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EUR USD at Important Resistance

This has been a very good week for the Euro. The common currency rallied first anticipating a positive austerity vote in Greece and then in response to it. All said, in last four days, the Euro advanced over 400 pips against the USD while also gaining on other currencies. For some time the price of EUR/USD, as seen on a daily chart, has been moving in ever-smaller swings, contained between the high of 1.4939 and the low 1.3968. It is also between two trendlines, which form a symmetrical triangle.

Most recently, the price tested the supporting trendline, twice, and both times, it failed to close under it. After this week’s rally, the EUR/USD found resistance on the other side of the triangle. The price retreated from the daily high and did not close above the trendline. N

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EUR/USD: Trading the U.S. ISM Manufacturing Report

Trading the News: U.S. ISM Manufacturing

What’s Expected:

Time of release: 07/01/2011 14:00 GMT, 10:00 EST

Primary Pair Impact:EURUSD

Expected: 52.0

Previous: 53.5

DailyFX Forecast: 51.0 to 54.0

Why Is This Event Important:

The U.S. ISM Manufacturing index is expected to fall back to 52.0 in June from 53.5 in the previous month, which would be the lowest reading since August 2009, and the slower pace of production could spark a bearish reaction in the U.S. dollar as it dampens the outlook for future growth. A

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FX: Most Important Dates In July

Earlier this week, we talked about how the foreign exchange market dodged a bullet when Greece voted “Yes” to more austerity. The sheer relief of investors can be seen in the price action of the euro which rose from a low of 1.4100 on Monday to a high of 1.4550 on Friday. The broad based decline in safe haven currencies also shows that investors are more willing to take on risk, which is another sign of optimism. Over the past week, the Swiss Franc depreciated against all the major currencies which is remarkable considering that it started the week at a record high against the euro and U.S. dollar.  Aside from strengthening against the Franc, the U.S. dollar Read more text…

Daily Chart Art – July 4, 2011

EUR/JPY: Daily

First on the canvas today is a potential support-turned-resistance play on EUR/JPY. The pair is currently testing 117.50, which is not only a minor psychological level, but is also a support-turned-resistance area for the pair. On top of that, there seems to be a bearish divergence forming with price making lower highs and the overbought Stochastic signal making higher highs. If you’re bearish on the pair you can place a tight stop and target the 115.00 support, while the bulls can also make a play for a potential double bottom and wait for a break above the 117.50 resistance.

GBP/USD: 1-hour

Who’s up for trading Cable today?

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Currency Correlations, Part II: Canadian Dollar Begins its Decline

In April, I wrote a post entitled, “Economic Theory Implies Canadian Dollar will Fall,” in which I argued that the currency’s impressive rise was belied by fundamentals. It seems the gods of forex read that post; since then, the Loonie has fallen 3% against the US dollar alone. Based on my reading of the tea leaves, the loonie will fall further over the coming months, and finish the year below parity.

My contention is basically that investors are falsely treating the Loonie is a high-yield growth currency, and hence, bidding up its value. There are a few reasons why I believe this viewpoint is completely erroneous. First of all, Canada’s economy is both plain and mature. While i

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Quantitative Easing Ends, U.S. Dollar Higher

The U.S. dollar is higher across the board today in forex trading on the currency market. It’s the first day without quantitative easing, and the greenback is doing better than many thought it would. 

However, a lot of it probably has to do with low volume. Americans are gearing up for a long weekend, and Europeans are waiting to see what happens at a special finance minister meeting on July 3.

With all of this waiting, it is little surprise that the U.S. dollar is higher — even with stock markets in Europe and the U.S. rallying to start the month of July. 

Canadian Dollar Jumps, Ending Very Good Week

The Canadian dollar jumped today, ending this week without losses against its US counterpart, as risk appetite, caused by the improvement of the Greek situation, spurred demand for higher-yielding currencies.

Canada’s gross domestic product was unchanged in April after increasing 0.3 percent in March, while a drop by 0.1 percent was expected. Crude oil, the main Canada’s export, advanced 4.2 percent this week, the biggest weekly gain since the week ended April 8. The unexpected increase of the Manufacturing Purchasing Managers’ Index of the US, the main trading partner of Canada, was also positive for the Canadian currency.

Next week we can also see some positive news. Analysts estimated that numb

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Daily Forex Analysis – July 1, 2011

GBPUSD Analysis. After touching the downtrend line from 1.6441 to 1.6261, GBPUSD dropped from 1.6118. Now the fall from 1.6118 would possibly be resumption of downtrend from 1.6546. Deeper decline to test 1.5912 previous low support is expected later today, a breakdown below this level will signal resumption of downtrend, then next target would be at 1.5700. Resistance is at 1.6118, only break above this level could indicate that lengthier consolidation of downtrend is underway.

AUDUSD Analysis. AUDUSD’s rise from 1.0390 extended to as high as 1.0750. The pair is now facing 1.0773 resistance. M

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