Asia Stocks Set for Biggest jump in a Decade

HONG KONG (Reuters) - Asian stocks edged up on Tuesday and were set to score their biggest monthly rise in a decade as some investors bet the most painful stretch of corporate earnings damage may be over and bought Asian technology shares.

As the first quarter and Japan's financial year draws to a close, stocks, oil prices and higher-yielding currencies gained after a one-day battering on news that the U.S. government was considering pushing General Motors (GM.N) into bankruptcy.

Government bonds retreated as equity markets regained their composure, while the dollar slipped as investors favored riskier assets. Asian stocks outside Japan were set to finish the first quarter with a dip of 0.7 percent but were up 15 percent in March, what would be the largest rise since 1999.

"There has been a huge change in sentiment. Rather than anticipating huge sell-offs in the U.S., we've been anticipating rallies," said Peter Wright, a dealer with Burrell Stockbroking in Sydney. Many stock markets have thrashed in ranges near last year's lows, with investors cautious about calling a turnaround as the global economy remains mired in a deep recession.

The economic fallout from the financial crisis is still taking a big toll on many economies, with data from Japan showing unemployment rising to a three-year high as the country's grapples with its worst recession since World War Two. But Japan's Nikkei average .N225 climbed 0.9 percent, highlighting how many investors are looking beyond the bleak conditions and expect stimulus spending to help spur a recovery later in the year.

Japanese Prime Minister Taro Aso is expected to unveil the outlines of a spending package on Tuesday ahead of the Group of 20 gathering of rich and developing nations this week. The MSCI index of Asia-Pacific stocks outside Japan rose 1.4 percent and is up 27 percent from a five-year low struck last November.

The Shanghai Composite has rebounded the most in the January-March quarter with a rise of 28 percent, making its the best-performing big equity market so far this year after being the hardest hit in 2008.

The tech-heavy Taiwan Weighted index was poised to finish the quarter with a 15 percent gain, boosted by incoming orders from China as part of its hefty stimulus spending.

Shares of Taiawn's Compal Electronics (2324.TW), the world's No. 2 contract laptop PC maker, rose 4 percent after it said demand from China ,the United States and Europe is picking up and its plans to add about 30 percent more employees by June.

"In the current downturn, tech shares like Compal whose sales and profits could still keep rising, are favorable," said Andrew Deng, a vice president of Taiwan International Securities Corp in Taipei.

Market Commentary

MARKET COMMENTARY ON 31ST MARCH 2009

GBP/USD closed lower on Monday and spiked below the 20-day moving average crossing at 1.4190 as it extended the decline off last week's high. A short covering rally tempered early losses and the mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing at 1.4190 are needed to confirm that a short-term top has been posted. If June renews this month's rally, February's high crossing at 1.4920 is the next upside target. First resistance is the 10-day moving average crossing at 1.4400. Second resistance is last Tuesday's high crossing at 1.4752. First support is the 20-day moving average crossing at 1.4190. Second support is today's low crossing at 1.4123.

EUR/USD closed lower on Monday as it extends last Friday's decline below the 10-day moving average. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near-term. If June extends today's decline, the 20-day moving average crossing at 1.3085 is the next downside target. Closes below the 20-day moving average crossing at 1.3085 would confirm that a short-term top has been posted.

USD/CHF closed lower on Monday as it extends last Friday's decline below the 10-day moving average crossing. The mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing are needed to confirm that a short-term top has been posted. If June renews this month's rally, the 62% retracement level of the December-March decline crossing is the next upside target.

USD/CAD closed sharply lower on Monday and below the 20-day moving average crossing at confirming that a short-term top has been posted. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. If June extends today's decline, the reaction low crossing at 78.48 is the next downside target. Closes above the today's high crossing would temper the near-term bearish outlook in the market.

USD/JPY closed higher on Monday due to short covering as it consolidates some of last week's decline. The mid- range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near-term. If June extends last week's decline, the reaction low crossing at 99.70 is the next downside target. Closes above the reaction high crossing at 100.20 would temper the near-term bearish outlook.

Market Commentary

MARKET COMMENTARY ON 30TH MARCH 2009

GBP/USD closed lower on Friday and below the 10-day moving average crossing at 1.4380 signaling that a short- term top has been posted. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing at 1.4191 are needed to confirm that a short-term top has been posted. If June renews this month's rally, February's high crossing at 1.4940 is the next upside target. First resistance is Tuesday's high crossing at 1.4762. Second resistance is February's high crossing at 1.4940. First support is today's low crossing at 1.4280. Second support is the 20-day moving average crossing at 1.4191.

EUR/USD closed lower on Friday and below the 10-day moving average crossing at 1.3410 signaling that a short-term top has been posted. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are overbought and are turning bearish signaling that sideways to lower prices are possible near-term. If June extends today's decline, the 20-day moving average crossing at 1.3055 is the next downside target. Closes below the 20-day moving average crossing at 1.3055 would confirm that a short-term top has been posted.

USD/CHF closed sharply lower on Friday and below the 10-day moving average crossing signaling that a short-term top has likely been posted. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are overbought and are turning neutral hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing would confirm that a short-term top has been posted. If June renews this month's rally, the 62% retracement level of the December-March decline crossing is the next upside target.

USD/CAD closed lower on Friday due to profit taking as it consolidated some of this month's rally. The mid- range close sets the stage for a steady opening on Monday. Stochastics and the RSI are overbought and are turning neutral to bearish hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing are needed to confirm that a short-term top has been posted. If June extends this month's rally, the reaction high crossing is the next upside target.

USD/JPY closed higher on Friday due to short covering as it consolidates some of this week's decline. The mid- range close sets the stage for a steady opening on Monday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term. If June extends this week's decline, the reaction low crossing is the next downside target. Closes above the reaction high crossing would temper the near-term bearish outlook.

Market Commentary

MARKET COMMENTARY ON 27TH MARCH 2009

GBP/USD closed lower due to profit taking on Thursday as it consolidated some of this month's rally. The low- range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are overbought and are turning neutral to bearish signaling that a short-term top might be in or is near. Closes below the 20-day moving average crossing at 1.4192 would confirm that a short-term top has been posted. If June extends this month's rally, February's high crossing at 1.4920 is the next upside target. First resistance is Tuesday's high crossing at 1.4778. Second resistance is February's high crossing at 1.4920. First support is the 10-day moving average crossing at 1.4364. Second support is the 20-day moving average crossing at 1.4192.

EUR/USD closed lower on Thursday and below the 50% retracement level of the December-March decline crossing at 1.3520. The low-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If June renews this month's rally, the 62% retracement level of the December-March decline crossing at 1.3753 is the next upside target. Closes below the 20- day moving average crossing at 1.3085 would confirm that a short-term top has been posted.

