treasury highlighted that China’s piling up of foreign reserves threatened to slow the correction of global imbalances, though again fell short of branding the Chinese authorities as a currency manipulator. Similar thoughts seem to be surfacing again in Europe as well with the head of euro-zone finance ministers Jean-Claude Juncker announcing that he, ECB chief Trichet and EU Monetary Affairs Commissioner Almunia would travel to China before year-end to discuss the Yuan’s exchange rate. A similar visit went ahead in November 2007 where the EU plead for a faster appreciation of the Yuan, a plea that was rejected at the time by Premier Wen Jiabao.

Meanwhile on the China economic front, various officials have been more upbeat about the recovery. The chief economist at the National Bureau of Statistics said that China’s V-shaped recovery could extend into next year. An official from the National Development and Reform Commission also said that China would have no difficulty in reaching the 8% official target for the full year 2009, having already reached 7% in the first 9 months of the year.

GBP

The pound was pressured by articles in the Sunday Times and Telegraph with the former highlighting comments from MPC member Posen. Posen said he was in favour of increasing quantitative easing and was not so concerned about overshooting inflation in the current environment. The QE comments ran contrary to those from BOE’s Fisher and Bean last week, who favoured a “pause and wait-and-see” approach. Additional pressure was piled on by an article in the Telegraph, quoting the Confederation of British Industries who warned that Britain risk a sterling crisis if public finances are not brought under control by 2015-16.

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US at Front to Pull off themselves from Existing Troubles

It’s true that the US economy is retaining back to its growing track as the media and some Forex experts have declared that the recession phase has come to an end.

Still it’s not the time to relax for the US officials because they are well informed of the fact that the economy is recovering but not with the desired pace.

The US economic recovery does not indicate any sign of employment generation so that they can delay the trillion-dollar relief program to safeguard the interests of the citizens.

Right now, US have two self-created problems in front of them seeking fast resolution. These are the coming election of 2010 and meeting the Federal Reserve Debt limit of 12.1$ trillion as soon as possible.

Both these situations are forming a vicious circle around the US government officials because foe conducting elections government require financial support in big amounts and the hands of the US are tied up in limits.

They have restricted resources to borrow and expend on elections because the more they borrow the more will be the debt pressure on the economy.

If the employment opportunities do not increases or if further drop takes place in the jobless claims that will bring the victory of US Democratic Party in question in the upcoming elections due to decline in the number of voters.

The problem is that employment generation require funds and funds will be arranged only when the economy is stabilized.

What are the plans of US government to deal with this kind of situation are still unclosed. There is no clear way visualizing to get out of these interconnected troubles.

The officials are trying every option to find the best possible trading option that can lift the value of the weakening USD.

The economic data suggests that the US economy has recovered with 3.2% of growing speed in the last 3Q. However, that will be more speedy then long-term trading trends that will add on the public investments, further weakens the USD and increase the inflation rate.

There is a need to consider the long-term results of each action, as the US government has to control the increasing Federal deficit, inflation rate and maintaining the USD value against all the major currencies to survive at the Forex trading platform.

Chart Analysis: GBP/USD

Forex Charts:

The GBP/USD managed to stave off new lows today below 1.5800 as GBP, USD and JPY fight for lowest spot on the currency totem pole. Today's low and the 1.6110 area are the two key trigger areas for the GBP/USD's next larger move now.

Canada Jobs Shocker

The Canadian Dollar though resisted the rising US Dollar on Friday, after a jobs report showed that the commodity reliant economy created jobs that totalled 600% more than analysts had called for.

The unemployment rate in the North American country fell for the first time in 14 months.

At the close of the Forex market, the Candian Dollar was up .13% to the Euro to 1.5371, up .21% to the Australian Dollar to .9436, up .15% to the Japanese Yen to 85.96, and up .13% to the British Pound Sterling to 1.653.

Chart Analysis: AUD/USD

The performance in AUD/USD looks very strong, and while the AUD/USD has just crossed the .90 mark, the expanding triangle formation we are seeing is a classic bearish one - though we would certainly wait for a break of the lower bound of the formation for confirmation in Forex Charts.

Forex News: Reserve Bank of Australia raised their core Interest Rate to 3.25%

Skirting widespread speculation, the Reserve Bank of Australia raised their core interest rate by a quarter basis point to 3.25%.

The move put Australia in front of all other Western nations, making them the first to raise rates amidst the current economic crisis and sent the Aussie on an upward tear through Forex Online pairs.

The rate hike also helped spur on stock markets across the globe as optimism grew that the global economy was recovering.

At 12:05AM GMT, the Australian Dollar was trading up 1.53% against the US Dollar to a 14 month high of .8904, up 1.25% to the Euro to 1.653, up .76% against the Canadian Dollar to .9433 and up .33% versus the Japanese Yen to 79.06.

Dollar take another hit after G7 confirms trader doubts on Dollar Viability

USD

The Dollar began this week as it ended last, on a down note after a weekend meeting of Finance Ministers and Secretaries from the Seven (G7) wealthiest nations highlighted the street’s view that the world’s financial policy makers are also foresee a gradually weakening Dollar. T

he meeting was seen as tense as conflicting views between China and the US continued to dominate the headlines. The Dollar was also hurt by a bounce in US and global stocks, which rose for the first time in four sessions and further reduced the need for a safe-haven currency.

At 11:50PM GMT, the US Dollar was down .2% to the Euro to 1.4651, down .04% to the Japanese Yen to 89.53 down .03% against the British Pound Sterling to 1.5938, down .63% to the New Zealand Dollar to .7305 and down .41% against the Canadian Dollar to 1.5681.

AUD

The Australian Dollar rose fast across the board, after two prominent Aussie journalists speculated that Australia's Central Bank could raise their core interest rates to 3¼% from a record low 3% this Tuesday's, as the Reserve Bank of Australia meets.

Still, many in the Forex market expect that the RBA will hold off this month and make the rate hike in November. Nonetheless, traders felt positive and boosted the Aussie.

At 12:00PM GMT, the Australian Dollar was up 1.1% to the US Dollar to .8777, up .3% to the Euro to 1.6687, up .45% to the Canadian Dollar to .9395, and up .06% to the New Zealand Dollar to 1.2009.

Dollar Falls as US Economy Shows Signs of Life

The US Dollar was lower against most of the major currencies on Wednesday, after a mixture of reports suggested that the US economy was edging closer to a recovery.

The first and most significant of these reports was a revised GDP report for the second quarter which showed that the US economy shrank, although at a slower rate than initially projected.

Last month, the US commerce department announced the economy fell at a rate of 1% in quarter 2, however Wednesday that number was revised upwards to .7%.

Other data contributing to the Dollar’s performance in the Forex market was a revised ADP employment service report for August which shaved 21,000 unemployed people off the list, from an initial 298,000 to a revised 277,000 job cuts.

Also, September’s initial numbers came in at 254,000, the smallest decline in the job market since the summer of 2008. The ADP numbers show the performance of private sector payrolls.

The US Labor Department will release its September payroll figures on Friday morning. The statistics are considered more comprehensive because they include both the private and public sectors.

It is expected to show the labor market's rate of deterioration slowing, with analysts forecasting a loss of 180,000 jobs in September versus 216,000 in August.

At 10:30PM GMT in Forex Charts, the US Dollar was off .22% to the Euro to 1.4633, down .11% against the Japanese Yen to 89.78, down .32% versus the British Pound Sterling to 1.6005, down .13% to the Canadian Dollar to 1.0686, down .15% to the Australian Dollar to .8839 and down .09% against the Swiss Franc to 1.0361.