Forex Update 17 August 2012

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Financial Spreads: Spread Betting and CFD Trading

Forex Trading: 17 August 2012

With summer drawing to a close, the forex CFD markets may well begin to focus on Eurozone problems again.

The downward trend line in the EUR/USD has held rather nicely on a couple of occasions thus far. However, it now looks like the trend may finally be broken, simply by the market staggering sideways through it.

Trading ranges are still contracting and volatility is falling off a cliff. As a result, it's tempting to think that we could see $1.2350 becoming a pivot point around which the market coalesces until the sovereign debt issue raises its head again.

Forex Trading: 16 August 2012

While FX spread trading investors are waiting for the ECB to support its banks, they looked to the US industrial data for direction in the EUR/USD pair.

With the figure increasing by 0.6%, the chosen currency was the dollar, and so the pair lost 33 points to close at $1.2286.

Forex Trading: 15 August 2012

On the currency front, the major resistance at $1.2375/85 for the euro/dollar market held almost exactly.

The high point of $1.2385/86 gave technical traders a nice chance to prosper, and we saw substantial selling from clients above the $1.2370 mark.

Many of these clients have now taken their profits, and we have seen renewed buying around the current levels.

There is some light support at $1.2315/25 and below there at $1.2285/95 and $1.2240/50.

For the sterling/dollar forex market, we are seeing a small sell off from the mid-$1.57's, which was reached yesterday morning, but there seems to be little other than profit taking behind it.

Prices are currently at $1.5665, with minor support just below here at $1.5650/60 and more solid support at $1.5615/25.

For the last few months, we had been bumbling around between, approximately, $1.5450 and $1.5750 and it is difficult to see why this should change in the near future.

Forex Trading: 14 August 2012

In the forex spread trading markets, the euro is currently pressing on the falling trend line resistance, which is now at $1.2375/85.

If this breaks, there may be some short covering and the bulls will be looking for an initial target of $1.2450/55. After this, there isn't much price resistance until we reach $1.2625.

Euro bears, and there are a lot of them, will want the resistance to hold, opening the way for a retracement back below $1.23. The ultimate aim will be an attack on the yearly lows down at $1.2055.

Forex Trading: 13 August 2012

Forex markets are as interesting as the indices, with the euro/dollar stuck in a battle between those who believe in the project and those who don't.

The medium-term falling trend line is currently around $1.2380 and this might attract some interest. Nevertheless, unless we see another 'spook' in the Eurozone, it seems that the currency markets are optimistic about the immediate issues/solutions.

The pound/dollar market continues to oscillate around the $1.5700 level, with occasional attempts at the low $1.60's and equally sporadic efforts at $1.5250.

With the current price bang on $1.5700, the temptation is to say 'toss a coin'.

We have reasonable resistance at $1.5715/20 and heavier resistance at $1.5770/80. On the downside, support is evident at $1.5625/35, but there is also a short-term support trend at around $1.5525/35 that might bear watching.

Forex Trading: 10 August 2012

Tired of waiting for the EU officials to deliver on last week's firm promises, currency investors started to exit the euro, sending the EUR/USD pair 59 points lower to $1.2300.

The dollar was also supported by better-than-expected US data regarding housing and employment, as well as a shrinking US deficit.

This morning, the single currency is continuing to drift a little, slipping to $1.2280 at the time of writing.

Forex Trading: 09 August 2012

During both today and tomorrow, things are going to remain quiet on the economic data front.

Today's session will just see the US weekly initial jobless claims and some trade balance data from the UK and US.

As Spain and Italy's borrowing costs remain elevated, and there's no end in sight for the battle to reduce debt, FX investors seem to be growing increasingly nervous about the euros future.

It's also true that the signs of sluggishness in global economic growth are not helping either.

As a result, it was little surprise to see that the euro/dollar pair was under pressure again yesterday, losing 34 points overall to $1.2362.

This morning the focus has been on Chinese industrial production and retail sales figures. These came in just below expectations and so we haven't seen a mad rush of selling.

Forex Trading: 08 August 2012

The shared currency took a breather yesterday, closing almost flat at $1.2397, as the relief rally which followed last week's US employment numbers seemed to have run its course.

Considering the recent manufacturing data from the Eurozone, it can be argued that the euros performance has been rather resilient of late.

On that note, German factory orders declined by more-than-expected, indicating a slowdown in Europe's biggest economy; yet another piece of bad news for the single currency.

Forex Trading: 07 August 2012

The euro continued to rise against the US dollar yesterday, reaching an intraday high of $1.2443.

This came on the back of building expectations that the European Central Bank is preparing to help the troubled Eurozone banks.

Nonetheless, the daily range was rather tight, as indicated by the Financial Spreads charts, and the overall gain was fairly limited.

The pair closed just 16 points higher at $1.2396 as forex investors didn't seem to buy into the story wholeheartedly.

Forex Trading: 06 August 2012

The US Non-Farm Payrolls data showed a better-than-expected increase in the jobs number, 163,000 versus 101,000, which completely changed the overall sentiment in global markets.

In reaction, forex spread trading investors felt confident enough to take on some risk and pushed the euro 203 points higher against the dollar to $1.2386.

There was also speculation that the Germans might just give in to bonds buying by the ECB and this added support to the shared currency.

This morning however, a little bit of profit taking is creeping in, taking EUR/USD to $1.2350.

By Simon Denham, 17 August 2012

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