USD/CHF posted an inside day with a lower close on Thursday as it consolidates below the 50% retracement level of the December-March decline crossing. The low-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near-term. If June renews this month's rally, the 62% retracement level of the December-March decline crossing is the next upside target. Closes below the 20-day moving average crossing would confirm that a short-term top has been posted.

USD/CAD posted an inside day with a higher close on Thursday as it extends this week's trading range. The mid-range close sets the stage for a steady opening on Friday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends this month's rally, the reaction high crossing at is the next upside target. Closes below the 20-day moving average crossing would confirm that a short-term top has been posted.

USD/JPY closed lower on Thursday as it extends this week's decline. The low-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. Closes below last Tuesday's low crossing would confirm that a short-term top has been posted. If June renews this month's rally, the reaction high crossing at 100.20 is the next upside target.

Geithner Remarks on IMF Currency Roil Foreign-Exchange Market

March 26 (Bloomberg) -- Treasury Secretary Timothy Geithner sent the dollar tumbling with comments about China’s ideas for overhauling the global monetary system, only to drive it back up by affirming that it should remain the world’s reserve currency. Geithner was asked at a Council on Foreign Relations event in New York yesterday about People’s Bank of China Governor Zhou Xiaochuan’s call for a new international reserve currency. He said while he had not read Zhou’s proposal, he understood it as a plan “designed to increase the use of the IMF’s special drawing rights. And we’re actually quite open to that.”

The dollar slid as much as 1.3 percent against the euro within 10 minutes of news accounts of Geithner’s remarks. It recouped much of the loss about 15 minutes later, when Geithner then predicted no change in the U.S. currency’s role. The dollar was down 0.22 percent at $1.3553 per euro as of 12:13 p.m. in Tokyo. The episode highlights investors’ sensitivity to any weakening role for the dollar as power shifts toward a wider group of developed and emerging nations, said James McCormick, Citigroup Inc.’s global head of foreign-exchange and local- markets strategy. It was “important” that China’s proposal came in the run-up to a Group of 20 summit next week, he added.

Share of Reserves

“The G-20 is gaining relative power versus the G-7 and we will feel that and see that for some time to come,” London- based McCormick said. One key focus for markets will be any change in sentiment toward the dollar, which makes up about two- thirds of world central banks’ foreign-exchange reserves, he said. Geithner will attend the summit of the G-20, which groups the largest developing and emerging countries, April 2 in London along with President Barack Obama. The smaller Group of Seven had since the 1970s been the main forum for leaders of nations with the biggest economies.

After the dollar slumped in the aftermath of Geithner’s first remarks, Roger Altman, who worked with Geithner as deputy Treasury secretary in the Clinton administration, asked him whether he wanted to “clarify” his comments. “I’d like to ask one final question, in effect on behalf of the market,” said Altman, founder of Evercore Partners Inc. “Let me ask the question this way. Do you see any change over the foreseeable future in the basic role of the dollar as the world’s key reserve currency?”

Strong Dollar

Geithner responded: “I think the dollar remains the world’s dominant reserve currency.” In an interview with CNBC broadcast after the event, the Treasury chief said that a “strong dollar” is in “America’s interest.” In his earlier answer, Geithner said increased use of SDRs should be “rather evolutionary, building on the current architecture, rather than moving us to global monetary union.” SDRs are a unit of account at the IMF used for member countries’ reserves with the fund.

Geithner’s remarks don’t indicate Geithner favors moving to a system with the SDR as a reserve currency, strategist Lee Hardman at Bank of Tokyo-Mitsubishi Ltd. wrote in a note. “That was the big concern amongst the confusion,” London- based Hardman said. “A move to an SDR-linked system away from the dollar would naturally lead to a reduction in the dollar’s share of global reserves.”

‘Confidence’ in U.S.

Geithner, a former Treasury undersecretary for international affairs and president of the Federal Reserve Bank of New York, which carries out U.S. interventions in currency markets, also said that “we will do what’s necessary to make sure we’re sustaining confidence in our financial markets.” Geithner and Fed Chairman Ben S. Bernanke both told lawmakers on March 24 that they expected the dollar to remain the most important global currency. Obama said at a news conference the same day that “the dollar is extraordinarily strong” because investors are confident in the ability of the U.S. to lead a worldwide recovery, and also rejected calls for a new global currency.

China is the largest foreign holder of U.S. Treasuries, and Premier Wen Jiabao earlier this month expressed concern about the value of its investment. Central bank governor Zhou this week advocated a “super-sovereign reserve currency” that’s disconnected from any individual nation. Zhou said, in an essay posted on the PBOC’s Web site, that the International Monetary Fund’s special drawing rights offer “light in the tunnel for the reform of the international monetary system.” He said the SDR has yet to be “put into full play due to limitations on its allocation and the scope of its uses.”

McCormick at Citigroup said it was a concern that Geithner said he hadn’t read Zhou’s comments. “If I’m running the Treasury I would want to have been briefed on that.” Geithner has been the only confirmed senior official at the Treasury since he took office in January. The White House this week nominated former Clinton official Lael Brainard as Treasury undersecretary for international affairs after at least one other candidate for the job removed herself from contention.

Euro Rally May Wane as Options Drop From Record on Rate Concern

March 26 (Bloomberg) -- Traders trimmed bets the euro will gain versus the dollar on speculation the European Central Bank will lower interest rates to bolster the region’s economies, options show. The euro’s one-month 25-delta risk-reversal rate against the dollar shows that premiums on euro call options over put options fell from record highs. The rate slid to as little as 0.55 percent yesterday, a one-week low, Bloomberg data show. It stood at 0.72 at 11:20 a.m. in Tokyo, from 1.17 on March 20, the most since Bloomberg started compiling the data in 2003.

“Risk-reversals have been skewed to euro bulls,” said Koji Fukaya, a senior currency strategist at the Tokyo unit of Deutsche Bank AG. “The European currency should naturally be sold after a sharp surge and may weaken in the long run,” as the pace of Europe’s economic recovery is likely to be slower than in the U.S., he said. The euro strengthened 7.4 percent against the dollar since Feb. 28, heading for its first monthly gain this year, after the U.S. central bank started buying Treasuries, raising concerns that will debase the value of the greenback. A call option gives its holder the right without obligation to buy an underlying asset while a put option gives the holder the right to sell an asset. Risk reversals measure demand for calls and puts.

