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October/10/2011- Comments and forex-analytics from FBS

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October/10/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Mon Oct 10, 2011 4:28 pm

Ichimoku. Weekly forecast. GBP/USD

Weekly GBP/USD

Last week the bears tested the levels below the Ichimoku Cloud, but then the bulls has managed to improve the situation and the pair ended up forming a bearish candle with long lower shadow.

After declining a bit the Standard line (1) and the Turning line (2) went horizontally showing that the prices are likely to keep consolidating within Kumo.

Pound is supported by Senkou Span B (3). Tenkan-sen (1) and the Kijun-sen as well as the upper border of the Ichimoku Cloud play the role of resistance for GBP/USD.

The Cloud itself which has recently switched to the negative mode (4) remains very thin, so the bears still lack power.

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Daily GBP/USD

On the daily chart sterling was trading around Tenkan-sen (1): at the beginning of the week the pair broke down support provided by the Turning line, but on Friday it once again managed to close higher. Now the horizontal conversion lone has retaken the supporting function.

The descending Ichimoku Cloud (3, 4) keeps widening due to the declining Senkou Span S (3) showing that the bears are in change on this timeframe.

The Standard line that’s moving down acts as resistance for the prices (2). The bulls may be able to push pound to its levels before British currency resumes its decline.

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Re: October/10/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Mon Oct 10, 2011 4:32 pm

Ichimoku. Weekly forecast. USD/JPY

Weekly USD/JPY

On the weekly chart the pair remains trapped in the range between 76 and 78 yen within which it has been trading since the beginning August.

The declining Turning line (1) doesn’t let the prices move up pressing the greenback to the minimums. The Standard line has also gone sharply down (2).

The bearish Ichimoku Cloud keep widening (3, 4). Tenkan-sen (1) and Kijun-sen (2) continue holding the strong “dead cross” in place providing resistance for the prices.

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Daily USD/JPY

On the daily chart USD/JPY consolidated in the area of the Turning line (1). The longer-term Standard line (2) and Senkou Span B (4) are directed horizontally hinting at further sideways trend.

Tenkan-sen (1) and Kijun-sen still hold the strong “dead cross” (5) formed below Kumo. The pair keeps being pressed by the wide descending Ichimoku Cloud (3, 4). Any attempts of the bulls to get higher will meet serious resistance.

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Re: October/10/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Mon Oct 10, 2011 4:38 pm

Ichimoku. Weekly forecast. USD/CHF

Weekly USD/CHF

On the weekly USD/CHF chart Kijun-sen (1) and Tenkan-sen (2), as it was expected, formed the “golden cross”. This is the bullish signal, though rather weak as the lines have intersected below Kumo (1).

The Turning line (2) is moving up – the short-term trend is bullish, though the horizontal Standard line (1) means that the prices may consolidate for some time taking into account the fact how close they have come to the resistance provided by Senkou Span A (3).

At the same time, the descending Ichimoku Cloud (4) has narrowed that means that the prices will likely enter Kumo.

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The Turning line (1) still supports US currency. The next support is provided by the Standard line (2).

The rising Ichimoku Cloud (3, 4) has become wide enough and keeps widening that means that the bulls finally managed to regain power. The general technical picture seems to be positive.

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Re: October/10/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Mon Oct 10, 2011 4:44 pm

Merkel and Sarkozy promised to recapitalize European banks

German Chancellor Angela Merkel and French President Nicolas Sarkozy pledged to come up with a plan of recapitalizing European banks at the G20 summit that will take place on November 3. According to the IMF, the region’s banks need 200 billion euro of capital.

It becomes more and more evident that the crisis reached the core euro zone nations: French-Belgian bank group Dexia fell victim of the liquidity squeeze. Belgian government announced that it would pay 4 billion euro ($5.4 billion) to take over the local consumer-lending unit, while the rest the group will be financed by the state guarantees worth 90 billion euro ($120 billion).

As for Greece, Merkel and Sarkozy underlined that they are waiting for the verdict of Troika experts – the EU, the IMF and the ECB – to determine the next step to keep the indebted nation in the currency bloc.

The single currency climbed today versus the greenback from the minimum at $1.3377 to the levels above $1.3550.

Analysts at Commerzbank note that the market’s negative reaction on Spain’s and Italy’s downgrades by Fitch on Friday was exaggerated. In their view, that explains today’s strengthening of euro. Strategists at Citi think that EUR/USD won’t be able to sustain gains as the European authorities have actually done nothing new and investors will soon return to the gloomy mood due to the absence of the details of Merkel-Sarkozy’s plan.

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Societe Generale advises to sell EUR/CAD

Analysts at Societe Generale note that better-than-expected US September Non-Farm Payrolls reading allows hoping for US economic recovery. According to the data released on Friday American employers added 103,000 jobs last month versus the forecast of 55,000, while Canada’s payrolls increased by 60,900 exceeding the projection of 15,200.

The specialists believe that US economy is likely to get stronger in the final quarter of the year. In their view, to benefit from such expectations one should sell the single currency versus Canadian dollar. The United States is Canada’s main trading partner, so its growth will be positive for loonie, while euro will likely stay under pressure due to the looming debt problems.

Societe Generale recommends opening shorts on EUR/CAD at 1.3900 stopping above 1.4100 and targeting 1.3100.

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