Trading Tips from 21 to 30

[walid]

The markets are waiting today curiously for the MPC meeting decision after the recent meeting minutes have shown that there is growing of the voting for tightening after as Mr. Dale has given his vote to hike the interest rate by .25% like Mr. Martin Weale and Andrew sentence has called for hiking by .5% while Possen was the only vote for increasing the buying bonds plan by another 50b Stg while the other 5 MPC voting members including BOE president Mr. Mervin King preferred leaving the interest rate unchanged keeping BOE 200b Stg buying bonds plan unchanged and this mixed position is reflecting the performance of the sterling which rises when it finds signs of inflation and quickly gets back under pressure with the signs of economic weakness and both directions signs are existing containing the sterling movements capping it from catching up with the single currency rising versus the greenback despite breaking its previous resistance at 1.6296 which could not add momentum to it to get higher versus the greenback as it is still contained in the same time by the signs of growth downside risks which lead recently to a down revision of UK Q4 GDP quarterly from -.5% to -.6% which caps BOE from tightening and the release of February Confederation of British industry survey of the retails sales was the best figuring out of this stagflation case facing the BOE as it has fallen to 6 from 37 in January to ensure the market worries about the growing pace of the demand which is moving the growth up and in the same time the figure of the selling prices inside the retail sales sector has shown strong rising from 43 in January to 73 in February which shows the need of tightening too.
The pressure came down on the single currency after the release of Feb Germane industrial productions which rose by 1.8% after sudden falling in January by .6%. The pressure increased this week on the single currency after Moody's downgrading of the Greek sovereign debt 3 notches to B1 and it came back again lowering the credit rating of 6 of Greece largest Greek Banks but it has mentioned that the biggest 4 of these 6 have credit rating better than the Greek sovereign debt. The single currency could find support at 1.3860 in testing it back as a support after breaking it last week on last week Trichet's comment that it is strong vigilance warranted to watch the prices which always hint to a close tightening action by the ECB but this week with the attention coming back to the debt problems in the Euro zone and the consequences of entering tightening cycle by the ECB on the struggling European debt ailing countries such as Greece, Ireland and Portugal, the European equities markets came under pressure and the single currency eased back below 1.39 as these waited actions for containing the prices over the medium term have been seen as new obstacles in the way of covering the costs of borrowing inside the European countries ailing of debt as hiking the interest rate will exceed the cost of covering their bonds auctions and in the same time adopting a tightening policy can feed the market with the believing that the ECB is caring much more now about the prices upside risks than funding the debt of the debt ailing countries which can lead to further injection of funds into the markets and banking system which can tackle the ECB efforts for containing the inflation over the medium term after it had resided above its 2% yearly target in the recent period fueled by remarkable increasing of the commodities and energy prices with the tension in the Middle East and specially Libya which is one of the most important and nearest oil and gas suppliers to Europe which takes 9.3% of its needs of oil from it and also gives Italy lonely 35% of its needs of gas and also countries behind of it like Spain, France and Germany and cutting these supplies should raise the cost of energy in Europe which can tackle the growth which has started to show good signs of recovery recently lead by Germany which has had significant declining of its unemployment rate of February to 7.3% from 8.5% in January and new 52k added jobs in that same month from just 18k in January while the market was waiting for another 18k in February and that's beside the continued spectacular improving of the Germane IFO business sentiment index which reached new high again in Feb at 111.2 and this number has not been seen since the beginning of that index in 1969 and also we have seen recently improving of its PMI manufacturing index to in February 62.7 from 60.5 in January a little bit above the market forecasting of 62.6 helping EU PMI to keep its scale of expansion of January at 59 and it is widely known that the number above 50 means expansion and below it means contraction.
The single currency is now trading just above 1.39 after testing back 1.386 as a support and failing to get over 1.4 can increase the downside pressure and lead to further pressure on 1.386 to be broken on a lower formed high and God willing, with the market focusing on the debt worries, this can lead to 1.37 and this can be accompanied with breaking the trend line support of the ascending channel extended from 1.2876 to 1.3523 and getting lower of it should be met with support at 1.359 whereas the 38.8% retracement of the rising from 1.2876 to 1.4036 and breaking it can be another downward strong sign to 1.35 psychological level and passing below this level can lead to the recent bottoming level at 1.3424 and breaking it can open the way again to 1.3238 then the psychological level at 1.3 versus the greenback which has started to gain recently from the risk aversion sentiment and the investors uncertainty which effect negatively on their business spending amid the rising of commodities energy prices which force the investors to tend to square their risky positions buying the low yielding currencies and the gold as a hedge against inflation and store of their wealth value as a safe haven and this can help its previous resistance at 1394$ and the psychological level at 1400$ which can underpin it technically too to make a higher high than it has made this week at 1444$ to face a new psychological level at 1500$.
Kind Regards
FX Market Strategist
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