‘Put Over’ Reverses

The euro-dollar risk-reversal stayed so-called “put over” for most of the first two months of the year, where demand for euro puts exceeds that for calls, indicating traders expect the 16-nation currency to weaken. The trend reversed in the middle of this month as concerns intensified that the Federal Reserve’s efforts to lower interest rates would revive inflation. As much as 10 billion euros ($13.6 billion) worth of euro put-dollar call options were bought on March 24 with a strike price of $1.30 per euro set to expire in a month, according to Takashi Kudo, director of foreign-exchange sales in Tokyo at NTT SmartTrade Inc., a unit of Nippon Telegraph & Telephone Corp.

The euro weakened as much as 1.5 percent against the dollar on that day, the biggest decline since Feb. 17. Implied volatility, a measure of expectations for future currency moves, on one-month euro-dollar options rose to about a month-high at 18.76 percent early this week and stood at 17.93 percent today in Tokyo. The euro traded at $1.3587 in Tokyo from $1.3583 late in New York yesterday. The 16-nation currency has fallen 2.6 percent against the dollar since Dec. 31, heading for its fourth quarterly decline, the longest streak of losses in three years.

Market Commentary

MARKET COMMENTARY ON 26TH MARCH 2009

GBP/USD closed lower due to profit taking on Wednesday as it consolidated some of this month's rally. The low- range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends this month's rally, February's high crossing at 1.4910 is the next upside target. Closes below the 20-day moving average crossing at 1.4185 would confirm that a short-term top has been posted. First resistance is Tuesday's high crossing at 1.4778. Second resistance is February's high crossing at 1.4910. First support is the 10-day moving average crossing at 1.4322. Second support is the 20-day moving average crossing at 1.4185.

EUR/USD closed higher on Wednesday and above the 50% retracement level of the December-March decline crossing at 1.3525. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends this month's rally, the 62% retracement level of the December-March decline crossing at 1.3758 is the next upside target. Closes below the 20-day moving average crossing at 1.3025 would confirm that a short-term top has been posted.

USD/CHF closed higher on Wednesday but remains below the 50% retracement level of the December-March decline crossing. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near-term. If June extends this week's rally, the 62% retracement level of the December-March decline crossing is the next upside target. Closes below the 20-day moving average crossing would confirm that a short-term top has been posted.

USD/CAD closed lower due to profit taking on Wednesday as it consolidated some of this month's rally. The low-range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near-term. If June extends this month's rally, the reaction high crossing is the next upside target. Closes below the 20-day moving average crossing would confirm that a short-term top has been posted.

USD/JPY closed higher due to short covering on Wednesday as it consolidates some of Monday's decline. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near-term. Closes below last Tuesday's low crossing would confirm that a short-term top has been posted. If June renews this month's rally, the reaction high crossing at 100.55 is the next upside target.

3-Month Dollar Interbank Rates Edge Up; Euro Steady

LONDON, March 25 (Reuters) - Interbank lending rates for three-month dollar funds were indicated slightly higher on Wednesday compared with the previous session as financial markets continued to reassess the likely success of the U.S. Government's plan to clean up banks' balance sheets. The two-year U.S. dollar interest rate swap spread over comparable Treasury yields -- a closely watched gauge of investor risk aversion -- narrowed to 54 basis points from 58 basis points early Tuesday, as the two-year yields held firm a day after the sale of $40 billion of two-year notes. Three-month dollar deposit rates were indicated between 1.24 and 1.55 percent compared with 1.16 and 1.53 percent early in London on Monday. Three-month euro deposit rates were indicated in a 1.39 to 1.56 percent range versus 1.35 to 1.56 percent, while three-month sterling was in a wider 1.17-1.51 percent range compared with 1.44-1.50 percent. Interbank deposit rates are only indicative prices of where banks are lending to each other, which institutions use as a base to set their own lending rates.

Market Commentary

MARKET COMMENTARY ON 25TH MARCH 2009

GBP/USD closed higher on Tuesday extending this month's rally. The high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If June extends this month's rally, February's high crossing at 1.4930 is the next upside target. Closes below the 20- day moving average crossing at 1.4200 would confirm that a short-term top has been posted. First resistance is today's high crossing at 1.4752. Second resistance is February's high crossing at 1.4910. First support is the 10-day moving average crossing at 1.4245. Second support is the 20-day moving average crossing at 1.4168.

EUR/USD closed lower on Tuesday and below the 50% retracement level of the December-March decline crossing at 1.3520. The low-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends this month's rally, the 62% retracement level of the December-March decline crossing at 1.3770 is the next upside target. Closes below the 20-day moving average crossing at 1.2948 would temper the near-term friendly outlook in the market.

USD/CHF posted an inside day with a lower close on Tuesday as it consolidates below the 50% retracement level of the December-March decline crossing. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are becoming overbought but remain bullish signaling that sideways to higher prices are possible near- term. If June extends this week's rally, the 62% retracement level of the December-March decline crossing is the next upside target. Closes below the 20-day moving average crossing would confirm that a short-term top has been posted.

USD/CAD closed higher on Tuesday as it extended this month's rally. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If June extends this month's rally, the reaction high crossing is the next upside target. Closes below the 20- day moving average crossing would confirm that a short-term top has been posted.

USD/JPY closed lower on Tuesday and below the 20-day moving average. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near-term. Closes below last Tuesday's low crossing would confirm that a short-term top has been posted. If June renews this month's rally, the reaction high crossing at 100.20 is the next upside target.

FOREX-Dollar, yen slide as US bank plan blurs haven allure

NEW YORK, March 23 (Reuters) - The dollar and yen fell on Monday as investors reduced safe-haven bids on both currencies after the U.S. government unveiled a plan to unlock toxic assets from banks' balance sheets in an effort to pull the economy out of recession.

Higher-yielding currencies such as the Australian and New Zealand dollars, meanwhile, gained sharply, along with soaring U.S. stocks, as Treasury Secretary Timothy Geithner outlined details of the bank rescue plan. "This is more about risk appetite with U.S. stocks up after the Geithner announcement," said Brian Kim, currency strategist at UBS in Stamford, Connecticut. "So we're seeing the euro rally against the dollar on this, along with the aussie and the kiwi" dollars.

In late afternoon trading, the euro rose 0.5 percent against the dollar to $1.3648 after trading as low as $1.3487, according to Reuters data. Earlier, the euro had risen as high as $1.3735 after European Central Bank chief Jean-Claude Trichet signaled in a newspaper interview published on Monday that the ECB remained wary of interest rates falling to zero.

That should enhance the attractiveness of euro zone instruments over those in the United States and Japan, where interest rates are already near zero. The yen, on the other hand, came under heavy selling pressure, falling to a five-month low against the euro. The single euro zone currency jumped on electronic trading platform EBS to 132.56 yen , the highest since October 2008. The euro last traded at 132.45 up 1.7 percent. Against the yen, the dollar rose 1.2 percent to 97 yen .

