Forex-Eurousd

Play the daily chart and short on high. Anticipate that Euro will drop further since stoc failed to complete its upward movement and Euro retraced from fib 38.2

Fannie-Freddie Bailout Could Cost Taxpayers $1 Trillion

By: Reported by Steve Liesman, written by Michelle Lodge

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AP

For American taxpayers, now on the hook for some $145 billion in housing losses connected to Fannie Mae and Freddie Mac loans, that amount could be just the tip of the iceberg.

According to the Congressional Budget Office, the losses could balloon to $400 billion. And if housing prices fall further, the cost to the taxpayer could hit as much as $1 trillion.

Two things are clear: Taxpayers don’t want to foot the bill, and Fannie and Freddie, taken over by the government in 2008 to stanch the financial bloodletting, need a major overhaul.

“Some of us who don’t even own homes are paying to support others and their home ownership, and they ask ‘why?’ said Robert J. Shiller, a Yale Universityeconomics professor and co-creator of the S&P/Case-Shiller Home Price Indices. Read more

China Stocks Breach `Key' Technical Support at 2,481, BGC Partners Says

The Shanghai Composite Index’s fall below “key” technical support of 2,481 deepened losses today and sent a bearish signal to investors, according to BGC Partners Inc.

The measure tumbled 4.3 percent to 2,427.05, the steepest decline since May 17. The gauge breached a so-called “double- bottom” at 2,481, Jamie Coutts, a Singapore-based technical analyst at BGC, said in e-mailed comments. A double bottom is a chart pattern showing a drop in price, followed by a rebound and then another drop to the same price, usually indicating support at that level.

“Today’s break below a key technical level is prompting a rush of selling,” said Michael Liang, chief investment officer at Foundation Asset Management (HK) Ltd., which oversees $120 million. Shanghai Good Hope Equity Investment Management Co. President Zheng Tuo said investors “now expect shares to extend declines after the breach.” Read more

Soros Says Germany Could Cause Euro Collapse

Germany's budget savings policy risks destroying the European project and a collapse of the euro cannot be ruled out, billionaire investor George Soros said in a newspaper interview released on Wednesday.

Source: World Economic Forum George Soros

"German policy is a danger for Europe, it could destroy the European project," he told German weekly Die Zeit.

Soros, who earned $1 billion in 1992 by betting against the British pound, added that he "could not rule out a collapse of the euro."

"If the Germans don't change their policy, their exit from the currency union would be helpful for the rest of Europe," he said.

Chancellor Angela Merkel unveiled plans earlier this month for 80 billion euros ($107 billion) in budget cuts over the next four years—a package she hopes will bring Germany's structural deficit within European Union limits by 2013. Read more

Forex-Eurousd to test 200 MA

As stated earlier, Euro is set to test the 200 MA or around 1.242 based on 4 hour chart. Breaking that Euro is expected to move higher. The next point to consider will be the cracking of the bollinger and downward trendline on the daily chart which is around 1.27 -1.28

Double-dip recession for Malaysia unlikely'

Malaysia is unlikely to face a double-dip recession as the country has come out of a slow growth phase over the last few years, according to an economist.

Datuk Dr Zainal Aznam, a member of the National Economic Advisory Council, said with Malaysia becoming more integrated with Asia, continuous regional growth would be an additional boost to the Malaysian economy.

"If Asian countries, particularly China and India, continue to develop, it would be an additional boost for Malaysia''s economic recovery. Anything that boosts Asian growth will be good for Malaysia," he said.

"If Asian countries, particularly China and India, continue to develop, it would be an additional boost for Malaysia's economic recovery. Anything that boosts Asian growth will be good for Malaysia," he said.

Read more: 'Double-dip recession for Malaysia unlikely' http://www.btimes.com.my/Current_News/BTIMES/articles/20100616181222/Article/index_html#ixzz0r27XeywP

Europe Recession Next Year 'Almost Inevitable': Soros

Europe faces almost inevitable recession next year and years of stagnation as policymakers' response to the euro zone crisis causes a downward spiral, billionaire U.S. investor George Soros said on Tuesday.

