USD,EUR, GOLD,SILVER (Analysis)

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USD

USD updated its historical minimums against major currencies once again. It seems that the effect of $900 billion injections in the banking finished influence on the market. There were not negative data on the United States that could make such an impact, and besides, there were not reasons for this decline except speculative selling of USD. Considering the negative expectations about the United States, most of people are using any correction or any other excuse to sell the American currency, so that it leads to the establishment of new negative records for the dollar, but it should not be forgotten that this market condition will not last for a long time and everything will change very soon in the opposite direction.
Yesterday negative condition of the market was caused by the market rumors about possible rejection of Persian Gulf countries from attaching their currencies to USD, which increased the overall negative sentiments.
Perhaps, time has not come for the opening of long positions on USD, but it is ahead.
Today, among statistics it is worth to pay attention to the price index of imports - Import Price Index, which is expected to grow against a background of USD declining. And also some interest Retail - Retail & Food Sales. Growth in sales will contribute to the confidence American consumers.
Although the data are not of fundamental importance, in the absence of them market can draw attention to them.
Commenting on USD decline to further minimums, the president Bush declared that the United States have a policy of a strong dollar, and USD "is going through a correction”. In his opinion, weak dollar has an impact on the purchasing capacity of the United States concerning energy. Bush: "Absolutely" wanted to see strong dollar.

EUR

EUR/USD mounted to a new absolute maximum at 1.5585. The increase was due to speculative factors as well as positive data on Industrial production - Industrial production in the EU, which made up 0.9% m / m, 3.8% y / y against -0.2% m / m, 1.3% g / g in the previous month.
Nevertheless, it is worth to mention that the current results have been achieved in January, when the rate was much lower than the current one. It is expected that next month's major trade estimates will be slightly worse because of the strengthening of EUR, which is setting new records almost everyday.
Today, there are no statistical data on the European economy, so all attention will be focused on the statements of politicians and statistics from other countries.
Among the high-flown speeches it is worth to mention the Head of the European Central Bank Jean-Claude Trichet, who said about the maintenance of liquidity through joint efforts, as well as the representative of the ECB Yungera Stark, who expects the slowing down of world economic growth this year. One of the factors will be slowing down of the American economy. Nevertheless, Stark noted that the investment in the EU remains at a high level, as there is no credit crisis. In his view, economic growth in the euro area in 2008 will be the modest, probably less than 2%, but in 2009 growth will accelerate.

CAD
Perhaps, USD/CAD remains the most stable pair at present. When major currencies against the American dollar are setting absolute records, CAD is trading in side trend.
The fact is that last year Canadian authorities have decided to follow the path of the development of the American economy after the United States and began to decrease interest rates. As a result, the weakness of the American dollar was partially compensated by the weakness of the Canadian currency. In addition, the understated rate of USD/CAD prevents pair from fall.
Therefore, opening long positions on the USD/CAD with the aim of 1.1650 (closing five-year cycle) and stop loss below 0.92 (minimum pair) remains the most interesting variant.
At present, the pair is being traded in the area of 0.99. Prices fell slightly against the backdrop of strong sales of the American currency, but it is expected that turnout will happen soon. A strong level of support is at 0.9965 (50% of the correctional growth)


Silver
At the start of the European session silver continues to increase, which was initiated in the Asian session. Before the opening of bids in Europe value of one troy ounce is $ 20.23. It is expected that against the backdrop of continuing decline in the value of USD, the value of precious metals will continue to rise.
The immediate support for the interim Silver is at around $ 19.40, and the nearest strong resistance is at $ 21. Intermediate resistance is at around $ 20.25.

 

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GOLD
Yesterday gold set a new maximum. Increased cost of the metal caused by the decline of USD in which gold is actually quoted. Against the background of declining dollar, many investors have moved some of their capital to commodity market, and that is supporting this sector.
Prior to the opening session of the European price closely approached the psychological resistance level of $ 1000 per troy ounce, but this level of testing did not. In the condition of large speculative capital it is not recommended to open positions before correction.
At present, a strong level of support is at around $ 940 (50% of the uptrend, see chart). Intermediate support is at around $ 973 per troy ounce, but in the condition of great position fixing this level can be broken.