The low-yielding dollar and yen are viewed as safe-haven currencies with minimal volatility. When stocks plunge and the risk barometer shoots up, investors repatriate funds, closing out losing trades that were financed by low rates in both the dollar and yen. Sterling firmed, rising 0.8 percent against the dollar to $1.4574 , despite the Bank of England's recent move toward quantitative easing as the UK currency benefited from a jump in equities following the Geithner news.

Sterling also hit a 3-1/2-month-high at 141.85 yen , while the Australian dollar rose to 68.37 yen, its highest since November 2008. While the Geithner announcement was a short-term negative for the safe-haven dollar, some analysts believe the bank bailout plan would be not be as detrimental for the greenback in the long term as many market watchers had initially surmised.

Market Commentary

MARKET COMMENTARY ON 24TH MARCH 2009

GBP/USD closed higher on Monday extending this month's rally. Profit taking tempered early gains and the mid- range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If June extends this month's rally, February's high crossing at 1.4940 is the next upside target. Closes below last Wednesday's low crossing at 1.3870 would confirm that a short-term top has been posted. First resistance is today's high crossing at 1.4635. Second resistance is February's high crossing at 1.4925. First support is the 20- day moving average crossing at 1.4156. Second support is last Wednesday's low crossing at 1.3870.

EUR/USD closed higher on Monday as it consolidates above the 50% retracement level of the December-March decline crossing. The mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends this month's rally, the 62% retracement level of the December-March decline crossing at 1.3745 is the next upside target. Closes below the 20-day moving average crossing at 1.3140 would temper the near-term friendly outlook in the market.

USD/CHF closed higher on Monday but remains below the 50% retracement level of the December-March decline crossing. The mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. If June extends this week's rally, the 62% retracement level of the December-March decline crossing is the next upside target. Closes below the 20-day moving average crossing would confirm that a short-term top has been posted.

USD/CAD closed higher on Monday as it extended this month's rally. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If June extends this month's rally, the reaction high crossing is the next upside target. Closes below the 20-day moving average crossing would confirm that a short-term top has been posted.

USD/JPY closed lower on Monday as it consolidated some of last Thursday's rally. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are turning neutral hinting that a short-term top might be in or is near. Closes below last Tuesday's low crossing would confirm that a short-term top has been posted. If June extends this month's rally, the reaction high crossing is the next upside target.

Yen falls as investors opt for higher-yielders

TOKYO (Reuters) - The yen fell to its lowest in five months against the euro on Monday and dropped more than 1 percent against higher-yielding currencies as investors grew bolder on U.S. plans to tackle financial system problems.

Stock markets around Asia rose in anticipation of plans by Treasury Secretary Timothy Geithner to purge U.S. banks of "toxic" assets, leaving the yen, which had been a gainer last year in times of financial stress, at the mercy of the Australian and New Zealand dollars.

Geithner is set to speak at 1245 GMT but a U.S. official gave details of the plan beforehand, saying the government would put in $75 billion to $100 billion from its bailout fund to partner with private investors and buy troubled assets at the heart of the financial crisis.

"It's naturally positive news for the financial markets. The scheme is necessary for the market, and the size of the reported toxic assets to be bought seems large," said Jun Kato, deputy general manager of the treasury business group at Shinkin Central Bank.

Traders and analysts said that as well as improved risk appetite investors were favouring currencies whose central banks had interest rates above zero and looked unlikely to deploy forms of quantitative easing to get their economies moving.

An announcement by the Federal Reserve last week that it would buy up to $300 billion in longer-term government debt sent the dollar into a tailspin as investors fretted it would flood the market with dollars.

The euro rose 1.1 percent to 131.41 yen. Earlier, it hit its highest since late October at 131.97 yen on trading platform ut for the time being, markets seem reassured and risk aversion may ease, said Akira Kato, senior manager for Bank of Tokyo-Mitsubishi UFJ's foreign exchange trading department.

"During the week, there will probably be more unwinding of risk-aversion type positions," Kato said, adding that the euro could rise toward 134 yen later this week.

Market Commentary

MARKET COMMENTARY ON 23rd MARCH 2009

GBP/USD posted an inside day with a lower close on Friday as it consolidated some of this week's rally. The low- range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If June extends this week's rally, the reaction high crossing at 1.4630 is the next upside target. Closes below Wednesday's low crossing at 1.3870 would confirm that a short-term top has been posted.

EUR/USD posted an inside day with a lower close on Friday due to profit taking as it consolidated some of this week's rally. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends this month's rally, the 62% retracement level of the December-March decline crossing at 1.3775 is the next upside target. Closes below the 20-day moving average crossing at 1.2890 would temper the near-term friendly outlook in the market.

USD/CHF posted an inside day with a lower close on Friday as it consolidates below the 50% retracement level of the December-March decline crossing. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. If June extends this week's rally, the 62% retracement level of the December-March decline crossing is the next upside target. Closes below the 20-day moving average crossing would temper the near-term friendly outlook in the market.

USD/CAD posted an inside day with a lower close on Friday as it consolidated some of this week's rally. A short covering rally tempered early losses and the mid-range close sets the stage for a steady opening on Monday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If June extends this week's rally, the reaction high crossing is the next upside target. Closes below the 10-day moving average crossing would confirm that a short-term top has been posted.

USD/JPY posted an inside day with a lower close on Friday as it consolidated some of Thursday's rally. The low- range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If June extends this week's rally, the reaction high crossing is the next upside target. Closes below Tuesday's low crossing would confirm that a short-term top has been posted.

Market Commentary

MARKET COMMENTARY ON 20TH MARCH 2009

GBP USD closed sharply higher for the second day in a row on Thursday as it extends this week's rally. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI remain bullish signalling that sideways to higher prices are possible near-term. If it extends this week's rally, the reaction high crossing is the next upside target. Closes below Wednesday's low crossing would confirm that a short-term top has been posted.

EUR/USD closed sharply higher for the second day in a row on Wednesday as it extends this month's rally. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are overbought but remain bullish signalling that sideways to higher prices are possible near-term. If it extends this month's rally, the 62% retracement level of the December-March decline crossing is the next upside target. Closes below the 20-day moving average crossing would temper the near-term friendly outlook in the market.

USD/CHF closed sharply higher and tested the 50% retracement level of the December-March decline crossing. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are turning bullish signalling that sideways to higher prices are possible near-term. If it extends this week's rally, the 62% retracement level of the December-March decline crossing is the next upside target. Closes below the 20-day moving average crossing would temper the near-term friendly outlook in the market.