The risk appetite has been hurt strongly by Moody's downgrading of Spain's debt to Aa2 triggering further worries about the debt risks evaluation in the Euro area while the markets are preparing for a tightening cycle to be entered by the ECB for containing the prices which should increase the cost of borrowing and covering the bonds auctions in Europe lowering the bonds and stocks prices after they have been underpinned by the adopted easing stance of the ECB after the credit crisis until now.
The US equities markets have been hit too after the drop of market confidence which followed the new downgrading of Spain underpinning the risk aversion sentiment supporting the greenback versus the single currency which came under pressure with its back securities leading Dow to have a red opening exacerbated by the rising of US trade deficit to 46.3b$ while the market was waiting for just 41b$ because of the rising of oil prices and also the rising of US initial jobless claim to 397k from 371 a weak earlier adding more worries about the stability of the labor markets to lead Dow to close below 12000 at 11984 on this new added risk from brought back from Europe threating the market confidence in the business spending to the current risks because of the rising of commodities and energy prices and the tension in Libya.
The sterling came under pressure after the MPC decision of keeping the interest rate unchanged at .5% and the buying bonds plan at 200bln Stg as the recent meeting minutes have shown that there was growing of the voting for tightening after as Mr. Dale has given his vote to hike the interest rate by .25% like Mr. Martin Weale and Andrew sentence has called for hiking by .5% while Possen was the only vote for increasing the buying bonds plan by another 50b Stg while the other 5 MPC voting members including BOE president Mr. Mervin King preferred leaving the interest rate unchanged keeping BOE 200b Stg buying bonds plan unchanged and this mixed position is looking holding until now as taking any direction will cause emerging of the other direction risks while the sterling rises when it finds signs of inflation and quickly gets back under pressure with the signs of economic weakness and both directions signs are existing containing the sterling movements
As we have seen recently with the down revision of UK Q4 GDP quarterly from -.5% to -.6% and the rise of UK Feb CPI to 4$ yearly and also the release of February Confederation of British industry survey of the retails sales which was the best figuring out of the stagflation case facing the BOE as it has fallen to 6 from 37 in January to ensure the market worries about the growing pace of the demand which is moving the growth up and in the same time the figure of the selling prices inside the retail sales sector has shown strong rising from 43 in January to 73 in February which shows the need of tightening too.
After the pressure had eased back on the single currency with the release of Feb Germane industrial productions which rose by 1.8% following a sudden falling in January by .6%, The pressure accumulated again forcing the single currency to break its support which held in the beginning at 1.386 brining back the single currency above 1.39 with new downgrading by Moody's of Spain sovereign debt one notch to Aa2 after it has begun the week with downgrading of the Greek sovereign debt 3 notches to B1. the breaking of 1.386 this time has triggered stop loses orders to bring down the single currency below 1.38 unable to get back above 1.386 until now with worries about the consequences of entering tightening cycle by the ECB on the struggling European debt ailing countries such as Greece, Ireland, Portugal an Spain containing the current market sentiment as the waited tightening actions for containing the prices over the medium term by the ECB will drive the costs of borrowing higher inside these European countries ailing of debt as hiking the interest rate will exceed the cost of covering their bonds auctions and in the same time adopting a tightening policy can feed the market with the believing that the ECB is caring much more now about the prices upside risks than funding the debt of the debt ailing countries which can lead to further injection of funds into the markets and banking system which can tackle the ECB efforts for containing the inflation over the medium term after it had resided above its 2% yearly target in the recent period fueled by remarkable increasing of the commodities and energy prices with the tension in the Middle East and specially Libya which is one of the most important and nearest oil and gas suppliers to Europe and specially Italy which takes 35% of its needs of gas from it also other countries behind of it like Spain, France and Germany and cutting its supplies should raise the cost of energy in Europe which can tackle the growth which has started to show good signs of recovery recently lead by Germany which has had significant declining of its unemployment rate of February to 7.3% from 8.5% in January and new 52k added jobs in that same month from just 18k in January while the market was waiting for another 18k in February and that's beside the continued spectacular improving of the Germane IFO business sentiment index which reached new high again in Feb at 111.2 and this number has not been seen since the beginning of that index in 1969 and also we have seen recently improving of its PMI manufacturing index to in February 62.7 from 60.5 in January a little bit above the market forecasting of 62.6 helping EU PMI to keep its scale of expansion of January at 59 and it is widely known that the number above 50 means expansion and below it means contraction.
God Willing, it is important to wait for important consuming data out from US as the release of US retails sales of February which are expected to be up by 1% from .3% in January while the core figure excluding the auto sales is expected to be up .6% from .3% in January too and we wait also for the preliminary figure of UN. Michigan consumers' sentiment of March to be down to 76.5 from 77.5 in February
Kind Regards
FX Market Strategist
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

