Market Analysis

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Good day Koalas!

One more day to Friday and i hope you are due to finish the week in GREEN

Yesterday was a day of relief for the Euro Zone as there was improvement in the Greek deficit crisis. Standard & Poor’s said that it is not reviewing the nation’s BBB+ rating for a downgrade due to the Greek government’s efforts to narrow the budget deficit.

I mentioned before and i will mention again. The Greek deficit crisis will not be a simple fix.

Let us look at how the EUR/USD is doing.

The EUR/USD suffered a major bearish attack and is testing the support of 1.3680.

The S&P 500 is facing bearish pressure too as world sentiments go low.

Oil is back at $81+. This is the previous top and any further bullish ascend may indicate the next phrase of recovery.

Gold continues to trade around $1121+.

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Who let the bears out?

Most of you koalas who know my style have probably guessed the cause of it from my opening paragraph. Yes indeed, the Greek deficit crisis takes on a negative turn.

It was reported that the Greek Prime Minister set a one-week deadline for the European Union to have a concrete framework of financial aid for Greece. He also challenged Germany to give up its doubts about having a rescue package. If no concrete plan materializes by then, Greece may turn to the IMF for aid.

Turning to the IMF for aid is something the ECB President Trichet do not want. Doing so may suggest that the European Union is not capable of solving its own issues and this may undermine the EU concept.

Greece needs to raise around 10 billion Euros due to debt redemption that come due in April and May.

While we wait for further developments, risk aversion runs amok.

There was a comment made with regards to China being a massive bubble waiting to be burst. This is a magnet for risk aversion too and either resolution may result in it. Should the bubble burst eventually, risk aversion may follow. Should the Chinese government step up measures to curb the bubble, risk aversion may happen too due to the fear of a recovery derailment. Stay focused on the developments.

Tomorrow’s important events include the German Producer Price Index and a speech by the ECB President Trichet. Do be on a lookout as unexpected spikes may occur.

Bullish relief may bring us back to 1.3740.

If the risk aversion sentiment continues to build up, we may soon see a test of 1.3600/1.3550.

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Trade safely.

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EURJPY Forecast
The EURJPY attempted to push higher yesterday, topped at 125.06 but closed lower at 124.04 and now is testing the lower line of the bullish channel indicating critical technical phase. After had bullish running since formed the double bottom around 119.70, the bullish momentum is now face a double top formation around 125.15. A violation to the bearish channel should be seen as bullish failure and trigger further bearish momentum at least towards 121.70 area especially if price able to break below 123.00 support. On the upside, break above 125.15 area should trigger further bullish momentum targeting 126.90.

GBPJPY Forecast
The GBPJPY slipped above 138.30 yesterday, topped at 139.34 but closed significantly lower at 138.32 and now move back below 138.30 area. As long as price still move inside the bullish channel, the bullish scenario should remain intact. The bias is neutral in nearest term but this fact could potentially produce a false breakout scenario if price fail to consistently move above 138.30 area testing the lower line of the bullish channel. Immediate support at 137.11. Break below that area should trigger further bearish momentum.

AUDUSD Forecast
The AUDUSD had a moderate bullish momentum yesterday, topped at 0.9250 and closed at 0.9234. The bullish scenario remains intact with technical target now around 0.9326 but we need a consistent move above 0.9250 to continue the bullish scenario. Immediate support at 0.9200. Break below that area could trigger further bearish correction testing 0.9140 but as long as price move above the trendline support the major bullish scenario remains intact.

USDJPY Forecast:
The USDJPY made another indecisive movement yesterday. Price still able to move inside the bearish channel indicating bearish scenario remains intact but actually still trapped in a range area of 90.80 – 90.00. We need a clear break on either side to see clearer direction towards 91.50 or 89.50 area. The bearish major scenario still intact as long as price stay below the major trendline resistance (blue). Break below 89.50 could trigger further bearish momentum towards 88.50 while break above 91.50 could be a serious threat to the bearish scenario and potential new bullish phase.

Simultaneous Release at www.thegeekknows.com

Good day to you koalas!

It is mid week and how is your trading so far?

Remember to be in the Green is the name of the game

Yesterday brought us a bullish day as stable economic data releases coaxed the bulls out of their barns. Optimism of a solution for the Greek deficit crisis also kept sentiments high.

Let us take a look at how the EUR/USD is holding up today.

After testing and edging above 1.38, the currency pair retreats to test the support of 1.3740.

The S&P 500 remains the winner for now. Going beyond the previous high, folks want to believe in the American Dream!

Oil is currently trading around $80. As i always look towards oil as a indicator for the global economy’s health, i am monitoring for more developments to determine if a strong recovery is under way.

Gold remains around $1120+. The low volatility indeed suggests that gold may be an investment of choice when it comes to uncertainty.

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Investors are apparently happy with the continuance of the near zero US Federal Funds Rate. With the low accommodating rates, the economic recovery may be nudged to pick up momentum as businesses thrive with the access to “easy credit.” Do note however that while such a policy may do good for now, the long term implications may be a much weaken currency.

Standard & Poor’s said yesterday that it is not reviewing the nation’s BBB+ rating for a downgrade due to the Greek government’s efforts to narrow the budget deficit. This came as a relief to most and probably contributed to the risk taking appetite.

Having said so, it was reported that the Greek Prime Minister had vowed to meet the EU’s 3 percent limit on budget gap in 2012 from the current 12.7. This remains to be seen as current implications such as strikes are hindering progress.

The US Producer Price Index (PPI) came out a few hours ago and was worst than expected. We may see a slight bearish hit from here and hence do be on a lookout for unexpected developments.

Fed Chairman Bernanke is due to testify later. As investors will be paying close attention to his speech for clues to future policies, tighten up your seat belts and plan your trades well.

Numerous important releases will be due tomorrow, including the US Consumer Price Index and US Unemployment Claims. These are crucial economic indicators and hence be on a lookout for risk aversion should the releases come out worst than expected.

Bullish pressure may test 1.3800/80.

Bearish momentum may hit 1.3680/00.

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EURJPY Forecast
The EURJPY had a moderate bullish momentum yesterday. This fact should keep the bullish scenario intact as price still convincingly move inside the bullish channel re-testing 125.15 area. Break above that area should trigger further bullish momentum testing 126.90 area. Immediate support at 123.70 followed by 123.00. Break below 123.00 could be a serious threat to the bullish scenario back towards 121.70 area.

GBPJPY Forecast
The GBPJPY had a bullish momentum yesterday as the lower line of the bullish channel provided good support area. This fact should keep the bullish scenario intact testing 138.30 area. Break above that area should trigger further bullish momentum targeting 141.50 this week. Immediate support at 137.00. Break below that area should lead us into no trading zone but as long as price still move inside the bullish channel I still prefer a bullish scenario.

AUDUSD Forecast
The AUDUSD had a significant bullish momentum yesterday, slipped above the double top formation, topped at 0.9216 but still unable to move consistently above the double top area (0.9190) so far. The bias is bullish in nearest term but we need a consistent move above 0.9190 to continue bullish momentum targeting 0.9250 and 0.9326 region. Immediate support at 0.9140. Break below that area should trigger further bearish momentum testing 0.9040 but as long as price move above the major trendline support I still prefer a bullish scenario.