USD/CAD closed lower on Thursday. The low-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If June extends this week's rally, the reaction high crossing at is the next upside target. Closes below the 10-day moving average crossing would confirm that a short-term top has been posted.

USD/JPY closed sharply higher for the second day in a row on Thursday and above the reaction high crossing confirming that a short-term low has been posted. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are bullish signalling that sideways to higher prices are possible near-term. If it extends this week's rally, the reaction high crossing is the next upside target. Closes below Tuesday's low crossing would confirm that a short-term top has been posted.

Euro, British Pound Consolidate Gains After Dovish FOMC Sparks Rally (Euro Open)

Euro, British Pound Consolidate Gains After Dovish FOMC Sparks Rally (Euro Open)
2009-03-19 05:19 (UTC)

The Euro and the British Pound consolidated in narrow ranges in overnight trading after an unexpectedly dovish statement from the US Federal Reserve triggered a US Dollar selloff, pushing EURUSD and GBPUSD sharply higher. Switzerland’s Trade Balance and ZEW survey of investor confidence are on tap in European hours.

Key Overnight Developments

• Australian Annual Car Sales Lowest in 7 Years

• Japan May Inject Capital into Failing Companies, Says LDP Chief

• Euro, British Pound Consolidate After FOMC Sparks Rally

The Euro and the British Pound consolidated in narrow ranges in overnight trading after an unexpectedly dovish statement from the US Federal Reserve triggered a US Dollar selloff, pushing EURUSD and GBPUSD sharply higher.

Market Commentary

MARKET COMMENTARY ON 19TH MARCH 2009

GBP/USD closed higher on Wednesday and above the 20-day moving average crossing at 1.4139 confirming that a short-term low has been posted. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If June extends this week's rally, the reaction high crossing at 1.4620 is the next upside target. Closes below today's low crossing at 1.3875 would confirm that a short-term top has been posted.

EUR/USD closed sharply higher on Wednesday as it extends this month's rally. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. If June extends this month's rally, the 50% retracement level of the December-March decline crossing is the next upside target. Closes below the 20-day moving average crossing would temper the near-term friendly outlook in the market.

USD/CHF closed sharply higher on Wednesday and above last week's high crossing confirming that a low has been posted. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends this week's rally, the 50% retracement level of the December-March decline crossing is the next upside target. Closes below the 10-day moving average crossing would temper the near-term friendly outlook in the market.

USD/CAD closed sharply higher on Wednesday as it extends Monday's breakout above the 20-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If June extends this week's rally, the reaction high crossing is the next upside target. Closes below the 10-day moving average crossing would confirm that a short-term top has been posted.

USD/JPY closed sharply higher on Wednesday and above the 20-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. Closes above the reaction high crossing are needed to confirm that a short-term low has been posted. Closes below the reaction low crossing would renew this year's decline.

Yen Trades Near 2009 Low Against Euro as BOJ Raises Debt Buying

March 18 (Bloomberg) -- The Yen traded near the weakest level against the Euro this year after the Bank of Japan said it will step up purchases of government debt, encouraging investors to seek higher-yielding assets overseas.

The dollar was near a one-month low against the euro as Asian stocks extended a rally in global equities, damping demand for the U.S. currency as a refuge from the financial turmoil. South Korea’s won had the biggest decline against the dollar of the 16 most-traded currencies on speculation domestic companies took advantage of its recent gains to pay import bills.

“Governments and central banks are taking various measures which are supporting sentiment that the worst of the financial crisis may be over,” said Yuji Saito, Tokyo-based head of the foreign-exchange group at Societe Generale SA, France’s third- largest bank. “People who had shunned risk are returning to the markets. This is causing selling of the dollar and the yen.”

Japan’s currency traded at 128.17 against the euro as of 7:49 a.m. in London, from 128.35 yesterday in New York, when it slid 0.8 percent. It earlier dropped to 128.83, the weakest since Dec. 29. The yen was at 98.58 per dollar from 98.60.

The dollar was at $1.3001 per euro from $1.3017 yesterday, when it declined 0.4 percent. The U.S. currency touched $1.3072 on March 16, the lowest level since Feb. 10.

Market Commentary

MARKET COMMENTARY ON 18TH MARCH 2009

GBP/USD posted an inside day with a lower close on Tuesday but remains above the 10-day moving average crossing at 1.3970. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are bullish hinting that a short-term low might be in or is near. Closes above the 20-day moving average crossing at 1.4140 are needed to confirm that a bottom has been posted. If June renews last week's decline, January's low crossing at 1.3630 is the next downside target.

EUR/USD closed higher on Monday as it extends this month's rally. The high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near- term. If June extends this month's rally, the 38% retracement level of the December-March decline crossing at 1.3260 is the next upside target. Closes below the 20-day moving average crossing at 1.2750 would temper the near-term friendly outlook in the market.

USD/CHF closed higher on Tuesday due to short covering as it consolidated some of last Thursday's decline. The high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term. Closes above the 20-day moving average crossing would temper the near-term friendly outlook in the market. Closes above the reaction high crossing are needed to renew the rally off February's low.

USD/CAD closed lower on Tuesday due to profit taking but remains above the 20-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. Multiple closes above the 20-day moving average crossing are needed to confirm that a short-term low has been posted. If June renews this year's decline, weekly support crossing is the next downside target.

USD/JPY closed lower on Tuesday but remains above the 62% retracement level of the August-January rally crossing. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are bullish hinting that a short-term low might be in or is near. Closes above the reaction high crossing are needed to confirm that a short-term low has been posted. If June renews this year's decline, the 75% retracement level of the August-January rally crossing is the next downside target.

Market Commentary

MARKET COMMENTARY ON 17TH MARCH 2009

GBP/USD closed higher due to short covering on Monday and above the 10-day moving average crossing signaling that a short-term low has been posted. The mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are turning bullish hinting that a short-term low might be in or is near. Closes above the 20-day moving average crossing are needed to confirm that a bottom has been posted. If June renews last week's decline, January's low crossing is the next downside target.

EUR/USD closed higher on Monday as it extends last week's breakout above the 20-day moving average. The mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are bullish signaling that a low might be in or is near. If June extends this month's rally, the 38% retracement level of the December-March decline crossing is the next upside target. Closes below the 20-day moving average crossing would temper the near-term friendly outlook in the market.

USD/CHF closed higher on Monday due to short covering as it consolidated some of last Thursday's decline. The mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term. If June extends last week's decline, October's low crossing is the next downside target. Closes above the reaction high crossing are needed to renew the rally off February's low.

USD/CAD closed higher on Monday and above the 20-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. Multiple closes above the 20-day moving average crossing are needed to confirm that a short-term low has been posted. If June renews this year's decline, weekly support crossing is the next downside target.