The Japanese yen could have the investors' interests in the recent sessions as the direct required currency for all risky squared positions in Japan after the Japanese earth quake and its implications could contain the market sentiment and from another side, the Japanese yen has been supported by the usual repatriations in this same time every year as the end of the Japanese fiscal year and also as a direct request for the Japanese yen from inside of Japan as a sack of liquidity and for getting use of the Japanese outside investments to rebuild what have been havocked inside of it but over the medium term it looks to be similar to the earthquake of 1995 impacts and also the USDJPY was near these same rates of exchange as the BOJ has started adopting easing policy for providing liquidity and it was the case since the beginning of this week when the back has injected about 183b$ and after that it has added about 98b$ for providing stability to the markets but these 2 tries did not make a even a block in the way of falling of the Japanese stocks especially after yesterday panic because of the radiation increasing in Tokyo because of the wind direction was from Fukushima directly which means that there are increased probabilities of injecting bigger amounts of funds for resorting confidence and stability to the markets which can put weights on the Japanese yen which is not accepted to appreciate further from BOJ while the Japanese exports are struggling the world fear of nuclear radiated products to come out from Japan which can effect negatively on the Japanese exports costs in the coming period before the confidence gets back by stopping the nuclear radiation from these nuclear reactors which supply 30% of the Japanese needs of energy and even in the case of calming down the investors in the Japanese equities markets evaluating this recent action as an over extended action, this can calm down the sharpness of the panic selling asking for the Japanese yen liquidities at any rate too which can support back USDJPY.
The equities markets have been impacted negatively from these sad events in Japan which triggered cutting of Japanese and Asian risky positions especially in US which come accompanied with the end of the fiscal year in Japan as we have just mentioned to trigger strong wave of risk aversion in the markets.
The US equities markets have started this week under the pressure of the Japanese earthquake consequences which have followed the significant drop of the market confidence which resulted from the drop of US preliminary figure of UN. Michigan consumers' sentiment of March to 68.2 from 77.5 in February by the end of last week while the market was expecting getting down to just 76.5 following new downgrading of Spain underpinning the risk aversion sentiment which increased after the rising of US trade deficit to 46.3b$ while the market was waiting for just 41b$ because of the rising of oil prices and also rising of US initial jobless claim to 397k from 371 a weak earlier adding more worries about the stability of the labor markets and so, the Fed's assessment came yesterday referring to a gradual pace of recovery in the labor market and depression in the housing markets with downside risks to face the growth in the case of rising of the commodities and energy prices further over the medium term expecting the underling inflation to be well-contained over the medium term after the Fed's decision of keeping the interest rate unchanged between 0 and .25% and keeping the 600b$ buying bonds plan which has been announced on the third of last November unchanged till the end of next June and this was widely expected and has been published by the Fed's chairman in from of the congress earlier and so there was no major impact on the markets from this week meeting.
The worries about the single currency and its assets backed securities have calmed down after the European countries had approved during the weekend to extend their 250b Euros package for aiding the ailing European countries of debt to 440b Euros while the markets can not rule out a new request from Portugal following Ireland's request last year to have an aid from this offered bailing out plan accompanied with the IMF. The single currency has been under pressure recently by Moody's downgrading of the Greek sovereign debt 3 notches to B1 and Spain's debt to Aa2 triggering further worries about the debt risks evaluation in the Euro area while the markets are preparing for a tightening cycle to be entered by the ECB for containing the prices which should increase the cost of borrowing and covering the bonds auctions in Europe lowering the bonds and stocks prices after they have been underpinned by the adopted easing stance of the ECB after the credit crisis until now and in a reaction against these increased market worries.

