Forex Update 28 October 2011

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Forex Trading: 28 October 2011

The appetite for risk boosted the single currency way beyond the expectations of many as EUR/USD went from strength to strength. The pair smashed straight through $1.4000 to get to the dizzy heights of $1.4200.

This morning a little bit of profit taking is the order of the day with EUR/USD trading at just a tad below its highs around $1.4195.



Forex Trading: 27 October 2011

There has been a lot of sideways trading for the EUR/USD pair on the FX CFD markets this week, as traders waited for the big news to come out of Brussels yesterday.

There was a mass sell off in the afternoon and the euro dived around 180 pips in an hour and half, as there was a lot of speculation over the outcome of the EU summit.

The news that Greek debt holders will accept a 50% loss and the rescue fund is to be increased to €1 trillion, has encouraged eager traders this morning and EUR/USD and is trading at $1.4035. This is a fundamentally-driven rally and so we could expect to see some further upside based on this news.

The pound saw a similar drop yesterday against the dollar for the same reason the euro fell and in similar fashion it bounced back as well.

The surge hasn't been quite the same this morning, but the gist is that equities are up, safe havens are down, and risk appetite is back on table. Cable is trading at $1.5995 and sees support at $1.5955 and resistance at $1.6050.



Forex Trading: 26 October 2011

The euro remains strong on the Forex CFDs markets. Today of all days, where again you'd maybe expect a bit of selling to cover long positions.

Not the case this morning as the single currency is just in the black against the dollar, trading at $1.3935 at the time of writing. Support and resistance for EUR/USD is seen at $1.3850/10, $1.3750 and $1.3955, $1.3985, $1.4020 respectively.

For cable, sterling still has the upper hand and is sitting above the $1.6000 level at $1.6025 at the time of writing. For GBP/USD, support and resistance is seen at $1.5900, $1.5850 and $1.6050/90, $1.6120 respectively.



Forex Trading: 25 October 2011

The euro moved higher against the dollar yesterday but has been trading gradually downwards in a tight range this morning to around $1.3916.

It's likely that a lot of traders are looking to the EU summit tomorrow to talk further about the debt situation in the Eurozone, which is why ranges are so tight.

Considering the EUR/USD analysis, the ten-minute trading chart is showing the pair trading within a bullish channel, which could signal some upside. However, if it breaks through $1.3830 we could then be looking at $1.3750.

Cable has recaptured the $1.6000 level this morning, not seen for six weeks or so. The sharp bounce from below the $1.5500 level has caught some bears off guard and the pair is now back above both the 20 and 55 day moving averages.

Dollar weakness is giving the upper hand to the likes of the euro and sterling as the appetite for risk continues to improve.



Forex Trading: 24 October 2011

A combination of factors has helped the euro strengthen against the dollar and the single currency has squeezed nearly 200 pips since last Friday.

Traders got the taste for riskier currencies after the EU summit, where the expectation is that the bailout fund will be expanded, despite a Franco-German divide on other areas.

Elsewhere, bullish traders were reviewing potential for further quantitative easing in the US and also expected rises in China's manufacturing. The EUR/USD forex pair is trading at $1.3900 currently, with support at $1.3810 and resistance at $1.3955.



Forex Trading: 21 October 2011

The dollar is seeing a little bit of strength this morning with the dollar index hovering just above the 77 level.

This is at the expense of the euro and sterling which are drifting to the downside but not with any great momentum.

EUR/USD is finding it difficult to hold onto the $1.3800 level as it trades at $1.3735 at the time of writing having been trying to hold its ground overnight.

Cable is not suffering as much as the euro this morning and so sterling has the edge over the single currency this morning as GBP/EUR trades at €1.1480.

Having traded between €1.1400 and €1.1500 over the last few days, the ongoing talks in Europe could give the pound the momentum to push beyond the near term resistance at €1.1500.



Forex Trading: 20 October 2011

There was strong interest in the euro yesterday and traders piled into the single currency, hiking it 140 pips against the dollar, but by around 7pm it had almost reversed the whole day's gains.

We saw the shift after S&P cut Slovenia's credit rating, which encouraged CFD trading investors to move out of long euro positions.

At the moment we have the ongoing speculation regarding the Franco-German divide and this is causing concerns as to how the European Financial Stability Facility can be maximised.

The euro is still dropping off this morning and is trading at $1.3686 against the dollar. With equities down strongly as well this morning, traders don't appear to be in the mood for any risk-taking.



Forex Trading: 19 October 2011

After a bit of a rollercoaster of a day on the forex markets, the euro ended the day pretty much flat against the dollar.

Traders are cautious at the moment as to how things are going to pan out at the EU leader summit October 23rd. However, both France and Germany have stated that they would support the idea of quadrupling the European Financial Stability Facility to two trillion euros.

The pair is having a small rally this morning off the back of that, trading at $1.3815 and there's support seen at $1.3725 and resistance at $1.3830.



Forex Trading: 18 October 2011

The official CPI measure is expected to rise to 4.9% year on year, a whisker off 5% which many expect it to beat at some point, even the BoE has admitted this. Considering the upward pressure to prices from energy bills we could even see inflation hit that number today.

The recent announcement from the BoE that they'll be printing more cash means that high inflation is likely to stay way beyond most people's expectations. It will only take a prolonged period of flat or even negative growth to bring it back down.

Later on this morning we get the German ZEW survey which is closely watched as it has been weakening significantly in the past few months. It will be interesting to see whether economic expectations have improved a little ahead of Sunday's big plan announcements.

Despite trading near a one month high, the EUR/USD forex pair dropped off drastically as traders were shaken by the news that German leaders think it is unrealistic to find a solution for eurozone debt problems by the October 23rd summit.

This wasn't what they said a couple of weeks back was it? The euro is now trading at $1.3704 against the dollar and momentum is pointing strongly downwards. It has broken through a rising trend line, which could signal further weakness from here.



Forex Trading: 17 October 2011

Since the start of the month the euro has put in a good performance against its counterparts and was just short of a month high on Friday versus the dollar.

Despite the strength in equities, this morning the forex CFDs market is looking a little more cautious than we could have expected. Some investors are positioning themselves just in case European leaders struggle to meet the deadline in curbing the debt problems.

The euro is down against the dollar this morning at 1.3861 but is trading above its 1.3800 support level, which could signal some potential upside here.


By Simon Denham, 28 October 2011


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