USD/JPY closed lower on Monday but remains above the 62% retracement level of the August-January rally crossing. The mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are turning bullish hinting that a short-term low might be in or is near. Closes above the reaction high crossing are needed to confirm that a short-term low has been posted. If June renews this year's decline, the 75% retracement level of the August- January rally crossing is the next downside target.

Australia, N.Z. Dollars Fall From Month Highs on Rates Concern

March 16 (Bloomberg) -- The Australian and New Zealand dollars fell, retreating from one-month highs touched late last week, amid concerns the nations’ deteriorating economies may spur their central banks to lower interest rates to records.

New Zealand’s manufacturing sales excluding inflation fell 5.4 percent in the fourth quarter, the statistics department said. The Reserve Bank of Australia tomorrow releases minutes of the March 3 board meeting, where policy makers halted reductions in borrowing costs. Since that meeting, government reports showed gross domestic product shrank for the first time in eight years and the unemployment rate climbed to a four-year high.

“The RBA’s minutes moved markets on quite a few occasions so traders are a bit uneasy ahead of that, especially as the meeting was prior to the weak GDP and jobs data,” said Sean Callow, a senior currency strategist in Sydney at Westpac Banking Corp., Australia’s biggest lender by market value. “New Zealand’s manufacturing sales today also puts downside risks to GDP forecasts for” the Reserve Bank of New Zealand.

Australia’s currency fell 0.3 percent to 65.62 U.S. cents as of 4:21 p.m. in Sydney from 65.82 cents in New York late last week, when it touched 66.04 cents, the strongest since Feb. 13. The currency was unchanged at 64.47 yen.

Rate Cut Chances

The Aussie, as the currency is often known, will trade between 65.15 to 66.20 cents to the U.S. dollar today, Callow said, adding that markets are pricing in an 80 percent chance the RBA will lower rates next month by 0.5 percentage point to 2.75 percent and a 20 percent chance for a reduction to 3 percent.

New Zealand’s dollar weakened 0.2 percent to 52.39 U.S. cents from 52.49 cents in New York on March 13, when it peaked at 52.69 cents, also the highest since Feb. 13. It was unchanged at 51.46 yen.

The kiwi, as the currency is commonly called, is likely to trade between 51.40 to 53.00 cents to the dollar today, Westpac’s Callow said.

Australian policy makers on March 3 left the benchmark interest rate unchanged for the first time in seven months, saying the lowest borrowing costs in four decades and government spending were supporting the economy.

Australian Dollar Shorts

“It’s come off a little before the RBA minutes as that will give indications on their thinking and that may add to speculation of a rate cut as early as next month,” said Besa Deda, chief economist at St. George Bank Ltd. in Sydney, said about the Australian currency.

Futures traders increased their bets that the Australian dollar will decline against the U.S. dollar, figures from the Washington-based Commodity Futures Trading Commission show. The difference in the number of wagers by hedge funds and other large speculators on a fall in the Australian dollar compared with those on a gain -- so-called net shorts -- was 3,945 on March 10, compared with net shorts of 2,786 a week earlier.

Futures are agreements to buy or sell assets at a set price and date. The figures reflect holdings in currency-futures contracts at the Chicago Mercantile Exchange as of Tuesday.

The euro fell versus the dollar, ending four days of gains, on speculation European nations will fail to increase spending enough to counter the financial turmoil in the region, spurring concerns of renewed risk aversion. The 16-nation currency declined against 11 of the 16 major currencies after European officials at the weekend Group of 20 finance ministers meeting said they had spent sufficient money to combat the financial crisis and didn’t want to blow out their budgets.

Market Commentary

MARKET COMMENTARY ON 16TH MARCH 2009

GBP/USD closed higher due to short covering on Friday as it consolidated some of this week's decline. The mid- range close sets the stage for a steady opening on Monday. Stochastics and the RSI are oversold and are turning bullish hinting that a short-term low might be in or is near. Closes above the 20-day moving average crossing are needed to confirm that a bottom has been posted. If June renews this week's decline, January's low crossing at 1.3620 is the next downside target.

EUR/USD closed higher on Friday as it extends this week's breakout above the 20-day moving average. The mid-range close sets the stage for a steady opening on Monday. Stochastics and the RSI are bullish signaling that a low might be in or is near. Closes above the reaction high crossing are needed to confirm that a short-term low has been posted. Closes below the 10-day moving average crossing would temper the near-term friendly outlook in the market.

USD/CHF posted an inside day with a higher close on Friday as it consolidated some of Thursday's decline. The mid-range close sets the stage for a steady opening on Monday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. If June extends this week's decline, October's low crossing is the next downside target. Closes above the reaction high crossing are needed to renew the rally off February's low.

USD/CAD closed higher due to short covering on Friday as it extends the rebound off this week's low. Profit taking tempered early gains and the mid-range close sets the stage for a steady opening on Monday. Stochastics and the RSI have turned bullish hinting that a short-term low might be in or is near. Closes above the 20-day moving average crossing are needed to confirm that a short-term low has been posted.

USD/JPY closed slightly lower on Friday but remains above the 62% retracement level of the August-January rally crossing. The mid-range close sets the stage for a steady opening on Monday. Stochastics and the RSI are turning bullish hinting that a short-term low might be in or is near. Closes above Thursday's high crossing are needed to confirm that a short-term low has been posted. If June renews this year's decline, the 75% retracement level of the August- January rally crossing is the next downside target.

Market Commentary

MARKET COMMENTARY ON 13TH MARCH 2009

GBP/USD closed higher due to short covering on Thursday as it consolidated some of this week's decline. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. If June renews this week's decline, January's low crossing is the next downside target. Closes above the 20-day moving average crossing are needed to confirm that a bottom has been posted.

EUR/USD closed higher on Thursday as it extends yesterday's breakout above the 20-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are bullish signaling that a low might be in or is near. Closes above the reaction high crossing are needed to confirm that a short-term low has been posted. If June renews this year's decline, October's low crossing is the next downside target.

USD/CHF closed sharply lower on Thursday and spiked below February's low crossing. The low-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near-term. Closes above the reaction high crossing are needed to renew the rally off February's low.

USD/CAD closed higher due to short covering on Thursday as it consolidates above December's low crossing. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are turning bullish hinting that a short-term low might be in or is near. If June extends this year's decline, weekly support crossing is the next downside target. Closes above the 20-day moving average crossing are needed to confirm that a short-term low has been posted.

USD/JPY closed lower on Wednesday but remains above the 62% retracement level of the August-January rally crossing. The low-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are turning bullish hinting that a short-term low might be in or is near. Closes above the 20-day moving average crossing are needed to confirm that a short-term low has been posted. If June extends this year's decline, the 75% retracement level of the August-January rally crossing is the next downside target.