Kind Regards
FX Market Strategist
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

The panic of selling has come back again because of the increased market worries about the radiation situation in Japan driving Nikkei 225 down and the Japanese yen up in the beginning of the Asian session after further loses in US equities markets pared back 2011 gains with market worries about direct withdrawing of the Asian investments for covering the exacerbated financial positions in Asia.
The Japanese yen has got strong demand from the investors who are looking for squaring their risky positions in Japan after the Japanese earth quake and this has started from the first minutes of the week as the markets have realized the negative impacts of it on the Japanese economy and so the USD JPY has opened the week at 80.56 after closing at 81.87 and with repeating this again today, Nikkei 225 came down to 8639 coincide with strong liquidation in the favor of the Japanese yen while the Japanese governmental bonds yields are going up back again in the sack of liquidity which pressed on the USDJPY to deepen its diving below 80 after breaking 80.27 which was the side way down barrier limit of the pair trading movements recently after reaching it on the beginning of last November while the upside limit of this way was at 84.53 which has been reached in the middle of last December triggering stop loses orders below 80 reaching 76.39 during today Asian session and what has added to this reversal exchanged impact between Nikkei 225 and the Japanese yen was not only the risk aversion and the increased demand of liquidity from inside of Japan or even the usual transferring by the end of Japanese fiscal year bat the end of this month but also the exports hedge positions against rising of the Japanese yen which always compensate their products loses and cause these sever market reaction which we have seen in the recent days.
The BOJ has started the week providing liquidity 7 trillions yens to the same day operations in the Japanese markets adding about 15 trillions yens or about 183b$ followed by about 98b$ to its buying bonds plans for providing stability to the markets but these 2 tries did not make a even a block in the way of falling of the Japanese stocks especially after with the panic because of the radiation increasing in Tokyo which started last Tuesday which the winds were coming directly from Fukushima to Tokyo which means that there are increased probabilities of injecting bigger amounts of funds for resorting confidence and stability to the markets which can put weights on the Japanese yen as it is not accepted to appreciate further from BOJ while the Japanese exports are struggling the world fear of nuclear radiated products to come out from Japan which can effect negatively on the Japanese exports costs in the coming period.
The worries about the single currency and its backed securities which are negatively impacted also by the risk aversion sentiment currently have renewed again by the new downgrading of Portuguese long term bonds by Moody's 2 notches to A3 came which suggest a closer request from Portugal to the aid of the extended European package from 250b Euros for aiding the ailing European countries of debt to 440b Euros during the weekend to the next following Ireland.
The single currency has been under pressure recently by Moody's downgrading of the Greek sovereign debt 3 notches to B1 and Spain's debt to Aa2 triggering further worries about the debt risks evaluation in the Euro area while the markets are preparing for a tightening cycle to be entered by the ECB for containing the prices which should increase the cost of borrowing and covering the bonds auctions in Europe lowering the bonds and stocks prices after they have been underpinned by the adopted easing stance of the ECB after the credit crisis until now.
The Swiss frank could have the investors' interests also as the worries about the tension in the middle east as a safe have option to the investments and as the recent increased worries about the debt crisis in US and finally by the expected negative impacts of the Japanese earthquake which is containing the market sentiment currently and so USDCHF has made a new low at .8915 during the Asian session which is still under the pressure of bigger than expected radiations to come to Tokyo threating about 35 million living in it.
Kind Regards
FX Market Strategist
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

