Mid-Day Report: Dollar Broadly Lower on Risk Appetite, Greece Still Awaited

Dollar is broadly lower today as risk appetites are lifted by German bill auction and bank stocks. Germany sold EUR 2.54b of 12-mont h bills today at average yield of 0.07%. That yield was much lower than October’s 0.346%. The auction attracted solid demand of EUR 5.53b of bids. Meanwhile, banking stocks in UK saw impressive strength with strong advance in RBS, Lloyds and HSBC leading FTSE and other major European indices higher. Dollar index is back below 80 psychological level and is set to take on 79.51 support.

Main focus remain on Greece and the EcoFin meeting in Eurozone. There is no details announced on Greece’s debt swap deal with private sector yet. But it’s believed that private bond holders are willing to take a loss of around 65 to 70% off their Greek debts. However, it’s still uncertain however the over deal could help Greece lower debt to 120% of GDP in 2020.

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Daily Chart Art – January 13, 2012

EUR/USD: 4-hour

Heads up! For the hardcore euro bears out there, you might want to think twice about shorting EUR/USD this time because a double bottom just formed on the pair’s 4-hour chart. According to my handy-dandy Chart Patterns Cheat Sheet, this chart formation signals that an uptrend could be in the cards. It seems that the pair already broke above the neckline of the formation around 1.2800 but stochastic is nearly in the overbought zone, which means that the bears could still have a fighting chance.

USD/CHF: 4-hour

Will the former resistance act as support for USD/CHF? After bouncing the 61.8% Fib, the pair is currently stalling at the .9450 minor psychological level, which lines up with the 50% Fibonacci retracement level.

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EUR Short Squeeze Presents Opportunities

As discussed in today’s FOREXYARD Daily Analysis, overstretched market positioning has allowed for a bit of a EUR short squeeze on the back of a solid Spanish bond auction and strong US housing numbers.

The most recent CFTC Commitment of Traders report shows speculators in the futures market have built their largest EUR short position since May 2010. As of last Tuesday speculators were holding -116k contracts short, up from -95k. The one sided positioning highlights the market’s pessimism against the EUR but also brings the possibility of a short squeeze.

Today’s short squeeze has helped the EUR/USD rise as high as 1.3120. There is short term resistance in this area as the 200-hour moving comes in at 1.3135. Also

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Mid-Day Report: Swiss Franc Jumps as SNB Kept EUR/CHF Floor Unchanged

Quick update: Dollar retreats further in early US session as risk appetite is given a lift by strong US data. Initial jobless claims unexpectedly improved to three year low of 366k in the week ended December 10. Empire state manufacturing index rose to 9.5 in December, highest level in seven months. Philly Fed survey also rose to 10.3 in December. Industrial production, though, dropped -0.2% in November. TIC capital flow dropped sharply to 4.8b in October. DOW rebounded strongly to 11967.74 but pares some agains as the sesssion goes on.

The SNB left the target range for 3-month Libor at 0-0.25% and the “minimum exchange rate” at CHF1.20 per EUR. The decision was widely expected by the market but we believe the central bank might raise the limit of EURCHF in coming months should the economic outlook deteriorates further.

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Daily Chart Art – December 9, 2011

GBP/USD: 1-hour

Looking for another shot at buying up the British pound? Well, you may get your chance soon enough! GBP/USD has been trading between 1.5750 and 1.5600 for over a week now, and it looks as though it’s about to test the bottom of the range. With Stochastic showing oversold conditions and a bullish divergence, it seems as though the pair is due for a turnaround. If buyers take control once again, expect them to bring the pair back up to the top of the range. On the other hand, if sellers manage to push GBP/USD below 1.5600, they could force to pair to forge a new monthly low.

AUD/USD: 1-hour

Will you look at that – another solid range!

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Financial Planning Tools that Everyone Can Use

Financial planning tools are essentially tools that help a person in the area of finances. There are many free tools available out there (e.g. budgeting calculators, credit card calculators, debt calculators, loan calculators, mortgage calculators, savings calculator, etc.) and it is not necessary to be acquainted with all. For starters, the following ones are probably the most beneficial for usage for the common person who is aiming to get a head start on achieving their personal financial goals without having to hire an actual financial or wealth planner.

Budgeting calculators. As the name suggests, this tool is to help the average person identify what are the main areas that require budgeting so that one does not go overboard in personal spending each month so as to avoid the problem of getting into debt. Read the full article…

Japanese Yen In “No Man’s Land”

This, according to a hedge fund manager that has decided to cancel all of his fund’s bearish bets on the Japanese Yen. The reason: the yen is rising, and it’s unclear when – or even if – the government will intervene to push it back down. Even though the yen’s strength is fundamentally illogical, it seems that investors are growing increasingly wary of betting against it.

As I pointed out in my previous post on the Yen (“Japanese Yen Strength is Illogical, but Does it Matter?“), the yen has actually fallen over the last twelve months, on a correlation weighted basis (though to be fair, it has staged a pretty impressive comeback since the beginning of April). Unfortunately, investors mainly care about how it is performing against a handful of key currencies, namely the US Dollar. Simply, the y

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