Source: World Economic Forum George Soros

Flaws built into the euro from the start had become acute, Soros told a seminar, warning that the euro crisis could have the potential to destroy the 27-nation European Union.

The euro's lack of a correction mechanism or of a provision for countries to leave it could be a fatal weakness, he said.

Germany had imposed its criteria on how a 750 billion euro ($1 trillion) euro zone rescue mechanism should be used and was imposing its own standards -- a trade surplus and a high savings rate -- on the rest of Europe, Soros said.

"But you can't be a creditor country, a surplus country, without somebody being in deficit," he said. Read more

Technical Levels—Not News— Become Main Driver of Markets

As much as Greece, the oil spill and the economy, the markets these days are moved by wild swings between technical levels that at times overshadow the underlying fundamentals.

"Technicals matter in this market," Pimco co-CEO Mohamed El-Erian proclaimed in a CNBC interview Tuesday, underscoring and perhaps understating just how much statistical measures of market behavior influence trading.

In particular, analysts have been watching support tests on the Standard & Poor's 500[.SPX 1115.23 25.60 (+2.35%) ] around the 1040 level and top-side resistance near 1110 as an important gauge for whether the market can stay out of the recently breached correction territory and resume the aggressive bull-market run that preceded it. read more

Forex-Eurousd marching forward.

Broke fib retracement back to 0 or 1.229 and moving further up as stated earlier.

Forex-Eurousd

As indicated earlier in my blog, Euro has fought the bearish movement and refused to move below and away from the fib 23.6. It has now moved upwards and most likely to complete its movement to fib 100 or 1.229. Should it break through fib retracement back to 0%, it will be testing the 200 MA or 1.244. I will not want to short Euro unless it breaks the M formation and breaks its neckline which is around 1.216.

Markets 'Overreact' to Europe's Problems: Almunia

Investors are "clearly overreacting" to the scale of the euro zone crisis, Joaquin Almunia, EU Commissioner for Competition Policy and vice president of the European Commission, said in a press conference in London late on Monday.

Moody's cut Greece's debt rating to junk, the second major ratings agency to do so after S&P's move at the end of April.

"The markets are clearly overreacting to the problems in Europe," Almunia, who was speaking before news of the Moody's cut came out, said.

The markets' reaction to the Moody's downgrade was not as drastic as that in April,when stocks plunged across the board. read more

Forex-Eurousd fighting against moving lower.

Euro retraced to 1.2206 and resting on fib 23.6. It has been stubbornly fighting to stay above that level which indicates that it is not ready to give in to the bearish force. Better to stay sideline. If it rebounces from this level and moves higher, it indicates more upward.

Moody's Cuts Greece Government Ratings to Junk

Moody's on Monday downgraded Greece government bond ratings into junk territory, citing the risks in the euro zone/IMF rescue package for the debt-laden country.

Jorg Greuel | Getty Images Moody's cut the government bond ratings of debt-laden Greece to Ba1 Monday, moving the debt one notch into junk status.

The agency downgraded the rating by four notches to Ba1, placing it one notch into junk status. The outlook is stable.

Moody's [MCO 19.91 0.23 (+1.17%) ] also downgraded Greece's short-term issuer rating to not-prime from Prime-1.

The rescue package "effectively eliminates any near-term risk of a liquidity-driven default and encourages the implementation of a credible, feasible, and incentive-compatible set of structural reforms, which have a high likelihood of stabilizing debt service requirements at manageable levels," said Moody's senior analyst Sarah Carlson. read more

Lots of Bears a Reason to Buy? No, Says Strategist

There are so many bearish calls and so much negative sentiment that now is the time to buy stocks, some analysts and strategists have advised. But Philippe Gijsels, the head of research at BNP Paribas Fortis Global Markets, thinks the opposite is true.

Many investors missed the 2009 rally because they could not see a reason to buy, and those trying to buy the market now risk the same fate in the opposite direction, Gijsels told CNBC.com.

