Forex Spread Bets December 2009
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A regular Forex spread trading update by Simon Denham of Capital Spreads. For the latest Forex spread trading update, click here.
Forex Spreads, 31 Dec 2009
Interesting movements in the Forex spreads markets are just about the only thing worth focussing on at the moment.
Yesterday the Dollar waxed and waned, managing a strong rally and then an even stronger fall.
Once GBP/USD had broken back above $1.5930 (the resistance level mentioned yesterday) the move was all one way.
We are now sitting above $1.6100 with everyone wondering what all the bearish worry was about. There is some solid resistance at around $1.6150 where we actually peaked early this morning and minor volume from $1.6115 up to $1.6150 as well.
On the down side we are back above $1.6070 and $1.6030 which proved to be supports in the past so we can probably speculate that these will prove as such again.
Sterling has made something of a recovery versus all the majors in the last couple of sessions as signs of a pick up across the economy seem to become more evident. But the main move yesterday was definitely one of a Dollar and Yen weakness.
Forex Spreads, 30 Dec 2009
As speculated in yesterday’s comment the Pound continues to be the whipping boy in the absence of anything else to do and yesterday’s session was no different with confidence in Sterling seeming to suddenly evaporate after an early rally to $1.6070.
The Cable cross then proceeded to slump 200 pips to a low of $1.5865 before managing a small rally back to $1.59 which is where we remain today. As mentioned $1.5930 was support and its failure now means that it may well act as resistance to any move back up but the Pound has threatened to collapse several times since it rallied back in May only for buying to hold steady in the high $1.50’s.
The fall through December versus the dollar looks to have more solidity to it though so traders should beware taking too strong an opinion that the same supports will hold.
The Dollar/Yen battered against the ¥91.80 resistance level (mentioned in our comment) for much of yesterday’s session before breaking through late in the European action.
The immediate reaction was to take us up to ¥92.00 and then an attempt to push back below ¥91.80 was beaten off in the evening trading. We remain at ¥92.00 this morning after an attempt higher reached ¥92.25 in the early hours. Traders are long and looking for further dollar gains. This said we must beware a move back under the ¥91.80 level as this might indicate a false break out.
Forex Spreads, 29 Dec 2009
Forex spreads markets have seen a small pull back in the Dollar over the Christmas period with the Cable cross currently back above $1.60 and the Euro struggling over $1.44.
This said, the Yen is not following suit and seems unable to get back under ¥91 having failed to hold the ¥88 break back at the end of November. On the other hand ¥91.80 looks to be very good resistance on the upside for the Dollar versus the Yen and we might be looking at some constrained activity in the next few weeks/months.
The pound, while recovering slightly against the dollar, still seems to be the general whipping boy when there is nothing else to do. Looking forward, it is rather too easy to speculate that a bitter election battle will not exactly improve things.
Cable reached $1.6070 this morning, pushing above the $1.6030 resistances but the effort appears to have been too much and we have slowly sunk back down again to the $1.6010 level, pretty much where we closed yesterday.
$1.5930 looks hard to penetrate on the downside as well so dealers will probably attempt to play the ranges until a confirmed break out is achieved.
Forex Spreads, 28 Dec 2009
Price update:
- GBP / USD closed last week down -$0.015 at $1.593 (down -0.93% week-on-week)
- USD / JPY closed last week up ¥1.0 at ¥91.8 (up 1.1% week-on-week)
- EUR / USD closed last week up $0.008 at $1.436 (up 0.54% week-on-week)
- EUR / GBP closed last week up 0.013 at 0.901 (up 1.5% week-on-week)
Also see:
Financial Spreads » "With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." » read Financial Spreads review.
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Forex Spreads, 24 Dec 2009
The forex spreads markets aren’t providing much excitement either this morning. In general, they are negative for the dollar. In the case of cable the pair is languishing at its lows below $1.6000. Sterling bears might try to force the issue at some point by testing the two month low around $1.5700 but for now support is $1.5925.