 

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EUR
EUR is being traded in expectation of statistics on the consumer price index - Final HICP. In conditions of increased inflationary pressure the main priority of the EU monetary authorities is the struggle with secondary effects of inflation. Against the backdrop of the high cost of oil and food it is difficult to keep inflation within the limits of allowable values, but the strengthening of currency partially solves this problem.
Before the opening of European trading session EUR/USD was in the region of 1.56. Recently, the price is steadily strengthening, and the lack of history at current levels makes technical analysis virtually helpless in predicting the point of turnout. The immediate support for the pair is at 1.53. Stronger support is situated at 1.5150. Intermediate resistance is at 1.5650. The strongest level is likely to be at 1.6, however, it is unlikely that the price will be able to reach it.

the source of info: http://blog.poltekfx.com

 

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USD
American currency continues to incur losses against other currencies. The uncertainty of the American economy and inactivity of the USA monetary authorities leads to the fact that the weak dollar is threatening the economy of many countries, especially those in the Persian Gulf where currency exchange rates attached to the dollar.
The American economy will go through this recession, but the dollar will never be able to become such a popular currency which it became after World War II. Moreover, against the background of high inflation in countries which exchange rates are attached to the dollar, the monetary authorities are seriously considering the possibility of the attaching rate to the basket of currencies, in which USD will not have the dominant value.
Such a step would make the dollar more vulnerable and “green papers” scattered around the world could not remain necessary for anybody… and then massive selling of USD by all countries is not excluded so that it would hurt the American economy.
Regarding the current economic situation, it is worth to note that USD continues to decline, and the rate of decline is increasing. Such a scenario will inevitably lead to the development of inflation growth due to increase in energy prices and import costs. After the mortgage crisis it will be more difficult to get loans for business development because the banks will increase the minimum requirements, and increased inflation will force them to raise interest rates.
Among the positive points it is worth to mention that for domestic production in the United States it will be easier to compete with imports and that will promote the growth of the economy.
Today will bring us new statistics on inflationary data for February, and consumer sentiment index for March will be published. Indicators will be taken into account by the market.

 

[timbecks777]

If USD continues to fall gold will be goin’ higher. But this speculative growth is not provided with fundamental factors. It means that at some moment when the U.S are in the phase of completion of struggle with recession USD will stop it fall and start strengthening. Then speculative funds will be took out from gold and the result will be rapid collapse of USD.

 

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JPY The weakness of USD has led to a decline in USD | JPY below 100 yen per $ 1. So cheap American currency have not been since 1913. It is obviously the current mark is not provided with fundamental data. On the one hand, opening positions on Bid is very risky, as there is a high probability of entering the market at minimums, but it is too early for Ask because the price may fall further. It is expected that the price against the background of retracement will return to the area of 112 figure (50% of the descending trend), but this corrective movement is possible only in case of strengthening the American currency. By analyzing the Japanese economy, it may be noted that the interest rate will be at the minimum points most likely before the third quarter of this year, when it has become known effects of the recession in the United States. Inflationary pressures in Japan show no signs of accelerating, despite the fact that industrial production is growing steadily. The problems in the Japanese economy can arise if only the American currency will be near the current mark for a long time. Then the import of the United States will decline and taking into consideration that the United States is a major consumer of Japanese goods, we can expect it.In the short term attentions by investors will be attracted by comments of politicians. There are no important data on the Japanese economy this week, so all attention will be paid to the comments and actions of the Fed. At the Asian session Fukui comments will be of great importance that will be followed after the pair USD | JPY sets new minimums.

the source of info: http://blog.poltekfx.com

 

[timbecks777]

USD Over last week, USD fell to new minimums. The decline was caused by cancellation of debts by American banks as well as the approaching meeting of the Federal Committee of the United States, which many analysts expect to reduce the interest rate by 0.5% -0.75%. Recession in the American economy led to a decline of USD value to the minimum. Particularly strong dollar has been falling over the past two weeks, when expectations of the recession began to be confirmed by fundamental data. As a result, some pairs updated their absolute maximums and deviated from balance. Fundamental analysis of the American economy shows that the interest rate in the United States could be reduced to 1%, which will lead to a decline of USD and the growth of industrial production. Among the negative factors there will be hyperinflation and raising interest rates to double quantities. The growth of inflation in the United States will be accompanied by rising interest rates leading to the strengthening of the dollar and slow growth. Among the statistics it is worth to note Friday’s issue of the consumer price index - Consumer Price Index, which in February was 0% vs 0.4% (month earlier). Reducing the index may mean that the Fed still has the possibility of reducing the interest rate, which is 3% at present. On Monday an issue about American economy will be published, which is worth to pay attention to capital inflows by data of the Treasury of the United States as well as data about industrial production. An increase of foreign capital will mean that investors believe in the imminent completion of a recession in the American economy and try to invest money in securities until they are at their minimum points, and growth in industrial production may mean “bottom” of reducing the American economy.