”There are certainly more bears than a couple of months ago," he said in a telephone interview. "However, we should also not forget that the rally from the March lows last year was the most hated and non-believed rally in history.” read more

Forex-Eurousd

With Euro hitting almost 1.23, just short of one pip, it traced downward. Since the daily chart is highly bought, I would expect it to retrace further. Shorting at this level might not be a bad idea.

US Discovers Vast Riches of Minerals in Afghanistan

The United States has discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, far beyond any previously known reserves and enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself, according to senior American government officials.

Stephane Victor | Getty Images Cityscape at sunrise, Kabul, Afghanistan

The previously unknown deposits — including huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium — are so big and include so many minerals that are essential to modern industry that Afghanistan could eventually be transformed into one of the most important mining centers in the world, the United States officials believe. read more

Forex -Eurousd expect to move higher.

As expected Euro moved up to 1.22 after breaking its downward short-term trendline. Expect it to move higher to complete its upward movement to fib 100 or around 1.23. However, on the longer term, it is still bearish biased.

KL shares to see technical rebound

Share prices on Bursa Malaysia are expected to stage a technical rebound next week in the absence of market-moving news, analysts said.

They said the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM-KLCI) was expected to drift higher to 1,320-level with mild intermittent bargain-hunting along the way.

An analyst said the investors would also assess the impact of the US stocks, which were expected to recover further, indicating the US economy was returning to the growth path.

"Wall Street is expected to extend its rally. It is expected to go up to as high as 10,700 points as risk appetite emerges in the world markets," he said.

On Friday, the FBM-KLCI nearly broke the resistance at 1,300 points, supported by Wall Street rally. It gave up some of the earlier gains to close at 1,294.67.

Meanwhile, the announcement of the 10th Malaysia Plan (10MP) by Prime Minister Datuk Seri Najib Tun Razak received muted response from the market, as most players had already discounted its impact.

OSK Research, in its note, said construction, property and utilities-related stocks would would benefit from the 52 high-impact projects worth RM63 billion unveiled under the 10MP.

Read more: KL shares to see technical rebound http://www.btimes.com.my/Current_News/BTIMES/articles/20100612150454/Article/index_html#ixzz0qh4epwdc

Retail Sales Show Surprise Slump as Consumers Struggle

Sales at U.S. retailers unexpectedly fell in May for the first time since September following a record slump in purchases of building materials, adding to fears the economic recovery was losing some steam.

UpperCut Images | Getty Images

The Commerce Department said total retail sales dropped 1.2 percent, the largest decline since September, after rising by an upwardly revised 0.6 percent in April. Sales in April were previously reported to have increased 0.4 percent.

Analysts polled by Reuters had forecast retail sales rising 0.2 percent last month.

Retail sales, which had risen for seven straight months, were up 6.9 percent compared to May last year.

U.S. stock index futures fell on the report, while Treasury debt prices rose. The U.S. dollar fell broadly.

"There's no getting around the fact you saw some consumer retrenchment in the month of May. The number is going to call into question the strength of consumer spending for the second quarter," said Kevin Flanagan, chief fixed income strategist at Morgan Stanley Smith Barney in Purchase, N.Y. read more

US Economist Fears Greek Debt Default in August

Greece will eventually default on its debt because the country is highly indebted and the euro zone's approach towards saving it is the wrong one, Carl Weinberg, chief economist at High Frequency Economics, told CNBC Friday.

A restructuring of Greek debt could happen as soon as August, when the Balkan country is due to receive another tranche of funds from its lending agreement with the International Monetary Fund (IMF) and the European Union, according to Weinberg. read more

Debt Spreading 'Like a Cancer': Black Swan Author

The root of the crisis over the past couple of years wasn't recession, but debt, which has spread "like a cancer," according to Taleb, who is now relived that public attention has shifted to debt, instead of growth.

The world needs to prepare itself for austerity, he warned. "We need to slash debt. Unfortunately, that's the only solution," Taleb said. read more

Forex-Eurousd

Euro is about to breakout from the trendline refer to 4 hour chart. If it does, it will move up and move towards 1.22 or fib 100%. So, on a short term basis, one should not short now but to wait for a higher level to short.

