euro turned bearish against virtually all of its main currency rivals
yesterday, as risk aversion returned to the marketplace ahead of today's
Spanish debt auction. Additionally, a positive UK Claimant Count Change figure
led to a steep drop for the EUR/GBP. Today, in addition to the Spanish news,
traders will want to monitor a batch of US news, including the Unemployment
Claims and Existing Home Sales figures. Should any of the American news come in
above expectations, the US dollar could see gains as a result.
USD - US Existing Home Sales May Lead to Dollar Gains
EUR - Spanish Debt Auction Forecasted to Generate Heavy
Gold - Gold Falls amid Euro-Zone Debt Fears
Oil - Oil Turns Bearish Following US
Market Trends – 19 April 2012
USD - US Existing Home
Sales May Lead to Dollar Gains
combination of worries regarding euro-zone debt and the Japanese trade deficit
caused investors to shift their funds to the greenback during yesterday's
trading session. The EUR/USD dropped close to 70 pips during the European
session, reaching as low as 1.3057 before staging a slight upward correction.
Meanwhile, the USD/JPY traded as high as 81.55 yesterday, up around 50 pips for
the day. The pair did see some slight downward movement toward the evening
session and eventually stabilized at 81.30.
Turning to today, all eyes will likely be on the Spanish long-term debt
auction. Unless the auction goes smoothly, euro-zone debt fears are likely to
dominate market sentiment which could cause the EUR/USD to tumble. In addition,
the dollar could see some volatility against its other main currency rivals
following the release of the US Unemployment Claims, Existing Home Sales and
Philly Fed Manufacturing Index later in the day. Analysts are predicting
positive results for all three indicators, which if true, could help the
greenback extend yesterday's bullish trend.
EUR - Spanish Debt Auction
Forecasted to Generate Heavy Volatility
euro saw significant downward movement yesterday, as fears regarding the
Spanish debt situation resurfaced leading to risk aversion. In addition to
losses against the US dollar, the euro also tumbled vs. the JPY and GBP. The
EUR/JPY dropped as low as 106.16 during the European session, down some 70 pips
for the day. The British pound saw major gains against the euro, following a
better than expected UK Claimant Count Change released earlier in the day. The
EUR/GBP was down around 65 pips, reaching as low as 0.8173.
Today, the long-term Spanish debt auction is likely to be the highlight of the
trading day. Analysts are warning that today's debt sale is likely to be
significantly more difficult than Tuesday's. Should the sale not go smoothly,
fears that the debt crisis could spread to other countries may lead to heavy
euro losses. That being said, should today's news turn out to be positive risk
taking may return to the marketplace, which could benefit the euro.
Gold - Gold Falls amid
Euro-Zone Debt Fears
price of gold fell throughout yesterday's trading session, as euro-zone news
generated risk aversion in the marketplace. Gold prices have become heavily
influenced by euro-zone news in recent weeks. Negative data has caused
investors to abandon higher yielding assets, including gold, silver and
platinum, in favor of safe-haven currencies like the US dollar. The precious
metal fell as low as $1637.64 an ounce during afternoon trading, down from a
high of $1654.10 earlier in the day.
Turning to today, the direction gold takes will likely be dependent on the
Spanish debt auction. Any positive developments with regards to the Spanish
debt crisis could help boost gold prices during the afternoon session. At the
same time, analysts are forecasting that today's auction will be more difficult
than the one earlier this week. If true, the price of gold could fall further.
Crude Oil - Oil Turns
Bearish Following US Inventories Figure
oil reversed some of its earlier gains during yesterday's trading session as a
higher than forecasted US inventory figure signaled decreased demand in the
world's largest oil consuming country. The US Crude Oil Inventories came in at
3.9M, well above the predicted figure of 1.5M. The price of oil dropped over $1
a barrel yesterday, reaching as low as $103.82 during the evening session.
Turning to today, oil traders will want to carefully monitor the results of the
Spanish debt auction. Should the sale not proceed as smoothly as the one
earlier this week, risk aversion is likely to return to the marketplace. In
such a case, the price of oil is likely to extend yesterday's bearish trend.
a sign that a price shift for this pair could occur in the near future, the
Bollinger Bands on the weekly chart are narrowing. While most other technical
indicators are currently in neutral territory, the MACD/OsMA on the same chart
appears close to forming a bullish cross. Traders will want to keep an eye on
this indicator, as it may be a sign of future upward movement.
bearish cross has formed on the daily chart's MACD/OsMA, indicating that this
pair could see downward movement in the near future. In addition, the Williams
Percent Range on the same chart is approaching overbought territory. Traders
may want to go short in their positions, ahead of a possible downward
a sign that this pair may see downward movement in the coming days, both the
Relative Strength Index and Williams Percent Range on the weekly chart are
moving toward overbought territory. Traders will want to keep an eye on both of
these indicators. Should they continue moving up, it may be a sign of an
impending bearish correction.
long term technical indicators show this pair trading in neutral territory,
meaning that no defined trend can be predicted at this time. Traders may want
to take a wait and see approach, as a clearer trend is likely to present itself
in the near future.