Forex Update 14 October 2011

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Forex Trading: 14 October 2011

Forex spread betting markets are largely flat this morning so for now the dollar's recent weakness is taking a respite.

The euro has made some decent gains against the US currency but seems to have come to a halt around $1.3800.

At the time of writing the euro - dollar currency pair is at $1.3770, with near term support and resistance seen at $1.3700, $1.3615, $1.3570 and $1.3830, $1.3875, $1.3950 respectively.

Sterling has had what can only be described as a rather boring time trading against the euro, as GBP/EUR is pretty much flat on the year.

Oscillating between €1.2 and €1.1 throughout the year it really has been the battle of the dogs with no major breakout in either direction.

Until the Eurozone mess is sorted out, or the BoE looks set to raise interest rates again, this trading range could continue for the foreseeable future. At the time of writing the pair is at €1.1440.



Forex Trading: 13 October 2011

The Dollar was the whipping boy for those spread betting on forex yesterday, and has now pretty much eradicated the gains it has built up since the middle of September.

This resulted in good strength for EUR/USD which surged back above $1.3700 and is now hovering around $1.3800 at the time of writing. The Dollar weakness gave Cable a boost too which almost hit $1.5800 but this morning is at $1.5735.

One of the biggest gainers against the US currency in the past few days has been the Australian Dollar which has enjoyed an 8.5% rise from its recent lows around $0.9400.

Now well back above parity, the AUD/USD is at $1.0220 this morning testing a three week high.



Forex Trading: 12 October 2011

Forex spread betting markets were, on the whole, rather range bound yesterday. The EUR/USD rejected the $1.3700 level before bouncing off its lows in conjunction with equity markets in order to have another look at its highs.

This morning the pair is at $1.3645 still finding the push above $1.3700 too much. This is the near term resistance followed by $1.3760 meanwhile $1.3570/20 and $1.3470 are seem as support.

The weaker than expected UK manufacturing data gave the bears the opportunity to push Sterling a little lower. GBP/USD dipped back below the $1.5600 and this morning the pair is at $1.5590.

Sterling has managed to remain relatively strong considering that the UK economy has flat lined over the past year, but questions are now being asked over the little 'safe haven' status it has recently enjoyed.

As mentioned in before, the UK finances are not in good shape and aren't getting any better either. The new bout of QE isn't positive for the UK's currency either and so at some point investors might turn against the Pound.

The Euro has also had the edge over Sterling so far this month, bringing the GBP/EUR spread betting market back down from the dizzy heights of €1.1700 to €1.1425 this morning.



Forex Trading: 11 October 2011

FX spread betting markets are broadly flat this morning with the Dollar not doing much. It's weaker against the Euro and a little stronger against the Pound so not much to write home about.

Like the shares spread betting markets, EUR/USD has enjoyed a good rally in recent days but is finding it hard to maintain gains around the $1.3700 level.

A few failures there in the past make this the big resistance level for the pair to overcome and with it trading at $1.3665 at the time of writing it's not far off possibly having a go.



Forex Trading: 10 October 2011

Currency spread betting investors have taken positively to the Franco-German meeting regarding recapitalising banks and the Greek rescue, and the Dollar and Yen have taken the brunt of it this morning.

The Euro is having a tasty 150 pip rally versus the Dollar, now trading at $1.3538, and the Euro - Yen spread betting market is also seeing gains.

Let's not forget Fitch's downgrade of Italy and Spain's credit rating, which is obviously a negative factor to be taken into account. However, there is finally some indication of action coming from Eurozone leaders and so, at least in the short term, the Euro will enjoy this bear squeeze.



Forex Trading: 07 October 2011

The Euro has managed to scrape back this week's losses against the Dollar, on the back of news that the ECB were to freeze interest rates at 1.5% and plans to buy €40bn of bank bonds.

Forex spread trading investors took this with great delight and shifted out of the safe haven Yen and Dollar, creating a spike in the Euro.

The Euro - Dollar forex pair is trading at $1.3455 having rebounded on its last support level and after yesterday's moves. We could see the Euro have a bit of a squeeze to end the week.



Forex Trading: 06 October 2011

Today is all about central bank decisions and yesterday FX spread betting investors were tentative in anticipation of the ECB meeting on interest rates.

There is some speculation is that European rates could be cut, which could signal weakness and further misery for the Euro, however no action is actually expected from either the BoE or the ECB.

If neither make their move today, then the likelihood of a fresh round of printing from the BoE and an interest rate cut by the ECB is far greater next month.

The EUR/USD pair is currently trading at $1.3339 and has broken through a rising trend line, which is a negative signal.

We could expect to see possible weakness here although, fundamentally, the news coming from the ECB meeting later is likely to have some sort of effect as well.

The Yen and Dollar remain the preferred choice of safe haven for traders at the moment and there is no reason for this to change anytime soon.



Forex Trading: 05 October 2011

The Euro took full advantage of Fed Chairman Bernanke's speech, after his reference to the US economy as "close to faltering", created a short term panic that the US could go back to quantitative easing.

The Dollar tumbled on the forex spread betting markets and the Euro was only too glad to make up for the sharp falls seen recently, jumping as high as $1.3368.

Having said all that, the Euro - Dollar pair is off again this morning, trading down at $1.3298, as traders are speculating that the ECB could look at increasing monetary stimulus. They are also looking to today's release on Eurozone retail sales, which are expected to show a fall for August.



Forex Trading: 04 October 2011

Forex spreads investors are still very much on edge as European finance ministers have now pushed back the release of Greece's next loan until after October 13th.

The EUR/JPY hit a ten year low and the Euro also went lower against the Dollar yesterday, as safe havens seemed to be the only option for traders. EUR/USD is currently trading at $1.3175 and we still know it's fragile out there for the single currency.



Forex Trading: 03 October 2011

With stock market indices flagging and bonds pushing higher, risk aversion is on the up. Therefore, we are seeing US Dollar strength this morning as the EUR/USD pair falls towards its January lows.

Currently at $1.3338, and in a strong downtrend, support is at $1.3285 with resistance at $1.3410.


By Simon Denham, 14 October 2011


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