US Foreclosures Fall, Bank Repossessions Hit Record High

The national foreclosure rate continued to fall in May from the previous month, according to a new report released Thursday.

The national foreclosure rate fell by 3.27 percent in May from the previous month.

However, bank repossessions reached a record high during the same month, a sign that lenders are focusing on their backlog of foreclosure inventory before tackling new distressed loans, according to foreclosure database website RealtyTrac, which released the report.

“What it looks like is that the lenders are focusing on processing the delinquent loans they already have rather than initiating new foreclosures,” said Rick Sharga, senior vice president of RealtyTrac. “They’re managing inventory to prevent a free fall in home prices.” read more

Liquidity Seizure’ May Cause Recession, Nomura Says

une 10 (Bloomberg) -- A “liquidity seizure” arising from Europe’s worsening debt crisis could drag the global economy back into recession, according toPaul Schulte, head of multi- asset strategy in Asia excluding Japan at Nomura Holdings Ltd.

“As Europe’s problems unwind, liquidity is going to seize up. As liquidity seizes up, multiples are going to contract,” Hong Kong-based Schulte told reporters in Singapore today. “Equities are not necessarily cheap.”

Concern that Europe’s sovereign-debt crisis will spread sent the euro to a four-year low against the dollar on June 7 and has wiped out more than $4 trillion from global stock markets this year. Global investors have little confidence in Europe’s efforts to contain its debt crisis, according to a quarterly poll of investors and analysts who are Bloomberg subscribers.

European Union leaders unveiled an almost $1 trillion loan package last month after Greece’s budget deficit expanded to almost 14 percent of gross domestic product, exceeding the EU’s 3 percent limit.

Investors withdrew some $12 billion from U.S. and European equity funds in the week to May 19, the most in almost two years, on concern Europe’s sovereign-debt crisis will slow global growth, EPFR Global said on May 21. Global equity funds are slowly putting money back into the market, absorbing $1.5 billion of inflows in the week ended June 2, the Cambridge, Massachusetts-based research firm said this week.

‘Liquidity Seizure’

“What we are having is a sort of liquidity seizure because of the dislocation in the euro,” Schulte said. “If we are not careful, that could tip us back into recession again.” read more

Foreign reserves in Malaysia, Singapore and Hong Kong fell in May as investors sold assets amid concern Europe’s debt crisis will slow the rebound in

Foreign reserves in Malaysia, Singapore and Hong Kong fell in May as investors sold assets amid concern Europe’s debt crisis will slow the rebound in the global economy.

Malaysia’s reserves fell to RM312.21 billion, equivalent to US$95.5 billion, as of May 31, from RM313.92 billion at the end of April, Bank Negara Malaysia said yesterday. Singapore’s official reserves slid 2.5 per cent to US$198.4 billion and Hong Kong’s declined 1.2 per cent to US$256.2 billion.

“Europe certainly has had an impact and there has been plenty of evidence of flows leaving Asia’s equity markets, and as risk aversion increased, outflows have accelerated,” said Mitul Kotecha, head of global currency strategy in Hong Kong at Credit Agricole CIB.

Asian governments said last month public debt risks and “destabilizing” capital flows are among threats to the region’s recovery. The escalation of Europe’s debt crisis forced the European Union and the International Monetary Fund to offer as much as 750 billion euros (US$898 billion) to countries in danger of financial instability and spurred a decline in global stocks last month.

“Foreign investors continued to liquidate their portfolio holdings on heightened risk aversion arising from worries that the European debt problems could halt the global recovery,” Lee Heng Guie, chief economist at CIMB Investment Bank in Kuala Lumpur, said in a note today on the Malaysian reserves.

In Malaysia, capital outflows from the equity market outpaced increased flows into the debt market in May, Lee said.

Read more: Malaysia, S'pore, HK foreign reserves fall http://www.btimes.com.my/Current_News/BTIMES/articles/20100608140342/Article/index_html#ixzz0qHB6sPKq

Next Support Levels for Euro: $1.16, then $1.03 — Charts

It's just a few weeks since my last note on the euro-dollar but I think an update is appropriate given the continued battering of the single currency.