As it was expected and as what has been repeated in the recent reports, it was not accepted for the BOJ to have this current appreciation of the Japanese yen which effects negatively on the Japanese exports competitively and on a greed deal with the G7 which is looking also for restoring the lost confidence in the markets, the intervention came pushing USDJPY above 81.50 from 79.2 initially and it is expected currently to meet resistance at 83.23 then 83.94 and then 84.52 which is the higher band of its side way barrier and it has been reached in the middle of last December which it has taken since the beginning of last November.
We have seen this week panic of selling in the equities markets because of the increased market worries about the radiation situation in Japan driving Nikkei 225 down forcing US equities indexes to pare back 2011 gains with market worries about direct withdrawing of the Asian investments for covering the exacerbated financial positions in Asia and even in the bonds market with worries about Japanese selling of its share of the US treasuries which can effect negatively on the us creditability and force the fed to cover this withdrawing which can trigger further selling of the US treasuries by other countries and so the intervention in the forex market was the best options having a lower cost than enduring further turmoil in the assets markets dampen the business spending which is still required for the recovery after the credit crisis with minimal possible expected criticism even in the case of intervening from the Japanese side only but it looks from the G7 statement that it is well appreciated currently to approve a weaker yen while the Japanese economy is struggling and cooling down as it also can not hurt the European exports at this point while the exports from Japan getting down severely on the current markets worries about the radiation in Japan which has no clear end until now.
The Japanese yen has got strong demand in the beginning of this week from the investors who are looking for squaring their risky positions in Japan after the Japanese earth quake and this has started from the first minutes of the week as the markets have realized the negative impacts of it on the Japanese economy and so the USD JPY has opened this week at 80.56 after closing at 81.87 and this has been repeated again last Thursday with Nikkei 225 coming down to 8639 coincide with strong liquidation in the favor of the Japanese yen while the Japanese governmental bonds yields are going up back again in the sack of liquidity to press on the USDJPY further to deepen its diving below 80 after breaking 80.27 which was downside limit of the side way which has been taken by the pair recently triggering stop loses orders below 80 reaching 76.39 and what has added to this reversal exchanged impact between Nikkei 225 and the Japanese yen was not only the risk aversion and the increased demand of liquidity from inside of Japan or even the usual transferring by the end of Japanese fiscal year bat the end of this month but also the exports hedge positions against rising of the Japanese yen which always compensate their products loses and cause these sever market reaction which we have seen in the recent days.
The BOJ has started the week providing liquidity 7 trillions yens to the same day operations in the Japanese markets adding about 15 trillions yens or about 183b$ followed by about 98b$ to its buying bonds plans for providing stability to the markets but these 2 tries did not make a even a block in the way of falling of the Japanese stocks especially after with the panic because of the radiation increasing in Tokyo which started last Tuesday which the winds were coming directly from Fukushima to Tokyo which means that there are increased probabilities of injecting bigger amounts of funds for resorting confidence and stability to the markets which can put weights on the Japanese yen as it is not accepted to appreciate further from BOJ while the Japanese exports are struggling the world fear of nuclear radiated products to come out from Japan which can effect negatively on the Japanese exports costs in the coming period.
Kind Regards
FX Market Strategist
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

The demand for the gold has increased in the beginning of this week to open on a gap at 1423$ after closing last week at 1418$ underpinned by the beginning of the military operations in Libya to cap EL Qaddafi forces and the aviation in Libya which has been answered back by opening his weapons stores to the people in Tripoli announcing the Mediterranean sea as a region of military operations opening the **** for any immigrations to Europe without any intersection which can extend the period of instability in Libya and tackle the land military operations against him but it looks that France and from the first moments of this action insisting in hitting him sand his land military facilities strongly as a reply of his words about funding the election campaign of Sarkozy and France asking for aids from Libya.
The gold has started to rebound from 1380$ last week after the intervention to weakening the Japanese yen which has been passed by an agreement from the G7 for restoring the lost confidence in the markets which has been hit by the Japanese earthquake and its implications which caused increasing of the nuclear radiations scales in Japan triggering selling asking for liquidities and specially for the Japanese yen which is well-used as a funding currency as its very low interest rate for lowering the investments costs and this action could brought back the hope for using it again as a funding currency as the direction is now for devaluating it after reaching these recent worrying rates which do not tackle the Japanese exports only but also the investments spending sentiment in the assets and stocks markets broadly. So it was a must to do for encouraging the markets confidence again while the criticism from the European countries are expected to be at the minimal level while the Japanese exports are depressed from different sides with the yen recording its all times high versus the greenback and the Japanese products are exposed to the radiations tests all over the world.
The gold is now trading around 1430$ after making a bottom at 1380$ which has been reached under increased technical pressure coming from breaking the trend line support extended from 1307$ to 1412$ at 1428$ and it is still well exposed to forming a lower high as long as it is still below its all times high which has made at 1444$ down below this supporting broken line while breaking 1444$ and getting back above this line can increase the buying momentum to test the next psychological waited level at 1500$

Kind Regards
FX Market Strategist
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

