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ANALYSIS

Daily Forex Market Analysis - 15 June 2012

The euro failed to make significant movements in trading yesterday, despite rising Spanish and Italian bond yields which many analysts had predicted would bring the common-currency lower vs. its main rivals. As we close out the week, euro traders will want to pay attention to announcements out of Greece which may give some clues as to what political parties will emerge victorious in elections on Sunday. Any signs that the anti-austerity parties could win may result in fears that Greece will leave the euro-zone, which may result in the common-currency tumbling.


Forex Market Trends

EUR/USD

GBP/USD

USD/JPY

USD/CHF

AUD/USD

EUR/GBP

Daily Trend

up

up

down

same

down

down

Weekly Trend

up

up

down

down

up

up

Resistance

1.2785

1.5676

79.65

0.9618

1.0142

0.8220

1.2694

1.5622

79.32

0.9565

1.0090

0.8175

1.2662

1.5589

79.13

0.9532

1.0058

0.8147

Support

1.2633

1.5535

78.82

0.9478

1.0004

0.8103

1.2599

1.5502

78.64

0.9444

0.9971

0.8074

1.2540

1.5448

78.33

0.9391

0.9919

0.8030

Fundamental Analysis – 15 June 2012

USD - Dollar Continues to Fall against JPY

Negative US economic indicators, including a higher than expected weekly Unemployment Claims figure, resulted in the USD tumbling against the yen throughout the day yesterday. The USD/JPY fell as low as 79.15 during the mid-day session, down over 30 pips for the day. Eventually the pair was able to stage a slight recovery to stabilize at the 79.25 level. The dollar also saw some bearish movement against the Swiss franc. The USD/CHF fell close to 50 pips during European trading, eventually reaching as low as 0.9524.

Turning to today, dollar traders will want to pay attention to the Prelim UoM Consumer Sentiment figure, scheduled to be released at 13:55 GMT. Should the figure come in above the forecasted 77.5, the dollar could see a slight recovery against the yen before markets close for the week. That being said, if today's indicator comes in below the expected level, the dollar may continue to slide against currencies like the yen and CHF. 

EUR - Italian Bond Auction may Signal Further Euro-Zone Troubles

Following yesterday's Italian bond auction, investors remained fearful that the euro-zone debt crisis could be spreading beyond Greece and Spain. Rising Italian bond yields were taken as a sign that the country may have to request a bailout in the near future to avoid defaulting on its debt. While analysts had predicted that bad news out of Italy would have weighed down on the euro, the common-currency managed to trade steadily over the course of the day. Investors remained reluctant to go short on the euro before the results of Greek elections on Sunday are known. 

Turning to today, traders will want to continue monitoring new developments out of the euro-zone. In addition to any fresh polls detailing who could win in the Greek elections on Sunday, announcements regarding the current economic situation in Italy have the potential to generate euro volatility. Analysts are warning that even if Greece elects a pro-austerity government, the possibility of the euro-zone debt crisis spreading to Italy could keep the euro bearish for the foreseeable future. 

Gold - Global Economic Uncertainty Helps Boost Gold

The price of gold moved up as high as $1627.75 during trading yesterday, as financial troubles in the euro-zone combined with a stalling economic recovery in the US helped boost the precious metal. Investors have been turning to gold as a safe-haven asset recently amid fears of a slow-down in the global economy. 

Today, traders will want to pay attention to any news out of the euro-zone and US, as it may help determine what direction gold takes. Any negative data, particularly with regards to the current economic situation in Italy, could cause gold to extend its current bullish trend. 

Crude Oil - Crude Oil Sees Little Movement before Greek Elections

The price of crude oil remained steady throughout the day yesterday, as investors anxiously awaited the results of Greek elections on Sunday. In addition, with crude stockpiles in the US at an 18-month high, investors saw no reason to open long oil positions. As a result, crude spent most of the day trading around the $82.60 level.

As we close out the week, crude oil traders will want to pay attention to the US Prelim UoM Consumer Sentiment figure at 13:55 GMT. Should the figure come in below expectations, the price of crude may drop, as it could be taken as a sign that demand in the US will continue to go down. On the other hand, any better than expected news out of the US may help turn the price of oil bullish.

Technical Analysis – 15 June 2012

EUR/USD

While the Bollinger Bands on the daily chart are narrowing, indicating that a price shift could occur in the near future, most other technical indicators show this pair trading in neutral territory. Taking a wait and see approach may be the best option for traders.

GBP/USD

A bullish cross on the weekly chart's Slow Stochastic indicates that this pair could see an upward correction in the coming days. In addition, the Williams Percent Range on the same chart is currently close to dropping into oversold territory. Traders will want to pay attention to this indicator. If it falls below -80, it may be a good time to open long positions.

USD/JPY

The daily chart's Slow Stochastic has formed a bearish cross, indicating that downward movement could occur in the near future. This theory is supported by the Williams Percent Range on the same chart, which has crossed into overbought territory. Opening short positions may be the wise choice for this pair.

USD/CHF

While a bearish cross has formed on the weekly chart's Slow Stochastic, most other technical indicators show this pair range-trading, meaning that no defined trend can be predicted at this time. Taking a wait and see approach may be the best choice for this pair, as a clearer picture could present itself in the near future.