Anne’s Avafx Blog

The latest Forex updates say that during the first part of the overnight session the CAD (USD/CAD) moved side-ways, trading near the low reached on Monday. However, the pair pushed during the European session, as crude oil broke and held on top of the $60 yardstick level. Furthermore, the CAD broke below the support trend-line at the ending days of trading.

The Aussie (AUD/USD) was aided by the London open to go forward and break above the high reached on Monday. Simultaneously, the Aussie broke above the 0.7700 resistance area, reaching the maximum evaluation since early October 2008. The Aussie maintained to trade beyond all of the daily SMA.

During the Asian session the Swissy (USD/CHF) tested the 1.1160 resistance area, but the London open pushed the Swissy much lower. In the next few days, the Swissy might carry on with its descending trend as, on Monday, the Swissy jumped off the resistance trend-line that connects the 04/22 and the 05/07 highs.

According to latest Forex updates Japanese machinery orders fell in March in a sign that companies are still unwilling to spend in spite of signs that a recession may soon be over.

Economists forecasted a return to growth in the forthcoming quarter. Recoiling in exports and production suggest the export-driven economy possibly reached a low in the January to March period.

Many company themselves forecasted machinery orders to fall in the forthcoming quarter, in another indication that Japan’s big producers of cars, technology and other exports are not sure enough to re-establish capital expenditure they slashed in the rouse of the financial crisis.

According to Friday’s data Japan’s core private-sector machinery orders fell 1.3 % in March, wiping out a 0.6 % rise in February but it was a much smaller decline than the median market predict for a 4.5 % fall.

The little than expected collapse helped improved stocks, with the standard Nikkei share average.N225 up 1.7 %, with investors shrugging off the biggest annual slide in wholesale prices in two decades.

The condition of the U.S financial system hangs about decisive, but signs of bottoming are commencement to come out here and there. Tough good new orders, as an instance, fell less than anticipated in March by 0.8 percent against February’s go up of 2.1 percent. Turns down were wide based, autos and metals are in red, but non-defense capital good orders rose 1.5 percent on the top of February’s gain of 4.3 percent. Gossips that some U.S. banks are under tight scrutiny are remanding us that the conclusion of the monetary crisis is still in movement. Though, the complexity for the USD to smash above key confrontation levels might be the authentication that markets are previously expecting a stabilization of the financial progression. The real estate market could guide the financial bounce back, but inventories should reject from present high levels previous to the market will significantly pick and choose up from the bottom.

The COT Index is the percentile of the dissimilarity between net approximate positioning and net marketable positioning calculated over an exact number of weeks (either 52 or 13).  A reading close to 0 proposes that a bottom is forming and an interpretation close to 100 suggests that a top is forming.  The readings are for the authentic currency, not the currency pair.

US Dollar Index: Investors are long but not tremendously long (commercials are short, but not extremely short).  This is bullish.

EUR: The 13 week index has turned over from 100, which pointed towards an emotion extreme (hopefulness extreme in this case).  This is tremendously bearish for the Euro.

GBP: The 13 week index is at 75 and has not been severe lately, which is neutral.  There is no response extreme from which to grasp a contrarian sight.

AUD: The 13 week index has turned over from 100.  Clippings arise when the index is at or close to 100, so the chance that a top is in place is high.

NZD:  The 13 week index has turned over from 100.  Clippings arise when the index is at or close to 100, so the chance that top is in place is soaring.

JPY:  The 13 week index is at 0.  These shows that commercial were the best ever they had been in 13 weeks and opportunists the shortest they had been in 13 weeks.  This is bullish for the Yen.

CAD: The 13 week index is at 100, which shows a sentiment extreme.  Trimmings (in the CAD here) come about when the index is at or close to 100, so anticipate the CAD to top (USDCAD bottom).
CHF:  The 13 week index is at 0.  A turn up from 0 would be bullish.  Until that time, a bearish response extreme can remain in place.

On Monday, the USD and the JPY rose and the Mexican Peso fell on concern about the increase of swine flu, which has killed 103 people in Mexico and infected people in the Canada and US. The WHO declared the flu a “public health emergency of international concern” that can become a deadly disease or global occurrence of serious disease.

The Mexican Peso drop down 2% against the USD in Asian trade, though Mexican Finance Minister Agustin Cartens tried to support markets, saying the impact on financial system would be “transitory”.

The USD jumped down to its lowest in a month against the JPY but rose against the NZD and AUD and edged higher against the Euro.

The Peso declined past 13.60 per dollar from a close of 13.284 pesos on Friday and Yamamoto said that it would be face more pressure later in the day when US trading started.

The Dollar fell down to 96.62 Yen, it’s lowest in a month, before edging back to 96.75 Yen losing 0.4% on the day.

Overall, the Sunday session began with traders looking to drop risk and buy the protection of the USD. It looks this has been the tendency over the last some days of trading and the market seems pretty happy to take it through. The US and the European calendar remain silent, as there are no significant reports planned.

On Friday, the Euro (EUR/USD) fell down 65 pips during the early part of the Asian session and broke under the low reached. Over the last five days of trading, the euro lost 400pips, as the market remains obsessed by risk.

The Pound (GBP/USD) fell down 60 pips in the Sunday open, as the currency market was again obsessed by risk-aversion. Furthermore, the pair already broke under Friday’s low, but now is leading towards an older 4h support area. The GBP’s calendar is full with top-row release this week.

The Cad (USD/CAD) gained 40 pips from the new trading week begun. The CAD is at present trying the same resistance part where it topped on Friday, although the pair saw strong volume and momentum. The Bank of Canada is likely to uphold the monetary policy at 0.50%, on Tuesday.