Yen Rises as Deepening Global Recession Spurs Demand for Refuge

March 12 (Bloomberg) -- The yen advanced for a second day against the euro on speculation the deepening global recession will increase demand for the currency as a refuge.
The yen and the greenback both gained versus the Australian and New Zealand dollars after a Japanese report confirmed the world’s second biggest economy shrank last quarter at the fastest pace since 1974, prompting investors to sell higher- yielding assets. The euro may halt a two-day winning streak against the dollar before a German report that economists say will show industrial production dropped for a fifth month, giving the European Central Bank more room to cut interest rates.
“The Japanese report was certainly bad, with some of the data suggesting the economy will keep deteriorating this quarter,” said Yuji Saito, head of the currency group in Tokyo at Societe Generale SA, France’s third-largest bank. “Investors are still risk-averse. This has led to buying of the yen.”
The yen climbed to 123.43 versus the euro as of 6:41 a.m. in London from 124.86 late yesterday in New York. The currency advanced to 96.40 per dollar 97.27. It earlier reached 95.96, the strongest level since Feb. 24.
Japan’s currency gained 2 percent to 62.20 against the Australian dollar and rose 1.3 percent to 49.30 versus the New Zealand dollar. The dollar traded at $1.2803 per euro from $1.2837 late yesterday.

http://www.bloomberg.com/apps/news?pid=20601083&sid=a.OHgzTSGdjU&refer=currency

Market Commentary

MARKET COMMENTARY ON 12TH MARCH 2009

GBP/USD closed higher due to short covering on Wednesday as it consolidated some of this week's decline. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. If June extends this week's decline, January's low crossing is the next downside target. Closes above the 20-day moving average crossing are needed to confirm that a bottom has been posted.

EUR/USD closed higher on Wednesday. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are bullish signaling that a low might be in or is near. Closes above the reaction high crossing are needed to confirm that a short-term low has been posted. If June renews this year's decline, October's low crossing is the next downside target.

USD/CHF closed higher on Wednesday and extended last Friday's rally above the 20-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above the reaction high crossing are needed to renew the rally off February's low. Closes below February's low crossing are needed to renew this year's decline.

USD/CAD closed higher due to short covering on Wednesday as it consolidates above December's low crossing. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are oversold but are neutral to bearish signaling that sideways to lower prices are possible near-term. If June extends this year's decline, weekly support crossing is the next downside target. Closes above the 20-day moving average crossing are needed to confirm that a short-term low has been posted.

USD/JPY closed higher on Wednesday as it consolidates above the retracement level of the August-January rally crossing. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are turning bullish hinting that a short-term low might be in or is near. Closes above the 20-day moving average crossing are needed to confirm that a short-term low has been posted. If June extends this year's decline, the 75% retracement level of the August-January rally crossing is the next downside target.

Market Commentary

MARKET COMMENTARY ON 11TH MARCH 2009

GBP/USD closed lower on Tuesday as it extended the decline off February's high. The low-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. If March extends this week's decline, January's low crossing is the next downside target. Closes above the 20-day moving average crossing are needed to confirm that a bottom has been posted.

EUR/USD closed slightly higher on Tuesday but remains below the 20-day moving average crossing. The low- range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI have turned bullish signaling that a low might be in or is near. Closes above the reaction high crossing are needed to confirm that a short-term low has been posted. If March renews this year's decline, November's low crossing is the next downside target.

USD/CHF closed higher on Tuesday as it consolidated some of last Friday's rally but remains below the 20-day moving average crossing. The low-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. Closes below the reaction low crossing are needed to renew the rally off February's high.

USD/CAD closed lower due to short covering on Tuesday as it consolidates below December's low crossing. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are oversold but are neutral to bullish signaling that sideways to higher prices are possible near-term. Closes below the 20-day moving average crossing are needed to confirm that a long-term high has been posted.

USD/JPY closed slightly lower on Tuesday as it consolidates above the retracement level of the August- January rally crossing. The low-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are oversold but are neutral to bullish hinting that a short-term low might be in or is near. Closes below the 20-day moving average crossing are needed to confirm that a short-term high has been posted.

Yen, Dollar Weaken as Stock Gains Boost Higher-Yield Currencies

March 10 (Bloomberg) -- The yen and the dollar weakened on speculation gains in Asian stocks and U.S. equity futures fueled demand for higher-yielding assets.
The euro approached a two-month high against Japan’s currency on expectations European investors will bring home overseas earnings before the end of the first quarter. South Korea’s won gained the most in almost two months against the dollar as overseas investors bought more of the nation’s shares than they sold. The Australian and New Zealand dollars advanced as Asian stocks rose.

“We’ve got a lot of green on the board in Asian equities and that’s good for risk-taking appetite,” said Sean Callow, a senior currency strategist at Westpac Banking Corp., Australia’s biggest lender by market value. “It would certainly fit into the yen weakness that’s been one of the biggest stories over the past month. That also works to the detriment of the dollar.”
The yen dropped to 125.42 versus the euro as of 7:51 a.m. in London from 124.65 late in New York yesterday. The dollar dropped to $1.2706 per euro from $1.2611. The U.S. currency declined to 98.69 yen from 98.84 yen.

Japan’s currency fell 1 percent to 63.04 versus the Australian dollar, and weakened 0.7 percent to 49.06 against the New Zealand dollar from late in New York yesterday.
The yen slid against 14 of the 16 most actively traded currencies after a Cabinet Office report today showed the leading index of business conditions fell to 77.1 in January from 80 in December, below the consensus forecast of 77.4 in a Bloomberg News survey. The coincident index, which shows current economic activity, dropped to 89.6 from 92.4.

http://www.bloomberg.com/apps/news?pid=20601083&sid=a300.7j5MLKo&refer=currency

Market Commentary

MARKET COMMENTARY on 10th March 2009

GBP/USD closed lower on Monday thereby renewing the decline off February's high. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are neutral signaling that sideways to lower prices are possible near-term. If March extends this week's decline, January's low crossing is the next downside target.

EUR/USD posted an inside day with a lower close on Monday as it consolidated some of last Friday's rally. The mid- range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are turning bullish signaling that a low might be in or is near. Closes above the reaction high crossing are needed to confirm that a short-term low has been posted. If March renews this year's decline, November's low crossing is the next downside target.

USD/CHF Closed higher on Monday as it consolidated some of last Friday's rally but remains below the 20-day moving average crossing. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. Closes below the reaction low crossing would renew the rally off February's high.

