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The New Zealand dollar is lower today in forex trading after expectations of a higher rate were crushed. The central bank in New Zealand decided to keep the interest rate the same, and gave no indication that any sort of rate hike is coming in the future.

The news is disappointing forex traders, and the U.S. dollar is gaining against the kiwi in currency trading as a result. Without a higher yield, traders are looking for other options.

Also weighing on the New Zealand dollar in forex trading is general risk aversion. Concerns about the debt ceiling are overwhelming other economic news around the world as the globe focuses on what’s next for U.S. debt. 

The root causes of global financial instability cannot be wished away or solved with modest policy tweaks: they are systemic. Read the full article here

Quiet sessions in Asia, as risk appetite pushed equities lower. Nikkei fell -1.45% as the JPY stayed in demand with FX flow moving towards safe havens. Yesterdays weak US durable Goods set the negative tone in stocks, as the report printed a 2.1% fall in headline orders and 0.4% drop in core capital goods orders. Global stock market indices turned into the red, US treasury went sideways and commodities retraced from their recent gains. Overnight, the only real news was the RBNZ kept the OCR steady at 2.5%, however, the accompanying statement suggested the growing need of a hike. EURCHF has been choppy, trading about the 1.14950 to 1.15250 range, while USDJPY is looking to retest the weekly lows at 77.58. Reuters reported that Economy Minister Yosano told Governor Hideaki Omura, whose prefecture is home to Toyota motor Corp, that FX intervention of around JPY1-2trn would be difficult. Then went on to suggest that FX intervention ahead of the Aug 2nd US debt ceiling deadline would be unlikely. While Noda has tried to keep traders wary of a possible intervention with the ‘tried and true’ verbal intervention of “I will continue to pay attention to markets”. Full article…

The EUR/GBP looks to have broken trendline support dating back to mid-February, after a false break last week saw the pair pull back into the formation. With the euro weakness seen in recent days, the pair is likely to continue moving lower with a close below this level, with the 76.4% Fibonacci extension taken from the May 5th and July 1st crests acting as our confirmation for further weakness moving forward. The 20, 50, and 100-day moving averages also seem to be converging, with the slope of the 20 & 50 day averages steepening in North American trade. RSI also continues to move sharply lower after failing to break above the 50-level earlier in the week. Accordingly, our bias on the scalp will be weighted to the downside.

A 30min chart shows the pair breaking below trendline support of the ascending channel dating back to July 17th. Full article…

EURUSD Forecast The EURUSD continued its bullish momentum yesterday, topped at 1.4524 and closed at 1.4507.  The bias is bullish in nearest term, but so far price still unable to make a significant breakout above 1.4520/40 resistance area as you can see on my hourly chart below. So actually from hourly chart point of view, price still trapped in the range area of 1.4520/40 – 1.4436 and need a clear break above 1.4520/40 to continue the bullish scenario testing 1.4577 before targeting 1.4695. On the downside, a failure to make a clear break above 1.4520/40 could lead price to a minor downside correction testing 1.4436 support area. I do not expect any move below that area as it would diminish the current strong bullish bias but as long as price stays above the trend line support my overall intraday bias remains to the upside.

Both the stock and contract for difference (CFD) markets are exciting markets that give individual investors access to the world’s stock markets with an exciting level of leverage and flexibility. The basic concepts are simple to grasp — when companies perform well, their stock price goes up, and when companies perform poorly, their stock price goes down. Along with stocks, CFDs offer incredible flexibility to investors. Here is some background information on how each of these markets work. The stock market Investors trade stocks — shares of ownership in a company — through stock exchanges. Before the rise of the Internet, stock exchanges were physical trading floors where investors, or their brokers, could get together and negotiate prices for the stocks they were looking to buy and sell. While many of these physical exchanges, like the New York Stock Exchange (NYSE) and the London Stock Exchange (LSE) still exist, new Internet-based stock exchanges, like the NASDAQ, have developed. Full article…