Market Forex Review By Acetrader - Forex Forum

Market Review by AceTrader - 05/03/2009 22:18 GMT

Japanese yen rises on risk aversion as stock markets plunge; ECB and BOE cut interest rates by 50 basis points


The Japanese yen rose across the board yesterday on the back of the selloff in global stock markets as optimism over the earlier news of a larger Chinese stimulus package dimmed and ECB President Jean-Claude Trichet said in his press conference that for growth in the eurozone is likely to remain weak for the rest of the year.

Dollar declined against the yen from 99.69 to 97.72 and the Japanese currency rebounded against the euro and sterling from 125.75 to 122.70 and from 141.50 to 138.06 respectively.
The Australian dollar weakened to 0.6382 on Thursday, giving up some of its gains following the previous day's strong rebound from 0.6285 to 0.6527. The Reserve Bank of Australia left rates unchanged on Tuesday, with economists expecting a reduction of 25 basis points.

The European Central Bank and Bank of England cut interest rates by 50 basis points to 1.50% (record low) and 0.50% respectively as widely expected, with Bank of England Governor Mervyn King announcing quantitative easing measures in order to increase liquidity in the credit markets. The euro and sterling declined against the dollar to 1.3482 and 1.4037 respectively before recovering in New York trading due to short-covering.

Equity markets were unable to hold on to Wednesday's gains and declined on Thursday as investors were also nervous ahead of the release of the closely-watched U.S. non-farm payrolls report (to be released on Friday at 13:30GMT). The Dow fell 281 points and ended the day at 6594 (lowest since April 1997). Weekly jobless claims eased to 639,000 from an upwardly revised 670,000 while factor orders fell by 1.9% in January (more than the consensus forecast of 1.6%).

U.S. non-farm payrolls are forecast to have fallen by 648,000 in February compared to 598,000 in the previous month, while the unemployment rate is expected to rise to 7.9% from 7.6%. Other data to be released on Friday include Swiss CPI and U.K. PPI.

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Futures on the DAX30 (FDAX) index

REVIEW

Situation

Yesterday futures have opened at the growth rate of 5772, but when closing it decreased to 5743, yet today the opening was above the maximum range of 5797. Formally and technically we went above the three-week range.

Causes

Yesterday was a growth situation in the world stock markets, but rather moderate and sometimes even contradictory.
U.S. major indexes: the Dow closed above the range, S & P500 at the border, NASDAQ100 and Russel have not reached the maximum.
Slowly and with great difficulty Oil went over $ 75.
Indexes today: India +1%, China +1.5 +1.7%, Nikkei -0.2% .
Today the focus is on the large block of news from the U.S.- retail sales at 16.30 Moscow time (Expected to fall by 2.7%), prices for import / export, and at 22.00 Moscow time - "minute" Fed.
Therefore we should expect a strong movement in the U.S. session, and until then the dynamics seem to be moving very slowly.

Forecast.

Formally, there is a buy signal and a new growth trend but in my opinion the signal is too weak so far. Before considering buying the trend, I think it is better to wait another day before closing.

Exchanging ideas.

No Sales for now (if they are not opened yet) - at least until the end of the day.
I still consider buying is logical from 21-day moving average 5650-5660, stop lower than 5620.

Nice review man..
Thanks...