 

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EUR EUR continues to strengthen against USD. Increased inflation in the EU, which the European Central Bank is intending to continue the fight with, regardless of everything and strong growth in the European economy (which is expected to slow down slightly in 2008, but accelerate in 2009) is supporting EUR. It is expected that interest rates in the EU will remain at 4% at least until the third quarter of this year, and then as inflationary pressure in Europe reduces interest rates will fall, causing decline of European currencies as well as additional support of the growth of the European economy. Considering reducing rates in the EU and the victory over the recession in the United States EUR/USD will change the ascending trend to descending one, which will mean a new cycle of the world economy. It is expected that after the growth of EUR/USD over 6 years (since the introduction of EUR), there will be a three-year period of declining. Perhaps the absolute maximum of pair will be recorded at the current points. Difficulties in predictions have been presented by the fact that at the current positions the price has not been located yet, but chances are 1.5875 mark will be tested. On Monday any significant data on the European economy will not be published, so the emphasis will be placed on market statistics from the USA\

 

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USD
The American currency on Asian bids set new absolute minimums, after which traders began to open the positions for the sale USD, which led to its strengthening to levels of opening.
Statistics from the American economy shown that capital inflows (according to the U.S. Treasury - Tsy Intl Capital System) have increased from $56 to $ 62 billion, that shows confidence of foreign investors in the future of the American economy.
Perhaps USD is at its minimum below which it will not be able to fall no more that pushes investors to buy American securities as they are relatively inexpensive.
Other indicators, among which it is worth to mention manufacturing production - Industrial Production and Business Activity Index - NY Fed Empire State Survey showed a slight deterioration, but it was within the permissible limits.
The market is waiting for a decision on interest rates, which will be published tomorrow at 21:15. No one doubts that rate will be lowered. The question is whether how they will be reduced. The range of opinions is verifying from 0.5% to 1%, but the majority believes that the Fed will reduce rate by 0.5%.
Besides reducing the interest rate tomorrow there will be published data on Producer Price Index. If the index stays at current points, it could cause much greater decline in the American currency because the Fed will have additional opportunities for lowering the interest rate.
In addition, investors' attention will be drawn to the start of construction of new houses -Housing Starts. This is an advanced rate indicator. It depends on many factors and therefore varies greatly, but if it shows a growing trend for the 3rd consecutive time, it will mean the completion of the negative effects in the construction sector, preceding future growth of the American economy and the strengthening of USD.

GBP
GBP is descending against USD two days running. After deviation of pair above the level of 2,008 the cost of USD expressed in terms of GBP has become very attractive for Bid and the main reason for reducing of GBP | USD.
Among the British data the main attention focuses on the inflationary data to be published before a decision on interest rates in the United States, as well as the publication of the Bank of England meeting minutes which will be published on Wednesday.
The British economy at the moment needs to reduce interest rates to support its growth, but inflation does not allow lowering them, forcing the Bank of England to keep their current levels for a long time.
At the end of trading day on Monday GBP/USD was above the level of 1.9870 (closing of the second three-year period), which is the first intermediate goal before further decline of pair. The next support is at 1.9575-1.94 (the area of closing five-year cycle). Further support is at 1.9175 (closing of a three-year period). Break by 1.94 may mean the final declining of pair, which should last for three years at least. The cause of decline will be the growth of USD and the decline of GBP, which will be caused by the needs of both economies.

 

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GOLD

After reaching a new absolute maximum the price of gold fell to $ 1000 per troy ounce. It was caused by technical factors and only fixation of speculative positions that were closed after reaching the level of $ 1030 per ounce.
If USD continues to decline, there will be new historical highs. In that case, growth could resume either from the level of $ 1000 or $ 980 (helpline ascending channel). However, the announcement of decision on interest rate in the United States (which will be held this evening) may cause movement in any direction. It is recommended to abstain from trading before the announcement of the decision.