USD/CAD closed lower on Monday and spiked below December's low crossing. The mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are oversold but are neutral to bearish signaling that sideways to lower prices are possible near-term. Closes above the 20-day moving average crossing are needed to confirm that a short-term low has been posted.

USD/YEN closed higher on Monday ending a two-day short covering bounce off the retracement level of the August-January rally crossing. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are oversold but are turning neutral to bullish hinting that a short-term high might be in or is near. Closes below the 20-day moving average crossing are needed to confirm that a short-term high has been posted.

MARKET COMMENTARY

MARKET COMMENTARY On 09th March'09


GBP/USD closed lower on Friday and the low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are neutral signalling that sideways to lower prices are possible near-term. If it extends this week's decline, January's low crossing is the next downside target. Closes above the 20-day moving average crossing are needed to confirm that a bottom has been posted.

EUR/USD closed higher on Friday due to short covering. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are diverging and turning bullish signalling that a low might be in or is near. Closes above last Monday's high crossing are needed to confirm that a short-term low has been posted. If it renews this year's decline, November's low crossing is the next downside target.

USD/JPY posted an inside day with a lower close on Friday. The low-range close sets the stage for a steady opening on Monday. Stochastics and the RSI remain neutral to bearish signalling that sideways to lower prices are possible near-term. If it renews this year's decline, November's low crossing is the next downside target. Closes above last Monday's high crossing are needed to confirm that a short-term low has been posted.

USD/CHF closed sharply higher on Friday and above the 20-day moving average crossing. The high- range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are turning bullish signalling that sideways to higher prices are possible near-term. Closes above the reaction high crossing would renew the rally off February's low. Closes below February's low crossing are needed to renew this year's decline.

USD/CAD posted an inside day with a slightly higher close on Friday as it consolidated some of Thursday's decline. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are oversold and are turning neutral hinting that a short-term low might be in or is near. Closes above the 20-day moving average crossing are needed to confirm that a short-term low has been posted.

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2) Cut Losses, Let Gain Run

3) Discipline is Crucial

4) Focus On The Process

5) Know Your Exit

6) Manage Your Money

7) The Trend Is Your Friend

8) Don’t Trade Emotions

9) Consider Who Loses

10) Remain Humble

SIX Guidelines for Forex Trading

Forex trading may become a much easier activity if you follow your own or someone else’s well-formulated guidelines. I’ve based my guidelines on my past Forex trading experience and knowledge gained listening to some of the best stock and Forex traders. What’s important is that the guidelines are not the laws and rules — they are not the only way to success, they just help the traders in their endeavor. Here’s the list of my Six Forex trading guidelines:

1) Open a Demo Account and learn to trade it first before “going live” with real money. You will usually learn how to avoid some mistakes and also get familiar with the broker’s trading platform before you have hard-earned money at risk.

2) If you’ve never traded Forex before, I recommend opening a mini account first. Trade less and become accustomed to the quick Forex market, before you start using the higher leverage of a standard account.

3) Risk only 3% of the total trading capital with each trade. Generally it’s quite hard to come up with the comfortable risk percentage value for your trades if you want to keep a good money management and still let your funds grow at a nice rate. For me 3% is the optimal level — safe enough to save and high enough to gain.

4) Reward-to-risk ratio should be no lower than 1. Many currency traders prefer trading with the ratio not less than 2 or even higher. That’s a problem of risk/gain balance too. For me the opportunities with the ratio above 2 are very rare — maybe, because I prefer high accuracy trades. If your accuracy rate is far from 90% than sticking to reward-to-risk ratio of 2 would probably be a better decision.

5) Don’t leave the positions open through the weekend. The weekly opening gap can be a killer. Don’t underestimate it. As a swing trader, I prefer to open my positions in the beginning of the week and I always close them before trading ends on Friday. The gap in the price rates that usually occurs after a weekend can make your stop-loss trigger far from the levels you planned it to.

6) Wait before opening a new order after you’ve just traded. If you jump into another position right after you closed or opened a previous order is a straight road to overtrading and an empty balance. I always wait some time analyzing opportunities and resting from the Forex market before setting up my next order. Maybe, for the extreme scalpers this isn’t a best decision, but for the absolute majority of the medium-term Forex traders it is.

FOUR Easy Steps to Remove Emotions from Your Forex Trading

Emotions are the one of the greatest problems of the Forex traders. Almost every beginning trader, who starts with the demo account, experiences a great success in his trading, but fails to carry this success to the real money account. What’s the problem? Emotions! When we lose we feel frustration and sometimes even despair. Winning can cause us to lose control over our actions and turn our trading into a gambling or cause a serious overtrading. So here are the four easy steps to stop emotions from ruining your Forex trading:

1. Single loss is not your fault. It’s not even the market’s fault. And it’s not your system’s fault. It’s just a loss. No trader or system can guarantee 100% winning rate. So, losses should happen. If you lose then your system works. It may even lose again, but that won’t change the full picture. Trading doesn’t work with a single loss or win; it works with the loss rate and risk-to-reward ratios. So, next time you lose, remember that there is no one to blame, because there is no guilt in losing.

2. If the losses prevail over the winning positions then check your risk-to-reward ratio first. If each of your losses is less than a third of your single winning position then maybe your system is intended to work with 65% of your positions in the red zone? If your risk-to-reward ratio doesn’t compensate your poor loss-to-win ratio, you still don’t have to blame yourself, the market or your system. Probably, it’s just the wrong system for the market you are trading in. Time changes and the old systems stop working, while the new ones are created. Just switch to something else and continue your pursuit of success.

3. Single winning position is not an indicator of your success. The same as with the losses don’t treat a single win as your accomplishment. It’s just a part of the routine process of trading Forex.

4. If your winning rate is high during the long period of time and the risk-to-reward ratio is rather low then I can congratulate you with finding the right strategy that worked fine for the kind of market you were trading on during that period. That’s it! Stick with it until your winning rate declines below the satisfying level.

Advantages of Online Trading!

1. Online futures commodities trading places the smart, self-directed trader in complete control of his or her trading decisions and executions
2. Futures Trades are instantly routed to the trading floor for immediate execution
3. Electronic futures such as E-Minis are filled in as little as one second
4. Fill reports are delivered promptly via electronic processing. The capacity for errors is theoretically lessened because there are fewer humans in the chain.
5. Risk management through easy account access: Online traders can quickly and easily check their order or account status at any time
6. Eliminate the broker-client “chit-chat” and execute your orders as soon as you want to
7. Save Your Money. Eliminate the middleman – you make your trades directly via the internet – online trading reduces the many overhead costs in trading that are typically passed to traders.

If you keep these things in mind as you get started trading, you will be doing yourself (and your account) a favour. I’ve never seen anyone regreting it.