Whilst volumes in currency markets will also be pitifully low today one cannot discount a move over and after the US data with anything negative most likely to prove bad for the greenback.
The dollar’s bounce of recent may just have become a little over stretched. There’s no doubt that there’s been a shift in sentiment towards USD and the recent economic data from the US has largely been in its favour.
However, interest rates in the US are still not going to rise for a long time to come, most likely the back end of 2010. If we see equity strength continue into the New Year then that might just keep a cap on dollar gains in early 2010.
Forex Spreads, 23 Dec 2009
In the currency spreads markets the dollar continues to gain ground against the other majors as the general US economic situation seems to improve in relation to Europe, Japan and the UK.
The Euro has now fallen below $1.4300 to $1.4255 and we can see good resistance above here at $1.4335, $1.4380 and $1.4450. Support is at $1.4180 but there is good volume support and resistance all the way between $1.4180 and $1.4330.
Sterling remains weak, in general, although well off the lows versus the Euro. Cable has now fallen to $1.5950 below good support at $1.5975. Although, at the moment, there appears to be little follow through selling.
For Sterling bears the next target is $1.5800 and then $1.5725. If we breach this support then the top of the previous trading range at around $1.54 may hove into view.
Forex Spreads, 22 Dec 2009
In the forex spread betting markets, the Dollar is continuing to regain lost ground but is, in truth, still in the ranges set up over the last six or seven months.
Versus the Yen we are now at ¥91.25 up from the lows last month of around ¥85.00. There is heavy resistance between ¥91.75 and ¥92.35. Nevertheless it must be said that the current momentum is in the dollar’s favour. The recent rally has been very sharp and is showing support at ¥89.55.
Against the Euro the indications are similarly bullish with the major support at $1.4400 having been broken last week. The Euro seems to have a whole host of other problems as well which might well give pause to any rally strong buying emerging in the medium term.
The Pound has its own problems as well and the decision by S&P to downgrade UK banks as a whole yesterday will not make things any easier.
Forex Spreads, 21 Dec 2009
While European indices attempt to make some ground this morning the dollar continues to find strength. This is a further indication that the dollar weakness/equity strength correlation is breaking down.
The change in sentiment towards the dollar has been apparent over the couple of weeks. Any strong US economic data is now expected to be dollar supportive whereas for most of 2009 it has been the other way round.
Looking across the FX spread betting markets, the euro, sterling and yen are all weaker this morning and it looks like the dollar has seen the worst of its demise this year. The euro is certainly not a currency that investors will want to have exposure to over the extended holiday period with all the credit defaults that have emerged recently.
The extent of the dollar’s correction has shaken out quite a few bears. In EUR/USD the $1.4300 level seems to be holding for now with Friday’s low at $1.4260 being the near term support and then $1.4080.
If we head below there then $1.3800 can’t be ruled out as a target. Cable has also been under pressure so far this morning and $1.6050 was Friday’s low which will be in the sights of dollar bulls.
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Risk Warning: Spread betting and CFD trading carry a high level of risk to your capital and you may lose more than your initial investment. Spread betting and CFD trading may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.
'Forex Spread Bets December 2009' by DB, updated 01-Jan-10
For related pages also see:
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EUR/USD Spread Betting Market Surges on Expectation of ECB Rate Cut, updated 30-Apr-13
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Currency Trading: GBP/USD Rallies as UK GDP Beats Expectations, updated 25-Apr-13
The pound has been the biggest outperformer today surging higher to its biggest one day gain against the US dollar in 9 months. The rise came after the surprisingly good Q1 GDP numbers saw...read article: Currency Trading: GBP/USD Rallies as UK GDP Beats Expectations.
Interesting Inverse Correlation Between JPY and Risk-On Trading, updated 24-Apr-13
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Forex Spread Betting Library, updated 17-Apr-13
An index of forex trading reviews, spread betting news, analysis and commentary. The forex spread betting articles focus on the major euro, dollar and pound sterling based...read article: Forex Spread Betting Library.
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