I mentioned in the previous chart analysis that the euro could fall quickly to $1.03 once the $1.19 mark (a particularly significant support level in 1998 and in 2003) has been breached, which happened on Monday.

The fall towards $1.03 may feel like a freefall plunge, but it is constrained by other technical features.

The euro is defined by a series of support and resistance bands. The positioning of these bands is important from an analytical perspective because it provides a method to project the future downside targets.

Euro-Dollar Chart CLICK ON GRAPH TO ENLARGE

The most important trading band is between $1.24 and $1.29. The width of this band is measured and projected downwards. It gives a downside target near $1.19. This support level has been breached.

The next historical support level in the immediate short term is $1.16. There is a higher probability the fall will dip towards $1.13 with a penetration to and a rebound to $1.16. This is the most bullish outcome in this environment. read more

Capitulation Sell-Off Or Start Of Something Big?

By: Lee Brodie
Producer

Bulls retired for week-end licking their wounds with Dow [.DJIA 9931.97 -323.31 (-3.15%) ] tumbling by triple digits again.

Investors ran for the exits after concerns that the latest jobs report wouldn’t live up to expectations proved to be well founded.

Although 431,000 jobs were created in May, most of those gains were due to temporary workers hired by the census. And to make matters worse the overall number fell short of Street expectations.

Meanwhile reports of another possible debt crisis – this time in Hungary added to the negative sentiment.

By the close the S&P 500 [.SPX 1064.88 -37.95 (-3.44%) ] had fallen below 1,070, a level which had been considered support and just below the intra-day low the market reached during the "flash crash" on May 6 of 1065.

How much farther is the S&P going to fall? read more

Forex-Eurousd broke 1.20

Euro keeps dropping. We could be looking at a melt down and could drop to 1.16 on a mid-term based on the monthly chart.

Forex -Eurousd Dropped to another low.

Again as predicted, Euro moved lower to previous low and even dropped to another new low.

Japan May Spark Next Sovereign Debt Crisis, Kusano Global Says

By Yasuhiko Seki and Yumi Ikeda

June 4 (Bloomberg) -- Japan may spark the next global debt crisis unless the nation’s new leader addresses its widening fiscal deficit, Kusano Global Frontier Co. said.

Prime Minister Yukio Hatoyama’s resignation two days ago may hamper the ruling Democratic Party of Japan’s plan to cut government debt, the world’s largest, said Toyomi Kusano, president and chief executive officer at Kusano Global, a hedge-fund research firm in Tokyo. Finance Minister Naoto Kan, who said he will run for leadership of the DPJ, has pledged to hammer out this month a mid-term plan on improving finances.

“What is bothering foreign investors the most is Japan’s debt issue and the related risk of Japan triggering the next sovereign debt crisis,” Kusano said in an interview. Read more

Forex-Usd/yen

As expected, usd/yen hits 9.81. I use fundamental news with TA to trade, therefore, news posted here are meant to reveal the likely fundamental impacts on the market.

Private Employment Grows Less Than Expected: ADP

The private sector added 55,000 jobs in May, less than expected as the employment picture continues a slow recovery, according to the ADP National Employment Report.

The service sector added a net 78,000 jobs this month to spur the growth, but the goods producing sector saw a loss of 23,000 positions.

Stock futures briefly shed gains after the report but then turned around and continued to indicate a positive open on Wall Street.

The number compared with an upwardly revised gain of 65,000 in April, which was originally reported as a gain of 32,000. read more

Forex-Eurousd.

Having moved up to 1.23 and unable to move above fib 61.8, expect it to move lower down, possible to previous low.

Retailers Post Another Month of Disappointing Sales

Early monthly sales reports from retailers have largely fallen short of analysts' estimates, possibly fanning further concerns about the state of the consumer and the impact that more tepid spending will have on the economy.

UpperCut Images | Getty Images

Coming on the heels of a disappointing April, the results from retailers in May underscores how fragile the economy recovery is at this stage.

Analysts on average are expecting same-store sales to rise 2.6 percent in May from the prior year, according to Thomson Reuters. That compares with a decline of 4.8 percent in May 2009.