The British pound has come under pressure across the broad because of the release MPC minutes which have shown the same status of the members as Mr. Dale has given his vote again to hike the interest rate by .25% like Mr. Martin Weale and Andrew sentence has repeated his calling for hiking by .5% while Possen was the same only vote for increasing the buying bonds plan by another 50b Stg while the other 5 MPC voting members including BOE president Mr. Mervin King preferred leaving the interest rate unchanged at .5% keeping BOE 200b Stg buying bonds plan unchanged as taking any direction will cause emerging of the other direction risks as we have seen recently with the down revision of UK Q4 GDP quarterly from -.5% to -.6% and the rising of UK Feb CPI to 4.4% yearly which underpinned the cable yesterday to reach 1.6399 ahead of 1.6471 resistance which can be followed by 1.6883 while the main resistance is still far away from here at 1.7062 which is the reached top after the credit crisis but these minutes release came again as usual to dampen the interest rate rising speculations weighing negatively on the sterling which rises when it finds signs of inflation and quickly gets back under pressure with the signs of economic weakness and both directions signs are existing containing the sterling movements forming a stagflation pressure on the BOE to keep watching! And the best to figure out this stagflation case facing the BOE was the release of confederation of British industry's monthly retail sales growth poll of February which has fallen to 6 from 37 in January to ensure the market worries about the growing pace of the demand which is moving the growth up and in the same time the figure of the selling prices inside the retail sales sector has shown strong rising from 43 in January to 73 in February which shows the need of tightening too.
The gold is still trading around 1430$ since the beginning of this week which opened on a gap at 1423$ after closing last week at 1418$ underpinned by the beginning of the military operations in Libya to cap EL Qaddafi forces and the aviation in Libya which has been answered back by opening his weapons stores to the people in Tripoli announcing the Mediterranean sea as a region of military operations opening the **** for any immigrations to Europe without any intersection which can extend the period of instability in Libya and tackle the land military operations against him but it looks that France and from the first moments of this action insisting in hitting him sand his land military facilities strongly as a reply of his words about funding the election campaign of Sarkozy and France asking for aids from Libya.
The gold has started to rebound from 1380$ last week after the intervention to weakening the Japanese yen which has been passed by an agreement from the G7 for restoring the lost confidence in the markets which has been hit by the Japanese earthquake and its implications which caused increasing of the nuclear radiations scales in Japan triggering selling asking for liquidities and specially for the Japanese yen which is well-used as a funding currency as its very low interest rate for lowering the investments costs and this action could brought back the hope for using it again as a funding currency as the direction is now for devaluating it after reaching these recent worrying rates which do not tackle the Japanese exports only but also the investments spending sentiment in the assets and stocks markets broadly. So it was a must to do for encouraging the markets confidence again while the criticism from the European countries are expected to be at the minimal level while the Japanese exports are depressed from different sides with the yen recording its all times high versus the greenback and the Japanese products are exposed to the radiations tests all over the world.
The gold is now trading around 1430$ after making a bottom at 1380$ which has been reached under increased technical pressure coming from breaking the trend line support extended from 1307$ to 1412$ at 1428$ and it is still well exposed to forming a lower high as long as it is still below its all times high which has made at 1444$ down below this supporting broken line while breaking 1444$ and getting back above this line can increase the buying momentum to test the next psychological waited level at 1500$

Kind Regards
FX Market Strategist
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

