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  • EUR/USD Is Expected To Gain Further

    EUR/USD breaking the resistance - December 17 2012The break over the resistance EUR/USD of 1.3172 . This break is not only a long awaited break which the currency pair has been failing to touch for past 3 months but this came as another attempt to break over the 38.2% retracement level resistance of the downward move during beginning of May, 2011 and July 24, 2012. This move certainly indicates that we can see further gains in the coming days.

    EUR/USD And The Fundamentals

    EUR/USD Fundamentals and Economic ReleasesRecent developments and discussions during Economic and Financial Affairs Council meeting have brought back some optimism about the debt crisis handling for Greece as well as the joint resolution for the stability mechanism for the failing banks in the Euro zone.

    Overall the economic releases from both Euro zone and U.S.A. during the last week have been overall on positive side. The Pie chart on the right hand side represents the relative strength of the last week's economic data from these economic zones. On Friday the CPI data from the U.S came weaker than expected but the Industrial production and Markit Manufacturing PMI showed some positive signs. The CPI data from U.S. and Euro zone came out similar and did not put either of the currency at any specific advantage. The Markit Manufacturing PMI data from Euro zone was comparatively weaker while the Markit Services PMI was better than expected and also as compared to the previous release.

    Main Events To Affect EUR/USD Moves In The Coming Days:

    Italy's Prime Minister Mario Monti's expected resignation:

    Monti's leadership during his 13-months old government has won many praises for the economic reforms for Italy. The Yield on 10-year government bond was over 7% in January 2012 and had further risen up before going down below 4.5%, The drop in the bond yield showed some improvement in the confidence in the steps for economic reforms.

    Italian Prime Minister Mario Monti has been refusing to declare whether he would run for the elections or not and overall the uncertainties for political change becomes a factor for the movement of Euro. Any declaration about Monti's candidature may fuel the strength of Euro.

    UBS and The Libor Penalty:

    The Libor manipulation by UBS AG is expected to bring US$ 1.6 Billion penalty for the settlement of claims. The decision is expected tomorrow i.e December 18th, 2012. Though the markets should have already factored this but some volatile moves can be expected with any such announcements.

    EUR/USD - What to Expect

    EUR/USD Today- What to ecpectOverall some more strength is expected. The next resistance should come near 1.3280 which is derived from the previous resistance level during end of April, 2012. Any decisive break of this should take EUR/USD towards 1.3480/1.3486. This level does not only represent the resistance during the later half of February 2012 but such a move will also represent the 50% retrancement of the downward move during beginning of May, 2011 and July 24, 2012.

    Any move below 1.3000 will neutralize this outlook.

    By: Himanshu Jain.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Additional disclosure: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

    Tags: forex
    Dec 20 7:10 PM | Link | Comment!
  • GBP/USD On The Rise

    On October 5th, 2012 GBP/USD had faced a strong resistance at 1.6217 and a strong fall had taken place from there. The recent upward move had taken the currency pair as high as 1.6218 i.e. 1 pips above that level but the pair has been hesitating to cross that resistance for past 23 hours.

    EUR?USD daily chart

    What To Expect From GBP/USD

    The break over that resistance was just by 1 pips but it indicates that some good possibilities are there for further gains but the long hesitation also indicates the chances of some consolidation before that.

    The recent pattern the price action has been showing is a support near 5-day EMA. If any decisive break below 1.6175 takes place then it would represent a break of that support. Such an action may bring further downward consolidation towards 1.6140/1.6155 support zone. This support zone is derived from Kijun line support of daily Ichimoku cloud as well as the 38.2% retracement of the upward move since December 10th. Not only that but 1.5154 was a support during the beginning of this week.

    Considering the combination of the above 3 supportive forces, a recovery is expected from this support zone. Any break above the recent 1.6218 should take GBP/USD first towards 1.6365 and then possibly towards 1.6450.

    Any strong break below 1.6140 should bring another strong support near 22-day EMA i.e. near 1.6105. This support zone is also important as the psychological support of 1.6000 ranges should start acting for the currency pair from here.

    Overall, out bullish outlook will remain intact till the price action remains over 1.6040.

    ForexAbode.com Provides free Forex trading analysis, forecast & strategies, free trading tools, education, Forex Blog and Forex Forum. The best Forex trading website for online trading.

    © 2012 Copyright ForexAbode.com - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

    Connect with the author at Google: +Himanshu Jain.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Dec 18 9:47 PM | Link | Comment!
  • USD/CHF: Past 2.5 Years And The Current Price Action

    USD/CHF had seen a great fall from the beginning of June 2010 to August 2011. The recover had started after that and had continued till it completed the 61.8% retracement of the previous great fall, when the currency pair reached a high of 0.9972 after nearly 1 year from the low of 0.7069.

    The 61.8% retracement level brought a strong resistance and the subsequent price action managed to break below the trend line support which had come into existence with the previous lows which were continuously rising up.

    The following weekly chart shows the above mentioned price actions:

    (click to enlarge)USD/CHF weekly chart

    The break of this trend line support was also the break below the 50% retracement, which should have also acted like a support. Hence the pair had actually broken the combined support of the trend line as well as the 50% retracement of the previous great fall.

    Subsequent price action - The supports became resistances:

    Past the break of the combined support for 7 weeks the 50% retracement level had been acting as resistance and that continued till November 5th, 2012 when the resistance was finally broken. The honeymoon did not last for long as just above the trend line which was acting as support level, now proved to be a resistance.

    Recent price action:

    There was another short fall and it again took USD/CHF below the above mentioned 50% retracement. For past 3 weeks this level has again proving to be the resistance.

    What can be expected:

    As the recent drop did not retest the low of October and the support came well above that, it indicates a lack of any strong bearish sentiment. USD/CHF carries a very strong positive correlation with EUR/USD and the continuously changing sentiments in Euro zone have been causing a lot of market noises. Overall our views remain same that EUR/USD may again have another fall and on the other side USD/CHF should make another upward break. A decisive break over 0.9400 is the first hurdle and once that takes place then a test of 0.9500 psychological level should take place. The support turned resistance trend line now indicates 0.9600 as the second resistance after the psychological 0.9500.

    Author: Himanshu Jain at ForexAbode.com

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Tags: forex
    Dec 12 4:22 AM | Link | Comment!
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