Sales are being impacted by a shift that has pushed a portion of the Memorial Day weekend sales into the month of June as most retailers will be reporting sales for the four weeks ended May 29. However, this calendar shift does not explain away the lackluster performance. read more

Time to Hike Rates Nearing: Fed's Lockhart

The U.S. economy is almost strong enough to allow the Federal Reserve to begin raising interest rates, Atlanta Fed President Dennis Lockhart said on Thursday.

While he noted unemployment would likely remain elevated for some time, Lockhart said the U.S. central bank should not wait too long before beginning to tighten the reins.

"The time is approaching when it will be appropriate to consider recalibrating interest rate policy. I do not believe that time has yet arrived," Lockhart said in the prepared text of a speech.

"The conditions that require a change of policy are not yet at hand. Read more

US Home-Buying Loan Demand Falls for 4th Week

Demand for loans to buy U.S. homes fell last week for the fourth straight week, holding 13-year lows, as the housing market adjusted to a selling environment without the federal tax credits that had stoked April sales, the Mortgage Bankers Association said on Wednesday.

AP

Home buying ran out of steam after eligible borrowers sprinted to meet the April 30 deadline for up to $8,000 in tax credits. The incentive pulled house sales forward and triggered the largest monthly construction spending gain in nearly a decade.

Total loan applications eked out a 0.9 percent rise in the week ended May 28, seasonally adjusted, as a 2.4 percent in refinancing demand offset a decline of 4.1 percent in purchase loan requests to the lowest level since April 1997. read more

Forex-Usd/Yen

Expect Usd/yen to hit fib 100 or 92.9.

Iran to Change 45 Billion Euros for Dollars, Gold: Report

Iran's central bank will sell 45 billion euros from its reserves to buy dollars and gold ingots, a report on the website of state-owned Press TV said on Wednesday.

AP

There was no announcement of the sale on the bank's website and officials at the bank declined comment.

Following the report, the euro eased slightly versus the dollar from around $1.2227 to $1.2213.

Traders said the news was having limited impact on the euro, and some in the market were sceptical about whether Tehran would be able to buy significant amounts of dollars, given that U.S. depository institutions are banned from processing transfers involving the country.

Last month Iran's central bank governor hinted at a move away from the euro, reversing several years of Tehran publicly shunning the U.S. currency in keeping with its political hostility towards Washington. Read more

Forex- Eurousd. Building a base.

Euro is building a base around 1.21 -1.22. Expect Euro to move upward as it is oversold.

Spanish Bank Seeks Cash from Rescue Fund: Report

Spain's second-largest savings bank Caja Madrid is seeking up to 3 billion euros ($3.7 billion) from a government rescue fund set up to promote mergers among the country's network of unlisted regional banks, El Pais reported on Tuesday citing financial sources.

GlowImages | Getty Images

No-one at Caja Madrid was immediately available for comment.

The bank, in talks with five regional savings banks — Caja Avila, Caja Insular de Canarias, Caixa Laietana, Caja Segoviaand Caja Rioja, plans to repay the money in less than two years, the report said.

The government has set a June 30 deadline to tap money from the 99 billion euro Fund for Orderly Bank Restructuring (FROB).

It wants the sector to merge after credit quality declined sharply due to heavy exposure to the country's property boom and bust. read more

forex-eurousd. Another lower low.

As expected, Euro dropped to another new low.

ECB Warns of $239 Billion in Further Bank Loan Losses

The European Central Bank warned on Monday that euro zone banks face up to 195 billion euros in a "second wave" of potential loan losses over the next 18 months due to the financial crisis, and disclosed it had increased purchases of euro zone government bonds.

AP

As the euro recouped losses but remained on the back foot after a cut in Spain's credit rating and China warned that the global economy remained vulnerable to sovereign debt risks, Spain assured investors it would reform its rigid labour market even if employers and trade unions cannot agree.

The ECB said euro zone banks would need to make provisions for further losses this year of 90 billion euros, and 105 billion in 2011, on top of some 238 billion euros in bad debts written off by the end of 2009. That was the first time it has given an estimate for next year. Read more