Despite the germane IFO Business climate getting down marginally in March to 111.1 from its all times high in last February at 111.3 while the market was waiting for it to come down to 110.6 negatively impacted by the tension in the middle east and the rising of energy prices, the single currency come back under the continued pressure of the debt downgrading falling on its budget deficit ailing countries as we have seen recently Moody's downgrading of the Greek sovereign debt 3 notches to B1 and Spain's debt to Aa2 triggering further worries about the debt risks evaluation in the Euro area while the markets are preparing for a tightening cycle to be entered by the ECB for containing the prices which should increase the cost of borrowing for covering the bonds auctions in Europe lowering the bonds and stocks prices after they have been underpinned by the adopted easing stance of the ECB after the credit crisis until now and the pressure has renewed again on the single currency which has fallen again versus the greenback to 1.4055 by the weekend with focusing rising on Portugal which suffers from the rising of covering its debt costs currently getting new downgrading to its long term debt by S&P to BBB from A- after another downgrading of it by Moody's 2 notches to A3 to increase the probability of having a share of the supplied bailing out plan which has been extended recently from 250B Euros to 440B Euros and it looks it depends now on the new government in Portugal to take this decision which can put pressure on it to take further austerity measures for capping its budget deficit to be the second country to take a share of this offering package after Ireland which added worries to the market by the release of its yearly GDP which shrank in 2011 by .7% while the market was waiting for rising by 1.2% after shrinking by .3% yearly in the third quarter of last year but it looks that the governmental cuts and the worries about the countries budget deficit have taken it toll on growth in Ireland which was doing double digits rates of growth in the 1990s.
The British pound has closed the week just above 1.6 psychological level versus the greenback negatively impacted by the release of UK retails sales of February falling by .8% monthly while the market was waiting for getting down by just .4% after rising in January by 1.5% while it has been already under another pressure since the release MPC minutes which have shown the same status of the MPC members as Mr. Dale has given his vote again to hike the interest rate by .25% like Mr. Martin Weale and Andrew sentence has repeated his calling for hiking by .5% while Possen was the same only vote for increasing the buying bonds plan by another 50b Stg while the other 5 MPC voting members including BOE president Mr. Mervin King preferred leaving the interest rate unchanged at .5% keeping BOE 200b Stg buying bonds plan unchanged as taking any direction will cause emerging of the other direction risks as we have seen recently with the down revision of UK Q4 GDP quarterly from -.5% to -.6% and the rising of UK Feb CPI to 4.4% yearly which underpinned the cable to reach 1.6399 ahead of 1.6471 resistance which can be followed by 1.6883 while the main resistance is still far away from here at 1.7062 which is the reached top after the credit crisis but these minutes release came again as usual to dampen the interest rate rising speculations weighing negatively on the sterling which rises when it finds signs of inflation and quickly gets back under pressure with the signs of economic weakness and both directions signs are existing containing the sterling movements forming a stagflation pressure on the BOE to keep watching! And the best to figure out this stagflation case facing the BOE was the release of confederation of British industry's monthly retail sales growth poll of February which has fallen to 6 from 37 in January to ensure the market worries about the growing pace of the demand which is moving the growth up and in the same time the figure of the selling prices inside the retail sales sector has shown strong rising from 43 in January to 73 in February which shows the need of tightening too.
The precious metals have been exposed to profit taken wave also last Thursday as the gold has broken 1444 to 1447 and the silver has taken out 36.74 to 38.16. The precious metals have been underpinned by the beginning of military operations in Libya last week underpinned by the beginning of the military operations in Libya to cap EL Qaddafi forces and the aviation in Libya which has been answered back by opening his weapons stores to the people in Tripoli announcing the Mediterranean sea as a region of military operations opening the **** for any immigrations to Europe without any intersection which can extend the period of instability in Libya and tackle the land military operations against him but it looks that France and from the first moments of this action insisting in hitting him sand his land military facilities strongly as a reply of his words about funding the election campaign of Sarkozy and France asking for aids from Libya.
The gold has started to rebound from 1380$ after the intervention to weakening the Japanese yen which has been passed by an agreement from the G7 for restoring the lost confidence in the markets which has been hit by the Japanese earthquake and its implications which caused increasing of the nuclear radiations scales in Japan triggering selling asking for liquidities and specially for the Japanese yen which is well-used as a funding currency as its very low interest rate for lowering the investments costs and this action could brought back the hope for using it again as a funding currency as the direction is now for devaluating it after reaching these recent worrying rates which do not tackle the Japanese exports only but also the investments spending sentiment in the assets and stocks markets broadly. So it was a must to do for encouraging the markets confidence again while the criticism from the European countries are expected to be at the minimal level while the Japanese exports are depressed from different sides with the yen recording its all times high versus the greenback and the Japanese products are exposed to the radiations tests all over the world.
The Gold has opened the past week on a gap at 1423$ after closing last week at 1418$ after making a bottom at 1380$ which has been reached under increased technical pressure coming from breaking the trend line support extended from 1307$ to 1412$ at 1428$ and getting over 1447$ as the current new resistance can increase the buying momentum of it to test the next psychological waited level at 1500$.
While the silver is stronger technically as it is still above the trend line support extended from 26.39 to 33.66 and on a shorter time frame it has just come down below the trend line support extended from 33.67 to 35.73 but it is still above its previous broken resistance at 36.74 while this recent profit taken wave has dragged it down just above it to 36.84 and it could close the week trading back above 37 at 37.25 trying to get back above this trend line support extended from 33.67 to 35.73 but making a lower high out of this trend line can expose it deepen the profit taken wave to what's below 36.74 meeting another support at 33.66.

