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BearishTitle:
Markets Correct Some of the Weekly Losses Ahead of the G8 Summit
As the end of this week approaches, markets started to correct some of the losses incurred through the week. Investors started to close their bearish positions ahead of the coming week, before the G8 summit, which is taking place in the U.S, the thing that supported the euro to rebound over daily basis, cutting most of the losses.
Today, pessimism dominated the euro with the start of the session, where negativity was driven by the Greek downgrade, as Fitch Ratings cut the credit ranking of Greece by one notch to CCC from B- on concerns the nation might exit the euro as more and more Greeks are joining anti-austerity parties.
Moreover, Moody`s downgraded sixteen Spanish banks due to the current turmoil in the debt market in addition to the technical recession and rising unemployment, ...
Title:
Euro hovers near 4-month low as crisis brews
The euro lifted off a four-month low against the dollar on Friday, as investors pared bearish bets after earlier falls but concerns about a Greek euro exit and instability in the Spanish banking system were likely to keep it under pressure.
Investors preferred the relative safety of the U.S. dollar and the Japanese yen and were reluctant to buy riskier assets after Moody's cut the credit ratings of 16 Spanish banks on Thursday.
The euro tumbled to $1.2642, not far from its lowest of the year, before recovering to trade 0.2 percent higher at $1.2715. Traders cited large option expiries at $1.2700 which were likely to cap gains.
Some traders said the euro's recent decline could slow, given investors may be wary of holding positions over the weekend when leaders of the G8 major industrial ...
Title:
Downgrades Day
Forex News and Events:
In a race for downgrades, rating agencies took action targeting the two most burdened countries in the EMU. Moody’s confirmed today a rumor about the downgrade of 16 Spanish banks after having downgraded four Spanish regions, which added more pressure to the the Spanish economy. The increase in risk was reflected by 4-year Spanish Bonos yields, higher at 5.106% against a previous 4.319%. Fitch took over the Greek front by downgrading the country to CCC, adding that all EU countries would be on “Rating Watch Negative” if no pro-bailout government were formed following the elections on June 17. What’s more, while Greek banks are struggling for liquidity from EUR 700mn withdrawals since the elections and Greek central bank governor Provopoulos expecting EUR 100mn more, ...
Title:
Dukascopy Morning Forex Overview : 05/18/2012
Fundamental Analysis
EUR
"Spain, once again, is where the confidence game is played"
- Sebastian Paris Horvitz, strategist at HSBC Private Bank Suisse
Spain sold the maximum targeted amount of debt, 2.5 billion euros, during yesterday’s auction with spiking borrowing costs. The interest rate of three-year bonds rose to 4.373% from April’s figure of 2.89% while interest rate of five-year bonds surged to 5.106% from 3.374 in March.
USD
"What we’re seeing in foreign-exchange markets is strong demand for the U.S. dollar"
- Steven Saywell, head of foreign-exchange strategy for Europe at BNP Paribas SA
Latest US initial unemployment claim data was released yesterday – 370 000 Americans demanded their jobless benefits last week versus a 368 000 consensus forecast. The Labor Department revised ...
Title:
SunBirdFX Daily Market Analysis : 05/18/2012
www.sunbirdfx.com
The US stock markets keep falling as NASDAQ shed 2.1% yesterday and Dow is close to erase everything it gained since the beginning of the year. The investors will focus on Facebook, which will start trading today for the first time.
GBP/USD
The collapse of the stocks makes the investors to move their investments to the USD, as many believe that the American economy is the more stable than the European economies. Therefore, the USD is strengthening against most of the major currencies, which fall sharply because of that. The pound reached the target we set for the current bearish session at 1.58 and stochastic low levels indicate for a possible correction that might hit 1.59. Nevertheless, if the stocks continue falling, we will probably see additional break-down by the ...
Title:
EUR Avoids New 4-Month Low
While the euro remained bearish against its main currency rivals throughout yesterday's trading session, it avoided falling to a new four-month low against the US dollar. The marketplace was unusually calm, as a bank holiday in Europe resulted in limited movements among the most traded currency pairs. As we close out the week, traders will want to note that another slow news day may result in low liquidity in the marketplace. Typically, low liquidity situations can result in exaggerated movements among currency pairs and commodities for seemingly no reason. Any mention of additional euro-zone worries may result in a significant drop for the euro.
Economic News
USD - Manufacturing Data Causes USD to Tumble
The US dollar tumbled vs. the Japanese yen during the afternoon session yesterday, ...
Title:
Crude oil resumes the selloff as the outlook continues to worsen
Crude oil resumes the strong decline and heading to the third consecutive weekly decline as the outlook for global growth and stability in Europe continues to worsen. Oil ended again with losses in NY yesterday for the sixth consecutive session and futures this morning and trading to the downside attempting to breach $92 areas.
The selloff across the board is surely fueled by the fears over the relapse in the global recovery and inevitably influenced by resurfacing debt problems in Europe, where Greece is on the verge of being forced to declare bankruptcy and drop the euro which might pull the footing under wobbling Spain.
Haven demand is keeping the dollar strong and that is further pressure on commodities. The GSCI ended yesterday with losses and was led by energy that dropped 1.10% ...
Title:
Technical analysis of the XAU/USD (Gold) pair on May 18th, 2012
Commentary of the XAU/USD (Gold) pair:
The gold has continued its rebound and is currently testing a pullback on the resistance at 1577 points and also on the lower band of its bearish channel (purple lines).
Indicators are globaly bearish.
We maintain to trade only short positions as far as 1577 points is resistance.
A return below 1550 points will comfort our bearish feeling.
The breakout of 1520 will both a new sell signal and open the way towards 1500 points.
In case of return above 1577 points, we will wait the breakout of 1600 to advise long positions.
See the previous analysis of the XAU/USD pair of May 17th, 2012
XAU/USD Analysis
Title:
Technical analysis of the AUD/USD parity on May 18th, 2012
Commentary of the AUD/USD parity:
The pair AUD/USD took up yesterday its bearish movement and the breakout of 0.99 gave us new sell signal.
The pair is now moving below its falling wedge (brown lines) and below the lower band of its bearish channel (purple lines).
All indicators are bearish.
We continue to advise short positions as far as 1.00 is resistance.
The breakout of 0.98 will give a new sell signal and open the way towards 0.97.
In case of return above 1.00, we will wait the breakout of 1.01 to advise long positons.
See the previous analysis of the AUD/USD parity of May 17th, 2012
AUD/USD Analysis
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