Kind Regards
FX Market Strategist
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

The precious metals corrections which have started last week are exposed to be extended with the Libyan rebels controlling the position on the land driving the oil prices down with their promises to keep supplying the oil and the natural gas to the west. The gold and the silver have started profit taken waves last Thursday as the gold has broken 1444$ to 1447$ and the silver has taken out 36.74 to 38.16 as these precious metals have been underpinned by the beginning of military operations in Libya last week to cap Qaddafi's forces imposing a free zone of flying in Libya and that has been replied by opening by opening weapons stores to the people in Tripoli announcing the Mediterranean sea as a region of military operations opening the **** for any immigrations to Europe without any intersection which can extend the period of instability in Libya and tackle the land military operations against him but it looks that France and from the first moments of this action insisting in hitting him and his military facilities strongly as a reply of his words about funding the election campaign of Sarkozy and France asking for aids from Libya and this direction of France has caused for the first time different directions about the leadership of the allied forces which is always in US hand.
The gold has started to rebound from 1380$ after the intervention to weaken the Japanese yen which has been passed by an agreement from the G7 for restoring the lost confidence in the markets which has been hit by the Japanese earthquake and its implications which caused increasing of the nuclear radiations scales in Japan triggering selling asking for liquidities and specially for the Japanese yen which is well-used as a funding currency as its very low interest rate for lowering the investments costs and this action could brought back the hope for using it again as a funding currency as the direction is now for devaluating it after reaching these recent worrying rates which do not tackle the Japanese exports only but also the investments spending sentiment in the assets and stocks markets broadly. So it was a must to do for encouraging the markets confidence again while the criticism from the European countries are expected to be at the minimal level while the Japanese exports are depressed from different sides with the yen recording its all times high versus the greenback and the Japanese products are exposed to the radiations tests all over the world.
The Gold has been underpinned by this Japanese intervention too to recover its loses which reached to 1380$ under increased technical pressure coming from breaking the trend line support extended from 1307$ to 1412$ at 1428$, So it should meet now support at 1393 whereas the 38.8% Fibonacci retracement of the rising from 1307$ to 1447$ and then 1380$ and the falling of it can be followed by reaching 1350$ then 1324$ and the breaking of it can open the way for total retracement of this move at 1307$ which can be a dovish new sign in the case of breaking it while the way up should be met again with resistance at 1447$ as and breaking it can increase the buying momentum of it to test the next psychological waited level at 1500$.
While the silver is stronger technically as it is still above the trend line support extended from 26.39 to 33.66 and on a shorter time frame it has just come down below the trend line support which is extended from 33.67 to 35.73 but making a lower high out of this trend line can expose it to deeper profit taken wave which can be extended again to 33.66 then 31.69 and this can be a strong reversing sign accompanied with the breaking of the trend line support extended from 26.39 to 33.66 too

Kind Regards
FX Market Strategist
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com

[walid]

Biding the Japanese yen looks growing containing the current market sentiment as the investors have realized that further appreciation of the Japanese yen will be capped by the Japanese concluded intervention specially after it has had a joint agreement from the other great industrial countries for underpinning the Japanese exports which moving the growth of the Japanese economy after these disaster of the earthquake and its negative impacts on the Japanese exports which have become exposed to the nuclear radiations worries which makes the BOJ intervention subjected to the minimal possible criticism from the European exporters.
And from another side, ahead of the ending of the Japanese repatriations by the end of this month which was reinforcing the Japanese yen can be reused again as a low cost funding currency can encourage the investors further to get use of it at these significant high unacceptable rates exposed to BOJ interventions by speeding up selling it in the benefit investing in other higher yielding currencies and other markets as we have seen even the gold could not endure the selling pressure which has been caused by the crisis in the sack of liquidity to fall below 1400$ to 1380$ by the Japanese intervention as a share of the funding liquidities has been drawn out from the market because of this crisis.
So, By God's will,, these can put pressure on the USDJPY to reach again 83.28 and breaking it can lead to the upper band of the side way which has been taken since the middle of last December at 83.94 then 84.51 and breaking it too can open the way for 85.92 by accelerating the pair buying momentum.

Kind Regards
FX Market Strategist
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com